Medical device company Given Imaging (Nasdaq: GIVN; TASE: GIVN) of Yokne'am, which produces the PillCam range of video capsules for detecting disorders of the gastrointestinal tract, has reported its results for the first quarter of 2006.
Worldwide sales of the Given System and Given PillCam video capsules were $20.3 million in the first quarter of 2006, compared with $22.0 million in the first quarter of 2005. Sales in first quarter of 2005 include $3.2 million related to a special PillCam ESO promotion.
The company made an operating loss in the first quarter of 2006 of $4.3 million, compared with an operating profit of $854,000 during the same period in 2005.
Gross margin in the first quarter of 2006 was 74.6%, compared with 70.9% in the first quarter of 2005.
On a GAAP basis, the company reported a net loss of $3.0 million, or $0.11 per share, in the first quarter of 2006, compared with net profit of $1.2 million, or $0.04 per share on a diluted basis, in the first quarter of 2005. The 2006 GAAP results include the impact of $1.3 million due to FAS 123R on accounting for stock option grants, which was adopted at the beginning of the year.
Excluding the impact of FAS 123R, the company reported a non-GAAP net loss of $1.7 million, or $0.06 per share, in the first quarter of 2006.
The company's revenue for the quarter is in line with analysts' estimates and with the preliminary results announced on April 10, but the net loss per share is worse than the consensus estimate of $0.02.
Given Imaging founder and executive vice chairman Gavriel Meron explained the worse than expected results by saying, "As announced previously, our results were lower than expected mainly due to changes in the composition and size of our US sales force. These changes required more training and territorial transition time than anticipated. We believe that we can continue to grow utilization in the market with the strengthened senior management team now in place."
The company announced the appointment of Christopher Rowland as president of US subsidiary Given Imaging Inc. Rowland will report to Homi Shamir, Given's President and CEO. He was previously senior vice president for business development at Given Imaging Ltd. Before joining Given Imaging earlier this year, he was vice president, marketing for Boston Scientific's Endovations group and, before that, served as vice president of global marketing of Boston Scientific's Endoscopy Division.
Cash, cash equivalents and marketable securities totaled $87.8 million at the end of the quarter.
Given Imaging president and CEO Homi Shamir said, "My first goals are to increase revenue and profitability. Based on decisions taken since I joined four weeks ago, I am optimistic that we will be able to demonstrate solid revenue growth quickly.
"In the meantime, I see no reason to update the company's previously issued guidance for the year. For now, I believe it is prudent for me to wait until the second quarter results to provide further guidance.
"With our increased US sales force now trained and in the field, our unwavering focus for 2006 will be to increase capsule utilization and expand workstation and PillCam sales. We are pleased that Chris Rowland, a seasoned executive with a deep understanding of our business and the sector, will be spearheading this effort for Given Imaging in the US."
The consensus analysts' estimate for Given Imaging in 2006 as a whole is earnings per share of $0.23 on revenue of $102 million.
Given Imaging shares closed at $24.07 in New York yesterday, giving the company a market cap of $673 million. On the Tel Aviv Stock Exchange this morning, the company's shares are down 1.6%, at NIS 104.80.
Published by Globes [online], Israel business news - www.globes.co.il - on May 9, 2006
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