Financial Data and Key Metrics Changes - The company generated revenue of approximately $272.5 million in Q3 2024, representing a decrease of 4.8% on an as-reported basis and a decrease of 3.9% on a constant currency basis [5][12] - Adjusted gross profit for Q3 2024 was $190.3 million with a margin of 69.8%, compared to $189.6 million and 66.3% in the prior year period [15] - GAAP net income for Q3 2024 was $14.7 million, or $0.25 per diluted share, compared to $15.2 million, or $0.26 per diluted share in the prior year [16] Business Line Data and Key Metrics Changes - The core injection business revenue declined by 4.1% on a constant currency basis compared to the prior year period, while year-to-date performance showed a stable growth of 0.4% on a constant currency basis [6][14] - Revenue in the US totaled $143.6 million, reflecting a year-over-year decline of approximately 6.7% on a constant currency basis [12] - International revenue was $128.9 million, equating to a year-over-year constant currency decline of 0.6% [13] Market Data and Key Metrics Changes - The company noted that the decline in revenue was primarily due to inventory rebalancing with distributors following ERP implementations [6][14] - The introduction of a new small pack pen needle product for GLP-1 administration is planned to launch in Germany, with expectations to expand to other countries in the future [7][30] Company Strategy and Development Direction - The company is focused on three strategic priorities: strengthening the base business in insulin injection devices, establishing operational independence, and investing for growth, particularly in the insulin patch pump program [5][8] - The company is also exploring M&A and partnership opportunities to enhance growth [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the core injection business despite the revenue decline, attributing it to expected inventory adjustments [6][14] - The company is optimistic about the potential benefits from the evolving GLP-1 administration methods and the introduction of new products [7][30] Other Important Information - The company is on track to complete ERP implementations and separation activities by early fiscal year 2025, with only brand transition remaining [8][9] - Cash balance at the end of Q3 was approximately $282 million, with expectations to end fiscal year 2024 with a cash balance of roughly $300 million [17][20] Q&A Session Summary Question: Can you explain the inventory valuation adjustments and their impact on gross margins? - Management clarified that the adjusted gross margin was better than expected due to inventory revaluation adjustments contributing about 550 basis points to the year-over-year increase [24][25] Question: Why is Germany the first market for the small pen needle packs for GLP-1 users? - Management indicated that Germany is a logical first market due to the prevalence of pen injectors for GLP-1 administration, and they are excited about the product launch [30][31] Question: What is the outlook for free cash flow and separation costs? - Management expects separation costs to decrease significantly from approximately $180 million this year to around $50 million next year, leading to improved free cash flow generation starting in 2025 [37][38]

Embecta Corp. (EMBC) came out with quarterly earnings of $0.74 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 54.17%. A quarter ago, it was expected that this company would post earnings of $0.43 per share when it actually produced earnings of $0.67, delivering a surprise of 55.81%. Over the last four quarters, the company ...

