Zurn Elkay Q3 2022 Earnings Report
Key Takeaways
Zurn Elkay Water Solutions reported an 82% increase in net sales to $418 million, driven by the acquisition of Elkay Manufacturing Company. Adjusted EPS increased to $0.26, while the company experienced a net loss from continuing operations of $(19) million, impacted by transaction and restructuring costs.
Completed the combination with Elkay Manufacturing Company on July 1, 2022.
Net sales increased 82% to $418 million compared to the previous year.
Net loss from continuing operations was $(19) million, or $(0.11) per share.
Adjusted EPS was $0.26, compared to $0.19 in the year-ago quarter.
Zurn Elkay
Zurn Elkay
Forward Guidance
For the fourth quarter, the company expects sales to be in a range of $350 million to $365 million and consolidated EBITDA margins to range between 20.0% and 21.0%.
Positive Outlook
- Unique set of competitive advantages.
- 98% plus exposed to the North American market.
- Highly levered to the institutional markets.
- Variable business model will quickly benefit from an improving supply chain.
- Benefiting from a strong US dollar.
Challenges Ahead
- Customer sentiment and market behavior will be more volatile.
- Deteriorating macro-environment.
- Reducing sales expectations for the residential portion of our business.
- Executing on an incremental $10 million of Elkay residential commodity, private label, and OEM product line exits.
- Fewer shipping days and traditional seasonality in the fourth quarter.