Bausch + Lomb Announces Second-Quarter 2023 Results and Raises Full-Year 2023 Revenue Outlook
Bausch + Lomb Announces Second-Quarter 2023 Results and Raises Full-Year 2023 Revenue Outlook
- 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
VAUGHAN, Ontario–(BUSINESS WIRE)–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:
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Second-Quarter 2023 |
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(in millions) |
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Three Months Ended |
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Reported |
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Reported |
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Change at |
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2023 |
2022 |
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Total Bausch + Lomb Revenues |
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$1,035 |
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$941 |
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$94 |
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10% |
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12% |
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Vision Care2 |
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$646 |
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$588 |
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$58 |
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10% |
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12% |
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Surgical |
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$195 |
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$184 |
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$11 |
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6% |
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7% |
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Pharmaceuticals2,3 |
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$194 |
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$169 |
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$25 |
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15% |
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16% |
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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.
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As of May 3, 2023 |
As of Aug. 2, 2023 |
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Full-year revenue |
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Full-year Adjusted EBITDA (non-GAAP)1 |
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Foreign exchange headwinds for the full year |
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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
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Date: |
Wednesday, Aug. 2, 2023 |
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Time: |
8:00 a.m. ET |
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Webcast: |
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Participant Event Dial-in: |
+1 (888) 506-0062 (North America) +1 (973) 528-0011 (International) |
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Participant Access Code: |
360419 |
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Replay Dial-in: |
+1 (877) 481-4010 (North America) +1 (919) 882-2331 (International) |
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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.
Contacts
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