[LOGO OMITTED] GIVEN IMAGING
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 RECORD FOURTH QUARTER AND FULL YEAR 2005 RESULTS
- Annual sales reach $87 million, up 34% -
- Fourth quarter net income up 44% to $3.5 million -
- Fourth quarter earnings per share of $0.12 -
YOQNEAM, Israel, February 7, 2006 - Given Imaging Ltd. (NASDAQ: GIVN) today
announced fourth quarter and full year results for the period ended December 31,
2005.
Worldwide sales of the Given(R) Diagnostic System ("GDS") and Given(R) PillCam
video capsules reached $24.4 million in the fourth quarter of 2005, a 10%
increase over sales of $22.2 million in the fourth quarter of 2004. Operating
income in the fourth quarter of 2005 was $2.3 million, compared to operating
income of $828,000 during the same period in 2004. Gross profit in the fourth
quarter of 2005 was 75.4%, significantly higher than 70.4% in the fourth quarter
of 2004. Net income for the fourth quarter was $3.5 million, or $0.12 per share
on a diluted basis, a 44% increase over net income of $2.4 million in the fourth
quarter of 2004. Cash, cash equivalents and marketable securities at year end
totaled $87.4 million.
For the twelve month period ended December 31, 2005, sales were $86.8 million
reflecting a 34% increase over sales of $65.0 million in the same period in
2004. Gross profit for the twelve month period was 74.6% compared to 72.7% in
2004. Operating income in 2005 was $4.2 million, compared to $495,000 in 2004.
Net income for 2005 was $6.3 million or $0.21 per share on a diluted basis, up
117% compared to net
income of $2.9 million, or $0.10 per share, for 2004. Net income for the year
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.
"In the second half of 2005 we concentrated on increasing utilization and
reached 1.4 capsules per workstation per week in the US - up from 1.15 last
year," said Gavriel D. Meron, president and chief executive officer of Given
Imaging. "During 2005 we also made important investments in our organization,
infrastructure and R & D that position us well for our next stage of growth as a
multi-product, multi-channel global leader in the GI space."
FOURTH QUARTER 2005 REVENUE ANALYSIS
- -----------------------------------
The geographic breakdown of fourth quarter 2005 sales is as follows:
(Millions of U.S. dollars)
United States $18.8
International $ 5.6
During the quarter, both the number of PillCam SB capsules sold and reordered
reached record levels. Reorders of PillCam SB grew to 37,800, up 56% from the
fourth quarter of 2004 and total PillCam SB capsules sold in the quarter grew to
39,950, 51% higher than the fourth quarter of 2004. Sales of GDS totaled 218 for
the fourth quarter of 2005, 6% less than the 233 systems in the fourth quarter
of 2004, reflecting the sales force's focus on increasing PillCam utilization.
The Company and its partner InScope continued to lay the groundwork for gaining
reimbursement coverage to drive sales of PillCam ESO in the future. Currently, a
number of payers are covering the ESO procedure on a case-by-case basis.
Supplemental fourth quarter data can be found at www.givenimaging.com in the
Investor section.
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FOURTH QUARTER AND RECENT HIGHLIGHTS
- ------------------------------------
o STRENGTHENING OF THE SENIOR MANAGEMENT TEAM:
- Chris Rowland has been appointed Senior Vice President for Business
Development and Corporate Strategy, reporting to the President and CEO.
Mr. Rowland brings 17 years of global sales and marketing experience in
the endoscopy space. He was most recently Vice President,
Commercialization for Boston Scientific's Endovations program and prior
to that served as Vice President of Global Marketing of the Endoscopy
Division of Boston Scientific.
- Ehud Har-Chen has been appointed Senior Vice President of Human
Resources reporting to the President and CEO. Mr. Har-Chen brings
30 years of experience in the human resources area including senior
management positions at Digital Equipment Corporate and Motorola, both
in Israel and in Europe.
- Mark Gilreath, who has served the Company as Corporate Vice President,
Marketing Strategy has expanded his role to include Product Management
and has been promoted to Senior Vice President, Global Marketing.
o REALIGNMENT OF THE COMPANY AS A MULTI-PRODUCT, MULTI-CHANNEL COMPANY:
- Yoram Ashery, who has served the Company as Corporate Vice President,
Business Development has taken the new position of Corporate Vice
President, Colon Products.
