Earnings jump at Zurn Elkay (NYSE: ZWS) on 11% Q1 sales growth
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Zurn Elkay Water Solutions reported solid first quarter 2026 results, with net sales rising to $433.0 million from $388.8 million, an 11% increase driven by broad-based core sales growth. Net income from continuing operations grew to $58.9 million, with diluted EPS from continuing operations of $0.35 versus $0.24 a year earlier.
Adjusted EPS was $0.41, up from $0.31, and adjusted EBITDA increased to $116.0 million from $98.0 million, expanding margins to 26.8% of net sales. The company reported net debt leverage of 0.5x, increased revolver capacity to $550 million, and repurchased $50 million (1.0 million shares) of common stock in the quarter. For the second quarter 2026, management expects core sales to grow 8–9% year over year and adjusted EBITDA margins between 27.0% and 27.5%, noting potential upside to its full-year 2026 outlook.
Positive
- Strong top- and bottom-line growth: Net sales rose 11% to $433.0 million, adjusted EBITDA increased to $116.0 million with margin expansion to 26.8%, and adjusted diluted EPS improved from $0.31 to $0.41 year over year.
- Robust balance sheet and capital returns: Net debt leverage is 0.5x, revolver capacity was increased to $550 million, and the company repurchased $50 million (1.0 million shares) of common stock while continuing dividends.
Negative
- None.
Insights
Q1 2026 delivered double-digit growth, margin expansion and conservative leverage for Zurn Elkay.
Zurn Elkay grew Q1 2026 net sales 11% year over year to $433.0 million, with core sales also up 11%. Net income from continuing operations rose to $58.9 million, and diluted EPS from continuing operations increased from $0.24 to $0.35, underscoring strong operational performance.
Profitability improved meaningfully, as adjusted EBITDA climbed from $98.0 million to $116.0 million and margins expanded from 25.2% to 26.8%. Management highlights productivity initiatives and price realization as key drivers. Net debt leverage stands at just 0.5x, providing balance sheet flexibility alongside expanded revolver capacity of $550 million.
Capital deployment remained shareholder-focused, with $50 million used to repurchase 1.0 million shares and continued dividends. For Q2 2026, the company guides to core sales growth of 8–9% and adjusted EBITDA margins of 27.0–27.5%, and management references potential upside to the full-year 2026 outlook, contingent on business trends and the existing tariff structure.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales: $433.0 million
Net income from continuing operations: $58.9 million
GAAP diluted EPS (continuing operations): $0.35
+5 more
8 metrics
Net sales
$433.0 million
Three months ended March 31, 2026 vs $388.8 million in 2025
Net income from continuing operations
$58.9 million
Three months ended March 31, 2026 vs $41.0 million in 2025
GAAP diluted EPS (continuing operations)
$0.35
Q1 2026 vs $0.24 in Q1 2025
Adjusted diluted EPS
$0.41
Q1 2026 vs $0.31 in Q1 2025
Adjusted EBITDA
$116.0 million
Q1 2026 vs $98.0 million in Q1 2025; 26.8% of net sales
Free cash flow
$42.7 million
Three months ended March 31, 2026 vs $38.6 million in 2025
Share repurchases
$50.0 million
Deployed to repurchase 1.0 million common shares in Q1 2026
Net debt leverage
0.5x
As of March 31, 2026
Key Terms
core sales, Adjusted EBITDA, net debt leverage, free cash flow, +1 more
5 terms
core sales financial
"First quarter core sales(1) grew 11% and adjusted EBITDA(1) grew 18%"
Core sales are the revenue generated by a company's main, ongoing business activities after removing one-time or unusual items such as proceeds from asset sales, discontinued operations, or temporary boosts. Investors care because core sales show the steady, repeatable demand for a company’s products or services—like judging a store by its regular weekly receipts rather than a single big clearance sale—to better assess growth trends and future earnings potential.
Adjusted EBITDA financial
"Adjusted EBITDA(1) was $116 million (26.8% of net sales)"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
net debt leverage financial
"Net debt leverage(1) of 0.5x as of March 31, 2026."
