Ireland | 001-34400 | 98-0626632 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits. |
Exhibit No. | Description |
99.1 | Press Release of Ingersoll-Rand plc dated April 26, 2016. |
INGERSOLL-RAND PLC (Registrant) | ||
Date: | April 26, 2016 | /s/ Susan K. Carter |
Susan K. Carter, Senior Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release of Ingersoll-Rand plc dated April 26, 2016. |
l | Bookings growth of 4 percent on an organic basis |
l | Revenues of $2.9 billion, up slightly as reported and 2 percent on an organic basis |
l | Operating margin improvement of 1.6 percentage points |
l | Adjusted free cash flow improved $135 million year-over-year |
l | Company increases guidance for full-year 2016 adjusted EPS from continuing operations to $3.95 to $4.10 compared to a prior guidance of $3.80 to $4.00; reported EPS to $5.39 to $5.54 including the gain on the Hussmann sale |
All items labeled “adjusted” in this news release exclude restructuring expenses in 2015 and 2016 and other one-time costs in 2015. Revenues and bookings labeled as “organic” exclude the impact of currency and acquisitions. See attached tables for additional details. |
$, millions except EPS | Q1 2016 | Q1 2015 | Y-O-Y change |
Bookings | $3,244 | $3,200 | 1.4% |
Net Revenues | $2,894 | $2,888 | 0.2% |
Reported Operating Margin | 7.5% | 5.9% | 1.6 PPts |
Adjusted Operating Margin | 7.8% | 6.4% | 1.4 PPts |
Reported EPS | $0.48 | $0.22 | 118% |
Adjusted EPS | $0.50 | $0.38 | 32% |
Adjusted Tax Rate | 24.5% | 26.9% | (2.4) PPts |
Restructuring Cost | $(8.4) | $(0.9) | $(7.5) |
• | The first-quarter reported operating margin was 7.5 percent compared with 5.9 percent in 2015. Adjusted for restructuring charges and other one-time items, operating margin for the first-quarter was 7.8 percent, up 1.4 percentage points versus prior year. |
• | Year-over-year margin gains from increased productivity savings, pricing and material deflation were partially offset by other inflation and negative currency. |
• | First-quarter net earnings included $125.5 million, or EPS of $0.48 from continuing operations, and EPS of $0.10 from discontinued operations. The gain in discontinued operations is primarily a one-time item related to insurance settlements. |
• | First-quarter 2016 results included $(8.4) million, or $(0.02) per share, from restructuring costs. Excluding restructuring and other one-time items, adjusted EPS from continuing operations were $0.50 and increased by 32 percent year-over-year. |
• | Organic revenues for U.S. operations were up 3 percent and international operations increased 1 percent. |
$, millions | Q1 2016 | Q1 2015 | Y-O-Y change |
Bookings | $2,537 | $2,443 | 4% |
Net Revenues | $2,214 | $2,159 | 3% |
Adjusted Operating Income | $216.2 | $151.2 | 43% |
Adjusted Operating Margin | 9.8% | 7.0% | 2.8 PPts |
• | First-quarter 2016 organic revenues and bookings were up 4 percent and 6 percent, respectively. |
• | First-quarter 2016 reported segment operating income increased 42 percent. |
• | Strong operating leverage: operating margin improved 2.7 percentage points due to higher volumes, productivity gains, pricing, mix and material deflation, partially offset by other inflation and negative currency impacts. |
• | Commercial HVAC organic revenues increased by a low-teens percentage in North America, up mid-single digits in Europe and Latin America, flat in Asia and down in the Middle East. |
• | Currency had a 3 percentage point negative impact on first-quarter revenue. |
• | Organic bookings were up high-single digits; up high-single digits in North America, up low teens in Asia, up high-single digits in Europe and down in Latin America and the Middle East. |
• | Revenue growth in North America and Europe truck and trailer were offset by currency and a sharp decline in marine containers. |
• | Organic bookings declined as the marine business offset gains in truck and trailer. |
$, millions | Q1 2016 | Q1 2015 | Y-O-Y change |
