Core Insights - Bausch + Lomb experienced a significant day with FDA approval and reports of a potential sale, leading to a stock price increase of over 7% [1] Group 1: FDA Approval - The FDA granted approval for Bausch + Lomb's full range of enVista Envy vision intraocular lenses (IOLs), which are used to treat cataracts and other vision disorders [4] Group 2: Potential Sale - Reports indicate that Bausch + Lomb is exploring a sale, with large U.S. investment firms Blackstone and TPG potentially collaborating on a buyout bid [2] - Bids for Bausch + Lomb are expected to range from $13 billion to $14 billion in enterprise value [3] - The management is working with advisor Goldman Sachs to gauge interest from potential buyers [2]

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Group 1 - Bausch + Lomb (BLCO) shares increased by 14.5% to $17.80, with a higher-than-average trading volume, contrasting with a 2.8% loss over the past four weeks [1][2] - The price surge is attributed to investor optimism following a Financial Times report indicating that Bausch + Lomb is considering a sale to address challenges from its spin-off from Bausch Health, with private equity firms likely interested [2][3] - The company is expected to report quarterly earnings of $0.16 per share, reflecting a year-over-year decline of 27.3%, while revenues are projected to be $1.17 billion, an increase of 15.8% from the previous year [3][4] Group 2 - The consensus EPS estimate for Bausch + Lomb has remained unchanged over the last 30 days, suggesting that the stock's price increase may not be sustainable without earnings estimate revisions [4] - Bausch + Lomb holds a Zacks Rank of 3 (Hold), indicating a neutral outlook, while another company in the same industry, Alignment Healthcare (ALHC), experienced a 3.2% decline in its last trading session [4][5] - Alignment Healthcare's consensus EPS estimate has decreased by 7.8% over the past month to -$0.14, representing a year-over-year change of 26.3% [5]

The highly indebted healthcare stock rose on rumors it may be selling itself. Shares of Bausch + Lomb (BLCO 15.63%) rallied 15.7% as of 3:07 p.m. ET today. The stock is surging today on news the company is considering selling itself. Of note, Bausch + Lomb is the eye-care subsidiary of Bausch Health Companies, which was formerly known as Valeant Pharmaceuticals. Bausch Health prefers cash, not shares Valeant got into trouble nearly a decade ago after using debt to buy up several pharmaceutical companies, th ...

Key Takeaways Bausch + Lomb is discussing a possible sale that would separate it from its parent company, Bausch Health Cos. Bausch Health is saddled with debt of $21 billion, nearly $10 billion of which is set to mature in 2027. In July, Bausch Health pushed back against a research firm's report that said it was mulling bankruptcy options. Bausch + Lomb (BLCO) shares popped Monday following a report that the eyecare company is considering a sale. The contact lens producer is working with Goldman Sachs (GS) ...

