SOURCE: Given Imaging

Given Imaging

February 16, 2010 18:03 ET

Given Imaging Reports Fourth Quarter and Full-Year 2009 Results

2009 Fiscal Year Revenues Increase 13.3% to $141.8 Million; Fourth Quarter 2009 Revenues Increase 18.5% to $40.0 Million; 2009 Fiscal Year GAAP EPS More Than Triples to $0.47; 2009 Fiscal Year Non-GAAP EPS Increases 67% to $0.64

YOQNEAM, ISRAEL--(Marketwire - February 16, 2010) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the fourth quarter and twelve months ended December 31, 2009.

For the twelve month period ended December 31, 2009, revenues increased by 13.3% to $141.8 million compared to $125.1 million in the same period of 2008. Revenues in the Americas region grew 18.6% to $89.7 million in 2009 compared to $75.6 million in the same period in 2008. Revenues in the EMEA region increased by 10.0% to $38.4 million, from $34.9 million in the same period in 2008, and revenues in the APAC region were $13.6 million, a decline of 6.7% from $14.6 million last year. Bravo pH Monitoring System revenues were $15.0 million in the 2009, representing 11% of total revenues and 15% of revenues in the Americas region.

Gross profit for the year increased to 76.6% from 73.6% in 2008. On a GAAP basis, net income for 2009 more than tripled to $14.3 million, or $0.47 per share on a fully diluted* basis, from $4.0 million or $0.13 per share for the same period in 2008. On a non-GAAP basis, net income for 2009 increased 67% to $19.5 million, or $0.64 per share on a fully diluted* basis, from $11.5 million or $0.37 per share in the same period in 2008.

Cash and cash equivalents, short-term investments and marketable securities at December 31, 2009 increased to $95.2 million. Net cash provided by operating activities was $24.2 million.

"I'm very proud with our performance in 2009 which demonstrates the strength of our business, despite the challenging economic environment. Our strong 2009 financial results reflect a record year in many aspects -- revenues, PillCam sales and profitability. The strong improvement in profitability stems from our ongoing efforts to improve operating efficiencies and increase revenues. We are also very pleased with our fourth quarter financial results including the solid 18.5% increase in revenues and record worldwide sales of 61,000 PillCam capsules," said Homi Shamir, president and CEO of Given Imaging.

"Looking ahead, in 2010 we intend to continue the progress made last year and grow revenues by expanding sales of PillCam SB in newer markets and further penetrating established PillCam markets with new indications. We will also invest in growing the market for Bravo worldwide, and begin developing the market for PillCam COLON 2. At the same time, we remain committed to maximizing profitability and shareholder value."

Fourth Quarter 2009 Analysis

Worldwide revenues were $40.0 million in the fourth quarter of 2009, an 18.5% increase from $33.8 million in the fourth quarter of 2008. Gross margin in the fourth quarter of 2009 increased to 76.6%, compared to 72.6% in the fourth quarter of 2008.

Revenues in the Americas region increased 16.0% to $24.0 million, from $20.7 million in the same period in 2008. Revenues in the EMEA region were $11.3 million, an increase of 16.5% from $9.7 million in the same period in 2008. Revenues in the APAC region were $4.7 million, an increase of 38.2% from $3.4 million last year.

Worldwide PillCam SB sales amounted to 60,800 capsules in the fourth quarter of 2009, a 9% increase compared to 55,800 capsules in the same period last year. PillCam SB sales in the Americas region increased 1.9% to 38,400 in the fourth quarter of 2009 compared to 37,700 the same period last year. PillCam SB sales in the EMEA region increased 16.9% to 15,900 in the fourth quarter of 2009, while PillCam SB sales in the APAC region increased 44% to 6,500.

Bravo pH Monitoring System revenues were $4.4 million in the fourth quarter representing 11% of total revenues and 15% of revenues in the Americas region.

On a GAAP basis, net income for the fourth quarter of 2009 increased to $5.4 million or $0.17 per share on a fully diluted* GAAP basis compared to a net loss of $ 2.0 million, or $0.07 per share, respectively, in the fourth quarter of 2008. Non-GAAP earnings per share for the fourth quarter of 2009 increased 33% to $6.4 million, or $0.21 per share, compared to $4.8 million, or $0.15 in the same period last year. A reconciliation of GAAP results to non-GAAP results is attached.

Supplemental fourth quarter 2009 data can be found at www.givenimaging.com in the Investor Relations section.

