Bausch & Lomb Comparable-Basis Fourth Quarter Profits Rise 30% On 8% Sales Gain.Business Editors ROCHESTER Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. , N.Y.--(BUSINESS WIRE)--Jan. 30, 2003 Bausch & Lomb (NYSE NYSE See: New York Stock Exchange :BOL BOL Bolivia (ISO Country code) BOL Books Online BOL Bole (SIL code, Nigeria) BOL Bill Of Lading BOL Beginning Of Line BOL Best Of Luck BOL Buzz Out Loud BOL Bruin Online BOL Beginning Of Life ) - EPS of $0.60 improve $0.14 over prior-year comparable-basis figures - Liquidity further strengthened through new $400 million five-year revolving credit agreement - Company projects mid-single-digit revenue growth and comparable-basis EPS of approximately $2.05 in 2003 Bausch & Lomb (NYSE:BOL) today reported fourth-quarter worldwide sales of $477.4 million, an increase over the prior-year quarter of $35.5 million or 8%. The continued positive performance was powered by gains in the company's contact lens contact lens, thin plastic lens worn between the eye and eyelid that may be used instead of eyeglasses. Actors, models, and others wear them for appearance, and athletes use them for safety and convenience. , pharmaceuticals and lens care product categories, as well as a 3% favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact from foreign currency. For the full year, Bausch & Lomb reported worldwide sales of $1.817 billion, up 9% over 2001, including a 1% benefit from currency. The company's fourth-quarter reported net earnings were $32.4 million, or $0.60 per share, compared to a reported net loss of $8.0 million, or $0.15 per share, in 2001. The prior-year period amounts include certain non-recurring items and an adjustment to gain on sale of a previously discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . Excluding these items, comparable-basis fourth-quarter 2001 earnings per share were $0.46. For the full year, reported net earnings were $72.5 million, or $1.34 per share in 2002 compared to $21.2 million, or $0.39 per share, in 2001. Excluding non-recurring items from both periods, and discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. from 2001 results, comparable-basis earnings per share were $1.73 in 2002 compared to $1.24 in 2001. "I am pleased to report that 2002 was a year of improving operational execution and the beginning of the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in our company, as we promised it would be," said Bausch & Lomb Chairman and Chief Executive Officer Ronald L. Zarrella. "We posted solid top- top- pref. Variant of topo-. and bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. growth with improved margins and we are well positioned to continue that momentum into 2003."
Reconciliation Between Reported and Comparable-Basis Earnings
The following table provides a reconciliation between reported and
"comparable-basis" fourth-quarter and full-year earnings and earnings
per share.
Dollars in Millions,
Except Per Share Data
Fourth Quarter Full Year
2002 2002
------------ --------------
Per Per
$ Share $ Share
----- ------ ------ ------
Reported net earnings $32.4 $0.60 $72.5 $1.34
Restructuring charges
and asset write-offs,
net of reversals - - 32.1 0.59
Gain on sale
of stock investment - - (18.1) (0.33)
Minority interest charge - - 7.0 0.13
------ ------ ------- -------
Comparable-basis results $32.4 $0.60 $93.5 $1.73
------ ------ ------- -------
Dollars in Millions,
Except Per Share Data
Fourth Quarter Full Year
2001 2001
------------ --------------
Per Per
$ Share $ Share
----- ------ ------ ------
Reported net (loss) earnings $(8.0)$(0.15) $21.2 $0.39
Adjustment to gain on
disposal of discontinued operations 21.1 0.39 21.1 0.39
Gain on adoption of SFAS 133 - - (0.3) -
------ ------ ------ ------
Reported earnings
from continuing operations $13.1 $0.24 $42.0 $0.78
CEO hiring costs 4.6 0.09 4.6 0.09
Restructuring charges
and asset write-offs 2.8 0.05 13.8 0.26
Pro forma impact of adopting SFAS 142 4.3 0.08 17.4 0.32
Gain on sale of stock investment - - (12.6) (0.24)
Severance of former CEO - - 1.8 0.03
------ ------ ------ ------
Comparable-basis results $24.8 $0.46 $67.0 $1.24
------ ------ ------ ------
There were no reconciling items for the fourth quarter of 2002. In addition to the adjustment to gain on sale of a previously discontinued operation, reconciling items for the fourth quarter of 2001 include previously disclosed costs associated with hiring a new chief executive officer, and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and asset write-offs, as well as the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma impact of adopting Statement of Financial Accounting Standards No. 142 - Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. at the beginning of 2002. Under the terms of this new accounting pronouncement, the company no longer amortizes goodwill recorded on its balance sheet, and prior periods cannot be restated. Fourth-Quarter Revenues by Geography U.S. revenues of $192.1 million increased 8% over the prior year, and constituted 40% of total company sales. Outside the U.S., reported revenues increased 8%, and were up 6% in constant dollars. Revenue increases in both actual and constant dollars for each of the company's geographic operating segments were as follows:
