Given Imaging Reports Third Quarter 2007 Results


YOQNEAM, ISRAEL--(Marketwire - October 31, 2007) - Given Imaging Ltd. (NASDAQ: GIVN)

--  Revenues Increased 15% Over Q3 2006
--  Q3 2007 GAAP Net Income Increased 123% to $1.7 million, or $0.05 per
    share vs. Q3 2006 Net Income of $741,000 or $0.02 per share on a fully
    diluted basis
--  Q3 2007 non-GAAP Net Income increased 153% to $4.7 million or, $0.15
    per share vs. Q3 2006 Net Income of $1.9 million or $0.06 per share on a
    fully diluted basis
--  Company lowering 2007 revenue guidance but reaffirming EPS guidance
    

Given Imaging Ltd. (NASDAQ: GIVN) today announced unaudited financial results for the third quarter ended September 30, 2007.

Worldwide revenues increased by 15% to $27.7 million compared to $24.0 million in the third quarter of 2006. Gross margin in the third quarter of 2007 was 74.3%, compared to 74.8%, in the third quarter of 2006.

"Worldwide revenues in the third quarter increased by 15%, and we are confident that our strategy will deliver strong revenue growth going forward," said Homi Shamir, president and CEO of Given Imaging. "Revenue in the third quarter and our expected revenue for fiscal year 2007 have been impacted by several factors -- first, a delay in our plan to bring PillCam COLON to the U.S. market this year as a result of our ongoing discussions with the U.S. Food and Drug Administration regarding clearance of PillCam COLON; second, the delay associated with receiving a monetary code for PillCam SB in France which we now expect to occur in the first half of 2008; and third, a shortfall in sales in one of our U.S. regions where actions have been taken to address operational issues. As a result, we now expect revenues in 2007 to be in the $109 - $112 million range, which represents growth of 15% - 18% compared to 2006. We reaffirm our Net Income and EPS guidance for 2007 of full year 2007 GAAP, fully-diluted earnings per share in the range of $0.21 and $0.31, and non-GAAP, fully-diluted earnings per share in the range of $0.34 to $0.44." GAAP net income and EPS guidance excludes the effect of patent litigation expenses.

On a GAAP basis, the Company reported net income of $1.7 million, or $0.05 per share on a fully diluted basis in the third quarter of 2007, compared to net income of $741,000, or $0.02 per share in the third quarter of 2006.

On a non-GAAP basis, the Company reported net income of $4.7 million, or $0.15 per share on a fully diluted basis in the third quarter of 2007 compared to net income of $1.9 million, or $0.06 per share, in the third quarter of 2006. Non-GAAP amounts exclude the effect of FAS123R ($1.6 million) and patent litigation expenses ($1.4 million).

For the third quarter of 2007, net cash provided by operating activities totaled $2.0 million. Cash, cash equivalents and marketable securities at September 30, 2007 totaled $103.3 million.

Third Quarter 2007 Revenue Analysis

Sales in the Americas region increased by 5.8% to $18.1 million compared to $17.1 million in the same period in 2006. EMEA sales increased 19.6% to $6.1 million compared to $5.1 million in the same period in 2006, while Asia/Pacific sales increased 89% to $3.4 million compared to $1.8 million in the same period in 2006. The increase in Asia/Pacific revenues mainly reflects initial sales of workstations and PillCam SB in Japan.

Worldwide PillCam SB sales were approximately 46,300, an increase of 11.6% compared to the same period last year. PillCam SB sales in the Americas increased 11.3%, while PillCam SB sales in the EMEA region and Asia/Pacific increased 11.5% and 11.1% respectively.

PillCam sales accounted for 87% of total revenues compared to 80% of total sales in the same period of last year. Reorders of PillCam SB increased 3.9% to approximately 42,300 compared to the third quarter of 2006.

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

Nine Month Financial Results

For the nine month period ended September 30, 2007, sales were $78.6 million compared to $67.6 million in the same period in 2006. Gross profit for the nine month period was 74.6% compared to 74.9% in 2006. On a GAAP basis, net income for the first nine months of 2007 was $2.35 million, or $0.08 per share on a fully diluted basis, compared to a net loss of $3.0 million, or ($0.10) per share, for the same period in 2006. The Company reported non-GAAP net income of $9.1 million, or $0.29 per share, on a fully diluted basis in the nine months of 2007 compared to a net income of $1.2 million, or $0.04 per share in the same period in 2006. Non-GAAP amounts exclude the effect of the adoption of FAS123R ($4.0 million) and patent litigation expenses ($2.8 million).

