- Revenues of $1.035 Billion
- GAAP Net Loss Attributable to Bausch + Lomb Corporation of
$32 Million
- Adjusted EBITDA (non-GAAP)1 of $179 Million
- Revenues Grew 10% as Reported and 12% on a Constant
Currency1 Basis Compared to the Second Quarter of 2022, Driven by
Growth Across All Segments
- Foreign Exchange Negatively Impacted Revenues and Adjusted
EBITDA (non-GAAP)1 by Approximately $18 Million and $25 Million,
Respectively
- Raises Full-Year Revenue Outlook and Reaffirms Adjusted
EBITDA (non-GAAP)1 Guidance Range
Bausch + Lomb Corporation, (NYSE/TSX: BLCO), a leading global
eye health company dedicated to helping people see better to live
better, today announced its second-quarter 2023 financial
results.
“The second quarter was defined by performance and progress. We
delivered double-digit total revenue growth and executed across all
segments, despite ongoing supply chain issues,” said Brent
Saunders, chairman and CEO, Bausch + Lomb. “We also advanced our
ambitious plan to reshape Bausch + Lomb and realize the company’s
full potential.”
Select Company and Pipeline Highlights
- Received approval from the U.S. Food and Drug Administration
for MIEBO™ (perfluorohexyloctane ophthalmic solution), for the
treatment of the signs and symptoms of dry eye disease (DED)
- Launched Bausch + Lomb INFUSE® Multifocal silicone hydrogel
(SiHy) daily disposable contact lenses in the United States
- Entered into a definitive agreement to acquire XIIDRA®
(lifitegrast ophthalmic solution) 5%, a non-steroid eye drop
specifically approved to treat the signs and symptoms of DED
focusing on inflammation associated with dry eye, and certain
pipeline assets; the transaction is expected to close by the end of
2023 and is subject to the receipt of regulatory approval and other
customary closing conditions
- Acquired the Blink® product line of eye and contact lens
drops
- Launched Biotrue® Hydration Boost Contact Lens Rehydrating
drops in the United States
- Launched PreserVision® AREDS 2 Formula Soft Gels Plus CoQ10 in
the United States
- Introduced the SeeLuma™ Fully Digital Surgical Visualization
Platform in the United States and Western Europe in partnership
with Heidelberg Engineering
Second-Quarter 2023 Revenue Performance
Total reported revenues were $1.035 billion for the second
quarter of 2023, as compared to $941 million in the second quarter
of 2022, an increase of $94 million, or 10%. Excluding the
unfavorable impact of foreign exchange of $18 million, revenue
increased by approximately 12% on a constant currency1 basis
compared to the second quarter of 2022.
Revenues by segment were as follows:
Second-Quarter 2023
(in millions)
Three Months Ended June
30
Reported Change
Reported Change
Change at Constant Currency1
(non-GAAP)
2023
2022
Total Bausch + Lomb Revenues
$1,035
$941
$94
10%
12%
Vision Care2
$646
$588
$58
10%
12%
Surgical
$195
$184
$11
6%
7%
Pharmaceuticals2,3
$194
$169
$25
15%
16%
Vision Care Segment2
Vision Care segment revenues were $646 million for the second
quarter of 2023, as compared to $588 million for the second quarter
of 2022, an increase of $58 million, or 10%. Excluding the
unfavorable impact of foreign exchange of $15 million, segment
revenues increased on a constant currency1 basis by approximately
12% compared to the second quarter of 2022, primarily due to higher
sales of Ocuvite® + PreserVision, the Biotrue® solutions franchise,
the Artelac® franchise, LUMIFY® (brimonidine tartrate ophthalmic
solution 0.025%) and Bausch + Lomb INFUSE/ULTRA® ONE DAY daily
disposable silicone hydrogel contact lenses, partially offset by
disruptions incurred during the implementation of a system upgrade
at a U.S. distribution facility that impacted our contact lens
business.
Surgical Segment
Surgical segment revenues were $195 million for the second
quarter of 2023, as compared to $184 million for the second quarter
of 2022, an increase of $11 million, or 6%. Excluding the
unfavorable impact of foreign exchange of $1 million, segment
revenues increased on a constant currency1 basis by approximately
7% compared to the second quarter of 2022, primarily due to
increased sales of consumables and equipment.
