Document FOR IMMEDIATE RELEASE Embecta Corp. Reports Second Quarter Fiscal 2026 Financial Results Lowers fiscal year 2026 financial guidance due to dynamics impacting U.S. business updated guidance also includes impact o

Embecta Corp. Reports Second Quarter Fiscal 2026 Financial Results

Lowers fiscal year 2026 financial guidance due to dynamics impacting U.S. business updated guidance also includes impact of the impending Owen Mumford acquisition

Initiated a review of cost structure and organizational footprint

Announced Board authorization of a three-year $100 million share repurchase program and a reduction in the dividend

Anticipates acquisition of Owen Mumford to be complete during May 2026

PARSIPPANY, N.J., May 5, 2026 (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, 2026.

We were disappointed with our second quarter results as they were significantly below our expectations, driven by a combination of factors which impacted our U.S. business, including increased competitive dynamics and softness in overall market volumes. Our International business performed in line with expectations, said Devdatt (Dev) Kurdikar, Chairman, President and Chief Executive Officer of embecta.

Mr. Kurdikar continued, Given our results, we have initiated a review of our cost structure and organizational footprint and expect to communicate findings and any resulting actions to investors once that process is complete. Our lowered financial guidance assumes that the dynamics which impacted our U.S. business during the second quarter will continue for the balance of the year, as well as the addition of Owen Mumford.

Mr. Kurdikar added, What gives us a constructive backdrop against which to manage through this period is the continued progress we are making in achieving important milestones on our strategic priorities and building embecta into a broader medical supplies company. On the strategic front, the pending acquisition of Owen Mumford remains on track to close during May 2026, following satisfaction of all closing conditions and regulatory approvals. This transaction will broaden our product portfolio beyond insulin injection delivery devices, significantly strengthen our B2B drug delivery platform, and it is consistent with the diversification strategy we presented at our 2025 Investor Day.

Mr. Kurdikar concluded, Despite the reduction in our revenue and profitability guidance ranges, we continue to expect to repay approximately $150 million in debt during 2026. We also adjusted our capital allocation framework this quarter, as our Board authorized a three-year share repurchase program of up to $100 million. Concurrently, we are reducing our quarterly cash dividend from $0.15 to $0.01 per share. Redirecting our regular dividend gives us increased flexibility to deploy capital towards share repurchases or additional debt reduction, consistent with our objective of long-term shareholder value creation.

Second Quarter Fiscal Year 2026 Financial Highlights

Reported revenues of $221.8 million, down 14.4% on a reported basis down 17.4% on an adjusted constant currency basis

U.S. revenues decreased 29.4% on both a reported and adjusted constant currency basis

International revenues increased 2.1% on a reported basis, and decreased 4.1% on an adjusted constant currency basis

Gross profit and margin of $127.8 million and 57.6%, compared to $164.1 million and 63.4% in the prior year period

Adjusted gross profit and margin of $131.8 million and 59.4%, compared to $165.0 million and 63.7% in the prior year period

Operating income and margin of $35.0 million and 15.8%, compared to $62.9 million and 24.3% in the prior year period

Adjusted operating income and margin of $48.6 million and 21.9%, compared to $81.4 million and 31.4% in the prior year period

Net (loss) income and (loss) earnings per diluted share of $(4.1) million and $(0.07), compared to $23.5 million and $0.40 in the prior year period

Adjusted net income and adjusted earnings per diluted share of $16.1 million and $0.27, compared to $40.7 million and $0.70 in the prior year period

Adjusted EBITDA and margin of $64.6 million and 29.1%, compared to $97.1 million and 37.5% in the prior year period

Announced a dividend of $0.01 per share

Six Months Ended March 31 2026 Financial Highlights

Reported revenues of $483.0 million, down 7.3% on a reported basis down 9.7% on an adjusted constant currency basis

U.S. revenues decreased 18.3% on both a reported and adjusted constant currency basis

International revenues increased 5.2% on a reported basis, and 0.2% on an adjusted constant currency basis

Gross profit and margin of $289.5 million and 59.9%, compared to $321.2 million and 61.7% in the prior year period

Adjusted gross profit and margin of $295.3 million and 61.1%, compared to $329.0 million and 63.2% in the prior year period

