Zurn Elkay Water Solutions Reports Third Quarter 2024 Financial Results
Zurn Elkay Water Solutions (NYSE:ZWS) reported strong Q3 2024 results with net sales of $410 million, up from $398 million year-over-year, showing 3% core sales growth. The company achieved net income of $44 million with diluted EPS of $0.25, improving from $35 million and $0.20 EPS in the previous year. Adjusted EBITDA reached $105 million (25.6% of net sales), up from $96 million (24.1%) last year. The company increased its quarterly dividend by 13% to $0.09 per share and repurchased 1.6 million shares for $50 million. For Q4, ZWS expects low single-digit core sales growth with adjusted EBITDA between $88-90 million.
Zurn Elkay Water Solutions (NYSE:ZWS) ha riportato risultati solidi per il terzo trimestre del 2024 con vendite nette di 410 milioni di dollari, in aumento rispetto ai 398 milioni dell'anno precedente, mostrando una crescita del 3% delle vendite core. L'azienda ha ottenuto un utile netto di 44 milioni di dollari con un utile per azione diluita di 0,25 dollari, in miglioramento rispetto ai 35 milioni e 0,20 dollari per azione dell'anno scorso. L'EBITDA rettificato ha raggiunto i 105 milioni di dollari (25,6% delle vendite nette), rispetto ai 96 milioni (24,1%) dell'anno precedente. L'azienda ha aumentato il suo dividendo trimestrale del 13% a 0,09 dollari per azione e ha riacquistato 1,6 milioni di azioni per 50 milioni di dollari. Per il quarto trimestre, ZWS prevede una crescita delle vendite core a un cifra bassa con un EBITDA rettificato compreso tra 88-90 milioni di dollari.
Zurn Elkay Water Solutions (NYSE:ZWS) reportó resultados sólidos para el tercer trimestre de 2024 con ventas netas de 410 millones de dólares, un aumento respecto a los 398 millones del año anterior, mostrando un crecimiento del 3% en las ventas principales. La compañía logró un ingreso neto de 44 millones de dólares con una utilidad por acción diluida de 0,25 dólares, mejorando desde 35 millones y 0,20 dólares por acción el año pasado. El EBITDA ajustado alcanzó los 105 millones de dólares (25,6% de las ventas netas), frente a los 96 millones (24,1%) del año anterior. La compañía incrementó su dividendo trimestral en un 13%, llevándolo a 0,09 dólares por acción y recompró 1,6 millones de acciones por 50 millones de dólares. Para el cuarto trimestre, ZWS espera un crecimiento de ventas principales de un solo dígito bajo con un EBITDA ajustado entre 88 y 90 millones de dólares.
Zurn Elkay Water Solutions (NYSE:ZWS)는 2024년 3분기에 4억 1000만 달러의 순매출을 보고하며, 지난해 3억 9800만 달러에서 증가하여 3%의 핵심 매출 성장을 보여주었습니다. 이 회사는 4400만 달러의 순이익을 올렸으며, 희석 기준 주당 순이익(EPS)은 0.25 달러로 작년의 3500만 달러와 0.20 달러의 EPS에서 개선되었습니다. 조정된 EBITDA는 1억 500만 달러에 달했으며(순매출의 25.6%), 지난해 9600만 달러(24.1%)에 비해 증가했습니다. 이 회사는 분기 배당금을 13% 증가시켜 주당 0.09 달러로 설정했으며, 5000만 달러에 160만 주를 재매입했습니다. 4분기에는 ZWS가 저단위의 핵심 매출 성장을 기대하고 있으며, 조정된 EBITDA는 8800만에서 9000만 달러 사이로 예상하고 있습니다.
Zurn Elkay Water Solutions (NYSE:ZWS) a annoncé des résultats solides pour le troisième trimestre 2024 avec des ventes nettes de 410 millions de dollars, en hausse par rapport à 398 millions de dollars l'année précédente, montrant une croissance de 3 % des ventes principales. L'entreprise a réalisé un bénéfice net de 44 millions de dollars avec un bénéfice par action dilué de 0,25 dollar, en hausse par rapport à 35 millions de dollars et 0,20 dollar de BPA l'année précédente. L'EBITDA ajusté a atteint 105 millions de dollars (25,6 % des ventes nettes), contre 96 millions de dollars (24,1 %) l'année dernière. La société a augmenté son dividende trimestriel de 13 % à 0,09 dollar par action et a racheté 1,6 million d'actions pour 50 millions de dollars. Pour le quatrième trimestre, ZWS prévoit une croissance des ventes principales à un chiffre bas avec un EBITDA ajusté entre 88 et 90 millions de dollars.
