Embecta Corp. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Certain Factors Affecting Forward-Looking Statements The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying notes contained elsewhere in this Quarterly Report on Form 10-Q. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and other factors described throughout this discussion and analysis, particularly in the section “Cautionary Statement Concerning Forward-Looking Statements.” Company Overview We are a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. In the 100-year history of our business, we believe that our products have become some of the most widely recognized and respected brands in diabetes management in the world. We estimate that our products are used by approximately 30 million people in over 100 countries for insulin administration and to aid with the daily management of diabetes. Our business traces its origins to 1924, when BD developed the first dedicated insulin syringe. Since then, we have built a world-class organization with a unique manufacturing, supply chain and commercial footprint. We have a broad portfolio of marketed products, including a variety of pen needles, syringes and safety injection devices. Our pen needles are sterile, single-use, medical devices, designed to be used in conjunction with pen injectors that inject insulin or other diabetes medications. We also sell safety pen needles, which have shields on both ends of the cannula that automatically deploy after the injection to help prevent needlestick exposure and injury during injection and disposal. Our traditional and safety pen needles are compatible and frequently used with widely available pen injectors in the market today. In addition to pen needles, we sell sterile, single-use insulin syringes, which are used to inject insulin drawn from insulin vials. We also sell safety insulin syringes, which have a sliding safety shield that can be activated with one-hand after the injection to help prevent needlestick exposure and injury during injection and disposal. We primarily sell our products to wholesalers and distributors that sell to retail and institutional channels who in turn sell to patients or use the products to deliver insulin injections to patients. Key Trends Affecting Our Results of Operations Competition. The regions in which we conduct our business and the medical devices industry in general are highly competitive. We face significant competition from a wide range of companies in a highly regulated industry. These include large companies with multiple product lines, some of which may have greater financial and marketing resources than us, as well as smaller more specialized companies. Non-traditional entrants, such as technology companies, are also entering into the diabetes care industry and its adjacent markets, some of which may have greater financial and marketing resources than us. Pricing Pressures. We face significant pricing pressures from competitors in the pen needle and insulin syringe categories who not only can provide competitive products at lower costs, but also provide payors and customers with more choices for formulary partners in these categories. In addition, the increased scrutiny by regulators on healthcare spending, which accelerated in light of the COVID-19 pandemic, along with a shift towards volume-based procurement and group purchasing organizations, which generally values lower cost over product features, benefits and quality, have placed significant pressure on Embecta to lower price in both developed and emerging markets. These trends may reduce our operating margins, which are only partially offset by our ability to differentiate our products and sell at higher prices. Commoditization of Injection Devices. Given the growing demand for medical devices to assist in the treatment of diabetes and difficulties around access to diabetes care due to complex and costly insurance plans, patient care is increasingly focused on providing more affordable products, which has led to the commoditization of more traditional injection delivery devices, such as insulin syringes and pen needles. Existing and new local and regional low-cost providers, in combination with a shift from insulin vials to insulin pens, have made the pen needle category highly competitive. This has forced providers to provide clinical evidence to differentiate their products. Changes in Clinical Practice. Introduction of new drugs and increased penetration of oral and once-weekly anti-diabetic drugs (e.g., SGLT-2s), GLP-1s and GLP-1 combination products have delayed initiation of insulin therapy and contributed to less demand for our products. New drug therapies, including weekly insulin, are targeted to challenge the current diabetes treatment paradigm, including the frequency insulin is dosed (weekly vs. daily injections) and amount of insulin used. Additionally, insulin therapy in developed markets continues to transition to infusion pumps. Decentralization of Chronic Care. Many countries are facing an aging population and a rapidly growing number of people living with diabetes. While healthcare investments in certain regions continue to grow, there is an increased burden on Dollar amounts are in millions except per share amounts or as otherwise specified. 