Given Imaging Ltd. and its Consolidated Subsidiaries Specified Items For the Three Months Ended June 30, 2008 and 2009 (Unaudited, dollars in thousands) Research General Termination And Selling And Of Develop- And Adminis- Marketing Tax ment Marketing tration Agreement Benefit Total Three month period ended June 30, 2009 Compensation expenses $ 115 $ 845 $ 1,218 $ - $ - $ 2,178 Tax (benefit) - - - - (1,390) (1,390) -------- --------- -------- ------------ ------- ------- Total $ 115 $ 845 $ 1,218 $ - $(1,390) $ 788 ======== ========= ======== ============ ======= ======= Three month period ended June 30, 2008 Compensation expenses $ 88 $ 500 $ 1,157 $ - $ - $ 1,745 IP Litigation expenses - - 468 - - 468 Patent litigation settlement - - (2,333) - - (2,333) Total $ 88 $ 500 $ (708) $ - $ - $ (120) ======== ========= ======== ============ ======= ======= Given Imaging Ltd. and its Consolidated Subsidiaries Specified Items For the Six Months Ended June 30, 2008 and 2009 (Unaudited, dollars in thousands) Research General Termination And Selling And Of Develop- And Adminis- Marketing Tax ment Marketing tration Agreement Benefit Total Six month period ended June 30, 2009 Compensation expenses $ 193 $ 998 $ 2,497 $ - $ - $ 3,688 Tax (benefit) - - - - (1,390) (1,390) -------- --------- -------- ----------- ------- ------- Total $ 193 $ 998 $ 2,497 $ - $(1,390) $ 2,298 ======== ========= ======== =========== ======= ======= Six month period ended June 30, 2008 Compensation expenses $ 173 $ 836 $ 2,247 $ - $ - $ 3,256 IP Litigation expenses - - 3,375 - - 3,375 Patent litigation settlement - - (2,333) - - (2,333) Termination of marketing agreement - - - (5,443) - (5,443) -------- --------- -------- ----------- ------- ------- Total $ 173 $ 836 $ 3,289 $ (5,443) $ - $(1,145) ======== ========= ======== =========== ======= ======= Given Imaging Ltd. and its Consolidated Subsidiaries Reconciliation of GAAP results to non-GAAP results For the three months ended June 30, 2009 and 2008 Condensed, in thousands except share and per share data Q2 2009 Q2 2008 Specified Non Specified Non GAAP Items (*) GAAP GAAP Items (*) GAAP -------- --------- -------- -------- --------- -------- Revenues $ 36,030 - $ 36,030 $ 33,072 - $ 33,072 Cost of revenues (8,621) - (8,621) (8,108) - (8,108) -------- --------- -------- -------- --------- -------- Gross profit 27,409 - 27,409 24,964 - 24,964 -------- --------- -------- -------- --------- -------- Gross profit as a % of revenues 76.1% - 76.1% 75.5% - 75.5% Operating expenses Research and development, net (4,214) 115 (4,099) (3,523) 88 (3,435) Sales and marketing (16,541) 845 (15,696) (16,960) 500 (16,460) General and administrat- ive (4,564) 1,218 (3,346) (2,894) (708) (3,602) Termination of marketing agreement - - - - - - Other, net (3) - (3) - - - -------- --------- -------- -------- --------- -------- Total operating expenses (25,322) 2,178 (23,144) (23,377) (120) (23,497) -------- --------- -------- -------- --------- -------- Operating profit 2,087 2,178 4,265 1,587 (120) 1,467 Operating profit as a % of revenues 5.8% 11.8% 4.8% 4.4% -------- --------- -------- -------- --------- -------- Financing income, net 1,316 - 1,316 870 - 870 -------- --------- -------- -------- --------- -------- Profit before taxes on income 3,403 2,178 5,581 2,457 (120) 2,337 Income tax benefit (expense) 1,194 (1,390) (196) 33 - 33 -------- --------- -------- -------- --------- -------- Net Profit 4,597 788 5,385 2,490 (120) 2,370 Net loss attributable to non-control- ling intere- st 291 - 291 394 - 394 -------- --------- -------- -------- --------- -------- Net profit attributable to shareholders $ 4,888 $ 788 $ 5,676 $ 2,884 $ (120) $ 2,764 ======== ========= ======== ======== ========= ======== Net profit attributable to shareholders as a % of revenues 13.6% 15.8% 8.7% 8.4% Earnings per