Zurn Elkay Water Solutions Posts Strong Q1 2026 Growth, Expands Revolver Capacity — Zurn Elkay Water Solutions Corporation

Event summary

Q1 2026 net sales rose 11% year-over-year to $433 million, with core sales growth of 11%.
Adjusted EBITDA increased 18% to $116 million, with margins expanding 160 basis points to 26.8%.
Net debt leverage stood at 0.5x as of March 31, 2026, with revolver capacity increased from $200 million to $550 million.
Company repurchased $50 million worth of shares in Q1 2026.
Guidance for Q2 2026 projects 8-9% core sales growth and adjusted EBITDA margins of 27.0-27.5%.

The big picture

Zurn Elkay Water Solutions is leveraging its strategic initiatives and operational execution to drive strong financial performance amid growing demand for sustainable water management solutions. The company's focus on expanding its product portfolio and improving margins positions it well in an industry increasingly concerned with water conservation and contamination issues. With a robust balance sheet and strong cash flow, Zurn Elkay is well-positioned to capitalize on market opportunities and navigate potential regulatory and tariff challenges.

What we're watching

Execution Risk: Whether Zurn Elkay can sustain its operational efficiency gains and meet its ambitious growth targets for 2026.
Market Dynamics: How current tariff structures will impact the company's supply chain and financial performance.
Strategic Initiatives: The pace at which new growth adjacencies will be launched and their potential impact on revenue diversification.