Core Insights - Embecta Corp. is hosting its inaugural Analyst and Investor Day to present its phased approach for value creation and long-range financial plan [1][2] - The company aims to transition into a broader medical supplies company while maintaining its leadership in insulin injection [2][3] Strategic Priorities - Embecta's core insulin injection business provides a stable revenue base with attractive margins, and the company is focusing on three strategic priorities for long-term success [3] - The company reaffirmed its fiscal year 2025 financial guidance, with reported revenues expected between $1,073 million and $1,090 million, reflecting a revenue growth decline of (4.4)% to (2.9)% [4][3] Financial Guidance - The adjusted gross margin is projected to be between 62.75% and 63.75%, with an adjusted operating margin of 29.75% to 30.75% [4] - Adjusted earnings per diluted share are expected to be between $2.70 and $2.90, with an adjusted EBITDA margin of 36.25% to 37.25% [4] Long Range Financial Plan - The long-range financial plan for fiscal years 2025 through 2028 includes strengthening the core business, expanding the product portfolio, and increasing financial flexibility through cost savings and debt reduction [5][6] - The company aims to maintain a flattish constant currency revenue CAGR, achieve an adjusted operating margin of approximately 28% to 30%, generate about $600 million in cumulative free cash flow, and repay between $450 million and $500 million of debt [6] Event Details - The Analyst and Investor Day is taking place live in New York City and via webcast, providing an opportunity for stakeholders to engage with the company's strategic vision [8]

Core Viewpoint - Embecta reported a decline in revenue for Q2 2025, primarily due to the termination of its insulin patch pump project and a strategic shift towards the rapidly growing GLP-1 market [1][6][10]. Financial Performance - Q2 2025 revenue was $259 million (approximately 1.87 billion RMB), a year-over-year decrease of 9.8%, with a constant currency decline of 7.7% [2][3]. - Net income for the quarter was $23.5 million, down 18.7% year-over-year, attributed to reduced revenue and increased restructuring costs [2]. - Revenue breakdown showed a significant decline in pen needles by 13.7% to $188.3 million, while syringes decreased by 4.0% to $28.8 million [3][4]. - Safety devices saw a slight increase of 2.7% to $34.2 million, and contract manufacturing revenue surged by 69.2% to $4.4 million [4]. Insulin Patch Pump Project Termination - The insulin patch pump project, aimed at developing systems for type 2 diabetes, was terminated in November 2024 due to competitive pressures and the rise of GLP-1 drugs [7][9]. - The termination is expected to incur restructuring costs between $35 million to $45 million, including cash and non-cash asset impairments [9]. - This decision is projected to save the company $60 million to $65 million annually, allowing a focus on core business and growth opportunities [9]. Strategic Shift to GLP-1 Market - The GLP-1 receptor agonist market is anticipated to reach $109 billion by 2030, prompting Embecta to explore opportunities in this area [10]. - The company began developing GLP-1 drug delivery solutions in September 2023, launching a small packaging GLP-1 needle in Germany in December 2024 [10]. - Embecta aims to expand its market share through partnerships with generic drug companies, expecting continued growth in the GLP-1 sector [10]. Company Overview - Embecta specializes in innovative insulin delivery and disease management solutions for diabetes patients, having become an independent Nasdaq-listed company in 2022 [11]. - The company’s core products include pen needles, syringes, and safety injection devices, serving approximately 30 million diabetes patients globally [11].

