LAVAL, Quebec, Nov. 6, 2018 /CNW/ --
- Third-Quarter 2018 Financial Results
-
- Revenues of $2.136
Billion
- GAAP Cash Flow From Operations of $522 Million
- GAAP Net Loss of $350
Million
- Adjusted EBITDA (non-GAAP)1 of $916 Million
- Delivered Organic Growth2 Across All
Reporting Segments
- Repaid More Than $360 Million
of Debt in the Quarter With Cash Generated From Operations
- Maintained Revenue Guidance Range and Raised Full-Year
Adjusted EBITDA (non-GAAP) Guidance Range
Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or
the "Company" or "we") today announced its third-quarter 2018
financial results.
"In addition to another consecutive quarter of overall organic
growth2, the Company delivered organic
growth2 across all reporting segments and generated
robust cash flow from operations in the third quarter of 2018,"
said Joseph C. Papa, chairman and
CEO, Bausch Health. "These results
demonstrate that our progress toward transformation is on track as
we continue to execute within our core businesses, launch new
products, resolve legacy issues and reduce the total quantum of our
debt."
"As we look to the end of the year, we are maintaining our
full-year revenue guidance range and raising our full-year Adjusted
EBITDA (non-GAAP) guidance range," continued Mr. Papa.
Company Highlights
Executing on Core Businesses and Advancing Pipeline
- Reported revenue in the Bausch + Lomb/International segment
decreased by 7% compared to the third quarter of 2017, primarily
due to divestitures and discontinuations; revenue in this segment
grew organically2 by 3% compared to the third quarter of
2017, primarily due to volume increases in all businesses of the
segment
-
- Segment reported eighth consecutive quarter of organic revenue
growth2
- LUMIFY® has become the number one physician-recommended brand
in the Redness Reliever category3 and one of the top 2
brands in the category4, achieving a weekly market share
of 26%5
- Launched AQUALOX™ (Silicone hydrogel, or SiHy, daily) in
Japan in September 2018
- Grew revenue in the Salix segment by 2% compared to the third
quarter of 2017 despite generic competition following the loss of
exclusivity for UCERIS®
-
- XIFAXAN® revenue increased by 11% compared to the third quarter
of 2017
- Launched PLENVU®, a one-liter PEG bowel cleansing preparation
for colonoscopies, in the United
States
- U.S. launch of LUCEMYRA™, the first and only non-opioid
medication for the mitigation of withdrawal symptoms to facilitate
abrupt discontinuation of opioids in adults, with US WorldMeds
- Entered into an exclusive agreement with Dova Pharmaceuticals,
Inc. to co-promote DOPTELET® in the
United States, for the treatment of thrombocytopenia in
adult patients with chronic liver disease who are scheduled to
undergo a procedure
- Entered into an amendment to an existing license agreement with
Alfasigma S.p.A. (Alfasigma) to initiate a late-stage clinical
program to study an investigational formulation of rifaximin in
patients with Postoperative Crohn's disease
- Expanded microbiome research and discovery through strategic
collaboration with Cedars-Sinai Medical Center
- Continued efforts to stabilize the Ortho Dermatologics
segment
-
- The U.S. Food and Drug Administration (FDA) approved the New
Drug Application (NDA) for ALTRENO™ Lotion for the treatment of
acne vulgaris, and ALTRENO™ has now launched
- The FDA has provided tentative approval of the NDA for BRYHALI™
Lotion for the topical treatment of plaque psoriasis in adult
patients; the Company plans to launch BRYHALI™ Lotion, as
scheduled, later this month, following receipt of final FDA
approval, which is pending due to the expiration of exclusivity for
a related product
- The FDA accepted the resubmission of the NDA for
DUOBRII™6 Lotion for the topical treatment of plaque
psoriasis with a PDUFA action date of Feb.
15, 2019
- Released first annual Corporate Social Responsibility
report
Addressing Debt
- $522 million of cash generated
from operations was used to repay more than $360 million of debt in the third quarter of
2018
-
- Repaid $114 million of senior
secured term loans and $250 million
of revolver borrowings
- Eliminated all mandatory amortization for the remainder of
2018
- Additionally, on Oct. 26, 2018,
redeemed $125 million aggregate
principal amount of outstanding 7.50% unsecured Senior Notes due
2021, using cash generated from operations
Resolving Legal Issues
- Achieved dismissals or other positive outcomes in resolving and
managing litigation and investigations in approximately 60 matters
since Jan. 1, 2018
-
- Resolved the XIFAXAN® intellectual property litigation with
Actavis Laboratories FL, Inc., preserving market exclusivity for
XIFAXAN® 550 mg tablets until 20287
- Resolved the legacy Salix investigation by the U.S. Securities
and Exchange Commission with no monetary penalty; settlement
remains subject to approval by the U.S. District Court for the
Southern District of New York
- Resolved outstanding arbitration with Alfasigma
Third-Quarter 2018 Revenue Performance
Total reported
revenues were $2.136 billion for the
third quarter of 2018, as compared to $2.219
billion in the third quarter of 2017, a decrease of
$83 million, or 4%. Excluding the
impact of the 2017 divestitures and discontinuations of
$112 million and the unfavorable
impact of foreign exchange of $30
million, revenue grew organically2 by 3% compared
to the third quarter of 2017, driven by organic growth2
across all four segments.
Revenues by segment for the third quarter of 2018 were as
follows:
(in
millions)
|
|
3Q 2018
|
|
3Q 2017
|
|
Reported
Change
|
|
Reported
Change
|
|
Change at
Constant
Currency8
|
|
Organic2 Change
|
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Bausch +
Lomb/International
|
|
$1,147
|
|
$1,234
|
|
($87)
|
|
(7%)
|
|
(5%)
|
|
3%
|
Salix
|
|
$460
|
|
$452
|
|
$8
|
|
2%
|
|
2%
|
|
2%
|
Ortho
Dermatologics
|
|
$177
|
|
$177
|
|
$0
|
|
0%
|
|
1%
|
|
1%
|
Diversified
Products
|
|
$352
|
|
$356
|
|
($4)
|
|
(1%)
|
|
(1%)
|
|
4%
|
Total
Revenues
|
|
$2,136
|
|
$2,219
|
|
($83)
|
|
(4%)
|
|
(2%)
|
|
3%
|
Bausch + Lomb/International Segment
Bausch +
Lomb/International segment revenues were $1.147 billion for the third quarter of 2018, as
compared to $1.234 billion for the
third quarter of 2017, a decrease of $87
million, or 7%. Excluding the impact of divestitures and
discontinuations of $94 million, and
the unfavorable impact of foreign exchange of $29 million, the Bausch + Lomb/International
segment grew organically2 by approximately 3% compared
to the third quarter of 2017.
Salix Segment
Salix segment revenues were $460 million for the third quarter of 2018, as
compared to $452 million for the
third quarter of 2017, an increase of $8
million, or 2%, despite generic competition following the
loss of exclusivity for UCERIS®. Growth in the segment was driven
by higher sales of XIFAXAN®, as well as higher sales of RELISTOR®,
which grew 88% in the third quarter of 2018 compared to the third
quarter of 2017.
