Highlights

  • Third quarter 2026 net sales were $495.1 million, and net income was $76.3 million, or $0.45 per diluted share.
  • Zurn Elkay acquired Intellihot on July 21, 2026 for total consideration of $107.3 million, net of cash acquired.
  • Cash and cash equivalents were $307.1 million at September 30, 2026, and the revolving credit facility commitment is $550.0 million.
  • Management expects Q4 sales of $430 million to $437 million and 2026 adjusted EBITDA of $512 million to $515 million.

Zurn Elkay Water Solutions (NYSE:ZWS) shares were trading at USD 43.61 on October 28, 2026, down 11.27%, with a relative volume at time of 3.27. The water management company acquired Intellihot on July 21, 2026, and filed its Form 10-Q for the third quarter ended September 30, 2026 on October 27, 2026.

Zurn Elkay Water Solutions Corporation is a Delaware corporation headquartered in Milwaukee, Wisconsin. It describes itself as a pure-play water management business that designs, procures, manufactures and markets specification-driven water management solutions. Its portfolio includes water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products. It uses the Zurn Elkay Business System as its operating philosophy. Its fiscal year ends December 31. Results of its former Process & Motion Control business, spun off in 2021, are reported as discontinued operations.

Third Quarter 2026 Results

Net sales were $495.1 million for the three months ended September 30, 2026, compared with $455.4 million a year earlier, an increase of 9%. Core sales, a non-GAAP measure, rose 7%, and the Intellihot acquisition added 2%. Income from operations was $108.2 million, compared with $77.5 million, and was 21.9% of net sales, compared with 17.0%.

Interest expense, net was $6.3 million, compared with $7.1 million. Other income, net was $0.7 million, compared with $8.7 million. The income tax provision was $26.5 million, compared with $19.5 million. Net income was $76.3 million, compared with $61.8 million, and diluted earnings per share were $0.45, compared with $0.36.

For the nine months, net sales were $1,419.1 million, compared with $1,288.7 million. Net income was $248.5 million, or $1.47 per diluted share, compared with $155.9 million, or $0.91. Adjusted EBITDA, a non-GAAP measure, was $392.1 million for the nine months, compared with $338.1 million.

Balance Sheet, Cash Flow and Capital

Cash and cash equivalents were $307.1 million at September 30, 2026, compared with $300.5 million at December 31, 2025. On February 19, 2026, Zurn Elkay increased its revolving credit facility commitment from $200.0 million to $550.0 million and extended maturity to February 19, 2031. Additional borrowing capacity under the facility was $540.8 million.

Net cash provided by operating activities was $320.6 million for the nine months, compared with $254.8 million, and included $49.1 million of refunds of previously paid IEEPA reciprocal tariffs. Repurchases of common stock were $134.7 million, and dividend payments were $55.0 million. The company declared dividends of $0.09 per share in each quarter. On the call, management said the board decided to increase the annual dividend 18%.

Acquisition and Tariff Developments

On July 21, 2026, Zurn Elkay acquired 100% of the stock of Intellihot, Inc. through a merger. Intellihot is based in Vernon Hills, Illinois, and provides tankless water heater solutions for the healthcare, education, hospitality and commercial end markets.

During the nine months, the company received tariff refunds of approximately $49.1 million, including approximately $1.5 million in the third quarter. It said uncertainty remains about the process, timing and total amount of any additional recoveries, and has not recorded any further potential benefit.

Outlook

The filing does not include numerical guidance. On the call, management said it expects fourth quarter sales of $430 million to $437 million and adjusted EBITDA of $120 million to $123 million. It said it is raising its 2026 adjusted EBITDA outlook to $512 million to $515 million and expects free cash flow of greater than $350 million, excluding the net impact of tariff refunds.

Management said it will not provide 2027 guidance until February and that it sees the market likely down a couple of points next year. It also said it expects incremental margins of 40% plus in 2027.