Zurn Elkay Water Solutions (NYSE:ZWS) berichtete starke Ergebnisse für das 3. Quartal 2024 mit einem Nettoumsatz von 410 Millionen US-Dollar, ein Anstieg von 398 Millionen US-Dollar im Vergleich zum Vorjahr, was ein Wachstum von 3% im Kerngeschäft zeigt. Das Unternehmen erzielte einen Nettogewinn von 44 Millionen US-Dollar mit einem verwässerten Gewinn pro Aktie von 0,25 US-Dollar, verbessert gegenüber 35 Millionen US-Dollar und 0,20 US-Dollar Gewinn pro Aktie im Vorjahr. Das bereinigte EBITDA erreichte 105 Millionen US-Dollar (25,6% des Nettoumsatzes), verglichen mit 96 Millionen US-Dollar (24,1%) im vergangenen Jahr. Das Unternehmen erhöhte seine vierteljährliche Dividende um 13% auf 0,09 US-Dollar pro Aktie und kaufte 1,6 Millionen Aktien für 50 Millionen US-Dollar zurück. Für das 4. Quartal erwartet ZWS ein niedriges einstelliges Wachstum im Kerngeschäft mit einem bereinigten EBITDA zwischen 88 und 90 Millionen US-Dollar.
- Net sales increased by 3% to $410 million
- Net income grew to $44 million from $35 million YoY
- Adjusted EBITDA margin expanded to 25.6% from 24.1%
- Generated $87 million in free cash flow for Q3
- Net debt leverage reduced to all-time low of 0.8x
- 13% increase in quarterly dividend
- Raised full-year adjusted EBITDA margin expansion guidance to 250-270 basis points
- 100 basis point impact from planned exit of residential sink products
- Challenging end markets noted in certain segments
Insights
Zurn Elkay delivered strong Q3 results with notable improvements across key metrics.
The company's capital allocation strategy demonstrates confidence, with a
The successful integration of Elkay and operational efficiency improvements are driving profitability, despite some challenging end markets. The raised full-year free cash flow guidance to
Investor call scheduled for Wednesday, October 30, 2024 at 8:30 a.m. Eastern Time
Third Quarter Highlights
-
Net sales in the quarter were
compared with$410 million in last year’s September quarter (+$398 million 3% core sales(1), inclusive of a 100 basis point impact from the planned exit of certain residential sink products). -
Net income from continuing operations was
(diluted EPS from continuing operations of$44 million ) compared with net income from continuing operations of$0.25 (diluted EPS from continuing operations of$35 million ) in the year-ago quarter.$0.20 -
Adjusted EPS(1) was
compared with$0.34 in the year-ago quarter.$0.29 -
Adjusted EBITDA(1) was
($105 million 25.6% of net sales) compared with ($96 million 24.1% of net sales) in last year's third quarter. - Net debt leverage(1) of 0.8x as of September 30, 2024.
-
Increased quarterly dividend per share
13% to per share.$0.09 -
Deployed
to repurchase 1.6 million shares of common stock in the quarter.$50 million
Todd A.
Fourth Quarter Outlook
“Based on demand trends as we exited the third quarter and the month of October, we believe core(1) net sales for the fourth quarter will be up low single digits and adjusted EBITDA(1) will be between
Third Quarter 2024 Overview
Net sales were
During the three months ended September 30, 2024, income from operations was
Adjusted EBITDA(1) was
(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. Further, management uses "pro forma core sales", defined as reported sales less the impact of mergers, acquisitions, divestitures, foreign currency translation, and product line exits, as a measure of our financial performance that is more relevant when evaluating us against peers.
