Raises Total Company Guidance including
Organic Revenue Growth
Third Quarter 2023 Highlights
(All comparisons against the third quarter of 2022 unless
otherwise noted.)
Strong performance driven by its competitive differentiator -
Ingersoll Rand Execution Excellence (IRX):
- Third quarter orders of $1,638 million, down 1%, or down 8%
organic
- On a two-year stack, organic orders grew 6%
- Reported third quarter revenues of $1,739 million, up 15%, or
up 6% organic1
- Reported net income attributable to Ingersoll Rand Inc. of $208
million, or earnings of $0.51 per share
- Adjusted net income from continuing operations, net of tax1 of
$316 million, or $0.77 per share
- Adjusted EBITDA1 of $462 million, up 23%, with a margin of
26.5%, up 170 basis points year over year, and incremental margin
of 38%
- Reported operating cash flow from continuing operations of $397
million and free cash flow from continuing operations1 of $369
million, up 46%
- Liquidity of $3.2 billion as of September 30, 2023, including
$1.2 billion of cash on hand and undrawn capacity of $2.0 billion
under available credit facilities
- Backlog remains near historically high levels, up 6%
Raising 2023 Guidance
- Raising full-year 2023 total revenue growth by 200 bps to a
range of 14% to 16% and organic revenue growth1 range expectation
by 100 bps to 9% to 11%
- Raising Adjusted EBITDA1 guidance to a range of $1,730 to
$1,770 million, up 21% to 23% over prior year
- Raising full-year 2023 Adjusted EPS1 guidance to a range of
$2.81 to $2.89, up 19% to 22% over prior year
Ingersoll Rand Inc. (NYSE: IR) reported record third quarter
revenues.
“We remain committed to delivering differentiated, profitable
growth and are again raising our full year guidance on total
revenue growth, organic revenue growth, Adjusted EBITDA, and
Adjusted EPS,” said Vicente Reynal, chairman and chief executive
officer. “In addition, we continue to stay nimble and pivot towards
high-growth, sustainable end markets. Our inorganic growth strategy
continues to deliver value-enhancing acquisitions, and we believe
that our IRX model enables us to better capitalize on those efforts
and strengthen our core capabilities to unlock further growth.”
Third Quarter 2023 Segment Review
(All comparisons against the third quarter of 2022 unless
otherwise noted.)
Industrial Technologies and Services Segment (IT&S):
broad range of compressor, vacuum and blower solutions as well as
industrial technologies including power tools and lifting
equipment
- Reported Orders of $1,347 million, down 1%, or 9%
organic
- On a two-year stack, organic orders grew 8%
- Reported Revenues of $1,428 million, up 19%, or 10%
organic1
- Reported Segment Adjusted EBITDA of $411 million, up 31%
with an incremental margin of 42%
- Reported Segment Adjusted EBITDA Margin of 28.8%, up 260
basis points, due to continued pricing strength and IRX driving
strong operational execution
- IT&S saw organic orders finish largely in line with
expectations down 9%, due largely to tough comparisons to the 16%
organic order growth in the third quarter of the prior year. Book
to bill remains on track and consistent with previous guidance of
approximately 1.0x for the year.
1 Non-GAAP measure (definitions and/or
reconciliations in tables below)
Precision and Science Technologies Segment (P&ST):
highly specialized fluid management solutions including precision
liquid and gas pumps and niche compression technologies
- Reported Orders of $291 million, down 3%, or 6% organic
- On a two-year stack, organic orders declined 3%
- Reported Revenues of $311 million, down 2%, or 5%
organic2
- Reported Segment Adjusted EBITDA of $94 million, up
2%
- Reported Segment Adjusted EBITDA Margin of 30.3%, up 120
basis points, driven largely by improvements in pricing versus cost
and synergy delivery in recently completed M&A
- Order declines were primarily driven by the Life Sciences
business, which continues to experience softness in the oxygen
concentration and biopharma end markets. In the industrial
businesses, short cycle orders were positive both sequentially and
year over year, driven by demand generation activities, use of IRX,
and lead time reductions.
Balance Sheet and Cash Flow
Ingersoll Rand remains in a strong financial position with ample
liquidity of $3.2 billion. On a reported basis, the Company
generated $397 million of cash flow from operating activities from
continuing operations and invested $29 million in capital
expenditures, resulting in free cash flow from continuing
operations2 of $369 million, compared to cash flow from operating
activities from continuing operations of $274 million and free cash
flow from continuing operations2 of $253 million in the prior year
period. Net debt to Adjusted EBITDA leverage2 was 0.9x for the
third quarter, which was an improvement of 0.1x as compared to the
prior year.
