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…
Earnings analysis · 10-Q
ZWS earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
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…
Read full summary
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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.67
- Operating margin
- 31.0%
What stood out
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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.
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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.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 4
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 itself. Analysis can contain errors; check the source document for full context.