Operating income and margin of $118.3 million and 24.5%, compared to $91.6 million and 17.6% in the prior year period

Adjusted operating income and margin of $127.9 million and 26.5%, compared to $161.9 million and 31.1% in the prior year period

Net income and earnings per diluted share of $40.0 million and $0.67, compared to $23.5 million and $0.40 in the prior year period

Adjusted net income and adjusted earnings per diluted share of $58.4 million and $0.98, compared to $79.0 million and $1.35 in the prior year period

Adjusted EBITDA and margin of $161.8 million and 33.5%, compared to $194.4 million and 37.3% in the prior year period

Acquisition of Owen Mumford

All closing conditions and regulatory approvals for the previously announced acquisition of Owen Mumford Holdings Limited ( Owen Mumford ) have been satisfied closing expected during May 2026

Share Repurchase Authorization and Lowering of Dividend Payments

embecta's Board of Directors have authorized a three-year share repurchase program of up to $100 million. Repurchases may be made from time to time over the three year period at management's discretion through open market transactions, privately negotiated transactions, or pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act ), or otherwise in compliance with Rule 10b-18 under the Exchange Act. The manner, timing, and amount of any repurchases will depend on market conditions, share price, applicable legal requirements, and other factors. The program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be modified, suspended, or discontinued at any time

The Board of Directors has also approved a reduction in the quarterly cash dividend from $0.15 to $0.01 per share, effective May 5, 2026, payable on June 15, 2026 to stockholders of record as of May 28, 2026

Strategic Highlights

Strengthen core business

Advanced the brand transition program globally, with over 75% of embecta revenue now represented by products commercially launched and shipped under the embecta label program remains on track for substantial completion by the end of calendar year 2026

Market-appropriate syringes have launched in China, with additional geographies expected to follow in the coming months

Market-appropriate pen needles are under regulatory review with the U.S. FDA, Brazilian authorities, and BSI for CE Mark certification

Expand product portfolio

Maintained momentum in our generic GLP-1 B2B partnership pipeline, with approximately 40% of identified partners either in contract negotiations or having executed agreements, including partners that have received Canadian approval and the first U.S. FDA tentative approval for a generic semaglutide injection product

Marked a meaningful commercial milestone with the launch of generic GLP-1 therapies in India, where embecta pen needles are included in the commercial packaging of a launched product, demonstrating our ability to execute on the B2B co-packaging opportunity

Launched GLP-1 small pack retail packaging in Canada and Australia expect to extend availability in the U.S. market in the coming months

Increase financial flexibility

Reduced debt during the second quarter of fiscal year 2026 by paying down approximately $37.5 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 2026 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 $37.2 million, or 14.4%, to $221.8 million for the three months ended March 31, 2026 as compared to revenues of $259.0 million for the three months ended March 31, 2025. 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 $39.3 million of unfavorable changes in volume, $3.6 million of unfavorable changes in price and a $2.0 million decrease in contract manufacturing revenue. This was partially offset by $7.7 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar.

Six Months Ended March 31, 2026 Results

Revenues by geographic regions are as follows

Revenues by product family are as follows

The Company's revenues decreased by $37.9 million, or 7.3%, to $483.0 million for the six months ended March 31, 2026 as compared to revenues of $520.9 million for the six months ended March 31, 2025. The decrease in revenues was driven by $40.2 million of unfavorable changes in volume, $7.3 million of unfavorable changes in price, and a $2.7 million decrease in contract manufacturing revenue. This was partially offset by $12.3 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar.

2 Other includes product sales for swabs and other accessories.

Fiscal Year 2026 Updated Financial Guidance (including Owen Mumford)

For fiscal year 2026, the Company now expects

(1) Previous guidance was issued on Feb 5, 2026.

(2) Reflects the recognition of changes in estimates associated with the Italian payback measure relating to certain prior years since 2015 recorded in Revenues.

(3) Reflects the recognition of four months of contribution from Owen Mumford acquisition, subject to expected closing during May 2026. Owen Mumford is expected to add approximately $30 million in revenue and, inclusive of interest expense on the associated borrowings to fund the acquisition, is expected to be dilutive to adjusted earnings per share by approximately $0.15 during fiscal year 2026.

