Zurn Elkay Water Solutions Corporation · NYSE:ZWS
Zurn Elkay Water Solutions — Rexnord — Q1 FY2020 Earnings Presentation
15 slides from Zurn Elkay Water Solutions's earnings presentation, Jul 31, 2019
Slide 1: First Quarter Fiscal Year 2020 Financial Results
FIRST QUARTER FISCAL YEAR 2020 FINANCIAL RESULTS July 31, 2019
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT This presentation and discussion contains certain forward-looking statements that are subject to the Safe Harbor and Cautionary language contained in the press release we issued on July 30, 2019, as well as other factors that co
Slide 3: Strategic Update
STRATEGIC UPDATE Consolidated Rexnord • 1Q net sales increase +1% year over year, core growth(1) +2% • Adjusted EBITDA(1) increases 6% year over year to $111 million • Simplification initiative reduces sales growth by approximately 150 bps year over year Process & Motion Control • 1Q net sales decre
Slide 4: Aerospace Center of Excellence Update
AEROSPACE CENTER OF EXCELLENCE UPDATE • Largest project within second phase of Supply Chain Optimization & Footprint Repositioning • Transition of previous Downer’s Grove facility into COE was completed in 4Q FY2019 • Productivity improvement ramping quickly – aka “producing more with less” • Enhanc
Slide 5: Financial Update
FINANCIAL UPDATE First Quarter Fiscal Year 2020 • Adjusted EBITDA(1) of $111 million increased +6% year over year • Net sales increased +1% year over year • Acquisitions increased sales by +1% • Foreign currency translation decreased sales by (2%) • Core sales(1) increased +2% year over year • Earni
Slide 6: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK • Core sales growth(1) in low single-digit percentage range(2), net of 8020 PLS impact • 8020 PLS (product line simplification) to be 150-200 bps headwind • Adjusted EBITDA(1) in $460 - $475 million range(2) • Free cash flow(1) to exceed net income (1) Non-GAAP measure defin
Slide 7: 1Q FY20 Summary
1Q FY20 SUMMARY 1Q FY20 Net Sales 1Q FY20 1Q FY19 Change Net Sales (1) $508 $504 1% Growth from: Core 2% 65% 35% Acquisitions 1% Translation (2%) Adjusted EBITDA (1) $111 $105 6% Process & Motion Control % of Sales 21.8% 20.8% 100 bps Water Management (1) Non-GAAP measure defined, reconciled, and di
Slide 8: Process & Motion Control
PROCESS & MOTION CONTROL 1Q FY20 1Q FY19 Change End-Market Outlook Assumed in Guidance Industrial Distribution Net Sales $330 $332 (1%) US & Canada Growth from: Europe Core 1% Acquisitions 1% Rest of World Translation (3%) Food & Beverage: Global Commercial Aerospace: Global Adjusted EBITDA (1) $74
Slide 9: Water Management
WATER MANAGEMENT 1Q FY20 1Q FY19 Change Net Sales $178 $171 4% End-Market Outlook Assumed in Guidance Growth from: Nonresidential Construction: US & Canada Core 4% Commercial & Industrial Acquisitions 0% Institutional Translation 0% Residential Construction: US & Canada (1) Adjusted EBITDA $47 $43 9
Slide 10: Cash Flow & Balance Sheet
CASH FLOW & BALANCE SHEET (1) Free Cash Flow is defined as Cash from Operations less Capital Expenditures, and is a Non-GAAP measure defined, reconciled, and discussed in the earnings release included in the Form 8-K filed with the Securities and Exchange Commission on July 30, 2019. (2) Net Debt Le
Slide 11: Rexnord Corporation
7/30/2019 Rexnord Corporation 11
Slide 12: Appendix
REXNORD APPENDIX
Slide 13: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK Core sales % growth(1) + Low Single Digit (net of 150-200 bps PLS impact) Adjusted EBITDA(1) $460 - $475 million Free Cash Flow(1) > Net Income Depreciation & Amortization(2) ~ $ 86 million Interest Expense (LIBOR < 3%) ~ $ 65 million Effective Tax Rate(3) 26% - 27% Capital
Slide 14: If-Converted Incremental Shares
IF-CONVERTED INCREMENTAL SHARES Incremental Shares Mandatory Convertible Preferred Details Average Common from Conversion Offering Size ($millions) $ 402.5 Stock Price (millions) Dividend Rate 5.75% < $ 20.99 19.18 Annual Dividend ($millions) $ 23.1 $ 20.99 19.18 Mandatory Conversion Date 11/15/2019
Slide 15: Calculating 1Q FY20 Diluted Adjusted EPS
CALCULATING 1Q FY20 DILUTED ADJUSTED EPS First Quarter Ended ($ mil li ons , exce pt per-sha re amounts) 6/30/2019 Base Methodology Adjusted Net Income (1) $ 53.2 Weighted-Average Number of Shares: Diluted (thousands) 107,685 Adjusted Earnings Per Share: Diluted (Base Method) (1) $ 0.49 If-Converted