YOQNEAM, ISRAEL--(Marketwire - August 05, 2009) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the second quarter ended June 30, 2009.
Worldwide revenues in the second quarter of 2009 increased to a record $36 million from $33.1 million in the second quarter of 2008. Gross margin in the second quarter of 2009 increased to 76.1%, compared to 75.5% in the second quarter of 2008.
Net income for the second quarter of 2009 increased by 75% to $4.9 million or $0.16 per share on a fully diluted* GAAP basis compared to $2.9 million, or $0.09 per share, respectively, in the second quarter of 2008. Non-GAAP earnings per share for the second quarter of 2009 increased to $0.19, compared to $0.09 in the same period last year.
Non-GAAP net income for the quarter excludes a tax benefit of $1.4 million resulting from a settlement agreement with the Israeli Tax Authorities related to an audit of the Company’s income tax returns for fiscal years 2004 through 2007. Non-GAAP net income also excludes compensation expense (FAS123R) of $2.1 million. A reconciliation of GAAP results to non-GAAP results is below.
Cash and cash equivalents, short-term investments and marketable securities at June 30, 2009 increased to $83.3 million.
“We are very pleased that despite the global economic slowdown, we are reporting very good second quarter results including record revenue fueled by strong Bravo sales and the highest level of PillCam SB sales ever reported. In particular, we’re extremely pleased that our efforts to increase operating efficiencies and make our sales promotions more cost-effective allowed us to triple the second quarter non-GAAP operating margin to almost 12%,” said Homi Shamir, president and CEO of Given Imaging. “Based on our robust second quarter and first half 2009 results, we believe that we are firmly on track to achieve our 2009 financial guidance.”
Second Quarter 2009 Revenue Analysis
Sales in the Americas region increased 16% to $22.9 million, from $19.7 million in the same period in 2008, and 18% compared to $20.2 million in the first quarter of 2009. Sales in the Americas region include $3.3 million from sales of the Bravo pH Monitoring System (Bravo). Sales in the EMEA region were $10 million, an increase of 20% from $8.3 million in the same period in 2008. EMEA sales include $400,000 from sales of Bravo. Sales in the APAC region were $3.2 million, a decline of 36% from $5 million last year. The decline in sales in the APAC region is attributable to a decline in systems sales in Japan, and a weak market in most of the Asian countries.
Worldwide PillCam SB sales amounted to 57,500 capsules in the second quarter of 2009, an increase of 8% compared to the same period last year. PillCam SB sales in the Americas region increased by 1% to 38,500 in the second quarter of 2009 compared to 38,200 in the second quarter of 2008. PillCam SB sales in the EMEA region increased 36% compared to the second quarter of 2008, while PillCam SB sales in the APAC region decreased 2%. Worldwide reorders of PillCam SB increased by 9% to approximately 56,100 compared to approximately 51,300 in the second quarter of 2008. PillCam SB reorders accounted for the majority of PillCam SB sales in the second quarter.
Supplemental second 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, 2009, sales increased by 10% to $66.5 million compared to $60.2 million in the same period of 2008. Sales in the Americas region in the first half of 2009 grew 21% to $43.1 million compared to $35.5 million in the same period in 2008. For the six month period, sales of PillCam SB in the Americas region grew approximately 7%. Also, sales in the Americas region include $5.9 million from sales of Bravo. Sales in the EMEA region increased by 10% to $18.1 million, from $16.5 million in the same period in 2008, and sales in the APAC region were $5.4 million, a decline of 50% from $8.1 million last year.
Gross profit for the six month period was 76% compared to 73.5% in 2008. Net income for the first six months of 2009 increased 29% to $5.1 million, or $0.17 per share on a fully diluted GAAP basis, compared to net income of $4 million or $0.13 per share for the same period in 2008. Non-GAAP earnings per share for the first six months of 2009 increased to $7.4 million or $0.25, compared to $2.8 million or $0.09 in the same quarter of last year.
2009 Guidance
The company is reaffirming its guidance for 2009 for revenues of between $141 million and $148 million, and GAAP EPS of between $0.20 - $0.28, and non-GAAP EPS of $0.46 - $0.54.
Recent Developments
-- One Millionth PillCam Milestone
In May 2009, Given Imaging announced that it had reached the milestone of selling one million PillCam video capsules since the company introduced the PillCam video capsule in 2001.
-- Launched Two New Products: SensorBelt and RecorderPouch
In May, Given Imaging launched a simplified procedure for performing PillCam SB 2 capsule endoscopies for the detection of disease in the small intestine. The new procedure utilizes two new products -- SensorBelt and RecorderPouch -- replacing the sensor array and the recorder belt used previously with the DataRecorder to record the wireless signals emitted by the capsule. The RecorderPouch and SensorBelt are now available following 510k clearance.
-- Dick Aderman Named President of Given Imaging Inc.
Dick Aderman was appointed President of Given Imaging Inc. in July. Mr. Aderman has extensive healthcare technology and diagnostics industry experience.
-- First Generation PillCam COLON Study Published in the New England Journal of Medicine
Results from a prospective multi-center study comparing the performance of the first generation PillCam COLON capsule endoscope with optical colonoscopy for the detection of colorectal polyps and cancer were published in the July 16, 2009 issue of the New England Journal of Medicine. The study’s authors concluded that while this first-generation PillCam COLON’s sensitivity for detecting colonic lesions was lower than colonoscopy, colon capsule endoscopy is a safe way to visualize the colon that obviates the need for sedation, intubation or air insufflation. Given Imaging is currently conducting R&D trials for the second generation PillCam COLON in Israel. PillCam COLON is not cleared for use in the USA.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English at 9:00am ET on Thursday, August 6. To participate in this teleconference, please dial 888-820-9408 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1241. 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 20 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 4097216.
Hebrew Call
A separate conference call in Hebrew will take place on August 6 at 2:00pm Israel time, 7am ET. To access this call, please dial +972 3 9180609 ten minutes before the conference is scheduled to begin. A replay of the call will be available from August 9 until August 11 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 29,766,429 at June 30, 2009, and 30,678,341 at June 30, 2008
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
