3 unchanged sentences
(in Millions, except share amounts)
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Current assets:
28 unchanged sentences
shares issued and outstanding:
−Removed: 171,097,696 at June 30, 2024 and 172,262,163 at December 31, 2023
+Added: 169,846,056 at September 30, 2024 and 172,262,163 at December 31, 2023
Additional paid-in capital 2,840.9 2,847.0
7 unchanged sentences
(in Millions, except share and per share amounts)
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: Three Months Ended Nine Months Ended
+Added: September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Net sales $ 410.0 $ 398.4 $ 1,195.8 $ 1,173.7
7 unchanged sentences
Interest expense, net ( 8.3 ) ( 9.9 ) ( 25.6 ) ( 29.8 )
−Removed: Other income (expense), net ( 1.6 ) 1.6 ( 3.0 ) ( 0.8 )
+Added: Other expense, net ( 1.5 ) ( 2.5 ) ( 4.5 ) ( 3.3 )
Income before income taxes 60.4 47.7 165.2 125.5
19 unchanged sentences
(in Millions)
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: Three Months Ended Nine Months Ended
+Added: September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Net income $ 43.5 $ 41.4 $ 123.8 $ 98.8
7 unchanged sentences
(in Millions)
−Removed: Six Months Ended
−Removed: June 30, 2024 June 30, 2023
+Added: Nine Months Ended
+Added: September 30, 2024 September 30, 2023
Operating activities
10 unchanged sentences
Receivables, net ( 32.7 ) ( 14.0 )
−Removed: Inventories 0.4 28.8
+Added: Inventories, net ( 2.1 ) 57.7
Other assets 2.0 17.1
10 unchanged sentences
Repayments of debt ( 0.6 ) ( 17.7 )
−Removed: Proceeds from exercise of stock options 3.8 1.2
+Added: Proceeds from exercise of stock options and ESPP contributions 6.1 1.9
+Added: Taxes withheld and paid on employees' share-based payment awards ( 0.1 ) ( 1.9 )
Repurchase of common stock ( 129.9 ) ( 100.2 )
2 unchanged sentences
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1.8 ) 0.7
−Removed: Increase (decrease) in cash, cash equivalents and restricted cash 26.0 ( 21.8 )
+Added: Increase in cash, cash equivalents and restricted cash 51.2 48.3
Cash, cash equivalents and restricted cash at beginning of period 136.7 124.8
3 unchanged sentences
Notes to Condensed Consolidated Financial Statements
−Removed: June 30, 2024
+Added: September 30, 2024
Basis of Presentation and Significant Accounting Policies
18 unchanged sentences
Grounded in the spirit of continuous improvement, ZEBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of its business.
−Removed: Reclassifications
−Removed: Certain prior year amounts have been reclassified to conform to the presentation used for the six months ended June 30, 2024.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting.
−Removed: The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either
−Removed: will not have an impact on its accounting or reporting or that such impact will not be material to its consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows when implemented.
+Added: The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows when implemented.
On July 1, 2022, the Company completed the Elkay Merger for a purchase price (after final purchase price adjustments) of $ 1,457.8 million.
5 unchanged sentences
In accordance with the merger agreement, at closing the Company increased the size of its Board of Directors to eleven members and appointed two directors designated by Elkay.
−Removed: As of June 30, 2024, the Board of Directors consisted of ten members, including one director designated by Elkay.
+Added: As of September 30, 2024, the Board of Directors consisted of ten members, including one director designated by Elkay.
Zurn senior management immediately prior to the consummation of the Elkay Merger remained as the executive officers of the Company immediately after the Elkay Merger.
29 unchanged sentences
Restructuring and Other Similar Charges
−Removed: During the three and six months ended June 30, 2024, the Company continued to execute various restructuring actions.
+Added: During the three and nine months ended September 30, 2024, the Company continued to execute various restructuring actions.
These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of mergers and acquisitions, including Elkay, on the Company's overall manufacturing capacity and the refinement of its overall product portfolio.
These restructuring actions primarily resulted in workforce reductions, lease termination costs and other facility rationalization costs.
−Removed: Management expects to continue executing similar initiatives to optimize its operating margin and manufacturing footprint.
+Added: Management expects to continue executing similar initiatives to optimize the Company's operating margin and manufacturing footprint.
As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease termination costs and other facility rationalization costs.
The Company's restructuring plans are preliminary and the full extent of related expenses are not yet estimable.
