Fourth Twelve Fourth Twelve
Qtr Months Qtr Months
2008 2008 2007 2007
-------- ------- ------- -------
Stock based compensation expenses
(FAS123R) $ 1.7 $ 6.9 $ 1.7 $ 5.6
InScope gain - (5.4) (22.9) (22.9)
Tax on InScope gain - - 3.0 3.0
Write-off of acquired in-process R&D 4.7 4.7 - -
IP litigation expenses 0.1 3.2 2.5 5.2
Settlement agreement with Olympus
Corporation - (2.3) - -
Early repayment to OCS (effect on COGS) - - 4.8 4.8
Adjustment to Early repayment to OCS
(effect on net R&D) - - 0.7 0.7
Adjustment to goodwill 0.3 0.3 - -
Loss from sale of securities - 0.4 - -
Recent Developments
-- Bravo® pH Monitoring Business: Given Imaging acquired the Bravo™
pH monitoring business for the diagnosis of Gastroesophageal Reflux Disease
(GERD) from Medtronic (NYSE : MDT ) for $20 million. The Bravo system is the
only wireless, catheter-free pH test for GERD. It uses a disposable capsule
temporarily placed in the esophagus that measures pH levels and transmits
the data to an external receiver.
-- Distribution Relationship with FUJIFILM: Given Imaging has announced
an expansion of its distribution agreement with FUJIFILM. FUJIFILM Medical
Co. Ltd., a fully owned subsidiary of FUJIFILM, will distribute Given
Imaging's PillCam® SB product line in Japan as of January 20th, 2009.
-- Recent management changes: The Company announced that Christopher
Rowland, President of Given Americas, is leaving the company. Edwin
Cordell, Vice President, Finance of Given Imaging Americas, will serve as
President of Given Imaging Americas on an interim basis until a successor
is named. The company also announced the appointment of Dr. David Mason as
Chief Medical Officer. Dr. Mason is board certified in Internal Medicine
and joins the company from UCB Pharma.
2009 Guidance
The company expects full year 2009 revenues to be between $141 million and
$148 million. The company expects fully diluted EPS of between $0.20 and
$0.28. This guidance reflects the uncertainties of the current economic
environment.
Dividend
The Board of Directors has approved a special cash dividend of
approximately $0.54 per share, or $16 million in the aggregate. The actual
payment of this special dividend, net of taxes withheld at source under
Israeli law, is expected to take place on or about March 10, 2009. The
dividend will be paid to shareholders of record as of the close of business
on February 24, 2009. The ex-dividend date for the purpose of trading of
the ordinary shares on the NASDAQ Global Market is February 20, 2009 and
the ex-dividend date for the purpose of trading of the ordinary shares on
Tel Aviv Stock Exchange is February 25, 2009.
The Board reviewed the Company's current and projected liquidity, its
anticipated operating performance, and its growth strategies. The Board
concluded that a total dividend payout of approximately $16 million is in
excess of the Company's expected cash requirements. No additional
dividends are currently anticipated.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English on Wednesday, February
11 at 9:00am ET. To participate in this teleconference, please dial (888)
215-6898 fifteen minutes before the conference is scheduled to begin.
Callers outside of the U.S. should dial (913) 312-0835. 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 February 25,
2009 by dialing 888-203-1112. Callers outside of the U.S. should dial
719-457-0820. The replay participant code is 2642066.
Hebrew Call
A separate conference call in Hebrew will take place on February 11 at
2:00pm Israel time, 7:00am ET. To access this call, please dial +972 3
9180609 ten minutes before the conference is scheduled to begin. A replay
of the call will be available from February 11 until February 13 by dialing
+972 3 9255930.
About Given Imaging
Since 2001 Given Imaging has advanced gastrointestinal diagnosis by
developing innovative, patient-friendly tools based on its PillCam®
Platform. PillCam capsule endoscopy provides physicians with natural images
of the small intestine via PillCam SB, the esophagus through PillCam ESO
and the colon with PillCam COLON [not cleared for use in the USA]. The
PillCam capsules are miniature video cameras that patients ingest. Given
Imaging's other capsule products include Agile™ patency capsule, to
verify intestinal patency, and Bravo®, the only wireless, catheter-free,
48-hour pH test commercially available for pH testing to assess
gastroesophageal reflux disease (GERD). Given Imaging's products use
cutting-edge wireless technology and advanced software to enable
gastroenterologists to better diagnose and more accurately treat patients.