Net debt leverage measures how many years it would take a company to pay off its debt using its normal operating earnings after subtracting cash on hand; mathematically it's the company’s total debt minus cash divided by its annual operating cash profit. Think of it like comparing a household’s mortgage balance (after savings) to its yearly take-home pay — higher numbers mean more financial strain and greater risk to investors, while lower numbers suggest more capacity to weather trouble or borrow for growth.
free cash flow financial
"We define Free Cash Flow as cash flow from operations less capital expenditures"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Return on Invested Capital financial
"Return on Invested Capital (“ROIC”) ROIC is used because we believe it is an important"
A percentage that shows how effectively a company turns the money invested in its business—both borrowed funds and shareholders’ equity—into operating profit after taxes. It tells investors whether a company earns more from its core operations than it costs to fund those operations; think of it like the annual return you’d expect from renovating a rental property—higher percentages mean the company uses capital more efficiently and is more likely to create value for shareholders.
Earnings Snapshot
Net sales: $433.0 million · Guidance included
Q1 2026
Net sales
$433.0 million
+11% year over year
Net income from continuing operations
$58.9 million
up from $41.0 million in Q1 2025
GAAP diluted EPS (continuing operations)
$0.35
up from $0.24 in Q1 2025
Adjusted diluted EPS
$0.41
up from $0.31 in Q1 2025
Adjusted EBITDA
$116.0 million
up from $98.0 million in Q1 2025; margin 26.8%
Guidance
For Q2 2026, the company expects core sales to grow 8–9% year over year and adjusted EBITDA margins to be between 27.0% and 27.5%.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of Earliest Event Reported): April 21, 2026
| (Exact name of registrant as specified in its charter) | ||
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(855 ) 480-5050
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth 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. ☐
Item 2.02 Results of Operations and Financial Condition.
Zurn Elkay Water Solutions Corporation (the "Company") is filing this Current Report on Form 8-K to furnish its earnings release dated April 21, 2026, regarding its financial results for the quarter ended March 31, 2026, which is furnished herewith as Exhibit 99.1.
The information in this Item, including Exhibit 99.1, is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing.
2
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description | |||||||
| 99.1 | Earnings Release, dated April 21, 2026* | |||||||
| 104 | Cover Page Inline XBRL data embedded within the Inline XBRL document | |||||||
* This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to be “filed.”
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Zurn Elkay Water Solutions Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized this 21st day of April, 2026.
| ZURN ELKAY WATER SOLUTIONS CORPORATION | ||||||||
| By: | /S/ DAVID J. PAULI | |||||||
| David J. Pauli | ||||||||
| Chief Financial Officer | ||||||||
4
Exhibit 99.1
| Press Release | |||||
| April 21, 2026 | Contact Information: | ||||
| For Immediate Release | Dave Pauli | ||||
| Chief Financial Officer | |||||
| 414.223.7770 | |||||
Zurn Elkay Water Solutions Reports First Quarter 2026 Financial Results
Investor call scheduled for Wednesday, April 22, 2026 at 8:30 a.m. Eastern Time
MILWAUKEE, WI (USA) - Zurn Elkay Water Solutions Corporation (NYSE:ZWS)
First Quarter Highlights
•Net sales in the quarter were $433 million compared with $389 million in last year’s March quarter (+11% core sales(1)).
•Net income from continuing operations was $59 million (diluted EPS from continuing operations of $0.35) compared with net income from continuing operations of $41 million (diluted EPS from continuing operations of $0.24) in the year-ago quarter.
•Adjusted EPS(1) was $0.41 compared with $0.31 in the year-ago quarter.
•Adjusted EBITDA(1) was $116 million (26.8% of net sales) compared with $98 million (25.2% of net sales) in last year's first quarter.
•Net debt leverage(1) of 0.5x as of March 31, 2026.
•Increased revolver capacity from $200 million to $550 million.
•Deployed $50 million to repurchase 1.0 million shares of common stock in the quarter.
