Exhibit 99.1
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 THIRD QUARTER 2010 RESULTS
- Third Quarter Revenues Increase 10 percent to $38.7 Million Compared to Q3 2009 -
- Third Quarter non-GAAP Gross Margin of 77.3 Percent -
- Non-GAAP Net Income $3.2 million, or $0.11 Per Share, Compared to $6.0 million, or $0.20 Per Share in Q3 2009 -
- GAAP Net Income of $1.0 million, or $0.03 Per Share, Compared to $3.8 million or $0.13 Per Share in Q3 2009 -
- Company Lowers 2010 Guidance -
YOQNEAM, Israel, November 3, 2010 - Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the third quarter ended September 30, 2010.
Worldwide revenues were $38.7 million in the third quarter of 2010, a 10 percent increase from $35.2 million in the third quarter of 2009. Third quarter revenues include $5.9 million from Sierra Scientific Instruments (SSI) which the company acquired in April. Revenue in the quarter was lower than expected primarily due to lower sales in the EMEA region. Gross margin on a non-GAAP basis in the third quarter of 2010 was 77.3 percent, compared to gross margin of 77.8 percent in the third quarter of 2009.
On a non-GAAP basis, net income for the third quarter of 2010 was $3.2 million, or $0.11 per share on a fully diluted basis, compared to net income of $6.0 million, or $0.20 per share on a fully diluted basis in the third quarter of 2009. On GAAP basis, net income for the third quarter of 2010 was $1.0 million, or $0.03 per share, compared to $3.8 million, or $0.13 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 third quarter was $11.2 million, compared to $3.3 million in the third quarter of 2009. Cash and cash equivalents, short-term investments and marketable securities on September 30, 2010 totaled $83.2 million.
"Financial results this quarter continued to be negatively affected by the global economic slowdown. In the EMEA region, we were impacted by lower than expected PillCam sales particularly in Spain, Italy and Greece where our customers have reduced inventory levels. We anticipate this trend may continue during the fourth quarter. At the same time, we are encouraged by the fact that PillCam utilization in this region hasn’t changed and we expect sales in the region to rebound in 2011. Despite the difficult global macroeconomic environment, our revenues grew by 10% compared to the same period last year, our gross margin remained strong and our operating cash flow exceeded $11 million. We are also pleased with the notable improvement in gross margins of the Bravo and Sierra product lines. With a diversified business, strong balance sheet and constant innovation, we are well positioned to accelerate our growth when the economy improves," said Homi Shamir, president and CEO.
Third Quarter 2010 Revenue Analysis
Revenues in the Americas region were $26.1 million, including revenues of $4.2 million from the Bravo pH Monitoring System and $3.6 million from sales of SSI. In the same period in 2009 revenues in the Americas region were $22.6 million, including revenues of $3.7 million from Bravo. Revenues in the EMEA region were $8.4 million including $1.6 million from SSI. In the same period in 2009, EMEA revenues were $9 million. APAC revenues were $4.1 million including SSI sales of $0.6 million in the third quarter of 2010 compared to $3.6 million in the same period in 2009.
Worldwide PillCam SB sales amounted to 52,600 capsules in the third quarter of 2010, compared to 54,800 in the same period last year. PillCam SB sales in the Americas region of 36,500 in the third quarter of 2010 were flat compared to the same period last year. PillCam SB sales in the EMEA region were 10,500 compared to 13,500 in the third quarter of 2009, while PillCam SB sales in the APAC region were 5,600 compared to 5,000 in the same period in 2009.
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 September 30, 2010, revenues increased by 11 percent to $112.9 million compared to $101.7 million in the same period of 2009. Revenue for the first nine months of 2010 includes SSI revenues of $11.6 million. Sales in the Americas region in the first nine months of 2010 were $72.5 million compared to $65.7 million in the same period in 2009. Sales in the Americas region include $11.9 million from sales of Bravo, compared to $9.6 million in the first nine months of 2009. SSI sales in the Americas region were $7.1 million in the period. Sales in the EMEA region were $28.5 million and include $3.2 million in sales from SSI, compared to $27.1 million in the same period in 2009. Sales in the APAC region were $11.7 million compared to $9.0 million last year.
