On May 4, 2023 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company" or "we" or "our") reported its first-quarter 2023 financial results (Press release, Bausch Health, MAY 4, 2023, View Source [SID1234631000]).

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"We are encouraged with the top-line improvement in the first quarter, with four out of five segments delivering revenue growth on both a reported revenue and organic basis1 and are pleased that demand for key products has remained resilient in the current macro environment," said Thomas J. Appio, Chief Executive Officer, Bausch Health. "We are progressing our mid- and late-stage pipeline, and we look forward to bringing new products to the patients who can benefit from them," concluded Appio.

Bausch Health (excl. B+L) Pipeline Update
•Amiselimod: Phase 2 trial is progressing and expected to be completed in the second half of 2023.
•RED-C: Investments related to Reduction of Early Decompensation in Cirrhosis (RED-C) program have accelerated. Two global Phase 3 studies are currently underway and enrollment is on-track. The Company held scientific advisory meetings with the Medicines Evaluation Board (MEB) in the Netherlands and with Health Canada, and plans to engage with relevant authorities in Japan and China later this year.
•IDP-126: The FDA accepted the Company’s new drug application and received an October 20, 2023, PDUFA date. If approved by the FDA, IDP-126 would be a first-in-class treatment with a triple combination of benzoyl peroxide, clindamycin phosphate and adapalene. A submission in Canada is planned for the second quarter of this year.
•Solta Medical: We are planning a regulatory submission for Clear and Brilliant Touch in Europe and Canada in 2024 and for Asia Pacific markets in 2025. FDA submission is expected for Next Generation Fraxel in Q4 2023.

First Quarter 2023 Revenue Performance
Total reported revenues were $1.94 billion for the first quarter of 2023, compared with $1.92 billion in the first quarter of 2022, an increase of $26 million, or 1%. Excluding the unfavorable impact of foreign exchange of $40 million and the impact of acquisitions, divestitures, and discontinuations of $7 million, revenue increased by 4% organically1 compared with the first quarter of 2022.

1 This is a non-GAAP measure or a non-GAAP ratio. For further information on non-GAAP measures and non-GAAP ratios, please refer to the "Non-GAAP Information" section of this news release. Please also refer to tables at the end of this news release for a reconciliation of this and other non-GAAP measures to the most directly comparable GAAP measure.

Reported revenues by segment were as follows:

Three Months Ended March 31, Reported Change
Change at Constant Currency1
(Non-GAAP)
Change in Organic Revenue1
(Non-GAAP)
(in millions) 2023 2022 Amount Pct.
Total Bausch Health Revenues $1,944 $1,918 $26 1 % 3 % 4 %
Bausch Health (excl. B+L) $1,013 $1,029 ($16) (2 %) (1 %) — %
Salix segment $496 $464 $32 7 % 7 % 7 %
International segment $247 $244 $3 1 % 4 % 5 %
Solta Medical segment $73 $72 $1 1 % 6 % 6 %
Diversified segment $197 $249 ($52) (21 %) (21 %) (21 %)
Bausch + Lomb segment $931 $889 $42 5 % 8 % 8 %

Salix Segment
Salix segment reported and organic1 revenues were $496 million for the first quarter of 2023, compared with $464 million for the first quarter of 2022, an increase of $32 million, or 7%. Sales growth was driven by Xifaxan, Relistor, and Trulance.

International Segment
International segment reported revenues were $247 million for the first quarter of 2023, compared with $244 million for the first quarter of 2022, an increase of $3 million, or 1%. Excluding the unfavorable impact of foreign exchange of $6 million and the impact of divestitures and discontinuations of $3 million, segment revenues increased organically1 by 5% compared with the first quarter of 2022, led by organic growth in Canada and Europe.

Solta Medical Segment
Solta Medical segment reported revenues were $73 million for the first quarter of 2023, compared with $72 million in the first quarter of 2022, an increase of $1 million, or 1%. Excluding the unfavorable impact of foreign exchange of $3 million, segment revenues increased organically1 by 6% compared with the first quarter of 2022.

Diversified Segment
Diversified segment reported and organic1 revenues were $197 million for the first quarter of 2023, compared with $249 million for the first quarter of 2022, a decrease of $52 million, or 21%, primarily attributable to decreases in sales across Neurology, Generics and Dermatology, partially offset by an increase in sales in Dentistry.

Bausch + Lomb Segment
Bausch + Lomb segment reported revenues were $931 million for the first quarter of 2023, compared with $889 million for the first quarter of 2022, an increase of $42 million, or 5%. Excluding the unfavorable impact of foreign exchange of $31 million, the impact of acquisitions of $2 million and the impact of divestitures and discontinuations of $2 million, the Bausch + Lomb segment revenue increased organically1 by 8%, compared with the first quarter of 2022, driven by increases across all business units.

Consolidated Operating Income
Consolidated operating income was $175 million for the first quarter of 2023, compared with operating income of $285 million for the first quarter of 2022, a decrease of $110 million. The change is primarily due to higher SG&A expenses, reflecting investments in selling and marketing, and R&D, as well as non-cash charges associated with adjustments to the fair value of acquisition related contingent consideration, offset by lower amortization of intangibles.

Net Loss Attributable to Bausch Health
Net loss attributable to Bausch Health for the first quarter of 2023 was $201 million, compared with a net loss of $69 million for the first quarter of 2022, an unfavorable change of $132 million. This was primarily due to the increase in loss before income taxes of $54 million, and an unfavorable change in income taxes of $89 million.

Adjusted net income attributable to Bausch Health (non-GAAP)1 for the first quarter of 2023 was $191 million, compared with $263 million for the first quarter of 2022, a decrease of $72 million primarily due to higher operating expenses and foreign exchange headwinds.

Loss Per Share Attributable to Bausch Health
GAAP Loss Per Share attributable to Bausch Health for the first quarter of 2023 was $(0.55), compared with $(0.19) for the first quarter of 2022.

Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $588 million for the first quarter of 2023, as compared to $732 million for the first quarter of 2022, a decrease of $144 million.

Cash Provided by (Used in) Operating Activities
The company generated $154 million of cash in the first quarter of 2023 compared with using $63 million of cash in the first quarter of 2022. The increase in cash flow from operations is primarily attributable to: (i) a decrease in payments of accrued legal settlements related to the Glumetza Antitrust Litigation in first quarter 2022 and (ii) a portion of cash interest payments being classified as Cash Flows from Financing activities as a result of the accounting treatment required for the Company’s New Secured Notes issued in September 2022, partially offset by (iii) changes in business performance.

Balance Sheet Highlights as of March 31, 2023:
•Cash and cash equivalents were $531 million.
•Bausch Health (excl. B+L) had availability under its 2027 revolving credit facility of approximately $557 million and Bausch + Lomb had availability of approximately $376 million under its revolving credit facility.

2023 Financial Outlook
The Company confirmed its full year guidance for Bausch Health (excl. B+L) and is providing full year consolidated guidance as follows:
•Full year revenue range of $8.35 – $8.55 billion
•Full year Adjusted EBITDA (non-GAAP)1 range of $3.00 – $3.15 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)1 to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because 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)1. 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. The guidance in this news release is only effective as of the date it is given, and will not be updated or affirmed unless and until the Company publicly announces updated or affirmed guidance.

Conference Call Details
Date:
Thursday, May 4, 2023
Time: 8:00 a.m. ET
Webcast: View Source

A replay of the conference call will be available on the investor relations website.