GIVEN
IMAGING
[Graphic Omitted]
For Immediate Release
For further information contact:
Yuval Yanai or Fern Lazar/David Carey
Given Imaging Ltd. Lazar Partners Ltd.
1-(866) GIVEN-IR
flazar@lazarpartners.com/
dcarey@lazarpartners.com
GIVEN IMAGING REPORTS THIRD QUARTER
AND NINE MONTH 2005 RESULTS
- Quarterly sales grow 36% to $19.8 million -
- Third quarter earnings per share of $0.07 -
- Gross profit reaches record of 76.7% -
YOQNEAM, Israel, November 7, 2005 - Given Imaging Ltd. (NASDAQ: GIVN) today
announced third quarter and nine month results for the period ended September
30, 2005.
Worldwide sales of the Given(R) Diagnostic System and Given(R) PillCam video
capsules reached $19.8 million in the third quarter of 2005, a 36% increase over
sales of $14.6 million in the third quarter of 2004. Operating income in the
third quarter of 2005 was $1.2 million, compared to an operating loss of
$256,000 in the same period in 2004. Gross profit in the third quarter of 2005
reached a record 76.7% of revenues, compared to 75.1% in the third quarter of
2004. The company recorded a net profit for the quarter of $1.94 million, or
$0.07 per share on a diluted basis, compared to a net profit of $114,000 in the
third quarter of 2004. Cash and marketable securities at the end of the third
quarter of 2005 totaled $80.9 million.
"We are pleased with the third quarter performance and our ability, despite the
typical summer seasonality, to grow our U.S PillCam SB sales by 46% from the
third quarter
of 2004 and achieve record gross profit" said Gavriel D. Meron, president and
CEO of Given Imaging.
For the nine month period ended September 30, 2005, sales were $62.3 million
reflecting a 45.6% increase over sales of $42.8 million in the same period in
2004. Gross profit for the nine month period was 74.2% compared to 73.9% in the
first nine months of 2004. Operating income in the first nine months of 2005 was
$1.86 million, compared to an operating loss of $300,000 in the same period in
2004. Net income for the first nine months of 2005 was $2.82 million or $0.095
per share on a diluted basis compared to net income of $450,000, or $0.015 per
share, on a diluted basis in the same period of 2004. The net profit for the
nine month period included a special provision recorded in the second quarter,
net of tax benefits, of $1.2 million for certain taxes related to our U.S.
subsidiary and an adjustment of $600,000 in the valuation allowance for U.S.
income tax benefits available in future periods. Excluding the aforementioned
provisions, net income was $4.55 million or $0.15 per share on a diluted basis.
Third Quarter 2005 Revenue Analysis
The geographic breakdown of third quarter 2005 sales is as follows:
(Millions of U.S. dollars)
United States $14.5
Europe and ROW $ 5.3
During the quarter, the number of PillCam SB capsules sold and reordered reached
record levels. Reorders of PillCam SB grew to 31,453, up 48.9% from the third
quarter of 2004, and total PillCam SB capsules sold in the quarter grew to
32,767, 46.2% higher than the third quarter of 2004. Sales of Given(R)
Diagnostic Systems totaled 153 for the third quarter of 2005, compared to 129
systems in the third quarter of 2004. The increase resulted primarily from
increased system sales in the United States, where system sales in this quarter
totaled 114, up 34.1% from 85 systems sold in the United
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States in the third quarter of 2004. PillCam ESO reorders were still
insignificant during the quarter as the efforts to gain reimbursement coverage
are ongoing, but still have not achieved the expected results. However, it is
noteworthy that numerous payers are covering the ESO procedure on a case-by-case
basis.
Supplemental third quarter data can be found at www.givenimaging.com in the
Investor section.
Third Quarter and Recent Highlights
New Products Update
o Given launched its RAPID 4 software at the World Congress of
Gastroenterology (WCOG) and other meetings. RAPID 4 offers new
physician-friendly features and powerful tools which make it easier to
read and interpret the images captured from the PillCam SB and PillCam
ESO video capsules. RAPID 4 is pending clearance from the U.S. Food
and Drug Administration (FDA).
o Given announced that it is finalizing the development of a third
generation PillCam SB that will double the frame rate from two to four
images per second and will offer enhanced viewing capacity, while at
the same time increasing the capsule's operational capture time from
eight to nine hours. The new capsule will incorporate new optical and
image sensor technology to provide superior image quality. The new
PillCam SB is expected to be commercially available in 2006.
Medical Conference Participation
During the third quarter, Given Imaging participated in four important
gastroenterology meetings. New clinical data was presented in numerous papers
supporting use of PillCam in both new and existing indications, as highlighted
below.
