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Bausch Health Companies Inc. Announces Second-Quarter 2020 Results

LAVAL, QC, Aug. 6, 2020 /CNW/ —

  • Second-Quarter 2020 Financial Results
  • Narrowed 2020 Full-Year Revenue and Adjusted EBITDA (non-GAAP) Guidance Ranges Primarily Due to the Impact of COVID-19 Pandemic

Bausch Health Companies Inc. (NYSE/TSX: BHC) (“Bausch Health” or the “Company” or “we”) today announced its second-quarter 2020 financial results. 

Joseph C. Papa, chairman and CEO, Bausch Health.

the United States, other markets in Europe and Asia will take more time to return to pre-pandemic levels,” continued Mr. Papa. “Given these variabilities, we are focused on driving market share for our key products, reaching customers in new ways and executing on our launches, such as the upcoming launch of BAUSCH + LOMB INFUSE™ SiHy daily contact lenses, while also optimizing our cost structure to protect the profitability of the Company.”

  • The Bausch + Lomb/International segment comprised approximately 53% of the Company’s reported revenue in the second quarter of 2020
  • The Salix segment comprised approximately 24% of the Company’s reported revenue in the second quarter of 2020
  • The Ortho Dermatologics segment comprised approximately 7% of the Company’s reported revenue in the second quarter of 2020
  • Repaid debt by approximately $100 million in the second quarter of 2020 for a total of approximately $320 million in the first half of 2020 with cash generated from operations
  • Refinanced $1.25 billion of 2022 Senior Secured Notes and prepaid $250 million of mandatory 2022 term loan amortization using net proceeds from newly issued $1.5 billion of 6.25% 2029 Senior Unsecured Notes and cash generated from operations
  • Bausch Health has no debt maturities or mandatory amortization payments until 2023
  • Resolved the legacy investigation on July 31 by the U.S. Securities and Exchange Commission for $45 million regarding the Company’s former relationship with Philidor Rx Services, LLC and certain accounting practices and disclosures related to the 2014 and 2015 reporting periods. The Company neither denied nor admitted the charges.
  • Agreed to resolve the Canadian securities class action litigation on August 4 for $94 million CAD (approximately $69 million3 USD), plus settlement administration costs, subject to court approval. The Company admits no liability and denies all allegations of wrongdoing whatsoever.
  • $1.664 billion for the second quarter of 2020, as compared to $2.152 billion in the second quarter of 2019, a decrease of $488 million, or 23%. Revenue was negatively impacted by approximately $500 million in the second quarter of 2020 primarily due to the impact of the COVID-19 pandemic. Excluding the unfavorable impact of foreign exchange of $27 million and the impact of divestitures and discontinuations of $4 million, revenue declined 21% organically1,2 compared to the second quarter of 2019.

    Revenues by segment were as follows:

    Three Months Ended

    Change at

    June 30

    Reported

    Reported

    Constant

    Organic

    (in millions)

    2020

    2019

    Change

    Change

    Currency4

    Change1,2

    Bausch + Lomb/International

    $883

    $1,208

    ($325)

    (27%)

    (25%)

    (24%)

    Salix

    $404

    $509

    ($105)

    (21%)

    (21%)

    (21%)

    Ortho Dermatologics

    $116

    $122

    ($6)

    (5%)

    (5%)

    (5%)

    Diversified Products

    $261

    $313

    ($52)

    (17%)

    (17%)

    (17%)

    Total Revenues

    $1,664

    $2,152

    ($488)

    (23%)

    (21%)

    (21%)

    $883 million for the second quarter of 2020, as compared to $1.208 billion for the second quarter of 2019, a decrease of $325 million, or 27%. Excluding the unfavorable impact of foreign exchange of $27 million and the impact of divestitures and discontinuations of $4 million, the Bausch + Lomb/International segment declined organically1,2 by approximately 24% compared to the second quarter of 2019 primarily due to the impact of the COVID-19 pandemic.

    $404 million for the second quarter of 2020, as compared to $509 million for the second quarter of 2019, a decrease of $105 million, or 21%. The decrease was primarily due to the impact of the COVID-19 pandemic; the loss of exclusivity of products in the segment, primarily APRISO® (mesalamine), which negatively impacted revenues by $39 million; and by sales of XIFAXAN® (rifaximin), which declined by 12% compared to the second quarter of 2019 primarily due to the COVID-19 pandemic, including reduced channel inventories at the retail level.

