SOURCE: Given Imaging

Given Imaging

August 03, 2011 16:54 ET

Given Imaging Reports Second Quarter 2011 Results

Second Quarter 2011 Revenues Increase 6.3% to $44.8 Million; First Half 2011 Revenues Increase 14% to $84.7 Million; Second Quarter 2011 Non-GAAP Net Income $4.1 Million

YOQNEAM, ISRAEL--(Marketwire - Aug 3, 2011) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the second quarter ended June 30, 2011.

Worldwide revenues were $44.8 million in the second quarter of 2011, a 6.3 percent increase from $42.1 million in the second quarter of 2010. Gross margin on a non-GAAP basis in the second quarter of 2011 was 76.0 percent, compared to 77.3 percent in the second quarter of 2010 due to certain one-time charges. The Company anticipates that gross margin for the remainder of the year will be higher and in line with company projections.

Non-GAAP operating profit was $4.8 million, compared to $7.2 million in the second quarter of 2010. On a non-GAAP basis, net income for the second quarter of 2011 was $4.1 million, or $0.13 per share on a fully diluted basis, compared to $6.3 million, or $0.20 per share on a fully diluted basis in the second quarter of 2010. On a GAAP basis, net income for the second quarter of 2011 was $1.9 million, or $0.06 per share, compared to $2.2 million, or $0.07 per share, in the same quarter of last year. A reconciliation of GAAP results to non-GAAP results is attached.

Cash and cash equivalents, short-term investments and marketable securities on June 30, 2011 totaled $91.5 million. Net cash provided by operating activities in the second quarter was $5.1 million.

"We are pleased with another quarter of solid financial results, including the 4.0% increase in second quarter revenues in the Americas region. We are also encouraged by revenue growth of 14% in the EMEA region in the first six months of 2011, and confident that we will achieve our full year revenue goal for the region. Therefore, our 2011 guidance remains unchanged, despite the challenges of the global economy," said Homi Shamir, President and CEO of Given Imaging. "On the development front, enrollment in the large multi-center PillCam COLON 2 pivotal trial which began in early June is proceeding on schedule and the majority of centers are actively enrolling patients."

Second Quarter 2011 Revenue Analysis

Revenues in the Americas region increased by 4.0 percent to $26.9 million in the second quarter of 2011 from $25.9 million in the same period last year. Revenues in the EMEA region were $11.8 million compared to $11.6 million in the same period last year. APAC revenues increased by 30 percent to $6.0 million, compared to $4.6 million in the same period in 2010.

Worldwide PillCam SB sales amounted to 58,700 capsules in the second quarter of 2011, compared to 59,900 capsules in the same period last year. PillCam SB sales in the Americas region were approximately 36,250 capsules, compared to 37,200 capsules in the second quarter of last year. PillCam SB sales in the EMEA region were 15,150 capsules, compared to 16,500 capsules in the second quarter of 2010 and PillCam SB sales in the APAC region were 7,300 capsules, compared to 6,100 capsules in the same period in 2010.

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

Six Month Financial Results

For the six month period ended June 30, 2011, revenues increased by 14 percent to $84.7 million and include sales of $11.7 million from Sierra Scientific Instruments (Sierra), which the company acquired on April 1, 2010. First half 2010 revenue included $5.7 million sales from Sierra. Sales in the Americas region in the first half of 2011 were 51.0 million, including revenues of $7.3 million from sales of Sierra products, compared to $46.5 million in the same period in 2010. Revenues in Americas in the same period of 2010 included sales of $3.6 million from Sierra. Sales in the EMEA region were $23.0 million, including $3.1 million from Sierra compared to $20.1 million, including $1.6 million from Sierra in the same period in 2010. Sales in the APAC region were $10.7 million, including $1.3 million from Sierra, compared to $7.7 million, including $0.6 million from Sierra last year.

