Bausch + Lomb Announces Fourth-Quarter and Full-Year 2022 Results

Fourth-Quarter 2022 Financial Results

Revenues of $996 Million

GAAP Net Loss Attributable to Bausch + Lomb Corporation of $1 Million

Adjusted EBITDA (non-GAAP)1 of $181 Million

GAAP Cash Flow from Operations of $159 Million

Reported Revenues Were in Line with Fourth-Quarter 2021 Reported Revenues, and Organic Revenues1,2 Grew 5%, Driven by Organic Growth1,2 Across All Segments

Full-Year 2022 Financial Results

Revenues of $3.768 Billion

GAAP Net Income Attributable to Bausch + Lomb Corporation of $6 Million

Adjusted EBITDA (non-GAAP)1 of $720 Million

GAAP Cash Flow from Operations of $345 Million

Reported Revenues Were in Line with Full-Year 2021 Reported Revenues, and Organic Revenues1,2 Grew 5%, Driven by Organic Growth1,2 in the Vision Care and Surgical Segments

Fourth Quarter and Full-Year 2022 Revenues and Adjusted EBITDA (non-GAAP)1 Were Negatively Impacted by Foreign Exchange

VAUGHAN, Ontario–(BUSINESS WIRE)–Bausch + Lomb Corporation, (NYSE/TSX: BLCO) (“Bausch + Lomb” or the “Company”, “we” or “our”), a leading global eye health company dedicated to helping people see better to live better, today announced its fourth-quarter and full-year 2022 financial results.

“Bausch + Lomb delivered another year of strong performance in 2022, growing the business organically1,2 at a mid-single-digit rate. Additionally, the fourth quarter marked our seventh consecutive quarter of organic growth1,2, with all three segments growing organically1,2,” said Joseph C. Papa, CEO, Bausch + Lomb. “Substantial progress was made in 2022 to complete our full separation from Bausch Health, and due to the dedication and unwavering focus of our employees, I am confident Bausch + Lomb is well-positioned for success as a stand-alone pure-play eye health company.”

“I’m very excited for the future of Bausch + Lomb with Brent Saunders as the incoming CEO and chair of the Board of Directors. I have known Brent for a long time, and with his long and esteemed track record in the health care industry, he has the right skills and experience to lead Bausch + Lomb at this critical time in our Company’s history,” continued Mr. Papa.

Brent Saunders Will Serve as CEO and Chair of the Board of Directors, Effective March 6, 2023

On Feb. 15, 2023, the Company announced the appointment of Brent Saunders as CEO and chair of the Board of Directors (“Board”), effective March 6, 2023. Concurrent with this appointment, and as previously announced, Joseph C. Papa will step down from his roles as CEO and director. Additionally, effective upon Mr. Saunders’ appointment as chair of the Board, Thomas W. Ross, Sr. will become the Lead Independent Director of the Board. To facilitate an orderly transition, Mr. Saunders joined Bausch + Lomb on Feb. 16, 2023, in an advisory capacity, where he is working closely with Mr. Papa.

Select Company and Pipeline Highlights

Launched and introduced multiple products across our core segments, including:

XIPERE®3 (triamcinolone acetonide injectable suspension), a therapy that uses the suprachoroidal space to treat patients suffering from macular edema associated with uveitis, in the United States; XIPERE® has also been filed for regulatory approval in Canada

Biotrue® Hydration Plus Multi-Purpose Solution in the United States

Revive™ custom soft contact lenses in the United States

Enhanced Ocuvite® Adult 50+ eye vitamins with 30 micrograms of vitamin D in the United States

Project Watson™ health care products for dogs in the United States

PreserVision® AREDS 2 Formula mini soft gels with OCUSorb™ in the United States

The U.S. Food and Drug Administration (FDA) accepted the New Drug Application for NOV034 (perfluorohexyloctane), an investigational treatment with a proposed indication of treating the signs and symptoms of dry eye disease associated with Meibomian gland dysfunction

Results from the first of two pivotal Phase 3 trials were published in Ophthalmology

Received 510(k) clearance from the FDA for Biotrue® Hydration Boost Contact Lens Rehydrating Drops

Enrolled first patient in a study evaluating the safety and efficacy of the Technolas® TENEO™ excimer laser in the United States for laser-assisted in situ keratomileusis (LASIK) vision correction surgery for hyperopia with astigmatism5

Completed six business development transactions since the Company’s initial public offering (“IPO”) in May 2022 to enhance our pipeline and commercial offerings, including, but not limited to:

