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 Devdatt (Dev) Kurdikar, Chief Executive Officer of embecta. "From a year-to-date perspective, our financial results demonstrated the continued resilience and stability of our business." "Additionally, I'm proud of the significant strides we have made as an organization in advancing our strategic priorities, including the transition to our own enterprise resource planning ("ERP") system, shared service capability and distribution infrastructure, which is now complete in most regions of the world. Furthermore, we made progress on our 510(k) application for the open-loop patch pump program. Lastly, given the strong year-to-date performance, coupled with our outlook for the remainder of the year, we are once again tightening and raising our fiscal 2024 outlook for certain financial metrics." Third Quarter Fiscal Year 2024 Financial Highlights: Revenues of $272.5 million, down 4.8% on a reported basis; down 3.9% on a constant currency basis U.S. revenues decreased 6.7% on both a reported and constant currency basis International revenues decreased 2.5% on a reported basis, and 0.6% on a constant currency basis Gross profit and margin of $190.1 million and 69.8%, compared to $189.5 million and 66.2% in the prior year period Adjusted gross profit and margin of $190.3 million and 69.8%, compared to $189.6 million and 66.3% in the prior year period Operating income and margin of $55.9 million and 20.5%, compared to $51.3 million and 17.9% in the prior year period Adjusted operating income and margin of $83.3 million and 30.6%, compared to $79.8 million and 27.9% in the prior year period Net income and earnings per diluted share of $14.7 million and $0.25, compared to $15.2 million and $0.26 in the prior year period Adjusted net income and adjusted earnings per diluted share of $43.0 million and $0.74, compared to $39.8 million and $0.69 in the prior year period Adjusted EBITDA and margin of $99.2 million and 36.4%, compared to $92.2 million and 32.2% in the prior year period Announced a dividend of $0.15 per share Nine Months Ended June 30 2024 Financial Highlights: Revenues of $837.0 million, down 0.2% on a reported basis; up 0.1% on a constant currency basis U.S. revenues decreased 2.2% on both a reported and constant currency basis International revenues increased 2.0% on a reported basis, and 2.7% on a constant currency basis Gross profit and margin of $561.4 million and 67.1%, compared to $568.1 million and 67.7% in the prior year period Adjusted gross profit and margin of $562.4 million and 67.2%, compared to $568.6 million and 67.8% in the prior year period Operating income and margin of $140.6 million and 16.8%, compared to $195.7 million and 23.3% in the prior year period Adjusted operating income and margin of $235.7 million and 28.2%, compared to $266.3 million and 31.7% in the prior year period Net income and earnings per diluted share of $63.7 million and $1.10, compared to $64.4 million and $1.12 in the prior year period Adjusted net income and adjusted earnings per diluted share of $117.2 million and $2.02, compared to $138.5 million and $2.40 in the prior year period Adjusted EBITDA and margin of $280.4 million and 33.5%, compared to $299.1 million and 35.7% in the prior year period Strategic Highlights: Strengthen the base business Initiated a program with the objective of introducing a new small-pack pen needle product in Germany, to address unmet needs of growing number of customers using GLP-1   Separate and stand-up Completed implementation of ERP, operationalization of shared service capability and distribution network in China; now approximately 93% of our global revenue is operating on our systems and processes Invest for growth Progressed the U.S. Food and Drug Administration ("FDA") 510(k) premarket filing of our open-loop insulin delivery system Advanced the development of a type 2 closed loop insulin delivery system utilizing embecta's proprietary patch pump system, which carries Breakthrough Device Designation from the FDA Presented embecta-sponsored abstracts at American Diabetes Association's 84th scientific sessions highlighting unmet need for patch pumps with 300 unit insulin reservoir Third Quarter Fiscal Year 2024 Results: Revenues by geographic region are as follows:   Three months ended June 30, Dollars in millions       Increase/(decrease)               As Reported   Constant Currency    2024    2023   $   %   % United States $                        143.6   $                        153.9   $                         (10.3 )   (6.7 ) %   (6.7 )% International   128.9     132.2                                 (3.3 )   (2.5 )   (0.6 ) Total $                        272.5   $                        286.1   $                         (13.6 )   (4.8 ) %   (3.9 )% Our revenues decreased by $13.6 million, or 4.8%, to $272.5 million for the three months ended June 30, 2024 as compared to revenues of $286.1 million for the three months ended June 30, 2023. Changes in revenues are driven by the volume of goods that the Company sells, the prices it negotiates with customers, and changes in foreign exchange rates. The decrease in revenues was driven by $24.4 million of unfavorable changes in volume and $2.5 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar. This was partially offset by $7.8 million of favorable gross-to-net adjustments resulting from changes in estimates, $4.9 million of favorable changes in price, and a $0.6 million increase in contract manufacturing revenues related to sales of non-diabetes products to BD. Nine Months Ended June 30, 2024 Results: Revenues by geographic region are as follows:   Nine months ended June 30, Dollars in millions       Increase/(decrease)               As Reported     Constant Currency    2024    2023   $   %     % United States $                        439.8   $                        449.6   $                         (9.8 )   (2.2 )%   (2.2 )% International   397.2     389.3                                 7.9     2.0     2.7   Total $                        837.0   $                        838.9   $                         (1.9 )   (0.2 )%   0.1 % Our revenues decreased by $1.9 million, or 0.2%, to $837.0 million for the nine months ended June 30, 2024 as compared to revenues of $838.9 million for the nine months ended June 30, 2023. The decrease in revenues was driven by $11.4 million of unfavorable changes in volume, $2.7 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar, and a $2.5 million decrease in contract manufacturing revenues related to sales of non-diabetes products to BD. This was partially offset by $14.0 million of favorable changes in price and $0.7 million of favorable gross-to-net adjustments resulting from changes in estimates. Fiscal Year 2024 Updated Financial Guidance:For fiscal year 2024, the Company now expects: Dollars in millions, except percentages and per share data   Current   Previous (1) Revenues   $1,111 - $1,116   $1,111 - $1,116 As Reported (%)   (0.9%) - (0.4%)   (0.9%) - (0.4%) Constant Currency (%)   (0.5%) - 0.0%   (0.5%) - 0.0% F/X (%)   (0.4)%   (0.4)% Contract Manufacturing   $8    $5  Adjusted Gross Margin (%)   65.25% - 65.50%   64.5% - 65.0% Adjusted Operating Margin (%)   25.75% - 26.00%   25.25% - 25.75% Adjusted Earnings per Diluted Share   $2.30 - $2.35   $2.20 - $2.30 Adjusted EBITDA Margin (%)   31.25% - 31.50%   31.0% - 31.5% (1) Previous guidance was issued on May 9, 2024. We are unable to present a quantitative reconciliation of our expected adjusted gross margin, expected adjusted operating margin, expected adjusted earnings per diluted share, expected adjusted EBITDA and our expected adjusted EBITDA margin as we are unable to predict with reasonable certainty, and without unreasonable effort the impact and timing of any one-time items. The financial impact of these one-time items is uncertain and is dependent on various factors, including timing, and could be material to our Condensed Consolidated Statements of Income. Balance sheet, Liquidity and Other Updates As of June 30, 2024, the Company had approximately $281.8 million in cash and equivalents and restricted cash and $1.629 billion of debt principal outstanding, and no amount drawn on its $500 million Revolving Credit Facility. The Company's Board of Directors declared a quarterly cash dividend of $0.15 for each issued and outstanding share of the Company's common stock. The dividend is payable on September 13, 2024 to stockholders of record at the close of business on August 27, 2024. Third Quarter Fiscal Year 2024 Earnings Conference Call: Management will host a conference call at 8:00 a.m. Eastern Time (ET) on August 9, 2024 to discuss the results of the quarter, provide an update on its business, and host a question and answer session. Those who would like to participate may access the live webcast here, or access the teleconference here. The live webcast can also be accessed via the company's website at investors.embecta.com. A webcast replay of the call will be available beginning at 11:00 a.m. ET on August 9, 2024, via the embecta investor relations website and archived on the website for one year.   Condensed Consolidated Statements of Income Embecta Corp. (Unaudited, in millions, except per share data)     Three Months Ended June 30,   Nine Months Ended June 30,    2024     2023     2024     2023                  Revenues $                 272.5     $                 286.1     $                 837.0     $                 838.9   Cost of products sold                       82.4                           96.6                         275.6                         270.8   Gross Profit $                 190.1     $                 189.5     $                 561.4     $                 568.1   Operating expenses:               Selling and administrative expense                       85.7                           87.6                         268.3                         245.6   Research and development expense                       20.4                           22.6                           59.0                           61.6   Other operating expenses                       28.1                           28.0                           93.5                           65.2   Total Operating Expenses $                 134.2     $                 138.2     $                 420.8     $                 372.4        Operating Income $                   55.9     $                   51.3     $                 140.6     $                 195.7   Interest expense, net                      (27.8 )                        (27.0 )                        (83.3 )                        (79.4 ) Other income (expense), net                        (1.1 )                          (4.2 )                          (6.1 )                        (15.6 ) Income Before Income Taxes $                   27.0     $                   20.1     $                   51.2     $                 100.7   Income tax provision (benefit)                       12.3                              4.9                          (12.5 )                         36.3        Net Income $                   14.7     $                   15.2     $                   63.7     $                   64.4                   Net Income per common share:               Basic $                   0.25     $                   0.27     $                   1.11     $                   1.13   Diluted $                   0.25     $                   0.26     $                   1.10     $                   1.12   Condensed Consolidated Balance Sheets Embecta Corp. (in millions, except share and per share data)     June 30, 2024   September 30, 2023   (Unaudited)     Assets       Current Assets            Cash and equivalents $                          275.1     $                          326.3        Restricted cash                                  6.7                                      0.2        Trade receivables, net (net of allowance for doubtful accounts of $2.4 million        and $1.0 million as of June 30, 2024 and September 30, 2023, respectively)                              171.8                                    16.7        Inventories:                 Materials                                38.2                                    32.1             Work in process                                  5.8