Q4 2024 Zurn Elkay Water Solutions Corp Earnings Call Transcript
Key Points
- Zurn Elkay Water Solutions Corp (ZWS) reported a 4% core growth in the fourth quarter, leading to an 8% increase in adjusted EBITDA and a 100 basis point improvement in margins.
- The company achieved a 15% growth in EBITDA for the year, reaching $390 million, with margins improving by 270 basis points to 24.9%.
- ZWS generated $272 million in free cash flow for the year, with $55 million in the fourth quarter alone.
- The company successfully repurchased $150 million worth of shares throughout the year, demonstrating strong capital allocation.
- ZWS has a strong balance sheet with a net debt leverage below one at 0.8 times, providing significant capital allocation flexibility.
- There was softness in the residential and certain commercial segments within non-residential markets, partially offsetting growth.
- The company faces potential uncertainties in 2025, including emerging tariff dynamics that could impact operations.
- Interest rates remaining elevated could potentially impact the company's growth rate over the medium to long term.
- ZWS has not included potential tariff impacts in its 2025 guidance, indicating uncertainty in the tariff environment.
- The company has a significant exposure to China, although it is working to reduce this to less than 10% by the end of 2026.
Good morning and Welcome to the Zurn Elkay Water Solutions Corporation Fourth quarter, 2024 Earnings or Conference call with Todd Adams, Chairman and Chief Executive Officer; Dave Pauli, Chief Financial Officer and Brian Weslin, Director of FBNA for Zurn Elkay Water Solutions. A replay of the conference call will be available as a webcast on the company's investor relations website at this time for opening remarks and introduction, I'll turn the call over to Brian Wendland.
Good morning, everyone, and thanks for joining the call today. Before we begin, I'd like to remind everyone that this call contains certain forward-looking statements that are subject to the safe harbor language contained in the press release that we issued yesterday afternoon as well as in our filings with the SEC.
In addition, some comparisons will refer to non-GAAP measures. Our earnings release and SEC filings contain additional information about these non-GAAP measures, why we use them and why we believe they're helpful to investors and contain certain reconciliations the
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