PARSIPPANY, N.J., Dec. 18, 2025 (GLOBE NEWSWIRE) -- Embecta Corp. (embecta) (Nasdaq: EMBC) today announced that management will present at the J.P. Morgan Healthcare Conference in San Francisco on Wednesday, January 14, 2026 at 2:15 p.m. PT / 5:15 p.m. ET. Audio webcasts of the presentations will be accessible under the “News & Events” section of the Company's investor relations website at investors.embecta.com. About embectaembecta is a global company that is advancing its 100-year legacy in insulin delive ...

Group 1 - Investors reacted quickly to a price drop, bidding down the price by 7.24% on the first day and an additional 7.44% the following day [1] - Robert F. Abbott has been managing his family's investments since 1995 and incorporated options trading in 2010, focusing on covered calls and collars with long stocks [1] Group 2 - No stock, option, or similar derivative positions are held by the analyst in any of the mentioned companies, nor are there plans to initiate such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not influenced by compensation from any company mentioned [2]

Financial Performance - Revenues decreased by $42.7 million, or 3.8%, to $1,080.4 million for the year ended September 30, 2025, compared to $1,123.1 million for the year ended September 30, 2024[228]. - Gross profit decreased by $58.4 million to $676.8 million, with gross profit as a percentage of revenue at 62.6%, down from 65.5% in the prior year[230]. - Operating income increased by $75.3 million to $242.1 million from $166.8 million[230]. - Net income increased by $17.1 million to $95.4 million from $78.3 million[230]. Expenses - Research and development expenses decreased by $41.5 million, or 52.7%, to $37.3 million due to the discontinuation of the patch pump program[233]. - Selling and administrative expenses decreased by $33.1 million, or 9.1%, to $332.0 million, primarily driven by lower costs with BD and reduced compensation expenses[232]. - Cost of products sold increased by $15.7 million, or 4.0%, to $403.6 million, with cost of products sold as a percentage of revenues at 37.4% compared to 34.5% in the prior year[229]. - Other operating expenses decreased to $65.4 million from $124.5 million, with significant reductions in costs related to the separation and the patch pump program[234]. Debt and Interest - Interest expense, net decreased to $107.3 million from $112.3 million, primarily due to lower debt levels and interest rates[235]. - As of September 30, 2025, total principal debt issued amounted to $1,416.8 million, with long-term debt standing at $1,388.7 million after accounting for current debt obligations and debt issuance costs[244]. - The company has outstanding $200.0 million of senior secured notes with a 6.75% interest rate due in February 2030, and $500.0 million of 5.00% senior secured notes due in February 2030[242][244]. - The weighted average cost of total debt as of September 30, 2025, was 6.4%, with short-term debt representing 0.7% of total debt[245]. - The company paid an aggregate principal amount of approximately $184.6 million on the Term Loan during the year ended September 30, 2025[246]. - The company is in compliance with all financial covenants related to its credit agreements and senior secured notes as of September 30, 2025[245]. Cash Flow - Cash and equivalents and restricted cash decreased to $228.6 million as of September 30, 2025, from $274.2 million as of September 30, 2024, reflecting a $45.6 million decrease[252][253]. - Net cash provided by operating activities was $191.7 million, primarily driven by a net income of $95.4 million and non-cash adjustments totaling $120.0 million[253]. - The company entered into a trade receivables sale agreement, resulting in the sale of $63.2 million of trade receivables during fiscal year 2025[250][251]. Taxation - The income tax provision increased to $40.9 million for the year ended September 30, 2025, compared to $(34.1) million for the year ended September 30, 2024, primarily due to the absence of prior tax benefits and higher overall earnings in 2025[238]. - The company has established a reserve for uncertain tax positions unless they are more likely than not to be sustained upon examination[264]. - The company’s policy includes recognizing interest and penalties related to income taxes as part of income tax expense[264]. Risks and Challenges - The company is exposed to risks from changes in foreign currency exchange rates, which could adversely affect its financial condition and cash flows[269]. - As of September 30, 2025, a 100 basis points change in interest rates would impact interest expense on the Term Loan by $7.1 million annually[273]. - The company anticipates potential impacts from new tariffs instituted by the U.S. government on raw materials and products, which could increase operating costs[270]. - The company is subject to risks related to the inability to replace services currently provided by BD on similar terms, which could affect operations[266]. - The company faces competitive pressures from new drug therapies for diabetes treatment and new product introductions by competitors[266]. - The company is undergoing a brand transition, which includes regulatory challenges and potential customer confusion[270]. Strategic Initiatives - The company has entered into foreign currency forward exchange contracts to manage currency exposures, partially offsetting gains and losses[271]. - The company is evaluating strategic collaborative partnerships and acquisition opportunities to accelerate growth and access innovative technologies[270].