On a non-GAAP basis, gross profit margin for the six month period was 76.7 percent compared to 77.2 percent in 2010. On a GAAP basis, gross profit margin in the first six months of 2011 was 76.1 percent, compared to 75.2 percent in first half of 2010. On a non-GAAP basis, net income for the first six months of 2011 was $7.1 million or $0.23 per share compared to $10.6 million, or $0.35 per share on a fully diluted GAAP basis. GAAP net income for the first six months of 2011 was $2.6 million or $0.08 per share compared to $4.3 million, or $0.14 per share in the same quarter of last year.

Recent Developments

PillCam COLON 2 Trial Initiation

-- In June, the company announced the initiation of an 800 patient
   multi-center pivotal trial for PillCam COLON 2. The trial will
   support the planned 510(k) submission to the U.S. Food and Drug
   Administration (FDA).

Digestive Disease Week 2011

-- In May, more than 150 podium and poster sessions featuring
   Given Imaging products were presented at Digestive Disease
   Week (DDW). Included in these presentations were data from
   the largest European multicenter study of PillCam COLON 2
   which concluded that PillCam COLON is an appropriate tool
   for visualizing the colon.

PillCam ESO 3 FDA Clearance

-- In May, the company announced that it received clearance from the FDA
   for PillCam ESO 3. The clearance included a new version of RAPID®
   software, and the new DataRecorder 3. PillCam ESO 3 incorporates new
   features developed for the PillCam COLON 2 video capsule currently
   available in Europe.

2011 Guidance

The Company continues to expect that 2011 revenues will be between $165 million and $173 million. The Company continues to expect that 2011 GAAP earnings per share will be between $0.35 - $0.40 and Non-GAAP earnings per share will be between $0.65 - $0.70.

Conference Call / Webcast Information

U.S. Call / Webcast

The company will host a conference call in English at 9:00 am ET on Thursday, August 4, 2011. To participate in this teleconference, please dial 800-992-7415 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-0946. 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 August 18, 2011, by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 4149553.

Hebrew Call

A separate conference call in Hebrew will take place on August 4, 2011 at 2:00 pm Israel time, 7:00 am 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 August 7 until August 8, 2011 by dialing +972 3 925590.

About Given Imaging Ltd.

Since pioneering the field of capsule endoscopy in 2001, Given Imaging has become a world leader in GI medical devices, offering health care providers a range of innovative options for visualizing, diagnosing and monitoring the digestive system. The company offers a broad product portfolio including PillCam® video capsules for the small bowel, esophagus and colon [PillCam® COLON not approved for use in the United States], industry-leading ManoScan™ high-resolution manometry and Bravo® wireless and Digitrapper® pH and impedance products. Given Imaging is committed to delivering breakthrough innovations to the GI community and to supporting its ongoing clinical needs. Given Imaging's headquarters are located in Yoqneam, Israel, with operating subsidiaries in the United States, Germany, France, Japan, Australia, Vietnam and Hong Kong. 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, (18) adverse events related to our products or product quality issues that could require us to recall products and impact our sales, and (19) 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, 2010. 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
                              Excluded Items
            For the Three Months Ended June 30, 2010 and 2011
                    (Unaudited, dollars in thousands)

                   Research   Selling   General              Tax
           Gross      And       And       And      Other   Expense
           Profit Development Marketing  Admin   Expenses (Benefit)   Total
           ------ ----------- --------- -------- --------- --------  ------

Three month
 period ended
 June 30,
 2011
Compensation
 expenses  $    - $       160 $     499 $  1,306 $       - $      -  $1,965
Sierra PPA    237           -        81        -         -     (128)    190
           ------ ----------- --------- -------- --------- --------  ------
Total      $  237 $       160 $     580 $  1,306 $       - $   (128) $2,155

           ====== =========== ========= ======== ========= ========  ======

Three month
 period ended
 June 30,
 2010
Compensation
 expenses  $    - $        73 $     299 $  2,420 $       - $      -  $2,792
Sierra PPA  1,509         111        82      250         -     (679)  1,273
           ------ ----------- --------- -------- --------- --------  ------
Total      $1,509 $       184 $     381 $  2,670 $       - $   (679) $4,065

