Nine Nine Third Qtr Months Third Qtr Months 2008 2008 2007 2007 --------- --------- ---------- ---------- Stock based compensation expenses (FAS123R) 1.8 5.1 1.6 4.0 --------- --------- ---------- ---------- InScope gain - (5.4) - - --------- --------- ---------- ---------- IP litigation expenses (0.2) 3.1 1.4 2.8 --------- --------- ---------- ---------- Settlement agreement with Olympus Corporation - (2.3) - - --------- --------- ---------- ---------- Loss from sale of securities (0.4) (0.4) - - --------- --------- ---------- ----------As of September 30, 2008 the Company had approximately $50 million in cash, $35 million of US government marketable securities and approximately $23 million of corporate bonds, including AIG bonds valued at $4 million. In marking these AIG bonds to market, the Company recorded a $1.1 million temporary loss charged against Shareholders' Equity. The EPS guidelines provided today exclude any potential impairment of the value of the AIG bonds, or other corporate bonds, which may be required if instability in the US financial markets continues. Also, during the quarter the Company sold bonds of certain financial institutions, resulting in a loss of $0.4 million included in Finance Income, Net. Recent Developments New Product and Service Launches Given Imaging recently launched new products and services developed to facilitate physician use of PillCam Capsule Endoscopy. These include:
-- VueSpan Diagnostic Services: a service using an independent faculty of gastroenterologists with recognized experience in capsule endoscopy to read PillCam video capsule studies submitted for interpretation by other gastroenterologists. VueSpan is currently offered in 14 states and is expanding nationwide. -- RAPID 5 Access: New software that allows a physician to read PillCam videos anytime and anywhere with the most advanced software tools. RAPID 5 Access also enables network-based storage of PillCam studies and the import and export of patient data to and from electronic medical record systems.Conference Call / Webcast Information U.S. Call / Webcast The company will host a conference call in English on Wednesday, November 12 at 9:00am ET. To participate in this teleconference, please dial 800-926-7061 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-0379. 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 November 26, 2008 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 3443955. Hebrew Call The company will host a call in Hebrew on November 12 at 14:00 Israel time (7:00am ET). To access this call, please dial +972-3-9180650 fifteen minutes before the conference is scheduled to begin. A replay of the call will be available November 12-14 by dialing +972-3-9255941. 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 markets a number of available capsules: the second-generation PillCam SB 2 video capsule to visualize the entire small intestine which is currently marketed in the United States and in more than 60 other countries; the second-generation PillCam ESO 2 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 820,000 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 (NASDAQ:ELRN) (TELAVIV:ELRN). For more information, visit http://www.givenimaging.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual events, results, performance, circumstances or achievements of the Company to be materially different from any future events, results, performance, circumstances or achievements expressed or implied by such forward-looking statements. Factors that could cause actual events, results, performance, circumstances or achievements to differ from such forward-looking statements include, but are not limited to, the following: (1) our ability to develop and bring to market new products, (2) our ability to receive regulatory clearance or approval to market our products or changes in regulatory environment, (3) our success in implementing our sales, marketing and manufacturing plans, (4) protection and validity of patents and other intellectual property rights, (5) the impact of currency exchange rates, (6) the effect of competition by other companies, (7) the outcome of significant litigation, (8) our ability to obtain reimbursement for our product from government and commercial payors, (9) quarterly variations in operating results, (10) the possibility of armed conflict or civil or military unrest in Israel, and (11) other risks and factors disclosed in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks and factors identified under such headings as "Risk Factors," "Cautionary Language Regarding Forward-Looking Statements" and "Operating Results and Financial Review and Prospects" in the Company's Annual Report on Form 20-F for the year ended December 31, 2007. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except for the Company's ongoing obligations to disclose material information under the applicable securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. (Financial Tables Follow)
Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Balance Sheets In thousands except share data September December 30, 31, 2008 2007 ----------- ----------- (Unaudited) (Audited) ----------- ----------- Assets Current assets Cash and cash equivalents $ 43,580 $ 37,103 Short-term investments 23,505 23,191 Accounts receivable: Trade (Net of provisions for doubtful debts of $279 and of $286 as of September 30, 2008 and December 31, 2007, respectively) 19,020 23,315 Other 3,610 10,385 Inventories 19,756 15,960 Prepaid expenses 1,921 1,289 Deferred tax assets 1,066 1,350 Advances to suppliers 501 190 ----------- ----------- Total current assets 112,959 112,783 ----------- ----------- Deposits 1,110 892 Assets held for employee severance payments 4,198 3,007 Marketable Securities 41,363 41,629 Fixed assets, at cost, less accumulated depreciation 15,585 15,422 Other assets, at cost, less accumulated amortization 4,759 3,583 ----------- ----------- Total assets $ 179,974 $ 177,316 =========== ========== Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Balance Sheets In thousands except share data September 30, December 31, 2008 2007 ------------ ------------ (Unaudited) (Audited) ------------ ------------ Liabilities and shareholders' equity Current liabilities Current installments of obligation under capital lease $ 125 $ 121 Accounts payable Trade 8,610 7,275 Other 17,143 21,012 Deferred income 2,794 9,379 ------------ ------------ Total current liabilities 28,672 37,787 ------------ ------------ Long-term liabilities Obligation under capital lease, net 466 448 Liability in respect of employees severance payments 4,955 3,490 ------------ ------------ Total long-term liabilities 5,421 3,938 ------------ ------------ Total liabilities 34,093 41,725 ------------ ------------ Minority interest 2,555 1,996 ------------ ------------ Shareholders equity Share capital: Ordinary Shares, NIS 0.05 par value each (90,000,000 shares authorized; 29,257,785 and 29,241,875 shares issued and fully paid as of September 30, 2008 and December 31, 2007, respectively) 343 343 Additional paid-in capital 172,191 166,813 Capital reserve 2,166 2,166 Accumulated other comprehensive loss (1,716) - Accumulated deficit (29,658) (35,727) ------------ ------------ Total shareholders' equity 143,326 133,595 ------------ ------------ Total liabilities and shareholders' equity $ 179,974 $ 177,316 ============ ============ Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Operations In thousands except share and per share data Nine month Three month period ended period ended September 30, September 30, Year ended ---------------------- ---------------------- December 31, 2008 2007 2008 2007 2007 ---------- ---------- ---------- ---------- ---------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) ---------- ---------- ---------- ---------- ---------- Revenues $ 91,332 $ 78,572 $ 31,136 $ 27,676 $ 112,868 Cost of revenues (23,736) (19,960) (7,793) (7,114) (29,721) Early repayment of royalty bearing government grants - - - - (4,843) ---------- ---------- ---------- ---------- ---------- Gross profit 67,596 58,612 23,343 20,562 78,304 ---------- ---------- ---------- ---------- ---------- Operating expenses Research and development, Gross (11,529) (9,093) (3,840) (3,105) (12,847) Royalty and non-royalty bearing grants 1,090 1,673 300 980 1,242 ---------- ---------- ---------- ---------- ---------- Research and development, net (10,439) (7,420) (3,540) (2,125) (11,605) Sales and marketing expenses (46,569) (38,581) (14,647) (13,169) (55,446) General and administrative expenses (14,449) (14,507) (4,276) (5,486) (20,981) Termination of marketing agreement 5,443 - - - 22,860 Other - - - - (422) ---------- ---------- ---------- ---------- ---------- Total operating expenses (66,014) (60,508) (22,463) (20,780) (65,594) ---------- ---------- ---------- ---------- ---------- Operating profit (loss) 1,582 (1,896) 880 (218) 12,710 Financing income, net 3,195 4,015 729 2,086 5,520 ---------- ---------- ---------- ---------- ---------- Profit before taxes on income and minority share 