(Mark one) | ||||||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: |
(Exact name of registrant as specified in its charter) |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Zip Code) | |||||||||||
(Address of Principal Executive Offices) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at July 20, 2023 | |||||||
Zurn Elkay Water Solutions Corporation Common Stock, $0.01 par value per share |
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 6. | ||||||||
(Unaudited) | ||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Receivables, net | ||||||||||||||
Inventories | ||||||||||||||
Income taxes receivable | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Insurance for asbestos claims | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and stockholders' equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Current maturities of debt | $ | $ | ||||||||||||
Trade payables | ||||||||||||||
Compensation and benefits | ||||||||||||||
Current portion of pension and postretirement benefit obligations | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Pension and postretirement benefit obligations | ||||||||||||||
Deferred income taxes | ||||||||||||||
Operating lease liability | ||||||||||||||
Reserve for asbestos claims | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Stockholders' equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders' equity | ||||||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Restructuring and other similar charges | ||||||||||||||||||||||||||
Amortization of intangible assets | ||||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Non-operating expense: | ||||||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense), net | ( | ( | ( | |||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Net income from continuing operations | ||||||||||||||||||||||||||
Income from discontinued operations, net of tax | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Basic net income per share: | ||||||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
Discontinued operations | $ | $ | $ | $ | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted net income per share: | ||||||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
Discontinued operations | $ | $ | $ | $ | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average number of shares outstanding (in thousands): | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Effect of dilutive equity awards | ||||||||||||||||||||||||||
Diluted |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | |||||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Six Months Ended | ||||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||||
Operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to cash provided by (used for) operating activities: | ||||||||||||||
Depreciation | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Non-cash asset impairment | ||||||||||||||
Loss on dispositions of long-lived assets | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Other non-cash expenses | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Receivables, net | ( | ( | ||||||||||||
Inventories | ( | |||||||||||||
Other assets | ||||||||||||||
Accounts payable | ( | |||||||||||||
Accruals and other | ( | ( | ||||||||||||
Cash provided by (used for) operating activities | ( | |||||||||||||
Investing activities | ||||||||||||||
Expenditures for property, plant and equipment | ( | ( | ||||||||||||
Acquisitions, net of cash acquired | ||||||||||||||
Proceeds from dispositions of long-lived assets | ||||||||||||||
Proceeds from insurance claims | ||||||||||||||
Proceeds associated with divestiture of discontinued operations | ||||||||||||||
Cash (used for) provided by investing activities | ( | |||||||||||||
Financing activities | ||||||||||||||
Proceeds from borrowings of debt | ||||||||||||||
Repayments of debt | ( | ( | ||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Taxes withheld and paid on employees' share-based payment awards | ( | |||||||||||||
Repurchase of common stock | ( | |||||||||||||
Payment of common stock dividends | ( | ( | ||||||||||||
Cash used for financing activities | ( | ( | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | |||||||||||||
(Decrease) increase in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
As Reported September 30, 2022 | Measurement Period Adjustments | As Reported June 30, 2023 | ||||||||||||||||||
Assets acquired: | ||||||||||||||||||||
Receivables, net | $ | $ | ( | $ | ||||||||||||||||
Inventories | ( | |||||||||||||||||||
Other current assets | ( | |||||||||||||||||||
Property, plant and equipment, net | ( | |||||||||||||||||||
Intangible assets, net | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Other assets | ( | |||||||||||||||||||
Total assets acquired | ( | |||||||||||||||||||
Liabilities assumed: | ||||||||||||||||||||
Trade payables | ||||||||||||||||||||
Compensation and benefits | ||||||||||||||||||||
Current portion of pension and postretirement benefit obligations | ||||||||||||||||||||
Other current liabilities | ||||||||||||||||||||
Operating lease liability | ( | |||||||||||||||||||
Pension and postretirement benefit obligations | ||||||||||||||||||||
Deferred income taxes | ( | |||||||||||||||||||
Other liabilities | ||||||||||||||||||||
Total liabilities assumed | ( | |||||||||||||||||||
Total purchase price | $ | $ | ( | $ |
Six Months Ended | ||||||||
June 30, 2022 | ||||||||
Net sales | $ | |||||||
Net income from continuing operations | $ | |||||||
Earnings per share from continuing operations | ||||||||
Basic | $ | |||||||
Assuming dilution | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Employee termination benefits | $ | $ | $ | $ | ||||||||||||||||||||||
Contract termination and other associated costs | ||||||||||||||||||||||||||
Total restructuring and other similar costs | $ | $ | $ | $ |
Employee termination benefits | Contract termination and other associated costs | Total | ||||||||||||||||||
Accrued Restructuring Costs, December 31, 2022 (1) | $ | $ | $ | |||||||||||||||||
Charges | ||||||||||||||||||||
Cash payments | ( | ( | ( | |||||||||||||||||
Non-cash charges (2) | ( | ( | ||||||||||||||||||
Accrued Restructuring Costs, June 30, 2023 (1) | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Selling, general and administrative expenses (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Income from discontinued operations before income tax | ||||||||||||||||||||||||||
Income tax (expense) benefit | ( | |||||||||||||||||||||||||
Income from discontinued operations, net of tax | $ | $ | $ | $ |
Six Months Ended | ||||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||||
Proceeds associated with divestiture of discontinued operations | $ | $ | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
Customer Type | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||||||||||
Institutional | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||
All other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
Geography | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Rest of world | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Common stock (1) | Additional paid-in capital | Retained deficit | Accumulated other comprehensive loss | Total stockholders’ equity | |||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Total comprehensive income | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Proceeds from exercise of stock options | — | — | — | ||||||||||||||||||||||||||
Taxes withheld and paid on employees' share-based payment awards | — | ( | — | — | ( | ||||||||||||||||||||||||
Proceeds associated with divestiture of discontinued operations | — | — | — | ||||||||||||||||||||||||||
Common stock dividends ($ | — | ( | — | — | ( | ||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Total comprehensive income (loss) | — | — | ( | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Proceeds from exercise of stock options | — | — | — | ||||||||||||||||||||||||||
