Zurn Elkay Water Solutions Corporation (NYSE:ZWS) Q2 2024 Earnings Conference Call July 31, 2024 8:30 AM ET

Company Participants

Bryan Wendlandt - Director, FP&A
Todd Adams - Chairman & CEO
David Pauli - VP, IR
Mark Peterson - SVP & CFO

Conference Call Participants

Bryan Blair - Oppenheimer
Andrew Buscaglia - BNP Paribas
Andrew Krill - Deutsche Bank
Nathan Jones - Stifel
Mike Halloran - Baird
Jeff Hammond - KeyBanc Capital Markets

Operator

Good morning, and welcome to the Zurn Elkay Water Solutions Corporation's Second Quarter 2024 Earnings Results Conference Call with Todd Adams, Chairman and Chief Executive Officer; David Pauli, Chief Financial Officer; and Bryan Wendlandt, Director of FP&A for Zurn Elkay Water Solutions. A replay of the 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 Bryan Wendlandt.

Bryan Wendlandt

Good morning, everyone, and thanks for joining the call today. Before we begin, I'd 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 SEC.

In addition, some comparisons will refer to non-GAAP 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 investors and contain reconciliations to the corresponding GAAP information. Consistent with prior quarters, we'll speak to certain non-GAAP metrics as we feel they provide a better understanding of our operating results. These measures are not a substitute for GAAP. We encourage you to review the GAAP information in our earnings release and in our SEC filings.

With that, I'll turn the call over to Todd Adams, Chairman and CEO of Zurn Elkay Water Solutions.

Todd Adams

Thanks, Bryan, and good morning, everyone, and thank you for taking the time to call in this morning. So I'll start on Page 3.

We turned in what we believe is a pretty solid quarter and are, again, raising our outlook for the year. We leveraged core growth of 3% into 20% adjusted EBITDA growth, which drove margins to 25.3%, equating to 370 basis points of margin expansion year-over-year. Free cash flow in the quarter was $80 million, and we deployed $60 million to repurchase almost 2 million shares in the quarter. For the first half of the year, in dollar terms, EBITDA is up $35 million, and free cash flow is up $50 million over last year's first half, and we continue to expect a nice second half from a cash flow perspective.