YOQNEAM, ISRAEL--(Marketwire - November 04, 2009) - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the third quarter ended September 30, 2009.
Worldwide revenues in the third quarter of 2009 increased to $35.2 million from $31.1 million in the third quarter of 2008. Gross margin in the third quarter of 2009 increased to 77.8%, compared to 75% in the third quarter of 2008.
Net income for the third quarter of 2009 increased by 82% to $3.8 million or $0.13 per share on a fully diluted* GAAP basis compared to $2.1 million, or $0.07 per share, respectively, in the third quarter of 2008. Non-GAAP earnings per share for the third quarter of 2009 increased to $6.0 million, or $0.20 per share, compared to $3.8 million, or $0.12 in the same period last year. A reconciliation of GAAP results to non-GAAP results is below.
Cash and cash equivalents, short-term investments and marketable securities at September 30, 2009 increased to $88.8 million.
"We are pleased to report another quarter of solid top and bottom-line results as third quarter revenue increased by 13% despite persistent softness in the medical equipment market. Sales of our Bravo pH Monitoring System grew again this quarter and helped to drive our top line. Our focus on increasing profitability resulted in significant growth in gross and operating profit margins," said Homi Shamir, president and CEO of Given Imaging. "Gross profit reached almost 78%, a result of improved manufacturing efficiencies and a favorable product mix. Non-GAAP operating margin continues to improve, reaching 13.7% this quarter, from 8.5% in the first quarter and 11.8% in the second quarter of this year. Looking ahead, we are very excited to be launching our second generation PillCam COLON at the GASTRO 2009 meeting in London later this month and plan to begin marketing this product in Europe in early 2010."
Third Quarter 2009 Revenue Analysis
Sales in the Americas region increased 16.5% to $22.6 million, from $19.4 million in the same period in 2008. Sales in the EMEA region were $9 million, an increase of 3.4% from $8.7 million in the same period in 2008. Sales in the APAC region were $3.6 million, an increase of 16% from $3.1 million last year.
Worldwide PillCam SB sales amounted to 54,800 capsules in the third quarter of 2009, compared to 56,100 capsules in the same period last year. PillCam SB sales in the Americas region of 36,300 were flat in the third quarter of 2009 compared to the same period last year. PillCam SB sales in the EMEA region increased 7% compared to the third quarter of 2008, while PillCam SB sales in the APAC region decreased 30%. Worldwide reorders of PillCam SB decreased by 2% to approximately 53,800 compared to approximately 55,100 in the third quarter of 2008. PillCam SB reorders accounted for the majority of PillCam SB sales in the third quarter.
Supplemental third quarter data can be found at www.givenimaging.com in the Investor Relations section.
Nine Month Financial Results
For the nine month period ended Sept 30, 2009, sales increased by 11% to $101.7 million compared to $91.3 million in the same period of 2008. Sales in the Americas region in the first three quarters of 2009 grew 20% to $65.7 million compared to $54.9 million in the same period in 2008. For the nine month period, sales of PillCam SB in the Americas region grew approximately 4.8%. Sales in the EMEA region increased by 7.5% to $27.1 million, from $25.2 million in the same period in 2008, and sales in the APAC region were $9.0 million, a decline of 20% from $11.2 million last year.
Gross profit for the nine month period was 76.6% compared to 74% in 2008. Net income for the first nine months of 2009 increased 48% to $9.0 million, or $0.30 per share on a fully diluted GAAP basis, compared to net income of $6.1 million or $0.20 per share for the same period in 2008. Non-GAAP earnings per share for the first nine months of 2009 more than doubled to $13.5 million or $0.45, compared to $6.8 million or $0.22 in the same quarter of last year.
2009 Guidance Revision
The company expects 2009 revenue to be near the low end of prior guidance of between $141 and $148 million. The company is increasing its 2009 EPS guidance and now expects GAAP EPS to be between $0.42 - $0.46, compared to prior guidance of $0.20 - $0.28 and non-GAAP EPS of $0.64 - $0.68 compared to prior guidance of $0.46 - $0.54.
Recent Developments
PillCam SB and Agile Patency Capsule Receive FDA Clearance for Young Children
In October, the U.S. Food and Drug Administration (FDA) cleared the PillCam SB video capsules and Agile patency capsules for use in patients two years of age and older.
PillCam COLON2 Update
Given Imaging recently announced encouraging results from a trial that validated new features of the company's second-generation PillCam Colon video capsule and system. Conducted by clinicians at five hospitals in Israel, the study evaluated the performance of PillCam COLON2 in 98 patients who had risk or warning symptoms of colon pathology.
