Full Press Release Details
BAUSCH + LOMB CORPORATION
(a business of Bausch Health Companies Inc.)
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 | F-2 | |
| Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 | F-3 | |
| Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2022 and 2021 | F-4 | |
| Condensed Consolidated Statements of Equity for the three months ended March 31, 2022 and 2021 | F-5 | |
| Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 | F-6 | |
| Notes to Condensed Consolidated Financial Statements | F-7 |
BAUSCH + LOMB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share amounts)
| March 31, 2022 | December 31, 2021 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 190 | $ | 174 | ||||
| Restricted cash | - | 3 | ||||||
| Trade receivables, net (Note 4) | 737 | 721 | ||||||
| Inventories, net | 598 | 572 | ||||||
| Prepaid expenses and other current assets | 194 | 165 | ||||||
| Total current assets | 1,719 | 1,635 | ||||||
| Property, plant and equipment, net | 1,225 | 1,225 | ||||||
| Intangible assets, net | 2,196 | 2,264 | ||||||
| Goodwill | 4,553 | 4,586 | ||||||
| Deferred tax assets, net | 1,026 | 933 | ||||||
| Other non-current assets | 188 | 180 | ||||||
| Total assets | $ | 10,907 | $ | 10,823 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable (Note 4) | $ | 251 | $ | 239 | ||||
| Accrued and other current liabilities | 841 | 860 | ||||||
| Total current liabilities | 1,092 | 1,099 | ||||||
| Deferred tax liabilities, net | 103 | 24 | ||||||
| Other non-current liabilities | 276 | 298 | ||||||
| BHC Purchase Debt (Note 4) | 2,220 | - | ||||||
| Total liabilities | 3,691 | 1,421 | ||||||
| Commitments and contingencies (Note 16) | ||||||||
| Equity | ||||||||
| Common shares, no par value, 350,000,000 shares authorized, issued and outstanding (Note 18) | - | - | ||||||
| Additional paid-in capital | 8,219 | - | ||||||
| Accumulated earnings | 20 | - | ||||||
| BHC investment | - | 10,364 | ||||||
| Accumulated other comprehensive loss | (1,099 | ) | (1,035 | ) | ||||
| Total Bausch + Lomb Corporation shareholder 's equity | 7,140 | 9,329 | ||||||
| Noncontrolling interest | 76 | 73 | ||||||
| Total equity | 7,216 | 9,402 | ||||||
| Total liabilities and equity | $ | 10,907 | $ | 10,823 |
The accompanying notes are an integral part
of these condensed consolidated financial statements.
BAUSCH + LOMB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenues | ||||||||
| Product sales | $ | 883 | $ | 874 | ||||
| Other revenues | 6 | 7 | ||||||
| 889 | 881 | |||||||
| Expenses | ||||||||
| Cost of goods sold (excluding amortization and impairments of intangible assets) (Note 4) | 346 | 331 | ||||||
| Cost of other revenues | 2 | 2 | ||||||
| Selling, general and administrative (Note 4) | 343 | 318 | ||||||
| Research and development (Note 4) | 77 | 67 | ||||||
| Amortization of intangible assets | 65 | 76 | ||||||
| Other expense, net | 2 | 2 | ||||||
| 835 | 796 | |||||||
| Operating income | 54 | 85 | ||||||
| Interest expense (Note 4) | (20 | ) | - | |||||
| Foreign exchange and other | (5 | ) | (8 | ) | ||||
| Income before provision for income taxes | 29 | 77 | ||||||
| Provision for income taxes | (6 | ) | (47 | ) | ||||
| Net income | 23 | 30 | ||||||
| Net income attributable to noncontrolling interest | (3 | ) | (3 | ) | ||||
| Net income attributable to Bausch + Lomb Corporation | $ | 20 | $ | 27 | ||||
| Basic and diluted income per share attributable to Bausch + Lomb Corporation | $ | 0.06 | $ | 0.08 | ||||
| Basic and diluted weighted-average common shares | 350 | 350 |
The accompanying notes are an integral part
of these condensed consolidated financial statements.
BAUSCH + LOMB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net income | $ | 23 | $ | 30 | ||||
| Other comprehensive loss | ||||||||
| Foreign currency translation adjustment | (60 | ) | (106 | ) | ||||
| Pension and postretirement benefit plan adjustments, net of income taxes | (4 | ) | 7 | |||||
| Other comprehensive loss | (64 | ) | (99 | ) | ||||
| Comprehensive loss | (41 | ) | (69 | ) | ||||
| Comprehensive income attributable to noncontrolling interest | (3 | ) | (3 | ) | ||||
| Comprehensive loss attributable to Bausch + Lomb Corporation | $ | (44 | ) | $ | (72 | ) |
The accompanying notes are an integral part
of these condensed consolidated financial statements.
