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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 September 30, 2021
or
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.)
1050 Dearborn Dr, Columbus, Ohio 43085
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 par value per share
VRTNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 October 29, 2021, there were 352,591,505 shares of our Class A common stock, par value $0.0001, issued and outstanding.



TABLE OF CONTENTS
Page

1



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 September 30, 2021
Three months ended September 30, 2020
Nine months ended September 30, 2021
Nine months ended September 30, 2020
Net sales
Net sales - products$926.0 $891.1 $2,746.5 $2,288.5 
Net sales - services302.9 270.9 841.1 776.5 
Net sales1,228.9 1,162.0 3,587.6 3,065.0 
Costs and expenses
Cost of sales - products678.4 596.7 1,958.0 1,575.2 
Cost of sales - services168.8 152.3 480.6 443.4 
Cost of sales847.2 749.0 2,438.6 2,018.6 
Operating expenses
Selling, general and administrative expenses257.8 251.7 779.6 742.8 
Amortization of intangibles31.6 32.5 95.3 97.1 
Restructuring costs(3.8)71.7 (0.7)73.0 
Foreign currency (gain) loss, net4.9 11.7 2.1 16.3 
Asset impairments8.7 9.4 8.7 21.7 
Other operating expense (income)0.7 0.9 0.2 2.0 
Operating profit (loss)81.8 35.1 263.8 93.5 
Interest expense, net22.4 26.4 66.5 125.4 
Loss on extinguishment of debt  0.4 174.0 
Change in fair value of warrant liabilities(32.5)87.7 52.3 109.3 
Income (loss) before income taxes91.9 (79.0)144.6 (315.2)
Income tax expense35.7 24.5 47.0 52.6 
Net income (loss)$56.2 $(103.5)$97.6 $(367.8)
Earnings (loss) per share:
Basic$0.16 $(0.32)$0.28 $(1.23)
Diluted$0.15 $(0.32)$0.27 $(1.23)
Weighted-average shares outstanding:
Basic352,482,900328,411,705351,439,095299,266,849
Diluted363,198,701328,411,705355,974,628299,266,849












See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
2

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
VERTIV HOLDINGS CO
(Dollars in millions)
Three months ended September 30, 2021Three months ended September 30, 2020Nine months ended September 30, 2021Nine months ended September 30, 2020
Net income (loss)$56.2 $(103.5)$97.6 $(367.8)
Other comprehensive income (loss), net of tax:
Foreign currency translation(28.0)46.1 (43.9)3.7 
Interest rate swaps2.7 (2.3)28.0 (37.8)
Tax receivable agreement2.2 (11.1)(3.1)5.1 
Pension0.1  (0.5)(0.2)
Other comprehensive income (loss), net of tax(23.0)32.7 (19.5)(29.2)
Comprehensive income (loss)$33.2 $(70.8)$78.1 $(397.0)













































See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
VERTIV HOLDINGS CO
(Dollars in millions)
September 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$743.6 $534.6 
Accounts receivable, less allowances of $13.0 and $15.0, respectively
1,386.1 1,354.4 
Inventories577.4 446.6 
Other current assets154.4 183.2 
Total current assets2,861.5 2,518.8 
Property, plant and equipment, net388.4 427.6 
Other assets:
Goodwill588.6 607.2 
Other intangible assets, net1,191.3 1,302.5 
Deferred income taxes15.4 20.9 
Other216.5 196.8 
Total other assets2,011.8 2,127.4 
Total assets$5,261.7 $5,073.8 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt$21.8 $22.0 
Current portion of warrant liabilities 68.5 
Accounts payable768.8 730.5 
Accrued expenses and other liabilities825.6 901.8 
Income taxes30.6 18.8 
Total current liabilities1,646.8 1,741.6 
Long-term debt, net2,118.4 2,130.5 
Deferred income taxes86.6 116.5 
Warrant liabilities140.0 87.7 
Other long-term liabilities484.2 485.4 
Total liabilities4,476.0 4,561.7 
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, 352,499,706 and 342,024,612 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
  