    $116 million for the second quarter of 2020, as compared to $122 million for the second quarter of 2019, a decrease of $6 million, or 5%. The decline in revenue was due to the impact of the COVID-19 pandemic.

    $261 million for the second quarter of 2020, as compared to $313 million for the second quarter of 2019, a decrease of $52 million, or 17%. The decrease was primarily attributable to the previously reported loss of exclusivity for a basket of products and the impact of the COVID-19 pandemic.

    $27 million for the second quarter of 2020, as compared to operating income of $257 million for the second quarter of 2019, a decrease of $284 million. The decrease in operating results was primarily due to decreases in revenues and gross margins as a result of the COVID-19 pandemic and the accrual of legal reserves established for the resolution of certain legacy litigation matters, partially offset by decreases in selling, general and administrative (SG&A) expenses and the amortization of intangible assets.

    $326 million for the second quarter of 2020, as compared to net loss of $171 million for the second quarter of 2019, an unfavorable change of $155 million. The change was primarily driven by decreased operating results discussed above, partially offset by an increase in benefit from income taxes and a decrease in interest expense.

    $165 million, as compared to $372 million for the second quarter of 2019, a decrease of $207 million, or 56%.

    $200 million of cash from operations in the second quarter of 2020, as compared to $339 million in the second quarter of 2019, a decrease of $139 million. The decrease in cash from operations was primarily attributed to the decreased operating results discussed above.

    ($0.92), as compared to ($0.49) for the second quarter of 2019.

    $622 million for the second quarter of 2020, as compared to $880 million for the second quarter of 2019, a decrease of $258 million, or 29%. The decrease was primarily due to decreases in revenues and gross margins as a result of the impact of the COVID-19 pandemic, partially offset by decreases in SG&A expenses.

  • Narrowed full-year revenue range from $7.80$8.20 billion to $7.80$8.00 billion
  • Narrowed full-year Adjusted EBITDA (non-GAAP) range from $3.15$3.35 billion to $3.15$3.30 billion
  • 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) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. In periods where significant acquisitions or divestitures are not expected, the Company believes it might have a basis for forecasting the GAAP equivalent for certain costs, such as amortization, which would otherwise be treated as non-GAAP to calculate projected GAAP net income (loss). However, because other deductions (such as restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP). The full-year guidance ranges have been lowered primarily due to the actual and anticipated impacts of the COVID-19 pandemic. These impacts have affected the Company’s assumptions regarding base performance and growth rates. These statements represent forward-looking information and may 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.

  • Bausch Health’s cash, cash equivalents and restricted cash were $1.907 billion5 at June 30, 2020
  • The Company’s availability under the Revolving Credit Facility was $1.131 billion at June 30, 2020
  • Basic weighted average shares outstanding for the quarter were 355.3 million shares. Diluted weighted average shares outstanding for the quarter were 357.3 million shares6
  • Date:

    Thursday, Aug. 6, 2020

    Time:

    8:00 a.m. EDT

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    www.bauschhealth.com.” data-reactid=”69″>About Bausch Health
    Bausch Health Companies Inc. (NYSE/TSX: BHC) is a global company whose mission is to improve people’s lives with our health care products. We develop, manufacture and market a range of pharmaceutical, medical device and over-the-counter products, primarily in the therapeutic areas of eye health, gastroenterology and dermatology. We are delivering on our commitments as we build an innovative company dedicated to advancing global health. More information can be found at www.bauschhealth.com.

    Asia and Europe being slower than originally anticipated; some of the Company’s business units (Global Surgical, Ortho Dermatologics and Dentistry) are expected to lag in the recovery, some possibly beyond 2021; and assumes no major interruptions in the Company’s supply chain and distribution channels. If any of these assumptions regarding the impacts of the COVID-19 pandemic are incorrect, our actual results could differ materially from those described in these forward-looking statements.