We are unable to present a quantitative reconciliation of our expected adjusted operating margin and expected adjusted earnings per diluted share 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, 2026, the Company had approximately $193.4 million in cash and equivalents and restricted cash and $1.342 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 $0.01 for each issued and outstanding share of the Company's common stock. The dividend is payable on June 15, 2026 to stockholders of record at the close of business on May 28, 2026.

Second Quarter Fiscal Year 2026 Earnings Conference Call

Management will host a conference call at 8 00 a.m. Eastern Time (ET) on May 5, 2026 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 5, 2026, via the embecta investor relations website and archived on the website for one year.

Condensed Consolidated Statements of (Loss) 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, (vii) Adjusted Net Income and Adjusted Earnings Per Diluted Share, and (viii) Free Cash Flow. 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, 2026 and 2025, 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, 2026 and 2025, respectively. For the three months ended March 31, 2026, $4.7 million is recorded in Selling and administrative expense, $0.9 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, 2025, $4.7 million is recorded in Selling and administrative expense, $1.9 million is recorded in Other operating expense, net, $0.6 million is recorded in Cost of products sold, and $0.1 million is recorded in Research and development expense. For the six months ended March 31, 2026, $9.7 million is recorded in Selling and administrative expense, $1.7 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, 2025, $12.1 million is recorded in Selling and administrative expense, $2.8 million is recorded in Other operating expense, net, $1.2 million is recorded in Cost of products sold, and $0.2 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, 2026, approximately $2.2 million is recorded in Other operating expense, net, $2.2 million is recorded in Cost of products sold, and $0.3 million is recorded in Research and development expense. For the three months ended March 31, 2025, approximately $6.3 million is recorded in Other operating expense, net, $0.8 million is recorded in Research and development expense, and $0.5 million is recorded in Cost of products sold. For the six months ended March 31, 2026, approximately $5.3 million is recorded in Other operating expense, net, $3.6 million is recorded in Cost of products sold, and $0.6 million is recorded in Research and development expense. For the six months ended March 31, 2025, approximately $16.6 million is recorded in Other operating expense, net, $0.8 million is recorded in Research and development expense, and $0.6 million is recorded in Cost of products sold.

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

(4)Represents acquisition-related costs incurred associated with the pending acquisition of Owen Mumford. For the three and six months ended March 31, 2026, $5.6 million is recorded in Other operating expense, net and $0.9 million is recorded in Other (income) expense, net.

(5)Represents amortization of implementation costs associated with cloud computing arrangements recognized in Other operating expense, net.

(6)Represents income and expenses incurred during the three and six months ended March 31, 2026 and 2025 associated with the discontinued patch pump program, excluding those program costs classified above within Depreciation and amortization and Stock-based compensation expense. These items are primarily one-time in nature that we do not view as fundamental to operate our core business. The items primarily consist of severance-related costs, asset impairments, contract termination costs, a gain on sale of certain assets, and other operating costs. For the three months ended March 31, 2026, a $1.2 million charge is recorded in Research and development expense, a $0.2 million charge is recorded in Cost of products sold, and a $0.1 million charge is recorded in Other operating expense, net. 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 expense, net. For the six months ended March 31, 2026, a $10.0 million gain is recorded in Other operating expense, net, a $1.6 million charge is recorded in Research and development expense, and a $0.3 million charge is recorded in Cost of products sold. 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 expense, net, $6.6 million is recorded in Cost of products sold, and $0.8 million is recorded in Selling and administrative expense.

(7)Represents various charges such as costs required to develop processes and systems to comply with regulations such as the EU Medical Device Regulation ( EU MDR ) and General Data Protection Regulation ("GDPR") which represent a significant, unusual change to the existing regulatory framework as well as charges associated with the discontinuation of alcohol swab products. For the three months ended March 31, 2026, $1.3 million was recorded in Cost of products sold. For the six months ended March 31, 2026, $1.3 million was recorded in Cost of products sold and $0.2 million was recorded in Research and development expense. For the six months ended March 31, 2025, $0.4 million was recorded in Research and development expense.

For the three and six month periods ended March 31, 2026 and 2025, 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, (4) GAAP Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share, and (5) Free Cash Flow were as follows (unaudited in millions, except per share amounts)

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