Acquired AcuFocus, Inc., whose IC-8® Apthera™ intraocular lens (“IOL”) was approved by the FDA as the first and only small aperture non-toric extended depth of focus IOL for certain cataract patients who have as much as 1.5 diopters of corneal astigmatism and wish to address presbyopia at the same time

Entered into strategic agreements with Sanoculis designed to address unmet needs in glaucoma, including an equity investment in Sanoculis, an exclusive European distribution agreement for Sanoculis’ Minimally Invasive Micro Sclerostomy (“MIMS®”), which is an innovative minimally invasive surgical procedure for the treatment of glaucoma, and an option agreement to purchase all of the assets of Sanoculis

Entered into an exclusive distribution agreement with Alfa Instruments s.r.l., under which Bausch + Lomb is distributing and commercializing Alfa Instruments’ line of surgical intraocular dyes, Vitreocare, globally with the exception of Italy, where Alfa Instruments is based

Continued geo-expansion for several products, including:

Bausch + Lomb INFUSE®/ULTRA® ONE DAY daily disposable silicone hydrogel contact lenses, which are now available in approximately 25 countries

LUMIFY® (brimonidine tartrate ophthalmic solution 0.025%), which is now approved in 6 countries. LUMIFY® was successfully launched in Canada in 2022, and the Company recently acquired the rights to market LUMIFY® in 18 additional countries

VYZULTA® (latanoprostene bunod ophthalmic solution), 0.024%, which has launched in 15 countries

Fourth-Quarter and Full-Year 2022 Revenue Performance

Total reported revenues were $996 million for the fourth quarter of 2022, as compared to $1.001 billion in the fourth quarter of 2021, a decrease of $5 million. Excluding the unfavorable impact of foreign exchange of $54 million and the impact of divestitures and discontinuations of $3 million, revenue increased organically1,2 by approximately 5% compared to the fourth quarter of 2021.

Total reported revenues were $3.768 billion for the full year of 2022, as compared to $3.765 billion in the full year of 2021, an increase of $3 million. Excluding the unfavorable impact of foreign exchange of $184 million and the impact of divestitures and discontinuations of $10 million, revenue increased organically1,2 by approximately 5% compared to 2021.

Revenues by segment were as follows:

Fourth-Quarter 2022

(in millions)

 

Three Months Ended

Dec. 31

 

Reported

Change

 

Reported

Change

 

Change at

Constant

Currency1,6

 

Organic

Change1,2

 

2022

2021

(non-GAAP)

(non-GAAP)

Total Bausch + Lomb Revenues

 

$996

 

$1,001

 

($5)

 

0%

 

5%

 

5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Care

 

$626

 

$626

 

$0

 

0%

 

5%

 

5%

 

Surgical

 

$188

 

$198

 

($10)

 

(5%)

 

2%

 

4%

 

Ophthalmic Pharmaceuticals

 

$182

 

$177

 

$5

 

3%

 

7%

 

7%

 

Full-Year 2022

(in millions)

 

Twelve Months Ended

Dec. 31

 

Reported

Change

 

Reported

Change

 

Change at

Constant

Currency1,6

 

 

Organic

Change1,2

 

2022

2021

(non-GAAP)

(non-GAAP)

Total Bausch + Lomb Revenues

 

$3,768

 

$3,765

 

$3

 

0%

 

5%

 

5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Care

 

$2,373

 

$2,343

 

$30

 

1%

 

6%

 

6%

 

Surgical

 

$718

 

$718

 

$0

 

0%

 

6%

 

8%

 

Ophthalmic Pharmaceuticals

 

$677

 

$704

 

($27)

 

(4%)

 

0%

 

0%

 

Vision Care Segment

Vision Care segment revenues were $626 million for the fourth quarter of 2022, which was in line with revenues for the fourth quarter of 2021. Excluding the unfavorable impact of foreign exchange of $32 million, segment revenues increased organically1,2 by approximately 5% compared to the fourth quarter of 2021, primarily due to higher sales of Ocuvite® + PreserVision®, Bausch + Lomb INFUSE®/ULTRA® ONE DAY daily disposable silicone hydrogel contact lenses, LUMIFY® (brimonidine tartrate ophthalmic solution 0.025%) and the Artelac® franchise.

Vision Care segment revenues were $2.373 billion for the full year of 2022, as compared to $2.343 billion for the full year of 2021, an increase of $30 million, or 1%. Excluding the unfavorable impact of foreign exchange of $114 million, segment revenues increased organically1,2 by approximately 6% compared to the full year of 2021, primarily due to higher sales of Ocuvite® + PreserVision® and LUMIFY® (brimonidine tartrate ophthalmic solution 0.025%), as well as the ongoing launches of Bausch + Lomb INFUSE®/ULTRA® ONE DAY daily disposable silicone hydrogel contact lenses in markets around the world, partially offset by decreased sales in China due to the impact of the COVID-19 pandemic.

