Embecta Corp.

2025 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Please note that this conference call is being recorded, and a replay will be available on the company's website following the call. I would now like to hand the conference call over to your host today, Mr. Pravesh Kandilwal, Vice President of Investor Relations. Mr. Kandilwal, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to MBECTA's Fiscal Third Quarter 2025 Earnings Conference Call. The press release and slides to accompany today's call and webcast replay details are available on the Investor Relations section of the company's website at www.mbecta.com. With me today are Dev Kurtykar, MBECTA's President and Chief Executive Officer, and Jake Alguiz, our Chief Financial Officer. Before we begin, I would like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides. Such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, which can be accessed on our website. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in our press release and conference call presentation. Our agenda for today's call is as follows. Deb will begin by providing some remarks on the overall performance of our business during the fiscal third quarter of 2025, as well as an overview of the progress that has been made concerning our strategic priorities. Jake will then review our financial results for the fiscal third quarter of 2025, as well as discuss the updated financial guidance for the fiscal year 2025. Following these updates, we will open the call for questions. With that said, I would now like to turn the call over to our CEO, Dev Kodekar.

Good morning, and thank you for taking the time to join us. As we detailed during our recently conducted Analyst and Investor Day event, we are currently in the second phase of our journey that is focused on progressing initiatives intended to position Embecta for long-term growth. Our priorities in this phase are to continue strengthening our core business, expanding our product portfolio, and increasing our financial flexibility. Starting with the core, we completed the ERP shared services and distribution network implementation in India, which had been the only remaining market operating on BD systems. This milestone means that 100% of our revenue is now flowing through MBECTA's own systems and marks the successful conclusion of a multi-year complex separation program. In addition, the transition from BD to MBECTA branded products in the US and Canada has significantly advanced, with greater than 90% of our North American revenue base having been changed over to MBECTA branded product. Consistent with our ERP implementation approach, we are executing the brand transition project in a phased manner to minimize risk. The transition began in North America in 2025, and in line with our plan, is expected to extend to international markets in 2026. On the portfolio expansion front, I'm pleased to share that we continue to make meaningful progress in our efforts aimed at positioning the utilization of our pen needles with GLP-1 therapies delivered via pen injectors. As we highlighted at our recent Analyst and Investor Day, we are actively collaborating with over 30 pharmaceutical companies to co-package our pen needles with their generic GLP-1 therapies. Several of these companies have already signed agreements with us and placed purchase orders for our pen needles. Our products are already part of multiple generic GLP-1 regulatory submissions with potential commercialization beginning as early as 2026. We continue to believe that we are well-placed to partner with these generic drug companies given our decades-long reputation for quality and reliability regulatory approvals in most markets, and a world-class distribution network. We are also making progress introducing pendules in retail small packs that patients can purchase for use with weekly GLP-1 injection treatments, thereby supporting patient needs and broadening our commercial relevance. Together, the co-packaging and retail packaging prospects represent a significant long-term opportunity that could generate more than $100 million in annual revenue for MBECTA by 2033. In line with our commitment to enhance financial flexibility in fiscal Q2, we initiated a restructuring plan aimed at streamlining our organization. This plan is now substantially complete, and we continue to expect this action will drive meaningful efficiencies with estimated pre-tax cost savings of between $7 and $8 million during the second half of fiscal 2025, or approximately $15 million on an annualized basis. And finally, during the third quarter, we paid down approximately $52 million of principal under our Term Loan B facility, bringing total year-to-date debt reduction to approximately $112 million. with this we have achieved our fiscal 2025 debt reduction goal of paying down approximately 110 million dollars with one quarter remaining during which we anticipate making an incremental debt payment with stand-up related cash usage largely behind us and cost optimization initiatives underway we believe we are well positioned to continue strengthening our balance sheet thereby enabling us to make future organic and inorganic investments. Turning to some fiscal third quarter highlights. Third quarter revenue reached all-time highs, totaling $295.5 million. This significantly exceeded our expectations and was due entirely to overperformance within the U.S. The strong performance in the U.S. in relation to our prior expectations was due to pricing and volume, which contributed equally. First, favorable pricing driven by year-to-date rebate reserve adjustments, and second, the timing of certain distributor orders in advance of the July 4th holiday, as well as incremental stocking related to our brand transition program. Overall, our Q3 results reflect strong commercial execution and are consistent with our expectation that the second half of the fiscal year would be stronger than the first from a top line perspective. Finally, as we reflect on our third quarter results and look ahead to the remainder of the year, we are narrowing our previously provided as reported revenue guidance range and We are raising and narrowing our fiscal 2025 guidance ranges for other key financial metrics. Now, let's review our revenue performance for the third quarter. During the third quarter of fiscal year 2025, MBECTA generated $295.5 million in revenue, reflecting growth of 8.4% on NAS reported basis or 8% on an adjusted constant currency basis. Within the US, revenue for the quarter totaled $160.2 million, representing year-over-year growth of 11.6% on an adjusted constant currency basis. This performance was aided in part by a favorable comparison to the prior year period, as well as the aforementioned rebate reserve adjustments and timing of orders. We expect the timing-related benefits from these orders to reverse in the fourth quarter. Turning to our international business, revenue for the third quarter totaled $135.3 million, representing growth of 5.0% on a reported basis and 4.2% on an adjusted constant currency basis. Growth in the quarter was primarily due to Latin America and Asia, which benefited from a favorable comparison to the prior year when order volumes were lower as customers normalized their purchasing patterns following our ERP transition. This was partially offset by year-over-year decline in China. While from a product family perspective, during the quarter, pen needle revenue grew approximately 6.8%, syringe revenue grew by approximately 14.5%, Safety products grew approximately 6.5%, and contract manufacturing grew approximately 47.2%. The year-over-year growth in pen needle revenue was primarily driven by increased product volumes, as pricing was relatively flat year-over-year. The increase in pen needle volumes were aided by the timing of distributor orders mentioned earlier, as well as a favorable comparison to the prior year period. Turning to our syringe products, they grew in the quarter by 14.5%, primarily driven by increased pricing, as volumes were lower than the prior year period. The increase in syringe revenue from pricing was due to a combination of increased U.S. prices aided in part by the year-to-date rebate reserve adjustment that occurred during the quarter, coupled with increased pricing in most international markets. While our safety products grew 6.5%, primarily due to improved pricing, as volume increases within the U.S. were offset by volume declines in international markets. That completes my prepared remarks, and with that, let me turn the call over to Jake to review other Q3 financial highlights, as well as provide our updated financial guidance for fiscal year 2025.