01—Abstract
Summary
Summary of the 10-K filed February 21, 2023. Cited figures are marked; the original filing is the authoritative source.
Ingersoll Rand Inc. reported revenues of $5,916.3 milliona for 2022, up from $5,152.4 million in 2021, with the increase primarily attributed to higher pricing of $420.7 million, higher organic volumes of $409.4 million, and acquisitions of $225.5 million, partially offset by unfavorable foreign currency impact of $291.7 million.
Operating income rose to $817.3 millionb from $565.7 million, and net income attributable to Ingersoll Rand Inc. was $604.7 million, compared with $562.5 million in 2021. Adjusted EBITDA increased to $1,434.8 million, or 24.3% of revenues, from $1,191.9 million, or 23.1%, and free cash flow was $770.8 million versus $563.7 million. The company ended 2022 with cash and cash equivalents of $1,613.0 million and total debt of $2,752.6 million, down from $3,440.6 million a year earlier, after principal payments on long-term debt of $655.6 million, including repayment of the Euro Term Loan on June 30, 2022.
Share repurchases totaled $261.1 millionc, and the Revolving Credit Facility had $1,100 million of unused availability. Management highlighted that aftermarket revenue represented 35.2% of total 2022 revenue, and that the Company completed or announced several acquisitions in 2022, including the SPX FLOW Air Treatment business, which closed on January 3, 2023 for approximately $525 million in cash.
Investors should also note the ongoing asbestos and silica-related litigation, for which the Company carried a reserve of $137.9 milliond against an insurance recovery receivable of $154.2 million, and the Adams County Case, which remains in discovery and motions. The filing notes that approximately 59% of 2022 revenues came from customers outside the United States, and that approximately 56% of revenues were denominated in currencies other than the U.S. dollar.
02—Key points
Key Highlights
- Revenues rose 14.8% to $5,916.3 million in 2022, driven by $420.7 million of higher pricing and $409.4 million of higher organic volumes.
- Operating income increased to $817.3 million from $565.7 million, and Adjusted EBITDA rose to $1,434.8 million, a 24.3% margin versus 23.1% in 2021.
- Net income attributable to Ingersoll Rand Inc. was $604.7 million, up from $562.5 million, and diluted earnings per share from continuing operations were $1.44 versus $1.24.
- Free cash flow from continuing operations increased to $770.8 million from $563.7 million, with operating cash flow of $865.4 million.
- Total debt declined to $2,752.6 million from $3,440.6 million, and cash and cash equivalents were $1,613.0 million at year-end 2022.
- Share repurchases of $261.1 million and dividends of $32.4 million were returned to stockholders, under a $750.0 million authorization with $492.7 million remaining.
- Asbestos and silica-related litigation reserve of $137.9 million is offset by a $154.2 million insurance recovery receivable, with the Adams County Case still pending.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Ingersoll Rand kept $0.10.
- Revenue$5.92B100.0%
- Cost of revenue−$3.59B60.7%
- Gross profit$2.33B39.3%
- Operating costs−$1.51B25.5%
- Operating income$817.3M13.8%
- Interest, other & tax−$212.6M3.6%
- Net income$604.7M10.2%
Where FY2022 revenue went
$5.92B- Cost of revenue: $3.59B, 61% of revenue
- SG&A: $1.10B, 19% of revenue
- Net income: $604.7M, 10% of revenue
- R&D: $91.3M, 1.5% of revenue
- Other operating costs: $321.2M, 5.4% of revenue
- Interest, other & tax: $212.6M, 3.6% of revenue
Kept 10% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 21, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.92B$5.15B | +14.8% |
| Cost of Revenue | $3.59B$3.16B | +13.5% |
| Gross Profit | $2.33B$1.99B | +17.0% |
| R&D Expenses | $91.30M$74.00M | +23.4% |
| SG&A Expenses | $1.10B$1.03B | +6.6% |
| Operating Income | $817.30M$565.70M | +44.5% |
| Interest Expense | $103.20M$87.70M | +17.7% |
| Net Income | $604.70M$562.50M | +7.5% |
| EPS (Basic) | $1.49$1.36 | +9.6% |
| EPS (Diluted) | $1.47$1.34 | +9.7% |
| Shares Outstanding (Basic) | 405.30M414.80M | −2.3% |
| Shares Outstanding (Diluted) | 410.20M421.20M | −2.6% |
05—Questions
Frequently Asked Questions
How did Ingersoll Rand's revenue and profitability change in 2022?
Revenues increased to $5,916.3 million from $5,152.4 million, primarily due to higher pricing, higher organic volumes and acquisitions, partially offset by unfavorable foreign currency effects of $291.7 million. Gross profit rose to $2,325.6 million, with gross margin of 39.3% versus 38.6%, and operating income increased to $817.3 million from $565.7 million.
How much debt did the company repay and what is its remaining liquidity?
The company made principal payments on long-term debt of $655.6 million in 2022, including repayment of the Euro Term Loan on June 30, 2022. Total debt was $2,752.6 million at December 31, 2022, and the Revolving Credit Facility had unused availability of $1,100.0 million, with no outstanding borrowings under it.
What acquisitions did Ingersoll Rand complete or announce in 2022?
The company acquired Dosatron International for $89.5 million in cash plus contingent consideration of up to $14.7 million, and Everest Group for $75.3 million in cash plus $12.1 million of estimated contingent consideration. It also announced the SPX FLOW Air Treatment business acquisition for approximately $525 million in cash, which was completed on January 3, 2023.
What is the company's exposure to asbestos and silica litigation?
The company is a defendant in asbestos and silica-related personal injury lawsuits, typically with approximately 25 or more named defendants. It held a reserve of $137.9 million for asbestos-related indemnification and an insurance recovery receivable for probable asbestos-related recoveries of $154.2 million at December 31, 2022. The Adams County Case against insurers remains in its Phase II discovery and motions process.
What were the company's capital allocation actions in 2022?
The company repurchased $261.1 million of common stock, including $257.3 million under its share repurchase program, and paid cash dividends of $32.4 million, or $0.08 per share. Capital expenditures were $94.6 million, and the company expects capital expenditures of approximately 2% of consolidated revenues in 2023.
06—Continue