Common stock dividends ($ | — | ( | — | — | ( | ||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Common stock (1) | Additional paid-in capital | Retained deficit | Accumulated other comprehensive loss | Total stockholders’ equity | |||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Total comprehensive income (loss) | — | — | ( | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Proceeds from exercise of stock options | — | — | — | ||||||||||||||||||||||||||
Elkay Merger (2) | — | ( | — | — | ( | ||||||||||||||||||||||||
Common stock issued to fund defined contribution plans | — | — | — | ||||||||||||||||||||||||||
Repurchase of common stock | — | — | ( | — | ( | ||||||||||||||||||||||||
Common stock dividends ($ | — | ( | — | — | ( | ||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Total comprehensive income | — | — | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Proceeds from exercise of stock options | — | — | — | ||||||||||||||||||||||||||
Repurchase of common stock | ( | — | ( | — | ( | ||||||||||||||||||||||||
Common stock dividends ($ | — | ( | — | — | ( | ||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Foreign Currency Translation and Other | Pension and Postretirement Plans | Total | ||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | $ | ( | |||||||||||||||
Other comprehensive income before reclassifications | ||||||||||||||||||||
Net current period other comprehensive income | ||||||||||||||||||||
Balance at June 30, 2023 | $ | ( | $ | $ | ( |
June 30, 2023 | December 31, 2022 | |||||||||||||
Finished goods | $ | $ | ||||||||||||
Work in progress | ||||||||||||||
Raw materials | ||||||||||||||
Inventories at First-in, First-Out ("FIFO") cost | ||||||||||||||
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost | ( | ( | ||||||||||||
$ | $ |
Net carrying amount as of December 31, 2022 | $ | |||||||
Currency translation adjustments | ( | |||||||
Purchase accounting adjustments (1) | ||||||||
Net carrying amount as of June 30, 2023 | $ |
June 30, 2023 | ||||||||||||||||||||||||||
Weighted Average Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||
Patents | $ | $ | ( | $ | ||||||||||||||||||||||
Customer relationships (including distribution network) | ( | |||||||||||||||||||||||||
Tradenames | ( | |||||||||||||||||||||||||
Intangible assets not subject to amortization - trademarks and tradenames | — | |||||||||||||||||||||||||
Total intangible assets, net | $ | $ | ( | $ | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Weighted Average Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||
Patents | $ | $ | ( | $ | ||||||||||||||||||||||
Customer relationships (including distribution network) | ( | |||||||||||||||||||||||||
Tradenames | ( | |||||||||||||||||||||||||
Intangible assets not subject to amortization - trademarks and tradenames | — | |||||||||||||||||||||||||
Total intangible assets, net | $ | $ | ( | $ |
June 30, 2023 | December 31, 2022 | |||||||||||||
Commissions | $ | $ | ||||||||||||
Income taxes payable | ||||||||||||||
Legal and environmental | ||||||||||||||
Product warranty (1) | ||||||||||||||
Restructuring and other similar charges (2) | ||||||||||||||
Risk management (3) | ||||||||||||||
Sales rebates | ||||||||||||||
Tax indemnities | ||||||||||||||
Taxes, other than income taxes | ||||||||||||||
Other | ||||||||||||||
$ | $ |
June 30, 2023 | December 31, 2022 | |||||||||||||
Term loan (1) | $ | $ | ||||||||||||
Finance leases | ||||||||||||||
Total | ||||||||||||||
Less current maturities | ||||||||||||||
Long-term debt | $ | $ |
Fair Value as of June 30, 2023 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Deferred compensation plan assets | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation plan liabilities | ||||||||||||||||||||||||||
Fair Value as of December 31, 2022 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Deferred compensation plan assets | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation plan liabilities |
Six Months Ended | ||||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Charged to operations | ||||||||||||||
Claims settled | ( | ( | ||||||||||||
Balance at end of period | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
Pension Benefits: | ||||||||||||||||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Net periodic cost (benefit) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Other Postretirement Benefits: | ||||||||||||||||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||||||||||||
Net periodic cost | $ | $ | $ | $ |
Award Type | Number of Awards | Weighted Average Grant-Date Fair Value | ||||||||||||
Stock options | $ | |||||||||||||
Restricted stock units | $ | |||||||||||||
Performance stock units | $ | |||||||||||||
Common stock | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||||||||
Selling, general and administrative expenses (1) | $ | 1.8 | $ | — | $ | 1.8 | $ | — | |||||||||||||||
Income from discontinued operations before income tax | 1.8 | — | 1.8 | — | |||||||||||||||||||
Income tax (expense) benefit | (0.1) | — | 0.1 | 0.8 | |||||||||||||||||||
Income from discontinued operations, net of tax | $ | 1.7 | $ | — | $ | 1.9 | $ | 0.8 |
Three Months Ended | |||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | % Change | ||||||||||||||||||||
Net Sales | $ | 403.2 | $ | 284.2 | $ | 119.0 | 41.9 | % |
Three Months Ended | |||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | % Change | ||||||||||||||||||||
Income from operations | $ | 54.8 | $ | 53.5 | $ | 1.3 | 2.4 | % | |||||||||||||||
% of net sales | 13.6 | % | 18.8 | % | (5.2) | % |
Six Months Ended | |||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | % Change | ||||||||||||||||||||
Net Sales | $ | 775.3 | $ | 523.8 | $ | 251.5 | 48.0 | % |
Six Months Ended | |||||||||||||||||||||||
June 30, 2023 | June 30, 2022 | Change | % Change | ||||||||||||||||||||
Income from operations | 98.5 | 97.4 | 1.1 | 1.1 | % | ||||||||||||||||||
% of net sales | 12.7 | % | 18.6 | % | (5.9) | % |
(in millions) | Six months ended June 30, 2022 | Twelve months ended December 31, 2022 | Six months ended June 30, 2023 | Twelve months ended June 30, 2023 | |||||||||||||||||||
Net income | $ | 66.6 | $ | 61.7 | $ | 57.4 | $ | 52.5 | |||||||||||||||
Income from discontinued operations, net of tax (1) | (0.8) | (4.7) | (1.9) | (5.8) | |||||||||||||||||||
Provision for income taxes | 21.3 | 26.8 | 22.3 | 27.8 | |||||||||||||||||||
Actuarial gain on pension and postretirement benefit obligations | — | (1.9) | — | (1.9) | |||||||||||||||||||
Other expense (income), net (2) | 0.3 | (1.7) | 0.8 | (1.2) | |||||||||||||||||||
Interest expense | 10.0 | 26.9 | 19.9 | 36.8 | |||||||||||||||||||
Depreciation and amortization | 9.3 | 54.5 | 44.6 | 89.8 | |||||||||||||||||||
EBITDA | 106.7 | 161.6 | 143.1 | 198.0 | |||||||||||||||||||
Adjustments to EBITDA | |||||||||||||||||||||||
Restructuring and other similar charges (3) | 1.4 | 15.4 | 9.7 | 23.7 | |||||||||||||||||||
Stock-based compensation expense | 7.7 | 25.0 | 20.5 | 37.8 | |||||||||||||||||||
Merger costs (4) | — | 33.7 | — | 33.7 | |||||||||||||||||||
Last-in first-out ("LIFO") adjustments (5) | (0.4) | 9.7 | (13.9) | (3.8) | |||||||||||||||||||
Acquisition-related fair value adjustment | 0.6 | 18.9 | — | 18.3 | |||||||||||||||||||
Other, net (6) | 0.3 | 0.3 | — | — | |||||||||||||||||||
Subtotal of adjustments to EBITDA | 9.6 | 103.0 | 16.3 | 109.7 | |||||||||||||||||||
Adjusted EBITDA | $ | 116.3 | $ | 264.6 | $ | 159.4 | $ | 307.7 | |||||||||||||||
Consolidated indebtedness (7) | $ | 474.3 | |||||||||||||||||||||
Total Net First Lien Leverage Ratio (8) | 1.54 |
Total Debt at June 30, 2023 | Current Maturities of Debt | Long-term Portion | ||||||||||||||||||
Term loan (1) | $ | 533.4 | $ | 5.5 | $ | 527.9 | ||||||||||||||