Financial Performance - Revenues for Q3 FY2024 were $272.5 million, a decrease of 4.8% year-over-year, with U.S. revenues down 6.7% and international revenues down 2.5%[3] - Gross profit for Q3 FY2024 was $190.1 million, resulting in a gross margin of 69.8%, compared to 66.2% in the prior year period[3] - Adjusted EBITDA for Q3 FY2024 was $99.2 million, with a margin of 36.4%, up from 32.2% in the prior year[3] - For the nine months ended June 30, 2024, total revenues were $837.0 million, a slight decrease of 0.2% year-over-year, with U.S. revenues down 2.2% and international revenues up 2.0%[4] - Net income for the three months ended June 30, 2024, was $63.7 million, slightly down from $64.4 million in the same period of 2023[18] - Adjusted EBITDA for the three months ended June 30, 2024, was $99.2 million, up from $92.2 million in the same period of 2023, representing an increase of 8.1%[22] - Total Revenues for the three months ended June 30, 2024, were $272.5 million, reflecting a decrease of 4.8% compared to $286.1 million in 2023, with a Constant Currency Change of (3.9)%[27] - Adjusted Net Income for the three months ended June 30, 2024, was $43.0 million, up from $39.8 million in 2023, resulting in an Adjusted Net Income per Diluted share of $0.74 compared to $0.69[24] - GAAP Net Income for the three months ended June 30, 2024, was $14.7 million, down from $15.2 million in 2023[24] Guidance and Expectations - The company expects FY2024 revenues to be in the range of $1,111 million to $1,116 million, maintaining previous guidance[10] - Adjusted earnings per diluted share for FY2024 are now expected to be between $2.30 and $2.35, an increase from previous guidance[10] Cash and Debt Management - The company reported $281.8 million in cash and equivalents and $1.629 billion in debt principal outstanding as of June 30, 2024[12] - Cash and equivalents decreased to $275.1 million as of June 30, 2024, from $326.3 million as of September 30, 2023, a decline of 15.7%[17] - The company’s long-term debt remained stable at $1,590.8 million as of June 30, 2024, compared to $1,593.9 million as of September 30, 2023[17] Operational Developments - The implementation of the ERP system is now complete in most regions, with approximately 93% of global revenue operating on the new systems[5] - Progress has been made on the FDA 510(k) premarket filing for the open-loop insulin delivery system and the development of a type 2 closed-loop insulin delivery system[5] - The company declared a quarterly cash dividend of $0.15 per share, payable on September 13, 2024[12] Asset and Liability Changes - Total assets increased to $1,267.5 million as of June 30, 2024, compared to $1,214.4 million as of September 30, 2023, reflecting a growth of 4.4%[17] - Total current liabilities rose to $370.7 million as of June 30, 2024, compared to $353.5 million as of September 30, 2023, an increase of 4.0%[17] - Inventories increased to $185.6 million as of June 30, 2024, compared to $152.1 million as of September 30, 2023, reflecting a growth of 22.0%[17] Compensation and Expenses - Stock-based compensation for the three months ended June 30, 2024, was $20.1 million, up from $16.6 million in the same period of 2023[18] - Stock-based compensation expense for the three months ended June 30, 2024, was $1.2 million, compared to $1.3 million in the same period of 2023[25] Market and Competitive Environment - The company experienced an unfavorable foreign currency translation impact on revenues due to a stronger U.S. dollar compared to the prior-year period[26] - Embecta is focusing on maintaining stability in its core injection business while investing in growth opportunities[31] - The company is working with the FDA to obtain clearance for new products and anticipates product launches in fiscal 2024[31] - Embecta is advancing the development of its closed-loop insulin delivery system, which is a key area of innovation[31] - The company plans to commercialize new product pacts for non-insulin diabetes drugs, expanding its product offerings[31] - There are risks associated with the separation from BD, including potential dis-synergy costs and restructuring expenses[31] - Embecta faces competitive factors that could adversely affect its operations and profitability[31] - The company is addressing challenges related to operating costs, including fluctuations in raw material availability[31] - Changes in reimbursement practices and foreign currency exchange rates could impact financial performance[31] - Embecta's ability to successfully complete clinical trials and obtain regulatory approvals is critical for future product launches[31] - The company is committed to securing distribution channels and obtaining access and reimbursement for its products[31]

PARSIPPANY, N.J., Aug. 09, 2024 (GLOBE NEWSWIRE) -- Embecta Corp. ("embecta" or the "Company") (Nasdaq: EMBC), a global diabetes care company, today reported financial results for the three and nine month periods ended June 30, 2024. "During the third quarter our business performed in alignment with our expectations. We generated strong gross, operating and EBITDA margins even as revenue was impacted by the expected timing of customer orders that had positively impacted our second quarter results," said Dev ...