Recent Highlights

PillCam ESO Reimbursement

--  National Government Services (NGS), the Medicare Part B Carrier
    serving more than 6 million individuals in New York, New Jersey, Kentucky
    and Indiana, issued a new coverage policy for cirrhotic patients for the
    evaluation of esophageal varices using capsule endoscopy of the esophagus.
    The policy becomes effective December 1st.
    

PillCam SB Reimbursement

--  NGS also revised language pertaining to PillCam SB by expanding the
    base of reimbursed indications to include the detection of small bowel
    tumors, evaluation of malabsorption syndrome, and small bowel evaluation
    prior to a small bowel surgical resection to control loss of blood or
    protein.
    

Third Quarter Conference Call / Webcast Information

U.S. Call / Webcast

Given Imaging will host a conference call for English speakers at 9am ET on Thursday, November 1. To participate in this teleconference, please dial (866) 409-1560 fifteen minutes before the conference begins. Callers outside of the U.S. should dial (913) 312-6690. The call will also be webcast live at www.givenimaging.com. To access, click "About Given Imaging." The webcast will be available in the Investor Relations section. A replay of the call will be available for two weeks on the Company's website, or until November 15, 2007 by dialing (888) 203-1112. Callers outside of the U.S. should dial (719) 457-0820. The replay participant code is 6368714.

Hebrew Call

The Company will host a separate conference call in Hebrew on November 1 at 9am Israel time. To access this call, please dial +972 3 9180609 fifteen minutes before this conference begins. A replay of the call will be available until November 6 by dialing +972 3 9255928.

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, and is pending clearance with the United States Food and Drug Administration. More than 600,000 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 and Australia. For more information, visit http://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 stock-based compensation expense and patent litigation expenses and are therefore not calculated in accordance with generally accepted accounting principals (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 prior to the adoption of FAS 123R and the beginning of our patent litigation in the U.S.

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.

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) satisfactory results of clinical trials with PillCam Colon (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 future litigation, including patent litigation with Olympus Corporation, (8) the reimbursement policies for our product from healthcare 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, 2006. 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.

                  Given Imaging Ltd. and its Subsidiaries
                        Consolidated Balance Sheets
                      In thousands except share data


                                                  September 30  December 31
                                                  ------------ ------------
                                                      2007         2006
                                                  ------------ ------------
                                                   (Unaudited)   (Audited)
                                                  ------------ ------------
Assets

Current assets
Cash and cash equivalents                         $     42,094 $     44,510
Short-term investments                                  27,842       17,245
Accounts receivable:
   Trade (Net of provisions for doubtful debts of
    $726 and of $787 as of September 30, 2007,
    and December 31, 2006, respectively)                18,884       18,887
   Other                                                 3,761        1,463
Inventories                                             18,882       18,168
Prepaid expenses                                         2,262        1,340
Deferred taxes                                           1,683        1,374
Advances to suppliers                                      257           82
                                                  ------------ ------------

Total current assets                                   115,665      103,069
                                                  ------------ ------------

Deposits                                                   918          469

Assets held for severance benefits                       2,657        1,984

Marketable Securities                                   33,407       34,769

Fixed assets, at cost, less accumulated
 depreciation                                           14,841       14,811

Other assets, at cost, less accumulated
 amortization                                            3,595        3,075
                                                  ------------ ------------


Total Assets                                      $    171,083 $    158,177
                                                  ============ ============





                  Given Imaging Ltd. and its Subsidiaries
                        Consolidated Balance Sheets
                      In thousands except share data


                                                  September 30  December 31
                                                  ------------ ------------
                                                      2007         2006
                                                  ------------ ------------
                                                   (Unaudited)   (Audited)
                                                  ------------ ------------
Liabilities and shareholders' equity

Current liabilities

Current installments of obligation under capital
 lease                                            $        25  $        13
Accounts payable
   Trade                                                7,346        5,550
   Other                                               15,906       14,620
Deferred income                                         4,701        3,871
                                                  -----------  -----------
Total current liabilities                              27,978       24,054
                                                  -----------  -----------