Finance leases | 22.0 | 0.8 | 21.2 | |||||||||||||||||
Total | $ | 555.4 | $ | 6.3 | $ | 549.1 |
ISSUER PURCHASES OF EQUITY SECURITIES | |||||||||||||||||||||||
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Approximate Dollar Value that may yet be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||
Period | |||||||||||||||||||||||
April 1 - April 30, 2023 | 856,253 | $ | 20.75 | 856,253 | $ | 460,743,607 | |||||||||||||||||
May 1 - May 31, 2023 | 1,103,471 | $ | 21.58 | 1,103,471 | $ | 436,905,124 | |||||||||||||||||
June 1 - June 30, 2023 | 347,389 | $ | 24.23 | 347,389 | $ | 428,482,327 | |||||||||||||||||
Total/Average | 2,307,113 | $ | 21.67 | 2,307,113 |
Exhibit No. | Description | Filed Herewith | ||||||||||||
31.1 | X | |||||||||||||
31.2 | X | |||||||||||||
32.1 | X | |||||||||||||
101.INS | Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.) | X | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||
104 | Cover Page Inline XBRL data (contained in Exhibit 101) | X |
ZURN ELKAY WATER SOLUTIONS CORPORATION | ||||||||||||||
Date: | July 24, 2023 | By: | /S/ MARK W. PETERSON | |||||||||||
Name: | Mark W. Peterson | |||||||||||||
Title: | Senior Vice President and Chief Financial Officer |
By: | /s/ TODD A. ADAMS | ||||
Name: | Todd A. Adams | ||||
Title: | Chairman of the Board, President and Chief Executive Officer |
By: | /s/ MARK W. PETERSON | ||||
Name: | Mark W. Peterson | ||||
Title: | Senior Vice President and Chief Financial Officer |
By: | /s/ TODD A. ADAMS | ||||
Name: | Todd A. Adams | ||||
Title: | Chairman of the Board, President and Chief Executive Officer |
By: | /s/ MARK W. PETERSON | ||||
Name: | Mark W. Peterson | ||||
Title: | Senior Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2023 |
Dec. 31, 2022 |
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Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 172,932,582 | 176,876,406 |
Common stock, shares outstanding (in shares) | 172,932,582 | 176,876,406 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 34.6 | $ 36.4 | $ 57.4 | $ 66.6 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 3.6 | (2.0) | 3.5 | 0.0 |
Other comprehensive income (loss), net of tax | 3.6 | (2.0) | 3.5 | 0.0 |
Total comprehensive income | $ 38.2 | $ 34.4 | $ 60.9 | $ 66.6 |
Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The unaudited condensed consolidated financial statements included herein have been prepared by Zurn Elkay Water Solutions Corporation (“Zurn Elkay” or the “Company”) in accordance with accounting principles generally accepted in the United States ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results of operations for the interim periods. Results for the interim periods are not necessarily indicative of results that may be expected for the year ending December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The Company On July 1, 2022, Zurn Water Solutions Corporation ("Zurn") completed its combination with Elkay Manufacturing Company (“Elkay”) through the merger of Elkay with and into a newly created subsidiary of the Company, with Elkay surviving as a wholly owned subsidiary of Zurn Elkay (the “Merger” or "Elkay Transaction"). The Company's results of operations include the acquired operations subsequent to July 1, 2022. See Note 2, Acquisition, for additional information on the Elkay Transaction. Zurn Elkay Water Solutions Corporation is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what the Company believes to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, human safety and the environment. The Company's product portfolio includes professional grade water safety and control products, flow system products, hygienic and environmental products, and drinking water products for public and private spaces that deliver superior value to building owners, positively impact the environment and human hygiene and reduce product installation time. The Company's heritage of innovation and specification has allowed it to provide highly-engineered, mission-critical solutions to customers for decades and affords it the privilege of having long-term, valued relationships with market leaders. The Company operates in a disciplined way and the Zurn Elkay Business System (“ZEBS”) is its operating philosophy. 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. Reclassifications Certain prior year amounts have been reclassified to conform to the presentation used for the six months ended June 30, 2023.
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Acquisition |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Elkay Merger On July 1, 2022, the Company completed the Elkay Merger for a purchase price of $1,457.8 million. Elkay, a market leader of drinking water solutions and commercial sinks, complements the Company's existing product portfolio. The purchase price includes $1,411.9 million of Zurn's common stock based on Zurn's closing stock price of $27.48 on July 1, 2022, and $45.9 million of net cash payments for the repayment of Elkay's term loan and Elkay's transaction related costs outstanding that were in excess of Elkay's cash and cash equivalents at the time of closing. Pursuant to the terms of the merger agreement, the Company issued 51,564,524 shares of its common stock, which represented approximately 29% of outstanding shares immediately following the Merger. During the six months ended June 30, 2023, the purchase price was adjusted and is reflected in the purchase price amounts above, following the return of 186,020 of the shares issued at closing 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. 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. As of June 30, 2023, 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. The Company's management determined that the Company is the accounting acquirer in the Elkay Merger based on the facts and circumstances noted within this section and other relevant factors. As such, the Company applied the acquisition method of accounting to the identifiable assets and liabilities of the Elkay business, which have been measured at estimated fair value as of the date of the business combination. The excess of the purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded as goodwill, which is not expected to be deductible for tax purposes. Elkay’s assets and liabilities were measured at estimated fair values at July 1, 2022, primarily using Level 3 inputs. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions including royalty rates and customer attrition rates and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the Merger date. As of June 30, 2023, the valuation process to determine the fair values of the net assets acquired during the measurement period was complete. The final fair value of the assets acquired and liabilities assumed were as follows (in millions):
Unaudited Pro Forma Information The following unaudited supplemental pro forma financial information presents the financial results from continuing operations for the six months ended June 30, 2022 as if the Elkay Merger had occurred on January 1, 2022. The pro forma financial information includes, where applicable, adjustments for: (i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional depreciation expense that would have been recognized related to the acquired property, plant, and equipment, (iii) removing Elkay Merger-Related costs recognized by Elkay during the six months ended June 30, 2022 as these costs will not affect the combined operations, and (iv) the estimated income tax effect on the pro forma adjustments. The pro forma financial information excludes adjustments for estimated cost synergies or other effects of the integration of the Elkay Merger. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the Elkay Merger been completed as of the date indicated or the results that may be obtained in the future.