On a non-GAAP basis, gross profit margin for the nine month period was 77.3 percent compared to 76.6 percent in 2009. On a GAAP basis, gross profit margin in the first nine months of 2010 was 75.7 percent. On a non-GAAP basis net income for the first nine months of 2010 was $13.8 million, or $0.45 per share on a fully diluted basis, compared to $13.5 million, or $0.45 per share on a fully diluted basis for the same period in 2009. GAAP net income for the first nine months of 2010 was $5.3 million, or $0.17 per share on a fully diluted basis, compared to $9.0 million or $0.30 per share on a fully diluted basis in the same period last year.
2010 Guidance Update
Due to the unstable European economy, the fact that EMEA customers reduced PillCam inventory levels which may continue in the fourth quarter, and lower healthcare utilization in the US, the company is reducing its 2010 financial guidance. The Company now anticipates that 2010 revenues will be between $154 million and $157 million. GAAP earnings per share is expected to be between $0.18 – $0.23. Non-GAAP earnings per share (excluding charges relating to FAS123R and SSI acquisition expenses) is expected to be between $0.51 – $0.58.
Recent Developments
Given Imaging recently launched new products at the American College of Gastroenterology Annual Meeting 2010:
A small bowel capsule which extends capsule operating time to a minimum of 12 hours for patients who are confirmed or believed to have slow motility
A video capsule delivery device for patients who are unable to ingest the capsule or who have slow gastric emptying times
Conference Call / Webcast Information
U.S. Call / Webcast
The company will host a conference call in English at 9:00 am ET on Thursday, November 4, 2010. To participate in this teleconference, please dial 888-264-8893 fifteen minutes before the conference is scheduled to begin. Callers outside of the U.S. should dial 913-312-1482. 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 18 by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 2594018.
Hebrew Call
A separate conference call in Hebrew will take place on November 4, 2010 at 1:00 pm Israel time, 7:00 am ET. To access this call, please dial +972 3 918 0610 ten minutes before the conference is scheduled to begin. A replay of the call will be available from November 7 until November 9 by dialing +972 3 925 5921.
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 uses cutting-edge, wireless technology and advanced software to provide 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). In April, 2010, Given Imaging acquired Sierra Scientific Instruments, the leading provider of specialty GI diagnostic solutions and pioneer of high-resolution manometry for assessing gastrointestinal motility. Sierra Scientific is now a wholly-owned subsidiary of Given Imaging. Given Imaging's headquarters, manufacturing and R&D facilities are located in Yoqneam, Israel, with operating subsidiaries in the United S tates, Germany, France, Japan, Australia and Hong Kong. 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 achi evements 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 compan ies, (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 September 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 September 30, 2010 | | | | | | | | | | | | | | | | |
| Compensation expenses | | $ | - | | | $ | 148 | | | $ | 367 | | | $ | 1,550 | | | $ | - | | | $ | 2,065 | |
| Sierra PPA | | | 236 | | | | (111 | ) | | | 82 | | | | - | | | | (82 | ) | | | 125 | |
