Given Imaging (GIVN) 6-K Given Imaging Reports First Quarter 2010 Results

For Immediate Release

For further information contact:

Fern Lazar/David Carey

Lazar Partners Ltd.

1-212-867-1768

flazar@lazarpartners.com/

dcarey@lazarpartners.com

GIVEN IMAGING REPORTS FIRST QUARTER 2010 RESULTS

- Revenues Increase 5.2% to $32.1 Million -

- GAAP Net Income $2.1 million, or $0.07 Per Share (includes $0.02 of Sierra Scientific

acquisition expenses) Compared to $0.2 million or $0.01 Per Share in Q1 2009  -

- Non-GAAP Net Income $4.4 million, or $0.14 Per Share, Compared to $1.7 million, or $0.06 Per Share in Q1 2009 - -

- Company Updates 2010 Financial Guidance to Reflect Sierra Acquisition -

YOQNEAM, Israel, May 11, 2010 - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the first quarter ended March 31, 2010.

Worldwide revenues were $32.1 million in the first quarter of 2010, a 5.2 percent increase from $30.5 million in the first quarter of 2009.  Gross margin in the first quarter of 2010 was 77.1 percent, compared to gross margin of 76.0 percent in the first quarter of 2009.

Net income for the first quarter of 2010 was $2.1 million, or $0.07 per share on a fully diluted GAAP basis, compared to net income of $239,000 or $0.01 per share on a fully diluted GAAP basis in the first quarter of 2009.  Non-GAAP net income for the first quarter of 2010 was $4.4 million, or $0.14 per share, compared to $1.7 million, or $0.06 per share in the same quarter of last year. Non-GAAP net income excludes $0.7 million of acquisition expenses and $1.6 million of equity related compensation expenses (FAS 123R). Non-GAAP net income for the first quarter of last year excluded equity related expenses of $1.5 million. A reconciliation of GAAP results to non-GAAP results is attached.

Cash and cash equivalents, short-term investments and marketable securities at March 31, 2010 totaled $64.9 million. This amount reflects the March 31, 2010 $35 million payment for the acquisition of Sierra Scientific which became effective on April 1, 2010.

“We are pleased that our focus on steadily increasing profitability continues to deliver results as we achieved a solid bottom-line increase in net income this quarter.   Since the first quarter is usually our slowest quarter, we are also pleased to grow revenues by 5.2 percent, and we remain on track to achieve our 2010 financial goals,” said Homi Shamir, president and CEO of Given Imaging.  “We are optimistic about the potential of expanding our PillCam business worldwide and leveraging our leadership in the specialty GI diagnostics market following our recent acquisition of Sierra Scientific.  We believe that we can expand this segment by capitalizing on Given Imaging’s skills in customer education, product development and software expertise.”

First Quarter 2010 Revenue Analysis

Revenues in the Americas region were $20.5 million, including revenue of $3.6 million from the Bravo pH Monitoring System.  Revenues in the Americas region in the same period in 2009 were $20.2 million, including revenues of $2.7 million from Bravo.  Revenues in the EMEA region were $8.5 million compared to $8.2 million in the same period last year.  APAC revenues increased by 45 percent to $3.1 million compared to $2.1 million in the same period in 2009.

Worldwide PillCam SB sales amounted to about 51,000 capsules in the first quarter of 2010, compared to approximately 50,100 in the same period last year.  PillCam SB sales in the Americas region decreased by 2.5 percent to 33,500 in the first quarter of 2010 compared to 34,400 in the first quarter of 2009.  PillCam SB sales in the EMEA region decreased 2.9 percent compared to the first quarter of 2009, while PillCam SB sales in the APAC region increased 80% to 4,700 from 2,600 in the same period in 2009.

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

2010 Guidance Update

The company is updating its 2010 guidance to reflect the acquisition of Sierra Scientific Instruments.  The company now projects revenues between $167 million and $174 million, an 18 to 22 percent increase compared to 2009 revenues, and GAAP EPS of between $0.51 – $0.59, and non-GAAP EPS (excluding charges relating to FAS123R and Sierra acquisition expenses) of $0.76 – $0.84.  Both GAAP and non-GAAP EPS guidance exclude the effect of the Sierra purchase price allocation which has not yet been completed.

Recent Developments

· Sierra Scientific Acquisition

Effective April 1, 2010 Given Imaging acquired privately-held Sierra Scientific Instruments.  Sierra Scientific is the leading provider of specialty diagnostic devices for the gastrointestinal tract.  In 2009, Sierra had unaudited revenues of approximately $18 million of which approximately 60% came from sales in the United States and 40% from sales in the rest of the world, principally Europe.

· Digestive Disease Week 2010

More than 145 abstracts and scientific studies on Given Imaging’s products were presented at Digestive Disease Week 2010.  The presentations included a plenary session during which Dr. Rami Eliakim of Rambam Medical Center, Israel, reviewed updated data from a multi-center PillCam COLON 2 trials.  The expanded results corroborate the high sensitivity and specificity of PillCam® COLON 2, and confirm previous data showing PillCam COLON 2 to be a safe and effective method for visualizing the colon to detect polyps in patients.