           ====== =========== ========= ======== ========= ========  ======



           Given Imaging Ltd. and its Consolidated Subsidiaries
                              Excluded Items
              For the Six Months Ended June 30, 2010 and 2011
                    (Unaudited, dollars in thousands)


                   Research   Selling    General              Tax
           Gross      And       And        And      Other   Expense
           Profit Development Marketing   Admin   Expenses (Benefit)  Total
           ------ ----------- --------- --------- -------- --------  ------

Six month
 period ended
 June 30,
 2011
Compensation
 expenses  $    - $       342 $   1,060 $   2,700 $      - $      -  $4,102
Sierra PPA    474           -       162         -        -     -255     381
           ------ ----------- --------- --------- -------- --------  ------
Total      $  474 $       342 $   1,222 $   2,700 $      0 ($   255) $4,483

           ====== =========== ========= ========= ======== ========  ======

Six month
 period ended
 June 30,
 2010
Compensation
 expenses  $    - $       156 $     626 $   3,623 $      - $      -  $4,405
Tax
 (benefit)  1,509         111        82       930        -     (679)  1,953
           ------ ----------- --------- --------- -------- --------  ------
Total      $1,509 $       267 $     708 $   4,553 $      0 ($   679) $6,358

           ====== =========== ========= ========= ======== ========  ======





           Given Imaging Ltd. and its Consolidated Subsidiaries
            Reconciliation of GAAP results to non-GAAP results
            For the Three months ended June 30, 2010 and 2011
          Condensed, in thousands except share and per share data

                             Q2 2011                     Q2 2010
                             Specified   Non             Specified   Non
                      GAAP   Items(*)    GAAP     GAAP   Items(*)    GAAP
                    -------  --------  -------  -------  --------  -------

Revenues            $44,773         -  $44,773  $42,134         -  $42,134

Cost of revenues    (10,985)      237  (10,748) (11,062)    1,509   (9,553)

Gross profit         33,788       237   34,025   31,072             32,581

  Gross profit as a
   % of revenues       75.5%        -     76.0%    73.7%              77.3%

Operating expenses

Research and
 development, net    (5,619)      160   (5,459)  (5,163)      184   (4,979)

Sales and marketing (19,869)      580  (19,289) (16,345)      381  (15,964)

General and
 administrative      (5,729)    1,306   (4,423)  (6,956)    2,670   (4,286)

Other, net              (59)        -      (59)    (171)        0     (171)

Total operating
 expenses           (31,276)    2,046  (29,230) (28,635)    3,235  (25,400)

Operating profit      2,512     2,283    4,795    2,437     3,235    7,181

  Operating profit
   as a % of
   revenues             5.6%              10.7%     5.8%              17.0%

Financing income
 (expense), net         118         -      118     (175)        -     (175)

Profit before taxes
 on income            2,630     2,283    4,913    2,262     3,235    7,006

Tax expense            (716)     (128)    (844)    (100)     (679)    (779)

Net Profit            1,914     2,155    4,069    2,162     2,556    6,227

Net loss
 attributable to
 non-controlling
 interest                 3         -        3       49         -       49

Net profit
 attributable to
 shareholders       $ 1,917  $  2,155  $ 4,072  $ 2,211  $  2,556  $ 6,276

Net profit
 attributable to
 shareholders as
 a % of revenues        4.3%               9.1%     5.2%              14.9%

Earnings per share

Basic Earnings
 attributable to
 shareholders per
 Ordinary Share     $  0.06  $   0.06  $  0.14  $  0.07  $   0.04  $  0.21

Diluted Earnings
 attributable to
 shareholders per
 Ordinary Share     $  0.06  $   0.06  $  0.13  $  0.06  $   0.08  $  0.20

(*)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, 2010  and 2011
          Condensed, in thousands except share and per share data


                             YTD 2011                    YTD 2010
                            Specified    Non            Specified    Non
                      GAAP   Items (*)   GAAP     GAAP   Items(*)    GAAP
                    -------  --------  -------  -------  --------  -------