Product Portfolio and Development - Bausch + Lomb reported a comprehensive portfolio of approximately 400 products in eye health, marketed in around 100 countries [161]. - The company has over 60 projects in its global pipeline, including new contact lenses and next-generation cataract equipment [166]. - The acquisition of XIIDRA in September 2023 enhances the company's dry eye franchise, being the first non-steroid eye drop approved for dry eye disease [171]. - The company launched Blink NutriTears in June 2024, targeting root causes of dry eyes and promoting healthy tear production [168]. - Bausch + Lomb's Vision Care segment includes leading products like Biotrue ONEday daily disposables and Biotrue multi-purpose solution [163]. - The Surgical segment includes key brands such as Akreos and VICTUS femtosecond laser, focusing on cataract and retinal conditions [164]. - The company acquired AcuFocus in January 2023, enhancing its surgical portfolio with the IC-8 Apthera IOL [171]. - The company plans to launch enVista Aspire and enVista Envy in the U.S. and Europe in 2024 and 2025, respectively [169]. - The company has received FDA approval for Lumify Preservative Free, expected to launch in Q1 2025 [167]. Financial Performance - Product sales for the three months ended June 30, 2024, were $1,213 million, an increase of $182 million (approximately 17.6%) compared to $1,031 million for the same period in 2023 [190]. - Total revenues for the six months ended June 30, 2024, were $2,315 million, up $349 million (approximately 17.8%) from $1,966 million for the same period in 2023 [190]. - Operating income for the three months ended June 30, 2024, was $26 million, a decrease of $17 million (approximately 39.5%) compared to $43 million for the same period in 2023 [190]. - Net loss attributable to Bausch + Lomb Corporation for the three months ended June 30, 2024, was $151 million, an increase of $119 million compared to a net loss of $32 million for the same period in 2023 [190]. - The cost of goods sold for the three months ended June 30, 2024, was $482 million, an increase of $65 million (approximately 15.6%) compared to $417 million for the same period in 2023 [190]. - Selling, general, and administrative expenses for the three months ended June 30, 2024, were $535 million, an increase of $118 million (approximately 28.3%) compared to $417 million for the same period in 2023 [190]. - Revenues for the three months ended June 30, 2024, were $1,216 million, an increase of $181 million, or 17%, compared to $1,035 million in 2023 [192]. - Vision Care segment revenue increased by $51 million, or 8%, to $697 million, driven by sales from the dry eye portfolio and contact lenses, despite a $20 million unfavorable impact from foreign currencies [198]. - Pharmaceuticals segment revenue rose by $116 million, or 60%, to $310 million, primarily due to the XIIDRA acquisition and the launch of MIEBO, with incremental sales from XIIDRA contributing $89 million [199]. - Surgical segment revenue increased by $14 million, or 7%, to $209 million, driven by increased system sales and demand for consumables [199]. Cost and Expense Management - Cost of goods sold increased by $65 million, or 16%, to $482 million, primarily due to costs associated with recent acquisitions [204]. - SG&A expenses rose by $118 million, or 28%, to $535 million, mainly due to higher selling and advertising costs related to XIIDRA and MIEBO [205]. - R&D expenses decreased slightly by $1 million, or 1%, to $84 million, reflecting ongoing investment in product development [207]. - Amortization of intangible assets increased by $18 million, or 32%, to $74 million, primarily due to acquisitions [208]. - Operating income decreased by $17 million to $26 million, reflecting increased SG&A and amortization expenses [210]. - Total provisions to reduce gross product sales to net product sales were 35.4% for Q2 2024, up from 29.1% in Q2 2023, primarily due to increased rebates [202]. Segment Performance - Vision Care segment profit increased to $192 million in Q2 2024, up 15% from $167 million in Q2 2023, driven by higher volume and pricing [214]. - Pharmaceuticals segment profit rose to $78 million in Q2 2024, a 15% increase from $68 million in Q2 2023, primarily due to increased contributions from XIIDRA and MIEBO [214]. - Surgical segment profit decreased to $4 million in Q2 2024, down 56% from $9 million in Q2 2023, attributed to higher costs and selling expenses [215]. - Total revenues for the six months ended June 30, 2024, were $2,315 million, an 18% increase from $1,966 million in 2023, driven by acquisitions and increased volumes [221]. - Vision Care segment revenue was $1,332 million for the six months ended June 30, 2024, an 8% increase from $1,233 million in 2023, primarily from dry eye products and contact lenses [225]. - Pharmaceuticals segment revenue surged to $577 million in the first half of 2024, a 63% increase from $355 million in 2023, mainly due to the XIIDRA acquisition and MIEBO launch [228]. Challenges and Risks - The ongoing Russia-Ukraine war has impacted the company's distribution capabilities, but necessary licenses have been obtained to sell products in those regions [175]. - Revenues attributable to Russia, Ukraine, and Belarus accounted for approximately 3% of total revenues for both the six months ended June 30, 2024, and the year ended December 31, 2023 [177]. - Revenues attributable to Israel and Iran were less than 1% of total revenues for the six months ended June 30, 2024, and the year ended December 31, 2023 [178]. - The company has implemented actions to mitigate supply chain challenges, resulting in higher inventory costs that have pressured margins, particularly in the surgical business [179]. - The company is facing challenges related to its initial public offering and the complexities of managing an independent business [285]. - The company is navigating challenges related to international operations, including compliance with varying regulatory regimes and geopolitical risks [290]. - The company faces challenges in obtaining components and raw materials, which may lead to manufacturing and supply difficulties [292]. - Economic factors such as historically high domestic and global inflation, interest rates, and foreign currency rates could impact revenues and margins [292]. - The company is exposed to interest rate risks associated with floating rate debt borrowings [292]. - There are uncertainties regarding the successful improvement and modification of existing products and the development of new products, which may require significant expenditures [292]. - The company is subject to compliance risks related to extensive regulations in marketing and business practices, including health care fraud laws and anti-bribery laws [293]. - Potential impacts from health care reforms and changes in legislation could affect the company's operations and pricing strategies [294]. - The company has identified risks related to illegal distribution or sale of counterfeit products, which could harm its market position [294]. - The company cautions that the list of factors affecting future results is not exhaustive and should be carefully considered by investors [295]. Debt and Interest Management - Interest expense rose to $102 million in Q2 2024, an increase of $44 million from $58 million in Q2 2023, mainly due to new debt instruments [217]. - Net loss attributable to Bausch + Lomb Corporation was $151 million in Q2 2024, a significant increase from a loss of $32 million in Q2 2023, driven by higher taxes and interest expenses [220]. - SG&A expenses increased by $204 million, or 24%, to $1,039 million for the six months ended June 30, 2024, primarily due to higher selling and advertising costs [233]. - R&D expenses rose by $4 million, or 2%, to $166 million for the same period, driven by ongoing product development [233]. - Amortization of intangible assets increased by $35 million, or 31%, to $148 million, mainly due to acquisitions [234]. - Operating income decreased by $9 million, or 22%, to $32 million, reflecting higher SG&A and amortization expenses [236]. - Interest expense surged by $93 million to $201 million, attributed to various debt facilities [241]. - Provision for income taxes increased by $102 million to $145 million, influenced by changes in earnings jurisdiction and discrete tax effects [243]. - Net cash provided by operating activities was $56 million, an increase of $136 million compared to a net cash used of $80 million in the prior year [246]. - As of June 30, 2024, the interest rate for borrowings under the Revolving Credit Facility ranges from 8.18% to 8.19% per annum [259]. - The stated interest rate under the May 2027 Term Facility at June 30, 2024 was 8.69% per annum [261]. - The stated interest rate under the September 2028 Term Facility at June 30, 2024 was 9.34% per annum [262]. - Bausch + Lomb issued $1,400 million aggregate principal amount of 8.375% Senior Secured Notes due October 2028 [265]. - The Company expects to make interest payments of approximately $200 million and mandatory debt amortization payments of $15 million for the period July 1, 2024 through December 31, 2024 [273]. - The remaining mandatory quarterly amortization payments for the May 2027 Term Facility were $69 million through March 2027 [264]. - The remaining mandatory quarterly amortization payments for the September 2028 Term Facility were $20 million through June 2028 [264]. - As of July 24, 2024, Bausch + Lomb had 351,895,407 issued and outstanding common shares [280]. - The weighted average stated rate of interest for the Company's outstanding debt obligations as of June 30, 2024 was 8.63% [269]. - Bausch + Lomb acquired AcuFocus, Inc. for an up-front purchase price of $35 million, with $31 million paid in January 2023 [274]. - The company anticipates continued improvement in operational efficiency and plans to manage cash and working capital requirements for the remainder of 2024 and beyond [285].