Surgical Segment

Surgical segment revenues were $188 million for the fourth quarter of 2022, as compared to $198 million for the fourth quarter of 2021, a decrease of $10 million, or 5%. Excluding the unfavorable impact of foreign exchange of $14 million and divestitures and discontinuations of $3 million, segment revenues increased organically1,2 by approximately 4% compared to the fourth quarter of 2021, primarily due to increased sales of intraocular lenses.

Surgical segment revenues were $718 million for the full year of 2022, which was in line with revenues for the full year of 2021. Excluding the unfavorable impact of foreign exchange of $44 million and divestitures and discontinuations of $10 million, segment revenues increased organically1,2 by approximately 8% compared to the full year of 2021, primarily due to increased sales of consumables and intraocular lenses.

Ophthalmic Pharmaceuticals Segment

Ophthalmic Pharmaceuticals segment revenues were $182 million for the fourth quarter of 2022, as compared to $177 million for the fourth quarter of 2021, an increase of $5 million, or 3%. Excluding the unfavorable impact of foreign exchange of $8 million, segment revenues increased organically1,2 by approximately 7% compared to the fourth quarter of 2021, primarily due to higher revenues in the U.S. portfolio, including VYZULTA® (latanoprostene bunod ophthalmic solution), 0.024%.

Ophthalmic Pharmaceuticals segment revenues were $677 million for the full year of 2022, as compared to $704 million for the full year of 2021, a decrease of $27 million, or 4%. Excluding the unfavorable impact of foreign exchange of $26 million, segment revenues were flat organically1,2 compared to the full year of 2021, primarily due to continued loss of exclusivity in the U.S. portfolio, partially offset by higher global revenues of VYZULTA® (latanoprostene bunod ophthalmic solution), 0.024%, which grew 31% compared to the full year of 2021.

Operating Results

Operating results in the fourth quarter and full year of 2021 were prepared on a carve-out basis and do not include expenses we are now incurring as a publicly traded company, such as interest expense and certain standalone public company costs.

Operating income was $51 million for the fourth quarter of 2022, as compared to $92 million for the fourth quarter of 2021, a decrease of $41 million. Operating income was $207 million for the full year of 2022, as compared to $329 million for the full year of 2021, a decrease of $122 million.

For both the fourth quarter and full year of 2022, the changes in operating income were largely driven by an increase in Cost of goods sold (COGS) due to the ramp-up of new manufacturing lines for Bausch + Lomb INFUSE®/ULTRA® ONE DAY daily disposable silicone hydrogel contact lenses and Selling, general and administrative (SG&A) expenses, due to restructuring, integration and transformation costs, as well as separation-related costs and dis-synergy costs associated with the Company becoming a stand-alone entity following its IPO in May 2022. Additionally, both COGS and SG&A expenses faced inflationary headwinds throughout the year, and the Company made incremental investments in R&D to expedite portfolio management. The Company is continuing to maintain a disciplined approach to cost management and to leverage its infrastructure.

Net Income/Loss

Net income attributable to Bausch + Lomb Corporation in the fourth quarter and full year of 2021 was prepared on a carve-out basis and does not include expenses we are now incurring as a publicly traded company, such as interest expense and certain standalone public company costs.

Net loss attributable to Bausch + Lomb Corporation for the fourth quarter of 2022 was $1 million, as compared to a net income attributable to Bausch + Lomb Corporation of $51 million for the fourth quarter of 2021, a decrease of $52 million. Net income attributable to Bausch + Lomb Corporation for the full year of 2022 was $6 million, as compared to a net income attributable to Bausch + Lomb Corporation of $182 million for the full year of 2021, a decrease of $176 million.

For both the fourth quarter and full year of 2022, the changes were largely due to an increase in interest expense and the decrease in operating results noted above, partially offset by a favorable change in the Provision for income taxes.

Adjusted net income (non-GAAP)1 for the fourth quarter of 2022 was $80 million, as compared to $121 million for the fourth quarter of 2021, a decrease of $41 million.

Adjusted net income (non-GAAP)1 for the full year of 2022 was $375 million, as compared to $454 million for the full year of 2021, a decrease of $79 million.

Cash Flow from Operations

Cash flow from operations in the fourth quarter and full year of 2021 was prepared on a carve-out basis and does not include expenses we are now incurring as a publicly traded company, such as interest expense and certain standalone public company costs.