−Removed: The following table summarizes the Company's restructuring and other similar charges during the three and six months ended June 30, 2024 and June 30, 2023, (in millions):
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: The following table summarizes the Company's restructuring and other similar charges during the three and nine months ended September 30, 2024 and September 30, 2023, (in millions):
+Added: Three Months Ended Nine Months Ended
+Added: September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Employee termination benefits $ 0.6 $ 0.5 $ 1.0 $ 3.4
1 unchanged sentence
Total restructuring and other similar charges $ 2.7 $ 2.2 $ 9.7 $ 11.9
−Removed: The following table summarizes the activity in the Company's restructuring accrual for the six months ended June 30, 2024 (in millions):
+Added: The following table summarizes the activity in the Company's restructuring accrual for the nine months ended September 30, 2024 (in millions):
Employee termination benefits Contract termination and other associated costs Total
3 unchanged sentences
Non-cash charges (2) — ( 6.8 ) ( 6.8 )
−Removed: Accrued restructuring costs, June 30, 2024 (1) $ — $ 0.3 $ 0.3
+Added: Accrued restructuring costs, September 30, 2024 (1) $ 0.5 $ 0.3 $ 0.8
____________________
−Removed: (1) As of June 30, 2024 and December 31, 2023, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.
+Added: (1) As of September 30, 2024 and December 31, 2023, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.
(2) Non-cash charges consist primarily of asset impairments based on Level 3 inputs.
3 unchanged sentences
The operating results of PMC are reported as discontinued operations in the consolidated statements of operations for all periods presented, as the Spin-Off Transaction of PMC represented a strategic shift that had a major impact on operations and financial results.
−Removed: The condensed consolidated statements of cash flows for the six months ended June 30, 2024 and June 30, 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations.
−Removed: The major components of the Income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three and six months ended June 30, 2024 and June 30, 2023, are as follows (in millions):
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
−Removed: Selling, general and administrative (expenses)/income (1) $ 0.7 $ 1.8 $ 0.7 $ 1.8
+Added: The condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and September 30, 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations.
+Added: The major components of the Income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and September 30, 2023, are as follows (in millions):
+Added: Three Months Ended Nine Months Ended
+Added: September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
+Added: Selling, general and administrative income (1) $ — $ 6.6 $ 0.7 $ 8.4
Income from discontinued operations before income tax — 6.6 0.7 8.4
1 unchanged sentence
Income from discontinued operations, net of tax $ — $ 6.2 $ 1.0 $ 8.1
−Removed: (1) Selling, general and administrative (expenses)/income include the reversal of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.
+Added: (1) Selling, general and administrative income includes the reversal of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.
Revenue Recognition
6 unchanged sentences
When the contract provides the customer the right to return eligible products or when the customer is part of a sales rebate program, the Company reduces revenue at the point of sale using current facts and historical experience by using an estimate for expected product returns and rebates associated with the transaction.
−Removed: The Company adjusts these estimates at the
−Removed: earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed.
+Added: The Company adjusts these estimates at the earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed.
Accordingly, an increase or decrease to revenue is recognized at that time.
6 unchanged sentences
The following tables present revenue disaggregated by customer type and the geographic region of the end customer (in millions):
−Removed: Three Months Ended Six Months Ended
−Removed: Customer Type June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: Three Months Ended Nine Months Ended
+Added: Customer Type September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Institutional $ 193.4 $ 179.8 $ 567.8 $ 531.6
2 unchanged sentences
Total $ 410.0 $ 398.4 $ 1,195.8 $ 1,173.7
−Removed: Three Months Ended Six Months Ended
−Removed: Geography June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: Three Months Ended Nine Months Ended
+Added: Geography September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
United States $ 375.2 $ 366.6 $ 1,094.7 $ 1,082.7
9 unchanged sentences
A contract liability exists when the Company has received consideration or the amount is due from the customer in advance of revenue recognition.
−Removed: Contract liabilities and contract assets as of June 30, 2024 and December 31, 2023 were not material.
−Removed: The Company had backlog of $ 59.6 million as of June 30, 2024, which represents the most likely amount of consideration expected to be received in satisfying the remaining backlog under open contracts.
+Added: Contract liabilities and contract assets as of September 30, 2024 and December 31, 2023 were not material.
+Added: The Company had backlog of $ 46.7 million as of September 30, 2024, which represents the most likely amount of consideration expected to be received in satisfying the remaining backlog under open contracts.
The Company utilizes the optional exemption provided by ASC 606-10-50-14A for variable consideration, and has not included estimated rebates in the amount of unsatisfied performance obligations.
