- Fourth-Quarter 2023 Financial Results
- Revenue of $1.173 Billion
- GAAP Net Loss Attributable to Bausch + Lomb Corporation of
$54 Million
- Adjusted EBITDA (non-GAAP)1 of $231
Million
- Revenue Grew 18% as Reported and 19% on a Constant Currency1
Basis Compared to the Fourth Quarter of 2022, Driven by Growth
Across All Segments
- Full-Year 2023 Financial Results
- Revenue of $4.146 Billion
- GAAP Net Loss Attributable to Bausch + Lomb Corporation of
$260 Million
- Adjusted EBITDA (non-GAAP)1 of $738 Million
- Revenue Grew 10% as Reported and 12% on a Constant Currency1
Basis Compared to the Full Year of 2022, Driven by Growth Across
All Segments
- Foreign Exchange Negatively Impacted Revenue and Adjusted
EBITDA (non-GAAP)1 by Approximately $68 Million and $51 Million,
Respectively
Bausch + Lomb Corporation (NYSE/TSX: BLCO), a leading global eye
health company dedicated to helping people see better to live
better, today announced its fourth-quarter and full-year 2023
financial results.
“Revenue growth in 2023, and in the fourth quarter in
particular, exceeded our expectations and set the tone for 2024,”
said Brent Saunders, chairman and CEO, Bausch + Lomb. “Double-digit
growth is always impressive, but even more so when you consider how
we got there. Our quality of growth is what helps set us apart from
others.”
Select Fourth-Quarter Company Highlights
- Launched enVista® Aspire monofocal and toric intraocular lenses
with Intermediate Optimized optics in the United States
- Launched SeeNa™, an ophthalmic diagnostic system for refractive
cataract patients that is fully integrated with Bausch + Lomb’s
Eyetelligence™ surgical planning software to help streamline
surgical planning and information flow
- Received U.S. Food and Drug Administration approval for TENEO™
Excimer Laser Platform for laser-assisted in situ keratomileusis
(LASIK) vision correction surgery for myopia and myopic astigmatism
(nearsightedness and nearsightedness with astigmatism)2 – the first
excimer platform approved in nearly two decades
Fourth-Quarter and Full-Year 2023 Revenue Performance
Total reported revenue was $1.173 billion for the fourth quarter
of 2023, as compared to $996 million in the fourth quarter of 2022,
an increase of $177 million, or 18%. Excluding the unfavorable
impact of foreign exchange of $9 million, revenue increased by
approximately 19% on a constant currency1 basis compared to the
fourth quarter of 2022.
Total reported revenue was $4.146 billion for the full year of
2023, as compared to $3.768 billion in the full year of 2022, an
increase of $378 million, or 10%. Excluding the unfavorable impact
of foreign exchange of $68 million, revenue increased by
approximately 12% on a constant currency1 basis compared to the
full year of 2022.
Revenue by segment was as follows:
Fourth-Quarter 2023
(in millions)
Three Months Ended
December 31
Reported Change
Reported Change
Change at Constant Currency1
(non-GAAP)
2023
2022
Total Bausch + Lomb Revenue
$1,173
$996
$177
18%
19%
Vision Care3
$662
$624
$38
6%
8%
Surgical
$204
$188
$16
9%
7%
Pharmaceuticals3
$307
$184
$123
67%
66%
Full-Year 2023
(in millions)
Twelve Months Ended
December 31
Reported Change
Reported Change
Change at Constant Currency1
(non-GAAP)
2023
2022
Total Bausch + Lomb Revenue
$4,146
$3,768
$378
10%
12%
Vision Care3
$2,543
$2,369
$174
7%
10%
Surgical
$767
$718
$49
7%
7%
Pharmaceuticals3
$836
$681
$155
23%
24%
Vision Care Segment3
Vision Care segment revenue was $662 million for the fourth
quarter of 2023, as compared to $624 million for the fourth quarter
of 2022, an increase of $38 million, or 6%. Excluding the
unfavorable impact of foreign exchange of $13 million, segment
revenue increased on a constant currency1 basis by approximately 8%
compared to the fourth quarter of 2022, primarily due to higher
sales of Lumify®, Eye Vitamins and Dry Eye Portfolio in our
consumer eye care business and higher sales of SiHy Daily lenses
and Ultra® within our contact lens business, partially offset by
unfilled orders as a result of the implementation of a system
upgrade at our Lynchburg distribution facility that impacted our
contact lens business.
Vision Care segment revenue was $2.543 billion for the full year
of 2023, as compared to $2.369 billion for the full year of 2022,
an increase of $174 million, or 7%. Excluding the unfavorable
impact of foreign exchange of $61 million, segment revenue
increased on a constant currency1 basis by approximately 10%
compared to the full year of 2022, primarily due to higher sales of
Lumify, Eye Vitamins, Dry Eye Portfolio and Biotrue® in our
consumer eye care business and higher sales of SiHy Daily lenses
and Ultra within our contact lens business, partially offset by
unfilled orders as a result of the implementation of a system
upgrade at our Lynchburg distribution facility that impacted our
contact lens business.