In addition, Ingersoll Rand continues to evolve its capital
structure to both facilitate its capital allocation strategy and
move towards a fully unsecured investment grade capital structure.
In August 2023, the Company refinanced $1.5 billion of floating
secured term loans and issued its inaugural unsecured investment
grade bonds. Under this new structure, Ingersoll Rand achieved a
fixed / floating ratio of 74% / 26% and extended its weighted
average maturity from four to six years.
Consistent with our comprehensive capital allocation strategy
led by M&A, in the third quarter of 2023, Ingersoll Rand
deployed $308 million to M&A. Ingersoll Rand closed on the
acquisition of Howden Roots LLC (“Roots”), a leading provider of
low-pressure compression and vacuum technologies. In addition, the
company recently closed on two additional transactions of Oxywise
s.r.o, a leading provider of onsite oxygen and nitrogen generating
systems as well as Fraserwoods Fabrication and Machining Ltd., a
leading provider of aftermarket services for blowers and pumps in
the vacuum truck market. The Company also returned $8 million to
shareholders through its quarterly dividend payment. No shares were
repurchased in the third quarter. The Company remains committed to
its annual share repurchase commitment of approximately $250
million for the full year.
2 Non-GAAP measure (definitions and/or
reconciliations in tables below)
Raising 2023 Guidance
Ingersoll Rand is raising its guidance for full year 2023 total
revenue growth, organic revenue growth, Adjusted EBITDA and
Adjusted EPS ranges based on robust performance in Q3, and its
expectations of continued strong commercial and operational
performance for the balance of the year:
Key Metrics2
Previous Guidance as of
5/3/23
Previous Guidance as of
8/2/23
Revised Guidance as of
11/1/23
Revenue - Total Ingersoll Rand
10-12%
12-14%
14-16%
Ingersoll Rand (Organic)1
6-8%
8-10%
9-11%
Industrial Technologies & Services
(Organic)
6-8%
9-11%
11-13%
Precision & Science Technologies
(Organic)
5-7%
5-7%
1-3%
FX Impact3
~Flat
~ Flat
(~1%)
M&A4
~$270M
~$300M
~$360M
Corporate Costs
(~$160M)
(~$165M)
(~$170M)
Adjusted EBITDA1
$1,660M - $1,710M (+16% - +19%
YoY)
$1,690M - $1,740M (+18% - +21%
YoY)
$1,730M - $1,770M (+21% - +23%
YoY)
Adjusted EPS1
$2.64 - $2.74 (+11% - +16%
YoY)
$2.70 - $2.80 (+14% - +19%
YoY)
$2.81 - $2.89 (+19% - +22%
YoY)
Reconciliations of non-GAAP measures related to full-year 2023
guidance have not been provided due to the unreasonable efforts it
would take to provide such reconciliations due to the high
variability, complexity and uncertainty with respect to forecasting
and quantifying certain amounts that are necessary for such
reconciliations, including net income (loss) and adjustments that
could be made for acquisitions-related expenses, restructuring and
other business transformation costs, gains or losses on foreign
currency exchange and the timing and magnitude of other amounts in
the reconciliation of historic numbers. For the same reasons, we
are unable to address the probable significance of the unavailable
information, which could have a potentially unpredictable, and
potentially significant, impact on our future GAAP financial
results.
__________________________________________
1
Non-GAAP measure (definitions
and/or reconciliations in tables below)
2
All revenue outlook commentary
expressed in percentages and based on growth as compared to
2022
3
Based on September 2023 FX rates;
does not include impact of FX on M&A
4
Reflects all completed and closed
M&A as of November 1, 2023
Conference Call
Ingersoll Rand will host a live earnings conference call to
discuss the third quarter results on Thursday, November 2, 2023 at
8:00 a.m. (Eastern Time). To participate in the call, please dial
1-888-330-3073, domestically, or 1-646-960-0683, internationally,
and use access Code 8970061. A real-time audio webcast of the
presentation can be accessed via the Events and Presentations
section of the Ingersoll Rand Investor Relations website
(https://investors.irco.com), where related materials will be
posted prior to the conference call. A replay of the webcast will
be available after conclusion of the conference and can be accessed
on the Ingersoll Rand Investor Relations website.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements related to Ingersoll Rand Inc.’s (the
“Company” or “Ingersoll Rand”) expectations regarding the
performance of its business, its financial results, its liquidity
and capital resources and other non-historical statements. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,”
“forecast,” “outlook,” “target,” “endeavor,” “seek,” “predict,”
“intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,”
“would,” “will be,” “on track to” “will continue,” “will likely
result,” “guidance” or the negative thereof or variations thereon
or similar terminology generally intended to identify
forward-looking statements. All statements other than historical
facts are forward-looking statements.
