Bausch Health Reports Second Straight Quarter of Organic Revenue Growth

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LAVAL, Quebec—Bausch Health Companies Inc., (NYSE/TSX: BHC) in its first financial results report since dropping the Valeant Pharmaceuticals corporate name, announced Tuesday that it had achieved “overall organic growth” for the second consecutive quarter. It attributed the growth to the performance of its Bausch + Lomb/International and Salix segments, according to the announcement. Bausch Health chairman and chief executive Joseph C. Papa noted that the organic growth in the Bausch + Lomb/International segment was “primarily due to volume increases and strong growth across Europe and China.” He also said that, due to the strong second-quarter results, the company was raising its full-year adjusted EBITDA (non-GAAP) guidance range and, “despite significant foreign exchange headwinds,” maintaining full-year revenue guidance.

Bausch Health reported total revenues of $2.13 billion in the second quarter, a decrease of $105 million or 5 percent compared with $2.23 billion in the year-ago period. Excluding the impact of divestitures and discontinuations of $183 million and the favorable impact of foreign exchange of $25 million, revenue grew organically by 3 percent, the company said.

Across the Bausch + Lomb/International segment, reported revenue totaled $1.21 billion, a decline of 1 percent compared with the year-ago period, “primarily due to divestitures and discontinuations,” the company noted in its announcement. Revenue in the B+L segment grew organically by 4 percent in the quarter, driven primarily by volume increases and strong growth in Europe and China.

The company also cited the following second-quarter highlights, among others:

• Completed a name change to Bausch Health Companies Inc.
• Realigned into four reporting segments (Bausch + Lomb/International, Salix, Ortho Dermatologics and Diversified Products), which allows for “greater clarity into the performance of each of our businesses.”
• Successfully launched Lumify, which achieved a weekly market share of 21 percent in the Redness Reliever category.
• Launched Soothe Xtra Protection Preservative Free lubricant eye drops.
• Launched Ocuvite Blue Light eye vitamins, a nutritional supplement that helps protect eyes from blue light emitted from digital devices.
• Launched PreserVision AREDS 2 Formula Chewable eye vitamins.

On a companywide basis, Bausch Health said its net loss in the quarter, ended June 30, was $873 million, which compares with a net loss of $38 million in the year-ago period. The decrease was attributed to an increase in operating loss and an increase in the provision for income taxes of $343 million, which is primarily due to internal tax reorganizational efforts that the company began in the fourth quarter of 2016 and completed in the third quarter of 2017.

Adjusted net income (non-GAAP) for the second quarter totaled $327 million, compared with $362 million in the year-ago period, a decrease of 10 percent. Bausch Health said it produced $222 million in operating cash in the quarter, compared with $268 million in year-ago period, a decrease of $46 million.

“Cash flows in the second quarter of 2018 were negatively affected by approximately $70 million due to divestitures in 2017, $57 million of accelerated interest payments in connection with the refinancings in June 2018 and approximately $50 million in payments for legal settlements,” the company reported.