Financial Performance - Bausch + Lomb reported a strong Q2 2024 performance with revenue growth of 17% to $1.216 billion compared to $1.035 billion in Q2 2023[10, 14] - Constant Currency (CC) revenue growth was even stronger at +20% compared to Q2 2023[8, 10] - Adjusted Gross Profit increased by 22% to $753 million, with an Adjusted Gross Margin of 61.9%, a 220 bps increase year-over-year[16] - The company is raising its FY24 revenue guidance to $4.7 - $4.8 billion and CC revenue growth to ~16-18%[20] - Adjusted EBITDA guidance is also raised to $850 - $900 million[20] Segment Performance - All segments contributed to the growth, with Pharmaceuticals leading at +61% CC revenue growth[11] - Vision Care segment revenue grew by 11% CC, Surgical by 9% CC[11] Key Growth Drivers - The Daily SiHy portfolio experienced significant growth, with a +67% increase in Q2 2024 revenue[24] - OTC Dry Eye Portfolio grew +24%[25]

Bausch + Lomb Corporation (NYSE:BLCO) Q2 2024 Earnings Call July 31, 2024 8:00 AM ET Company Participants George Gadkowski - Vice President, Investor Relations Brent Saunders - Chairman and Chief Executive Officer Sam Eldessouky - Chief Financial Officer Conference Call Participants Xuyang Li - Jefferies Patrick Wood - Morgan Stanley Craig Bijou - Bank of America Robbie Marcus - JPMorgan Douglas Miehm - RBC Capital Markets Matt Miksic - Barclays Operator Good morning, and welcome to Bausch + Lomb’s Second Q ...