Financial Data and Key Metrics Changes - For Q4 2025, Embecta generated $264 million in revenue, reflecting a 7.7% decline year-over-year on an as-reported basis or a 10.4% decline on an adjusted cost and currency basis [10] - GAAP gross profit for Q4 2025 totaled $158.5 million with a margin of 60%, compared to $173.8 million and 60.7% in the prior year [15] - Adjusted net income for Q4 2025 was $29.4 million, or $0.50 per diluted share, compared to $25.9 million and $0.45 in the prior year [17] Business Line Data and Key Metrics Changes - In Q4 2025, pen needle revenue declined approximately 13.9%, while syringe revenue declined by approximately 4.5% [12] - Safety products grew approximately 3.7%, and contract manufacturing revenue grew approximately 8.5% during the same period [12] - For the full year, pen needle revenue declined approximately 7.1%, while syringe revenues grew by 1.7% and safety products grew by 6.3% [14] Market Data and Key Metrics Changes - U.S. revenue for Q4 totaled $142 million, reflecting a year-over-year decline of 15.2% on an adjusted cost and currency basis [11] - International revenue for Q4 totaled $122 million, representing an increase of 2.8% on a reported basis but a decline of 4% on an adjusted cost and currency basis, primarily due to lower volumes in China [12] - The decline in international revenue was primarily due to lower revenue contribution from China, driven by heightened competitive intensity and local brand preferences [14] Company Strategy and Development Direction - The company ended its patch pump program and executed a restructuring plan aimed at enhancing profitability and free cash flow [5] - Embecta is collaborating with over 30 pharmaceutical partners to co-package pen needles with generic GLP-1 therapies, anticipating launches in Canada, Brazil, and India during calendar year 2026 [7] - The company aims to maintain its leadership position in core product categories while expanding into new market segments through product development programs [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made during fiscal 2025 and outlined a strategic direction for sustainable growth [10] - The company anticipates a flat to down 2% revenue change for fiscal 2026, with expectations of modest declines in core injection and contract manufacturing revenue [22] - Management acknowledged the challenges posed by geopolitical tensions, particularly in China, but remains optimistic about long-term market potential [40] Other Important Information - Embecta generated approximately $182 million in free cash flow during fiscal 2025 and repaid approximately $184 million of debt [21] - The company expects to generate between $180 million and $200 million in free cash flow during fiscal 2026 [29] - A transaction to sell certain intellectual property rights associated with the discontinued patch pump program for $10 million occurred after year-end [21] Q&A Session Summary Question: Details on GLP-1 partnerships - Management is in discussions with over 30 potential GLP-1 entrants, with several already providing orders for development purposes [33][34] Question: Consumer willingness to buy non-Chinese products in China - Management noted that Q4 2025 performance in China met expectations, and steps have been taken to stabilize the situation [39][40] Question: Increased cannula costs and sourcing alternative suppliers - The company is working on identifying alternate cannula suppliers to mitigate cost increases and reduce reliance on a sole source [45][46] Question: Clarification on milestone payments to a U.S. pharmacy customer - Management explained that milestone payments are related to volume levels and marketing spend, impacting pricing dynamics [49] Question: Structure of contracts with generic GLP-1 providers - Management discussed the initial phases of contracting and the importance of reliability in supply for generic manufacturers [56][58] Question: Capital deployment and M&A opportunities - Management remains focused on debt repayment but is open to organic and inorganic investments as leverage decreases [64][65] Question: Sale of intellectual property associated with the patch pump - The sale of certain IP for $10 million will increase cash but will not impact adjusted results for fiscal 2026 [70]

