PARSIPPANY, N.J., May 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 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 spinoff approximately two years ago, we've remained steadfast in delivering on our financial and strategic priorities, including standing embecta up as an independent company; maintaining stability within our core injection business; and investing in growth, most notably behind our insulin patch pump," said Devdatt (Dev) Kurdikar, Chief Executive Officer of embecta. "During the second quarter, I am pleased to report that we made progress in each of these areas as evidenced by the transition of approximately 85 percent of our revenue to our own ERP system, shared service capability and distribution infrastructure; FDA's continued review of our insulin patch pump 510(k) filing; and delivering financial results that exceeded our expectations. With the backdrop of our positive performance during the first half of the year, we are raising and tightening our fiscal 2024 outlook for our key financial metrics." Second Quarter Fiscal Year 2024 Financial Highlights: Revenues of $287.2 million, up 3.6% on a reported basis; up 4.5% on a constant currency basis U.S. revenues increased 0.8% on both a reported and constant currency basis International revenues increased 6.8% on a reported basis, and 8.7% on a constant currency basis Gross profit and margin of $185.4 million and 64.6%, compared to $189.8 million and 68.5% in the prior year period Adjusted gross profit and margin of $185.8 million and 64.7%, compared to $190.1 million and 68.6% in the prior year period Operating income and margin of $39.2 million and 13.6%, compared to $55.6 million and 20.1% in the prior year period Adjusted operating income and margin of $74.9 million and 26.1%, compared to $84.9 million and 30.6% in the prior year period Net income and earnings per diluted share of $28.9 million and $0.50, compared to $14.0 million and $0.24 in the prior year period Adjusted net income and adjusted earnings per diluted share of $38.9 million and $0.67, compared to $43.3 million and $0.75 in the prior year period Adjusted EBITDA and margin of $90.8 million and 31.6%, compared to $96.7 million and 34.9% in the prior year period Announced a dividend of $0.15 per share Six Months Ended March 31 2024 Financial Highlights: Revenues of $564.5 million, up 2.1% on a reported basis; up 2.2% on a constant currency basis U.S. revenues increased 0.2% on both a reported and constant currency basis International revenues increased 4.4% on both reported and constant currency basis Gross profit and margin of $371.3 million and 65.8%, compared to $378.6 million and 68.5% in the prior year period Adjusted gross profit and margin of $372.1 million and 65.9%, compared to $379.0 million and 68.6% in the prior year period Operating income and margin of $84.7 million and 15.0%, compared to $144.4 million and 26.1% in the prior year period Adjusted operating income and margin of $152.4 million and 27.0%, compared to $186.5 million and 33.7% in the prior year period Net income and earnings per diluted share of $49.0 million and $0.85, compared to $49.2 million and $0.85 in the prior year period Adjusted net income and adjusted earnings per diluted share of $74.2 million and $1.28, compared to $98.7 million and $1.71 in the prior year period Adjusted EBITDA and margin of $181.2 million and 32.1%, compared to $206.9 million and 37.4% in the prior year period Strategic Highlights: Strengthen the base business Sponsored the publication of a peer-reviewed paper authored by experts and opinion leaders in Postgraduate Medicine medical journal, entitled "Opportunities to overcome underutilization of enhanced insulin delivery technologies in people with type 2 diabetes: a narrative review" Separate and stand-up Completed enterprise resource planning ("ERP") implementation comprising approximately eighty five percent of embecta's revenue base, including all three of its manufacturing plants; implemented new shared service capability and distribution infrastructure for U.S., Canada, EMEA and certain regions in Asia Completed the transfer of the remaining Suzhou, China assets, including the manufacturing entity and related assets, from BD to embecta Limited extension for amended Transition Services Agreement and Logistics Services Agreement granted by BD to support the Interim Business Continuity Processes until November 1, 2024 Invest for growth 510(k) premarket filing for the open-loop insulin delivery system with the U.S. Food and Drug Administration ("FDA") remains under review Progressed 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 Second Quarter Fiscal Year 2024 Results: Revenues by geographic region are as follows:   Three