Record Double-Digit Organic Orders Growth; Raising 2021 Guidance

Important note: On February 29, 2020, Gardner Denver Holdings, Inc. closed on the acquisition of Ingersoll-Rand plc’s Industrial segment (“the Transaction”) and assumed the name Ingersoll Rand Inc. “Reported results” reflect the respective contributions from each company based on the close of the Transaction. For comparative purposes, management has also presented herein Supplemental Financial Information as if the Transaction was completed on January 1, 2018. All comparisons provided are on a year-over-year basis unless otherwise noted.

First-Quarter 2021 Highlights

(All comparisons against the first quarter of 2020 unless otherwise noted.)

Strong performance and transformation fueled by Ingersoll Rand Execution Excellence (IRX) drove the following:

• Reported revenues of $1.4 billion, up 95%, and up 17% (12% organically) as compared to prior year supplemental adjusted revenues
• Reported orders of $1.7 billion, up 124%, and up 29% (24% organically) as compared to prior year supplemental adjusted orders
• Reported net loss attributable to Ingersoll Rand of $90 million, or a loss of $0.21 per share, including $319 million of pre-tax loss from discontinued operations, amortization, restructuring and related business transformation costs, acquisition-related expenses and other adjustments, down 146% from prior year net loss attributable to Ingersoll Rand of $37 million
  • Adjusted income from continuing operations, net of tax of $192 million, or $0.45 per share
• Adjusted EBITDA of $293 million, up 57% from prior year supplemental adjusted EBITDA of $186 million, with a margin of 21.4%
• Reported operating cash flow from continuing operations of $123 million and free cash flow from continuing operations of $108 million, both including Transaction-related outflows of $10 million
• Liquidity of $2.6 billion as of March 31, 2021, including $1.6 billion of cash on hand and undrawn capacity of $1.0 billion under available credit facilities

Portfolio Optimization

• Completed the sale of a majority interest in High Pressure Solutions (“HPS”) business to American Industrial Partners on April 1, 2021; Ingersoll Rand received approximately $300 million in cash at closing (representing a 24x multiple of 2020 HPS segment adjusted EBITDA) and retained a 45% common equity interest in the business
• Announced the sale of the Specialty Vehicle Technologies (“SVT” or “Club Car®”) segment to Platinum Equity on April 12, 2021; the all-cash transaction is valued at $1.68 billion, which is approximately 12.1x 2020 SVT segment adjusted EBITDA, and is expected to be completed by the third quarter of 2021

2021 Revised Guidance, excluding Specialty Vehicle Technologies Segment

• Raising full-year 2021 revenue growth expectation, excluding SVT, to low double digits (up approximately 200 bps of organic growth from initial guidance) and raising adjusted EBITDA guidance, excluding SVT, to $1.12 billion to $1.15 billion (up approximately $45 million from initial guidance midpoint)

DAVIDSON, N.C.--(BUSINESS WIRE)--Ingersoll Rand Inc. (NYSE: IR) reported record double-digit organic orders and organic revenue growth in the first quarter of 2021.

Vicente Reynal, chief executive officer, stated, “Our strong first-quarter performance demonstrates our continued focus on executing our strategy, enabled by the transformative power of IRX. We continue to successfully navigate the rapidly changing landscape – from cautionary mode to growth mode as the economy and our markets recover. I want to thank our employees, who are shareholders, for their steadfast dedication to serving our customers, living our core values every day, and creating a culture of accountability and collaboration. This quarter, we substantially accelerated our portfolio transformation with the sale of a majority interest in our High Pressure Solutions business and agreement to sell Club Car for a total of approximately $2 billion. The proceeds from these transactions will create long-term value, including enabling significant organic and inorganic investment into our core business segments as we advance our growth strategies and expand our addressable market. As we build Ingersoll Rand into a leading employer of choice, I am proud of the strides we are making. Our recently released 2025 Diversity, Equity and Inclusion goals exemplify our continued commitment to making a positive impact for our employees around the globe. Thinking back to our Gardner Denver IPO in 2017, it is humbling and inspiring to reflect on all we have accomplished in a relatively short timeframe but even more exciting when we think about all the opportunity in front of us.”

First-Quarter 2021 Segment Review

(All comparisons against the first quarter of 2020 unless otherwise noted.)