These forward-looking statements are based on Ingersoll Rand’s
current expectations and are subject to risks and uncertainties,
which may cause actual results to differ materially from these
current expectations. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated
or anticipated by such forward-looking statements. The inclusion of
such statements should not be regarded as a representation that
such plans, estimates or expectations will be achieved. Important
factors that could cause actual results to differ materially from
such plans, estimates or expectations include, among others, (1)
adverse impact on our operations and financial performance due to
natural disaster, catastrophe, global pandemics (including
COVID-19), geopolitical tensions, cyber events or other events
outside of our control; (2) unexpected costs, charges or expenses
resulting from completed and proposed business combinations; (3)
uncertainty of the expected financial performance of the Company;
(4) failure to realize the anticipated benefits of completed and
proposed business combinations; (5) the ability of the Company to
implement its business strategy; (6) difficulties and delays in
achieving revenue and cost synergies; (7) inability of the Company
to retain and hire key personnel; (8) evolving legal, regulatory
and tax regimes; (9) changes in general economic and/or industry
specific conditions; (10) actions by third parties, including
government agencies; and (11) other risk factors detailed in
Ingersoll Rand’s most recent Annual Report on Form 10-K filed with
the Securities and Exchange Commission (the “SEC”), as such factors
may be updated from time to time in its periodic filings with the
SEC, which are available on the SEC’s website at
http://www.sec.gov. The foregoing list of important factors is not
exclusive.
Any forward-looking statements speak only as of the date of this
release. Ingersoll Rand undertakes no obligation to update any
forward-looking statements, whether as a result of new information
or development, future events or otherwise, except as required by
law. Readers are cautioned not to place undue reliance on any of
these forward-looking statements.
About Ingersoll Rand Inc.
Ingersoll Rand Inc. (NYSE:IR), driven by an entrepreneurial
spirit and ownership mindset, is dedicated to helping make life
better for our employees, customers and communities. Customers lean
on us for our technology-driven excellence in mission-critical flow
creation and industrial solutions across 40+ respected brands where
our products and services excel in the most complex and harsh
conditions. Our employees develop customers for life through their
daily commitment to expertise, productivity and efficiency. For
more information, visit www.IRCO.com.
Non-U.S. GAAP Measures of Financial Performance
In addition to consolidated GAAP financial measures, Ingersoll
Rand reviews various non-GAAP financial measures, including
“Organic Revenue Growth,” “Adjusted EBITDA,” “Adjusted Net Income,”
“Adjusted Diluted EPS” and “Free Cash Flow.”
Ingersoll Rand believes Adjusted EBITDA, Adjusted Net Income,
and Adjusted Diluted EPS are helpful supplemental measures to
assist management and investors in evaluating the Company’s
operating results as they exclude certain items that are unusual in
nature or whose fluctuation from period to period do not
necessarily correspond to changes in the operations of Ingersoll
Rand’s business. Ingersoll Rand believes Organic Revenue Growth is
a helpful supplemental measure to assist management and investors
in evaluating the Company’s operating results as it excludes the
impact of foreign currency and acquisitions on revenue growth.
Adjusted EBITDA represents net income before interest, taxes,
depreciation, amortization and certain non-cash, non-recurring and
other adjustment items. Adjusted Net Income is defined as net
income including interest, depreciation and amortization of
non-acquisition related intangible assets and excluding other items
used to calculate Adjusted EBITDA and further adjusted for the tax
effect of these exclusions. Organic Revenue Growth is defined as As
Reported Revenue growth less the impacts of Foreign Currency and
Acquisitions. Ingersoll Rand believes that the adjustments applied
in presenting Adjusted EBITDA and Adjusted Net Income are
appropriate to provide additional information to investors about
certain material non-cash items and about non-recurring items that
the Company does not expect to continue at the same level in the
future. Adjusted Diluted EPS is defined as Adjusted Net Income
divided by Adjusted Diluted Average Shares Outstanding.
