SOURCE: Given Imaging

Given Imaging

November 04, 2009 17:10 ET

Given Imaging Reports Third Quarter 2009 Results

13% Increase in Third Quarter 2009 Revenues to $35.2 Million; 82% Increase in Third Quarter 2009 GAAP EPS to $0.13; 60% Increase in Third Quarter 2009 Non-GAAP EPS to $0.20; Full Year 2009 GAAP EPS Guidance Increased to $0.43 - $0.45, Non-GAAP Guidance to $0.65 - $0.67

YOQNEAM, ISRAEL--(Marketwire - November 4, 2009) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the third quarter ended September 30, 2009.

Worldwide revenues in the third quarter of 2009 increased to $35.2 million from $31.1 million in the third quarter of 2008. Gross margin in the third quarter of 2009 increased to 77.8%, compared to 75% in the third quarter of 2008.

Net income for the third quarter of 2009 increased by 82% to $3.8 million or $0.13 per share on a fully diluted* GAAP basis compared to $2.1 million, or $0.07 per share, respectively, in the third quarter of 2008. Non-GAAP earnings per share for the third quarter of 2009 increased to $6.0 million, or $0.20 per share, compared to $3.8 million, or $0.12 in the same period last year. A reconciliation of GAAP results to non-GAAP results is below.

Cash and cash equivalents, short-term investments and marketable securities at September 30, 2009 increased to $88.8 million.

"We are pleased to report another quarter of solid top and bottom-line results as third quarter revenue increased by 13% despite persistent softness in the medical equipment market. Sales of our Bravo pH Monitoring System grew again this quarter and helped to drive our top line. Our focus on increasing profitability resulted in significant growth in gross and operating profit margins," said Homi Shamir, president and CEO of Given Imaging. "Gross profit reached almost 78%, a result of improved manufacturing efficiencies and a favorable product mix. Non-GAAP operating margin continues to improve, reaching 13.7% this quarter, from 8.5% in the first quarter and 11.8% in the second quarter of this year. Looking ahead, we are very excited to be launching our second generation PillCam COLON at the GASTRO 2009 meeting in London later this month and plan to begin marketing this product in Europe in early 2010."

Third Quarter 2009 Revenue Analysis

Sales in the Americas region increased 16.5% to $22.6 million, from $19.4 million in the same period in 2008. Sales in the EMEA region were $9 million, an increase of 3.4% from $8.7 million in the same period in 2008. Sales in the APAC region were $3.6 million, an increase of 16% from $3.1 million last year.

Worldwide PillCam SB sales amounted to 54,800 capsules in the third quarter of 2009, compared to 56,100 capsules in the same period last year. PillCam SB sales in the Americas region of 36,300 were flat in the third quarter of 2009 compared to the same period last year. PillCam SB sales in the EMEA region increased 7% compared to the third quarter of 2008, while PillCam SB sales in the APAC region decreased 30%. Worldwide reorders of PillCam SB decreased by 2% to approximately 53,800 compared to approximately 55,100 in the third quarter of 2008. PillCam SB reorders accounted for the majority of PillCam SB sales in the third quarter.

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 Sept 30, 2009, sales increased by 11% to $101.7 million compared to $91.3 million in the same period of 2008. Sales in the Americas region in the first three quarters of 2009 grew 20% to $65.7 million compared to $54.9 million in the same period in 2008. For the nine month period, sales of PillCam SB in the Americas region grew approximately 4.8%. Sales in the EMEA region increased by 7.5% to $27.1 million, from $25.2 million in the same period in 2008, and sales in the APAC region were $9.0 million, a decline of 20% from $11.2 million last year.

Gross profit for the nine month period was 76.6% compared to 74% in 2008. Net income for the first nine months of 2009 increased 48% to $9.0 million, or $0.30 per share on a fully diluted GAAP basis, compared to net income of $6.1 million or $0.20 per share for the same period in 2008. Non-GAAP earnings per share for the first nine months of 2009 more than doubled to $13.5 million or $0.45, compared to $6.8 million or $0.22 in the same quarter of last year.