Ortho Dermatologics Segment
Ortho
Dermatologics segment revenues were $177 million for the third quarter of 2018, which
was in line with the third quarter of 2017. Excluding the
unfavorable impact of foreign exchange of $1
million, the Ortho Dermatologics segment grew
organically2 by 1% compared to the third quarter of
2017. Revenues in the Global Solta business grew by 12% on a
reported basis and by 15% organically2 compared to the
third quarter of 2017, driven by demand and the launch of the
Thermage FLX™ System in additional markets around the world.
Diversified Products Segment
Diversified
Products segment revenues were $352 million for the third quarter of 2018, as
compared to $356 million for the
third quarter of 2017, a decrease of $4
million, or 1%. The decline in revenue was partially offset
by growth in the Generics business. Excluding the impact of
divestitures and discontinuations of $16
million, the Diversified Products segment grew
organically2 by 4% compared to the third quarter of
2017.
Operating Income
Operating income was $117 million for the third quarter of 2018, as
compared to an operating income of $38
million for the third quarter of 2017, an increase of
$79 million. The increase in
operating results for the third quarter of 2018 primarily reflects
favorable Cost of Goods Sold (COGS) and Selling, General and
Administrative Expenses (SG&A), partially offset by an increase
in Research & Development (R&D).
Net Loss
Net loss for the three months ended
Sept. 30, 2018 was $350 million, as compared to net income of
$1.301 billion for the same period in
2017, a decrease of $1.651 billion.
The decrease is primarily due to a tax benefit of $1.397 billion generated in the third quarter of
2017 as a result of the completion of internal tax reorganization
efforts that the Company had begun in the fourth quarter of
2016.
Adjusted net income (non-GAAP) for the third quarter of 2018 was
$403 million, as compared to
$367 million for the third quarter of
2017, an increase of $36 million, or
10%. The increase was primarily due to a reduction in interest
expense of $39 million in the third
quarter of 2018 and a lower tax rate due to changes in product and
geography mix.
Operating Cash
The Company generated $522 million of cash from operations in the third
quarter of 2018, as compared to $490
million in the third quarter of 2017, an increase of
$32 million, or 7%. The increase in
cash from operations was attributable to profitable operating
results and improved working capital.
EPS
GAAP Earnings Per Share (EPS) Diluted for the
third quarter of 2018 was ($1.00), as
compared to $3.69 for the third
quarter of 2017.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA
(non-GAAP) was $916 million
for the third quarter of 2018, as compared to $951 million for the third quarter of 2017, a
decrease of $35 million, or 4%.
2018 Financial Outlook
Bausch Health has maintained
its full-year revenue guidance range for 2018 and has raised its
full-year Adjusted EBITDA (non-GAAP) guidance range for 2018:
- Full-Year Revenues in the range of $8.15 – $8.35
billion
- Full-Year Adjusted EBITDA (non-GAAP) in the range of
$3.30 – $3.45
billion from $3.20 –
$3.35 billion
The Company is taking proactive steps to improve working capital
through an ongoing efficiency initiative, Project CORE (Cost
Optimization and Revenue Enhancement). As part of Project CORE, the
Company plans to proactively reduce U.S. channel inventory in the
fourth quarter of 2018, which we expect will result in a reduction
in revenue and a decrease in profit. Despite this anticipated
reduction in revenue, the Company is maintaining full-year revenue
guidance, primarily due to actual outperformance and changes in the
expected timing of products losing exclusivity, and is raising
Adjusted EBITDA (non-GAAP) guidance, primarily due to actual
outperformance and lower actual and expected SG&A expense.
Other than with respect to GAAP Revenues, the Company only
provides guidance on a non-GAAP basis. The Company does not provide
a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to
GAAP net income (loss), due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation. In periods where significant acquisitions or
divestitures are not expected, the Company believes it might have a
basis for forecasting the GAAP equivalent for certain costs, such
as amortization, which would otherwise be treated as non-GAAP to
calculate projected GAAP net income (loss). However, because other
deductions (such as restructuring, gain or loss on extinguishment
of debt and litigation and other matters) used to calculate
projected net income (loss) vary dramatically based on actual
events, the Company is not able to forecast on a GAAP basis with
reasonable certainty all deductions needed in order to provide a
GAAP calculation of projected net income (loss) at this time. The
amount of these deductions may be material and, therefore, could
result in projected GAAP net income (loss) being materially less
than projected Adjusted EBITDA (non-GAAP). The guidance provided in
this section represents forward-looking information, and actual
results may vary. Please see the risks and assumptions referred to
in the Forward-looking Statements section of this news release.
Additional Highlights
- Bausch Health's cash and cash equivalents were $973 million at Sept. 30,
2018
- The Company's availability under the Revolving Credit Facility
was approximately $980 million at
Sept. 30, 2018
Conference Call Details
Date:
|
Tuesday, Nov. 6,
2018
|
Time:
|
8:00 a.m.
ET
|
Webcast:
|
http://ir.bauschhealth.com/events-and-presentations
|
Participant Event
Dial-in:
|
+1 (888) 317-6003
(United States)
|
|
+1 (412) 317-6061
(International)
|
|
+1 (866) 284-3684
(Canada)
|
Participant
Passcode:
|
4973686
|
Replay
Dial-in:
|
+1 (877) 344-7529
(United States)
|
|
+1 (412) 317-0088
(International)
|
|
+1 (855) 669-9658
(Canada)
|
Replay
Passcode:
|
10125383 (replay
available until Nov. 13, 2018)
|
About Bausch Health
Bausch Health Companies Inc.
(NYSE/TSX: BHC) is a global company whose mission is to improve
people's lives with our health care products. We develop,
manufacture and market a range of pharmaceutical, medical device
and over-the-counter products, primarily in the therapeutic areas
of eye health, gastroenterology and dermatology. We are delivering
on our commitments as we build an innovative company dedicated to
advancing global health. More information can be found
at www.bauschhealth.com.
Forward-looking Statements
This news release
contains forward-looking information and statements, within the
meaning of applicable securities laws (collectively,
"forward-looking statements"), including, but not limited to,
statements regarding anticipated approvals and launch dates for
certain of the Company's products and Bausch Health's future
prospects and performance, including the Company's 2018 full-year
guidance, and the Company's plans to proactively reduce U.S.
channel inventory, and the anticipated impact of such plans.
Forward-looking statements may generally be identified by the use
of the words "anticipates," "expects," "intends," "plans,"
"should," "could," "would," "may," "will," "believes," "estimates,"
"potential," "target," or "continue" and variations or similar
expressions, and phrases or statements that certain actions, events
or results may, could, should or will be achieved, received or
taken, or will occur or result, and similar such expressions also
identify forward-looking information. These forward-looking
statements, including the Company's full-year guidance, are based
upon the current expectations and beliefs of management and are
provided for the purpose of providing additional information about
such expectations and beliefs, and readers are cautioned that these
statements may not be appropriate for other purposes. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. These risks
and uncertainties include, but are not limited to, the risks and
uncertainties discussed in the Company's most recent annual or
quarterly report and detailed from time to time in the Company's
other filings with the Securities and Exchange Commission and the
Canadian Securities Administrators, which risks and uncertainties
are incorporated herein by reference. In addition, certain material
factors and assumptions have been applied in making these
forward-looking statements, including, without limitation,
assumptions regarding our 2018 full-year guidance with respect to
the timing and anticipated effect of the implementation of the
Company's Project Core, adjusted SG&A expense (non-GAAP) and
the Company's ability to continue to manage such expense in the
manner anticipated, the anticipated timing and extent of the
Company's R&D expense, interest expense, our adjusted tax rate
(non-GAAP), the average fully diluted share count, the expected
timing and impact of loss of exclusivity for certain of our
products, and the expected amount of certain additional cash items
(such as capital expenditures) and non-cash adjustments (including
depreciation and stock-based compensation), and the assumption that
the risks and uncertainties outlined above will not cause actual
results or events to differ materially from those described in
these forward-looking statements, and additional information
regarding certain of these material factors and assumptions may
also be found in the Company's filings described above. The Company
believes that the material factors and assumptions reflected in
these forward-looking statements are reasonable in the
circumstances, but readers are cautioned not to place undue
reliance on any of these forward-looking statements. These
forward-looking statements speak only as of the date hereof. Bausch
Health undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances after
the date of this news release or to reflect actual outcomes, unless
required by law.
