NYSE$ZWS

Zurn Elkay Water Solutions Corporation · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Reported an outstanding third quarter, demonstrating benefits from long-term strategy and investments, with exceptional service amidst unprecedented challenges.

Rexnord reported net sales of $494 million, a 5% decrease compared to the previous year. Net income from continuing operations was $45 million, or $0.37 per diluted share, compared to $57 million, or $0.46 per diluted share, in the year-ago quarter. Adjusted EPS was $0.47 compared to $0.51 in the prior year. Adjusted EBITDA was $109 million, representing 22.0% of net sales, compared to $118 million, or 22.7% of net sales, in the previous year.

  • Net sales were $494 million, 5% below the previous year's September quarter.
  • Net income from continuing operations was $45 million (diluted EPS of $0.37), compared to $57 million (diluted EPS of $0.46) in the year-ago quarter.
  • Adjusted EPS was $0.47 compared with $0.51 in the year-ago quarter.
  • Adjusted EBITDA was $109 million (22.0% of net sales) compared with $118 million (22.7% of net sales) in last year's September quarter.

Headline financials

Total Revenue

$492M

Previous: $485M+1.4%
EPS (adj)

$0.38

Previous: $0.19+100.0%
Net Debt Leverage Ratio

2

No prior period
Capital Expenditures

-$12.3M

Previous: -$26.5M+53.6%
Free Cash Flow

$36.2M

Previous: -$1.1M+3390.9%
Net Income

$48.5M

Previous: $25.4M+90.9%
Operating Income

$77.6M

Previous: $70.9M+9.4%
Gross Profit

$192M

Previous: $184M+4.0%
Cash & Equivalents

$277M

Previous: $297M-6.8%
Total Assets

$3.26B

Previous: $3.22B+1.2%
Stock-Based Comp

$7.4M

Previous: $5.5M+34.5%

Revenue & EPS history

Zurn Elkay · Revenue · Quarterly

$492M

Q3 2020+1.4%vs Q3 2019

Forward guidance

For the fourth quarter, the company expects core sales to decline between 7% and 11%, total segment Adjusted EBITDA margin to range between 21.5% and 23%, and corporate expenses to approximate $9 million.

Tailwinds

  • Permanent cost reduction initiatives implemented.
  • Order backlogs heading into the December quarter.
  • October results to date.
  • Anticipated range of demand patterns through December.
  • High confidence in the resilience of the business model, execution, and strategy.

Headwinds

  • Guarded external outlook due to the potential range of outcomes based on things outside our control.
  • Current realities of the ongoing pandemic.
  • Potential for demand patterns to shift negatively.
  • Uncertainty regarding the full impact of the pandemic.
  • External factors that could affect business performance.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+1.0%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+4.7%

Avg return

30 days after

62%

36 / 58 earnings

Positive

+13.5%

Q4 2020

Best reaction

-18.5%

Q1 2012

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+9.4%+10.1%+0.1%
Q4 2025+10.0%+11.6%+0.7%
Q3 2025+3.6%+2.2%+3.6%
Q1 2025+4.9%+8.3%+14.1%
Q4 2024-3.3%-3.6%-10.2%
Q3 2024-0.4%+2.8%+10.0%
Q2 2024+0.7%-5.3%+0.0%
Q1 2024+0.1%-1.2%-1.1%
Q4 2023+6.4%+3.3%+2.7%
Q3 2023+5.0%+9.9%+13.0%
Q2 2023+6.6%+11.4%+5.6%
Q1 2023-4.5%+0.7%+3.7%
Q4 2022+8.0%+4.3%+0.0%
Q3 2022-8.1%-5.8%+2.6%
Q2 2022-8.9%-6.9%-2.6%
Q1 2022-7.1%-10.3%-20.4%
Q4 2021+4.9%+0.7%+8.7%
Q3 2021-1.1%-0.3%+2.1%
Q2 2021+9.2%+8.7%+22.4%
Q1 2021+1.6%+2.8%+5.9%
Q4 2020+13.5%+11.7%+18.6%
Q3 2020-4.1%-0.0%+19.5%
Q2 2020-1.2%-5.4%-2.7%
Q1 2020-9.4%-13.5%+22.0%
Q4 2019+1.4%+0.5%+4.5%
Q3 2019+5.3%+6.1%+9.1%
Q2 2019+11.0%+17.3%+15.3%
Q1 2019-0.9%-0.7%+2.8%
Q4 2018-1.2%+0.6%+4.0%
Q3 2018+4.5%-2.9%-0.2%
Q2 2018-2.2%-1.9%-4.0%
Q1 2018+0.4%-0.6%+0.5%
Q4 2017-0.3%-0.3%+1.2%
Q3 2017-1.1%+1.9%+4.6%
Q2 2017-11.7%-6.2%+3.7%
Q1 2017+2.5%+0.5%+10.7%
Q4 2016-3.1%
Q3 2016+2.8%
Q2 2016+10.4%
Q1 2016+2.6%
Q4 2015-6.6%
Q3 2015+1.6%
Q2 2015-3.8%
Q1 2015+0.8%
Q4 2014-4.5%
Q3 2014-4.3%
Q2 2014+6.1%
Q1 2014+4.7%
Q4 2013+5.4%
Q3 2013+3.5%
Q3 2012+3.5%
Q2 2013+1.6%
Q1 2012-18.5%
Q1 2013+1.6%
Q4 2012+2.6%
Q4 2011+2.6%
Q2 2012+2.6%
Q4 2010+2.6%

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