BAUSCH + LOMB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
| Common Shares | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | BHC Investment | Additional Paid in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Bausch + Lomb Corporation Shareholder's Equity | Non- controlling Interest | Total Equity | ||||||||||||||||||||||||||||
| Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2022 | - | $ | - | $ | 10,364 | $ | - | $ | - | $ | (1,035 | ) | $ | 9,329 | $ | 73 | $ | 9,402 | ||||||||||||||||||
| Issuance of common shares (Note 18) | 350 | - | (8,164 | ) | 8,164 | - | - | - | - | - | ||||||||||||||||||||||||||
| Issuance of BHC Purchase Debt (Note 4) | - | - | (2,200 | ) | - | - | - | (2,200 | ) | - | (2,200 | ) | ||||||||||||||||||||||||
| Net distributions to BHC and affiliates | - | - | - | 55 | - | - | 55 | - | 55 | |||||||||||||||||||||||||||
| Net income | - | - | - | - | 20 | - | 20 | 3 | 23 | |||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | (64 | ) | (64 | ) | - | (64 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2022 | 350 | $ | - | $ | - | $ | 8,219 | $ | 20 | $ | (1,099 | ) | $ | 7,140 | $ | 76 | $ | 7,216 |
| Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2021 | - | $ | - | $ | 10,807 | $ | - | $ | - | $ | (889 | ) | $ | 9,918 | $ | 70 | $ | 9,988 | ||||||||||||||||||
| Net decrease in BHC investment | - | - | (85 | ) | - | - | - | (85 | ) | - | (85 | ) | ||||||||||||||||||||||||
| Net income | - | - | 27 | - | - | - | 27 | 3 | 30 | |||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | (99 | ) | (99 | ) | - | (99 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2021 | - | $ | - | $ | 10,749 | $ | - | $ | - | $ | (988 | ) | $ | 9,761 | $ | 73 | $ | 9,834 |
The accompanying notes are an integral part
of these condensed consolidated financial statements.
BAUSCH + LOMB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | 23 | $ | 30 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization of intangible assets | 95 | 106 | ||||||
| Asset impairments | - | 1 | ||||||
| Allowances for losses on trade receivables and inventories | 7 | 13 | ||||||
| Deferred income taxes | (43 | ) | 26 | |||||
| Payments of accrued legal settlements | (2 | ) | - | |||||
| Share-based compensation | 16 | 14 | ||||||
| Foreign exchange loss | 1 | 10 | ||||||
| Other | (9 | ) | (6 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | (21 | ) | 31 | |||||
| Inventories | (41 | ) | (20 | ) | ||||
| Prepaid expenses and other current assets | (31 | ) | (14 | ) | ||||
| Accounts payable, accrued and other liabilities | 8 | (3 | ) | |||||
| Net cash provided by operating activities | 3 | 188 | ||||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property, plant and equipment | (42 | ) | (45 | ) | ||||
| Purchases of marketable securities | (5 | ) | (5 | ) | ||||
| Proceeds from sale of marketable securities | 6 | 2 | ||||||
| Net cash used in investing activities | (41 | ) | (48 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Net borrowings under BHC pooled financing arrangements (Note 4) | 31 | - | ||||||
| Net transfers to BHC (Note 4) | 21 | (114 | ) | |||||
| Net cash provided by (used in) financing activities | 52 | (114 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1 | ) | (7 | ) | ||||
| Net increase in cash and cash equivalents and restricted cash | 13 | 19 | ||||||
| Cash and cash equivalents and restricted cash, beginning of period | 177 | 238 | ||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 190 | $ | 257 | ||||
| Non-cash Financing Activity | ||||||||
| Issuance of BHC Purchase Debt (Note 4) | $ | 2,200 | $ | - |
The accompanying notes are an integral part
of these condensed consolidated financial statements.
BAUSCH + LOMB CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Bausch + Lomb Corporation ("Bausch
+ Lomb" or the "Company") is a subsidiary of Bausch
Health Companies Inc. ("BHC"), and is a leading global eye
health company 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. The Company operates in three reportable segments: (i) Vision Care/Consumer Health Care segment
which includes both a contact lens business and a consumer eye care business that consists of contact lens care products, over-the-counter
("OTC") eye drops and eye vitamins, (ii) Ophthalmic Pharmaceuticals segment which consists of a broad line of proprietary
pharmaceutical products for post-operative treatments and treatments for a number of eye conditions, such as glaucoma, eye inflammation,
ocular hypertension, dry eyes and retinal diseases and (iii) Surgical segment which consists of medical device equipment, consumables
and instrumental tools and technologies for the treatment of corneal, cataracts, and vitreous and retinal eye conditions, and includes
intraocular lenses and delivery systems, phacoemulsification equipment and other surgical instruments and devices necessary for cataract
surgery. See Note 17, "SEGMENT INFORMATION" for additional information regarding these reportable segments.