All Given Imaging products allow patients to maintain normal activities.
Given Imaging's headquarters, manufacturing and R&D facilities are located
in Yoqneam, Israel, with operating subsidiaries in the United States,
Germany, France, Japan, Australia and Singapore. For more information,
please 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, (11) the impact of
global economic conditions, and (12) 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.
(1) Relates to early repayment of the Company's outstanding royalty
obligation and accrued interest to Israel's Office of the Chief Scientist
of the Ministry of Industry, Trade and Labor ("OCS").
Given Imaging Ltd. and its subsidiaries
Consolidated Balance Sheets
(In thousands except per share data)
December 31
---------------------
2008 2007
Assets
Current assets
Cash and cash equivalents $ 31,697 $ 37,103
Short-term investments 28,509 23,191
Accounts receivable:
Trade, net 21,673 23,315
Other 4,662 10,385
Inventories 18,931 15,960
Advances to suppliers 3,540 190
Deferred tax assets 1,178 1,350
Prepaid expenses 1,631 1,289
---------- ----------
Total current assets 111,821 112,783
Deposits 1,094 892
Assets held for employees' severance payments 3,686 3,007
Marketable securities 30,063 41,629
Fixed assets, less accumulated depreciation 15,115 15,422
Intangible assets less accumulated amortization 12,067 3,583
Goodwill 4,069 -
---------- ----------
Total Assets $ 177,915 $ 177,316
========== ==========
Given Imaging Ltd. and its subsidiaries
Consolidated Balance Sheets
(In thousands except share data)
December 31
--------------------
2008 2007
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital
lease $ 114 $ 121
Accounts payable:
Trade 7,418 7,275
Other 17,612 21,012
Deferred income 1,523 9,379
--------- ---------
Total current liabilities 26,667 37,787
--------- ---------
Long-term liabilities
Obligation under capital lease 485 448
Liability in respect of employees' severance payments 4,599 3,490
--------- ---------
Total long-term liabilities 5,084 3,938
--------- ---------
Total liabilities 31,751 41,725
--------- ---------
Commitments and contingencies
Minority interest 1,993 1,996
--------- ---------
Shareholders' equity
Share capital:
Ordinary Shares, NIS 0.05 par value each (90,000,000
shares authorized as of December 31, 2007 and 2008,
29,241,785 and 29,257,785 shares issued and fully
paid as of December 31, 2007 and 2008, respectively) 343 343
Additional paid-in capital 173,983 166,813
Capital reserve 2,166 2,166
Accumulated other comprehensive loss (600) -
Accumulated deficit (31,721) (35,727)
--------- ---------
Total shareholders' equity 144,171 133,595
--------- ---------
Total liabilities and shareholders' equity $ 177,915 $ 177,316
========= =========
Given Imaging Ltd. and its subsidiaries
Consolidated Statements of Operations
(In thousands except share and per share data)
Year ended December 31, Three month period
Ended December 31,
---------------------- ----------------------
2007 2008 2007 2008
Audited Unaudited Unaudited Unaudited
---------- ---------- ---------- ----------
Revenues $ 112,868 $ 125,108 $ 34,296 $ 33,776
Cost of revenues (29,721) (33,001) (9,761) (9,265)
Early repayment of royalty
bearing government grants (4,843) (4,843)
---------- ---------- ---------- ----------
Gross profit 78,304 92,107 19,692 24,511
---------- ---------- ---------- ----------
Operating expenses
Research and development,
gross (12,847) (15,126) (3,754) (3,597)
In-process research and
development acquired in a
business combination (4,700) (4,700)
Royalty bearing government
grants 1,242 1,530 (431) 440
---------- ---------- ---------- ----------
Research and development,
net (11,605) (18,296) (4,185) (7,857)
Sales and marketing (55,446) (60,902) (16,865) (14,333)
General and administrative (20,981) (19,320) (6,474) (4,871)
Termination of marketing
agreement 22,860 5,443 22,860
Other, net (422) (867) (422) (867)
---------- ---------- ---------- ----------
Total operating expenses (65,594) (93,942) (5,086) (27,928)
---------- ---------- ---------- ----------
