On February 23, 2023 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health", "BHC", the "Company", or "we") reported its fourth-quarter and full-year 2022 financial results (Press release, Bausch Health, FEB 23, 2023, View Source [SID1234627598]).
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"2022 was a transformative year for Bausch Health, as we executed on our strategic priorities," said Thomas J. Appio, Chief Executive Officer, Bausch Health. "Since completing the initial public offering of Bausch + Lomb last May, we have made significant progress in de-levering our balance sheet, reducing our debt principal net of unrestricted cash by $3.2 billion. We are encouraged by our second half performance and look to build on this momentum. We will invest in sustainable growth drivers across our products and pipeline to position us for long-term success," concluded Appio.
Fourth-Quarter and Full-Year 2022 Revenue Performance
Total reported revenues were $2.2 billion for the fourth quarter of 2022, flat compared with the fourth quarter of 2021. Excluding the unfavorable impact of foreign exchange of $78 million and the impact of divestitures and discontinuations of $6 million, revenue increased by 4% organically1 compared with the fourth quarter of 2021.
Total reported revenues were $8.1 billion for the full year of 2022, compared with $8.4 billion in the full year of 2021, a decrease of $310 million, or 4%. Excluding the unfavorable impact of foreign exchange of $264 million and the impact of divestitures and discontinuations of $178 million, revenue increased organically1 by 2% compared with the full year of 2021.
Revenues by segment were as follows:
Three Months Ended December 31,
(in millions) 2022 2021 Reported Change Reported Change
Change at Constant Currency1
(non-GAAP)
Organic
Change1
(non-GAAP)
Total Bausch Health Revenues $2,193 $2,196 ($3) 0% 3% 4%
Bausch Health (Excl. B+L) $1,197 $1,195 $2 0% 2% 2%
Salix segment $581 $559 $22 4% 4% 4%
International segment2
$261 $276 ($15) (5%) 0% 2%
Solta Medical segment2
$99 $89 $10 11% 20% 20%
Diversified Products segment2
$256 $271 ($15) (6%) (6%) (6%)
Bausch + Lomb segment2
$996 $1,001 ($5) 0% 5% 5%
Twelve Months Ended December 31,
(in millions) 2022 2021 Reported Change Reported Change
Change at Constant Currency1
(non-GAAP)
Organic
Change1
(non-GAAP)
Total Bausch Health Revenues $8,124 $8,434 ($310) (4%) (1%) 2%
Bausch Health (Excl. B+L) $4,356 $4,669 ($313) (7%) (5%) (1%)
Salix segment $2,090 $2,074 $16 1% 1% 1%
International segment2
$988 $1,166 ($178) (15%) (10%) 5%
Solta Medical segment2
$300 $308 ($8) (3%) 2% 2%
Diversified Products segment2
$978 $1,121 ($143) (13%) (13%) (13%)
Bausch + Lomb segment2
$3,768 $3,765 $3 0% 5% 5%
Salix Segment
Salix segment reported and organic1 revenues were $581 million for the fourth quarter and $2,090 million for the full year of 2022, compared with $559 million for the fourth quarter and $2,074 million for the full year of 2021, an increase of $22 million, or 4% in the fourth quarter, and $16 million, or 1% for the full year. Sales growth for the quarter and full year was primarily driven by Xifaxan, Relistor, Trulance and Plenvu.
International Segment2
International segment reported revenues were $261 million for the fourth quarter and $988 million for the full year of 2022, compared with $276 million for the fourth quarter and $1,166 million for the full year of 2021, a decrease of $15 million, or 5% in the fourth quarter, and $178 million, or 15% for the full year.
Excluding the unfavorable impact of foreign exchange of $16 million for the fourth quarter and $65 million for the full year of 2022, and the impact of divestitures and discontinuations of $4 million for the fourth quarter and $167 million for the full year of 2022, segment revenues increased organically1 by 2% for the fourth quarter and 5% for the full year, compared with the fourth quarter and the full year of 2021, primarily driven by Canada and Europe.
Solta Medical Segment2
Solta Medical segment reported revenues were $99 million for the fourth quarter and $300 million for the full year of 2022, compared with $89 million for the fourth quarter and $308 million for the full year of 2021, an increase of $10 million, or 11% in the fourth quarter, and a decrease of $8 million, or 3% for the full year.
Excluding the unfavorable impact of foreign exchange of $8 million for the fourth quarter and $15 million for the full year of 2022, segment revenues increased organically1 by 20% for the fourth quarter and 2% for the full year, compared with the fourth quarter and the full year of 2021, primarily driven by strong results in Asia Pacific (excluding China).
Diversified Products Segment2
Diversified Products segment reported revenues were $256 million for the fourth quarter and $978 million for the full year of 2022, compared with $271 million for the fourth quarter and $1,121 million for the full year of 2021, a decrease of $15 million, or 6% in the fourth quarter, and a decrease of $143 million, or 13% for the full year.