Separation of Bausch + Lomb
On August 6, 2020, BHC announced its
plan to separate Bausch + Lomb into an independently publicly traded company from the remainder of Bausch Health Companies Inc. (the "Separation").
Prior to January 1, 2022, Bausch + Lomb had nominal assets and liabilities. Prior to March 31, 2022, in connection with the Separation,
BHC transferred to Bausch + Lomb, in a series of steps, substantially all the entities, assets, liabilities and obligations that Bausch
+ Lomb will hold upon completion of the Separation pursuant to a Master Separation Agreement (the "MSA") with BHC. The remaining
entities, assets, liabilities and obligations and associated results of operations and cash flows are included in these financial statements
and were not material to Bausch + Lomb's financial position, operations and cash flows for the periods presented.
The registration statement related
to the initial public offering of Bausch + Lomb's common shares (the "B+L IPO") was declared effective on May 5, 2022,
and Bausch + Lomb's common shares began trading on the New York Stock Exchange and the Toronto Stock Exchange, in each case under
the ticker symbol "BLCO" on May 6, 2022. Bausch + Lomb also obtained a final receipt to its final Canadian base PREP prospectus
on May 5, 2022. Prior to the effectiveness of the registration statement, Bausch + Lomb was a wholly-owned subsidiary of BHC. On May 10,
2022, a wholly owned subsidiary of BHC (the "Selling Shareholder") sold 35,000,000 common shares of Bausch + Lomb, at an offering
price of $18.00, per share, pursuant to the Bausch + Lomb prospectuses. The Selling Shareholder received all net proceeds from the B+L
IPO. BHC expects to complete the separation of Bausch + Lomb after the expiry of customary lockups related to the B+L IPO and achievement
of targeted debt leverage ratios, subject to the receipt of applicable shareholder and other necessary approvals, and subject to the various
risk factors set forth in the prospectuses relating to the separation approvals. See Note 18, "EARNINGS PER SHARE" for additional
details regarding the B+L IPO.
Basis of Presentation
connection with the Separation, effective January 1, 2022, BHC has transferred to Bausch + Lomb substantially all the entities, assets,
liabilities and obligations related to the Bausch + Lomb business, such that the accompanying unaudited financial statements for all periods
presented, including the historical results of the Company prior to January 1, 2022, are now referred to as "Condensed Consolidated
Financial Statements", and have been prepared pursuant to the rules and
regulations for reporting on Form 10-Q. Prior to January 1, 2022, the Company's combined financial statements were prepared on a
combined basis and were derived from BHC's historical consolidated financial statements.
Prior to the completion of the B+L
IPO on May 10, 2022, Bausch + Lomb had historically operated as part of
BHC; therefore, standalone financial statements were not historically prepared. The accompanying Condensed Consolidated Financial Statements
have been prepared from BHC's historical accounting records and policies and are presented on a standalone basis as if the Company's
operations had been conducted independently from BHC. These Condensed Consolidated Financial Statements have been prepared by Bausch
+ Lomb in United States ("U.S.") dollars and in accordance with U.S. generally accepted accounting principles ("U.S.
GAAP") for interim financial reporting and pursuant
to the rules and regulations for reporting
on Form 10-Q, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly,
certain information and disclosures required by U.S. GAAP for complete Consolidated Financial Statements are not included herein.
The results of operations of any interim
period are not necessarily indicative of the results of operations for the full year. In Bausch
+ Lomb's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal
and recurring nature. These interim statements should be read in conjunction with the audited financial statements and notes thereto included
in Bausch + Lomb's Registration Statement on Form S-1, as amended, filed on April 28, 2022 and declared effective on May 5, 2022
and in Bausch + Lomb's final Canadian base PREP prospectus dated May 5, 2022 and the supplemented PREP prospectus dated May 6, 2022.
+ Lomb has historically operated as part of BHC, Bausch + Lomb relied
on BHC's corporate and other support functions. Therefore, certain corporate and shared costs have been allocated to Bausch
+ Lomb, including expenses related to BHC support functions that are provided on a centralized basis, including expenses for executive
oversight, treasury, accounting, legal, human resources, shared services, compliance, procurement, information technology and other corporate
functions. The expenses associated with these services generally include all payroll and benefit costs, certain share-based compensation
expenses related to BHC's long-term incentive program for BHC employees who are providing corporate services to Bausch
+ Lomb, certain expenses associated with corporate insurance coverage and medical, pension, postretirement and other health plan costs
for employees participating in BHC sponsored plans, as well as overhead costs related to the support functions. These expenses have been
allocated to Bausch + Lomb using the same basis and methodologies used
in preparing Bausch + Lomb's audited Combined Financial Statements
for the year ended December 31, 2021.
Following the B+L IPO, certain functions