Investor call scheduled for Wednesday, October 28, 2026 at 8:30 a.m. Eastern Time
MILWAUKEE--(BUSINESS WIRE)--October 27, 2026--
(USA) - Zurn Elkay Water Solutions Corporation $(ZWS)$
Third Quarter Highlights
-- Net sales in the quarter were $495 million compared with $455 million
in last year's September quarter (+7% core sales(1), +2% acquisitions).
-- Net income from continuing operations was $76 million (diluted EPS from
continuing operations of $0.45) compared with net income from continuing
operations of $60 million (diluted EPS from continuing operations of
$0.35) in the year-ago quarter.
-- Adjusted EBITDA(1) was $140 million (28.3% of net sales) compared with
$122 million (26.8% of net sales) in last year's third quarter.
-- Adjusted EPS(1) was $0.52 compared with $0.43 in the year-ago quarter.
-- Free cash flow(1) of $110 million, excluding International Emergency
Economic Powers Act ("IEEPA") reciprocal tariff refunds received, net of
related taxes paid; Net debt leverage(1) of 0.4x as of September 30,
2026.
-- Completed acquisition of Intellihot, Inc. ("Intellihot").
-- Deployed $35 million to repurchase 0.7 million shares of common stock
in the quarter.
-- Increased annual dividend 18% to $0.52 per share.
Todd A. Adams, Chairman and Chief Executive Officer, commented, "We delivered 7% core sales(1) growth, 28.3% adjusted EBITDA margins(1) and free cash flow(1) of $110 million in the third quarter. We were able to leverage our exceptional free cash flow(1) to invest $35 million in share repurchases in the quarter as well as fund the Intellihot acquisition, which closed during the third quarter. Finally, we are increasing our annual dividend by 18% to $0.52 per share, reflecting the confidence we have in the long-term fundamentals of our business and business model driven by the Zurn Elkay Business System."
Adams continued, "Last quarter we announced the acquisition of Intellihot, which along with our Wilkins backflow are key components of the hot water loop. Earlier this month, we continued to build out our presence in the hot water loop with the entrance into the digital master mixing valve market with internally developed new products that we believe will allow us to take meaningful, profitable share in the category over the next several years. These breakthrough initiatives are part of our continued focus to leverage our significant competitive advantages into adjacencies. In 2026 alone, we believe we've expanded our served markets by roughly $400 million. While we're encouraged with our progress, we are also aware that we must continue to be nimble in finding pockets of growth to offset the general uncertainty that exists within our served markets and the broader economy."
Fourth Quarter and Full Year Outlook
"As we start the fourth quarter, it feels like a time to be conservative in our assumptions while remaining aggressive with our actions with everything that's happening in the world right now. For the fourth quarter, we expect net sales to be between $430 million to $437 million and adjusted EBITDA(1) between $120 million to $123 million and full year free cash flow(1) to be greater than $350 million, excluding the net impact of tariff related refunds received."
Third Quarter 2026 Overview
Net sales were $495.1 million and $455.4 million during the three months ended September 30, 2026 and September 30, 2025, respectively, an increase of 9% year over year. Core sales improved 7% year over year, including growth in nearly all product categories, as well as an additional 2% increase resulting from our acquisition of Intellihot.
During the three months ended September 30, 2026, income from operations was $108.2 million compared to $77.5 million during the three months ended September 30, 2025. Income from operations as a percentage of net sales increased by 490 basis points year over year as a result of product mix, Zurn Elkay Business System led productivity initiatives and supply chain repositioning.