Todd A. Adams, Chairman and Chief Executive Officer, commented, “First quarter core sales(1) grew 11% and adjusted EBITDA(1) grew 18% year over year as adjusted EBITDA margins(1) expanded 160 basis points to 26.8%. We’re pleased with the traction we’re getting on our targeted growth initiatives as well as the progress we’re making on opening new growth adjacencies that will launch later in 2026 and into 2027.”
“We continue to prioritize the relentless deployment of our strategic initiatives paired with world-class operational execution within our business by leveraging the Zurn Elkay Business System. The strength and resilience of our business is something we’ve cultivated and added to over a long period of time, by being laser focused on building unique, sustainable competitive advantages across our business. The depth and breadth of these advantages lie in our products, supply chain, go-to market alignment, vertical and geographic market focus, and the value that provides to our customers and the industry.”
Adams continued, “In February we issued our 2025 Sustainability report, which highlights our continued progress in strengthening environmental stewardship across our operations and providing additional solutions to help our customers meet their sustainability goals. As the world increasingly faces water conservation and contamination issues, our role as a leader in water management is to meet those challenges with practical, innovative solutions that set new standards for water efficiency, safety and quality.”
Outlook
“Our outlook for the second quarter and full year is based on the assumption that the current tariff structure in place as of today (April 21, 2026) remains in place throughout 2026. We expect second quarter core sales(1) to grow by 8% to 9% compared to last year's second quarter and adjusted EBITDA margins(1) to be between 27.0% to 27.5%. At present, we see the potential for upside beyond our Q1 actuals and Q2 guidance to the full year 2026 outlook we provided last quarter, and our plan is to revisit the second half of 2026 outlook as we announce Q2 results.”
First Quarter 2026 Overview
Net sales were $433.0 million and $388.8 million during the three months ended March 31, 2026 and March 31, 2025, respectively, an increase of 11% year over year. Core sales(1) improved 11% year over year, including growth in nearly all product categories.
During the three months ended March 31, 2026, income from operations was $82.1 million compared to $63.4 million during the three months ended March 31, 2025. Income from operations as a percentage of net sales increased by 270 basis points year over year as a result of the favorable impact of year-over-year sales growth (inclusive of price realization) and Zurn Elkay Business System led productivity initiatives.
Adjusted EBITDA(1) was $116.0 million, or 26.8% of net sales, during the three months ended March 31, 2026 compared to $98.0 million, or 25.2% of net sales, during the three months ended March 31, 2025.
(1) Refer to "Non-GAAP Financial Measures" for a definition of this non-GAAP metric, as well as the accompanying reconciliations to GAAP.
Non-GAAP Financial Measures
The following non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods as well as insight into the compliance with our debt covenants. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to our GAAP results has been provided in the financial tables included in this press release.
Core Sales
Core sales excludes the impact of mergers, acquisitions, divestitures and foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparison of our net sales performance with prior and future periods and to our peers. We exclude the effect of mergers, acquisitions and divestitures because the nature, size and number of mergers, acquisitions and divestitures can vary dramatically from period to period and between us and our peers, and can also obscure underlying business trends and make comparisons of long-term performance difficult. We exclude the effect of foreign currency translation from this measure because the volatility of currency translation is not under management's control.
Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income and adjusted earnings per share (calculated on a diluted basis) exclude actuarial gains and losses on pension and postretirement benefit obligations, restructuring and other similar charges, gains or losses on divestitures, discontinued operations, gains or losses on extinguishment of debt, the impact of acquisition-related fair value adjustments in connection with purchase accounting, amortization of intangible assets, the adjustment to state inventories at last-in, first-out costs, and other non-operational, non-cash or non-recurring gains and losses, net of their income tax impact. The tax rates used to calculate adjusted net income and adjusted earnings per share are based on a transaction specific basis. We believe that adjusted net income and adjusted earnings per share are useful in assessing our financial performance by excluding items that are not indicative of our core operating performance or that may obscure trends useful in evaluating our continuing results of operations.
