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Sep 30, 2023
Zurn Elkay Q3 2023 Earnings Report
Reported strong Q3 2023 results, demonstrating successful integration and strategic growth investments.
Key Takeaways
Zurn Elkay Water Solutions reported a decrease in net sales by 5% to $398 million. However, the company's adjusted EBITDA margin improved significantly, reaching 24.1%, and adjusted EPS increased to $0.29. The company also raised its free cash flow outlook to approximately $230 million for the year.
Net sales decreased 5% to $398 million.
Net income from continuing operations was $35 million, with diluted EPS of $0.20.
Adjusted EPS was $0.29, compared to $0.26 in the prior year.
Adjusted EBITDA was $96 million, representing 24.1% of net sales.
Forward Guidance
The company expects fourth-quarter sales to be around $351 million, implying approximately 6% proforma core organic growth. The adjusted EBITDA margin is expected to be between 23.0% and 23.5%. The full-year outlook is $1.525 billion in sales and an adjusted EBITDA of $336 million to $338 million. The outlook for free cash flow is raised to $230 million.
Positive Outlook
- Fourth quarter sales expected to be around $351 million.
- Implies ~6% proforma core organic growth over the prior year fourth quarter
- Adjusted EBITDA margin between 23.0% and 23.5% for the fourth quarter.
- Full year outlook to $1.525 billion
- Free cash flow outlook increased to $230 million.
Challenges Ahead
- Based on demand trends as we exited the third quarter and the month of October
- Market has more uncertainty in it than any point over the past year.
- Not to say we won’t be impacted by the market
Historical Earnings Impact
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Avg. Return Before/After Earnings
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