Non-GAAP Information
To supplement the financial
measures prepared in accordance with U.S. generally
accepted accounting principles (GAAP), the Company uses certain
non-GAAP financial measures, including (i) Adjusted EBITDA
(non-GAAP), (ii) organic growth/change and (iii) constant currency.
As discussed below, we also provide Adjusted Net Income (non-GAAP)
to provide supplemental information to readers. Management uses
these non-GAAP measures as key metrics in the evaluation of company
performance and the consolidated financial results and, in part, in
the determination of cash bonuses for its executive officers. The
Company believes these non-GAAP measures are useful to investors in
their assessment of our operating performance and the valuation of
our Company. In addition, these non-GAAP measures address questions
the Company routinely receives from analysts and investors, and in
order to assure that all investors have access to similar data, the
Company has determined that it is appropriate to make this data
available to all investors.
However, these measures are not prepared in accordance with GAAP
nor do they have any standardized meaning under GAAP. In addition,
other companies may use similarly titled non-GAAP financial
measures that are calculated differently from the way we calculate
such measures. Accordingly, our non-GAAP financial measures may not
be comparable to similar non-GAAP measures. We caution investors
not to place undue reliance on such non-GAAP measures, but instead
to consider them with the most directly comparable GAAP measures.
Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation. They should be
considered as a supplement to, not a substitute for, or superior
to, the corresponding measures calculated in accordance with GAAP.
The reconciliations of these historic non-GAAP measures to the most
directly comparable financial measures calculated and presented in
accordance with GAAP are shown in the tables below. However, as
indicated above, for guidance purposes, the Company does not
provide reconciliations of projected Adjusted EBITDA (non-GAAP) to
projected GAAP net income (loss), due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations.
Specific Non-GAAP Measures
Adjusted EBITDA
(non-GAAP)
Adjusted EBITDA (non-GAAP) is GAAP net (loss) income (its most
directly comparable GAAP financial measure) adjusted for certain
items, as further described below. Management of the Company
believes that Adjusted EBITDA (non-GAAP), along with the GAAP
measures used by management, most appropriately reflect how the
Company measures the business internally and sets operational goals
and incentives, especially in light of the Company's new
strategies. In particular, the Company believes that Adjusted
EBITDA (non-GAAP) focuses management on the Company's underlying
operational results and business performance. As a result, the
Company uses Adjusted EBITDA (non-GAAP) both to assess the actual
financial performance of the Company and to forecast future results
as part of its guidance. Management believes Adjusted EBITDA
(non-GAAP) is a useful measure to evaluate current performance.
Adjusted EBITDA (non-GAAP) is intended to show our unleveraged,
pre-tax operating results and therefore reflects our financial
performance based on operational factors. In addition, cash bonuses
for the Company's executive officers and other key employees are
based, in part, on the achievement of certain Adjusted EBITDA
(non-GAAP) targets.
Adjusted EBITDA (non-GAAP) reflects adjustments based on the
following items:
- Restructuring and integration costs: Since 2016, while the
Company has undertaken fewer acquisitions, the Company has incurred
additional restructuring costs as it implements its new strategies,
which involve, among other things, improvements to our
infrastructure and other operational improvements, internal
reorganizations and impacts from the divestiture of assets and
businesses. With regard to infrastructure and operational
improvements which the Company has taken to improve efficiencies in
the businesses and facilities, these tend to be costs intended to
right size the business or organization that fluctuate
significantly between periods in amount, size and timing, depending
on the improvement project, reorganization or transaction. As a
result, the Company does not believe that such costs (and their
impact) are truly representative of the underlying business. The
Company believes that the adjustments of these items provide
supplemental information with regard to the sustainability of the
Company's operating performance, allow for a comparison of the
financial results to historical operations and forward-looking
guidance and, as a result, provide useful supplemental information
to investors.
- Acquired in-process research and development costs: The Company
has excluded expenses associated with acquired in-process research
and development, as these amounts are inconsistent in amount and
frequency and are significantly impacted by the timing, size and
nature of acquisitions. Furthermore, as these amounts are
associated with research and development acquired, the Company does
not believe that they are a representation of the Company's
research and development efforts during the period.
- Asset Impairments: The Company has excluded the impact of
impairments of finite-lived and indefinite-lived intangible assets,
as well as impairments of assets held for sale, as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions and divestitures. The
Company believes that the adjustments of these items correlate with
the sustainability of the Company's operating performance. Although
the Company excludes intangible impairments from its non-GAAP
expenses, the Company believes that it is important for investors
to understand that intangible assets contribute to revenue
generation.
- Goodwill Impairments: The Company has excluded the impact of
goodwill impairment. When the Company has made acquisitions where
the consideration paid was in excess of the fair value of the net
assets acquired, the remaining purchase price is recorded as
goodwill. For assets that we developed ourselves, no goodwill is
recorded. Goodwill is not amortized but is tested for impairment.
For periods prior to Jan. 1, 2018,
the amount of goodwill impairment is measured as the excess of the
carrying value of a reporting unit's goodwill over its implied fair
value. However, in January 2017, new
accounting guidance was issued which simplifies the subsequent
measurement of an impairment to goodwill. Under the new guidance,
which the Company early adopted effective Jan. 1, 2018, the amount of goodwill impairment
is measured as the excess of a reporting unit's carrying value over
its fair value. Management excludes these charges in measuring the
performance of the Company and the business.
- Share-based Compensation: The Company has excluded the impact
of costs relating to share-based compensation. The Company believes
that the exclusion of share-based compensation expense assists
investors in the comparisons of operating results to peer
companies. Share-based compensation expense can vary significantly
based on the timing, size and nature of awards granted.
- Acquisition-related adjustments excluding amortization of
intangible assets and depreciation expense: The Company has
excluded the impact of acquisition-related contingent consideration
non-cash adjustments due to the inherent uncertainty and volatility
associated with such amounts based on changes in assumptions with
respect to fair value estimates, and the amount and frequency of
such adjustments is not consistent and is significantly impacted by
the timing and size of the Company's acquisitions, as well as the
nature of the agreed-upon consideration. In addition, the Company
has excluded the impact of fair value inventory step-up resulting
from acquisitions as the amount and frequency of such adjustments
are not consistent and are significantly impacted by the timing and
size of its acquisitions.
- Loss on extinguishment of debt: The Company has excluded loss
on extinguishment of debt as this represents a cost of refinancing
our existing debt and is not a reflection of our operations for the
period. Further, the amount and frequency of such charges are not
consistent and are significantly impacted by the timing and size of
debt financing transactions and other factors in the debt market
out of management's control.