months ended March 31, Dollars in millions       Increase/(decrease)               As Reported   Constant Currency     2024     2023   $   %   % United States $ 147.6   $ 146.4   $ 1.2   0.8 %   0.8 % International   139.6     130.7     8.9   6.8     8.7   Total $ 287.2   $ 277.1   $ 10.1   3.6 %   4.5 % The Company's revenues increased by $10.1 million, or 3.6%, to $287.2 million for the three months ended March 31, 2024 as compared to revenues of $277.1 million for the three months ended March 31, 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 increase in revenues was driven by $15.0 million of favorable changes in volume. This was partially offset by $2.5 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar, $1.4 million of unfavorable changes in price, and a $1.0 million decrease in contract manufacturing revenues related to sales of non-diabetes products to BD. Six Months Ended March 31, 2024 Results: Revenues by geographic region are as follows:   Six months ended March 31, Dollars in millions       Increase/(decrease)               As Reported   Constant Currency     2024     2023   $   %   % United States $ 296.2   $ 295.7   $ 0.5   0.2 %   0.2 % International   268.3     257.1     11.2   4.4     4.4   Total $ 564.5   $ 552.8   $ 11.7   2.1 %   2.2 % The Company's revenues increased by $11.7 million, or 2.1%, to $564.5 million for the six months ended March 31, 2024 as compared to revenues of $552.8 million for the six months ended March 31, 2023. The increase in revenues was driven by $13.0 million of favorable changes in volume and $2.0 million of favorable changes in price. This was partially offset by a $3.1 million decrease in contract manufacturing revenues related to sales of non-diabetes products to BD and $0.2 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar. 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   $1,094 - $1,116 As Reported (%)   (0.9%) - (0.4%)   (2.4%) - (0.4%) Constant Currency (%)   (0.5%) - 0.0%   (2.0%) - 0.0% F/X (%)   (0.4)%   (0.4)% Contract Manufacturing   $5   $2 - $5 Adjusted Gross Margin (%)   64.5% - 65.0%   63.0% - 64.0% Adjusted Operating Margin (%)   25.25% - 25.75%   23.75% - 24.75% Adjusted Earnings per Diluted Share   $2.20 - $2.30   $1.95 - $2.15 Adjusted EBITDA Margin (%)   31.0% - 31.5%   29.5% - 30.5% (1) Previous guidance was issued on February 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 March 31, 2024, the Company had approximately $306.5 million in cash and equivalents and restricted cash and $1.631 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 June 14, 2024 to stockholders of record at the close of business on May 28, 2024. Second Quarter Fiscal Year 2024 Earnings Conference Call: Management will host a conference call at 8:00 a.m. Eastern Time (ET) on May 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 May 9, 2024, via the embecta investor relations website and archived on the website for one year. Condensed Consolidated Statements of IncomeEmbecta Corp.(Unaudited, in millions, except per share data)   Three Months EndedMarch 31,   Six Months EndedMarch 31,     2024       2023       2024       2023                   Revenues $ 287.2     $ 277.1     $ 564.5     $ 552.8   Cost of products sold   101.8       87.3       193.2       174.2   Gross Profit $ 185.4     $ 189.8     $ 371.3     $ 378.6   Operating expenses:               Selling and administrative expense   92.3       85.2       182.6       158.0   Research and development expense   18.4       22.1       38.6       39.0   Other operating expenses   35.5       26.9       65.4       37.2   Total Operating Expenses $ 146.2     $ 134.2     $ 286.6     $ 234.2   Operating Income $ 39.2     $ 55.6     $ 84.7     $ 144.4   Interest expense, net   (27.8 )     (26.8 )     (55.5 )     (52.4 ) Other income (expense), net   (1.5 )     (4.3 )     (5.0 )     (11.4 ) Income Before Income Taxes $ 9.9     $ 24.5     $ 24.2     $ 80.6   Income tax provision (benefit)   (19.0 )     10.5       (24.8 )     31.4   Net Income $ 28.9     $ 14.0     $ 49.0     $ 49.2                   Net Income per common share:               Basic $ 0.50     $ 0.24     $ 0.85     $ 0.86   Diluted $ 0.50     $ 0.24     $ 0.85     $ 0.85   Condensed Consolidated Balance SheetsEmbecta Corp.(in millions, except share and per share data)   March 31, 2024   September 30, 2023   (Unaudited)     Assets       Current Assets       Cash and equivalents $ 299.8     $ 326.3   Restricted cash   6.7       0.2   Trade receivables, net (net of allowance for doubtful accounts of $1.6 million and $1.0 million as of March 31, 2024 and September 30, 2023, respectively)   123.7       16.7   Inventories:       Materials   37.4       32.1   Work in process   10.5       8.1   Finished products