Surgical Segment
Surgical segment revenue was $204 million for the fourth quarter
of 2023, as compared to $188 million for the fourth quarter of
2022, an increase of $16 million, or 9%. Excluding the favorable
impact of foreign exchange of $3 million, segment revenue increased
on a constant currency1 basis by approximately 7% compared to the
fourth quarter of 2022, primarily due to higher sales of
consumables, equipment and premium intraocular lenses (“IOLs”).
Surgical segment revenue was $767 million for the full year of
2023, as compared to $718 million for the full year of 2022, an
increase of $49 million, or 7%. Excluding the unfavorable impact of
foreign exchange of $1 million, segment revenue increased on a
constant currency1 basis by approximately 7% compared to the full
year of 2022, primarily due to higher sales of consumables,
equipment and premium IOLs.
Pharmaceuticals Segment3
Pharmaceuticals segment revenue was $307 million for the fourth
quarter of 2023, as compared to $184 million for the fourth quarter
of 2022, an increase of $123 million, or 67%. Excluding the
favorable impact of foreign exchange of $1 million, segment revenue
increased on a constant currency1 basis by approximately 66%
compared to the fourth quarter of 2022, primarily due to the
acquisition of XIIDRA®, sales of MIEBO® and higher sales of
Vyzulta®.
Pharmaceuticals segment revenue was $836 million for the full
year of 2023, as compared to $681 million for the full year of
2022, an increase of $155 million, or 23%. Excluding the
unfavorable impact of foreign exchange of $6 million, segment
revenue increased on a constant currency1 basis by approximately
24% compared to the full year of 2022, primarily due to the
acquisition of XIIDRA, launch of MIEBO and higher sales of Vyzulta,
U.S. generics business and International Pharmaceuticals.
Operating Results
Operating income was $49 million for the fourth quarter of 2023,
as compared to $51 million for the fourth quarter of 2022, a
decrease of $2 million. Operating income was $130 million for the
full year of 2023, as compared to $207 million for the full year of
2022, a decrease of $77 million.
For both the fourth quarter and full year of 2023, the changes
in operating income were largely driven by an increase in selling,
general and administrative expenses driven by product launches.
Full year 2023 was also impacted by Business Transformation Costs
and dis-synergy costs associated with the company becoming a
stand-alone entity. The company is committed to continuing to
maintain a disciplined approach to cost management and to leverage
its infrastructure.
Net Loss
Net loss attributable to Bausch + Lomb Corporation for the
fourth quarter of 2023 was $54 million, as compared to $1 million
for the fourth quarter of 2022, an unfavorable change of $53
million. Net loss attributable to Bausch + Lomb Corporation for the
full year of 2023 was $260 million, as compared to a net income
attributable to Bausch + Lomb Corporation of $6 million for the
full year of 2022, an unfavorable change of $266 million.
For the fourth quarter of 2023, the change was primarily due to
higher interest expense and the decrease in operating results noted
above.
For the full year of 2023, the change was primarily due to
higher interest expense, the decrease in operating results noted
above and foreign exchange headwinds.
Adjusted net income attributable to Bausch + Lomb Corporation
(non-GAAP)1 for the fourth quarter of 2023 was $83 million, as
compared to $80 million for the fourth quarter of 2022, an increase
of $3 million.
Adjusted net income (non-GAAP)1 for the full year of 2023 was
$258 million, as compared to $375 million for the full year of
2022, a decrease of $117 million.
Cash from Operations
Cash flow from operations for the fourth quarter of 2023 was $15
million, as compared to $159 million for the fourth quarter of
2022, a decrease of $144 million. Cash flow from operations was
negatively impacted in the fourth quarter of 2023 primarily by the
timing of collections and payments in the ordinary course of
business and a strategic increase in inventories.
Cash flow used in operations for the full year of 2023 was $17
million, as compared to cash flow from operations of $345 million
for the full year of 2022, a decrease of $362 million. Cash flow
was negatively impacted in the full year of 2023 primarily by a
strategic increase in inventories, decrease in operating results,
and the timing of collections and payments in the ordinary course
of business.
Earnings Per Share
GAAP Earnings Per Share (“EPS”) Basic and Diluted attributable
to Bausch + Lomb Corporation for the fourth quarter of 2023 was
($0.15), as compared to $0.00 for the fourth quarter of 2022.
Adjusted EPS attributable to Bausch + Lomb Corporation (non-GAAP)1
for the fourth quarter of 2023 was $0.24, as compared to $0.23 for
the fourth quarter of 2022.
GAAP EPS Basic and Diluted attributable to Bausch + Lomb
Corporation for the full year of 2023 was ($0.74), as compared to
$0.02 for the full year of 2022. Adjusted EPS attributable to
Bausch + Lomb Corporation (non-GAAP)1 for the full year of 2023 was
$0.73, as compared to $1.07 for the full year of 2022.