    Additional information regarding certain of these material factors and assumptions may also be found in the Company’s filings described above. The Company believes that the material factors and assumptions reflected in these forward-looking statements are reasonable in the circumstances, but 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 Health 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.

    However, these measures are not prepared in accordance with GAAP nor do they have any standardized meaning under GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures 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 to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables below. However, as indicated above, for guidance purposes, the Company does not provide reconciliations of projected Adjusted EBITDA (non-GAAP) to projected GAAP net loss, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.

    Adjusted EBITDA (non-GAAP) is net loss attributable to the Company (its most directly comparable GAAP financial measure) adjusted for interest expense, net, provision for (benefit from) income taxes, depreciation and amortization and the following items:

    • Restructuring and integration 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. In addition, in connection with its acquisition of certain assets of Synergy Pharmaceuticals Inc. (“Synergy”), the Company has incurred certain severance and integration costs. 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. With regard to the severance and integration costs associated with the acquisition of certain assets of Synergy, these costs are specific to the acquisition itself and provided no benefit to the ongoing operations of the Company. As a result, the Company does not believe that such costs (and their impact) are truly representative of its underlying business. 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.
    • Asset impairments: The Company has excluded the impact of impairments of finite-lived and indefinite-lived intangible assets, as well as impairments of assets held for sale, 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 the business, the Company believes that it is important for investors to understand that intangible assets contribute to revenue generation.
    • Goodwill impairments: The Company excludes the impact of goodwill impairments. When the Company has made acquisitions where the consideration paid was in excess of the fair value of the net assets acquired, the remaining purchase price is recorded as goodwill. For assets that we developed ourselves, no goodwill is recorded. Goodwill is not amortized but is tested for impairment. In January 2017, new accounting guidance was issued which simplifies the subsequent measurement of an impairment to goodwill. Under the new guidance, which the Company early adopted effective Jan. 1, 2018, the amount of goodwill impairment is measured as the excess of a reporting unit’s carrying value over its fair value. Management excludes these charges in measuring the performance of the Company and the business.
    • Share-based compensation: The Company has excluded recorded 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.
    • 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 impacted by the timing and size of its acquisitions. In addition, the Company has excluded 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 is not consistent and is significantly impacted by the timing and size of the Company’s acquisitions, as well as the nature of the agreed-upon consideration.
    • Loss on extinguishment of debt: The Company has excluded loss on extinguishment of debt as this represents a cost of refinancing our existing debt and is not a reflection of our operations for the period. Further, the amount and frequency of such charges are not consistent and are significantly impacted by the timing and size of debt financing transactions and other factors in the debt market out of management’s control.
    • Other Non-GAAP charges: The Company has excluded certain other amounts, including legal and other professional fees incurred in connection with recent legal and governmental proceedings, investigations and information requests regarding certain of our legacy distribution, marketing, pricing, disclosure and accounting practices, litigation and other matters, and net gain on sales of assets. The Company has also excluded expenses associated with in-process research and development, as these amounts are inconsistent in amount and frequency and are significantly impacted by the timing, size and nature of acquisitions. Furthermore, as these amounts are associated with research and development acquired, the Company does not believe that they are a representation of the Company’s research and development efforts during any given period. The Company has also excluded IT infrastructure investment, that are the result of other, non-comparable events to measure operating performance. 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 normal 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 normal operating expenses. In addition, as opposed to more ordinary course matters, the Company considers that each of the recent proceedings, investigations and information requests, given their nature and frequency, are outside of the ordinary course and relate to unique circumstances. 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) is net loss attributable to Bausch Health Companies Inc. (its most directly comparable GAAP financial measure) adjusted for restructuring and integration costs, acquired in-process research and development costs, loss on extinguishment of debt, asset impairments, acquisition-related adjustments, excluding amortization and other non-GAAP charges as these adjustments are described above, and 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 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.