About embecta Contacts: | --- | --- | |----------------------------------------|--------------------------------| | | | | Media | Investors | | Christian Glazar | Pravesh Khandelwal | | Sr. Director, Corporate Communications | VP, Head of Investor Relations | | 908-821-6922 | 551-264-6547 | | Contact Media Relations | Contact IR | PARSIPPANY, N.J., July 18, 2024 (GLOBE NEWSWIRE) -- Embecta Corp. ("embecta") (Nasdaq: EMBC), a global diabetes care company with a 100-year legacy in insulin delivery, will host ...

Media Investors Christian Glazar Pravesh Khandelwal Sr. Director, Corporate Communications VP, Head of Investor Relations 908-821-6922 551-264-6547 Contact Media Relations Contact IR In "Evaluating Need for Larger Insulin Reservoir in Patch Pumps: Leveraging Retrospective Dose Data for US Adults with T2D on MDI," Eugene E. Wright Jr., M.D., Medical Director, South Piedmont Area Health Education Center, and co-authors analyzed adults with T2D on multiple daily injection therapy, estimating the number of peop ...

Media Investors Christian Glazar Pravesh Khandelwal Sr. Director, Corporate Communications VP, Head of Investor Relations 908-821-6922 551-264-6547 Contact Media Relations Contact IR In "Evaluating Need for Larger Insulin Reservoir in Patch Pumps: Leveraging Retrospective Dose Data for US Adults with T2D on MDI," Eugene E. Wright Jr., M.D., Medical Director, South Piedmont Area Health Education Center, and co-authors analyzed adults with T2D on multiple daily injection therapy, estimating the number of peop ...

