Zurn Elkay Water Solutions Corporation (ZWS) Q1 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

earnings release and SEC filings contain additional information about these non-GAAP measures, why we use them, and why we believe they are helpful to investors, and contain reconciliations to the corresponding GAAP information. With prior quarters, we will 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. I'll turn the call over to Todd Adams, Chairman and CEO of Zurn Alkay Water Solutions. Thanks, Brian, and good morning, everyone. Hopefully, everyone's had a chance to read through the release and the charts from last night, so I'll get right to it on page three. We had a solid Q1, 5% organic growth, 110 basis points of year-over-year improvement in EBITDA margins, and cash flow ahead of our expectations. I think it's important to point out that there is little to no impact on the Q1 results from the implementation of tariffs. either in terms of additional costs arising from the tariffs and certainly no realization yet from the new price increases we've announced that will be effective as we get into Q2. We're going to get into the details regarding the impact of tariffs in just a few minutes and share what it means to us from both a supply chain strategy perspective as well as from a pricing standpoint, but I'll give you the punchline ahead of time. First, we have high confidence we will be price-cost positive based on the work and actions we've already implemented and will continue to optimize. Second, which is really important because there's been some confusion by the sell side on this, by the end of 2026, only 2% to 3% of our COGS will be coming from China based on...