Revenues            $84,742         -  $84,742  $74,231         -  $74,231

Cost of revenues    (20,252)      474  (19,778) (18,398)    1,509  (16,889)

Gross profit         64,490       474  $64,964   55,833         -   57,342

   Gross profit as
    a % of revenues    76.1%              76.7%    75.2%              77.2%

Operating expenses

Research and
 development, net   (11,080)      342  (10,738)  (8,940)      267   (8,673)

Sales and marketing (37,118)    1,222  (35,896) (31,094)      708  (30,386)

General and
 administrative     (12,251)    2,700   (9,551) (12,090)    4,553   (7,537)

Other, net              (76)        -      (76)    (234)        0     (234)

Total operating
 expenses           (60,525)    4,264  (56,261) (52,358)    5,528  (46,830)

Operating profit      3,965     4,738    8,703    3,475     5,528   10,512

   Operating profit
    as a % of
    revenues            4.7%              10.3%     4.7%              14.2%

Financing income, net    22         -       22      803         -      803

Profit before taxes
 on income            3,987     4,738    8,725    4,278     5,528   11,315

Tax expense          (1,308)     (255)  (1,563)    (229)     (679)    (908)

Net Profit            2,679     4,483    7,162    4,049     4,849   10,407

Net loss (profit)
 attributable to
 non-controlling
 interest               (85)        -      (85)     215         -      215

Net profit
 attributable to
 shareholders       $ 2,594  $  4,483  $ 7,077  $ 4,264  $  4,849  $10,622

Net profit
 attributable to
 shareholders as a
 % of revenues          3.1%               8.4%     5.7%              14.3%

Earnings per share

Basic Earnings
 attributable to
 shareholders per
 Ordinary Share     $  0.10  $   0.15  $  0.26  $  0.14  $   0.16  $  0.36

Diluted Earnings
 attributable to
 shareholders per
 Ordinary Share     $  0.08  $   0.14  $  0.23  $  0.14  $   0.16  $  0.35

(*)See specified items




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

                                                      June 30   December 31
                                                    ----------- -----------
                                                       2011        2010
                                                    ----------- -----------
Assets

Current assets
Cash and cash equivalents                           $    34,816 $    34,619
Short-term investments                                   41,859      51,973
Accounts receivable:
  Trade                                                  28,032      27,862
  Other                                                   2,955       4,291
Inventories                                              22,178      19,076
Prepaid expenses                                          1,824       1,585
Deferred tax assets                                       1,900       1,638
Advances to suppliers                                     1,197         441
                                                    ----------- -----------

Total current assets                                    134,761     141,485

Deposits                                                  1,278       1,212

Assets held for employee severance payments               7,336       6,393

Marketable Securities                                    14,832       3,873

Non-current Inventory                                     4,626       5,626

Fixed assets, at cost, less accumulated
 depreciation                                            12,843      13,709

Intangible assets, less accumulated amortization         30,567      25,813

Goodwill                                                 24,089      24,089
                                                    ----------- -----------

Total Assets                                        $   230,332 $   222,200
                                                    =========== ===========



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

                                                     June 30   December 31
                                                   ----------  -----------
                                                      2011         2010
                                                   ----------  -----------
Liabilities and equity

Current liabilities

Current installments of obligation under capital
 lease                                             $      172  $       168
Accounts payable:
  Trade                                                 6,149        9,125
  Other                                                24,731       26,065
Deferred income                                           636          788
                                                   ----------  -----------
Total current liabilities                              31,688       36,146
                                                   ----------  -----------

Long-term liabilities
Obligation under capital lease, net                       166          244
Liability in respect of employees' severance
 payments                                               8,120        7,151
Deferred tax liabilities                                5,616        5,871
                                                   ----------  -----------
Total long-term liabilities                            13,902       13,266
                                                   ----------  -----------
Total liabilities                                      45,590       49,412
                                                   ----------  -----------

