Document FOR IMMEDIATE RELEASE Embecta Corp. Reports Second Quarter Fiscal 2025 Financial Results PARSIPPANY, N.J.

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, thereby allowing us to continue to repay debt and create additional balance sheet flexibility, said Devdatt (Dev) Kurdikar, President and Chief Executive Officer of embecta.

Mr. Kurdikar added, In this challenging operating environment, we are raising key profitability metrics while maintaining our prior adjusted earnings per share guidance despite a lowered fiscal year 2025 adjusted constant current revenue guidance range and the impact of incremental tariffs. This reflects favorable projected foreign exchange rates, which are allowing us to keep our as-reported revenue guidance range largely unchanged, as well as disciplined operating expense controls and the benefit of our recently announced restructuring program.

Looking ahead, we remain focused on executing our strategic priorities and look forward to sharing more at our Analyst Investor Day on May 22, 2025.

Second Quarter Fiscal Year 2025 Financial Highlights

Revenues of $259.0 million, down 9.8% on a reported basis down 7.7% on an adjusted constant currency basis

U.S. revenues decreased 8.4% on both a reported and adjusted constant currency basis

International revenues decreased 11.3% on a reported basis, and 7.0% on an adjusted constant currency basis

Gross profit and margin of $164.1 million and 63.4%, compared to $185.4 million and 64.6% in the prior year period

Adjusted gross profit and margin of $165.0 million and 63.7%, compared to $185.8 million and 64.7% in the prior year period

Operating income and margin of $62.9 million and 24.3%, compared to $39.2 million and 13.6% in the prior year period

Adjusted operating income and margin of $81.4 million and 31.4%, compared to $74.9 million and 26.1% in the prior year period

Net income and earnings per diluted share of $23.5 million and $0.40, compared to $28.9 million and $0.50 in the prior year period

Adjusted net income and adjusted earnings per diluted share of $40.7 million and $0.70, compared to $38.9 million and $0.67 in the prior year period

Adjusted EBITDA and margin of $97.1 million and 37.5%, compared to $90.8 million and 31.6% in the prior year period

Announced a dividend of $0.15 per share

Six Months Ended March 31 2025 Financial Highlights

Revenues of $520.9 million, down 7.7% on a reported basis down 6.3% on an adjusted constant currency basis

U.S. revenues decreased 6.5% on both a reported and adjusted constant currency basis

International revenues decreased 9.1% on a reported basis, and 6.1% on an adjusted constant currency basis

Gross profit and margin of $321.2 million and 61.7%, compared to $371.3 million and 65.8% in the prior year period

Adjusted gross profit and margin of $329.2 million and 63.2%, compared to $372.1 million and 65.9% in the prior year period

Operating income and margin of $91.6 million and 17.6%, compared to $84.7 million and 15.0% in the prior year period

Adjusted operating income and margin of $161.9 million and 31.1%, compared to $152.4 million and 27.0% in the prior year period

Net income and earnings per diluted share of $23.5 million and $0.40, compared to $49.0 million and $0.85 in the prior year period

Adjusted net income and adjusted earnings per diluted share of $79.0 million and $1.35, compared to $74.2 million and $1.28 in the prior year period

Adjusted EBITDA and margin of $194.4 million and 37.3%, compared to $181.2 million and 32.1% in the prior year period

Strategic Highlights

Strengthen core business

Advanced the brand transition program in the U.S. and Canada, which is on track to be substantially complete in the second half of fiscal year 2025

Published updated FITTER (Forum for Injection Technique and Therapy Expert Recommendations) Forward Expert Recommendations in Mayo Clinic Proceedings, enhancing global best practices for insulin injection technique and education to improve clinical outcomes, standardize injection methods, optimize device use, and strengthen provider training

Received certification as a Great Place to Work for 2025 in the following countries Brazil, Canada, China, Germany, India, Mexico, Switzerland and the UK

Expand product portfolio

Received several purchase orders from pharmaceutical companies to co-package our pen needles with potential generic GLP-1 drugs

Continued to make progress on expanding availability of appropriately sized GLP-1 retail packaging for use with weekly injection therapies

Increase financial flexibility

Substantially completed the restructuring plan related to the discontinuation of the insulin patch pump program

Initiated a separate restructuring plan to streamline the organization and optimize resources

Reduced debt during the fiscal year 2025 second quarter by paying down approximately $27.4 million of outstanding principal under the term loan B facility that had an interest rate of 300 basis points over the secured overnight financing rate ("SOFR"), with a 0.50% SOFR floor

Adjusted Constant Currency Revenue Growth is based upon Reported Revenues, adjusted to exclude, depending on the period presented, the items described in Adjusted Revenues and to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and such changes generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on an Adjusted constant currency revenue basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

Second Quarter Fiscal Year 2025 Results

Revenues by geographic region are as follows

Revenues by product family are as follows

1 Other includes product sales for swabs and other accessories.

The Company's revenues decreased by $28.2 million, or 9.8%, to $259.0 million for the three months ended March 31, 2025 as compared to revenues of $287.2 million for the three months ended March 31, 2024. 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 $26.6 million of unfavorable changes in volume and $6.0 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 $2.5 million of favorable changes in price and a $1.9 million increase in contract manufacturing revenues related to sales of non-diabetes products to Becton, Dickinson and Company ( BD ).