- Other Non-GAAP Charges: The Company has excluded certain other
amounts, including legal and other professional fees incurred in
connection with recent legal and governmental proceedings,
investigations and information requests respecting certain of our
distribution, marketing, pricing, disclosure and accounting
practices, litigation and other matters, and net (gain)/loss on
sale of assets. In addition, the Company has excluded certain other
expenses that are the result of other, non-comparable events to
measure operating performance. These events arise outside of the
ordinary course of continuing operations. Given the unique nature
of the matters relating to these costs, the Company believes these
items are not normal operating expenses. For example, legal
settlements and judgments vary significantly, in their nature, size
and frequency, and, due to this volatility, the Company believes
the costs associated with legal settlements and judgments are not
normal operating expenses. In addition, as opposed to more ordinary
course matters, the Company considers that each of the recent
proceedings, investigations and information requests, given their
nature and frequency, are outside of the ordinary course and relate
to unique circumstances. The Company believes that the exclusion of
such out-of-the-ordinary-course amounts provides supplemental
information to assist in the comparison of the financial results of
the Company from period to period and, therefore, provides useful
supplemental information to investors. However, investors should
understand that many of these costs could recur and that companies
in our industry often face litigation.
Finally, to the extent not already adjusted for above, Adjusted
EBITDA (non-GAAP) reflects adjustments for interest, taxes,
depreciation and amortization (EBITDA represents earnings before
interest, taxes, depreciation and amortization).
Adjusted Net Income (non-GAAP)
Historically, management has used adjusted net income (non-GAAP)
(the most directly comparable GAAP financial measure for which is
GAAP net income (loss)) for strategic decision making, forecasting
future results and evaluating current performance. This non-GAAP
measure excludes the impact of certain items (as further described
below) that may obscure trends in the Company's underlying
performance. By disclosing this non-GAAP measure, it was
management's intention to provide investors with a meaningful,
supplemental comparison of the Company's operating results and
trends for the periods presented. It was management's belief that
this measure was also useful to investors as such measure allowed
investors to evaluate the Company's performance using the same
tools that management had used to evaluate past performance and
prospects for future performance. Accordingly, it was the Company's
belief that adjusted net income (non-GAAP) was useful to investors
in their assessment of the Company's operating performance and the
valuation of the Company. It is also noted that, in recent periods,
our GAAP net income (loss) was significantly lower than our
adjusted net income (non-GAAP). Commencing in 2017, management of
the Company identified and began using certain new primary
financial performance measures to assess the Company's financial
performance. However, management still believes that adjusted net
income (non-GAAP) may be useful to investors in their assessment of
the Company and its performance.
In addition to certain of the adjustments described above
(namely restructuring and integration costs, acquired in-process
research and development costs, loss on extinguishment of debt,
asset impairments, acquisition-related adjustments, excluding
amortization, and other non-GAAP charges), adjusted net income
(non-GAAP) also reflects adjustments based on the following
additional item:
- Amortization of intangible assets: The Company has excluded the
impact of amortization of intangible assets, as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions. The Company believes
that the adjustments of these items correlate with the
sustainability of the Company's operating performance. Although the
Company excludes amortization of intangible assets from its
non-GAAP expenses, the Company believes that it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in the amortization of additional
intangible assets.
Organic Growth/Change
Organic growth/change, a non-GAAP metric, is defined as a change on
a period-over-period basis in revenues on a constant currency basis
(if applicable) excluding the impact of recent acquisitions,
divestitures and discontinuations. Organic growth/change is change
in GAAP Revenue (its most directly comparable GAAP financial
measure) adjusted for certain items, as further described below, of
businesses that have been owned for one or more years. The Company
uses organic revenue and organic growth/change to assess
performance of its business units and operating and reportable
segments, and the Company in total, without the impact of foreign
currency exchange fluctuations and recent acquisitions,
divestitures and product discontinuations. The Company believes
that such measures are useful to investors as it provides a
supplemental period-to-period comparison.
Organic revenue growth/change reflects adjustments for: (i) the
impact of period-over-period changes in foreign currency exchange
rates on revenues and (ii) the revenues associated with
acquisitions, divestitures and discontinuations of businesses
divested and/ or discontinued. These adjustments are determined as
follows:
- Foreign currency exchange rates: Although changes in foreign
currency exchange rates are part of our business, they are not
within management's control. Changes in foreign currency exchange
rates, however, can mask positive or negative trends in the
business. The impact for changes in foreign currency exchange rates
is determined as the difference in the current period reported
revenues at their current period currency exchange rates and the
current period reported revenues revalued using the monthly average
currency exchange rates during the comparable prior period.
- Acquisitions, divestitures and discontinuations: In order to
present period-over-period organic revenues (non-GAAP) on a
comparable basis, revenues associated with acquisitions,
divestitures and discontinuations are adjusted to include only
revenues from those businesses and assets owned during both
periods. Accordingly, organic revenue (non-GAAP) growth/change
excludes from the current period, revenues attributable to each
acquisition for twelve months subsequent to the day of acquisition,
as there are no revenues from those businesses and assets included
in the comparable prior period. Organic revenue (non-GAAP)
growth/change excludes from the prior period (but not the current
period), all revenues attributable to each divestiture and
discontinuance during the twelve months prior to the day of
divestiture or discontinuance, as there are no revenues from those
businesses and assets included in the comparable current
period.
Constant Currency
Changes in the relative values of non-U.S. currencies to
the U.S. dollar may affect the Company's financial
results and financial position. To assist investors in evaluating
the Company's performance, we have adjusted for foreign currency
effects. Constant currency impact is determined by comparing 2018
reported amounts adjusted to exclude currency impact, calculated
using 2017 monthly average exchange rates, to the actual 2017
reported amounts.
Please also see the reconciliation tables below for further
information as to how these non-GAAP measures are calculated for
the periods presented.
1
|
Please see the tables
at the end of this news release for a reconciliation of this and
other non-GAAP measures to the nearest comparable GAAP
measure.
|
2
|
Organic
growth/change, a non-GAAP metric, is defined as a change on a
period-over-period basis in revenues on a constant currency basis
(if applicable) excluding the impact of recent acquisitions,
divestitures and discontinuations.
|
3
|
IQVIA ProVoice
Monthly Survey Month Ending September 2018.
|
4
|
IRI Retail Dollar
Share for the week ending Oct. 28, 2018.
|
5
|
Retail Dollar Share
for total United States (MULO + AMAZON) for the week ending Oct.