Equity
Shareholders' equity
Ordinary Shares, NIS 0.05 par value each
 (90,000,000 shares authorized; 30,334,313 and
 29,829,277 shares issued and fully paid as of
 June 30, 2011 and December 31, 2010, respectively)       357          350
Additional paid-in capital                            204,275      194,899
Capital reserve                                         2,051        2,051
Accumulated other comprehensive gain (loss)               (13)          95
Accumulated deficit                                   (22,113)     (24,707)
                                                   ----------  -----------
Shareholders' equity                                  184,557      172,688
                                                   ----------  -----------
Non-controlling interest                                  185          100
                                                   ----------  -----------
Total Equity                                          184,742      172,788
                                                   ----------  -----------


Total liabilities and equity                       $  230,332  $   222,200
                                                   ==========  ===========





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

                Six-month period ended    Three-month period
                        June 30              ended June 30      Year ended
                ----------------------  ----------------------  December 31
                   2011        2010        2011        2010        2010
                ----------  ----------  ----------  ----------  ----------
Revenues        $   84,742  $   74,231  $   44,773  $   42,134  $  157,809

Cost of
 revenues          (20,252)    (18,398)    (10,985)    (11,062)    (37,629)
                ----------  ----------  ----------  ----------  ----------

Gross profit        64,490      55,833      33,788      31,072     120,180
                ----------  ----------  ----------  ----------  ----------

Operating expenses
Research and
 development,
 gross             (11,615)     (9,447)     (5,842)     (5,423)    (21,695)

Government
 grants                535         507         223         260       1,477
                ----------  ----------  ----------  ----------  ----------
Research and
 development,
 net               (11,080)     (8,940)     (5,619)     (5,163)    (20,218)

Sales and
 marketing         (37,118)    (31,094)    (19,869)    (16,345)    (67,114)
General and
 administrative    (12,251)    (12,090)     (5,729)     (6,956)    (25,138)
Other, net             (76)       (234)        (59)       (171)       (759)
                ----------  ----------  ----------  ----------  ----------

Total operating
 expenses          (60,525)    (52,358)    (31,276)    (28,635)   (113,229)
                ----------  ----------  ----------  ----------  ----------

Operating income     3,965       3,475       2,512       2,437       6,951
Financing income
 (expense), net         22         803         118        (175)      2,599
                ----------  ----------  ----------  ----------  ----------

Income before
 taxes on income     3,987       4,278       2,630       2,262       9,550
Income tax
 expense            (1,308)       (229)       (716)       (100)     (1,362)
                ----------  ----------  ----------  ----------  ----------

Net income           2,679       4,049       1,914       2,162       8,188

Net loss (income)
 attributable
 to non-controlling
 interest              (85)        215           3          49         290
                ----------  ----------  ----------  ----------  ----------

Net income
 attributable to
 shareholders   $    2,594  $    4,264  $    1,917  $    2,211  $    8,478
                ==========  ==========  ==========  ==========  ==========

Earnings per share

Basic Earnings
 attributable to
 shareholders
 per Ordinary
 Share          $     0.09  $     0.14  $     0.06  $     0.07  $     0.29
                ==========  ==========  ==========  ==========  ==========

Diluted Earnings
 attributable to
 shareholders
 per Ordinary
 Share          $     0.08  $     0.13  $     0.06  $     0.07  $     0.28
                ==========  ==========  ==========  ==========  ==========

Weighted average
 number of
 Ordinary Shares
 used to compute
 basic Earnings
 per Ordinary
 share          30,009,592  29,551,276  30,126,138  29,674,785  29,670,842
                ==========  ==========  ==========  ==========  ==========

Weighted average
 number of
 Ordinary Shares
 used to compute
 diluted Earnings
 per Ordinary
 share          31,062,476  30,676,309  31,309,679  30,706,200  30,525,654
                ==========  ==========  ==========  ==========  ==========






