Mr. Brent Saunders reports

BAUSCH + LOMB ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2023 RESULTS AND PROVIDES 2024 GUIDANCE

Bausch + Lomb Corp. has released its fourth quarter and full-year 2023 financial results.

"Revenue growth in 2023, and in the fourth quarter in particular, exceeded our expectations and set the tone for 2024," said Brent Saunders, chairman and chief executive officer, Bausch + Lomb. "Double-digit growth is always impressive, but even more so when you consider how we got there. Our quality of growth is what helps set us apart from others."

Select fourth quarter company highlights:

• Launched enVista Aspire monofocal and toric intraocular lenses with intermediate optimized optics in the United States;
• Launched SeeNa, an ophthalmic diagnostic system for refractive cataract patients that is fully integrated with Bausch + Lomb's Eyetelligence surgical planning software to help streamline surgical planning and information flow;
• Received U.S. Food and Drug Administration approval for Teneo excimer laser platform for laser-assisted in situ keratomileusis (lasik) vision correction surgery for myopia and myopic astigmatism (nearsightedness and nearsightedness with astigmatism) -- the first excimer platform approved in nearly two decades.

Fourth quarter and full-year 2023 revenue performance

Total reported revenue was $1,173-million for the fourth quarter of 2023, as compared with $996-million in the fourth quarter of 2022, an increase of $177-million, or 18 per cent. Excluding the unfavourable impact of foreign exchange of $9-million, revenue increased by approximately 19 per cent on a constant currency basis compared with the fourth quarter of 2022.

Total reported revenue was $4,146-million for the full year of 2023, as compared with $3,768-million in the full year of 2022, an increase of $378-million, or 10 per cent. Excluding the unfavourable impact of foreign exchange of $68-million, revenue increased by approximately 12 per cent on a constant currency basis compared with the full year of 2022.

Revenue by segment was as follows:

Vision care segment

Vision care segment revenue was $662-million for the fourth quarter of 2023, as compared with $624-million for the fourth quarter of 2022, an increase of $38-million, or 6 per cent. Excluding the unfavourable impact of foreign exchange of $13-million, segment revenue increased on a constant currency basis by approximately 8 per cent compared with the fourth quarter of 2022, primarily due to higher sales of Lumify, eye vitamins and dry eye portfolio in the company's consumer eye care business and higher sales of SiHy daily lenses and Ultra within its contact lens business, partially offset by unfilled orders as a result of the implementation of a system upgrade at Bausch's Lynchburg distribution facility that impacted its contact lens business.

Vision care segment revenue was $2,543-million for the full year of 2023, as compared with $2,369-million for the full year of 2022, an increase of $174-million, or 7 per cent. Excluding the unfavourable impact of foreign exchange of $61-million, segment revenue increased on a constant currency basis by approximately 10 per cent compared with the full year of 2022, primarily due to higher sales of Lumify, eye vitamins, dry eye portfolio and Biotrue in the company's consumer eye care business and higher sales of SiHy daily lenses and Ultra within the compan's contact lens business, partially offset by unfilled orders as a result of the implementation of a system upgrade at Bausch's Lynchburg distribution facility that impacted its contact lens business.

Surgical segment

Surgical segment revenue was $204-million for the fourth quarter of 2023, as compared with $188-million for the fourth quarter of 2022, an increase of $16-million, or 9 per cent. Excluding the favourable impact of foreign exchange of $3-million, segment revenue increased on a constant currency basis by approximately 7 per cent compared with the fourth quarter of 2022, primarily due to higher sales of consumables, equipment and premium intraocular lenses (IOLs).

Surgical segment revenue was $767-million for the full year of 2023, as compared with $718-million for the full year of 2022, an increase of $49-million, or 7 per cent. Excluding the unfavourable impact of foreign exchange of $1-million, segment revenue increased on a constant currency basis by approximately 7 per cent compared with the full year of 2022, primarily due to higher sales of consumables, equipment and premium IOLs.

Pharmaceuticals segment

Pharmaceuticals segment revenue was $307-million for the fourth quarter of 2023, as compared with $184-million for the fourth quarter of 2022, an increase of $123-million, or 67 per cent. Excluding the favourable impact of foreign exchange of $1-million, segment revenue increased on a constant currency basis by approximately 66 per cent compared with the fourth quarter of 2022, primarily due to the acquisition of Xiidra, sales of Miebo and higher sales of Vyzulta.

Pharmaceuticals segment revenue was $836-million for the full year of 2023, as compared with $681-million for the full year of 2022, an increase of $155-million, or 23 per cent. Excluding the unfavourable impact of foreign exchange of $6-million, segment revenue increased on a constant currency basis by approximately 24 per cent compared with the full year of 2022, primarily due to the acquisition of Xiidra, launch of Miebo, and higher sales of Vyzulta, U.S. generics business and international pharmaceuticals.