Incrementals/Decrementals are defined as the change in Adjusted
EBITDA versus the prior year period divided by the change in
revenue versus the prior year period.
Ingersoll Rand uses Free Cash Flow to review the liquidity of
its operations. Ingersoll Rand measures Free Cash Flow as cash
flows from operating activities less capital expenditures.
Ingersoll Rand believes Free Cash Flow is a useful supplemental
financial measures for management and investors in assessing the
Company’s ability to pursue business opportunities and investments
and to service its debt. Free Cash Flow is not a measure of our
liquidity under GAAP and should not be considered as an alternative
to cash flows from operating activities.
Management and Ingersoll Rand’s board of directors regularly use
these measures as tools in evaluating the Company’s operating and
financial performance and in establishing discretionary annual
compensation. Such measures are provided in addition to, and should
not be considered to be a substitute for, or superior to, the
comparable measures under GAAP. In addition, Ingersoll Rand
believes that Organic Revenue Growth, Adjusted EBITDA, Adjusted Net
Income, Adjusted Diluted EPS, Incrementals/Decrementals and Free
Cash Flow are frequently used by investors and other interested
parties in the evaluation of issuers, many of which also present
Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and
Free Cash Flow when reporting their results in an effort to
facilitate an understanding of their operating and financial
results and liquidity.
Organic Revenue Growth, Adjusted EBITDA, Adjusted Net Income,
Adjusted Diluted EPS and Free Cash Flow should not be considered as
alternatives to revenue growth, net income, diluted earnings per
share or any other performance measure derived in accordance with
GAAP, or as alternatives to cash flow from operating activities as
a measure of our liquidity. Organic Revenue Growth, Adjusted
EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Free Cash
Flow have limitations as analytical tools, and you should not
consider such measures either in isolation or as substitutes for
analyzing Ingersoll Rand’s results as reported under GAAP.
Reconciliations of Organic Revenue Growth, Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow to
their most comparable U.S. GAAP financial metrics for historical
periods are presented in the tables below.
Reconciliations of non-GAAP measures related to full-year 2023
guidance have not been provided due to the unreasonable efforts it
would take to provide such reconciliations due to the high
variability, complexity and uncertainty with respect to forecasting
and quantifying certain amounts that are necessary for such
reconciliations, including net income (loss) and adjustments that
could be made for acquisitions-related expenses, restructuring and
other business transformation costs, gains or losses on foreign
currency exchange and the timing and magnitude of other amounts in
the reconciliation of historic numbers. For the same reasons, we
are unable to address the probable significance of the unavailable
information, which could have a potentially unpredictable, and
potentially significant, impact on our future GAAP financial
results.
INGERSOLL RAND INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited; in millions, except
per share amounts)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Revenues
$
1,738.9
$
1,515.7
$
5,054.7
$
4,292.6
Cost of sales
999.6
940.4
2,953.7
2,621.4
Gross Profit
739.3
575.3
2,101.0
1,671.2
Selling and administrative expenses
315.2
278.7
941.9
819.8
Amortization of intangible assets
92.2
93.8
274.3
263.6
Other operating expense, net
13.5
12.8
53.7
43.4
Operating Income
318.4
190.0
831.1
544.4
Interest expense
39.6
26.6
119.3
68.8
Loss on extinguishment of debt
12.6
—
13.5
1.1
Other income, net
(7.6
)
(9.8
)
(25.4
)
(21.8
)
Income from Continuing Operations
Before Income Taxes
273.8
173.2
723.7
496.3
Provision for income taxes
60.3
30.3
168.9
104.6
Income (loss) on equity method
investments
(3.9
)
2.6
(1.2
)
(2.5
)
Income from Continuing
Operations
209.6
145.5
553.6
389.2
Income from discontinued operations, net
of tax
—
0.5
—
0.6
Net Income
209.6
146.0
553.6
389.8
Less: Net income attributable to
noncontrolling interests
1.3
0.9
4.7
2.5
Net Income Attributable to Ingersoll
Rand Inc.
$
208.3
$
145.1
$
548.9
$
387.3
Amounts attributable to Ingersoll Rand
Inc. common stockholders:
Income from continuing operations, net of
tax
$
208.3
$
144.6
$
548.9
$
386.7
Income from discontinued operations, net
of tax
—
0.5
—
0.6
Net income attributable to Ingersoll Rand
Inc.
