10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2023

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-41186

EMBECTA CORP.

(Exact name of registrant as specified in its charter)

Delaware	87-1583942
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)
300 Kimball Drive, Suite 300, Parsippany, New Jersey	07054
(Address of principal executive offices)	(Zip code)

(862) 401-0000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EMBC	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐
Emerging growth company	☐	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Embecta Corp. common stock outstanding as of February 2, 2024 was 57,578,921 shares, par value $0.01 per share.

Embecta Corp.

Form 10-Q

For the Quarterly Period ended December 31, 2023

Table of Contents

		Page
Part I. Financial Information		1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
Part II. Other Information		25
Item 1A.	Risk Factors	25
Item 6.	Exhibits	25
Signatures		26

-i-

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Condensed Consolidated Statements of Income

Embecta Corp.

(Unaudited)

	Three Months Ended December 31,
	2023		2022
Revenues	$	277.3	$	275.7
Cost of products sold	91.4		86.9
Gross Profit	$	185.9	$	188.8
Operating expenses:
Selling and administrative expense	90.3		72.8
Research and development expense	20.2		16.9
Other operating expenses	29.9		10.3
Total Operating Expenses	$	140.4	$	100.0
Operating Income	$	45.5	$	88.8
Interest expense, net	(27.7)		(25.6)
Other income (expense), net	(3.5)		(7.1)
Income Before Income Taxes	$	14.3	$	56.1
Income tax provision (benefit)	(5.8)		20.9
Net Income	$	20.1	$	35.2
Net Income per common share:
Basic	$	0.35	$	0.62
Diluted	$	0.35	$	0.61

See notes to the Unaudited Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

1

Condensed Consolidated Statements of Comprehensive Income

Embecta Corp.

(Unaudited)

	Three Months Ended December 31,
	2023		2022
Net Income	$	20.1	$	35.2
Other Comprehensive Income, net of tax
Foreign currency translation adjustments	11.6		26.0
Other Comprehensive Income	$	11.6	$	26.0
Comprehensive Income	$	31.7	$	61.2

See notes to the Unaudited Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

2

Condensed Consolidated Balance Sheets

Embecta Corp.

	December 31, 2023		September 30, 2023
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	298.7	$	326.5
Trade receivables, net (net of allowance for doubtful accounts of $1.2 million and $1.0 million as of December 31, 2023 and September 30, 2023, respectively)	96.1		16.7
Inventories:
Materials	32.9		32.1
Work in process	11.7		8.1
Finished products	104.6		111.9
Total Inventories	$	149.2	$	152.1
Amounts due from Becton, Dickinson and Company	110.3		142.4
Prepaid expenses and other	65.2		111.4
Total Current Assets	$	719.5	$	749.1
Property, Plant and Equipment, Net	301.3		300.2
Goodwill and Intangible Assets	24.3		24.7
Deferred Income Taxes and Other Assets	172.7		140.4
Total Assets	$	1,217.8	$	1,214.4
Liabilities and Equity
Current Liabilities
Accounts payable	$	42.1	$	53.5
Accrued expenses	122.2		118.1
Amounts due to Becton, Dickinson and Company	57.6		73.1
Salaries, wages and related items	57.4		62.1
Current debt obligations	9.5		9.5
Current finance lease liabilities	3.7		3.6
Income taxes	34.1		33.6
Total Current Liabilities	$	326.6	$	353.5
Deferred Income Taxes and Other Liabilities	60.7		57.2
Long-Term Debt	1,592.9		1,593.9
Non Current Finance Lease Liabilities	31.1		31.5
Commitments and Contingencies
Embecta Corp. Equity
Common stock, $0.01 par value Authorized - 250,000,000 Issued and outstanding - 57,573,497 as of December 31, 2023 and 57,333,353 as of September 30, 2023	$	0.6	$	0.6
Additional paid-in capital	33.4		27.9
Accumulated deficit	(530.0)		(541.1)
Accumulated other comprehensive loss	(297.5)		(309.1)
Total Equity	$	(793.5)	$	(821.7)
Total Liabilities and Equity	$	1,217.8	$	1,214.4

See notes to the Unaudited Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

3

Condensed Consolidated Statements of Equity

Embecta Corp.

(Unaudited)

	Common Stock
	Shares	Par Value		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total
Balance at October 1, 2022	57,055,327	$	0.6	$	10.0	$	(577.1)	$	(324.9)	$	(891.4)
Net income attributable to Embecta Corp.	—	—		—		35.2		—		35.2
Other comprehensive loss, net of taxes	—	—		—		—		26.0		26.0
Stock-based compensation plans	—	—		5.5		—		—		5.5
Dividends declared ($0.15 per share)	—	—		—		(8.6)		—		(8.6)
Issuance of shares related to stock-based compensation plans	158,430	—		(2.8)		—		—		(2.8)
Balance at December 31, 2022	57,213,757	$	0.6	$	12.7	$	(550.5)	$	(298.9)	$	(836.1)
Balance at October 1, 2023	57,333,353	$	0.6	$	27.9	$	(541.1)	$	(309.1)	$	(821.7)
Net income attributable to Embecta Corp.	—	—		—		20.1		—		20.1
Other comprehensive income, net of taxes	—	—		—		—		11.6		11.6
Stock-based compensation plans	—	—		7.3		—		—		7.3
Dividends and dividend equivalents declared ($0.15 per share)	—	—		0.4		(9.0)		—		(8.6)
Issuance of shares related to stock-based compensation plans	240,144	—		(2.2)		—		—		(2.2)
Balance at December 31, 2023	57,573,497	$	0.6	$	33.4	$	(530.0)	$	(297.5)	$	(793.5)

See notes to the Unaudited Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

4

Condensed Consolidated Statements of Cash Flows

Embecta Corp.

(Unaudited)

	Three Months Ended December 31,
	2023		2022
Operating Activities
Net income	$	20.1	$	35.2
Adjustments to net income to derive net cash provided by operating activities:
Depreciation and amortization	8.8		7.2
Amortization of debt issuance costs	1.6		1.6
Amortization of cloud computing arrangements	0.4		—
Stock-based compensation	7.3		5.5
Deferred income taxes	(17.0)		1.4
Change in operating assets and liabilities:
Trade receivables, net	(78.6)		3.0
Inventories	4.1		(14.7)
Due from/due to Becton, Dickinson and Company	17.1		(9.5)
Prepaid expenses and other	43.7		(6.6)
Accounts payable, accrued expenses and other current liabilities	(15.7)		19.4
Income and other net taxes payable	4.4		18.2
Other assets and liabilities, net	(9.3)		(0.3)
Net Cash (Used for) Provided by Operating Activities	$	(13.1)	$	60.4
Investing Activities
Capital expenditures	$	(2.7)	$	(4.7)
Net Cash Used for Investing Activities	$	(2.7)	$	(4.7)
Financing Activities
Payments on long-term debt	$	(2.4)	$	(2.4)
Payments related to tax withholding for stock-based compensation	(2.2)		(2.8)
Payments on finance lease	(0.3)		(0.9)
Dividend payments	(8.6)		—
Net Cash Used for Financing Activities	$	(13.5)	$	(6.1)
Effect of exchange rate changes on cash and cash equivalents	1.5		4.7
Net Change in Cash and cash equivalents	$	(27.8)	$	54.3
Opening Cash and cash equivalents	326.5		330.9
Closing Cash and cash equivalents	$	298.7	$	385.2

See notes to the Unaudited Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

5

Notes to Unaudited Condensed Consolidated Financial Statements

Embecta Corp.

Note 1 — Background

Embecta Corp. ("Embecta" or the "Company") is a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. The Company has a broad portfolio of marketed products, including a variety of pen needles, syringes and safety devices, which are complemented by a proprietary digital application designed to assist people with managing their diabetes. The Company primarily sells 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.

Note 2 — Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Embecta have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Embecta's Annual Report on Form 10-K for the year ended September 30, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses, depreciable and amortizable lives, sales returns and allowances, rebate accruals, inventory reserves and taxes on income as reflected in the Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Account Standard Board issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

Note 3 — Third Party Arrangements and Related Party Disclosures

On April 1, 2022, Embecta and Becton, Dickinson and Company ("BD") entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, BD agreed to spin off its diabetes care business (the "Diabetes Care Business") into Embecta, a new, publicly traded company (the "Separation").

In connection with the Separation, the Company entered into the Separation and Distribution Agreement, which contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of Embecta and BD (including certain deferred assets and liabilities) as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of Embecta's business with Embecta and financial responsibility for the obligations and liabilities of BD’s remaining businesses with BD, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation among Embecta and BD of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Separation, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures

Dollar amounts are in millions except per share amounts or as otherwise specified.

6

governing Embecta’s and BD’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of BD’s business and Embecta’s business.

Agreements that Embecta entered into with BD that govern aspects of Embecta's relationship with BD following the Separation include, but are not limited to the Transition Services Agreements ("TSA"), Trade Receivables Factoring Agreements ("Factoring Agreements"), Distribution Agreements, Cannula Supply Agreement, Tax Matters Agreement, Logistics Services Agreement, employee matters agreement, an intellectual property matters agreement, local support services agreements, certain other manufacturing arrangements and a process services agreement and lease agreement for a manufacturing facility located in Holdrege, Nebraska. For details on the rights and responsibilities of the parties under these agreements refer to Note 4 to the audited Consolidated Financial Statements in Embecta’s Annual Report on Form 10-K for the year ended September 30, 2023 filed with the Securities and Exchange Commission on November 29, 2023 (the “2023 Form 10-K”).

In November 2023, a portion of the Factoring Agreement between Embecta and BD for services to the U.S. for the Company’s U.S. subsidiary expired and terminated as a result of our implementation and onboarding of certain systems and services, including, but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report, which, for clarity, includes enterprise resource planning (“ERP”) systems (“Business Continuity Processes”) in North America.

The amount due from BD under the above agreements was $110.3 million at December 31, 2023 and is included in Amounts due from Becton, Dickinson and Company. The amount due to BD under these agreements was $57.6 million at December 31, 2023 and is included in Amounts due to Becton, Dickinson and Company.

The closing of the transfers of certain assets and liabilities related to the Diabetes Care Business in certain jurisdictions, including China, Mexico, and Italy, as contemplated by the Separation and Distribution Agreement did not occur at Separation. The transfers of the relevant local assets and liabilities for these deferred countries are expected to close at a future date. As of December 31, 2023, the Company estimates that amounts due to BD related to certain assets and liabilities in deferred close jurisdictions is $13.5 million and are reflected in Accrued expenses. As of December 31, 2023, the Company estimates that amounts due from BD related to certain assets and liabilities in deferred close jurisdictions are $7.4 million and is reflected in Prepaid expenses and other.

Note 4 — Collaboration Agreement

In March 2023, the Company entered into a collaboration agreement with a third-party to develop and commercialize an interoperable automated glycemic controller ("iAGC") to complement the Company's insulin patch pump currently in development. The Company believes that both parties are active participants in the operating activities of the collaboration and exposed to certain risks and rewards depending on commercial success. Upon successful commercialization of the iAGC, the Company will be responsible for the sales and marketing effort and would pay a royalty to the third-party based on future product sales to customers. The Company expects that it will be the principal in the end customer sale and 100% of product sales will be included in Revenues and any royalty payments and continued project costs after commercialization will be included in Cost of products sold as they are incurred.

Note 5 — Other Operating Expenses

In connection with the Separation, the Company incurred separation and stand-up costs of approximately $26.4 million and $9.9 million during the three months ended December 31, 2023 and 2022, respectively. The costs incurred primarily consist of costs associated with accounting, auditing, legal services, supply chain, employee retention, the implementation of the Company's new ERP system, and certain other costs to establish certain Business Continuity Processes and stand-alone functions to assist with the transition to being a stand-alone entity.

During the three months ended December 31, 2023, the Company recorded approximately $1.9 million of severance costs related to the optimization of certain business functions. These costs were primarily recorded in the U.S. Severance costs related to the optimization of certain business functions were not material in the comparable prior year period. Liabilities for costs associated with these activities were not material to any period presented.

Note 6 — Contingencies

The Company was not a party to any material legal proceedings at December 31, 2023 or September 30, 2023, nor is it a party to any material legal proceedings as of the date of issuance of these Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

7

Note 7 — Revenues

The Company’s policies for recognizing sales have not changed from those described in the 2023 Form 10-K. The Company sells syringes, pen needles and other products used in the management of diabetes which are primarily sold 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. End-users of the Company’s products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public.

Measurement of Revenues

Payment terms extended to the Company’s customers are based upon commercially reasonable terms for the markets in which the Company’s products are sold. Because the Company generally expects to receive payment within one year or less from when control of a product is transferred to the customer, the Company does not generally adjust its revenues for the effects of a financing component. The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured in the historical loss information. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. The allowance for doubtful accounts for trade receivables is not material to the Company’s Condensed Consolidated Financial Statements.