share Basic Earnings attributable to shareholders per Ordinary Share $ 0.17 $ 0.02 $ 0.19 $ 0.10 - $ 0.10 ======== ========= ======== ======== ========= ======== Diluted Earnings attributable to shareholders per Ordinary Share $ 0.16 $ 0.03 $ 0.19 $ 0.09 - $ 0.09 ======== ========= ======== ======== ========= ======== (*)See specified items Given Imaging Ltd. and its Consolidated Subsidiaries Reconciliation of GAAP results to non-GAAP results For the six months ended June 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 $ 66,503 - $ 66,503 $ 60,196 - $ 60,196 Cost of revenues (15,939) - (15,939) (15,943) - (15,943) -------- --------- -------- -------- --------- -------- Gross profit 50,564 - 50,564 44,253 - 44,253 -------- --------- -------- -------- --------- -------- Gross profit as a % of revenues 76.0% - 76.0% 73.5% - 73.5% Operating expenses Research and development, net (7,890) 193 (7,697) (6,899) 173 (6,726) Sales and marketing (30,499) 998 (29,501) (31,922) 836 (31,086) General and administrat- ive (8,979) 2,497 (6,482) (10,173) 3,289 (6,884) Termination of marketing agreement - - - 5,443 (5,443) - Other, net (15) - (15) - - - -------- --------- -------- -------- --------- -------- Total operating expenses (47,383) 3,688 (43,695) (43,551) (1,145) (44,696) -------- --------- -------- -------- --------- -------- Operating profit (loss) 3,181 3,688 6,869 702 (1,140) (438) Operating profit (loss) as a % of revenues 4.8% 10.3% 1.2% (0.1%) -------- --------- -------- -------- --------- -------- Financing income, net 190 - 190 2,466 - 2,466 -------- --------- -------- -------- --------- -------- Profit before taxes on income 3,371 3,688 7,059 3,168 (1,145) 2,023 Income tax benefit 1,166 (1,390) (224) (126) - (126) -------- --------- -------- -------- --------- -------- Net Profit 4,537 2,298 6,835 3,042 (1,145) 1,897 Net loss attributable to non-control- ling intere- st 590 - 590 918 - 918 -------- --------- -------- -------- --------- -------- Net profit attributable to shareholders $ 5,127 $ 2,298 $ 7,425 $ 3,960 $ (1,145) $ 2,815 ======== ========= ======== ======== ========= ======== Net profit attributable to shareholders as a % of revenues 7.7% 11.2% 6.6% 4.7% Earnings per share Basic Earnings attributable to shareholders per Ordinary Share $ 0.18 $ 0.08 $ 0.26 $ 0.14 $ (0.04) $ 0.10 ======== ========= ======== ======== ========= ======== Diluted Earnings attributable to shareholders per Ordinary Share $ 0.17 $ 0.08 $ 0.25 $ 0.13 $ (0.04) $ 0.09 ======== ========= ======== ======== ========= ======== (*)See specified items Given Imaging Ltd. and its Consolidated Subsidiaries Unaudited Consolidated Balance Sheets In thousands except share data June 30, December 31, ------------- ------------- 2009 2008 ------------- ------------- Assets Current assets Cash and cash equivalents $ 29,238 $ 31,697 Short-term investments 27,039 28,509 Accounts receivable: Trade (Net of provisions for doubtful debts of $256 and of $210 as of June 30, 2009 and December 31, 2008, respectively) 22,381 21,673 Other 2,988 4,662 Inventories 21,619 18,931 Advances to suppliers 839 3,540 Deferred tax assets 995 1,178 Prepaid expenses 1,249 1,631 ------------- ------------- Total current assets 106,348 111,821 ------------- ------------- Deposits 1,078 1,094 Assets held for employee severance payments 4,093 3,686 Marketable Securities 27,091 30,063 Fixed assets, at cost, less accumulated depreciation 14,770 15,115 Intangible assets less accumulated amortization 11,869 12,067 Goodwill 4,063 4,069 ------------- ------------- Total Assets $ 169,312 $ 177,915 ============= ============= Given Imaging Ltd. And its Consolidated Subsidiaries Unaudited Consolidated Balance Sheets In thousands except share data June 30, December 31, ------------ ------------ 2009 2008 ------------ ------------ Liabilities and