SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of: April 2003
Given Imaging Ltd.
(Exact name of registrant as specified in charter)
13 Ha'Yetzira Street, Yoqneam 20692, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F __
---
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes __ No X
---
Given Imaging Ltd.
The following exhibits are filed as part of this Form 6-K:
Exhibit Description
A. Press release dated April 28, 2003, entitled "Given Imaging Appoints Giora
Shalgi to Board of Directors."
B. Press release dated April 30, 2003, entitled "Given Imaging Announces First
Quarter 2003 Results."
C. Unaudited interim consolidated financial statements of Given Imaging Ltd.
as of March 31, 2003.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GIVEN IMAGING LTD.
Date: May 1, 2003 By: /s/ ZVI BEN DAVID
--------------------------------------
Name: Zvi Ben David
Title: Vice President and
Chief Financial Officer
Exhibit A
GIVEN IMAGING APPOINTS GIORA SHALGI TO BOARD OF DIRECTORS
Yoqneam, Israel, April 28, 2003 - Given Imaging Ltd (Nasdaq: GIVN) today
announced the appointment of Mr. Giora Shalgi, President and Chief Executive
Officer of Rafael Israel Armament Development Authority Ltd., to the company's
board of directors, effective immediately.
"I am pleased that Given Imaging has asked me to serve on its Board of
Directors," said Giora Shalgi. "I was involved with the early development of the
technology behind the M2A at Rafael, and have followed Given Imaging's progress
in using it to create a valuable diagnostic tool. I look forward to working
closely with the management team during its next phase of corporate
development."
"Giora Shalgi is a welcome addition to Given Imaging's Board of Directors," said
Gavriel D. Meron, President and CEO of Given Imaging. "We look forward to his
experience and insight as we expand our business."
Mr. Shalgi has held numerous positions at Rafael since joining the company in
1960. In addition to his current role as President and CEO, a position he has
held since 1999, Mr. Shalgi was Corporate Vice President for Research and
Development from 1998 to 1999, and from 1987 to 1998 he was head of Rafael's
Electro-Optical Department. From 1960 until 1990, Mr. Shalgi held various
positions at Rafael, including head of the Electro-Optical and Mechanical Design
Department of the Air-to-Air Missile Directorate.
Mr. Shalgi received the Stefan Bergman Prize from the American Mathematical
Society in 1980 and the Israel Defense Prize in 1970 and 1978. He holds a BSc.
in Mechanical Engineering and an MSc. in Mechanics, both from the Israel
Institute of Technology, and an Engineer's Degree in Aeronautics and
Astronautics from Stanford University.
Mr. Shalgi replaces Mr. Gideon Cohen, Sales and Contract Manager in the missile
division of Rafael.
About Given Imaging:
Given Imaging develops, produces and markets the Given(R) Diagnostic System
featuring the M2A(R) Capsule Endoscope, the only non-invasive method for direct
visualization of the entire small intestine. The system uses a disposable
miniature video camera contained in a capsule which is ingested by the patient.
The M2A capsule passes naturally through the digestive tract, transmitting high
quality color images, without interfering with the patient's normal activities.
The system received clearance from the FDA in August 2001 and received
permission to affix the CE mark in May 2001. Distribution channels for the
system have been established in more than 50 countries worldwide. The M2A has
been utilized to diagnose a range of diseases of the small
intestine including Crohn's Disease, Celiac disease and other malabsorption
disorders, benign and malignant tumors of the small intestine, vascular
disorders, medication related small bowel injury, as well as a range of
pediatric small bowel disorders. For more information, visit
http://www.givenimaging.com.
