0001628280-26-026281
SEC filingQ1 delivered double-digit revenue growth and accelerated profitability with operating income up 29.5% to $82.1M, driven by sales momentum and margin gains from productivity initiatives amid ongoing restructuring.
Net sales increased 11.4% to $433.0 million in Q1 FY2026 from $388.8 million in the prior year period. This growth underscores sustained demand for Zurn Elkay's specification-driven water management products, including professional-grade water safety, flow systems, and filtered drinking water solutions. The topline expansion sets the foundation for improved profitability by leveraging scale across the portfolio.
Gross profit advanced 13.7% to $205.8 million, lifting the gross margin to 47.5%. This outperformance relative to revenue growth reflects effective pricing realization and operational efficiencies, providing a stronger base for operating leverage. Operating income rose more sharply by 29.5% to $82.1 million, with the operating margin expanding to 19.0%. Management's focus on productivity initiatives, including optimization of the manufacturing footprint, contributed to this margin acceleration by controlling costs amid revenue gains.
Net cash provided by operating activities improved to $46.1 million from $42.9 million. This resilience stemmed from higher net income and favorable timing of other assets, partially offset by increased use of cash for trade working capital during the quarter. The change highlights the business's ability to convert profitability into cash despite seasonal working capital demands.