Adjusted EBITDA (non-GAAP)1
Adjusted EBITDA (non-GAAP)1 was $231 million for the fourth
quarter of 2023, as compared to $181 million for the fourth quarter
of 2022, an increase of $50 million, primarily due to the
acquisition of XIIDRA and revenue growth across all segments.
Adjusted EBITDA (non-GAAP)1 was $738 million for the full year
of 2023, as compared to $720 million for the full year of 2022, an
increase of $18 million, primarily due to the acquisition of XIIDRA
and revenue growth across all segments, partially offset by foreign
exchange headwinds.
2024 Financial Outlook4
Bausch + Lomb provided guidance for the full year of 2024, as
follows.
As of Feb. 21, 2024
Full-year revenue
- $4.600 - $4.700 billion
- ~12% - 14% constant currency growth1
Full-year Adjusted EBITDA
(non-GAAP)1
Foreign exchange headwinds for the full
year
Other than with respect to GAAP revenue, the company only
provides guidance on a non-GAAP basis. The company does not provide
a reconciliation of forward-looking Adjusted EBITDA (non-GAAP)1 to
GAAP net income (loss) attributable to Bausch + Lomb Corporation or
of forward-looking constant currency revenue growth1 to reported
revenue growth, due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliations. These amounts may be material and, therefore,
could result in the projected GAAP measure or ratio being
materially different or less than the projected non-GAAP measure or
ratio. These statements represent forward-looking information and
may represent a financial outlook, and actual results may vary.
Please see the risks and assumptions referred to in the
Forward-looking Statements section of this news release.
Balance Sheet Highlights
- Bausch + Lomb’s cash, cash equivalents and restricted cash were
$334 million at Dec. 31, 2023
- Basic weighted average shares outstanding for the fourth
quarter of 2023 were 350.8 million, and diluted weighted average
shares outstanding for the fourth quarter of 2023 were 352.2
million5
- Basic weighted average shares outstanding for the full year of
2023 were 350.5 million, and diluted weighted average shares
outstanding for the full year of 2023 were 352 million5
Conference Call Details
Date:
Wednesday, Feb. 21, 2024
Time:
8:00 a.m. ET
Webcast:
https://www.webcaster4.com/Webcast/Page/2883/49630
Participant Event Dial-in:
+1 (888) 506-0062 (North America)
+1 (973) 528-0011 (International)
Participant Access Code:
181271
Replay Dial-in:
+1 (877) 481-4010 (North America)
+1 (919) 882-2331 (International)
Replay Passcode:
49630 (replay available until Mar. 6,
2024)
About Bausch + Lomb
Bausch + Lomb is dedicated to protecting and enhancing the gift
of sight for millions of people around the world – from birth
through every phase of life. Its comprehensive portfolio of
approximately 400 products includes contact lenses, lens care
products, eye care products, ophthalmic pharmaceuticals,
over-the-counter products and ophthalmic surgical devices and
instruments. Founded in 1853, Bausch + Lomb has a significant
global research and development, manufacturing and commercial
footprint with approximately 13,000 employees and a presence in
nearly 100 countries. Bausch + Lomb is headquartered in Vaughan,
Ontario with corporate offices in Bridgewater, New Jersey. For more
information, visit www.bausch.com and connect with us on X,
LinkedIn, Facebook and Instagram.
Forward-looking Statements
This news release contains forward-looking information and
statements within the meaning of applicable securities laws
(collectively, “forward-looking statements”), which may generally
be identified by the use of the words “anticipates,” “hopes,”
“expects,” “intends,” “plans,” “projects,” “predicts,” “forecasts,”
“should,” “could,” “would,” “may,” “might,” “will,” “strive,”
“believes,” “estimates,” “potential,” “target,” “guidance,”
“outlook,” or “continue” and positive and negative 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. Forward-looking
statements include statements regarding Bausch + Lomb’s future
prospects and performance, including the company’s 2024 full-year
guidance, and the company’s planned approach to cost management.
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 Bausch + Lomb’s filings with
the U.S. Securities and Exchange Commission (“SEC”) and the
Canadian Securities Administrators (the “CSA”) (including the
company’s Annual Report on Form 10-K for the year ended Dec. 31,
2023 (which is anticipated to be filed with the SEC and CSA on Feb.