The Company also announced that it obtained the CE mark for the sale of PillCam COLON2 in Europe. PillCam COLON2 will be launched at the Gastro 2009 conference taking place in London November 21 - 25 at which time the company plans on disclosing additional details regarding PillCam COLON2, including product specifications and software enhancements.
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English at 9:00am ET on Thursday, November 5. To participate in this teleconference, please dial 888-661-5138 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1279. 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 November 19 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 9998874.
A separate conference call in Hebrew will take place on November 5 at 2:00pm Israel time, 7am 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 November 8 until November 10th 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 30,648,420 at Sept 30, 2009, and 30,601,355 at Sept 30, 2008
Given Imaging Ltd. and its Consolidated Subsidiaries
Specified Items
For the Three Months Ended September 30, 2008 and 2009
(Unaudited, dollars in thousands)
General Termination
Research Selling And Of
And And Administra- Marketing Tax
Development Marketing tion Agreement Benefit Total
Three month
period
ended
September
30, 2009
Compensation
expenses $ 93 $ 511 $ 1,586 $ - $ - $ 2,190
----------- ---------- --------- ---------- -------- -------
Total $ 93 $ 511 $ 1,586 $ - $ - $ 2,190
=========== ========== ========= ========== ======== =======
Three month
period
ended
September
30, 2008
Compensation
expenses $ 97 $ 467 $ 1,306 $ - $ - $ 1,870
IP
Litigation
expenses - - (200) - - (200)
Total $ 97 $ 467 $ 1,106 $ - $ - $ 1,670
=========== ========== ========= ========== ======== =======
Given Imaging Ltd. and its Consolidated Subsidiaries
Specified Items
For the Nine Months Ended September 30, 2008 and 2009
(Unaudited, dollars in thousands)
General Termination
Research Selling And Of
And And Administra- Marketing Tax
Development Marketing tion Agreement Benefit Total
Nine month
period
ended
September
30, 2009
Compensation
Expenses $ 286 $ 1,509 $ 4,083 $ - $ - $ 5,878
Tax
(benefit) - - - - (1,390) (1,390)
----------- --------- ----------- --------- -------- -------
Total $ 286 $ 1,509 $ 4,083 $ - $ (1,390) $ 4,488
=========== ========= =========== ========= ======== =======
Nine month
period
ended
September
30, 2008
Compensation
expenses $ 270 $ 1,303 $ 3,553 $ - $ - $ 5,126
IP
Litigation
expenses - - 3,375 - - 3,375
Patent
litigation
settlement - - (2,333) - - (2,333)
Terminatiion
of
marketing
agreement - - - (5,443) - (5,443)
----------- --------- ----------- --------- -------- -------
Total $ 270 $ 1,303 $ 4,595 $ (5443) $ - $ 725
=========== ========= =========== ========= ======== =======
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the three months ended September 30, 2009 and 2008
Condensed, in thousands except share and per share data
Q3 2009 Q3 2008
Specified Non Specified Non
GAAP Items (*) GAAP GAAP Items (*) GAAP
-------- --------- -------- -------- --------- --------
Revenues $ 35,220 - $ 35,220 $ 31,136 - $ 31,136
Cost of
revenues (7,827) - (7,827) (7,793) - (7,793)
-------- --------- -------- -------- --------- --------
Gross profit 27,393 - 27,393 23,343 - 23,343
-------- --------- -------- -------- --------- --------
Gross profit
as a % of
revenues 77.8% - 77.8% 75.0% - 75.0%
Operating
expenses
Research and
development,
net (4,632) 93 (4,539) (3,540) 97 (3,443)
Sales and
marketing (14,758) 511 (14,247) (14,647) 467 (14,180)
General and
administrative (5,042) 1,586 (3,456) (4,276) 1,106 (3,170)
Termination of
marketing
agreement - - - - - -
Other, net (316) - (316) - - -
-------- --------- -------- -------- --------- --------
Total operating
expenses (24,748) 2,190 (22,558) (22,463) 1,670 (20,793)
-------- --------- -------- -------- --------- --------
Operating
profit 2,645 2,190 4,835 880 1,670 2,550
Operating
profit as a
% of
revenues 7.5% - 13.7% 2.8% - 8.2%
-------- --------- -------- -------- --------- --------
Financing
income, net 1,086 - 1,086 729 - 729
-------- --------- -------- -------- --------- --------
Profit before
taxes on
income 3,731 2,190 5,921 1,609 1,670 3,279
Income tax