28, 2018, according to IRI and One Click Retail.
|
6
|
Provisional
name.
|
7
|
Actavis will be able
to begin marketing the medicine earlier if another generic
rifaximin product is granted approval and starts selling or
distributing such generic rifaximin product before Jan. 1,
2028.
|
8
|
To assist investors
in evaluating the Company's performance, we have adjusted for
changes in foreign currency exchange rates. Change at constant
currency, a non-GAAP metric, is determined by comparing 2018
reported amounts adjusted to exclude currency impact, calculated
using 2017 monthly average exchange rates, to the actual 2017
reported amounts.
|
FINANCIAL TABLES FOLLOW
Bausch Health
Companies Inc.
|
|
|
|
|
|
|
|
Table
1
|
Condensed
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30
|
|
September
30
|
(in
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
|
Product
sales
|
|
$
|
2,108
|
|
|
$
|
2,186
|
|
|
$
|
6,173
|
|
|
$
|
6,462
|
|
Other
revenues
|
|
28
|
|
|
33
|
|
|
86
|
|
|
99
|
|
|
|
2,136
|
|
|
2,219
|
|
|
6,259
|
|
|
6,561
|
|
Expenses
|
|
|
|
|
|
|
|
|
Cost of goods sold
(excluding amortization and impairments of intangible
assets)
|
|
573
|
|
|
650
|
|
|
1,717
|
|
|
1,869
|
|
Cost of other
revenues
|
|
9
|
|
|
9
|
|
|
32
|
|
|
32
|
|
Selling, general and
administrative
|
|
614
|
|
|
623
|
|
|
1,847
|
|
|
1,943
|
|
Research and
development
|
|
107
|
|
|
81
|
|
|
293
|
|
|
271
|
|
Amortization of
intangible assets
|
|
658
|
|
|
657
|
|
|
2,142
|
|
|
1,915
|
|
Goodwill
impairments
|
|
—
|
|
|
312
|
|
|
2,213
|
|
|
312
|
|
Asset
impairments
|
|
89
|
|
|
406
|
|
|
434
|
|
|
629
|
|
Restructuring and
integration costs
|
|
3
|
|
|
6
|
|
|
16
|
|
|
42
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
Acquisition-related
contingent consideration
|
|
(19)
|
|
|
(238)
|
|
|
(23)
|
|
|
(297)
|
|
Other income,
net
|
|
(15)
|
|
|
(325)
|
|
|
(4)
|
|
|
(584)
|
|
|
|
2,019
|
|
|
2,181
|
|
|
8,668
|
|
|
6,137
|
|
Operating income
(loss)
|
|
117
|
|
|
38
|
|
|
(2,409)
|
|
|
424
|
|
Interest
income
|
|
3
|
|
|
3
|
|
|
9
|
|
|
9
|
|
Interest
expense
|
|
(420)
|
|
|
(459)
|
|
|
(1,271)
|
|
|
(1,392)
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
(1)
|
|
|
(75)
|
|
|
(65)
|
|
Foreign exchange and
other
|
|
—
|
|
|
19
|
|
|
18
|
|
|
87
|
|
Loss before
(provision for) benefit from income taxes
|
|
(300)
|
|
|
(400)
|
|
|
(3,728)
|
|
|
(937)
|
|
(Provision for)
benefit from income taxes
|
|
(51)
|
|
|
1,700
|
|
|
(74)
|
|
|
2,829
|
|
Net (loss)
income
|
|
(351)
|
|
|
1,300
|
|
|
(3,802)
|
|
|
1,892
|
|
Net loss (income)
attributable to noncontrolling interest
|
|
1
|
|
|
1
|
|
|
(2)
|
|
|
(1)
|
|
Net (loss) income
attributable to Bausch Health Companies Inc.
|
|
$
|
(350)
|
|
|
$
|
1,301
|
|
|
$
|
(3,804)
|
|
|
$
|
1,891
|
|
Bausch Health
Companies Inc.
|
|
|
|
|
|
|
|
Table
2
|
Reconciliation of
GAAP Net (Loss) Income to Adjusted Net Income
(non-GAAP)
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30
|
|
September
30
|
(in
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net (loss) income
attributable to Bausch Health Companies Inc.
|
|
$
|
(350)
|
|
|
$
|
1,301
|
|
|
$
|
(3,804)
|
|
|
$
|
1,891
|
|
Non-GAAP adjustments:
(a)
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
|
658
|
|
|
657
|
|
|
2,142
|
|
|
1,915
|
|
Asset
impairments
|
|
89
|
|
|
406
|
|
|
434
|
|
|
629
|
|
Goodwill
impairments
|
|
—
|
|
|
312
|
|
|
2,213
|
|
|
312
|
|
Restructuring and
integration costs
|
|
3
|
|
|
6
|
|
|
16
|
|
|
42
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
Acquisition-related
adjustments excluding amortization of intangible assets
|
|
(19)
|
|
|
(238)
|
|
|
(23)
|
|
|
(297)
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
1
|
|
|
75
|
|
|
65
|
|
Legal and other
professional fees
|
|
15
|
|
|
14
|
|
|
35
|
|
|
37
|
|
Litigation and other
matters
|
|
(40)
|
|
|
3
|
|
|
(30)
|
|
|
111
|
|
Net loss (gain) on
sale of assets
|
|
26
|
|
|
(328)
|
|
|
26
|
|
|
(695)
|
|
Other
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Tax effect of
non-GAAP adjustments
|
|
22
|
|
|
(1,767)
|
|
|
(42)
|
|
|
(3,013)
|
|
Total non-GAAP
adjustments
|
|
753
|
|
|
(934)
|
|
|
4,846
|
|
|
(889)
|
|
Adjusted net
income attributable to Bausch Health Companies Inc.
(non-GAAP)
|
|
$
|
403
|
|
|
$
|
367
|
|
|
$
|
1,042
|
|
|
$
|
1,002
|
|
|
|
(a)
|
The components of
(and further details respecting) each of these non-GAAP adjustments
and the financial statement line item to which each component
relates can be found on Table 2a.
|
Bausch Health
Companies Inc.