| Total | | $ | 236 | | | $ | 37 | | | $ | 449 | | | $ | 1,550 | | | $ | (82 | ) | | $ | 2,190 | |
| Three month period | | | | | | | | | | | | | | | | | | | | | | | | |
| ended September 30, 2009 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Compensation expenses | | $ | - | | | $ | 93 | | | $ | 511 | | | $ | 1,586 | | | $ | - | | | $ | 2,190 | |
| Total | | $ | - | | | $ | 93 | | | $ | 511 | | | $ | 1,586 | | | $ | 0 | | | $ | 2,190 | |
| Given Imaging Ltd. and its Consolidated Subsidiaries |
| Excluded Items |
| For the Nine Months Ended September 30, 2009 and 2010 |
| (Unaudited, dollars in thousands) |
| | | | | | Research | | | Selling | | | General | | | Tax | | | | |
| | | Gross | | | And | | | And | | | And | | | Expense | | | | |
| | | Profit | | | Development | | | Marketing | | | Admin | | | (Benefit) | | | Total | |
| | | | | | | | | | | | | | | | | | | |
| Nine month period | | | | | | | | | | | | | | | | | | |
| ended September 30, 2010 | | | | | | | | | | | | | | | | |
| Compensation expenses | | $ | - | | | $ | 304 | | | $ | 993 | | | $ | 5,173 | | | $ | - | | | $ | 6,470 | |
| Sierra acquisition expenses | | | - | | | | - | | | | - | | | | 686 | | | | - | | | | 686 | |
| Sierra PPA | | | 1,745 | | | | - | | | | 164 | | | | 250 | | | | (761 | ) | | | 1,398 | |
| Total | | $ | 1,745 | | | $ | 304 | | | $ | 1,157 | | | $ | 6,109 | | | $ | (761 | ) | | $ | 8,554 | |
| Nine month period | | | | | | | | | | | | | | | | | | | | | | | | |
| ended September 30, 2009 | | �� | | | | | | | | | | | | | | | | | | | |
| Compensation expenses | | $ | - | | | $ | 286 | | | $ | 1,509 | | | $ | 4,083 | | | $ | - | | | $ | 5,878 | |
| Tax (benefit) | | | - | | | | - | | | | - | | | | - | | | | (1,390 | ) | | | (1,390 | ) |
| Total | | $ | 0 | | | $ | 286 | | | $ | 1,509 | | | $ | 4,083 | | | $ | (1,390 | ) | | $ | 4,488 | |
| Given Imaging Ltd. and its Consolidated Subsidiaries |
| Reconciliation of GAAP results to non-GAAP results |
| For the Three months ended September 30, 2010 and 2009 |
| Condensed, in thousands except share and per share data |
| | | | | | Q3 2010 | | | | | | | | | Q3 2009 | | | | |
| | | | | | Specified | | | Non | | | | | | Specified | | | Non | |
| | | GAAP | | | Items (*) | | | GAAP | | | GAAP | | | Items (*) | | | GAAP | |
| | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 38,658 | | | | - | | | $ | 38,658 | | | $ | 35,220 | | | | - | | | $ | 35,220 | |
| Cost of revenues | | | (8,999 | ) | | | 236 | | | | (8,763 | ) | | | (7,827 | ) | | | - | | | | (7,827 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | | 29,659 | | | | 236 | | | | 29,895 | | | | 27,393 | | | | | | | | 27,393 | |
| Gross profit as a % of revenues | | | 76.7 | % | | | - | | | | 77.3 | % | | | 77.8 | % | | | | | | | 77.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development, net | | | (5,635 | ) | | | 37 | | | | (5,598 | ) | | | (4,632 | ) | | | 93 | | | | (4,539 | ) |
| Sales and marketing | | | (17,408 | ) | | | 449 | | | | (16,959 | ) | | | (14,758 | ) | | | 511 | | | | (14,247 | ) |
| General and administrative | | | (6,046 | ) | | | 1,550 | | | | (4,496 | ) | | | (5,042 | ) | | | 1,586 | | | | (3,456 | ) |
| Other, net | | | (142 | ) | | | - | | | | (142 | ) | | | (316 | ) | | | - | | | | (316 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | (29,231 | ) | | | 2,036 | | | | (27,195 | ) | | | (24,748 | ) | | | 2,190 | | | | (22,558 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating profit | | | 428 | | | | 2,272 | | | | 2,700 | | | | 2,645 | | | | 2,190 | | | | 4,835 | |