The Company’s gross revenues are subject to a variety of deductions which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts, and sales returns. Because these deductions represent estimates of the related obligations, judgment is required when determining the impact of these revenue deductions on gross revenues for a reporting period. Rebates provided by the Company are based upon prices determined under the Company’s agreements primarily with its end-user customers. Additional factors considered in the estimate of the Company’s rebate liability include the quantification of inventory that is either in stock at or in transit to the Company’s distributors, as well as the estimated lag time between the sale of product and the payment of corresponding rebates.

The Company’s liability attributed to variable consideration at December 31, 2023 and September 30, 2023 was $118.0 million and $36.4 million, respectively. Sales deductions recorded as a reduction of gross revenues for the three months ended December 31, 2023 and 2022 were $126.7 million and $92.6 million, respectively.

Disaggregation of Revenues

Disaggregation of revenue by geographic region is provided within Note 8.

Contract Assets and Liabilities

The Company does not have contract liabilities. Contract assets consist of the Company’s right to consideration that is conditional upon its future performance pursuant to private label agreements and are presented within Prepaid expenses and other in the Condensed Consolidated Balance Sheets.

The Company’s contract asset balance was $1.2 million as of both December 31, 2023 and September 30, 2023.

Note 8 — Segment and Geographical Data

Operating segments are identified as components of an enterprise in which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding assessing business performance and allocating resources and capital. Management has concluded that the Company operates in one segment based upon the information used by the CODM in evaluating the performance of the Company’s business and allocating resources and capital.

Disaggregation of Revenues

The Company has distribution agreements with regional or national distributors (including wholesalers and medical suppliers) to ensure broad availability of its products as well as a direct sales force in certain countries and regions around the world. In the United States and Canada, the Company utilizes its large and small key account managers that call on payers, retailers, wholesalers and institutional customers, and field-based territory managers that call on health care providers and pharmacies. In certain markets within Europe, the Company has dedicated sales representatives and in certain regions of the Middle East and Africa, the Company has distribution agreements. In Asia, the Company has distribution agreements, and in China the Company relies on its own commercial team to support sales execution. In Latin America, the Company maintains distribution agreements and direct sales representatives.

The Company disaggregates its revenue by geography as management believes this category best depicts how the nature, amount, and timing of revenues and cash flows are affected by economic factors.

Dollar amounts are in millions except per share amounts or as otherwise specified.

8

Revenues by geographic region are as follows:

	Three months ended December 31,
	2023		2022
United States	$	148.6	$	149.3
International(1)	128.7		126.4
Total	$	277.3	$	275.7

(1)For the three months ended December 31, 2023 and 2022, no individual country outside of the United States generated net revenues that represented more than 10.0% of total revenues.

Note 9 — Stock-Based Compensation

Stock-Based Compensation Expense

Total direct and allocated stock-based compensation expense for the three months ended December 31, 2023 and 2022 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

	Three months ended December 31,
	2023		2022
Cost of products sold	$	0.9	$	0.6
Selling and administrative expense	5.9		4.6
Research and development expense	0.6		0.3
Total Stock-Based Compensation Expense	$	7.4	$	5.5
Tax benefit associated with stock-based compensation costs recognized	$	0.7	$	1.3

The following table summarizes the Company's total stock-based compensation expense by classification of award for the three months ended December 31, 2023 and 2022:

	2023		2022
Equity Awards	$	7.3	$	5.5
Liability Awards	0.1		—
Total	$	7.4	$	5.5

The following table summarizes the Company's total stock-based compensation expense by award type for the three months ended December 31, 2023 and 2022:

	2023		2022
Time-Vested Restricted Stock Units (TVUs)	$	5.4	$	4.1
Performance-Based Restricted Stock Units (PSUs)	0.9		0.1
Stock Appreciation Rights (SARs)	1.1		1.3
Total	$	7.4	$	5.5

Time Vested Restricted Stock Units ("TVUs")

During the three months ended December 31, 2023, Embecta granted 1,277,644 restricted stock units ("RSUs") in the form of TVUs to employees which vest ratably over three years, subject to continued employment of the recipients. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant.

Dollar amounts are in millions except per share amounts or as otherwise specified.

9

A summary of TVUs outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	RSUs (in thousands)	Weighted Average Grant Date Fair Value
Nonvested at October 1	1,188.8	$	29.42
Granted	1,277.6	17.52
Distributed*	(370.6)	29.11
Forfeited, canceled or expired	(17.3)	29.21
Nonvested at December 31	2,078.5	$	22.16
Expected to vest at December 31	1,970.9	$	22.16
*The RSUs distributed include shares withheld for taxes that are not formally issued to the market.

The weighted average grant date fair value of TVUs granted during the three months ended December 31, 2023 is $17.52 and the total fair value of TVUs vested during the three months ended December 31, 2023 is $10.8 million.

At December 31, 2023, the weighted average remaining vesting term of TVUs is 2.3 years.

Performance Based Restricted Stock Units ("PSUs")

During the three months ended December 31, 2023, Embecta awarded 531,253 RSUs in the form of PSUs to certain executive officers and employees which vest after three years, subject to continued employment of the recipients and the achievement of certain performance metric targets. The Company has identified certain performance metrics associated with these awards and certain targets will be fully established at a future date. The Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, the Company recognizes stock-based compensation expense for each separately-vesting tranche over the requisite service period based on the fair value at each reporting date. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant. As of December 31, 2023, there were 709,112 RSUs in the form of PSUs that have been awarded for which a grant date has not yet been established.

As of both December 31, 2023 and September 30, 2023, there were approximately 57.8 thousand nonvested PSUs with a weighted average grant date fair value of $30.24. As of December 31, 2023, there were approximately 54.6 thousand nonvested PSUs expected to vest with a weighted average grant date fair value of $30.24.

At December 31, 2023, the weighted average remaining vesting term of PSUs is 1.9 years.

Stock Appreciation Rights

A summary of stock appreciation rights ("SARs") outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	SARs (in thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at October 1	1,831.7	$	29.06
Forfeited, canceled or expired	(1.2)	10.27
Balance at December 31	1,830.5	$	29.07	7.5	$	0.1
Vested and expected to vest at December 31	1,775.5	29.04		7.4	$	0.1
Exercisable at December 31	829.6	$	27.84	6.8	$	0.1

Dollar amounts are in millions except per share amounts or as otherwise specified.

10

No SARs were exercised during the three months ended December 31, 2023.

Unrecognized Stock-Based Compensation Expense and Other Stock Plans

The amount of unrecognized compensation expense for all non-vested stock-based awards granted as of December 31, 2023, is approximately $49.8 million which is expected to be recognized over a weighted-average remaining life of approximately 2.3 years. At December 31, 2023, 2.6 million shares were authorized for future grants under the 2022 Employee and Director Equity Based Compensation Plan.

Note 10 — Goodwill, Intangible Assets, and Cloud Computing Arrangements

Goodwill and Intangible Assets

Goodwill and Other Intangible Assets consisted of:

	December 31, 2023		September 30, 2023
Amortized intangible assets
Patents – gross	$	10.6	$	10.6
Less: accumulated amortization	(4.6)		(4.5)
Patents – net	$	6.0	$	6.1
Customer Relationships and Other – gross	$	5.3	$	5.4
Less: accumulated amortization	(2.5)		(2.4)
Customer Relationships and Other – net	$	2.8	$	3.0
Total amortized intangible assets	$	8.8	$	9.1
Goodwill	15.5		15.6
Total Goodwill and Other Intangible Assets	$	24.3	$	24.7

Cloud Computing Arrangements

The Company capitalizes costs associated with the development of cloud computing arrangements in a manner consistent with internally developed software. The total balance of capitalized costs associated with these arrangements as of December 31, 2023 and September 30, 2023 is $50.4 million and $38.0 million, respectively, which primarily relates to the implementation of the Company's new ERP system. These capitalized costs are included in Deferred Income Taxes and Other Assets. Costs amortized during the three months ended December 31, 2023 were $0.4 million and are included in Other operating expenses. Costs amortized during the three months ended December 31, 2022 were not material to the Company's condensed consolidated financial results. As of December 31, 2023, cloud computing arrangement assets in-service have useful lives which range from approximately three to nine years.

Note 11 — Long-Term Debt

Credit Agreement

On March 31, 2022, Embecta entered into a credit agreement (the “Credit Agreement”), providing for:

•a Term Loan B Facility (the "Term Loan") in the amount of $950.0 million, with a seven-year term that matures in March 2029. The interest rate is 300 basis points over the secured overnight financing rate (“SOFR”), with a 0.50% SOFR floor. The Term Loan was issued at a discount of 0.50%. Principal and interest payments on the Term Loan commenced on June 30, 2022. Such quarterly principal payments are calculated as 0.25% of the initial principal amount, with the remaining balance payable upon maturity; and

•a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $500.0 million, with a five-year term that matures in 2027. Borrowings under the Revolving Credit Facility bear interest, at Embecta’s option, at an annual rate equal to (a) in the case of loans denominated in United States dollars (i) the SOFR or (ii) the alternate base rate or (b) in the case of loans denominated in Euros, the EURIBOR rate, in each case plus an applicable margin specified in the credit agreement. A commitment fee applies to the unused portion of the Revolving Credit Facility, equal to 0.25% per annum. As of December 31, 2023, no amount has been drawn on the Revolving Credit Facility.

The Credit Agreement and the indentures for Embecta's outstanding 5.00% senior secured notes due February 2030 (the "5.00% Notes") and 6.75% senior secured notes due February 2030 (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)

Dollar amounts are in millions except per share amounts or as otherwise specified.

11

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 the 5.00% Notes and 6.75% Notes. In addition, the Credit Agreement contains covenants that will limit, among other things, Embecta’s ability to prepay, redeem or repurchase its 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.

The following is a summary of Embecta's total debt outstanding as of December 31, 2023:

Term Loan due March 2029	$	933.4
5.00% Notes due February 2030	500.0
6.75% Notes due February 2030	200.0
Total principal debt issued	$	1,633.4
Less: current debt obligations	(9.5)
Less: debt issuance costs and discounts	(31.0)
Long-term debt	$	1,592.9

The debt issuance costs on the Term Loan, 5.00% Notes, 6.75% Notes and the discount on the Term Loan are reported in the Condensed Consolidated Balance Sheets as a reduction of debt and are amortized as a component of Interest expense, net over the term of the related debt using the effective interest method.

The schedule of principal payments required on long-term debt for the next five fiscal years and thereafter is as follows:

2024	$	9.5
2025	9.5
2026	9.5
2027	9.5
2028	9.5
Thereafter	1,585.9

The estimated fair value of long-term debt (including current portion) at December 31, 2023 was $1,510.5 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $1,602.4 million. Fair value was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability and would be considered Level 2 in the fair value hierarchy.

Note 12 — Earnings per Share

The calculation of earnings per basic and diluted common share for the three months ended December 31, 2023 and 2023 was as follows:

	Three Months Ended December 31,
($ in millions and shares in thousands, except per share amounts)	2023		2022
Net Income attributable to Embecta	$	20.1	$	35.2
Basic weighted average number of shares outstanding	57,486		57,113
Stock awards and equity units (share equivalent)	146		371
Diluted weighted average shares outstanding	57,632		57,484
Earnings per common share - Basic	$	0.35	$	0.62
Earnings per common share - Diluted	$	0.35	$	0.61

Earnings per diluted share is computed by giving effect to all potentially dilutive stock awards that are outstanding. The computation of earnings per diluted share excludes the effect of the potential exercise of stock-based awards, when the effect of the potential exercise would be anti-dilutive. For the three months ended December 31, 2023, and 2022, 3.2 million and 2.0 million of dilutive share equivalents issuable under stock-based compensation plans were excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

Dollar amounts are in millions except per share amounts or as otherwise specified.

12

Note 13 — Income Taxes

The Company is subject to income tax in the various jurisdictions in which it operates. A significant portion of the Company's earnings are taxed in jurisdictions with tax rates that are lower than the statutory tax rate of the United States. The effective tax rate can vary from quarter to quarter because of changes in the global pretax income or geographical mix of the Company's earnings, changes in tax laws and matters related to tax audits.

The effective tax rates were (40.6)% and 37.3% for the three months ended December 31, 2023 and 2022, respectively. The decrease in the Company’s effective tax rate from the prior comparative period is primarily due to a tax benefit of approximately $17.1 million for the establishment of a deferred tax asset related to tax law changes in Switzerland. The tax law changes instituted a higher cantonal tax rate and additional tax basis that is amortizable for income tax purposes over a period of seven years.

