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Given Imaging Reports First Quarter 2013 Financial Results

– First Quarter 2013 Revenues of $40.6 million –

– First Quarter 2013 GAAP and Non-GAAP EPS ($0.01) and $0.06, Respectively –

– First Quarter 2013 GAAP and Non-GAAP Gross Margin 77% and 78%, Respectively –

YOQNEAM, Israel, May 8, 2013 (GLOBE NEWSWIRE) -- Given Imaging Ltd. (Nasdaq:GIVN) today announced financial results for the first quarter ended March 31, 2013.

Revenues were $40.6 million in the first quarter of 2013, a decrease of 2.9 percent compared to $41.8 million in the first quarter of 2012. Gross margin on a GAAP-basis in the first quarter of 2013 was 77.1 percent, compared to 75.6 percent in the first quarter of 2012. Gross margin on a non-GAAP-basis in the first quarter of 2013 was 78.1 percent, compared to 76.2 percent in the first quarter of 2012.

On a GAAP-basis, operating profit was $0.1 million in the first quarter of 2013, compared to $0.4 million in the first quarter of 2012. Non-GAAP operating profit was $2.0 million in the first quarter of 2013, compared to $2.1 million in the same period in 2012.

On a GAAP-basis, net loss for the first quarter of 2013 was $0.2 million, or ($0.01) per share, compared to net income of $0.2 million, or $0.01 per share, in the same period in 2012. On a non-GAAP-basis, net income for the first quarter of 2013 was $1.5 million, or $0.05 per share on a fully diluted basis, compared to a net income of $1.8 million, or $0.06 per share on a fully diluted basis in the first quarter of 2012.

A reconciliation of GAAP results to non-GAAP results is attached.

Cash used in operating activities in the first quarter was 2013 was $2.2 million. Cash and cash equivalents, short-term investments and marketable securities on March 31, 2013 totaled $121.8 million.

"While we achieved record first quarter revenues in both the EMEA and APAC regions, total revenues were below our expectations due to a shortfall in sales execution in the Americas region. We are encouraged by our second quarter strong revenues to date and we remain on track to meet the full-year 2013 financial guidance that we provided earlier this year. We are also encouraged by our advanced discussions with both U.S. and Japanese regulatory authorities regarding approvals for PillCam COLON 2" said Homi Shamir, President and CEO, Given Imaging.

First Quarter 2013 Revenue Analysis

Revenues in the Americas region in the first quarter of 2013 decreased 11 percent to $23.9 million from $26.7 million in the same period in 2012. The decrease is attributable to lower sales of PillCam and functional GI diagnostics products. Revenues in the EMEA region increased 8 percent to $11.6 million compared to $10.8 million in the same period in 2012. APAC revenues increased by 20 percent to $5.1 million, compared to $4.2 million in the same period in 2012.

Worldwide PillCam SB sales decreased three percent to 54,600 capsules in the first quarter of 2013, compared to 56,500 capsules in the same period in 2012. PillCam SB sales in the Americas region decreased by eight percent to 30,800 capsules in the first quarter of 2013, compared to 33,700 capsules in the first quarter of 2012. PillCam SB sales in the EMEA region increased by three percent to 15,500 capsules, compared to 15,100 capsules in the first quarter of 2012, while PillCam SB sales in the APAC region increased by seven percent to 8,300 capsules, compared to 7,700 capsules in the same period in 2012.

Worldwide sales of functional GI diagnostics products including the Bravo pH Monitoring System, Digitrapper pH-Z, ManoScan and SmartPill products decreased by 12 percent to $11.0 million in the first quarter of 2013 compared to $12.6 million in the same period in 2012. In the Americas region, functional GI diagnostics product revenue decreased by 17 percent in the first quarter of 2013 to $8.3 million compared to $10.0 million in the same period in 2012. Functional GI diagnostics revenue in the EMEA region increased by 23 percent to $2.3 million, while revenue in the APAC region was $0.4 million, a decrease of 38 percent compared to the same quarter last year.

Supplemental first quarter data can be found at www.givenimaging.com in the Investor Relations section.

Digestive Disease Week 2013

Over 120 studies will be presented at Digestive Disease Week 2013 featuring Given Imaging's complete product portfolio including PillCam® SB, PillCam® COLON 2(*), PillCam® ESO, Bravo® pH monitoring, Digitrapper® pH-z monitoring, ManoScan™ high resolution manometry and the SmartPill® motility monitoring system. Digestive Disease Week takes place in Orlando May 18-21, 2013.

