Summary
Vertiv Holdings Co. reported significant revenue growth in 2021, driven by increased demand across its data center, communication network, and commercial & industrial sectors. The company's net sales grew by 14.4% to $4.998 billion, a substantial increase from the prior year. This growth was supported by positive impacts from foreign currency, the acquisition of E&I Engineering, and a general global economic recovery. Despite the top-line growth, gross profit as a percentage of sales decreased from 33.7% in 2020 to 30.5% in 2021, primarily due to higher commodity, freight, and labor costs stemming from supply chain constraints. The company's backlog significantly increased to $3.191 billion by the end of 2021, signaling strong future demand, though it also highlights potential pricing challenges as cost increases may not be immediately reflected. Vertiv addressed its debt structure by issuing Senior Secured Notes and amending its Term Loan Credit Agreement, aiming to manage its financial position. Management expresses confidence in near-term liquidity supported by operating cash flow and debt arrangements, while acknowledging the ongoing impacts of supply chain disruptions and cost pressures expected to persist into 2022.
Financial Highlights
52 data points| Revenue | $5.00B |
| Cost of Revenue | $3.48B |
| Gross Profit | $1.52B |
| R&D Expenses | $266.40M |
| SG&A Expenses | $1.11B |
| Operating Income | $259.90M |
| Interest Expense | $90.60M |
| Net Income | $119.60M |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 355.54M |
| Shares Outstanding (Diluted) | 360.14M |
Key Highlights
- 1Net sales increased by 14.4% to $4.998 billion in 2021, driven by broad demand and the E&I acquisition.
- 2Gross profit margin declined to 30.5% from 33.7% due to increased commodity, freight, and labor costs.
- 3The company's order backlog significantly grew to $3.191 billion as of December 31, 2021, indicating strong future demand.
- 4Vertiv completed the acquisition of E&I Engineering for $1.776 billion and issued $850 million in Senior Secured Notes due 2028.
- 5Operating profit increased by 21.7% to $259.9 million, despite the compressed gross margins, due to managed SG&A expenses and lower restructuring costs.
- 6The company has successfully remediated previously identified material weaknesses in its internal controls over financial reporting and concluded that its controls were effective as of December 31, 2021.
- 7Significant investments in R&D were made, with $266.4 million spent in 2021 to foster new product innovation.