Financial Data and Key Metrics Changes - For Q4 2025, Embecta generated $264 million in revenue, reflecting a 7.7% decline year-over-year on an as-reported basis or a 10.4% decline on an adjusted cost and currency basis [10][11] - GAAP gross profit for Q4 2025 totaled $158.5 million with a margin of 60%, compared to $173.8 million and 60.7% in the prior year [15] - Adjusted net income for Q4 2025 was $29.4 million, up from $25.9 million in the prior year, with adjusted diluted earnings per share at $0.50 compared to $0.45 [17][20] Business Line Data and Key Metrics Changes - In Q4 2025, U.S. revenue totaled $142 million, reflecting a year-over-year decline of 15.2% on an adjusted cost and currency basis, primarily due to unfavorable comparisons from the previous year [11][12] - International revenue for Q4 was $122 million, representing a 2.8% increase on a reported basis but a decline of 4% on an adjusted cost and currency basis, driven by lower volumes and pricing headwinds in China [12][13] - For the full year, pen needle revenue declined approximately 7.1% to $784.1 million, while safety products grew 6.3% due to improved pricing and volume increases [14][19] Market Data and Key Metrics Changes - The decline in international revenue was primarily attributed to lower contributions from China, influenced by heightened competitive intensity and local brand preferences [12][14] - The company anticipates launches of generic GLP-1 products in Canada, Brazil, and India during Calendar Year 2026, which could represent a significant revenue opportunity [8][35] Company Strategy and Development Direction - The company ended its Patch Pump Program and executed a restructuring plan to enhance profitability and free cash flow, generating approximately $182 million in free cash flow and paying down $184 million of debt in FY 2025 [5][9] - Embecta is focusing on advancing its GLP-1 strategy, collaborating with over 30 pharmaceutical partners to co-package pen needles with generic GLP-1 therapies, aiming for a $100 million annual revenue opportunity by 2033 [7][35] - The company is prioritizing financial discipline and debt reduction while exploring organic and inorganic growth opportunities [9][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction despite a complex geopolitical and trade backdrop, emphasizing the importance of maintaining leadership in core categories and advancing innovation programs [75] - The initial guidance for FY 2026 anticipates flat to down 2% revenue compared to 2025 levels, with expectations of modest volume declines in core injection business [22][24] Other Important Information - The company completed the implementation of its ERP system and operationalized a new distribution network in Latin America and India, marking a significant milestone in its strategic roadmap [5][10] - A recent agreement to sell certain intellectual property rights associated with the discontinued Patch Pump Program for $10 million is expected to increase cash flow but will not impact adjusted results [21][68] Q&A Session Summary Question: Details on GLP-1 partnerships - Management is in discussions with over 30 potential GLP-1 partners, with several already providing orders for development purposes, and anticipates commercial launches in 2026 [33][34] Question: Consumer willingness to buy non-Chinese products in China - Management noted that Q4 2025 performance in China met expectations, and steps have been taken to stabilize the situation, including introducing a more price-competitive pen needle [38][39] Question: Increased cannula costs and sourcing alternative suppliers - The company is working on identifying alternate cannula suppliers to mitigate increased costs from the sole-source agreement with BD, which is expected to last until 2032 [44][46] Question: Clarification on milestone payments to a U.S. pharmacy customer - Management explained that milestone payments are tied to contract terms, including rebates and marketing spend, which can lead to year-over-year price fluctuations [49][50] Question: Structure of contracts with generic GLP-1 providers - Management indicated that initial contracts focus on quality agreements and vendor qualification, with commercial contracts to be discussed once generic manufacturers receive approval [55][56]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company generated adjusted revenues of approximately $1.08 billion, reflecting a decline of 3.9% on an adjusted cost and currency