21, 2024) and its most recent quarterly filings), which factors are
incorporated herein by reference. They also include, but are not
limited to, risks and uncertainties relating to the expected timing
of resolving the disruptions (including unfulfilled orders) caused
by the implementation of a system upgrade at our Lynchburg
distribution facility. They also include risks and uncertainties
respecting the proposed plan to spin off or separate Bausch + Lomb
from Bausch Health Companies Inc. (“BHC”), including the expected
benefits and costs of the spinoff transaction, the expected timing
of completion of the spinoff transaction and its terms (including
the expectation that the spinoff transaction will be completed
following the achievement of targeted net leverage ratios, subject
to receipt of applicable shareholder and other necessary
approvals), the ability to complete the spinoff transaction
considering the various conditions to the completion of the spinoff
transaction (some of which are outside the company’s and BHC’s
control, including conditions related to regulatory matters and
receipt of applicable shareholder and other approvals), the impact
of any potential sales of the company’s common shares by BHC, that
market or other conditions are no longer favorable to completing
the transaction, that applicable shareholder, stock exchange,
regulatory or other approval is not obtained on the terms or
timelines anticipated or at all, business disruption during the
pendency of or following the spinoff transaction, diversion of
management time on spinoff transaction-related issues, retention of
existing management team members, the reaction of customers and
other parties to the spinoff transaction, the structure of the
spinoff transaction and related distribution, the qualification of
the spinoff transaction as a tax-free transaction for Canadian
and/or U.S. federal income tax purposes (including whether or not
an advance ruling from the Canada Revenue Agency and/or the
Internal Revenue Service will be sought or obtained), the ability
of the company and BHC to satisfy the conditions required to
maintain the tax-free status of the spinoff transaction (some of
which are beyond their control), other potential tax or other
liabilities that may arise as a result of the spinoff transaction,
the potential dis-synergy costs resulting from the spinoff
transaction, the impact of the spinoff transaction on relationships
with customers, suppliers, employees and other business
counterparties, general economic conditions, conditions in the
markets the company is engaged in, behavior of customers, suppliers
and competitors, technological developments and legal and
regulatory rules affecting the company’s business. In particular,
the company can offer no assurance that any spinoff transaction
will occur at all, or that any spinoff transaction will occur on
the terms and timelines anticipated by the company and BHC. They
also include risks and uncertainties respecting the acquisition of
XIIDRA® and certain other ophthalmology assets, including the
company’s ability to effectively and efficiently integrate the
acquired business into its existing business; the effect of the
transaction on Bausch + Lomb’s ability to maintain relationships
with customers, suppliers and other business partners; risks
relating to potential diversion of management attention away from
Bausch + Lomb’s ongoing business operations; risks relating to
increased levels of debt as a result of debt incurred to finance
such transaction, including in regards to compliance with our debt
covenants; and risks that the company may not realize the expected
benefits of that transaction on a timely basis or at all. Finally,
they also include, but are not limited to, risks and uncertainties
caused by or relating to adverse economic conditions and other
macroeconomic factors, including inflation, slower growth or a
potential recession, which could adversely impact our revenue,
expenses and resulting margins, and economic factors over which we
have no control, including inflationary pressures as a result of
historically high domestic and global inflation and otherwise,
interest rates, foreign currency rates, and the positional effect
of such factors on revenue, expenses and resulting margins. In
addition, certain material factors and assumptions have been
applied in making these forward-looking statements, including,
without limitation, 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. In addition, management has also made certain
assumptions regarding our 2024 full-year guidance with respect to
expectations regarding base performance growth, expectations
regarding performance of certain of our key products (including
XIIDRA® and MIEBO®), currency impact, run-rate dis-synergies and
inflation, expectations regarding adjusted gross margin (non-GAAP),
adjusted SG&A expense (non-GAAP) and the company’s ability to
continue to manage such expense in the manner anticipated and the
anticipated timing and extent of the company’s R&D expense.
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 + Lomb 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.
Links provided in this news release are solely for information
purposes and do not constitute Bausch + Lomb affirming any
forward-looking statements contained in the linked content.
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 and ratios. Management
uses these non-GAAP measures and ratios as key metrics in the
evaluation of the company’s 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 and ratios are useful to investors in their
assessment of our operating performance and the valuation of the
company. In addition, these non-GAAP measures and ratios 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.
These measures and ratios do not have any standardized meaning
under GAAP and other companies may use similarly titled non-GAAP
financial measures and ratios that are calculated differently from
the way we calculate such measures and ratios. Accordingly, our
non-GAAP financial measures and ratios may not be comparable to
similar non-GAAP measures and ratios of other companies. We caution
investors not to place undue reliance on such non-GAAP measures and
ratios, but instead to consider them with the most directly
comparable GAAP measures and ratios. Non-GAAP financial measures
and ratios 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 financial
measures and ratios to the most directly comparable financial
measures and ratios calculated and presented in accordance with
GAAP are shown in the tables below.
Specific Non-GAAP Measures
EBITDA and Adjusted EBITDA
EBITDA (non-GAAP) is Net income (loss) attributable to Bausch +
Lomb Corporation (its most directly comparable U.S. GAAP financial
measure) adjusted for interest, income taxes, depreciation and
amortization. Adjusted EBITDA (non-GAAP) is EBITDA (non-GAAP)
further adjusted for the items described below. Management 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.
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) is Net income (loss) attributable to
Bausch + Lomb Corporation (its most directly comparable U.S. GAAP
financial measure) adjusted for interest expense, net, (benefit
from) provision for income taxes, depreciation and amortization and
further adjusted for the following items:
- Asset impairments: The company has
excluded the impact of impairments of finite-lived and
indefinite-lived intangible assets 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 impairments of intangible assets from measuring
the performance of the company and its business, the company
believes that it is important for investors to understand that
intangible assets contribute to revenue generation.
