Zurn Elkay 10-Q: Q3 Sales Up 9% to $495.1M, Nine-Month Operating Cash Flow $320.6M
ZWS is trading near its 52-week low of $43.06 (14% above the low).
Summary
Zurn Elkay's Q3 10-Q confirms 9% sales growth to $495.1M and $248.5M of nine-month net income, with $320.6M of operating cash flow and leverage at 0.47x — though about $49.1M of the nine-month profit boost came from one-time tariff refunds.
Key Events · Earnings and Guidance · ZWS
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Q3 Sales Rise 9% to $495.1M
Net sales came in at $495.1 million versus $455.4 million a year ago, as core sales grew 7% and the Intellihot acquisition added 2%.
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Margins Expand on Mix and Productivity
Gross profit rose to $245.8 million from $200.7 million, lifting income from operations to $108.2 million (21.9% of sales) from $77.5 million (17.0%).
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Tariff Refunds Flatter Nine-Month Results
Nine-month results include $49.1 million of IEEPA tariff refunds recorded as a reduction to cost of sales; excluding them, operating income still rose $75.0 million.
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Strong Cash Generation and Low Leverage
Nine-month operating cash flow was $320.6 million versus $254.8 million, with total net leverage at 0.47 to 1.00 and $540.8 million of revolver availability.
Analysis · ZWS · Technology
The headline numbers were already out via this morning's release, but the full 10-Q confirms the quality of the quarter: gross margin expanded sharply, with gross profit of $245.8M on $495.1M of sales versus $200.7M on $455.4M a year ago, and nine-month operating cash flow rose to $320.6M from $254.8M. Note that roughly $49.1M of the nine-month pre-tax benefit came from IEEPA tariff refunds, so a chunk of the earnings uplift is non-recurring; excluding those refunds, nine-month operating income still rose $75.0M. The balance sheet remains conservative, with total net leverage of 0.47 to 1.00, $307.1M of cash and $540.8M of revolver capacity, while the company kept buying back stock ($134.6M in nine months) and raised the quarterly dividend to $0.13 from $0.11.
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At the time of this filing, ZWS was trading at $49.15 on NYSE in the Technology sector, with a market capitalization of approximately $8.2B. The 52-week trading range was $43.06 to $55.00. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.