Bausch + Lomb Bankruptcy?

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Anonymous

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Is Bausch + Lomb going Bankrupt? Maybe not. But it is worrisome that there is not a public statement about the financial health of this company.

When my customers ask how is B+L doing I have nothing to say. The top management does not have to give out any company secrets on how sales are doing. Just a statement that says the companies finances are just fine and there is no chance B+L will go Bankrupt over the next three years would be OK to assure confidence in our company.
 






Chances are that any financial information will be "misleading" from the top. Since B+L is a private company it doesn't need to release detailed financial info to the public. This is one of the strategies that a private equity firm uses to make sure they can borrow as much money as possible under a company without people realizing that it's all going to fail sooner or later.
 






Watch the scene in "Goodfellas" where they are using the restaurant to buy everything in sight and selling out the back. In the end the torch the restaurant. This is analogous to what is taking place. They will keep it quiet until the very last minute and then just file BK. At this point anything goes and liabilities are shed, anything and everything WP doesn't want to deal with gets tossed.
 






Looks as if Bankruptcy is likely for B+L. It is just a matter of when. I suppose the longer they wait the more multi-million dollar salary money the executives get and the more assets can be moved out from under B+L umbrella.

So probably everything that goes on at this company does not really matter. I would doubt that B+L can secure any more loans and no one is going to buy it with a recent recall. Not a happy place to work knowing your efforts are essentially wasted on a company that will shut its doors soon.

Unless the top executives are nice enough to come out with some reassuring statements about B+L I would start putting a Plan B together for your future.
 






One recall is not going to kill a company. However, what this recall says is that WP had B+L for three years and was not able to change the culture or fix its problems. This recall shows that there is a systemic problem at B+L. If 3 years did not fix the systemic problems a new owner sure would have a difficult time finding where the issue is to fix it.

The reality of the situation is WP has done virtually nothing with this company in the 3 years that they owned it. Looking from the outside looking in the company looks the same as it did 3 years ago. Some new products but the products do the same thing as the previous products without much differentiation. Top management change but no change in the rest of the organization in terms of the number of employees or dramatic structural changes that would imply efficiency improvements.

The competition has launched a number of new products that at least match if not surpass B+L products. A potential buyer would look at B+L and figure that the company looks the same as it has for the past 10 years and has no potential for high growth and may sales may actually be decreasing.

It is a strange company strategy. What the end game is should be anyone's guess.
 






Anonymous said:
One recall is not going to kill a company. However, what this recall says is that WP had B+L for three years and was not able to change the culture or fix its problems. This recall shows that there is a systemic problem at B+L. If 3 years did not fix the systemic problems a new owner sure would have a difficult time finding where the issue is to fix it.

The reality of the situation is WP has done virtually nothing with this company in the 3 years that they owned it. Looking from the outside looking in the company looks the same as it did 3 years ago. Some new products but the products do the same thing as the previous products without much differentiation. Top management change but no change in the rest of the organization in terms of the number of employees or dramatic structural changes that would imply efficiency improvements.

The competition has launched a number of new products that at least match if not surpass B+L products. A potential buyer would look at B+L and figure that the company looks the same as it has for the past 10 years and has no potential for high growth and may sales may actually be decreasing.

It is a strange company strategy. What the end game is should be anyone's guess.
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The hope had been that as Novartis swooped in with tons of cash to buy out Alcon the same would happen on lesser scale for B&L; didn't and never going to happen as people inside the industry understand difference in culture between two like Mercedes and Chrysler. Outsiders (WP) thought they were very similar. Fatal mistake. Plan B: BK the thing; that's where we're headed gentlemen
 






You'd also be surprised how many execs use Cafe Pharma to dig up dirt on companies to see how screwed up they are from the ground level. You never know who is checking out the website here.
 






Anonymous said:
One recall is not going to kill a company. However, what this recall says is that WP had B+L for three years and was not able to change the culture or fix its problems. This recall shows that there is a systemic problem at B+L. If 3 years did not fix the systemic problems a new owner sure would have a difficult time finding where the issue is to fix it.

The reality of the situation is WP has done virtually nothing with this company in the 3 years that they owned it. Looking from the outside looking in the company looks the same as it did 3 years ago. Some new products but the products do the same thing as the previous products without much differentiation. Top management change but no change in the rest of the organization in terms of the number of employees or dramatic structural changes that would imply efficiency improvements.

The competition has launched a number of new products that at least match if not surpass B+L products. A potential buyer would look at B+L and figure that the company looks the same as it has for the past 10 years and has no potential for high growth and may sales may actually be decreasing.

It is a strange company strategy. What the end game is should be anyone's guess.
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Umm, were you working at B+L during the MoistureLoc recall? One recall *can* kill a company, it basically killed B+L for all intents and purposes. I worked here during the recall, during the WP merger, and left for far greener pastures almost two years ago.

The ML recall killed B+L's solution market share, basically decimated it in the short-term (among other products that were caught up in the post ML recall shock-wave), and they will never get that back, even with the launch of BioTrue. It sure took them long enough to launch a replacement for MultiPlus. but I believe it's far too little too late.

There is no innovation from an R&D perspective, and any success they've had was from purchasing developed products or technologies from 3rd parties, like Alimera Sciences (Alaway, Soothe).
 