Additional paid-in capital1,987.3 1,791.8 
Accumulated deficit(1,233.6)(1,331.2)
Accumulated other comprehensive (loss) income32.0 51.5 
Total equity785.7 512.1 
Total liabilities and equity$5,261.7 $5,073.8 













See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
VERTIV HOLDINGS CO
(Dollars in millions)
Nine months ended September 30, 2021Nine months ended September 30, 2020
Cash flows from operating activities:
Net income (loss)$97.6 $(367.8)
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation51.6 42.9 
Amortization105.5 107.8 
Deferred income taxes(22.3)(7.7)
Amortization of debt discount and issuance costs4.6 9.0 
Loss on extinguishment of debt0.4 174.0 
Change in fair value of warrant liabilities52.3 109.3 
Asset impairment8.7 21.7 
Changes in operating working capital(160.0)(102.1)
Stock based compensation17.5 7.0 
Changes in tax receivable agreement3.3 18.8 
Other15.2 1.5 
Net cash provided by operating activities174.4 14.4 
Cash flows from investing activities:
Capital expenditures(43.3)(21.3)
Investments in capitalized software(9.5)(4.9)
Proceeds from disposition of property, plant and equipment6.1  
Net cash used for investing activities(46.7)(26.2)
Cash flows from financing activities:
Borrowings from ABL revolving credit facility 324.2 
Repayments of ABL revolving credit facility (370.5)
Proceeds from short-term borrowings 22.0 
Repayment of short-term borrowings (3.8)
Borrowing on Term Loan, net of discount 2,189.0 
Repayment on Term Loan(16.4)(11.0)
Repayment on Prior Term Loan (2,070.0)
Repayment of Prior Notes (1,370.0)
Payment of redemption premiums (75.0)
Payment of debt issuance costs (11.2)
Proceeds from reverse recapitalization, net 1,832.5 
Payment to Vertiv Stockholder (341.6)
Proceeds from the exercise of warrants107.5  
Exercise of employee stock options2.6  
Employee taxes paid from shares withheld(7.2) 
Other financing (2.3)
Net cash provided by financing activities86.5 112.3 
Effect of exchange rate changes on cash and cash equivalents(5.2)(1.9)
Increase (decrease) in cash, cash equivalents and restricted cash209.0 98.6 
Beginning cash, cash equivalents and restricted cash542.6 233.7 
Ending cash, cash equivalents and restricted cash$751.6 $332.3 
Changes in operating working capital
Accounts receivable$(67.8)$(76.5)
Inventories(147.7)(64.5)
Other current assets2.4 8.0 
Accounts payable63.1 20.8 
Accrued expenses and other liabilities5.7 (2.8)
Income taxes(15.7)12.9 
Total changes in operating working capital$(160.0)$(102.1)