shareholders' equity Current liabilities Current installments of obligation under capital lease $ 138 $ 114 Accounts payable Trade 8,108 7,418 Other 16,324 17,612 Deferred income 605 1,523 ------------ ------------ Total current liabilities 25,175 26,667 ------------ ------------ Long-term liabilities Obligation under capital lease, net 407 485 Liability in respect of employees' severance payments 4,735 4,599 ------------ ------------ Total long-term liabilities 5,142 5,084 ------------ ------------ Total liabilities 30,317 31,751 ------------ ------------ Equity Shareholders' equity Ordinary Shares, NIS 0.05 par value each (90,000,000 shares authorized; 29,258,785 and 29,257,785 shares issued and fully paid as of June 30, 2009 and December 31, 2008, respectively) 343 343 Additional paid-in capital 177,671 173,983 Capital reserve 2,166 2,166 Accumulated other comprehensive income (loss) 249 (600) Accumulated deficit (42,393) (31,721) ------------ ------------ Shareholders' equity 138,036 144,171 ------------ ------------ Non-controlling interest 959 1,993 ------------ ------------ Total Equity 138,995 146,164 ------------ ------------ Total liabilities and equity $ 169,312 $ 177,915 ============ ============ Given Imaging Ltd. and its Consolidated Subsidiaries Unaudited Consolidated Statements of Operations In thousands except share and per share data Six month period ended Three month period ended June 30, June 30, Year ended ------------------------ ------------------------ December 31, 2009 2008 2009 2008 2008 ----------- ----------- ----------- ----------- ----------- Revenues $ 66,503 $ 60,196 $ 36,030 $ 33,072 $ 125,108 Cost of revenues (15,939) (15,943) (8,621) (8,108) (33,001) ----------- ----------- ----------- ----------- ----------- Gross profit 50,564 44,253 27,409 24,964 92,107 ----------- ----------- ----------- ----------- ----------- Operating expenses Research and development, gross (8,524) (7,689) (4,514) (3,893) (15,126) In-process research and development acquired in a business combination - - - - (4,700) ----------- ----------- ----------- ----------- ----------- (8,524) (7,689) (4,514) (3,893) (19,826) Government grants 634 790 300 370 1,530 ----------- ----------- ----------- ----------- ----------- Research and development, net (7,890) (6,899) (4,214) (3,523) (18,296) Sales and marketing (30,499) (31,922) (16,541) (16,960) (60,902) General and administ- rative (8,979) (10,173) (4,564) (2,894) (19,320) Termination of marketing agreement - 5,443 - - 5,443 Other, net (15) - (3) - (867) ----------- ----------- ----------- ----------- ----------- Total operating expenses (47,383) (43,551) (25,322) (23,377) (93,942) ----------- ----------- ----------- ----------- ----------- Operating profit (loss) 3,181 702 2,087 1,587 (1,835) Financing income, net 190 2,466 1,316 870 4,004 ----------- ----------- ----------- ----------- ----------- Profit (loss) before taxes on income 3,371 3,168 3,403 2,457 2,169 Income tax benefit (expense) 1,166 (126) 1,194 33 (250) ----------- ----------- ----------- ----------- ----------- Net Profit 4,537 3,042 4,597 2,490 1,919 Net loss attributable to non- controlling Interest 590 918 291 394 2,087 ----------- ----------- ----------- ----------- ----------- Net profit attributable to share- holders $ 5,127 $ 3,960 $ 4,888 $ 2,884 $ 4,006 =========== =========== =========== =========== =========== Earnings per share Basic Earnings attributable to shareholders per Ordinary Share $ 0.18 $ 0.14 $ 0.17 $ 0.1 $ 0.14 =========== =========== =========== =========== =========== Diluted Earnings attributable to shareholders per Ordinary Share $ 0.17 $ 0.13 $ 0.16 $ 0.09 $ 0.13 =========== =========== =========== =========== =========== Weighted average number of Ordinary Shares used to compute basic earnings per Ordinary share 29,258,035 29,251,868 29,258,285 