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Conference Call / Webcast Information

U.S. Call / Webcast

The company will host a conference call in English at 9:00am ET on Wednesday, May 12, 2010. To participate in this teleconference, please dial 800-930-7616 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-981-5556. 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 May 26 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 3458268.

Hebrew Call

A conference call in Hebrew will take place on May 12 at 2:00pm Israel time, 7:00am ET. To access this call, please dial +972 3 9180610t en minutes before the conference is scheduled to begin. A replay of the call will be available from May 12 until May 14 by dialing +972 3 9255925.

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.

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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.

# # #

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Given Imaging Ltd. and its Consolidated Subsidiaries

Specified Items

For the Three Months Ended March 31, 2009 and 2010

(Unaudited, dollars in thousands)

	Research		Selling		General
	And		And		And
	Development		Marketing		Administration		Total
Three month period ended March 31, 2010
Compensation expenses	$	83	$	327	$	1,203	$	1,613
Acquisition expenses		-		-		686		686
Total	$	83	$	327	$	1,889	$	2,299
Three month period ended March 31, 2009
Compensation expenses	$	78	$	153	$	1,279	$	1,510
Total	$	78	$	153	$	1,279	$	1,510

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Given Imaging Ltd. and its Consolidated Subsidiaries

Reconciliation of GAAP results to non-GAAP results

For the three months ended March 31, 2010 and 2009

Condensed, in thousands except share and per share data

				Q1 2010								Q1 2009
				Specified		Non						Specified		Non
	GAAP			Items (*)		GAAP			GAAP			Items (*)		GAAP
Revenues	$	32,097			-	$	32,097		$	30,473			-	$	30,473
Cost of revenues		(7,336	)		-		(7,336	)		(7,318	)		-		(7,318	)
Gross profit		24,761			-		24,761			23,155			-		23,155
Gross profit as a % of revenues		77.1	%		-		77.1	%		76.0	%		-		76.0	%
Operating expenses
Research and development, net		(3,777	)		83		(3,694	)		(3,676	)		78		(3,598	)
Sales and marketing		(14,749	)		327		(14,422	)		(13,958	)		153		(13,805	)
General and administrative		(5,134	)		1,889		(3,245	)		(4,415	)		1,279		(3,136	)
Termination of marketing agreement		-			-		-			-			-		-
Other, net		(63	)		-		(63	)		(12	)		-		(12	)
Total operating expenses		(23,723	)		2,299		(21,424	)		(22,061	)		1,510		(20,551	)
Operating profit		1,038			2,299		3,337			1,094			1,510		2,604
Operating profit  as a % of revenues		3.2	%				10.4	%		3.6	%				8.5	%
Financing income (expense), net		978			-		978			(1,126	)		-		(1,126	)
Profit (loss) before taxes on income		2,016			2,299		4,315			(32	)		1,510		1,478
Income tax expense		(129	)		-		(129	)		(28	)		-		(28	)
Net Profit (loss)		1,887			2,299		4,186			(60	)		1,510		1,450
Net loss attributable to non-controlling interest		166			-		166			299			-		299
Net profit attributable to shareholders	$	2,053		$	2,299	$	4,352		$	239		$	1,510	$	1,749
Net profit attributable to shareholders as a % of revenues		6.4	%				13.6	%		0.8	%				5.7	%
Earnings  per share
Basic Earnings attributable to shareholders per Ordinary Share	$	0.07		$	0.08	$	0.15		$	0.01		$	0.05	$	0.06
Diluted Earnings attributable to shareholders per Ordinary Share	$	0.07		$	0.07	$	0.14		$	0.01		$	0.05	$	0.06

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Given Imaging Ltd. and its Consolidated Subsidiaries

Interim Consolidated Balance Sheets

In thousands except share data

(Unaudited)

	March 31		December 31
	2010		2009
Assets
Current assets
Cash and cash equivalents	$	26,975	$	46,458
Short-term investments		27,916		31,736
Accounts receivable:
Trade (Net of provisions for doubtful debts of $259
and of $252 as of March 31, 2010 and December 31,
2009, respectively)		21,714		24,742
Other		4,572		3,799
Inventories		16,444		17,302
Prepaid expenses		1,595		1,036
Deferred tax assets		2,001		2,207
Advances to suppliers		377		534
Total current assets		101,594		127,814
Deposits		1,084		1,062
Assets held for employee severance payments		5,231		4,968
Marketable Securities		9,987		16,956
Non-current Inventory		5,448		6,015
Fixed assets, at cost, less accumulated depreciation		13,742		13,843
Advance on account of business combination (See Note 4)		35,000		-
Deferred tax assets		192		192
Intangible assets, less accumulated amortization		11,046		11,284
Goodwill		3,586		3,586

Total Assets $ 186,910 $ 185,720

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Given Imaging Ltd. and its Consolidated Subsidiaries

Interim Consolidated Balance Sheets

In thousands except share data

(Unaudited)

