Zurn Elkay Water reports Q1 adjusted EPS 29c, consensus 26c

Reports Q1 revenue $374M, consensus $368.99M. Todd A. Adams, Chairman and Chief Executive Officer, commented, “We had a solid start to the year as our first quarter growth, profitability, and free cash flow each exceeded our expectations heading into the quarter. Our first quarter pro forma core growth of 4% tracked modestly ahead of what we thought, with the benefits of some of our strategic growth initiatives positively impacting our growth with underlying market conditions performing very much in line with our expectations. From a profitability perspective, our adjusted EBITDA grew 24% year over year and our margin of 24.1% improved by 460 basis points over the prior year. These first quarter margins are reflective of the new, higher baseline we expect to deliver from moving forward as a result of the synergies realized from the Elkay combination and the compounding benefits we capture through the deployment of the Zurn Elkay Business System day in and day out. With a strong start to the year of $50 million in free cash flow, we repurchased $19 million of shares in the quarter while leaving ourselves significant balance sheet optionality as our net debt leverage ended at an all-time low of 0.9x. In February we published our 2023 Sustainability Report. Sustainability is inherently linked to our business and at the core of it is our role as a water steward and helping our customers advance and achieve their sustainability goals. The 2023 report highlights our progress against nearly two dozen existing targets and establishes new targets for air emissions, employee training, and waste reduction. We are committed and excited to build on the momentum we have around sustainability as a company.”