Pharmaceuticals Segment2,3
Pharmaceuticals segment revenues were $194 million for the
second quarter of 2023, as compared to $169 million for the second
quarter of 2022, an increase of $25 million, or 15%. Excluding the
unfavorable impact of foreign exchange of $2 million, segment
revenues increased on a constant currency1 basis by approximately
16% compared to the second quarter of 2022, primarily due to higher
volumes in the U.S. generics businesses and the international
portfolio.
Operating Results
Operating results were prepared for a portion of the second
quarter of 2022 on a carve-out basis and do not include expenses we
are now incurring as a publicly traded company, such as interest
expense, taxes and standalone public company costs.
Operating income was $43 million for the second quarter of 2023,
as compared to operating income of $56 million for the second
quarter of 2022, a decrease of $13 million. The change was largely
driven by an increase in Selling, general and administrative
(“SG&A”) expenses, due to dis-synergy costs in the second
quarter of 2023 associated with the company becoming a stand-alone
entity (following its initial public offering (“IPO”) in May 2022)
and inflationary factors, mostly in freight and distribution; and
restructuring, integration and transformation costs. The change was
also driven by an increase in Cost of goods sold, primarily due to
higher volumes, supply shortages resulting in increased costs, and
the ramp-up of new manufacturing lines for Bausch + Lomb
INFUSE/ULTRA ONE DAY daily disposable silicone hydrogel contact
lenses.
The company is continuing to maintain a disciplined approach to
cost management and to leverage its infrastructure.
Net Loss/Income
Net income attributable to Bausch + Lomb Corporation was
prepared for a portion of the second quarter of 2022 on a carve-out
basis and does not include expenses we are now incurring as a
publicly traded company, such as interest expense, taxes and
standalone public company costs.
Net loss attributable to Bausch + Lomb Corporation for the
second quarter of 2023 was $32 million, as compared to a net income
attributable to Bausch + Lomb Corporation of $5 million for the
second quarter of 2022, a decrease of $37 million. The change was
primarily due to an increase in interest expense, foreign exchange
headwinds and the decrease in operating results noted above.
Adjusted net income (non-GAAP)1 for the second quarter of 2023
was $65 million, as compared to $103 million for the second quarter
of 2022, a decrease of $38 million.
Cash from Operations
Cash flow from operations was prepared for a portion of the
second quarter of 2022 on a carve-out basis and does not include
expenses we are now incurring as a publicly traded company, such as
interest expense, taxes and standalone public company costs.
Cash used in operations for the second quarter of 2023 was $24
million, as compared to cash flow from operations of $156 million
for the second quarter of 2022, a decrease of $180 million. Cash
flow from operations was negatively impacted in the second quarter
of 2023 primarily by an increase in Accounts Receivable driven by
the increase and timing of sales, strategic inventory build and
interest payments that were not incurred in the second quarter of
2022.
Earnings Per Share
GAAP Earnings Per Share (“EPS”) Basic and Diluted attributable
to Bausch + Lomb Corporation for the second quarter of 2023 was
($0.09), as compared to $0.01 for the second quarter of 2022.
Adjusted EPS (non-GAAP)1 for the second quarter of 2023 was $0.18,
as compared to $0.29 for the second quarter of 2022.
Adjusted EBITDA (non-GAAP)1
Adjusted EBITDA (non-GAAP)1 was prepared for a portion of the
second quarter of 2022 on a carve-out basis and does not include
expenses we are now incurring as a publicly traded company, such as
interest expense, taxes and standalone public company costs.
Adjusted EBITDA (non-GAAP)1 was $179 million for the second
quarter of 2023, as compared to $182 million for the second quarter
of 2022, a decrease of $3 million, primarily due to dis-synergies
and foreign exchange headwinds, partially offset by revenue growth
across all three segments.
2023 Financial Outlook4
Bausch + Lomb raised its revenue guidance for the full year of
2023 and reaffirmed its Adjusted EBITDA (non-GAAP)1 guidance for
the full year of 2023, as follows.