    Organic growth/change reflects adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates on revenues and (ii) the revenues associated with acquisitions, divestitures and discontinuations of businesses divested and/or discontinued. These adjustments are determined as follows:

    • Foreign currency exchange rates: 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 business. 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.
    • Acquisitions, divestitures and discontinuations: In order to present period-over-period organic revenue (non-GAAP) growth/change on a comparable basis, revenues associated with acquisitions, divestitures and discontinuations are adjusted to include only revenues from those businesses and assets owned during both periods. Accordingly, organic revenue (non-GAAP) growth/change excludes from the current period, revenues attributable to each acquisition for twelve months subsequent to the day of acquisition, as there are no revenues from those businesses and assets included in the comparable prior period. Organic revenue (non-GAAP) growth/change excludes from the prior period, all revenues attributable to each divestiture and discontinuance during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period.

    Please also see the reconciliation tables below for further information as to how these non-GAAP measures are calculated for the periods presented.

    1

    Please see the tables at the end of this news release for a reconciliation of this and other non-GAAP measures to the nearest comparable GAAP measure.

    2

    Organic growth/change, a non-GAAP metric, is defined as a change on a period-over-period basis in revenues on a constant currency basis (if applicable) excluding the impact of recent acquisitions, divestitures and discontinuations.

    3

    Exchange rate used as of June 30, 2020.

    4

    To assist investors in evaluating the Company’s performance, we have adjusted for changes in foreign currency exchange rates. Change at constant currency, a non-GAAP metric, is determined by comparing 2020 reported amounts adjusted to exclude currency impact, calculated using 2019 monthly average exchange rates, to the actual 2019 reported amounts. 

    5

    Cash, cash equivalents and restricted cash at June 30, 2020 includes remaining net proceeds from the December 2019 bond issuance intended to be used to finance the $1.210 billion pending settlement of the U.S. Securities litigation due in 2020.

    6

    Diluted weighted average shares includes the dilutive impact of options and restricted stock units, which are 1,998,000 common shares for the 3 months ended June 30, 2020, and which are excluded when calculating GAAP diluted loss per share because the effect of including the impact would be anti-dilutive.

    Bausch Health Companies Inc.

     Table 1

    Condensed Consolidated Statements of Operations

    For the Three and Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Three Months Ended

    Six Months Ended

    June 30,

    June 30,

    (in millions)

    2020

    2019

    2020

    2019

    Revenues

    Product sales

    $

    1,637

    $

    2,122

    $

    3,623

    $

    4,111

    Other revenues

    27

    30

    53

    57

    1,664

    2,152

    3,676

    4,168

    Expenses

    Cost of goods sold (excluding amortization and impairments of intangible assets)

    482

    580

    987

    1,104

    Cost of other revenues

    13

    14

    27

    27

    Selling, general and administrative

    526

    651

    1,159

    1,238

    Research and development

    108

    117

    230

    234

    Amortization of intangible assets

    436

    488

    872

    977

    Asset impairments

    1

    13

    15

    16

    Restructuring and integration costs

    7

    4

    11

    24

    Acquisition-related contingent consideration

    11

    20

    24

    (1)

    Other expense, net

    107

    8

    130

    5

    1,691

    1,895

    3,455

    3,624

    Operating (loss) income

    (27)

    257

    221

    544

    Interest income

    2

    3

    9

    7

    Interest expense

    (385)

    (409)

    (781)

    (815)

    Loss on extinguishment of debt

    (27)

    (33)

    (51)

    (40)

    Foreign exchange and other

    3

    (13)

    3

    Loss before benefit from income taxes

    (437)

    (179)

    (615)

    (301)

    Benefit from income taxes

    112

    9

    138

    83

    Net loss

    (325)

    (170)

    (477)

    (218)

    Net income attributable to noncontrolling interest

    (1)

    (1)

    (1)

    (5)

    Net loss attributable to Bausch Health Companies Inc.

    $

    (326)

    $

    (171)

    $

    (478)

    $

    (223)

     

    Bausch Health Companies Inc.

     Table 2

    Reconciliation of GAAP Net Loss to Adjusted Net Income (non-GAAP)

    For the Three and Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Three Months Ended

    Six Months Ended

    June 30,

    June 30,

    (in millions)

    2020

    2019

    2020

    2019

    Net loss attributable to Bausch Health Companies Inc.

