ZWS

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Zurn Elkay Water Solutions has delivered a strong 85.8% return over the past five years, yet its valuation signals are split, with an intrinsic value estimate from a Discounted Cash Flow (DCF) model suggesting upside while market multiples point to a richer price tag. The 85.8% five year return highlights that long term shareholders have already seen substantial gains, which can limit the margin of safety at today’s price. Expectations around Zurn Elkay Water Solutions’ ability to convert revenue into steady cash flows can support the intrinsic value case, while any pressure on margins or higher capital spending needs may weigh on how much investors are willing to pay. With a low value score, Zurn Elkay Water Solutions screens as expensive on most of the broader valuation checks, even though the DCF model points to the stock trading about 10.9% below its intrinsic value. The issue now is whether the recent share price around US$50.97 still leaves enough upside relative to intrinsic value to compensate for the risks that the broader valuation checks are flagging. Zurn Elkay Water Solutions delivered 15.1% returns over the last year. See how this stacks up to the rest of the Building industry. The Discounted Cash Flow (DCF) model for Zurn Elkay Water Solutions uses projected future free cash flows to estimate what the stock could be worth today. On the latest twelve month numbers, the company generated around $376.7 million of free cash flow, and the model assumes these cash flows keep growing rather than shrinking over the coming years. On this basis, the DCF points to an estimated intrinsic value of about $57 per share. That sits above the recent share price around $50.97, which implies the stock trades at roughly a 10.9% discount to this cash flow based estimate. On balance, the DCF work suggests Zurn Elkay Water Solutions stock appears undervalued relative to its projected cash generation. Our Discounted Cash Flow (DCF) analysis suggests Zurn Elkay Water Solutions is undervalued by 10.9%. Track this in your watchlist or portfolio, or discover 50 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Zurn Elkay Water Solutions. P/E is a useful way to look at Zurn Elkay Water Solutions because earnings remain a key reference point for how the market values the business today. On this measure, the stock trades on about 31.0x earnings, which sits above both the wider building industry average of around 22.9x and the peer group average near 26.9x. The valuation framework that adjusts for Zurn Elkay Water Solutions’ scale, sector, and risk profile points to a P/E closer to 21.9x. That is a clear gap to the current 31.0x multiple and indicates that investors are paying a premium relative to what the model would imply. Even allowing for company specific factors that may justify some uplift, the stock appears to be pricing in a substantial amount of positive expectations on earnings. On the P/E yardstick, Zurn Elkay Water Solutions stock appears more expensive than both its tailored P/E indication and broader industry benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Zurn Elkay Water Solutions build on this valuation puzzle by setting out the specific paths for growth, margins and earnings that would need to play out for the stock to be worth materially more or less than today’s price, and they sit on the company’s Community page. Where a ratio or model shows a single number, these narratives describe the future that number relies on so you can monitor whether those conditions remain in place. You can add your own narrative on Zurn Elkay Water Solutions' valuation and a view on where its growth, margins, and execution go from here. Share a number-driven case and see how it holds up as new information is released. Do you think there's more to the story for Zurn Elkay Water Solutions? Head over to our Community to see what others are saying! Zurn Elkay Water Solutions sits in a grey zone where its Discounted Cash Flow (DCF) work points to some intrinsic value upside, while the P/E and broader checks lean toward the stock being overvalued. The split comes from the DCF leaning on future cash flow delivery and capital needs, while the market multiple reflects the strong expectations already built into the current earnings and sentiment. For investors, the key question is whether Zurn Elkay Water Solutions can sustain the cash generation that underpins the intrinsic value estimate without putting pressure on margins or capital spending. That assumption is what separates the opportunity from the risk of paying up. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ZWS. Have feedback on this article? Concerned about the content? 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The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Zurn Elkay (NYSE:ZWS) and the rest of the hvac and water systems stocks fared in Q2. Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. The 9 hvac and water systems stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.7%. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Zurn Elkay reported revenues of $491 million, up 10.5% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a strong quarter for the company with a decent beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates. Todd A. Adams, Chairman and Chief Executive Officer, commented, “We delivered a solid second quarter, first half and are raising our outlook for the full year. Core sales(1) grew 10% and adjusted EBITDA margins(1) of 27.7% expanded by 120 basis points over the prior year second quarter. We continue to leverage the Zurn Elkay Business System to drive above market growth in targeted areas as well as a higher baseline of incremental margins through our relentless deployment of 80/20, our supply chain initiatives and the continuous improvement our associates drive every day. Our robust and increasing levels of free cash flow(1) provide us with the flexibility to continue to be both disciplined and strategic, investing in stock repurchases, a growing dividend and acquisitions while maintaining a low leverage profile. In the quarter we repurchased $50 million dollars of our own shares, bringing the total to $100 million over the first half of 2026 while also paying $37 million in dividends.” Interestingly, the stock is up 3.3% since reporting and currently trades at $50.95. We think Zurn Elkay is a good business, but is it a buy today? Read our full report here, it’s free. Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings. AAON reported revenues of $627 million, up 101% year on year, outperforming analysts’ expectations by 24.6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates. AAON scored the biggest analyst estimate beat and fastest revenue growth in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 7.7% since reporting. It currently trades at $87.50. Is now the time to buy AAON? Access our full analysis of the earnings results here, it’s free. Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods. Lennox reported revenues of $1.55 billion, up 3% year on year, falling short of analysts’ expectations by 1%. It was a mixed quarter as it posted a solid beat of analysts’ organic revenue estimates but full-year EPS guidance missing analysts’ expectations significantly. Lennox delivered the weakest performance against analyst estimates of the whole group. As expected, the stock is down 20.8% since the results and currently trades at $430.82. Read our full analysis of Lennox’s results here. Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. Advanced Drainage reported revenues of $1.00 billion, up 20.6% year on year. This result topped analysts’ expectations by 2%. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates. Advanced Drainage had the weakest full-year guidance update among its peers. The stock is down 5.5% since reporting and currently trades at $141.34. Read our full, actionable report on Advanced Drainage here, it’s free. Founded by the inventor of air conditioning, Carrier Global (NYSE:CARR) manufactures heating, ventilation, air conditioning, and refrigeration products. Carrier Global reported revenues of $6.35 billion, up 3.9% year on year. This print surpassed analysts’ expectations by 5.6%. Overall, it was a stunning quarter as it also recorded a solid beat of analysts’ organic revenue estimates and full-year EPS guidance exceeding analysts’ expectations. Carrier Global achieved the highest full-year guidance raise in the group. The stock is down 8.3% since reporting and currently trades at $63.61. Read our full, actionable report on Carrier Global here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Interested in Zurn Elkay Water Solutions Cor? Here are five stocks we like better. Strong second-quarter performance: Organic sales rose 10% to $491 million, while adjusted EBITDA increased 15% to $136 million. The adjusted EBITDA margin reached a record 27.7%, supported by pricing, volume leverage, productivity gains and favorable product mix. Intellihot expands the company’s addressable market: Zurn Elkay completed its $109 million acquisition of commercial tankless water-heater maker Intellihot, adding access to a $1.1 billion market. Management sees a path for Intellihot to reach $100 million in sales and a 30% EBITDA margin within five to six years. Full-year outlook raised: The company now expects 2026 adjusted EBITDA of $503 million to $513 million and free cash flow of at least $350 million, excluding IEPA and reciprocal tariff refunds. Zurn Elkay also repurchased $50 million of shares during the quarter, bringing year-to-date repurchases to $100 million. Zurn Elkay Water Solutions Cor (NYSE:ZWS) reported second-quarter organic sales growth of 10% and adjusted EBITDA growth of 15%, supported by demand in its Water Safety and Control and Drinking Water product lines, higher pricing, and margin expansion. Second-quarter sales totaled $491 million, while adjusted EBITDA reached $136 million. Adjusted EBITDA margin expanded 120 basis points from a year earlier to a record 27.7%, exceeding the company’s prior guidance range of 27% to 27.5%. → Microsoft Just Flipped the AI Spending Narrative Overnight Chairman and Chief Executive Officer Todd Adams said the company generated $112 million in free cash flow during the quarter and repurchased $50 million of shares at roughly $48 per share. Year-to-date share repurchases totaled $100 million. Chief Financial Officer Dan Klun said institutional end markets continued to show positive momentum, partly offset by residential weakness and pockets of softness in commercial markets. Price contributed approximately 5% to second-quarter growth, consistent with the first quarter. → 2 Unique Space ETFs That Could Upend the Industry Water Safety and Control and Drinking Water grew faster than the company average during the quarter, according to Klun. During the question-and-answer session, Adams said those two platforms were growing somewhat faster than Flow Systems, while Hygienic and Environmental remained positive but grew at a slower rate. The company attributed margin improvement to operating leverage on higher volume, productivity efforts under its