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• Revenue: $261.9 million, a 5.6% decline year over year on a reported basis and a 4.8% decline on an adjusted constant currency basis.

• US Revenue: $141.7 million, a 4.6% decline year over year on an adjusted constant currency basis.

• International Revenue: $120.2 million, a 5.1% decline on an adjusted constant currency basis.

• Pen Needle Revenue: Declined approximately 8.5%.

• Syringe Revenue: Declined approximately 4.2%.

• Safety Products Revenue: Grew approximately 11.3%.

• Contract Manufacturing Revenue: Grew approximately 153%.

• GAAP Gross Profit: $157.1 million, with a margin of 60%.

• Adjusted Gross Profit: $164.2 million, with a margin of 62.7%.

• GAAP Operating Income: $28.7 million, with a margin of 11%.

• Adjusted Operating Income: $80.5 million, with a margin of 30.7%.

• GAAP Net Income: Zero.

• Adjusted Net Income: $38.3 million, with earnings per share of $0.65.

• Adjusted EBITDA: $97.3 million, with a margin of 37.2%.

• Debt Reduction: Paid down $32.4 million of term loan B debt.

• Cash Balance: Approximately $217 million.

• Updated Revenue Guidance: Decline of between 2.8% and 4.3%, resulting in a range of between $1.075 billion and $1.092 billion.

• Adjusted Gross Margin Guidance: Between 63.25% and 64.25%.

• Adjusted Operating Margin Guidance: Raised to between 29.5% and 30.5%.

• Adjusted EPS Guidance: Reaffirmed at between $2.70 and $2.90.

• Adjusted EBITDA Margin Guidance: Raised to between 36% and 37%.

• Warning! GuruFocus has detected 9 Warning Signs with EMBC.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Embecta Corp (NASDAQ:EMBC) exceeded internal expectations for the first quarter of fiscal 2025, generating approximately $262 million in revenue.

• The company is focused on strengthening its core business and expanding its product portfolio, which includes leveraging its expertise in high-volume manufacturing.

• Embecta Corp (NASDAQ:EMBC) is making progress in securing external distribution agreements and partnerships, particularly in the fast-growing GLP-1 market.

• The restructuring plan related to the discontinuation of the insulin patch pump program is on track, expected to generate significant cost savings.

• The company is committed to reducing its debt, with plans to pay down approximately $110 million in debt during 2025, enhancing financial flexibility.

Negative Points

• Embecta Corp (NASDAQ:EMBC) reported a 5.6% decline in revenue year over year on a reported basis and a 4.8% decline on an adjusted constant currency basis.

• The company faced unfavorable foreign exchange rates, which negatively impacted financial guidance.

• There was a decline in pen needle revenue by approximately 8.5% and syringe revenue by approximately 4.2%.

• GAAP gross profit and margin decreased compared to the prior year, primarily due to lower revenue and inventory adjustments.

• The company is still dealing with the impact of ERP implementations and distributor inventory changes, affecting year-over-year growth comparisons.