EBITDA
EBITDA represents earnings from continuing operations before interest and other debt related activities, taxes, depreciation and amortization. EBITDA is presented because it is an important supplemental measure of performance and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.
Adjusted EBITDA
“Adjusted EBITDA” is the term we use to describe EBITDA as defined and adjusted in our credit agreement, which is net income, adjusted for the items summarized in the Reconciliation of GAAP to Non-GAAP Financial Measures table below. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring gains or losses. It is also provided to aid investors in understanding our compliance with our debt covenants. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA varies from others in our industry. Adjusted EBITDA should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; or (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash,
non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. “Adjusted EBITDA Margin” is the term we use to describe Adjusted EBITDA divided by net sales.
In addition, certain of these expenses can represent the reduction of cash that could be used for other corporate purposes. Further, although not included in the calculation of Adjusted EBITDA below, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA (which includes a full pro forma last-twelve-month impact of acquisitions), or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. Lastly, management and various investors use the ratio of the change in Adjusted EBITDA divided by the change in net sales (referred to as “incremental margin” in the case of an increase in net sales or “decremental margin” in the case of a decrease in net sales) as an additional measure of our financial performance and when making key investment decisions and evaluating us against peers.
Free Cash Flow
We define Free Cash Flow as cash flow from operations less capital expenditures, and we use this metric in analyzing our ability to service and repay our debt and to forecast future periods. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt. We define Free Cash Flow Conversion as Free Cash Flow divided by net income.
Return on Invested Capital (“ROIC”)
ROIC is used because we believe it is an important supplemental measure of financial performance and it is also currently a performance measure under our long-term incentive plan. ROIC is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. ROIC is also used by investors and analysts to evaluate management’s deployment of capital to create shareholder value. We define ROIC as tax-effected net operating income for the last 12 months divided by average total invested capital over a rolling four-quarter period. Total invested capital is defined as shareholders equity plus debt, less cash and cash equivalents. Other companies may not define or calculate ROIC in the same way.
About Zurn Elkay Water Solutions
Named one of America’s Most Responsible Companies and one of America’s Greenest Companies by Newsweek and one of the World’s Best Companies for Sustainable Growth by TIME, Zurn Elkay Water Solutions is headquartered in Milwaukee, WI, and is a growth-oriented, pure-play water management business that designs, procures, manufactures and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. The Zurn Elkay product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products and filtered drinking water products for public and private spaces. Learn more at www.zurnelkay.com.
Conference Call Details
Zurn Elkay Water Solutions will hold a conference call and webcast presentation on Wednesday, April 22, 2026, at 8:30 a.m. Eastern Time to discuss its first quarter 2026 results, provide a general business update and respond to investor questions. Zurn Elkay Water Solutions Chairman and CEO, Todd Adams, and CFO, Dave Pauli, will co-host the call and webcast. The conference call can be accessed via telephone as follows:
Domestic toll-free: 800-715-9871
International toll: 646-307-1963
Access Code: 6071902
A live webcast of the call will also be available on the Company's investor relations website. Please go to the website (investors.zurnelkay.com) at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.
If you are unable to participate during the live teleconference, a replay of the conference call will be available as a webcast on the Company's investor relations website.
Cautionary Statement on Forward-Looking Statements
Information in this release may involve outlook, expectations, beliefs, plans, intentions, strategies or other statements regarding the future, which are forward-looking statements. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based on information available to Zurn Elkay Water Solutions as of the date of this release, and Zurn Elkay Water Solutions assumes no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance, and actual results could differ materially from current expectations. Numerous factors could cause or contribute to such differences. Please refer to “Risk Factors” and “Cautionary Notice Regarding Forward-Looking Statements” in our report on Form 10-K for the period ended December 31, 2025, as well as the Company’s subsequent annual, quarterly and current reports filed on Forms 10-K, 10-Q and 8-K from time to time with the Securities and Exchange Commission for a further discussion of the factors and risks associated with the business.
