Zurn Elkay Water Solutions reported first‑quarter 2026 results that exceeded consensus expectations, with net sales of $433 million—an 11% increase from the same period a year earlier. Net income was $58.9 million, diluted earnings per share were $0.35, and adjusted earnings per share rose to $0.41, beating the consensus estimate of $0.36–$0.3674 by $0.04 to $0.05 per share.
Adjusted EBITDA for the quarter was $116 million, giving the company a margin of 26.8%, a 160‑basis‑point expansion over the prior year. The margin growth was driven by pricing power, disciplined cost controls, and a favorable product mix that included higher‑margin drinking‑water and filtration solutions. The company’s Zurn Elkay Business System has helped accelerate productivity initiatives and sustain the mix shift.
Segment performance highlighted strong growth in the Drinking Water and Pro Filtration lines, while the company exited low‑margin residential sink products. The retrofit‑to‑new‑construction ratio moved toward a 50/50 split, positioning the firm for higher‑margin new‑construction work and a more balanced portfolio.
Capital‑allocation moves included an increase of the revolving credit facility to $550 million from $200 million, a share‑repurchase of 1.0 million shares for $50 million, and a net debt leverage ratio of 0.5x as of March 31, 2026. The company also generated $43 million of free cash flow during the quarter.
Guidance for the second quarter remains strong, with core sales expected to grow 8%–9% and adjusted EBITDA margins projected at 27.0%–27.5%. Management indicated potential upside to the full‑year outlook and reaffirmed confidence in sustaining profitability through disciplined execution.
"The strength and resilience of our business is something we've cultivated and added to over a long period of time, by being laser focused on building unique, sustainable competitive advantages across our business," said Todd A. Adams, Chairman and CEO. "First quarter core sales grew 11% and adjusted EBITDA grew 18% year over year as adjusted EBITDA margins expanded 160 basis points to 26.8%." David Pauli, CFO, added, "For the second quarter of 2026, we are projecting core sales growth to increase 8% to 9% over the prior year, and we anticipate our adjusted EBITDA margin to be in the range of 27% to 27.5%, which is 50 to 100 basis point expansion year‑over‑year."
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