basis [13] - The fourth quarter revenue was $264 million, a 7.7% decline year-over-year on an as-reported basis, or a 10.4% decline on an adjusted cost and currency basis [10] - GAAP net income for fiscal 2025 was $95.4 million, compared to $78.3 million in the prior year, while adjusted net income was $173.9 million, up from $143.1 million [21][22] Business Line Data and Key Metrics Changes - Pen needle revenue declined approximately 7.1% year-over-year, totaling $784.1 million, primarily due to advanced distributor ordering in the prior year and pricing headwinds [14] - Syringe product revenues grew by 1.7% year-over-year, driven by improved pricing, while safety products grew 6.3% due to a combination of improved pricing and volume increases [15] - Contract manufacturing revenue grew approximately 53.9% compared to the prior year [15] Market Data and Key Metrics Changes - U.S. revenue for the fourth quarter totaled $142 million, reflecting a year-over-year decline of 15.2% on an adjusted cost and currency basis [11] - International revenue for the fourth quarter was $122 million, representing an increase of 2.8% on a reported basis but a decline of 4% on an adjusted cost and currency basis, primarily due to lower volumes and pricing headwinds in China [12] - The decline in international revenue was largely attributed to lower revenue contribution from China, driven by heightened competitive intensity and local brand preferences [14] Company Strategy and Development Direction - The company ended its patch pump program and executed a restructuring plan aimed at enhancing profitability and free cash flow [5] - The company is advancing its GLP-1 strategy, collaborating with over 30 pharmaceutical partners to co-package pen needles with generic GLP-1 therapies, anticipating a $100 million annual revenue opportunity by 2033 [6][8] - The company aims to maintain leadership in core product categories while expanding its portfolio through new product development programs [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction despite a complex geopolitical and trade backdrop, focusing on maintaining leadership in core categories and delivering strong profitability and cash flow [58][59] - The company anticipates flat to down 2% revenue growth on an adjusted constant currency basis for fiscal year 2026, with expectations of modest declines in core injection and contract manufacturing revenue [25][26] - Management highlighted the importance of stabilizing the situation in China and remains optimistic about long-term growth in that market [39] Other Important Information - The company generated approximately $182 million in free cash flow during fiscal year 2025 and repaid approximately $184 million of debt, ending the year with a net leverage level of approximately 2.9 times [23] - The company sold certain intellectual property rights and long-lived assets associated with the discontinued patch pump program for $10 million, which will not impact adjusted results for fiscal year 2026 [54] Q&A Session Summary Question: Details on GLP-1 partnerships - The company is in discussions with over 30 potential GLP-1 entrants, with several already providing orders and submitting regulatory submissions [33][34] Question: Consumer willingness to buy non-Chinese products in China - The company has taken steps to stabilize the situation in China and introduced a more price-competitive pen needle [38] Question: Increased cannula costs and sourcing alternative suppliers - The company is working on identifying alternate cannula suppliers to mitigate cost increases and has made significant progress [41][43] Question: Milestone payments to a large U.S. pharmacy customer - Milestone payments are related to contract terms that include rebates and marketing spend, which can lead to year-over-year price fluctuations [44] Question: Capital deployment and M&A opportunities - The company remains focused on paying down debt but is open to organic and inorganic investments if value-creative opportunities arise [52]

