Bausch+Lomb Results Presentation Deck
Non-GAAP Appendix
Adjusted EBITA/Adjusted EBITA Margin
Adjusted EBITA represents Operating income (loss) (its most directly comparable
GAAP financial measure) adjusted to exclude amortization, fair value adjustments to
inventory in connection with business combinations and integration related inventory
charges and technology transfer costs, restructuring and integration costs, asset
impairments, goodwill impairments, acquisition related costs, separation costs, IPO
costs, separation-related costs, IPO-related costs and certain other non-GAAP
charges as discussed under "Other Non-GAAP charges" above. Adjusted EBITA
Margin (non-GAAP) is Adjusted EBITA (non-GAAP) divided by Revenues. The most
directly comparable GAAP financial measure is operating income margin, which is
Operating income (loss) divided by Revenues.
Management believes that Adjusted EBITA (non-GAAP) and Adjusted EBITA
Margin (non-GAAP), along with the GAAP measures used by management,
appropriately reflect how the Company measures the business internally and sets
operational goals for each of its businesses. In particular, the Company believes that
Adjusted EBITA (non-GAAP) and Adjusted EBITA Margin (non-GAAP) focuses
management on the Company's underlying operational results and segment
performance. As a result, the Company uses Adjusted EBITA (non-GAAP) and
Adjusted EBITA Margin (non-GAAP) to assess the actual financial performance of
each segment and to forecast future results as part of its guidance.
The Company believes that Adjusted EBITA (non-GAAP) and Adjusted EBITA
Margin (non-GAAP) are useful to investors as they provide consistency and
comparability with our past financial performance and facilitates period-to-period
comparisons of the Company's profitability and the profitability of our segments as
they eliminate the effects of certain cash and non-cash charges, which given their
nature and frequency, are outside the ordinary course and relate to unique
circumstances.
Adjusted Gross Profit/Adjusted Gross Margin
Adjusted gross profit (non-GAAP) represents gross profit (its most directly
comparable GAAP financial measure) adjusted for Other revenues, Cost of other
revenues, Amortization of intangible assets and fair value adjustments to inventory
in connection with business combinations. In accordance with GAAP, Gross profit
represents total Revenues less Costs of goods sold (excluding amortization of
intangible assets) less Cost of other revenues less Amortization of intangible assets.
Adjusted gross margin (non-GAAP) (the most directly comparable GAAP financial
measure for which is gross margin) represents Adjusted gross profit (non-GAAP)
divided by Product revenues.
Adjusted gross profit (non-GAAP) and Adjusted gross margin (non-GAAP) are
measures used by management to understand and evaluate the Company's and
each of its segment's pricing strategy, strength of product portfolio, ability to control
product costs and the success of its go-to-market strategies. Adjusted gross profit
(non-GAAP) and Adjusted gross margin (non-GAAP) facilitates period-to-period
comparisons of the Company's and each of its segment's ability to generate cash
flows from sales, as these measures eliminate the effects of amortization of
intangible assets and fair value adjustments to inventory in connection with business
combinations, which are a non-cash charges.
The Company believes that Adjusted gross profit (non-GAAP) and Adjusted gross
margin (non-GAAP) are useful to investors as they provide consistency and
comparability with our past financial performance and facilitate period-to-period
comparisons of the Company's and each of its segments' ability to generate
incremental cash flows from its revenues as these measures eliminate the effects of
amortization of intangible assets and fair value adjustments to inventory in
connection with business combinations, which are a non-cash charges that can be
impacted by, among other things, the timing and magnitude of acquisitions, which
given their nature and frequency, are outside the ordinary course and relate to
unique circumstances.
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