Ingersoll-Rand (IR) Tops Q4 EPS by 8c, Revenues Beat

Ingersoll-Rand (NYSE: IR) reported Q4 EPS of $0.53, $0.08 better than the analyst estimate of $0.45. Revenue for the quarter came in at $1.51 billion versus the consensus estimate of $1.46 billion.

Fourth-Quarter 2020 Highlights

• Reported revenues of $1.5 billion
• Reported net income attributable to Ingersoll Rand Inc. of $152 million, or earnings per share of $0.36, including $179 million of pre-tax amortization, restructuring and related business transformation costs, acquisition-related expenses and other adjustments
  • Adjusted net income of $226 million, or $0.53 per share
• Adjusted EBITDA of $344 million with a margin of 22.8%
• Reported operating cash flow of $412 million and free cash flow of $397 million, both including Transaction-related outflows of $17 million
• Liquidity of $2.7 billion as of December 31, 2020, including $1.8 billion of cash on hand and undrawn capacity of $1.0 billion under available credit facilities; finished the year at 2.0x net debt to supplemental Adjusted EBITDA leverage1
• Executed a total of approximately $175 million of annualized Transaction-related cost synergies, including approximately $115 million of in-year 2020 savings; increasing expectation for total cost synergies by $50 million to $300 million by the end of year three post Transaction close2
• Strong performance and transformation fueled by Ingersoll Rand Execution Excellence (IRX)

2021 Guidance

• Full-year 2021 Adjusted EBITDA expected to be $1,230 to $1,260 million

“We are proud of our strong fourth-quarter performance. Despite challenges posed by the COVID-19 resurgence, we continued to successfully navigate the pandemic and deliver shareholder value through our focus on customers, the continued proliferation of IRX, and our employees’ unwavering commitment amid an uncertain environment,” said Vicente Reynal, chief executive officer. “We delivered on our commitments in 2020. Our $150 million employee equity grant along with our strategic commitment of becoming a leader in sustainability has strengthened our employee resolve and continues to differentiate us as an employer of choice. We closed on the transformational Ingersoll Rand Industrial business transaction in March and delivered better than expected Year 1 synergy benefits. We continue to reshape our portfolio with the recent acquisition of Tuthill Vacuum and Blower Systems and the agreement to sell a majority interest in the High Pressure Solutions Segment, which will materially reduce our upstream oil and gas exposure. While we are motivated by our progress, there is more work to do to fuel long-term growth and position Ingersoll Rand, and our shareholders, for continued success.”

2021 Guidance, Excluding HPS Segment

The company expects continued improving demand trends in 2021. As a result, the expectation for the Industrial Technologies and Services, Precision and Science Technologies and Specialty Vehicle Technologies Segments is mid-single digit organic revenue growth. FX is expected to be a low-single digit tailwind for the total company. In addition, the recent Tuthill Vacuum and Blower Systems acquisition is expected to deliver approximately $60 million in revenue for the Industrial Technologies and Services Segment. High Pressure Solutions is not included in the company 2021 guidance due to the recently announced agreement to sell the majority interest in the Segment.

In total, the company expects to see full-year 2021 revenue growth of high-single to low-double digits and Adjusted EBITDA of $1,230 to $1,260 million, up 14% to 17% over prior year.

For earnings history and earnings-related data on Ingersoll-Rand (IR) click here.

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