Note 14 — Financial Instruments and Fair Value Measurements

The following reconciles Cash and cash equivalents reported within the Condensed Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	298.7	$	326.5

Cash and cash equivalents as of December 31, 2023 includes cash held in money market funds and other cash equivalents. All cash and cash equivalents are Level 1 in the fair value hierarchy. Interest income on Cash and cash equivalents was $3.4 million and $1.1 million for the three months ended December 31, 2023 and 2022, respectively, and is included as a component of Interest expense, net.

Foreign Currency Risks and Related Strategies

The Company has foreign currency exposures throughout Europe, Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts.

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of December 31, 2023 and September 30, 2023, respectively:

	Hedge Designation	December 31, 2023		September 30, 2023
Foreign exchange contracts (a)	Undesignated	$	6.7	$	6.7

a.Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in Other income (expense), net. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Gains and losses recognized to date on these instruments were not material to the Company's Condensed Consolidated Financial Statements.

Nonrecurring Fair Value Measurements

Non-financial assets, including property, plant and equipment as well as intangible assets, are measured at fair value when there are indicators of impairment and these assets are recorded at fair value only when an impairment is recognized. These measurements of fair value are generally based upon Level 3 inputs, including values estimated using the income approach.

Concentration of Credit Risk

Three of the Company’s customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 40.8% for the three months ended December 31, 2023.

Four of the Company's customers represented at least 10.0% of total gross trade receivables individually and, in the aggregate, represented approximately 60.9% as of December 31, 2023.

Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry. The Company does not normally require collateral from its customers.

Dollar amounts are in millions except per share amounts or as otherwise specified.

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Note 15 — Property, Plant and Equipment

Property, Plant and Equipment, Net consisted of:

	December 31, 2023		September 30, 2023
Land	$	2.4	$	2.3
Buildings	122.5		124.5
Machinery, equipment and fixtures	580.1		567.2
Leasehold improvements	8.9		9.1
Construction in progress	45.2		44.8
	$	759.1	$	747.9
Less: accumulated depreciation	(457.8)		(447.7)
Total Property, Plant and Equipment, Net	$	301.3	$	300.2

Note 16 — Leases

Finance Leases

The Company's finance lease assets and liabilities are attributed to its manufacturing site in Holdrege, Nebraska, which has an initial term of ten years and an option for the Company to extend the lease term for an additional period of up to five years. This lease is classified as a finance lease because the present value of the sum of the lease payments associated with the lease exceeds substantially all of the fair value of the manufacturing site.

Operating Leases

The Company's operating leases primarily relate to its real estate leases that are not classified as finance leases.

Aggregate Lease Information

The Company's leases are included in its Condensed Consolidated Balance Sheets as follows:

	December 31, 2023			September 30, 2023
Finance Leases
Property, Plant, and Equipment, Net	$	32.6		$	33.1
Total Finance Lease Assets	$	32.6		$	33.1
Current finance lease liabilities	$	3.7		$	3.6
Non Current Finance Lease Liabilities	31.1			31.5
Total Finance Lease Liabilities	$	34.8		$	35.1
Weighted-average remaining lease term (years)	13.3			13.5
Weighted-average discount rate	6.8		%	6.8		%
Operating Leases
Other Assets	$	21.7		$	23.0
Total Operating Lease Assets	$	21.7		$	23.0
Accrued expenses	$	6.0		$	5.9
Deferred Income Taxes and Other Liabilities	14.5			15.4
Total Operating Lease Liabilities	$	20.5		$	21.3
Weighted-average remaining lease term (years)	7.4			7.3
Weighted-average discount rate	6.9		%	6.9		%

Dollar amounts are in millions except per share amounts or as otherwise specified.

14

Supplemental cash flow information related to leases for the three months ended December 31, 2023 and 2022 were as follows:

For both the three months ended December 31, 2023 and 2022, right of use assets obtained in exchange for lease liabilities were not material.

	December 31, 2023
Cash used for amounts included in the measurement of lease liabilities
Operating cash flows from Operating Leases	$	1.4
Financing cash flows from Finance Lease	0.3
Operating cash flows from Finance Lease	0.6

For the three months ended December 31, 2022, cash used for amounts included in the measurement of lease liabilities was not material.

Maturities of the Company's finance and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Leases		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3
Less: amount representing interest	19.2		6.8		26.0
Present value of lease liabilities	$	34.8	$	20.5	$	55.3

Dollar amounts are in millions except per share amounts or as otherwise specified.

15

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 our 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 nearly 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, which are complemented by our proprietary digital application designed to assist people with managing their diabetes. 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 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 in development are targeted to challenge the current diabetes treatment paradigm, including the frequency of insulin use. 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.

16

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.

We are continuing to work with BD on the process to obtain a supplemental private letter ruling to the private letter ruling BD received in connection with the Separation and the distribution in order to finalize the conditional limited extension granted by BD to the Company until November 1, 2024 of certain services under the TSA, the Logistic Services Agreement (“LSA”) and other transaction documents in a limited set of markets to support various services provided by BD to the Company, including, but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report (“Interim Business Continuity Processes”).

We continue to monitor and respond to 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 9, 2024, 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 rising 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.

17

Results of Operations

Our unaudited Condensed Consolidated Statements of Income are as follows:

	Three months ended December 31,
	2023		2022		%
Revenues	$	277.3	$	275.7	0.6
Cost of products sold	91.4		86.9		5.2
Gross Profit	185.9		188.8		(1.5)
Operating expenses:
Selling and administrative expense	90.3		72.8		24.0
Research and development expense	20.2		16.9		19.5
Other operating expenses	29.9		10.3		190.3
Total Operating Expenses	140.4		100.0		40.4
Operating Income	45.5		88.8		(48.8)
Interest expense, net	(27.7)		(25.6)		8.2
Other income (expense), net	(3.5)		(7.1)		(50.7)
Income Before Income Taxes	14.3		56.1		(74.5)
Income tax provision (benefit)	(5.8)		20.9		(127.8)
Net Income	$	20.1	$	35.2	(42.9)
Net Income per common share:
Basic	$	0.35	$	0.62	(43.5)	%
Diluted	$	0.35	$	0.61	(42.6)	%

Three Months Ended December 31, 2023 Summary (on a comparative basis)

Key financial results for the three months ended December 31, 2023 were as follows:

•Revenue increased by $1.6 million to $277.3 million from $275.7 million;

•Gross profit decreased by $2.9 million to $185.9 million from $188.8 million. Gross profit as a percent of revenue was 67.0%, as compared to 68.5% in the prior year comparative period;

•Operating income decreased by $43.3 million to $45.5 million from $88.8 million; and

•Net income decreased by $15.1 million to $20.1 million from $35.2 million.

Revenues

Our revenues increased by $1.6 million, or 0.6%, to $277.3 million for the three months ended December 31, 2023 as compared to revenues of $275.7 million for the three months ended December 31, 2022. Changes in our revenues are driven by the volume of goods that we sell, the prices we negotiate with customers and changes in foreign exchange rates. The increase in revenues was driven by $2.3 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar and $3.4 million of favorable changes in price. This was partially offset by a $2.1 million decrease in contract manufacturing related to sales of non-diabetes products to BD and $2.0 million of unfavorable changes in volume.

Revenues by geographic region are as follows:

	Three months ended December 31,
	2023		2022
United States	$	148.6	$	149.3
International	128.7		126.4
Total	$	277.3	$	275.7

Dollar amounts are in millions except per share amounts or as otherwise specified.

18

Cost of products sold

Cost of products sold increased by $4.5 million, or 5.2%, to $91.4 million for the three months ended December 31, 2023 as compared to $86.9 million for the three months ended December 31, 2022. Cost of products sold as a percentage of revenues was 33.0% for the three months ended December 31, 2023 as compared to 31.5% for the three months ended December 31, 2022. The increase in cost of products sold for the three month comparative period was primarily driven by the negative impact of foreign currency translation primarily due to the weakening of the U.S. dollar, the impact of inflation on the costs of certain raw materials (including freight), direct labor, and overhead, and the impact of negative year-over-year manufacturing variances primarily attributable to the planned temporary shutdown of our Suzhou, China facility as it relates to production for the domestic Chinese market. We intend to continue to work to improve productivity to help partially offset these increased costs.

Selling and administrative expenses

Selling and administrative expenses increased by $17.5 million, or 24.0%, to $90.3 million for the three months ended December 31, 2023 as compared to $72.8 million for the three months ended December 31, 2022. The increase for the three month comparative period was primarily driven by an increase in compensation and benefit costs due to increased headcount.

Research and development expenses

Research and development expenses increased by $3.3 million, or 19.5%, to $20.2 million for the three months ended December 31, 2023 as compared to $16.9 million for the three months ended December 31, 2022. The increase for the three month comparative period was primarily driven by increased spending on our insulin patch pump platform. In December 2023, we submitted our first 510(k) premarket filing to the U.S. Food and Drug Administration ("FDA") for our proprietary disposable insulin delivery system.

Other operating expenses

We incurred other operating expenses of $29.9 million and $10.3 million for the three months ended December 31, 2023 and 2022, respectively, driven by costs related to the Separation. The costs incurred primarily relate to accounting, auditing, legal services, supply chain, employee retention, increased costs associated with the implementation of our new ERP system and other Business Continuity Processes, and certain other costs to establish certain stand-alone functions to assist with the transition to being a stand-alone entity. As we continue to stand-up various corporate functions as a stand-alone publicly-traded company, we expect to incur similar costs associated with the same type of activities in the current year.

During the three months ended December 31, 2023, the Company recorded approximately $1.9 million of severance costs related to the optimization of certain business functions. These costs were primarily recorded in the U.S. Severance costs related to the optimization of certain business functions were not material in the comparable prior year period. Liabilities for costs associated with these activities were not material to any period presented.

Interest expense, net

Interest expense, net increased by $2.1 million to $27.7 million for the three months ended December 31, 2023 as compared to $25.6 million for the three months ended December 31, 2022. The increase for the three month comparative period is primarily a result of higher interest rates on our variable rate debt, primarily as a result of increases in SOFR that impacted our Term Loan, which was partially offset by an increase in interest income from amounts held in interest bearing accounts and money market funds. If the United States Federal Reserve resumes raising the benchmark interest rate, then we would expect the interest expense on our variable rate debt to increase during the remainder of fiscal 2024.

Other income (expense), net

Other income (expense), net, was $(3.5) million and $(7.1) million for the three months ended December 31, 2023 and 2022, respectively. The costs incurred primarily relate to amounts due to BD for income taxes payable incurred in deferred jurisdictions where BD is considered the primary obligor.

Dollar amounts are in millions except per share amounts or as otherwise specified.

19

Income tax provision (benefit)

The effective tax rates were (40.6)% and 37.3% for the three months ended December 31, 2023 and 2022, respectively. The decrease in the Company’s effective tax rate from the prior comparative period is primarily due to a tax benefit of approximately $17.1 million for the establishment of a deferred tax asset related to tax law changes in Switzerland. The tax law changes instituted a higher cantonal tax rate and additional tax basis that is amortizable for income tax purposes over a period of seven years.

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, share repurchases 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, 2023:

Term Loan	$	933.4
5.00% Notes	500.0
6.75% Notes	200.0
Total principal debt issued	$	1,633.4
Less: current debt obligations	(9.5)
Less: debt issuance costs and discounts	(31.0)
Long-term debt	$	1,592.9

The schedule of principal payments required on long-term debt for the next five years and thereafter is as follows:

2024	$	9.5
2025	9.5
2026	9.5
2027	9.5
2028	9.5
Thereafter	1,585.9

Certain measures relating to our total debt outstanding as of December 31, 2023 were as follows:

Total debt	$	1,602.4
Short-term debt as a percentage of total debt	0.6		%
Weighted average cost of total debt	7.2		%

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, 2023, we were in compliance with all of such covenants. The credit agreement and the senior secured are secured by substantially all assets of Embecta and each subsidiary guarantor, subject to certain exceptions.

For additional information related to the Company's debt related activities, refer to Note 11 within the Notes to Condensed Consolidated Financial Statements within this Form 10-Q.

Dollar amounts are in millions except per share amounts or as otherwise specified.

20

Leases

Maturities of our finance lease and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Lease		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3

For additional information related to our leases, refer to Note 16 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 owes BD a service fee calculated as 0.1% of annual revenues related to countries subject to the agreement, in exchange for the services provided by BD pursuant to the Factoring Agreements.

In November 2023, the portion of the Factoring Agreement between Embecta and BD for services to the U.S. for the Company’s U.S. subsidiary expired and terminated as a result of our implementation and onboarding of certain Business Continuity Processes in North America.

Access to Capital and Credit Ratings

In November 2023 and June 2023, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates to our credit ratings of Ba3 and B+, respectively. These ratings remain unchanged from the initial published ratings from January 2022.

Cash and cash equivalents were $298.7 million as of December 31, 2023 as compared to $326.5 million as of September 30, 2023.