Financial Performance - Q4 FY2025 - Reported revenue was $264 million, a decrease of 7.7% compared to the prior year period[16] - Adjusted revenue was $263.3 million, a decrease of 10.4% on an adjusted constant currency basis compared to the prior year period[16] - Adjusted EBITDA was $89.9 million with a margin of 34.1%, compared to $73 million and 25.2% in the prior year period[16] Financial Performance - FY2025 - Reported revenue was $1,080.4 million, down 3.8% compared to the prior year period[17] - Adjusted revenue was $1,079.7 million, down 3.9% on an adjusted constant currency basis compared to the prior year period[17] - Adjusted EBITDA was $415.3 million with a margin of 38.5%, compared to $353.4 million and 31.4% in the prior year[17] FY2026 Financial Guidance - The company projects reported revenue between $1,071 million and $1,093 million, representing a growth rate between -0.9% and 1.1%[18] - Adjusted constant currency revenue growth is expected to be between -2.0% and 0.0%[18] - Adjusted operating margin is projected to be between 29.0% and 30.0%[18]

Revenue Performance - Reported revenues for Q4 2025 were $264.0 million, a decrease of 7.7% compared to $286.1 million in Q4 2024[9] - Adjusted revenues for Q4 2025 were $263.3 million, down 10.4% on an adjusted constant currency basis[5] - U.S. revenues decreased by 15.2% on both a reported and adjusted constant currency basis[5] - International revenues increased by 2.8% on a reported basis but decreased by 4.0% on an adjusted constant currency basis[5] - The company's reported revenues decreased by $42.7 million, or 3.8%, to $1,080.4 million for the year ended September 30, 2025, compared to $1,123.1 million for the year ended September 30, 2024[11] - The decrease in reported revenues was primarily driven by $52.9 million of unfavorable changes in volume and $3.5 million associated with negative foreign currency translation impacts[11] - For fiscal year 2026, the company expects reported revenues to be between $1,071 million and $1,093 million, reflecting a growth rate of (0.9)% to 1.1%[12] - Adjusted revenues for the twelve months ended September 30, 2025, were $1,079.7 million, a decrease of 4.2% from $1,127.2 million in 2024[27] Profitability Metrics - Gross profit for Q4 2025 was $158.5 million, with a margin of 60.0%, compared to $173.8 million and 60.7% in the prior year[5] - Operating income for Q4 2025 was $56.5 million, with a margin of 21.4%, compared to $26.2 million and 9.2% in the prior year[5] - Net income for Q4 2025 was $26.4 million, with diluted earnings per share of $0.45, compared to $14.6 million and $0.25 in the prior year[5] - The company's net income for the year ended September 30, 2025, was $95.4 million, compared to $78.3 million for the previous year[19] - Net income for the twelve months ended September 30, 2025, was $95.4 million, an increase of 22.7% compared to $78.3 million in 2024[23] - Adjusted Operating Income for the twelve months ended September 30, 2025, reached $337.7 million, compared to $296.9 million for the same period in 2024, reflecting a 13.8% growth[36] - Adjusted Net Income for the twelve months ended September 30, 2025, was $173.9 million, compared to $143.1 million in 2024, reflecting a 21.5% growth[36] Cash Flow and Debt Management - Free cash flow for Q4 2025 was approximately $77 million, compared to $27 million in the prior year quarter[6] - The company reduced debt by approximately $72.4 million in Q4 2025, bringing total fiscal year 2025 debt reduction to approximately $184.5 million[6] - As of September 30, 2025, the company had $228.6 million in cash and equivalents and $1.417 billion of debt principal outstanding[14] - The company repaid approximately $72.4 million under its term loan B facility during the fourth quarter[14] - Payments on long-term debt increased significantly to $184.6 million in 2025 from $34.6 million in 2024[23] - Non-GAAP Free Cash Flow for the twelve months ended September 30, 2025, was $182.4 million, compared to $19.9 million in the previous year, indicating a substantial increase[38] - The company aims to prioritize free cash flow towards paying down debt and creating financial flexibility for future investments[42] Asset and Liability Management - Total current assets decreased from $761.0 million as of September 30, 2024, to $631.4 million as of September 30, 2025[21] - The total liabilities and equity decreased from $1,285.3 million as of September 30, 2024, to $1,090.9 million as of September 30, 2025[21] - Closing cash and equivalents decreased to $228.6 million in 2025 from $274.2 million in 2024[23] Capital Expenditures and Investments - Capital expenditures for the twelve months ended September 30, 2025, were $9.3 million, a