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The World Congress of Gastroenterology (WCOG)
Thirteen scientific abstracts were presented on capsule endoscopy in Montreal,
Canada on September 10-14. Two important studies were presented concluding that
PillCam SB capsule endoscopy should be used for diagnosing the cause of
unexplained iron deficiency anemia (IDA) to obtain a definitive diagnosis. In
addition, Given Imaging sponsored a clinical symposium attended by more than 200
physicians, at which lectures on use of PillCam for detection of small bowel
tumors, celiac disease and esophageal disorders were presented.
Australian Gastroenterology Week (AGW) October 19-22
Attended by more than 1,400 delegates from Australia and New Zealand, AGW 2005
featured more than 8 oral presentations and 11 posters on PillCam SB capsule
endoscopy.
United European Gastroenterology Week (UEGW)
Sixteen oral and poster presentations on PillCam endoscopy were presented at
UEGW in Copenhagen, Denmark, October 15-19. Highlights included one study
recommending use of the PillCam SB video capsule as a first line diagnostic tool
in patients with suspected small bowel Crohn's Disease (CD) and additional
clinical studies that showed PillCam SB's value in improving clinical and
therapeutic outcomes.
American College of Gastroenterology (ACG)
Attended by more than 3,800 physicians, more than 30 abstracts using PillCam
capsule endoscopy were presented at the ACG annual meeting which took place in
Hawaii from October 31 to November 2. Included were three independent PillCam SB
studies of more than 670 patients which showed that capsule endoscopy not only
identifies small bowel tumors and previously undetected Crohn's disease, but
also leads to meaningful changes in patient management.
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Capsuleendoscopy.org
This educational web portal dedicated to capsule endoscopy, now has 1,750
members from more than 70 countries who have enrolled at the site.
CMS Coding for PillCam ESO
The Centers for Medicare and Medicaid Services (CMS) determined that hospital
coding for PillCam ESO is described by the American Medical Association's (AMA)
common procedural terminology (CPT) code 91110, along with modifier 52. For
Medicare patients, hospitals can now report PillCam ESO procedures using CPT
91110-52, giving them a uniform mechanism for reporting Medicare claims for the
PillCam ESO. For physicians, the AMA issued coding guidance when reporting
claims for PillCam ESO. Physicians are instructed to use CPT 91299;
miscellaneous diagnostic gastroenterology procedure unless otherwise directed by
the payer. Since the 52 modifier will only allow 50% of the fee to be paid as of
January 1st 2006, a request to the AMA for a dedicated CPT code, supported by
the ASGE and the AGA, has been submitted on November 7, and a decision is
expected by CMS at the end of 2006, to be implemented as of January 1, 2007.
Inscope $10 million Milestone Achieved
At the end of the third quarter Given Imaging achieved a $10 million milestone
payment from Ethicon Endo-Surgery following the sale of the 500th workstation
since the FDA approved PillCam ESO in November 2004. The milestone (included in
other receivables and deferred income) will be recorded on a straight line basis
over the 15 year life of the agreement as a reduction in marketing expenses.
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2005 Guidance Reiteration
Given Imaging reiterates full year 2005 guidance as follows:
Full Year Q4
--------- --
Revenues ($ million) $84.0 - 90.0 21.7 - 26.7
-----------
Earnings per share (on a diluted basis) $0.15 - $0.26 $0.07 - $0.18
-------------
Third Quarter Webcast Information
Given Imaging will host a conference call tomorrow, Tuesday, November 8, 2005,
at 9:00 am Eastern Time to discuss third quarter 2005 results. To participate in
the teleconference, please dial 800-289-0494 fifteen minutes before the
conference begins. International callers should dial 913-981-5520. The call will
also be webcast live at www.givenimaging.com. A replay of the call will be
available for thirty days on the company's website or until November 15, 2005 by
dialing 888-203-1112. International callers should dial 719-457-0820. The replay
participant code is 2567774.
About Given Imaging
Given Imaging is redefining gastrointestinal diagnosis by developing, producing
and marketing innovative, patient-friendly products for detecting
gastrointestinal disorders. The company is developing a complete line of
PillCam(TM) video capsules for detecting disorders of the gastrointestinal
tract. The company's technology platform is the Given(R) Diagnostic System,
featuring the PillCam video capsule, a disposable, miniature video camera
contained in a capsule, which is ingested by the patient. The PillCam(TM) SB
capsule is the only naturally ingested method for direct visualization of the
entire small intestine. It is currently marketed in the United States and in
more than 50 other countries and has benefited more than 260,000 patients
worldwide. The PillCam(TM) ESO video capsule, which provides visual examination
of the esophagus, has been cleared for marketing by the FDA. Additional capsules
for visualization of the stomach and colon are under development. Given
Imaging's headquarters, manufacturing and R&D facilities are located in Yoqneam,
Israel; it has direct sales and marketing operations in the United States,
Germany and France, and local offices in Japan, Spain and Australia. For more
information, visit http://www.givenimaging.com.
