Bausch & Lomb CEO Eyes IPO

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Anonymous said:
If they are really looking for 20B then everyone should just ignore B+L. If I went into a car dealership and asked how much for the Honda Civic and the salesman said $100,000 dollars I would not even spend 5 minutes of my time negotiating.

WP should get really comfortable with owning B+L. They will own it for a long long time.
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They have been ignored. They are waiting for a desperate chump to show up who wants at all costs to be in eyecare; so they hang on.
 






They paid 4B and change with debt which is about the max it was really worth. I guess they thought they could increase the value, but they brought in the wrong leadership and bad leadership trickled all the way down the ranks. Like most things, you make money when you buy something at a discount and sell it for what it is worth. But because they have done nothing to increase value and it is still only worth about the same as they paid, they have no where to go.

Total attrition of the original sales forces many times over and you are exactly where you deserve to be.

Alcon was worth what it was because it was the dominant force in ophthalmics. Not because the products were any better, but because the reps in the street had been there for years and years and had all the relationships with all the top docs. The value was there, because the docs use their products. End of story. The products are no better, the strength of those relationships are.

It doesn't matter how many swat analysis KK has you do, you can't replace decades of relationships with new hires and expect to get that share. B&L is toast and has been for several years now. It will never regain the luster it once had. The only division with a prayer is vision care and the optometrists hate B&L. They don't even put B&L in the top 10 of most important companies in their practice. That tells you all you need to know.
 






Given the state of B+L described above the employees must be focused on performing activities that improve their resumes instead of improving the sales of the company. They will do the minimum to make it look like they are focused on the company priorities but they will work on their own personal goals as much as possible.

This is essentially the state of any company that has a short term plan and a short term management. You really only have half of the time of your work force working on company priorities. No one is going to be a 100% work time dedicated to company priorities if the management will change in a year or two when the company is sold.

Private equity is a short term fix for companies. Since employees have no dedication to short term private equity companies prolonging the sale of the company decreases the value due to a unfocused me first company last priorities.
 






I would agree with that last post.

Most of the sales force at B&L probably works far less than 40 hours per week in the field.
Probably close to 20hrs. Most are doing the bare minimum while they look for another job, take time out of territory to go to interviews, etc. I did that for a year and left in the top 10. Consider that, if that's what I was doing, what the hell were other people doing.

It was totally disrespectful to the company, but I hated the management of KK and PS so I didn't care. You have people going to school full time to get MBAs that are supposed to be working. It's basically theft. Stealing paid time off. It's massive theft. The problems there are unreal.

It really all comes down to management. I think at this point the company is so far gone I wouldn't even know where to try and repair it. Too many hurt relationships with top customers. Those reps and managers have moved on to other companies and have trashed the company so bad, B&L will not gain a dominant share.

Attrition is the killer of companies like B&L and they let it out of control for too many years. PS and KK destroyed B&L just like novartis. It's a me-too, has-been pharma company now.
 












Numbers for Allergan.
Divide by 5 and it's basically a good idea of what B&L does
about 1 billion per year in revenue instead of 5 billion.

CEO of allergan had a 3 mil base and 30 mil in options for 2010.

Bottom line. 4.2 gross profit on 5.2 gross revenue.
figure B&L is 800 Mil on 1 billion.

Warburg is probably halfway paid off on their purchase. B&L is like an ATM throwing off cash to warburg. B&L is in real bad shape, but as long as they can keep sucking it dry, they will. Eventually they'll sell off the pieces. It definitely wasn't their plan. They wanted out by now, but raking in hundreds of millions in cash isn't bad.

Financial Highlights
Fiscal Year
Fiscal Year Ends: Dec 31
Most Recent Quarter (mrq): Jun 30, 2011
Operating Margin (ttm): 25.09%
Return on Assets (ttm): 10.42%
Return on Equity (ttm): 0.04%
Income Statement
Revenue (ttm): 5.21B
Revenue Per Share (ttm): 17.13
Qtrly Revenue Growth (yoy): 13.60%
Gross Profit (ttm): 4.20B
EBITDA (ttm)6: 1.47B
Diluted EPS (ttm): -0.01
Qtrly Earnings Growth (yoy): 2.70%
Balance Sheet
Total Cash (mrq): 2.16B
Total Cash Per Share (mrq): 7.07
Total Debt (mrq): 1.59B
Total Debt/Equity (mrq): 31.80
Current Ratio (mrq): 3.90
Book Value Per Share (mrq): 16.26
Cash Flow Statement
Operating Cash Flow (ttm): 333.90M
Levered Free Cash Flow (ttm): 628.88M
 






B&L does well. WP takes profits. B&L no better off because WP took the profits. Value of B&L minimal because WP is sucking it dry. Who in there right mind would buy a company that is being sucked dry by a private equity firm?
 






someone else who wants to suck it dry. Problem is, can only suck it so dry.
eventually it runs out of steam because it's not being built up. It's a shame what the company has become. Dirtbags corrupted the public company years ago with cooked books, that caused investors to lose faith.

Then the product recall happened that made it vulnerable, the CEO reacted too quickly and pulled the product when in fact there was nothing wrong with B&L product was just bad patient compliance, stock price tanked, warburg swooped in.

Just a couple bad decisions and the whole thing crumbled. Just plain sad. pathetic.
 






Essentially this ends up being like the restaurant "bust out" in Goodfellas where they are bringing in everything through the front door and selling it out the back until the thing has so much debt they have to go BK with what was a perfectly good and well run restaurant. I guess gangster tactics= Private Equity tactics.
 