    $

    (326)

    $

    (171)

    $

    (478)

    $

    (223)

    Non-GAAP adjustments: (a)

    Amortization of intangible assets

    436

    488

    872

    977

    Asset impairments

    1

    13

    15

    16

    Restructuring and integration costs

    7

    4

    11

    24

    Acquired in-process research and development costs

    7

    7

    8

    8

    Acquisition-related costs and adjustments (excluding amortization
      of intangible assets)

    11

    24

    24

    12

    Loss on extinguishment of debt

    27

    33

    51

    40

    IT infrastructure investment

    4

    5

    11

    9

    Legal and other professional fees

    13

    11

    22

    19

    Net loss (gain) on sale of assets

    1

    (1)

    (9)

    Litigation and other matters

    100

    1

    123

    3

    Other

    (3)

    (7)

    Tax effect of non-GAAP adjustments

    (115)

    (41)

    (177)

    (139)

    Total non-GAAP adjustments

    491

    543

    959

    953

    Adjusted net income attributable to Bausch Health Companies
      Inc. (non-GAAP)

    $

    165

    $

    372

    $

    481

    $

    730

    (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.

     

    Bausch Health Companies Inc.

     Table 2a

    Reconciliation of GAAP to Non-GAAP Financial Information

    For the Three and Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Three Months Ended

    Six Months Ended

    June 30,

    June 30,

    (in millions)

    2020

    2019

    2020

    2019

    Cost of goods sold reconciliation:

    GAAP Cost of goods sold (excluding amortization and impairments
      of intangible assets)

    $

    482

    $

    580

    $

    987

    $

    1,104

    Fair value inventory step-up resulting from acquisitions (a)

    (4)

    (5)

    Adjusted cost of goods sold (excluding amortization and impairments of
      intangible assets) (non-GAAP)

    $

    482

    $

    576

    $

    987

    $

    1,099

    Selling, general and administrative reconciliation:

    GAAP Selling, general and administrative

    $

    526

    $

    651

    $

    1,159

    $

    1,238

    IT infrastructure investment (b)

    (4)

    (5)

    (11)

    (9)

    Legal and other professional fees (c)

    (13)

    (11)

    (22)

    (19)

    Other Selling, general and administrative (d)

    2

    2

    Adjusted selling, general and administrative (non-GAAP)

    $

    509

    $

    637

    $

    1,126

    $

    1,212

    Amortization of intangible assets reconciliation:

    GAAP Amortization of intangible assets

    $

    436

    $

    488

    $

    872

    $

    977

    Amortization of intangible assets (e)

    (436)

    (488)

    (872)

    (977)

    Adjusted amortization of intangible assets (non-GAAP)

    $

    $

    $

    $

    Restructuring and integration costs reconciliation:

    GAAP Restructuring and integration costs

    $

    7

    $

    4

    $

    11

    $

    24

    Restructuring and integration costs (f)

    (7)

    (4)

    (11)

    (24)

    Adjusted restructuring and integration costs (non-GAAP)

    $

    $

    $

    $

    Asset impairments reconciliation:

    GAAP Asset impairments

    $

    1

    $

    13

    $

    15

    $

    16

    Asset impairments (g)

    (1)

    (13)

    (15)

    (16)

    Adjusted asset impairments (non-GAAP)

    $

    $

    $

    $

    Acquisition-related contingent consideration reconciliation:

    GAAP Acquisition-related contingent consideration

    $

    11

    $

    20

    $

    24

    $

    (1)

    Acquisition-related contingent consideration (a)

    (11)

    (20)

    (24)

    1

    Adjusted acquisition-related contingent consideration (non-GAAP)

    $

    $

    $

    $

    Other expense, net reconciliation:

    GAAP Other expense, net

    $

    107

    $

    8

    $

    130

    $

    5

    Net (loss) gain on sale of assets (h)

    (1)

    1

    9

    Acquisition-related costs (a)

    (8)

    Litigation and other matters (i)

    (100)

    (1)

    (123)

    (3)

    Acquired in-process research and development costs (j)

    (7)

    (7)

    (8)

    (8)

    Other (d)

    1

    5

    Adjusted other expense, net (non-GAAP)

    $

    $

    $

    $

    Bausch Health Companies Inc.

