Watts Water Technologies (NYSE:WTS) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Speaker9Welcome to Watts Water Technologies, Inc. fourth quarter and full year 2025 earnings call. At the end of the presentation, we will open the line for questions. I will now turn the call over to Diane McClintock, Chief Financial Officer. Please go ahead.Speaker3Thank you, and good morning, everyone. Joining me today is Bob Pagano, President and CEO. Before we begin, I'd like to remind everyone that during this call ...

Zurn Elkay Water Solutions (NYSE:ZWS) Q4 2025 Earnings call February 04, 2026 08:30 AM ET Company ParticipantsDavid Pauli - CFOJames Coe - Equity Research AssociateTodd Adams - Chairman and CEOConference Call ParticipantsAdam Farley - Associate AnalystBen Pezan - Research AnalystBrett Linzey - Equity Research AnalystBryan Blair - Managing Director and Senior AnalystJeff Hammond - Managing Director and Equity Research AnalystOperatorGood morning and welcome to the Zurn Elkay Water Solutions Corporation Fourt ...

Zurn Elkay Water Solutions (NYSE:ZWS) Q4 2025 Earnings call February 04, 2026 08:30 AM ET Company ParticipantsDavid Pauli - CFOJames Coe - Equity Research AssociateTodd Adams - Chairman and CEOConference Call ParticipantsAdam Farley - Associate AnalystBen Pezan - Research AnalystBrett Linzey - Equity Research AnalystBryan Blair - Managing Director and Senior AnalystJeff Hammond - Managing Director and Equity Research AnalystOperatorGood morning and welcome to the Zurn Elkay Water Solutions Corporation fourt ...

Financial Data and Key Metrics Changes - The company reported first quarter sales of $558 million, down 2% on both a reported and organic basis, primarily due to fewer shipping days and ongoing weakness in Europe [13][14] - Adjusted operating income reached a record $106 million, increasing by 2%, with adjusted operating margins at 19%, up 80 basis points [16][18] - Adjusted earnings per share rose to $2.37, reflecting a 2% increase compared to the previous year [16][18] - Free cash flow for the quarter was $46 million, up from $37 million in the same quarter last year [17][18] Business Line Data and Key Metrics Changes - Americas organic sales decreased by 1%, while reported sales remained flat, benefiting from the Icon acquisition which added $5 million [13][14] - Europe experienced a 9% decline in organic sales and a 12% drop in reported sales, attributed to fewer shipping days and weakness in new construction markets [14][16] - APMEA sales increased by 9% on a reported basis and 13% on an organic basis, driven by growth in China, the Middle East, and Australia [14][16] Market Data and Key Metrics Changes - The company anticipates continued weakness in Europe due to a slowdown in new construction amid economic challenges [10][11] - The Americas market is expected to show slight improvement, while Europe is projected to decline compared to initial forecasts [19][20] Company Strategy and Development Direction - The company is focusing on vertical integration and manufacturing close to customers in the U.S. to mitigate tariff impacts [7][12] - A proactive approach to productivity savings through automation and lean initiatives is being implemented [8] - The company is maintaining its full-year organic sales and adjusted operating margin outlook despite macroeconomic uncertainties [9][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current trade environment and expects to manage costs effectively through their OneWatts performance system [24][25] - The outlook for the second half of 2025 remains cautious due to potential demand impacts from tariffs and economic conditions [10][11] Other Important Information - The company announced a 21% increase in dividends starting in June, reflecting strong cash flow and a healthy balance sheet [6][18] - The search for a new CFO is ongoing, with the current CFO remaining in position to ensure a smooth transition [13] Q&A Session Summary Question: Opportunities to gain market share and margin - Management highlighted their strategy of manufacturing products regionally, which positions them favorably in the current tariff environment [31][33] Question: Pacing of price increases and potential tariff reductions - The company implemented annual price increases in January and additional tariff-related increases in March and May [35][36] Question: Front half versus back half margin and revenue expectations - Management indicated that the cautious outlook for the second half is due to uncertainty surrounding tariffs and potential demand impacts [44][90] Question: Weaker guidance for Europe - The management noted that the guidance reflects destocking in the heat pump market and uncertainty in new construction [61] Question: Integration of recent acquisitions - Integration efforts with recent acquisitions are ahead of schedule, with positive synergy tracking [63] Question: Raw material supply issues - Management acknowledged some raw material supply constraints but emphasized that tariffs are the primary concern impacting pricing [67][68] Question: Capacity and utilization of U.S. manufacturing facilities - The company has not fully utilized its North American manufacturing footprint and plans to expand shifts as needed without significant capital expenditures [79] Question: Margin expectations for the Americas - Management aims for a year-over-year margin increase of 30 to 50 basis points while continuing to invest in the business [92]