Revenues by geographic region are as follows

Revenues by product family are as follows

The Company's revenues decreased by $43.6 million, or 7.7%, to $520.9 million for the six months ended March 31, 2025 as compared to revenues of $564.5 million for the six months ended March 31, 2024. The decrease in revenues was driven by $44.5 million of unfavorable changes in volume and $8.0 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 a $4.8 million increase in contract manufacturing revenues related to sales of non-diabetes products to BD and $4.1 million of favorable changes in price.

2 Other includes product sales for swabs and other accessories.

Fiscal Year 2025 Updated Financial Guidance

For fiscal year 2025, the Company now expects

(1) Previous guidance was issued on February 6, 2025.

(2) Reflects the recognition of incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015 recorded in Revenues.

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, 2025, the Company had approximately $212.3 million in cash and equivalents and restricted cash and $1.542 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 13, 2025 to stockholders of record at the close of business on May 28, 2025.

Second Quarter Fiscal Year 2025 Earnings Conference Call

Management will host a conference call at 8 00 a.m. Eastern Time (ET) on May 9, 2025 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, 2025, via the embecta investor relations website and archived on the website for one year.

Condensed Consolidated Statements of Income

(Unaudited, in millions, except per share data)

Condensed Consolidated Balance Sheets

(in millions, except share and per share data)

Condensed Consolidated Statements of Cash Flows

(Unaudited, in millions)

About Non-GAAP financial measures

In evaluating our operating performance, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures including (i) Adjusted Revenues, (ii) earnings before interest, taxes, depreciation, and amortization ("EBITDA"), (iii) Adjusted EBITDA and Adjusted EBITDA Margin, (iv) Adjusted Gross Profit and Adjusted Gross Profit Margin, (v) Adjusted Constant Currency Revenue Growth, (vi) Adjusted Operating Income and Adjusted Operating Income Margin, and (vii) Adjusted Net Income and Adjusted Earnings Per Diluted Share. These non-GAAP financial measures are indicators of our performance that are not required by, or presented in accordance with, GAAP. They are presented with the intent of providing greater transparency to financial information used by us in our financial analysis and operational decision-making. We believe that these non-GAAP measures provide meaningful information to assist investors, stockholders and other readers of our consolidated financial statements in making comparisons to our historical operating results and analyzing the underlying performance of our results of operations. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company's results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. The Company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a meaningful alternative representation of the underlying operating performance of the business.

For the three and six month periods ended March 31, 2025 and 2024, the reconciliation of (1) GAAP Revenues ( Reported Revenues ) to Adjusted Revenues, and (2) GAAP Net income to EBITDA and Adjusted EBITDA was as follows (unaudited, in millions)

(1)Represents stock-based compensation expense incurred during the three and six months ended March 31, 2025 and 2024, respectively. For the three months ended, March 31, 2025, $4.7 million is recorded in Selling and administrative expense, $1.9 million is recorded in Other operating expenses $0.6 million is recorded in Cost of products sold, and $0.1 million is recorded in Research and development expense. For the three months ended, March 31, 2024, $4.9 million is recorded in Selling and administrative expense, $1.1 million is recorded in Cost of products sold, and $0.5 million is recorded in Research and development expense. For the six months ended March 31, 2025, $12.1 million is recorded in Selling and administrative expense, $2.8 million is recorded in Other operating expenses, $1.2 million is recorded in Cost of products sold, and $0.2 million is recorded in Research and development expense. For the six months ended March 31, 2024, $10.8 million is recorded in Selling and administrative expense, $2.0 million is recorded in Cost of products sold, and $1.1 million is recorded in Research and development expense.

(2)One-time stand-up costs incurred primarily include (i) product registration, labeling, and brand transition costs (ii) warehousing and distribution set-up costs (iii) legal costs associated with patents and trademark work (iv) temporary headcount resources within accounting, tax, finance, human resources, regulatory and IT and (v) one-time business integration and IT related costs primarily associated with our global ERP implementation. For the three months ended March 31, 2025, approximately $6.3 million is recorded in Other operating expenses, $0.8 million is recorded in Research and development expense, and $0.5 is recorded in Cost of products sold. For the three months ended March 31, 2024, approximately $32.6 million is recorded in Other operating expenses and $1.0 million is recorded in Selling and administrative expense. For the six months ended March 31, 2025, approximately $16.6 million is recorded in Other operating expenses, $0.8 million is recorded in Research and development expense, and $0.6 million is recorded in Cost of products sold. For the six months ended March 31, 2024, approximately $59.0 million is recorded in Other operating expenses and $2.9 million is recorded in Selling and administrative expense.