| Operating profit as a % of revenues | | | 1.1 | % | | | | | | | 7.0 | % | | | 7.5 | % | | | | | | | 13.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financing income ,net | | | 887 | | | | - | | | | 887 | | | | 1,086 | | | | - | | | | 1,086 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Profit before taxes on income | | | 1,315 | | | | 2,272 | | | | 3,587 | | | | 3,731 | | | | 2,190 | | | | 5,921 | |
| Income tax benefit (expense) | | | (334 | ) | | | (82 | ) | | | (416 | ) | | | (6 | ) | | | 0 | | | | (6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Profit | | | 981 | | | | 2,190 | | | | 3,171 | | | | 3,725 | | | | 2,190 | | | | 5,915 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss attributable to non-controlling interest | | | 30 | | | | - | | | | 30 | | | | 114 | | | | - | | | | 114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net profit attributable to shareholders | | $ | 1,011 | | | $ | 2,190 | | | $ | 3,201 | | | $ | 3,839 | | | $ | 2,190 | | | $ | 6,029 | |
| Net profit attributable to shareholders as a % of revenues | | | 2.6 | % | | | | | | | 8.3 | % | | | 10.9 | % | | | | | | | 17.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings per share | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic Earnings attributable to shareholders per Ordinary Share | | $ | 0.03 | | | $ | 0.08 | | | $ | 0.108 | | | $ | 0.13 | | | $ | 0.07 | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted Earnings attributable to shareholders per Ordinary Share | | $ | 0.03 | | | $ | 0.08 | | | $ | 0.11 | | | $ | 0.13 | | | $ | 0.07 | | | $ | 0.20 | |
| Given Imaging Ltd. and its Consolidated Subsidiaries |
| Reconciliation of GAAP results to non-GAAP results |
| For the nine months ended September 30, 2010 and 2009 |
| Condensed, in thousands except share and per share data |
| | | | | | YTD 2010 | | | | | | | | | YTD 2009 | | | | |
| | | | | | Specified | | | Non | | | | | | Specified | | | Non | |
| | | GAAP | | | Items (*) | | | GAAP | | | GAAP | | | Items (*) | | | GAAP | |
| | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 112,889 | | | | - | | | $ | 112,889 | | | $ | 101,723 | | | | - | | | $ | 101,723 | |
| Cost of revenues | | | (27,397 | ) | | | 1,745 | | | | (25,652 | ) | | | (23,766 | ) | | | - | | | | (23,766 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | | 85,492 | | | | 1,745 | | | $ | 87,237 | | | | 77,957 | | | | - | | | | 77,957 | |
| Gross profit as a % of revenues | | | 75.7 | % | | | | | | | 77.3 | % | | | 76.6 | % | | | | | | | 76.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development, net | | | (14,575 | ) | | | 304 | | | | (14,271 | ) | | | (12,522 | ) | | | 286 | | | | (12,236 | ) |
| Sales and marketing | | | (48,502 | ) | | | 1,157 | | | | (47,345 | ) | | | (45,257 | ) | | | 1,509 | | | | (43,748 | ) |
| General and administrative | | | (18,136 | ) | | | 6,109 | | | | (12,027 | ) | | | (14,021 | ) | | | 4,083 | | | | (9,938 | ) |
| Other, net | | | (376 | ) | | | - | | | | (376 | ) | | | (331 | ) | | | - | | | | (331 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | (81,589 | ) | | | 7,570 | | | | (74,019 | ) | | | (72,131 | ) | | | 5,878 | | | | (66,253 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating profit | | | 3,903 | | | | 9,315 | | | | 13,218 | | | | 5,826 | | | | 5,878 | | | | 11,704 | |