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

                         Six-month period   Three-month period
                           ended June 30       ended June 30    Year ended
                       -------------------  ------------------  December 31
                         2011      2010       2011      2010       2010
                       --------  ---------  --------  --------  ----------
Cash flows from
 operating activities:
Net income             $  2,679  $   4,049  $  1,914  $  2,162  $    8,188

Adjustments required
 to reconcile net
 income to net cash
 provided by operating
 activities:
Depreciation and
 amortization             4,070      4,056     2,072     2,558       7,662
Goodwill impairment           -          -         -         -          20
Changes in deferred
 tax assets                (262)       373      (236)      167         761
Changes in deferred
 tax liabilities           (255)         -      (128)        -        (888)
Stock based
 compensation             4,102      4,405     1,965     2,792       8,482
Loss from disposal
 of long term assets        100        292        73       229         739
Other                        31       (292)       41      (229)        304
Gain (loss) from
 trading securities           -        323         -       236           -
Decrease (increase) in
 accounts receivable -
 trade                     (170)     2,053    (1,416)     (975)        560
Decrease (increase) in
 accounts receivable -
 other                    1,336       (984)      685      (664)       (488)
Decrease (increase) in
 prepaid expenses          (239)         3       482       562         (23)
Decrease (increase) in
 advances to suppliers     (756)      (199)     (824)     (356)         93
Decrease (increase) in
 Inventories             (2,102)     2,641      (218)    1,216       2,331
Increase (decrease) in
 accounts payable        (4,400)    (5,593)      912      (383)      3,389
Increase (decrease) in
 deferred income           (152)       635      (216)      383         554
                       --------  ---------  --------  --------  ----------
Net cash provided by
 operating activities  $  3,982  $  11,762  $  5,106  $  7,698  $   31,684
                       --------  ---------  --------  --------  ----------

Cash flows from
 investing activities:
Purchase of fixed
 assets and intangible
 assets                $ (8,058) $  (2,550) $   (759) $ (1,328) $   (5,056)
Deposits                    (38)       (27)      (10)       (3)         (6)
Acquisition of Sierra,
 net of cash
 acquired (1)                 -    (34,709)        -       291     (34,709)
Changes in short term
 deposits, net              720      1,990    (4,352)    4,185     (26,830)
Proceeds from sales of
 marketable securities   13,212     18,208     4,240         -      25,167
Investments in trading
 and marketable
 securities             (14,910)    (5,591)   (1,762)     (240)     (5,953)
                       --------  ---------  --------  --------  ----------
Net cash provided by
 (used in) investing
 activities            $ (9,074) $ (22,679) $ (2,643) $  2,905  $  (47,387)
                       ========  =========  ========  ========  ==========




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

                         Six-month period   Three-month period
                           ended June 30       ended June 30    Year ended
                        ------------------  ------------------  December 31
                          2011      2010      2011      2010       2010
                        --------  --------  --------  --------  ----------
Cash flows from
 financing activities:
Principal payments on
 capital lease
 obligation, net        $    (82) $    (49) $    (41) $    (15) $     (143)
Proceeds from the
 issuance of Ordinary
 Shares                    5,281     3,791     3,432     1,800       4,219

Purchase of shares from
 a non-controlling
 shareholder in a
 subsidiary                    -         -         -         -        (403)
                        --------  --------  --------  --------  ----------
Net cash provided by
 financing activities      5,199     3,742     3,391     1,785       3,673
                        --------  --------  --------  --------  ----------

Effect of exchange rate
 changes on cash              90      (227)       40      (307)        191
                        --------  --------  --------  --------  ----------

Increase (decrease) in
 cash and cash
 equivalents                 197    (7,402)    5,894    12,081     (11,839)
Cash and cash equivalents
 at beginning of period   34,619    46,458    28,922    26,975      46,458
                        --------  --------  --------  --------  ----------

Cash and cash
 equivalents at end of
 period                 $ 34,816  $ 39,056  $ 34,816  $ 39,056  $   34,619
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Supplementary cash flow
 information Income
 taxes paid             $  1,095  $     94  $  1,045  $     46  $      234
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