Summary
Vertiv Holdings Co.'s 2020 Form 10-K, filed in March 2021, details the company's performance as a global leader in critical digital infrastructure technology. The report highlights the impact of the COVID-19 pandemic on sales, which saw a slight decrease of 1.4% to $4.37 billion, primarily affecting the Americas segment. Despite revenue headwinds, the company improved its gross profit margin to 33.7% and significantly reduced selling, general, and administrative expenses by 8.4%, demonstrating effective cost management. The company completed a significant business combination in February 2020, leading to a substantial refinancing of its debt and a strengthening of its balance sheet, though it also incurred significant one-time costs related to debt extinguishment. A key area of focus is the company's ongoing efforts to remediate material weaknesses in its internal control over financial reporting, particularly concerning IT general controls and the aggregation of control deficiencies. While these weaknesses did not result in material misstatements in the financial statements for 2020, they indicate areas requiring significant management attention and investment to ensure robust financial reporting moving forward. The company's backlog stood at $1.84 billion as of December 31, 2020, suggesting potential for future revenue growth, with the majority expected to be fulfilled within one year.
Financial Highlights
52 data points| Revenue | $4.37B |
| Cost of Revenue | $2.90B |
| Gross Profit | $1.47B |
| R&D Expenses | $228.60M |
| SG&A Expenses | $1.01B |
| Operating Income | $213.50M |
| Interest Expense | $150.40M |
| Net Income | -$327.30M |
| EPS (Basic) | $-1.07 |
| EPS (Diluted) | $-1.07 |
| Shares Outstanding (Basic) | 307.08M |
| Shares Outstanding (Diluted) | 307.08M |
Key Highlights
- 1Vertiv Holdings Co. reported net sales of $4.37 billion for the year ended December 31, 2020, a 1.4% decrease from 2019, largely attributed to the impact of the COVID-19 pandemic.
- 2The company achieved a gross profit margin of 33.7% in 2020, an improvement from 32.8% in 2019, driven by cost of sales efficiencies and favorable mix.
- 3Selling, General, and Administrative (SG&A) expenses decreased by 8.4% to $1.01 billion in 2020, reflecting successful cost reduction initiatives in response to the pandemic.
- 4A significant business combination was completed on February 7, 2020, followed by a substantial debt refinancing, which improved the company's debt structure and reduced interest expenses by $160 million year-over-year.
- 5The company reported two material weaknesses in internal control over financial reporting related to IT general controls and aggregation of control deficiencies, though no material misstatements were identified in the 2020 financial statements.
- 6Vertiv's order backlog increased to $1.84 billion as of December 31, 2020, from $1.40 billion in the prior year, indicating strong demand for its products and services.
- 7The company incurred a net loss of $183.6 million in 2020, an increase from a loss of $140.8 million in 2019, partly due to significant one-time charges including a $174.0 million loss on extinguishment of debt and $251.8 million in other deductions, net.