Embecta Corp. (NASDAQ:EMBC) Q2 2024 Results Conference Call May 9, 2024 8:00 AM ET Company Participants Pravesh Khandelwal - Vice President & Head of Investor Relations Dev Kurdikar - President, Chief Executive Officer & Director Jake Elguicze - Senior Vice President & Chief Financial Officer Conference Call Participants Marie Thibault - BTIG Kallum Titchmarsh - Morgan Stanley Ryan Schiller - Wolfe Research, LLC Operator Welcome, ladies and gentlemen, to the Fiscal Second Quarter 2024 Embecta Earnings Confe ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited statements show quarterly revenue growth but decreased gross and operating profit, with net income boosted by a significant tax benefit [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Financial Performance Summary | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $287.2M | $277.1M | $564.5M | $552.8M | | **Gross Profit** | $185.4M | $189.8M | $371.3M | $378.6M | | **Operating Income** | $39.2M | $55.6M | $84.7M | $144.4M | | **Net Income** | $28.9M | $14.0M | $49.0M | $49.2M | | **Diluted EPS** | $0.50 | $0.24 | $0.85 | $0.85 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Financial Position Summary | Balance Sheet Item | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | **Cash and equivalents** | $299.8M | $326.3M | | **Total Current Assets** | $710.0M | $749.1M | | **Total Assets** | $1,199.6M | $1,214.4M | | **Long-Term Debt** | $1,591.8M | $1,593.9M | | **Total Liabilities** | $1,969.2M (derived) | $2,036.1M (derived) | | **Total Equity** | $(769.6)M | $(821.7)M | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary | Cash Flow Activity (Six Months Ended March 31) | 2024 | 2023 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $11.2M | $47.4M | | **Net Cash Used for Investing Activities** | $(6.1)M | $(10.5)M | | **Net Cash Used for Financing Activities** | $(25.3)M | $(26.8)M | | **Net Change in Cash** | $(20.0)M | $15.5M | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - As of March 31, 2024, all factoring agreements with former parent company BD have **expired and terminated** due to the implementation of new ERP systems and business continuity processes[42](index=42&type=chunk) - Separation and stand-up costs related to the spin-off from BD amounted to **$32.6 million for the quarter** and **$59.0 million for the six months** ended March 31, 2024, primarily for implementing the new ERP system[46](index=46&type=chunk) Revenue by Geography (in millions) | Revenue by Geography (in millions) | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **United States** | $147.6 | $146.4 | $296.2 | $295.7 | | **International** | $139.6 | $130.7 | $268.3 | $257.1 | | **Total** | $287.2 | $277.1 | $564.5 | $552.8 | - The effective tax rate for the quarter was **(191.9)%** compared to 42.9% in the prior year, primarily due to a discrete **tax benefit of $18.8 million**[76](index=76&type=chunk) - The company has significant customer concentration risk, with **three customers accounting for 42.0% of total gross revenues** and **four customers representing 63.6% of total gross trade receivables**[83](index=83&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth drivers, margin pressures from inflation and operational issues, and the impact of separation costs on operating income [Results of Operations](index=23&type=section&id=Results%20of%20Operations) - For the three months ended March 31, 2024, **revenue increased 3.6% to $287.2 million**, driven by volume increases but partially offset by negative foreign currency translation and unfavorable pricing[109](index=109&type=chunk) - Cost of products sold as a percentage of revenue **increased to 34.2% from 31.5%** year-over-year, driven by inflation, manufacturing variances from a plant shutdown, and unfavorable foreign exchange[112](index=112&type=chunk) - Selling and administrative expenses **rose 8.3% for the quarter**, primarily due to increased compensation, benefits, and outbound freight costs[113](index=113&type=chunk) - Research and development expenses **decreased by 16.7% for the quarter**, mainly due to a prior-year upfront payment for a collaboration agreement[114](index=114&type=chunk) - Other operating expenses increased to **$35.5 million for the quarter**, driven by costs related to the Separation from BD and the implementation of a new ERP system[115](index=115&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Debt Summary (as of March 31, 2024) | Debt Summary (as of March 31, 2024) | Amount (in millions) | | :--- | :--- | | Term Loan due March 2029 | $931.0 | | 5.00% Notes due February 2030 | $500.0 | | 6.75% Notes due February 2030 | $200.0 | | **Total principal debt issued** | **$1,631.0** | | Less: current obligations & issuance costs | $(39.2) | | **Long-term debt (net)** | **$1,591.8** | - Cash and equivalents **decreased by $20.0 million** during the six months ended March 31, 2024, while net cash from operating activities saw a **significant decrease to $11.2 million** from $47.4 million in the prior year[126](index=126&type=chunk)[127](index=127&type=chunk) - The increase in trade receivables is a direct result of the company now being responsible for collections following its ERP implementation and the termination of factoring agreements with BD[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency and interest rate fluctuations, managed through derivatives and exposed via its Term Loan - The company's primary interest rate risk is associated with its Term Loan B facility; a **100 basis point change** in interest rates would affect annualized interest expense by **$9.3 million**[143](index=143&type=chunk) - The company uses foreign currency forward exchange contracts to manage exposure from transactions denominated in currencies other than an entity's functional currency[141](index=141&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management affirmed the effectiveness of disclosure controls while noting the ongoing multi-phase ERP system implementation post-separation - Management concluded that as of March 31, 2024, the company's **disclosure controls and procedures were effective**[144](index=144&type=chunk) - The company is implementing a new ERP system in phases and still relies on some of BD's systems and controls for certain international markets during the transition[145](index=145&type=chunk)[146](index=146&type=chunk) [Part II. Other Information](index=31&type=section&id=Part%20II.%20Other%20Information) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last annual and quarterly reports - **No material changes** have been made to the risk factors previously described in the 2023 Form 10-K and the Q1 2024 Form 10-Q[150](index=150&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including agreement amendments with BD, officer certifications, and iXBRL data - Exhibits filed include amendments to agreements with BD, CEO/CFO certifications, and iXBRL data files[151](index=151&type=chunk) [Signatures](index=32&type=section&id=Signatures)

FOR IMMEDIATE RELEASE Embecta Corp. Reports Second Quarter Fiscal 2024 Financial Results PARSIPPANY, N.J., May 9, 2024 (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, 2024. "Our performance in the second quarter and fiscal first half of 2024 underscores the resiliency of our base business, as well as strong operational execution by our global team. Since our spin ...