Part I [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Embecta Corp. as of and for the periods ended March 31, 2025 [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended March 31, 2025, revenues were $259.0 million, a decrease from $287.2 million in the prior year period, with net income at $23.5 million, down from $28.9 million Condensed Consolidated Statements of Income (in millions, except per share amounts) | | Three Months Ended March 31, | | Six Months Ended March 31, | | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Revenues** | $259.0 | $287.2 | $520.9 | $564.5 | | **Gross Profit** | $164.1 | $185.4 | $321.2 | $371.3 | | **Operating Income** | $62.9 | $39.2 | $91.6 | $84.7 | | **Net Income** | $23.5 | $28.9 | $23.5 | $49.0 | | **Diluted EPS** | $0.40 | $0.50 | $0.40 | $0.85 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended March 31, 2025, comprehensive income was $34.9 million, including a $11.4 million positive foreign currency translation adjustment, while the six-month period saw comprehensive income of $8.0 million, significantly lower than the prior year Condensed Consolidated Statements of Comprehensive Income (in millions) | | Three Months Ended March 31, | | Six Months Ended March 31, | | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Net Income** | $23.5 | $28.9 | $23.5 | $49.0 | | **Foreign currency translation adjustments** | $11.4 | $(2.4) | $(15.5) | $9.2 | | **Comprehensive Income** | $34.9 | $26.5 | $8.0 | $58.2 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $1,120.2 million from $1,285.3 million, with total liabilities at $1,856.4 million and a total equity deficit of $736.2 million Balance Sheet Highlights (in millions) | | **March 31, 2025** | **September 30, 2024** | | :--- | :--- | :--- | | **Total Current Assets** | $643.4 | $761.0 | | **Total Assets** | $1,120.2 | $1,285.3 | | **Total Current Liabilities** | $259.3 | $374.0 | | **Long-Term Debt** | $1,509.1 | $1,565.3 | | **Total Equity** | $(736.2) | $(738.3) | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) The company's total equity deficit slightly improved to $736.2 million at March 31, 2025, driven by net income offset by dividends and accumulated other comprehensive loss Changes in Total Equity (Six Months Ended March 31, 2025, in millions) | Description | Amount | | :--- | :--- | | **Balance at October 1, 2024** | $(738.3) | | Net Income | $23.5 | | Other comprehensive (loss), net of taxes | $(15.5) | | Stock-based compensation plans | $16.2 | | Dividends and dividend equivalents declared | $(17.5) | | Issuance of shares related to stock-based compensation | $(4.6) | | **Balance at March 31, 2025** | $(736.2) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2025, net cash provided by operating activities was $26.5 million, while net cash used for financing activities was $82.5 million, resulting in a net decrease in cash of $61.9 million Summary of Cash Flows (Six Months Ended March 31, in millions) | | **2025** | **2024** | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $26.5 | $11.2 | | **Net cash used for investing activities** | $(1.6) | $(6.1) | | **Net cash used for financing activities** | $(82.5) | $(25.3) | | **Net Change in Cash** | $(61.9) | $(20.0) | | **Closing Cash and equivalents and restricted cash** | $212.3 | $306.5 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the discontinuation of the patch pump program, new restructuring plans, revenue disaggregation, and the company's $1.5 billion debt - The company initiated two restructuring plans: the 'Patch Pump Restructuring Plan' to discontinue its patch pump program with estimated costs of **$30.0-$40.0 million**, and a '2025 Restructuring Plan' to streamline the organization with estimated costs of **$4.0-$5.0 million**[44](index=44&type=chunk)[45](index=45&type=chunk) - A non-cash asset impairment charge of **$10.4 million** was recorded in the first half of fiscal 2025 to write down property and equipment due to the discontinuation of the patch pump program[89](index=89&type=chunk)[92](index=92&type=chunk) Revenues by Geography and Product Line (Six Months Ended March 31, in millions) | Category | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **By Geography** | | | | | United States | $276.9 | $296.2 | (6.5%) | | International | $244.0 | $268.3 | (9.1%) | | **By Product Line** | | | | | Pen Needles | $379.4 | $428.0 | (11.4%) | | Syringes | $57.2 | $60.8 | (5.9%) | | Safety | $68.4 | $64.1 | +6.7% | - As of March 31, 2025, the company had total principal debt of **$1,541.5 million**, consisting of a Term Loan, 5.00% Notes, and 6.75% Notes, and was in compliance with all debt covenants[76](index=76&type=chunk)[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 7.7% revenue decrease for the six months ended March 31, 2025, driven by lower volumes and unfavorable foreign currency translation, while operating income increased due to reduced operating expenses - The company faces significant pricing