2010 Guidance

The company expects 2010 revenues to be between $154 and $160 million. The company expects GAAP EPS to be between $0.50 - $0.58, and non-GAAP EPS of between $0.76 - $0.84.

Recent Developments

--  In November, the Company introduced its second-generation PillCam®
    COLON capsule at the Gastro 2009 Conference in London. This advanced
    PillCam system contains proprietary, innovative technologies, including
    intelligent functionality and superior imaging, designed to provide
    physicians with clear and precise views of the colon and polyps of
    interest. Following receipt of the CE mark in September 2009, The
    Company plans to gradually make PillCam COLON 2 available in Europe
    during 2010.

--  At the UEGW meeting, independent investigators presented results of an
    initial 98-patient feasibility PillCam COLON 2 study. The study was
    published in the December 2009 edition of the journal Endoscopy. To
    access the study visit:

    http://delivery.sheridan.com/downloads/mobile/THIEME_161122_CP.exe

Conference Call / Webcast Information

U.S. Call / Webcast

The company will host a conference call in English at 9:00am ET on Wednesday, February 17, 2010. To participate in this teleconference, please dial 888-684-1277 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1483. 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 March 3, 2010, by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 6876444.

A separate conference call in Hebrew will take place on February 17, at 2:00pm Israel time, 7am ET. To access this call, please dial +972 3 9180609 ten minutes before the call is scheduled to begin. A replay of the call will be available from February 17th until February 19th by dialing +972 3 9255900.

Upcoming Events

Given Imaging management will be presenting at the following investor conferences:

--  February 23 -- Yuval Yanai, Chief Financial Officer, will present at
    the NASDAQ OMX/Oppenheimer 14th Israeli Equities Conferences in New
    York City.  Mr. Yanai's presentation is scheduled for 1:55pm ET. This
    presentation will be webcast live at www.givenimaging.com.

--  February 25 -- Homi Shamir, President and CEO, will present at the
    Lazard Capital Markets Medical Device Conference in Salt Lake City.

--  March 3 -- Yuval Yanai will present to a group of institutional
    investors at an event sponsored by Morgan Stanley in Brussels, Belgium.

--  March 4 -- Homi Shamir will present at the Morningstar/NYSSA Healthcare
    Conference in New York City.  Mr. Shamir's presentation is scheduled
    for 11am ET.

About Given Imaging Ltd.

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 [PillCam COLON is 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 diseases of the esophagus, small bowel and colon 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 www.givenimaging.com.

Use of Non-GAAP Measures

This press release provides financial measures for net income and basic and diluted earnings per share that exclude certain items and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance that enhances management's and investors' ability to evaluate the Company's net income and earnings per share and to compare it with historical net income and earnings per share.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors.

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 successfully complete any necessary or required clinical studies with our products, (3) our ability to receive regulatory clearance or approval to market our products or changes in regulatory environment, (4) our success in implementing our sales, marketing and manufacturing plans, (5) the level of adoption of our products by medical practitioners, (6) the emergence of other products that may make our products obsolete, (7) lack of an appropriate bowel preparation materials to be used with our PillCam COLON capsule, (8) protection and validity of patents and other intellectual property rights, (9) the impact of currency exchange rates, (10) the effect of competition by other companies, (11) the outcome of significant litigation, (12) our ability to obtain reimbursement for our product from government and commercial payors, (13) quarterly variations in operating results, (14) the possibility of armed conflict or civil or military unrest in Israel, (15) the impact of global economic conditions, (16) our ability to successfully integrate acquired businesses, (17) changes and reforms in applicable healthcare laws and regulations and (18) 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, 2008. 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.

* Based on fully diluted shares of 30,423,162 at Dec 31, 2009, and 30,798,360 at Dec 31, 2008


           Given Imaging Ltd. and its Consolidated Subsidiaries
                              Specified Items
          For the Three Months Ended December 31, 2008 and 2009
                    (Unaudited, dollars in thousands)


                                       Termination
           Research   Selling  General     Of
             And        And       And   Marketing  Other    Tax
          Development Marketing  Admin  Agreement Expenses Benefit  Total