This press release contains forward-looking statements about Given Imaging,
including projections about our business, our future revenues, and our future
profitability, within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. For example, statements
in the future tense, words such as "anticipates," "estimates," "expects,"
"intends," "plans," "believes," and words and terms of similar substance used in
connection with any discussion of future operating or financial performance
identify such forward-looking statements. Those forward-looking statements are
not guarantees of future performance and actual results could differ materially
from our current expectations as a result of numerous factors, including but not
limited to the following: changes in regulatory environment, our success in
implementing our sales, marketing and manufacturing plan, protection and
validity of patents and other intellectual property rights, the impact of
currency exchange rates, the effect of competition by other companies, the
outcome of future litigation, the reimbursement policies for our product from
healthcare payors, quarterly variations in operating results, the possibility of
armed conflict or civil or military unrest in Israel and other risks disclosed
in our filings with the U.S. Securities Exchange Commission.
# # #
EXHIBIT B
GIVEN IMAGING ANNOUNCES FIRST QUARTER 2003 RESULTS
Sales Increase 65% Compared to First Quarter 2002
Yoqneam, Israel, April 30, 2003 - Given Imaging Ltd. (NASDAQ:GIVN), today
announced first quarter results for the period ended March 31, 2003.
The Company announced revenues of $8.6 million for the first quarter of 2003, a
65% increase over the first quarter of 2002, but less than guidance of 100%
growth over the first quarter of 2002. Gross margin increased to 67.2% of
revenues, as compared to a gross margin of 52% in the first quarter of 2002 and
66.3% in the fourth quarter of 2002. Operating expenses were $9.7 million, $0.4
million lower than the $10.1 million recorded for the fourth quarter of 2002.
Net loss for the first quarter was $3.6 million or ($0.14) per share, compared
to $5.7M or ($0.23) per share in the first quarter of 2002, and slightly less
than the loss of $3.7 million or ($0.15) per share in the fourth quarter of
2002.
While capsule sales grew by more than 110% compared to the first quarter of 2002
and were 25% higher than capsule sales in the fourth quarter of 2002, systems
sales remained similar to the first quarter of 2002, and 31% less than systems
sales in the fourth quarter of 2002. We believe that this lag in systems sales
reflects the tendency of our prospective customers to carefully evaluate the
system and the related reimbursement before committing to capital spending,
which was exacerbated by the worldwide economic downturn and the unexpected
impact of the war in Iraq on sales that were planned for the end of the quarter.
The Company's liquidity remains strong and at the end of the quarter we had cash
reserves amounting to $29.3 million.
First Quarter 2003 Revenue Analysis
- -----------------------------------
On a geographic basis, sales of the Given System in the United States accounted
for 58% of the quarterly revenues. A geographic breakdown of first quarter 2003
sales is as follows:
(Millions of U.S. dollars)
United States $5.0
Europe $1.4
ROW $2.2
----
Total $8.6
During the quarter, worldwide M2A capsule sales grew to more than 10,200,
representing 52% of revenues. M2A reorders in the first quarter increased to
more than 8,600, or 84% of total M2A sales.
Sales of workstations totaled 161 for the first quarter of 2003 with 86, or 53%,
sold in the United States. Sales of recorders totaled 297 during the quarter
with 170 recorders or 57% sold in the United States. Worldwide deliveries of
Given Systems reached more than 1,170 by the end of the first quarter of 2003.
"During the first quarter of 2003 we saw a steady increase in M2A usage by
existing customers particularly in the U.S. which reflects growing familiarity
with the system and a more favorable reimbursement climate," said Gavriel Meron,
President and CEO of Given Imaging, Ltd. "We anticipate that this trend will
continue as we gain additional reimbursement coverage in the U.S. and abroad,
and as reimbursement policies expand to include indications beyond bleeding such
as Crohn's disease."
"As we enter the second quarter, we expect to see a growing number of product
demonstrations that have been performed by our sales team convert into sales,
spurred by first hand experience with Capsule Endoscopy as well as additional
validation through peer-review publications and scientific discussion at this
year's Digestive Disease Week in May."
Highlights
- ----------
In the first quarter, Given Imaging accomplished the following milestones:
- - Launched the Rapid 2 System in the United States with Suspected Bleeding
Indicator following FDA clearance.