pressure from competitors, commoditization of its traditional injection devices, and a shift in diabetes treatment towards new drug therapies (e.g., GLP-1s) that delay or reduce insulin use[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) - In November 2024, the company discontinued its patch pump R&D program to refocus on its core business, optimize free cash flow, and pay down debt, initiating a new restructuring plan in Q2 2025 to streamline the organization[109](index=109&type=chunk)[110](index=110&type=chunk) Results of Operations Summary (in millions) | | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $520.9 | $564.5 | (7.7)% | | **Gross Profit** | $321.2 | $371.3 | (13.5)% | | **Operating Income** | $91.6 | $84.7 | 8.1% | | **Net Income** | $23.5 | $49.0 | (52.0)% | - For the six months ended March 31, 2025, the company made a discretionary principal payment of **$55.0 million** on its Term Loan, part of a total **$59.8 million** in debt payments[133](index=133&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rates, with foreign currency risk managed through forward exchange contracts and interest rate risk primarily related to its variable-rate Term Loan - The company uses foreign currency forward exchange contracts to manage currency exposures from transactions denominated in currencies other than an entity's functional currency[152](index=152&type=chunk) - The primary interest rate risk is from the Term Loan, which has a variable rate based on SOFR, where a **100 basis point** change in interest rates would affect annualized interest expense by approximately **$8.5 million** based on the outstanding balance at March 31, 2025[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting related to a new ERP system implementation - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting[156](index=156&type=chunk) - The material weakness is related to the ongoing, phased implementation of a new ERP system across the company's global operations, which is expected to be fully completed in the third quarter of fiscal 2025[157](index=157&type=chunk) - A remediation plan is in progress, including enhancing control design, executing robust training, and implementing enhanced oversight, but the material weakness has not yet been fully remediated[158](index=158&type=chunk)[159](index=159&type=chunk) Part II. Other Information [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section introduces a new material risk factor regarding trade actions, highlighting that new or increased tariffs and 'buy local' initiatives could adversely impact the availability and cost of raw materials and products - A new risk factor was added concerning trade actions, warning that tariffs, retaliatory tariffs, and 'buy local' initiatives could negatively affect the business by increasing product costs, reducing margins, and potentially decreasing product competitiveness[163](index=163&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications of the Chief Executive Officer and Chief Financial Officer, and iXBRL data files List of Exhibits | Exhibit | Description | | :--- | :--- | | 31.1 | Certification of Chief Executive Officer, pursuant to SEC Rule 13a–14(a) | | 31.2 | Certification of Chief Financial Officer, pursuant to SEC Rule 13a–14(a) | | 32.1 | Certification of Chief Executive Officer, pursuant to Rule 13a–14(b) and Section 1350 | | 32.2 | Certification of Chief Financial Officer, pursuant to Rule 13a–14(b) and Section 1350 | | 101 | iXBRL formatted financial statements and notes | | 104 | Cover Page Interactive Data File (Inline XBRL) |

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $259 million, exceeding expectations of $250 million to $255 million, with half of the overachievement attributed to constant currency performance and the other half due to less adverse foreign exchange impacts than anticipated [1][5] - Year-over-year revenue declined by 9.8% on an as-reported basis and 7.7% on an adjusted constant currency basis [9] - GAAP gross profit for the second quarter was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year [13] - Adjusted net income increased to $40.7 million, or $0.70 per diluted share, compared to $38.9 million and $0.67 in the prior year [16] Business Line Data and Key Metrics Changes - Pen needle revenue declined approximately 12.1%, while syringe revenue grew by 1.7%, safety products grew by 4.2%, and contact manufacturing grew by 73% [10][11] - The decline in pen needle revenue was primarily due to timing issues related to price increases and unfavorable prior year comparisons [11] Market Data and Key Metrics Changes - U.S. revenue for the quarter totaled $135.2 million, reflecting a year-over-year decline of 8.4% on an adjusted constant currency basis [9] - International revenue totaled $123.8 million, equating to a 7% decline on an adjusted constant currency basis compared to the prior year [10] Company Strategy and Development Direction - The company is advancing