18 Table of Contents physicians and longer wait times for patients. Healthcare delivery for non-emergency diabetes care is expected to continue shifting outside of hospitals to primary care providers, which could have a material impact on our results of operations. Political and Economic Instability in Emerging Markets. We operate in a number of emerging markets, many of which are subject from time to time to significant political and economic disruptions. However, the number of countries we provide products to and our proactive channel management strategies help us manage this variability. Recent Developments We continue to face increases in the cost and disrupted availability of raw materials, components, and other inputs necessary to manufacture and distribute our products due to constraints and inflation within the global supply chain, as well as increases in the cost and time to distribute our products. To date we have been able to successfully mitigate this disruption and provide uninterrupted supply to our customers by increasing our inventory levels and taking other measures. On November 22, 2024, the Company's Board of Directors approved a plan to discontinue internal and external investment in the research and development of our patch pump program. As a result of this decision, the Company is in the process of executing an organizational Restructuring Plan which is expected to be completed by the end of the first half of the fiscal year, with the cumulative pretax costs to be incurred by the Company to implement the Restructuring Plan estimated to be $35.0 million to $45.0 million. In addition, we discontinued our commercial operation plans for the insulin delivery system, including the previous intended limited launch. The Company plans to refocus its investment on its core business while looking to optimize free cash flow and strengthen its balance sheet by paying down debt. We continue to monitor the conflict in Ukraine and the associated sanctions and other restrictions. We also are monitoring the Israel-Hamas war and Houthi attacks on commercial shipping vessels and other naval vessels. As of February 6, 2025, there is no material impact to our business operations and financial performance as a result of the aforementioned conflicts. However, the full impact of the conflicts on our business operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflicts and their impact on regional and global economic conditions. We will continue to monitor these conflicts and assess the related restrictions and other effects on our business. In addition, our revenues and results of operations have been affected by various fluctuations in macroeconomic conditions and regulatory and policy changes, both on a global level and in particular markets, which include inflation and slowing economic growth and contractions, a changing interest rate environment, supply chain interruptions, tariff policy changes, volatility in capital markets and the availability of credit, tax rates and the rate of exchange between the United States dollar and foreign currencies. The nature and extent of the impact of these factors among others varies by region and remains uncertain and unpredictable and may affect our business. Dollar amounts are in millions except per share amounts or as otherwise specified. 19 Table of Contents Results of Operations Our unaudited Condensed Consolidated Statements of Income are as follows: Three months ended December 31, 2024 2023 % Revenues $ 261.9 $ 277.3 (5.6) % Cost of products sold 104.8 91.4 14.7 Gross Profit 157.1 185.9 (15.5) Operating expenses: Selling and administrative expense 81.1 90.3 (10.2) Research and development expense 20.3 20.2 0.5 Other operating expenses 27.0 29.9 (9.7) Total Operating Expenses 128.4 140.4 (8.5) Operating Income 28.7 45.5 (36.9) Interest expense, net (27.9) (27.7) 0.7 Other income (expense), net (1.5) (3.5) (57.1) (Loss) Income Before Income Taxes (0.7) 14.3 (104.9) Income tax (benefit) (0.7) (5.8) (87.9) Net Income $ — $ 20.1 (100.0) Net Income per common share: Basic $ — $ 0.35 (100.0) % Diluted $ — $ 0.35 (100.0) % Three Months Ended December 31, 2024 Summary (on a comparative basis) Key financial results for the three months ended December 31, 2024 were as follows: • Revenue decreased by $15.4 million to $261.9 million from $277.3 million; • Gross profit decreased by $28.8 million to $157.1 million from $185.9 million. Gross profit as a percent of revenue was 60.0%, as compared to 67.0% in the prior year comparative period; • Operating income decreased by $16.8 million to $28.7 million from $45.5 million; and • Net income decreased by $20.1 million to $0.0 million from $20.1 million. Revenues Our revenues decreased by $15.4 million, or 5.6%, to $261.9 million for the three months ended December 31, 2024 as compared to revenues of $277.3 million for the three months ended December 31, 2023. 