Actual $ Constant $
-------- ----------
Americas + 6% + 8%
Europe, Middle East and Africa + 7% - 4%
Asia + 14% + 11%
These operating segment revenue trends are largely the result of the factors discussed below which influence each of the company's product categories. Fourth-Quarter Revenues by Product Category Contact lens revenues increased 13% from the fourth quarter of 2001, and were up 8% in constant dollars, powered by the company's Europe and Asia regions. Newer technology lenses continued to generate strong double-digit sales gains in established markets in these regions; the early 2002 launch of SofLens66(TM) Toric tor·ic adj. Of, relating to, or shaped like a torus or part of a torus. lenses in Japan also contributed to the sales increase. Contact lens revenues in the Americas region declined 3% from the prior year. Double-digit revenue gains for newer technology products were more than offset by the lack of PureVision(TM) lens sales in the U.S. following a court ruling, which the company has appealed, barring the sale of those lenses in that market. Lens care revenues increased 8% from the prior year in actual dollars and 7% in constant dollars, driven by double-digit sales increases for the ReNu(R) brand of lens care products in the Americas and Asia regions. In Europe, overall lens care revenues declined slightly from the prior year, largely due to the company's decision earlier in 2002 to exit non-strategic product lines acquired as part of its Woehlk acquisition. Pharmaceutical revenues increased 12% over the prior year and were up 9% in constant dollars. In the Americas region, mid-teen sales growth was powered by the company's ocular ocular /oc·u·lar/ (ok´u-lar) 1. of, pertaining to, or affecting the eye. 2. eyepiece. oc·u·lar adj. 1. Of or relating to the eye or the sense of sight. vitamin franchise and by higher sales of Lotemax(R), Alrex(R), and multisource products. In Europe, positive currency benefits offset low-single-digit constant-dollar sales declines primarily resulting from Bausch & Lomb's decision earlier in 2002 to exit certain non-strategic product lines acquired with Groupe Chauvin. Cataract surgery Cataract Surgery Definition Cataract surgery is a procedure performed to remove a cloudy lens from the eye; usually an intraocular lens is implanted at the same time. Purpose The purpose of cataract surgery is to restore clear vision. product revenues were flat with the prior year and decreased 4% in constant dollars. Higher sales of instruments and other products used in cataract surgery, as well as vitreoretinal vitreoretinal /vit·reo·ret·i·nal/ (vit?re-o-ret´i-n'l) of or pertaining to the vitreous and retina. vit·re·o·ret·i·nal adj. products, were more than offset by lower equipment sales. Refractive surgery Refractive surgery A surgical procedure that corrects visual defects. Mentioned in: Photorefractive Keratectomy and Laser-Assisted In-Situ Keratomileusis refractive surgery product revenues were down 2% from the fourth quarter of 2001 and declined 5% in constant dollars. The decline was due to lower European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. laser sales, which more than offset increased laser and diagnostic equipment sales in the Americas and Asia regions. Liquidity Highlights The company generated free cash flow (defined as cash generated before the payment of dividends, the borrowing or repayment of debt, stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. , the acquisition of businesses and intangible assets, and divestitures) of $40.8 million in the 2002 fourth quarter and $191.1 million for the full year. Total cash and investments at year end totaled $465.1 million in 2002, a decrease of $69.4 million from year end 2001. Positive free cash flow was primarily used to reduce the company's outstanding debt and minority interest obligations by the net amount of $182.5 million, as well as to pay dividends. In January 2003, the company replaced a $250 million three-year revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility set to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. in January 2004 with a $400 million five-year facility. "The new, larger revolving credit facility demonstrates lenders' recognition of our strong balance sheet," said Bausch & Lomb Chief Financial Officer Stephen C. McCluski. "We are pleased to have this enhanced back-up credit facility in place, which more than adequately covers our scheduled debt maturities over the next three years." Update on Retisert Drug Delivery Program In a quarterly update on the progress of its Retisert(TM) ophthalmic ophthalmic /oph·thal·mic/ (of-thal´mik) ocular (1). oph·thal·mic adj. Of or relating to the eye; ocular. Ophthalmic Pertaining to the eye. drug delivery implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. program, Bausch & Lomb provided the following information. Two pivotal trials assessing the safety and efficacy of the Retisert implant in the treatment of diabetic diabetic /di·a·bet·ic/ (-bet´ik) 1. pertaining to or affected with diabetes. 