- - Installed a back-up line in Ireland that is now operational, and completed
installation of a second semi-automated line in Yoqneam, Israel.
- - Commenced clinical trials for clearance of Capsule Endoscopy in Japan, the
second largest healthcare market in the world in terms of spending. We
expect clinical trials to be completed by the end of 2003.
- - Hosted the Second International Conference on Capsule Endoscopy (ICCE) in
Berlin. More than 160 gastroenterologists
2
from around the world attended the conference and exchanged clinical
experience using the M2A capsule. A presentation of the consensus of the
conferences is provided on the Company's website, www.givenimaging.com.
Reimbursement update
- --------------------
- - More than 100 million individuals worldwide now have reimbursable access to
capsule endoscopy, of which 20 million are covered for a wide range of
indications, including Crohn's disease and other small bowel pathology, and
80 million beneficiaries are currently covered only for obscure bleeding,
which is a far smaller indication in the population.
The total number of United States residents with reimbursable access to
capsule endoscopy is now 86 million, representing 35% of the insured
population. This reflects an increase in the number of individuals eligible
for capsule endoscopy by more than 48 million. The majority of these
coverage statements relate to bleeding indications and require that a
previous procedure be performed prior to using the Given System. The
breakdown of coverage between private payers and Medicare in the United
States is as follows:
o The number of individuals with access to capsule endoscopy
through private insurance increased by 42 million to 63 million.
Private payers that issued capsule endoscopy coverage policies
during the quarter including Blue Shield of California,
Wellpoint, Excellus, Univera, Healthnet, and the Blue Cross and
Blue Shields of Alabama, Arkansas and Minnesota. In addition, the
Company recently announced that Aetna has issued a national
coverage policy for capsule endoscopy.
o The number of individuals covered by Medicare reached 23 million
- an increase of 5.7 million.
- - Received capsule endoscopy reimbursement in Portugal and Austria covering a
total of 18 million individuals. In both countries, coverage is for a broad
range of gastrointestinal disorders.
Revised Annual Guidance
- -----------------------
3
Based on in-depth evaluation of the factors that impacted system sales in the
first quarter, which was conducted following the quarter revenue
pre-announcement earlier this month, Given Imaging anticipates that in light of
the longer sales cycle of new systems, and anticipated continued overall
slowdown in capital expenditure by our potential customers, total revenues for
the full year 2003 will increase by 40% to 50% over 2002 sales, compared to
previously stated guidance of 100% year to year growth. Accordingly, our target
to reach breakeven is delayed to early 2004.
First Quarter Webcast Information
- ---------------------------------
Given Imaging's first quarter earnings conference call will take place tomorrow,
May 1, 2003 at 10:00 am ET, 5:00 pm Israel time. To access the call dial
800-360-9865. International callers dial 973-694-6836. A live webcast of this
call will be available on the Given Imaging corporate website,
www.givenimaging.com. A replay of the call will also be available for one week
by dialing 800-428-6051 and entering passcode 290734. International callers dial
973-709-2089 and enter the same passcode.
About Given Imaging:
- --------------------
Given Imaging develops, produces and markets the Given(R) Diagnostic System
featuring the M2A(R) Capsule Endoscope, the only non-invasive method for direct
visualization of the entire small intestine. The system uses a disposable
miniature video camera contained in a capsule which is ingested by the patient.
The M2A capsule passes naturally through the digestive tract, transmitting high
quality color images, without interfering with the patient's normal activities.
The system received clearance from the FDA in August 2001 and received
permission to affix the CE mark in May 2001. Distribution channels for the
system have been established in more than 50 countries worldwide. The M2A has
been utilized to diagnose a range of diseases of the small intestine including
Crohn's Disease, Celiac disease and other malabsorption disorders, benign and
malignant tumors of the small intestine, vascular disorders, medication related
small bowel injury, as well as a range of pediatric small bowel disorders. For
more information, visit http://www.givenimaging.com.