As of May 3, 2023
As of Aug. 2, 2023
Full-year revenue
- $3.90 - $3.95 billion
- 5 - 6% constant currency growth1
- $3.95 - $4.00 billion
- ~6.5 - 7.5% constant currency growth1
Full-year Adjusted EBITDA
(non-GAAP)1
Foreign exchange headwinds for the full
year
- Revenue: ~$50 million
- Adj. EBITDA (non-GAAP)1: ~$35 million
- Revenue: ~$50 million
- Adj. EBITDA (non-GAAP)1: ~$35 million
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)1 to
GAAP net income (loss) attributable to Bausch + Lomb Corporation,
of forward-looking Adjusted EBITDA (non-GAAP), adjusted for foreign
exchange headwinds1 to GAAP net income (loss) attributable to
Bausch + Lomb Corporation, of forward-looking constant currency
revenue growth1 to reported revenue growth or of revenue adjusted
for foreign exchange headwinds to GAAP revenue, 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 not 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
$392 million at June 30, 2023
- Basic weighted average shares outstanding for the second
quarter of 2023 were 350.5 million, and diluted weighted average
shares outstanding for the second quarter of 2023 were 352.1
million5
Conference Call Details
Date:
Wednesday, Aug. 2, 2023
Time:
8:00 a.m. ET
Webcast:
https://www.webcaster4.com/Webcast/Page/2883/47446
Participant Event Dial-in:
+1 (888) 506-0062 (North America)
+1 (973) 528-0011 (International)
Participant Access Code:
360419
Replay Dial-in:
+1 (877) 481-4010 (North America)
+1 (919) 882-2331 (International)
Replay Passcode:
47446 (replay available until Aug. 16,
2023)
About Bausch + Lomb
Bausch + Lomb is dedicated to protecting and enhancing the gift
of sight for millions of people around the world – from the moment
of birth through every phase of life. Its comprehensive portfolio
of more than 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 Twitter,
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 2023 full-year
guidance, details of the company’s product pipeline, the XIIDRA
acquisition and the anticipated timing of closing that transaction,
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,
2022 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 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 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 XIIDRA
acquisition, including uncertainties relating to the timing of the
consummation of that transaction; the possibility that any or all
of the conditions to the consummation of that transaction may not
be satisfied or waived, including failure to receive required
regulatory approvals; the effect of the announcement or pendency of
that 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;
the company’s ability to finance the transaction as anticipated and
risks relating to increased levels of debt as a result of debt
expected to be incurred to finance such transaction; and risks that
the company may not realize the expected benefits of that
transaction on a timely basis or at all. They also include, but are
not limited to, risks and uncertainties caused by or relating to
the evolving COVID-19 pandemic, including the potential effects and
economic and future impact of that pandemic. Finally, they also
include, but are not limited to, risks and uncertainties caused by
or relating to a potential recession and other adverse economic
conditions (such as inflation and slower growth), which could
adversely impact our revenues, 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
revenues, 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, certain
assumptions have been made regarding our 2023 full-year guidance
with respect to expectations regarding base performance growth,
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, Adjusted EBITDA and Adjusted
EBITDA, adjusted for currency headwinds
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 new 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
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 EBITDA, adjusted for foreign exchange headwinds is
Adjusted EBITDA (non-GAAP) further adjusted for the impact or the
anticipated impact of foreign exchange. The company uses this
non-GAAP measure as part of the guidance it provides to its
investors. Although changes due to foreign exchange movements are
part of our business, they are not within management’s control.
These changes, however, can mask positive or negative trends in the
underlying business performance. Accordingly, the company believes
the measure is useful to investors in assessing our performance.
For guidance purposes, the company has further adjusted Adjusted
EBITDA (non-GAAP) for the anticipated impact of foreign exchange
for full-year 2023.
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, 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.
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; Revenue adjusted for
foreign exchange headwinds
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 revenues (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. For guidance purposes, the company also provides revenue,
adjusted for foreign exchange headwinds (GAAP revenue being the
most directly comparable GAAP financial measures), which is
adjusted for the anticipated impact of foreign exchange for
full-year 2023.
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 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.