Three month
 period
 ended
 December
 31, 2009

Compensation
 expenses    $   (29) $    110 $  1,309 $      - $      - $     -  $ 1,390
Impairment
 of Goodwill       -         -        -        -      483       -      483
Tax benefit        -         -        -        -        -    (857)    (857)
             -------  -------- -------- -------- -------- -------  -------
Total        $   (29) $    110 $  1,309 $      - $    483 $  (857) $ 1,016
             =======  ======== ======== ======== ======== =======  =======


Three month
 period
 ended
 December
 31, 2008

Compensation
 expenses    $    37  $    453 $  1,302 $      - $      - $     -  $ 1,792
Write-off of
 Bravo IPR&D   4,700         -        -        -        -       -    4,700
Impairment
 of goodwill       -         -        -        -      406       -      406
Total        $ 4,737  $    453 $  1,302 $      - $    406 $     -  $ 6,898
             =======  ======== ======== ======== ======== =======  =======








           Given Imaging Ltd. and its Consolidated Subsidiaries
                              Specified Items
          For the Twelve Months Ended December 31, 2008 and 2009
                    (Unaudited, dollars in thousands)


                                       Termination
           Research   Selling  General     Of
             And        And       And   Marketing  Other    Tax
          Development Marketing  Admin  Agreement Expenses Benefit  Total

Twelve month
 period
 ended
 December
 31, 2009

Compensation
 expenses    $    257 $  1,619 $ 5,392  $     -  $      - $     -  $ 7,268
Impairment
 of goodwill        -        -       -        -       483       -      483
Tax
 (benefit)          -        -       -        -         -  (2,608)  (2,608)
             -------- -------- -------  -------  -------- -------  -------
Total        $    257 $  1,619 $ 5,392  $     -  $    483 $(2,608) $ 5,143
             ======== ======== =======  =======  ======== =======  =======


Twelve month
 period
 ended
 December
 31, 2008

Compensation
 expenses    $    307 $  1,756 $ 4,855  $     -  $      - $     -  $ 6,918
IP
 Litigation
 expenses           -        -   3,375        -         -       -    3,375
Patent
 litigation
 settlement         -        -  (2,333)       -         -       -   (2,333)
Termination
 of
 marketing
 agreement          -        -       -   (5,443)        -       -   (5,443)
Impairment
 of goodwill        -        -       -        -       406       -      406
Write-off of
 Bravo IPR&D    4,700        -       -        -         -       -    4,700
             -------- -------- -------  -------  -------- -------  -------
Total        $  5,007 $  1,756 $ 5,897  $(5,443) $    406 $     -  $ 7,623
             ======== ======== =======  =======  ======== =======  =======







           Given Imaging Ltd. and its Consolidated Subsidiaries
            Reconciliation of GAAP results to non-GAAP results
      For the three and nine months ended December 31, 2009 and 2008
          Condensed, in thousands except share and per share data


                              Q4 2009                     Q4 2008
                             Specified   Non             Specified   Non
                       GAAP  Items (*)   GAAP     GAAP   Items (*)   GAAP
                     -------  -------  -------  -------   -------- -------


Revenues             $40,040        -  $40,040  $33,776          - $33,776
Cost of revenues      (9,379)       -   (9,379)  (9,265)         -  (9,265)
                     -------  -------  -------  -------   -------- -------

Gross profit          30,661        -   30,661   24,511          -  24,511
                     -------  -------  -------  -------   -------- -------
  Gross profit as a %
   of revenues          76.6%       -     76.6%    72.6 %        -    72.6%

Operating expenses
Research and
 development, net     (4,211)     (29)  (4,240)  (7,857)     4,737  (3,120)
Sales and marketing  (16,171)     110  (16,061) (14,333)       453 (13,880)
General and
 administrative       (4,898)   1,309   (3,589)  (4,871)     1,302  (3,569)
Termination of
 marketing agreement       -        -        -        -          -       -
Other, net              (889)     483     (406)    (867)       406    (461)
                     -------  -------  -------  -------   -------- -------

Total operating
 expenses            (26,169)   1,873  (24,296) (27,928)     6,898 (21,030)
                     -------  -------  -------  -------   -------- -------

Operating profit
 (loss)                4,492    1,873    6,365   (3,417)     6,898   3,481
  Operating profit as
   a % of revenues      11.2%             15.9%   (10.1%)             10.3%


                     -------  -------  -------  -------   -------- -------
Financing income,
 net                     308        -      308      809          -     809
                     -------  -------  -------  -------   -------- -------