$
208.3
$
145.1
$
548.9
$
387.3
Basic earnings per share of common
stock:
Earnings from continuing operations
$
0.51
$
0.36
$
1.36
$
0.95
Earnings from discontinued operations
—
—
—
—
Net earnings
0.51
0.36
1.36
0.96
Diluted earnings per share of common
stock:
Earnings from continuing operations
$
0.51
$
0.35
$
1.34
$
0.94
Earnings from discontinued operations
—
—
—
—
Net earnings
0.51
0.36
1.34
0.94
INGERSOLL RAND INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Unaudited; in millions, except
share amounts)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
1,197.5
$
1,613.0
Accounts receivable, net of allowance for
credit losses of $53.1 and $47.2, respectively
1,216.1
1,122.0
Inventories
1,082.9
1,025.4
Other current assets
236.9
206.9
Total current assets
3,733.4
3,967.3
Property, plant and equipment, net of
accumulated depreciation of $472.7 and $417.4, respectively
685.8
624.4
Goodwill
6,489.8
6,064.2
Other intangible assets, net
3,673.0
3,578.6
Deferred tax assets
22.3
22.3
Other assets
549.7
509.1
Total assets
$
15,154.0
$
14,765.9
Liabilities and Stockholders'
Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt
$
33.9
$
36.5
Accounts payable
663.1
778.7
Accrued liabilities
957.7
858.8
Total current liabilities
1,654.7
1,674.0
Long-term debt, less current
maturities
2,699.3
2,716.1
Pensions and other postretirement
benefits
145.0
147.2
Deferred income taxes
630.1
610.6
Other liabilities
405.1
360.8
Total liabilities
$
5,534.2
$
5,508.7
Stockholders' equity:
Common stock, $0.01 par value;
1,000,000,000 shares authorized; 428,208,898 and 426,327,805 shares
issued as of September 30, 2023 and December 31, 2022,
respectively
4.3
4.3
Capital in excess of par value
9,527.1
9,476.8
Retained earnings
1,475.5
950.9
Accumulated other comprehensive loss
(341.6
)
(251.7
)
Treasury stock at cost; 23,412,443 and
21,210,095 shares as of September 30, 2023 and December 31, 2022,
respectively
(1,111.3
)
(984.5
)
Total Ingersoll Rand stockholders'
equity
$
9,554.0
$
9,195.8
Noncontrolling interests
65.8
61.4
Total stockholders' equity
$
9,619.8
$
9,257.2
Total liabilities and stockholders'
equity
$
15,154.0
$
14,765.9
INGERSOLL RAND INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited; in millions)
Nine Month Period Ended
September 30,
2023
2022
Cash Flows From Operating Activities
From Continuing Operations:
Net income
$
553.6
$
389.8
Income from discontinued operations, net
of tax
—
0.6
Income from continuing operations
553.6
389.2
Adjustments to reconcile income from
continuing operations to net cash provided by operating activities
from continuing operations:
Amortization of intangible assets
274.3
263.6
Depreciation
67.2
64.4
Non-cash restructuring charges
2.1
6.0
Stock-based compensation expense
35.2
62.3
Income (loss) on equity method
investments
1.2
2.5
Foreign currency transaction losses
(gains), net
1.0
(12.3
)
Non-cash adjustments to carrying value of
LIFO inventories
14.0
33.0
Loss on extinguishment of debt
13.5
1.1
Other non-cash adjustments
7.4
2.0
Changes in assets and liabilities:
Receivables
(62.2
)
(160.1
)
Inventories
10.0
(260.2
)
Accounts payable
(140.8
)
76.4
Accrued liabilities
82.1
90.2
Other assets and liabilities, net
(62.6
)
(47.5
)
Net cash provided by operating activities
from continuing operations
796.0
510.6
Cash Flows From Investing Activities
From Continuing Operations:
Capital expenditures
(75.8
)
(61.1
)
Net cash paid in acquisitions
(923.8
)
(62.5
)
Disposals of property, plant and
equipment
7.6
—
Other investing
0.3
4.1
