Zurn Elkay Q2 Sales Beat Estimates with 8% Rise to $444.5M

Zurn Elkay Water Solutions Corporation reported Q2 sales of $444.5M, an 8% increase from last year, beating estimates of $424.8M. The company's adjusted earnings per share were $0.42, surpassing the FactSet estimate of $0.36.

Zurn Elkay Water Solutions Corporation (NYSE: ZWS) reported robust financial performance for the second quarter of 2025, with net sales of $444.5 million, representing an 8% year-over-year increase. This result exceeded estimates of $424.8 million, demonstrating strong growth in core sales, which improved by 8% year over year. The company's adjusted earnings per share (EPS) for the quarter reached $0.42, surpassing the FactSet estimate of $0.36.

The company's adjusted EBITDA grew by 13% to $118 million, or 26.5% of net sales, compared to $104 million (25.3% of net sales) in the prior year's second quarter. This performance was driven by the company's effective navigation of global tariff dynamics, a diversified and flexible supply chain, and strategic pricing actions. The company's adjusted EBITDA margin, at 26.5%, was above the high end of its guidance range and represented a 120 basis point increase from the prior year's second quarter.

Free cash flow (FCF) for the quarter exceeded $100 million for the first time, inclusive of the $33 million deployed to repurchase 1.0 million shares of common stock. The company's net debt leverage as of June 30, 2025, was 0.7x, reflecting a decline in leverage compared to the prior year.

Todd A. Adams, Chairman and Chief Executive Officer, commented on the quarter's results, stating, "We continue to navigate the global tariff dynamic extraordinarily well as the diversity and flexibility of our supply chain, selective pricing actions and the Zurn Elkay Business System drove strong results in the quarter. Second quarter core sales growth was 8% year over year and includes some customer buy ahead as well as some early benefit from our pricing actions implemented in the quarter. Adjusted EBITDA margins were above the high end of our guidance range at a record 26.5% and up 120 basis points over the prior year second quarter. Free cash flow, inclusive of the $33 million we deployed to buy back shares, exceeded $100 million in the quarter for the first time ever while our leverage declined to 0.7x.”

The company raised its full-year outlook based on its outperformance in the second quarter and a more favorable perspective on the second half of the year. It expects core sales growth to be at least 5% year over year, adjusted EBITDA of $420 million to $430 million, and full-year free cash flow of approximately $300 million.

References:
[1] https://www.stocktitan.net/news/ZWS/zurn-elkay-water-solutions-reports-second-quarter-2025-financial-kvtoe95dvyhm.html