Segment revenues declined organically1 by 6% for the fourth quarter and 13% for the full year, compared with the fourth quarter and the full year of 2021, primarily attributable to declines in Neurology and Generics.
Bausch + Lomb Segment2
Bausch + Lomb segment reported revenues were $996 million for the fourth quarter and $3,768 million for the full year of 2022, compared with $1,001 million for the fourth quarter and $3,765 million for the full year of 2021, a decrease of $5 million, or less than 1% in the fourth quarter, and an increase of $3 million, or less than 1% for the full year.
Excluding the unfavorable impact of foreign exchange of $54 million for the fourth quarter and $184 million for the full year of 2022, and the impact of divestitures and discontinuations of $3 million for the fourth quarter and $10 million for the full year of 2022, segment revenues increased organically1 by 5% for the fourth quarter and for the full year, compared with the fourth quarter and the full year of 2021.
Consolidated Operating (Loss) Income
Consolidated operating loss was $236 million for the fourth quarter of 2022, compared with operating income of $367 million for the fourth quarter of 2021, a decrease of $603 million, primarily driven by a goodwill impairment charge of $622 million in our Neurology business.
Consolidated operating income was $454 million for the full year of 2022, compared with operating income of $450 million for the full year of 2021, an increase of $4 million. The change reflects, among
other factors: a decrease in contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of intangible assets) of $271 million, mainly due to the unfavorable impact of foreign currencies and impact of our divestiture of Amoun on July 26, 2021, an increase in Goodwill impairments of $355 million associated with our Neurology and Ortho Dermatologics reporting unit, a decrease in Amortization of intangible assets of $160 million, a decrease in Asset impairments, including loss on assets held for sale of $219 million, primarily attributable to adjustments to the loss on assets held for sale in connection with the Amoun sale during 2021, a favorable change in Other expense, net of $338 million, primarily attributable: (i) to higher adjustments related to the settlements of certain litigation matters during 2021 and (ii) the loss on the completion of the Amoun sale in 2021, partially offset by insurance recoveries related to certain litigation matters.
Net (Loss) Income Attributable to Bausch Health
Net loss attributable to Bausch Health for the fourth quarter of 2022 was $410 million, compared with income of $69 million for the fourth quarter of 2021, an unfavorable change of $479 million. The change was primarily due to the increase in goodwill impairments, partially offset by a gain on extinguishment of debt.
Net loss attributable to Bausch Health for the full year of 2022 was $225 million, compared with a loss of $948 million for the full year of 2021, a favorable change of $723 million. The change was primarily due the changes in operating income as discussed above and gains on extinguishment of debt in 2022 of $875 million.
Adjusted net income attributable to Bausch Health (non-GAAP)1 was $372 million for the fourth quarter and $1,113 million for the full year of 2022, compared with $463 million for the fourth quarter and $1,602 million for the full year of 2021, a decrease of $91 million in the fourth quarter and $489 million for the full year.
Earnings (Loss) Per Share Attributable to Bausch Health
GAAP Earnings Per Share attributable to Bausch Health was ($1.13) for the fourth quarter and ($0.62) for the full year of 2022, compared with $0.19 for the fourth quarter and ($2.64) for the full year of 2021.
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $823 million for the fourth quarter and $3,022 million for the full year of 2022, compared with $909 million for the fourth quarter and $3,472 million for the full year of 2021, a decrease of $86 million in the quarter and $450 million for the full year.
Cash (Used in) Provided by Operating Activities
The Company generated $475 million of cash from operations in the fourth quarter and used cash of $728 million for the full year of 2022, compared with generating $24 million in the fourth quarter and $1,426 for the full year of 2021. The decrease in cash flow from operations of $2,154 million for the full year is primarily attributable to: (i) reductions of restricted cash as certain litigation settlements became final and unappealable, (ii) changes in business performance, (iii) the impact of our divestiture of Amoun on July 26, 2021 and (iv) an increase in payments for separation costs, separation-related costs, IPO costs and IPO-related costs in 2022 as compared to 2021.
Balance Sheet Highlights as of December 31, 2022
•Cash, cash equivalents, and restricted cash were $591 million.
•Executed open market repurchases during the second and fourth quarters of this year, retiring an aggregate of $927 million in principal of bonds for $550 million of cash consideration.
•Reduced debt principal net of unrestricted cash by $3.2 billion since the IPO of B+L.
•Bausch Health (excl. B+L) had availability under its revolving credit facility of approximately $480 million and Bausch + Lomb had availability under its revolving credit facility of approximately $475 million.
2023 Financial Outlook
The Company is not providing consolidated full year guidance, as Bausch + Lomb has not provided full year guidance. Bausch Health (excl. B+L) has provided guidance for the full year of 2023 as follows:
•Full-year revenue range of $4.45 – $4.6 billion
•Full-year adjusted EBITDA (non-GAAP)1 range of $2.3 – $2.4 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, Feb. 23, 2023
Time: 8:00 a.m. ET
Webcast: View Source
A replay of the conference call will be available on the investor relations website.