29,252,785 29,254,035 =========== =========== =========== =========== =========== Weighted average number of Ordinary Shares used to compute diluted Earnings per Ordinary share 29,838,686 30,886,460 29,766,429 30,678,341 30,798,360 =========== =========== =========== =========== =========== Given Imaging Ltd. and its Consolidated Subsidiaries Unaudited Consolidated Statements of Cash Flows In thousands Six month period Three month period ended ended Year ended June 30, June 30, December ------------------ ------------------ 31, 2009 2008 2009 2008 2008 -------- -------- -------- -------- -------- Cash flows from operating activities: Net profit $ 4,537 $ 3,042 $ 4,597 $ 2,490 $ 1,919 Adjustments required to reconcile net profit to net cash used in operating activities: Depreciation and amortization 2,982 2,541 1,517 1,276 5,183 In-process research and development - - - - 4,700 Goodwill impairment - - - - 406 Deferred tax assets 183 175 173 13 172 Stock option compensation 3,688 3,256 2,178 1,745 6,918 Other (136) 9 (145) (80) 621 Net increase in trading securities (3,372) - (3,372) - - Decrease (increase) in accounts receivable - trade (708) 2,788 (527) (2,163) 1,642 Decrease (increase) in accounts receivable - other 1,674 4,583 (660) (2,967) 5,723 Decrease (increase) in prepaid expenses 382 82 637 (1) (342) Change in advances to suppliers 2,701 (25) 2,742 38 (3,350) (Increase) decrease in inventories (2,688) (2,617) 676 (2,017) (2,971) Increase (decrease) in accounts payable (509) (1,785) (687) 303 (3,287) Decrease in deferred income (918) (6,513) (524) (21) (7,856) -------- -------- -------- -------- -------- Net cash provided by operating activities 7,816 5,536 6,605 (1,384) 9,478 -------- -------- -------- -------- -------- Cash flows from investing activities: Excess of cash investment over equity share in subsidiary - 965 - 965 - Purchase of fixed assets and intangible assets (2,448) (3,597) (1,392) (2,350) (6,300) Purchase of fixed assets, intangible assets and goodwill in a business combination - (244) - (219) (16,660) Deposits (10) - (13) - (192) Proceeds from sales of marketable Securities and change in short term investments 20,726 34,714 (1,055) 16,274 67,743 Proceeds from sales of fixed assets - 30 - 5 61 Investments in marketable securities (12,208) (32,514) (11,958) (12,887) (61,986) -------- -------- -------- -------- -------- Net cash provided by (used in) Investing activities 6,060 (646) (14,418) 1,788 (17,334) -------- -------- -------- -------- -------- Cash flows from financing activities: Principal payments on capital lease obligation (65) (85) (32) (35) (120) Proceeds from the issuance of Ordinary Shares - 196 - - 252 Dividend distribution (15,799) - - - - Purchase of shares from a non-controlling shareholder in a subsidiary (382) - (382) - - Issuance of shares to a non-controlling shareholder in a subsidiary - 1,207 - - 2,288 -------- -------- -------- -------- -------- Net cash (used in) provided by financing activities (16,246) 1,318 (414) (35) 2,420 -------- -------- -------- -------- -------- Effect of exchange rate changes on cash (89) 273 169 98 30 -------- -------- -------- -------- -------- Increase (decrease) in cash and cash Equivalents (2,459) 6,481 (8,058) 467 (5,406) Cash and cash equivalents at beginning of period 31,697 37,103 37,296 43,117 37,103 -------- -------- -------- -------- -------- Cash and cash equivalents at end of period $ 29,238 $ 43,584 $ 29,238 $ 43,584 $ 31,697 ======== ======== ======== ======== ======== Supplementary cash flow information Income taxes paid $ 85 $ 122 $ 41 $ 47 $ 259 ======== ======== ======== ======== ======== Assets acquired under capital lease - $ 109 - - $ 109 ======== ======== ======== ======== ========
Contact Information: For further information contact: Fern Lazar/David Carey Lazar Partners Ltd. 866-GIVEN-IR