Second Qtr First Half Second Qtr First Half 2008 2008 2007 2007 ---------- ---------- ---------- ---------- Stock based compensation expenses (FAS123R) 1.7 3.2 1.2 2.3 InScope gain - (5.4) - - IP litigation expenses 0.4 3.3 1.2 1.3 Settlement agreement with Olympus Corporation (2.33) (2.33) - -Increasing 2008 GAAP EPS Guidance As a result of settling our patent litigation with Olympus Corporation, the Company is increasing full year 2008 GAAP, fully diluted earnings per share from $0.26 and $0.34 to $0.34 and $0.42. Reimbursement Highlights
-- Medical Mutual of Ohio, serving more than 3.9 million individuals in Ohio and South Carolina, recently updated its capsule endoscopy policy and will allow physicians to use PillCam SB as a primary test for symptoms indicative of small bowel tumors or Crohn's disease. In addition, Medical Mutual will allow the use of PillCam ESO in the evaluation of esophageal varices in patients who have esophageal varices or portal hypertension and when EGD is contraindicated. The policy also includes the use of the Agile patency capsule prior to the administration of the PillCam video capsule. -- Australia's Minister of Health and Ageing approved Medicare funding of PillCam SB in patients with Peutz-Jeghers syndrome (PJS). PJS is a genetic condition that is characterized by the presence of gastrointestinal polyps and a high risk of certain types of cancer including cancer of the small intestine. It is estimated that up to 1 in 25,000 individuals have PJS. Surveillance of these patients with capsule endoscopy has been recommended at an interval of every two years.Conference Call / Webcast Information U.S. Call / Webcast Given Imaging will host a conference call Thursday, August 7, 2008, at 9:00 a.m. Eastern time to discuss second quarter 2008 results. To participate in the teleconference, please dial 1-888-778-9069 fifteen minutes before the conference begins. International callers should dial 913-312-0849. The call will also be webcast live at www.givenimaging.com. A replay of the call will be available for two weeks on the company's website, or until August 21, 2008 by dialing 1-888-203-1112. International callers should dial 719-457-0820. The replay participant code is 5010408. Hebrew Call The company will host a separate conference call in Hebrew on August 7 at 14:00 Israel time, (7:00 a.m. ET). To access this call, please dial +972-3-9180650 ten minutes before the conference is scheduled to begin. A replay of the call will be available from August 10-12 by dialing +972-3-9255900. About Given Imaging Ltd. Given Imaging is redefining gastrointestinal diagnosis by developing, producing and marketing innovative, patient-friendly products for detecting gastrointestinal disorders. The company's technology platform is the PillCam® Platform, featuring the PillCam video capsule, a disposable, miniature video camera contained in a capsule, which is ingested by the patient, a sensor array, data recorder and RAPID® software. Given Imaging has a number of available capsules: the PillCam SB video capsule to visualize the entire small intestine which is currently marketed in the United States and in more than 60 other countries; the PillCam ESO video capsule to visualize the esophagus; the Agile™ patency capsule to determine the free passage of the PillCam capsule in the GI tract and the PillCam COLON video capsule to visualize the colon that has been cleared for marketing in the European Union. PillCam COLON has received a CE Mark, but is not cleared for marketing or available for commercial distribution in the USA. More than 750,000 patients worldwide have benefited from the PillCam capsule endoscopy procedure. Given Imaging's headquarters, manufacturing and R&D facilities are located in Yoqneam, Israel. It has operating subsidiary companies in the United States, Germany, France, Japan, Australia and Singapore. Given Imaging's largest shareholders include Elron Electronic Industries (
Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Balance Sheets In thousands except share data June 30, December 31, ------------ ------------ 2008 2007 ------------ ------------ (Unaudited) (Audited) ------------ ------------ Assets Current assets Cash and cash equivalents $ 43,584 $ 37,103 Short-term investments 14,001 23,191 Accounts receivable: Trade (Net of provisions for doubtful debts of $338 and of $329 as of June 30, 2008 and December 31, 2007, respectively) 20,527 23,315 Other 5,802 10,385 Inventories 18,577 15,960 Prepaid expenses 1,207 1,289 Deferred tax assets 1,175 1,350 Advances to suppliers 215 190 ------------ ------------ Total current assets 105,088 112,783 ------------ ------------ Deposits 1,122 892 Assets held for employee severance payments 3,963 3,007 Marketable Securities 48,605 41,629 Fixed assets, at cost, less accumulated depreciation 15,511 15,422 Other assets, at cost, less accumulated amortization 4,614 3,583 ------------ ------------ Total Assets $ 178,903 $ 177,316 ============ ============ Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Balance Sheets In thousands except share data June 30, December 31, ----------- ----------- 2008 2007 ----------- ----------- (Unaudited) (Audited) ----------- ----------- Liabilities and shareholders' equity Current liabilities Current installments of obligation under capital lease $ 128 $ 121 Accounts payable Trade 9,215 7,275 Other 17,560 21,012 Deferred income 2,866 9,379 ----------- ----------- Total current liabilities 29,769 37,787 ----------- ----------- Long-term liabilities Obligation under capital lease, net 508 448 Liability in respect of employees severance payments 4,560 3,490 ----------- ----------- Total long-term liabilities 5,068 3,938 ----------- ----------- Total liabilities 34,837 41,725 ----------- ----------- Minority interest 3,162 1,996 ----------- ----------- Shareholders equity Share capital: Ordinary Shares, NIS 0.05 par value each (90,000,000 shares authorized; 29,252,785 and 29,241,875 shares issued and fully paid as of June 30, 2008 and December 31, 2007, respectively) 343 343 Additional paid-in capital 170,265 166,813 Capital reserve 2,166 2,166 Accumulated other comprehensive loss (103) - Accumulated deficit (31,767) (35,727) ----------- ----------- Total shareholders' equity 140,904 133,595 ----------- ----------- Total liabilities and shareholders' equity $ 178,903 $ 177,316 =========== =========== Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Operations In thousands except share and per share data Six month Three month period ended period ended June 30, June 30, Year ended ---------------------- ---------------------- December 31, 2008 2007 2008 2007 2007 ---------- ---------- ---------- ---------- ---------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) ---------- ---------- ---------- ---------- ---------- Revenues $ 60,196 $ 50,896 $ 33,072 $ 27,844 $ 112,868 Cost of revenues (15,943) (12,846) (8,108) (6,824) (29,721) Early repayment of royalty bearing government grants - - - - (4,843) ---------- ---------- ---------- ---------- ---------- Gross profit 44,253 38,050 24,964 21,020 78,304 ---------- ---------- ---------- ---------- ---------- Operating expenses Research and development, gross (7,689) (5,988) (3,893) (3,205) (12,847) Royalty and non-royalty bearing grants 790 693 370 600 1,242 ---------- ---------- ---------- ---------- ---------- Research and development, net (6,899) (5,295) (3,523) (2,605) (11,605) Sales and marketing (31,922) (25,412) (16,960) (13,906) (55,446) General and administrative (10,173) (9,021) (2,894) (5,078) (20,981) Termination of marketing agreement 5,443 - - - 22,860 Other - - - - (422) ---------- ---------- ---------- ---------- ---------- Total operating expenses (43,551) (39,728) (23,377) (21,589) (65,594) ---------- ---------- ---------- ---------- ---------- Operating profit (loss) 702 (1,678) 1,587 (569) 12,710 Financing income, net 2,466 1,929 870 727 5,520 ---------- ---------- ---------- ---------- ---------- Profit before taxes on income and minority share 3,168 251 2,457 158 18,230 Income tax benefit (expense) (126) (244) 33 3 (4,548) ---------- ---------- ---------- ---------- ---------- Profit before minority Share 3,042 7 2,490 161 13,682 Minority share in losses of subsidiary 918 687 394 462 1,503 ---------- ---------- ---------- ---------- ---------- Net profit $ 3,960 $ 694 $ 2,884 $ 623 $ 15,185 ========== ========== ========== ========== ========== Earnings per share Basic Earnings per Ordinary Share $ 0.14 $ 0.02 $ 0.10 $ 0.02 $ 0.52 ========== ========== ========== ========== ========== Diluted Earnings per Ordinary Share $ 0.13 $ 0.02 $ 0.09 $ 0.02 $ 0.49 ========== ========== ========== ========== ========== Weighted average number of Ordinary