	March 31			December 31
	2010			2009
Liabilities and equity
Current liabilities
Current installments of obligation under capital lease	$	145		$	145
Accounts payable
Trade		5,817			6,789
Other		15,902			20,060
Deferred income		486			234
Total current liabilities		22,350			27,228
Long-term liabilities
Obligation under capital lease, net		320			356
Liability in respect of employees’ severance payments		5,795			5,530
Total long-term liabilities		6,115			5,886
Total liabilities		28,465			33,114
Equity
Shareholders’ equity
Ordinary Shares, NIS 0.05 par value each (90,000,000
shares authorized; 29,615,152and 29,370,972 shares
issued and fully paid as of March 31, 2010 and
December 31, 2009, respectively)		348			345
Additional paid-in capital		186,257			182,203
Capital reserve		2,166			2,166
Accumulated other comprehensive loss		294			399
Accumulated deficit		(31,132	)		(33,185	)
Shareholders' equity		157,933			151,928
Non-controlling interest		512			678
Total Equity		158,445			152,606
Total liabilities and equity	$	186,910		$	185,720

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Given Imaging Ltd. and its Consolidated Subsidiaries

Interim Consolidated Statements of Operations

In thousands except share and per share data

(Unaudited)

	Three month period ended						Year ended
	March 31						December 31
	2010			2009			2009
Revenues	$	32,097		$	30,473		$	141,763
Cost of revenues		(7,336	)		(7,318	)		(33,145	)
Gross profit		24,761			23,155			108,618
Operating expenses
Research and development, gross		(4,024	)		(4,010	)		(17,842	)
Government grants		247			334			1,109
Research and development, net		(3,777	)		(3,676	)		(16,733	)
Sales and marketing		(14,749	)		(13,958	)		(61,428	)
General and administrative		(5,134	)		(4,415	)		(18,919	)
Other, net		(63	)		(12	)		(1,220	)
Total operating expenses		(23,723	)		(22,061	)		(98,300	)
Operating income		1,038			1,094			10,318
Financing income (expense), net		978			(1,126	)		1,584
Income (loss) before taxes on income		2,016			(32	)		11,902
Income tax expense		(129	)		(28	)		1,542
Net income (loss)		1,887			(60	)		13,444
Net loss attributable to non-controlling interest		166			299			891
Net profit attributable to owners of the company	$	2,053		$	239			14,335
Earnings  per share
Basic Earnings attributable to shareholders per Ordinary Share	$	0.07		$	0.01		$	0.49
Diluted Earnings attributable to shareholders per Ordinary Share	$	0.07		$	0.01		$	0.47
Weighted average number of Ordinary Shares used
to compute basic Earnings  per Ordinary share		29,427,767			29,257,785			29,281,897
Weighted average number of Ordinary Shares used
to compute dilute Earnings per Ordinary share		30,646,418			29,910,943			30,423,162

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Given Imaging Ltd. and its Consolidated Subsidiaries

Consolidated Statements of Cash Flows

In thousands

(Unaudited)

	Three month period ended						Year ended
	March 31,						December 31,
	2010			2009			2009
Cash flows from operating activities:
Net income (loss)	$	1,887		$	(60	)	$	13,444
Adjustments required to reconcile net profit (loss)
to net cash used in operating activities:
Depreciation and amortization		1,498			1,465			6,096
Goodwill impairment		-			-			483
Deferred tax assets		206			10			(1,221	)
Stock option compensation		1,613			1,510			7,268
Other		87			9			570
Decrease (increase) in accounts receivable – trade		3,028			(181	)		(3,069	)
Decrease(increase) in accounts receivable – other		(320	)		2,334			863
Decrease (increase) in prepaid expenses		(559	)		(255	)		595
Decrease (increase) in advances to suppliers		157			(41	)		3,006
Decrease (increase) in inventories		1,425			(3,364	)		(4,386	)
Increase (decrease) in accounts payable		(5,210	)		178			1,819
Increase (decrease) in deferred income		252			(394	)		(1,289	)
Net cash provided by  operating activities		4,064			1,211			24,179
Cash flows from investing activities:
Purchase of fixed assets and intangible assets		(1,222	)		(1,056	)		(4,794	)
Payment on account of business combination		(35,000	)		-			-
Deposits		(24	)		3			34
Proceeds from sales of marketable securities and short term investments		18,208			21,781			38,085
Investments in trading and  marketable securities		(7,546	)		(250	)		(27,410	)
Net cash provided by (used in) investing activities		(25,584	)		20,478			5,915
Cash flows from financing activities:
Principal payments on capital lease obligation		(34	)		(33	)		(131	)
Proceeds from the issuance of Ordinary Shares		1,991			-			954
Dividend distribution		-			(15,799	)		(15,799	)
Purchase of shares from a non-controlling shareholder in a subsidiary		-			-			(382	)
Net cash (used in) provided by financing activities		1,957			(15,832	)		(15,358	)
Effect of exchange rate changes on cash		80			(258	)		25
Increase (decrease) in cash and cash equivalents		(19,483	)		5,599			14,761
Cash and cash equivalents at beginning of period		46,458			31,697			31,697
Cash and cash equivalents at end of period	$	26,975		$	37,296		$	46,458
Supplementary cash flow information
Income taxes paid	$	48		$	44		$	877

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