The Company will host a meeting with members of the financial community with several key GI opinion leaders to review highlights of the conference. The meeting will take place on Tuesday, May 21st, 2013 at 10:00am ET/5:00pm Israel time. A live audio webcast will be available in the investor relations section of the company's website, www.givenimaging.com.

Conference Call / Webcast Information

Given Imaging will host a conference call on Thursday, May 9, 2013 at 9:00am ET, 4:00pm Israel time to discuss first quarter 2013 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, 888-438-5491; Israel, 1-80-924-5906. Callers in other countries should dial 719-785-1753. 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, 2013, by dialing 888-203-1112. Callers in Israel should dial 1-80-924-6038. Callers outside of the U.S. and Israel should dial 719-457-0820. The replay participant code is 3944471.

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® capsule endoscope for the small bowel, esophagus and colon. The company also offers industry-leading GI functional diagnostic solutions including ManoScan™ high-resolution manometry, Bravo® capsule-based pH monitoring, Digitrapper® pH-Z impedance, and the SmartPill® GI monitoring systems. 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, Hong Kong and Brazil. For more information, please visit www.givenimaging.com.

(*) Pending 510(k), not available for sale within the United States

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. Such forward-looking statements include statements relating to the Company exploring strategic alternatives and considering possible strategic transactions involving the Company. 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 ability of the Company to reach agreement on any strategic alternative and/or to complete any such alternative, as well as 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, 2012. 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 to the extent expressly required under applicable law, the Company 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, 2013 and 2012
(Unaudited, dollars in thousands)
Gross
Profit
Research
And
Development
Selling
And
Marketing
General
And
Admin
Tax
Expense
(Benefit)
Total
Three month period ended March 31, 2013
Compensation expenses $ -- $ 196 $ 418 $ 782 $ -- $ 1,396
Sierra and SmartPill PPA 399 -- 93 -- $ (171) 321
Total $ 399 $ 196 $ 511 $ 782 $ (171) $ 1,717
Three month period ended March 31, 2012
Compensation expenses $ -- $ 158 $ 229 $ 1,042 $ -- $ 1,429
Sierra PPA 237 -- 81 -- $ (171) 147
Total $ 237 $ 158 $ 310 $ 1,042 $ (171) $ 1,576
Given Imaging Ltd. And its Consolidated Subsidiaries
Reconciliation of GAAP results to non-GAAP results
For the three months ended March 31, 2013 and 2012
Condensed, in thousands except share and per share data
Three months ended March 31, 2013 GAAP Specified
Items (*)
Non
GAAP
Gross profit $31,310 $ 399 $31,709
Research and Development, net 5,971 (196) 5,775
Sales and Marketing 19,631 (511) 19,120
General and administrative 5,561 (782) 4,779
Income tax expense 312 171 483
Net income (loss) attributable to shareholders $ (221) $ 1,717 $1,496
Three months ended March 31, 2012 GAAP Specified
Items (*)
Non
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
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
March 31,
2013
December 31,
2012
Assets
Current assets
Cash and cash equivalents $ 31,711 $ 35,442
Short-term investments 59,836 58,446
Accounts receivable:
Trade 27,245 31,279
Other 4,852 4,654
Inventories 23,585 22,591
Advances to suppliers 1,140 1,349
Deferred tax assets 2,791 2,646
Other current assets 2,769 2,689
Total current assets 153,929 159,096
Deposits 881 924
Assets held for employees' severance payments 8,386 7,974
Long-term investments 30,262 30,188
Non-current Inventory 5,773 6,150
Fixed assets, less accumulated depreciation 11,982 12,335
Intangible assets, less accumulated amortization 29,747 30,705
Goodwill 26,942 26,942
Total Assets $267,902 $274,314
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Balance Sheets
In thousands except share data
(Unaudited)
March 31,
2013
December 31,
2012
Liabilities and equity
Current liabilities
Current installments of obligation under capital lease $ -- $ 38
Accounts payable:
Trade 6,956 8,756
Other 19,997 27,091
Deferred income 979 929
Total current liabilities 27,932 36,814
Long-term liabilities
Obligation under capital lease, net 71 78
Liability in respect of employees' severance payments 9,171 8,761
Contingent consideration in respect of business combination 1,113 1,038
