ZWS · Zurn Elkay Water Solutions Corporation

Zurn Elkay Water Solutions delivered strong Q1 2026 results with net sales rising 11% year-over-year to $433 million, driven entirely by 11% core sales growth across nearly all product categories. Income from operations expanded to $82.1 million from $63.4 million, boosting the operating margin by 270 basis points due to sales growth including price realization and productivity gains from the Zurn Elkay Business System. Adjusted EBITDA grew 18% to $116 million, achieving a 26.8% margin, up 160 basis points from 25.2% last year, reflecting operational leverage and execution on strategic initiatives. GAAP net income from continuing operations increased to $59 million with diluted EPS of $0.35, while adjusted EPS rose to $0.41. Balance sheet strength is evident with net debt leverage at a low 0.5x as of March 31, 2026, supporting capital deployment including a $50 million share repurchase of 1.0 million shares and an increase in revolver capacity from $200 million to $550 million. CEO Todd Adams highlighted traction in targeted growth initiatives and new adjacencies planned for late 2026 and 2027, underpinned by competitive advantages in products, supply chain, and market focus. The company issued Q2 guidance for 8-9% core sales growth and adjusted EBITDA margins of 27.0-27.5%, based on current tariff assumptions, with potential upside to full-year outlook to be revisited post-Q2. An investor call is scheduled for April 22, 2026.