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 $17.9 million of unfavorable changes in volume and $2.0 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 $2.9 million increase in contract manufacturing revenues related to sales of non-diabetes products to BD and $1.6 million of favorable changes in price. Dollar amounts are in millions except per share amounts or as otherwise specified. 20 Table of Contents Cost of products sold Cost of products sold increased by $13.4 million, or 14.7%, to $104.8 million for the three months ended December 31, 2024 as compared to $91.4 million for the three months ended December 31, 2023. Cost of products sold as a percentage of revenues was 40.0% for the three months ended December 31, 2024 as compared to 33.0% for the three months ended December 31, 2023. The increase in cost of products sold for the three month comparative period was primarily driven by a non-cash asset impairment charge to write down the carrying value of certain property and equipment as a result of the Company's plan to discontinue the patch pump program. Also, contributing to the period over period increase was the impact of net changes in profit in inventory adjustments. These items were partially offset by the impact of lower sales recognized in the current period as compared to the prior year period. Selling and administrative expenses Selling and administrative expenses decreased by $9.2 million, or 10.2%, to $81.1 million for the three months ended December 31, 2024 as compared to $90.3 million for the three months ended December 31, 2023. The decrease for the three month comparative period was primarily driven by lower TSA and LSA costs with BD in addition to lower compensation and marketing expense recognized in the current period. Research and development expenses Research and development expenses increased by $0.1 million, or 0.5%, to $20.3 million for the three months ended December 31, 2024 as compared to $20.2 million for the three months ended December 31, 2023. The increase for the three month comparative period was primarily driven by certain asset impairments attributed to our decision to discontinue internal and external investment in the research and development of the Company's patch pump program. This was partially offset by a reduction in payments made in connection with the development of our insulin patch pump program in the current period as compared to the prior period, given the discontinuation of the patch pump program. We expect our research and development expense to decrease sequentially in fiscal year 2025 compared to fiscal year 2024. Other operating expenses Other operating expenses incurred primarily relate to accounting, auditing, legal services, marketing, supply chain, employee retention, costs associated with the implementation of our new ERP system and other Business Continuity Processes, costs associated with brand transition, and certain other costs to establish certain stand-alone functions to assist with the transition to being a stand-alone entity. These costs also include certain severance costs related to the optimization of certain business functions as we transition to being a stand-alone entity and severance and contract termination costs associated with the discontinued patch pump program. Other operating expenses are as follows: Three months ended December 31, 2024 2023 Costs related to the Separation $ 10.4 $ 26.4 Amortization of cloud computing arrangements 2.5 0.4 Costs associated with the discontinued patch pump program 14.3 — Business optimization and severance related costs — 1.9 Other (0.2) 1.2 Total $ 27.0 $ 29.9 Interest expense, net Interest expense, net increased by $0.2 million to $27.9 million for the three months ended December 31, 2024 as compared to $27.7 million for the three months ended December 31, 2023, which equates to a relatively flat change period over period. It remains unclear whether the United States Federal Reserve will increase or decrease the benchmark interest rate during the remainder of fiscal 2025. An increase in the benchmark interest rate would result in an increase in interest expense on our variable rate debt and a decrease in the benchmark interest rate would result in a decrease in interest expense on our variable rate debt. Dollar amounts are in millions except per share amounts or as otherwise specified. 