YOQNEAM, ISRAEL--(Marketwire - February 15, 2011) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the fourth quarter and twelve months ended December 31, 2010.
Worldwide revenues in the fourth quarter of 2010 were a record $44.9 million, a 12% increase from $40 million in the fourth quarter of 2009. Revenues in the Americas region were $27.9 million, including revenues of $5.2 million from the Bravo pH Monitoring System and $4.0 million from sales of Sierra Scientific Instruments, which was acquired in April 2010. In the same period in 2009 revenues in the Americas region were $24 million, including revenues of $4.4 million from Bravo. Revenues in the EMEA region were $11.7 million including $2.0 million from Sierra products. In the same period in 2009, EMEA revenues were $11.3 million. APAC revenues were $5.3 million in the fourth quarter of 2010 compared to $4.7 million in the same period in 2009.
Worldwide PillCam SB sales amounted to 57,900 capsules in the fourth quarter of 2010, compared to 60,800 in the same period last year. PillCam SB sales in the Americas region were 36,900 in the fourth quarter of 2010 compared to 38,400 in the same period last year. PillCam SB sales in the EMEA region were 14,100 compared to 15,900 in the fourth quarter of 2009, while PillCam SB sales in the APAC region were 6,900 compared to 6,500 in the same period in 2009.
Gross margin on a non-GAAP basis in the fourth quarter of 2010 was 77.7 percent, compared to 76.6 percent in the same period in 2009. On a GAAP basis, gross margin for the quarter was 77.2 percent. On a non-GAAP basis, net income for the fourth quarter of 2010 was $5.8 million, or $0.19 per share on a fully diluted basis, compared to net income of $6.4 million, or $0.21 per share on a fully diluted basis in 2009. On a GAAP basis, net income for the fourth quarter of 2010 was $3.2 million, or $0.11 per share, compared to $5.4 million, or $0.17 per share in the same quarter of last year. A reconciliation of GAAP results to non-GAAP results is attached.
Net cash provided by operating activities in the fourth quarter was $8.7 million, compared to $6.7 million in the fourth quarter of 2009.
Supplemental fourth quarter data can be found at www.givenimaging.com in the Investor Relations section.
"Fiscal year 2010 was very productive for Given Imaging. We grew revenues by 11 percent, reflecting solid growth in all three of our operating regions: the Americas, EMEA and Asia-Pacific. Sales of our flagship PillCam SB in the U.S. were relatively stable despite a more than 10 percent drop in overall GI procedures last year. We benefited from strong sales of our upper GI products including Bravo, which grew by 24% compared to 2009 to $18.6 million, and Sierra, which contributed nearly $18 million to our top line since acquiring this company last April. Our ongoing focus on lowering operational costs proved successful resulting in a record non-GAAP gross margin for the year of 77.4%, and we once again achieved a solid level of profitability. In addition, we generated record cash flow from operating activities of almost $31 million, reflecting the overall strength of our business," said Homi Shamir, president and CEO, Given Imaging.
"Following our record fourth quarter we enter 2011 as the global leader in specialty GI diagnostics products poised to expand the market for our existing product line and launch several exciting new products. We are cautiously optimistic that the market for GI medical procedures in the U.S. will begin to recover leading to renewed growth of our PillCam SB business, and we anticipate accelerating growth in the rest of the world. We are laser-focused on developing the market for PillCam COLON 2 outside the U.S., and look forward to beginning the U.S. pivotal clinical trial for this product soon after receiving IDE approval from the FDA."
Mr. Shamir concluded: "Reflecting our commitment to the PillCam COLON 2 program in support of the U.S. pivotal study, as well as smaller trials in Japan and Europe, we plan to increase our R&D investment by 15 to 20 percent compared to 2010, which is reflected in our 2011 earnings per share guidance."
Fiscal Year 2010 Revenue Analysis
For the year ended December 31, 2010, revenues increased by 11% to $157.8 million, compared to $141.8 million in the same period of 2009. 2010 revenues include Sierra product revenues of $17.9 million, or 11% of total revenues. Bravo pH Monitoring System revenues were $18.6 million in 2010, representing 12% of total revenues.