The primary sources and uses of cash that contributed to the $27.8 million decrease were:

September 30, 2023 Cash and cash equivalents balance	$	326.5
Cash used for operating activities	(13.1)
Cash used for investing activities	(2.7)
Cash used for financing activities	(13.5)
Effect of exchange rate changes on cash and cash equivalents	1.5
December 31, 2023 Cash and cash equivalents balance	$	298.7

Net cash used for operating activities was primarily attributable to:

Net income	$	20.1
Non-cash adjustments related to depreciation and amortization, stock-based compensation, and deferred income taxes	1.1
Change in accounts payable and accrued expenses	(15.7)
Change in trade receivables	(78.6)
Change in inventories	4.1
Change in amounts due from/due to Becton, Dickinson and Company	17.1
Change in prepaid expenses and other	43.7
Change in income and other net taxes payable	4.4
Change in other assets and liabilities, net	(9.3)
Net cash used for operating activities	$	(13.1)

Dollar amounts are in millions except per share amounts or as otherwise specified.

21

The change in accounts payable and accrued expenses is primarily due to timing attributable to payments to vendors in the first quarter of fiscal 2024.

As a result of our implementation of certain Business Continuity Processes in North America, including our ERP system, that went live in November 2023, and the expiration and termination of a portion of the Factoring Agreement between Embecta and BD for services to the U.S. subsidiary, we are now responsible for the collection of any outstanding trade receivables in the U.S. The increase in trade receivables is a direct result of this impact, and we expect to convert these outstanding receivables due from customers into cash during fiscal 2024 in line with contractual payment terms.

The change in inventories is driven by product sales of certain inventory levels that had been built up at the end of fiscal 2023 in anticipation of our North America ERP system and other Business Continuity Processes that went live in November 2023.

The change in amounts due from/due to Becton, Dickinson and Company primarily relates to the termination of the portion of the Factoring Agreement between Embecta and BD for services to the U.S. subsidiary as we are now responsible for the collection of any outstanding trade receivables in the U.S.

The change in prepaid expenses and other are primarily driven by a reduction in payments during the first quarter of fiscal 2024 to BD for future payments made to third parties on our behalf as a result of our implementation of certain Business Continuity Processes in North America, including our ERP system, that went live in November 2023.

The change in income and other net taxes payable was primarily due to the timing of required tax payments.

The change in other assets and liabilities, net is primarily due to costs capitalized associated with the implementation of our ERP system.

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 primarily comprised of capital expenditures of $2.7 million and $4.7 million during the three months ended December 31, 2023 and 2022, respectively, to support further expansion of our business and operations.

Net cash used for financing activities was primarily attributable to:

Dividend payments	$	(8.6)
Payments on long-term debt	(2.4)
Payments related to tax withholding for stock-based compensation	(2.2)
Payments on finance lease	(0.3)
Net cash provided by financing activities	$	(13.5)

Contractual Obligations

Our contractual obligations as of December 31, 2023, 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 significant costs associated with information technology infrastructure as we transition to our own systems. Lease obligations include lease agreements for which a contract has been signed even if the lease has not yet commenced. Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Form 10-K for further details. As of December 31, 2023, 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 our 2023 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 Embecta's 2023 Form 10-K. There have been no changes to our critical accounting policies as of December 31, 2023.

Dollar amounts are in millions except per share amounts or as otherwise specified.

22

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, 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 extend the TSA, the LSA, and other transaction agreements or replace the services, including the Interim Business Continuity Processes, that BD currently provides to it on substantially similar terms as the terms on which BD is providing these services 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 FDA 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.

•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 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 continuing impact of the COVID-19 pandemic 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.

Dollar amounts are in millions except per share amounts or as otherwise specified.

23

•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 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 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.

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 2023 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in information reported since the filing of the Company's 2023 Form 10-K except as follows:

Foreign Currency Exchange and Other Rate Risks

We operate on a global basis and are exposed to the risk that changes in foreign currency exchange rates could adversely affect our financial condition, results of operations and cash flows.

From time to time, we enter into foreign currency forward exchange contracts with major financial institutions to manage currency exposures for transactions denominated in a currency other than an entity’s functional currency. As a result, the impact of foreign currency gains/losses recognized in earnings are partially offset by gains/losses on the related foreign currency forward exchange contracts in the same reporting period. Refer to Note 14, Financial Instruments and Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for further information.

Consequently, foreign currency exchange contracts would not subject us to material risk due to exchange rate movements, because gains and losses on these contracts offset gains and losses on the assets, liabilities or transactions being hedged.

Interest Rate Risk

Debt - Our interest rate risk relates primarily to our Term Loan. The interest rate is set at 300 basis points over SOFR, with a 0.50% SOFR floor. Based on our outstanding borrowings at December 31, 2023, a 100 basis points change in interest rates would have impacted interest expense on the Term Loan by $9.3 million on an annualized basis. To the extent we borrow on our revolving credit facility, we will be subject to risks related to changes in SOFR.

Item 4. Controls and Procedures.

An evaluation was carried out by Embecta’s management, with the participation of Embecta’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Embecta’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 2023. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were, as of the end of the period covered by this report, effective and designed to ensure that material information relating to Embecta and its consolidated subsidiaries would be made known to them by others within these entities.

During the TSA period, we will continue to rely on certain material processes and internal control over financial reporting performed by BD. There were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, Embecta’s internal control over financial reporting.

In 2022, the Company commenced on the process of building a new ERP system and other Business Continuity Processes to replace the existing systems provided by BD. The ERP system is designed to accurately maintain the Company's financial records used to report operating results. The implementation of the Business Continuity Processes will occur in phases. The first phase of the implementation began in the fourth quarter of fiscal year 2023. The second phase began in the first quarter of fiscal year 2024 with the remaining phases expected to commence throughout the current calendar year. A standardized internal control framework is implemented with each phase as we move away from relying on BD’s systems and controls. The Company will evaluate each quarter whether there are changes that materially affect, or are reasonably likely to materially affect our internal control over financial reporting.

Dollar amounts are in millions except per share amounts or as otherwise specified.

24

PART II. OTHER INFORMATION

Item 1A. Risk Factors.

There have been no material changes to Embecta’s risk factors from those described in “Risk Factors” included within the 2023 Form 10-K, except for the addition of the following risk factor:

In the first quarter of Embecta’s fiscal year 2024, Embecta submitted its first 510(k) premarket filing to the FDA for its proprietary disposable insulin delivery system. We cannot predict when, if ever, such submission will be cleared by the FDA, as the FDA can refuse to grant a 510(k) clearance for many reasons, including the system may not be deemed by the FDA to be substantially equivalent to appropriate predicate devices under the 510(k) pathway, the system may not satisfy the FDA’s safety or effectiveness requirements, or changes in FDA clearance policies or adoption of new regulations may require additional data. Even if cleared by the FDA or foreign regulatory agencies, future generations of our systems, expanded indications for use of future systems, our software platforms or any other system under development, may not be cleared for the indications that are necessary or desirable for successful commercialization.

Item 6. Exhibits.

Exhibit Number	Exhibit Description
10.1*	Amendment No. 1 to the Embecta Corp. 2022 Employee and Director Equity-Based Compensation Plan
31.1*	Certification of Chief Executive Officer, pursuant to SEC Rule 13a–14(a)
31.2*	Certification of Chief Financial Officer, pursuant to SEC Rule 13a–14(a)
32.1**	Certification of Chief Executive Officer, pursuant to Rule 13a–14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code
32.2**	Certification of Chief Financial Officer, pursuant to Rule 13a–14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code
101*	The following materials from this report, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

Dollar amounts are in millions except per share amounts or as otherwise specified.

25

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EMBECTA CORP.
Date: February 9, 2024	By:	/s/ Devdatt Kurdikar
	Name:	Devdatt Kurdikar
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

Date: February 9, 2024	By:	/s/ Jacob Elguicze
	Name:	Jacob Elguicze
	Title:	Senior Vice President, Chief Financial Officer
		(Principal Financial Officer)

Date: February 9, 2024	By:	/s/ Brian Capone
	Name:	Brian Capone
	Title:	Vice President, Controller and Chief Accounting Officer
		(Principal Accounting Officer)

26

EX-10.1

Exhibit 10.1

Amendment No. 1 to the Embecta Corp. 2022 Employee and Director Equity-Based Compensation Plan

This Amendment (the “Amendment”) to the Embecta Corp. 2022 Employee and Director Equity-Based Compensation Plan (the “2022 Plan”), is made effective as of the 7th day of February, 2024, by Embecta Corporation, a Delaware corporation (the “Company”).

1. Amendment to Section 5(a) of the 2022 Plan. Section 5(a) of the 2022 Plan is deleted in its entirety and replaced with the following:

The number of Shares available for issuance under the Plan is 10,189,000 shares, which includes Shares subject to all Assumed Spin-Off Awards, subject to adjustment as provided below. Notwithstanding the foregoing and subject to adjustment as provided in Sections 5(e) and 5(f), the maximum number of Shares that may be granted pursuant to Stock Options intended to be Incentive Stock Options shall be 10,189,000 Shares. The maximum number of Shares available to be granted pursuant to Awards to any non-employee director under the Plan in any fiscal year of the Company shall be equal to $500,000 as of the applicable date of grant.

2. Amendment to Section 13(b) of the 2022 Plan. The second sentence of Section 13(b) of the 2022 Plan is deleted in its entirety and replaced with the following:

In no event shall an outstanding Option or Stock Appreciation Right for which the exercise price is less than the Fair Market Value of a Share be cancelled in exchange for cash or any other Award (including, except as provided in Sections 5(e) and 5(f), a new Option or Stock Appreciation Right with a lower exercise price), without approval of the Company’s shareholders.

3. Addition of a new Section 17 to the 2022 Plan. The following new Section should be added to the 2022 Plan:

Section 15. Dividend Rights and Dividend Equivalents.

The Committee may provide that an Award other than an Option or a Stock Appreciation Right include dividend rights and dividend equivalents. Dividend equivalents may also be granted to Participants at such time or times as shall be determined by the Committee, in tandem with other Awards, in addition to other Awards, or freestanding and unrelated to other Awards. Dividend equivalents may, at the discretion of the Committee, be fully vested and nonforfeitable when granted or subject to such vesting conditions as determined by the Committee; provided that dividend rights, dividend equivalents or other distributions on Awards that are subject to vesting criteria shall not be fully vested until the Awards have been earned and shall be forfeited if the related Award is forfeited.

4. Continued Effect. Except as set forth herein, the 2022 Plan shall remain unchanged and in full force and effect.

    1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Devdatt Kurdikar, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Embecta Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 9, 2024

/s/ Devdatt Kurdikar

Devdatt Kurdikar

President and Chief Executive Officer

-1-

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jacob Elguicze, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Embecta Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 9, 2024

/s/ Jacob Elguicze

Jacob Elguicze

Chief Financial Officer

-1-

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, in connection with the Quarterly Report on Form 10-Q of Embecta Corp. for the quarter ended December 31, 2023 as filed with the Securities and Exchange Commission (the “Report”).

I, Devdatt Kurdikar, the Chief Executive Officer of Embecta Corp., certify that, to the best of my knowledge:

1.such Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Embecta Corp.

Date: February 9, 2024

/s/ Devdatt Kurdikar

Devdatt Kurdikar

President and Chief Executive Officer

-1-

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, in connection with the Quarterly Report on Form 10-Q of Embecta Corp. for the quarter ended December 31, 2023 as filed with the Securities and Exchange Commission (the “Report”).

I, Jacob Elguicze, the Chief Financial Officer of Embecta Corp., certify that, to the best of my knowledge:

1.such Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Embecta Corp.