Zurn Elkay Business System, and favorable mix as higher-margin products led growth. First-half sales and EBITDA increased $91 million and $36 million, respectively, from the prior year. The company’s first-half adjusted EBITDA margin was 27.3%, up about 140 basis points year over year. → MarketBeat Week in Review – 07/27- 07/31 Klun also noted that the company received $48 million in cash related to IEPA and reciprocal tariff refunds, including $2 million of accrued interest. The refund was recorded in cost of goods sold and affected reported GAAP earnings and earnings per share, but was excluded from adjusted earnings and free cash flow. As of June 30, Zurn Elkay had about $60 million of IEPA and reciprocal tariffs that remained uncollected and unrecognized in its financial statements. Net debt leverage ended the quarter at 0.3 times, the lowest level in the company’s history as a public company, Klun said. Zurn Elkay recently completed its acquisition of Intellihot, a producer of commercial tankless condensing water heaters. Adams said the company paid $109 million for the business, or $100 million net of a tax asset. Intellihot is expected to generate about $37 million of sales in 2026, with gross margins of about 50% and EBITDA margins in the low teens. Management said the transaction adds a $1.1 billion commercial water-heating market to its addressable market, including a tankless segment of more than $200 million. President Jeff Schoon said tankless water heating is growing faster than the broader commercial water-heating category, driven by efficiency regulations, building-owner concerns around Legionella risk, smaller mechanical-room requirements, and operating-cost savings. Adams said Zurn Elkay sees a path for Intellihot to become a $100 million business with a 30% EBITDA margin within five to six years, and expects a double-digit return on invested capital in three years. The company plans to use its specification, contractor, wholesaler and end-user relationships to expand Intellihot’s reach, while also pursuing supply-chain and operational improvements. Management said Intellihot was not acquired for a near-term earnings contribution. For the final five months of 2026, Klun estimated the acquisition would contribute about $18 million in net sales. Chief Operating Officer Dave Pauli said adjusted EBITDA margins have improved 660 basis points on a trailing 12-month basis from the first quarter of 2023 through the second quarter of 2026. On a point-to-point basis, margins rose 820 basis points over 14 quarters, from 19.5% in the first quarter of 2023 to 27.7% in the latest quarter. Pauli cited continuous-improvement initiatives, growth in higher-margin product lines, portfolio pruning under the company’s 80/20 strategy, manufacturing footprint consolidation, and sourcing changes as contributors. He said the company’s efforts to reduce sourcing from China have provided both geopolitical risk mitigation and a lower landed-cost profile. In Drinking Water, the company said its filtration business has grown from less than $25 million of sales before the Elkay merger to more than $60 million expected this year. Zurn Elkay expects more than 60% of Drinking Water units sold in 2026 to be filtered, compared with 50% in 2023, and is targeting 70% in 2027. The company highlighted its Elkay Pro Filtration platform, which adds easier filter replacement, options for two filters, connectivity features and proprietary filter heads intended to prevent use of counterfeit filters. Following its first-half performance, Zurn Elkay raised its full-year outlook for sales, adjusted EBITDA and free cash flow. The company expects third-quarter core sales growth of 6% to 7% and adjusted EBITDA margin of about 28%. Fourth-quarter core sales growth is expected to be in the mid-single digits. For 2026, including Intellihot, the company expects adjusted EBITDA of $503 million to $513 million and free cash flow of at least $350 million, excluding past and future IEPA reciprocal tariff refunds. Adams said the company’s full-year assumptions include three to four percentage points of pricing, about one point of market growth, and additional growth from share gains and exposure to higher-growth categories. He said the outlook incorporates the transition from expired Section 122 tariffs to newly announced Section 301 tariffs. Zurn Elkay Water Solutions Corp, trading on the NYSE under the ticker ZWS, is a global provider of water delivery and plumbing products. The company was established in October 2022 through a spin-off from Rexnord Corp, creating a standalone business focused on designing, manufacturing and marketing water system components for residential, commercial and industrial customers. Through its Zurn segment, the company offers solutions for water delivery, drainage and waste evacuation. Product lines include valves, hydrants, backflow prevention devices, piping systems, fittings and commercial waste stations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Zurn Elkay Water Solutions Cor Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Zurn Elkay Water Solutions Corp (NYSE:ZWS) reported a 10% organic sales growth in Q2 2026, with EBITDA increasing by 15% and margin expanding by 120 basis points to a record 27.7%. The company generated $112 million in free cash flow and repurchased $50 million of its shares, demonstrating strong financial health and shareholder value return. The acquisition of Intellihot is expected to significantly enhance ZWS's market position, with a clear path to double-digit return on invested capital in three years. ZWS raised its