| Operating profit as a % of revenues | | | 3.5 | % | | | | | | | 11.7 | % | | | 5.7 | % | | | | | | | 11.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financing income, net | | | 1,690 | | | | - | | | | 1,690 | | | | 1,276 | | | | - | | | | 1,276 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Profit before taxes on income | | | 5,593 | | | | 9,315 | | | | 14,908 | | | | 7,102 | | | | 5,878 | | | | 12,980 | |
| Income tax benefit (expense) | | | (563 | ) | | | (761 | ) | | | (1,324 | ) | | | 1,160 | | | | (1,390 | ) | | | (230 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Profit | | | 5,030 | | | | 8,554 | | | | 13,584 | | | | 8,262 | | | | 4,488 | | | | 12,750 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss attributable to non-controlling interest | | | 245 | | | | - | | | | 245 | | | | 704 | | | | - | | | | 704 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net profit attributable to shareholders | | $ | 5,275 | | | $ | 8,554 | | | $ | 13,829 | | | $ | 8,966 | | | $ | 4,488 | | | $ | 13,454 | |
Net profit attributable to shareholders as a % of revenues | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 4.7 | % | | | | | | | 12.3 | % | | | 8.8 | % | | | | | | | 13.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings per share | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic Earnings attributable to shareholders per Ordinary Share | | $ | 0.18 | | | $ | 0.29 | | | $ | 0.48 | | | $ | 0.31 | | | $ | 0.15 | | | $ | 0.46 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted Earnings attributable to shareholders per Ordinary Share | | $ | 0.17 | | | $ | 0.28 | | | $ | 0.45 | | | $ | 0.30 | | | $ | 0.15 | | | $ | 0.45 | |
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
| | | September 30 | | | December 31 | |
| | | 2010 | | | 2009 | |
| Assets | | | | | | |
| | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 39,848 | | | $ | 46,458 | |
| Short-term investments | | | 38,414 | | | | 31,736 | |
| Accounts receivable: | | | | | | | | |
| Trade | | | 25,113 | | | | 24,742 | |
| Other | | | 3,276 | | | | 3,799 | |
| Inventories | | | 18,921 | | | | 17,302 | |
| Prepaid expenses | | | 2,323 | | | | 1,036 | |
| Deferred tax assets | | | 1,558 | | | | 2,207 | |
| Advances to suppliers | | | 385 | | | | 534 | |
| | | | | | | | | |
| Total current assets | | | 129,838 | | | | 127,814 | |
| | | | | | | | | |
| Deposits | | | 1,223 | | | | 1,062 | |
| | | | | | | | | |
| Assets held for employee severance payments | | | 5,895 | | | | 4,968 | |
| | | | | | | | | |
| Marketable securities | | | 4,925 | | | | 16,956 | |
| | | | | | | | | |
| Non-current inventory | | | 5,899 | | | | 6,015 | |
| | | | | | | | | |
| Fixed assets, at cost, less accumulated depreciation | | | 14,034 | | | | 13,843 | |
| | | | | | | | | |
| Deferred tax assets | | | 192 | | | | 192 | |
| | | | | | | | | |
| Intangible assets, less accumulated amortization | | | 26,319 | | | | 11,284 | |
| | | | | | | | | |
| Goodwill | | | 24,109 | | | | 3,586 | |
| | | | | | | | | |
| Total Assets | | $ | 212,434 | | | $ | 185,720 | |
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
| | | September 30 | | | December 31 | |
| | | 2010 | | | 2009 | |
| Liabilities and equity | | | | | | |
| | | | | | | |
| Current liabilities | | | | | | |
| | | | | | | |
| Current installments of obligation under capital lease | | $ | 171 | | | $ | 145 | |
| Accounts payable: | | | | | | | | |
| Trade | | | 8,704 | | | | 6,789 | |
| Other | | | 23,828 | | | | 20,060 | |
| Deferred income | | | 771 | | | | 234 | |
| Total current liabilities | | | 33,474 | | | | 27,228 | |
| | | | | | | | | |
| Long-term liabilities | | | | | | | | |
