- Revenues of $1.007 Billion
- GAAP Net Loss Attributable to Bausch + Lomb Corporation of
$84 Million
- Adjusted EBITDA (non-GAAP)1 of $187 Million
- Revenues Grew 7% as Reported and 8% on a Constant Currency1
Basis Compared to the Third Quarter of 2022, Driven by Growth in
the Vision Care and Surgical Segments
- Foreign Exchange Negatively Impacted Revenues and Adjusted
EBITDA (non-GAAP)1 by Approximately $10 Million and $14 Million,
Respectively
- Raises Full-Year Revenue and Adjusted EBITDA (non-GAAP)1
Guidance
Bausch + Lomb Corporation (NYSE/TSX: BLCO), a leading global eye
health company dedicated to helping people see better to live
better, today announced its third-quarter 2023 financial
results.
“We continue to grow revenue at or above market thanks to the
strength of established and emerging brands that cover the entire
spectrum of eye health,” said Brent Saunders, chairman and CEO,
Bausch + Lomb. “Our multi-year effort to rewire the company is
gaining traction as we methodically review and improve areas
critical to our success, with a focus on sales and supply
chain.”
Select Company Highlights
- Acquired XIIDRA® (lifitegrast ophthalmic solution) 5%, a
non-steroid eye drop specifically approved to treat the signs and
symptoms of dry eye disease (DED) focusing on inflammation
associated with dry eye, and certain other ophthalmology
assets
- Launched MIEBO™ (perfluorohexyloctane ophthalmic solution), for
the treatment of the signs and symptoms of DED in the United
States
- Launched LUMIFY EYE ILLUMINATIONS™ in the United States, a new
line of hypoallergenic specialty eye care products scientifically
developed to cleanse, nourish and brighten the sensitive eye
area
- Launched enVista® Aspire monofocal and toric intraocular lenses
with Intermediate Optimized optics in the United States
Third-Quarter 2023 Revenue Performance Total reported
revenues were $1.007 billion for the third quarter of 2023, as
compared to $942 million in the third quarter of 2022, an increase
of $65 million, or 7%. Excluding the unfavorable impact of foreign
exchange of $10 million, revenue increased by approximately 8% on a
constant currency1 basis compared to the third quarter of 2022.
Revenues by segment were as follows:
Third-Quarter 2023
(in millions)
Three Months Ended September
30
Reported Change
Reported Change
Change at Constant Currency1
(non-GAAP)
2023
2022
Total Bausch + Lomb Revenues
$1,007
$942
$65
7
%
8
%
Vision Care2
$648
$597
$51
9
%
11
%
Surgical
$185
$172
$13
8
%
6
%
Pharmaceuticals2
$174
$173
$1
1
%
1
%
Vision Care Segment2 Vision Care segment revenues were
$648 million for the third quarter of 2023, as compared to $597
million for the third quarter of 2022, an increase of $51 million,
or 9%. Excluding the unfavorable impact of foreign exchange of $13
million, segment revenues increased on a constant currency1 basis
by approximately 11% compared to the third quarter of 2022,
primarily due to higher sales of Lumify® and Eye Vitamins 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 a U.S. distribution facility that impacted our contact
lens business. We expect to substantially resolve the Lynchburg
implementation disruptions, and optimize the system upgrade, during
the first quarter of 2024.
Surgical Segment Surgical segment revenues were $185
million for the third quarter of 2023, as compared to $172 million
for the third quarter of 2022, an increase of $13 million, or 8%.
Excluding the favorable impact of foreign exchange of $3 million,
segment revenues increased on a constant currency1 basis by
approximately 6% compared to the third quarter of 2022, primarily
due to increased demand of consumables and equipment.
Pharmaceuticals Segment2 Pharmaceuticals segment revenues
were $174 million for the third quarter of 2023, as compared to
$173 million for the third quarter of 2022, an increase of $1
million, or 1%, on a reported and constant currency1 basis. The
increase compared to the third quarter of 2022 was primarily due to
higher sales of Vyzulta® and our International Pharmaceuticals
portfolio.