−Removed: The Company expects to recognize approximately 99 % of the backlog in the remaining six months of the year ending December 31, 2024, and the remaining approximately 1 % in 2025 and beyond.
+Added: The Company expects to recognize approximately 95 % of the backlog in the remaining three months of the year ending December 31, 2024, and the remaining approximately 5 % in 2025 and beyond.
Timing of Performance Obligations Satisfied at a Point in Time
9 unchanged sentences
If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization.
−Removed: As of June 30, 2024 and December 31, 2023, the contract assets capitalized, as well as amortization recognized in the three and six months ended June 30, 2024 and June 30, 2023, are not significant and no impairment losses were recognized.
+Added: As of September 30, 2024 and December 31, 2023, the contract assets capitalized, as well as amortization recognized in the three and nine months ended September 30, 2024 and September 30, 2023, are not significant and no impairment losses were recognized.
Allowance for Credit Losses
14 unchanged sentences
The Company is continuing to monitor the potential impact of the Pillar 2 proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules.
−Removed: As of June 30, 2024, the Company has determined that no accrual is currently required for Top-Up Taxes.
+Added: As of September 30, 2024, the Company has determined that no accrual is currently required for Top-Up Taxes.
The Company regularly reviews its deferred tax assets for recoverability and valuation allowances are established based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences, as deemed appropriate.
4 unchanged sentences
Future changes to the balances of these valuation allowances, as a result of this continued review and analysis by the Company, could impact the financial statements for such period of change.
−Removed: The income tax provision was $ 16.5 million for the three months ended June 30, 2024, compared to $ 13.2 million for the three months ended June 30, 2023.
−Removed: The effective income tax rate for the three months ended June 30, 2024 was 26.7 % versus 28.6 % for the three months ended June 30, 2023.
−Removed: The effective income tax rate for the three months ended June 30, 2024 and the three months ended June 30, 2023 was above the U.S.
+Added: The income tax provision was $ 16.9 million for the three months ended September 30, 2024, compared to $ 12.5 million for the three months ended September 30, 2023.
+Added: The effective income tax rate for the three months ended September 30, 2024 was 28.0 % versus 26.2 % for the three months ended September 30, 2023.
+Added: The effective income tax rate for the three months ended September 30, 2024 and the three months ended September 30, 2023 was above the U.S.
federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.
federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments .
−Removed: The income tax provision was $ 25.5 million for the six months ended June 30, 2024, compared to $ 22.3 million for the six months ended June 30, 2023.
−Removed: The effective income tax rate for the six months ended June 30, 2024 was 24.3 % versus 28.7 % for the six months ended June 30, 2023.
−Removed: The effective income tax rate for the six months ended June 30, 2024 was above the U.S.
+Added: The income tax provision was $ 42.4 million for the nine months ended September 30, 2024, compared to $ 34.8 million for the nine months ended September 30, 2023.
+Added: The effective income tax rate for the nine months ended September 30, 2024 was 25.7 % versus 27.7 % for the nine months ended September 30, 2023.
+Added: The effective income tax rate for
+Added: the nine months ended September 30, 2024 was above the U.S.
federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.
federal statutory rate, partially offset by the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations and income tax benefits associated with share-based payments.
−Removed: The effective income tax rate for the six months ended June 30, 2023 was above the U.S.
+Added: The effective income tax rate for the nine months ended September 30, 2023 was above the U.S.
federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.
federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.
−Removed: The Company’s total liability for net unrecognized tax benefits as of June 30, 2024 and December 31, 2023 was $ 3.6 million and $ 5.6 million, respectively.
+Added: The Company’s total liability for net unrecognized tax benefits as of September 30, 2024 and December 31, 2023 was $ 3.6 million and $ 5.6 million, respectively.
The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense.
−Removed: As of June 30, 2024 and December 31, 2023, the total amount of unrecognized tax benefits includes gross accrued interest and penalties of $ 0.8 million and $ 1.1 million, respectively.
−Removed: The Company recognized $( 0.2 ) million and $ 0.2 million of net interest and penalties as income tax (benefit) expense during the six months ended June 30, 2024 and June 30, 2023, respectively.
+Added: As of September 30, 2024 and December 31, 2023, the total amount of unrecognized tax benefits includes gross accrued interest and penalties of $ 0.9 million and $ 1.1 million, respectively.
+Added: The Company recognized $( 0.1 ) million and $ 0.3 million of net interest and penalties as income tax (benefit) expense during the nine months ended September 30, 2024 and September 30, 2023, respectively.
The Company conducts business in multiple locations within and outside the U.S.
Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities.
−Removed: In accordance with the terms of the sale agreement relating to a group of certain previously owned legal entities (the parent of which was VAG Holding GbmH, “VAG”), the Company is required to indemnify the purchaser for any future income tax liabilities associated with all open tax years ending prior to, and including, the short period ended on the date of the Company's sale of VAG.
+Added: In accordance with the terms of the sale agreement relating to a group of certain previously owned legal entities (the parent of which was VAG Holding GbmH, “VAG”), the Company is required to indemnify the purchaser for any future income tax liabilities associated with all open tax years ended prior to, and including, the short period ended on the date of the Company's sale of VAG.
VAG was notified by the German tax authorities of its intention to conduct an income tax examination of the VAG German entities’ corporate income and trade tax returns for the tax years ended March 31, 2014 through 2020.
−Removed: Similarly, in accordance with the Spin-Off Transaction, the Company is required to indemnify Regal Rexnord Corporation for any future income tax liabilities associated with PMC entities relating to all open tax years ending prior to, and including, the short period ended on the date of the Spin-Off.
+Added: Similarly, in accordance with the Spin-Off Transaction, the Company is required to indemnify Regal Rexnord Corporation for any future income tax liabilities associated with PMC entities relating to all open tax years ended prior to, and including, the short period ended on the date of the Spin-Off.
There are currently a number of ongoing tax examinations being conducted by the applicable tax authorities in Germany with respect to certain PMC entities.
2 unchanged sentences
With certain exceptions, the Company is no longer subject to U.S.
−Removed: federal income tax examinations for tax years ending prior to December 31, 2020, state and local income tax examinations for years ending prior to March 31, 2020 or significant foreign income tax examinations for years ending prior to March 31, 2019.
+Added: federal income tax examinations for tax years ended prior to December 31, 2020, state and local income tax examinations for years ended prior to March 31, 2020 or significant foreign income tax examinations for years ended prior to March 31, 2019.
Earnings per Share
1 unchanged sentence
Diluted net income per share from continuing and discontinued operations is computed based on the weighted average number of common shares outstanding, increased by the number of incremental shares that would have been outstanding if the potential dilutive shares were issued through the exercise of outstanding stock options to purchase common shares, except when the effect would be anti-dilutive.
−Removed: The computation for diluted net income per share for the three and six months ended June 30, 2024 excludes 0.5 million and 0.3 million shares due to their anti-dilutive effects, respectively.
−Removed: The computation for diluted net income per share for the three and six months ended June 30, 2023 excludes 0.4 million shares and 0.4 million shares due to their anti-dilutive effects, respectively.
+Added: The computation for diluted net income per share for the three and nine months ended September 30, 2024 excludes 0.3 million shares due to their anti-dilutive effects.
+Added: The computation for diluted net income per share for the three and nine months ended September 30, 2023 excludes 0.3 million shares due to their anti-dilutive effects.
Stockholders' Equity
18 unchanged sentences
Balance at June 30, 2023 $ 1.7 $ 2,853.7 $ ( 1,195.3 ) $ ( 71.5 ) $ 1,588.6
+Added: Total comprehensive income — — 41.4 ( 2.1 ) 39.3
+Added: Stock-based compensation expense — 10.0 — — 10.0
+Added: Proceeds from exercise of stock options — 0.7 — — 0.7
+Added: Taxes withheld and paid on employees' share-based payment awards — ( 1.9 ) — — ( 1.9 )
+Added: Repurchase of common stock — — ( 13.0 ) — ( 13.0 )
+Added: Common stock dividends ($ 0.07 per share)
+Added: — ( 12.1 ) — — ( 12.1 )
+Added: Balance at September 30, 2023 $ 1.7 $ 2,850.4 $ ( 1,166.9 ) $ ( 73.6 ) $ 1,611.6
Common stock (1) Additional
18 unchanged sentences
Balance at June 30, 2024 $ 1.7 $ 2,842.5 $ ( 1,178.1 ) $ ( 71.7 ) $ 1,594.4
+Added: Total comprehensive income — — 43.5 0.6 44.1
+Added: Stock-based compensation expense — 9.8 — — 9.8
+Added: Proceeds from exercise of stock options and ESPP contributions — 2.3 — — 2.3
+Added: Taxes withheld and paid on employees' share-based payment awards — ( 0.1 ) — — ( 0.1 )
+Added: Repurchase of common stock — — ( 50.4 ) — ( 50.4 )
+Added: Common stock dividends ($ 0.08 per share)
— ( 13.6 ) — — ( 13.6 )
−Removed: (1) During the three and six months ended June 30, 2024, the Company issued 171,495 and 1,398,393 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.