Profit (loss) before
 taxes on income       4,800    1,873    6,673   (2,608)     6,898   4,290
Income tax benefit
 (expense)               382     (857)    (475)     (17)         -     (17)
                     -------  -------  -------  -------   -------- -------

Net Profit (loss)      5,182    1,016    6,198   (2,625)     6,898   4,273

Net loss
 attributable to
 non-controlling
 interest                187        -      187      562          -     562
                     -------  -------  -------  -------   -------- -------

Net profit (loss)
 attributable to
 shareholders        $ 5,369  $ 1,016  $ 6,385  $(2,063)  $  6,898 $ 4,835
                     =======  =======  =======  =======   ======== =======
  Net profit (loss)
   attributable to
   shareholders
   as a
   % of revenues        13.4%             15.9%    (6.1)%             14.3%

Earnings per share

Basic Earnings
 (losses)
 attributable to
 shareholders per
 Ordinary Share      $  0.18  $  0.04  $  0.22  $ (0.07)      0.24 $  0.17
                     =======  =======  =======  =======   ======== =======

Diluted Earnings
 (losses)
 attributable to
 shareholders per
 Ordinary Share      $  0.17  $  0.03  $  0.20  $ (0.07)      0.23 $  0.16
                     =======  =======  =======  =======   ======== =======

(*) See specified items






           Given Imaging Ltd. and its Consolidated Subsidiaries
            Reconciliation of GAAP results to non-GAAP results
      For the three and nine months ended December 31, 2009 and 2008
          Condensed, in thousands except share and per share data


                          YTD 2009                      YTD 2008
                         Specified    Non              Specified    Non
                  GAAP    Items (*)   GAAP      GAAP    Items (*)   GAAP
                --------  --------  --------  --------  --------  --------


Revenues        $141,763         -  $141,763  $125,108         -  $125,108
Cost of
 revenues        (33,145)        -   (33,145)  (33,001)        -   (33,001)
                --------  --------  --------  --------  --------  --------

Gross profit     108,618         -   108,618    92,107         -    92,107
                --------  --------  --------  --------  --------  --------
  Gross profit
   as a % of
   revenues         76.6%        -      76.6%     73.6%        -      73.6%

Operating
 expenses
Research and
 development,
 net             (16,733)      257   (16,476)  (18,296)    5,007   (13,289)
Sales and
 marketing       (61,428)    1,619   (59,809)  (60,902)    1,756   (59,146)
General and
 administrative  (18,919)    5,392   (13,527)  (19,320)    5,897   (13,423)
Termination of
 marketing
 agreement             -         -         -     5,443    (5,443)        -
Other, net        (1,220)      483      (737)     (867)      406      (461)
                --------  --------  --------  --------  --------  --------

Total operating
 expenses        (98,300)    7,751   (90,549)  (93,942)    7,623   (86,319)
                --------  --------  --------  --------  --------  --------

Operating
 profit (loss)    10,318     7,751    18,069    (1,835)    7,623     5,788
  Operating
   profit as a %
   of revenues       7.3%               12.7%     (1.5%)               4.6%


                --------  --------  --------  --------  --------  --------
Financing
 income, net       1,584         -     1,584     4,004         -     4,004
                --------  --------  --------  --------  --------  --------

Profit before
 taxes on
 income           11,902     7,751    19,653     2,169     7,623     9,792
Income tax
 benefit
 (expense)         1,542    (2,608)   (1,066)     (250)        -      (250)
                --------  --------  --------  --------  --------  --------

Net Profit        13,444     5,143    18,587     1,919     7,623     9,542

Net loss
 attributable
 to
 non-controlling
 interest            891         -       891     2,087         -     2,087
                --------  --------  --------  --------  --------  --------

Net profit
 attributable
 to
 shareholders   $ 14,335  $  5,143  $ 19,478  $  4,006  $  7,623  $ 11,629
                ========  ========  ========  ========  ========  ========
  Net profit
   attributable
   to
   shareholders
   as a % of
   revenues         10.1%               13.7%      3.2%                9.3%

Earnings per
 share

Basic Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $   0.49  $   0.18  $   0.67  $   0.14  $   0.26  $   0.40
                ========  ========  ========  ========  ========  ========

Diluted
 Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $   0.47  $   0.17  $   0.64  $   0.13  $   0.25  $   0.38
                ========  ========  ========  ========  ========  ========

(*) See specified items







                  Given Imaging Ltd. and its Subsidiaries

                        Consolidated Balance Sheets
                   (In thousands except per share data)