21 Table of Contents Other income (expense), net Other income (expense), net, was $(1.5) million and $(3.5) million for the three months ended December 31, 2024 and 2023, respectively. The costs incurred for the three month period ended December 31, 2024 are primarily attributed to unfavorable impacts from foreign exchange. The costs incurred for the three month period ended December 31, 2023, are primarily attributed to amounts due to BD for income taxes payable incurred in deferred jurisdictions where BD is considered the primary obligor. We do not expect to incur any additional amounts where BD is considered the primary obligor in the current fiscal year. Income tax (benefit) The effective tax rates were 100.0% and (40.6)% for the three months ended December 31, 2024 and 2023, respectively. The increase in the Company’s effective tax rate from the prior comparative period is primarily due to the absence of a tax benefit from the establishment of deferred tax assets related to tax law changes in Switzerland, as well as a decrease in earnings. LIQUIDITY AND CAPITAL RESOURCES We believe that our cash and our cash equivalents and cash from operations, together with our borrowing capacity under our Revolving Credit Facility, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares and additional growth opportunities for the foreseeable future. However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund growth opportunities and satisfy upcoming debt maturities. The following is a summary of Embecta's total debt outstanding as of December 31, 2024: Term Loan $ 868.9 5.00% Notes 500.0 6.75% Notes 200.0 Total principal debt issued $ 1,568.9 Less: current debt obligations (9.5) Less: debt issuance costs and discounts (24.7) Long-term debt $ 1,534.7 The schedule of principal payments required on long-term debt for the next five years and thereafter is as follows: 2025 $ 7.1 2026 9.5 2027 9.5 2028 9.5 2029 833.3 Thereafter 700.0 Dollar amounts are in millions except per share amounts or as otherwise specified. 22 Table of Contents Certain measures relating to our total debt outstanding as of December 31, 2024 were as follows: Total debt $ 1,544.2 Short-term debt as a percentage of total debt 0.6 % Weighted average cost of total debt 6.7 % The credit agreement and the indentures for the 5.00% Notes and the 6.75% Notes contain customary financial covenants, including a total net leverage ratio covenant, which measures the ratio of (i) consolidated total net debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, must meet certain defined limits which are tested on a quarterly basis in accordance with the terms of the credit agreement and indentures governing the 5.00% Notes and the 6.75% Notes. In addition, the credit agreement contains covenants that limit, among other things, our ability to prepay, redeem or repurchase our subordinated and junior lien debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, redeem or repurchase equity interests, and create or become subject to liens. As of December 31, 2024, we were in compliance with all of such covenants. The credit agreement and the senior secured notes are secured by substantially all assets of Embecta and each subsidiary guarantor, subject to certain exceptions. During the first quarter of fiscal year 2025 , the Company paid an aggregate principal amount of approximately $32.4 million on the Term Loan, of which $30.0 million was discretionary. Debt extinguishment charges as a result of this discretionary prepayment were not material to the Company's Condensed Consolidated Statements of Income. We may, from time to time, seek to retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchase, or privately negotiated transactions, or otherwise may redeem some or all of our debt pursuant to its terms. Such repurchases or exchanges, if any, will depend upon various factors existing at the time, including prevailing market conditions, our liquidity requirements, contractual restrictions and other factors , and there can be no assurance as to which, if any, of these alternatives, or combination thereof, we may choose to pursue in the future. For additional information related to the Company's debt related activities, refer to Note 12 within the Notes to Condensed Consolidated Financial Statements within this Form 10-Q. Leases Maturities of our finance lease and operating lease liabilities as of December 31, 2024 by fiscal year are as follows: Finance Lease Operating Leases Total 2025 $ 2.8 $ 4.9 $ 7.7 2026 3.7 3.5 7.2 2027 3.8 1.9 5.7 2028 3.9 1.9 5.8 2029 3.9 1.7 5.6 Thereafter 32.3 7.3 39.6 Total lease payments $ 50.4 $ 21.2 $ 71.6 For additional information related to our leases, refer to Note 17 within the Notes to Condensed Consolidated Financial Statements of this Form 10-Q. Factoring Agreements In conjunction with the Separation, we entered into the Factoring Agreements with BD. Embecta owed BD a service fee calculated as 0.1% of annual revenues related to countries subject to the Factoring Agreements, in exchange for the services provided by BD pursuant to the Factoring Agreements. As of March 31, 2024, all Factoring Agreements between Embecta and BD had expired and terminated as a result of our implementation and onboarding of certain Business Continuity Processes in North America, and certain jurisdictions in Europe and Asia. Access to Capital and Credit Ratings In May 2024 and June 2024, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates to our credit ratings. Our Moody's Investors Services credit rating is B1 and our Standard & Poor's Rating Services credit rating is B+. Dollar amounts are in millions except per share amounts or as otherwise specified. 