−Removed: During the three and six months ended June 30, 2023, the Company issued 170,917 and 327,236 shares of common stock, upon the exercise of stock options, vesting of restricted stock units, and for other common stock issuances, respectively.
−Removed: (2) During the six months ended June 30, 2023, 186,020 of the shares issued at closing of the Elkay Merger were returned to the Company as a result of lower working capital and cash balances at closing compared to targets stipulated in the Merger Agreement.
+Added: Balance at September 30, 2024 $ 1.7 $ 2,840.9 $ ( 1,185.0 ) $ ( 71.1 ) $ 1,586.5
+Added: ____________________
+Added: (1) During the three and nine months ended September 30, 2024, the Company issued 1,300,020 and 2,698,413 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.
+Added: During the three and nine months ended September 30, 2023, the Company issued 135,502 and 462,738 shares of common stock, upon the exercise of stock options, vesting of restricted stock units, and for other common stock issuances, respectively.
+Added: (2) During the nine months ended September 30, 2023, 186,020 of the shares issued at closing of the Elkay Merger were returned to the Company as a result of lower working capital and cash balances at closing compared to targets stipulated in the Merger Agreement.
The shares returned to the Company were canceled upon receipt.
5 unchanged sentences
The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid;
−Removed: however, the program will continue until the maximum
−Removed: amount of dollars authorized have been expended or until it is modified or terminated by the Board of Directors.
−Removed: During the three months ended June 30, 2024, the Company repurchased 1,942,016 shares of common stock at a total cost of $ 61.0 million at a weighted average price of $ 31.38 per share.
−Removed: During the six months ended June 30, 2024, the Company repurchased 2,562,860 shares of common stock at a total cost of $ 79.9 million at a weighted average price of $ 31.15 per share.
−Removed: During the three months ended June 30, 2023, the Company repurchased 2,307,113 shares of common stock at a total cost of $ 50.1 million at a weighted average price of $ 21.67 per share.
−Removed: During the six months ended June 30, 2023, the Company repurchased 3,989,869 shares of common stock at a total cost of $ 87.1 million at a weighted average price of $ 21.81 per share.
+Added: however, the program will continue until the maximum amount of dollars authorized have been expended or until it is modified or terminated by the Board of Directors.
+Added: During the three months ended September 30, 2024, the Company repurchased 1,622,895 shares of common stock at a total cost of $ 50.0 million at an average price of $ 30.81 per share.
+Added: During the nine months ended September 30, 2024, the Company repurchased 4,185,755 shares of common stock at a total cost of $ 129.9 million at an average price of $ 31.02 per share.
+Added: During the three months ended September 30, 2023, the Company repurchased 444,606 shares of common stock at a total cost of $ 13.0 million at an average price of $ 29.24 per share.
+Added: During the nine months ended September 30, 2023, the Company repurchased 4,434,475 shares of common stock at a total cost of $ 100.1 million at an average price of $ 22.55 per share.
The repurchased shares were canceled by the Company upon receipt.
−Removed: Approximately $ 310.6 million of the existing authority remained under the Repurchase Program at June 30, 2024.
+Added: Approximately $ 260.6 million of the existing authority remained under the Repurchase Program at September 30, 2024.
Accumulated Other Comprehensive Loss
−Removed: The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2024, are as follows (in millions):
+Added: The changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2024, are as follows (in millions):
Foreign Currency Translation and Other Pension and Postretirement Plans Total
Balance at December 31, 2023 $ ( 71.5 ) $ 3.8 $ ( 67.7 )
−Removed: Other comprehensive income before reclassifications ( 4.0 ) — ( 4.0 )
−Removed: Net current period other comprehensive income ( 4.0 ) — ( 4.0 )
−Removed: Balance at June 30, 2024 $ ( 75.5 ) $ 3.8 $ ( 71.7 )
−Removed: There were no amounts reclassified from accumulated other comprehensive loss to net income during the three and six months ended June 30, 2024 and 2023.
+Added: Other comprehensive loss before reclassifications ( 3.4 ) — ( 3.4 )
+Added: Net current period other comprehensive loss ( 3.4 ) — ( 3.4 )
+Added: Balance at September 30, 2024 $ ( 74.9 ) $ 3.8 $ ( 71.1 )
+Added: There were no amounts reclassified from accumulated other comprehensive loss to net income during the three and nine months ended September 30, 2024 and 2023.