Bookings | $707 | $758 | (7%) |
Net Revenues | $681 | $729 | (7%) |
Adjusted Operating Income | $65.5 | $86.9 | (25%) |
Adjusted Operating Margin | 9.6% | 11.9% | (2.3) PPts |
• | First-quarter 2016 organic revenues and bookings both declined by approximately 5 percent. |
• | First-quarter reported segment operating margin declined (1.1) percentage points due to lower volumes and mix, negative currency and other inflation, partially offset by productivity gains, positive price realization and material deflation. |
• | Organic revenues for compression-related products were down low-single digits, industrial products were down mid-teens due to a 50 percent decline in material handling equipment, and Club Car was up slightly due to growth in golf cars and aftermarket parts. |
• | Organic revenues were down high-single digits in the Americas due to declines in large compressors and material handling equipment; down low-single digits in EMEA and flat in Asia. |
• | Currency had 2 percentage point negative impact on first-quarter revenue. |
• | Adjusted free cash flow in the first quarter of $(46) million improved compared to $(181) million in 2015. |
• | At the end of the first quarter, working capital was 6.2 percent of revenues, compared with 6.3 percent in 2015. |
• | Cash balances and total debt balances were $0.6 billion and $4.5 billion, respectively. |
• | Reported revenues in the range of flat to up 2 percent; organic up 2 percent to 4 percent compared with 2015. |
• | Adjusted EPS from continuing operations of $3.95 to $4.10, compared with a prior guidance of $3.80 to $4.00. |
• | Reported continuing EPS $5.39 to $5.54, including EPS of $(0.05) for restructuring, and approximately $1.49 from the gain on the sale of Hussmann. |
• | Average diluted share count of approximately 261 million shares. |
• | Adjusted free cash flow of $950 million to $1 billion, excluding the proceeds of the sale of Hussmann. |
• | Reported revenues up 2 percent to 4 percent; organic up 4 percent to 6 percent compared with 2015. |
• | Adjusted EPS from continuing operations of $1.27 to $1.32. |
• | Reported continuing EPS of $2.75 to $2.80, including EPS of $(0.01) for restructuring, and approximately $1.49 from the gain on the sale of Hussmann. |
• | Condensed Consolidated Income Statement |
• | Segments |
• | Non-GAAP Financial Tables |
• | Condensed Consolidated Balance Sheet |
• | Condensed Consolidated Statement of Cash Flow |
• | Balance Sheet Metrics and Free Cash Flow |
Contacts: | |
Media: | Investors and Financial Analysts: |
Misty Zelent | Joe Fimbianti |
(704) 655-5324, mzelent@irco.com | (704) 655-4721, joseph_fimbianti@irco.com |
-or- | |
Janet Pfeffer | |
(704) 655-5319, janet_pfeffer@irco.com |
For the quarter ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net revenues | $ | 2,894.1 | $ | 2,887.8 | |||
Cost of goods sold | (2,047.0 | ) | (2,086.7 | ) | |||
Selling & administrative expenses | (629.8 | ) | (630.0 | ) | |||
Operating income | 217.3 | 171.1 | |||||
Interest expense | (56.7 | ) | (55.1 | ) | |||
Other income/(expense), net | 10.0 | (26.4 | ) | ||||
Earnings before income taxes | 170.6 | 89.6 | |||||
Provision for income taxes | (41.9 | ) | (26.9 | ) | |||
Earnings from continuing operations | 128.7 | 62.7 | |||||
Discontinued operations, net of tax | 26.9 | (7.3 | ) | ||||
Net earnings | 155.6 | 55.4 | |||||
Less: Net earnings attributable to noncontrolling interests | (3.2 | ) | (4.1 | ) | |||
Net earnings attributable to Ingersoll-Rand plc | $ | 152.4 | $ | 51.3 | |||
Amounts attributable to Ingersoll-Rand plc | |||||||
ordinary shareholders: | |||||||
Continuing operations | $ | 125.5 | $ | 58.6 | |||
Discontinued operations | 26.9 | (7.3 | ) | ||||
Net earnings | $ | 152.4 | $ | 51.3 | |||
Diluted earnings (loss) per share attributable to | |||||||
Ingersoll-Rand plc ordinary shareholders: | |||||||
Continuing operations | $ | 0.48 | $ | 0.22 | |||
Discontinued operations | 0.10 | (0.03 | ) | ||||
$ | 0.58 | $ | 0.19 | ||||