2009 Guidance Revision

The company expects 2009 revenue to be near the low end of prior guidance of between $141 and $148 million. The company is increasing its 2009 EPS guidance and now expects GAAP EPS to be between $0.42 - $0.46, compared to prior guidance of $0.20 - $0.28 and non-GAAP EPS of $0.64 - $0.68 compared to prior guidance of $0.46 - $0.54.

Recent Developments

PillCam SB and Agile Patency Capsule Receive FDA Clearance for Young Children

In October, the U.S. Food and Drug Administration (FDA) cleared the PillCam SB video capsules and Agile patency capsules for use in patients two years of age and older.

PillCam COLON2 Update

Given Imaging recently announced encouraging results from a trial that validated new features of the company's second-generation PillCam Colon video capsule and system. Conducted by clinicians at five hospitals in Israel, the study evaluated the performance of PillCam COLON2 in 98 patients who had risk or warning symptoms of colon pathology.

The Company also announced that it obtained the CE mark for the sale of PillCam COLON2 in Europe. PillCam COLON2 will be launched at the Gastro 2009 conference taking place in London November 21 - 25 at which time the company plans on disclosing additional details regarding PillCam COLON2, including product specifications and software enhancements.

Conference Call / Webcast Information

U.S. Call / Webcast

The company will host a conference call in English at 9:00am ET on Thursday, November 5. To participate in this teleconference, please dial 888-661-5138 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1279. 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 19 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 9998874.

A separate conference call in Hebrew will take place on November 5 at 2:00pm Israel time, 7am ET. To access this call, please dial +972 3 9180610 ten minutes before the conference is scheduled to begin. A replay of the call will be available from November 8 until November 10th by dialing +972 3 9255951.

About Given Imaging

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 disease of the esophagus, small bowel and colon and more accurately treat patients. All Given Imaging products allow patients to maintain normal activities. Since 2001, more than one million PillCam® video capsules have helped physicians evaluate patients for GI disorders. 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.

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 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.

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 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, 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 30,648,420 at Sept 30, 2009, and 30,601,355 at Sept 30, 2008

           Given Imaging Ltd. and its Consolidated Subsidiaries
                              Specified Items
          For the Three Months Ended September 30, 2008 and 2009
                    (Unaudited, dollars in thousands)


                                     General  Termination
               Research  Selling       And        Of
                 And       And    Administra-  Marketing   Tax
             Development Marketing    tion     Agreement  Benefit   Total

Three month
 period
 ended
 September
 30, 2009

Compensation
 expenses    $        93 $      511 $   1,586  $        - $      - $ 2,190

             ----------- ---------- ---------  ---------- -------- -------
Total        $        93 $      511 $   1,586  $        - $      - $ 2,190
             =========== ========== =========  ========== ======== =======


Three month
 period
 ended
 September
 30, 2008

Compensation
 expenses    $        97 $      467 $   1,306  $        - $      - $ 1,870
IP
 Litigation
 expenses              -          -      (200)          -        -    (200)
Total        $        97 $      467 $   1,106  $        - $      - $ 1,670
             =========== ========== =========  ========== ======== =======




           Given Imaging Ltd. and its Consolidated Subsidiaries
                              Specified Items
          For the Nine Months Ended September 30, 2008 and 2009
                    (Unaudited, dollars in thousands)


                                   General   Termination
            Research   Selling       And         Of
               And       And     Administra-  Marketing    Tax
           Development Marketing     tion     Agreement  Benefit    Total

Nine month
 period
 ended
 September
 30, 2009

Compensation
 Expenses  $       286 $   1,509 $     4,083  $       -  $      -  $ 5,878
Tax
 (benefit)           -         -           -          -    (1,390)  (1,390)
           ----------- --------- -----------  ---------  --------  -------
Total      $       286 $   1,509 $     4,083  $       -  $ (1,390) $ 4,488
           =========== ========= ===========  =========  ========  =======


Nine month
 period
 ended
 September
 30, 2008

Compensation
 expenses  $       270 $   1,303 $     3,553  $       -  $      -  $ 5,126
IP
 Litigation
 expenses            -         -       3,375          -         -    3,375
Patent
 litigation
 settlement          -         -      (2,333)         -         -   (2,333)
Terminatiion
 of
 marketing
 agreement           -         -           -     (5,443)        -   (5,443)
           ----------- --------- -----------  ---------  --------  -------
Total      $       270 $   1,303 $     4,595  $   (5443) $      -  $   725
           =========== ========= ===========  =========  ========  =======