Company Overview - Bausch + Lomb is expected to report quarterly earnings of $0.49 per share, reflecting a year-over-year decline of 27.9% [1] - The company posted revenues of $1.22 billion for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 4.11%, compared to $1.04 billion in the same quarter last year [2] - Bausch + Lomb has surpassed consensus revenue estimates four times over the last four quarters [2] Stock Performance - Bausch + Lomb shares have decreased by approximately 1.1% since the beginning of the year, while the S&P 500 has gained 14% [3] - The current estimate revisions trend for Bausch + Lomb is unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [5] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $1.14 billion, and for the current fiscal year, it is $0.63 on revenues of $4.66 billion [13] - The company has surpassed consensus EPS estimates two times over the last four quarters [9] - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call [10] Industry Context - The Medical Services industry, to which Bausch + Lomb belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [12]

Financial Performance - Total revenue for Q2 2024 was $1.216 billion, a 17% increase from $1.035 billion in Q2 2023, with a 20% increase on a constant currency basis[4] - Adjusted EBITDA (non-GAAP) for Q2 2024 was $209 million, up from $179 million in Q2 2023, reflecting a $30 million increase primarily due to higher sales[20] - The company raised its full-year 2024 revenue guidance to $4.700 - $4.800 billion, expecting approximately 16% - 18% constant currency growth[21] - Cash flow from operations improved to $15 million in Q2 2024, compared to a cash outflow of $24 million in Q2 2023, an increase of $39 million[19] - Adjusted net income (non-GAAP) for Q2 2024 was $45 million, down from $65 million in Q2 2023, a decrease of $20 million[18] - Adjusted EPS (non-GAAP) for Q2 2024 was $0.13, down from $0.18 in Q2 2023, representing a decline of 27.78%[45] - Operating income for Q2 2024 was $26 million, down from $43 million in Q2 2023, indicating a decrease of 39.53%[44] - The company reported a net loss of $151 million for Q2 2024, compared to a net loss of $32 million in Q2 2023, reflecting a significant increase in losses[44] Segment Performance - The Pharmaceuticals segment saw a revenue increase of 60%, reaching $310 million compared to $194 million in Q2 2023, driven by the XIIDRA® acquisition and strong launch of MIEBO®[11] - Vision Care segment revenue increased by 8% to $697 million, driven by sales from the dry eye portfolio and daily SiHy lenses[9] - Surgical segment revenue grew by 7% to $209 million, primarily due to increased demand for equipment and consumables[10] Costs and Expenses - The cost of goods sold for Q2 2024 was $482 million, an increase of 15.59% from $417 million in Q2 2023[44] - Research and development expenses for Q2 2024 were $84 million, slightly down from $85 million in Q2 2023[44] - Selling, general and administrative expenses for the three months ended June 30, 2024, were $535 million, up from $417 million in the same period of 2023, representing a 28.3% increase[50] - Interest expense for Q2 2024 was $102 million, significantly higher than $58 million in Q2 2023, reflecting increased borrowing costs[44] Non-GAAP Measures - Adjusted EBITDA (non-GAAP) is used to assess financial performance, focusing on underlying operational results and business performance[33] - The company excludes certain costs from non-GAAP measures, including asset impairments and restructuring costs, to provide a clearer view of operational sustainability[35] - Adjusted net income (non-GAAP) excludes amortization of intangible assets and acquisition-related costs to reflect more accurately the company's financial performance[36] - The company emphasizes the importance of non-GAAP measures for investors, as they provide insights into operating performance and valuation[29] Future Outlook and Risks - Future economic conditions, including inflation and interest rates, are expected to impact revenue, expenses, and margins[25] - Risks associated with the proposed spinoff from Bausch Health Companies Inc. include potential delays and the need for shareholder approvals, which could impact the transaction's completion[25] - The acquisition of XIIDRA® and other ophthalmology assets may not yield expected benefits in a timely manner, and could increase debt levels due to financing[25] - The company expects continued revenue growth driven by new product launches and market expansion strategies[53] - The company is preparing for post-separation operations with transformation initiatives that may lead to restructuring actions and associated costs[35]