This press release contains forward-looking statements about Given Imaging,
including projections about our business, our future revenues, and our future
profitability, within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. For example, statements
in the future tense, words such as "anticipates," "estimates," "expects,"
"intends," "plans," "believes," and words and terms of similar substance used in
connection with any discussion of future operating or financial performance
identify such forward-looking statements. Those forward-looking statements are
not guarantees of future performance and actual results could differ materially
from our current expectations as a result of numerous factors, including but not
limited to the following: changes in regulatory environment, our success in
implementing our sales, marketing and manufacturing plan, protection and
validity of
4
patents and other intellectual property rights, the impact of currency exchange
rates, the effect of competition by other companies, the outcome of future
litigation, the reimbursement policies for our product from healthcare payors,
quarterly variations in operating results, the possibility of armed conflict or
civil or military unrest in Israel and other risks disclosed in our filings with
the U.S. Securities Exchange Commission.
# # #
(Financial tables follow)
5
Given Imaging Ltd. And Its Consolidated Subsidiaries
Consolidated Balance Sheets
U.S. $ in thousands except per share data
March 31, December 31,
------------------------------ ------------
2003 2002 2002
----------- ----------- ------------
(Unaudited) (Unaudited) (Audited)
----------- ----------- ------------
Assets
Current assets
Cash and cash equivalents $ 29,338 $ 53,698 $ 35,792
Accounts receivable:
Trade 5,704 3,301 6,865
Other 1,131 900 1,485
Inventories 12,630 4,629 10,659
Prepaid expenses 1,257 1,089 1,234
Advances to suppliers 180 6 24
-------- -------- --------
Total current assets 50,240 63,623 56,059
-------- -------- --------
Deposits 194 104 192
Assets held for severance benefits 734 403 674
Fixed assets, at cost, less accumulated depreciation 10,140 6,221 9,967
Other assets, at cost, less accumulated amortization 1,914 1,503 1,836
-------- -------- --------
Total Assets $ 63,222 $ 71,854 $ 68,728
======== ======== ========
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital lease $ 67 $ 62 $ 56
Accounts payable
Trade 4,561 3,238 4,990
Other 4,824 3,905 6,279
Related parties - 37 35
Deferred revenue 775 332 727
-------- -------- --------
Total current liabilities 10,227 7,574 12,087
-------- -------- --------
Long-term liabilities
Obligation under capital lease, net 25 95 47
Liability for employee severance benefits 894 522 835
-------- -------- --------
Total long-term liabilities 919 617 882
-------- -------- --------
Total liabilities 11,146 8,191 12,969
-------- -------- --------
Minority interest 2,114 - 2,182
Shareholders' equity 49,962 63,663 53,577
-------- -------- --------
Total liabilities and shareholders' equity $ 63,222 $ 71,854 $ 68,728
======== ======== ========
6
Given Imaging Ltd. And Its Consolidated Subsidiaries
Consolidated Statements Of Operations
U.S. $ in thousands except per share data
Three month period ended Year ended
March 31, December 31,
2003 2002 2002
----------- ----------- ----------
(Unaudited) (Unaudited) (Audited)
Revenues $ 8,629 $ 5,216 $ 28,904
Cost of revenues 2,827 2,503 11,907
Gross profit 5,802 2,713 16,997
Operating expenses
Research and development (1,834) (1,993) (8,609)
Sales and marketing expenses (6,521) (4,831) (22,681)
General and administrative expenses (1,366) (1,084) (4,749)
----------- ---------- -----------
Total operating expenses (9,721) (7,908) (36,039)
----------- ---------- -----------
Operating loss (3,919) (5,195) (19,042)
Financing income, net 228 281 1,469
Other expenses, net - (836) (711)
----------- ---------- -----------
Loss before taxes on income (3,691) (5,750) (18,284)
Taxes on income - - -
----------- ---------- -----------
Loss before minority share (3,691) (5,750) (18,284)
Minority share in loss (profits) of subsidiary 68 - (26)
----------- ---------- -----------
Net loss $ (3,623) $ (5,750) $ (18,310)
=========== ========== ===========
Basic and diluted loss per Ordinary Share $ (0.14) $ (0.23) $ (0.73)
=========== ========== ===========
Weighted average number of Ordinary Shares
outstanding used in basic and diluted loss per
Ordinary Share calculation 25,375,513 25,104,913 25,182,563
=========== ========== ===========
EXHIBIT C
Given Imaging Ltd.