           Given Imaging Ltd. and its Consolidated Subsidiaries
            Reconciliation of GAAP results to non-GAAP results
          For the three months ended September 30, 2009 and 2008
          Condensed, in thousands except share and per share data



                          Q3 2009                       Q3 2008
                          Specified   Non               Specified   Non
                  GAAP    Items (*)   GAAP      GAAP    Items (*)   GAAP
                --------  --------- --------  --------  --------- --------


Revenues        $ 35,220          - $ 35,220  $ 31,136          - $ 31,136
Cost of
 revenues         (7,827)         -   (7,827)   (7,793)         -   (7,793)
                --------  --------- --------  --------  --------- --------

Gross profit      27,393          -   27,393    23,343          -   23,343
                --------  --------- --------  --------  --------- --------
  Gross profit
   as a % of
   revenues         77.8%         -     77.8%     75.0%         -     75.0%

Operating
 expenses
Research and
 development,
 net              (4,632)        93   (4,539)   (3,540)        97   (3,443)
Sales and
 marketing       (14,758)       511  (14,247)  (14,647)       467  (14,180)
General and
 administrative   (5,042)     1,586   (3,456)   (4,276)     1,106   (3,170)
Termination of
 marketing
 agreement             -          -        -         -          -        -
Other, net          (316)         -     (316)        -          -        -
                --------  --------- --------  --------  --------- --------

Total operating
 expenses        (24,748)     2,190  (22,558)  (22,463)     1,670  (20,793)
                --------  --------- --------  --------  --------- --------

Operating
 profit            2,645      2,190    4,835       880      1,670    2,550
  Operating
   profit as a
   % of
   revenues          7.5%         -     13.7%      2.8%         -      8.2%


                --------  --------- --------  --------  --------- --------
Financing
 income, net       1,086          -    1,086       729          -      729
                --------  --------- --------  --------  --------- --------

Profit before
 taxes on
 income            3,731      2,190    5,921     1,609      1,670    3,279
Income tax
 expense              (6)         -       (6)     (107)         -     (107)
                --------  --------- --------  --------  --------- --------

Net Profit         3,725      2,190    5,915     1,502      1,670    3,172

Net loss
 attributable
 to
 non-controlli-
 ng interest         114          -      114       607          -      607
                --------  --------- --------  --------  --------- --------

Net profit
 attributable
 to
 shareholders   $  3,839  $   2,190 $  6,029  $  2,109  $   1,670 $  3,779
                ========  ========= ========  ========  ========= ========
  Net profit
   attributable
   to
   shareholders
   as a %
   of revenues      10.9%         -     17.1%      6.8%         -     12.1%

Earnings per
 share

Basic Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $   0.13  $    0.08 $   0.21  $   0.07  $    0.06 $   0.13
                ========  ========= ========  ========  ========= ========

Diluted
 Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $   0.13  $    0.07 $   0.20  $   0.07  $    0.05 $   0.12
                ========  ========= ========  ========  ========= ========


(*)See specified items




           Given Imaging Ltd. and its Consolidated Subsidiaries
            Reconciliation of GAAP results to non-GAAP results
          For the nine months ended September 30, 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    $ 101,723          -  $ 101,723  $ 91,332          -  $ 91,332
Cost of
 revenues     (23,766)         -    (23,766)  (23,736)         -   (23,736)
            ---------  ---------  ---------  --------  ---------  --------

Gross
 profit        77,957          -     77,957    67,596          -    67,596
            ---------  ---------  ---------  --------  ---------  --------
  Gross
   profit
   as a %
   of
   revenues      76.6%         -       76.6%     74.0%         -      74.0%

Operating
 expenses
Research
 and
 development,
 net          (12,522)       286    (12,236)  (10,439)       270   (10,169)
Sales and
 marketing    (45,257)     1,509    (43,748)  (46,569)     1,303   (45,266)
General and
 administr-
 ative        (14,021)     4,083     (9,938)  (14,449)     4,595    (9,854)
Termination
 of
 marketing
 agreement          -          -          -     5,443     (5,443)        -
Other, net       (331)         -       (331)        -          -         -
            ---------  ---------  ---------  --------  ---------  --------

