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Ingersoll Rand 8-K Report, Financial Results (Jul 31, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 31, 2024
Period End
July 31, 2024
Security
IR
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 8-K filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.

Ingersoll Rand Inc. (NYSE: IR) furnished a press release dated July 31, 2024 under Item 2.02, reporting record second-quarter revenues, Adjusted EBITDA, and Adjusted EPS for the quarter ended June 30, 2024.

Reported revenues were $1,805 milliona, up 7% (up 1% organic), and orders were $1,799 million, up 4% (down 1% organic). Reported net income attributable to Ingersoll Rand was $185 million, or $0.45 per diluted share, while Adjusted net income was $341 million, or $0.83 per share. Adjusted EBITDA was $495 million, up 16%, with a margin of 27.4%, up 220 basis points.

Operating cash flow was $305 millionb and free cash flow was $283 million, up 39%. The company raised its full-year 2024 guidance. Total revenue growth is now expected at 6% to 8%, up from 4% to 6%, with organic growth lowered to 0% to 2% from 2% to 4%, largely due to China.

Adjusted EBITDA guidance rose to $2,010 million to $2,060 millionc, and Adjusted EPS guidance rose to $3.27 to $3.37. The filing attributes the revenue increase mainly to recent M&A, partly offset by FX and lower organic growth expectations. During the quarter the company deployed $2.6 billion to M&A, including the ILC Dover acquisition, and closed several other deals.

It issued $3.3 billiond of unsecured investment grade bonds in May 2024, which were used in part to repay term loans and fund ILC Dover. Net debt to Adjusted EBITDA was 2.0x, and liquidity totaled $3.7 billion, including $1.1 billion of cash and $2.6 billion of undrawn credit facility capacity. The company also reported a $58.8 million loss on an asbestos-related asset sale in the quarter.

02—Key points

Key Highlights

  1. Q2 2024 reported revenues of $1,805 million, up 7% (up 1% organic), with orders of $1,799 million, up 4%.
  2. Net income attributable to Ingersoll Rand of $185 million, or $0.45 per diluted share; Adjusted net income of $341 million, or $0.83 per share.
  3. Adjusted EBITDA of $495 million, up 16%, with a 27.4% margin, up 220 basis points; free cash flow of $283 million, up 39%.
  4. Full-year 2024 revenue growth guidance raised to 6% to 8% from 4% to 6%; Adjusted EBITDA guidance raised to $2,010 million to $2,060 million; Adjusted EPS guidance raised to $3.27 to $3.37.
  5. Organic revenue growth guidance lowered to 0% to 2% from 2% to 4%, largely driven by China.
  6. Deployed $2.6 billion to M&A in the quarter, including ILC Dover, Complete Air and Power Solutions, Fruvac Ltd., and Del PD Pumps & Gear Pvt Ltd.
  7. Liquidity of $3.7 billion as of June 30, 2024, with net debt to Adjusted EBITDA of 2.0x after the $3.3 billion bond issuance.

03—Questions

Frequently Asked Questions

  1. How did Ingersoll Rand perform in the second quarter of 2024?

    Reported revenues were $1,805 million, up 7% (up 1% organic), and orders were $1,799 million, up 4% (down 1% organic). Reported net income attributable to Ingersoll Rand was $185 million, or $0.45 per diluted share, and Adjusted net income was $341 million, or $0.83 per share. Adjusted EBITDA was $495 million, up 16%.

  2. What changed in the company's 2024 guidance?

    Total revenue growth guidance was raised to 6% to 8% from 4% to 6%, Adjusted EBITDA guidance was raised to $2,010 million to $2,060 million from $1,940 million to $2,000 million, and Adjusted EPS guidance was raised to $3.27 to $3.37 from $3.20 to $3.30. Organic growth guidance was lowered to 0% to 2% from 2% to 4%, largely driven by China. The filing states the revenue increase is driven by recent M&A, partially offset by FX.

  3. How did the company finance its recent acquisitions?

    In May 2024 the company issued $3.3 billion of unsecured investment grade bonds. Proceeds were used to repay $1.2 billion of floating rate secured term loans, $2.0 billion to partially fund the ILC Dover acquisition, and $0.1 billion for general corporate purposes. The resulting debt structure is 84% fixed and 16% floating, with weighted average maturity extended from six to ten years.

  4. What is the company's liquidity and leverage position?

    Liquidity was $3.7 billion as of June 30, 2024, including $1.1 billion of cash on hand and $2.6 billion of undrawn capacity under available credit facilities. Net debt to Adjusted EBITDA leverage was 2.0x for the second quarter, an increase of 1.0x from the prior year driven primarily by the ILC Dover acquisition. The company received a one notch upgrade from each of its rating agencies.

  5. What one-time items affected the quarter's results?

    The company recorded a $58.8 million loss on asbestos sale, $27.7 million of acquisition and other transaction related expenses and non-cash charges, and $3.9 million of restructuring and related business transformation costs in the quarter. These items are excluded from Adjusted EBITDA and Adjusted net income. Other operating expense, net was $88.2 million for the quarter, compared with $19.8 million in the prior year period.

04—Continue

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