efforts to co-package pen needles with potential generic GLP-1 drugs, aiming to expand into a fast-growing market [3] - A restructuring plan has been initiated to streamline operations, with expected pretax charges of $4 million to $5 million and anticipated cost savings of $7 million to $8 million in the second half of fiscal 2025 [4][5] Management Comments on Operating Environment and Future Outlook - Management adjusted the full-year 2025 constant currency revenue outlook due to lower projected U.S. volumes linked to customer inventory reductions [6] - Despite headwinds, the company raised guidance for adjusted operating and EBITDA margins due to disciplined expense management [6] Other Important Information - The company received certification as a great place to work for 2025 in eight countries, reflecting a strong workplace culture [2] - The brand transition plan is underway in the U.S. and Canada, with expectations for global completion within the next couple of years [7][8] Q&A Session Summary Question: Can you provide insights into growth and demand dynamics across pen and syringes? - Management explained that ERP implementations and price increase timing affected year-over-year comparisons, but they expect stability in the pen needle market moving forward [29][35] Question: How should the market interpret the guidance cut? - Management indicated that despite the guidance cut, they expect the second half of the year to show improvement and momentum [40][43] Question: What is the impact of tariffs on margins? - Management confirmed a $3 million impact from tariffs in the second half of the year, with an estimated annualized impact of $8 million to $9 million for 2026 [48][49] Question: What is the focus of the new efficiency program? - The restructuring program aims to streamline operations, primarily in SG&A, with expected savings of $7 million to $8 million in the second half of the year [71][73]

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $259 million, exceeding expectations of $250 million to $255 million, with half of the overachievement attributed to constant currency performance and the other half due to less adverse foreign exchange impacts than anticipated [1][5] - Year-over-year revenue declined by 9.8% on an as-reported basis and 7.7% on an adjusted constant currency basis [9] - GAAP gross profit for the second quarter was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year [13] - Adjusted net income increased to $40.7 million, or $0.70 per diluted share, compared to $38.9 million and $0.67 in the prior year [16] Business Line Data and Key Metrics Changes - Pen needle revenue declined approximately 12.1%, while syringe revenue grew by 1.7%, safety products grew by 4.2%, and contact manufacturing grew by 73% [10][11] - The decline in pen needle revenue was primarily due to timing issues related to price increases and unfavorable prior year comparisons [11] Market Data and Key Metrics Changes - U.S. revenue for the quarter totaled $135.2 million, reflecting a year-over-year decline of 8.4% on an adjusted constant currency basis [9] - International revenue totaled $123.8 million, equating to a 7% decline on an adjusted constant currency basis compared to the prior year [10] Company Strategy and Development Direction - The company is advancing efforts to co-package pen needles with potential generic GLP-1 drugs, aiming to expand into a fast-growing market [3] - A restructuring plan has been initiated to streamline operations, with expected pretax charges of $4 million to $5 million and anticipated cost savings of $7 million to $8 million in the second half of fiscal 2025 [4][5] - The brand transition plan is underway in the U.S. and Canada, with expectations to complete the global transition within the next couple of years [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged lower projected U.S. volumes due to anticipated reductions in customer inventory levels tied to store closures at a specific U.S. retail pharmacy customer [6][22] - Despite the challenges, management expects to see flat to slightly positive overall constant currency revenue growth in the second half of the year [43][44] - The company remains committed to mitigating potential impacts from tariffs and is focused on maintaining profitability and reducing debt [19][24] Other Important Information - The company has received certification as a great place to work for 2025 in eight countries, reflecting a strong workplace culture [2] - The upcoming Analyst and Investor Day is scheduled for May 22, where the company will provide deeper insights into its portfolio and long-term financial objectives [26] Q&A Session Summary Question: Can you provide insights into growth and demand dynamics across pen and syringes? - Management explained that the decline in U.S. revenue was influenced by ERP implementations and price increase timing, but they expect improvements moving forward [29][35] Question: How should the market interpret the guidance cut? - Management indicated that despite the guidance cut, they expect stronger performance in the second half of the year, with low single-digit growth anticipated [41][44] Question: What is the impact of tariffs on margins? - Management confirmed a $3 million impact from tariffs in the second half of the year, with an estimated annualized impact of $8 million to $9 million for 2026 [49][51] Question: What is the status of the new efficiency program? - The restructuring program is focused on SG&A cost reductions, with expected savings of $7 million to $8 million in the second half of the year, and an annualized impact of around $15 million for fiscal 2026 [75][77]