expense (6) - (6) (107) - (107)
-------- --------- -------- -------- --------- --------
Net Profit 3,725 2,190 5,915 1,502 1,670 3,172
Net loss
attributable
to
non-controlli-
ng interest 114 - 114 607 - 607
-------- --------- -------- -------- --------- --------
Net profit
attributable
to
shareholders $ 3,839 $ 2,190 $ 6,029 $ 2,109 $ 1,670 $ 3,779
======== ========= ======== ======== ========= ========
Net profit
attributable
to
shareholders
as a %
of revenues 10.9% - 17.1% 6.8% - 12.1%
Earnings per
share
Basic Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.13 $ 0.08 $ 0.21 $ 0.07 $ 0.06 $ 0.13
======== ========= ======== ======== ========= ========
Diluted
Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.13 $ 0.07 $ 0.20 $ 0.07 $ 0.05 $ 0.12
======== ========= ======== ======== ========= ========
(*)See specified items
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the nine months ended September 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 $ 101,723 - $ 101,723 $ 91,332 - $ 91,332
Cost of
revenues (23,766) - (23,766) (23,736) - (23,736)
--------- --------- --------- -------- --------- --------
Gross
profit 77,957 - 77,957 67,596 - 67,596
--------- --------- --------- -------- --------- --------
Gross
profit
as a %
of
revenues 76.6% - 76.6% 74.0% - 74.0%
Operating
expenses
Research
and
development,
net (12,522) 286 (12,236) (10,439) 270 (10,169)
Sales and
marketing (45,257) 1,509 (43,748) (46,569) 1,303 (45,266)
General and
administr-
ative (14,021) 4,083 (9,938) (14,449) 4,595 (9,854)
Termination
of
marketing
agreement - - - 5,443 (5,443) -
Other, net (331) - (331) - - -
--------- --------- --------- -------- --------- --------
Total
operating
expenses (72,131) 5,878 (66,253) (66,014) 725 (65,289)
--------- --------- --------- -------- --------- --------
Operating
profit 5,826 5,878 11,704 1,582 725 2,307
Operating
profit
(loss)
as a %
of
revenues 5.7% - 11.5% 1.7% - 2.5%
--------- --------- --------- -------- --------- --------
Financing
income,
net 1,276 - 1,276 3,195 - 3,195
--------- --------- --------- -------- --------- --------
Profit
before
taxes on
income 7,102 5,878 12,980 4,777 725 5,502
Income tax
benefit
(expense) 1,160 (1,390) (230) (233) - (233)
--------- --------- --------- -------- --------- --------
Net Profit 8,262 4,488 12,750 4,544 725 5,269
Net loss
attributable
to
non-controlling
interest 704 - 704 1,525 - 1,525
--------- --------- --------- -------- --------- --------
Net profit
attributable
to
sharehold-
ers $ 8,966 $ 4,488 $ 13,454 $ 6,069 $ 725 $ 6,794
========= ========= ========= ======== ========= ========
Net
profit
attributable
to
shareholders
as a % of
revenues 8.8% - 13.2% 6.6% - 7.4%
Earnings
per share
Basic
Earnings
attributable
to
shareholders
per
Ordinary
Share $ 0.31 $ 0.15 $ 0.46 $ 0.21 $ 0.02 $ 0.23
========= ========= ========= ======== ========= ========
Diluted
Earnings
attributable
to
shareholders
per
Ordinary
Share $ 0.30 $ 0.15 $ 0.45 $ 0.20 $ 0.02 $ 0.22
========= ========= ========= ======== ========= ========
(*)See specified items
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
(Unaudited)
September 30 December 31
2009 2008
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 42,199 $ 31,697
Short-term investments 26,537 28,509
Accounts receivable:
Trade (Net of provisions for doubtful debts of
$287 and of $210 as of September 30, 2009 and
December 31, 2008, respectively) 21,247 21,673
Other 3,093 4,662
Inventories 24,477 18,931
Advances to suppliers 577 3,540
Deferred tax assets 1,512 1,178
Prepaid expenses 1,960 1,631
------------ ------------
Total current assets 121,602 111,821
------------ ------------
Deposits 1,099 1,094
Assets held for employee severance payments 4,658 3,686
Marketable Securities 20,097 30,063
Fixed assets, at cost, less accumulated
depreciation 14,365 15,115
Intangible assets less accumulated amortization 11,598 12,067
Goodwill 4,063 4,069
------------ ------------
Total Assets $ 177,482 $ 177,915
============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
(Unaudited)
September 30 December 31
2009 2008
----------- -----------
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital
lease $ 149 $ 114
Accounts payable
Trade 7,649 7,418
Other 18,665 17,612
Deferred income 219 1,523