Total
 operating
 expenses     (72,131)     5,878    (66,253)  (66,014)       725   (65,289)
            ---------  ---------  ---------  --------  ---------  --------

Operating
 profit         5,826      5,878     11,704     1,582        725     2,307
  Operating
   profit
   (loss)
   as a %
   of
   revenues       5.7%         -       11.5%      1.7%         -       2.5%


            ---------  ---------  ---------  --------  ---------  --------
Financing
 income,
 net            1,276          -      1,276     3,195          -     3,195
            ---------  ---------  ---------  --------  ---------  --------

Profit
 before
 taxes on
 income         7,102      5,878     12,980     4,777        725     5,502
Income tax
 benefit
 (expense)      1,160     (1,390)      (230)     (233)         -      (233)
            ---------  ---------  ---------  --------  ---------  --------

Net Profit      8,262      4,488     12,750     4,544        725     5,269

Net loss
 attributable
 to
 non-controlling
 interest         704          -        704     1,525          -     1,525
            ---------  ---------  ---------  --------  ---------  --------

Net profit
 attributable
 to
 sharehold-
 ers        $   8,966  $   4,488  $  13,454  $  6,069  $     725  $  6,794
            =========  =========  =========  ========  =========  ========
  Net
   profit
   attributable
   to
   shareholders
   as a % of
   revenues       8.8%         -       13.2%      6.6%         -       7.4%

Earnings
 per share

Basic
 Earnings
 attributable
 to
 shareholders
 per
 Ordinary
 Share      $    0.31  $    0.15  $    0.46  $   0.21  $    0.02  $   0.23
            =========  =========  =========  ========  =========  ========

Diluted
 Earnings
 attributable
 to
 shareholders
 per
 Ordinary
 Share      $    0.30  $    0.15  $    0.45  $   0.20  $    0.02  $   0.22
            =========  =========  =========  ========  =========  ========

(*)See specified items




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


                                                  September 30  December 31
                                                      2009         2008
                                                  ------------ ------------
Assets

Current assets
Cash and cash equivalents                         $     42,199 $     31,697
Short-term investments                                  26,537       28,509
Accounts receivable:
  Trade (Net of provisions for doubtful debts of
   $287 and of $210 as of September 30, 2009 and
   December 31, 2008, respectively)                     21,247       21,673
  Other                                                  3,093        4,662
Inventories                                             24,477       18,931
Advances to suppliers                                      577        3,540
Deferred tax assets                                      1,512        1,178
Prepaid expenses                                         1,960        1,631
                                                  ------------ ------------

Total current assets                                   121,602      111,821
                                                  ------------ ------------

Deposits                                                 1,099        1,094

Assets held for employee severance payments              4,658        3,686

Marketable Securities                                   20,097       30,063

Fixed assets, at cost, less accumulated
 depreciation                                           14,365       15,115

Intangible assets less accumulated amortization         11,598       12,067

Goodwill                                                 4,063        4,069
                                                  ------------ ------------

Total Assets                                      $    177,482 $    177,915
                                                  ============ ============




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

                                                 September 30  December 31
                                                      2009         2008
                                                  -----------  -----------
Liabilities and shareholders' equity

Current liabilities

Current installments of obligation under capital
 lease                                            $       149  $       114
Accounts payable
  Trade                                                 7,649        7,418
  Other                                                18,665       17,612
Deferred income                                           219        1,523
                                                  -----------  -----------
Total current liabilities                              26,682       26,667
                                                  -----------  -----------

Long-term liabilities
Obligation under capital lease, net                       401          485
Liability in respect of employees’ severance
 payments                                               5,257        4,599
                                                  -----------  -----------
Total long-term liabilities                             5,658        5,084
                                                  -----------  -----------
Total liabilities                                      32,340       31,751
                                                  -----------  -----------

