Zurn Elkay Projects $335 Million Free Cash Flow for 2026 Following Strong Q1

Zurn Elkay Water Solutions (ZWS) has started the 2026 fiscal year with strong operational momentum, reporting an 11% increase in organic sales for the first quarter. The results indicate a successful start to the year, driven by steady demand and improved internal efficiencies. The company's profitability metrics showed significant improvement during the period. EBITDA grew by 18%, reaching $116 million, while margins expanded by 160 basis points to settle at 26.8%. Additionally, the firm generated $43 million in cash during the first quarter. Looking forward, management has provided an optimistic outlook for the immediate term, guiding core sales growth for the second quarter in the range of 8% to 9%. This suggests a sustained growth trajectory as the company moves further into the fiscal year. Most notably, Zurn Elkay has set a high benchmark for its annual liquidity, forecasting free cash flow of $335 million for the full year 2026. This projection underscores the company's focus on capital discipline and cash generation capabilities. From a market perspective, these figures suggest a healthy operational state and a disciplined approach to scaling. While the results are specific to the water solutions sector, the combination of margin expansion and strong cash flow guidance provides a bullish signal for the company's mid-term financial health.