4,777 2,119 1,609 1,868 18,230 Income tax expense (233) (489) (107) (245) (4,548) ---------- ---------- ---------- ---------- ---------- Profit before minority Share 4,544 1,630 1,502 1,623 13,682 Minority share in losses of subsidiary 1,525 720 607 33 1,503 ---------- ---------- ---------- ---------- ---------- Net profit $ 6,069 $ 2,350 2,109 $ 1,656 $ 15,185 ========== ========== ========== ========== ========== Earnings per share Basic Earnings per Ordinary Share $ 0.21 $ 0.08 $ 0.07 $ 0.06 $ 0.52 ========== ========== ========== ========== ========== Diluted Earnings per Ordinary Share $ 0.20 $ 0.08 $ 0.07 $ 0.05 $ 0.49 ========== ========== ========== ========== ========== Weighted average number of Ordinary Shares used to compute basic Earnings per Ordinary share 29,252,785 28,880,299 29,254,618 29,119,996 28,961,968 ========== ========== ========== ========== ========== Weighted average number of Ordinary Shares used to compute diluted Earnings per Ordinary share 30,791,425 30,911,256 30,601,355 31,239,196 31,030,458 ========== ========== ========== ========== ========== Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Cash Flows In thousands Nine month period Three month period ended ended September 30, September 30, Year ended ---------------------- ---------------------- December 31, 2008 2007 2008 2007 2007 ---------- ---------- ---------- ---------- ---------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) ---------- ---------- ---------- ---------- ---------- Cash flows from operating activities: Net profit (loss) $ 6,069 $ 2,350 $ 2,109 $ 1,656 $ 15,185 Adjustments required to reconcile net loss to net cash used in operating activities: Minority share in losses of subsidiary (1,525) (720) (607) (33) (1,503) Depreciation and amortization 3,839 3,532 1,298 1,252 4,771 Deferred tax assets 284 (309) 109 134 24 Stock based compensation 5,126 3,977 1,870 1,640 5,651 Excess tax benefits related to stock based compensation - - - - (693) Other 197 18 188 129 380 Net decrease (increase) in trading securities - 3,060 - (418) 5,092 Decrease (increase) in accounts receivable - trade 4,295 3 1,507 (1,343) (4,428) Decrease (increase) in accounts receivable - other 6,775 (2,298) 2,192 (810) (8,922) Decrease (increase) in prepaid expenses (632) (922) (714) (541) 51 Increase in advances to suppliers (311) (175) (286) (42) (108) Decrease (Increase) in inventories (3,796) (714) (1,179) (522) 2,208 Increase (decrease) in accounts payable (2,792) 2,961 (1,007) 828 8,570 Increase (decrease) in deferred income (6,585) (445) (72) 85 (14,903) ---------- ---------- ---------- ---------- ---------- Net cash provided by operating activities 10,944 10,318 5,408 2,015 $ 11,375 ---------- ---------- ---------- ---------- ---------- Cash flows from investing activities: Excess of cash investment over equity share in subsidiary 965 - - - - Purchase of fixed assets and intangible assets (5,166) (4,082) (1,569) (2,077) (5,772) Deposits, net (247) (405) (3) (427) (355) Proceeds from sales of marketable securities 52,396 15,503 17,682 6,371 18,753 Proceeds from sales of fixed assets 30 - - - - Purchase of marketable securities and short term investment (54,071) (27,789) (21,557) (992) (36,584) ---------- ---------- ---------- ---------- ---------- Net cash (used in) provided by investing activities (6,093) (16,773) (5,447) 2,875 $ (23,958) ---------- ---------- ---------- ---------- ---------- Given Imaging Ltd. and its Consolidated Subsidiaries Consolidated Statements of Cash Flows In thousands except share and per share data Nine month Three month period ended period ended September 30, September 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 (91) (10) (6) (4) $ (37) Proceeds from issuance of ordinary shares 252 3,928 56 1,036 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 financing activities 1,368 3,918 50 1,032 $ 4,936 ---------- ---------- ---------- ---------- ---------- Effect of exchange rate changes on cash 258 121 (15) 138 240 ---------- ---------- ---------- ---------- ---------- Increase (decrease) in cash and cash equivalents 6,477 (2,416) (4) 6,060 (7,407) Cash and cash equivalents at beginning of period 37,103 44,510 43,584 36,034 44,510 ---------- ---------- ---------- ---------- ---------- Cash and cash equivalents at end of period $ 43,580 $ 42,094 $ 43,580 $ 42,094 $ 37,103 ========== ========== ========== ========== ========== Supplementary cash flow Information Income taxes paid $ 194 $ 283 $ 72 $ 130 $ 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 /