| Obligation under capital lease, net | | | 285 | | | | 356 | |
| Liability in respect of employees’ severance payments | | | 6,617 | | | | 5,530 | |
| Deferred tax liabilities | | | 4,486 | | | | - | |
| Total long-term liabilities | | | 11,388 | | | | 5,886 | |
| Total liabilities | | | 44,862 | | | | 33,114 | |
| | | | | | | | | |
| Equity | | | | | | | | |
| Shareholders’ equity | | | | | | | | |
| Ordinary Shares, NIS 0.05 par value each (90,000,000 | | | | | | | | |
| shares authorized; 29,784,327 and 29,370,972 shares | | | | | | | | |
| issued and fully paid as of September 30, 2010 and | | | | | | | | |
| December 31, 2009, respectively) | | | 350 | | | | 345 | |
| Additional paid-in capital | | | 192,766 | | | | 182,203 | |
| Capital reserve | | | 2,051 | | | | 2,166 | |
| Accumulated other comprehensive income | | | 170 | | | | 399 | |
| Accumulated deficit | | | (27,910 | ) | | | (33,185 | ) |
| Shareholders' equity | | | 167,427 | | | | 151,928 | |
| Non-controlling interest | | | 145 | | | | 678 | |
| Total Equity | | | 167,572 | | | | 152,606 | |
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Statements of Operations
In thousands except share and per share data
(Unaudited)
| | | Nine-month period ended | | | Three-month period ended | | | Year ended | |
| | | | | | | | | December 31 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Revenues | | $ | 112,889 | | | $ | 101,723 | | | $ | 38,658 | | | $ | 35,220 | | | $ | 141,763 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cost of revenues | | | (27,397 | ) | | | (23,766 | ) | | | (8,999 | ) | | | (7,827 | ) | | | (33,145 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | | 85,492 | | | | 77,957 | | | | 29,659 | | | | 27,393 | | | | 108,618 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | | | | | |
| Research and development, gross | | | (15,643 | ) | | | (13,543 | ) | | | (6,196 | ) | | | (5,019 | ) | | | (17,842 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Government grants | | | 1,068 | | | | 1,021 | | | | 561 | | | | 387 | | | | 1,109 | |
| Research and development, net | | | (14,575 | ) | | | (12,522 | ) | | | (5,635 | ) | | | (4,632 | ) | | | (16,733 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Sales and marketing | | | (48,502 | ) | | | (45,257 | ) | | | (17,408 | ) | | | (14,758 | ) | | | (61,428 | ) |
| General and administrative | | | (18,136 | ) | | | (14,021 | ) | | | (6,046 | ) | | | (5,042 | ) | | | (18,919 | ) |
| Other, net | | | (376 | ) | | | (331 | ) | | | (142 | ) | | | (316 | ) | | | (1,220 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | (81,589 | ) | | | (72,131 | ) | | | (29,231 | ) | | | (24,748 | ) | | | (98,300 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Operating income | | | 3,903 | | | | 5,826 | | | | 428 | | | | 2,645 | | | | 10,318 | |
| Financing income, net | | | 1,690 | | | | 1,276 | | | | 887 | | | | 1,086 | | | | 1,584 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income before taxes | | | | | | | | | | | | | | | | | | | | |
| on income | | | 5,593 | | | | 7,102 | | | | 1,315 | | | | 3,731 | | | | 11,902 | |
| Income tax benefit (expense) | | | (563 | ) | | | 1,160 | | | | (334 | ) | | | (6 | ) | | | 1,542 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | | 5,030 | | | | 8,262 | | | | 981 | | | | 3,725 | | | | 13,444 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss attributable to | | | | | | | | | | | | | | | | | | | | |
| non-controlling interest | | | 245 | | | | 704 | | | | 30 | | | | 114 | | | | 891 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income attributable to | | | | | | | | | | | | | | | | | | | | |