Cash flow from operations for the fourth quarter of 2022 was $159 million, as compared to $162 million for the fourth quarter of 2021, a decrease of $3 million.

Cash flow from operations for the full year of 2022 was $345 million, as compared to $873 million for the full year of 2021, a decrease of $528 million. Cash flow from operations was negatively impacted in the full year of 2022 by the decrease in our operating results noted above, change in deferred income taxes and the change in our operating assets and liabilities driven by a strategic build in inventory.

Earnings Per Share

GAAP Earnings Per Share (“EPS”) and Adjusted EPS (non-GAAP)1 for the fourth quarter and full year of 2021 has been calculated on a pro forma basis after giving effect to the Company’s IPO.

GAAP EPS Basic and Diluted attributable to Bausch + Lomb Corporation for the fourth quarter of 2022 was $0.00, as compared to $0.15 for the fourth quarter of 2021. Adjusted EPS (non-GAAP)1 for the fourth quarter of 2022 was $0.23, as compared to $0.35 for the fourth quarter of 2021.

GAAP EPS Basic and Diluted attributable to Bausch + Lomb Corporation for the full year of 2022 was $0.02, as compared to $0.52 for the full year of 2021. Adjusted EPS (non-GAAP)1 for the full year of 2022 was $1.07, as compared to $1.30 for the full year of 2021.

Adjusted EBITDA (non-GAAP)1

Adjusted EBITDA (non-GAAP)1 in the fourth quarter and full year of 2021 was prepared on a carve-out basis and does not include certain standalone public company costs.

Adjusted EBITDA (non-GAAP)1 was $181 million for the fourth quarter of 2022, as compared to $216 million for the fourth quarter of 2021, a decrease of $35 million, primarily due to foreign exchange headwinds and R&D investment, partially offset by organic revenue growth1,2 across all segments.

Adjusted EBITDA (non-GAAP)1 was $720 million for the full year of 2022, as compared to $821 million for the full year of 2021, a decrease of $101 million, primarily due to foreign exchange headwinds, increases in COGS and SG&A driven by inflation and dis-synergies, and R&D investment, as noted above, partially offset by organic revenue growth1,2 in the Vision Care and Surgical segments.

2023 Financial Outlook

Bausch + Lomb will provide expectations on its first-quarter 2023 outlook during the call today at 8 a.m. ET; however, given the appointment of Mr. Saunders as CEO and chair of the Board, effective March 6, 2023, the Company will provide full guidance for 2023 when it provides first-quarter 2023 results.

Balance Sheet Highlights

Bausch + Lomb’s cash, cash equivalents and restricted cash were $380 million at Dec. 31, 2022

Basic weighted average shares outstanding for the fourth quarter of 2022 were 350 million, and diluted weighted average shares outstanding for the fourth quarter of 2022 were 350.5 million

Basic weighted average shares outstanding for the full year of 2022 were 350 million, and diluted weighted average shares outstanding for the full year of 2022 were 350.2 million

Conference Call Details

Date:

Wednesday, Feb. 22, 2023

Time:

8:00 a.m. ET

Webcast:

https://www.webcaster4.com/Webcast/Page/2883/47443

Participant Event Dial-in:

+1 (888) 506-0062 (North America)

+1 (973) 528-0011 (International)

Participant Access Code:

681651

Replay Dial-in:

+1 (877) 481-4010 (North America)

+1 (919) 882-2331 (International)

Replay Passcode:

47443 (replay available until March 8, 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,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” 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 anticipated spinoff of Bausch + Lomb from Bausch Health Companies Inc. (“BHC”) and the timing thereof, details of the Company’s product pipeline and the timing on which the Company will provide its 2023 guidance. These forward-looking statements 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 to be filed with the SEC on Feb. 22, 2023 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 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 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, 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 (or resurgence thereof) and the reaction to it (including as it relates to the reinstitution of any lockdowns or other restrictions), all of which are highly uncertain and cannot be predicted, and which may have a material adverse impact on the Company, including but not limited to its supply chain, third-party suppliers, project development timelines, employee base, liquidity, stock price, financial condition and costs (which may increase) and revenue and margins (both of which may decrease).

Contacts

Investor Contacts:
Arthur Shannon

[email protected]

Allison Ryan

[email protected]
(877) 354-3705 (toll free)

(908) 927-0735

Media Contacts:
Lainie Keller

[email protected]
(908) 927-1198

Kristy Marks

[email protected]
(908) 927-0683

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