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Restructuring and Other Similar Charges |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Similar Charges | Restructuring and Other Similar ChargesDuring the three and six months ended June 30, 2023, 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 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. Management expects to continue executing similar initiatives to optimize its 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. The following table summarizes the Company's restructuring and other similar charges during the three and six months ended June 30, 2023 and June 30, 2022, (in millions):
The following table summarizes the activity in the Company's restructuring accrual for the six months ended June 30, 2023 (in millions):
(1)As of June 30, 2023, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets. As of December 31, 2022, $8.4 million of the restructuring accrual is included in other current liabilities and $0.6 million is included in other liabilities in the condensed consolidated balance sheets. (2)Non-cash charges consist of asset impairments based on Level 3 inputs.
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On October 4, 2021, the Company completed a Reverse Morris Trust tax-free spin-off transaction (the “Spin-Off Transaction”) in which (i) substantially all the assets and liabilities of the Company's Process & Motion Control ("PMC") business were transferred to a newly created subsidiary, Land Newco, Inc. (“Land”), (ii) the shares of Land were distributed to the Company's stockholders pro rata, and (iii) Land was merged with a subsidiary of Regal Rexnord Corporation (formerly known as Regal Beloit Corporation), in which the stock of Land was converted into a specified number of shares of Regal Rexnord Corporation in accordance with the exchange ratio. The operating results of PMC are reported as discontinued operations in the condensed 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. The condensed consolidated statements of cash flows for the six months ended June 30, 2023 and June 30, 2022 have not been adjusted to separately disclose cash flows related to the discontinued operations. During 2022, the Company received $35.0 million from Regal Rexnord Corporation as a result of the final working capital and cash balances at closing exceeding the targets stipulated in the Spin-Off Transaction agreement. 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, 2023 and June 30, 2022, are as follows (in millions):
(1)Selling, general and administrative expenses include the reversal of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction. The condensed consolidated statements of cash flows for the six months ended June 30, 2023 and June 30, 2022 have not been adjusted to separately disclose cash flows related to discontinued operations. However, the significant investing and financing cash flows and other significant non-cash operating items associated with the discontinued operations were as follows (in millions):
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer. When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continue to be recognized as an expense when the products are sold. 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. 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. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a component of cost of sales in the consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as cost of sales in the condensed consolidated statements of operations. Revenue by Category The Company designs, procures, manufactures, and markets a comprehensive portfolio of water management solutions. The Company disaggregates its sales by customer type and geographic location, which the Company believes best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows may be impacted differently by certain economic factors. The following tables present revenue disaggregated by customer type and the geographic region of the end customer (in millions):
Contract Balances For substantially all of the Company's product sales, the customer is billed 100% of the contract value when the product ships and payment is generally due 30 days from shipment. Certain contracts include longer payment periods; however, the Company has elected to utilize the practical expedient in which the Company will only recognize a financing component to the sale if payment is due more than one year from the date of shipment. Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. Contract assets arise when the Company performs by transferring goods or services to a customer before the customer pays consideration, or before the customer’s payment is due. A contract liability exists when the Company has received consideration or the amount is due from the customer in advance of revenue recognition. Contract liabilities and contract assets as of June 30, 2023 and December 31, 2022 were not material. Backlog The Company had backlog of $53.6 million as of June 30, 2023, which represents the most likely amount of consideration expected to be received in satisfying the remaining backlog under open contracts. The Company has elected to use 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. The Company expects to recognize approximately 98% of the backlog in the remaining six months of the year ending December 31, 2023, and the remaining approximately 2% in 2024 and beyond. Timing of Performance Obligations Satisfied at a Point in Time The Company determined that the customer is able to control the product when it is delivered to them; thus, depending on the shipping terms, control will transfer at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset and the customer has significant risks and rewards of ownership of the asset. Variable Consideration The Company provides volume-based rebates and the right to return product to certain customers, which are accrued for based on current facts and historical experience. Rebates are paid either on an annual or quarterly basis. There are no other significant variable consideration elements included in the Company's contracts with customers. Contract Costs The Company has elected to expense contract costs as incurred if the amortization period is expected to be one year or less. If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization. As of June 30, 2023 and December 31, 2022, the contract assets capitalized, as well as amortization recognized in the three and six months ended June 30, 2023 and June 30, 2022, are not significant and no impairment losses were recognized. Allowance for Credit Losses The Company assesses the collectability of customer receivables based on the credit worthiness of a customer as determined by credit checks and analysis, as well as the customer’s payment history. In determining the allowance for credit losses, the Company also considers various factors, including the aging of customer accounts and historical write-offs. In addition, the Company monitors other risk factors, including forward-looking information when establishing allowances for credit losses, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for all periods presented is based on an estimated effective income tax rate for the respective fiscal years. The estimated annual effective income tax rate is determined excluding the effect of significant discrete items or items that are reported net of their related tax effects. The tax effect of significant discrete items is reflected in the period in which they occur. The Company's income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are generally higher than the U.S. federal statutory rate, state tax rates in the jurisdictions where the Company does business and the Company's ability to utilize various tax credits, capital loss and net operating loss (“NOL”) carryforwards. 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. In addition, all other available positive and negative evidence is taken into consideration for purposes of determining the proper balances of such valuation allowances. As a result of this review, the Company continues to maintain a full valuation allowance against U.S. federal and state capital loss carryforwards and a partial valuation allowance against certain foreign NOL carryforwards and other related foreign deferred tax assets, as well as certain U.S. state NOL carryforwards. 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. The income tax provision was $13.2 million for the three months ended June 30, 2023, compared to $11.3 million for the three months ended June 30, 2022. The effective income tax rate for the three months ended June 30, 2023 was 28.6% versus 23.7% for the three months ended June 30, 2022. The effective income tax rate for the three months ended June 30, 2023 and the three months ended June 30, 2022 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. The income tax provision was $22.3 million for the six months ended June 30, 2023, compared to $21.3 million for the six months ended June 30, 2022. The effective income tax rate for the six months ended June 30, 2023 was 28.7% versus 24.5% for the six months ended June 30, 2022. The effective income tax rate for the six months ended June 30, 2023 and the six months ended June 30, 2022 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. The Company’s total liability for net unrecognized tax benefits as of June 30, 2023 and December 31, 2022 was $5.4 million and $5.5 million, respectively. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense. As of June 30, 2023 and December 31, 2022, the total amount of unrecognized tax benefits includes gross accrued interest and penalties of $0.9 million and $0.7 million, respectively. The Company recognized $0.2 million and $0.0 million of net interest and penalties as income tax expense during the six months ended June 30, 2023 and June 30, 2022, 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. Currently, the Company is undergoing routine, periodic income tax examinations in foreign jurisdictions. 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. 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 2019. 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. There are currently a number of ongoing income tax examinations being conducted by the applicable tax authorities in various foreign tax jurisdictions with respect to certain PMC entities. It appears reasonably possible that the amounts of unrecognized income tax benefits and indemnification liabilities could change in the next twelve months upon conclusion of the current ongoing examinations; however, any potential payments of income tax, interest and penalties are not expected to be significant to the Company's consolidated financial statements. With certain exceptions, the Company is no longer subject to U.S. federal income tax examinations for tax years ending prior to March 31, 2020, state and local income tax examinations for years ending prior to March 31, 2019 or significant foreign income tax examinations for years ending prior to March 31, 2018.