|
|
|
|
|
|
Table
2a
|
Reconciliation of
GAAP to Non-GAAP Financial Information
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30
|
|
September
30
|
(in
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Selling, general
and administrative reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Selling, general
and administrative
|
|
$
|
614
|
|
|
$
|
623
|
|
|
$
|
1,847
|
|
|
$
|
1,943
|
|
Legal and other
professional fees (a)
|
|
(15)
|
|
|
(14)
|
|
|
(35)
|
|
|
(37)
|
|
Other Selling,
general and administrative (b)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Adjusted selling,
general and administrative (non-GAAP)
|
|
$
|
599
|
|
|
$
|
609
|
|
|
$
|
1,813
|
|
|
$
|
1,906
|
|
Amortization of
intangible assets reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Amortization of
intangible assets
|
|
$
|
658
|
|
|
$
|
657
|
|
|
$
|
2,142
|
|
|
$
|
1,915
|
|
Amortization of
intangible assets (c)
|
|
(658)
|
|
|
(657)
|
|
|
(2,142)
|
|
|
(1,915)
|
|
Adjusted amortization
of intangible assets (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Goodwill
impairment reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Goodwill
impairment
|
|
$
|
—
|
|
|
$
|
312
|
|
|
$
|
2,213
|
|
|
$
|
312
|
|
Goodwill impairment
(d)
|
|
—
|
|
|
(312)
|
|
|
(2,213)
|
|
|
(312)
|
|
Adjusted goodwill
impairment (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring and
integration costs reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Restructuring
and integration costs
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
16
|
|
|
$
|
42
|
|
Restructuring and
integration costs (e)
|
|
(3)
|
|
|
(6)
|
|
|
(16)
|
|
|
(42)
|
|
Adjusted
restructuring and integration costs (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquired
in-process research and development costs
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Acquired
in-process research and development costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Acquired in-process
research and development costs (f)
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
(5)
|
|
Adjusted acquired
in-process research and development costs (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Asset impairments
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Asset
impairments
|
|
$
|
89
|
|
|
$
|
406
|
|
|
$
|
434
|
|
|
$
|
629
|
|
Asset impairments
(g)
|
|
(89)
|
|
|
(406)
|
|
|
(434)
|
|
|
(629)
|
|
Adjusted asset
impairments (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition-related contingent consideration
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP
Acquisition-related contingent consideration
|
|
$
|
(19)
|
|
|
$
|
(238)
|
|
|
$
|
(23)
|
|
|
$
|
(297)
|
|
Acquisition-related
contingent consideration (h)
|
|
19
|
|
|
238
|
|
|
23
|
|
|
297
|
|
Adjusted
acquisition-related contingent consideration (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income, net
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Other income,
net
|
|
$
|
(15)
|
|
|
$
|
(325)
|
|
|
$
|
(4)
|
|
|
$
|
(584)
|
|
Litigation and other
matters (i)
|
|
40
|
|
|
(3)
|
|
|
30
|
|
|
(111)
|
|
Net (loss) gain on
sale of assets (j)
|
|
(26)
|
|
|
328
|
|
|
(26)
|
|
|
695
|
|
Other
(b)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted other income
(non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loss on
extinguishment of debt reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Loss on
extinguishment of debt
|
|
$
|
—
|
|
|
$
|
(1)
|
|
|
$
|
(75)
|
|
|
$
|
(65)
|
|
Loss on
extinguishment of debt (k)
|
|
—
|
|
|
1
|
|
|
75
|
|
|
65
|
|
Adjusted loss on
extinguishment of debt (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2a
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30
|
|
September
30
|
(in
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
(Provision for)
benefit from income taxes reconciliation:
|
|
|
|
|
|
|
|
|
GAAP (Provision for)
benefit from income taxes
|
|
$
|
(51)
|
|
|
$
|
1,700
|
|
|
$
|
(74)
|
|
|
$
|
2,829
|
|
Tax effect of
non-GAAP adjustments (l)
|
|
22
|
|
|
(1,767)
|
|
|
(42)
|
|
|
(3,013)
|
|
Adjusted provision
for income taxes (non-GAAP)
|
|
$
|
(29)
|
|
|
$
|
(67)
|
|
|
$
|
(116)
|
|
|
$
|
(184)
|
|
|
|
(a)
|
Represents the sole
component of the non-GAAP adjustment of "Legal and other
professional fees" (see Table 2). Legal and other professional fees
incurred during the three and nine months ended September 30, 2018
and 2017 in connection with recent legal and governmental
proceedings, investigations and information requests related to,
among other matters, our distribution, marketing, pricing,
disclosure and accounting practices.
|
(b)
|
Represents the two
components of the non-GAAP adjustment of "Other" (see Table
2).
|
(c)
|
Represents the sole
component of the non-GAAP adjustment of "Amortization of intangible
assets" (see Table 2).
|
(d)
|
Represents the sole
component of the non-GAAP adjustment of "Goodwill impairment" (see
Table 2).
|
(e)
|
Represents the sole
component of the non-GAAP adjustment of "Restructuring and
integration costs" (see Table 2).
|
(f)
|
Represents the sole
component of the non-GAAP adjustment of "Acquired in-process
research and development costs" (see Table 2).
|
(g)
|
Represents the sole
component of the non-GAAP adjustment of "Asset impairments" (see
Table 2).
|
(h)
|
Represents the sole
component of the non-GAAP adjustment of "Acquisition-related
adjustments excluding amortization of intangible assets" (see Table
2).
|
(i)
|
Represents the sole
component of the non-GAAP adjustment of "Litigation and other
matters" (see Table 2).
|
(j)
|
Represents the sole
component of the non-GAAP adjustment "Net (loss) gain on sale of
assets" (see Table 2). Net gain on sale of assets of $328
million and $695 million during the three and nine months ended
September 30, 2017, respectively, includes the $306 million gain on
sale of iNova Pharmaceuticals in September 2017, the $98 million
gain on the sale of Dendreon Pharmaceuticals LLC in June 2017 and
the $316 million gain on the sale of CeraVe, AcneFree and AMBI
skincare brands in March of 2017.
|
(k)
|
Represents the sole
component of the non-GAAP adjustment of "Loss on extinguishment of
debt" (see Table 2).
|
(l)
|
Represents the sole
component of the non-GAAP adjustment of "Tax effect of non-GAAP
adjustments" (see Table 2).
|
Bausch Health
Companies Inc.
|
|
|
|
|
|
Table
2b
|
Reconciliation of
GAAP Net (Loss) Income to Adjusted EBITDA (non-GAAP)
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30
|
|
September
30
|
(in
millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net (loss) income
attributable to Bausch Health Companies Inc.
|
|
$
|
(350)
|
|
|
$
|
1,301
|
|
|
$
|
(3,804)
|
|
|
$
|
1,891
|
|
|
Interest expense,
net
|
|
417
|
|
|
456
|
|
|
1,262
|
|
|
1,383
|
|
|
Provision for
(benefit from) income taxes
|
|
51
|
|
|
(1,700)
|
|
|
74
|
|
|
(2,829)
|
|
|
Depreciation and
amortization
|
|
703
|
|
|
699
|
|
|
2,273
|
|
|
2,039
|
|
EBITDA
|
|
821
|
|
|
756
|
|
|
(195)
|
|
|
2,484
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Asset
impairments
|
|
89
|
|
|
406
|
|
|
434
|
|
|
629
|
|
|
Goodwill
impairments
|
|
—
|
|
|
312
|
|
|
2,213
|
|
|
312
|
|
|
Restructuring and
integration costs
|
|
3
|
|
|
6
|
|
|
16
|
|
|
42
|
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
Acquisition-related
adjustments excluding amortization and depreciation
|
|
(19)
|
|
|
(238)
|
|
|
(23)
|
|
|
(297)
|
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
1
|
|
|
75
|
|
|
65
|
|
|
Share-based
compensation
|
|
22
|
|
|
19
|
|
|
65
|
|
|
70
|
|
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
|
Legal and other
professional fees (a)
|
|
15
|
|
|
14
|
|
|
35
|
|
|
37
|
|
|
Litigation and other
matters
|
|
(40)
|
|
|
3
|
|
|
(30)
|
|
|
111
|
|
|
Net loss (gain) on
sale of assets (b)
|
|
26
|
|
|
(328)
|
|
|
26
|
|
|
(695)
|
|
|
Other
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Adjusted EBITDA
(non-GAAP)
|
|
$
|
916
|
|
|
$
|
951
|
|
|
$
|
2,616
|
|
|
$
|
2,763
|
|
|
|
(a)
|
Legal and other
professional fees incurred during the three and nine months ended
September 30, 2018 and 2017 in connection with recent legal and
governmental proceedings, investigations and information requests
related to, among other matters, our distribution, marketing,
pricing, disclosure and accounting practices.
|
(b)
|
Net gain on sale of
assets of $328 million and $695 million during the three and nine
months ended September 30, 2017, respectively, includes the $306
million gain on sale of iNova Pharmaceuticals in September 2017,
the $98 million gain on the sale of Dendreon Pharmaceuticals LLC in
June 2017 and the $316 million gain on the sale of CeraVe, AcneFree
and AMBI skincare brands in March of 2017.
|
Bausch Health
Companies Inc.