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in Millions, except share and per share amounts)
(Unaudited)
| Three Months Ended | ||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Net sales | $ | 433.0 | $ | 388.8 | ||||||||||
| Cost of sales | 227.2 | 207.8 | ||||||||||||
| Gross profit | 205.8 | 181.0 | ||||||||||||
| Selling, general and administrative expenses | 108.2 | 101.2 | ||||||||||||
| Restructuring and other similar charges | 0.9 | 1.7 | ||||||||||||
| Amortization of intangible assets | 14.6 | 14.7 | ||||||||||||
| Income from operations | 82.1 | 63.4 | ||||||||||||
| Non-operating expense: | ||||||||||||||
| Interest expense, net | (6.2) | (7.3) | ||||||||||||
| Other income, net | 1.0 | — | ||||||||||||
| Income before income taxes | 76.9 | 56.1 | ||||||||||||
| Provision for income taxes | (18.0) | (15.1) | ||||||||||||
| Net income from continuing operations | 58.9 | 41.0 | ||||||||||||
| Income from discontinued operations, net of tax | — | 2.6 | ||||||||||||
| Net income | $ | 58.9 | $ | 43.6 | ||||||||||
| Basic net income per share: | ||||||||||||||
| Continuing operations | $ | 0.35 | $ | 0.24 | ||||||||||
| Discontinued operations | $ | — | $ | 0.02 | ||||||||||
| Net income | $ | 0.35 | $ | 0.26 | ||||||||||
| Diluted net income per share: | ||||||||||||||
| Continuing operations | $ | 0.35 | $ | 0.24 | ||||||||||
| Discontinued operations | $ | — | $ | 0.02 | ||||||||||
| Net income | $ | 0.35 | $ | 0.26 | ||||||||||
| Weighted-average number of shares outstanding (in thousands): | ||||||||||||||
| Basic | 167,696 | 170,346 | ||||||||||||
| Effect of dilutive equity awards | 1,980 | 1,843 | ||||||||||||
| Diluted | 169,676 | 172,189 | ||||||||||||
Zurn Elkay Water Solutions Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2026
(in Millions) (Unaudited)
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Reported Results | Adjustments | Non-GAAP Results | ||||||||||||||||||||||||||||||||||||
| Net Sales | $ | 433.0 | $ | — | $ | 433.0 | ||||||||||||||||||||||||||||||||
| Income from operations | 82.1 | 12.9 | (a) | 95.0 | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 76.9 | 14.8 | (b) | 91.7 | ||||||||||||||||||||||||||||||||||
| Provision for income taxes and indicated rate | (18.0) | 23.4 | % | (3.5) | 23.6 | % | (21.5) | 23.4 | % | |||||||||||||||||||||||||||||
| Net income | $ | 58.9 | $ | 11.3 | $ | 70.2 | ||||||||||||||||||||||||||||||||
| Income from Operations Adjustments (a) | Income before Income Taxes Adjustments (b) | |||||||||||||||||||||||||||||||||||||
| Restructuring and other similar charges | $ | 0.9 | $ | 0.9 | ||||||||||||||||||||||||||||||||||
| Other, net (1) | 0.2 | 0.2 | ||||||||||||||||||||||||||||||||||||
| Last-In, First-Out ("LIFO") adjustments | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 11.7 | — | ||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | — | 14.6 | ||||||||||||||||||||||||||||||||||||
| Other income, net (2) | — | (1.0) | ||||||||||||||||||||||||||||||||||||
| Total Adjustments | 12.9 | 14.8 | ||||||||||||||||||||||||||||||||||||
____________________
(1)Other, net includes the gains and losses from the disposition of long-lived assets.
(2)Other income, net for the periods indicated, consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses.
