Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results
for the first quarter ended March 31, 2012.
Revenues were $41.8 million in the first quarter of 2012, a 5
percent increase from $40.0 million in the first quarter of 2011.
Gross margin on a GAAP basis in the first quarter of 2012 was 75.6
percent, compared to 76.8 percent in the first quarter of 2011.
Gross margin on a non-GAAP basis in the first quarter of 2012 was
76.2 percent, compared to 77.7 percent in the first quarter of
2011. The decline in gross margin was primarily due to a different
product and geographic mix.
Non-GAAP operating profit was $2.1 million, compared to $3.9
million in the first quarter of 2011. Research and development
expenses in the first quarter of 2012 include $2.2 million in costs
related primarily to PillCam Colon 2 pivotal clinical trials in the
U.S. and Japan. In the same quarter of last year, the total cost of
clinical trial amounted to $0.8 million. On a GAAP basis, net
income for the first quarter of 2012 was $0.2 million, or $0.01 per
share, compared to $0.7 million, or $0.02 per share, in the same
quarter of last year. On a non-GAAP basis, net income for the first
quarter of 2012 was $1.8 million, or $0.06 per share on a fully
diluted basis, compared to $3.0 million, or $0.10 per share on a
fully diluted basis, in the first quarter of 2011. A reconciliation
of GAAP results to non-GAAP results is attached.
Cash and cash equivalents, short-term investments and marketable
securities on March 31, 2012 totaled $105 million.
"We achieved record revenue of $41.8 million in the first
quarter of 2012, driven by a solid 11 percent increase in revenue
in the Americas region. This increase partially compensated for
relatively weak sales in southern Europe and Japan. During the
quarter we continued to advance our PillCam COLON 2 pivotal
clinical trials in the U.S and Japan and we are very pleased that
the enrollment and capsule ingestion phases of these trials are
complete. We are on target to conclude these trials by June," said
Homi Shamir, president and CEO, Given Imaging Ltd. "Our investment
in the PillCam COLON 2 trials is reflected in our bottom line
results for the quarter. We continue to be confident that we will
realize our financial goals for 2012."
First Quarter 2012 Revenue Analysis
Revenues in the Americas region in the first quarter of 2012
increased by 11 percent to $26.7 million from $24.1 million in the
same period last year. Revenues in the EMEA region decreased by 3.5
percent to $10.8 million compared to $11.2 million in the same
period last year due to lower PillCam sales in the southern
European countries. APAC revenues decreased by 10 percent to $4.2
million, compared to $4.7 million in the same period in 2011. The
decrease was primarily due to lower sales in Japan, which are
expected to be stronger in the second quarter.
Worldwide PillCam SB sales increased 4 percent and amounted to
56,400 capsules in the first quarter of 2012, compared to 54,200
capsules in the same period last year. PillCam SB sales in the
Americas region were approximately 33,700 capsules, a 1 percent
increase compared to 33,400 capsules in the first quarter last
year. PillCam SB sales in the EMEA region increased by 0.6 percent
to 15,100 capsules, compared to 15,000 capsules in the first
quarter of 2011, while PillCam SB sales in the APAC region
increased by 32 percent to 7,700 capsules, compared to 5,900
capsules in the same period in 2011.
Worldwide sales of functional diagnostics products increased by
28 percent to $12.6 million in the first quarter of 2012 compared
to $9.8 million in the same period last year. In the Americas
region, functional diagnostics products revenue increased 36% in
the first quarter of 2012 to $10 million compared to $7.3 million
in the same period last year. Functional diagnostics revenue in the
EMEA region increased by 4 percent to $1.9 million, while revenue
in the APAC region decreased 3 percent to $700,000.
Supplemental first quarter data can be found at
www.givenimaging.com in the Investor Relations section.
Recent Developments
PillCam COLON
- Completion of Capsule Ingestion Phase of U.S.
and Japan PillCam COLON Pivotal Trials More than 850
individuals in the U.S. PillCam COLON 2 pivotal trial and 72
individuals in the Japan trial have completed the ingestion phase
of these trials.
- Publication of COLON Capsule Endoscopy
Guidelines In March, the company announced publication of
guidelines that provide physicians with a framework for using
PillCam COLON 2 in daily clinical practice. The guidelines which
were commissioned by the European Society of Gastrointestinal
Endoscopy (ESGE) are available online and in the May edition of
Endoscopy, the official journal of the ESGE.