And Its Consolidated Subsidiaries
Interim Consolidated Financial Statements
As of March 31, 2003
(Unaudited)
Given Imaging Ltd. and its Consolidated Subsidiaries
Index to Consolidated Financial Statements
Page
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Changes in Shareholders' Equity 6
Consolidated Statements of Cash Flows 7
Notes to the Consolidated Financial Statements 9
2
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
U.S. $ in thousands except per share data
March 31, December 31,
----------------------------- -------------
2003 2002 2002
----------- ----------- -------------
(Unaudited) (Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents $ 29,338 $ 53,698 $ 35,792
Accounts receivable:
Trade 5,704 3,301 6,865
Other 1,131 900 1,485
Inventories 12,630 4,629 10,659
Prepaid expenses 1,257 1,089 1,234
Advances to suppliers 180 6 24
-------- -------- --------
Total current assets 50,240 63,623 56,059
-------- -------- --------
Deposits 194 104 192
Assets held for severance benefits 734 403 674
Fixed assets, at cost, less accumulated depreciation 10,140 6,221 9,967
Other assets, at cost, less accumulated amortization 1,914 1,503 1,836
-------- -------- --------
Total Assets $ 63,222 $ 71,854 $ 68,728
======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
U.S. $ in thousands except per share data
March 31, December 31,
----------------------------- ------------
2003 2002 2002
----------- ----------- ------------
(Unaudited) (Unaudited) (Audited)
----------- ----------- ------------
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital lease $ 67 $ 62 $ 56
Accounts payable
Trade 4,561 3,238 4,990
Other 4,824 3,905 6,279
Related parties - 37 35
Deferred revenue 775 332 727
--------- --------- ----------
Total current liabilities 10,227 7,574 12,087
--------- --------- ----------
Long-term liabilities
Obligation under capital lease, net 25 95 47
Liability for employee severance benefits 894 522 835
--------- --------- ----------
Total long-term liabilities 919 617 882
--------- --------- ----------
Total liabilities 11,146 8,191 12,969
--------- --------- ----------
Minority interest 2,114 - 2,182
Shareholders' equity
Share capital:
Ordinary Shares, NIS 0.05 par value each (60,000,000
shares authorized; 25,379,513, 25,104,913 and 25,373,513 shares
issued and fully paid at March 31, 2003, 2002 and
December 31, 2002, respectively) 299 296 298
Additional paid-in capital 100,196 100,103 100,262
Capital reserve 2,166 - 2,166
Unearned compensation (50) (270) (123)
Accumulated deficit (52,649) (36,466) (49,026)
--------- --------- -----------
Total shareholders' equity 49,962 63,663 53,577
--------- --------- -----------
Total liabilities and shareholders' equity $ 63,222 $ 71,854 $ 68,728
========= ========= ==========
The accompanying notes are an integral part of these consolidated financial
statements.
