On November 2, 2023 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company" or "we" or "our") reported its third-quarter 2023 financial results and other key updates from the quarter (Press release, Bausch Health, NOV 2, 2023, View Source [SID1234636734]).

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"We are pleased with our solid third-quarter performance, as each of our business segments posted year-over-year revenue growth on both a reported and organic basis. We remain focused on advancing our R&D pipeline, strengthening our balance sheet and executing on our commercial strategies to drive global growth," said Thomas J. Appio, Chief Executive Officer, Bausch Health.

Bausch Health (excl. B+L) R&D Update
•RED-C: prevention and delay of first episode of hepatic encephalopathy
◦Enrollment of two global Phase 3 trials on track and expected to be completed in Q1 2024
•Amiselimod (S1P modulator): treatment of mild to moderate Ulcerative Colitis
◦Phase 2 study completed enrollment in July 2023 and induction portion of the study is expected to be completed in Q4 2023
•CABTREOTM: first triple combination product for the treatment of acne vulgaris
◦Received FDA approval on October 20, 2023
◦Commercial launch expected in Q1 2024
◦New Drug Submission was submitted to Health Canada on May 30, 2023
•Clear + Brilliant Touch: fractionated laser device for skin rejuvenation
◦Planned regulatory submissions on track for Europe, Canada, and Asia Pacific markets in 2024
•Next Generation Fraxel: fractionated laser device for skin resurfacing
◦FDA submission planned in Q1 2024 and approval is expected 1H 2024

Third Quarter 2023 Revenue Performance
Total reported revenues were $2.24 billion for the third quarter of 2023, compared with $2.05 billion in the third quarter of 2022, an increase of $192 million, or 9%. Excluding the impact of foreign exchange of $6 million and acquisitions, divestitures, and discontinuations of $19 million, revenue increased by 9% organically1 compared with the third quarter of 2022.

Reported revenues by segment were as follows:

Three Months Ended September 30, Reported Change
Change at Constant Currency1
(Non-GAAP)
Change in Organic Revenue1
(Non-GAAP)
(in millions) 2023 2022 Amount Pct.
Total Bausch Health Revenues $2,238 $2,046 $192 9 % 9 % 9 %
Bausch Health (excl. B+L) $1,231 $1,104 $127 12 % 10 % 10 %
Salix segment $614 $544 $70 13 % 13 % 13 %
International segment $275 $250 $25 10 % 3 % 4 %
Solta Medical segment $83 $72 $11 15 % 17 % 17 %
Diversified segment $259 $238 $21 9 % 9 % 9 %
Bausch + Lomb segment $1,007 $942 $65 7 % 8 % 7 %

Salix Segment
Salix segment reported and organic1 revenues were $614 million for the third quarter of 2023, compared with $544 million for the third quarter of 2022, an increase of $70 million, or 13%. Sales growth was driven by Xifaxan, Relistor, and Trulance.

International Segment
International segment reported revenues were $275 million for the third quarter of 2023, compared with $250 million for the third quarter of 2022, an increase of $25 million, or 10%. Excluding the impact of foreign exchange of $17 million and divestitures and discontinuations of $1 million, segment revenues increased organically1 by 4% compared with the third quarter of 2022, led by strong performances in Latin America and Poland.

Solta Medical Segment
Solta Medical segment reported revenues were $83 million for the third quarter of 2023, compared with $72 million in the third quarter of 2022, an increase of $11 million, or 15%, which was driven by growth in the Asia Pacific region. Excluding the impact of foreign exchange of $1 million, segment revenues increased organically1 by 17% compared with the third quarter of 2022.

Diversified Segment
Diversified segment reported revenues were $259 million for the third quarter of 2023, compared with $238 million for the third quarter of 2022, an increase of $21 million, or 9% on both a reported and organic1 basis, primarily attributable to increases in sales in Generics and Neurology.

Bausch + Lomb Segment
Bausch + Lomb segment reported revenues were $1,007 million for the third quarter of 2023, compared with $942 million for the third quarter of 2022, an increase of $65 million, or 7%. Excluding the impact of foreign exchange of $10 million, acquisitions of $15 million and divestitures and discontinuations of $3 million, the Bausch + Lomb segment revenue increased organically1 by 7%, compared with the third quarter of 2022, driven by increases across all business units.

Consolidated Operating Income
Consolidated operating income was $14 million for the third quarter of 2023, compared with operating income of $244 million for the third quarter of 2022, a decrease of $230 million. The change is primarily due to an increase in goodwill impairments, higher selling, general and administrative expenses, and investments in research and development, which were partially offset by higher revenues and associated gross profit, and lower amortization of intangible assets.

Net (Loss) Income Attributable to Bausch Health
Net loss attributable to Bausch Health for the third quarter of 2023 was $378 million, compared with net income attributable to Bausch Health of $399 million for the third quarter of 2022, a decrease of $777 million, primarily due to the decrease in Operating Income and a gain on extinguishment of debt of $570 million recorded in the third quarter of 2022.

Adjusted net income attributable to Bausch Health (non-GAAP)1 for the third quarter of 2023 was $377 million, compared with $277 million for the third quarter of 2022, an increase of $100 million primarily due to higher revenues and gross profit, partially offset by higher selling, general and administrative expenses and investments in research and development.

(Loss) Earnings Per Share Attributable to Bausch Health
GAAP loss per share attributable to Bausch Health for the third quarter of 2023 was $1.03, compared with earnings per share of $1.10 for the third quarter of 2022.

Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $830 million for the third quarter of 2023, as compared to $766 million for the third quarter of 2022, an increase of $64 million.

Cash Provided by (Used in) Operating Activities
The Company generated $281 million of cash from operating activities in the third quarter of 2023 compared with cash used of $1,263 million in the third quarter of 2022. The increase in cash flow reflects improved operating results as well as the impact in 2022 of a reduction of $1.2 billion from restricted cash in connection with the settlement of legacy U.S. securities litigation.

Balance Sheet Highlights as of September 30, 2023:
•Cash and cash equivalents of $780 million.
•Bausch Health (excl. B+L) had availability under its 2027 revolving credit facility of $952 million and Bausch + Lomb had availability of approximately $300 million under its revolving credit facility.
•Bausch Health (excl. B+L) has an accounts receivable credit facility which provides for up to $600 million of availability, $350 million of which was drawn as of September 30, 2023.

2023 Financial Outlook
The Company updated its full-year revenue and Adjusted EBITDA (non-GAAP)1 guidance:

Previous Guidance (as of Aug. 3, 2023) Current Guidance (as of Nov. 2, 2023)
BHC BHC
(excl. B+L) B+L BHC BHC
(excl. B+L) B+L
Revenues (in Billions) $8.45 – $8.65 $4.50 – $4.65 $3.95 – $4.00 $8.585 – $8.710 $4.550 – $4.625 $4.035 – $4.085
Organic1 growth vs. Prior Year
2%-5% 4%-6%
Adjusted EBITDA1 (in Billions)
$3.00 – $3.15 $2.30 – $2.40 $0.70 – $0.75 $3.01 – $3.11 $2.30 – $2.35 $0.71 – $0.76

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, November 2, 2023
Time: 8:00 a.m. ET
Webcast: View Source

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