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 Greenest Companies and one of America’s Most Responsible Companies by Newsweek, Zurn Elkay Water Solutions is headquartered in
Conference Call Details
Zurn Elkay Water Solutions will hold a conference call and webcast presentation on Wednesday, October 30, 2024, at 8:30 a.m. Eastern Time to discuss its third quarter 2024 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, 2023, 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
|
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net sales |
|
$ |
410.0 |
|
|
$ |
398.4 |
|
|
$ |
1,195.8 |
|
|
$ |
1,173.7 |
|
Cost of sales |
|
|
220.6 |
|
|
|
228.5 |
|
|
|
650.0 |
|
|
|
681.5 |
|
Gross profit |
|
|
189.4 |
|
|
|
169.9 |
|
|
|
545.8 |
|
|
|
492.2 |
|
Selling, general and administrative expenses |
|
|
101.7 |
|
|
|
92.9 |
|
|
|
296.5 |
|
|
|
277.7 |
|
Restructuring and other similar charges |
|
|
2.7 |
|
|
|
2.2 |
|
|
|
9.7 |
|
|
|
11.9 |
|
Amortization of intangible assets |
|
|
14.8 |
|
|
|
14.7 |
|
|
|
44.3 |
|
|
|
44.0 |
|
Income from operations |
|
|
70.2 |
|
|
|
60.1 |
|
|
|
195.3 |
|
|
|
158.6 |
|
Non-operating expense: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(8.3 |
) |
|
|
(9.9 |
) |
|
|
(25.6 |
) |
|
|
(29.8 |
) |
Other income (expense), net |
|
|
(1.5 |
) |
|
|
(2.5 |
) |
|
|
(4.5 |
) |
|
|
(3.3 |
) |
Income before income taxes |
|
|
60.4 |
|
|
|
47.7 |
|
|
|
165.2 |
|
|
|
125.5 |
|
Provision for income taxes |
|
|
(16.9 |
) |
|
|
(12.5 |
) |
|
|
(42.4 |
) |
|
|
(34.8 |
) |
Net income from continuing operations |
|
|
43.5 |
|
|
|
35.2 |
|
|
|
122.8 |
|
|
|
90.7 |
|
Income from discontinued operations, net of tax |
|
|
— |
|
|
|
6.2 |
|
|
|
1.0 |
|
|
|
8.1 |
|
Net income |
|
$ |
43.5 |
|
|
$ |
41.4 |
|
|
$ |
123.8 |
|
|
$ |
98.8 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share: |
|
|
|
|
|
|
|
|
||||||||
Continuing operations |
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.71 |
|
|
$ |
0.52 |
|
Discontinued operations |
|
$ |
— |
|
|
$ |
0.04 |
|
|
$ |
0.01 |
|
|
$ |
0.05 |
|
Net income |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.72 |
|
|
$ |
0.57 |
|
Diluted net income per share: |
|
|
|
|
|
|
|
|
||||||||
Continuing operations |
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.70 |
|
|
$ |
0.51 |
|
Discontinued operations |
|
$ |
— |
|
|
$ |
0.04 |
|
|
$ |
0.01 |
|
|
$ |
0.05 |
|
Net income |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.71 |
|
|
$ |
0.56 |
|
Weighted-average number of shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
170,551 |
|
|
|
173,276 |
|
|
|
172,057 |
|
|
|
174,632 |
|
Effect of dilutive equity awards |
|
|
2,480 |
|
|
|
2,866 |
|
|
|
2,915 |
|
|
|
2,803 |
|
Diluted |
|
|
173,031 |
|
|
|
176,142 |
|
|
|
174,972 |
|
|
|
177,435 |
|
Zurn Elkay Water Solutions Corporation and Subsidiaries
|
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|
Three Months Ended September 30, 2024 |
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|
Reported Results |
|
|
|
Adjustments |
|
|
|
Non-GAAP Results |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Sales |
|
$ |
