Core Insights - Embecta Corp. will hold an Analyst and Investor Day on May 22, 2025, in New York City, focusing on strategic and business overview [1][2] - The event will feature presentations from the CEO, CFO, and other leadership team members, discussing value creation opportunities and the company's financial profile [2] - The webcast will be available for registration, and materials will be accessible post-event on the company's Investor Relations website [3] Company Overview - Embecta is a global diabetes care company with a 100-year legacy in insulin delivery, aiming to empower individuals with diabetes through innovative solutions [4] - The company employs approximately 2,000 individuals worldwide, emphasizing partnerships and a commitment to improving the lives of people with diabetes [4]

Core Viewpoint - Embecta Corp. will host a conference call to discuss its fiscal second quarter 2025 financial results and provide an operational update on May 9, 2025 [1] Group 1: Conference Call Details - The conference call is scheduled for 8:00 a.m. Eastern Time (ET) [1] - Participants can access the live webcast through the company's website or via a teleconference link [2] - A replay of the call will be available starting at 11:00 a.m. ET on the same day and will be archived for one year [2] Group 2: Company Overview - Embecta is a global diabetes care company with a 100-year legacy in insulin delivery [3] - The company aims to empower people with diabetes through innovative solutions and partnerships, supported by approximately 2,000 employees worldwide [3]

Core Insights - Embecta Corp. has announced the FITTER Forward Expert Recommendations, a significant update to global best practices for insulin injection technique and education, aimed at improving clinical outcomes for diabetes patients worldwide [1][2][3] Group 1: Publication and Initiative - The FITTER Forward initiative is a collaboration of 16 diabetes specialists from 13 countries, emphasizing the need for improved training and standardization in insulin delivery [1][2] - The publication titled "Advance Insulin Injection Technique and Education with FITTER Forward Expert Recommendations" is featured in the April edition of Mayo Clinic Proceedings [3] Group 2: Importance of Injection Technique - Proper injection technique, device handling, and insulin management are crucial for long-term glycemic control, often overlooked in discussions about insulin treatments [2] - The new recommendations provide healthcare professionals with evidence-based strategies to ensure correct and safe insulin delivery [2][3] Group 3: Advancements and Training - The update reflects advancements in device technology, research, and real-world patient data since the original FITTER guidelines were developed in 2016 [2] - Key components of the recommendations include new insights on injection device technology, standardized injection techniques, structured training programs for healthcare providers, and patient-centered tools [7]

Core Insights - Embecta's end market growth is influenced by new technologies that are capturing market share in insulin delivery, alongside the rising use of GLP-1 drugs which are reducing the frequency of Embecta's product usage [1] Company Analysis - Embecta is facing competition from emerging technologies in the insulin delivery market, which may impact its market share [1] - The increased adoption of GLP-1 drugs is leading to a decline in the frequency of Embecta's product usage, indicating a shift in treatment preferences among patients [1]

Group 1 - Embecta Corp. will have its Chief Financial Officer, Jake Elguicze, present at the J.P. Morgan Global Leveraged Finance Conference on February 25, 2025 [1] - The conference will take place in Miami at 3:00 p.m. ET [1] Group 2 - Embecta is a global diabetes care company with nearly 100 years of experience in insulin delivery [2] - The company aims to empower people with diabetes through innovative solutions and partnerships [2] - Embecta employs approximately 2,000 individuals worldwide [2]

Financial Data and Key Metrics Changes - Embecta Corp. generated approximately $262 million in revenue for Q1 2025, reflecting a 5.6% decline year-over-year on a reported basis and a 4.8% decline on an adjusted constant currency basis [14][21][22] - GAAP gross profit for Q1 2025 was $157.1 million with a margin of 60%, compared to $185.9 million and 67% in the prior year [26] - Adjusted net income for Q1 2025 was $38.3 million, resulting in adjusted earnings per share of $0.65, compared to $35.3 million and $0.61 in the prior year [30] Business Line Data and Key Metrics Changes - Pen needle revenue declined approximately 8.5%, while syringe revenue declined approximately 4.2% [24] - Safety products grew approximately 11.3%, and contact manufacturing revenue grew approximately 153% [24] - The decline in pen needle revenue was attributed to additional revenue in Q4 2024 due to distributor inventory purchases in anticipation of a US port strike [24][51] Market Data and Key Metrics Changes - US revenue for Q1 totaled $141.7 million, reflecting a year-over-year decline of 4.6% on an adjusted constant currency basis [22] - International revenue totaled $120.2 million, equating to a 5.1% decline on an adjusted currency basis [23] - The year-over-year decline in international business was primarily due to distributor rebalancing and difficult comparisons from prior inventory purchases [23] Company Strategy and Development Direction - The company is focused on three key priorities: strengthening the core business, expanding the product portfolio, and increasing financial flexibility [10][12] - The brand transition program is on track, with efforts to co-package pen needles with potential generic GLP-1 drugs [15][18] - The restructuring plan related to the discontinuation of the insulin patch pump program is expected to be completed by the end of the first half of fiscal year 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter slightly exceeded internal expectations, but revenue comparisons will be impacted by prior year order timing and ERP implementations [14][21] - The company expects to materially reduce outstanding debt over the next few years, enhancing financial agility [12][32] - Management updated fiscal 2025 guidance, reaffirming constant currency revenue guidance while raising adjusted operating and EBITDA margin guidance ranges [17][40] Other Important Information - The company plans to pay down approximately $110 million in debt during 2025 [12][32] - The updated financial guidance reflects unfavorable foreign exchange rates, with an expected headwind of about 2.2% versus the prior year [38] Q&A Session Summary Question: Can you walk through each of the three key product categories and their expected performance? - Management indicated that Q1 performance was slightly better than expected, with pen needles being the majority category affected by prior year inventory dynamics and ERP implementations [49][51] Question: What is the progress on the GLP-1 pen needle opportunity, particularly in Germany? - Management stated that progress in Germany is ongoing, with expectations for pen needles to be used for out-of-pocket prescriptions, but quantification of revenue is not yet available [62][64] Question: What leverage ratio would allow for more opportunistic M&A? - Management emphasized a focus on debt repayment and financial flexibility, with a net leverage target of around three times by the end of fiscal 2025 before considering M&A opportunities [71][74] Question: How should we think about long-term margin progressions? - Management indicated that long-term margin discussions will occur at the upcoming Analyst Day, with a focus on expanding the product portfolio and optimizing costs [76][82]