The major classes of inventories are summarized as follows (in millions):
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Finished goods $ 226.3 $ 224.8
5 unchanged sentences
Goodwill and Intangible Assets
−Removed: The changes in the net carrying value of goodwill for the six months ended June 30, 2024, are presented below (in millions):
+Added: The changes in the net carrying value of goodwill for the nine months ended September 30, 2024, are presented below (in millions):
Net carrying amount as of December 31, 2023 $ 796.0
Currency translation adjustments 0.5
−Removed: Net carrying amount as of June 30, 2024 $ 795.1
−Removed: The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2024 and December 31, 2023 are as follows (in millions):
−Removed: June 30, 2024
+Added: Net carrying amount as of September 30, 2024 $ 796.5
+Added: The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of September 30, 2024 and December 31, 2023 are as follows (in millions):
+Added: September 30, 2024
Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount
13 unchanged sentences
Total intangible assets, net 16 years $ 1,340.7 $ ( 388.3 ) $ 952.4
−Removed: Intangible asset amortization expense totaled $ 14.8 million and $ 14.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively.
−Removed: Intangible asset amortization expense totaled $ 29.5 million and $ 29.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively.
−Removed: The Company expects to recognize amortization expense on the intangible assets subject to amortization of $ 59.1 million in the year ending December 31, 2024 (inclusive of the $ 29.5 million of amortization expense recognized in the six months ended June 30, 2024), $ 58.7 million in 2025, $ 58.5 million in 2026, $ 58.5 million in 2027, $ 58.5 million in 2028 and $ 58.5 million in 2029.
+Added: Intangible asset amortization expense totaled $ 14.8 million and $ 14.7 million for the three months ended September 30, 2024 and September 30, 2023, respectively.
+Added: Intangible asset amortization expense totaled $ 44.3 million and $ 44.0 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.
+Added: The Company expects to recognize amortization expense on the intangible assets subject to amortization of $ 59.2 million in the year ending December 31, 2024 (inclusive of the $ 44.3 million of amortization expense recognized in the nine months ended September 30, 2024), $ 58.7 million in 2025, $ 58.5 million in 2026, $ 58.5 million in 2027, $ 58.5 million in 2028 and $ 58.5 million in 2029.
Other Current Liabilities
Other current liabilities are summarized as follows (in millions):
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Commissions $ 10.8 $ 8.6
13 unchanged sentences
(2) See more information related to the restructuring obligations balance within Note 3, Restructuring and Other Similar Charges.
−Removed: (3) Includes projected liabilities related to losses arising from automobile, general, environmental, and product liability claims.
+Added: (3) Includes projected liabilities related to losses arising from automobile, general, environmental, worker's compensation, and product liability claims.
Long-Term Debt
Long-term debt is summarized as follows (in millions):
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
Term loan (1) $ 474.6 $ 473.6
4 unchanged sentences
____________________
−Removed: (1) Includes unamortized debt issuance costs of $ 6.1 million and $ 6.8 million at June 30, 2024 and December 31, 2023, respectively.
+Added: (1) Includes unamortized debt issuance costs of $ 5.7 million and $ 6.8 million at September 30, 2024 and December 31, 2023, respectively.
Senior Secured Credit Facility
6 unchanged sentences
1 dated as of July 1, 2022, executed by Elkay and its domestic subsidiaries, and certain other collateral documents.
−Removed: The Credit Agreement contains representations, warranties, covenants and events of default, including, without limitation, a financial covenant under which the Borrowers are, if certain conditions are met, obligated to maintain on a consolidated basis, as of the end of each fiscal quarter, a certain maximum Net First Lien Leverage Ratio (as defined in the Credit Agreement).
−Removed: As of June 30, 2024, the Borrowers were in compliance with all applicable covenants under the Credit Agreement.
+Added: The Credit Agreement contains representations, warranties, covenants and events of default, including, without limitation, a financial covenant under which the Borrowers are, if certain conditions are met, obligated to maintain on a consolidated basis, as of the end of each fiscal quarter, a certain maximum Net First Lien Leverage Ratio (as defined in the
+Added: Credit Agreement).
+Added: As of September 30, 2024, the Borrowers were in compliance with all applicable covenants under the Credit Agreement.
The Credit Agreement provides for the issuance of a term loan facility in an aggregate principal amount of $ 550.0 million.
7 unchanged sentences
In the event the Borrowers’ Net First Lien Leverage Ratio is less than or equal to 1.80 to 1.00, the applicable margin on both base rate and SOFR borrowings would decrease by 0.25 %.
