Zurn Elkay Core Sales Growth Slows After June Quarter

The Tip Desk · November 8, 2026 · 2 min read

Net sales were $495.1 million in the September quarter, with adjusted EBITDA at $140.1 million, or 28.3% of sales.

Zurn Elkay Water Solutions Corporation (ZWS) reported third-quarter net sales of $495.1 million, up 9% from $455.4 million a year earlier, as core sales growth slowed to 7% after 10% in the June quarter.

The Milwaukee-based water management company said the 7% core increase covered nearly all product categories, with an additional 2% from the Intellihot acquisition that closed during the quarter. Adjusted EBITDA was $140.1 million, or 28.3% of net sales, compared with $122.2 million, or 26.8%, in the year-ago third quarter.

Income from operations was $108.2 million, versus $77.5 million a year earlier. The company said the operating margin rose 490 basis points on product mix, Zurn Elkay Business System productivity initiatives and supply-chain repositioning. Net income from continuing operations was $76.1 million, or $0.45 a share, compared with $59.6 million, or $0.35 a share, a year earlier. Adjusted earnings were $0.52 a share versus $0.43.

Free cash flow was $109.6 million, excluding International Emergency Economic Powers Act reciprocal tariff refunds received, net of related taxes paid. Net debt leverage was 0.4 times as of September 30, 2026. The company deployed $35 million to repurchase 0.7 million shares in the quarter and increased its annual dividend 18% to $0.52 a share.

Chairman and Chief Executive Officer Todd A. Adams said the company used that cash generation to fund the share repurchases and the Intellihot close. Intellihot, a tankless water-heater maker, had been announced on July 20, 2026, with 2026 net sales expected at about $37 million. Adams said the company entered the digital master mixing valve market with internally developed products and that in 2026 it expanded served markets by roughly $400 million.

For the fourth quarter, Zurn Elkay expects net sales of $430 million to $437 million and adjusted EBITDA of $120 million to $123 million. Full-year free cash flow is expected to be greater than $350 million, excluding the net impact of tariff-related refunds received. In the second-quarter release, the company had said it expected mid-single-digit core growth in the fourth quarter and full-year 2026 adjusted EBITDA of $503 million to $513 million, excluding tariff refunds.