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Earnings per Share |
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Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic net income per share from continuing and discontinued operations is computed by dividing net income from continuing operations and income from discontinued operations, respectively, by the corresponding weighted average number of common shares outstanding for the period. 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. The computation for diluted net income per share for the three and six months ended June 30, 2023 excludes 0.4 million shares due to their anti-dilutive effects. The computation for diluted net income per share for the three and six months ended June 30, 2022 excludes 0.2 million shares due to their anti-dilutive effects.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Stockholders' equity consists of the following (in millions):
____________________ (1)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. During the three and six months ended June 30, 2022, the Company issued 335,177 and 462,178 shares of common stock upon the exercise of stock options, vesting of restricted stock units, and for other common stock issuances, respectively. (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. The shares returned to the Company were canceled upon receipt. Refer to Note 2, Acquisition for additional information. Share Repurchase Program During fiscal 2015, the Company's Board of Directors approved a common stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. On January 27, 2020, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $300.0 million. On February 8, 2023, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $500.0 million. 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; 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. 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. 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. The repurchased shares were canceled by the Company upon receipt. During the three and six months ended June 30, 2022, the Company did not repurchase any shares of common stock. Approximately $428.5 million of the existing authority remained under the Repurchase Program at June 30, 2023.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2023, are as follows (in millions):
There were no amounts reclassified from accumulated other comprehensive loss to net income during the three and six months ended June 30, 2023 and 2022.
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Inventories |
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The major classes of inventories are summarized as follows (in millions):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the net carrying value of goodwill for the six months ended June 30, 2023, are presented below (in millions):
(1)Refer to Note 2, Acquisition for additional information regarding the acquisition and purchase accounting adjustments. The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2023 and December 31, 2022 are as follows (in millions):
Intangible asset amortization expense totaled $14.6 million and $1.6 million for the three months ended June 30, 2023 and June 30, 2022, respectively. Intangible asset amortization expense totaled $29.3 million and $4.6 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The Company expects to recognize amortization expense on the intangible assets subject to amortization of $58.8 million in the year ending December 31, 2023 (inclusive of the $29.3 million of amortization expense recognized in the six months ended June 30, 2023), $58.8 million in 2024, $58.7 million in 2025, $58.6 million in 2026, $58.5 million in 2027 and $58.5 million in 2028.
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Other Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities Other current liabilities are summarized as follows (in millions):
____________________ (1)See more information related to the product warranty obligations within Note 15, Commitments and Contingencies. (2)See more information related to the restructuring obligations within Note 3, Restructuring and Other Similar Charges. (3)Includes projected liabilities related to losses arising from automobile, general and product liability claims.
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Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt is summarized as follows (in millions):
____________________ (1)Includes unamortized debt issuance costs of $8.4 million and $9.2 million at June 30, 2023 and December 31, 2022, respectively. Senior Secured Credit Facility On October 4, 2021, ZBS Global, Inc. (“Holdings”), Zurn Holdings, Inc., Zurn LLC (together, the “Original Borrowers”), the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent for the lenders (in such capacity, the “Administrative Agent”) entered into a Fourth Amended and Restated First Lien Credit Agreement, which was amended by that certain Amendment No. 1 to Fourth Amended and Restated First Lien Credit Agreement dated as of July 1, 2022 (the "2022 Amendment") (as so amended, the “Credit Agreement”). Pursuant to the 2022 Amendment, Elkay joined the Credit Agreement as a borrower (Elkay and the Original Borrowers, collectively, the "Borrowers"). The Credit Agreement is funded by a syndicate of banks and other financial institutions and provides for (i) a $550.0 million term loan facility (the “Term Loan”) and (ii) a $200.0 million revolving credit facility (the “Revolving Credit Facility”). The obligations under the Credit Agreement and related documents are secured by liens on substantially all of the assets of Holdings, the Borrowers, and certain subsidiaries of the Borrowers pursuant to a Third Amended and Restated Guarantee and Collateral Agreement, dated as of October 4, 2021, among Holdings, the Borrowers, the subsidiaries of the Borrowers party thereto, and the Administrative Agent, as supplemented pursuant to that certain Supplement No. 1 dated as of July 1, 2022, executed by Elkay and its domestic subsidiaries, and certain other collateral documents. 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). As of June 30, 2023, the Borrowers were in compliance with all applicable covenants under the Credit Agreement. Term Debt The Credit Agreement provides for the issuance of a term loan facility in an aggregate principal amount of $550.0 million. The proceeds of the Term Loan were, together with the dividend received by the Company in connection with the Spin-Off Transaction and cash on hand, used to (i) repay in full a $625 million term loan, together with accrued interest thereon, (ii) redeem the $500 million of outstanding principal amount of the 4.875% notes, and (iii) pay related fees and expenses. The Term Loan has a maturity date of October 4, 2028. The Borrowers are required to make quarterly payments of principal in an amount equal to $1.4 million on each quarter until the maturity date. 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. If the Net First Lien Leverage Ratio was greater than 1.80 to 1.00, the applicable margin shall equal 1.25% in the case of base rate borrowings and 2.25% in the case of LIBOR borrowings. In the event the Borrowers’ Net First Lien Leverage Ratio was less than or equal to 1.80 to 1.00, the applicable margin on both base rate and LIBOR borrowings would decrease by 0.25%. The Borrowers’ Net First Lien Leverage Ratio was 1.54 to 1.00 as of June 30, 2023, and therefore the applicable margin is 2.00%. At June 30, 2023 and for the six months then ended, the borrowings under the Term Loan had weighted-average effective interest rates of 7.22% and 6.78%, respectively. Effective July 1, 2023, the secured overnight financing rate ("SOFR") replaced LIBOR, and accordingly, beginning July 1, 2023 the Term Loan will bear interest by reference to a base rate or a rate based on Term SOFR, plus a Term SOFR adjustment of 0.115%, 0.262%, or 0.428% for interest periods of one month, three months, and six months, respectively, plus an applicable margin based on the Borrowers' Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above. Revolving Credit Facility The Credit Agreement includes a $200.0 million revolving credit facility that has a maturity date of October 2, 2026. 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. If the Net First Lien Leverage Ratio was greater than 2.00 to 1.00, the applicable margin shall equal 1.00% in the case of base rate borrowings and 2.00% in the case of LIBOR borrowings. In the event the Borrowers' Net First Lien Leverage Ratio was less than or equal to 2.00 to 1.00, the applicable margin on both base rate and LIBOR borrowings would decrease by 0.25%. The Borrowers’ Net First Lien Leverage Ratio was 1.54 to 1.00 as of June 30, 2023. 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. If the Net First Lien Leverage Ratio is greater than 2.00 to 1.00, the commitment fee shall equal 0.50%, and if the Company's Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, the commitment fee shall equal 0.375%. At June 30, 2023 and December 31, 2022, there were no amounts borrowed under the Revolving Credit Facility. As of June 30, 2023 and December 31, 2022, $5.8 million and $7.5 million of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit, respectively. Effective July 1, 2023, the SOFR replaced LIBOR, and accordingly, beginning July 1, 2023 the Revolving Credit Facility will bear interest by reference to a base rate or a rate based on Term SOFR, plus a Term SOFR adjustment of 0.115%, 0.262%, or 0.428% for interest periods of one month, three months, and six months, respectively, plus an applicable margin based on the Borrowers' Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above. Finance Leases At June 30, 2023 and December 31, 2022, the Company had finance lease obligations of $22.0 million and $0.6 million, respectively.