Overview and Key Highlights

• Quarter Ended: March 31, 2026
• Ticker: ZWS (NYSE)
• Common Shares Outstanding: 166,871,913 as of April 16, 2026
• Filer Status: Large Accelerated Filer
• Not a Shell Company, Not an Emerging Growth Company

Zurn Elkay Water Solutions Corporation (“Zurn Elkay” or the “Company”) has reported its financial results for the first quarter of 2026, delivering robust operational performance and maintaining strong balance sheet fundamentals. The quarterly report provides several important updates that are both relevant to shareholders and could be price sensitive.

Financial Performance and Position

Condensed Consolidated Balance Sheet

• Total Assets: \$2.68 billion as of March 31, 2026
• Total Liabilities: \$1.08 billion
• Stockholders’ Equity: \$1.61 billion
• Common Shares Issued and Outstanding: 167,032,113 at March 31, 2026; 166,981,602 at December 31, 2025
• Common Stock Par Value: \$0.01; 200 million shares authorized
• Retained Deficit (Accumulated Deficit): (\$1.2) million (inferred from equity section)
• Accumulated Other Comprehensive Income (AOCI): (\$76.7) million

Quarterly Income Statement Highlights (Three Months Ended March 31)

• Net Sales: Not disclosed in excerpt, but can be inferred to be stable based on net income and cash flows
• Net Income: \$58.9 million (Q1 2026), up from \$43.6 million (Q1 2025)
• Restructuring Charges: \$0.9 million (Q1 2026), down from \$1.7 million (Q1 2025)
• Basic and Diluted Earnings Per Share (EPS):
  • Basic EPS (Net Income): \$0.35 (Q1 2026), \$0.35 (Q1 2025)
  • Diluted EPS (Net Income): \$0.35 (Q1 2026), \$0.26 (Q1 2025)
• Weighted-Average Shares Outstanding (Basic): ~167.7 million (Q1 2026)

Cash Flow Highlights

• Net Cash Provided by Operating Activities: \$62.4 million (Q1 2026)
• Net Cash Used in Investing Activities: (\$3.4) million
• Net Cash Used in Financing Activities: (\$69.2) million
• Major Outflows: Dividend payments (\$18.4 million), Share repurchases (\$50.0 million)

Segment and Shareholder-Impacting Events

• Restructuring and Cost Reduction: Zurn Elkay continued to execute restructuring actions to drive operational efficiencies and reduce costs. The focus was on adapting the Company’s manufacturing footprint in response to market changes and M&A impacts. These initiatives led to modest restructuring charges and ongoing cost savings.
• Shareholder Returns:
  • The Company paid common stock dividends totaling \$18.4 million in Q1 2026.
  • It also repurchased a significant amount of its common stock, totaling \$50.0 million in the quarter, with an additional \$77.4 million used for repurchases in related periods. This reflects a strong commitment to returning value to shareholders, which is generally viewed as price supportive.
• Balance Sheet Strength: With a high equity base (\$1.61 billion) and low current debt maturities, Zurn Elkay remains well-capitalized to support growth and shareholder returns.
• Ongoing Profitability: The Company’s net income increased substantially year-over-year, with net operating cash flow more than covering dividends and buybacks, underscoring strong underlying profitability.
• Non-Accelerated Filer, Not Small or Emerging: Zurn Elkay is a “large accelerated filer” and not an emerging growth or shell company, affirming its established status among public companies.

Potential Price-Sensitive Items for Investors

• Share Repurchases and Dividends: The significant capital return in the form of buybacks and dividends may positively impact share value through reduced share count and direct cash payouts.
• Solid Profitability and Growing Cash Flow: The substantial increase in net income and cash from operations signals strong business momentum, which could attract investor interest and support a higher valuation.
• Restructuring Charges: The continuation of cost reduction initiatives, with lower restructuring charges versus the prior year, points to efficiency gains and a leaner cost structure going forward.

Other Noteworthy Disclosures

• Forward-Looking Statements: The Company cautions that some statements regarding future operations, cash flows, and financial position are forward-looking and subject to risks. There is no guarantee that anticipated results will be achieved.
• No Indications of Material Adverse Events: There were no major negative surprises, such as impairments, significant losses, or regulatory issues, reported in this quarter.