Weighted-average number of common shares | |||||||
outstanding: | |||||||
Diluted | 261.3 | 268.5 |
For the quarter | |||||||
ended March 31, | |||||||
2016 | 2015 | ||||||
Climate | |||||||
Net revenues | $ | 2,213.5 | $ | 2,158.5 | |||
Segment operating income * | 214.3 | 150.9 | |||||
and as a % of Net revenues | 9.7 | % | 7.0 | % | |||
Industrial | |||||||
Net revenues | 680.6 | 729.3 | |||||
Segment operating income * | 62.4 | 74.8 | |||||
and as a % of Net revenues | 9.2 | % | 10.3 | % | |||
Unallocated corporate expense | (59.4 | ) | (54.6 | ) | |||
Total | |||||||
Net revenues | $ | 2,894.1 | $ | 2,887.8 | |||
Consolidated operating income | $ | 217.3 | $ | 171.1 | |||
and as a % of Net revenues | 7.5 | % | 5.9 | % |
For the quarter ended March 31, 2016 | ||||||||||||
As | As | |||||||||||
Reported | Adjustments | Adjusted | ||||||||||
Net revenues | $ | 2,894.1 | $ | — | $ | 2,894.1 | ||||||
Operating income | 217.3 | 8.4 | (a) | 225.7 | ||||||||
Operating margin | 7.5 | % | 7.8 | % | ||||||||
Earnings from continuing operations before income taxes | 170.6 | 8.4 | (a) | 179.0 | ||||||||
Provision for income taxes | (41.9 | ) | (2.0 | ) | (b) | (43.9 | ) | |||||
Tax rate | 24.6 | % | 24.5 | % | ||||||||
Earnings from continuing operations attributable to Ingersoll-Rand plc | $ | 125.5 | $ | 6.4 | (c) | $ | 131.9 | |||||
Diluted earnings per common share | ||||||||||||
Continuing operations | $ | 0.48 | $ | 0.02 | $ | 0.02 | ||||||
Weighted-average number of common shares outstanding | ||||||||||||
Diluted | 261.3 | — | 261.3 | |||||||||
Detail of Adjustments: | ||||||||||||
(a) | Restructuring costs | $ | 8.4 | |||||||||
(b) | Tax impact | (2.0 | ) | |||||||||
(c) | Impact of adjustments on earnings from continuing operations attributable to Ingersoll-Rand plc | $ | 6.4 |
For the quarter ended March 31, 2015 | ||||||||||||
As | As | |||||||||||
Reported | Adjustments | Adjusted | ||||||||||
Net revenues | $ | 2,887.8 | $ | — | $ | 2,887.8 | ||||||
Operating income | 171.1 | 12.6 | (a,b) | 183.7 | ||||||||
Operating margin | 5.9 | % | 6.4 | % | ||||||||
Earnings from continuing operations before income taxes | 89.6 | 55.2 | (a,b,c) | 144.8 | ||||||||
Provision for income taxes | (26.9 | ) | (12.1 | ) | (d) | (39.0 | ) | |||||
Tax rate | 30.0 | % | 26.9 | % | ||||||||
Earnings from continuing operations attributable to Ingersoll-Rand plc | 58.6 | 43.1 | (e) | 101.7 | ||||||||
Diluted earnings per common share | ||||||||||||
Continuing operations | $ | 0.22 | $ | 0.16 | $ | 0.38 | ||||||
Weighted-average number of common shares outstanding | ||||||||||||
Diluted | 268.5 | — | 268.5 | |||||||||
Detail of Adjustments: | ||||||||||||
(a) | Restructuring costs | 0.9 | ||||||||||
(b) | Acquisition Inventory step up | 11.7 | ||||||||||
(c) | Venezuela remeasurement of monetary assets | 42.6 | ||||||||||
(d) | Tax impact of adjustments a, b, and c | (12.1 | ) | |||||||||
(e) | Impact of adjustments on earnings from continuing operations attributable to Ingersoll-Rand plc | $ | 43.1 |
For the quarter ended March 31, 2016 | For the quarter ended March 31, 2015 | ||||||||||||
As Reported | Margin | As Reported | Margin | ||||||||||
Climate | |||||||||||||
Net revenues | $ | 2,213.5 | $ | 2,158.5 | |||||||||
Segment operating income | $ | 214.3 | 9.7 | % | $ | 150.9 | 7.0 | % | |||||
Restructuring/Other | 1.9 | 0.1 | % | 0.3 | — | % | |||||||
Adjusted operating income | 216.2 | 9.8 | % | 151.2 | 7.0 | % | |||||||
Depreciation and amortization | 57.2 | 2.6 | % | 59.6 | 2.8 | % | |||||||
EBITDA | $ | 273.4 | 12.4 | % | $ | 210.8 | 9.8 | % | |||||
Industrial | |||||||||||||
Net revenues | $ | 680.6 | $ | 729.3 | |||||||||
Segment operating income | $ | 62.4 | 9.2 | % | $ | 74.8 | 10.3 | % | |||||
Restructuring/Other | 3.1 | 0.4 | % | 12.1 | 1.6 | % | |||||||
Adjusted operating income | 65.5 | 9.6 | % | 86.9 | 11.9 | % | |||||||
Depreciation and amortization | 16.3 | 2.4 | % | 13.2 | 1.8 | % | |||||||
EBITDA | $ | 81.8 | 12.0 | % | $ | 100.1 | 13.7 | % | |||||