                                                             December 31,
                                                          -----------------
                                                            2009     2008

Assets

Current assets
Cash and cash equivalents                                 $ 46,458 $ 31,697
Short-term investments                                      31,736   28,509
Accounts receivable:
  Trade, net                                                24,742   21,673
  Other                                                      3,799    4,662
Inventories                                                 17,302   18,931
Advances to suppliers                                          534    3,540
Deferred tax assets                                          2,207    1,178
Prepaid expenses                                             1,036    1,631
                                                          -------- --------

Total current assets                                       127,814  111,821

Deposits                                                     1,062    1,094

Assets held for employees' severance payments                4,968    3,686

Marketable securities                                       16,956   30,063

Long-term inventory                                          6,015        -

Fixed assets, less accumulated depreciation                 13,843   15,115

Deferred tax assets                                            192        -

Intangible assets less accumulated amortization             11,284   12,067

Goodwill                                                     3,586    4,069
                                                          -------- --------





Total Assets                                              $185,720 $177,915
                                                          ======== ========



                 Given Imaging Ltd. and its Subsidiaries

                        Consolidated Balance Sheets
                     (In thousands except share data)


                                                           December 31,
                                                        ------------------
                                                          2009      2008

Liabilities and shareholders' equity


Current liabilities

Current installments of obligation under capital lease  $    145  $    114
Accounts payable:
  Trade                                                    6,789     7,418
  Other                                                   20,060    17,612
Deferred income                                              234     1,523
                                                        --------  --------

Total current liabilities                                 27,228    26,667
                                                        --------  --------

Long-term liabilities
Obligation under capital lease                               356       485
Liability in respect of employees' severance payments      5,530     4,599
                                                        --------  --------

Total long-term liabilities                                5,886     5,084
                                                        --------  --------

Total liabilities                                         33,114    31,751
                                                        --------  --------

Commitments and contingencies


Equity
Shareholders' equity:
Ordinary Shares, NIS 0.05 par value each
 (90,000,000 shares authorized as of December 31, 2008
  and 2009, 29,257,785 and 29,370,972 shares issued and
  fully paid as of December 31, 2008 and 2009,
  respectively)                                              345       343
Additional paid-in capital                               182,203   173,983
Capital reserve                                            2,166     2,166
Accumulated other comprehensive income (loss)                399      (600)
Accumulated deficit                                      (33,185)  (31,721)
                                                        --------  --------
Shareholders' equity                                     151,928   144,171
                                                        --------  --------
Non-controlling interests                                    678     1,993
                                                        --------  --------
Total equity                                             152,606   146,164
                                                        --------  --------




Total liabilities, shareholders' equity and
 non-controlling interests                              $185,720  $177,915
                                                        ========  ========








                  Given Imaging Ltd. and its Subsidiaries

                  Consolidated Statements of Operations
              (In thousands except share and per share data)


                                              Year ended December 31,
                                        ----------------------------------
                                           2009        2008        2007
                                        ----------  ----------  ----------

Revenues                                $  141,763  $  125,108  $  112,868
Cost of revenues                           (33,145)    (33,001)    (29,721)
Early repayment of royalty bearing
 government Grants                               -           -      (4,843)
                                        ----------  ----------  ----------

Gross profit                               108,618      92,107      78,304
                                        ----------  ----------  ----------

Operating expenses
Research and development, gross            (17,842)    (15,126)    (12,847)
In-process research and development
 acquired in a business combination              -      (4,700)          -
                                        ----------  ----------  ----------
                                           (17,842)    (19,826)    (12,847)
Government grants                            1,109       1,530       1,242
                                        ----------  ----------  ----------
Research and development, net              (16,733)    (18,296)    (11,605)

Sales and marketing                        (61,428)    (60,902)    (55,446)
General and administrative                 (18,919)    (19,320)    (20,981)
Termination of marketing agreement               -       5,443      22,860
Other, net                                  (1,220)       (867)       (422)
                                        ----------  ----------  ----------

Total operating expenses                   (98,300)    (93,942)    (65,594)
                                        ----------  ----------  ----------

Operating profit (loss)                     10,318      (1,835)     12,710

Financial income, net                        1,584       4,004       5,520
                                        ----------  ----------  ----------


Profit before taxes on income               11,902       2,169      18,230

Income tax benefit (expense)                 1,542        (250)     (4,548)
                                        ----------  ----------  ----------