Financial Performance - Revenues decreased by $15.4 million, or 5.6%, to $261.9 million for the three months ended December 31, 2024, compared to $277.3 million for the same period in 2023[112] - Gross profit decreased by $28.8 million to $157.1 million, with gross profit as a percentage of revenue dropping to 60.0% from 67.0% in the prior year[112] - Operating income fell by $16.8 million to $28.7 million, representing a decrease of 36.9%[112] - Net income decreased by $20.1 million to $0.0 million, marking a 100% decline compared to the previous year[112] - Cost of products sold increased by $13.4 million, or 14.7%, to $104.8 million, with cost of products sold as a percentage of revenues rising to 40.0% from 33.0%[113] - Selling and administrative expenses decreased by $9.2 million, or 10.2%, to $81.1 million, primarily due to lower costs associated with BD[114] - Research and development expenses increased slightly by $0.1 million, or 0.5%, to $20.3 million, driven by asset impairments related to the discontinued patch pump program[115] Debt and Cash Flow - As of December 31, 2024, total principal debt issued by the company was $1,568.9 million, with long-term debt amounting to $1,534.7 million after accounting for current debt obligations and debt issuance costs[123] - The company's total debt as of December 31, 2024, was $1,544.2 million, with short-term debt representing 0.6% of total debt and a weighted average cost of total debt at 6.7%[124] - Cash and equivalents decreased from $274.2 million on September 30, 2024, to $216.7 million on December 31, 2024, primarily due to cash used for financing activities totaling $45.2 million[133] - The company paid approximately $32.4 million on the Term Loan during the first quarter of fiscal year 2025, with $30.0 million being discretionary payments[125] - Net cash used for operating activities was $5.3 million, primarily due to changes in accounts payable and accrued expenses, which were affected by the timing of payments[133] - The company plans to explore options for retiring or repurchasing outstanding debt, depending on market conditions and liquidity requirements[126] Tax and Regulatory Issues - The effective tax rate increased to 100.0% for the three months ended December 31, 2024, compared to (40.6)% in the prior year, primarily due to the absence of tax benefits from deferred tax assets[121] Operational Challenges - The company continues to face pricing pressures and competition in the medical device industry, impacting operating margins[100] - The company is subject to various risks, including competitive factors, operating cost fluctuations, and potential impacts from geopolitical instability[141] - The company is exposed to foreign currency exchange risks that could adversely affect its financial condition and cash flows[145] Internal Controls and Compliance - As of December 31, 2024, the company's disclosure controls and procedures were deemed ineffective due to a material weakness in internal control over financial reporting[150] - The company has initiated a remediation plan to address the identified material weakness, which will continue through fiscal year 2025[152] - No changes in internal control over financial reporting occurred during the three months ended December 31, 2024, that materially affected internal controls[153] - The company is enhancing control documentation and design to improve the accuracy of data used in financial reporting[154] Technology and Infrastructure - The company expects to incur material costs associated with operating and maintaining its information technology infrastructure over the next several years[138] - The implementation of a new ERP system is ongoing, with phases completed in North America, EMEA, Asia, and Greater China during fiscal years 2023 and 2024; Latin America implementation was completed in Q1 FY2025[151] Interest Rates - The interest rate on the company's Term Loan is set at 300 basis points over SOFR, with a 0.50% SOFR floor; a 100 basis points change in interest rates would impact interest expense by $8.7 million annually[148] Lease Obligations - Total lease payments, including finance and operating leases, are projected to be $71.6 million as of December 31, 2024[128] Credit Ratings - The company’s credit ratings are B1 from Moody's and B+ from Standard & Poor's as of mid-2024[131]