Adjusted EBITDA(1) was $140.1 million, or 28.3% of net sales, during the three months ended September 30, 2026 compared to $122.2 million, or 26.8% of net sales, during the three months ended September 30, 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 IEEPA reciprocal tariff refunds, net of related taxes paid, 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 Greatest Companies and America's Most Responsible Companies by Newsweek and one of America's Best Companies and the World's Best Companies for Sustainable Growth by TIME, Zurn Elkay Water Solutions is headquartered in Milwaukee, Wisconsin, 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, October 28, 2026, at 8:30 a.m. Eastern Time to discuss its third quarter 2026 results, provide a general business update and respond to investor questions. The conference call can be accessed via telephone as follows:
North America toll-free: 833-461-5787
International toll: 585-542-9983
Meeting ID: 323358105
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 Nine Months Ended
-------------------------- --------------------------
September September September September
30, 2026 30, 2025 30, 2026 30, 2025
------------ ------------ ------------ ------------
Net sales $ 495.1 $ 455.4 $1,419.1 $1,288.7
Cost of sales 249.3 254.7 679.2 704.7
------- ------- ------- -------
Gross profit 245.8 200.7 739.9 584.0
Selling, general
and
administrative
expenses 121.0 106.7 348.7 316.1
Restructuring and
other similar
charges 1.4 1.8 4.1 5.4
Amortization of
intangible
assets 15.2 14.7 44.5 44.0
------- ------- ------- -------
Income from
operations 108.2 77.5 342.6 218.5
Non-operating
expense:
Interest
expense, net (6.3) (7.1) (18.6) (22.1)
Other income,
net 0.7 8.7 5.6 6.7
------- ------- ------- -------
Income before
income taxes 102.6 79.1 329.6 203.1
Provision for
income taxes (26.5) (19.5) (82.1) (52.4)
------- ------- ------- -------
Net income from
continuing
operations 76.1 59.6 247.5 150.7
Income from
discontinued
operations, net
of tax 0.2 2.2 1.0 5.2
------- ------- ------- -------
Net income $ 76.3 $ 61.8 $ 248.5 $ 155.9
======= ======= ======= =======
Basic net income
per share:
Continuing
operations $ 0.46 $ 0.35 $ 1.49 $ 0.89
Discontinued
operations $ -- $ 0.01 $ -- $ 0.03
Net income $ 0.46 $ 0.36 $ 1.49 $ 0.92
Diluted net
income per
share:
Continuing
operations $ 0.45 $ 0.35 $ 1.47 $ 0.88
Discontinued
operations $ -- $ 0.01 $ -- $ 0.03
Net income $ 0.45 $ 0.36 $ 1.47 $ 0.91
Weighted-average
number of shares
outstanding (in
thousands):
Basic 166,259 168,125 167,002 168,977
Effect of
dilutive
equity awards 1,846 2,148 2,009 2,250
------- ------- ------- -------
Diluted 168,105 170,273 169,011 171,227
======= ======= ======= =======
Zurn Elkay Water Solutions Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended September 30, 2026
(in Millions) (Unaudited)
Three Months Ended September 30, 2026
----------------------------------------------------------------------------
Reported Non-GAAP
Results Adjustments Results
------------- -------------- ----------
Net Sales $495.1 $ -- $495.1
Income from operations 108.2 10.4 (a) 118.6
Income before income
taxes 102.6 14.3 (b) 116.9
Provision for income
taxes and indicated
rate (26.5) 25.8% (3.6) 25.2% (30.1) 25.7%
----- ---- ---- ------ -----
Net income from
continuing operations 76.1 10.7 86.8
Income from discontinued
operations, net of tax 0.2 (0.2) --
----- ----- ---- ------ -----
Net income $ 76.3 $10.5 $ 86.8
Income from Income before
Operations Income Taxes
Adjustments Adjustments
(a) (b)
------------- --------------
Restructuring and
other similar
charges $ 1.4 $ 1.4
Acquisition-related
fair value
adjustment 0.7 0.7
Last-In, First-Out
("LIFO")
adjustments (0.8) (0.8)
Tariff refunds (1.5) (1.5)
Stock-based
compensation
expense 10.6 --
Amortization of
intangible assets -- 15.2
Other income, net (1) -- (0.7)
----- ----- ---- ------
Total Adjustments $ 10.4 $14.3
____________________
(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.