Zurn Elkay Water Solutions Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2025
(in Millions) (Unaudited)
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Reported Results | Adjustments | Non-GAAP Results | ||||||||||||||||||||||||||||||||||||
| Net Sales | $ | 388.8 | $ | — | $ | 388.8 | ||||||||||||||||||||||||||||||||
| Income from operations | 63.4 | 13.0 | (a) | 76.4 | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 56.1 | 17.2 | (b) | 73.3 | ||||||||||||||||||||||||||||||||||
| Provision for income taxes and indicated rate | (15.1) | 26.9 | % | (4.1) | 23.8 | % | (19.2) | 26.2 | % | |||||||||||||||||||||||||||||
| Net income from continuing operations | 41.0 | 13.1 | 54.1 | |||||||||||||||||||||||||||||||||||
| Income from discontinued operations, net of tax | 2.6 | (2.6) | — | |||||||||||||||||||||||||||||||||||
| Net income | $ | 43.6 | $ | 10.5 | $ | 54.1 | ||||||||||||||||||||||||||||||||
| Income from Operations Adjustments (a) | Income before Income Taxes Adjustments (b) | |||||||||||||||||||||||||||||||||||||
| Restructuring and other similar charges | $ | 1.7 | $ | 1.7 | ||||||||||||||||||||||||||||||||||
| Last-In, First-Out ("LIFO") adjustments | (0.3) | (0.3) | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 10.5 | — | ||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | — | 14.7 | ||||||||||||||||||||||||||||||||||||
| Supply chain optimization and footprint repositioning initiatives | 1.1 | 1.1 | ||||||||||||||||||||||||||||||||||||
| Total Adjustments | 13.0 | 17.2 | ||||||||||||||||||||||||||||||||||||
Zurn Elkay Water Solutions Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2026 and March 31, 2025
(in Millions, except share and per share amounts) (Unaudited)
| Three Months Ended | ||||||||||||||
| Adjusted EBITDA | March 31, 2026 | March 31, 2025 | ||||||||||||
| Net income | $ | 58.9 | $ | 43.6 | ||||||||||
| Income from discontinued operations, net of tax | — | (2.6) | ||||||||||||
| Provision for income taxes | 18.0 | 15.1 | ||||||||||||
| Other income, net (1) | (1.0) | — | ||||||||||||
| Interest expense, net | 6.2 | 7.3 | ||||||||||||
| Depreciation and amortization | 21.0 | 22.7 | ||||||||||||
| EBITDA | $ | 103.1 | $ | 86.1 | ||||||||||
| Adjustments | ||||||||||||||
| Restructuring and other similar charges | $ | 0.9 | $ | 1.7 | ||||||||||
| Stock-based compensation expense | 11.7 | 10.5 | ||||||||||||
| Last-In, First-Out ("LIFO") adjustments | 0.1 | (0.3) | ||||||||||||
| Other, net (2) | 0.2 | — | ||||||||||||
| Subtotal of adjustments | 12.9 | 11.9 | ||||||||||||
| Adjusted EBITDA | $ | 116.0 | $ | 98.0 | ||||||||||
(1)Other income, net for the periods indicated, consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses.
(2)Other, net includes the gains and losses from disposition of long-lived assets.
| Three Months Ended | |||||||||||
| Adjusted Net Income and Earnings Per Share | March 31, 2026 | March 31, 2025 | |||||||||
| Net income | $ | 58.9 | $ | 43.6 | |||||||
| Income from discontinued operations, net of tax | — | (2.6) | |||||||||
| Amortization of intangible assets | 14.6 | 14.7 | |||||||||
| Restructuring and other similar charges | 0.9 | 1.7 | |||||||||
| Supply chain optimization and footprint repositioning initiatives | — | 1.1 | |||||||||
| Last-In, First-Out ("LIFO") adjustments | 0.1 | (0.3) | |||||||||
| Other income, net (1) | (1.0) | — | |||||||||
| Other, net (2) | 0.2 | — | |||||||||
| Tax effect on above items | (3.5) | (4.1) | |||||||||
| Adjusted net income | $ | 70.2 | $ | 54.1 | |||||||
| GAAP diluted net income per share from continuing operations | $ | 0.35 | $ | 0.24 | |||||||
| Adjusted earnings per share - diluted | $ | 0.41 | $ | 0.31 | |||||||
| Weighted-average number of shares outstanding (in thousands): | |||||||||||
| GAAP basic weighted-average shares | 167,696 | 170,346 | |||||||||
| Effect of dilutive equity awards | 1,980 | 1,843 | |||||||||
| Adjusted diluted weighted-average shares | 169,676 | 172,189 | |||||||||
(1)Other income, net for the periods indicated, consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses.