4
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
U.S. $ in thousands except per share data
Three month period Year ended
ended March 31, December 31
------------------------
2003 2002 2002
----------- ----------- -----------
(Unaudited) (Unaudited) (Audited)
Revenues $ 8,629 $ 5,216 $ 28,904
Cost of revenues 2,827 2,503 11,907
--------- ---------- -----------
Gross profit 5,802 2,713 16,997
Operating expenses
Research and development (1,834) (1,993) (8,609)
Sales and marketing expenses (6,521) (4,831) (22,681)
General and administrative expenses (1,366) (1,084) (4,749)
--------- ---------- -----------
Total operating expenses (9,721) (7,908) (36,039)
--------- ---------- -----------
Operating loss (3,919) (5,195) (19,042)
Financing income, net 228 281 1,469
Other expenses, net - (836) (711)
--------- ---------- -----------
Loss before taxes on income (3,691) (5,750) (18,284)
Taxes on income - - -
--------- ---------- -----------
Loss before minority share (3,691) (5,750) (18,284)
Minority share in loss (profits) of subsidiary 68 - (26)
--------- ---------- -----------
Net loss $ (3,623) $ (5,750) $ (18,310)
========= ========== ===========
Basic and diluted loss per Ordinary Share $ (0.14) $ (0.23) $ (0.73)
========= ========== ===========
Weighted average number of Ordinary Shares
outstanding used in basic and diluted loss per
Ordinary Share calculation 25,375,513 25,104,913 25,182,563
========== =========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
5
Given Imaging Ltd. and its Consolidated Subsidiar
Consolidated Statements of Changes in Shareholders' Equity
U.S. $ in thousands except per share data
Additional
Ordinary shares Paid-In Capital
Shares Amount Capital Reserve
----------- -------- ----------- ---------
Three month period ended March 31, 2003
(Unaudited)
Balance as of December 31, 2002 25,373,513 $ 298 $100,262 $ 2,166
Changes during the period:
Exercise of stock options 6,000 1 7 -
Forfeiture of stock options - - (73) -
Net loss - - - -
---------- ------ --------- --------
Balance as of March 31, 2003 (Unaudited) 25,379,513 $ 299 $100,196 $ 2,166
========== ====== ========= ========
Three month period ended March 31, 2002
(Unaudited)
Balance as of December 31, 2001 25,104,913 $ 296 $100,103 $ -
Changes during the period
Amortization of unearned compensation - - - -
Net loss - - - -
---------- ------ --------- --------
Balance as of March 31, 2002 (Unaudited) 25,104,913 $ 296 $100,103 $ -
========== ====== ========= ========
Year ended December 31, 2002 (Audited)
Balance as of December 31, 2001 25,104,913 $ 296 $100,103 $ -
Changes during the year 2002:
Exercise of stock options 268,600 2 159 -
Amortization of unearned compensation - - - -
Capital reserve from issuance of shares in a newly
formed subsidiary - - - 2,166
Net loss - - - -
---------- ------ --------- --------
Balance as of December 31, 2002 (Audited) 25,373,513 $ 298 $100,262 $ 2,166
========== ====== ========= ========
Unearned Accumulated
Compensation Deficit Total
------------- ----------- ---------
Three month period ended March 31, 2003
(Unaudited)
Balance as of December 31, 2002 $ (123) $ (49,026) $53,577
Changes during the period:
Exercise of stock options - - 8
Forfeiture of stock options 73 - -
Net loss - (3,623) (3,623)
-------- ---------- --------
Balance as of March 31, 2003 (Unaudited) $ (50) $ (52,649) $49,962
======== ========== ========
Three month period ended March 31, 2002
(Unaudited)
Balance as of December 31, 2001 $ (350) $ (30,716) $69,333
Changes during the period
Amortization of unearned compensation 80 - 80
Net loss - (5,750) (5,750)
-------- ---------- --------
Balance as of March 31, 2002 (Unaudited) $ (270) $ (36,466) $63,663
======== ========== ========
Year ended December 31, 2002 (Audited)
Balance as of December 31, 2001 $ (350) $ (30,716) $69,333
Changes during the year 2002:
Exercise of stock options - - 161
Amortization of unearned compensation 227 - 227
Capital reserve from issuance of shares in a newly
formed subsidiary - - 2,166
Net loss - (18,310) (18,310)
-------- ---------- --------
Balance as of December 31, 2002 (Audited) $ (123) $(49,026) $53,577
======== ========== ========
The accompanying notes are an integral part of these consolidated financial
statements.