(3)Represents costs required to develop processes and systems to comply with regulations such as the EU MDR and General Data Protection Regulation ( GDPR ) which represent a significant, unusual change to the existing regulatory framework. We consider these costs to be duplicative of previously incurred costs and or one-off costs, which are limited to a specific period of time. For the six months ended March 31, 2025, $0.2 million is recorded in Research and development expense and $0.2 million is recorded in Cost of products sold. For the six months ended March 31, 2024, $0.2 million is recorded in is Research and development expense.

(4)Represents restructuring, business optimization, and severance related costs associated with standing up and optimizing the organization recorded in Other operating expenses excluding costs classified above within Stock-based compensation expense.

(5)Represents amounts due to BD for tax liabilities incurred in deferred closing jurisdictions where BD is considered the primary obligor.

(6)Represents amortization of implementation costs associated with cloud computing arrangements recognized in Other operating expenses.

(7)Represents costs incurred during the three and six months ended March 31, 2025 associated with the discontinued patch pump program, excluding those program costs classified above within Depreciation and amortization and Stock-based compensation expense. The discontinued patch pump program costs are primarily one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our core business. The costs primarily consist of severance-related costs, asset impairments, contract termination costs, and other operating costs. For the three months ended March 31, 2025, $4.8 million is recorded in Research and development expense, $0.3 million is recorded in Selling and administrative expense and $0.1 million is recorded in Cost of products sold. Offsetting these costs was a non-cash adjustment associated with changes in estimates of $0.5 million recorded in Other operating expenses. For the six months ended March 31, 2025, $22.8 million is recorded in Research and development expense, $12.9 million is recorded in Other operating expenses, $6.6 million is recorded in Cost of products sold, and $0.8 million is recorded in Selling and administrative expense.

For the three and six month periods ended March 31, 2025 and 2024, the reconciliations of (1) GAAP Revenues ( Reported Revenues ) to Adjusted Revenues (2) GAAP Gross Profit and Gross Margin to Adjusted Gross Profit and Adjusted Gross Margin, (3) GAAP Operating Income and Operating Margin to Adjusted Operating Income and Adjusted Operating Income Margin and (4) GAAP Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share are as follows (unaudited in millions, except per share amounts)

(1)Amortization of intangible assets is recorded in Cost of products sold.

(2)One-time stand-up costs incurred are primarily attributed to brand transition.

(3)Represents costs required to develop processes and systems to comply with regulations such as the EU MDR and GDPR which represent a significant, unusual change to the existing regulatory framework. We consider these costs to be duplicative of previously incurred costs and or one-off costs, which are limited to a specific period of time.

(4)Represents costs incurred for the three and six months ended March 31, 2025 associated with the discontinued patch pump program. These costs are primarily one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our core business. The costs primarily consist of asset impairments and other operating costs.

(1)Amortization of intangible assets is recorded in Cost of products sold.

(2)One-time stand-up costs incurred primarily include (i) product registration, labeling, and brand transition costs (ii) warehousing and distribution set-up costs (iii) legal costs associated with patents and trademark work (iv) temporary headcount resources within accounting, tax, finance, human resources, regulatory and IT and (v) one-time business integration and IT related costs primarily associated with our global ERP implementation. For the three months ended March 31, 2025, approximately $6.3 million is recorded in Other operating expenses, $0.8 million is recorded in Research and development expense, and $0.5 is recorded in Cost of products sold. For the three months ended March 31, 2024, approximately $32.6 million is recorded in Other operating expenses and $1.0 million is recorded in Selling and administrative expense. For the six months ended March 31, 2025, approximately $16.6 million is recorded in Other operating expenses, $0.8 million is recorded in Research and development expense, and $0.6 million is recorded in Cost of products sold. For the six months ended March 31, 2024, approximately $59.0 million is recorded in Other operating expenses and $2.9 million is recorded in Selling and administrative expense.

(3)Represents costs required to develop processes and systems to comply with regulations such as the EU MDR and GDPR which represent a significant, unusual change to the existing regulatory framework. We consider these costs to be duplicative of previously incurred costs and or one-off costs, which are limited to a specific period of time. For the six months ended March 31, 2025, $0.2 million is recorded in Research and development expense and $0.2 million is recorded in Cost of products sold. For the six months ended March 31, 2024, $0.2 million is recorded in is Research and development expense.

(4)Represents stock-based compensation expense recognized during the period associated with the incremental value of converted legacy BD share-based awards and one-time sign-on equity awards granted to certain members of the embecta leadership team in connection with the Company's separation from BD. For the three months ended March 31, 2025, $0.7 million is recorded in Selling and administrative expense. For the three months ended March 31, 2024, $0.7 million is recorded in Selling and administrative expense and $0.1 million is recorded in Cost of products sold. For the six months ended March 31, 2025, $1.8 million is recorded in Selling and administrative expense. For the six months ended March 31, 2024, $1.8 million is recorded in Selling and administrative expense, $0.2 million is recorded in Cost of products sold, and $0.1 million is recorded in Research and development expense.

(5)Represents restructuring, business optimization, and severance related costs associated with standing up and optimizing the organization recorded in Other operating expenses.

(6)Represents amounts due to BD for tax liabilities incurred in deferred jurisdictions where BD is considered the primary obligor.