# Zurn Elkay Water Solutions (ZWS) Q2 2025 Financial Results Summary
Zurn Elkay Water Solutions Corporation released its second-quarter 2025 financial results on July 29, 2025. Here is a summary of their performance:
### Key Highlights
– **Net Sales**: $445 million, an increase of **8%** compared to $412 million in Q2 2024.
– Core sales also grew by **8%** year-over-year, with growth across all product categories.
– **Net Income**: $50 million with a diluted EPS of $0.29, an increase from $45 million and $0.26 in the same quarter last year.
– Adjusted EPS rose **27%** to $0.42 from $0.33 in the prior year.
– **Adjusted EBITDA**: $118 million, representing **13%** growth, with an adjusted EBITDA margin of **26.5%** of net sales, up from **25.3%** a year earlier.
– **Income from Operations**: $77.6 million, up from $71.9 million year-over-year.
– **Net Debt Leverage**: 0.7x as of June 30, 2025, indicating a strong position in financial obligations.
### Share Repurchase and Dividends
– The company deployed **$33 million** to repurchase **1.0 million** shares of common stock during the quarter.
– Zurn Elkay paid **$30.3 million** in common stock dividends in the second quarter, compared to **$27.7 million** in the same quarter of the previous year, representing an increase.
### Financial Performance
– **Free Cash Flow**: Exceeded **$100 million** for the first time, standing at **$101.6 million** for the quarter, compared to **$80.2 million** in Q2 2024.
– **Cash Provided by Operating Activities**: Increased to **$110.6 million**, up from **$85.1 million** the previous year.
– **Expenditures for Property, Plant, and Equipment (CapEx)**: All expenditures this quarter amounted to **$9 million**, compared to **$4.9 million** in the prior year’s quarter.
### Third Quarter and Full Year Outlook
– The company expects to maintain similar growth rates for both core sales and adjusted EBITDA margins in the upcoming third quarter relative to the results seen in Q2 2025.
– Adjusted EBITDA is projected to be between **$420 million and $430 million**, up from a previous forecast of **$405 million to $420 million**.
– For the full year 2025, core sales growth is anticipated to reach at least **5%** year-over-year.
### Comprehensive Income and Operational Metrics
– **Comprehensive Income**: Total comprehensive income for the quarter was **$55.4 million**, an increase from **$44.5 million** in Q2 2024.
– **Gross Profit**: Increased to **$202.3 million** from **$186.3 million** in the previous year.
– **Selling, General & Administrative Expenses (SG&A)**: Increased to **$108.2 million**, up from **$98.9 million** a year ago.
### Conclusion
Zurn Elkay Water Solutions continues to show robust growth in several key financial metrics during the second quarter of 2025, with significant year-over-year improvements in net sales, EPS, and adjusted EBITDA. The company’s effective financial management is underlined by its share repurchase activities and strategic dividend payments. Additionally, the positive outlook for H2 2025 emphasizes the anticipated continued growth trajectory for the company.
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
|---|---|---|---|---|
| Net sales | $444.5 | $412.0 | $833.3 | $785.8 |
| Cost of sales | $242.2 | $225.7 | $450.0 | $429.4 |
| Gross profit | $202.3 | $186.3 | $383.3 | $356.4 |
| Selling, general and administrative expenses | $108.2 | $98.9 | $209.4 | $194.8 |
| Restructuring and other similar charges | $1.9 | $0.7 | $3.6 | $7.0 |
| Amortization of intangible assets | $14.6 | $14.8 | $29.3 | $29.5 |
| Income from operations | $77.6 | $71.9 | $141.0 | $125.1 |
| Non-operating expense: Interest expense, net | $-7.7 | $-8.5 | $-15.0 | $-17.3 |
| Other expense, net | $-2.0 | $-1.6 | $-2.0 | $-3.0 |
| Income before income taxes | $67.9 | $61.8 | $124.0 | $104.8 |
| Provision for income taxes | $-17.8 | $-16.5 | $-32.9 | $-25.5 |
| Net income from continuing operations | $50.1 | $45.3 | $91.1 | $79.3 |
| Income from discontinued operations, net of tax | $0.4 | $0.7 | $3.0 | $1.0 |
| Net income | $50.5 | $46.0 | $94.1 | $80.3 |
| Basic net income per share: Continuing operations | $0.30 | $0.26 | $0.54 | $0.46 |
| Discontinued operations | $— | $0.01 | $0.02 | $0.01 |
| Net income | $0.30 | $0.27 | $0.56 | $0.47 |
| Diluted net income per share: Continuing operations | $0.29 | $0.26 | $0.53 | $0.45 |
| Discontinued operations | $— | $0.01 | $0.02 | $0.01 |
| Net income | $0.29 | $0.27 | $0.55 | $0.46 |
| Weighted-average number of shares outstanding (in thousands): Basic | 168,483 | 172,627 | 169,409 | 172,818 |
| Effect of dilutive equity awards | 1,600 | 2,376 | 1,901 | 2,738 |
| Diluted | 170,083 | 175,003 | 171,310 | 175,556 |
| June 30, 2025 | December 31, 2024 | |
|---|---|---|
| Assets | ||
| Current assets: Cash and cash equivalents | $201.9 | $198.0 |
| Receivables, net | $240.1 | $202.2 |
| Inventories, net | $275.8 | $272.6 |
| Income taxes receivable | $2.5 | $19.6 |
| Other current assets | $33.7 | $29.7 |
| Total current assets | $754.0 | $722.1 |
| Property, plant and equipment, net | $162.2 | $164.0 |
| Intangible assets, net | $863.9 | $891.6 |
| Goodwill | $795.6 | $794.2 |
| Other assets | $78.6 | $76.6 |
| Total assets | $2,654.3 | $2,648.5 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: Current maturities of debt | $0.8 | $0.8 |
| Trade payables | $88.9 | $71.7 |
| Compensation and benefits | $34.0 | $37.9 |
| Current portion of pension and postretirement benefit obligations | $1.2 | $1.2 |
| Other current liabilities | $153.4 | $136.2 |
| Total current liabilities | $278.3 | $247.8 |
| Long-term debt | $495.1 | $494.8 |
| Pension and postretirement benefit obligations | $14.0 | $14.1 |
| Deferred income taxes | $186.0 | $196.5 |
| Operating lease liability | $46.3 | $43.3 |
| Other liabilities | $70.2 | $65.2 |
| Total liabilities | $1,089.9 | $1,061.7 |
| Stockholders’ equity: Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 1.7 | $1.7 | $1.7 |
| 167,661,315 at June 30, 2025 and 170,308,023 at December 31, 2024 | ||
| Additional paid-in capital | $2,817.9 | $2,828.2 |
| Retained deficit | $-1,185.5 | $-1,168.7 |
| Accumulated other comprehensive loss | $-69.7 | $-74.4 |
| Total stockholders’ equity | $1,564.4 | $1,586.8 |
| Total liabilities and stockholders’ equity | $2,654.3 | $2,648.5 |
