Zurn Elkay Water Solutions Corporation

Good morning and welcome to the Zurn LK Water Solutions Corporation's second quarter 2024 earnings results conference call with Todd Adams, Chairman and Chief Executive Officer, David Pauley, Chief Financial Officer, and Brian Wendland, Director of FP&A for Zurn LK 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 Brian Winland.

Good morning, everyone, and thanks for joining the call today. Before we begin, I'd like to remind everyone that this call contains certain war-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 findings 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 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. With that, I'll turn the call over to Todd Adams, Chairman and CEO of Zurn LK Water Solutions.

Thanks, Brian, and good morning, everyone. Thank you for taking the time to call in this morning. So I'll start on page three. 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. Qualitatively, our underlying markets continue to match our views coming into the year, and we're making steady progress on our growth initiatives and breakthroughs. Hopefully, our results over the last 12 months have answered the question on whether or not we'd achieve the $50 million plus in synergies from the LK transaction, given where our consolidated EBITDA margins now sit. Our story at this point is really quite simple. We have what we believe is the premier water solutions business in North America, with best-in-class financial performance and a business system and culture that underpins our confidence in being able to perform at a very high level, regardless of the macro environment. We have a balance sheet and cash flow profile that puts us in a position to reliably and increasingly return capital to shareholders while executing on proprietary M&A opportunities moving forward. I now have the privilege of turning the call over to our newly minted CFO, Mr. Dave Pawley. At the same time, I'd like to say good morning to our former CFO and now Chief Administrative Officer, Mark Peterson, who's listening in as he's driving to work and certainly not missing having to get here early for this call.