Equity
Shareholders’ equity
Ordinary Shares, NIS 0.05 par value each
 (90,000,000 shares authorized; 29,294,785
 and 29,257,785 shares issued and fully
 paid as of September 30, 2009 and
 December 31, 2008, respectively)                         344          343
Additional paid-in capital                            179,910      173,983
Capital reserve                                         2,166        2,166
Accumulated other comprehensive income (loss)             431         (600)
Accumulated deficit                                   (38,554)     (31,721)
                                                  -----------  -----------
Shareholders' equity                                  144,297      144,171
                                                  -----------  -----------
Noncontrolling interest                                   845        1,993
                                                  -----------  -----------
Total Equity                                          145,142      146,164
                                                  -----------  -----------

Total liabilities and equity                      $   177,482  $   177,915
                                                  ===========  ===========




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



                  Nine-month period       Three-month period
                        ended                   ended
                     September 30            September 30       Year ended
                ----------------------  ---------------------- December 31
                   2009        2008        2009        2008        2008
                ----------  ----------  ----------  ----------  ----------
Revenues        $  101,723  $   91,332  $   35,220  $   31,136  $  125,108
Cost of
 revenues          (23,766)    (23,736)     (7,827)     (7,793)    (33,001)
                ----------  ----------  ----------  ----------  ----------

Gross profit        77,957      67,596      27,393      23,343      92,107
                ----------  ----------  ----------  ----------  ----------

Operating
 expenses
Research and
 development,
 gross             (13,543)    (11,529)     (5,019)     (3,840)    (15,126)
In-process
 research and
 development
 acquired in a
 business
 combination             -           -           -           -      (4,700)
                ----------  ----------  ----------  ----------  ----------
                   (13,543)    (11,529)     (5,019)     (3,840)    (19,826)

Government
 grants              1,021       1,090         387         300       1,530
                ----------  ----------  ----------  ----------  ----------
Research and
 development,
 net               (12,522)   (10,439)      (4,632)    (3,540)     (18,296)

Sales and
 marketing         (45,257)   (46,569)     (14,758)   (14,647)     (60,902)
General and
 administrative    (14,021)   (14,449)      (5,042)    (4,276)     (19,320)
Termination of
 marketing
 agreement               -       5,443           -           -       5,443
Other, net            (331)          -        (316)          -        (867)
                ----------  ----------  ----------  ----------  ----------

Total operating
 expenses          (72,131)    (66,014)    (24,748)    (22,463)    (93,942)
                ----------  ----------  ----------  ----------  ----------

Operating
 profit (loss)       5,826       1,582       2,645         880      (1,835)
Financing
 income, net         1,276       3,195       1,086         729       4,004
                ----------  ----------  ----------  ----------  ----------

Profit (loss)
 before taxes
 on income           7,102       4,777       3,731       1,609       2,169
Income tax
 (expense)
 benefit             1,160        (233)         (6)       (107)       (250)
                ----------  ----------  ----------  ----------  ----------

Net Profit           8,262       4,544       3,725       1,502       1,919

Net loss
 attributable
 to
 noncontrolling
 interest              704       1,525         114         607       2,087
                ----------  ----------  ----------  ----------  ----------

Net profit
 attributable
 to
 shareholders   $    8,966  $    6,069  $    3,839  $    2,109  $    4,006
                ==========  ==========  ==========  ==========  ==========

Earnings per
 share

Basic Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $     0.31  $     0.21  $     0.13  $     0.07  $     0.14
                ==========  ==========  ==========  ==========  ==========

Diluted
 Earnings
 attributable
 to
 shareholders
 per Ordinary
 Share          $     0.30  $     0.20 $     0.13  $     0.07  $     0.13
                ==========  ==========  ==========  ==========  ==========

Weighted
 average number
 of Ordinary
 Shares used to
 compute basic
 earnings per
 Ordinary
 share          29,264,952  29,252,785  29,278,785  29,254,618  29,254,035
                ==========  ==========  ==========  ==========  ==========

Weighted
 average number
 of
 Ordinary
 Shares used
 to compute
 diluted
 Earnings per
 Ordinary
 share          30,108,597  30,791,425  30,648,420  30,601,355  30,798,360
                ==========  ==========  ==========  ==========  ==========

The accompanying notes are an integral part of these consolidated financial
statements.