3 Effective as of the second quarter of
2023, the company changed the name of the segment from “Ophthalmic
Pharmaceuticals” to “Pharmaceuticals”. Aside from the change in
name, there were no other changes to the segment itself as a
result.
4 The guidance in this news release is
only effective as of the date given, Aug. 2, 2023, 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 Aug. 2, 2023, 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 1,600,000
common shares for the 3 months ended June 30, 2023, and which are
excluded when calculating GAAP diluted loss per share because the
effect of including the impact would be anti-dilutive.
Unless otherwise indicated, ®/™ are trademarks of Bausch + Lomb
Corporation or its affiliates.
Any other product/brand names are trademarks of the respective
owners.
© 2023 Bausch + Lomb.
FINANCIAL TABLES FOLLOW
Bausch + Lomb Corporation
Table 1
Consolidated Statements of
Operations
For the Three and Six Months Ended June
30, 2023 and 2022
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions, except per share
amounts)
2023
2022
2023
2022
Revenues
Product sales
$
1,031
$
935
$
1,959
$
1,818
Other revenues
4
6
7
12
1,035
941
1,966
1,830
Expenses
Cost of goods sold (excluding amortization
and impairments of intangible assets)
417
377
788
723
Cost of other revenues
—
2
1
4
Selling, general and administrative
417
368
835
711
Research and development
85
75
162
152
Amortization of intangible assets
56
64
113
129
Other expense (income), net
17
(1
)
26
1
992
885
1,925
1,720
Operating income
43
56
41
110
Interest income
5
1
8
1
Interest expense
(58
)
(44
)
(108
)
(64
)
Foreign exchange and other
(9
)
14
(15
)
9
(Loss) income before provision for
income taxes
(19
)
27
(74
)
56
Provision for income taxes
(10
)
(20
)
(43
)
(26
)
Net (loss) income
(29
)
7
(117
)
30
Net income attributable to noncontrolling
interest
(3
)
(2
)
(5
)
(5
)
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(32
)
$
5
$
(122
)
$
25
Basic and diluted (loss) income per
share attributable to Bausch + Lomb Corporation
$
(0.09
)
$
0.01
$
(0.35
)
$
0.07
Basic and diluted weighted-average
common shares
350
350
350
350
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 Six Months Ended June
30, 2023 and 2022
(unaudited)
Three Months Ended June
30,
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
$
(32
)
$
(0.09
)
$
5
$
0.01
Non-GAAP adjustments: (a)
Amortization of intangible assets
56
0.16
64
0.18
Restructuring, integration and
transformation costs
30
0.09
1
—
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
3
0.01
(5
)
(0.01
)
Separation costs and separation-related
costs
2
—
9
0.03
Other
2
—
—
—
Tax effect of non-GAAP adjustments
4
0.01
29
0.08
Total non-GAAP adjustments
97
0.27
98
0.28
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
65
$
0.18
$
103
$
0.29
Six Months Ended June
30,
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
$
(122
)
$
(0.35
)
$
25
$
0.07
Non-GAAP adjustments: (a)
Amortization of intangible assets
113
0.32
129
0.37
Restructuring, integration and
transformation costs
62
0.18
4
0.01
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
4
0.01
(5
)
(0.01
)
Separation costs and separation-related
costs
5
0.01
13
0.04
Other
2
0.01
6
0.02
Tax effect of non-GAAP adjustments
35
0.10
16
0.04
Total non-GAAP adjustments
221
0.63
163
0.47
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
99
$
0.28
$
188
$
0.54
(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 Six Months Ended June
30, 2023 and 2022
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2023
2022
2023
2022
Selling, general and administrative
reconciliation:
GAAP Selling, general and
administrative
$
417
$
368
$
835
$
711
Separation-related costs (a)
(2
)
(6
)
(5
)
(10
)
Transformation costs (b)
(16
)
—
(40
)
(1
)
Other (c)
(1
)
—
(1
)
—
Adjusted selling, general and