     Table 2a (continued)

    Reconciliation of GAAP to Non-GAAP Financial Information

    For the Three and Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Three Months Ended

    Six Months Ended

    June 30,

    June 30,

    (in millions)

    2020

    2019

    2020

    2019

    Loss on extinguishment of debt reconciliation:

    GAAP Loss on extinguishment of debt

    $

    (27)

    $

    (33)

    $

    (51)

    $

    (40)

    Loss on extinguishment of debt (k)

    27

    33

    51

    40

    Adjusted loss on extinguishment of debt (non-GAAP)

    $

    $

    $

    $

    Benefit from (provision for) income taxes reconciliation:

    GAAP (Provision for) benefit from income taxes

    $

    112

    $

    9

    $

    138

    $

    83

    Tax effect of non-GAAP adjustments (l)

    (115)

    (41)

    (177)

    (139)

    Adjusted provision for income taxes (non-GAAP)

    $

    (3)

    $

    (32)

    $

    (39)

    $

    (56)

    (a)

    Represents the three components of the non-GAAP adjustment of “Acquisition-related costs and adjustments (excluding amortization of intangible assets)” (see Table 2).

    (b)

    Represents the sole component of the non-GAAP adjustment of “IT infrastructure investment” (see Table 2).

    (c)

    Represents the sole component of the non-GAAP adjustment of “Legal and other professional fees” (see Table 2). Legal and other professional fees incurred during the three and six months ended June 30, 2020 and 2019 in connection with recent legal and governmental proceedings, investigations and information requests related to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices.

    (d)

    Represents the two 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 “Restructuring and integration costs” (see Table 2).

    (g)

    Represents the sole component of the non-GAAP adjustment of “Asset impairments” (see Table 2).

    (h)

    Represents the sole component of the non-GAAP adjustment of “Net loss (gain) on sale of assets” (see Table 2).

    (i)

    Represents the sole component of the non-GAAP adjustment of “Litigation and other matters” (see Table 2).

    (j)

    Represents the sole component of the non-GAAP adjustment of “Acquired in-process research and development costs” (see Table 2).

    (k)

    Represents the sole component of the non-GAAP adjustment of “Loss on extinguishment of debt” (see Table 2).

    (l)

    Represents the sole component of the non-GAAP adjustment of “Tax effect of non-GAAP adjustments” (see Table 2).

     

    Bausch Health Companies Inc.

     Table 2b

    Reconciliation of GAAP Net Loss to Adjusted EBITDA (non-GAAP)

    For the Three and Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Three Months Ended

    Six Months Ended

    June 30,

    June 30,

    (in millions)

    2020

    2019

    2020

    2019

    Net loss attributable to Bausch Health Companies Inc.

    $

    (326)

    $

    (171)

    $

    (478)

    $

    (223)

    Interest expense, net

    383

    406

    772

    808

    Benefit from income taxes

    (112)

    (9)

    (138)

    (83)

    Depreciation and amortization

    480

    531

    961

    1,063

    EBITDA

    425

    757

    1,117

    1,565

    Adjustments:

    Asset impairments

    1

    13

    15

    16

    Restructuring and integration costs

    7

    4

    11

    24

    Acquisition-related costs and adjustments (excluding amortization
      of intangible assets)

    11

    24

    24

    12

    Loss on extinguishment of debt 

    27

    33

    51

    40

    Share-based compensation

    27

    27

    54

    51

    Other adjustments:

    Litigation and other matters

    100

    1

    123

    3

    IT infrastructure investment

    4

    5

    11

    9

    Legal and other professional fees (a)

    13

    11

    22

    19

    Net loss (gain) on sale of assets

    1

    (1)

    (9)

    Acquired in-process research and development costs

    7

    7

    8

    8

    Other

    (3)

    (7)

    Adjusted EBITDA (non-GAAP)

    $

    622

    $

    880

    $

    1,435

    $

    1,731

    (a)

    Legal and other professional fees incurred during the three and six months ended June 30, 2020 and 2019 in connection with recent legal and governmental proceedings, investigations and information requests related to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices.

     

    Bausch Health Companies Inc.