| shareholders | | $ | 5,275 | | | $ | 8,966 | | | $ | 1,011 | | | $ | 3,839 | | | $ | 14,335 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings per share | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Basic Earnings attributable to | | | | | | | | | | | | | | | | | | | | |
shareholders per Ordinary Share | | $ | 0.18 | | | $ | 0.31 | | | $ | 0.03 | | | $ | 0.13 | | | $ | 0.49 | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings attributable to | | | | | | | | | | | | | | | | | | | | |
| shareholders per Ordinary Share | | $ | 0.17 | | | $ | 0.30 | | | $ | 0.03 | | | $ | 0.13 | | | $ | 0.47 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number | | | | | | | | | | | | | | | | | | | | |
| of Ordinary Shares used to | | | | | | | | | | | | | | | | | | | | |
| compute basic Earnings | | | | | | | | | | | | | | | | | | | | |
| per Ordinary Share | | | 29,623,700 | | | | 29,264,952 | | | | 29,768,548 | | | | 29,278,785 | | | | 29,281,897 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number | | | | | | | | | | | | | | | | | | | | |
| of Ordinary Shares used to | | | | | | | | | | | | | | | | | | | | |
| compute diluted Earnings | | | | | | | | | | | | | | | | | | | | |
| per Ordinary Share | | | 30,566,498 | | | | 30,108,597 | | | | 30,346,875 | | | | 30,648,420 | | | | 30,423,162 | |
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
| | | Nine-month period ended | | | Three-month period ended | | | Year ended | |
| | | | | | | | | December 31 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Cash flows from operating activities: | | | | | | | | | | | | | | | |
| Net income | | $ | 5,030 | | | $ | 8,262 | | | $ | 981 | | | $ | 3,725 | | | $ | 13,444 | |
| | | | | | | | | | | | | | | | | | | | | |
Adjustments required to reconcile net income | | | | | | | | | | | | | | | | | | | | |
| to net cash provided by operating activities: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 5,823 | | | | 4,513 | | | | 1,767 | | | | 1,531 | | | | 6,096 | |
| Goodwill impairment | | | | | | | - | | | | | | | | - | | | | 483 | |
| Deferred tax assets | | | 649 | | | | (334 | ) | | | 276 | | | | (517 | ) | | | (1,221 | ) |
| Deferred tax liabilities | | | 4,486 | | | | - | | | | (82 | ) | | | - | | | | - | |
| Stock based compensation | | | 6,470 | | | | 5,878 | | | | 2,065 | | | | 2,190 | | | | 7,268 | |
| Loss from disposal of fixed assets | | | 468 | | | | 331 | | | | 176 | | | | 316 | | | | 714 | |
| Other | | | 121 | | | | (231 | ) | | | 413 | | | | (80 | ) | | | (144 | ) |
| Net change in trading securities | | | 108 | | | | (6,355 | ) | | | (215 | ) | | | (2,983 | ) | | | - | |
| Decrease (increase) in | | | | | | | | | | | | | | | | | | | | |
| accounts receivable – trade | | | 3,309 | | | | 426 | | | | 1,256 | | | | 1,134 | | | | (3,069 | ) |
| Decrease (increase) in | | | | | | | | | | | | | | | | | | | | |
| accounts receivable – other | | | 527 | | | | 1,569 | | | | 1,511 | | | | (105 | ) | | | 863 | |
| Decrease (increase) in prepaid expenses | | | (761 | ) | | | (329 | ) | | | (764 | ) | | | (711 | ) | | | 595 | |
| Decrease in | | | | | | | | | | | | | | | | | | | | |
| advances to suppliers | | | 149 | | | | 2,963 | | | | 348 | | | | 262 | | | | 3,006 | |
| Decrease (increase) in | | | | | | | | | | | | | | | | | | | | |
| inventories | | | 2,213 | | | | (5,546 | ) | | | (428 | ) | | | (2,858 | ) | | | (4,386 | ) |
| Increase (decrease) in | | | | | | | | | | | | | | | | | | | | |