2. a person with diabetes. di·a·bet·ic adj. 1. macular edema macular edema Ophthalmology Waxing and waning retinal thickening due to the accumulation of fluid, seen in Pts with diabetic retinopathy, seen with a binocular slit lamp or stereoscopic fundus photography; while ME has no visual consequences, it is often (DME (Distributed Management Environment) A network monitoring and control protocol defined by the Open Software Foundation (now The Open Group). DME was not widely used. DME - Distributed Management Environment ) are underway, with an objective of filing for approval with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. under the agency's Fast Track accelerated approval process. Based on feedback received from the FDA in discussions regarding the development of the validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. plan associated with these trials, Bausch & Lomb will now analyze 12-month data for its submission for FDA approval, rather than six-month data as was originally planned. Twelve-month data from the first pivotal trial for this indication will be available in the first quarter of 2003 and is expected to be presented at the ARVO ARVO Association for Research in Vision and Ophthalmology. (Association for Research in Vision and Ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for ) meeting in May. Analysis of 12-month data from the second trial is expected to be available in the second half of this year. Filing for approval with the FDA is now targeted for around the end of 2003, with commercialization to follow in 2004. "We feel we have had constructive dialogue with the FDA concerning the development of our validation plan for DME," said Zarrella. "Although a 12-month analysis of the data puts us somewhat behind our previous schedule, the FDA's input has been helpful and we are making progress." Bausch & Lomb is also conducting pivotal trials assessing the safety and efficacy of the Retisert implant for treatment of non-infectious posterior posterior /pos·ter·i·or/ (pos-ter´e-er) directed toward or situated at the back; opposite of anterior. pos·te·ri·or adj. 1. Located behind a part or toward the rear of a structure. uveitis uveitis Inflammation of the uvea, the middle coat of the eyeball. Anterior uveitis, involving the iris or ciliary body (containing the muscle that adjusts the lens) or both, can lead to glaucoma and blindness. , a sight threatening condition that affects as many as 800,000 people on a worldwide basis. Filing for approval with the FDA is targeted for mid- mid- pref. Middle: midbrain. 2003, with commercialization expected in 2004. The company previously indicated it was enrolling patients in two Phase II clinical trials Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II for the wet form of age-related macular degeneration Age-related macular degeneration (ARMD) Degeneration of the macula (the central part of the retina where the rods and cones are most dense) that leads to loss of central vision in people over 60. (AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. ). Phase II trials are intended to further assess the feasibility of the product for development and to provide information for the design of pivotal trials. The first of these trials, targeting the occult form of wet AMD, is fully enrolled and six-month data from that trial will be analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. in the second quarter of this year. The second trial, targeting the classic form of AMD, has been enrolling slowly and the company has elected to suspend enrollment to consider alternative trial designs. Company Comments on Expectations for 2003 Bausch & Lomb expects 2003 revenues to grow in the mid-single digits over the full-year results reported today. Upper-single-digit revenue growth is expected from the company's lines of contact lenses contact lenses contact npl → verres mpl de contact contact lenses contact npl → Kontaktlinsen pl contact lenses npl and cataract cataract, in medicine, opacity of the lens of the eye, which impairs vision. In the young, cataracts are generally congenital or hereditary; later they are usually the result of degenerative changes brought on by aging or systemic disease (diabetes). products, with mid-single-digit growth in pharmaceuticals and low-single-digit growth in the lens care and refractive refractive capacity to refract light. refractive error a difference between the focal length of the cornea and lens, and the length of the eye, resulting in myopia or hyperopia. categories. The company also expects to make continued progress against its three-year financial goals, and to post full-year operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in excess of 12%. Continued gross margin expansion is expected to be partially offset by higher research and development expense as a percent of sales, with selling, general and administrative expenses remaining at roughly the same percentage of sales in 2003 as in 2002. The Company expects full-year earnings per share of approximately $2.05, with each quarter growing about 15%-20% over 2002 comparable-basis results. Note: All per share amounts in this release are calculated on the diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, as defined by Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 128.