Date: February 9, 2024

/s/ Jacob Elguicze

Jacob Elguicze

Chief Financial Officer

-1-

XML

Cover Page - shares	3 Months Ended
	Dec. 31, 2023	Feb. 02, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-41186
Entity Registrant Name	EMBECTA CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-1583942
Entity Address, Address Line One	300 Kimball Drive, Suite 300
Entity Address, City or Town	Parsippany
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07054
City Area Code	862
Local Phone Number	401-0000
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	EMBC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		57,578,921
Central Index Key	0001872789
Period Focus	Q1
Fiscal Year Focus	2024
Current Fiscal Year End	--09-30
Amendment Flag	false

XML

Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Revenues	$ 277.3	$ 275.7
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Product [Member]	Product [Member]
Cost of products sold	$ 91.4	$ 86.9
Cost, Product and Service [Extensible Enumeration]	Product [Member]	Product [Member]
Gross Profit	$ 185.9	$ 188.8
Operating expenses:
Selling and administrative expense	90.3	72.8
Research and development expense	20.2	16.9
Other operating expenses	29.9	10.3
Total Operating Expenses	140.4	100.0
Operating Income	45.5	88.8
Interest expense, net	(27.7)	(25.6)
Other income (expense), net	(3.5)	(7.1)
Income Before Income Taxes	14.3	56.1
Income tax provision (benefit)	(5.8)	20.9
Net Income	$ 20.1	$ 35.2
Net Income per common share:
Basic (in dollars per share)	$ 0.35	$ 0.62
Diluted (in dollars per share)	$ 0.35	$ 0.61

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net Income	$ 20.1	$ 35.2
Other Comprehensive Income, net of tax
Foreign currency translation adjustments	11.6	26.0
Other Comprehensive Income	11.6	26.0
Comprehensive Income	$ 31.7	$ 61.2

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Current Assets
Cash and cash equivalents	$ 298.7	$ 326.5
Trade receivables, net (net of allowance for doubtful accounts of $1.2 million and $1.0 million as of December 31, 2023 and September 30, 2023, respectively)	96.1	16.7
Inventories:
Materials	32.9	32.1
Work in process	11.7	8.1
Finished products	104.6	111.9
Total Inventories	149.2	152.1
Amounts due from Becton, Dickinson and Company	110.3	142.4
Prepaid expenses and other	65.2	111.4
Total Current Assets	719.5	749.1
Property, Plant and Equipment, Net	301.3	300.2
Goodwill and Intangible Assets	24.3	24.7
Deferred Income Taxes and Other Assets	172.7	140.4
Total Assets	1,217.8	1,214.4
Current Liabilities
Accounts payable	42.1	53.5
Accrued expenses	122.2	118.1
Amounts due to Becton, Dickinson and Company	57.6	73.1
Salaries, wages and related items	57.4	62.1
Current debt obligations	9.5	9.5
Current finance lease liabilities	3.7	3.6
Income taxes	34.1	33.6
Total Current Liabilities	326.6	353.5
Deferred Income Taxes and Other Liabilities	60.7	57.2
Long-Term Debt	1,592.9	1,593.9
Non Current Finance Lease Liabilities	31.1	31.5
Commitments and Contingencies
Embecta Corp. Equity
Common stock, $0.01 par value Authorized - 250,000,000 Issued and outstanding - 57,573,497 as of December 31, 2023 and 57,333,353 as of September 30, 2023	0.6	0.6
Additional paid-in capital	33.4	27.9
Accumulated deficit	(530.0)	(541.1)
Accumulated other comprehensive loss	(297.5)	(309.1)
Total Equity	(793.5)	(821.7)
Total Liabilities and Equity	$ 1,217.8	$ 1,214.4

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Statement of Financial Position [Abstract]
Trade receivables, allowance for doubtful accounts	$ 1.2	$ 1.0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	250,000,000	250,000,000
Common stock, issued (in shares)	57,573,497	57,333,353
Common stock, outstanding (in shares)	57,573,497	57,333,353

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Condensed Consolidated Statements of Equity - USD ($) $ in Millions	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Sep. 30, 2022		57,055,327
Beginning balance at Sep. 30, 2022	$ (891.4)	$ 0.6	$ 10.0	$ (577.1)	$ (324.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Embecta Corp.	35.2			35.2
Other comprehensive income (loss), net of taxes	26.0				26.0
Stock-based compensation plans	5.5		5.5
Dividends and dividend equivalents declared	(8.6)			(8.6)
Issuance of shares related to share-based compensation plans (in shares)		158,430
Issuance of shares related to stock-based compensation plans	(2.8)		(2.8)
Ending balance (in shares) at Dec. 31, 2022		57,213,757
Ending balance at Dec. 31, 2022	$ (836.1)	$ 0.6	12.7	(550.5)	(298.9)
Beginning balance (in shares) at Sep. 30, 2023	57,333,353	57,333,353
Beginning balance at Sep. 30, 2023	$ (821.7)	$ 0.6	27.9	(541.1)	(309.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Embecta Corp.	20.1			20.1
Other comprehensive income (loss), net of taxes	11.6				11.6
Stock-based compensation plans	7.3		7.3
Dividends and dividend equivalents declared	(8.6)		0.4	(9.0)
Issuance of shares related to share-based compensation plans (in shares)		240,144
Issuance of shares related to stock-based compensation plans	$ (2.2)		(2.2)
Ending balance (in shares) at Dec. 31, 2023	57,573,497	57,573,497
Ending balance at Dec. 31, 2023	$ (793.5)	$ 0.6	$ 33.4	$ (530.0)	$ (297.5)

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Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Stockholders' Equity [Abstract]
Common dividends (in dollars per share)	$ 0.15	$ 0.15

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating Activities
Net Income	$ 20.1	$ 35.2
Adjustments to net income to derive net cash provided by operating activities:
Depreciation and amortization	8.8	7.2
Amortization of debt issuance costs	1.6	1.6
Amortization of cloud computing arrangements	0.4	0.0
Stock-based compensation	7.3	5.5
Deferred income taxes	(17.0)	1.4
Change in operating assets and liabilities:
Trade receivables, net	(78.6)	3.0
Inventories	4.1	(14.7)
Due from/due to Becton, Dickinson and Company	17.1	(9.5)
Prepaid expenses and other	43.7	(6.6)
Accounts payable, accrued expenses and other current liabilities	(15.7)	19.4
Income and other net taxes payable	4.4	18.2
Other assets and liabilities, net	(9.3)	(0.3)
Net Cash (Used for) Provided by Operating Activities	(13.1)	60.4
Investing Activities
Capital expenditures	(2.7)	(4.7)
Net Cash Used for Investing Activities	(2.7)	(4.7)
Financing Activities
Payments on long-term debt	(2.4)	(2.4)
Payments related to tax withholding for stock-based compensation	(2.2)	(2.8)
Payments on finance lease	(0.3)	(0.9)
Dividend payments	(8.6)	0.0
Net Cash Used for Financing Activities	(13.5)	(6.1)
Effect of exchange rate changes on cash and cash equivalents	1.5	4.7
Net Change in Cash and cash equivalents	(27.8)	54.3
Opening Cash and cash equivalents	326.5	330.9
Closing Cash and cash equivalents	$ 298.7	$ 385.2

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Background

3 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background

Note 1 — Background

Embecta Corp. ("Embecta" or the "Company") is a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. The Company has a broad portfolio of marketed products, including a variety of pen needles, syringes and safety devices, which are complemented by a proprietary digital application designed to assist people with managing their diabetes. The Company primarily sells 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.

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Basis of Presentation

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Note 2 — Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Embecta have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Embecta's Annual Report on Form 10-K for the year ended September 30, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses, depreciable and amortizable lives, sales returns and allowances, rebate accruals, inventory reserves and taxes on income as reflected in the Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Account Standard Board issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

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Third Party Arrangements and Related Party Disclosures

3 Months Ended

Dec. 31, 2023

Third Party and Related Party Transactions [Abstract]

Third Party Arrangements and Related Party Disclosures

Note 3 — Third Party Arrangements and Related Party Disclosures

On April 1, 2022, Embecta and Becton, Dickinson and Company ("BD") entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, BD agreed to spin off its diabetes care business (the "Diabetes Care Business") into Embecta, a new, publicly traded company (the "Separation").

In connection with the Separation, the Company entered into the Separation and Distribution Agreement, which contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of Embecta and BD (including certain deferred assets and liabilities) as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of Embecta's business with Embecta and financial responsibility for the obligations and liabilities of BD’s remaining businesses with BD, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation among Embecta and BD of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Separation, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures

governing Embecta’s and BD’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of BD’s business and Embecta’s business.

Agreements that Embecta entered into with BD that govern aspects of Embecta's relationship with BD following the Separation include, but are not limited to the Transition Services Agreements ("TSA"), Trade Receivables Factoring Agreements ("Factoring Agreements"), Distribution Agreements, Cannula Supply Agreement, Tax Matters Agreement, Logistics Services Agreement, employee matters agreement, an intellectual property matters agreement, local support services agreements, certain other manufacturing arrangements and a process services agreement and lease agreement for a manufacturing facility located in Holdrege, Nebraska. For details on the rights and responsibilities of the parties under these agreements refer to Note 4 to the audited Consolidated Financial Statements in Embecta’s Annual Report on Form 10-K for the year ended September 30, 2023 filed with the Securities and Exchange Commission on November 29, 2023 (the “2023 Form 10-K”).

In November 2023, a portion of the Factoring Agreement between Embecta and BD for services to the U.S. for the Company’s U.S. subsidiary expired and terminated as a result of our implementation and onboarding of certain systems and services, including, but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report, which, for clarity, includes enterprise resource planning (“ERP”) systems (“Business Continuity Processes”) in North America.

The amount due from BD under the above agreements was $110.3 million at December 31, 2023 and is included in Amounts due from Becton, Dickinson and Company. The amount due to BD under these agreements was $57.6 million at December 31, 2023 and is included in Amounts due to Becton, Dickinson and Company.

The closing of the transfers of certain assets and liabilities related to the Diabetes Care Business in certain jurisdictions, including China, Mexico, and Italy, as contemplated by the Separation and Distribution Agreement did not occur at Separation. The transfers of the relevant local assets and liabilities for these deferred countries are expected to close at a future date. As of December 31, 2023, the Company estimates that amounts due to BD related to certain assets and liabilities in deferred close jurisdictions is $13.5 million and are reflected in Accrued expenses. As of December 31, 2023, the Company estimates that amounts due from BD related to certain assets and liabilities in deferred close jurisdictions are $7.4 million and is reflected in Prepaid expenses and other.

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Collaboration Agreement

3 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration Agreement

Note 4 — Collaboration Agreement

In March 2023, the Company entered into a collaboration agreement with a third-party to develop and commercialize an interoperable automated glycemic controller ("iAGC") to complement the Company's insulin patch pump currently in development. The Company believes that both parties are active participants in the operating activities of the collaboration and exposed to certain risks and rewards depending on commercial success. Upon successful commercialization of the iAGC, the Company will be responsible for the sales and marketing effort and would pay a royalty to the third-party based on future product sales to customers. The Company expects that it will be the principal in the end customer sale and 100% of product sales will be included in Revenues and any royalty payments and continued project costs after commercialization will be included in Cost of products sold as they are incurred.

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Other Operating Expenses

3 Months Ended

Dec. 31, 2023

Other Income and Expenses [Abstract]

Other Operating Expenses

Note 5 — Other Operating Expenses

In connection with the Separation, the Company incurred separation and stand-up costs of approximately $26.4 million and $9.9 million during the three months ended December 31, 2023 and 2022, respectively. The costs incurred primarily consist of costs associated with accounting, auditing, legal services, supply chain, employee retention, the implementation of the Company's new ERP system, and certain other costs to establish certain Business Continuity Processes and stand-alone functions to assist with the transition to being a stand-alone entity.

During the three months ended December 31, 2023, the Company recorded approximately $1.9 million of severance costs related to the optimization of certain business functions. These costs were primarily recorded in the U.S. Severance costs related to the optimization of certain business functions were not material in the comparable prior year period. Liabilities for costs associated with these activities were not material to any period presented.

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Contingencies

3 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Note 6 — Contingencies

The Company was not a party to any material legal proceedings at December 31, 2023 or September 30, 2023, nor is it a party to any material legal proceedings as of the date of issuance of these Condensed Consolidated Financial Statements.

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Revenues

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues

Note 7 — Revenues

The Company’s policies for recognizing sales have not changed from those described in the 2023 Form 10-K. The Company sells syringes, pen needles and other products used in the management of diabetes which are primarily sold 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. End-users of the Company’s products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public.

Measurement of Revenues

Payment terms extended to the Company’s customers are based upon commercially reasonable terms for the markets in which the Company’s products are sold. Because the Company generally expects to receive payment within one year or less from when control of a product is transferred to the customer, the Company does not generally adjust its revenues for the effects of a financing component. The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured in the historical loss information. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. The allowance for doubtful accounts for trade receivables is not material to the Company’s Condensed Consolidated Financial Statements.

The Company’s gross revenues are subject to a variety of deductions which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts, and sales returns. Because these deductions represent estimates of the related obligations, judgment is required when determining the impact of these revenue deductions on gross revenues for a reporting period. Rebates provided by the Company are based upon prices determined under the Company’s agreements primarily with its end-user customers. Additional factors considered in the estimate of the Company’s rebate liability include the quantification of inventory that is either in stock at or in transit to the Company’s distributors, as well as the estimated lag time between the sale of product and the payment of corresponding rebates.

The Company’s liability attributed to variable consideration at December 31, 2023 and September 30, 2023 was $118.0 million and $36.4 million, respectively. Sales deductions recorded as a reduction of gross revenues for the three months ended December 31, 2023 and 2022 were $126.7 million and $92.6 million, respectively.

Disaggregation of Revenues

Disaggregation of revenue by geographic region is provided within Note 8.

Contract Assets and Liabilities

The Company does not have contract liabilities. Contract assets consist of the Company’s right to consideration that is conditional upon its future performance pursuant to private label agreements and are presented within Prepaid expenses and other in the Condensed Consolidated Balance Sheets.