Revenues in the Americas region increased by 11% for the year ended December 31, 2010 to $99.7 million compared to $89.7 million in 2009. Sales in the Americas region included $17.1 million from sales of Bravo, compared to $15 million in 2009. Sierra product sales in the Americas region since the acquisition were $11.2 million. Sales in the EMEA region were $40.2 million, compared to $38.4 million in the same period in 2009 and included $5.3 million and $1.4 million in sales from Sierra products and Bravo, respectively. Revenues in the APAC region were $17.2 million, an increase of 26% from $13.6 million last year.
On a non-GAAP basis, gross profit margin for the year was 77.4% compared to 76.6% in 2009. On a GAAP basis, gross profit margin for 2010 was 76.2%, as compared to 76.6% in 2009. On a GAAP basis, net income for 2010 was $8.5 million, or $0.28 per share on a fully diluted* basis, compared to $14.3 million, or $0.47 per share on a fully diluted basis in 2009. On a non-GAAP basis, net income for 2010 remained flat at $19.6 million, or $0.64 per share on a fully diluted* basis, compared to $19.5 million or $0.64 per share in the same period in 2009.
Cash and cash equivalents, short-term investments and marketable securities at December 31, 2010 increased to $90.5 million. Net cash provided by operating activities was $30.8 million compared to $24.2 million in 2009.
* Based on fully diluted shares of 30,525,654 at Dec 31, 2010, and 30,423,162 at Dec 31, 2009.
2011 Guidance
Taking into account the uncertainty that marks today's global economy as well as our increased investment to support several PillCam Colon clinical trials, the company anticipates that GAAP earnings per share will be between $0.35 - $0.40. Non-GAAP earnings per share is expected to be between $0.65 - $0.70. The Company expects that 2011 revenues will be between $165 million and $173 million.
Recent Developments
PillCam SB
-- The Brazilian Medical Association recently issued a reimbursement code for PillCam SB capsule endoscopy. Approximately 9.1 million of Brazil's 44.3 million privately insured citizens are currently covered for the PillCam SB procedure and the company believes coverage for the remaining 35.2 million privately insured individuals will be fully implemented by the latter part of 2011. -- Germany's Ministry of Health recently announced its intent to create an outpatient reimbursement code for PillCam® SB capsule endoscopy for obscure gastrointestinal bleeding. The declaration begins a 12 to 15-month process for establishing a medical code, after which the 73 million Germans covered by the public health system, or about 90 percent of the entire German population, will have access to the PillCam SB procedure, with full reimbursement under the German statutory health insurance system.
PillCam COLON 2
-- Germany's Institute for Reimbursement in Hospitals has published the 2011 update of the Diagnosis Related Group (DRG) Codes which includes an inpatient reimbursement pathway for PillCam COLON capsule endoscopy. This went into effect on January 1, 2011 and covers any publicly insured individual, or approximately 90 percent of the German population. -- In January, Given Imaging initiated a small study in the United States for PillCam COLON 2 to confirm the optimal procedures and logistics to be used in the pivotal trial to help support the Company's planned 510(k)submission to the U.S. Food and Drug Administration (FDA).
Bravo
-- The FDA and the Canadian government cleared use of the Bravo pH Monitoring System in patients four years of age and older. The Bravo pH Monitoring System was previously indicated for individuals 18 years and older in both countries.
Upcoming Events
Given Imaging management will present at the following upcoming investor conferences:
-- February 23 - The Lazard Capital Markets Medical Device Conference taking place in Snowbird, Utah. -- March 3 - The RBC Healthcare Conference taking place in New York. Homi Shamir, President and CEO will present at 2:30pm ET.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English at 9:00 am ET on Wednesday, February 16, 2011. To participate in this teleconference, please dial 888-631-3389 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1520. 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 March 2, 2011 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 5242909.
Hebrew Call
A separate conference call in Hebrew will take place on February 16, 2011 at 2:00 pm Israel time, 7:00 am ET. To access this call, please dial +972 3 918 0609 ten minutes before the conference is scheduled to begin. A replay of the call will be available from February 16 until February 18 by dialing +972 3 925 5901.
