vrt-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __to__

Commission File No. 001-38518

Vertiv Holdings Co

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

81-2376902

(I.R.S Employer

Identification No.)

505 N. Cleveland Ave., Westerville, Ohio 43082

(Address of principal executive offices including zip code)

614-888-0246

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, $0.0001 par value per share

VRT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of April 24, 2023, there were 379,736,270 shares of the Company’s Class A common stock, par value $0.0001, issued and outstanding.

TABLE OF CONTENTS

Page

Part I - Financial Information

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Statements of Earnings (Loss)

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II - Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Part I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

VERTIV HOLDINGS CO

(Dollars in millions except for per share data)


	Three months ended March 31, 2023		Three months ended March 31, 2022
Net sales
Net sales - products	$	1,186.5	$	849.4
Net sales - services	334.6		307.0
Net sales	1,521.1		1,156.4
Costs and expenses
Cost of sales - products	819.5		655.8
Cost of sales - services	206.1		197.0
Cost of sales	1,025.6		852.8
Operating expenses
Selling, general and administrative expenses	308.7		292.2
Amortization of intangibles	45.2		57.7
Restructuring costs	13.1		0.8
Foreign currency (gain) loss, net	3.1		(1.3)

Other operating expense (income)	(4.9)		(0.6)
Operating profit (loss)	130.3		(45.2)
Interest expense, net	46.8		29.3

Change in fair value of warrant liabilities	(4.2)		(94.9)
Income (loss) before income taxes	87.7		20.4
Income tax expense	37.4		11.9
Net income (loss)	$	50.3	$	8.5

Earnings (loss) per share:
Basic	$	0.13	$	0.02
Diluted	$	0.12	$	(0.23)
Weighted-average shares outstanding:
Basic	378,129,786		375,972,294
Diluted	381,683,511		379,692,729

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of contents

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

VERTIV HOLDINGS CO

(Dollars in millions)


	Three months ended March 31, 2023		Three months ended March 31, 2022
Net income (loss)	$	50.3	$	8.5
Other comprehensive income (loss), net of tax:
Foreign currency translation	41.4		(36.3)
Interest rate swaps	(13.9)		54.2
Pension	(0.2)		0.1
Other comprehensive income (loss), net of tax	27.3		18.0
Comprehensive income (loss)	$	77.6	$	26.5

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of contents

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

VERTIV HOLDINGS CO

(Dollars in millions)


	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	276.1	$	260.6
Accounts receivable, less allowances of $24.3 and $18.4, respectively	1,991.9		1,888.8
Inventories	903.5		822.0
Other current assets	169.1		187.3
Total current assets	3,340.6		3,158.7
Property, plant and equipment, net	496.4		489.4
Other assets:
Goodwill	1,295.4		1,284.7
Other intangible assets, net	1,787.3		1,816.1
Deferred income taxes	52.6		46.4
Right-of-use assets, net	165.6		166.4
Other	117.5		134.0
Total other assets	3,418.4		3,447.6
Total assets	$	7,255.4	$	7,095.7
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	21.8	$	21.8
Accounts payable	917.0		984.0
Deferred revenue	502.9		358.7
Accrued expenses and other liabilities	496.4		513.7
Income taxes	33.5		19.7
Total current liabilities	1,971.6		1,897.9
Long-term debt, net	3,156.0		3,169.1
Deferred income taxes	188.5		176.5
Warrant liabilities	32.9		58.7
Long-term lease liabilities	132.5		132.0
Other long-term liabilities	223.1		219.6
Total liabilities	5,704.6		5,653.8
Equity
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.0001 par value, 700,000,000 shares authorized, 379,133,659 and 377,368,837 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	2,662.0		2,630.7
Accumulated deficit	(1,092.3)		(1,142.6)
Accumulated other comprehensive income (loss)	(18.9)		(46.2)
Total equity	1,550.8		1,441.9
Total liabilities and equity	$	7,255.4	$	7,095.7

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of contents

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

VERTIV HOLDINGS CO

(Dollars in millions)


	Three months ended March 31, 2023		Three months ended March 31, 2022
Cash flows from operating activities:
Net income (loss)	$	50.3	$	8.5
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation	17.7		17.9
Amortization	48.9		61.3
Deferred income taxes	3.4		(4.6)
Amortization of debt discount and issuance costs	2.7		2.3

Change in fair value of warrant liabilities	(4.2)		(94.9)

Changes in operating working capital	(86.9)		(116.1)
Stock-based compensation	5.5		6.6
Payment of contingent consideration	—		(8.7)
Other	4.6		(4.5)
Net cash provided by (used for) operating activities	42.0		(