410.0 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
410.0 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
|
|
92.1 |
|
|
|
|
|
12.9 |
|
(a) |
|
|
|
105.0 |
|
|
|
|||
Depreciation and amortization |
|
|
(21.9 |
) |
|
|
|
|
— |
|
|
|
|
|
(21.9 |
) |
|
|
|||
Income from operations |
|
|
70.2 |
|
|
|
|
|
12.9 |
|
(b) |
|
|
|
83.1 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
|
|
60.4 |
|
|
|
|
|
19.4 |
|
(c) |
|
|
|
79.8 |
|
|
|
|||
Provision for income taxes and indicated rate |
|
|
(16.9 |
) |
|
28.0 |
% |
|
|
(4.6 |
) |
|
23.7 |
% |
|
|
(21.5 |
) |
|
26.9 |
% |
Net income from continuing operations |
|
|
43.5 |
|
|
|
|
|
14.8 |
|
|
|
|
|
58.3 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of tax |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|||
Net income |
|
$ |
43.5 |
|
|
|
|
$ |
14.8 |
|
|
|
|
$ |
58.3 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
EBITDA Adjustments (a) |
|
|
|
Income from Operations Adjustments (b) |
|
|
|
Income before Income Taxes Adjustments (c) |
|
|
|||||||||
Restructuring and other similar charges |
|
$ |
2.7 |
|
|
|
|
$ |
2.7 |
|
|
|
|
$ |
2.7 |
|
|
|
|||
Last-in-first-out inventory adjustments |
|
|
0.4 |
|
|
|
|
|
0.4 |
|
|
|
|
|
0.4 |
|
|
|
|||
Stock-based compensation expense |
|
|
9.8 |
|
|
|
|
|
9.8 |
|
|
|
|
|
— |
|
|
|
|||
Amortization of intangible assets |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
14.8 |
|
|
|
|||
Other expense, net (1) |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
1.5 |
|
|
|
|||
Total Adjustments |
|
$ |
12.9 |
|
|
|
|
$ |
12.9 |
|
|
|
|
$ |
19.4 |
|
|
|
____________________ |
|
(1) |
Other expense, 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
|
|||||||||||||||||||||
|
|
Nine Months Ended September 30, 2024 |
|||||||||||||||||||
|
|
Reported Results |
|
|
|
Adjustments |
|
|
|
Non-GAAP Results |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Sales |
|
$ |
1,195.8 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
1,195.8 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
|
|
260.5 |
|
|
|
|
|
38.8 |
|
(a) |
|
|
|
299.3 |
|
|
|
|||
Depreciation and amortization |
|
|
(65.2 |
) |
|
|
|
|
— |
|
|
|
|
|
(65.2 |
) |
|
|
|||
Income from operations |
|
|
195.3 |
|
|
|
|
|
38.8 |
|
(b) |
|
|
|
234.1 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
|
|
165.2 |
|
|
|
|
|
58.4 |
|
(c) |
|
|
|
223.6 |
|
|
|
|||
Provision for income taxes and indicated rate |
|
|
(42.4 |
) |
|
25.7 |
% |
|
|
(13.9 |
) |
|
23.8 |
% |
|
|
(56.3 |
) |
|
25.2 |
% |
Net income from continuing operations |
|
|
122.8 |
|
|
|
|
|
44.5 |
|
|
|
|
|
167.3 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of tax |
|
|
1.0 |
|
|
|
|
|
(1.0 |
) |
|
|
|
|
— |
|
|
|
|||
Net income |
|
$ |
123.8 |
|
|
|
|
$ |
43.5 |
|
|
|
|
$ |
167.3 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
EBITDA Adjustments (a) |
|
|
|
Income from Operations Adjustments (b) |
|
|
|
Income before Income Taxes Adjustments (c) |
|
|
|||||||||
Restructuring and other similar charges |
|
$ |
9.7 |
|
|
|
|
$ |
9.7 |
|
|
|
|
$ |
9.7 |
|
|
|
|||
Other, net (1) |
|
|
0.4 |
|
|
|
|
|
0.4 |
|
|
|
|
|
0.4 |
|
|
|
|||