Alaway was neutral but Soothe was a dump. Alimera could not afford to support an OTC product and because Flemming had been in bed with those guys, B&L took it off their hands (read: drowning man clings to straw) as nothing (and I mean nothing) was really coming out of R&D.
 


















I love that the same people 'analyzing' B+L's finances probably pay a broker to manage their retirement accounts - point being, my guess is that the person(s) on here posting that B+L is going bankrupt have zero basis for their comments and probably don't know jack about finances in general.

Do you know of an upcoming debt the company is going to default on?!
Do you even know the current debt of B+L?
Do you know how much cash is on hand and/or annual cash flow?
Do you even know the total of all revenues for B+L?

So now that you've answered 'NO' to the questions above, realize you don't know shit and that your assumptions are completely worthless.

Does B+L have problems? Sure it does. But potential bankruptcy is not one of them...

Is the company likely to be sold (pieces or whole) in the next few/several years? Yes. But remember, you don't bring in new management/board members to sell 6 months or even 1 year later. If the company could be sold 6 months - 1 year later (for the return Warburg is looking for...) you would simply sell it now instead of hassling with new mgmt.

Have you researched Fred Hassan and learned that his tenure is no less than 5 years at any company? No you haven't. This isn't an overnight process. It takes years to 'turn-around' a company and sell it for a higher-than-expected profit.

Quit freaking out today and save your energy - 'cause you're gonna need it in 2-3 years...
 






Looking at the initial post the question raised was "Is Bausch + Lomb going Bankrupt?"

A number of people weighed in to give their perspective. Since management will not comment on the financial health of the company you have to look at other avenues of information to determine the probability of this happening. If you are an employee this is a reasonable question to ask since the company is your financial future and if you are a bank you would need to assess this probability as you do not want to lose your shirt to a bankrupt company.

This question probably was raised as their does not seem to be any buyers for this company. Three years is a reasonable time for a Private Equity firm to hold on to a company prior to sell. Three years are up and there were likely a lot of companies that looked over B+L's books. No one is interested. Probably because the finances do not look very good.

WP certainly has a lot of money and if they wanted to they could use their own money to keep B+L going forever (20 years). The question then is if it is in WPs interest to keep putting money into a business or is it better to take money out of the business and let it die by going into bankruptcy.

The critical piece in this puzzle is whether after 3 years under WP are sales increasing or decreasing and are profits increasing or decreasing. Using the sales figures from the competition this information can be determined.

So to answer the initial question I would say that the probability of bankruptcy is high if the sales are going down as WP will want to find a way to walk away from a bad investment. If however the sales are increasing the probability of bankruptcy is low as WP would be able to pay off the current bills and hope that in 2 to 3 years the markets will improve.

The recent recalled product likely does not help current sales and that would have to be calculated in as well.

Bottom line --if you have a choice to work for or invest in company X vs B+L work for company X because their finances are public and you can predict the viability of the company. B+L is a gamble due to uncertainty. Higher uncertainty means demanding more safeguards like severance pay, higher salaries, and if you are a bank higher interest rates.
 






Anonymous said:
I love that the same people 'analyzing' B+L's finances probably pay a broker to manage their retirement accounts - point being, my guess is that the person(s) on here posting that B+L is going bankrupt have zero basis for their comments and probably don't know jack about finances in general.

Do you know of an upcoming debt the company is going to default on?!
Do you even know the current debt of B+L?
Do you know how much cash is on hand and/or annual cash flow?
Do you even know the total of all revenues for B+L?

So now that you've answered 'NO' to the questions above, realize you don't know shit and that your assumptions are completely worthless.

Does B+L have problems? Sure it does. But potential bankruptcy is not one of them...

Is the company likely to be sold (pieces or whole) in the next few/several years? Yes. But remember, you don't bring in new management/board members to sell 6 months or even 1 year later. If the company could be sold 6 months - 1 year later (for the return Warburg is looking for...) you would simply sell it now instead of hassling with new mgmt.

Have you researched Fred Hassan and learned that his tenure is no less than 5 years at any company? No you haven't. This isn't an overnight process. It takes years to 'turn-around' a company and sell it for a higher-than-expected profit.

Quit freaking out today and save your energy - 'cause you're gonna need it in 2-3 years...
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None of the companies Fred liquidated in the past were owned by Private (Pirate) Equity. What you've written here is the same gobledeegook that is being told outsiders. It's all smoke and mirrors otherwise we would be hearing about how things are going well or at least fine (but management won't address this as it is real mess). The sale is likely to be of the IP and the name. It will be like a neutron bomb, no people left, just inanimate objects. Your speech is similar to what was being told to people before they were gassed in Auschwitz. "Stay calm, everything will be fine, we're just going to have you take a shower."
 












Anonymous said:
Our future is uncertain and no one can tell us the financial status of this company.
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That's the beauty of having a private company. It's closed off to prying eyes who really want to kick the tires and see the financial engine. This company has the body of a Plymouth with a financial engine of a Geo Metro. Both were failures and dumped by the side of the road.
 












Looking more likely with every new Recall and nothing new is coming out of R&D. This company is only relevant to the banks that loaned to it. Everyone is going to try to get their money back. In bankruptcy will the banks get their money back? Maybe.

The employees are going to be the big losers in this one.
 






B+L is very much a dying brand name, despite any flashy marketing on OTC products. The next few years you will witness competition eroding B+L market share in its core areas of business. The one thing this company does ok with is the generics.
 












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