Shares used to compute basic Earnings per Ordinary share 29,251,868 28,760,450 29,252,785 28,861,380 28,961,968 ========== ========== ========== ========== ========== Weighted average number of Ordinary Shares used to compute diluted Earnings per Ordinary share 30,886,460 30,747,285 30,678,341 30,990,699 31,030,458 ========== ========== ========== ========== ========== Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Cash Flows In thousands Six month Three month period ended period ended June 30, June 30, Year ended -------------------- --------------------December 31, 2008 2007 2008 2007 2007 --------- --------- --------- --------- --------- (Unaudited)(Unaudited)(Unaudited)(Unaudited) (Audited) --------- --------- --------- --------- --------- Cash flows from operating activities: Net profit $ 3,960 $ 694 $ 2,884 $ 623 $ 15,185 Adjustments required to reconcile net loss to net cash used in operating activities: Minority share in losses of subsidiary (918) (687) (394) (462) (1,503) Depreciation and amortization 2,541 2,280 1,276 1,130 4,771 Deferred tax assets 175 (443) 13 (204) 24 Stock based compensation 3,256 2,337 1,745 1,228 5,651 Excess tax benefits related to stock based compensation - - - - (693) Other 9 (111) (80) (184) 380 Net decrease (increase) in trading securities - 3,478 - 400 5,092 Decrease (increase) in accounts receivable - trade 2,788 1,346 (2,163) (793) (4,428) Decrease (increase) in accounts receivable - other 4,583 (1,488) (2,967) (743) (8,922) Decrease (increase) in prepaid expenses 82 (381) (1) 45 51 Decrease (increase) in advances to to suppliers (25) (133) 38 (90) (108) Decrease (increase) in inventories (2,617) (192) (2,017) (973) 2,208 Increase (decrease) in accounts payable (1,785) 2,133 303 5,734 8,570 Decrease in deferred income (6,513) (530) (21) (572) (14,903) Net cash provided by (used in) operating --------- --------- --------- --------- --------- activities $ 5,536 $ 8,303 $ (1,384) $ 5,139 $ 11,375 --------- --------- --------- --------- --------- Cash flows from investing activities: Excess of cash investment over equity share in subsidiary 965 - 965 - Purchase of fixed assets and intangible assets (3,597) (2,005) (2,350) (1,313) (5,772) Deposits (244) 22 (219) 33 (355) Proceeds from sales of marketable securities 34,714 9,132 16,274 9,132 18,753 Proceeds from sales of fixed assets 30 - 5 - - Purchase of marketable securities (32,514) (26,797) (12,887) (9,439) (36,584) --------- --------- --------- --------- --------- Net cash (used in) provided by investing activities $ (646) $ (19,648) $ 1,788 $ (1,587) $ (23,958) --------- --------- --------- --------- --------- Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Cash Flows In thousands Six month Three month period ended period ended June 30, June 30, Year ended -------------------- --------------------December 31, 2008 2007 2008 2007 2007 --------- --------- --------- --------- --------- (Unaudited)(Unaudited)(Unaudited)(Unaudited) (Audited) --------- --------- --------- --------- --------- Cash flows from financing activities: Principal payments on capital lease obligation $ (85) $ (6) $ (35) $ (3) $ (37) Proceeds from the issuance of Ordinary Shares 196 2,892 - 2,540 4,280 Issuance of shares to a minority shareholder in a consolidated company 1,207 - - - - Excess tax benefits related to stock based compensation - - - 693 --------- --------- --------- --------- --------- Net cash provided by (used in) financing activities $ 1,318 $ 2,886 $ (35) $ 2,537 $ 4,936 --------- --------- --------- --------- --------- Effect of exchange rate changes on cash 273 (17) 98 (66) 240 --------- --------- --------- --------- --------- Increase (decrease) in cash and cash equivalents 6,481 (8,476) 467 6,023 (7,407) Cash and cash equivalents at beginning of period 37,103 44,510 43,117 30,011 44,510 --------- --------- --------- --------- --------- Cash and cash equivalents at end of period $ 43,584 $ 36,034 $ 43,584 $ 36,034 $ 37,103 ========= ========= ========= ========= ========= Supplementary cash flow Information Income taxes paid $ 122 $ 153 $ 47 $ 78 $ 1,098 ========= ========= ========= ========= ========= Assets acquired under capital Lease $ 109 $ - $ - $ - $ 569 ========= ========= ========= ========= =========
Contact Information: For further information contact: Fern Lazar David Carey Lazar Partners Ltd. 1-212-867-1768