YOQNEAM, ISRAEL--(Marketwire - August 11, 2010) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the second quarter ended June 30, 2010.
Worldwide revenues were $42.1 million in the second quarter of 2010, a 17 percent increase from $36 million in the second quarter of 2009. Second quarter revenues include $5.7 million from Sierra Scientific Instruments (SSI) which the company acquired in April. Global sales of existing PillCam SB products were essentially flat as Americans cut back on visits to the doctor and healthcare utilization in general was much lower in the second quarter due to economic uncertainty. Specifically, overall GI procedures have fallen considerably in the U.S. from levels a year ago. The European economic crisis associated with the weak Euro also negatively impacted European revenue growth. However, gross margin on a non-GAAP basis in the second quarter of 2010 was 77.3 percent, compared to gross margin of 76.1 percent in the second quarter of 2009 due to productivity improvements and headcount control. On a GAAP basis, gross margin in the second quarter of 2010 includes a one-time charge of $1.5 million from the SSI acquisition and was 73.7 percent, compared to 76.1 percent in second quarter of 2009.
On a non-GAAP basis, net income for the second quarter of 2010 increased 10.5 percent and reached $6.3 million, or $0.20 per share on a fully diluted basis, compared to net income of $5.7 million or $0.19 per share on a fully diluted basis in the second quarter of 2009. Non-GAAP net income excludes $1.3 million of expenses related to the SSI acquisition and $2.8 million of equity related compensation expenses (FAS 123R). Non-GAAP net income for the second quarter of 2009 also excluded compensation expenses of $2.2 million and a one-time tax gain of $1.4 million. On GAAP basis, net income for the second quarter of 2010 was $2.2 million, or $0.07 per share, compared to $4.9 million, or $0.16 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 second quarter was $7.7 million, compared to $6.6 million in the second quarter of 2009. Cash and cash equivalents, short-term investments and marketable securities on June 30, 2010 totaled $72.9 million.
"We sold approximately 60,000 PillCam SB capsules during the second quarter, close to our quarterly sales record. We are very pleased with our strong operating cash flow, as well as the ongoing improvement in our operating and net income margins, which reached 17.0 percent and 14.9 percent, respectively as reflected in our non-GAAP results," said Homi Shamir, president and CEO of Given Imaging. "We remain confident that our PillCam business will continue to grow during the second half of 2010, despite the fact that sales were impacted by the trend of lower utilization of healthcare services, especially in the U.S., and the adverse effect of the weak Euro."
Second Quarter 2010 Revenue Analysis
Revenues in the Americas region were $22.4 million, including revenues of $4.5 million from the Bravo pH Monitoring System. In the same period in 2009 revenues in the Americas region were $22.9 million, including revenues of $3.3 million from Bravo. Revenues in the EMEA region were $10.0, the same as in the corresponding period last year. Revenues in the EMEA region were impacted by the weakness of the Euro. APAC revenues increased by 28 percent to $4.1 million compared to $3.2 million in the same period in 2009. SSI contributed $5.7 million to the Company's consolidated revenues.
Worldwide PillCam SB sales amounted to 59,900 capsules in the second quarter of 2010, compared to 57,500 in the same period last year. PillCam SB sales in the Americas region declined by 3 percent to 37,200 in the second quarter of 2010. PillCam SB sales in the EMEA region increased by 10 percent to 16,500 compared to the second quarter of 2009, while PillCam SB sales in the APAC region grew almost 50 percent to 6,100 from 4,100 in the same period in 2009.
Supplemental second 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, 2010, revenues increased by 11.6 percent to $74.2 million compared to $66.5 million in the same period of 2009. First half 2010 revenues also include second quarter 2010 SSI revenues of $5.7 million. Sales in the Americas region in the first half of 2010 were $42.9 million, slightly below the $43.1 million in the same period in 2009. For the six month period, sales of PillCam SB in the Americas region declined approximately 3 percent. Sales in the Americas region include $7.2 million from sales of Bravo, compared to $5.9 million in the first half of 2009. Sales in the EMEA region increased by 2 percent to $18.5 million, from $18.1 million in the same period in 2009. Revenues in the EMEA region were adversely impacted by the weakness of the Euro during the second quarter. Sales in the APAC region were $7.2 million, a 33 percent increase from $5.4 million last year.