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about the assumptions a market participant would use. In accordance with ASC 820, fair value measurements are classified under the following hierarchy: •Level 1 - Quoted prices for identical instruments in active markets. •Level 2 - Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable. •Level 3 - Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value measurement and unobservable. If applicable, the Company uses quoted market prices in active markets to determine fair value, and therefore classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters. These measurements are classified within Level 3 if they use significant unobservable inputs. Fair Value of Financial Instruments The Company has a nonqualified deferred compensation plan where assets are invested in mutual funds and corporate-owned life insurance contracts held in a Rabbi Trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for the mutual funds, which are measured using quoted prices of identical instruments in active markets categorized as Level 1. Corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and reflects the net asset value of the underlying publicly traded mutual funds categorized as Level 2. The deferred compensation plan assets are classified within other assets on the condensed consolidated balance sheets. Deferred compensation plan liabilities are measured at fair value based on quoted prices of identical instruments to the investment vehicles selected by the participants categorized as Level 1. Deferred compensation plan liabilities are classified within other liabilities on the condensed consolidated balance sheets. 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, 2023 and December 31, 2022 (in millions):
There were no transfers of assets between levels at June 30, 2023 and December 31, 2022, respectively. Fair Value of Non-Derivative Financial Instruments The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at June 30, 2023 and December 31, 2022, due to the short-term nature of those instruments. The fair value of long-term debt as of June 30, 2023 and December 31, 2022, was approximately $562.4 million and $543.1 million, respectively. The fair value is based on quoted market prices for the same instruments.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Warranties: The Company offers warranties on the sales of certain of its products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The following table presents changes in the Company’s product warranty liability (in millions):
Contingencies: 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. 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. 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. Certain Company subsidiaries are subject to asbestos litigation. As of June 30, 2023, Zurn and numerous other unrelated companies were defendants in approximately 6,000 asbestos related lawsuits representing approximately 7,500 claims. Plaintiffs' claims allege personal injuries caused by exposure to asbestos used primarily in industrial boilers formerly manufactured by a segment of Zurn. Zurn did not manufacture asbestos or asbestos components. Instead, Zurn purchased them from suppliers. These claims are being handled pursuant to a defense strategy funded by insurers. As of June 30, 2023, the Company estimates the potential liability for the asbestos-related claims described above, as well as the claims expected to be filed in the next ten years, to be approximately $79.0 million, of which Zurn expects approximately $58.0 million to be paid in the next ten years on such claims, with the balance of the estimated liability being paid in subsequent years. The $79.0 million was developed based on actuarial studies and represents the projected indemnity payout for current and future claims. There are inherent uncertainties involved in estimating the number of future asbestos claims, future settlement costs, and the effectiveness of defense strategies and settlement initiatives. As a result, actual liability could differ from the estimate described herein and could be substantial. The liability for the asbestos-related claims is recorded in reserve for asbestos claims within the condensed consolidated balance sheets. Management estimates that the available insurance to cover this ten year estimated potential asbestos liability as of June 30, 2023 is $72.1 million. The Company recorded a receivable from its insurance carriers, which corresponds to the amount of this potential asbestos liability that is covered by available insurance and is currently determined to be probable of recovery. However, there is no assurance the Company's current insurance coverage will ultimately be available or that this asbestos liability will not ultimately exceed the Company's coverage limits. Factors that could cause a decrease in the amount of available coverage or create gaps in coverage include: changes in law governing the policies, potential disputes and settlements with the carriers regarding the scope of coverage, and insolvencies of one or more of the Company's carriers. The receivable for probable asbestos-related recoveries is recorded in insurance for asbestos claims within the condensed consolidated balance sheets.
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Retirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits | Retirement Benefits The components of net periodic (benefit) cost are as follows (in millions):
The service cost component of net periodic benefits 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 (benefit) cost are presented within Other income (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). During the six months ended June 30, 2023 and June 30, 2022, the Company made contributions of $0.1 million and $0.7 million, respectively, to its U.S. qualified pension plan trusts. See Note 16, Retirement Benefits, to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for further information regarding retirement benefits.
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Stock-Based Compensation |
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Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation 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. For the three months ended June 30, 2023 and June 30, 2022, the Company recognized $10.2 million and $3.8 million of stock-based compensation expense, respectively. For the six months ended June 30, 2023 and June 30, 2022, the Company recognized $20.5 million and $7.7 million of stock-based compensation expense, respectively. During the six months ended June 30, 2023, the Company granted the following stock options, restricted stock units, performance stock units and common stock to directors, executive officers, and certain other employees:
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Subsequent Events |
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Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn July 20, 2023, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.07 per-share to be paid on September 7, 2023, to stockholders of record as of August 18, 2023. |
Basis of Presentation and Significant Accounting Policies (Policies) |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the presentation used for the six months ended June 30, 2023.
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Revenue Recognition | Revenue Recognition A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer. When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continue to be recognized as an expense when the products are sold. 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. 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. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a component of cost of sales in the consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as cost of sales in the condensed consolidated statements of operations. For substantially all of the Company's product sales, the customer is billed 100% of the contract value when the product ships and payment is generally due 30 days from shipment. Certain contracts include longer payment periods; however, the Company has elected to utilize the practical expedient in which the Company will only recognize a financing component to the sale if payment is due more than one year from the date of shipment.Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. Contract assets arise when the Company performs by transferring goods or services to a customer before the customer pays consideration, or before the customer’s payment is due. A contract liability exists when the Company has received consideration or the amount is due from the customer in advance of revenue recognition.The Company has elected to use 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.Timing of Performance Obligations Satisfied at a Point in Time The Company determined that the customer is able to control the product when it is delivered to them; thus, depending on the shipping terms, control will transfer at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset and the customer has significant risks and rewards of ownership of the asset. Variable Consideration The Company provides volume-based rebates and the right to return product to certain customers, which are accrued for based on current facts and historical experience. Rebates are paid either on an annual or quarterly basis. There are no other significant variable consideration elements included in the Company's contracts with customers. Contract CostsThe Company has elected to expense contract costs as incurred if the amortization period is expected to be one year or less. If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization.