The Company’s contract asset balance was $1.2 million as of both December 31, 2023 and September 30, 2023.

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Segment and Geographical Data

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment and Geographical Data

Note 8 — Segment and Geographical Data

Operating segments are identified as components of an enterprise in which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding assessing business performance and allocating resources and capital. Management has concluded that the Company operates in one segment based upon the information used by the CODM in evaluating the performance of the Company’s business and allocating resources and capital.

Disaggregation of Revenues

The Company has distribution agreements with regional or national distributors (including wholesalers and medical suppliers) to ensure broad availability of its products as well as a direct sales force in certain countries and regions around the world. In the United States and Canada, the Company utilizes its large and small key account managers that call on payers, retailers, wholesalers and institutional customers, and field-based territory managers that call on health care providers and pharmacies. In certain markets within Europe, the Company has dedicated sales representatives and in certain regions of the Middle East and Africa, the Company has distribution agreements. In Asia, the Company has distribution agreements, and in China the Company relies on its own commercial team to support sales execution. In Latin America, the Company maintains distribution agreements and direct sales representatives.

The Company disaggregates its revenue by geography as management believes this category best depicts how the nature, amount, and timing of revenues and cash flows are affected by economic factors.

Revenues by geographic region are as follows:

	Three months ended December 31,
	2023		2022
United States	$	148.6	$	149.3
International(1)	128.7		126.4
Total	$	277.3	$	275.7

(1)For the three months ended December 31, 2023 and 2022, no individual country outside of the United States generated net revenues that represented more than 10.0% of total revenues.

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Stock-Based Compensation

3 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 9 — Stock-Based Compensation

Stock-Based Compensation Expense

Total direct and allocated stock-based compensation expense for the three months ended December 31, 2023 and 2022 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

	Three months ended December 31,
	2023		2022
Cost of products sold	$	0.9	$	0.6
Selling and administrative expense	5.9		4.6
Research and development expense	0.6		0.3
Total Stock-Based Compensation Expense	$	7.4	$	5.5
Tax benefit associated with stock-based compensation costs recognized	$	0.7	$	1.3

The following table summarizes the Company's total stock-based compensation expense by classification of award for the three months ended December 31, 2023 and 2022:

	2023		2022
Equity Awards	$	7.3	$	5.5
Liability Awards	0.1		—
Total	$	7.4	$	5.5

The following table summarizes the Company's total stock-based compensation expense by award type for the three months ended December 31, 2023 and 2022:

	2023		2022
Time-Vested Restricted Stock Units (TVUs)	$	5.4	$	4.1
Performance-Based Restricted Stock Units (PSUs)	0.9		0.1
Stock Appreciation Rights (SARs)	1.1		1.3
Total	$	7.4	$	5.5

Time Vested Restricted Stock Units ("TVUs")

During the three months ended December 31, 2023, Embecta granted 1,277,644 restricted stock units ("RSUs") in the form of TVUs to employees which vest ratably over three years, subject to continued employment of the recipients. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant.

A summary of TVUs outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	RSUs (in thousands)	Weighted Average Grant Date Fair Value
Nonvested at October 1	1,188.8	$	29.42
Granted	1,277.6	17.52
Distributed*	(370.6)	29.11
Forfeited, canceled or expired	(17.3)	29.21
Nonvested at December 31	2,078.5	$	22.16
Expected to vest at December 31	1,970.9	$	22.16
*The RSUs distributed include shares withheld for taxes that are not formally issued to the market.

The weighted average grant date fair value of TVUs granted during the three months ended December 31, 2023 is $17.52 and the total fair value of TVUs vested during the three months ended December 31, 2023 is $10.8 million.

At December 31, 2023, the weighted average remaining vesting term of TVUs is 2.3 years.

Performance Based Restricted Stock Units ("PSUs")

During the three months ended December 31, 2023, Embecta awarded 531,253 RSUs in the form of PSUs to certain executive officers and employees which vest after three years, subject to continued employment of the recipients and the achievement of certain performance metric targets. The Company has identified certain performance metrics associated with these awards and certain targets will be fully established at a future date. The Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, the Company recognizes stock-based compensation expense for each separately-vesting tranche over the requisite service period based on the fair value at each reporting date. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant. As of December 31, 2023, there were 709,112 RSUs in the form of PSUs that have been awarded for which a grant date has not yet been established.

As of both December 31, 2023 and September 30, 2023, there were approximately 57.8 thousand nonvested PSUs with a weighted average grant date fair value of $30.24. As of December 31, 2023, there were approximately 54.6 thousand nonvested PSUs expected to vest with a weighted average grant date fair value of $30.24.

At December 31, 2023, the weighted average remaining vesting term of PSUs is 1.9 years.

Stock Appreciation Rights

A summary of stock appreciation rights ("SARs") outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	SARs (in thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at October 1	1,831.7	$	29.06
Forfeited, canceled or expired	(1.2)	10.27
Balance at December 31	1,830.5	$	29.07	7.5	$	0.1
Vested and expected to vest at December 31	1,775.5	29.04		7.4	$	0.1
Exercisable at December 31	829.6	$	27.84	6.8	$	0.1

No SARs were exercised during the three months ended December 31, 2023.

Unrecognized Stock-Based Compensation Expense and Other Stock Plans

The amount of unrecognized compensation expense for all non-vested stock-based awards granted as of December 31, 2023, is approximately $49.8 million which is expected to be recognized over a weighted-average remaining life of approximately 2.3 years. At December 31, 2023, 2.6 million shares were authorized for future grants under the 2022 Employee and Director Equity Based Compensation Plan.

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Goodwill, Intangible Assets, and Cloud Computing Arrangements

3 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Intangible Assets, and Cloud Computing Arrangements

Note 10 — Goodwill, Intangible Assets, and Cloud Computing Arrangements

Goodwill and Intangible Assets

Goodwill and Other Intangible Assets consisted of:

	December 31, 2023		September 30, 2023
Amortized intangible assets
Patents – gross	$	10.6	$	10.6
Less: accumulated amortization	(4.6)		(4.5)
Patents – net	$	6.0	$	6.1
Customer Relationships and Other – gross	$	5.3	$	5.4
Less: accumulated amortization	(2.5)		(2.4)
Customer Relationships and Other – net	$	2.8	$	3.0
Total amortized intangible assets	$	8.8	$	9.1
Goodwill	15.5		15.6
Total Goodwill and Other Intangible Assets	$	24.3	$	24.7

Cloud Computing Arrangements

The Company capitalizes costs associated with the development of cloud computing arrangements in a manner consistent with internally developed software. The total balance of capitalized costs associated with these arrangements as of December 31, 2023 and September 30, 2023 is $50.4 million and $38.0 million, respectively, which primarily relates to the implementation of the Company's new ERP system. These capitalized costs are included in Deferred Income Taxes and Other Assets. Costs amortized during the three months ended December 31, 2023 were $0.4 million and are included in Other operating expenses. Costs amortized during the three months ended December 31, 2022 were not material to the Company's condensed consolidated financial results. As of December 31, 2023, cloud computing arrangement assets in-service have useful lives which range from approximately three to nine years.

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Long-Term Debt

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Note 11 — Long-Term Debt

Credit Agreement

On March 31, 2022, Embecta entered into a credit agreement (the “Credit Agreement”), providing for:

•a Term Loan B Facility (the "Term Loan") in the amount of $950.0 million, with a seven-year term that matures in March 2029. The interest rate is 300 basis points over the secured overnight financing rate (“SOFR”), with a 0.50% SOFR floor. The Term Loan was issued at a discount of 0.50%. Principal and interest payments on the Term Loan commenced on June 30, 2022. Such quarterly principal payments are calculated as 0.25% of the initial principal amount, with the remaining balance payable upon maturity; and

•a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $500.0 million, with a five-year term that matures in 2027. Borrowings under the Revolving Credit Facility bear interest, at Embecta’s option, at an annual rate equal to (a) in the case of loans denominated in United States dollars (i) the SOFR or (ii) the alternate base rate or (b) in the case of loans denominated in Euros, the EURIBOR rate, in each case plus an applicable margin specified in the credit agreement. A commitment fee applies to the unused portion of the Revolving Credit Facility, equal to 0.25% per annum. As of December 31, 2023, no amount has been drawn on the Revolving Credit Facility.

The Credit Agreement and the indentures for Embecta's outstanding 5.00% senior secured notes due February 2030 (the "5.00% Notes") and 6.75% senior secured notes due February 2030 (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 the 5.00% Notes and 6.75% Notes. In addition, the Credit Agreement contains covenants that will limit, among other things, Embecta’s ability to prepay, redeem or repurchase its 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.

The following is a summary of Embecta's total debt outstanding as of December 31, 2023:

Term Loan due March 2029	$	933.4
5.00% Notes due February 2030	500.0
6.75% Notes due February 2030	200.0
Total principal debt issued	$	1,633.4
Less: current debt obligations	(9.5)
Less: debt issuance costs and discounts	(31.0)
Long-term debt	$	1,592.9

The debt issuance costs on the Term Loan, 5.00% Notes, 6.75% Notes and the discount on the Term Loan are reported in the Condensed Consolidated Balance Sheets as a reduction of debt and are amortized as a component of Interest expense, net over the term of the related debt using the effective interest method.

The schedule of principal payments required on long-term debt for the next five fiscal years and thereafter is as follows:

2024	$	9.5
2025	9.5
2026	9.5
2027	9.5
2028	9.5
Thereafter	1,585.9

The estimated fair value of long-term debt (including current portion) at December 31, 2023 was $1,510.5 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $1,602.4 million. Fair value was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability and would be considered Level 2 in the fair value hierarchy.

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Earnings per Share

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Earnings per Share

Note 12 — Earnings per Share

The calculation of earnings per basic and diluted common share for the three months ended December 31, 2023 and 2023 was as follows:

	Three Months Ended December 31,
($ in millions and shares in thousands, except per share amounts)	2023		2022
Net Income attributable to Embecta	$	20.1	$	35.2
Basic weighted average number of shares outstanding	57,486		57,113
Stock awards and equity units (share equivalent)	146		371
Diluted weighted average shares outstanding	57,632		57,484
Earnings per common share - Basic	$	0.35	$	0.62
Earnings per common share - Diluted	$	0.35	$	0.61

Earnings per diluted share is computed by giving effect to all potentially dilutive stock awards that are outstanding. The computation of earnings per diluted share excludes the effect of the potential exercise of stock-based awards, when the effect of the potential exercise would be anti-dilutive. For the three months ended December 31, 2023, and 2022, 3.2 million and 2.0 million of dilutive share equivalents issuable under stock-based compensation plans were excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

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Income Taxes

3 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 — Income Taxes

The Company is subject to income tax in the various jurisdictions in which it operates. A significant portion of the Company's earnings are taxed in jurisdictions with tax rates that are lower than the statutory tax rate of the United States. The effective tax rate can vary from quarter to quarter because of changes in the global pretax income or geographical mix of the Company's earnings, changes in tax laws and matters related to tax audits.

The effective tax rates were (40.6)% and 37.3% for the three months ended December 31, 2023 and 2022, respectively. The decrease in the Company’s effective tax rate from the prior comparative period is primarily due to a tax benefit of approximately $17.1 million for the establishment of a deferred tax asset related to tax law changes in Switzerland. The tax law changes instituted a higher cantonal tax rate and additional tax basis that is amortizable for income tax purposes over a period of seven years.

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Financial Instruments and Fair Value Measurements

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Note 14 — Financial Instruments and Fair Value Measurements

The following reconciles Cash and cash equivalents reported within the Condensed Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	298.7	$	326.5

Cash and cash equivalents as of December 31, 2023 includes cash held in money market funds and other cash equivalents. All cash and cash equivalents are Level 1 in the fair value hierarchy. Interest income on Cash and cash equivalents was $3.4 million and $1.1 million for the three months ended December 31, 2023 and 2022, respectively, and is included as a component of Interest expense, net.

Foreign Currency Risks and Related Strategies

The Company has foreign currency exposures throughout Europe, Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts.

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of December 31, 2023 and September 30, 2023, respectively:

	Hedge Designation	December 31, 2023		September 30, 2023
Foreign exchange contracts (a)	Undesignated	$	6.7	$	6.7

a.Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in Other income (expense), net. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Gains and losses recognized to date on these instruments were not material to the Company's Condensed Consolidated Financial Statements.

Nonrecurring Fair Value Measurements

Non-financial assets, including property, plant and equipment as well as intangible assets, are measured at fair value when there are indicators of impairment and these assets are recorded at fair value only when an impairment is recognized. These measurements of fair value are generally based upon Level 3 inputs, including values estimated using the income approach.

Concentration of Credit Risk

Three of the Company’s customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 40.8% for the three months ended December 31, 2023.

Four of the Company's customers represented at least 10.0% of total gross trade receivables individually and, in the aggregate, represented approximately 60.9% as of December 31, 2023.

Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry. The Company does not normally require collateral from its customers.

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Property, Plant and Equipment

3 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 15 — Property, Plant and Equipment

Property, Plant and Equipment, Net consisted of:

	December 31, 2023		September 30, 2023
Land	$	2.4	$	2.3
Buildings	122.5		124.5
Machinery, equipment and fixtures	580.1		567.2
Leasehold improvements	8.9		9.1
Construction in progress	45.2		44.8
	$	759.1	$	747.9
Less: accumulated depreciation	(457.8)		(447.7)
Total Property, Plant and Equipment, Net	$	301.3	$	300.2

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Leases

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 16 — Leases

Finance Leases

The Company's finance lease assets and liabilities are attributed to its manufacturing site in Holdrege, Nebraska, which has an initial term of ten years and an option for the Company to extend the lease term for an additional period of up to five years. This lease is classified as a finance lease because the present value of the sum of the lease payments associated with the lease exceeds substantially all of the fair value of the manufacturing site.

Operating Leases

The Company's operating leases primarily relate to its real estate leases that are not classified as finance leases.

Aggregate Lease Information

The Company's leases are included in its Condensed Consolidated Balance Sheets as follows:

	December 31, 2023			September 30, 2023
Finance Leases
Property, Plant, and Equipment, Net	$	32.6		$	33.1
Total Finance Lease Assets	$	32.6		$	33.1
Current finance lease liabilities	$	3.7		$	3.6
Non Current Finance Lease Liabilities	31.1			31.5
Total Finance Lease Liabilities	$	34.8		$	35.1
Weighted-average remaining lease term (years)	13.3			13.5
Weighted-average discount rate	6.8		%	6.8		%
Operating Leases
Other Assets	$	21.7		$	23.0
Total Operating Lease Assets	$	21.7		$	23.0
Accrued expenses	$	6.0		$	5.9
Deferred Income Taxes and Other Liabilities	14.5			15.4
Total Operating Lease Liabilities	$	20.5		$	21.3
Weighted-average remaining lease term (years)	7.4			7.3
Weighted-average discount rate	6.9		%	6.9		%

Supplemental cash flow information related to leases for the three months ended December 31, 2023 and 2022 were as follows:

For both the three months ended December 31, 2023 and 2022, right of use assets obtained in exchange for lease liabilities were not material.

	December 31, 2023
Cash used for amounts included in the measurement of lease liabilities
Operating cash flows from Operating Leases	$	1.4
Financing cash flows from Finance Lease	0.3
Operating cash flows from Finance Lease	0.6

For the three months ended December 31, 2022, cash used for amounts included in the measurement of lease liabilities was not material.

Maturities of the Company's finance and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Leases		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3
Less: amount representing interest	19.2		6.8		26.0
Present value of lease liabilities	$	34.8	$	20.5	$	55.3

Leases

Note 16 — Leases

Finance Leases

The Company's finance lease assets and liabilities are attributed to its manufacturing site in Holdrege, Nebraska, which has an initial term of ten years and an option for the Company to extend the lease term for an additional period of up to five years. This lease is classified as a finance lease because the present value of the sum of the lease payments associated with the lease exceeds substantially all of the fair value of the manufacturing site.

Operating Leases

The Company's operating leases primarily relate to its real estate leases that are not classified as finance leases.

Aggregate Lease Information

The Company's leases are included in its Condensed Consolidated Balance Sheets as follows:

	December 31, 2023			September 30, 2023
Finance Leases
Property, Plant, and Equipment, Net	$	32.6		$	33.1
Total Finance Lease Assets	$	32.6		$	33.1
Current finance lease liabilities	$	3.7		$	3.6
Non Current Finance Lease Liabilities	31.1			31.5
Total Finance Lease Liabilities	$	34.8		$	35.1
Weighted-average remaining lease term (years)	13.3			13.5
Weighted-average discount rate	6.8		%	6.8		%
Operating Leases
Other Assets	$	21.7		$	23.0
Total Operating Lease Assets	$	21.7		$	23.0
Accrued expenses	$	6.0		$	5.9
Deferred Income Taxes and Other Liabilities	14.5			15.4
Total Operating Lease Liabilities	$	20.5		$	21.3
Weighted-average remaining lease term (years)	7.4			7.3
Weighted-average discount rate	6.9		%	6.9		%

Supplemental cash flow information related to leases for the three months ended December 31, 2023 and 2022 were as follows:

For both the three months ended December 31, 2023 and 2022, right of use assets obtained in exchange for lease liabilities were not material.

	December 31, 2023
Cash used for amounts included in the measurement of lease liabilities
Operating cash flows from Operating Leases	$	1.4
Financing cash flows from Finance Lease	0.3
Operating cash flows from Finance Lease	0.6

For the three months ended December 31, 2022, cash used for amounts included in the measurement of lease liabilities was not material.

Maturities of the Company's finance and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Leases		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3
Less: amount representing interest	19.2		6.8		26.0
Present value of lease liabilities	$	34.8	$	20.5	$	55.3

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Basis of Presentation (Policies)

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Embecta have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Embecta's Annual Report on Form 10-K for the year ended September 30, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses, depreciable and amortizable lives, sales returns and allowances, rebate accruals, inventory reserves and taxes on income as reflected in the Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Account Standard Board issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

Reclassification

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

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Segment and Geographical Data (Tables)

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Revenues by Geographical Region

Revenues by geographic region are as follows:

	Three months ended December 31,
	2023		2022
United States	$	148.6	$	149.3
International(1)	128.7		126.4
Total	$	277.3	$	275.7

(1)For the three months ended December 31, 2023 and 2022, no individual country outside of the United States generated net revenues that represented more than 10.0% of total revenues.

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Stock-Based Compensation (Tables)

3 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule and Location of Compensation Cost

Total direct and allocated stock-based compensation expense for the three months ended December 31, 2023 and 2022 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

	Three months ended December 31,
	2023		2022
Cost of products sold	$	0.9	$	0.6
Selling and administrative expense	5.9		4.6
Research and development expense	0.6		0.3
Total Stock-Based Compensation Expense	$	7.4	$	5.5
Tax benefit associated with stock-based compensation costs recognized	$	0.7	$	1.3

The following table summarizes the Company's total stock-based compensation expense by classification of award for the three months ended December 31, 2023 and 2022:

	2023		2022
Equity Awards	$	7.3	$	5.5
Liability Awards	0.1		—
Total	$	7.4	$	5.5

The following table summarizes the Company's total stock-based compensation expense by award type for the three months ended December 31, 2023 and 2022:

	2023		2022
Time-Vested Restricted Stock Units (TVUs)	$	5.4	$	4.1
Performance-Based Restricted Stock Units (PSUs)	0.9		0.1
Stock Appreciation Rights (SARs)	1.1		1.3
Total	$	7.4	$	5.5

Schedule of Restricted Stock Units Outstanding and Changes

A summary of TVUs outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	RSUs (in thousands)	Weighted Average Grant Date Fair Value
Nonvested at October 1	1,188.8	$	29.42
Granted	1,277.6	17.52
Distributed*	(370.6)	29.11
Forfeited, canceled or expired	(17.3)	29.21
Nonvested at December 31	2,078.5	$	22.16
Expected to vest at December 31	1,970.9	$	22.16
*The RSUs distributed include shares withheld for taxes that are not formally issued to the market.

Schedule of SAR's Outstanding

A summary of stock appreciation rights ("SARs") outstanding as of December 31, 2023 and changes during the three months ended December 31, 2023 are as follows:

	SARs (in thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at October 1	1,831.7	$	29.06
Forfeited, canceled or expired	(1.2)	10.27
Balance at December 31	1,830.5	$	29.07	7.5	$	0.1
Vested and expected to vest at December 31	1,775.5	29.04		7.4	$	0.1
Exercisable at December 31	829.6	$	27.84	6.8	$	0.1

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Goodwill, Intangible Assets, and Cloud Computing Arrangements (Tables)

3 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets consisted of:

	December 31, 2023		September 30, 2023
Amortized intangible assets
Patents – gross	$	10.6	$	10.6
Less: accumulated amortization	(4.6)		(4.5)
Patents – net	$	6.0	$	6.1
Customer Relationships and Other – gross	$	5.3	$	5.4
Less: accumulated amortization	(2.5)		(2.4)
Customer Relationships and Other – net	$	2.8	$	3.0
Total amortized intangible assets	$	8.8	$	9.1
Goodwill	15.5		15.6
Total Goodwill and Other Intangible Assets	$	24.3	$	24.7

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Long-Term Debt (Tables)

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Debt Outstanding

The following is a summary of Embecta's total debt outstanding as of December 31, 2023:

Term Loan due March 2029	$	933.4
5.00% Notes due February 2030	500.0
6.75% Notes due February 2030	200.0
Total principal debt issued	$	1,633.4
Less: current debt obligations	(9.5)
Less: debt issuance costs and discounts	(31.0)
Long-term debt	$	1,592.9

Schedule of Principal Payments Required on Long-Term Debt

The schedule of principal payments required on long-term debt for the next five fiscal years and thereafter is as follows:

2024	$	9.5
2025	9.5
2026	9.5
2027	9.5
2028	9.5
Thereafter	1,585.9

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Earnings per Share (Tables)

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings per Share

The calculation of earnings per basic and diluted common share for the three months ended December 31, 2023 and 2023 was as follows:

	Three Months Ended December 31,
($ in millions and shares in thousands, except per share amounts)	2023		2022
Net Income attributable to Embecta	$	20.1	$	35.2
Basic weighted average number of shares outstanding	57,486		57,113
Stock awards and equity units (share equivalent)	146		371
Diluted weighted average shares outstanding	57,632		57,484
Earnings per common share - Basic	$	0.35	$	0.62
Earnings per common share - Diluted	$	0.35	$	0.61

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Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Cash and Cash Equivalents

The following reconciles Cash and cash equivalents reported within the Condensed Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	298.7	$	326.5

Schedule of Notional Amounts of Derivative Instruments

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of December 31, 2023 and September 30, 2023, respectively:

	Hedge Designation	December 31, 2023		September 30, 2023
Foreign exchange contracts (a)	Undesignated	$	6.7	$	6.7

a.Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in Other income (expense), net. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Gains and losses recognized to date on these instruments were not material to the Company's Condensed Consolidated Financial Statements.

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Property, Plant and Equipment (Tables)

3 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, Plant and Equipment, Net consisted of:

	December 31, 2023		September 30, 2023
Land	$	2.4	$	2.3
Buildings	122.5		124.5
Machinery, equipment and fixtures	580.1		567.2
Leasehold improvements	8.9		9.1
Construction in progress	45.2		44.8
	$	759.1	$	747.9
Less: accumulated depreciation	(457.8)		(447.7)
Total Property, Plant and Equipment, Net	$	301.3	$	300.2

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Leases (Tables)

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Balance Sheet Information

The Company's leases are included in its Condensed Consolidated Balance Sheets as follows:

	December 31, 2023			September 30, 2023
Finance Leases
Property, Plant, and Equipment, Net	$	32.6		$	33.1
Total Finance Lease Assets	$	32.6		$	33.1
Current finance lease liabilities	$	3.7		$	3.6
Non Current Finance Lease Liabilities	31.1			31.5
Total Finance Lease Liabilities	$	34.8		$	35.1
Weighted-average remaining lease term (years)	13.3			13.5
Weighted-average discount rate	6.8		%	6.8		%
Operating Leases
Other Assets	$	21.7		$	23.0
Total Operating Lease Assets	$	21.7		$	23.0
Accrued expenses	$	6.0		$	5.9
Deferred Income Taxes and Other Liabilities	14.5			15.4
Total Operating Lease Liabilities	$	20.5		$	21.3
Weighted-average remaining lease term (years)	7.4			7.3
Weighted-average discount rate	6.9		%	6.9		%

Schedule of Supplemental Cash Flow Information

For both the three months ended December 31, 2023 and 2022, right of use assets obtained in exchange for lease liabilities were not material.