Industrial Technologies and Services Segment: broad range of compressor, vacuum and blower solutions as well as fluid transfer equipment, loading systems, power tools and lifting equipment

• Reported Revenues of $914 million, up 81%, and up 15% (9% organically) as compared to prior year supplemental adjusted revenues
• Reported Orders of $1,042 million, up 84%, and up 17% (11% organically) as compared to prior year supplemental adjusted orders
• Reported Segment Adjusted EBITDA of $212 million, up 123%, and up 57% as compared to prior year supplemental segment adjusted EBITDA
• Reported Segment Adjusted EBITDA Margin of 23.1%, up 430 basis points and up 610 basis points as compared to prior year supplemental segment Adjusted EBITDA margin, fueled by the use of IRX to drive execution and realization of Transaction synergies
• Core industrial end markets saw continued strong demand with orders up 17% as compared to prior year supplemental adjusted orders, including positive momentum across all major regions. Orders for total compressor offerings, which represent approximately 65% of the total segment, were up 20%+. Orders in Industrial Vacuum & Blowers and Power Tools and Lifting were both up low double digits.

Precision and Science Technologies Segment: highly specialized gas, fluid management systems, liquid and precision syringe pumps and compressors

• Reported Revenues of $216 million, up 91%, and up 12% (7% organically) as compared to prior year supplemental adjusted revenues
• Reported Orders of $258 million, up 97%, and up 18% (12% organically) as compared to prior year supplemental adjusted orders
• Reported Segment Adjusted EBITDA of $67 million, up 104% and up 26% as compared to prior year supplemental segment adjusted EBITDA
• Reported Segment Adjusted EBITDA Margin of 31.2%, up 210 basis points and up 350 basis points as compared to prior year supplemental segment Adjusted EBITDA margin, driven by revenue growth coupled with IRX execution to deliver synergies and productivity improvements
• Orders increased 18% as compared to supplemental adjusted orders driven primarily by continued strong double-digit growth from both medical pumps and the Dosatron product line, which serves niche end markets such as lab and life sciences, water treatment, food sanitation and animal health, as well as strong performance from the ARO product line, which largely serves core industrial end markets.

Specialty Vehicle Technologies Segment¹: Club Car golf, utility and consumer low-speed vehicles

• Reported Revenues of $240 million, up 177%, and up 30% (29% organically) as compared to prior year supplemental adjusted revenues
• Reported Orders of $405 million, up 549%, and up 90% (89% organically) as compared to prior year supplemental adjusted orders
• Reported Segment Adjusted EBITDA of $48 million, up 242%, and up 162% as compared to prior year supplemental segment adjusted EBITDA of $18 million
• Reported Segment Adjusted EBITDA Margin was 20.1%, up 380 basis points and up 1,020 basis points as compared to prior year supplemental segment adjusted EBITDA margin, driven by strong revenue growth and the use of IRX to accelerate productivity initiatives
• Strong orders momentum, driven by record demand for consumer vehicles as well as growth in golf, commercial and aftermarket product offerings

Discontinued Operations

High Pressure Solutions business: diverse range of positive displacement pumps, integrated systems, consumables and associated aftermarket parts and services largely for use in the upstream oil and gas market

• Beginning in Q1 2021, Ingersoll Rand classified the HPS business as discontinued operations and has reclassified certain prior year amounts to conform to the current year presentation

Environmental, Social and Governance (ESG) Update

• Announced 2030 and 2050 Environmental goals to reduce the impact of operations and products on the environment, and support customers and partners in doing the same. These goals include achieving net-zero greenhouse gas emissions by 2050, reduction of water use by 17% by 2030 and achieving zero waste to landfill at >50% of current sites by 2030
• Announced 2025 Diversity, Equity and Inclusion goals to accelerate representation, career advancement and employee sense of belonging. These goals include an increase in under-represented talent in the U.S. workforce to at least 30% and an increase in global employment of women to at least 25%

Balance Sheet and Cash Flow

Ingersoll Rand remains in a strong financial position with ample liquidity of $2.6 billion. Free cash flow continues to increase. On a reported basis, Ingersoll Rand generated $123 million of cash flow from operating activities from continuing operations and invested $15 million in capital expenditures, resulting in free cash flow from continuing operations of $108 million, compared to cash flow from operating activities from continuing operations of $38 million and free cash flow from continuing operations of $30 million in the year-ago period. Operating cash flows from continuing operations in the first quarter of 2021 include outflows of approximately $10 million related to synergy delivery costs and stand-up related outflows. Net debt to supplemental adjusted EBITDA leverage was 1.9x for the first quarter, which was a 0.1x improvement as compared to prior quarter.