−Removed: The Borrowers’ Net First Lien Leverage Ratio was 0.98 to 1.00 as of June 30, 2024, and therefore the applicable margin is 2.00 %.
+Added: The Borrowers’ Net First Lien Leverage Ratio was 0.89 to 1.00 as of September 30, 2024, and therefore the applicable margin is 2.00 %.
Prior to July 1, 2023, the Term Loan bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above.
−Removed: At June 30, 2024 and for the six months then ended, the borrowings under the Term Loan had weighted-average effective interest rates of 7.44 % and 7.45 %, respectively.
+Added: At September 30, 2024 and for the nine months then ended, the borrowings under the Term Loan had weighted-average effective interest rates of 6.71 % and 7.43 %, respectively.
Revolving Credit Facility
3 unchanged sentences
In the event the Borrowers' Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, the applicable margin on both base rate and SOFR borrowings would decrease by 0.25 %.
−Removed: The Borrowers’ Net First Lien Leverage Ratio was 0.98 to 1.00 as of June 30, 2024.
+Added: The Borrowers’ Net First Lien Leverage Ratio was 0.89 to 1.00 as of September 30, 2024.
The Borrowers are also required to pay a quarterly commitment fee on the average daily unused portion of the Revolving Credit Facility for each fiscal quarter and fees in connection with the issuance of letters of credit.
1 unchanged sentence
Prior to July 1, 2023, borrowings under the Revolving Credit Facility bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case, plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above.
−Removed: At June 30, 2024 and December 31, 2023, there were no amounts borrowed under the Revolving Credit Facility.
−Removed: As of each of June 30, 2024 and December 31, 2023, $ 11.0 million of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit.
+Added: At September 30, 2024 and December 31, 2023, there were no amounts borrowed under the Revolving Credit Facility.
+Added: As of September 30, 2024 and December 31, 2023, $ 11.3 million and $ 11.0 million, respectively, of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit.
Finance Leases
−Removed: At June 30, 2024 and December 31, 2023, the Company had finance lease obligations of $ 21.2 million and $ 21.7 million, respectively.
+Added: At September 30, 2024 and December 31, 2023, the Company had finance lease obligations of $ 21.0 million and $ 21.7 million, respectively.
Fair Value Measurements
19 unchanged sentences
Deferred compensation plan liabilities are classified within other liabilities on the condensed consolidated balance sheets.
−Removed: The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 (in millions):
−Removed: Fair Value as of June 30, 2024
+Added: The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in millions):
+Added: Fair Value as of September 30, 2024
Level 1 Level 2 Level 3 Total
5 unchanged sentences
Deferred compensation plan liabilities 14.7 — — 14.7
−Removed: There were no transfers of assets between levels at June 30, 2024 and December 31, 2023, respectively.
+Added: There were no transfers of assets between levels at September 30, 2024 and December 31, 2023, respectively.
Fair Value of Non-Derivative Financial Instruments
−Removed: The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at June 30, 2024 and December 31, 2023, due to the short-term nature of those instruments.
−Removed: The fair value of long-term debt as of June 30, 2024 and December 31, 2023, was approximately $ 504.0 million and $ 503.9 million, respectively.
+Added: The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at September 30, 2024 and December 31, 2023, due to the short-term nature of those instruments.
+Added: The fair value of long-term debt as of September 30, 2024 and December 31, 2023, was approximately $ 504.4 million and $ 503.9 million, respectively.
The fair value is based on quoted market prices for the same instruments.
3 unchanged sentences
The following table presents changes in the Company’s product warranty liability (in millions):
−Removed: Six Months Ended
−Removed: June 30, 2024 June 30, 2023
+Added: Nine Months Ended
+Added: September 30, 2024 September 30, 2023
Balance at beginning of period $ 4.7 $ 4.2
4 unchanged sentences
The Company's subsidiaries are involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business involving, among other things, product liability, commercial, employment, workers' compensation, intellectual property claims and environmental matters.
−Removed: The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when liability is probable and those costs are capable of being reasonably estimated.
+Added: The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when a liability is probable and those costs are capable of being reasonably estimated.
Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss or recovery, based upon current information, management believes the eventual outcome of these unresolved legal actions, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.
5 unchanged sentences
As such, the divested entities have been deconsolidated from our 2023 financial results as the Company no longer owns or controls such entities.
−Removed: Therefore, for the period ending December 31, 2023, all asbestos obligations and liabilities, related insurance assets and associated deferred taxes, and other assets of the divested subsidiaries are no longer reported on the consolidated balance sheet.
