Bausch Health Companies Inc.

And welcome to the Vouch Health First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. We do ask that you limit yourself to one question and a single follow-up. Please note, today's event is being recorded. I would now like to turn the conference over to Christina Cheng, Senior Vice President, Investor Relations. Please go ahead, ma'am.

Good morning. Welcome, everyone, to our first quarter 2022 earnings conference call. Participating in today's call are the Chairman of Bausch Health and Bausch Loans CEO, Mr. Joe Papa, the new CEO of Bausch Health, Mr. Thomas Appio, and the new Chief Financial Officer of Bausch Health, Mr. Tom Vadeke. Before we begin, I'd like to remind you that our presentation today contains forward-looking information. Our actual results may vary materially from those expressed or implied in our forward-looking statements, and you should not place undue reliance on any forward-looking statements. Please refer to our SEC filings and filings to the Canadian Securities Administrator for illicit factors that could cause our actual results to differ materially from our expectations. We use non-GAAP financial measures to help investors understand our ongoing business performance. Non-GAAP financial measures may not be comparable to similarly titled measures used by other companies, should not be considered along with, but not as alternatives to, operating performance measures as prescribed by the GAAP. You will find reconciliations to our non-GAAP measures in our appendix, of the presentation online. Finally, the financial guidance in this presentation is effective as of today only. We do not undertake any obligations to update guidance. I would like to take a moment to remind you that the first quarter results are the fully consolidated results of Bausch Health, covering the quarter ended March 31st, before the IPO of Bausch & Lomb, which is scheduled to close this morning, subject to customary closing conditions. Our discussion today will focus on Bausch Pharma in Solta, and we will briefly comment on Bausch & Lomb's results disclosed in its IPO perspectives. Bausch & Lomb will file a separate 10Q within 45 days after IPO pricing, and will host a separate earnings call in conjunction with the filing. Please note that the results of the B&L segment presented here today will differ from the results presented in the standalone financial statements of Bausch & Lomb, as those standalone results include certain corporate and shared costs that are allocated to Bausch & Lomb, which are not included in our B&L segment results. With that, it is my pleasure to turn the call over to Joe.

Thank you, Christina, and thank you, everyone, for joining us today. With the initial public offering of Bausch & Lomb scheduled to close today, Bausch Health begins the journey toward the separation of its global pharmaceutical and eye health business, an important step that we expect will help unlock the value in each of our established franchises. Before I start, I would like to thank the 20,000 Bausch Health employees around the world for their ongoing contributions to simultaneously move forward with our strategic alternatives process. advance our R&D projects, and drive business performance that helps to improve people's lives around the world. As part of our planned succession of Bouch Health Management Team, Tom Appiah will lead the new Bouch Health into its next chapter as Chief Executive Officer. Tom's extensive experience in pharmaceuticals includes more than two decades at Shearing Plow, and 12 years in Bausch Health, where the B&L International business delivered significant top-line and bottom-line growth under his leadership as president and co-head. Tom Vadekep succeeds Samuel DeSucchi as the new chief financial officer of Bausch Health, with over 30 years of financial leadership experience in several industries and companies, both public and private, including Tyco, Procter & Gamble, and Cambrix Corporation. Tom's experience in the successful spinoff of Tyco subsidiaries will guide the separation process. Sam began serving as the Chief Financial Officer of Bausch & Lomb today, May 10th. We are confident each organization will benefit from a dedicated focus on our respective verticals that will fuel innovation to address significant unmet medical needs. On page six, let me provide a quick update on our strategic alternative process and the B&L IPO. We launched the initial public offering of 35 million shares of Bausch & Lomb last week, equivalent to 10% of shares outstanding, generating gross proceeds of approximately $630 million, which will go towards the repayment of Bausch Health debt upon closing. Given current market conditions, we decided to proceed with a smaller IPO offering than we originally intended. At IPO closing, Bausch Health will own a 90% majority stake in Bausch & Lomb. Bausch Health will have the flexibility to monetize approximately an additional 10% of Bausch & Lomb shares to decrease debt and for the benefit of Bausch Healthcare shareholders. The remaining 80% will be distributed directly to Bausch Health shareholders following the expiry of agreed upon lockups and the achievement of our target net leverage ratios of 6.5 to 6.7 times subject to shareholder and regulatory approval as noted on page 7. We will remain patient with Solta and wait for better market conditions for its IPO. Solta Medical is a valuable asset and has the potential to grow in the double digits driven by healthy demand for aesthetic products and services. Solta CEO Scott Hirsch will report to Tom Appio going forward. Before I turn it over to Tom, I'd like to make three points. First, Since resolving the legacy U.S. class action security litigation in 2019, we have reached mutually agreeable settlements with a meaningful portion of the opt-outs and have 21 matters remaining. We disagree with reports in the media regarding the characterization of potential risks and dispute the claims in the remaining individual opt-out complaints. We believe we have viable defenses in each of these actions and will continue to vigorously defend ourselves. With respect to the evaluation of the 21 remaining opt-out cases as publicized by the plaintiffs, we disagree with any suggestion that these cases have greater value than the class action and have taken provision for these remaining opt-out cases. Second, I'd like to comment on a few items that have been raised recently in the public and reiterate our confidence in the position we have previously stated. One such item are various allegations made by the opt-out plaintiffs in the securities case, which we disagree with. We have stated this before, but I think it's important to reiterate it. Bausch Healthcare is and will continue to be fully compliant regarding the debt covenants as we go through the strategic alternatives process with the IPO and spinoff of Bausch & Lomb. The entire company, together with multiple legal advisors in the U.S. and Canada, accounting and valuation advisors, and our banking advisors have done a tremendous amount of work over the past 18 months to get to this point. One of the final steps of this process, we are committed to Bausch Healthcare achieving the leverage target we set out with a 6.5 to 6.7 before spinning off Bausch & Lomb. And with respect to the Zyfax and Norwich trial, as you know, we had our trial in March of 2022. Our evidence went in well. We remain more confident in the strength of our intellectual property today than before the trial, and therefore in our chances of a successful outcome. Finally, I want to comment on the B&L business and our recent roadshow activities. Over the past few weeks, Sam and I had a chance to meet with many investors and analysts to share the B&L story. B&L fundamentals are strong, and the business continues to show strong momentum with 5% organic growth in the first quarter of 2022. We continue to see the favorable impact of megatrends that we expect to continue to drive the Bausch & Lomb business in the future. As a final comment, today we are reaffirming our top line guidance of 4% to 5% organic growth for the full year of 2022. With that, let me turn it over to the floor to Tom.