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



                        Nine-month period   Three-month period
                              ended               ended
                          September 30,       September 30,     Year ended
                        ------------------  ------------------ December 31,
                          2009      2008      2009      2008       2008
                        --------  --------  --------  --------  ----------
Cash flows from
 operating activities:
Net profit              $  8,262  $  4,544  $  3,725  $  1,502  $    1,919
Adjustments required to
 reconcile
 net profit  to net
 cash used in
 operating activities:
Depreciation and
 amortization              4,513     3,839     1,531     1,298       5,183
In-process research and
 development                   -         -         -         -       4,700
Goodwill impairment            -         -         -         -         406
Changes in deferred tax
 assets                     (334)      284      (517)      109         172
Stock option
 compensation              5,878     5,126     2,190     1,870       6,918
Other                        100       197       236       188         621
Net increase in trading
 securities               (6,355)        -     (2983)        -           -
Decrease  in accounts
 receivable - trade          426     4,295     1,134     1,507       1,642
Decrease (increase) in
 accounts receivable -
 other                     1,569     6,775      (105)    2,192       5,723
(Increase) in prepaid
 expenses                   (329)     (632)     (711)     (714)       (342)
Decrease (Increase) in
 advances to suppliers     2,963      (311)      262      (286)     (3,350)
Increase in inventories   (5,546)   (3,796)   (2,858)   (1,179)     (2,971)
Increase (decrease) in
 accounts payable          1,251    (2,792)    1,760    (1,007)     (3,287)
Decrease in deferred
 income                   (1,304)   (6,585)     (386)      (72)     (7,856)
                        --------  --------  --------  --------  ----------
Net cash provided by
 operating activities     11,094    10,944     3,278     5,408       9,478
                        --------  --------  --------  --------  ----------
Cash flows from
 investing activities:
Excess of cash
 investment over equity
 share in subsidiary           -       965         -         -           -
Purchase of fixed
 assets and
 intangible assets        (3,619)   (5,166)   (1,171)   (1,569)     (6,300)
Purchase of fixed
 assets, intangible
 assets
 and goodwill in a
 business combination          -         -         -         -     (16,660)
Deposits                      16      (247)       26        (3)       (192)
Proceeds from sales of
 marketable
 securities and short
 term investments         32,424    52,396    11,698    17,682      67,743
Proceeds from sales of
 fixed assets                  -        30         -         -          61
Investments in
 marketable securities   (13,218)  (54,071)   (1,010)  (21,557)    (61,986)
                        --------  --------  --------  --------  ----------
Net cash provided by
 (used in)
 investing activities     15,603    (6,093)    9,543    (5,447)    (17,334)
                        --------  --------  --------  --------  ----------
Cash flows from
 financing activities:
Principal payments on
 capital lease
 obligation                  (97)      (91)      (32)       (6)       (120)
Proceeds from the
 issuance of
 ordinary Shares              50       252        50        56         252
Dividend distribution    (15,799)        -         -         -           -
Purchase of shares from
 a noncontrolling
 shareholder in a
 subsidiary                 (382)        -         -         -       2,288
Issuance of shares to a
 noncontrolling
 shareholder in a
 subsidiary                    -     1,207         -         -           -
                        --------  --------  --------  --------  ----------
Net cash (used in)
 provided by
 financing activities    (16,228)    1,368        18        50       2,420
                        --------  --------  --------  --------  ----------
Effect of exchange rate
 changes on cash              33       258       122       (15)         30
                        --------  --------  --------  --------  ----------
Increase (decrease) in
 cash and cash
 Equivalents              10,502     6,477    12,961        (4)     (5,406)
Cash and cash
 equivalents at
 beginning
 of period                31,697    37,103    29,238    43,584      37,103
                        --------  --------  --------  --------  ----------
Cash and cash
 equivalents at end of
 period                 $ 42,199  $ 43,580  $ 42,199  $ 43,580  $   31,697
                        ========  ========  ========  ========  ==========
Supplementary cash flow
 information
Income taxes paid       $    728  $    194  $    643  $     72  $      259
                        ========  ========  ========  ========  ==========
Assets acquired under
 capital lease          $      -  $    109  $      -  $      -  $      109
                        ========  ========  ========  ========  ==========



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