23 Table of Contents Cash and equivalents and restricted cash were $216.7 million as of December 31, 2024 as compared to $274.2 million as of September 30, 2024. The primary uses of cash that contributed to the $57.5 million decrease were: September 30, 2024 Cash and equivalents and restricted cash balance $ 274.2 Cash used for operating activities (5.3) Cash used for investing activities (1.5) Cash used for financing activities (45.2) Effect of exchange rate changes on cash and equivalents and restricted cash (5.5) December 31, 2024 Cash and equivalents and restricted cash balance $ 216.7 Net cash used for operating activities was primarily attributable to: Net Income $ — Non-cash adjustments related to depreciation and amortization, impairment of property, plant and equipment, stock-based compensation, and deferred income taxes 35.6 Change in accounts payable and accrued expenses (40.8) Change in trade receivables 5.8 Change in inventories (4.5) Change in amounts due from/due to Becton, Dickinson and Company 15.8 Change in prepaid expenses and other 9.6 Change in income and other net taxes payable (26.3) Change in other assets and liabilities, net (0.5) Net cash used for operating activities $ (5.3) The change in accounts payable and accrued expenses is primarily attributed to timing of payments to vendors and annual bonus payments. The change in trade receivables is primarily attributed to the timing of sales. The change in inventories is primarily attributed to actions taken to build inventory to support the execution of our brand transition program. The change in amounts due from/due to Becton, Dickinson and Company is attributed to the timing of payments associated with certain agreements effectuated at Separation. The change in prepaid expenses and other is primarily attributed to payments received from BD associated with the transfer of certain assets and liabilities related to the Diabetes Care Business in certain jurisdictions that closed in the first quarter of fiscal 2025. The change in income and other net taxes payable is primarily attributed to timing of required tax payments. The change in other assets and liabilities, net is primarily attributed to costs capitalized attributed to cloud computing arrangements. All other movements related to working capital were due to timing of payments and receipts of cash in the ordinary course of business. Net cash used for investing activities was comprised of capital expenditures of $1.5 million for the three months ended December 31, 2024 to support our business and operations. Net cash used for financing activities was primarily attributable to: Dividend payments $ (8.8) Payments on long-term debt (32.4) Payments related to tax withholding for stock-based compensation (3.7) Payments on finance lease (0.3) Net cash used for financing activities $ (45.2) Dollar amounts are in millions except per share amounts or as otherwise specified. 24 Table of Contents Contractual Obligations Our contractual obligations as of December 31, 2024, which require material cash requirements in the future, consist of purchase obligations and lease obligations. Purchase obligations are enforceable and legally binding obligations for purchases of goods and services which include inventory purchase commitments. Over the next several years, we expect to incur material costs associated with operating and maintaining our information technology infrastructure. Lease obligations include lease agreements for which a contract has been signed even if the lease has not yet commenced. Refer to "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2024 Form 10-K for further details. As of December 31, 2024, there have been no material changes to our contractual obligations outside the ordinary course of business. Critical Accounting Policies Our significant accounting policies, which include management’s best estimates and judgments, are included in Note 3 to the Consolidated Financial Statements included in the 2024 Form 10-K. A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates are disclosed in the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2024 Form 10-K. There have been no changes to our critical accounting policies as of December 31, 2024. Cautionary Statements Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains statements that constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements include those containing such words as “anticipates,” “believes,” "can," “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “outlook,” “plans,” "possible," “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” or other words of similar meaning. All statements that reflect Embecta’s expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts relating to discussions of future operations and financial performance (including volume growth, pricing, sales and earnings per share growth and cash flows) and statements regarding Embecta’s strategy for growth, the Restructuring Plan, brand transition, future product development, anticipated product and regulatory clearances, approvals, and launches, competitive position and expenditures. Forward-looking statements are based upon our present intent, beliefs or expectations, are not