Financial Data and Key Metrics Changes - Second quarter revenue totaled $259 million, exceeding expectations of $250 million to $255 million, with half of the overachievement attributed to constant currency performance and the other half due to less foreign exchange headwinds than anticipated [1][5] - GAAP gross profit for the second quarter was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year [12] - Adjusted net income for the second quarter was $40.7 million, up from $38.9 million in the prior year, with adjusted earnings per share increasing to $0.70 from $0.67 [15] Business Line Data and Key Metrics Changes - In the U.S., revenue for the quarter was $135.2 million, reflecting an 8.4% decline on an adjusted constant currency basis [9] - International revenue totaled $123.8 million, equating to a 7% decline on an adjusted constant currency basis [10] - Thin needle revenue declined approximately 12.1%, while syringe revenue grew by approximately 1.7% and safety products grew approximately 4.2% [11] Market Data and Key Metrics Changes - The decline in U.S. revenue was primarily due to timing issues related to price increases and customer purchasing patterns [9][10] - The international business faced similar challenges with prior year inventory builds impacting comparisons [10] - The company noted that the anticipated reductions in customer inventory levels tied to store closures at a specific U.S. retail pharmacy customer would impact future volumes [21] Company Strategy and Development Direction - The company is advancing efforts to co-package pen needles with potential generic GLP-1 drugs, aiming to expand into a fast-growing market [3] - A restructuring plan was initiated to streamline operations, with expected pretax charges of $4 million to $5 million and estimated cost savings of $7 million to $8 million during the second half of fiscal 2025 [4][5] - The brand transition plan is underway, with a phased execution expected to complete globally within the next couple of years [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of lower projected U.S. volumes and customer inventory reductions on guidance, but maintained that these issues are transitory [21] - The company expects to see flat to slightly positive overall constant currency revenue growth in the second half of the year, despite a 150 basis point reduction in full-year guidance [42] - Management remains focused on maintaining profitability and reducing debt, with a goal of reducing gross debt by $110 million during fiscal 2025 [17][72] Other Important Information - The company has received several purchase orders from generic manufacturers for bulk pen needles, marking a significant strategic milestone [52] - The company is committed to mitigating potential impacts from tariffs, with an estimated $3 million impact on full-year margins due to U.S.-China tariffs [48][49] - The inaugural Analyst and Investor Day is scheduled for May 22, where the company will share more about its portfolio and long-term financial objectives [26] Q&A Session Summary Question: Can you provide insights into growth and demand dynamics across pen and syringes? - Management explained that the decline in U.S. revenue was influenced by ERP implementations and price increase timing, leading to unfavorable year-over-year comparisons [30][34] Question: Are the store closures isolated issues? - Management indicated that while aware of planned store closures, they believe the impact on their products will be manageable as patients may switch to other pharmacies [36][38] Question: What is the expected impact of tariffs on margins? - Management confirmed a $3 million impact on full-year margins due to tariffs, with potential annualized impacts estimated for future fiscal years [48][49] Question: Can you elaborate on the new efficiency program? - The restructuring program focuses on SG&A cost reductions, with expected savings of $7 million to $8 million in the second half of the year, potentially annualizing to around $15 million [75]