(2)Other, net includes the gains and losses from the disposition of long-lived assets.
| Three Months Ended | ||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Cash provided by operating activities | $ | 46.1 | $ | 42.9 | ||||||||||
| Expenditures for property, plant and equipment | (3.4) | (4.3) | ||||||||||||
| Free cash flow | $ | 42.7 | $ | 38.6 | ||||||||||
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(in Millions)
(Unaudited)
| Three Months Ended | ||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Net income | $ | 58.9 | $ | 43.6 | ||||||||||
| Other comprehensive loss: | ||||||||||||||
| Foreign currency translation adjustments | (1.6) | (0.2) | ||||||||||||
| Other comprehensive loss, net of tax | (1.6) | (0.2) | ||||||||||||
| Total comprehensive income | $ | 57.3 | $ | 43.4 | ||||||||||
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in Millions, except share amounts)
| (Unaudited) | ||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 273.5 | $ | 300.5 | ||||||||||
| Receivables, net | 242.7 | 184.8 | ||||||||||||
| Inventories, net | 292.3 | 274.4 | ||||||||||||
| Income taxes receivable | 1.8 | 13.3 | ||||||||||||
| Other current assets | 26.2 | 38.7 | ||||||||||||
| Total current assets | 836.5 | 811.7 | ||||||||||||
| Property, plant and equipment, net | 155.9 | 157.6 | ||||||||||||
| Intangible assets, net | 820.4 | 835.0 | ||||||||||||
| Goodwill | 794.4 | 795.0 | ||||||||||||
| Other assets | 77.2 | 80.1 | ||||||||||||
| Total assets | $ | 2,684.4 | $ | 2,679.4 | ||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Current maturities of debt | $ | 1.4 | $ | 0.9 | ||||||||||
| Trade payables | 99.0 | 65.2 | ||||||||||||
| Compensation and benefits | 18.3 | 40.9 | ||||||||||||
| Current portion of pension and other postretirement benefit obligations | 1.1 | 1.1 | ||||||||||||
| Other current liabilities | 138.7 | 151.3 | ||||||||||||
| Total current liabilities | 258.5 | 259.4 | ||||||||||||
| Long-term debt | 497.6 | 495.6 | ||||||||||||
| Pension and other postretirement benefit obligations | 9.5 | 9.6 | ||||||||||||
| Deferred income taxes | 191.8 | 189.7 | ||||||||||||
| Operating lease liability | 38.1 | 42.0 | ||||||||||||
| Other liabilities | 82.1 | 79.8 | ||||||||||||
| Total liabilities | 1,077.6 | 1,076.1 | ||||||||||||
| Stockholders' equity: | ||||||||||||||
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 167,032,113 at March 31, 2026 and 166,981,602 at December 31, 2025 | 1.7 | 1.7 | ||||||||||||
| Additional paid-in capital | 2,806.2 | 2,810.0 | ||||||||||||
| Retained deficit | (1,122.8) | (1,131.7) | ||||||||||||
| Accumulated other comprehensive loss | (78.3) | (76.7) | ||||||||||||
| Total stockholders' equity | 1,606.8 | 1,603.3 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 2,684.4 | $ | 2,679.4 | ||||||||||
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in Millions)
(Unaudited)
| Three Months Ended | ||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||
| Operating activities | ||||||||||||||
| Net income | $ | 58.9 | $ | 43.6 | ||||||||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
| Depreciation | 6.4 | 8.0 | ||||||||||||
| Amortization of intangible assets | 14.6 | 14.7 | ||||||||||||
| Non-cash restructuring charges | — | 0.5 | ||||||||||||
| Loss on dispositions of long-lived assets | 0.2 | — | ||||||||||||
| Deferred income taxes | 2.1 | (1.3) | ||||||||||||
| Other non-cash expenses | 1.0 | — | ||||||||||||
| Pension curtailment and settlement | — | (0.7) | ||||||||||||
| Stock-based compensation expense | 11.7 | 10.5 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Receivables, net | (58.1) | (40.5) | ||||||||||||