- Restructuring, integration and
transformation costs: The company has incurred restructuring
costs as it implemented certain strategies, which involved, among
other things, improvements to its infrastructure and operations,
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.
Additionally, with the completion of the Bausch + Lomb IPO, as the
company prepares for post-separation operations, the company is
launching certain transformation initiatives that will result in
certain changes to and investment in its organizational structure
and operations. These transformation initiatives arise outside of
the ordinary course of continuing operations and, as is the case
with the company’s restructuring efforts, costs associated with
these transformation initiatives are expected to fluctuate between
periods in amount, size and timing. These
out-of-the-ordinary-course charges include third-party advisory
costs, as well as certain compensation-related costs (including
costs associated with changes in our executive officers, such as
the severance costs associated with the departure of the company’s
former CEO and the costs associated with the appointment of the
company’s current CEO). Investors should understand that the
outcome of these transformation initiatives may result in future
restructuring actions and certain of these charges could recur. 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.
- Acquisition-related costs and adjustments
excluding amortization of intangible assets: The company has
excluded the impact of acquisition-related costs and fair value
inventory step-up resulting from acquisitions as the amounts and
frequency of such costs and adjustments are not consistent and are
significantly impacted by the timing and size of its acquisitions.
In addition, the company excludes 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 are not consistent and
are significantly impacted by the timing and size of the company’s
acquisitions, as well as the nature of the agreed-upon
consideration.
- Share-based compensation: The
company excludes 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.
- Separation costs and separation-related
costs: The company has excluded certain costs incurred in
connection with activities taken to: (i) separate the Bausch + Lomb
business from the remainder of BHC and (ii) register the Bausch +
Lomb business as an independent publicly traded entity. Separation
costs are incremental costs directly related to effectuating the
separation of the Bausch + Lomb business from the remainder of BHC
and include, but are not limited to, legal, audit and advisory
fees, talent acquisition costs and costs associated with
establishing a new Board of Directors and Audit Committee.
Separation-related costs are incremental costs indirectly related
to the separation of the Bausch + Lomb business from the remainder
of BHC and include, but are not limited to, IT infrastructure and
software licensing costs, rebranding costs and costs associated
with facility relocation and/or modification. As these costs arise
from events outside of the ordinary course of continuing
operations, 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.
- Other Non-GAAP adjustments: The
company also excludes certain other amounts, including IT
infrastructure investment, litigation and other matters,
gain/(loss) on sales of assets and certain other amounts that are
the result of other, non-comparable events to measure operating
performance if and when present in the periods presented. 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 routine
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 routine operating expenses.
The company has also excluded certain other costs, including
settlement costs associated with the conversion of a portion of the
company’s defined benefit plan in Ireland to a defined contribution
plan. The company excluded these costs as this event is outside of
the ordinary course of continuing operations and is infrequent in
nature. 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.
Adjusted Net Income (non-GAAP)
Adjusted net income (non-GAAP) is net income (loss) attributable
to Bausch + Lomb Corporation (its most directly comparable GAAP
financial measure) adjusted for asset impairments, restructuring,
integration and transformation costs, acquisition-related
contingent consideration, separation costs and separation-related
costs and other non-GAAP adjustments, as these adjustments are
described above, and further adjusted for amortization of
intangible assets and acquisition-related costs and adjustments
excluding amortization of intangible assets, as described
below:
- 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 the 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.
- Acquisition-related costs and adjustments
excluding amortization of intangible assets: In addition to
the acquisition-related costs and adjustments as described above,
the company has excluded the expense directly attributable to
one-time commitment and structuring fees related to a bridge loan
facility put in place prior to the acquisition of XIIDRA and
certain other ophthalmology assets. The company excluded these
costs as they are outside of the ordinary course of continuing
operations and are infrequent in nature. 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.
Adjusted net income (non-GAAP) excludes the impact of these
certain items that may obscure trends in the company’s underlying
performance. Management uses Adjusted net income (non-GAAP) for
strategic decision making, forecasting future results and
evaluating current performance. By disclosing this non-GAAP
measure, it is management’s intention to provide investors with a
meaningful, supplemental comparison of the company’s operating
results and trends for the periods presented. Management believes
that this measure is also useful to investors as such measure
allows investors to evaluate the company’s performance using the
same tools that management uses to evaluate past performance and
prospects for future performance. Accordingly, the company believes
that Adjusted net income (non-GAAP) is 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) attributable to Bausch + Lomb Corporation was
significantly lower than our Adjusted net income (non-GAAP).
Constant Currency
Constant currency change or constant currency revenue growth is
a change in GAAP revenue (its most directly comparable GAAP
financial measure) on a period-over-period basis adjusted for
changes in foreign currency exchange rates. The company uses
Constant Currency revenue (non-GAAP) and Constant Currency revenue
Growth (non-GAAP) to assess performance of its reportable segments,
and the company in total, without the impact of foreign currency
exchange fluctuations. The company believes that such measures are
useful to investors as they provide a supplemental period-to-period
comparison. 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 underlying business performance.