Last-in-first-out inventory adjustments |
|
|
(0.5 |
) |
|
|
|
|
(0.5 |
) |
|
|
|
|
(0.5 |
) |
|
|
|||
Stock-based compensation expense |
|
|
29.2 |
|
|
|
|
|
29.2 |
|
|
|
|
|
— |
|
|
|
|||
Amortization of intangible assets |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
44.3 |
|
|
|
|||
Other expense, net (2) |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
4.5 |
|
|
|
|||
Total Adjustments |
|
$ |
38.8 |
|
|
|
|
$ |
38.8 |
|
|
|
|
$ |
58.4 |
|
|
|
____________________ |
|
(1) |
Other, net includes the gains and losses from the disposition of long-lived assets. |
(2) |
Other expense, 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
|
|||||||||||||||||||||
|
|
Three Months Ended September 30, 2023 |
|||||||||||||||||||
|
|
Reported Results |
|
|
|
Adjustments |
|
|
|
Non-GAAP Results |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Sales |
|
$ |
398.4 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
398.4 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
|
|
81.8 |
|
|
|
|
|
14.2 |
|
(a) |
|
|
|
96.0 |
|
|
|
|||
Depreciation and amortization |
|
|
(21.7 |
) |
|
|
|
|
— |
|
|
|
|
|
(21.7 |
) |
|
|
|||
Income from operations |
|
|
60.1 |
|
|
|
|
|
14.2 |
|
(b) |
|
|
|
74.3 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
|
|
47.7 |
|
|
|
|
|
21.4 |
|
(c) |
|
|
|
69.1 |
|
|
|
|||
Provision for income taxes and indicated rate |
|
|
(12.5 |
) |
|
26.2 |
% |
|
|
(5.1 |
) |
|
23.8 |
% |
|
|
(17.6 |
) |
|
25.5 |
% |
Net income from continuing operations |
|
|
35.2 |
|
|
|
|
|
16.3 |
|
|
|
|
|
51.5 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of tax |
|
|
6.2 |
|
|
|
|
|
(6.2 |
) |
|
|
|
|
— |
|
|
|
|||
Net income |
|
$ |
41.4 |
|
|
|
|
$ |
10.1 |
|
|
|
|
$ |
51.5 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
EBITDA Adjustments (a) |
|
|
|
Income from Operations Adjustments (b) |
|
|
|
Income before Income Taxes Adjustments (c) |
|
|
|||||||||
Restructuring and other similar charges |
|
$ |
2.2 |
|
|
|
|
$ |
2.2 |
|
|
|
|
$ |
2.2 |
|
|
|
|||
Last-in-first-out inventory adjustments |
|
|
2.0 |
|
|
|
|
|
2.0 |
|
|
|
|
|
2.0 |
|
|
|
|||
Stock-based compensation expense |
|
|
10.0 |
|
|
|
|
|
10.0 |
|
|
|
|
|
— |
|
|
|
|||
Amortization of intangible assets |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
14.7 |
|
|
|
|||
Other expense, net (1) |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
2.5 |
|
|
|
|||
Total Adjustments |
|
$ |
14.2 |
|
|
|
|
$ |
14.2 |
|
|
|
|
$ |
21.4 |
|
|
|
____________________ |
|
(1) |
Other expense, 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
|
|||||||||||||||||||||
|
|
Nine Months Ended September 30, 2023 |
|||||||||||||||||||
|
|
Reported Results |
|
|
|
Adjustments |
|
|
|
Non-GAAP Results |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Sales |
|
$ |
1,173.7 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
1,173.7 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
|
|
224.9 |
|
|
|
|
|
30.5 |
|
(a) |
|
|
|
255.4 |
|
|
|
|||
Depreciation and amortization |
|
|
(66.3 |
) |
|
|
|
|
— |
|
|
|
|
|
(66.3 |
) |
|
|
|||
Income from operations |
|
|
158.6 |
|
|
|
|
|
30.5 |