    Table 3a

    Organic Growth (non-GAAP) – by Segment

    For the Three Months Ended June 30, 2020 and 2019

    (unaudited)

    Calculation of Organic Revenue for the Three Months Ended

    June 30, 2020

    June 30, 2019

    Change in

    Organic Revenue

    Revenue

    as

    Reported

    Changes
    in
    Exchange
    Rates (a)

    Acquisition

    Organic
    Revenue
    (Non-
    GAAP) (b)

    Revenue

    as

    Reported

    Divestitures

    and
    Discontinuations

    Organic
    Revenue
    (Non-
    GAAP) (b)

    (in millions)

    Amount

    Pct.

    Bausch + Lomb/International

    Global Vision Care

    $

    135

    $

    2

    $

    $

    137

    $

    216

    $

    $

    216

    $

    (79)

    (37)

    %

    Global Surgical

    90

    2

    92

    177

    (1)

    176

    (84)

    (48)

    %

    Global Consumer Products

    321

    10

    331

    371

    371

    (40)

    (11)

    %

    Global Ophtho Rx

    97

    2

    99

    172

    (2)

    170

    (71)

    (42)

    %

    International Rx

    240

    11

    251

    272

    (1)

    271

    (20)

    (7)

    %

      Total Bausch + Lomb/International

    883

    27

    910

    1,208

    (4)

    1,204

    (294)

    (24)

    %

    Salix

    404

    404

    509

    509

    (105)

    (21)

    %

    Ortho Dermatologics

    Ortho Dermatologics

    74

    74

    77

    77

    (3)

    (4)

    %

    Global Solta

    42

    42

    45

    45

    (3)

    (7)

    %

      Total Ortho Dermatologics

    116

    116

    122

    122

    (6)

    (5)

    %

    Diversified Products

    Neurology and Other

    153

    153

    175

    175

    (22)

    (13)

    %

    Generics

    100

    100

    112

    112

    (12)

    (11)

    %

    Dentistry

    8

    8

    26

    26

    (18)

    (69)

    %

      Total Diversified Products

    261

    261

    313

    313

    (52)

    (17)

    %

    Totals

    $

    1,664

    $

    27

    $

    $

    1,691

    $

    2,152

    $

    (4)

    $

    2,148

    $

    (457)

    (21)

    %

    (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. For additional information about the Company’s use of such non-GAAP financial measures, refer to the body of the news release to which these tables are attached. Organic revenue (non-GAAP) for the three months ended June 30, 2020 is calculated as revenue as reported adjusted for: (i) the impact for changes in exchange rates (previously defined in this news release) and (ii) revenues attributable to acquisitions during the twelve months subsequent to the day of acquisition, as there are no revenues from those businesses included in the comparable prior period. Organic revenue (non-GAAP) for the three months ended June 30, 2019 is calculated as revenue as reported less revenues attributable to divestitures and discontinuances during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period.

     

    Bausch Health Companies Inc.

    Table 3b

    Organic Growth (non-GAAP) – by Segment

    For the Six Months Ended June 30, 2020 and 2019

    (unaudited)

    Calculation of Organic Revenue for the Six Months Ended

    June 30, 2020

    June 30, 2019

    Change in

    Organic Revenue

    Revenue

    as

    Reported

    Changes
    in
    Exchange
    Rates (a)

    Acquisition

    Organic
    Revenue
    (Non-
    GAAP) (b)

    Revenue
    as
     
    Reported

    Divestitures
    and
    Discontinuations

    Organic
    Revenue
    (Non-
    GAAP) (b)

    (in millions)

    Amount

    Pct.

    Bausch + Lomb/International

    Global Vision Care

    $

    328

    $

    4

    $

    $

    332

    $

    419

    $

    (1)

    $

    418

    $

    (86)

    (21)

    %

    Global Surgical

    243

    5

    248

    344

    (2)

    342

    (94)

    (27)

    %

    Global Consumer Products

    674

    18

    692

    695

    (1)

    694

    (2)

    %

    Global Ophtho Rx

    229

    4

    233

    333

    (4)

    329

    (96)

    (29)

    %

    International Rx

    523

    13

    536

    535

    (3)

    532

    4

    1

    %

      Total Bausch +
      Lomb/International

    1,997

    44

    2,041

    2,326

    (11)

    2,315

    (274)

    (12)

    %

    Salix

    881

    (13)

    868

    954

    954

    (86)

    (9)