Constant currency impact is determined by comparing 2023 reported
amounts adjusted to exclude currency impact, calculated using 2022
monthly average exchange rates, to the actual 2022 reported
amounts.
Adjusted EPS (non-GAAP)
Adjusted earnings per share or Adjusted EPS (non-GAAP) is
calculated as Diluted income per share attributable to Bausch +
Lomb Corporation (“GAAP EPS”) (its most directly comparable GAAP
financial measure), adjusted for the per diluted share impact of
each adjustment made to reconcile Net income (loss) attributable to
Bausch + Lomb Corporation to Adjusted net income (non-GAAP) as
discussed above. Like Adjusted net income (non-GAAP), Adjusted EPS
(non-GAAP) excludes the impact of certain items that may obscure
trends in the company’s underlying performance on a per share
basis. By disclosing this non-GAAP measure, it is management’s
intention to provide investors with a meaningful, supplemental
comparison of the company’s results and trends for the periods
presented on a diluted share basis. Accordingly, the company
believes that Adjusted EPS (non-GAAP) is useful to investors in
their assessment of the company’s operating performance, the
valuation of the company and an investor’s return on investment. It
is also noted that, for the periods presented, our GAAP EPS was
significantly lower than our Adjusted EPS (non-GAAP).
____________________ 1 This is a non-GAAP measure or a non-GAAP
ratio. For further information on non-GAAP measures and non-GAAP
ratios, please refer to the “Non-GAAP Information” section of this
news release. Please also refer to tables at the end of this news
release for a reconciliation of this and other non-GAAP measures to
the most directly comparable GAAP measure. 2 Nearsightedness
(myopia) between -1 and -10 diopters (D) with astigmatism between 0
and -3 D. 3 Effective in the first quarter of 2023, certain
products historically included in the reported results of the
Pharmaceuticals segment are now included in the reported results of
the Vision Care segment and certain products included in the
reported results of the Vision Care segment are now included in the
reported results of the Pharmaceuticals segment. Management
believes these movements are necessary in order to better align
these products with the groupings of similar products. The net
impact of these product movements was not material to the periods
presented. Prior period presentations of segment revenues have been
conformed to the current segment reporting structure. 4 The
guidance in this news release is only effective as of the date
given, Feb. 21, 2024, and will not be updated or affirmed unless
and until the company publicly announces updated or affirmed
guidance. Distribution or reference of this news release following
Feb. 21, 2024, does not constitute the company reaffirming
guidance. See the “Forward-looking Statements” section for further
information. 5 Diluted weighted average shares includes the
dilutive impact of options, performance based restricted stock
units and restricted stock units, which are approximately 1,400,000
common shares for the 3 months ended December 31, 2023 and
approximately 1,500,000 common shares for the 12 months ended
December 31, 2023, and which are excluded when calculating GAAP
diluted loss per share because the effect of including the impact
would be anti-dilutive.
© 2024 Bausch + Lomb.
FINANCIAL TABLES FOLLOW
Bausch + Lomb Corporation
Table 1
Consolidated Statements of
Operations
For the Three and Twelve Months Ended
December 31, 2023 and 2022
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in millions, except per share
amounts)
2023
2022
2023
2022
Revenues
Product sales
$
1,168
$
991
$
4,131
$
3,746
Other revenues
5
5
15
22
1,173
996
4,146
3,768
Expenses
Cost of goods sold (excluding amortization
and impairments of intangible assets)
461
418
1,640
1,511
Cost of other revenues
—
2
2
8
Selling, general and administrative
483
386
1,736
1,478
Research and development
80
78
324
307
Amortization of intangible assets
80
56
240
244
Other expense, net
20
5
74
13
1,124
945
4,016
3,561
Operating income
49
51
130
207
Interest income
3
3
15
6
Interest expense
(99
)
(47
)
(283
)
(146
)
Foreign exchange and other
(10
)
(9
)
(28
)
6
(Loss) income before provision for
income taxes
(57
)
(2
)
(166
)
73
Benefit (provision) for income taxes
6
2
(82
)
(58
)
Net (loss) income
(51
)
—
(248
)
15
Net income attributable to noncontrolling
interest
(3
)
(1
)
(12
)
(9
)
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(54
)
$
(1
)
$
(260
)
$
6
Basic and diluted (loss) income per
share attributable to Bausch + Lomb Corporation
$
(0.15
)
$
—
$
(0.74
)
$
0.02
Basic weighted-average common
shares
350.8
350.0
350.5
350.0
Diluted weighted-average common
shares
350.8
350.0
350.5
350.2
Bausch + Lomb Corporation
Table 2