Investor Conference Call Information
10:00 a.m. (ET)
The News Media is invited to listen only on this call.
Call-in Number: 913-981-5507
Rebroadcast Number: 719-457-0820
Confirmation #383448
The rebroadcast of the conference call will be available starting at
1:30 p.m. ET January 30, 2003 through midnight February 3, 2003.
Additionally, the investor call will be broadcast live over the
Internet. It can be accessed from the Investor Relations page of the
Company's Web site, www.bausch.com, or at www.vcall.com.
This press release contains, among other things, certain statements of a forward-looking nature relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future events or the future business performance of Bausch & Lomb. Such statements involve a number of risks and uncertainties including those concerning economic conditions, currency exchange rates, government pricing changes and initiatives with respect to healthcare products, product development and rationalization rationalization, in psychology: see defense mechanism. , enrollment and completion of clinical trials, regulatory approvals, the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , product introductions, the financial well-being of key customers, the successful execution of marketing strategies, the continued successful implementation of its efforts in managing and reducing costs and expenses, continued positive relations with third party financing sources, as well as the risk factors listed from time to time in the Company's SEC filings, including but not limited to the Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 28, 2002. Bausch & Lomb Incorporated is the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae global technology-based healthcare company for the eye, dedicated to helping consumers see, look and feel better through innovative technology and design. Its core businesses include soft and rigid gas permeable gas permeable gas adj (lenses) → luftdurchlässig contact lenses, lens care products, ophthalmic surgical and pharmaceutical products. The Company is advantaged with some of the most respected brands in the world starting with its name, Bausch & Lomb(R), and including SofLens(TM), PureVision(TM), Boston(R), ReNu(R), Storz(R) and Technolas(TM). Founded in 1853 in Rochester, N.Y., where it continues to have its headquarters, the Company has annual revenues of approximately $1.8 billion and employs approximately 11,500 people in more than 50 countries. Bausch & Lomb products are available in more than 100 countries around the world. More information about the Company can be found on the Bausch & Lomb web site at www.bausch.com. Copyright Bausch & Lomb. Trademarks of Bausch & Lomb Incorporated and its affiliates are italicized.
Bausch & Lomb Incorporated
STATEMENT OF EARNINGS
Twelve
Quarter Ended Months Ended
------------------ -----------------
Dollar Amounts in Millions- Dec. 28, Dec. 29, Dec. 28, Dec. 29,
Except Per Share Data 2002 2001 2002 2001
-------------------------- -------- -------- -------- -------
Net Sales
Americas $ 214.0 $ 201.1 $ 844.1 $ 763.1
Europe 163.3 153.1 613.1 581.7
Asia-Pacific 100.1 87.7 359.5 320.7
-------- -------- ------- -------
477.4 441.9 1,816.7 1,665.5
Costs and Expenses
Cost of products sold 213.1 200.2 797.1 763.7
Selling, administrative
and general (1) 165.3 175.4 692.5 671.9
Research and development 35.2 31.4 128.4 122.0
Restructuring charges (2) - 4.3 49.0 21.2
-------- -------- ------- -------
413.6 411.3 1,667.0 1,578.8
-------- -------- ------- -------
Operating Earnings 63.8 30.6 149.7 86.7
Other (Income) Expense
Interest and
investment income (3) (4.5) (4.7) (44.9) (48.4)