Net cash used in investing activities from
continuing operations
(991.7
)
(119.5
)
Cash Flows From Financing Activities
From Continuing Operations:
Principal payments on long-term debt
(1,510.8
)
(647.1
)
Proceeds from long-term debt
1,490.4
—
Purchases of treasury stock
(132.9
)
(257.8
)
Cash dividends on common shares
(24.3
)
(24.3
)
Proceeds from stock option exercises
21.9
14.7
Payments of interest rate cap premiums
—
(13.4
)
Payments of deferred and contingent
acquisition consideration
(17.4
)
(4.1
)
Payments of debt issuance costs
(17.3
)
—
Other financing
(3.4
)
(2.8
)
Net cash used in financing activities from
continuing operations
(193.8
)
(934.8
)
Cash Flows From Discontinued
Operations:
Net cash used in operating activities
—
(5.0
)
Net cash provided by investing
activities
—
4.4
Net cash used in discontinued
operations
—
(0.6
)
Effect of exchange rate changes on cash
and cash equivalents
(26.0
)
(105.8
)
Net decrease in cash and cash
equivalents
(415.5
)
(650.1
)
Cash and cash equivalents, beginning of
period
1,613.0
2,109.6
Cash and cash equivalents, end of
period
$
1,197.5
$
1,459.5
INGERSOLL RAND INC. AND
SUBSIDIARIES
UNAUDITED ADJUSTED FINANCIAL
INFORMATION
(Dollars in millions)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Ingersoll Rand
Revenues
$
1,738.9
$
1,515.7
$
5,054.7
$
4,292.6
Adjusted EBITDA
$
461.5
$
376.1
$
1,286.3
$
1,014.6
Adjusted EBITDA Margin
26.5
%
24.8
%
25.4
%
23.6
%
INGERSOLL RAND INC. AND
SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME
(Unaudited; in millions)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Net Income
$
209.6
$
146.0
$
553.6
$
389.8
Less: Income from discontinued
operations
—
0.6
—
0.8
Less: Income tax provision from
discontinued operations
—
(0.1
)
—
(0.2
)
Income from Continuing
Operations
209.6
145.5
553.6
389.2
Plus:
Provision for income taxes
60.3
30.3
168.9
104.6
Amortization of acquisition related
intangible assets
89.8
84.8
266.7
248.2
Restructuring and related business
transformation costs
2.2
7.2
12.4
30.9
Acquisition and other transaction related
expenses and non-cash charges
14.8
12.1
46.6
27.0
Stock-based compensation
11.2
27.1
35.2
69.3
Foreign currency transaction losses
(gains), net
1.1
(6.7
)
1.0
(12.3
)
Loss (income) on equity method
investments
3.9
(2.6
)
1.2
2.5
Loss on extinguishment of debt
12.6
—
13.5
1.1
Adjustments to LIFO inventories
(0.3
)
33.0
14.0
33.0
Cybersecurity incident costs
0.1
—
2.3
—
Gain on settlement of post-acquisition
contingencies
—
(6.2
)
—
(6.2
)
Other adjustments
(8.2
)
(4.4
)
(20.4
)
(18.7
)
Minus:
Income tax provision, as adjusted
89.0
70.0
252.5
194.8
Interest income on cash and cash
equivalents
(7.9
)
(3.0
)
(18.7
)
(3.0
)
Adjusted Net Income
$
316.0
$
253.1
$
861.2
$
676.8
Adjusted Basic Earnings Per
Share1
$
0.78
$
0.63
$
2.13
$
1.67
Adjusted Diluted Earnings Per
Share2
$
0.77
$
0.62
$
2.09
$
1.64
Average shares outstanding:
Basic, as reported
404.5
404.0
404.8
405.4
Diluted, as reported
408.6
408.5
408.9
410.3
Adjusted diluted2
408.6
408.5
408.9
410.3
INGERSOLL RAND INC. AND
SUBSIDIARIES
RECONCILIATION OF DILUTED NET
INCOME PER SHARE TO ADJUSTED DILUTED NET INCOME PER SHARE FROM
CONTINUING OPERATIONS
(Unaudited; in millions, except
per share amounts)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Diluted Net Income Per Share (As
Reported)1
$
0.51
$
0.36
$
1.34
$
0.94
Less: Diluted Net Income Per Share from
Discontinued Operations (As Reported)1
—
—
—
—
Diluted Net Income Per Share from
Continuing Operations (As Reported)1
0.51
0.35
1.34
0.94