|
|
|
|
|
|
|
Table
3
|
Organic Growth
(non-GAAP) - by Segment
|
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Organic Revenue for the Three Months Ended
|
|
|
|
|
|
|
September 30,
2018
|
|
September 30,
2017
|
|
Change
in
Organic
Revenue
|
|
|
Revenue
as
Reported
|
|
Changes
in
Exchange
Rates (a)
|
|
Organic
Revenue
(Non-
GAAP) (b)
|
|
Revenue
as
Reported
|
|
Divested
Revenues
|
|
Organic
Revenue
(Non-
GAAP) (b)
|
|
(in
millions)
|
|
Amount
|
|
Pct.
|
Bausch +
Lomb/International (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Vision
Care
|
|
$
|
209
|
|
|
$
|
5
|
|
|
$
|
214
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
208
|
|
|
$
|
6
|
|
|
3
|
%
|
Global
Surgical
|
|
159
|
|
|
3
|
|
|
162
|
|
|
161
|
|
|
(3)
|
|
|
158
|
|
|
4
|
|
|
3
|
%
|
Global Consumer
Products
|
|
354
|
|
|
11
|
|
|
365
|
|
|
392
|
|
|
(39)
|
|
|
353
|
|
|
12
|
|
|
3
|
%
|
Global Ophtho
Rx
|
|
161
|
|
|
2
|
|
|
163
|
|
|
149
|
|
|
—
|
|
|
149
|
|
|
14
|
|
|
9
|
%
|
International Rx
|
|
264
|
|
|
8
|
|
|
272
|
|
|
324
|
|
|
(52)
|
|
|
272
|
|
|
—
|
|
|
—
|
%
|
Total Bausch +
Lomb/International
|
|
1,147
|
|
|
29
|
|
|
1,176
|
|
|
1,234
|
|
|
(94)
|
|
|
1,140
|
|
|
36
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salix
(c)
|
|
460
|
|
|
—
|
|
|
460
|
|
|
452
|
|
|
—
|
|
|
452
|
|
|
8
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ortho
Dermatologics (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ortho Dermatologics
(d)
|
|
148
|
|
|
—
|
|
|
148
|
|
|
151
|
|
|
(2)
|
|
|
149
|
|
|
(1)
|
|
|
(1)
|
%
|
Global
Solta
|
|
29
|
|
|
1
|
|
|
30
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|
4
|
|
|
15
|
%
|
Total Ortho
Dermatologics
|
|
177
|
|
|
1
|
|
|
178
|
|
|
177
|
|
|
(2)
|
|
|
175
|
|
|
3
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified
Products (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurology and
Other
|
|
211
|
|
|
—
|
|
|
211
|
|
|
227
|
|
|
(1)
|
|
|
226
|
|
|
(15)
|
|
|
(7)
|
%
|
Generics
|
|
117
|
|
|
—
|
|
|
117
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|
35
|
|
|
43
|
%
|
Dentistry
|
|
24
|
|
|
—
|
|
|
24
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|
(8)
|
|
|
(25)
|
%
|
Other revenues
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
(15)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Diversified
Products
|
|
352
|
|
|
—
|
|
|
352
|
|
|
356
|
|
|
(16)
|
|
|
340
|
|
|
12
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
2,136
|
|
|
$
|
30
|
|
|
$
|
2,166
|
|
|
$
|
2,219
|
|
|
$
|
(112)
|
|
|
$
|
2,107
|
|
|
$
|
59
|
|
|
3
|
%
|
|
|
(a)
|
The impact for
changes in foreign currency exchange rates is determined as the
difference in the current period reported revenues at their current
period currency exchange rates and the current period reported
revenues revalued using the monthly average currency exchange rates
during the comparable prior period.
|
(b)
|
To supplement the
financial measures prepared in accordance with GAAP, the Company
uses certain non-GAAP financial measures. For additional
information about the Company's use of such non-GAAP financial
measures, refer to the body of the news release to which these
tables are attached. Organic revenue (non-GAAP) for the three
months ended September 30, 2018 is calculated as revenue as
reported adjusted for the impact for changes in exchange rates
(previously defined in this news release). Organic revenue
(non-GAAP) for the three months ended September 30, 2017 is
calculated as revenue as reported less revenues attributable to
divestitures and discontinuances during the twelve months prior to
the day of divestiture or discontinuance, as there are no revenues
from those businesses and assets included in the comparable current
period. Organic revenue is also adjusted for acquisitions, however,
during the three months ended September 30, 2018 and 2017, there
were no acquisitions.
|
(c)
|
Commencing in the
second quarter of 2018, the Company realigned its segment reporting
structure and now operates in four operating segments. All segment
references in this news release are to this realigned segment
reporting structure and prior period presentations of segment
results have been conformed to the current segment reporting
structure to allow investors to evaluate results between periods on
a constant basis. For more information about the current segment
reporting structure, please see "Changes in Reportable Segments" in
Note 2, "SIGNIFICANT ACCOUNTING POLICIES" to our unaudited interim
Consolidated Financial Statements included in our quarterly report
on Form 10-Q for the quarter ended September 30, 2018 and slide 26
in the appendix to our Third-Quarter 2018 Financial Results
presentation.
|
(d)
|
Effective in the
first quarter of 2018, two products historically included in the
reported results of the former Other business unit in the former
U.S. Diversified segment are included in the reported results of
the Ortho Dermatologics business unit in the Ortho Dermatologics
segment as management believes the products better align with that
business unit. Prior period presentations of segment and business
unit revenues have been conformed to current segment and business
unit reporting structures to allow investors to evaluate results
between periods on a consistent basis.
|
Bausch Health
Companies Inc.
|
|
|
|
|
Table 3
(continued)
|
Organic Growth
(non-GAAP) - by Segment
|
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months ended September 30, 2018 and 2017
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Organic Revenue for the Nine Months Ended
|
|
|
|
|
|
|
September 30,
2018
|
|
September 30,
2017
|
|
Change
in
Organic
Revenue
|
|
|
Revenue
as
Reported
|
|
Changes
in
Exchange
Rates (a)
|
|
Organic
Revenue
(Non-
GAAP) (b)
|
|
Revenue
as
Reported
|
|
Divested
Revenues
|
|
Organic
Revenue
(Non-
GAAP) (b)
|
|
(in
millions)
|
|
Amount
|
|
Pct.