Group 1: Earnings Performance - Embecta Corp. reported quarterly earnings of $0.70 per share, exceeding the Zacks Consensus Estimate of $0.66 per share, and showing an increase from $0.67 per share a year ago, representing an earnings surprise of 6.06% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - In the most recent quarter, Embecta Corp. posted revenues of $259 million, which fell short of the Zacks Consensus Estimate by 2.92%, compared to $287.2 million in revenues from the previous year [2] Group 2: Stock Performance and Outlook - Embecta Corp. shares have declined approximately 35.6% since the beginning of the year, contrasting with the S&P 500's decline of 3.7% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.79, with expected revenues of $274.85 million, and for the current fiscal year, the EPS estimate is $2.85 on revenues of $1.09 billion [7] Group 3: Industry Context - The Medical Services industry, to which Embecta Corp. belongs, is currently ranked in the top 21% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Embecta Corp. may also be influenced by the overall industry outlook, as empirical research suggests a strong correlation between near-term stock movements and earnings estimate revisions [5][8] - Another company in the same industry, HealthEquity, is expected to report quarterly earnings of $0.81 per share, reflecting a year-over-year change of +1.3%, with revenues projected to be $321.13 million, up 11.7% from the previous year [9]

Financial Performance - Q2 Fiscal Year 2025 - Revenue for Q2 Fiscal Year 2025 was $259 million, a decrease of 9.8% compared to $287.2 million in Q2 Fiscal Year 2024 [21, 23] - Adjusted constant currency revenue decreased by 7.7% compared to the prior year period [21, 23] - GAAP gross profit was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year period [23] - Adjusted EBITDA was $97.1 million, representing 37.5% of revenue, compared to $90.8 million and 31.6% in the prior year period [23] - The company paid down approximately $27.4 million of outstanding principal under its term loan B facility during the second quarter [14] Financial Performance - Six Months Ended March 31, 2025 - Total revenue was $520.9 million, a decrease of 7.7% compared to $564.5 million for the six months ended March 31, 2024 [32] - Adjusted constant currency revenue decreased by 6.3% [32] Fiscal Year 2025 Guidance - Reported revenue is projected to be between $1.073 billion and $1.090 billion, representing a decrease of 4.4% to 2.9% [24] - Adjusted constant currency revenue growth is expected to be between -4.0% and -2.5% [24] - The company expects pre-tax cost savings of between $7 million and $8 million during the second half of fiscal year 2025 [13]

FOR IMMEDIATE RELEASE Embecta Corp. Reports Second Quarter Fiscal 2025 Financial Results PARSIPPANY, N.J., May 9, 2025 (GLOBE NEWSWIRE) – Embecta Corp. ("embecta" or the "Company") (Nasdaq: EMBC), a global diabetes care company, today reported financial results for the three and six month periods ended March 31, 2025. "This quarter's financial results were once again slightly ahead of our prior expectations, as our teams executed well, which included driving an acceleration in our free-cash flow generation, ...

Core Viewpoint - Embecta Corp. reported financial results for the three and six month periods ended March 31, 2025, showing a decline in revenues but improvements in profitability metrics and cash flow generation [1][2][3]. Financial Highlights - For the second quarter, revenues were $259.0 million, down 9.8% year-over-year; U.S. revenues decreased by 8.4% and international revenues decreased by 11.3% [7][11]. - Gross profit was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year [7][33]. - Operating income increased to $62.9 million with a margin of 24.3%, up from $39.2 million and 13.6% in the prior year [7][33]. - Net income was $23.5 million, or $0.40 per diluted share, compared to $28.9 million and $0.50 in the prior year [7][33]. - Adjusted EBITDA was $97.1 million with a margin of 37.5%, compared to $90.8 million and 31.6% in the prior year [7][33]. Strategic Highlights - The company is focused on strengthening its core business and has advanced its brand transition program in the U.S. and Canada, expected to be substantially complete in the second half of fiscal year 2025 [6][10]. - Embecta has received several purchase orders from pharmaceutical companies to co-package pen needles with potential generic GLP-1 drugs [10]. - The company has initiated a restructuring plan to streamline operations and optimize resources, which includes the discontinuation of the insulin patch pump program [10][12]. Updated Financial Guidance - For fiscal year 2025, the company expects reported revenues between $1,073 million and $1,090 million, with a revenue growth decline of 4.4% to 2.9% [14][15]. - Adjusted constant currency revenue growth is now projected to be between -4.0% and -2.5% [14][15]. Balance Sheet and Liquidity - As of March 31, 2025, the company had approximately $212.3 million in cash and equivalents and $1.542 billion in debt principal outstanding [17][18]. - The company declared a quarterly cash dividend of $0.15 per share, payable on June 13, 2025 [18].