full-year outlook for sales, EBITDA, and free cash flow, indicating confidence in continued strong performance. The company's strategic focus on high-margin products and continuous improvement initiatives has led to substantial margin expansion and operational efficiency gains. There is ongoing work required for the integration of Intellihot, which may present challenges and require significant resources. The residential and pockets of commercial markets showed some softness, partially offsetting the positive momentum in institutional markets. The company's growth strategy involves significant investment in new products and adjacencies, which may not yield immediate returns. ZWS's reliance on non-GAAP measures for reporting may obscure the full financial picture for some investors. The transition from Section 122 tariffs to Section 301 tariffs introduces some uncertainty in cost structures and pricing strategies. Warning! GuruFocus has detected 8 Warning Signs with CAR. Is ZWS fairly valued? Test your thesis with our free DCF calculator. Q: Can you rank order the growth of your higher margin platforms, such as water safety and control, drinking water, and flow systems? A: Todd Adams, CEO: Drinking water and safety and control are slightly above flow systems in terms of growth. Hygienic and environmental is still positive, especially on a unit volume basis, but it's our smallest category. Q: Could you provide more details on the Intellihot acquisition and its expected impact in the short term? A: Todd Adams, CEO: Intellihot is a strategic acquisition due to its best-in-class technology. We expect it to become a $100 million business with 30% margins in 5-6 years. The acquisition was not for immediate gains but for long-term growth and integration with our existing offerings. Q: How is pricing trending for the year, and have there been any mid-year adjustments? A: Todd Adams, CEO: Pricing is trending towards the high end of the 3-4% range for the year. We haven't needed additional price increases in 2026, and we expect a normal pricing year moving forward. Q: Can you elaborate on the margin expansion strategy for Intellihot? A: Dan Klun, CFO: The margin expansion will come from leveraging our scale, purchasing power, and optimizing the cost structure. It's a combination of improving efficiencies and leveraging our existing capabilities. Q: What are the primary focus areas for Zurn Elkay's strategic plan in 2027? A: Todd Adams, CEO: We will focus on adjacencies and categories related to our current operations, aiming to generate $20-$30 million in revenue over three years by leveraging our channels and relationships. Q: How do you identify products or businesses to exit under the 80/20 strategy? A: Todd Adams, CEO: We conduct a detailed product lifecycle management review to assess competitive dynamics and investment needs. This helps us decide which areas to exit and where to reinvest for faster growth. Q: How important is expanding recurring revenue and MRO exposure in your growth strategy? A: Dave Foley, COO: Growing the installed base of filtered units is crucial, as it leads to a larger filter business. Our focus on retrofit and replacement provides a hedge against new construction activity. Q: What is the framework for organic growth in adjacencies? A: Todd Adams, CEO: We target $20-$30 million in revenue over three years from new categories. The growth may not be linear, but we focus on developing competitive advantages and leveraging our existing capabilities. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Investor call scheduled for Wednesday, July 29, 2026 at 8:30 a.m. Eastern Time MILWAUKEE, July 28, 2026--(BUSINESS WIRE)--Zurn Elkay Water Solutions Corporation (NYSE:ZWS) Second Quarter Highlights Net sales in the quarter were $491 million compared with $445 million in last year’s June quarter (+10% core sales(1)). Net income from continuing operations was $113 million (diluted EPS from continuing operations of $0.67) compared with net income from continuing operations of $50 million (diluted EPS from continuing operations of $0.29) in the year-ago quarter. Adjusted EBITDA(1) was $136 million (27.7% of net sales) compared with $118 million (26.5% of net sales) in last year's second quarter. Adjusted EPS(1) was $0.50 compared with $0.42 in the year-ago quarter. Net debt leverage(1) of 0.3x as of June 30, 2026. Deployed $50 million to repurchase 1.0 million shares of common stock in the quarter. Received $48 million of cash refunds related to previously paid International Emergency Economic Powers Act ("IEEPA") reciprocal tariffs (benefit recorded within cost of sales in the condensed consolidated statements of operations and excluded from adjusted EBITDA(1)). Todd A. Adams, Chairman and Chief Executive Officer, commented, "We delivered a solid second quarter, first half and are raising our outlook for the full year. Core sales(1) grew 10% and adjusted EBITDA margins(1) of 27.7% expanded by 120 basis points over the prior year second quarter. We continue to leverage the Zurn Elkay Business System to drive above market growth in targeted areas as well as a higher baseline of incremental margins through our relentless deployment of 80/20, our supply chain initiatives and the continuous improvement our associates drive every day. Our robust and increasing levels of free cash flow(1) provide us with the flexibility to continue to be both disciplined and strategic, investing in stock repurchases, a growing dividend and acquisitions while maintaining a low leverage profile. In the quarter we repurchased $50 million dollars of our own