01—Abstract
Summary
Summary of the 10-K filed February 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Ingersoll Rand Inc. (NYSE: IR) reported revenues of $6.88 billiona for 2023, up $959.8 million, or 16.2%, from $5.92 billion in 2022, driven primarily by higher pricing of $397.0 million, acquisitions of $375.1 million, and higher organic volumes of $213.3 million.
Gross profit rose to $2.88 billionb (41.9% of revenues versus 39.3% in 2022), and operating income increased to $1.16 billion from $817.3 million. Net income attributable to Ingersoll Rand Inc. was $778.7 million, or $1.90 diluted earnings per share, compared with $604.7 million in 2022. Adjusted EBITDA rose $352.0 million to $1.79 billion, with its margin reaching 26.0% of revenues.
Free cash flow from continuing operations was $1.27 billionc, up from $770.8 million. The company's two segments both grew. Industrial Technologies and Services revenues rose 19.7% to $5.63 billion, with Segment Adjusted EBITDA margin of 28.2%.
Precision and Science Technologies revenues rose 2.7% to $1.24 billiond, with a 30.0% segment Adjusted EBITDA margin, though segment orders declined 3.5%. Acquisitions in 2023 included SPX FLOW's Air Treatment business for $519.0 million and Howden Roots for $292.5 million. Capital allocation included $263.0 million of share repurchases, $32.4 million of dividends, and $27.6 million of net debt repayments.
Investors should note total debt of $2.72 billion at year-end, with interest expense rising to $156.7 million from $103.2 million, reflecting higher variable-rate interest. The company had $1.60 billion of cash and cash equivalents and $2.00 billion of unused revolving credit availability.
Asbestos and silica-related litigation remains a disclosed risk, with a litigation reserve of $126.9 million and an insurance recovery receivable of $157.7 million. The company also disclosed a April 2023 cybersecurity incident that it stated did not have a material impact on results.
02—Key points
Key Highlights
- Revenue grew 16.2% to $6,876.1 million in 2023, led by $397.0 million of higher pricing and $375.1 million from acquisitions.
- Operating income rose to $1,164.3 million from $817.3 million, and gross margin improved to 41.9% from 39.3%.
- Net income attributable to Ingersoll Rand Inc. was $778.7 million, up from $604.7 million; diluted EPS was $1.90 versus $1.47.
- Adjusted EBITDA increased $352.0 million to $1,786.8 million, with the margin reaching 26.0% of revenues.
- Free cash flow from continuing operations was $1,272.0 million, up from $770.8 million, on operating cash flow of $1,377.4 million.
- Acquired SPX FLOW's Air Treatment business ($519.0 million) and Howden Roots ($292.5 million) during 2023.
- Total debt was $2,723.6 million at year-end, with interest expense increasing to $156.7 million from $103.2 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Ingersoll Rand kept $0.11.
- Revenue$6.88B100.0%
- Cost of revenue−$3.99B58.1%
- Gross profit$2.88B41.9%
- Operating costs−$1.72B25.0%
- Operating income$1.16B16.9%
- Interest, other & tax−$385.6M5.6%
- Net income$778.7M11.3%
Where FY2023 revenue went
$6.88B- Cost of revenue: $3.99B, 58% of revenue
- SG&A: $1.27B, 19% of revenue
- Net income: $778.7M, 11% of revenue
- R&D: $108.2M, 1.6% of revenue
- Other operating costs: $337.0M, 4.9% of revenue
- Interest, other & tax: $385.6M, 5.6% of revenue
Kept 11% as net incomeR&D $108.2M · 1.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 23, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $6.88B$5.92B | +16.2% |
| Cost of Revenue | $3.99B$3.59B | +11.2% |
| Gross Profit | $2.88B$2.33B | +23.9% |
| R&D Expenses | $108.20M$91.30M | +18.5% |
| SG&A Expenses | $1.27B$1.10B | +16.1% |
| Operating Income | $1.16B$817.30M | +42.5% |
| Interest Expense | $156.70M$103.20M | +51.8% |
| Net Income | $778.70M$604.70M | +28.8% |
| EPS (Basic) | $1.92$1.49 | +28.9% |
| EPS (Diluted) | $1.90$1.47 | +29.3% |
| Shares Outstanding (Basic) | 404.80M405.30M | −0.1% |
| Shares Outstanding (Diluted) | 409.00M410.20M | −0.3% |
05—Questions
Frequently Asked Questions
How did Ingersoll Rand's revenue and profitability change in 2023?
Revenues increased $959.8 million, or 16.2%, to $6,876.1 million. Operating income rose to $1,164.3 million from $817.3 million, and net income attributable to Ingersoll Rand Inc. increased to $778.7 million from $604.7 million. The filing attributes the revenue increase primarily to higher pricing, acquisitions and higher organic volumes.
Which segment drove growth in 2023?
Industrial Technologies and Services drove most of the growth, with segment revenues up 19.7% to $5,632.8 million and segment Adjusted EBITDA up 30.7% to $1,587.3 million. Precision and Science Technologies revenues rose 2.7% to $1,243.3 million, but segment orders fell 3.5% to $1,203.5 million.
How much debt does the company carry and what is its liquidity position?
Total debt was $2,723.6 million as of December 31, 2023. The company had cash and cash equivalents of $1,595.5 million and unused availability of $2,000.0 million under its Revolving Credit Facility, and stated it was in compliance with all debt covenants.
How much did the company return to shareholders in 2023?
The company repurchased $263.0 million of common stock and paid $32.4 million in cash dividends on common stock. The filing states that $243,033,169 remained available under the share repurchase program as of December 31, 2023, and notes the program was authorized at up to $750.0 million.
What are the main litigation and cybersecurity risks disclosed?
The company is a defendant in asbestos and silica-related personal injury lawsuits and carries an undiscounted asbestos-related reserve of $126.9 million, with an insurance recovery receivable of $157.7 million. It also disclosed an April 27, 2023 cybersecurity incident that it stated did not have a material impact on results of operations or cash flows for 2023.
06—Continue