First Qtr. First Qtr.
2008 2007
----------- ------------
GAAP net income (loss) $ 1.1 $ 0.1
----------- ------------
InScope gain (5.4)
----------- ------------
Compensation expenses (FAS123R) 1.5 1.1
----------- ------------
IP Litigation expenses 2.9 (*)0.4
----------- ------------
Non-GAAP net income $ 0.1 (*)$ 1.6
----------- ------------
Non-GAAP EPS $ 0.00 $ 0.05
----------- ------------
(*)Reclassified to a non-GAAP item. The Company did not report this amount
as a non-GAAP item when it reported first quarter 2007 results.
Gross margin in the first quarter of 2008 was 71.1%, compared to 73.9% in
the first quarter of 2007.
For the first quarter of 2008, net cash provided by operating activities
totaled $6.9 million. Cash and cash equivalents, short-term investments
and marketable securities at March 31, 2008 totaled $109.2 million.
First Quarter 2008 Revenue Analysis
Sales in the Americas region were $15.8 million, up 2% from the $15.4
million in the same period in 2007. EMEA sales increased 39% to $8.2
million compared to $5.9 million in the same period in 2007, while APAC
sales increased 75% to $3.1 million from $1.8 million in the same period in
2007.
Worldwide PillCam SB sales were 46,100 in the first quarter of 2008, an
increase of 9.5% compared to the same period last year. PillCam SB sales
in the Americas were 29,900 in the first quarter of 2008 compared to 30,200
in the first quarter of 2007. Reorders of PillCam SB in the Americas
region grew 5.7% to 29,300 compared to 27,700 the first quarter of 2007.
PillCam SB sales in the EMEA region increased 12.7% and sales in APAC
regions more than doubled compared to the first quarter of 2007. The
increase in PillCam SB sales in the APAC region is mainly attributable to
sales in Japan.
PillCam sales accounted for 85% of total revenues compared to 87% of total
sales in the same period of last year. Reorders of PillCam SB increased
15% to approximately 44,600 compared to approximately 38,700 in the first
quarter of 2007.
Supplemental first quarter data can be found at www.givenimaging.com in the
Investor Relations section.
2008 Guidance
The Company reaffirms its fiscal 2008 revenue guidance of $130 - $136
million and non-GAAP, fully-diluted earnings per share of $0.44 to $0.52.
Upon signing the final intellectual property settlement agreement with
Olympus Corporation in the near term, the Company expects full year 2008
GAAP, fully-diluted earnings per share to be in the range of $0.26 and
$0.34. This guidance does not take into account the $2.33 million pre-tax
payment the Company expects to receive from Olympus Corporation once the
settlement is finalized, which may result in additional pre-tax earnings
per share of up to $0.08.
The following table reconciles GAAP and non-GAAP EPS guidance for fiscal
2008:
2008
---------------
GAAP EPS $ 0.26 - $ 0.34
---------------
InScope gain (0.17)
---------------
Compensation expenses (FAS123R) 0.23
---------------
IP Litigation expenses 0.12
---------------
Non-GAAP EPS $ 0.44 - $ 0.52
---------------
Conference Call / Webcast Information
U.S. Call / Webcast
Given Imaging will host a conference call Wednesday, May 14, 2008, at 9:00
a.m. Eastern time to discuss first quarter 2008 results. To participate in
the teleconference, please dial 1-800-289-0544 fifteen minutes before the
conference begins. International callers should dial 913-312-1402. 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 May 28,
2008 by dialing 888-203-1112. International callers should dial
719-457-0820. The replay participant code is 4237742.
Hebrew Call
The company will host a separate conference call in Hebrew on May 14 at
7:00 a.m. Eastern time. To access this call, please dial +972-3-9180650
ten minutes before the conference is scheduled to begin. A replay of the
call will be available until May 16 by dialing +972-3-9255939.