shares, bringing the total to $100 million over the first half of 2026 while also paying $37 million in dividends." Adams continued, "We’re pleased to have completed the acquisition of Intellihot, which has been a long-term proprietary cultivation of a strategic opportunity in an adjacency we had wanted to enter. Intellihot is a pioneer in high-efficiency water heating, offering tankless gas and electric water heaters into our core markets and verticals that provide category leading efficiency and reliability. We see significant long-term upside in the business as we move through a thoughtful integration plan over the coming years. Beyond Intellihot, we remain on track to launch several new products into adjacent categories in the back half of 2026 and into 2027 that expand our served available market, that in time, we believe will continue to help us drive the above-market growth we have delivered for 15+ years." Third Quarter and Full Year Outlook "We continue to approach our outlook through a prudent, quarter-by-quarter lens. For the third quarter, we expect core sales(1) growth of approximately 6% to 7% and adjusted EBITDA margins(1) to be around 28%. We currently expect mid-single digit core(1) growth in the fourth quarter and for the full year 2026, adjusted EBITDA(1) between $503 million to $513 million, which would represent year-over-year margin expansion of roughly 140 basis points compared to 2025 (excluding all tariff related refunds). We expect Intellihot sales to approximate $16 million for the remainder of 2026. Finally, we expect full year free cash flow(1) of at least $350 million, which also excludes the net impact of tariff related refunds we've already received." Second Quarter 2026 Overview Net sales were $491.0 million and $444.5 million during the three months ended June 30, 2026 and June 30, 2025, respectively, an increase of 10% year over year. Core sales improved 10% year over year, including growth in all product categories. During the three months ended June 30, 2026, income from operations was $152.3 million compared to $77.6 million during the three months ended June 30, 2025. During the quarter ended June 30, 2026, the Company received a $47.6 million IEEPA reciprocal tariff refund. Excluding this item, income from operations increased by $27.1 million, an increase of 380 basis points year over year as a result of the favorable impact of year-over-year sales growth (inclusive of price realization) and Zurn Elkay Business System led productivity initiatives. Adjusted EBITDA(1) was $136.0 million, or 27.7% of net sales, during the three months ended June 30, 2026 compared to $117.9 million, or 26.5% of net sales, during the three months ended June 30, 2025. Non-GAAP Financial Measures The following non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods as well as insight into the compliance with our debt covenants. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to our GAAP results has been provided in the financial tables included in this press release. Core Sales Core sales excludes the impact of mergers, acquisitions, divestitures and foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparison of our net sales performance with prior and future periods and to our peers. We exclude the effect of mergers, acquisitions and divestitures because the nature, size and number of mergers, acquisitions and divestitures can vary dramatically from period to period and between us and our peers, and can also obscure underlying business trends and make comparisons of long-term performance difficult. We exclude the effect of foreign currency translation from this measure because the volatility of currency translation is not under management's control. Adjusted Net Income and Adjusted Earnings Per Share Adjusted net income and adjusted earnings per share (calculated on a diluted basis) exclude actuarial gains and losses on pension and postretirement benefit obligations, restructuring and other similar charges, gains or losses on divestitures, discontinued operations, gains or losses on extinguishment of debt, the impact of acquisition-related fair value adjustments in connection with purchase accounting, amortization of intangible assets, the adjustment to state inventories at last-in, first-out costs, and other non-operational, non-cash or non-recurring gains and losses, net of their income tax impact. The tax rates used to calculate adjusted net income and adjusted earnings per share are based on a transaction specific basis. We believe that adjusted net income and adjusted earnings per share are useful in assessing our financial performance by excluding items that are not indicative of our core operating performance or that may obscure trends useful in evaluating our continuing results of operations. EBITDA EBITDA represents earnings from continuing operations before interest and other debt related activities, taxes, depreciation and amortization. EBITDA is presented because it is an important supplemental measure of performance and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business. Adjusted EBITDA "Adjusted EBITDA" is the term we use to describe EBITDA as defined and adjusted in our credit agreement, which is net income, adjusted for the items summarized in the Reconciliation of GAAP to Non-GAAP Financial Measures table below. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring gains or losses. It is also provided to aid investors in understanding our compliance with our debt covenants. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA varies from others in our industry. Adjusted EBITDA should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; or (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. "Adjusted EBITDA Margin" is the term we use to describe Adjusted EBITDA divided by net sales. In addition, certain of these expenses can represent the reduction of cash that could be used for other corporate purposes. Further, although not included in the calculation of Adjusted EBITDA below, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA (which includes a full pro forma last-twelve-month impact of acquisitions), or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. Lastly, management and various investors use the ratio of the change in Adjusted EBITDA divided by the change in net sales (referred to as "incremental margin" in the case of an increase in net sales or "decremental margin" in the case of a decrease in net sales) as an additional measure of our financial performance and when making key investment decisions and evaluating us against peers. Free Cash Flow We define Free Cash Flow as cash flow from operations less capital expenditures and IEEPA reciprocal tariff refunds, and we use this metric in analyzing our ability to service and repay our debt and to forecast future periods. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt. We define Free Cash Flow Conversion as Free Cash Flow divided by net income. Return on Invested Capital ("ROIC") ROIC is used because we believe it is an important supplemental measure of financial performance and it is also currently a performance measure under our long-term incentive plan. ROIC is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. ROIC is also used by investors and analysts to evaluate management’s deployment of capital to create shareholder value. We define ROIC as tax-effected net operating income for the last 12 months divided by average total invested capital over a rolling four-quarter period. Total invested capital is defined as shareholders equity plus debt, less cash and cash equivalents. Other companies may not define or calculate ROIC in the same way. About Zurn Elkay Water Solutions Named one of America’s Most Responsible Companies and one of America’s Greenest Companies by Newsweek and one of the World’s Best Companies for Sustainable Growth by TIME, Zurn Elkay Water Solutions is headquartered in Milwaukee, Wisconsin, and is a growth-oriented, pure-play water management business that designs, procures, manufactures and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. The Zurn Elkay product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products and filtered drinking water products for public and private spaces. Learn more at www.zurnelkay.com. Conference Call Details Zurn Elkay Water Solutions will hold a conference call and webcast presentation on Wednesday, July 29, 2026, at 8:30 a.m. Eastern Time to discuss its second quarter 2026 results, provide a general business update and respond to investor questions. Zurn Elkay Water Solutions Chairman and CEO, Todd Adams, CFO, Dan Klun, COO, Dave Pauli, and President, Jeff Schoon, will host the call and webcast. The conference call can be accessed via telephone as follows: Domestic toll-free: 800-715-9871 International toll: 646-307-1963 Access Code: 6071902 A live webcast of the call will also be available on the Company's investor relations website. Please go to the website (investors.zurnelkay.com) at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. If you are unable to participate during the live teleconference, a replay of the conference call will be available as a webcast on the Company's investor relations website. Cautionary Statement on Forward-Looking Statements Information in this release may involve outlook, expectations, beliefs, plans, intentions, strategies or other statements regarding the future, which are forward-looking statements. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based on information available to Zurn Elkay Water Solutions as of the date of this release, and Zurn Elkay Water Solutions assumes no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance, and actual results could differ materially from current expectations. Numerous factors could cause or contribute to such differences. Please refer to "Risk Factors" and "Cautionary Notice Regarding Forward-Looking Statements" in our report on Form 10-K for the period ended December 31, 2025, as well as the Company’s subsequent annual, quarterly and current reports filed on Forms 10-K, 10-Q and 8-K from time to time with the Securities and Exchange Commission for a further discussion of the factors and risks associated with the business. View source version on businesswire.com: https://www.businesswire.com/news/home/20260728985627/en/ Contacts Bobbi BelstnerVice President, Corporate Controller414.361.0122