Reconciliation of GAAP Net (Loss)
Income and Diluted (Loss) Income per Share Attributable to Bausch +
Lomb Corporation to Adjusted Net Income (non-GAAP) and Adjusted
Earnings Per Share (non-GAAP)
For the Three and Twelve Months Ended
December 31, 2023 and 2022
(unaudited)
Three Months Ended December
31,
2023
2022
(in millions, except per share
amounts)
Income (Expense)
Earnings per Share Impact
(b)
Income (Expense)
Earnings per Share Impact
(b)
Net loss and Diluted loss per share
attributable to Bausch + Lomb Corporation
$
(54
)
$
(0.15
)
$
(1
)
$
—
Non-GAAP adjustments: (a)
Amortization of intangible assets
80
0.23
56
0.16
Restructuring, integration and
transformation costs
27
0.08
21
0.06
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
29
0.08
1
—
Separation costs and separation-related
costs
3
0.01
7
0.02
Other
4
0.01
1
—
Tax effect of non-GAAP adjustments
(6
)
(0.02
)
(5
)
(0.01
)
Total non-GAAP adjustments
137
0.39
81
0.23
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
83
$
0.24
$
80
$
0.23
Twelve Months Ended December
31,
2023
2022
(in millions, except per share
amounts)
Income (Expense)
Earnings per Share Impact
(b)
Income (Expense)
Earnings per Share Impact
(b)
Net (loss) income and Diluted (loss)
income per share attributable to
Bausch + Lomb Corporation
$
(260
)
$
(0.74
)
$
6
$
0.02
Non-GAAP adjustments: (a)
Amortization of intangible assets
240
0.68
244
0.70
Asset impairments
—
—
1
—
Restructuring, integration and
transformation costs
123
0.35
36
0.10
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
66
0.19
(4
)
(0.01
)
Separation costs and separation-related
costs
10
0.03
35
0.10
Other
9
0.03
7
0.02
Tax effect of non-GAAP adjustments
70
0.19
50
0.14
Total non-GAAP adjustments
518
1.47
369
1.05
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
258
$
0.73
$
375
$
1.07
(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.
(b)
On April 28, 2022, Bausch + Lomb effected
a share consolidation as a result of which it had 350,000,000
issued and outstanding common shares. These common shares are
treated as issued and outstanding at January 1, 2022 for purposes
of calculating Basic and diluted income per share attributable to
Bausch + Lomb Corporation.
Bausch + Lomb Corporation
Table 2a
Reconciliation of GAAP to Non-GAAP
Financial Information
For the Three and Twelve Months Ended
December 31, 2023 and 2022
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in millions)
2023
2022
2023
2022
Cost of goods sold
reconciliation:
GAAP Cost of goods sold (excluding
amortization and impairments of intangible assets)
$
461
$
418
$
1,640
$
1,511
Fair value inventory step-up resulting
from acquisitions (a)
(21
)
—
(23
)
—
Adjusted cost of goods sold (excluding
amortization and impairments of intangible assets) (non-GAAP)
$
440
$
418
$
1,617
$
1,511
Selling, general and administrative
reconciliation:
GAAP Selling, general and
administrative
$
483
$
386
$
1,736
$
1,478
Separation-related costs (b)
(2
)
(5
)
(7
)
(26
)
Transformation costs (c)
(16
)
(20
)
(80
)
(31
)
Other (d)
—
—
1
—
Adjusted selling, general and
administrative (non-GAAP)
$
465
$
361
$
1,650
$
1,421
Research and development
reconciliation:
GAAP Research and development
$
80
$
78
$
324
$
307
Separation-related costs (b)
(1
)
—
(2
)
—
Adjusted research and development
(non-GAAP)
$
79
$
78
$
322
$
307
Amortization of intangible assets
reconciliation:
GAAP Amortization of intangible assets
$
80
$
56
$
240
$
244
Amortization of intangible assets (e)
(80
)
(56
)
(240
)
(244
)
Adjusted amortization of intangible assets
(non-GAAP)
$
—
$
—
$
—
$
—
Other expense, net
reconciliation:
GAAP Other expense, net
$
20
$
5
$
74
$
13
Litigation and other matters (d)
(1
)
(1
)
(3
)
(1
)
Restructuring and integration costs
(c)
(11
)
(1
)
(43
)
(5
)
Asset impairments (f)
—
—
—
(1
)
Separation costs (b)
—
(2
)
(1
)
(9
)
Acquisition-related costs (a)
(6
)
(1
)
(25
)
(1
)
Acquisition-related contingent
consideration (a)
(2
)
—
(2
)
5
Adjusted other expense, net (non-GAAP)
$
—
$
—
$
—
$
1
Interest expense
reconciliation:
GAAP Interest expense
$
(99
)
$
(47
)
$
(283
)
$
(146
)
Acquisition-related financing costs
(a)
—
—
16
—
Adjusted interest expense (non-GAAP)
$
(99
)
$
(47
)
$
(267
)
$
(146
)
Foreign exchange and other
reconciliation:
GAAP Foreign exchange and other
$
(10
)
$
(9
)
$
(28
)
$
6
Other (d)
3
—
7
6
Adjusted foreign exchange and other
(non-GAAP)
$
(7
)
$
(9
)
$
(21
)
$
12
Provision for income taxes
reconciliation:
GAAP benefit (provision) for income
taxes
$
6
$
2
$
(82
)
$
(58
)
Tax effect of non-GAAP adjustments (g)
(6
)
(5
)
70
50
Adjusted provision for income taxes
(non-GAAP)
$
—
$
(3
)
$
(12
)
$
(8
)
(a)
Represents the four components of the
non-GAAP adjustment of “Acquisition-related costs and adjustments
(excluding amortization of intangible assets)” (see Table 2).