	December 31, 2023
Cash used for amounts included in the measurement of lease liabilities
Operating cash flows from Operating Leases	$	1.4
Financing cash flows from Finance Lease	0.3
Operating cash flows from Finance Lease	0.6

Schedule of Maturities of Finance Lease Liabilities

Maturities of the Company's finance and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Leases		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3
Less: amount representing interest	19.2		6.8		26.0
Present value of lease liabilities	$	34.8	$	20.5	$	55.3

Schedule of Maturities of Operating Lease Liabilities

Maturities of the Company's finance and operating lease liabilities as of December 31, 2023 by fiscal year are as follows:

	Finance Leases		Operating Leases		Total
2024	$	2.7	$	4.8	$	7.5
2025	3.7		3.9		7.6
2026	3.7		2.9		6.6
2027	3.8		2.2		6.0
2028	3.9		2.2		6.1
Thereafter	36.2		11.3		47.5
Total lease payments	$	54.0	$	27.3	$	81.3
Less: amount representing interest	19.2		6.8		26.0
Present value of lease liabilities	$	34.8	$	20.5	$	55.3

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Third Party Arrangements and Related Party Disclosures (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Related Party Transaction [Line Items]
Amounts due from Becton, Dickinson and Company	$ 110.3	$ 142.4
Amounts due to Becton, Dickinson and Company	57.6	73.1
Accrued expenses	122.2	118.1
Prepaid expenses and other	65.2	$ 111.4
Becton, Dickinson and Company
Related Party Transaction [Line Items]
Amounts due from Becton, Dickinson and Company	110.3
Amounts due to Becton, Dickinson and Company	57.6
Accrued expenses	13.5
Prepaid expenses and other	$ 7.4

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Other Operating Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Other Income and Expenses [Abstract]
Separation and stand-up costs	$ 26.4	$ 9.9
Severance costs	$ 1.9	$ 0.0

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Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Customer rebate liability	$ 118.0		$ 36.4
Rebates recorded	126.7	$ 92.6
Contract asset	$ 1.2		$ 1.2

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Segment and Geographical Data (Details) $ in Millions	3 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment	1
Segment Reporting Information [Line Items]
Revenues	$ 277.3	$ 275.7
United States
Segment Reporting Information [Line Items]
Revenues	148.6	149.3
International
Segment Reporting Information [Line Items]
Revenues	$ 128.7	$ 126.4

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Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Unrecognized compensation expense	$ 49.8
Period for recognition for unrecognized compensation expense	2 years 3 months 10 days
2022 Employee and Director Equity Based Compensation Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Authorized for future grant ( in shares )	2,600,000
Time Vested Restricted Stock Units
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Awards granted (in shares)	1,277,644
Granted (in dollars per share)	$ 17.52
Share-based compensation arrangement, nonvested, number (in shares)	2,078,500	1,188,800
Weighted average grant date fair value (in dollars per share)	$ 22.16	$ 29.42
Expected to vest (in dollars per share)	$ 22.16
Remaining vesting term	2 years 3 months 18 days
RSUs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Vesting period	3 years
Granted (in dollars per share)	$ 17.52
Fair value of awards vested	$ 10.8
Performance Stock Units (PSUs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Awards granted (in shares)	709,112
Share-based compensation arrangement, nonvested, number (in shares)	57,800	57,800
Weighted average grant date fair value (in dollars per share)	$ 30.24	$ 30.24
Share-Based Compensation , vested and expected to vest, outstanding, number (in shares)	54,600
Expected to vest (in dollars per share)	$ 30.24
Remaining vesting term	1 year 10 months 24 days
Performance Stock Units (PSUs) | Executive Officers and Employees
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Awards granted (in shares)	531,253
Vesting period	3 years
SARs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Remaining vesting term	7 years 6 months
Awards exercised (in shares)	0

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Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	$ 7.4	$ 5.5
Tax benefit associated with stock-based compensation costs recognized	0.7	1.3
Equity Awards
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	7.3	5.5
Liability Awards
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	0.1	0.0
Time-Vested Restricted Stock Units (TVUs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	5.4	4.1
Performance-Based Restricted Stock Units (PSUs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	0.9	0.1
Stock Appreciation Rights (SARs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	1.1	1.3
Cost of products sold
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	0.9	0.6
Selling and administrative expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	5.9	4.6
Research and development expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total Stock-Based Compensation Expense	$ 0.6	$ 0.3

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Stock-Based Compensation - Restricted Stock Units Activity (Details) - Time Vested Restricted Stock Units	3 Months Ended
	Dec. 31, 2023 $ / shares shares
Stock Units (in thousands)
Nonvested, Beginning Balance (in shares) | shares	1,188,800
Granted (in shares) | shares	1,277,644
Distributed (in shares) | shares	(370,600)
Forfeited, canceled or expired (in shares) | shares	(17,300)
Nonvested, Ending Balance (in shares) | shares	2,078,500
Expected to vest (in shares) | shares	1,970,900
Weighted Average Grant Date Fair Value
Nonvested, Beginning Balance (in dollars per share) | $ / shares	$ 29.42
Granted (in dollars per share) | $ / shares	17.52
Distributed (in dollars per share) | $ / shares	29.11
Forfeited, canceled or expired (in dollars per share) | $ / shares	29.21
Nonvested, Ending Balance (in dollars per share) | $ / shares	22.16
Expected to vest (in dollars per share) | $ / shares	$ 22.16

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Stock-Based Compensation - SARs Outstanding and the Changes (Details) - SARs $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares
SARs (in thousands)
Outstanding, Beginning Balance (in shares) | shares	1,831,700
Forfeited, canceled or expired (in shares) | shares	(1,200)
Outstanding, Ending Balance (in shares) | shares	1,830,500
Vested and expected to vest (in shares) | shares	1,775,500
Exercisable (in shares) | shares	829,600
Weighted Average Exercise Price
Outstanding, Beginning Balance (in dollars per share) | $ / shares	$ 29.06
Forfeited, canceled or expired (in dollars per share) | $ / shares	10.27
Outstanding, Ending Balance (in dollars per share) | $ / shares	29.07
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share) | $ / shares	29.04
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 27.84
Additional Disclosures
Weighted average remaining term of awards	7 years 6 months
Vested and expected to vest, Weighted Average Remaining Contractual Term	7 years 4 months 24 days
Exercisable, Weighted Average Remaining Contractual Term	6 years 9 months 18 days
Outstanding, Aggregate Intrinsic Value | $	$ 0.1
Vested and expected to vest, Aggregate Intrinsic Value | $	0.1
Exercisable, Aggregate Intrinsic Value | $	$ 0.1

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Goodwill, Intangible Assets, and Cloud Computing Arrangements -Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Amortized intangible assets - net	$ 8.8	$ 9.1
Goodwill	15.5	15.6
Total Goodwill and Other Intangible Assets	24.3	24.7
Patents
Finite-Lived Intangible Assets [Line Items]
Amortized intangible assets - gross	10.6	10.6
Amortized intangible assets - accumulated amortization	(4.6)	(4.5)
Amortized intangible assets - net	6.0	6.1
Customer Relationship and Other
Finite-Lived Intangible Assets [Line Items]
Amortized intangible assets - gross	5.3	5.4
Amortized intangible assets - accumulated amortization	(2.5)	(2.4)
Amortized intangible assets - net	$ 2.8	$ 3.0

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Goodwill, Intangible Assets, and Cloud Computing Arrangements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Costs capitalized for cloud computing arrangements	$ 50.4		$ 38.0
Amortization of cloud computing arrangements	$ 0.4	$ 0.0
Minimum
Finite-Lived Intangible Assets [Line Items]
Cloud computing arrangement assets in-service useful lives	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Cloud computing arrangement assets in-service useful lives	9 years

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Long-Term Debt - Additional Information (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2023
Level 2 | Fair Value
Debt Instrument [Line Items]
Long-term debt		$ 1,510,500,000
Level 2 | Reported Value Measurement
Debt Instrument [Line Items]
Long-term debt		1,602,400,000
Term Loan due March 2029 | Secured Debt
Debt Instrument [Line Items]
Face amount	$ 950,000,000
Term	7 years
Discount percentage	0.50%
Quarterly payment as a percentage of principal	0.25%
Term Loan due March 2029 | Secured Debt | SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
Variable rate floor	0.50%
Revolving Credit Facility | Secured Debt | Revolving Credit Facility
Debt Instrument [Line Items]
Term	5 years
Maximum borrowing capacity	$ 500,000,000
Commitment fee percentage	0.25%
Amount drawn		$ 0
5.00% Senior Secured Notes due 2030 | Senior Notes
Debt Instrument [Line Items]
Stated interest rate		5.00%
6.75% Senior Secured Notes due 2030 | Senior Notes
Debt Instrument [Line Items]
Stated interest rate		6.75%

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Long-Term Debt - Debt Outstanding (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Debt Instrument [Line Items]
Total principal debt issued	$ 1,633.4
Less: current debt obligations	(9.5)	$ (9.5)
Less: debt issuance costs and discounts	(31.0)
Long-term debt	1,592.9	$ 1,593.9
Secured Debt | Term Loan due March 2029
Debt Instrument [Line Items]
Total principal debt issued	$ 933.4
Senior Notes | 5.00% Notes due February 2030
Debt Instrument [Line Items]
Stated interest rate	5.00%
Total principal debt issued	$ 500.0
Senior Notes | 6.75% Notes due February 2030
Debt Instrument [Line Items]
Stated interest rate	6.75%
Total principal debt issued	$ 200.0

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Long-Term Debt - Principal Payments Required on Long-Term Debt (Details) $ in Millions	Dec. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2024	$ 9.5
2025	9.5
2026	9.5
2027	9.5
2028	9.5
Thereafter	$ 1,585.9

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Earnings per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share	3.2	2.0

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Earnings per Share - Computation of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Earnings Per Share [Abstract]
Net Income attributable to Embecta	$ 20.1	$ 35.2
Basic weighted average number of shares outstanding	57,486	57,113
Stock awards and equity units (share equivalent)	146	371
Diluted weighted average shares outstanding	57,632	57,484
Earnings per common share - Basic (in dollars per share)	$ 0.35	$ 0.62
Earnings per common share - Diluted (in dollars per share)	$ 0.35	$ 0.61

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	(40.60%)	37.30%
Effective income tax rate reconciliation, tax law change, amount	$ 17.1

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Financial Instruments and Fair Value Measurements - Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Cash and cash equivalents - condensed combined balance sheets	$ 298.7	$ 326.5
Cash and cash equivalents - condensed combined statements of cash flows	$ 298.7	$ 326.5	$ 385.2	$ 330.9

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Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Concentration Risk [Line Items]
Interest income	$ 3.4	$ 1.1
Customer Concentration Risk | Revenues | Three Customers In Aggregate
Concentration Risk [Line Items]
Concentration risk percentage	40.80%
Customer Concentration Risk | Revenues | Four Customers In Aggregate
Concentration Risk [Line Items]
Concentration risk percentage	60.90%

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Financial Instruments and Fair Value Measurements - Notional Amounts of Derivative Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Foreign exchange contracts | Undesignated
Derivative [Line Items]
Notional amount	$ 6.7	$ 6.7

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Property, Plant and Equipment (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 759.1	$ 747.9
Less: accumulated depreciation	(457.8)	(447.7)
Total Property, Plant and Equipment, Net	301.3	300.2
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment	2.4	2.3
Buildings
Property, Plant and Equipment [Line Items]
Property, plant and equipment	122.5	124.5
Machinery, equipment and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment	580.1	567.2
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment	8.9	9.1
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 45.2	$ 44.8

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Leases - Additional Information (Details)	Dec. 31, 2023
Leases [Abstract]
Term of finance lease	10 years
Finance lease renewal term	5 years

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Leases - Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Finance Leases
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net
Total Finance Lease Assets	$ 32.6	$ 33.1
Current finance lease liabilities	3.7	3.6
Non Current Finance Lease Liabilities	31.1	31.5
Total Finance Lease Liabilities	$ 34.8	$ 35.1
Weighted-average remaining lease term (years)	13 years 3 months 18 days	13 years 6 months
Weighted-average discount rate	6.80%	6.80%
Operating Leases
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Deferred Income Taxes and Other Assets	Deferred Income Taxes and Other Assets
Total Operating Lease Assets	$ 21.7	$ 23.0
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued expenses	Accrued expenses
Current operating lease liabilities	$ 6.0	$ 5.9
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Deferred Income Taxes and Other Liabilities	Deferred Income Taxes and Other Liabilities
Non Current operating lease liabilities	$ 14.5	$ 15.4
Total Operating Lease Liabilities	$ 20.5	$ 21.3
Weighted-average remaining lease term (years)	7 years 4 months 24 days	7 years 3 months 18 days
Weighted-average discount rate	6.90%	6.90%

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from Operating Leases	$ 1.4
Financing cash flows from Finance Lease	0.3	$ 0.9
Operating cash flows from Finance Lease	$ 0.6

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Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
Finance Leases
2024	$ 2.7
2025	3.7
2026	3.7
2027	3.8
2028	3.9
Thereafter	36.2
Total lease payments	54.0
Less: amount representing interest	19.2
Present value of lease liabilities	34.8	$ 35.1
Operating Leases
2024	4.8
2025	3.9
2026	2.9
2027	2.2
2028	2.2
Thereafter	11.3
Total lease payments	27.3
Less: amount representing interest	6.8
Present value of lease liabilities	20.5	$ 21.3
Total
2024	7.5
2025	7.6
2026	6.6
2027	6.0
2028	6.1
Thereafter	47.5
Total lease payments	81.3
Less: amount representing interest	26.0
Present value of lease liabilities	$ 55.3