Zurn Elkay Water Solutions Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
Nine Months Ended September 30, 2026
(in Millions) (Unaudited)
Nine Months Ended September 30, 2026
----------------------------------------------------------------------------
Reported Non-GAAP
Results Adjustments Results
-------------- -------------- ---------
Net Sales $1,419.1 $ -- $1,419.1
Income from operations 342.6 (14.3) (a) 328.3
Income before income
taxes 329.6 (6.9) (b) 322.7
Provision for income
taxes and indicated
rate (82.1) 24.9% 0.7 10.1% (81.4) 25.2%
------- --- ----- ------ -------
Net income from
continuing operations 247.5 (6.2) 241.3
Income from discontinued
operations, net of tax 1.0 (1.0) --
------- ---- ----- ----- -------
Net income $ 248.5 $ (7.2) $ 241.3
Income from Income before
Operations Income Taxes
Adjustments Adjustments
(a) (b)
-------------- --------------
Restructuring and
other similar
charges $ 4.1 $ 4.1
Acquisition-related
fair value
adjustment 0.7 0.7
Other, net (1) 0.7 0.7
Last-In, First-Out
("LIFO")
adjustments (2.2) (2.2)
Tariff refunds (49.1) (49.1)
Stock-based
compensation
expense 31.5 --
Amortization of
intangible assets -- 44.5
Other income, net (2) -- (5.6)
------- ---- ----- -----
Total Adjustments $ (14.3) $ (6.9)
____________________
(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 September 30, 2025
(in Millions) (Unaudited)
Three Months Ended September 30, 2025
----------------------------------------------------------------------------
Reported Non-GAAP
Results Adjustments Results
------------- -------------- ----------
Net Sales $455.4 $ -- $455.4
Income from
operations 77.5 23.6 (a) 101.1
Income before
income taxes 79.1 20.0 (b) 99.1
Provision for
income taxes and
indicated rate (19.5) 24.7% (4.8) 24.0% (24.3) 24.5%
----- ---- ---- ------ -----
Net income from
continuing
operations 59.6 15.2 74.8
Income from
discontinued
operations, net of
tax 2.2 (2.2) --
----- ----- ---- ------ -----
Net income $ 61.8 $13.0 $ 74.8
Income from Income before
Operations Income Taxes
Adjustments Adjustments
(a) (b)
------------- --------------
Restructuring
and other
similar
charges $ 1.8 $ 1.8
Other, net (1) 0.3 0.3
Last-In,
First-Out
("LIFO")
adjustments 11.2 11.2
Stock-based
compensation
expense 9.6 --
Amortization of
intangible
assets -- 14.7
Supply chain
optimization
and footprint
repositioning
initiatives 0.7 0.7
Other income,
net (2) -- (8.7)
----- ----- ---- ------
Total
Adjustments $ 23.6 $20.0
____________________
(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
Nine Months Ended September 30, 2025
(in Millions) (Unaudited)
Nine Months Ended September 30, 2025
----------------------------------------------------------------------------
Reported Non-GAAP
Results Adjustments Results
-------------- -------------- ---------
Net Sales $1,288.7 $ -- $1,288.7
Income from
operations 218.5 55.5 (a) 274.0
Income before
income taxes 203.1 63.7 (b) 266.8
Provision for
income taxes and
indicated rate (52.4) 25.8% (15.2) 23.9% (67.6) 25.3%
------- --- ----- ----- -------
Net income from
continuing
operations 150.7 48.5 199.2
Income from
discontinued
operations, net of
tax 5.2 (5.2) --
------- ---- ----- ----- -------
Net income $ 155.9 $ 43.3 $ 199.2
Income from Income before
Operations Income Taxes
Adjustments Adjustments
(a) (b)
-------------- --------------
Restructuring
and other
similar
charges $ 5.4 $ 5.4
Other, net (1) 0.3 0.3
Last-In,
First-Out
("LIFO")
adjustments 18.2 18.2