Plus:
Provision for income taxes
0.15
0.07
0.41
0.25
Amortization of acquisition related
intangible assets
0.22
0.21
0.65
0.60
Restructuring and related business
transformation costs
0.01
0.02
0.03
0.08
Acquisition and other transaction related
expenses and non-cash charges
0.03
0.03
0.11
0.07
Stock-based compensation
0.03
0.07
0.09
0.17
Foreign currency transaction losses
(gains), net
—
(0.01
)
—
(0.03
)
Loss (income) on equity method
investments
0.01
(0.01
)
—
0.01
Loss on extinguishment of debt
0.03
—
0.03
—
Adjustments to LIFO inventories
—
0.08
0.04
0.08
Cybersecurity incident costs
—
—
0.01
—
Gain on settlement of post-acquisition
contingencies
—
(0.02
)
—
(0.02
)
Other adjustments
(0.02
)
(0.01
)
(0.05
)
(0.05
)
Minus:
Income tax provision, as adjusted
0.22
0.17
0.62
0.47
Interest income on cash and cash
equivalents
(0.02
)
(0.01
)
(0.05
)
(0.01
)
Adjusted Diluted Net Income Per Share
from Continuing Operations2
$
0.77
$
0.62
$
2.09
$
1.64
Average shares outstanding:
Basic, as reported
404.5
404.0
404.8
405.4
Diluted, as reported
408.6
408.5
408.9
410.3
Adjusted diluted2
408.6
408.5
408.9
410.3
1 Basic and diluted earnings (loss) per
share (as reported) are calculated by dividing net income (loss)
attributable to Ingersoll Rand Inc. by the basic and diluted
average shares outstanding for the respective periods.
2 Adjusted diluted share count and
adjusted diluted earnings per share include incremental dilutive
shares, using the treasury stock method, which are added to average
shares outstanding.
INGERSOLL RAND INC. AND
SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA AND ADJUSTED INCOME FROM CONTINUING OPERATIONS,
NET OF TAX AND CASH FLOWS FROM OPERATING ACTIVITIES TO FREE CASH
FLOW
(Unaudited; in millions)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Net Income
$
209.6
$
146.0
$
553.6
$
389.8
Less: Income from discontinued
operations
—
0.6
—
0.8
Less: Income tax provision from
discontinued operations
—
(0.1
)
—
(0.2
)
Income from Continuing Operations, Net
of Tax
209.6
145.5
553.6
389.2
Plus:
Interest expense
39.6
26.6
119.3
68.8
Provision for income taxes
60.3
30.3
168.9
104.6
Depreciation expense
22.4
20.4
64.4
61.8
Amortization expense
92.2
93.8
274.3
263.6
Restructuring and related business
transformation costs
2.2
7.2
12.4
30.9
Acquisition and other transaction related
expenses and non-cash charges
14.8
12.1
46.6
27.0
Stock-based compensation
11.2
27.1
35.2
69.3
Foreign currency transaction losses
(gains), net
1.1
(6.7
)
1.0
(12.3
)
Loss (income) on equity method
investments
3.9
(2.6
)
1.2
2.5
Loss on extinguishment of debt
12.6
—
13.5
1.1
Adjustments to LIFO inventories
(0.3
)
33.0
14.0
33.0
Cybersecurity incident costs
0.1
—
2.3
—
Gain on settlement of post-acquisition
contingencies
—
(6.2
)
—
(6.2
)
Other adjustments
(8.2
)
(4.4
)
(20.4
)
(18.7
)
Adjusted EBITDA
$
461.5
$
376.1
$
1,286.3
$
1,014.6
Minus:
Interest expense
39.6
26.6
119.3
68.8
Income tax provision, as adjusted
89.0
70.0
252.5
194.8
Depreciation expense
22.4
20.4
64.4
61.8
Amortization of non-acquisition related
intangible assets
2.4
9.0
7.6
15.4
Interest income on cash and cash
equivalents
(7.9
)
(3.0
)
(18.7
)
(3.0
)
Adjusted Income from Continuing
Operations, Net of Tax
$
316.0
$
253.1
$
861.2
$
676.8
Free Cash Flow from Continuing
Operations:
Cash flows from operating activities from
continuing operations
397.3
274.4
796.0
510.6
Minus:
Capital expenditures
28.6
21.8
75.8
61.1
Free Cash Flow from Continuing
Operations
$
368.7
$
252.6
$
720.2
$
449.5
INGERSOLL RAND INC. AND