- First Colon Capsule Endoscopy Center of
Excellence Given Imaging designated the Policlinico Agostino
Gemelli in Rome, Italy, as the first Colon Capsule Endoscopy Center
of Excellence in the world. Policlinico A. Gemelli is part of the
medical school of the Universita Cattolica del Sacro Cuore, the
largest private university in Italy.
PillCam SB
- PillCam SB Expanded Indications Japan's
Ministry of Health, Labor and Welfare (MHLW) cleared the PillCam
Patency Capsule for use with PillCam SB and expanded the
indications for use of the PillCam SB video capsule for patients
with known or suspected small bowel disease, including the
visualization and diagnosis of Crohn's disease.
Conference Call / Webcast Information
U.S. Call / Webcast
Given Imaging will host a conference call on Wednesday, May 9,
2012 at 9:00am ET, 4:00pm Israel time to discuss first quarter 2012
financial results. To participate in the teleconference, please
dial the following numbers fifteen minutes before the call is
scheduled to begin: U.S. and Canada, 1-877-675-4751; Israel,
1-80-925-8243. Callers in other countries should dial 719-325-4774.
The call will also be webcast live at www.givenimaging.com.
A replay of the call will be available for two weeks on the
company's website, or until May 23, 2012, by dialing 888-203-1112.
Callers outside of the U.S. should dial 719-457-0820. The replay
participant code is 9412947.
Use of Non-GAAP Measures
This press release provides financial measures for net income
and basic and diluted earnings per share that exclude certain items
and are therefore not calculated in accordance with generally
accepted accounting principles (GAAP). Management believes that
these non-GAAP financial measures provide meaningful supplemental
information regarding our performance that enhances management's
and investors' ability to evaluate the Company's net income and
earnings per share and to compare it with historical net income and
earnings per share.
The presentation of this non-GAAP financial information is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. Management uses both GAAP and non-GAAP measures when
evaluating the business internally and therefore felt it is
important to make these non-GAAP adjustments available to
investors.
About Given Imaging Ltd.
Since pioneering the field of capsule endoscopy in 2001, Given
Imaging has become a world leader in GI medical devices, offering
health care providers a range of innovative options for
visualizing, diagnosing and monitoring the digestive system. The
company offers a broad product portfolio including PillCam® video
capsules for the small bowel, esophagus and colon, industry-leading
ManoScan™ high-resolution manometry and Bravo® wireless and
Digitrapper® pH and impedance products. Given Imaging is committed
to delivering breakthrough innovations to the GI community and
supporting its ongoing clinical needs. Given Imaging's headquarters
are located in Yoqneam, Israel, with operating subsidiaries in the
United States, Germany, France, Japan, Australia, Vietnam, Brazil
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 achievements expressed or implied by
such forward-looking statements. Factors that could cause actual
events, results, performance, circumstances or achievements to
differ from such forward-looking statements include, but are not
limited to, the following: (1) our ability to develop and bring to
market new products, (2) our ability to successfully complete any
necessary or required clinical studies with our products, (3) our
ability to receive regulatory clearance or approval to market our
products or changes in regulatory environment, (4) our success in
implementing our sales, marketing and manufacturing plans, (5) the
level of adoption of our products by medical practitioners, (6) the
emergence of other products that may make our products obsolete,
(7) lack of an appropriate bowel preparation materials to be used
with our PillCam COLON capsule, (8) protection and validity of
patents and other intellectual property rights, (9) the impact of
currency exchange rates, (10) the effect of competition by other
companies, (11) the outcome of significant litigation, (12) our
ability to obtain reimbursement for our product from government and
commercial payors, (13) quarterly variations in operating results,
(14) the possibility of armed conflict or civil or military unrest
in Israel, (15) the impact of global economic conditions, (16) our
ability to successfully integrate acquired businesses, (17) changes
and reforms in applicable healthcare laws and regulations, (18)
quality issues and adverse events related to our products, such as
capsule retention, aspiration and failure to attach or detach,
bleeding or perforation that could require us to recall products
and impact our sales and net income, and (19) 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, 2011. 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.