On a non-GAAP basis, gross profit margin for the six month period was 77.2 percent compared to 76 percent in 2009. On a GAAP basis, gross profit margin in the first six months of 2010 was 73.7 percent, and includes a one-time charge of $1.5 million from the SSI acquisition, compared to 76.1 percent in the second quarter of 2009. On a non-GAAP basis net income for the first six months of 2010 grew 43 percent to $10.6 million, or $0.35 per share on a fully diluted GAAP basis, compared to net income of $7.4 million or $0.25 per share for the same period in 2009. GAAP net income for the first six months of 2010 was $4.3million, or $0.14 per share, compared to $5.1 million or $0.17 in the same quarter of last year.
2010 Guidance Update
The Company is updating its 2010 earnings per share guidance to reflect the acquisition of SSI. As a result of the provisional purchase price allocation, the Company now projects GAAP earnings per share of $0.44 - $0.52. Non-GAAP earnings per share guidance (excluding charges relating to FAS123R and SSI acquisition expenses) remains unchanged at $0.76 - $0.84.
The Company anticipates that as a result of the continued trend of lower utilization of healthcare services by Americans, and persistent global economic weakness, 2010 revenues will be in the lower range of guidance, previously updated to reflect the SSI acquisition on April 1, 2010, which is between $167 million and $174 million.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English at 9:00am ET on Thursday, August 12, 2010. To participate in this teleconference, please dial 888-206-4913 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-9313. 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 26 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 3918364.
Hebrew Call
A conference call in Hebrew will take place on August 12 at 2:00pm Israel time, 7:00am 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 12 until August 14 by dialing +972 3 9255937.
About Given Imaging Ltd.
Since 2001, Given Imaging has advanced gastrointestinal visualization 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 visualize diseases of the esophagus, small bowel and colon. All Given Imaging products allow patients to maintain normal activities. In April 2010 Given Imaging acquired Sierra Scientific Instruments, a 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 Singapore. For more information, please visit www.givenimaging.com.
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 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 June 30, 2009 and 2010
(Unaudited, dollars in thousands)
Research Selling General Tax
Gross And And And Expense
Profit Development Marketing Admin (Benefit) Total
--------- ---------- --------- -------- -------- --------
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
========= ========== ========= ======== ======== ========
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
========= ========== ========= ======== ======== ========
Given Imaging Ltd. and its Consolidated Subsidiaries
Excluded Items
For the Six Months Ended June 30, 2009 and 2010
(Unaudited, dollars in thousands)
Research Selling General Tax
Gross And And And Expense
Profit Development Marketing Admin (Benefit) Total
--------- ---------- --------- -------- -------- --------
Six month period
ended June 30, 2010
Compensation
expenses $ - $ 156 $ 626 $ 3,623 $ - $ 4,405
Sierra PPA 1,509 111 82 930 (679) 1,953
--------- ---------- --------- -------- -------- --------
Total $ 1,509 $ 267 $ 708 $ 4,553 $ (679) $ 6,358
========= ========== ========= ======== ======== ========
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
========= ========== ========= ======== ======== ========
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the three months ended June 30, 2010 and 2009
Condensed, in thousands except share and per share data
Q2 Q2
2010 2009
Specified Specified
Items Non Items Non
GAAP (*) GAAP GAAP (*) GAAP
-------- ------ -------- -------- ------ --------
Revenues $ 42,134 $ - $ 42,134 $ 36,030 $ - $ 36,030
Cost of revenues (11,062) 1,509 (9,553) (8,621) - (8,621)
Gross profit 31,072 1,509 32,581 27,409 27,409
Gross profit
as a % of
revenues 73.7% - 77.3% 76.1% 76.1%
Operating expenses
Research and
development, net (5,163) 184 (4,979) (4,214) 115 (4,099)
Sales and marketing (16,345) 381 (15,964) (16,541) 845 (15,696)