Operating Results Operating income was $40 million for
the third quarter of 2023, as compared to $46 million for the third
quarter of 2022, a decrease of $6 million. The change was largely
driven by an increase in Selling, general and administrative
expenses, driven by higher professional fees, primarily related to
Business Transformation Costs and higher selling, advertising and
promotion expenses due to product launches during the quarter,
primarily MIEBO.
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 third quarter of 2023 was $84 million, as
compared to $18 million for the third quarter of 2022, an
unfavorable change of $66 million. The change was primarily due to
operating results noted above as well as higher interest
expense.
Adjusted net income attributable to Bausch + Lomb Corporation
(non-GAAP)1 for the third quarter of 2023 was $76 million, as
compared to $107 million for the third quarter of 2022, a decrease
of $31 million.
Cash from Operations Cash flow from operations for the
third quarter of 2023 was $48 million, as compared to $27 million
for the third quarter of 2022, an increase of $21 million. Cash
flow from operations was positively impacted in the third quarter
of 2023 primarily by the timing of collections and payments in the
ordinary course of business, offset by a strategic increase in
inventories.
Earnings Per Share GAAP Earnings Per Share (“EPS”) Basic
and Diluted attributable to Bausch + Lomb Corporation for the third
quarter of 2023 was ($0.24), as compared to ($0.05) for the third
quarter of 2022. Adjusted EPS attributable to Bausch + Lomb
Corporation (non-GAAP)1 for the third quarter of 2023 was $0.22, as
compared to $0.31 for the third quarter of 2022.
Adjusted EBITDA (non-GAAP)1 Adjusted EBITDA
(non-GAAP)1 was $187 million for the third quarter of 2023, as
compared to $187 million for the third quarter of 2022.
2023 Financial Outlook3 Bausch + Lomb raised its revenue
and Adjusted EBITDA (non-GAAP)1 guidance for the full year of 2023,
as follows.
As of Aug. 2, 2023
As of Nov. 1, 2023
Full-year revenue
- $3.95 - $4.00 billion
- ~6.5 - 7.5% constant currency growth1
- $4.035 - $4.085 billion
- ~9.5 - 10.5% 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: -$85 million
- Adj. EBITDA (non-GAAP)1: -$55 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 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 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
$360 million at Sept. 30, 2023
- Completed an offering of $1.4 billion aggregate principal
amount of 8.375% senior secured notes due 2028 and borrowed $500
million of new term B loans under its new incremental term loan
facility, a portion of the proceeds from which were used to fund
the upfront payment for the acquisition of XIIDRA and certain other
ophthalmology assets and pay related acquisition and financing
costs
- Basic weighted average shares outstanding for the third quarter
of 2023 were 350.8 million, and diluted weighted average shares
outstanding for the third quarter of 2023 were 352.7 million4
Conference Call Details
Date:
Wednesday, Nov. 1, 2023
Time:
8:00 a.m. ET
Webcast:
https://www.webcaster4.com/Webcast/Page/2883/47447
Participant Event Dial-in:
+1 (888) 506-0062 (North America)
+1 (973) 528-0011 (International)
Participant Access Code:
632888
Replay Dial-in:
+1 (877) 481-4010 (North America)
+1 (919) 882-2331 (International)
Replay Passcode:
47447 (replay available until Nov. 15,
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, 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 expected timing of
resolving the Lynchburg implementation disruptions and optimizing
the system upgrade at that facility and other supply chain
initiatives. 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 market
conditions and 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. 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, management has also made certain
assumptions 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
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 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 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 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.
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).
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.
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 The guidance in this news release is
only effective as of the date given, Nov. 1, 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 Nov. 1, 2023, does not constitute the
company reaffirming guidance. See the “Forward-looking Statements”
section for further information.
4 Diluted weighted average shares includes
the dilutive impact of options, performance based restricted stock
units and restricted stock units, which are approximately 1,900,000
common shares for the 3 months ended September 30, 2023, and which
are excluded when calculating GAAP diluted loss per share because
the effect of including the impact would be anti-dilutive.