Long-term liabilities
Deferred income                                        19,136       20,411
Obligation under capital lease, net                         -           20
Liability for employee severance benefits               3,149        2,407
                                                  -----------  -----------
Total long-term liabilities                            22,285       22,838
                                                  -----------  -----------

Total liabilities                                      50,263       46,892
                                                  -----------  -----------

Minority interest                                       2,779        3,499
                                                  -----------  -----------

Shareholders' equity
Share capital:
Ordinary Shares, NIS $0.05 par value each
 (90,000,000 shares authorized; 29,182,574 and
 28,641,291 shares issued and fully paid as of
 September 30, 2007, and December 31, 2006,
 respectively)                                            342          335
Additional paid-in capital                            164,095      156,197
Capital reserve                                         2,166        2,166
Accumulated deficit                                   (48,562)     (50,912)
                                                  -----------  -----------
Total shareholders' equity                            118,041      107,786
                                                  -----------  -----------


Total liabilities and shareholders' equity        $   171,083  $   158,177
                                                  ===========  ===========



                  Given Imaging Ltd. and its Subsidiaries
                  Consolidated Statements of Operations
               In thousands except share and per share data


                      Nine month period     Three month period  Year ended
                      ended September 30    ended September 30  December 31
                    --------------------- --------------------- -----------
                       2007       2006       2007       2006       2006
                    ---------- ---------- ---------- ---------- ----------
                    (Unaudited)(Unaudited)(Unaudited)(Unaudited) (Audited)
                    ---------- ---------- ---------- ---------- ----------

Revenues            $   78,572 $   67,557 $   27,676 $   24,050 $   95,029
Cost of revenues       (19,960)   (16,969)    (7,114)    (6,058)   (24,154)
                    ---------- ---------- ---------- ---------- ----------

Gross profit            58,612     50,588     20,562     17,992     70,875
                    ---------- ---------- ---------- ---------- ----------

Operating expenses

Research and
 development, gross     (9,093)    (9,374)    (3,105)    (2,753)   (12,678)
Royalty bearing
 participation           1,673      1,287        980        447      1,867
                    ---------- ---------- ---------- ---------- ----------

Research and
 development, net       (7,420)    (8,087)    (2,125)    (2,306)   (10,811)
Sales and marketing
 expenses              (38,581)   (37,123)   (13,169)   (11,239)   (50,732)
General and
 administrative
 expenses              (14,507)   (12,254)    (5,486)    (4,410)   (16,027)
                    ---------- ---------- ---------- ---------- ----------

Total operating
 expenses              (60,508)   (57,464)   (20,780)   (17,955)   (77,570)
                    ---------- ---------- ---------- ---------- ----------

Operating loss          (1,896)    (6,876)      (218)        37     (6,695)
Financing income,
 net                     4,015      2,958      2,086        581      3,980
                    ---------- ---------- ---------- ---------- ----------

Profit (loss) before
 taxes on income         2,119     (3,918)     1,868        618     (2,715)
Taxes on income           (489)       (28)      (245)      (254)      (127)
                    ---------- ---------- ---------- ---------- ----------

Profit (loss) before
 minority share          1,630     (3,946)     1,623        364     (2,842)

Minority share in
 losses of
 subsidiary                720        977         33        377      1,334
                    ---------- ---------- ---------- ---------- ----------

Net profit (loss)   $    2,350 $   (2,969)$    1,656 $      741 $   (1,508)
                    ========== ========== ========== ========== ==========


Basic profit (loss)
 per Ordinary Share $     0.08 $    (0.10)$     0.06 $     0.02 $    (0.05)
                    ========== ========== ========== ========== ==========

Diluted profit (loss)
 per Ordinary Share $     0.08 $    (0.10)$     0.05 $     0.02 $    (0.05)
                    ========== ========== ========== ========== ==========


Weighted average
 number of Ordinary
 Shares used to
 compute basic profit
 (loss) per Ordinary
 Share              28,880,299 28,017,914 29,119,996 28,061,356 28,053,849
                    ========== ========== ========== ========== ==========

Weighted average
 number of Ordinary
 Shares used to
 compute diluted profit
 (loss) per Ordinary
 Share              30,911,256 28,017,914 31,239,196 29,377,249 28,053,849
                    ========== ========== ========== ========== ==========

Contact Information: For further information contact: Fern Lazar/David Carey Lazar Partners Ltd. 1-(866) GIVEN-IR