|
Bausch +
Lomb/International (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Vision
Care
|
|
$
|
611
|
|
|
$
|
(8)
|
|
|
$
|
603
|
|
|
$
|
565
|
|
|
$
|
—
|
|
|
$
|
565
|
|
|
$
|
38
|
|
|
7
|
%
|
Global
Surgical
|
|
512
|
|
|
(14)
|
|
|
498
|
|
|
490
|
|
|
(5)
|
|
|
485
|
|
|
13
|
|
|
3
|
%
|
Global Consumer
Products
|
|
1,053
|
|
|
(12)
|
|
|
1,041
|
|
|
1,146
|
|
|
(133)
|
|
|
1,013
|
|
|
28
|
|
|
3
|
%
|
Global Ophtho
Rx
|
|
482
|
|
|
(6)
|
|
|
476
|
|
|
459
|
|
|
—
|
|
|
459
|
|
|
17
|
|
|
4
|
%
|
International Rx
|
|
801
|
|
|
(19)
|
|
|
782
|
|
|
931
|
|
|
(152)
|
|
|
779
|
|
|
3
|
|
|
—
|
%
|
Total Bausch +
Lomb/International
|
|
3,459
|
|
|
(59)
|
|
|
3,400
|
|
|
3,591
|
|
|
(290)
|
|
|
3,301
|
|
|
99
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salix
(c)
|
|
1,323
|
|
|
—
|
|
|
1,323
|
|
|
1,141
|
|
|
—
|
|
|
1,141
|
|
|
182
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ortho
Dermatologics (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ortho Dermatologics
(d)
|
|
370
|
|
|
—
|
|
|
370
|
|
|
479
|
|
|
(5)
|
|
|
474
|
|
|
(104)
|
|
|
(22)
|
%
|
Global
Solta
|
|
90
|
|
|
—
|
|
|
90
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|
13
|
|
|
17
|
%
|
Total Ortho
Dermatologics
|
|
460
|
|
|
—
|
|
|
460
|
|
|
556
|
|
|
(5)
|
|
|
551
|
|
|
(91)
|
|
|
(17)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified
Products (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neurology and
Other
|
|
636
|
|
|
—
|
|
|
636
|
|
|
718
|
|
|
(1)
|
|
|
717
|
|
|
(81)
|
|
|
(11)
|
%
|
Generics
|
|
297
|
|
|
—
|
|
|
297
|
|
|
249
|
|
|
—
|
|
|
249
|
|
|
48
|
|
|
19
|
%
|
Dentistry
|
|
84
|
|
|
—
|
|
|
84
|
|
|
95
|
|
|
(2)
|
|
|
93
|
|
|
(9)
|
|
|
(10)
|
%
|
Other revenues
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
(211)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Diversified
Products
|
|
1,017
|
|
|
—
|
|
|
1,017
|
|
|
1,273
|
|
|
(214)
|
|
|
1,059
|
|
|
(42)
|
|
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
6,259
|
|
|
$
|
(59)
|
|
|
$
|
6,200
|
|
|
$
|
6,561
|
|
|
$
|
(509)
|
|
|
$
|
6,052
|
|
|
$
|
148
|
|
|
2
|
%
|
|
|
(a)
|
The impact for
changes in foreign currency exchange rates is determined as the
difference in the current period reported revenues at their current
period currency exchange rates and the current period reported
revenues revalued using the monthly average currency exchange rates
during the comparable prior period.
|
(b)
|
To supplement the
financial measures prepared in accordance with GAAP, the Company
uses certain non-GAAP financial measures. For additional
information about the Company's use of such non-GAAP financial
measures, refer to the body of the news release to which these
tables are attached. Organic revenue (non-GAAP) for the nine months
ended September 30, 2018 is calculated as revenue as reported
adjusted for the impact for changes in exchange rates (previously
defined in this news release). Organic revenue (non-GAAP) for the
nine months ended September 30, 2017 is calculated as revenue as
reported less revenues attributable to divestitures and
discontinuances during the twelve months prior to the day of
divestiture or discontinuance, as there are no revenues from those
businesses and assets included in the comparable current period.
Organic revenue is also adjusted for acquisitions, however, during
the nine months ended September 30, 2018 and 2017, there were no
acquisitions.
|
(c)
|
Commencing in the
second quarter of 2018, the Company realigned its segment reporting
structure and now operates in four operating segments. All segment
references in this news release are to this realigned segment
reporting structure and prior period presentations of segment
results have been conformed to the current segment reporting
structure to allow investors to evaluate results between periods on
a constant basis. For more information about the current segment
reporting structure, please see "Changes in Reportable Segments" in
Note 2, "SIGNIFICANT ACCOUNTING POLICIES" to our unaudited interim
Consolidated Financial Statements included in our quarterly report
on Form 10-Q for the quarter ended September 30, 2018 and slide 26
in the appendix to our Third-Quarter 2018 Financial Results
presentation.
|
(d)
|
Effective in the
first quarter of 2018, two products historically included in the
reported results of the former Other business unit in the former
U.S. Diversified segment are included in the reported results of
the Ortho Dermatologics business unit in the Ortho Dermatologics
segment as management believes the products better align with that
business unit. Prior period presentations of segment and business
unit revenues have been conformed to current segment and business
unit reporting structures to allow investors to evaluate results
between periods on a consistent basis.
|
Bausch Health
Companies Inc.
|
|
|
|
Table
4
|
Consolidated
Balance Sheet and Other Financial Information
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September
30,
2018
|
|
December 31,
2017
|
Cash
Balances
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
973
|
|
|
$
|
720
|
|
Restricted
cash
|
|
—
|
|
|
77
|
|
Cash, cash
equivalents and restricted cash
|
|
$
|
973
|
|
|
$
|
797
|
|
|
|
|
|
|
Debt
Balances
|
|
|
|
|
Senior Secured
Credit Facilities:
|
|
|
|
|
Revolving Credit
Facilities
|
|
$
|
75
|
|
|
$
|
250
|
|
Series F Tranche B
Term Loan Facility
|
|
—
|
|
|
3,420
|
|
2025 Term Loan B
Facility
|
|
4,320
|
|
|
—
|
|
Senior Secured
Notes
|
|
4,946
|
|
|
4,939
|
|
Senior Unsecured
Notes:
|
|
|
|
|
5.375% Senior
Unsecured Notes due March 2020
|
|
—
|
|
|
1,699
|
|
7.00% Senior
Unsecured Notes due October 2020
|
|
—
|
|
|
71
|
|
6.375% Senior
Unsecured Notes due October 2020
|
|
—
|
|
|
656
|
|
6.750% Senior
Unsecured Notes due October 2021
|
|
—
|
|
|
648
|
|
7.250% Senior
Unsecured Notes due October 2022
|
|
—
|
|
|
545
|
|
9.25% Senior
Unsecured Notes due April 2026
|
|
1,481
|
|
|
—
|
|
8.50% Senior
Unsecured Notes due January 2027
|
|
738
|
|
|
—
|
|
All other Senior
Unsecured Notes
|
|
13,157
|
|
|
13,201
|
|
Other
|
|
14
|
|
|
15
|
|
Total long-term
debt and other, net of unamortized discounts and issuance
costs
|
|
24,731
|
|
|
25,444
|
|
Plus: Unamortized
discounts and issuance costs
|
|
324
|
|
|
308
|
|
Total long-term
debt and other
|
|
$
|
25,055
|
|
|
$
|
25,752
|
|
|
|
|
|
|
Maturities and
Mandatory Payments of Debt Obligations
|
|
|
|
October through
December 2018
|
|
$
|
125
|
|
|
$
|
209
|
|
2019
|
|
230
|
|
|
—
|
|
2020
|
|
228
|
|
|
2,690
|
|
2021
|
|
2,628
|
|
|
3,175
|
|
2022
|
|
1,478
|
|
|
5,115
|
|
2023
|
|
6,293
|
|
|
6,051
|
|
Thereafter
|
|
14,073
|
|
|
8,512
|
|
Total gross
maturities
|
|
$
|
25,055
|
|
|
$
|
25,752
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
Cash provided by
operating activities - Three months ended September
30
|
|
$
|
522
|
|
|
$
|
490
|
|
Investor
Contact:
|
Media
Contact:
|
Arthur
Shannon
|
Lainie
Keller
|
arthur.shannon@bauschhealth.com
|
lainie.keller@bauschhealth.com
|
(514)
856-3855
|
(908)
927-0617
|
(877) 281-6642 (toll
free)
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/bausch-health-companies-inc-announces-third-quarter-2018-results-300744524.html
SOURCE Bausch Health Companies Inc.