Deferred tax liabilities 4,504 4,675
Total long-term liabilities 14,859 14,552
Total liabilities 42,791 51,366
Equity
Ordinary Shares, NIS 0.05 par value each (90,000,000 shares authorized; 31,371,861 and 31,080,876 shares issued and fully paid as of March 31, 2013 and December 31, 2012, respectively) 369 367
Additional paid-in capital 221,480 219,103
Capital reserve 1,591 1,591
Accumulated other comprehensive income 271 266
Retained earnings 1,400 1,621
Total Equity 225,111 222,948
Total liabilities and equity $267,902 $274,314
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Statements of Income and Comprehensive Income
In thousands except share data
(Unaudited)
Three month period ended Year ended
March 31, December 31,
2013 2012 2012
Revenues $ 40,620 $ 41,839 $ 180,501
Cost of revenues (9,310) (10,193) (42,971)
Gross profit 31,310 31,646 137,530
Operating expenses
Research and development, gross (6,101) (7,156) (25,627)
Government grants 130 412 1,439
Research and development, net (5,971) (6,744) (24,188)
Sales and marketing (19,631) (18,763) (76,272)
General and administrative (5,561) (5,637) (22,746)
Other, net (48) (101) (455)
Total operating expenses (31,211) (31,245) (123,661)
Operating profit 99 401 13,869
Financing income (expenses), net (8) 331 847
Profit before taxes on income 91 732 14,716
Income tax expense (312) (624) (459)
Net profit (loss) (221) 108 14,257
Net loss attributable to non-controlling interest -- 93 93
Net profit (loss) attributable to shareholders $ (221) $ 201 $ 14,350
Net change in respect of available for sale securities 5 430 1,151
Total comprehensive profit (loss) attributable to shareholders $ (216) $ 631 $ 15,501
Total comprehensive loss attributable to non-controlling interest -- (93) (93)
Total comprehensive profit (loss) $ (216) $ 538 $ 15,408
Earnings per share
Basic Earnings (loss) attributable to shareholders per Ordinary Share $ (0.01) $ 0.01 $ 0.47
Diluted Earnings (loss) attributable to shareholders per Ordinary Share $ (0.01) $ 0.01 $ 0.45
Weighted average number of Ordinary Shares used to compute basic Earnings (loss) per Ordinary share 31,227,150 30,579,090 30,853,581
Weighted average number of Ordinary Shares used to compute diluted Earnings (loss) per Ordinary share 31,227,150 31,477,929 31,563,208
Given Imaging Ltd. and its Consolidated Subsidiaries
Interim Consolidated Statements of Cash Flows
In thousands except share data
(Unaudited)
Three month period ended Year ended
March 31, December 31,
2013 2012 2012
Cash flows from operating activities:
Net profit (loss) $ (221) $ 108 $ 14,257
Adjustments required to reconcile net profit to net cash provided by (used in) operating activities:
Depreciation and amortization 2,198 1,996 8,597
Change in deferred taxes (316) (1,007) (1,795)
Stock based compensation 1,396 1,429 6,158
Loss from disposal of fixed assets and intangible assets 87 102 484
Unrealized interest on contingent consideration 75 -- --
Decrease in accounts receivable – trade 4,034 2,820 977
Decrease (increase) in accounts receivable – other (186) 1,355 1,252
Increase in other current assets (80) (852) (1,316)
Decrease (increase) in advances to suppliers 209 (172) (142)
Increase in inventories (617) (472) (299)
Decrease in accounts payable (8,960) (4,595) (691)
Increase in deferred income 50 12 408
Other 109 (50) (62)
Net cash provided by (used in) operating activities (2,222) 674 27,828
Cash flows from investing activities:
Purchase of fixed assets and intangible assets (1,012) (1,480) (7,005)
Other long term assets 1 (599) (538)
Acquisition of business, net of cash acquired -- -- (6,000)
Change in short-term deposit, net 7,500 20,617 4,968
Proceeds from sales and maturity of marketable securities 246 2,000 13,343
Investments in marketable securities (9,293) (12,322) (24,827)
Net cash provided by (used in) investing activities (2,558) 8,216 (20,059)
Cash flows from financing activities:
Principal payments on capital lease obligation -- (41) (129)
Proceeds from the issuance of Ordinary Shares 983 1,337 4,115
Purchase of shares from a non-controlling shareholder in a subsidiary -- (658) (658)
Net cash provided by financing activities 983 638 3,328
Effect of exchange rate changes on cash and cash equivalents 66 46 60
Increase (decrease) in cash and cash equivalents (3,731) 9,574 11,157
Cash and cash equivalents at beginning of period 35,442 24,285 24,285
Cash and cash equivalents at end of period $ 31,711 $ 33,859 $ 35,442
Supplementary cash flow information
Income taxes paid $ 1,240 $ 122 $ 2,883

CONTACT: 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.comSource:Given Imaging Ltd.