- Sidney (Skip) Ashmore has been appointed Corporate Vice President,
Small Bowel Products. Skip was most recently Vice President Sales and
Marketing of CryoLife. Prior to this he held senior marketing roles in
Baxter Healthcare Corp., Renal Division.
o SIGNIFICANTLY STRENGTHENING THE U.S. SALES FORCE, including:
- Hiring experienced sales executives to the two newly created positions
of Area Directors (East and West).
- Expanding the number of regional managers from 6 to 9.
- Expanding the number of territory managers from 40 to 60.
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o COMMENCEMENT OF PIVOTAL CLINICAL TRIALS FOR PILLCAM COLON IN THE U.S. AND
EUROPE. This program has continued to move forward with initial trials
ongoing prior to the commencement of the pivotal screening trials in 2006.
o CLEARANCE FROM THE U.S. FOOD AND DRUG ADMINISTRATION TO MARKET RAPID 4 FOR
USE WITH THE PILLCAM(TM) PLATFORM.
RAPID 4's new and unique features include:
- AUTOMATIC VIEWING MODE: Aids in more efficient diagnostic review of the
video by regulating the rate of change so that images flow more
smoothly and constantly.
- QUICKVIEW: Allows fast preview of the video and highlights potentially
interesting images in the video stream.
- RAPID ATLAS: Compares the on-screen case image with known reference
images stored in the database. The reference images can be searched by
findings, diagnosis, or using Capsule Endoscopy Standard Terminology
(CEST).
o REIMBURSEMENT:
- U.S. REIMBURSEMENT:
o Tennessee Medicare Part B Carrier administered by CIGNA
Government Services revised its capsule endoscopy coverage
guidelines such that patients with suspected Crohn's disease or
indeterminate colitis are not required to undergo any other
diagnostic test or procedure before capsule endoscopy ("1st line
tool" policy). Additionally, the coverage guidelines have been
expanded to include patients with iron deficiency anemia (IDA),
irritable bowel syndrome (IBS) and functional diarrhea. CIGNA
Government Services serves approximately 720,000 beneficiaries
throughout Tennessee.
o Empire Blue Cross Blue Shield, NY revised its capsule policy
coverage guidelines to include coverage for patients with
suspected Crohn's disease, and for patients with iron deficiency
anemia (IDA). Empire BCBS serves approximately 4.8 million
beneficiaries in New York.
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- CZECH REPUBLIC REIMBURSEMENT: Ministry of Health officials issued a
reimbursement policy for PillCam SB capsule endoscopy which provides
reimbursement for approximately 7 million Czech citizens who are
covered by the Vseobecna zdravotni pojistovna insurance company. The
policy covers reimbursement of PillCam SB for suspected small bowel
disease including bleeding, tumors and Inflammatory Bowel Disease (IBD)
following a negative gastroscopy or colonoscopy.
- FOLLOWING THESE APPROVALS, A TOTAL OF 346 MILLION INDIVIDUALS NOW HAVE
COVERAGE WORLDWIDE.
2006 GUIDANCE
- -------------
Given Imaging 2006 guidance is as follows:
US GAAP
----------------------------------
Full Year 2006 Q1 2006
-------------- ----------------
Revenues ($ million) $110 - $120 $21 - $23
Earnings per share US GAAP $0.11 - $0.21 ($0.07) - ($0.05)
(on a diluted basis)
Earnings per share Pro Forma* $0.35 - $0.45 $0.01 - $0.03
(on a diluted basis)
(*) Pro Forma numbers exclude effect of FAS123(R)
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"Looking ahead, we expect top line growth of 28% to 38% in 2006 as PillCam
utilization grows and as we continue to expand our footprint. The investments we
are making in expanding the sales force in the US will impact EPS in 2006 and
especially in Q1 as the team gets trained and up to speed. Additionally, we are
planning significant investments in the new PillCam COLON throughout the year in
order to bring this exciting new product to the US market in 2007," added
Gavriel D. Meron.
FOURTH QUARTER WEBCAST INFORMATION
- ----------------------------------
To participate in the teleconference, please dial 800-811-7286 fifteen minutes
before the conference begins. International callers should dial 913-981-4902.