Cash and selling off the parts. I am sure WP is putting as little capital into this company as possible. If a buyer has not stepped up to the plate by now they never will as B&L products get older and older. R&D would have to come up with some clear winners soon in order to change this outlook.
 


















companies make money on an IPO when the shares are sold before it goes public. Day it goes public, the suckers in the after market that buy it are completely crushed and the execs that got the inside IPO price make out like bandits.

Watch the groupon IPO later this week and you will see how it works. Company is releasing 5% of common shares for the IPO. Stock price will easily double from the open price. As price increases, insiders who bought the IPO share sell off. Should be illegal but isn't.

Watch what happens to the price post IPO. will tank.

Look at the history of WIFI since IPO in May of this year. Many many examples.
Dunkin donuts just did the same thing.

If B&L had an IPO I would suspect some people at the very top would make out on the quick flip but long term the stock would be a horrible dud. Wall street wants rapid growth and B&L is not doing that.
 






Anonymous said:
companies make money on an IPO when the shares are sold before it goes public. Day it goes public, the suckers in the after market that buy it are completely crushed and the execs that got the inside IPO price make out like bandits.

Watch the groupon IPO later this week and you will see how it works. Company is releasing 5% of common shares for the IPO. Stock price will easily double from the open price. As price increases, insiders who bought the IPO share sell off. Should be illegal but isn't.

Watch what happens to the price post IPO. will tank.

Look at the history of WIFI since IPO in May of this year. Many many examples.
Dunkin donuts just did the same thing.

If B&L had an IPO I would suspect some people at the very top would make out on the quick flip but long term the stock would be a horrible dud. Wall street wants rapid growth and B&L is not doing that.
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Unfortunately, you are not very aware of SEC requirements. Insiders are not able to sell their shares for 6 months from the date of an IPO. They may become rich on paper immediately, but it's where the stock ultimately settles that dictates the kind of pricing they will get. The qualifier though is that some employment contracts stipulate that say someone like Freddie is able to buy millions of shares at say $1 each. Then if the stock ultimately ends up at say 9$ he can make out but not in the same way as if it were a company with a good future. The rest of the company may be granted a strike price of say $12 and they then remain underwater supporting Freddie's riches.
 






Is there any indication that B&L is increasing sales at all? Any products doing well in the marketplace?

All a company needs is one winner. However if there are no winners then losing patents and increased competition from competitors shrink market share.

To bad this is not a public company. You have to rely on what the CEO says about the company as to how the company is doing. According to the CEO everything is rosy and could not be better times at B&L.
 






Anonymous said:
Is there any indication that B&L is increasing sales at all? Any products doing well in the marketplace?

All a company needs is one winner. However if there are no winners then losing patents and increased competition from competitors shrink market share.

To bad this is not a public company. You have to rely on what the CEO says about the company as to how the company is doing. According to the CEO everything is rosy and could not be better times at B&L.
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No real indication of how sales are doing. Based on the data from my territory and what I can see of other territories sales are down from last year. We did not hit goals last year and we will not hit the goals set for 2011. Big pic here - Lotemax is the money maker and it is off patent in a year. That is why they cannot find a buyer and ultimately the company will be sold off product by product.
 






Anonymous said:
Unfortunately, you are not very aware of SEC requirements. Insiders are not able to sell their shares for 6 months from the date of an IPO. They may become rich on paper immediately, but it's where the stock ultimately settles that dictates the kind of pricing they will get. The qualifier though is that some employment contracts stipulate that say someone like Freddie is able to buy millions of shares at say $1 each. Then if the stock ultimately ends up at say 9$ he can make out but not in the same way as if it were a company with a good future. The rest of the company may be granted a strike price of say $12 and they then remain underwater supporting Freddie's riches.
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unfortunately you don't know how an IPO works. Lock up periods are not set by the SEC, but by the firms handling the IPO and they usually set 6 months for IPO Lock ups for insiders as a general rule but not always.

The people that get IPO shares don't have to be insiders. Insider's relatives can get IPO through their broker because they are rich and their broker will get them for them. Average joe can't get IPO shares. Call your stock broker and ask if you can get groupon IPO shares right now and they will laugh at you.

Now it gets good. Stock options. Forget about the IPO shares. Groupon is a perfect example. They will release 5% of the shares in the IPO. This creates artificial price inflation. The company has been losing money hand over fist with customer acquisition costs but have been giving HUGE stock options to execs and listing that as a business cost as well. Massive net loss right.

After IPO, groupon will have first and second offerings. That's when those private shares are sold on the market. Bottom line. Don't buy IPO shares on the open market after the company goes public. If your broker can't get you shares during the IPO before the stock opens public then you are hosed. When all those private shares come out in secondary offerings, insiders kill it and the general public gets crushed.

I don't see B&L having a successful IPO, it would be easy enough to assess the strength of the company from the outside.

As for Lotemax it is not the company's cash cow. You idiots in pharma have to realize you are small potatoes. Yes lotemax is pharmas cash cow but all of pharma business is 1/10th of B&L revenues. Vision care is what matters. Period.
 


















Vision Care is where the growth and $$ is at. Gained share with PV2HD in the largest lens category in the first 3 quarters for the first time in......well a very long time. Newest technology in toric innovation launches nationally in January, a new material in the daily disposable segment in June, a new multi-focal design in Q4 (if not sooner), plus they will also launch a competitive peroxide based lens care product by Q4 as well.

This is where the company is going.
 






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