(b)
Represents the three components of the
non-GAAP adjustment of “Separation costs and separation-related
costs” (see Table 2).
(c)
Represents the two components of the
non-GAAP adjustment of “Restructuring, integration and
transformation costs” (see Table 2).
(d)
Represents the three components of the
non-GAAP adjustment of “Other” (see Table 2).
(e)
Represents the sole component of the
non-GAAP adjustment of “Amortization of intangible assets” (see
Table 2).
(f)
Represents the sole component of the
non-GAAP adjustment of “Asset impairments” (see Table 2).
(g)
Represents the sole component of the
non-GAAP adjustment of “Tax effect of non-GAAP adjustments” (see
Table 2).
Bausch + Lomb Corporation
Table 2b
Reconciliation of GAAP Net (Loss)
Income to Adjusted EBITDA (non-GAAP)
For the Three and Twelve Months Ended
December 31, 2023 and 2022
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(in millions)
2023
2022
2023
2022
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(54
)
$
(1
)
$
(260
)
$
6
Interest expense, net
96
44
268
140
(Benefit) provision for income taxes
(6
)
(2
)
82
58
Depreciation and amortization of
intangible assets
116
93
382
379
EBITDA
152
134
472
583
Adjustments:
Asset impairments
—
—
—
1
Restructuring, integration and
transformation costs
27
21
123
36
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
29
1
50
(4
)
Share-based compensation
16
17
74
62
Separation and Separation-related
costs
3
7
10
35
Other non-GAAP adjustments:
Other
4
1
9
7
Adjusted EBITDA (non-GAAP)
$
231
$
181
$
738
$
720
Bausch + Lomb Corporation
Table 3
Constant Currency Revenue (non-GAAP)
and Constant Currency Revenue Growth (non-GAAP) - by
Segment
For the Three and Twelve Months Ended
December 31, 2023 and 2022
(unaudited)
Calculation of Constant
Currency Revenue for the Three Months Ended
December 31, 2023
December 31, 2022
Change in Revenue as
Reported
Change in
Constant Currency Revenue
(Non-GAAP) (b)
Revenue
as
Reported
Changes in Exchange Rates
(a)
Constant Currency
Revenue
(Non-GAAP) (b)
Revenue
as
Reported
(in millions)
Amount
Pct.
Amount
Pct.
Vision Care (c)
$
662
$
13
$
675
$
624
$
38
6
%
$
51
8
%
Surgical
204
(3
)
201
188
16
9
%
13
7
%
Pharmaceuticals (c)
307
(1
)
306
184
123
67
%
122
66
%
Total revenues
$
1,173
$
9
$
1,182
$
996
$
177
18
%
$
186
19
%
Calculation of Constant
Currency Revenue for the Twelve Months Ended
December 31, 2023
December 31, 2022
Change in Revenue as
Reported
Change in
Constant Currency Revenue
(Non-GAAP) (b)
Revenue
as
Reported
Changes in Exchange Rates
(a)
Constant Currency
Revenue
(Non-GAAP) (b)
Revenue
as
Reported
(in millions)
Amount
Pct.
Amount
Pct.
Vision Care (c)
$
2,543
$
61
$
2,604
$
2,369
$
174
7
%
$
235
10
%
Surgical
767
1
768
718
49
7
%
50
7
%
Pharmaceuticals (c)
836
6
842
681
155
23
%
161
24
%
Total revenues
$
4,146
$
68
$
4,214
$
3,768
$
378
10
%
$
446
12
%
(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 and ratios. For additional information about the
Company’s use of such non-GAAP financial measures and ratios, refer
to the “Non-GAAP Information” section in the body of the news
release to which these tables are attached. Constant currency
revenue (non-GAAP) for the three and twelve months ended December
31, 2023 is calculated as revenue as reported adjusted for the
impact for changes in exchange rates (previously defined in this
news release). Change in constant currency revenue (non-GAAP) is
calculated as the difference between constant currency revenue for
the current period and revenue as reported for the comparative
period.
(c)
Effective in the first quarter of 2023,
certain products historically included in the reported results of
the Pharmaceuticals segment are now included in the reported
results of the Vision Care segment and certain products included in
the reported results of the Vision Care segment are now included in
the reported results of the Pharmaceuticals segment. Management
believes these movements are necessary in order to better align
these products with the groupings of similar products. The net
impact of these product movements was not material to the periods
presented. Prior period presentations of segment revenues have been
conformed to the current segment reporting structure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221799323/en/
Media: T.J. Crawford tj.crawford@bausch.com (908)
705-2851
Investor: George Gadkowski george.gadkowski@bausch.com
(877) 354-3705 (toll free) (908) 927-0735
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