FINANCIAL TABLES FOLLOW
Bausch + Lomb Corporation
Table 1
Consolidated Statements of
Operations
For the Three and Nine Months Ended
September 30, 2023 and 2022
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in millions, except per share
amounts)
2023
2022
2023
2022
Revenues
Product sales
$
1,004
$
937
$
2,963
$
2,755
Other revenues
3
5
10
17
1,007
942
2,973
2,772
Expenses
Cost of goods sold (excluding amortization
and impairments of intangible assets)
391
370
1,179
1,093
Cost of other revenues
1
2
2
6
Selling, general and administrative
418
381
1,253
1,092
Research and development
82
77
244
229
Amortization of intangible assets
47
59
160
188
Other expense, net
28
7
54
8
967
896
2,892
2,616
Operating income
40
46
81
156
Interest income
4
2
12
3
Interest expense
(76
)
(35
)
(184
)
(99
)
Foreign exchange and other
(3
)
6
(18
)
15
(Loss) income before provision for
income taxes
(35
)
19
(109
)
75
Provision for income taxes
(45
)
(34
)
(88
)
(60
)
Net (loss) income
(80
)
(15
)
(197
)
15
Net income attributable to noncontrolling
interest
(4
)
(3
)
(9
)
(8
)
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(84
)
$
(18
)
$
(206
)
$
7
Basic and diluted (loss) income per
share attributable to Bausch + Lomb Corporation
$
(0.24
)
$
(0.05
)
$
(0.59
)
$
0.02
Basic weighted-average common
shares
350.8
350.0
350.4
350.0
Diluted weighted-average common
shares
350.8
350.0
350.4
350.1
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 Nine Months Ended
September 30, 2023 and 2022
(unaudited)
Three Months Ended September
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
$
(84
)
$
(0.24
)
$
(18
)
$
(0.05
)
Non-GAAP adjustments: (a)
Amortization of intangible assets
47
0.13
59
0.17
Asset impairments
—
—
1
—
Restructuring, integration and
transformation costs
34
0.10
11
0.03
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
33
0.09
—
—
Separation costs and separation-related
costs
2
0.01
15
0.04
Other
3
0.01
—
—
Tax effect of non-GAAP adjustments
41
0.12
39
0.12
Total non-GAAP adjustments
160
0.46
125
0.36
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
76
$
0.22
$
107
$
0.31
Nine Months Ended September
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
$
(206
)
$
(0.59
)
$
7
$
0.02
Non-GAAP adjustments: (a)
Amortization of intangible assets
160
0.45
188
0.54
Asset impairments
—
—
1
—
Restructuring, integration and
transformation costs
96
0.27
15
0.04
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
37
0.11
(5
)
(0.01
)
Separation costs and separation-related
costs
7
0.02
28
0.08
Other
5
0.02
6
0.02
Tax effect of non-GAAP adjustments
76
0.22
55
0.15
Total non-GAAP adjustments
381
1.09
288
0.82
Adjusted net income (non-GAAP) and
Adjusted earnings per
share (non-GAAP)
$
175
$
0.50
$
295
$
0.84
(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 Nine Months Ended
September 30, 2023 and 2022
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in millions)
2023
2022
2023
2022
Cost of goods sold
reconciliation:
GAAP Cost of goods sold (excluding
amortization and impairments of intangible assets)
$
391
$
370
$
1,179
$
1,093
Fair value inventory step-up resulting
from acquisitions (a)
(2
)
—
(2
)
—
Adjusted cost of goods sold (excluding
amortization and impairments of intangible assets) (non-GAAP)
$
389
$
370
$
1,177
$
1,093
Selling, general and administrative
reconciliation:
GAAP Selling, general and
administrative
$
418
$
381
$
1,253
$
1,092
Separation-related costs (b)
—
(11
)
(5
)
(21
)
Transformation costs (c)
(24
)
(10
)
(64
)
(11
)
Other (d)
2
—
1
—
Adjusted selling, general and
administrative (non-GAAP)
$
396
$
360
$
1,185
$
1,060
Research and development