This press release contains forward-looking statements about Given Imaging,
including projections about our business and our future revenues, expenses and
profitability, within the
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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 impact of the newly adopted SFAS 123R for
expensing option-based payments, the possibility of armed conflict or civil or
military unrest in Israel and other risks disclosed in our filings with the U.S.
Securities and Exchange Commission.
# # #
(Financial tables follow)
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GIVEN
IMAGING
[Graphic Omitted]
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Balance Sheets
In thousands except share data
September 30, December 31,
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2005 2004
------------- ------------
Assets
Current assets
Cash and cash equivalents $ 58,900 $ 80,861
Accounts receivable:
Trade (Net of provisions for doubtful debts of $411 and $115
as of September 30, 2005 and December 31, 2004, respectively) 14,436 12,261
Other 11,640 1,271
Inventories 15,961 13,794
Prepaid expenses 1,747 954
Deferred taxes 849 737
Advances to suppliers 511 555
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Total current assets 104,044 110,433
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Deposits 425 425
Marketable securities 21,628 -
Assets held for severance benefits 1,569 1,339
Fixed assets, at cost, less accumulated depreciation 13,933 9,862
Other assets, at cost, less accumulated amortization 2,246 2,165
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Total assets $ 143,845 $ 124,224
========= =========
Liabilities and shareholders' equity
Current liabilities
Current installments of obligation under capital lease $ 11 $ 11
Accounts payable:
Trade 3,987 5,147
Other 13,822 8,678
Deferred revenue 2,429 3,610
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Total current liabilities 20,249 17,446
--------- ---------
Long-term liabilities
Deferred income 22,938 9,340
Obligation under capital lease, net 38 48
Liability for employee severance benefits 1,912 1,596
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Total long-term liabilities 24,888 10,984
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Total liabilities 45,137 28,430
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Minority interest 374 1,177
Shareholders' equity 98,334 94,617
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Total liabilities and shareholders' equity $ 143,845 $ 124,224
========= =========
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Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Operations
In thousands except share and per share data
Nine-month period ended Three-month period ended Year ended
September 30, September 30, December 31
2005 2004 2005 2004 2004
----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
----------- ----------- ----------- ----------- -----------
Revenues $ 62,376 $ 42,807 $ 19,841 $ 14,594 $ 65,020
Cost of revenues (16,070) (11,154) (4,618) (3,636) (17,734)
----------- ------------ ----------- ---------- ----------
Gross profit 46,306 31,653 15,223 10,958 47,286
----------- ------------ ----------- ---------- ----------
Operating expenses
Research and development, gross (6,079) (5,456) (2,061) (2,119) (7,363)
Royalty bearing participation 872 702 374 288 1,140
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Research and development, net (5,207) (4,754) (1,687) (1,831) (6,223)
Sales and marketing expenses (32,227) (22,588) (9,778) (7,705) (33,652)
General and administrative expenses (7,013) (4,644) (2,539) (1,678) (6,916)
----------- ------------ ----------- ---------- ----------
Total operating expenses (44,447) (31,986) (14,004) (11,214) (46,791)
----------- ------------ ----------- ---------- ----------
Operating profit (loss) 1,859 (333) 1,219 (256) 495
Financing income, net 155 102 519 165 956
----------- ------------ ----------- ---------- ---------
Profit (loss) before taxes on income 2,014 (231) 1,738 (91) 1,451
Taxes on income 5 - (53) - 690
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Profit (loss) before minority share 2,019 (231) 1,685 (91) 2,141
Minority share in losses of subsidiary 803 681 253 205 747
----------- ------------ ----------- ----------- ----------
Net profit $ 2,822 $ 450 $ 1,938 $ 114 $ 2,888
=========== ============ =========== ========== ==========
Basic profit per Ordinary Share $ 0.102 $ 0.017 $ 0.070 $ 0.004 $ 0.110
=========== ============ =========== ========== ==========
Diluted profit per Ordinary Share $ 0.095 $ 0.015 $ 0.065 $ 0.004 $ 0.100
=========== ============ =========== ========== ==========
Weighted average number of Ordinary Shares
outstanding used in basic profit per
Ordinary Share calculation 27,736,989 26,332,954 27,829,442 27,404,098 26,633,964
=========== ============ =========== ========== ===========
Weighted average number of Ordinary Shares
outstanding used in diluted profit per
Ordinary Share calculation 29,731,618 29,091,795 29,568,874 30,139,467 29,353,448
=========== ============ =========== ========== ===========
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