Financial Tables Follow
Given Imaging Ltd. and its Consolidated Subsidiaries
Specified Items
For the Three Months Ended March 31, 2012 and 2011
(Unaudited, dollars in thousands)
Research Selling General Tax
Gross And And And Expense
Profit Development Marketing Admin (Benefit) Total
------- ----------- --------- ------- --------- ------
Three month
period ended
March 31,
2012
Compensation
expenses $ - $ 158 $ 229 $ 1,042 $ - $1,429
Sierra PPA 237 - 81 - (127) 191
------- ----------- --------- ------- --------- ------
Total $ 237 $ 158 $ 310 $ 1,042 $ (127) $1,620
======= =========== ========= ======= ========= ======
Three month
period ended
March 31,
2011
Compensation
expenses $ - $ 82 $ 561 $ 1,394 $ - $ - $2,137
Sierra PPA 237 - 81 - - (127) 191
------- ----------- --------- ------- --------- ------ ------
Total $ 237 $ 82 $ 642 $ 1,394 $ - $ (127) $2,328
======= =========== ========= ======= ========= ====== ======
Given Imaging Ltd. and its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the three months ended March 31, 2012 and 2011
Condensed, in thousands except share and per share data
Specified Non
Three months ended March 31, 2012 GAAP Items (*) GAAP
-------- --------- --------
Gross profit $ 31,646 $ 237 $ 31,883
Research and Development, net 6,744 (158) 6,586
Sales and Marketing 18,763 (310) 18,453
General and administrative 5,637 (1,042) 4,595
Income tax expense 624 127 751
Net income attributable to shareholders $ 201 $ 1,620 $ 1,821
-------- --------- --------
Three months ended March 31, 2011 Specified Non
GAAP Items (*) GAAP
-------- --------- --------
Gross profit $ 30,702 $ 237 $ 30,939
Research and Development, net 5,461 (182) $ 5,279
Sales and Marketing 17,249 (642) 16,607
General and administrative 6,522 (1,394) 5,128
Income tax expense 592 127 719
Net income attributable to shareholders $ 677 $ 2,328 $ 3,005
(*) See specified items
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
March 31, December 31,
2012 2011
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 33,859 $ 24,285
Short-term investments 42,144 64,762
Accounts receivable:
Trade (Net of provisions for doubtful debts of
$433 and $311 as of March 31, 2012 and
December 31, 2011, respectively) 29,436 32,406
Other 3,904 5,259
Inventories 23,870 22,921
Prepaid expenses 2,225 1,207
Deferred tax assets 2,418 1,538
Advances to suppliers 1,379 1,373
------------- -------------
Total current assets 139,235 153,751
Assets held for employee severance payments 7,389 6,854
Marketable Securities 28,745 16,003
Non-current Inventory 4,449 4,926
Other Long Term Assets 1,851 1,266
Fixed assets, at cost, less accumulated
depreciation 12,166 12,301
Intangible assets, less accumulated amortization 28,742 29,075
Goodwill 24,089 24,089
------------- -------------
Total Assets $ 246,666 $ 248,265
============= =============
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
March 31, December 31,
2012 2011
------------ ------------
Liabilities and equity
Current liabilities
Current installments of obligation under capital
lease $ 97 $ 139
Accounts payable:
Trade 8,038 8,081
Other 23,891 28,397
Deferred income 533 521
------------ ------------
Total current liabilities 32,559 37,138
------------ ------------
Long-term liabilities
Obligation under capital lease, net 112 120
Liability in respect of employees' severance
payments 8,189 7,720
Deferred tax liabilities 5,235 5,362
------------ ------------
Total long-term liabilities 13,536 13,202
------------ ------------
Total liabilities 46,095 50,340
------------ ------------
Equity
Shareholders' equity
Ordinary Shares, NIS 0.05 par value each
(90,000,000 shares authorized; 30,724,435 and
30,448,838 shares issued and fully paid as of
March 31, 2012 and December 31, 2011,
respectively) 363 359
Additional paid-in capital 211,600 208,838
Capital reserve 1,591 2,051
Accumulated other comprehensive loss (455) (885)
Accumulated deficit (12,528) (12,729)
------------ ------------
Total shareholders' equity 200,571 197,634
------------ ------------
Non-controlling interest - 291
------------ ------------
Total Equity 200,571 197,925
------------ ------------
Total liabilities and equity $ 246,666 $ 248,265
============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Statements of Operations
In thousands except share and per share data
(Unaudited)
Three month period ended
March 31, Year ended
-------------------------- December 31,
2012 2011 2011
------------ ------------ ------------
Revenues $ 41,839 $ 39,969 $ 177,955
Cost of revenues (10,193) (9,267) (41,466)
------------ ------------ ------------
Gross profit 31,646 30,702 136,489
------------ ------------ ------------
Operating expenses
Research and development, gross (7,156) (5,773) (26,129)