Operating profit (loss) 12,710 (1,835) 14,606 (3,417)
Financial income, net 5,520 4,004 1,505 809
---------- ---------- ---------- ----------
Profit (loss) before taxes
on income
and minority share 18,230 2,169 16,111 (2,608)
Taxes on income (4,548) (250) (4,059) (17)
---------- ---------- ---------- ----------
Profit (loss) before
minority share 13,682 1,919 12,052 (2,625)
Minority share in losses of
subsidiary 1,503 2,087 783 562
---------- ---------- ---------- ----------
Net profit (loss) $ 15,185 $ 4,006 $ 12,835 $ (2,063)
========== ========== ========== ==========
Profit (loss) per share
Basic profit (loss) per
Ordinary Share $ 0.52 $ 0.14 $ 0.44 $ (0.07)
========== ========== ========== ==========
Diluted profit (loss) per
Ordinary Share $ 0.49 $ 0.13 $ 0.41 $ (0.07)
========== ========== ========== ==========
Weighted average number of
Ordinary Shares used to
compute basic profit
(loss) per Ordinary Share 28,961,968 29,254,035 29,206,977 29,257,785
========== ========== ========== ==========
Weighted average number of
Ordinary Shares used to
compute diluted profit
(loss) per Ordinary Share 31,030,459 30,798,360 31,388,068 29,718,331
========== ========== ========== ==========
Given Imaging Ltd. and its subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Year ended December 31,
----------------------------
2008 2007 2006
-------- -------- --------
Cash flows from operating activities:
Net profit (loss) $ 4,006 $ 15,185 $ (1,508)
Adjustments required to reconcile net profit
(loss) to net cash
provided by operating activities:
Minority share in losses of subsidiary (2,087) (1,503) (1,334)
Depreciation and amortization 5,183 4,771 4,237
In-process research and development 4,700 - -
Goodwill impairment 406 - -
Deferred tax assets 172 24 (155)
Stock based compensation 6,918 5,651 5,213
Excess tax benefits related to stock based
compensation - (693) -
Other 621 380 18
Net decrease (increase) in trading securities - 5,092 (5,060)
Increase (decrease) in accounts receivable -
trade 1,642 (4,428) (562)
Decrease (increase) in other accounts
receivable 5,723 (8,922) 4,801
Decrease (increase) in prepaid expenses (342) 51 (320)
Decrease (increase) in advances to suppliers (3,350) (108) 250
Decrease (increase) in inventories (2,971) 2,208 (1,996)
Increase (decrease) in accounts payable (3,287) 8,570 500
Decrease in deferred income (7,856) (14,903) (1,223)
-------- -------- --------
Net cash provided by operating activities 9,478 11,375 2,861
-------- -------- --------
Cash flows from investing activities:
Purchase of fixed assets and intangible
assets (6,300) (5,772) (5,876)
Purchase of fixed assets, intangible assets,
and goodwill in a business combination (16,660) - -
Deposits (192) (355) (41)
Proceeds from sale of marketable securities 67,743 18,753 13,120
Proceeds from sales of fixed assets 61 - -
Investments in marketable securities (61,986) (36,584) (37,960)
-------- -------- --------
Net cash used in investing activities (17,334) (23,958) (30,757)
-------- -------- --------
Cash flows from financing activities:
Principal payments on capital lease
obligation (120) (37) (14)
Proceeds from the issuance of Ordinary Shares 252 4,280 2,037
Excess tax benefits related to stock based
compensation - 693 -
Issuance of shares by a consolidated company 2,288 - 4,772
-------- -------- --------
Net cash provided by financing activities 2,420 4,936 6,795
-------- -------- --------
Effect of exchange rate changes on cash 30 240 255
-------- -------- --------
Decrease in cash and cash equivalents (5,406) (7,407) (20,846)
Cash and cash equivalents at beginning of
year 37,103 44,510 65,356
-------- -------- --------
Cash and cash equivalents at end of year 31,697 37,103 44,510
======== ======== ========
Supplementary cash flow information
Year ended December 31,
----------------------------
2008 2007 2006
-------- -------- --------
Income taxes paid $ 259 $ 1,098 $ 300
======== ======== ========
Assets acquired under capital lease $ 109 $ 569 -
======== ======== ========
Contact Information: For further information contact: Fern Lazar David Carey Lazar Partners Ltd. 1-212-867-1768