|
(b) |
|
|
|
189.1 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
|
|
125.5 |
|
|
|
|
|
47.3 |
|
(c) |
|
|
|
172.8 |
|
|
|
|||
Provision for income taxes and indicated rate |
|
|
(34.8 |
) |
|
27.7 |
% |
|
|
(11.3 |
) |
|
23.9 |
% |
|
|
(46.1 |
) |
|
26.7 |
% |
Net income from continuing operations |
|
|
90.7 |
|
|
|
|
|
36.0 |
|
|
|
|
|
126.7 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of tax |
|
|
8.1 |
|
|
|
|
|
(8.1 |
) |
|
|
|
|
— |
|
|
|
|||
Net income |
|
$ |
98.8 |
|
|
|
|
$ |
27.9 |
|
|
|
|
$ |
126.7 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
EBITDA Adjustments (a) |
|
|
|
Income from Operations Adjustments (b) |
|
|
|
Income before Income Taxes Adjustments (c) |
|
|
|||||||||
Restructuring and other similar charges |
|
$ |
11.9 |
|
|
|
|
$ |
11.9 |
|
|
|
|
$ |
11.9 |
|
|
|
|||
Last-in-first-out inventory adjustments |
|
|
(11.9 |
) |
|
|
|
|
(11.9 |
) |
|
|
|
|
(11.9 |
) |
|
|
|||
Stock-based compensation expense |
|
|
30.5 |
|
|
|
|
|
30.5 |
|
|
|
|
|
— |
|
|
|
|||
Amortization of intangible assets |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
44.0 |
|
|
|
|||
Other expense, net (1) |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
3.3 |
|
|
|
|||
Total Adjustments |
|
$ |
30.5 |
|
|
|
|
$ |
30.5 |
|
|
|
|
$ |
47.3 |
|
|
|
____________________ |
|
(1) |
Other expense, 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
|
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Adjusted EBITDA |
|
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net income |
|
$ |
43.5 |
|
$ |
41.4 |
|
|
$ |
123.8 |
|
|
$ |
98.8 |
|
|
Income from discontinued operations, net of tax |
|
|
— |
|
|
(6.2 |
) |
|
|
(1.0 |
) |
|
|
(8.1 |
) |
|
Provision for income taxes |
|
|
16.9 |
|
|
12.5 |
|
|
|
42.4 |
|
|
|
34.8 |
|
|
Other expense, net (1) |
|
|
1.5 |
|
|
2.5 |
|
|
|
4.5 |
|
|
|
3.3 |
|
|
Interest expense |
|
|
8.3 |
|
|
9.9 |
|
|
|
25.6 |
|
|
|
29.8 |
|
|
Income from operations |
|
$ |
70.2 |
|
$ |
60.1 |
|
|
$ |
195.3 |
|
|
$ |
158.6 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
$ |
21.9 |
|
$ |
21.7 |
|
|
$ |
65.2 |
|
|
$ |
66.3 |
|
|
Restructuring and other similar charges |
|
|
2.7 |
|
|
2.2 |
|
|
|
9.7 |
|
|
|
11.9 |
|
|
Stock-based compensation expense |
|
|
9.8 |
|
|
10.0 |
|
|
|
29.2 |
|
|
|
30.5 |
|
|
Last-in first-out inventory adjustment |
|
|
0.4 |
|
|
2.0 |
|
|
|
(0.5 |
) |
|
|
(11.9 |
) |
|
Other, net (2) |
|
|
— |
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
Subtotal of adjustments |
|
|
34.8 |
|
|
35.9 |
|
|
|
104.0 |
|
|
|
96.8 |
|
|
Adjusted EBITDA |
|
$ |
105.0 |
|
$ |
96.0 |
|
|
$ |
299.3 |
|
|
$ |
255.4 |
|
____________________ |
|
(1) |
Other expense, 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 Share |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net income |
$ |
43.5 |
|
|
$ |
41.4 |
|
|
$ |
123.8 |
|
|
$ |
98.8 |
|
Income from discontinued operations, net of tax |
|
— |
|
|
|
(6.2 |
) |
|
|
(1.0 |
) |
|
|
(8.1 |
) |
Amortization of intangible assets |
|
14.8 |
|
|
|
14.7 |
|
|
|
44.3 |
|
|
|
44.0 |
|
Restructuring and other similar charges |
|
2.7 |
|
|
|
2.2 |
|
|
|
9.7 |
|
|
|