+Added: Therefore, for the period ended December 31, 2023, all asbestos obligations and liabilities, related insurance assets and associated deferred taxes, and other assets of the divested subsidiaries are no longer reported on the consolidated balance sheet.
The Company recorded a loss on the divestiture of asbestos liabilities and certain assets of $ 11.4 million in the fourth quarter of 2023, including transaction expenses of $ 2.1 million.
17 unchanged sentences
Retirement Benefits
−Removed: The components of net periodic cost (benefit) are as follows (in millions):
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
+Added: The components of net periodic cost are as follows (in millions):
+Added: Three Months Ended Nine Months Ended
+Added: September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Pension Benefits:
2 unchanged sentences
Expected return on plan assets ( 1.9 ) ( 1.9 ) ( 5.6 ) ( 5.6 )
−Removed: Net periodic cost (benefit) $ 1.1 $ 1.2 $ 2.0 $ 2.3
+Added: Net periodic cost $ 0.9 $ 1.1 $ 2.9 $ 3.4
Other Postretirement Benefits:
1 unchanged sentence
Net periodic cost $ 0.1 $ 0.2 $ 0.3 $ 0.5
−Removed: The service cost component of net periodic cost (benefit) is presented within Cost of sales and Selling, general and administrative expenses in the condensed consolidated statements of operations, while the other components of net periodic cost (benefit) are presented within Other income (expense), net.
+Added: The service cost component of net periodic cost is presented within Cost of sales and Selling, general and administrative expenses in the condensed consolidated statements of operations, while the other components of net periodic cost are presented within Other expense, net.
The Company recognizes the net actuarial gains or losses in excess of the corridor in operating results during the final quarter of each fiscal year (or upon any required re-measurement event).
−Removed: During the six months ended June 30, 2024, the Company did not make any contributions to its U.S.
+Added: During the nine months ended September 30, 2024, the Company did not make any contributions to its U.S.
qualified pension plan trusts.
−Removed: During the six months ended June 30, 2023, the Company made contributions of $ 0.1 million to its U.S.
+Added: During the nine months ended September 30, 2023, the Company made contributions of $ 0.2 million to its U.S.
qualified pension plan trusts.
2 unchanged sentences
The Zurn Elkay Water Solutions Corporation Performance Incentive Plan (the "Plan") is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons to encourage them to maximize the Company's performance and create value for the Company's stockholders.
−Removed: For the three months ended June 30, 2024 and June 30, 2023, the Company recognized $ 9.4 million and $ 10.2 million of stock-based compensation expense, respectively.
−Removed: For the six months ended June 30, 2024 and June 30, 2023, the Company recognized $ 19.4 million and $ 20.5 million of stock-based compensation expense, respectively.
−Removed: During the six months ended June 30, 2024, the Company granted the following stock options, restricted stock units, performance stock units, and common stock to directors, executive officers, and certain other employees:
+Added: For the three months ended September 30, 2024 and September 30, 2023, the Company recognized $ 9.8 million and $ 10.0 million of stock-based compensation expense, respectively.
+Added: For the nine months ended September 30, 2024 and September 30, 2023, the Company recognized $ 29.2 million and $ 30.5 million of stock-based compensation expense, respectively.
+Added: During the nine months ended September 30, 2024, the Company granted the following stock options, restricted stock units, performance stock units, and common stock to directors, executive officers, and certain other employees:
Award Type Number of Awards Weighted Average Grant-Date Fair Value
3 unchanged sentences
Common stock 141,347 $ 33.51
+Added: Employee Stock Purchase Plan
+Added: In May 2024, the Company’s stockholders approved the adoption of the Zurn Elkay Water Solutions Corporation Employee Stock Purchase Plan (the “ESPP").
+Added: The number of shares of Company common stock available for purchase under the ESPP is 2,000,000 shares, subject to adjustment in the event of a change in capitalization.
+Added: During the three months ended September 30, 2024, the Company issued 29,389 shares of common stock.
+Added: As of September 30, 2024, 1,970,611 shares remained available for future issuance.
+Added: During the three months ended September 30, 2024, the Company recognized $ 0.2 million of stock-based compensation expense related to the ESPP.
See Note 14, Stock-Based Compensation, to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, for further information regarding stock-based compensation.
Subsequent Events
−Removed: On July 25, 2024, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $ 0.08 per-share to be paid on September 6, 2024, to stockholders of record as of August 20, 2024.
+Added: On October 23, 2024, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $ 0.09 per-share to be paid on December 6, 2024, to stockholders of record as of November 20, 2024.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.