General and
administrative (6,956) 2,670 (4,286) (4,564) 1,218 (3,346)
Other, net (171) - (171) (3) - (3)
Total operating
expenses (28,635) 3,235 (25,400) (25,322) 2,178 (23,144)
Operating profit
(loss) 2,437 4,744 7,181 2,087 2,178 4,265
Operating
profit as a % of
revenues 5.8% 17.0% 5.8% 11.8%
Financing income, net (175) - (175) 1,316 - 1,316
Profit (loss)
before taxes on
income 2,262 4,744 7,006 3,403 2,178 5,581
Income tax benefit
(expense) (100) (679) (779) 1,194 (1,390) (196)
Net Profit (loss) 2,162 4,065 6,227 4,597 788 5,385
Net loss
attributable to
non-controlling
interest 49 - 49 291 - 291
Net profit (loss)
attributable to
shareholders $ 2,211 $4,065 $ 6,276 $ 4,888 $ 788 $ 5,676
Net profit (loss)
attributable to
shareholders as
a % of revenues 5.2% 14.9% 13.6% 15.8%
Earnings per share
Basic Earnings
(losses)
attributable to
shareholders per
Ordinary Share $ 0.07 $ 0.14 $ 0.21 $ 0.17 $ 0.02 $ 0.19
Diluted Earnings
(losses)
attributable to
shareholders per
Ordinary Share $ 0.07 $ 0.13 $ 0.20 $ 0.16 $ 0.03 $ 0.19
(*)See specified items
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the three and six months ended June 30, 2010 and 2009
Condensed, in thousands except share and per share data
YTD 2010 YTD 2009
Specified Specified
Items Non Items Non
GAAP (*) GAAP GAAP (*) GAAP
-------- -------- -------- -------- -------- --------
Revenues $ 74,231 $ - $ 74,231 $ 66,503 $ - $ 66,503
Cost of
revenues (18,398) 1,509 (16,889) (15,939) - (15,939)
Gross profit 55,833 1,509 57,342 50,564 - 50,564
Gross profit
as a % of
revenues 75.2% 77.2% 76.0% 76.0%
Operating
expenses
Research and
development,
net (8,940) 267 (8,673) (7,890) 193 (7,697)
Sales and
marketing (31,094) 708 (30,386) (30,499) 998 (29,501)
General and
administrative (12,090) 4,553 (7,537) (8,979) 2,497 (6,482)
Other, net (234) - (234) (15) - (15)
Total operating
expenses (52,358) 5,528 (46,830) (47,383) 3,688 (43,695)
Operating
profit (loss) 3,475 7,037 10,512 3,181 3,688 6,869
Operating
profit as a %
of revenues 4.7% 14.2% 4.8% 10.3%
Financing
income, net 803 - 803 190 - 190
Profit before
taxes on
income 4,278 7,037 11,315 3,371 3,688 7,059
Income tax
benefit
(expense) (229) (679) (908) 1,166 (1,390) (224)
Net Profit 4,049 6,358 10,407 4,537 2,298 6,835
Net loss
attributable to
non-controlling
interest 215 - 215 590 - 590
Net profit
attributable to
shareholders $ 4,264 $ 6,358 $ 10,622 $ 5,127 $ 2,298 $ 7,425
Net profit
attributable
to shareholders
as a % of
revenues 5.7% 14.3% 7.7% 11.2%
Earnings per share
Basic Earnings
attributable to
shareholders
per Ordinary
Share $ 0.14 $ 0.22 $ 0.36 $ 0.18 $ 0.08 $ 0.26
Diluted
Earnings
attributable to
shareholders
per Ordinary
Share $ 0.14 $ 0.21 $ 0.35 $ 0.17 $ 0.08 $ 0.25
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
June 30, December 31,
------------ ------------
2010 2009
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 39,056 $ 46,458
Short-term investments 27,891 31,736
Accounts receivable:
Trade 26,369 24,742
Other 4,787 3,799
Inventories 18,472 17,302
Prepaid expenses 1,559 1,036
Deferred tax assets 1,834 2,207
Advances to suppliers 733 534
------------ ------------
Total current assets 120,701 127,814
------------ ------------
Deposits 1,147 1,062
Assets held for employee severance payments 5,252 4,968
Marketable Securities 5,915 16,956
Non-current Inventory 5,920 6,015
Fixed assets, at cost, less accumulated
depreciation 14,205 13,843
Deferred tax assets 192 192
Intangible assets, less accumulated amortization
(Note 4) 26,864 11,284
Goodwill 24,109 3,586
------------ ------------
Total Assets $ 204,305 $ 185,720
=========== ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
June 30, December 31,
------------ ------------
2010 2009
------------ ------------
Liabilities and equity
Current liabilities
Current installments of obligation under capital
lease $ 162 $ 145
Accounts payable
Trade 7,376 6,789
Other 25,173 20,060
Deferred income 869 234
----------- -----------
Total current liabilities 33,580 27,228
----------- -----------
Long-term liabilities
Obligation under capital lease, net 311 356
Liability in respect of employees' severance
payments 5,779 5,530
----------- -----------
Total long-term liabilities 6,090 5,886
----------- -----------
Total liabilities 39,670 33,114
----------- -----------
Equity
Shareholders' equity