    %

    Ortho Dermatologics

    Ortho Dermatologics

    156

    156

    177

    177

    (21)

    (12)

    %

    Global Solta

    93

    1

    94

    83

    83

    11

    13

    %

      Total Ortho Dermatologics

    249

    1

    250

    260

    260

    (10)

    (4)

    %

    Diversified Products

    Neurology and Other

    315

    315

    361

    361

    (46)

    (13)

    %

    Generics

    205

    205

    216

    216

    (11)

    (5)

    %

    Dentistry

    29

    29

    51

    51

    (22)

    (43)

    %

      Total Diversified Products

    549

    549

    628

    628

    (79)

    (13)

    %

    Totals

    $

    3,676

    $

    45

    $

    (13)

    $

    3,708

    $

    4,168

    $

    (11)

    $

    4,157

    $

    (449)

    (11)

    %

    (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. For additional information about the Company’s use of such non-GAAP financial measures, refer to the body of the news release to which these tables are attached. Organic revenue (non-GAAP) for the six months ended June 30, 2020 is calculated as revenue as reported adjusted for: (i) the impact for changes in exchange rates (previously defined in this news release) and (ii) revenues attributable to acquisitions during the twelve months subsequent to the day of acquisition, as there are no revenues from those businesses included in the comparable prior period. Organic revenue (non-GAAP) for the six months ended June 30, 2020 is calculated as revenue as reported less revenues attributable to divestitures and discontinuances during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period.

     

    Bausch Health Companies Inc.

    Table 4

    Other Financial Information

    (unaudited)

    (in millions)

    June 30,
    2020

    December 31,
    2019

    Cash, Cash Equivalents and Restricted Cash

    Cash and cash equivalents1

    $

    896

    $

    3,243

    Restricted cash2

    1,011

    1

    Cash, cash equivalents and restricted cash

    $

    1,907

    $

    3,244

    Debt Obligations

    Senior Secured Credit Facilities:

      Revolving Credit Facility

    $

    $

      Term Loan Facilities

    4,594

    5,025

    Senior Secured Notes

    4,213

    5,451

    Senior Unsecured Notes

    15,538

    15,407

    Other

    13

    12

    Total long-term debt and other, net of premiums, discounts and issuance costs

    24,358

    25,895

    Plus: Unamortized premiums, discounts and issuance costs

    271

    293

    Total long-term debt and other

    $

    24,629

    $

    26,188

    Maturities and Mandatory Payments of Debt Obligations

    Remainder of 2020

    $

    1

    $

    1,240

    2021

    103

    2022

    1,553

    2023

    2,431

    2,595

    2024

    2,303

    2,303

    2025

    10,632

    10,632

    2026 – 2030

    9,262

    7,762

    Total debt obligations

    $

    24,629

    $

    26,188

    Three Months Ended
    June 30,

    Six Months Ended
    June 30,

    2020

    2019

    2020

    2019

    Cash provided by operating activities

    $

    200

    $

    339

    $

    461

    $

    752

    1 As of December 31, 2019, Cash and cash equivalents includes net proceeds from the issuance of: (i) $1,250 million aggregate principal amount of 5.00% Senior Unsecured Notes due January 2028 and (ii) $1,250 million aggregate principal amount of 5.25% Senior Unsecured Notes due January 2030 in a private placement. The proceeds and cash on hand were used to: (i) redeem $1,240 million of 5.875% Senior Unsecured Notes due 2023 on January 16, 2020, (ii) finance the $1,210 million settlement of certain U.S. Securities litigation, subject to court approval and (iii) pay all fees and expenses associated with these transactions.

    2 As of June 30, 2020, Restricted cash includes $1,010 million of payments into an escrow fund under the terms of a settlement agreement regarding certain U.S. Securities Litigation, subject to court approval. These payments will remain in escrow until final approval of the settlement.

     

    Investor Contact:                                                           

    Media Contact:

    Arthur Shannon                                                                                 

    Lainie Keller

    [email protected]                       

    [email protected]

    (514) 856-3855                                                                           

    (908) 927-1198

    (877) 281-6642 (toll free)

     

    Bausch Health logo (PRNewsfoto/Bausch Health Companies Inc.)

     

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