分组1 - Embecta Corp. reported quarterly earnings of $0.65 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and showing an increase from $0.61 per share a year ago, resulting in an earnings surprise of 44.44% [1] - The company achieved revenues of $261.9 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.02%, although this represents a decline from year-ago revenues of $277.3 million [2] - Over the last four quarters, Embecta Corp. has consistently surpassed consensus EPS and revenue estimates [2] 分组2 - The stock has underperformed, losing about 11.9% since the beginning of the year, while the S&P 500 has gained 3.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.72 on revenues of $272.06 million, and for the current fiscal year, it is $2.84 on revenues of $1.11 billion [7] - The Medical Services industry, to which Embecta Corp. belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [8]

Forward-Looking Statements Earnings Conference Call Fiscal Q1 2025 February 6, 2025 Safe Harbor Statement Regarding Forward-Looking Statements Today's topics: Strategic Priorities Dev Kurdikar Chief Executive Officer Jake Elguicze Chief Financial Officer Guidance Q&A Pravesh Khandelwal This presentation contains express or implied "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern ou ...

Financial Performance - Revenues for Q1 FY2025 were $261.9 million, a decrease of 5.6% from $277.3 million in Q1 FY2024[4] - U.S. revenues decreased by 4.6% to $141.7 million, while international revenues decreased by 6.6% to $120.2 million[7] - Gross profit was $157.1 million with a margin of 60.0%, down from $185.9 million and 67.0% in the prior year[4] - Adjusted net income was $38.3 million, or $0.65 per diluted share, compared to $35.3 million, or $0.61 per diluted share in the prior year[4] - Reported revenues for the three months ended December 31, 2024, were $261.9 million, down from $277.3 million in the same period of 2023, indicating a decrease of about 5.2%[24] - GAAP net income for the three months ended December 31, 2024, was $0, compared to $20.1 million for the same period in 2023, reflecting a significant decline[21] - Adjusted EBITDA for Q1 FY2025 was $97.3 million, with a margin of 37.2%, compared to $90.4 million and 32.6% in the prior year[4] - Adjusted EBITDA for the three months ended December 31, 2024, was $97.3 million, an increase from $90.4 million in the same period of 2023, resulting in an adjusted EBITDA margin of 37.2% compared to 32.6%[24] - GAAP Operating Income for Q4 2024 was $28.7 million, down from $45.5 million in Q4 2023, resulting in a margin decrease from 16.4% to 11.0%[30] - Adjusted Operating Income increased to $80.5 million in Q4 2024, compared to $77.5 million in Q4 2023, with an improved margin of 30.7% versus 27.9%[30] - Adjusted Net Income rose to $38.3 million in Q4 2024, up from $35.3 million in Q4 2023, with Adjusted Net Income per Diluted share increasing from $0.61 to $0.65[30] Cash and Debt Management - The company had approximately $216.7 million in cash and equivalents and $1.569 billion in debt principal outstanding as of December 31, 2024[12] - Cash and equivalents decreased from $267.5 million as of September 30, 2024, to $210.0 million as of December 31, 2024, a reduction of approximately 21.5%[19] - Closing cash and equivalents and restricted cash were $216.7 million as of December 31, 2024, down from $298.7 million as of December 31, 2023[21] - Payments on long-term debt amounted to $32.4 million for the three months ended December 31, 2024, compared to $2.4 million in the same period of 2023[21] Restructuring and Strategic Initiatives - The restructuring plan related to the discontinuation of the insulin patch pump program is on track to be completed by the end of the first half of FY2025[5] - The brand transition program is progressing as planned, with the U.S. and Canada expected to transition in the second half of FY2025[5] - Future guidance includes plans for market expansion and strengthening the core business, alongside a restructuring plan related to the insulin patch pump program[32] - The company is actively pursuing strategic partnerships and acquisitions to enhance its product portfolio and market presence[32] Asset Management - Total assets decreased from $1,285.3 million as of September 30, 2024, to $1,149.5 million as of December 31, 2024, representing a decline of approximately 10.6%[19] - Total current liabilities decreased from $374.0 million as of September 30, 2024, to $298.2 million as of December 31, 2024, a decline of about 20.3%[19] - The accumulated deficit increased from $(498.6) million as of September 30, 2024, to $(507.9) million as of December 31, 2024[19] Employee and Operational Insights - The company has approximately 2,000 employees globally, focusing on innovative solutions in diabetes care[32] - Costs associated with the discontinued patch pump program amounted to $39.6 million in Q4 2024, with significant expenses recorded in R&D and other operating costs[30] Dividend Announcement - The company announced a quarterly cash dividend of $0.15 per share, payable on March 14, 2025[13] Tax and Shareholder Information - The non-GAAP effective tax rate for Q4 2024 was 25.0%, a slight decrease from 26.0% in Q4 2023[31] - Basic weighted average shares outstanding increased to 57,952 thousand in Q4 2024 from 57,486 thousand in Q4 2023[30]