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Fair Value of Financial Instruments | The Company has a nonqualified deferred compensation plan where assets are invested in mutual funds and corporate-owned life insurance contracts held in a Rabbi Trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for the mutual funds, which are measured using quoted prices of identical instruments in active markets categorized as Level 1. Corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and reflects the net asset value of the underlying publicly traded mutual funds categorized as Level 2. The deferred compensation plan assets are classified within other assets on the condensed consolidated balance sheets. Deferred compensation plan liabilities are measured at fair value based on quoted prices of identical instruments to the investment vehicles selected by the participants categorized as Level 1. Deferred compensation plan liabilities are classified within other liabilities on the condensed consolidated balance sheets. |
Acquisition (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preliminary Fair Value Assets Acquired and Liabilities Assumed | The final fair value of the assets acquired and liabilities assumed were as follows (in millions):
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Schedule of Pro Forma Financial Information | The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the Elkay Merger been completed as of the date indicated or the results that may be obtained in the future.
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Restructuring and Other Similar Charges (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The following table summarizes the Company's restructuring and other similar charges during the three and six months ended June 30, 2023 and June 30, 2022, (in millions):
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Schedule of Activity in Restructuring Accrual | The following table summarizes the activity in the Company's restructuring accrual for the six months ended June 30, 2023 (in millions):
(1)As of June 30, 2023, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets. As of December 31, 2022, $8.4 million of the restructuring accrual is included in other current liabilities and $0.6 million is included in other liabilities in the condensed consolidated balance sheets. (2)Non-cash charges consist of asset impairments based on Level 3 inputs.
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Discontinued Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | 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, 2023 and June 30, 2022, are as follows (in millions):
(1)Selling, general and administrative expenses include the reversal of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction. The condensed consolidated statements of cash flows for the six months ended June 30, 2023 and June 30, 2022 have not been adjusted to separately disclose cash flows related to discontinued operations. However, the significant investing and financing cash flows and other significant non-cash operating items associated with the discontinued operations were as follows (in millions):
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Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present revenue disaggregated by customer type and the geographic region of the end customer (in millions):
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity | Stockholders' equity consists of the following (in millions):
____________________ (1)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. During the three and six months ended June 30, 2022, the Company issued 335,177 and 462,178 shares of common stock upon the exercise of stock options, vesting of restricted stock units, and for other common stock issuances, respectively. (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. The shares returned to the Company were canceled upon receipt. Refer to Note 2, Acquisition for additional information.
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2023, are as follows (in millions):
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Major Classes of Inventories | The major classes of inventories are summarized as follows (in millions):
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | The changes in the net carrying value of goodwill for the six months ended June 30, 2023, are presented below (in millions):
(1)Refer to Note 2, Acquisition for additional information regarding the acquisition and purchase accounting adjustments.
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Schedule of Gross Carrying Amount and Accumulated Amortization for Finite-Lived Intangible Assets | The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2023 and December 31, 2022 are as follows (in millions):
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Schedule of Gross Carrying Amount and Accumulated Amortization for Infinite-Lived Intangible Assets | The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2023 and December 31, 2022 are as follows (in millions):
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Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Liabilities | Other current liabilities are summarized as follows (in millions):
____________________ (1)See more information related to the product warranty obligations within Note 15, Commitments and Contingencies. (2)See more information related to the restructuring obligations within Note 3, Restructuring and Other Similar Charges. (3)Includes projected liabilities related to losses arising from automobile, general and product liability claims.
|
Long-Term Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt is summarized as follows (in millions):
____________________ (1)Includes unamortized debt issuance costs of $8.4 million and $9.2 million at June 30, 2023 and December 31, 2022, respectively.
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Recognized at Fair Value on a Recurring Basis | 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, 2023 and December 31, 2022 (in millions):
|
Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The following table presents changes in the Company’s product warranty liability (in millions):
|
Retirement Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic (benefit) cost are as follows (in millions):
|
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Payments | During the six months ended June 30, 2023, the Company granted the following stock options, restricted stock units, performance stock units and common stock to directors, executive officers, and certain other employees:
|
Acquisition - Narrative (Details) - Elkay Manufacturing Company $ / shares in Units, $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 01, 2022
USD ($)
member
director
$ / shares
shares
|
Jun. 30, 2023
director
member
shares
|
|
Business Acquisition [Line Items] | ||
Business combination, consideration transferred | $ 1,457.8 | |
Purchase price, common stock | $ 1,411.9 | |
Business acquisition, share price (in dollars per share) | $ / shares | $ 27.48 | |
Preliminary cash purchase price | $ 45.9 | |
Issued shares (in shares) | shares | 51,564,524 | |
Percent of shares issued of outstanding shares | 29.00% | |
Number of issued shares (in shares) | shares | 186,020 | |
Number of board members | member | 11 | 10 |
Number of directors | director | 2 | 1 |
Acquisition - Pro Forma Financial Information (Details) - Elkay Manufacturing Company $ / shares in Units, $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Net sales | $ | $ 822.5 |
Net income from continuing operations | $ | $ 56.6 |
Earnings per share from continuing operations | |
Basic (in dollars per share) | $ / shares | $ 0.45 |
Assuming dilution (in dollars per share) | $ / shares | $ 0.44 |
Restructuring and Other Similar Charges - By Operating Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar costs | $ 7.8 | $ 0.3 | $ 9.7 | $ 1.4 |
Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar costs | 2.0 | 0.2 | 2.9 | 1.3 |
Contract termination and other associated costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar costs | $ 5.8 | $ 0.1 | $ 6.8 | $ 0.1 |
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Working capital | $ 35.0 | |
Discontinued Operations, Disposed of by Sale | Process & Motion Control | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Working capital | $ 35.0 |