Zurn Water (ZWS) came out with quarterly earnings of $0.5 per share, beating the Zacks Consensus Estimate of $0.47 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.38%. A quarter ago, it was expected that this motion control and water management company would post earnings of $0.37 per share when it actually produced earnings of $0.41, delivering a surprise of +10.81%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Zurn Water, which belongs to the Zacks Waste Removal Services industry, posted revenues of $491 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.78%. This compares to year-ago revenues of $444.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Zurn Water shares have added about 4.9% since the beginning of the year versus the S&P 500's gain of 8.3%. While Zurn Water has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Zurn Water was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $482.3 million in revenues for the coming quarter and $1.75 on $1.83 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Waste Removal Services is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, LanzaTech Global, Inc. (LNZA), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 14. This company is expected to post quarterly loss of $0.76 per share in its upcoming report, which represents a year-over-year change of +94.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. LanzaTech Global, Inc.'s revenues are expected to be $13.1 million, up 44.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zurn Elkay Water Solutions Cor (ZWS) : Free Stock Analysis Report LanzaTech Global, Inc. (LNZA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MILWAUKEE, July 23, 2026--(BUSINESS WIRE)--Zurn Elkay Water Solutions Corporation (NYSE: ZWS) announced today that its Board of Directors declared a quarterly common stock dividend of $0.11 per share. The dividend is payable in cash on September 4, 2026 to stockholders of record as of August 20, 2026. About Zurn Elkay Water SolutionsNamed one of America’s Most Responsible Companies and one of America’s Greenest Companies by Newsweek and one of the World’s Best Companies for Sustainable Growth by TIME, Zurn Elkay Water Solutions is headquartered in Milwaukee, WI, and is a growth-oriented, pure-play water management business that designs, procures, manufactures and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. The Zurn Elkay product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products and filtered drinking water products for public and private spaces. Learn more at www.zurnelkay.com. Forward-Looking StatementsInformation in this release may involve outlook, expectations, beliefs, plans, intentions, strategies or other statements regarding the future, which are forward-looking statements. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Zurn Elkay Water Solutions Corporation as of the date of the release, and Zurn Elkay Water Solutions Corporation assumes no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance, and actual results could differ materially from current expectations. Numerous factors could cause or contribute to such differences. Please refer to "Risk Factors" and "Cautionary Notice Regarding Forward-Looking Statements" in the Company’s Form 10-K for the period ended December 31, 2025 as well as the Company’s annual, quarterly and current reports filed on Forms 10-K, 10-Q and 8-K from time to time with the SEC for a further discussion of the factors and risks associated with the business. View source version on businesswire.com: https://www.businesswire.com/news/home/20260722439448/en/ Contacts Investor Contact:Bobbi Belstner, Vice President – Corporate Controller414-361-0122 Media Contact:Angela Hersil, Vice President – Marketing and Communications855-480-5050414-808-0199Corporate.Communications@zurnelkay.com

Let’s dig into the relative performance of Zurn Elkay (NYSE:ZWS) and its peers as we unravel the now-completed Q1 HVAC and water systems earnings season. Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. The 9 HVAC and water systems stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 6.9%. Luckily, HVAC and water systems stocks have performed well with share prices up 11.5% on average since the latest earnings results. Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Zurn Elkay reported revenues of $433 million, up 11.4% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EBITDA and EPS estimates. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.2% since reporting and currently trades at $47.35. Is now the time to buy Zurn Elkay? Access our full analysis of the earnings results here, it’s free. Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings. AAON reported revenues of $496.9 million, up 54.3% year on year, outperforming analysts’ expectations by 29.5%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates. AAON scored the biggest analyst estimate beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 17.3% since reporting. It currently trades at $115.30. Is now the time to buy AAON? Access our full analysis of the earnings results here, it’s free. Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries. A. O. Smith reported revenues of $945.6 million, down 1.9% year on year, falling short of analysts’ expectations by 3.5%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EPS estimates. A. O. Smith delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 5.1% since the results and currently trades at $60.44. Read our full analysis of A. O. Smith’s results here. Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. Advanced Drainage reported revenues of $676.8 million, up 9.9% year on year. This number beat analysts’ expectations by 3.8%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates. Advanced Drainage delivered the highest full-year guidance raise among its peers. The stock is up 10% since reporting and currently trades at $150.49. Read our full, actionable report on Advanced Drainage here, it’s free. Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure. Northwest Pipe reported revenues of $138.3 million, up 19.1% year on year. This result surpassed analysts’ expectations by 10.5%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates. The stock is up 55.7% since reporting and currently trades at $133.90. Read our full, actionable report on Northwest Pipe here, it’s free. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.