Newsroom
FOR RELEASE FRIDAY, MARCH 17, 2006
ROCHESTER, N.Y. - Bausch & Lomb (NYSE:BOL) is filing a Form 12b-25 today with the Securities and Exchange Commission (SEC) indicating that it must delay filing its 10-K which was otherwise required to be filed on March 16, 2005, and that it expects to file its 2005 Annual Report on Form 10-K on or before April 30, 2006. The reasons for the Company's delay in filing its 10-K are set forth in its Form 12b-25 filing today, to which readers are directed, and are summarized below.
The previously announced investigation by the Audit Committee of the Company's Board of Directors into allegations of misconduct at the Company's Brazil subsidiary is complete. As previously announced, the Company expects to restate financial results for the fiscal years ended 2001 through 2004, as well as for the first and second quarters of 2005, in order to account properly for the impact of tax matters identified in connection with that investigation.
The previously announced independent investigation into alleged improper sales practices at the Company's Korea vision care joint venture (BL Korea) is ongoing. To date, the Korea investigation has found evidence that from 2002 to 2005, BL Korea engaged in improper vision care-related sales practices in violation of Company policies. In light of that evidence, Bausch & Lomb has preliminarily determined that, pursuant to generally accepted accounting principles, all BL Korea vision care transactions for this period should be recorded under consignment accounting rules which only recognize revenue upon payment by the customer. Accordingly, the Company currently expects that its previously reported expected restatement of prior period financial statements also will include revenue recognition adjustments for vision care sales in Korea from 2002 to 2005 using consignment sales accounting. While work with respect to these adjustments has not been finalized, Bausch & Lomb currently estimates the unaudited impact of these adjustments would reduce the Company's previously reported net sales for the first and second quarters of 2005 by a cumulative total of approximately $1.4 million and reduce the previously reported net sales for the period 2002 through 2004 by a cumulative total of approximately $7.9 million. There can be no assurance that the final adjustments will not differ, including materially, from these estimated amounts.
In light of the Brazil and Korea investigations, Bausch & Lomb undertook expanded year-end procedures focused on, among other things, revenue recognition practices at certain other foreign subsidiaries. As a result of these procedures, the Company currently expects that its previously reported expected restatement of prior period financial statements also will include additional revenue recognition adjustments relating to refractive laser sales in certain foreign subsidiaries and for certain vision care transactions with a single distributor in Thailand. While work with respect to these adjustments has not been finalized, the Company currently estimates the unaudited impact of these adjustments would be to reduce the Company's previously reported net sales for the first and second quarters of 2005 by a cumulative total of approximately $1.4 million and to reduce the previously reported net sales for the period 2003 to 2004 by a cumulative total of approximately $1.9 million. There can be no assurance that the final adjustments will not differ, including materially, from these estimated amounts. The Company is continuing to review revenue recognition issues relating to transactions in certain additional locations, some or all of which may result in additional adjustments to certain prior year financial statements covered by the expected restatement.
The Company also has undertaken expanded procedures with respect to assessing deferred income tax balance sheet accounts, which the Company expects will result in additional adjustments to prior period financial statements covered by the expected restatement. Work with respect to these matters is continuing.
In addition, as previously disclosed, the Company has reviewed other unrelated accounting entries, and in light of the expected restatement, those entries are now required to be recorded in the prior periods to which they relate. Work with respect to these matters is also continuing.
The Company indicated that it is required to delay the filing of its Annual Report on Form 10-K, which was due on March 16, 2006, in order to allow for finalization of the above-described estimated adjustments, completion of the expanded procedures, and completion of the Company's analyses with respect to adjustments to be made in connection with the previously reported expected restatement.
In addition, the Company has not completed its required assessment of the Company's internal control over financial reporting and the control deficiencies identified to date in 2005, as described in the December 22, 2005 release. As noted in the December 22, 2005 release, the Company's previous conclusion as of December 25, 2004 - which was based on the procedures then performed and the information then known to it - that its internal control over financial reporting was effective should no longer be relied upon. In light of the matters described above, the Company's management currently expects ultimately to identify additional control deficiencies as being material weaknesses at December 31, 2005. The Company will conclude its analyses and report its findings in this regard when it files its Annual Report on Form 10-K for the period ended December 31, 2005.
Bausch & Lomb intends to release preliminary unaudited financial results for the year ended December 31, 2005 and to hold an earnings call as soon as practicable prior to filing the Form 10-K, but cannot predict an exact date at this time.
Bausch & Lomb is the eye health company, dedicated to perfecting vision and enhancing life for consumers around the world. Its core businesses include soft and rigid gas permeable contact lenses and lens care products, and ophthalmic surgical and pharmaceutical products. The Bausch & Lomb name is one of the best known and most respected healthcare brands in the world. Founded in 1853, the Company is headquartered in Rochester, New York. Bausch & Lomb's 2004 revenues were $2.2 billion; it employs approximately 12,400 people worldwide and its products are available in more than 100 countries. More information about the Company can be found on the Bausch & Lomb Web site at www.bausch.com . Copyright Bausch & Lomb Incorporated.
® / TM denote trademarks of Bausch & Lomb Incorporated.
This news release contains, among other things, certain statements of a forward-looking nature relating to future events or the future business performance of Bausch & Lomb. Such statements involve a number of risks and uncertainties including, without limitation, those concerning global and local economic, political and sociological conditions; currency exchange rates; government pricing changes and initiatives with respect to healthcare products; changes in laws and regulations relating to the Company's products and the import and export of such products; product development and rationalization; enrollment and completion of clinical trials; the ability of the Company to obtain regulatory approvals; the outcome of litigation; the outcome of the Audit Committee's continuing independent investigations of events described in this news release and in the Company's prior disclosures concerning those investigations; the outcome of PriceWaterhouseCoopers' quarterly review process in connection with the filing of the Company's Quarterly Report on Form 10-Q for the third quarter of fiscal 2005 and of the extended year-end review process in connection with the filing of the Company's Annual Report on Form 10-K for fiscal 2005 and the expected, estimated adjustments described in this news release; the filing of the Company's 10-Q for third quarter of fiscal 2005 and its 10-K for fiscal 2005; the possibility that the market for the sale of certain products and services may not develop as expected; the financial well-being of key customers, development partners and suppliers; the successful execution of marketing strategies; continued efforts in managing and reducing costs and expenses; the successful completion and integration of business acquisitions; the Company's success in introducing and implementing its enterprise-wide information technology initiatives, including the corresponding impact on internal controls and reporting; the Company's success in the process of management testing, including evaluation of results; continued positive relations with third party financing sources and the risk factors listed from time to time in the Company's SEC filings, including but not limited to the Current Report on Form 8-K, dated June 14, 2002 and the Form 10-Q for the quarter ended June 25, 2005.