Net Profit                                  13,444       1,919      13,682

Net loss attributable to
 non-controlling interest                      891       2,087       1,503
                                        ----------  ----------  ----------

Net profit attributable to shareholders $   14,335  $    4,006  $   15,185
                                        ==========  ==========  ==========

Earnings per share:

Basic Earnings per Ordinary Share       $     0.49  $     0.14  $     0.52
                                        ==========  ==========  ==========

Diluted Earnings per Ordinary Share     $     0.47  $     0.13  $     0.49
                                        ==========  ==========  ==========

Weighted average number of Ordinary
 Shares used to compute basic Earnings
 per Ordinary Share                     29,281,897  29,254,035  28,961,968
                                        ==========  ==========  ==========
Weighted average number of Ordinary
 Shares used to compute diluted
 Earnings per Ordinary Share            30,423,162  30,798,360  31,030,459
                                        ==========  ==========  ==========




                  Given Imaging Ltd. and its Subsidiaries
                  Consolidated Statements of Cash Flows
                              (In thousands)

                                                 Year ended December 31,
                                              ----------------------------
                                                2009      2008      2007
                                              --------  --------  --------

Cash flows from operating activities:
Net profit                                    $ 13,444  $  1,919  $ 13,682

Adjustments required to reconcile net profit
 to net cash provided by operating activities:

Depreciation and amortization                    6,096     5,183     4,771
In-process research and development                  -     4,700         -
Goodwill impairment                                483       406         -
Deferred tax assets                             (1,221)      172        24
Stock based compensation                         7,268     6,918     5,651
Excess tax benefits related to stock based
 compensation                                        -         -      (693)
Other                                              570       621       380
Decrease (increase) in accounts receivable -
 trade                                          (3,069)    1,642    (4,428)
Decrease (increase) in other accounts
 receivable                                        863     5,723    (8,922)
Decrease (increase) in prepaid expenses            595      (342)       51
Decrease (increase) in advances to suppliers     3,006    (3,350)     (108)
Decrease (increase) in inventories              (4,386)   (2,971)    2,208
Increase (decrease) in accounts payable          1,819    (3,287)    8,570
Decrease in deferred income                     (1,289)   (7,856)  (14,903)
                                              --------  --------  --------
Net cash provided by operating activities       24,179     9,478     6,283
                                              --------  --------  --------

Cash flows from investing activities:
Purchase of fixed assets and intangible
 assets                                         (4,794)   (6,300)   (5,772)
Purchase of fixed assets, intangible assets,
 and goodwill in a business combination              -   (16,660)        -
Deposits                                            34      (192)     (355)
Proceeds from sale of trading and marketable
 securities and short term investments          38,085    67,743    23,845
Proceeds from sales of fixed assets                  -        61         -
Investments in trading and marketable
 securities                                    (27,410)  (61,986)  (36,584)
                                              --------  --------  --------
Net cash provided by (used in) investing
 activities                                      5,915   (17,334)  (18,866)
                                              --------  --------  --------

Cash flows from financing activities:
Principal payments on capital lease
 obligation                                       (131)     (120)      (37)
Proceeds from the issuance of Ordinary Shares      954       252     4,280
Dividend distribution                          (15,799)        -         -
Excess tax benefits related to stock based
 compensation                                        -         -       693
Purchase of shares from a noncontrolling
 shareholder in a subsidiary                      (382)        -         -
Issuance of shares by a consolidated company         -     2,288         -
                                              --------  --------  --------
Net cash provided by (used in) financing
 activities                                    (15,358)    2,420     4,936
                                              --------  --------  --------

Effect of exchange rate changes on cash             25        30       240
                                              --------  --------  --------
Increase (decrease) in cash and cash
 equivalents                                    14,761    (5,406)   (7,407)
Cash and cash equivalents at beginning of
 year                                           31,697    37,103    44,510
                                              --------  --------  --------
Cash and cash equivalents at end of year      $ 46,458  $ 31,697  $ 37,103
                                              ========  ========  ========

Supplementary cash flow information

                                                 Year ended December 31,
                                              ----------------------------
                                                2009      2008      2007
                                              --------  --------  --------

Income taxes paid                             $    877  $    259  $  1,098
                                              ========  ========  ========
Assets acquired under capital lease                  -  $    109  $    569
                                              ========  ========  ========

Contact Information