Embecta Corp. reports fiscal 2023 Q4 and full year financial results

Embecta Corp. reported financial results for the three- and twelve-month periods ended September 30, 2023.

“During fiscal 2023, our first full year as an independent company, we delivered better than expected performance during each quarter, including strong performance during our fiscal fourth quarter,” said Devdatt (Dev) Kurdikar, Chief Executive Officer of embecta. “As we look ahead to fiscal 2024, we remain focused on advancing our strategic priorities and continuing to invest in the development of our type 2 closed loop insulin delivery system.”

embecta spun off from Becton, Dickinson and Company (“BD”) on April 1, 2022 (the “Separation Date”). Financial results during the pre-spin period were presented on the carve-out basis of accounting and do not purport to reflect what embecta’s financial results would have been had embecta operated as a standalone public company. Therefore, financial results for the twelve-month periods ended September 30, 2022 and September 30, 2023 are not meaningfully comparable.

Fourth quarter fiscal year 2023 financial highlights:

• Revenues of $281.9 million, up 2.7% on a reported basis; up 2.1% on a constant currency basis
  • U.S. revenues increased 1.3% on both a reported and constant currency basis
  • International revenues increased 4.3% on a reported basis, and increased 3.0% on a constant currency basis
• Gross profit and margin of $181.8 million and 64.5%, compared to $176.9 million and 64.4% in the prior year period
• Adjusted gross profit and margin of $182.6 million and 64.8%
• Operating income (loss) and margin of $25.8 million and 9.2%, compared to $(3.0) million and (1.1)% in the prior year period
• Adjusted operating income and margin of $65.2 million and 23.1%
• Net income (loss) of $6.0 million and earnings per diluted share of $0.10. This compares to net income (loss) of $(17.2) million and earnings per diluted share of $(0.30) in the prior year period inclusive of an impairment charge of $58.9 million related to the abandonment of certain manufacturing production lines in the United States that are no longer expected to be completed, and a $5.5 million charge related to purchase commitments associated with the abandonment of the assets noted above.
• Adjusted net income and adjusted earnings per diluted share of $34.1 million and $0.59
• Adjusted EBITDA and margin of $79.6 million and 28.2%, compared to $87.2 million and 31.8% in the prior year period
• Announced a dividend of $0.15 per share

Twelve months ended september 30 fiscal year 2023 financial highlights:

• Revenues of $1,120.8 million, down 0.8% on a reported basis; up 1.6% on a constant currency basis
  • U.S. revenues increased 0.2% on both a reported and constant currency basis
  • International revenues decreased 1.9% on a reported basis, and increased 3.2% on a constant currency basis
• Gross profit and margin of $749.9 million and 66.9%, compared to $774.9 million and 68.6% in the prior year period
• Adjusted gross profit and margin of $751.2 million and 67.0%
• Operating income and margin of $221.5 million and 19.8%, compared to $309.6 million and 27.4% in the prior year period
• Adjusted operating income and margin of $331.5 million and 29.6%
• Net income and earnings per diluted share of $70.4 million and $1.22, respectively. This compares to net income and earnings per diluted share of $223.6 million and $3.89, respectively, in the prior year period inclusive of an impairment charge of $58.9 million related to the abandonment of certain manufacturing production lines in the United States that are no longer expected to be completed, and a $5.5 million charge related to purchase commitments associated with the abandonment of the assets noted above.
• Adjusted net income and adjusted earnings per diluted share of $172.6 million and $2.99
• Adjusted EBITDA and margin of $378.7 million and 33.8%, compared to $459.9 million and 40.7% in the prior year period

Strategic highlights:

• Strengthen the base business
  • Continued to demonstrate our ability to serve the market with high-quality products while providing a seamless patient experience with the addition of embecta products as an exclusive or dual-preferred brand with three of the top Medicare part D payers effective January 2024
• Separate and stand-up
  • Made substantial progress on the demerger process to transfer Suzhou, China manufacturing entity from BD to embecta, including completing enterprise resource planning (“ERP”) system implementation in Suzhou, China
  • Initiated next wave of ERP system implementation in U.S. and Canada
  • Implemented global HR information system, customer relationship management system, and global IT network; continued to exit transition service agreements with BD
• Invest for growth
  • Continued making progress on 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 U.S. Food & Drug Administration (FDA)

For full financial results click.
MB Bureau