reconciliation:
GAAP Research and development
$
82
$
77
$
244
$
229
Separation-related costs (b)
(1
)
—
(1
)
—
Adjusted research and development
(non-GAAP)
$
81
$
77
$
243
$
229
Amortization of intangible assets
reconciliation:
GAAP Amortization of intangible assets
$
47
$
59
$
160
$
188
Amortization of intangible assets (e)
(47
)
(59
)
(160
)
(188
)
Adjusted amortization of intangible assets
(non-GAAP)
$
—
$
—
$
—
$
—
Other expense (income), net
reconciliation:
GAAP Other expense (income), net
$
28
$
7
$
54
$
8
Litigation and other matters (d)
(2
)
—
(2
)
—
Restructuring and integration costs
(c)
(10
)
(1
)
(32
)
(4
)
Asset impairments (f)
—
(1
)
—
(1
)
Separation costs (b)
(1
)
(4
)
(1
)
(7
)
Acquisition-related contingent
consideration (a)
1
—
—
5
Acquisition-related costs (a)
(16
)
—
(19
)
—
Adjusted other expense, net (non-GAAP)
$
—
$
1
$
—
$
1
Interest expense
reconciliation:
GAAP Interest expense
$
(76
)
$
(35
)
$
(184
)
$
(99
)
Acquisition-related financing costs
(a)
16
—
16
—
Adjusted interest expense (non-GAAP)
$
(60
)
$
(35
)
$
(168
)
$
(99
)
Foreign exchange and other
reconciliation:
GAAP Foreign exchange and other
$
(3
)
$
6
$
(18
)
$
15
Other (d)
3
—
4
6
Adjusted foreign exchange and other
(non-GAAP)
$
—
$
6
$
(14
)
$
21
Provision for income taxes
reconciliation:
GAAP Provision for income taxes
$
(45
)
$
(34
)
$
(88
)
$
(60
)
Tax effect of non-GAAP adjustments (g)
41
39
76
55
Adjusted (provision) benefit for income
taxes (non-GAAP)
$
(4
)
$
5
$
(12
)
$
(5
)
(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 Nine Months Ended
September 30, 2023 and 2022
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in millions)
2023
2022
2023
2022
Net (loss) income attributable to
Bausch + Lomb Corporation
$
(84
)
$
(18
)
$
(206
)
$
7
Interest expense, net
72
33
172
96
Provision for income taxes
45
34
88
60
Depreciation and amortization of
intangible assets
82
93
266
286
EBITDA
115
142
320
449
Adjustments:
Asset impairments
—
1
—
1
Restructuring, integration and
transformation costs
34
11
96
15
Acquisition-related costs and adjustments
(excluding amortization of intangible assets)
17
—
21
(5
)
Share-based compensation
16
18
58
45
Separation costs and Separation-related
costs
2
15
7
28
Other non-GAAP adjustments:
Other
3
—
5
6
Adjusted EBITDA (non-GAAP)
$
187
$
187
$
507
$
539
Bausch + Lomb Corporation
Table 3
Constant Currency Revenue (non-GAAP)
and Constant Currency Revenue Growth (non-GAAP) - by
Segment
For the Three and Nine Months Ended
September 30, 2023 and 2022
(unaudited)
Calculation of Constant
Currency Revenue for the Three Months Ended
September 30, 2023
September 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)
$
648
$
13
$
661
$
597
$
51
9
%
$
64
11
%
Surgical
185
(3
)
182
172
13
8
%
10
6
%
Pharmaceuticals (c)
174
—
174
173
1
1
%
1
1
%
Total revenues
$
1,007
$
10
$
1,017
$
942
$
65
7
%
$
75
8
%
Calculation of Constant
Currency Revenue for the Nine Months Ended
September 30, 2023
September 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)
$
1,881
$
48
$
1,929
$
1,745
$
136
8
%
$
184
11
%
Surgical
563
4
567
530
33
6
%
37
7
%
Pharmaceuticals (c)
529
7
536
497
32
6
%
39
8
%
Total revenues
$
2,973
$
59
$
3,032
$
2,772
$
201
7
%
$
260
9
%
(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 nine months ended September
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/20231101538812/en/
Media Contact: T.J. Crawford tj.crawford@bausch.com (908)
705-2851 Investor Contact: George Gadkowski
george.gadkowski@bausch.com (877) 354-3705 (toll free) (908)
927-0735
Bausch plus Lomb (NYSE:BLCO)
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