Discontinued Operations - Loss From Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income from discontinued operations, net of tax | $ 1.7 | $ 0.0 | $ 1.9 | $ 0.8 |
Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Selling, general and administrative expenses | 1.8 | 0.0 | 1.8 | 0.0 |
Income from discontinued operations before income tax | 1.8 | 0.0 | 1.8 | 0.0 |
Income tax (expense) benefit | (0.1) | 0.0 | 0.1 | 0.8 |
Income from discontinued operations, net of tax | $ 1.7 | $ 0.0 | $ 1.9 | $ 0.8 |
Discontinued Operations - Other Significant Operating Non-Cash Items (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds associated with divestiture of discontinued operations | $ 0.0 | $ 35.0 |
Revenue Recognition - Revenue Disaggregated by Customer Type (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Total | $ 403.2 | $ 284.2 | $ 775.3 | $ 523.8 |
Institutional | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 183.8 | 108.8 | 351.7 | 196.4 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 113.2 | 84.3 | 223.9 | 159.8 |
All other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 106.2 | $ 91.1 | $ 199.7 | $ 167.6 |
Revenue Recognition - Revenue Disaggregated by Geography (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Total | $ 403.2 | $ 284.2 | $ 775.3 | $ 523.8 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 367.2 | 257.5 | 716.0 | 477.1 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 24.3 | 20.5 | 38.2 | 35.6 |
Rest of world | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 11.7 | $ 6.2 | $ 21.1 | $ 11.1 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 13.2 | $ 11.3 | $ 22.3 | $ 21.3 | |
Effective income tax rate | 28.60% | 23.70% | 28.70% | 24.50% | |
Unrecognized tax benefits | $ 5.4 | $ 5.4 | $ 5.5 | ||
Accrued interest and penalties | $ 0.9 | 0.9 | $ 0.7 | ||
Net interest and penalties recognized as income tax expense | $ 0.2 | $ 0.0 |
Earnings per Share (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.4 | 0.2 | 0.4 | 0.2 |
Stockholders' Equity - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Feb. 08, 2023 |
Jan. 27, 2020 |
Mar. 31, 2015 |
|
Class of Stock [Line Items] | |||||||
Repurchased and canceled shares (in shares) | 2,307,113 | 0 | 3,989,869 | 0 | |||
Cost of repurchased and canceled shares of common stock | $ 50,100,000 | $ 87,100,000 | |||||
Average price of repurchased and canceled shares of common stock (in dollars per share) | $ 21.67 | $ 21.81 | |||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock repurchase program amount | $ 500,000,000 | $ 300,000,000 | $ 200,000,000 | ||||
Remaining amount of repurchase authority | $ 428,500,000 | $ 428,500,000 |
Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished goods | $ 243.6 | $ 285.9 |
Work in progress | 15.5 | 19.1 |
Raw materials | 54.8 | 75.7 |
Inventories at First-in, First-Out ("FIFO") cost | 313.9 | 380.7 |
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost | (0.1) | (14.0) |
Inventories | $ 313.8 | $ 366.7 |
Goodwill and Intangible Assets - Changes in Net Carrying Value (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Net carrying amount, beginning of period | $ 777.0 |
Currency translation adjustments | (0.1) |
Purchase accounting adjustments | 19.0 |
Net carrying amount, end of period | $ 795.9 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible asset amortization expense | $ 14.6 | $ 1.6 | $ 29.3 | $ 4.6 |
Amortization expense in year ending 2023 | 58.8 | 58.8 | ||
Amortization expense in fiscal year 2024 | 58.8 | 58.8 | ||
Amortization expense in fiscal year 2025 | 58.7 | 58.7 | ||
Amortization expense in fiscal year 2026 | 58.6 | 58.6 | ||
Amortization expense in fiscal year 2027 | 58.5 | 58.5 | ||
Amortization expense in fiscal year 2028 | $ 58.5 | $ 58.5 |
Other Current Liabilities (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Commissions | $ 11.6 | $ 9.0 |
Current portion of operating lease liability | 10.1 | 9.4 |
Income taxes payable | 2.1 | 2.3 |
Legal and environmental | 1.5 | 2.3 |
Product warranty | 4.4 | 4.2 |
Restructuring and other similar charges | 3.6 | 8.4 |
Risk management | 16.6 | 16.3 |
Sales rebates | 58.3 | 56.0 |
Tax indemnities | 17.5 | 19.0 |
Taxes, other than income taxes | 3.3 | 2.5 |
Other | 7.4 | 16.5 |
Other current liabilities | $ 136.4 | $ 145.9 |
Operating lease, liability, current, statement of financial position, extensible list | Other current liabilities | Other current liabilities |
Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 555.4 | $ 535.9 |
Less current maturities | 6.3 | 5.7 |
Long-term debt | 549.1 | 530.2 |
Term loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Total | 533.4 | 535.3 |
Unamortized debt issuance costs | 8.4 | 9.2 |
Finance Leases | Other | ||
Debt Instrument [Line Items] | ||
Total | $ 22.0 | $ 0.6 |
Fair Value Measurements - Schedule of Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | $ 13.0 | $ 11.5 |
Deferred compensation plan liabilities | 14.0 | 12.1 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 0.4 | 0.2 |
Deferred compensation plan liabilities | 14.0 | 12.1 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 12.6 | 11.3 |
Deferred compensation plan liabilities | 0.0 | 0.0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 0.0 | 0.0 |
Deferred compensation plan liabilities | $ 0.0 | $ 0.0 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt | $ 562.4 | $ 543.1 |
Commitments and Contingencies - Warranty Liability (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Movement in Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 4.2 | $ 1.3 |
Charged to operations | 1.5 | 0.6 |
Claims settled | (1.3) | (0.7) |
Balance at end of period | $ 4.4 | $ 1.2 |
Commitments and Contingencies - Narrative (Details) lawsuit in Thousands, $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023
USD ($)
lawsuit
claimant
carrier
|
Dec. 31, 2022
USD ($)
|
|
Loss Contingencies [Line Items] | ||
Insurance for asbestos claims | $ 72.1 | $ 72.1 |
Number of carriers, if insolvent, could impact coverage | carrier | 1 | |
Asbestos Issue | Zurn | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits | lawsuit | 6 | |
Number of claimants | claimant | 7,500 | |
Time frame of claims expected to be filed | 10 years | |
Insurance for asbestos claims | $ 79.0 | |
Estimated claim payments made over specified period | $ 58.0 | |
Time frame of estimated claims disbursements | 10 years | |
Insurance for asbestos claims | $ 72.1 |
Retirement Benefits - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Pension Benefits: | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 3.0 | $ 2.2 | $ 6.0 | $ 4.3 |
Expected return on plan assets | (1.8) | (2.4) | (3.7) | (4.8) |
Net periodic cost (benefit) | 1.2 | (0.2) | 2.3 | (0.5) |
Other Postretirement Benefits: | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 0.1 | 0.0 | 0.3 | 0.1 |
Net periodic cost (benefit) | $ 0.1 | $ 0.0 | $ 0.3 | $ 0.1 |
Retirement Benefits - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Retirement Benefits [Abstract] | ||
Contributions by employer | $ 0.1 | $ 0.7 |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Share-Based Payment Arrangement, Noncash Expense [Abstract] | ||||
Stock-based compensation expense | $ 10.2 | $ 3.8 | $ 20.5 | $ 7.7 |
Stock-Based Compensation - Stock Options, Restricted Stock Units, and Performance Stock Units (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
shares
| |
Stock options | |
Number of Awards | |
Number of awards (in shares) | shares | 118,776 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 8.17 |
Restricted stock units | |
Number of Awards | |
Number of awards (in shares) | shares | 294,584 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 23.14 |
Performance stock units | |
Number of Awards | |
Number of awards (in shares) | shares | 425,246 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 23.25 |
Common stock | |
Number of Awards | |
Number of awards (in shares) | shares | 138,784 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 23.37 |
Subsequent Events (Details) |
Jul. 20, 2023
$ / shares
|
---|---|
Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock dividend to be paid (in dollars per share) | $ 0.07 |
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