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,745,352
and 29,370,972 shares issued and fully paid
as of March 31, 2010 and December 31, 2009,
respectively) 349 345
Additional paid-in capital 190,395 182,203
Capital reserve 2,166 2,166
Accumulated other comprehensive loss 183 399
Accumulated deficit (28,921) (33,185)
----------- -----------
Shareholders' equity 164,172 151,928
----------- -----------
Non-controlling interest 463 678
----------- -----------
Total Equity 164,635 152,606
----------- -----------
Total liabilities and equity $ 204,305 $ 185,720
=========== ===========
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 ended Year
June 30 June 30 ended
---------------------- ---------------------- December 31
2010 2009 2010 2009 2009
---------- ---------- ---------- ---------- ----------
Revenues $ 74,231 $ 66,503 $ 42,134 $ 36,030 $ 141,763
Cost of
revenues (18,398) (15,939) (11,062) (8,621) (33,145)
---------- ---------- ---------- ---------- ----------
Gross profit 55,833 50,564 31,072 27,409 108,618
---------- ---------- ---------- ---------- ----------
Operating
expenses
Research and
development,
gross (9,447) (8,524) (5,423) (4,514) (17,842)
Government
grants 507 634 260 300 1,109
---------- ---------- ---------- ---------- ----------
Research and
development,
net (8,940) (7,890) (5,163) ( 4,214) (16,733)
Sales and
marketing (31,094) (30,499) (16,345) (16,541) (61,428)
General and
administrative (12,090) (8,979) (6,956) (4,564) (18,919)
Other, net (234) (15) (171) (3) (1,220)
---------- ---------- ---------- ---------- ----------
Total operating
expenses (52,358) (47,383) (28,635) (25,322) (98,300)
---------- ---------- ---------- ---------- ----------
Operating
income 3,475 3,181 2,437 2,087 10,318
Financing
income
(expense), net 803 190 (175) 1,316 1,584
---------- ---------- ---------- ---------- ----------
Income before
taxes
on income 4,278 3,371 2,262 3,403 11,902
Income tax
(expense)
benefit (229) 1,166 (100) 1,194 1,542
---------- ---------- ---------- ---------- ----------
Net income 4,049 4,537 2,162 4,597 13,444
Net loss
attributable to
non-controlling
interest 215 590 49 291 891
---------- ---------- ---------- ---------- ----------
Net income
attributable to
Shareholders $ 4,264 $ 5,127 $ 2,211 $ 4,888 $ 14,335
========== ========== ========== ========== ==========
Earnings per
share
Basic Earnings
attributable
to shareholders
per Ordinary
Share $ 0.14 $ 0.18 $ 0.07 $ 0.17 $ 0.49
========== ========== ========== ========== ==========
Diluted
Earnings
attributable
to shareholders
per Ordinary
Share $ 0.14 $ 0.17 $ 0.07 $ 0.16 $ 0.47
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used to
compute basic
Earnings
per Ordinary
share 29,551,276 29,258,035 29,674,785 29,258,285 29,281,897
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used to
compute dilute
Earnings
per Ordinary
share 30,676,309 29,838,686 30,706,200 29,766,429 30,423,162
========== ========== ========== ========== ==========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
Six month period Three month period
ended ended Year
June 30 June 30 ended
-------------------- -------------------- December 31
2010 2009 2010 2009 2009
--------- --------- --------- --------- ---------
Cash flows from
operating
activities:
Net income $ 4,049 $ 4,537 $ 2,162 $ 4,597 $ 13,444
Adjustments required
to reconcile net
income to net cash
used in operating
activities:
Depreciation and
amortization 4,056 2,982 2,558 1,517 6,096
Goodwill impairment - - - - 483
Deferred tax assets 373 183 167 173 (1,221)
Stock based
compensation 4,405 3,688 2,792 2,178 7,268
Other - (136) - (145) 570
Net increase in
trading securities 323 (3,372) 236 (3,372) -
Decrease (increase)
in accounts receivable
- trade 2,053 (708) (975) (527) (3,069)
Decrease(increase)
in accounts receivable
- other (984) 1,674 (664) (660) 863
Decrease in prepaid
expenses 3 382 562 637 595
Decrease (increase)
in advances to suppliers (199) 2,701 (356) 2,742 3,006
Decrease (increase)
in inventories 2,641 (2,688) 1,216 676 (4,386)
Increase (decrease)
in accounts payable (5,593) (509) (383) (687) 1,819
Increase (decrease) in
deferred income 635 (918) 383 (524) (1,289)
--------- --------- --------- --------- ---------
Net cash provided by
operating activities 11,762 7,816 7,698 6,605 24,179
--------- --------- --------- --------- ------