decrease from $15.8 million in 2024[23] Other Financial Metrics - Adjusted EBITDA for the twelve months ended September 30, 2025, was $415.3 million, representing a 17.5% increase from $353.4 million in 2024[27] - The adjusted EBITDA margin improved to 38.5% in 2025 from 31.4% in 2024[27] - The company reported a GAAP gross profit margin of 62.6% for the twelve months ended September 30, 2025, down from 65.5% in 2024[32] - Stock-based compensation expense for the twelve months ended September 30, 2025, was $31.6 million, up from $26.3 million in 2024[23] Future Outlook - The company plans to maintain its global leadership position and execute on new product programs in fiscal year 2026[2]

Core Insights - The company reported a decrease in revenue for the fourth quarter and the full fiscal year 2025, primarily due to advanced distributor ordering and ongoing business dynamics in China [2][10][11] - Despite the revenue decline, the company achieved higher profitability metrics, including increased GAAP operating margin and net income year over year [3][10] - The company completed the first phase of its strategic roadmap and initiated the second phase focused on growth, operational efficiency, and debt reduction [3][9] Fourth Quarter Fiscal Year 2025 Financial Highlights - Reported revenues were $264.0 million, down 7.7% from $286.1 million in the prior year [6][10] - U.S. revenues decreased by 15.2%, while international revenues increased by 2.8% on a reported basis [6][8] - Gross profit was $158.5 million with a margin of 60.0%, compared to $173.8 million and 60.7% in the prior year [6][19] - Net income was $26.4 million, with diluted earnings per share of $0.45, compared to $14.6 million and $0.25 in the prior year [6][19] Twelve Months Ended September 30 Fiscal Year 2025 Financial Highlights - Reported revenues totaled $1,080.4 million, down 3.8% from $1,123.1 million in the previous year [11][19] - U.S. revenues decreased by 4.6%, while international revenues decreased by 2.8% on a reported basis [11][19] - Gross profit was $676.8 million with a margin of 62.6%, compared to $735.2 million and 65.5% in the prior year [11][19] - Net income was $95.4 million, with diluted earnings per share of $1.62, compared to $78.3 million and $1.34 in the prior year [11][19] Strategic Initiatives and Future Outlook - The company aims to strengthen its core business and expand its product portfolio, particularly in the GLP-1 strategy [9][12] - Fiscal year 2026 guidance anticipates reported revenues between $1,071 million and $1,093 million, with an expected revenue growth of -0.9% to 1.1% [12][13] - The company plans to maintain a strong adjusted operating margin of 29.0% to 30.0% in fiscal year 2026 [12][13] Balance Sheet and Liquidity - As of September 30, 2025, the company had $228.6 million in cash and equivalents and $1.417 billion in debt principal outstanding [15][19] - The company repaid approximately $72.4 million of outstanding principal under its term loan B facility during the fourth quarter [9][15] - A quarterly cash dividend of $0.15 per share was declared, payable on December 18, 2025 [16]

Core Points - Embecta Corp. announced the resignation of David J. Albritton from the Board of Directors due to personal reasons, effective immediately [1] - LTG (Ret.) David F. Melcher will not seek re-election at the 2026 annual stockholder meeting and will retire from the Board due to other commitments [1] - Both Albritton and Melcher have been Directors since the Board's inception in 2022 [1] Leadership Transition - Devdatt "Dev" Kurdikar, President and CEO, expressed gratitude for the contributions of both departing Directors, highlighting their leadership during the company's establishment [2] - Kurdikar noted the importance of Melcher's mentorship and leadership in navigating complex initiatives [2] - The Board plans to appoint Kurdikar as Chairman and Dr. Claire Pomeroy as Lead Independent Director upon Melcher's departure [2] Company Overview - Embecta is transitioning from its initial phase to a focus on growth, with a commitment to prioritize the needs of customers, employees, and shareholders [2] - The company has a 100-year legacy in insulin delivery and aims to become a broad-based medical supplies company [3] - Embecta employs approximately 2,000 individuals globally, dedicated to improving lives through innovative solutions [3]