| accounts payable | | | (1,683 | ) | | | 1,251 | | | | 3,992 | | | | 1,760 | | | | 1,819 | |
| Increase (decrease) in | | | | | | | | | | | | | | | | | | | | |
| deferred income | | | 537 | | | | (1,304 | ) | | | (98 | ) | | | (386 | ) | | | (1,289 | ) |
| Net cash provided by | | | | | | | | | | | | | | | | | | | | |
| operating activities | | | 22,960 | | | | 11,094 | �� | | | 11,198 | | | | 3,278 | | | | 24,179 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | |
| Purchase of fixed assets and | | | | | | | | | | | | | | | | | | | | |
| intangible assets | | | (3,777 | ) | | | (3,619 | ) | | | (1,227 | ) | | | (1,171 | ) | | | (4,794 | ) |
| Deposits | | | (41 | ) | | | 16 | | | | (14 | ) | | | 26 | | | | 34 | |
| Acquisition of Sierra, net | | | | | | | | | | | | | | | | | | | | |
| of cash acquired (1) | | | (34,709 | ) | | | | | | | - | | | | | | | | - | |
| Proceeds from sales of | | | | | | | | | | | | | | | | | | | | |
| marketable securities and | | | | | | | | | | | | | | | | | | | | |
| short term investments | | | 26,793 | | | | 32,424 | | | | 4,400 | | | | 11,698 | | | | 38,085 | |
| Investments in trading and | | | | | | | | | | | | | | | | | | | | |
| marketable securities | | | (21,777 | ) | | | (13,218 | ) | | | (13,991 | ) | | | (1,010 | ) | | | (27,410 | ) |
| Net cash provided by (used | | | | | | | | | | | | | | | | | | | | |
| in) investing activities | | | (33,511 | ) | | $ | 15,603 | | | | (10,832 | ) | | $ | 9,543 | | | | 5,915 | |
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
| | | Nine-month period ended | | | Three-month period ended | | | Year ended | |
| | | | | | | | | December 31 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | | | | | | | | |
| Principal payments on capital | | | | | | | | | | | | | | | |
| lease obligation, net | | $ | (86 | ) | | $ | (97 | ) | | $ | (37 | ) | | $ | (32 | ) | | $ | (131 | ) |
| Proceeds from the issuance | | | | | | | | | | | | | | | | | | | | |
| of Ordinary Shares | | | 4,098 | | | | 50 | | | | 307 | | | | 50 | | | | 954 | |
| Dividend distribution | | | | | | | (15,799 | ) | | | | | | | - | | | | (15,799 | ) |
| Purchase of shares from a | | | | | | | | | | | | | | | | | | | | |
| non-controlling shareholder | | | | | | | | | | | | | | | | | | | | |
| in a subsidiary | | | (403 | ) | | | (382 | ) | | | (403 | ) | | | - | | | | (382 | ) |
| Net cash (used in) provided | | | | | | | | | | | | | | | | | | | | |
| by financing activities | | | 3,609 | | | | (16,228 | ) | | | (133 | ) | | | 18 | | | | (15,358 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Effect of exchange rate | | | | | | | | | | | | | | | | | | | | |
| changes on cash | | | 332 | | | | 33 | | | | 559 | | | | 122 | | | | 25 | |
| | | | | | | | | | | | | | | | | | | | | |
| Increase (decrease) in cash | | | | | | | | | | | | | | | | | | | | |
| and cash equivalents | | | (6,610 | ) | | | 10,502 | | | | 792 | | | | 12,961 | | | | 14,761 | |
| Cash and cash equivalents | | | | | | | | | | | | | | | | | | | | |
| at beginning of period | | | 46,458 | | | | 31,697 | | | | 39,056 | | | | 29,238 | | | | 31,697 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | | | | | | | | | | | | | | | | | | | |
| at end of period | | $ | 39,848 | | | $ | 42,199 | | | $ | 39,848 | | | $ | 42,199 | | | $ | 46,458 | |
| | | | | | | | | | | | | | | | | | | | | |
| Supplementary cash flow information | | | | | | | | | | | | | | | | | | | | |
| Income taxes paid | | $ | 184 | | | $ | 728 | | | $ | 90 | | | $ | 643 | | | $ | 877 | |
12