| Inventories, net | (18.2) | (7.9) | ||||||||||||
| Other assets | 29.6 | 25.0 | ||||||||||||
| Accounts payable | 33.9 | 23.3 | ||||||||||||
| Accruals and other | (36.0) | (32.3) | ||||||||||||
| Cash provided by operating activities | 46.1 | 42.9 | ||||||||||||
| Investing activities | ||||||||||||||
| Expenditures for property, plant and equipment | (3.4) | (4.3) | ||||||||||||
| Cash used for investing activities | (3.4) | (4.3) | ||||||||||||
| Financing activities | ||||||||||||||
| Repayments of debt | (0.3) | (0.2) | ||||||||||||
| Payment of debt issuance costs | (3.0) | — | ||||||||||||
| Proceeds from exercise of stock options and ESPP contributions | 2.5 | 1.2 | ||||||||||||
| Taxes withheld and paid on employees' share-based payment awards | — | (0.5) | ||||||||||||
| Repurchase of common stock | (50.0) | (77.4) | ||||||||||||
| Payment of common stock dividends | (18.4) | (15.2) | ||||||||||||
| Cash used for financing activities | (69.2) | (92.1) | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.5) | 0.2 | ||||||||||||
| Decrease in cash, cash equivalents and restricted cash | (27.0) | (53.3) | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 300.5 | 198.0 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 273.5 | $ | 144.7 | ||||||||||
FAQ
How did Zurn Elkay Water Solutions (ZWS) perform in Q1 2026?
Zurn Elkay delivered strong Q1 2026 results, with net sales of $433.0 million, up from $388.8 million a year earlier. Net income from continuing operations reached $58.9 million, and diluted EPS from continuing operations increased to $0.35 from $0.24.
What were ZWS’s key profitability metrics and margins in Q1 2026?
Profitability improved meaningfully, with adjusted EBITDA rising to $116.0 million from $98.0 million. Adjusted EBITDA margin expanded to 26.8% of net sales from 25.2%. Adjusted diluted EPS increased to $0.41, compared with $0.31 in the prior-year quarter.
What guidance did Zurn Elkay (ZWS) provide for Q2 2026?
For Q2 2026, Zurn Elkay expects core sales to grow by 8–9% versus last year’s second quarter. It also anticipates adjusted EBITDA margins between 27.0% and 27.5%, assuming the current tariff structure remains in place throughout 2026, with potential upside to the full-year outlook.
How strong is Zurn Elkay’s (ZWS) balance sheet and leverage position?
The company reported net debt leverage of 0.5x as of March 31, 2026, indicating modest leverage. It also increased revolver capacity from $200 million to $550 million, providing additional liquidity and financial flexibility to support operations and capital allocation plans.
What capital allocation actions did Zurn Elkay (ZWS) take in Q1 2026?
In Q1 2026, Zurn Elkay deployed $50 million to repurchase 1.0 million shares of common stock. The company also paid common stock dividends of $18.4 million and modestly reduced debt, while continuing to invest in property, plant and equipment at $3.4 million.
How did Zurn Elkay’s cash flow and free cash flow look in Q1 2026?
Cash provided by operating activities was $46.1 million in Q1 2026, up from $42.9 million a year earlier. After $3.4 million of capital expenditures, free cash flow totaled $42.7 million, compared with $38.6 million in the prior-year quarter.
What non-GAAP metrics does Zurn Elkay (ZWS) emphasize and why?
Zurn Elkay highlights non-GAAP measures such as core sales, adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, free cash flow, and ROIC. Management believes these metrics help compare performance across periods, assess operational trends, and evaluate compliance with debt covenants.