----------- -----------
Total current liabilities 26,682 26,667
----------- -----------
Long-term liabilities
Obligation under capital lease, net 401 485
Liability in respect of employees’ severance
payments 5,257 4,599
----------- -----------
Total long-term liabilities 5,658 5,084
----------- -----------
Total liabilities 32,340 31,751
----------- -----------
Equity
Shareholders’ equity
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 29,294,785
and 29,257,785 shares issued and fully
paid as of September 30, 2009 and
December 31, 2008, respectively) 344 343
Additional paid-in capital 179,910 173,983
Capital reserve 2,166 2,166
Accumulated other comprehensive income (loss) 431 (600)
Accumulated deficit (38,554) (31,721)
----------- -----------
Shareholders' equity 144,297 144,171
----------- -----------
Noncontrolling interest 845 1,993
----------- -----------
Total Equity 145,142 146,164
----------- -----------
Total liabilities and equity $ 177,482 $ 177,915
=========== ===========
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
In thousands except share and per share data
(Unaudited)
Nine-month period Three-month period
ended ended
September 30 September 30 Year ended
---------------------- ---------------------- December 31
2009 2008 2009 2008 2008
---------- ---------- ---------- ---------- ----------
Revenues $ 101,723 $ 91,332 $ 35,220 $ 31,136 $ 125,108
Cost of
revenues (23,766) (23,736) (7,827) (7,793) (33,001)
---------- ---------- ---------- ---------- ----------
Gross profit 77,957 67,596 27,393 23,343 92,107
---------- ---------- ---------- ---------- ----------
Operating
expenses
Research and
development,
gross (13,543) (11,529) (5,019) (3,840) (15,126)
In-process
research and
development
acquired in a
business
combination - - - - (4,700)
---------- ---------- ---------- ---------- ----------
(13,543) (11,529) (5,019) (3,840) (19,826)
Government
grants 1,021 1,090 387 300 1,530
---------- ---------- ---------- ---------- ----------
Research and
development,
net (12,522) (10,439) (4,632) (3,540) (18,296)
Sales and
marketing (45,257) (46,569) (14,758) (14,647) (60,902)
General and
administrative (14,021) (14,449) (5,042) (4,276) (19,320)
Termination of
marketing
agreement - 5,443 - - 5,443
Other, net (331) - (316) - (867)
---------- ---------- ---------- ---------- ----------
Total operating
expenses (72,131) (66,014) (24,748) (22,463) (93,942)
---------- ---------- ---------- ---------- ----------
Operating
profit (loss) 5,826 1,582 2,645 880 (1,835)
Financing
income, net 1,276 3,195 1,086 729 4,004
---------- ---------- ---------- ---------- ----------
Profit (loss)
before taxes
on income 7,102 4,777 3,731 1,609 2,169
Income tax
(expense)
benefit 1,160 (233) (6) (107) (250)
---------- ---------- ---------- ---------- ----------
Net Profit 8,262 4,544 3,725 1,502 1,919
Net loss
attributable
to
noncontrolling
interest 704 1,525 114 607 2,087
---------- ---------- ---------- ---------- ----------
Net profit
attributable
to
shareholders $ 8,966 $ 6,069 $ 3,839 $ 2,109 $ 4,006
========== ========== ========== ========== ==========
Earnings per
share
Basic Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.31 $ 0.21 $ 0.13 $ 0.07 $ 0.14
========== ========== ========== ========== ==========
Diluted
Earnings
attributable
to
shareholders
per Ordinary
Share $ 0.30 $ 0.20 $ 0.13 $ 0.07 $ 0.13
========== ========== ========== ========== ==========
Weighted
average number
of Ordinary
Shares used to
compute basic
earnings per
Ordinary
share 29,264,952 29,252,785 29,278,785 29,254,618 29,254,035
========== ========== ========== ========== ==========
Weighted
average number
of
Ordinary
Shares used
to compute
diluted
Earnings per
Ordinary
share 30,108,597 30,791,425 30,648,420 30,601,355 30,798,360
========== ========== ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
Nine-month period Three-month period
ended ended
September 30, September 30, Year ended
------------------ ------------------ December 31,
2009 2008 2009 2008 2008
-------- -------- -------- -------- ----------
Cash flows from
operating activities:
Net profit $ 8,262 $ 4,544 $ 3,725 $ 1,502 $ 1,919
Adjustments required to
reconcile
net profit to net
cash used in
operating activities:
Depreciation and
