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Dec 31, 2025
Zurn Elkay Q4 2025 Earnings Report
Zurn Elkay Water Solutions reported strong fourth quarter and full year 2025 financial results, with significant increases in net sales, net income, and adjusted EBITDA, alongside strategic capital deployment.
Key Takeaways
Zurn Elkay Water Solutions concluded 2025 with record annual sales, adjusted EBITDA, and free cash flow, driven by 8% year-over-year core sales growth and expanding adjusted EBITDA margins. The company also repurchased $160 million of common stock and increased its quarterly dividend by 22%.
Net sales for the fourth quarter increased by 10% to $407 million, compared to $371 million in the prior year's December quarter.
Net income from continuing operations for the fourth quarter was $42 million, with diluted EPS of $0.24, up from $36 million and $0.21 respectively in the year-ago quarter.
Adjusted EBITDA for the fourth quarter reached $104 million, representing 25.6% of net sales, an increase from $91 million (24.6% of net sales) in the prior year.
The company deployed $25 million to repurchase 0.5 million shares of common stock during the quarter, and achieved a net debt leverage of 0.4x as of December 31, 2025.
Forward Guidance
For the full year 2026, Zurn Elkay Water Solutions anticipates mid-single digit core sales growth, approximately 35% incremental adjusted EBITDA margins, and around $335 million in free cash flow. For the first quarter of 2026, the company expects 7% to 8% positive core sales growth and approximately 35% incremental adjusted EBITDA margins, equating to 25.5% to 26.0% adjusted EBITDA margins.
Positive Outlook
- Full year 2026 mid-single digit core sales growth expected.
- Full year 2026 incremental adjusted EBITDA margins of approximately 35% anticipated.
- Full year 2026 free cash flow projected to be approximately $335 million.
- First quarter 2026 positive core sales growth of 7% to 8% expected.
- First quarter 2026 incremental adjusted EBITDA margins of approximately 35% expected, leading to 25.5% to 26.0% adjusted EBITDA margins.
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