Corporate | |||||||||||||
Unallocated corporate expense | $ | (59.4 | ) | $ | (54.6 | ) | |||||||
Restructuring/Other | 3.4 | 0.2 | |||||||||||
Adjusted corporate expense | (56.0 | ) | (54.4 | ) | |||||||||
Depreciation and amortization | 14.5 | 15.1 | |||||||||||
EBITDA | $ | (41.5 | ) | $ | (39.3 | ) | |||||||
Total Company | |||||||||||||
Net revenues | $ | 2,894.1 | $ | 2,887.8 | |||||||||
Operating income | $ | 217.3 | 7.5 | % | $ | 171.1 | 5.9 | % | |||||
Restructuring/Other | 8.4 | 0.3 | % | 12.6 | 0.5 | % | |||||||
Adjusted operating income | 225.7 | 7.8 | % | 183.7 | 6.4 | % | |||||||
Depreciation and amortization | 88.0 | 3.0 | % | 87.9 | 3.0 | % | |||||||
EBITDA | $ | 313.7 | 10.8 | % | $ | 271.6 | 9.4 | % |
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 612.9 | $ | 736.8 | |||
Accounts and notes receivable, net | 2,155.1 | 2,150.6 | |||||
Inventories | 1,612.7 | 1,410.7 | |||||
Other current assets | 432.2 | 311.3 | |||||
Total current assets | 4,812.9 | 4,609.4 | |||||
Property, plant and equipment, net | 1,582.2 | 1,575.1 | |||||
Goodwill | 5,784.4 | 5,730.2 | |||||
Intangible assets, net | 3,903.1 | 3,926.1 | |||||
Other noncurrent assets | 869.9 | 876.8 | |||||
Total assets | $ | 16,952.5 | $ | 16,717.6 | |||
LIABILITIES AND EQUITY | |||||||
Accounts payable | $ | 1,345.8 | $ | 1,249.3 | |||
Accrued expenses and other current liabilities | 1,826.3 | 1,894.9 | |||||
Short-term borrowings and current maturities of long-term debt | 758.0 | 504.2 | |||||
Total current liabilities | 3,930.1 | 3,648.4 | |||||
Long-term debt | 3,714.6 | 3,713.6 | |||||
Other noncurrent liabilities | 3,455.1 | 3,476.4 | |||||
Equity | 5,852.7 | 5,879.2 | |||||
Total liabilities and equity | $ | 16,952.5 | $ | 16,717.6 |
For the quarter | |||||||
ended March 31, | |||||||
2016 | 2015 | ||||||
Operating Activities | |||||||
Income from continuing operations | $ | 128.7 | $ | 62.7 | |||
Depreciation and amortization | 88.0 | 87.9 | |||||
Changes in assets and liabilities and other non-cash items | (222.0 | ) | (265.8 | ) | |||
Net cash used in operating activities of continuing operations | (5.3 | ) | (115.2 | ) | |||
Net cash used in operating activities of discontinued operations | (6.7 | ) | (10.0 | ) | |||
Net cash used in operating activities | (12.0 | ) | (125.2 | ) | |||
Investing Activities | |||||||
Capital expenditures | (40.1 | ) | (55.7 | ) | |||
Acquisitions and other investing activities, net | — | (937.7 | ) | ||||
Net cash used in investing activities | (40.1 | ) | (993.4 | ) | |||
Financing Activities | |||||||
Net debt proceeds | 254.0 | 311.1 | |||||
Dividends paid to ordinary shareholders | (82.2 | ) | (73.8 | ) | |||
Repurchase of ordinary shares | (250.1 | ) | — | ||||
Other financing activities, net | (6.7 | ) | 19.5 | ||||
Net cash provided by (used in) financing activities | (93.8 | ) | 256.8 | ||||
Effect of exchange rate changes on cash and cash equivalents | 22.0 | (109.5 | ) | ||||
Net decrease in cash and cash equivalents | (123.9 | ) | (971.3 | ) | |||
Cash and cash equivalents - beginning of period | 736.8 | 1,705.2 | |||||
Cash and cash equivalents - end of period | $ | 612.9 | $ | 733.9 |
December 31, | March 31, | ||||||||||
2015 | 2015 | 2016 | |||||||||
Net Receivables | $ | 2,151 | $ | 2,190 | $ | 2,155 | |||||
Days Sales Outstanding | 59.0 | 69.2 | 67.9 | ||||||||
Net Inventory | $ | 1,411 | $ | 1,613 | $ | 1,613 | |||||
Inventory Turns | 6.6 | 5.2 | 5.1 | ||||||||
Accounts Payable | $ | 1,249 | $ | 1,356 | $ | 1,346 | |||||
Days Payable Outstanding | 48.7 | 59.3 | 60.0 | ||||||||
Quarter ended | Quarter ended | ||||||||||
March 31, 2015 | March 31, 2016 | ||||||||||
Cash flow used in operating activities (a) | $ | (125.2 | ) | $ | (12.0 | ) | |||||
Capital expenditures | (55.7 | ) | (40.1 | ) | |||||||
Free cash flow | $ | (180.9 | ) | $ | (52.1 | ) | |||||
Cash payments for Restructuring | — | 5.8 | |||||||||
Adjusted free cash flow | $ | (180.9 | ) | $ | (46.3 | ) |