About Given Imaging Ltd.
Since 2001, Given Imaging has advanced gastrointestinal visualization by developing state-of-the art, patient-friendly tools based on its PillCam® Platform. PillCam® capsule endoscopy uses miniature video cameras in a capsule, wireless technology, and advanced software to provide physicians with clear images of the small intestine via PillCam® SB and the esophagus through PillCam® ESO. The PillCam® COLON video capsule, which is an investigational device in the U.S., is designed to visualize the colon. Given Imaging's other capsule products include the 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). In April 2010, Given Imaging acquired Sierra Scientific Instruments, the leading provider of specialty GI diagnostic solutions and pioneer of high-resolution manometry for assessing gastrointestinal motility. Sierra Scientific is now a wholly-owned subsidiary of Given Imaging. 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 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 "will," "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) the availability of reimbursement or other forms of funding for our products 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, and (18) 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, 2009. 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 December 31, 2009 and 2010 (Unaudited, dollars in thousands) Research Selling And And General Tax Gross Develop- Market- And Other Expense Profit ment ing Admin Expenses (Benefit) Total -------- ------- -------- -------- -------- ------- ------- Three month period ended December 31, 2010 Compensation expenses $ - $ 124 $ 564 $ 1,324 $ - $ - $ 2,012 Sierra PPA 237 - 81 395 - (127) 586 -------- ------- -------- -------- -------- ------- ------- Total $ 237 $ 124 $ 645 $ 1,719 $ 0 $ (127) $ 2,598 ======== ======= ======== ======== ======== ======= ======= Three month period ended December 31, 2009 Compensation expenses $ - $ (29) $ 110 $ 1,309 $ - $ - $ 1,390 Impairment of Goodwill - - - - 483 - 483 Tax benefit - - - - - (857) (857) -------- ------- -------- -------- -------- ------- ------- Total $ 0 $ (29) $ 110 $ 1,309 $ 483 $ (857) $ 1,016 ======== ======= ======== ======== ======== ======= ======= Given Imaging Ltd. and its Consolidated Subsidiaries Excluded Items For the Twelve Months Ended December 31, 2009 and 2010 (Unaudited, dollars in thousands) Research Selling And And General Tax Gross Develop- Market- And Other Expense Profit ment ing Admin Expenses (Benefit) Total -------- ------- -------- -------- -------- ------- ------- Twelve month period ended December 31, 2010 Compensation expenses $ - $ 428 $ 1,557 $ 6,497 $ - $ - $ 8,482 Sierra acquisition expenses - - - 686 - - 686 Sierra PPA 1,982 - 245 645 - (888) 1,984 -------- -------- -------- -------- -------- ------- ------- Total $ 1,982 $ 428 $ 1,802 $ 7,828 $ 0 $ (888) $11,152 ======== ======== ======== ======== ======== ======= ======= Twelve month period ended December 31, 2009 Compensation expenses $ - $ 257 $ 1,619 $ 5,392 $ - $ - $ 7,268 Impairment of Goodwill - - - - 483 - 483 Tax (benefit) - - - - - (2,608) (2,608) -------- -------- -------- -------- -------- ------- ------- Total $ 0 $ 257 $ 1,619 $ 5,392 $ 483 $(2,608) $ 5,143 ======== ======== ======== ======== ======== ======= ======= Given Imaging Ltd. and its Consolidated Subsidiaries Reconciliation of GAAP results to non-GAAP results For the Three months ended December 31, 2010 and 2009 Condensed, in thousands except share and per share data Q4 2010 Q4 2009 Specified Non Specified Non GAAP Items (*) GAAP GAAP Items (*) GAAP -------- -------- -------- -------- -------- -------- Revenues $ 44,920 - $ 44,920 $ 40,040 - $ 40,040 Cost of revenues (10,232) 237 (9,995) (9,379) - (9,379) Gross profit 34,688 237 34,925 30,661 - 30,661 Gross profit as a % of revenues 77.2% - 77.7% 76.6% - 76.6% Operating expenses Research and development, net (5,643) 124 (5,519) (4,211) (29) (4,240) Sales and marketing (18,696) 645 (18,051) (16,171) 110 (16,061) General and administrative (7,002) 1,719 (5,283) (4,898) 1,309 (3,589) Other, net (299) - (299) (889) 483 (406) Total operating expenses (31,640) 2,488 (29,152) (26,169) 1,873 (24,296) Operating profit 3,048 2,725 5,773 4,492 1,873 6,365 Operating profit as a % of revenues 6.8% - 12.9% 11.2% - 15.9% Financing income, net 909 - 909 308 - 308 Profit before taxes on income 3,957 2,725 6,682 4,800 1,873 6,673 Income tax benefit (expense) (799) (127) (926) 382 (857) (475) Net Profit 3,158 2,598 5,756 5,182 1,016 6,198 Net loss attributable to non-controlling interest 45 - 45 187 - 187 Net profit attributable to shareholders $ 3,203 $ 2,598 $ 5,801 $ 5,369 $ 1,016 $ 6,385 Net profit attributable to share- holders as a % of revenues 7.1% - 12.9% 13.4% - 15.9% Earnings per share Basic Earnings attributable to shareholders per Ordinary Share $ 0.11 $ 0.08 $ 0.19 $ 0.18 $ 0.04 $ 0.22 Diluted Earnings attributable to shareholders per Ordinary Share $ 0.11 $ 0.08 $ 0.19 $ 0.17 $ 0.03 $ 0.21 Given Imaging Ltd. and its Consolidated Subsidiaries Reconciliation of GAAP results to non-GAAP results For the nine months ended September 30, 2010 and 2009 Condensed, in thousands except share and per share data YTD 2010 YTD 2009 Specified Non Specified Non GAAP Items (*) GAAP GAAP Items (*) GAAP -------- -------- -------- -------- -------- -------- Revenues $157,809 - $157,809 $141,763 - $141,763 Cost of revenues (37,629) 1,982 (35,647) (33,145) - (33,145) Gross profit 120,180 1,982 122,162 108,618 - 108,618 Gross profit as a % of revenues 76.2% - 77.4% 76.6% - 76.6% Operating expenses Research and development, net (20,218) 428 (19,790) (16,733) 257 (16,476) Sales and marketing (67,114) 1,802 (65,312) (61,428) 1,619 (59,809) General and administrative (25,138) 7,828 (17,310) (18,919) 5,392 (13,527) Other, net (759) - (759) (1,220) 483 (737) Total operating expenses (113,229) 10,058 (103,171) (98,300) 7,751 (90,549) Operating profit 6,951 12,040 18,991 10,318 7,751 18,069 Operating profit as a % of revenues 4.4% - 12.0% 7.3% - 12.7% Financing income, net 2,599 - 2,599 1,584 - 1,584 Profit before taxes on income 9,550 12,040 21,590 11,902 7,751 19,653 Income tax benefit (expense) (1,362) (888) (2,250) 1,542 (2,608) (1,066) Net Profit 8,188 11,152 19,340 13,444 5,143 18,587 Net loss attributable to non-controlling interest 290 - 290 891 - 891 Net profit attributable to shareholders $ 8,478 $ 11,152 $ 19,630 $ 14,335 $ 5,143 $ 19,478 Net profit attributable to share- holders as a % of revenues 5.4% - 12.4% 10.1% - 13.7% Earnings per share Basic Earnings attributable to shareholders per Ordinary Share $ 0.29 $ 0.37 $ 0.66 $ 0.49 $ 0.18 $ 0.67 Diluted Earnings attributable to shareholders per Ordinary Share $ 0.28 $ 0.36 $ 0.64 $ 0.47 $ 0.17 $ 0.64 Given Imaging Ltd. and its Subsidiaries Consolidated Balance Sheets (In thousands except share data) December 31, ---------- ---------- 2010 2009 Assets Current assets Cash and cash equivalents $ 34,619 $ 46,458 Short-term investments 51,973 31,736 Accounts receivable: Trade, net 27,862 24,742 Other 4,291 3,799 Inventories 19,076 17,302 Advances to suppliers 441 534 Deferred tax assets 1,638 2,207 Prepaid expenses 1,585 1,036 ---------- ---------- Total