Stock-based
compensation
expense 29.1 --
Amortization of
intangible
assets -- 44.0
Supply chain
optimization
and footprint
repositioning
initiatives 2.5 2.5
Other income,
net (2) -- (6.7)
------- ---- ----- -----
Total
Adjustments $ 55.5 $ 63.7
____________________
(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 and Nine Months Ended September 30, 2026 and September 30, 2025
(in Millions, except share and per share amounts) (Unaudited)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
Adjusted EBITDA 2026 2025 2026 2025
------------- ------------- ------------- -------------
Net income $ 76.3 $ 61.8 $ 248.5 $ 155.9
Income from
discontinued
operations, net of
tax (0.2) (2.2) (1.0) (5.2)
Provision for income
taxes 26.5 19.5 82.1 52.4
Other income, net (1) (0.7) (8.7) (5.6) (6.7)
Interest expense, net 6.3 7.1 18.6 22.1
Depreciation and
amortization 21.5 21.8 63.8 66.6
----- ----- ----- -----
EBITDA $ 129.7 $ 99.3 $ 406.4 $ 285.1
===== ===== ===== =====
Adjustments
Restructuring and
other similar
charges $ 1.4 $ 1.8 4.1 5.4
Stock-based
compensation
expense 10.6 9.6 31.5 29.1
Last-In, First-Out
("LIFO")
adjustments (0.8) 11.2 (2.2) 18.2
Tariff refunds (1.5) -- (49.1) --
Acquisition-related
fair value
adjustment 0.7 -- 0.7 --
Other, net (2) -- 0.3 0.7 0.3
----- ----- ----- -----
Subtotal of
adjustments 10.4 22.9 (14.3) 53.0
----- ----- ----- -----
Adjusted EBITDA $ 140.1 $ 122.2 $ 392.1 $ 338.1
===== ===== ===== =====
(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 Nine Months Ended
-------------------------- --------------------------
Adjusted Net Income
and Earnings Per September September September September
Share 30, 2026 30, 2025 30, 2026 30, 2025
------------ ------------ ------------ ------------
Net income $ 76.3 $ 61.8 $ 248.5 $ 155.9
Income from
discontinued
operations, net of
tax (0.2) (2.2) (1.0) (5.2)
Amortization of
intangible assets 15.2 14.7 44.5 44.0
Restructuring and
other similar
charges 1.4 1.8 4.1 5.4
Supply chain
optimization and
footprint
repositioning
initiatives -- 0.7 -- 2.5
Acquisition-related
fair value
adjustment 0.7 -- 0.7 --
Last-In, First-Out
("LIFO")
adjustments (0.8) 11.2 (2.2) 18.2
Tariff refunds (1.5) -- (49.1) --
Other income, net (1) (0.7) (8.7) (5.6) (6.7)
Other, net (2) -- 0.3 0.7 0.3
Tax effect on above
items (3.6) (4.8) 0.7 (15.2)
------- ------- ------- -------
Adjusted net income $ 86.8 $ 74.8 $ 241.3 $ 199.2
======= ======= ======= =======
GAAP diluted net
income per share
from continuing
operations $ 0.45 $ 0.35 $ 1.47 $ 0.88
Adjusted earnings per
share - diluted $ 0.52 $ 0.43 $ 1.43 $ 1.16
Weighted-average
number of shares
outstanding (in
thousands):
GAAP basic
weighted-average
shares 166,259 168,125 167,002 168,977
Effect of dilutive
equity awards 1,846 2,148 2,009 2,250
------- ------- ------- -------
Adjusted diluted
weighted-average
shares 168,105 170,273 169,011 171,227
======= ======= ======= =======
(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 Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2026 2025 2026 2025
------------- ------------- ------------- -------------
Cash provided
by operating
activities $ 112.2 $ 101.3 $ 320.6 $ 254.8
Expenditures
for property,
plant and
equipment (9.8) (7.4) (16.1) (20.7)
Tariff refunds
(1) 7.2 -- (40.4) --
----- ----- ----- -----
Free cash flow $ 109.6 $ 93.9 $ 264.1 $ 234.1
===== ===== ===== =====
(1) Net of related taxes paid of $8.7 million during the three and nine
months ended September 30, 2026.
