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Jun 30, 2023

Zurn Elkay Q2 2023 Earnings Report

Zurn Elkay Water Solutions' second quarter results exceeded expectations with increased sales and progress on strategic initiatives.

Key Takeaways

Zurn Elkay Water Solutions reported a 42% increase in net sales to $403 million for the second quarter of 2023. The company's adjusted EPS was $0.24, and adjusted EBITDA was $87 million, representing 21.6% of net sales. Demand trends remained constructive, with pro forma orders increasing high single digits year over year.

Net sales increased 42% to $403 million compared to the previous year's June quarter.

Net income from continuing operations was $33 million, with diluted EPS from continuing operations at $0.19.

Adjusted EPS was $0.24, compared to $0.32 in the year-ago quarter.

Adjusted EBITDA was $87 million, representing 21.6% of net sales, compared to $64 million in the previous year's second quarter.

Total Revenue
$403M
Previous year: $284M
+41.9%
EPS
$0.24
Previous year: $0.32
-25.0%
Adjusted EBITDA Margin
21.6%
Previous year: 22.6%
-4.4%
Gross Profit
$174M
Previous year: $114M
+52.5%
Cash and Equivalents
$103M
Previous year: $110M
-6.7%
Free Cash Flow
$81.3M
Previous year: $40.7M
+99.8%
Total Assets
$2.8B
Previous year: $1.18B
+138.2%

Zurn Elkay

Zurn Elkay

Forward Guidance

The company has increased the low end of its previously provided sales and Adjusted EBITDA outlook and is raising its free cash flow forecast for the year.

Positive Outlook

  • Sales to be in the range of $1,525 million and $1,550 million.
  • Adjusted EBITDA to be in the range of $335 million to $345 million.
  • Free cash flow to total approximately $215 million.
  • Sales for the third quarter are expected to be in a range of $390 million to $400 million.
  • Consolidated Adjusted EBITDA margin for the third quarter is expected to range between 23.5% and 24.0%.