administrative (non-GAAP)
$
398
$
362
$
789
$
700
Amortization of intangible assets
reconciliation:
GAAP Amortization of intangible assets
$
56
$
64
$
113
$
129
Amortization of intangible assets (d)
(56
)
(64
)
(113
)
(129
)
Adjusted amortization of intangible assets
(non-GAAP)
$
—
$
—
$
—
$
—
Other expense (income), net
reconciliation:
GAAP Other expense (income), net
$
17
$
(1
)
$
26
$
1
Restructuring and integration costs
(b)
(14
)
(1
)
(22
)
(3
)
Separation costs (a)
—
(3
)
—
(3
)
Acquisition-related contingent
consideration (e)
(1
)
5
(1
)
5
Acquisition-related costs (e)
(2
)
—
(3
)
—
Adjusted other expense, net (non-GAAP)
$
—
$
—
$
—
$
—
Foreign exchange and other
reconciliation:
GAAP Foreign exchange and other
$
(9
)
$
14
$
(15
)
$
9
Other (c)
1
—
1
6
Adjusted foreign exchange and other
(non-GAAP)
$
(8
)
$
14
$
(14
)
$
15
Provision for income taxes
reconciliation:
GAAP Provision for income taxes
$
(10
)
$
(20
)
$
(43
)
$
(26
)
Tax effect of non-GAAP adjustments (f)
4
29
35
16
Adjusted (provision) benefit for income
taxes (non-GAAP)
$
(6
)
$
9
$
(8
)
$
(10
)
(a)
Represents the two components of the
non-GAAP adjustment of “Separation costs and separation-related
costs” (see Table 2).
(b)
Represents the two components of the
non-GAAP adjustment of “Restructuring, integration and
transformation costs” (see Table 2).
(c)
Represents the two components of the
non-GAAP adjustment of “Other” (see Table 2).
(d)
Represents the sole component of the
non-GAAP adjustment of “Amortization of intangible assets” (see
Table 2).
(e)
Represents the two components of the
non-GAAP adjustment of “Acquisition-related costs and adjustments
(excluding amortization of intangible assets)” (see Table 2).
(f)
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 Six Months Ended June
30, 2023 and 2022
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
(in millions)
2023
2022
2023
2022
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(32
)
$
5
$
(122
)
$
25
Interest expense, net
53
43
100
63
Provision for income taxes
10
20
43
26
Depreciation and amortization of
intangible assets
93
98
184
193
EBITDA
124
166
205
307
Adjustments:
Restructuring, integration and
transformation costs
30
1
62
4
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
3
(5
)
4
(5
)
Share-based compensation
18
11
42
27
Separation costs and Separation-related
costs
2
9
5
13
Other non-GAAP adjustments:
Other
2
—
2
6
Adjusted EBITDA (non-GAAP)
$
179
$
182
$
320
$
352
Bausch + Lomb Corporation
Table 3
Constant Currency Revenue (non-GAAP)
and Constant Currency Revenue Growth (non-GAAP) - by
Segment
For the Three and Six Months Ended June
30, 2023 and 2022
(unaudited)
Calculation of Constant
Currency Revenue for the Three Months Ended
June 30, 2023
June 30, 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)
$
646
$
15
$
661
$
588
$
58
10
%
$
73
12
%
Surgical
195
1
196
184
11
6
%
12
7
%
Pharmaceuticals (c)
194
2
196
169
25
15
%
27
16
%
Total revenues
$
1,035
$
18
$
1,053
$
941
$
94
10
%
$
112
12
%
Calculation of Constant
Currency Revenue for the Six Months Ended
June 30, 2023
June 30, 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)
$
1,233
$
35
$
1,268
$
1,148
$
85
7
%
$
120
10
%
Surgical
378
7
385
358
20
6
%
27
8
%
Pharmaceuticals (c)
355
7
362
324
31
10
%
38
12
%
Total revenues
$
1,966
$
49
$
2,015
$
1,830
$
136
7
%
$
185
10
%
(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 six months ended June 30, 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/20230802431864/en/
Investor Contacts: George Gadkowski
george.gadkowski@bausch.com
Allison Ryan allison.ryan@bausch.com (877) 354-3705 (toll free)
(908) 927-0735
Media Contacts: T.J. Crawford tj.crawford@bausch.com
(908) 705-2851
Lainie Keller lainie.keller@bausch.com (908) 927-1198
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