11.9 |
|
Last-in first-out inventory adjustment |
|
0.4 |
|
|
|
2.0 |
|
|
|
(0.5 |
) |
|
|
(11.9 |
) |
Other expense, net (1) |
|
1.5 |
|
|
|
2.5 |
|
|
|
4.5 |
|
|
|
3.3 |
|
Other, net (2) |
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
Tax effect on above items |
|
(4.6 |
) |
|
|
(5.1 |
) |
|
|
(13.9 |
) |
|
|
(11.3 |
) |
Adjusted net income |
$ |
58.3 |
|
|
$ |
51.5 |
|
|
$ |
167.3 |
|
|
$ |
126.7 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per share from continuing operations |
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.70 |
|
|
$ |
0.51 |
|
Adjusted earnings per share - diluted |
$ |
0.34 |
|
|
$ |
0.29 |
|
|
$ |
0.96 |
|
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding (in thousands): |
|
|
|
|
|
|
|
||||||||
GAAP basic weighted-average shares |
|
170,551 |
|
|
|
173,276 |
|
|
|
172,057 |
|
|
|
174,632 |
|
Effect of dilutive equity awards |
|
2,480 |
|
|
|
2,866 |
|
|
|
2,915 |
|
|
|
2,803 |
|
Adjusted diluted weighted-average shares |
|
173,031 |
|
|
|
176,142 |
|
|
|
174,972 |
|
|
|
177,435 |
|
____________________ |
|
(1) |
Other expense, 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, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Cash provided by operating activities |
|
$ |
90.9 |
|
|
$ |
103.5 |
|
|
$ |
229.9 |
|
|
$ |
195.7 |
|
Expenditures for property, plant and equipment |
|
|
(4.1 |
) |
|
|
(4.8 |
) |
|
|
(12.7 |
) |
|
|
(15.9 |
) |
Free cash flow |
|
$ |
86.8 |
|
|
$ |
98.7 |
|
|
$ |
217.2 |
|
|
$ |
179.8 |
|
Zurn Elkay Water Solutions Corporation and Subsidiaries
|
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net income |
|
$ |
43.5 |
|
$ |
41.4 |
|
|
$ |
123.8 |
|
|
$ |
98.8 |
||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments |
|
|
0.6 |
|
|
(2.1 |
) |
|
|
(3.4 |
) |
|
|
1.4 |
||
Other comprehensive income (loss), net of tax |
|
|
0.6 |
|
|
(2.1 |
) |
|
|
(3.4 |
) |
|
|
1.4 |
||
Total comprehensive income |
|
$ |
44.1 |
|
$ |
39.3 |
|
|
$ |
120.4 |
|
|
$ |
100.2 |
Zurn Elkay Water Solutions Corporation and Subsidiaries
|
||||||||
|
|
(Unaudited) |
|
|
||||
|
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
187.9 |
|
|
$ |
136.7 |
|
Receivables, net |
|
|
242.4 |
|
|
|
210.2 |
|
Inventories, net |
|
|
278.6 |
|
|
|
277.6 |
|
Income taxes receivable |
|
|
5.0 |
|
|
|
17.0 |
|
Other current assets |
|
|
41.2 |
|
|
|
26.3 |
|
Total current assets |
|
|
755.1 |
|
|
|
667.8 |
|
Property, plant and equipment, net |
|
|
165.4 |
|
|
|
180.3 |
|
Intangible assets, net |
|
|
908.4 |
|
|
|
952.4 |
|
Goodwill |
|
|
796.5 |
|
|
|
796.0 |
|
Other assets |
|
|
79.4 |
|
|
|
70.5 |
|
Total assets |
|
$ |
2,704.8 |
|
|
$ |
2,667.0 |
|
Liabilities and stockholders' equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Current maturities of debt |
|
$ |
0.9 |
|
|
$ |
0.9 |
|
Trade payables |
|
|
94.7 |
|
|
|
56.4 |
|
Compensation and benefits |
|
|
33.1 |
|
|
|
30.5 |
|
Current portion of pension and postretirement benefit obligations |
|
|
1.3 |
|
|
|
1.3 |
|
Other current liabilities |
|
|
149.2 |
|
|
|
131.8 |
|
Total current liabilities |
|
|
279.2 |
|
|
|
220.9 |
|
|
|
|
|
|
||||
Long-term debt |
|