guarantees of future performance and are subject to numerous risks, uncertainties, and changes in circumstances that are difficult to predict. Although Embecta believes that the expectations reflected in any forward-looking statements it makes are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: • Competitive factors that could adversely affect Embecta’s operations, including adoption of new drug therapies for treatment of diabetes, new product introductions by Embecta’s competitors, the development of new technologies, lower cost producers that create pricing pressure, and consolidation resulting in companies with greater scale and market presence than Embecta. • The risk that Embecta is unable to replace the services, including the Business Continuity Processes, that BD currently provides to it on substantially similar terms as the terms on which BD is providing these services under the transaction agreements or that BD terminates such services. • Any failure by BD to perform its obligations under the various separation agreements entered into in connection with the Separation and distribution, including the cannula supply agreement. • Any events that adversely affect the sale or profitability of one of Embecta’s key products or the revenue delivered from sales to its key customers. • Increases in operating costs, including fluctuations in the cost and availability of oil-based resins, other raw materials, and energy as well as certain components, used in its products, the ability to maintain favorable supplier arrangements and relationships, and the potential adverse effects of any disruption in the availability of such items. • Embecta’s ability to obtain clearance from the U.S. Food and Drug Administration of any product, to market and sell such products successfully, to anticipate the needs of people with diabetes, and future business decisions by Embecta and its competitors. • Changes in reimbursement practices of governments or private payers or other cost containment measures. Dollar amounts are in millions except per share amounts or as otherwise specified. 25 Table of Contents • The adverse financial impact resulting from unfavorable changes in foreign currency exchange rates, as well as regional, national and foreign economic factors, including inflation, deflation, and fluctuations in interest rates, and their potential effect on its operating performance. • The impact of changes in United States, federal laws and policy that could affect fiscal and tax policies, healthcare and international trade, including import and export regulation, tariffs and international trade agreements. In particular, tariffs or other trade barriers imposed by the United States or other countries could adversely impact its supply chain costs or otherwise adversely impact its results of operations. • Any future impact of pandemics or geopolitical instability on Embecta’s business, including disruptions in its operations and supply chains. • New or changing laws and regulations affecting Embecta’s domestic and foreign operations, or changes in enforcement practices, including laws relating to healthcare, environmental protection, trade, monetary and fiscal policies, taxation (including tax reforms that could adversely impact multinational corporations) and licensing and regulatory requirements for products. • The expected benefits of the Separation from BD. • Risks associated with indebtedness and our use of indebtedness available to us. • The risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the Separation will exceed Embecta's estimates. • The impact of the Separation on Embecta's businesses and the risk that the Separation may be more difficult, time-consuming or costly than expected, including brand transition, the impact on its resources, systems, including ERP, procedures and controls, diversion of management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties. • The expectations related to the costs, profitability, timing and the estimated financial impact of, and charges associated with, the Restructuring Plan. • The risk that we may not complete strategic collaborative partnerships and acquisition opportunities that enable us to accelerate our growth or strategic collaborative opportunities that give us access to innovative technologies, complementary product lines, and new markets. • The risks associated with the material weakness identified in our internal control over financial reporting and our ability to remediate such material weakness. There can be no assurance that the transactions or uncertainties described above will in fact be consummated or occur in the manner described or at all. As a result, you should not place undue reliance upon our forward-looking statements. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussions under “Risk Factors,” included within the 2024 Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Embecta expressly disclaims and assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Dollar amounts are in millions except per share amounts or as otherwise specified. 26 Table of Contents