Given Imaging Reports Second Quarter 2012 Results
YOQNEAM, ISRAEL -- (Marketwire) -- 08/07/12 -- Given Imaging Ltd. (NASDAQ: GIVN) today announced financial results for the second quarter ended June 30, 2012
Revenues were $44.5 million in the second quarter of 2012, compared to $44.8 million in the second quarter of 2011. Excluding the negative impact of foreign currency translation, second quarter 2012 revenues were $46 million, a three percent increase compared to the same period last year.
Gross margin on a GAAP basis in the second quarter of 2012 was 76.6 percent, compared to 75.5 percent in the second quarter of 2011. Gross margin on a non-GAAP basis in the second quarter of 2012 was 78.2 percent, compared to 76.0 percent in the second quarter of 2011. The increase in non-GAAP gross margin is attributable to higher production volume, and a more favorable product and geographic mix.
On a GAAP basis, operating profit was $3.4 million, compared to $2.5 million in the second quarter of 2011. Non-GAAP operating profit was $5.5 million, compared to $4.8 million in the second quarter of 2011. On a GAAP basis, net income for the second quarter of 2012 increased 59 percent to $3.0 million, or $0.10 per share, compared to $1.9 million, or $0.06 per share, in the same quarter of last year. On a non-GAAP basis, net income for the second quarter of 2012 increased 21 percent to $4.9 million, or $0.16 per share on a fully diluted basis, compared to $4.1 million, or $0.13 per share on a fully diluted basis, in the second 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 June 30, 2012 totaled $111.3 million.
"We are pleased that ongoing initiatives to maximize efficiencies resulted in a solid increase in second quarter GAAP and Non-GAAP earnings per share. Our top line revenue of $44.5 million reflects a six percent increase in revenues from the Americas region. However, revenue growth was offset by a challenging southern European market, the weakness of the Euro, as well as lower than anticipated revenue growth in the APAC region," said Homi Shamir, President and CEO, Given Imaging.
Second Quarter 2012 Revenue Analysis
Revenues in the Americas region in the second quarter of 2012 increased by six percent to $28.4 million from $26.9 million in the same period last year. Revenues in the EMEA region decreased by 9 percent to $10.7 million compared to $11.8 million in the same period last year due to lower PillCam sales in the southern European countries and the weakness of the Euro. Excluding the negative impact of foreign currency translation, revenues in the EMEA region increased by $1.4 million, or three percent compared to the same period last year. APAC revenues decreased by 10 percent to $5.4 million, compared to $6.0 million in the same period in 2011.
Worldwide PillCam SB sales grew by one percent to 59,200 capsules in the second quarter of 2012, compared to 58,700 capsules in the same period last year. PillCam SB sales in the Americas region also increased by one percent to approximately 36,500 capsules, compared to 36,200 capsules in the second quarter last year. PillCam SB sales in the EMEA region increased by two percent to 15,500 capsules, compared to 15,200 capsules in the second quarter of 2011, while PillCam SB sales in the APAC region decreased by three percent to 7,100 capsules, compared to 7,300 capsules in the same period in 2011.
Worldwide sales of functional GI diagnostics products including the Bravo pH Monitoring System, Digitrapper pH-Z and Manoscan increased by 13 percent to $12.6 million in the second quarter of 2012 compared to $11.2 million in the same period last year. In the Americas region, functional diagnostics products revenue increased by 13% in the second quarter of 2012 to $9.9 million compared to $8.8 million in the same period last year. Functional GI diagnostics revenue in the EMEA region decreased by 11 percent to $1.6 million, while revenue in the APAC region increased by 58 percent to $1 million.
Supplemental second quarter data can be found at www.givenimaging.com in the Investor Relations section.
Six Month Financial Results
For the six month period ended June 30, 2012, revenues increased by two percent to $86.3 million compared to $84.8 million in the same period last year. Revenues in the Americas region in the first half of 2012 increased by eight percent to $55.2 million from $51.0 million in the same period last year. Revenues in the EMEA region decreased by seven percent to $21.4 million compared to $23.0 million in the same period last year due to lower PillCam sales in the southern European countries and the weakness of the Euro. EMEA revenues in the first half of 2012 increased by one percent compared to the same period last year, excluding the $1.9 million negative impact of the weaker Euro. APAC revenues decreased by nine percent to $9.7 million, compared to $10.7 million in the same period in 2011.
Worldwide PillCam SB sales increased by two percent to 115,600 capsules in the first half of 2012, compared to 113,000 capsules in the same period last year. PillCam SB sales in the Americas region were approximately 70,200 capsules, a one percent increase compared to 69,600 capsules that were sold in the first half of 2011. PillCam SB sales in the EMEA region increased by one percent to 30,600 capsules, compared to 30,200 capsules in the first half of 2011, while PillCam SB sales in the APAC region increased by 12 percent to 14,800 capsules, compared to 13,200 capsules in the same period in 2011.
Worldwide sales of Given Imaging's functional GI diagnostics products increased by 19 percent to $25.2 million in the first half of 2012 compared to $21.1 million in the same period last year. In the Americas region, functional GI diagnostics product revenue increased by 24% in the first half of 2012 to $19.9 million compared to $16.1 million in the same period last year. Functional diagnostics revenue in the EMEA region were $3.6 million, similar to the first half of 2011, while revenue in the APAC region increased by 21 percent to $1.6 million.
2012 Guidance Update
As a result of ongoing economic weakness in Europe, associated with the weak Euro and the lower than forecast revenue in the Asia Pacific region in the first half of 2012, the Company is lowering its revenue guidance for fiscal year 2012 from between $190 million and $200 million to between $185 and $190 million. Despite lowering top-line guidance, the Company believes that initiatives to maximize profitability will enable the Company to achieve its earnings per share guidance of between $0.45 and $0.55 on a GAAP basis, and between $0.70 and $0.80 on a non-GAAP basis. However, the Company expects that 2012 earnings per share will be closer to the lower range of the guidance.
Conference Call / Webcast Information
Given Imaging will host a conference call on Wednesday, August 8, 2012 at 9:00am ET, 4:00pm Israel time to discuss second 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, 1-877-604-9665; Israel, 1-80-925-8243. Callers in other countries should dial 719-325-4838. 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 August 22, 2012, by dialing 888-203-1112. Callers outside of the U.S. should dial 719-457-0820. The replay participant code is 1564690.
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 and Hong Kong. For more information, please visit www.givenimaging.com.
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.