|
494.7 |
|
|
|
494.4 |
|
Pension and postretirement benefit obligations |
|
|
38.8 |
|
|
|
36.6 |
|
Deferred income taxes |
|
|
193.4 |
|
|
|
210.0 |
|
Operating lease liability |
|
|
46.2 |
|
|
|
37.3 |
|
Other liabilities |
|
|
66.0 |
|
|
|
65.0 |
|
Total liabilities |
|
|
1,118.3 |
|
|
|
1,064.2 |
|
|
|
|
|
|
||||
Stockholders' equity: |
|
|
|
|
||||
Common stock, |
|
|
1.7 |
|
|
|
1.7 |
|
Additional paid-in capital |
|
|
2,840.9 |
|
|
|
2,847.0 |
|
Retained deficit |
|
|
(1,185.0 |
) |
|
|
(1,178.2 |
) |
Accumulated other comprehensive loss |
|
|
(71.1 |
) |
|
|
(67.7 |
) |
Total stockholders' equity |
|
|
1,586.5 |
|
|
|
1,602.8 |
|
Total liabilities and stockholders' equity |
|
$ |
2,704.8 |
|
|
$ |
2,667.0 |
|
Zurn Elkay Water Solutions Corporation and Subsidiaries
|
||||||||
|
|
Nine Months Ended |
||||||
|
|
September 30, 2024 |
|
September 30, 2023 |
||||
Operating activities |
|
|
|
|
||||
Net income |
|
$ |
123.8 |
|
|
$ |
98.8 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
20.9 |
|
|
|
22.3 |
|
Amortization of intangible assets |
|
|
44.3 |
|
|
|
44.0 |
|
Non-cash restructuring charges |
|
|
6.8 |
|
|
|
2.5 |
|
Loss on dispositions of long-lived assets |
|
|
0.4 |
|
|
|
— |
|
Deferred income taxes |
|
|
(16.6 |
) |
|
|
(7.1 |
) |
Other non-cash expenses |
|
|
2.1 |
|
|
|
1.8 |
|
Stock-based compensation expense |
|
|
29.2 |
|
|
|
30.5 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Receivables, net |
|
|
(32.7 |
) |
|
|
(14.0 |
) |
Inventories, net |
|
|
(2.1 |
) |
|
|
57.7 |
|
Other assets |
|
|
2.0 |
|
|
|
17.1 |
|
Accounts payable |
|
|
38.6 |
|
|
|
(56.4 |
) |
Accruals and other |
|
|
13.2 |
|
|
|
(1.5 |
) |
Cash provided by operating activities |
|
|
229.9 |
|
|
|
195.7 |
|
|
|
|
|
|
||||
Investing activities |
|
|
|
|
||||
Expenditures for property, plant and equipment |
|
|
(12.7 |
) |
|
|
(15.9 |
) |
Proceeds from dispositions of long-lived assets |
|
|
1.6 |
|
|
|
0.3 |
|
Proceeds from insurance claims |
|
|
— |
|
|
|
9.0 |
|
Cash used for investing activities |
|
|
(11.1 |
) |
|
|
(6.6 |
) |
|
|
|
|
|
||||
Financing activities |
|
|
|
|
||||
Proceeds from borrowings of debt |
|
|
— |
|
|
|
13.0 |
|
Repayments of debt |
|
|
(0.6 |
) |
|
|
(17.7 |
) |
Proceeds from exercise of stock options and ESPP contributions |
|
|
6.1 |
|
|
|
1.9 |
|
Taxes withheld and paid on employees' share-based payment awards |
|
|
(0.1 |
) |
|
|
(1.9 |
) |
Repurchase of common stock |
|
|
(129.9 |
) |
|
|
(100.2 |
) |
Payment of common stock dividends |
|
|
(41.3 |
) |
|
|
(36.6 |
) |
Cash used for financing activities |
|
|
(165.8 |
) |
|
|
(141.5 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(1.8 |
) |
|
|
0.7 |
|
Increase in cash, cash equivalents and restricted cash |
|
|
51.2 |
|
|
|
48.3 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
136.7 |
|
|
|
124.8 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
187.9 |
|
|
$ |
173.1 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029235299/en/
Dave Pauli
Chief Financial Officer
414.223.7770
Source: Zurn Elkay Water Solutions Corporation
FAQ
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