ZWS earnings analysis
What we found in ZWS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Zurn Elkay delivered a strong Q2, with revenue up 10.5% year over year to $491.0 million, operating margin reaching 31.0%, and GAAP diluted EPS rising to $0.67 from $0.29. Reported profitability was materially assisted by a $47.6 million tariff refund, but excluding that item operating income still increased $27.1 million and margin expanded 380 basis points on sales growth, price realization and productivity. Liquidity is ample at $365.0 million of cash and $540.3 million of revolver capacity, though the subsequent $108.5 million Intellihot acquisition and uncertainty around further tariff recoveries are key considerations.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 10.5% year over year
- Q2 net sales rose $46.5 million, or 10.5%, year over year to $491.0 million; management said core sales also improved 10%, with growth across all product categories.
- Underlying operating margin expanded
- Operating income increased 96.3% to $152.3 million and operating margin expanded to 31.0% from 17.5%. Excluding the $47.6 million IEEPA tariff refund, operating income still rose $27.1 million and margin expanded 380 basis points.
- EPS more than doubled year over year
- GAAP diluted EPS increased to $0.67 from $0.29 and net income rose to $113.3 million from $50.5 million. The result includes the $47.6 million tariff refund and $4.4 million purchase-price adjustment gain.
- Cash generation and capex efficiency improved
- Six-month operating cash flow increased to $208.4 million from $153.5 million, while capital expenditures declined to $6.3 million from $13.3 million. This produced six-month cash flow after capex of approximately $202.1 million.
- Cash and revolver capacity increased
- Liquidity strengthened: cash and equivalents were $365.0 million at June 30, 2026, up from $300.5 million at December 31, 2025, and revolver availability was $540.3 million after $9.7 million of letters of credit.
- Intellihot acquisition expands portfolio
- The company acquired Intellihot for a preliminary cash purchase price of approximately $108.5 million on July 21, 2026, adding tankless-water-heater exposure in healthcare, education, hospitality and commercial end markets.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariff-refund benefit may not recur
- The $47.6 million IEEPA reciprocal-tariff refund materially benefited Q2 operating income; management has not recorded any additional potential recovery because the process, timing and ultimate amount remain uncertain.
- Debt and acquisition cash deployment
- Total indebtedness was $499.1 million at June 30, 2026, including a $477.1 million term loan. Although net leverage was low at 0.36x, the July 21 acquisition required approximately $108.5 million of cash.
- Further restructuring costs expected
- Restructuring charges were $1.8 million in Q2, and management expects further expenses for workforce reductions, asset impairment or accelerated depreciation, lease terminations and facility rationalization.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.67
- Operating margin
- 31.0%
What they said about what is next.
The 10-Q does not provide quantitative revenue or EPS guidance. Management states that it believes $365.0 million of cash, operating cash flow and up to $550.0 million of revolving-credit-facility capacity are adequate for expected short- and long-term needs.
The filing reads better than the one before it.
What came before.
- 10-Q · April 21, 2026
- Zurn Elkay reported quarterly net sales of $433.0M (Q1 2026) with gross profit of $205.8M and operating income of $82.1M, driving GAAP diluted EPS from continuing operations of $0.35. Revenue and margins improved…
- 10-K · February 9, 2026
- Zurn Elkay presents itself as a pure‑play, specification‑driven water management platform focused on institutional and commercial construction with a ZEBS operating system and a stated M&A growth strategy. The filing…
- 10-Q · October 28, 2025
- Zurn Elkay reported third-quarter net sales of $455.4 million, up $45.4 million (11.1%) versus $410.0 million in Q3 2024, with net income of $61.8 million (diluted net income per share $0.36) versus $43.5 million…
- 10-Q · April 22, 2025
- Zurn Elkay reported Q1 net sales of $388.8M (up $15.0M vs. Q1 2024) with gross profit rising to $181.0M and income from operations increasing to $63.4M. Diluted EPS was $0.26 and operating cash flow was $42.9M; cash…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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