Embecta Corp (EMBC, Financial) released its 8-K filing on November 21, 2023, detailing its financial results for the fiscal fourth quarter and full year ended September 30, 2023. The company, which specializes in diabetes care, experienced a mixed financial year with a slight increase in fourth-quarter revenue but a marginal annual decline.
Fiscal 2023 Fourth Quarter Performance
For the fourth quarter, Embecta Corp reported revenues of $281.9 million, marking a 2.7% increase on a reported basis and a 2.1% increase on a constant currency basis. The U.S. revenues grew by 1.3%, while international revenues saw a more robust 4.3% increase on a reported basis and a 3.0% increase on a constant currency basis.
Gross profit for the quarter was $181.8 million with a gross margin of 64.5%, slightly up from the prior year's $176.9 million and 64.4% margin. Adjusted gross profit was slightly higher at $182.6 million with a 64.8% margin. Operating income showed a significant improvement, with $25.8 million reported, compared to a loss of $3.0 million in the previous year. The adjusted operating income stood at $65.2 million, translating to a 23.1% margin.
Net income for the quarter was $6.0 million, or $0.10 earnings per diluted share, a notable improvement from the prior year's net loss of $17.2 million, or a loss of $0.30 per diluted share. Adjusted net income was reported at $34.1 million, or $0.59 per diluted share. Adjusted EBITDA was $79.6 million with a margin of 28.2%, compared to $87.2 million and a 31.8% margin in the prior year period.
Full Year Financial Highlights
For the full fiscal year 2023, Embecta Corp's revenues slightly declined by 0.8% to $1,120.8 million on a reported basis but increased by 1.6% on a constant currency basis. U.S. revenues were relatively flat, while international revenues decreased by 1.9% on a reported basis but increased by 3.2% on a constant currency basis.
The annual gross profit was $749.9 million with a 66.9% margin, compared to $774.9 million and a 68.6% margin in the prior year. Adjusted gross profit was $751.2 million with a 67.0% margin. Operating income for the year was $221.5 million, a decrease from $309.6 million in the previous year, with the margin also declining to 19.8% from 27.4%. Adjusted operating income was $331.5 million with a 29.6% margin.
Net income for the year was $70.4 million, or $1.22 per diluted share, compared to $223.6 million, or $3.89 per diluted share in the prior year. Adjusted net income was $172.6 million, or $2.99 per diluted share. Adjusted EBITDA was $378.7 million with a 33.8% margin, down from $459.9 million and a 40.7% margin in the prior year.
Financial Position and Outlook
As of September 30, 2023, Embecta Corp had approximately $326.5 million in cash and cash equivalents. The company's debt stood at $1.636 billion, with no amount drawn on its $500 million Revolving Credit Facility. The Board declared a quarterly cash dividend of $0.15 per share, payable in December 2023.
Looking ahead to fiscal 2024, Embecta Corp expects revenues to be between $1,085 and $1,105 million, with an adjusted gross margin of 63.0% to 64.0% and an adjusted operating margin of 23.75% to 24.75%. Adjusted earnings per diluted share are forecasted to be between $1.90 and $2.10, with an adjusted EBITDA margin of 29.5% to 30.5%.
The company's CEO, Devdatt Kurdikar, stated,
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."Kurdikar also emphasized the company's focus on advancing strategic priorities and investing in the development of their type 2 closed loop insulin delivery system.
Embecta Corp's financial results reflect its strategic efforts to strengthen its base business and invest in growth opportunities. The company's performance and future guidance suggest a cautious optimism as it navigates the complexities of the global diabetes care market.
Explore the complete 8-K earnings release (here) from Embecta Corp for further details.