2021 Guidance, Excluding Specialty Vehicle Technologies Segment

The company is experiencing continued strong performance in 2021. As a result, Ingersoll Rand is raising its full-year 2021 revenue growth and Adjusted EBITDA guidance, excluding SVT, to the following:

Conference Call

Ingersoll Rand will host a live earnings conference call to discuss the first-quarter results on Thursday, April 29, 2021 at 8 a.m. (Eastern Time). To participate in the call, please dial 1-844-200-6205, domestically, or 1-646-904-5544, internationally, and use conference ID, 833508, or ask to be joined into the Ingersoll Rand call. A real-time audio webcast of the presentation can be accessed via the Events and Presentations section of the Ingersoll Rand Investor Relations website (https://investors.irco.com), where related materials will be posted prior to the conference call. A replay of the webcast will be available after conclusion of the conference and can be accessed on the Ingersoll Rand Investor Relations website.

¹ Beginning in Q2 2021, Ingersoll Rand will classify SVT as discontinued operations and will reclassify certain prior year amounts to conform to the current year presentation.

Forward-Looking Statements

This news release contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the completed Transaction (the “Transaction”) between Ingersoll-Rand plc’s Industrial segment (“Ingersoll Rand Industrial”) and the Company (f/k/a Gardner Denver Holdings, Inc. or “Gardner Denver”) and the recently-announced sale of the SVT Segment to Platinum Equity (the “SVT Sale”). These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “target,” “endeavor,” “seek,” “predict,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “on track to” “will continue,” “will likely result,” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements, other than historical facts, including, but not limited to, statements regarding the expected benefits of the Transaction, including future financial and operating results and strategic benefits, the tax consequences of the Transaction, the combined company’s plans, objectives, expectations and intentions, legal, economic and regulatory conditions, the future impact of the ongoing coronavirus (COVID-19) pandemic on the Company’s business and any assumptions underlying any of the foregoing, are forward-looking statements.

These forward-looking statements are based on Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these current expectations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) the impact on the Company’s business, suppliers and customers and global economic conditions of the COVID-19 pandemic (2) unexpected costs, charges or expenses resulting from the Transaction; (3) uncertainty of the expected financial performance of the combined company following completion of the Transaction; (4) failure to realize the anticipated benefits of the Transaction, including as a result of delay in integrating the businesses of Gardner Denver and Ingersoll Rand Industrial; (5) the ability of the combined company to implement its business strategy; (6) difficulties and delays in the combined company achieving revenue and cost synergies; (7) inability of the combined company to retain and hire key personnel; (8) risks and uncertainties with respect to the proposed SVT Sale, including, without limitation, that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, or that the proposed transaction may not be completed on the terms or in the time frame expected by the Company, or at all; (9) evolving legal, regulatory and tax regimes; (10) changes in general economic and/or industry specific conditions; (11) actions by third parties, including government agencies; and (12) adverse impact on our operations and financial performance due to natural disaster, catastrophe, pandemic or other events outside of our control. Additional factors that could cause Ingersoll Rand’s results to differ materially from those described in the forward-looking statements can be found under the section entitled “Risk Factors” in its most recent annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in its periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. The foregoing list of important factors is not exclusive.

Any forward-looking statements speak only as of the date of this release. Ingersoll Rand undertakes no obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

About Ingersoll Rand Inc.

Ingersoll Rand Inc. (NYSE:IR), driven by an entrepreneurial spirit and ownership mindset, is dedicated to helping make life better for our employees, customers and communities. Customers lean on us for our technology-driven excellence in mission-critical flow creation and industrial solutions across 40+ respected brands where our products and services excel in the most complex and harsh conditions. Our employees develop customers for life through their daily commitment to expertise, productivity and efficiency. For more information, visit www.IRCO.com.