current assets 141,485 127,814 Deposits 1,212 1,062 Assets held for employees' severance payments 6,393 4,968 Marketable securities 3,873 16,956 Long-term inventory 5,626 6,015 Fixed assets, less accumulated depreciation 13,709 13,843 Deferred tax assets - 192 Intangible assets less accumulated amortization 25,813 11,284 Goodwill 24,089 3,586 ---------- ---------- Total Assets $ 222,200 $ 185,720 ========== ========== Given Imaging Ltd. and its Subsidiaries Consolidated Balance Sheets (In thousands except share data) December 31, -------------------- 2010 2009 Liabilities and equity Current liabilities Current installments of obligation under capital lease $ 168 $ 145 Accounts payable: Trade 9,125 6,789 Other 26,065 20,060 Deferred revenue 788 234 --------- --------- Total current liabilities 36,146 27,228 --------- --------- Long-term liabilities Obligation under capital lease 244 356 Liability in respect of employees' severance payments 7,151 5,530 Deferred tax liabilities 5,871 - --------- --------- Total long-term liabilities 13,266 5,886 --------- --------- Total liabilities 49,412 33,114 --------- --------- Commitments and contingencies Equity Shareholders` equity: Ordinary Shares, NIS 0.05 par value each (90,000,000 shares authorized as of December 31, 2010 and 2009, 29,829,277 and 29,370,972 shares issued and fully paid as of December 31, 2010 and 2009, respectively) 350 345 Additional paid-in capital 194,899 182,203 Capital reserve 2,051 2,166 Accumulated other comprehensive income 95 399 Accumulated deficit (24,707) (33,185) --------- --------- Shareholders` equity 172,688 151,928 --------- --------- Non-controlling interests 100 678 --------- --------- Total equity 172,788 152,606 --------- --------- Total liabilities, shareholders' equity and non-controlling interests $ 222,200 $ 185,720 ========= ========= Given Imaging Ltd. and its Subsidiaries Consolidated Statements of Operations (In thousands except share and per share data) Year ended December 31, ---------------------------------- 2010 2009 2008 ---------- ---------- ---------- Revenues $ 157,809 $ 141,763 $ 125,108 Cost of revenues (37,629) (33,145) (33,001) ---------- ---------- ---------- Gross profit 120,180 108,618 92,107 ---------- ---------- ---------- Operating expenses Research and development, gross (21,695) (17,842) (15,126) In-process research and development acquired in a business combination - - (4,700) ---------- ---------- ---------- (21,695) (17,842) (19,826) Government grants 1,477 1,109 1,530 ---------- ---------- ---------- Research and development, net (20,218) (16,733) (18,296) Sales and marketing (67,114) (61,428) (60,902) General and administrative (25,138) (18,919) (19,320) Termination of marketing agreement - - 5,443 Other, net (759) (1,220) (867) ---------- ---------- ---------- Total operating expenses (113,229) (98,300) (93,942) ---------- ---------- ---------- Operating profit (loss) 6,951 10,318 (1,835) Financial income, net 2,599 1,584 4,004 ---------- ---------- ---------- Profit before taxes on income 9,550 11,902 2,169 Income tax benefit (expense) (1,362) 1,542 (250) ---------- ---------- ---------- Net Profit 8,188 13,444 1,919 Net loss attributable to non-controlling interest 290 891 2,087 ---------- ---------- ---------- Net profit attributable to shareholders $ 8,478 $ 14,335 $ 4,006 ========== ========== ========== Earnings per share: Basic Earnings per Ordinary Share $ 0.29 $ 0.49 $ 0.14 ========== ========== ========== Diluted Earnings per Ordinary Share $ 0.28 $ 0.47 $ 0.13 ========== ========== ========== Weighted average number of Ordinary Shares used to comp