6
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
U.S. $ in thousands except per share data
Three month period ended Year ended
March 31, December 31,
------------------------
2003 2002 2002
---------- ----------- ----------
(Unaudited) (Unaudited) (Audited)
Cash flows from operating activities:
Net loss $ (3,623) $ (5,750) $ (18,310)
Adjustments required to reconcile net loss to
net cash used in operating activities:
Minority share in profits (losses) of subsidiary (68) - 26
Depreciation and amortization 699 394 2,176
Employees' stock options compensation - 80 227
Other (2) 57 97
Decrease (increase) in accounts receivable - trade 1,161 (831) (4,395)
Decrease (increase) in accounts receivable - other 354 (47) (633)
Decrease (increase) in prepaid expenses (23) 60 (109)
Increase in advances to suppliers (156) (6) -
Increase in inventory (1,971) (1,372) (7,402)
Increase (decrease) in accounts payable (1,889) 1,396 5,537
Increase in deferred revenue 48 139 534
Increase (decrease) in payable to related parties (35) 21 19
--------- --------- ----------
Net cash used in operating activities $ (5,505) $ (5,859) $ (22,233)
--------- --------- ----------
Cash flows from investing activities:
Purchase of fixed assets and other assets $ (950) $ (1,610) $ (7,472)
Deposits - - (88)
--------- --------- ----------
Net cash used in investing activities $ (950) $ (1,610) $ (7,560)
--------- --------- ----------
Cash flows from financing activities:
Principal payments on capital lease obligation $ (12) $ (12) $ (64)
Proceeds from the issuance of Ordinary Shares 8 - 161
Proceeds from issuance of shares by consolidated company - - 4,322
--------- --------- ----------
Net cash (used in) provided by financing activities $ (4) $ (12) $ 4,419
--------- --------- ----------
Effect of exchange rate changes on cash $ 5 $ (51) $ (64)
--------- --------- ----------
Decrease in cash and cash equivalents $ (6,454) $(7,532) $ (25,438)
Cash and cash equivalents at beginning of period $ 35,792 $61,230 $ 61,230
--------- --------- ----------
Cash and cash equivalents at end of period $ 29,338 $53,698 $ 35,792
========= ========= ==========
The accompanying notes are an integral part of these consolidated financial
statements.
7
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows (Cont'd)
U.S. $ in thousands except per share data
(a) Supplementary cash flow information
Three month period ended Year ended
March 31, December 31,
------------------------
2003 2002 2002
----------- ----------- -------------
(Unaudited) (Unaudited) (Audited)
Interest paid $ 1 $ 3 $ 7
Income taxes paid $ 17 $ 18 $ 79
The accompanying notes are an integral part of these consolidated financial
statements.
8
Given Imaging Ltd. and its Consolidated Subsidiaries
Notes to the Consolidated Financial Statements
U.S. $ in thousands except per share data
Note 1 - Organization and Basis of Presentation
A. Description of business
Given Imaging Ltd. (the "Company") was incorporated in Israel in
January 1998. The Company has generated revenue from sales of its
products commencing the third quarter of 2001. Due in large part to
the significant expenditures required to develop and market its
product, the Company has generated losses each year since its
inception.
The novel medical device industry in which the Company is involved is
characterized by the risks of regulatory barriers and reimbursement
issues. Penetration into the world market requires the investment of
considerable resources and continuous development efforts. The
Company's future success is dependent upon several factors including
the technological quality, regulatory approvals and sufficient
reimbursement of its products.
B. Basis of presentation
The accompanying unaudited condensed consolidated financial statements
contain all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of management, are necessary to
present fairly, the financial information included therein. It is
suggested that these financial statements be read in conjunction with
the audited consolidated financial statements and accompanying notes
included in the Company's Annual Report on Form 20-F for the year
ended December 31, 2002. Results for the interim periods presented are
not necessarily indicative of the results to be expected for the full
year.
9