Q3 2024 Zurn Elkay Water Solutions Corp Earnings Call Transcript
Key Points
- Zurn Elkay Water Solutions Corp (ZWS) exceeded its third-quarter guidance and raised its full-year outlook, demonstrating strong financial performance.
- The company achieved a 9% adjusted EBITDA growth, leading to a 150 basis points margin expansion year-over-year.
- Free cash flow for the quarter was $87 million, with $50 million deployed for share repurchases, indicating strong cash management.
- ZWS raised its dividend by 12.5% to $0.09 per quarter, reflecting confidence in its financial stability and commitment to returning value to shareholders.
- The company has a strong balance sheet with leverage at an all-time low of 0.8 times, providing flexibility for future investments and capital allocation.
- Sales to residential end markets were flat year-over-year, indicating potential challenges in this segment.
- The company noted that the realization of projected starts in 2025 is uncertain, which could impact future growth.
- There is a reliance on legislative actions, such as Michigan's filter first regulations, which may take time to fully implement and impact sales.
- The market for non-residential construction is complex and subject to various external factors, including weather and regional differences, which could affect project timelines.
- Despite strong performance, the company remains cautious about declaring victory for 2025, acknowledging potential market volatility and uncertainties.
Good morning and welcome to the Zurn Elkay Water Solutions Corp third quarter, 2024 earnings result conference call with Todd Adams, Chairman and Chief Executive Officer Dave Pauli, Chief Financial Officer and Bryan Wendlandt, Director of FP&A for Zurn Elkay Water Solutions. A replay of this conference call will be available as a webcast on the company's investor relations website at this time for opening remarks and introduction. I'll turn the call over to\
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Good morning, everyone and thanks for joining the call today. Before we begin, I would like to remind everyone that this call contains certain forward-looking statements that are subject to the safe harbor language contained in the press release that we issued yesterday afternoon as well as in our filings with the SCC edition. Some comparisons were nongaap measures. Our earnings release and sec filings contain additional information about these Non-GAAP measures, why we use them and why we believe they're helpful to
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