SUBSIDIARIES
RECONCILIATION OF SEGMENT
ADJUSTED EBITDA TO NET INCOME
(Unaudited; in millions)
For the Three Month Period
Ended September 30,
For the Nine Month Period
Ended September 30,
2023
2022
2023
2022
Orders
Industrial Technologies and Services
$
1,346.9
$
1,355.2
$
4,241.5
$
3,928.6
Precision and Science Technologies
290.9
299.3
910.5
954.6
Total Orders
$
1,637.8
$
1,654.5
$
5,152.0
$
4,883.2
Revenue
Industrial Technologies and Services
$
1,428.4
$
1,199.6
$
4,124.0
$
3,389.7
Precision and Science Technologies
310.5
316.1
930.7
902.9
Total Revenue
$
1,738.9
$
1,515.7
$
5,054.7
$
4,292.6
Segment Adjusted EBITDA
Industrial Technologies and Services
$
410.9
$
314.0
$
1,134.0
$
853.4
Precision and Science Technologies
94.2
92.0
278.7
254.8
Total Segment Adjusted EBITDA
$
505.1
$
406.0
$
1,412.7
$
1,108.2
Less items to reconcile Segment Adjusted
EBITDA to Income from Continuing Operations Before Income
Taxes:
Corporate expenses not allocated to
segments
$
43.6
$
29.9
$
126.4
$
93.6
Interest expense
39.6
26.6
119.3
68.8
Depreciation and amortization expense
114.6
114.2
338.7
325.4
Restructuring and related business
transformation costs
2.2
7.2
12.4
30.9
Acquisition and other transaction related
expenses and non-cash charges
14.8
12.1
46.6
27.0
Stock-based compensation
11.2
27.1
35.2
69.3
Foreign currency transaction losses
(gains), net
1.1
(6.7
)
1.0
(12.3
)
Loss on extinguishment of debt
12.6
—
13.5
1.1
Adjustments to LIFO inventories
(0.3
)
33.0
14.0
33.0
Cybersecurity incident costs
0.1
—
2.3
—
Gain on settlement of post-acquisition
contingencies
—
(6.2
)
—
(6.2
)
Other adjustments
(8.2
)
(4.4
)
(20.4
)
(18.7
)
Income from Continuing Operations
Before Income Taxes
273.8
173.2
723.7
496.3
Provision for income taxes
60.3
30.3
168.9
104.6
Income (loss) on equity method
investments
(3.9
)
2.6
(1.2
)
(2.5
)
Income from Continuing
Operations
209.6
145.5
553.6
389.2
Income from discontinued operations, net
of tax
—
0.5
—
0.6
Net Income
$
209.6
$
146.0
$
553.6
$
389.8
INGERSOLL RAND INC. AND
SUBSIDIARIES
ORDERS AND REVENUE GROWTH
(DECLINE) BY SEGMENT1
For the Three Month Period
Ended September 30, 2023
Orders
Revenue
Ingersoll Rand
Organic growth (decline)
(8.2
%)
6.4
%
Impact of foreign currency
1.1
%
1.4
%
Impact of acquisitions
6.1
%
6.9
%
Total orders and revenue growth
(decline)
(1.0
%)
14.7
%
Industrial Technologies &
Services
Organic growth (decline)
(8.7
%)
9.5
%
Impact of foreign currency
1.0
%
1.4
%
Impact of acquisitions
7.1
%
8.2
%
Total orders and revenue growth
(decline)
(0.6
%)
19.1
%
Precision & Science
Technologies
Organic decline
(6.0
%)
(5.3
%)
Impact of foreign currency
1.7
%
1.8
%
Impact of acquisitions
1.5
%
1.7
%
Total orders and revenue decline
(2.8
%)
(1.8
%)
1 Organic growth/(decline), impact of
foreign currency, and impact of acquisitions are non-GAAP measures.
References to “impact of acquisitions” refer to GAAP sales from
acquired businesses recorded prior to the first anniversary of the
acquisition. The portion of GAAP revenue attributable to currency
translation is calculated as the difference between (a) the
period-to-period change in revenue (excluding acquisition sales)
and (b) the period-to-period change in revenue (excluding
acquisition sales) after applying prior year foreign exchange rates
to the current year period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101957677/en/
Contacts: Investor Relations: Matthew Fort
Matthew.Fort@irco.com
Media: Sara Hassell Sara.Hassell@irco.com
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