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
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 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:
Three Months Ended
Total Bausch + Lomb Revenues
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 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 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 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 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
$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
$700 – $750 million
$710 – $760 million
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
Wednesday, Nov. 1, 2023
8:00 a.m. ET
Participant Event Dial-in:
+1 (888) 506-0062 (North America)
+1 (973) 528-0011 (International)
Participant Access Code:
+1 (877) 481-4010 (North America)
+1 (919) 882-2331 (International)
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.
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.
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.
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