The call will also be webcast live at http://www.givenimaging.com. A replay of
the call will be available for thirty days on the company's website, or until
February 15, 2006 by dialing 888-203-1112. International callers should dial
719-457-0820. The replay participant code is 7836746.
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 60 other countries and has benefited more than 300,000 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 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
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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 LTD. AND ITS CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
DECEMBER 31
-----------------------
2004 2005
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 80,861 $ 65,356
Accounts receivable:
Trade (net of provision for doubtful debts of $ 115 and $ 431
as of December 31, 2004 and 2005, respectively) 12,261 18,325
Other 1,271 6,552
Inventories 13,794 16,172
Advances to suppliers 555 332
Deferred taxes 737 1,219
Prepaid expenses 954 1,020
---------- ----------
Total current assets 110,433 108,976
Assets held for employee severance payments 1,339 1,690
Marketable securities - 21,664
Fixed assets, at cost, less accumulated depreciation 9,862 13,862
Other assets, at cost, less accumulated amortization 2,590 2,918
---------- ----------
Total Assets $ 124,224 $ 149,110
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of obligation under capital lease $ 11 $ 11
Accounts payable:
Trade 5,147 5,529
Other 8,678 13,886
Deferred income 3,610 3,333
---------- ----------
Total current liabilities 17,446 22,759
---------- ----------
LONG-TERM LIABILITIES
Deferred income 9,340 22,172
Obligation under capital lease 48 34
Liability in respect of employee severance payments 1,596 2,040
---------- ----------
Total long-term liabilities 10,984 24,246
---------- ----------
Total liabilities 28,430 47,005
---------- ----------
COMMITMENTS AND CONTINGENCIES
Minority interest 1,177 61
Shareholders' equity $ 94,617 $ 102,044
---------- ----------
Total liabilities and shareholders' equity $ 124,224 $ 149,110
========== ==========
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GIVEN IMAGING LTD. AND ITS CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
THREE MONTH PERIOD
YEAR ENDED DECEMBER 31, ENDED DECEMBER 31,
-------------------------------- --------------------------------
2004 2005 2004 2005
-------------- -------------- -------------- --------------
Revenues $ 65,020 $ 86,776 $ 22,213 $ 24,440
Cost of revenues 17,734 22,070 6,580 6,000
-------------- -------------- -------------- --------------
Gross profit 47,286 64,706 15,633 18,400
-------------- -------------- -------------- --------------
OPERATING EXPENSES
Research and development, gross (7,363) (8,833) (1,907) (2,754)
Royalty bearing participation 1,140 1,244 438 372
-------------- -------------- -------------- --------------
Research and development, net (6,223) (7,589) (1,469) (2,382)
Sales and marketing expenses (33,652) (43,281) (11,064) (11,054)
General and administrative expenses (6,916) (9,657) (2,272) (2,644)
-------------- -------------- -------------- --------------
Total operating expenses (46,791) (60,527) (14,805) (16,080)
-------------- -------------- -------------- --------------
Operating profit (loss) 495 4,179 828 2,320
Financing income, net 956 762 854 607
-------------- -------------- -------------- --------------
Profit (loss) before taxes on income 1,451 4,941 1,682 2,927
Taxes on income 690 286 690 281
-------------- -------------- -------------- --------------
Profit (loss) before minority share 2,141 5,227 2,372 3,208
Minority share in losses of subsidiary 747 1,116 66 313
-------------- -------------- -------------- --------------
Net profit (loss) $ 2,888 $ 6,343 $ 2,438 $ 3,521
============== ============== ============== ==============
PROFIT (LOSS) PER SHARE
Basic profit (loss) per ordinary share $ .11 $ 0.23 $ 0.09 $ 0.13
============== ============== ============== ==============
Diluted profit (loss) per ordinary share $ .10 $ 0.21 $ 0.08 $ 0.12
============== ============== ============== ==============
Weighted average number of ordinary
shares used to compute basic profit
(loss) per ordinary share 26,633,964 27,781,223 27,536,995 27,920,441
============== ============== ============== ==============
Weighted average number of ordinary
shares used to compute diluted profit
(loss) per ordinary share 29,353,448 29,695,164 30,129,113 29,950,208
============== ============== ============== ==============
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