Non-U.S. GAAP Measures of Financial Performance

In addition to consolidated GAAP financial measures, Ingersoll Rand reviews various non-GAAP financial measures, including “Adjusted EBITDA,” “Supplemental Adjusted EBITDA,” “Adjusted Net Income,” “Supplemental Further Adjusted Net Income,” “Supplemental Further Adjusted Diluted EPS,” “Adjusted Diluted EPS,” “Free Cash Flow,” “Supplemental Revenue” and “Incrementals/Decrementals.”

Ingersoll Rand believes Supplemental Revenue, Supplemental Further Adjusted Net Income, Supplemental Further Adjusted Diluted EPS and Supplemental Adjusted EBITDA are helpful supplemental measures to assist management and investors in evaluating the Company’s operating results as they provide supplemental information about the Company’s financial performance on a combined basis as if the Transaction had occurred on January 1, 2018. Ingersoll Rand believes Adjusted EBITDA, Supplemental Adjusted EBITDA, Adjusted Net Income, Supplemental Further Adjusted Net Income, Supplemental Further Adjusted Diluted EPS, Adjusted Diluted EPS and Supplemental Revenue are helpful supplemental measures to assist management and investors in evaluating the Company’s operating results as they exclude certain items that are unusual in nature or whose fluctuation from period to period do not necessarily correspond to changes in the operations of Ingersoll Rand’s business. Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Supplemental Adjusted EBITDA represents Adjusted EBITDA as if the Transaction had occurred on January 1, 2018. Adjusted Net Income is defined as net income including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions. Supplemental Further Adjusted Net Income represents Adjusted Net Income as if the Transaction had occurred on January 1, 2018. Ingersoll Rand believes that the adjustments applied in presenting Adjusted EBITDA, Supplemental Adjusted EBITDA, Adjusted Net Income and Supplemental Further Adjusted Net Income are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that the Company does not expect to continue at the same level in the future. Adjusted Diluted EPS is defined as Adjusted Net Income divided by Adjusted Diluted Average Shares Outstanding. Supplemental Further Adjusted Diluted EPS is defined as Supplemental Further Adjusted Net Income divided by Adjusted Diluted Average Shares Outstanding as if the Transaction had occurred on January 1, 2018. Supplemental Revenue represents revenue for the Company as if the Transaction had occurred on January 1, 2018. Incrementals/Decrementals are defined as the change in Adjusted EBITDA versus the prior year period divided by the change in revenue versus the prior year period.

Ingersoll Rand uses Free Cash Flow to review the liquidity of its operations. Ingersoll Rand measures Free Cash Flow as cash flows from operating activities less capital expenditures. Ingersoll Rand believes Free Cash Flow is a useful supplemental financial measure for management and investors in assessing the Company’s ability to pursue business opportunities and investments and to service its debt. Free Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.

Management and Ingersoll Rand’s board of directors regularly use these measures as tools in evaluating the Company’s operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measures under GAAP. In addition, Ingersoll Rand believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Incrementals/Decrementals and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.

Adjusted EBITDA, Supplemental Adjusted EBITDA, Adjusted Net Income, Supplemental Further Adjusted Net Income, Supplemental Further Adjusted Diluted EPS, Adjusted Diluted EPS, Incrementals/Decrementals, Free Cash Flow and Supplemental Revenue should not be considered as alternatives to net income, diluted earnings per share or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA, Supplemental Adjusted EBITDA, Adjusted Net Income, Supplemental Further Adjusted Net Income, Supplemental Further Adjusted Diluted EPS, Adjusted Diluted EPS, Free Cash Flow and Supplemental Revenue have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing Ingersoll Rand’s results as reported under GAAP.

Reconciliations of Adjusted EBITDA, Supplemental Adjusted EBITDA, Adjusted Net Income, Supplemental Further Adjusted Net Income, Supplemental Further Adjusted Diluted EPS, Adjusted Diluted EPS, Free Cash Flow and Supplemental Revenue to their most comparable U.S. GAAP financial metrics for historical periods are presented in the tables below.

Reconciliations of non-GAAP measures related to full year 2021 guidance have not been provided due to the unreasonable efforts it would take to provide such reconciliations due to the high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for acquisitions-related expenses, restructuring and other business transformation costs, gains or losses on foreign currency exchange and the timing and magnitude of other amounts in the reconciliation of historic numbers. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.

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