Operating results

Operating income was $49-million for the fourth quarter of 2023, as compared with $51-million for the fourth quarter of 2022, a decrease of $2-million. Operating income was $130-million for the full year of 2023, as compared with $207-million for the full year of 2022, a decrease of $77-million.

For both the fourth quarter and full year of 2023, the changes in operating income were largely driven by an increase in selling, general and administrative expenses driven by product launches. Full year 2023 was also impacted by business transformation costs and dis-synergy costs associated with the company becoming a stand-alone entity. The company is committed to continuing to maintain a disciplined approach to cost management and to leverage its infrastructure.

Net loss

Net loss attributable to Bausch + Lomb for the fourth quarter of 2023 was $54-million, as compared with $1-million for the fourth quarter of 2022, an unfavourable change of $53-million. Net loss attributable to Bausch + Lomb for the full year of 2023 was $260-million, as compared with a net income attributable to Bausch + Lomb of $6-million for the full year of 2022, an unfavourable change of $266-million.

For the fourth quarter of 2023, the change was primarily due to higher interest expense and the decrease in operating results noted above.

For the full year of 2023, the change was primarily due to higher interest expense, the decrease in operating results noted above and foreign exchange headwinds.

Adjusted net income attributable to Bausch + Lomb (non-GAAP (generally accepted accounting principles)) for the fourth quarter of 2023 was $83-million, as compared with $80-million for the fourth quarter of 2022, an increase of $3-million.

Adjusted net income (non-GAAP) for the full year of 2023 was $258-million, as compared with $375-million for the full year of 2022, a decrease of $117-million.

Cash from operations

Cash flow from operations for the fourth quarter of 2023 was $15-million, as compared with $159-million for the fourth quarter of 2022, a decrease of $144-million. Cash flow from operations was negatively impacted in the fourth quarter of 2023 primarily by the timing of collections and payments in the ordinary course of business and a strategic increase in inventories.

Cash flow used in operations for the full year of 2023 was $17-million, as compared with cash flow from operations of $345-million for the full year of 2022, a decrease of $362-million. Cash flow was negatively impacted in the full year of 2023 primarily by a strategic increase in inventories, decrease in operating results, and the timing of collections and payments in the ordinary course of business.

Earnings per share

GAAP earnings per share (EPS) basic and diluted attributable to Bausch + Lomb for the fourth quarter of 2023 were (15 cents), as compared with nil for the fourth quarter of 2022. Adjusted EPS attributable to Bausch + Lomb (non-GAAP) for the fourth quarter of 2023 was 24 cents, as compared with 23 cents for the fourth quarter of 2022.

GAAP EPS basic and diluted attributable to Bausch + Lomb for the full year of 2023 was (74 cents), as compared with two cents for the full year of 2022. Adjusted EPS attributable to Bausch + Lomb (non-GAAP) for the full year of 2023 was 73 cents, as compared with $1.07 for the full year of 2022.

Adjusted earnings before interest, taxes, depreciation and amortization (non-GAAP)

Adjusted EBITDA (non-GAAP) was $231-million for the fourth quarter of 2023, as compared with $181-million for the fourth quarter of 2022, an increase of $50-million, primarily due to the acquisition of Xiidra and revenue growth across all segments.

Adjusted EBITDA (non-GAAP) was $738-million for the full year of 2023, as compared with $720-million for the full year of 2022, an increase of $18-million, primarily due to the acquisition of Xiidra and revenue growth across all segments, partially offset by foreign exchange headwinds.

2024 financial outlook

Bausch + Lomb provided guidance for the full year of 2024.

Balance sheet highlights:

• Bausch + Lomb's cash, cash equivalents and restricted cash were $334-million at Dec. 31, 2023.
• Basic weighted average shares outstanding for the fourth quarter of 2023 were 350.8 million, and diluted weighted average shares outstanding for the fourth quarter of 2023 were 352.2 million.
• Basic weighted average shares outstanding for the full year of 2023 were 350.5 million, and diluted weighted average shares outstanding for the full year of 2023 were 352 million.

Conference call details

Date: Wednesday, Feb. 21, 2024

Time: 8 a.m. ET

Participant event dial-in: 1-888-506-0062 (North America), 1-973-528-0011 (international)

Participant access code: 181271

Replay dial-in: 1-877-481-4010 (North America), 1-919-882-2331 (international)

Replay passcode: 49630 (replay available until March 6, 2024)

About Bausch + Lomb Corp.

Bausch + Lomb is dedicated to protecting and enhancing the gift of sight for millions of people around the world -- from birth through every phase of life. Its comprehensive portfolio of approximately 400 products includes contact lenses, lens care products, eye care products, ophthalmic pharmaceuticals, over-the-counter products, and ophthalmic surgical devices and instruments. Founded in 1853, Bausch + Lomb has a significant global research and development, manufacturing, and commercial footprint with approximately 13,000 employees and a presence in nearly 100 countries. Bausch + Lomb is headquartered in Vaughan, Ont., with corporate offices in Bridgewater, N.J.

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