Q4 2025 Zurn Elkay Water Solutions Corp Earnings Call Transcript
Key Points
- Zurn Elkay Water Solutions Corp (ZWS) reported a 10% organic sales growth in Q4 2025, with EBITDA increasing by 14% to $104 million.
- The company generated $83 million in free cash flow during the quarter, contributing to a total of $317 million for the year, a 17% increase over 2024.
- ZWS successfully repurchased 3% of its outstanding shares for $160 million and paid $64 million in dividends, while reducing leverage to 0.4 times.
- The company has implemented a supply chain optimization plan that has been tested and proven effective, enhancing operational efficiency.
- ZWS is actively pursuing new organic growth opportunities in adjacencies and underserved verticals, which are expected to enhance its growth trajectory over the next two to three years.
- The residential and certain commercial segments within non-residential markets experienced softness, impacting overall market performance.
- The company faces uncertainties related to the evolving tariff environment, which could affect cost structures and pricing strategies.
- ZWS's guidance for 2026 assumes a generally flat to slightly positive market, indicating potential challenges in achieving significant growth.
- The company is monitoring metal price increases and general inflation, which could necessitate additional price adjustments.
- Despite a strong balance sheet and cash flow, ZWS has not executed any recent M&A transactions, indicating potential challenges in identifying suitable opportunities.
Good morning, and welcome to the Zurn Elkay Water Solutions Corporation fourth-quarter 2025 earnings results conference call with Todd Adams, Chairman and Chief Executive Officer; and David Pauli, Chief Financial Officer for Zurn Elkay Water Solutions. A replay of the conference call will be made available as a webcast on the company's Investor Relations website.
As a reminder, this call contains certain forward-looking statements, which are subject to the safe harbor language outlined in Zurn Elkay's press release issued yesterday afternoon and in the company's filings with the SEC. In addition, some comparisons will refer to non-GAAP measures. The company's earnings release and SEC filings contain additional information about these non-GAAP measures, why they are used and why the company believes they are helpful to investors and contain reconciliations to the corresponding GAAP confirmation.
Consistent with prior quarters, the company will speak to certain non-GAAP metrics as they feel they provide a better understanding of the company's operating results. These measures are not a
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