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. PillCam COLON has received a CE Mark,
but is not cleared for marketing or available for commercial distribution
in the USA. More than 700,000 patients worldwide have benefited from the
PillCam capsule endoscopy procedure. Given Imaging's headquarters,
manufacturing and R&D facilities are located in Yoqneam, Israel. It has
operating subsidiary companies in the United States, Germany, France,
Japan, Australia and Singapore. Given Imaging's largest shareholders
include Elron Electronic Industries (NASDAQ & TASE: ELRN). 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.
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) 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) our ability to obtain
reimbursement for our product from government and commercial payors, (9)
quarterly variations in operating results, (10) the possibility of armed
conflict or civil or military unrest in Israel, and (11) other risks and
factors disclosed in our filings with the U.S. Securities and Exchange
Commission, including, but not limited to, risks and factors identified
under such headings as "Risk Factors," "Cautionary Language Regarding
Forward-Looking Statements" and "Operating Results and Financial Review and
Prospects" in the Company's Annual Report on Form 20-F for the year ended
December 31, 2007. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Except for the Company's ongoing obligations to disclose material
information under the applicable securities laws, it undertakes no
obligation to release publicly any revisions to any forward-looking
statements, to report events or to report the occurrence of unanticipated
events.
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
March 31, December 31,
------------ ------------
2008 2007
------------ ------------
(Unaudited) (Audited)
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 43,117 $ 37,103
Short-term investments 23,594 23,191
Accounts receivable:
Trade (Net of provisions for doubtful debts of
$286 and of $329 as of March 31, 2008 and
December 31, 2007, respectively) 18,364 23,315
Other 3,466 10,385
Inventories 16,560 15,960
Prepaid expenses 1,206 1,289
Deferred tax assets 1,188 1,350
Advances to suppliers 253 190
------------ ------------
Total current assets 107,748 112,783
------------ ------------
Deposits 916 892
Assets held for employee severance payments 3,477 3,007
Marketable Securities 42,235 41,629
Fixed assets, at cost, less accumulated
depreciation 15,408 15,422
Other assets, at cost, less accumulated
amortization 3,663 3,583
------------ ------------
Total Assets $ 173,447 $ 177,316
============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
March 31, December 31,
----------- -----------
2008 2007
----------- -----------
(Unaudited) (Audited)
----------- -----------
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital
lease $ 133 $ 121
Accounts payable
Trade 9,781 7,275
Other 16,593 21,012
Deferred income 2,887 9,379
----------- -----------
Total current liabilities 29,394 37,787
----------- -----------
Long-term liabilities
Deferred income - -
Obligation under capital lease, net 561 448
Liability in respect of employees' severance
payments 4,071 3,490
----------- -----------
Total long-term liabilities 4,632 3,938
----------- -----------
Total liabilities 34,026 41,725
----------- -----------
Minority interest 2,679 1,996
----------- -----------
Shareholders' equity
Share capital:
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,252,785 and
29,241,785 shares issued and fully paid as of
March 31, 2008 and December 31, 2007,
respectively) 343 343
Additional paid-in capital 168,520 166,813
Capital reserve 2,166 2,166
Accumulated other comprehensive income 364 -
----------- -----------
Accumulated deficit (34,651) (35,727)
----------- -----------
Total shareholders' equity 136,742 133,595
----------- -----------
Total liabilities and shareholders' equity $ 173,447 $ 177,316
=========== ===========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
In thousands except share and per share data
Three month
period ended
March 31, Year Ended
---------------------- December 31,
2008 2007 2007
---------- ---------- ----------
(Unaudited) (Unaudited) (Audited)
---------- ---------- ----------
Revenues $ 27,124 $ 23,052 $ 112,868
Cost of revenues (7,835) (6,022) (29,721)
Early repayment of royalty bearing