Government grants 412 312 1,113
------------ ------------ ------------
Research and development, net (6,744) (5,461) (25,016)
Sales and marketing (18,763) (17,249) (75,014)
General and administrative (5,637) (6,522) (23,078)
Other, net (101) (17) (397)
------------ ------------ ------------
Total operating expenses (31,245) (29,249) (123,505)
------------ ------------ ------------
Operating income 401 1,453 12,984
Financing income (expense), net 331 (96) 1,343
------------ ------------ ------------
Income before taxes on income 732 1,357 14,327
Income tax expense (624) (592) (2,158)
------------ ------------ ------------
Net income 108 765 12,169
Net loss (income) attributable to
non-controlling interest 93 (88) (191)
------------ ------------ ------------
Net income attributable to
shareholders $ 201 $ 677 $ 11,978
Net change in respect of available
for sale securities 430 (1) (980)
------------ ------------ ------------
Total comprehensive income
attributable to shareholders $ 631 $ 676 $ 10,998
Total comprehensive income (loss)
attributable to non-controlling
interest (93) 88 191
------------ ------------ ------------
Total comprehensive income $ 538 $ 764 $ 11,189
============ ============ ============
Earnings per share
Basic Earnings attributable to
shareholders per Ordinary Share $ 0.01 $ 0.02 $ 0.40
============ ============ ============
Diluted Earnings attributable to
shareholders per Ordinary Share $ 0.01 $ 0.02 $ 0.39
============ ============ ============
Weighted average number of
Ordinary Shares used to compute
basic Earnings per Ordinary share 30,579,090 29,434,741 30,212,787
============ ============ ============
Weighted average number of
Ordinary Shares used to compute
diluted Earnings per Ordinary
share 31,477,929 30,356,969 31,089,499
============ ============ ============
Given Imaging Ltd. and its Consolidated Subsidiaries
Consolidated Statements of Cash Flows
In thousands
(Unaudited)
Three month period ended
March 31, Year ended
-------------------------- December 31,
2012 2011 2011
------------ ------------ ------------
Cash flows from operating
activities:
Net income $ 108 $ 765 $ 12,169
Adjustments required to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation and amortization 1,996 1,998 8,296
Deferred tax assets (880) (26) 100
Deferred tax liabilities (127) (127) (509)
Stock based compensation 1,429 2,137 7,363
Loss from disposal of long-term
assets 102 27 397
Other (50) (10) 158
Decrease (increase) in accounts
receivable - trade 2,820 1,246 (4,544)
Decrease (increase) in accounts
receivable - other 1,355 651 (968)
Decrease (increase) in prepaid
expenses (852) (721) 212
Decrease (increase) in advances to
suppliers (172) 68 (766)
Increase in inventories (472) (1,884) (3,145)
Increase (decrease) in accounts
payable (4,595) (5,312) 1,433
Increase (decrease) in deferred
income 12 64 (267)
------------ ------------ ------------
Net cash provided by (used in)
operating activities 674 (1,124) 19,929
------------ ------------ ------------
Cash flows from investing
activities:
Purchase of fixed assets and
intangible assets (1,480) (7,299) (10,551)
Other long term assets, net (599) (28) (39)
Change in short-term deposit, net 20,617 9,144 (20,176)
Proceeds from sales and maturity
of marketable securities 2,000 4,900 11,141
Investments in marketable
securities (12,322) (13,148) (16,910)
------------ ------------ ------------
Net cash provided by (used in)
investing activities 8,216 (6,431) (36,535)
------------ ------------ ------------
Cash flows from financing
activities:
Principal payments on capital
lease obligation (41) (41) (168)
Proceeds from the issuance of
Ordinary Shares 1,337 1,849 6,585
Purchase of shares from a non-
controlling shareholder in a
subsidiary (658) - -
------------ ------------ ------------
Net cash provided by financing
activities 638 1,808 6,417
------------ ------------ ------------
Effect of exchange rate changes on
cash and cash equivalents 46 50 (145)
------------ ------------ ------------
Increase (decrease) in cash and
cash equivalents 9,574 (5,697) (10,334)
Cash and cash equivalents at
beginning of period 24,285 34,619 34,619
------------ ------------ ------------
Cash and cash equivalents at end
of period $ 33,859 $ 28,922 $ 24,285
============ ============ ============
Supplementary cash flow
information
Income taxes paid $ 122 $ 50 $ 2,179
============ ============ ============
For further information contact: Fern Lazar/David Carey
Lazar Partners Ltd. 1-212-867-1768 flazar@lazarpartners.com/
dcarey@lazarpartners.com Israel Investor Contact: Nava Ladin
Gelbart Kahana Investor Relations +972-3-6074717
nava@gk-biz.com
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