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(in Millions)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------- ----------------------------
September September 30, September 30, September 30,
30, 2026 2025 2026 2025
----------- ------------- ------------- -------------
Net income $ 76.3 $ 61.8 $ 248.5 $ 155.9
Other
comprehensive
income (loss):
Foreign currency
translation
adjustments 0.5 (2.5) (3.6) 2.2
Change in
pension and
other
postretirement
benefit
obligations,
net of tax -- (6.2) -- (6.2)
--- ------ ---- ----- -----
Other comprehensive
income (loss), net
of tax 0.5 (8.7) (3.6) (4.0)
--- ------ ---- ----- -----
Total comprehensive
income $ 76.8 $ 53.1 $ 244.9 $ 151.9
=== ====== ==== === ===== =====
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in Millions, except share amounts)
(Unaudited)
September 30, 2026 December 31, 2025
-------------------- ---------------------
Assets
Current assets:
Cash and cash
equivalents $ 307.1 $ 300.5
Receivables, net 264.9 184.8
Inventories, net 280.8 274.4
Income taxes receivable 0.9 13.3
Other current assets 30.4 38.7
--------------- --------------
Total current assets 884.1 811.7
Property, plant and
equipment, net 160.3 157.6
Intangible assets, net 835.0 835.0
Goodwill 848.6 795.0
Other assets 78.8 80.1
--------------- --------------
Total assets $ 2,806.8 $ 2,679.4
=============== ==============
Liabilities and
stockholders' equity
Current liabilities:
Current maturities of
debt $ 1.7 $ 0.9
Trade payables 90.4 65.2
Compensation and
benefits 41.7 40.9
Current portion of
pension and other
postretirement benefit
obligations 1.1 1.1
Other current
liabilities 175.2 151.3
--------------- --------------
Total current liabilities 310.1 259.4
Long-term debt 498.6 495.6
Pension and other
postretirement benefit
obligations 9.3 9.6
Deferred income taxes 166.9 189.7
Operating lease liability 32.2 42.0
Other liabilities 96.2 79.8
--------------- --------------
Total liabilities 1,113.3 1,076.1
Stockholders' equity:
Common stock, $0.01 par
value; 200,000,000
shares authorized;
shares issued and
outstanding:
165,383,297 at
September 30, 2026 and
166,981,602 at December
31, 2025 1.7 1.7
Additional paid-in
capital 2,790.8 2,810.0
Retained deficit (1,018.7) (1,131.7)
Accumulated other
comprehensive loss (80.3) (76.7)
--------------- --------------
Total stockholders' equity 1,693.5 1,603.3
--------------- --------------
Total liabilities and
stockholders' equity $ 2,806.8 $ 2,679.4
=============== ==============
Zurn Elkay Water Solutions Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in Millions)
(Unaudited)
Nine Months Ended
----------------------------------------------
September 30, 2026 September 30, 2025
---------------------- ----------------------
Operating activities
Net income $ 248.5 $ 155.9
Adjustments to reconcile
net income to cash
provided by operating
activities:
Depreciation 19.3 22.6
Amortization of
intangible assets 44.5 44.0
Non-cash restructuring
charges -- 0.5
Loss on dispositions of
long-lived assets 0.7 0.3
Deferred income taxes (14.2) (11.7)
Other non-cash expenses 2.0 1.7
Pension curtailment and
settlement -- (10.7)
Stock-based
compensation expense 31.5 29.1
Changes in operating
assets and
liabilities:
Receivables, net (76.6) (29.4)
Inventories, net 2.2 0.5
Other assets 27.6 22.9
Accounts payable 22.8 10.3
Accruals and other 12.3 18.8
--- ------------- --- -------------
Cash provided by operating
activities 320.6 254.8
Investing activities
Expenditures for property,
plant and equipment (16.1) (20.7)
Acquisitions, net of cash
acquired (107.3) --
--- ------------- --- -------------
Cash used for investing
activities (123.4) (20.7)
Financing activities
Repayments of debt (1.0) (0.6)
Payment of debt issuance
costs (3.0) --
Proceeds from exercise of
stock options and ESPP
contributions 4.4 7.4
Taxes withheld and paid on
employees' share-based
payment awards -- (0.6)
Repurchase of common stock (134.7) (134.9)
Payment of common stock
dividends (55.0) (45.4)
--- ------------- --- -------------
Cash used for financing
activities (189.3) (174.1)
Effect of exchange rate
changes on cash, cash
equivalents and
restricted cash (1.3) 2.1
--- ------------- --- -------------
Increase in cash, cash
equivalents and
restricted cash 6.6 62.1
Cash, cash equivalents and
restricted cash at
beginning of period 300.5 198.0
--- ------------- --- -------------
Cash, cash equivalents and
restricted cash at end of
period $ 307.1 $ 260.1
=== ============= === =============
View source version on businesswire.com: https://www.businesswire.com/news/home/20261027819007/en/
CONTACT: Bobbi Belstner
Vice President, Corporate Controller
414.361.0122
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