government grants - - (4,843)
---------- ---------- ----------
Gross profit 19,289 17,030 78,304
---------- ---------- ----------
Operating expenses
Research and development, gross (3,796) (2,783) (12,847)
Royalty and non-royalty bearing grants 420 93 1,242
---------- ---------- ----------
Research and development, net (3,376) (2,690) (11,605)
Sales and marketing (14,962) (11,506) (55,446)
General and administrative (7,279) (3,943) (20,981)
Termination of marketing agreement 5,443 - 22,860
Other - - (422)
---------- ---------- ----------
Total operating expenses (20,174) (18,139) (65,594)
---------- ---------- ----------
Operating income (loss) (885) (1,109) 12,710
Financing income, net 1,596 1,202 5,520
---------- ---------- ----------
Profit before taxes on income and
minority share 711 93 18,230
Income tax expense (159) (247) (4,548)
---------- ---------- ----------
Profit (loss) before minority share 552 (154) 13,682
Minority share in losses of subsidiary 524 225 1,503
---------- ---------- ----------
Net profit $ 1,076 $ 71 $ 15,185
========== ========== ==========
Earnings per share
Basic Earnings per Ordinary Share $ 0.04 $ 0.00 $ 0.52
========== ========== ==========
Diluted Earnings per Ordinary Share $ 0.03 $ 0.00 $ 0.49
========== ========== ==========
Weighted average number of Ordinary
Shares used to compute basic profit per
Ordinary share 29,250,952 28,659,520 28,961,968
========== ========== ==========
Weighted average number of Ordinary
Shares used to compute dilute Earnings
per Ordinary share 31,094,578 30,503,871 31,030,458
========== ========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands except share and per share data
Three month
period ended
March 31, Year Ended
---------------------- December 31,
2008 2007 2007
---------- ---------- ----------
(Unaudited) (Unaudited) (Audited)
---------- ---------- ----------
Cash flows from operating activities:
Net profit $ 1,076 $ 71 $ 15,185
Adjustments required to reconcile net
profit to net cash used in operating
activities:
Minority share in losses of subsidiary (524) (225) (1,503)
Depreciation and amortization 1,265 1,150 4,771
Deferred tax assets 162 (239) 24
Stock options compensation 1,511 1,109 5,651
Excess tax benefits related to stock
based compensation - - (693)
Other 172 73 380
Net decrease (increase) in trading
securities (89) 3,078 5,092
Decrease (increase) in accounts
receivable - trade 4,951 2,139 (4,428)
Decrease (increase) in accounts
receivable - other 7,550 (745) (8,922)
Decrease (increase) in prepaid expenses 83 (426) 51
Increase in advances to suppliers (63) (43) (108)
Decrease (Increase) in inventories (600) 781 2,208
Increase (decrease) in accounts payable (2,088) (3,601) 8,570
Increase (decrease) in deferred income (6,492) 42 (14,903)
---------- ---------- ----------
Net cash provided by operating
activities 6,914 3,164 11,375
---------- ---------- ----------
Cash flows from investing activities:
Purchase of fixed assets and intangible
assets (1,247) (692) (5,772)
Deposits (25) (11) (355)
Proceeds from sales of marketable
securities 18,446 - 18,753
Proceeds from sales of fixed assets 25
Acquisition of marketable securities (19,627) (17,358) (36,584)
---------- ---------- ----------
Net cash used in investing activities (2,428) (18,061) (23,958)
---------- ---------- ----------
Cash flows from financing activities:
Principal payments on capital lease
obligation (50) (3) (37)
Proceeds from the issuance of Ordinary
Shares 196 352 4,280
Excess tax benefits related to stock
based compensation - - 693
Issuance of shares by consolidated
company to the minority 1,207 - -
---------- ---------- ----------
Net cash provided by financing
activities 1,353 349 4,936
---------- ---------- ----------
Effect of exchange rate changes on cash 175 49 240
---------- ---------- ----------
Increase (decrease) in cash and cash
equivalents 6,014 (14,499) (7,407)
Cash and cash equivalents at beginning
of period 37,103 44,510 44,510
---------- ---------- ----------
Cash and cash equivalents at end of
period $ 43,117 $ 30,011 $ 37,103
========== ========== ==========
Supplementary cash flow information
Income taxes paid $ 77 $ 75 $ 1,098
========== ========== ==========
Assets acquired under capital lease $ 109 $ - $ 569
========== ========== ==========
Contact Information: For further information contact: Fern Lazar David Carey Lazar Partners Ltd. 1-212-867-1768