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Ingersoll Rand Annual Report, Year Ended Dec 31, 2021

Filing Date
Filed February 25, 2022
Period End
December 31, 2021
Security
IR
One revenue dollarkept$0.11
In the record · 2017–202610-K910-Q298-K113

IR filed 9 annual reports (10-K), 29 quarterly reports (10-Q) and 113 current reports (8-K) between 2017 and 2026.

  1. Leadership change8-K · Dec ’18Dec ’18
  2. Material agreement8-K · May ’21May ’21
  3. Material agreement8-K · Apr ’23Apr ’23
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.

Ingersoll Rand Inc. reported 2021 revenues of $5.15 billiona, up from $3.97 billion in 2020, with the increase driven primarily by acquisitions, including the full-year inclusion of Ingersoll Rand Industrial, and organic volume growth in the Industrial Technologies and Services segment.

Gross profit rose to $1.99 billionb (38.6% of revenues versus 35.4% in 2020), and operating income increased to $565.7 million from $59.6 million. Net income attributable to Ingersoll Rand Inc. was $562.5 million, compared with a net loss of $33.3 million in 2020. Adjusted EBITDA reached $1.19 billion, or 23.1% of revenues, versus $878.1 million in 2020.

Results were significantly affected by discontinued operations: the company sold a majority interest in its High Pressure Solutions business and its Specialty Vehicle Technologies (Club Car) segment, with SVT generating a $298.3 millionc pre-tax gain and HPS a $207.7 million pre-tax loss. The balance sheet remained substantial, with total assets of $15.15 billion, goodwill and other intangibles representing 65% of total assets, and total indebtedness of $3.44 billion against cash and cash equivalents of $2.11 billion at year-end. Cash flow from continuing operations was $627.8 million, and free cash flow was $563.7 million.

The company repurchased $736.8 milliond of treasury stock during 2021 and paid $8.2 million in dividends, with a $750.0 million repurchase program authorized in August 2021. Investors should note ongoing asbestos and silica-related litigation with a reserve of $136.9 million, and the company's significant exposure to currency movements, with about 59% of revenues denominated in currencies other than the U.S. dollar.

The company operates two reportable segments, Industrial Technologies and Services (revenues of $4.16 billion) and Precision and Science Technologies (revenues of $991.4 million). The 2021 acquisitions of Seepex, Tuthill's vacuum and blower and pump businesses, Maximus Solutions, and Air Dimensions added to the Precision and Science Technologies portfolio.

02—Key points

Key Highlights

  1. Revenues rose to $5,152.4 million in 2021 from $3,973.2 million in 2020, primarily due to acquisitions and organic volume growth in Industrial Technologies and Services.
  2. Operating income increased to $565.7 million from $59.6 million, and net income attributable to Ingersoll Rand Inc. was $562.5 million versus a net loss of $33.3 million in 2020.
  3. Adjusted EBITDA was $1,191.9 million, or 23.1% of revenues, compared with $878.1 million, or 22.1%, in 2020.
  4. Free cash flow from continuing operations was $563.7 million, and cash flow from operating activities was $627.8 million.
  5. The company sold its majority interest in High Pressure Solutions and its Specialty Vehicle Technologies segment, which together produced net income of $41.6 million from discontinued operations.
  6. Total indebtedness was $3,440.6 million against cash of $2,109.6 million, and $1,093.4 million was available under the Revolving Credit Facility.
  7. The board authorized a $750.0 million share repurchase program in August 2021, and the company purchased $736.8 million of treasury stock during the year.

03—One dollar

Follow one dollar

Of each $1.00 of revenue in FY2021, Ingersoll Rand kept $0.11.

  1. Revenue$5.15B100.0%
  2. Cost of revenue−$3.16B61.4%
  3. Gross profit$1.99B38.6%
  4. Operating costs−$1.42B27.6%
  5. Operating income$565.7M11.0%
  6. Interest, other & tax−$3.2M0.1%
  7. Net income$562.5M10.9%
Computed from 10-KFY2021filed February 25, 2022Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

Where FY2021 revenue went

$5.15B
  • Cost of revenue: $3.16B, 61% of revenue
  • SG&A: $1.03B, 20% of revenue
  • Net income: $562.5M, 11% of revenue
  • R&D: $74.0M, 1.4% of revenue
  • Other operating costs: $320.8M, 6.2% of revenue

Kept 11% as net income

Full revenue history →

04—Financials

Financial Highlights

Figures from 10-KFY2021filed February 25, 2022
Revenue$5.15B38.6% Gross MarginNet Income$562.50M10.9% Net MarginEPS (Diluted)$1.34Total Assets$15.15BCash & Equivalents$2.11BFree Cash Flow$627.80M

Financial Statements

FY2021 against FY2020

Line itemFY2021FY2020Change
Revenue$5.15B$3.97B+29.7%
Cost of Revenue$3.16B$2.57B+23.2%
Gross Profit$1.99B$1.40B+41.5%
R&D Expenses$74.00M$58.00M+27.6%
SG&A Expenses$1.03B$789.30M+30.2%
Operating Income$565.70M$59.60M+849.2%
Interest Expense$87.70M$111.10M−21.1%
Net Income$562.50M-$33.30M+1789.2%
EPS (Basic)$1.36$-0.09+1611.1%
EPS (Diluted)$1.34$-0.09+1588.9%
Shares Outstanding (Basic)414.80M382.80M+8.4%
Shares Outstanding (Diluted)421.20M382.80M+10.0%

05—Questions

Frequently Asked Questions

  1. What drove the increase in revenue in 2021?

    Revenues increased $1,179.2 million, or 29.7%, to $5,152.4 million. The filing attributes $537.5 million of the increase to acquisitions, including Ingersoll Rand Industrial, and $330.3 million to organic volume growth in the Industrial Technologies and Services segment.

  2. How much debt does the company carry and how much liquidity does it have?

    As of December 31, 2021, total indebtedness was $3,440.6 million, and the company had no outstanding borrowings under its Revolving Credit Facility. Cash and cash equivalents were $2,109.6 million, and unused availability under the Revolving Credit Facility was $1,093.4 million.

  3. What were the effects of the divestitures on reported results?

    The company recognized a pre-tax gain of $298.3 million on the sale of Specialty Vehicle Technologies and a pre-tax loss of $207.7 million on the High Pressure Solutions transaction. Income from discontinued operations, net of tax, totaled $41.6 million for 2021, and cash from investing activities of discontinued operations was $1,943.7 million.

  4. What legal exposure does the company disclose?

    The company is a defendant in asbestos and silica-related personal injury lawsuits, typically alongside approximately 25 or more named defendants. It holds a litigation reserve of $136.9 million and an insurance recovery receivable of $145.1 million as of December 31, 2021, and the filing notes that the Adams County Case against insurers could affect outcomes.

  5. How did the company return capital to shareholders in 2021?

    The company purchased $736.8 million of treasury stock, including 14,894,317 shares repurchased in an August 2021 KKR secondary offering at $49.05 per share, and paid $8.2 million in cash dividends. The company declared and paid a dividend of $0.02 per share during 2021.

06—Continue

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