Interest expense 15.9 10.6 53.9 58.3
Gain from foreign currency 1.1 (0.6) 3.7 (8.2)
-------- ------- ------- -------
12.5 5.3 12.7 1.7
-------- ------- ------- -------
Earnings Before Income
Taxes and Minority Interest 51.3 25.3 137.0 85.0
Provision for income taxes 17.7 8.9 47.2 28.7
-------- ------- ------- -------
Earnings
Before Minority Interest 33.6 16.4 89.8 56.3
Minority interest
in subsidiaries (4) 1.2 3.3 17.3 14.3
-------- ------- ------- -------
Earnings
from Continuing Operations 32.4 13.1 72.5 42.0
Gain from Change in Accounting
Principle, net of taxes (5) - - - 0.3
Adjustment to Gain on
Disposal of Discontinued
Operations, net of taxes (6) - (21.1) - (21.1)
-------- -------- ------- -------
Net Earnings (Loss) $ 32.4 $ (8.0) $ 72.5 $ 21.2
======== ======== ======= =======
Per Share:
Earnings
from Continuing Operations $ 0.60 $ 0.24 $ 1.34 $ 0.78
Gain from Change in Accounting
Principle, net of taxes - - - -
Adjustment to Gain on
Disposal of Discontinued
Operations, net of taxes - (0.39) - (0.39)
-------- -------- ------- -------
Net Earnings (Loss) $ 0.60 $ (0.15) $ 1.34 $ 0.39
======== ======== ======= =======
Average Shares
Outstanding - (000s) 54,056 53,720 53,997 53,715
======== ======== ======= =======
(1) CEO hiring costs reduced fourth-quarter 2001 earnings by $7.1
($4.6 after taxes or $0.09 per diluted share). Including the
severance accrual for the former CEO, 2001 full-year earnings
reflected $9.9 ($6.4 after taxes or $0.12 per diluted share)
of related costs.
(2) Restructuring charges reduced full-year 2002 net earnings by
$32.1 or $0.59 per diluted share. Such charges reduced 2001
fourth-quarter net earnings by $2.8 or $0.05 per diluted share
and 2001 full-year net earnings by $13.8 or $0.26 per diluted
share.
(3) Includes $27.6 income for the full year 2002 ($18.1 after
taxes or $0.33 per diluted share) and $19.4 income for the
full year 2001 ($12.6 after taxes or $0.24) related to the
sale of Charles River stock.
(4) Full-year 2002 amount reflects a one-time minority interest
payment reducing net earnings $7.0 or $0.13 per share.
(5) Income taxes related to the adoption of SFAS 133 were $0.1 for
the full year 2001.
(6) Income taxes related to the settlement of litigation impacting
the gain on sale of the Eyewear business were $14.1 for the
fourth quarter 2001.
SUPPLEMENTAL REVENUE INFORMATION
Net Sales
Contact Lens $ 134.1 $ 119.0 $ 523.9 $ 462.7
Lens Care 121.0 111.6 465.5 415.9
Pharmaceuticals 106.2 94.5 396.1 344.7
Cataract 81.2 81.2 301.8 304.0
Refractive 34.9 35.6 129.4 138.2
------- ------- -------- --------
$ 477.4 $ 441.9 $1,816.7 $1,665.5
======= ======= ======== ========
Bausch & Lomb Incorporated
BALANCE SHEET
Dec. 28, Dec. 29,
2002 2001
---------- --------
Dollar Amounts in Millions
--------------------------
Assets
Cash and Short-term Investments $ 465.1 $ 534.4
Trade Receivables, Net 425.0 380.7
Other Investments, Available for Sale - 41.9
Inventories, Net 208.5 253.4
Other Current Assets 186.1 186.9
--------- --------
Current Assets 1,284.7 1,397.3
Properties, Net 537.5 543.3
Other Investments, Net 862.8 839.0
Other Assets 222.8 213.9
--------- --------
Total Assets $ 2,907.8 $2,993.5
--------- --------
Liabilities and Shareholders' Equity
Short-Term Debt $ 187.9 $ 123.3
Other Current Liabilities 641.1 580.3
--------- --------
Current Liabilities 829.0 703.6
Long-Term Debt 656.2 703.2
Other Long-Term Liabilities 385.7 397.1
Minority Interest 19.1 214.6
--------- --------
Total Liabilities 1,890.0 2,018.5
Shareholders' Equity 1,017.8 975.0
--------- --------
Total Liabilities
and Shareholders' Equity $ 2,907.8 $2,993.5
--------- --------
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