See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
VERTIV HOLDINGS CO
(Dollars in millions)
Share Capital
SharesAmountAdditional Paid in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
Balance at December 31, 2019, as originally reported
1,000,000 $ $277.7 $(1,000.6)$18.1 $(704.8)
Conversion of units of share capital117,261,955 — — — — — 
Balance at December 31, 2019, as recasted (1)
118,261,955  277.7 (1,000.6)18.1 (704.8)
Tax Receivable Agreement— (133.4)— — (133.4)
Net income (loss)— — (208.3)— (208.3)
Stock issuance123,900,000 — 1,195.1 — — 1,195.1 
Merger recapitalization (2)
86,249,750 — 179.5 — — 179.5 
Stock-based compensation— — 0.7 — — 0.7 
Other comprehensive income (loss), net of tax— — — — (52.6)(52.6)
Balance at March 31, 2020
328,411,705 $ $1,519.6 $(1,208.9)$(34.5)$276.2 
Net income (loss)— — — (56.0)— (56.0)
Stock-based compensation— — 2.5 — — 2.5 
Other merger adjustment— — (0.4)— — (0.4)
Other comprehensive income (loss), net of tax— — — — (9.3)(9.3)
Balance at June 30, 2020
328,411,705 $ $1,521.7 $(1,264.9)$(43.8)$213.0 
Net income (loss)— — — (103.5)— (103.5)
Stock-based compensation— — 3.9 — — 3.9 
Other merger adjustment— — — — —  
Other comprehensive income (loss), net of tax— — — — 32.7 32.7 
Balance at September 30, 2020
328,411,705 $ $1,525.6 $(1,368.4)$(11.1)$146.1 
Balance at December 31, 2020
342,024,612 $ $1,791.8 $(1,331.2)$51.5 $512.1 
Net income (loss)— — — 31.7 — 31.7 
Exercise of employee stock options76,047 — 0.9 — — 0.9 
Employee 401K match with Vertiv stock69,309 — 1.3 — — 1.3 
Exercise of warrants (3)
9,346,822 — 176.0 — — 176.0 
Stock-based compensation— — 5.6 — — 5.6 
Other comprehensive income (loss), net of tax— — — — 1.1 1.1 
Balance at March 31, 2021
351,516,790 $ $1,975.6 $(1,299.5)$52.6 $728.7 
Net income (loss)— — — 9.7 — 9.7 
Exercise of employee stock options120,721 — 1.4 — — 1.4 
Stock comp activity, net of withholdings for tax (4)
586,139 — (0.8)— — (0.8)
Employee 401K match with Vertiv stock107,890 — 2.3 — — 2.3 
Other comprehensive income (loss), net of tax— — — — 2.4 2.4 
Balance at June 30, 2021
352,331,540 $ $1,978.5 $(1,289.8)$55.0 $743.7 
Net income (loss)— — — 56.2 — 56.2 
Exercise of employee stock options51,122 — 0.8 — — 0.8 
Stock comp activity, net of withholdings for tax (5)
27,069 — 5.5 — — 5.5 
Employee 401K match with Vertiv stock89,975 — 2.5 — — 2.5 
Other comprehensive income (loss), net of tax— — — — (23.0)(23.0)
Balance at September 30, 2021
352,499,706 $ $1,987.3 $(1,233.6)$32.0 $785.7 
(1)The shares and earnings per share available to holders of the Company’s capital stock, prior to the business combination, have been recasted as shares reflecting the exchange ratio established in the business combination (1.0 Vertiv Holdings share to 118.261955 Vertiv Holdings Co shares).
(2)The merger recapitalization includes the fair value of $116.3 of Public Warrants and Private Placement Warrants as of February 7, 2020.
(3)The exercise of warrants includes $107.5 of cash received during the three months ended March 31, 2021 for the exercise of Public Warrants.
(4)Net stock compensation activity includes 906,197 vested shares offset by 320,058 shares withheld for taxes valued at $7.0 and stock-based compensation of $6.2.
(5)Net stock compensation activity includes 29,605 vested shares offset by 2,536 shares withheld for taxes valued at $0.2 and stock-based compensation of $5.7.
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
6


Vertiv Holdings Co
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except as otherwise specified and per share amounts)
(1) DESCRIPTION OF BUSINESS
Vertiv Holdings Co ("Holdings Co", and together with its majority-owned subsidiaries, “Vertiv”, "we", "our", or "the Company"), formerly known as GS Acquisition Holdings Corp ("GSAH"), provides mission-critical infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. Vertiv’s offerings include power conditioning and uninterruptible power systems, thermal management, integrated data center control devices, software, monitoring, and service. Vertiv manages and reports results of operations for three reportable segments: Americas; Asia Pacific; and Europe, Middle East & Africa.
(2) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission ("SEC") and include the accounts of the Company and its subsidiaries in which the Company has a controlling interest. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented.
The presentation of certain prior period amounts includes the reclassification of intangible amortization expense, restructuring costs and net foreign currency (gain) loss into separate components within operating expenses to conform to the current period presentation. In addition certain prior period amounts have been reclassed to conform with current year presentation.
The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Results for these interim periods are not necessarily indicative of results to be expected for the full year due to, among other reasons, the continued uncertainty of general economic conditions due to the COVID-19 pandemic that has impacted, and may continue to impact, our sales channels, supply chain, manufacturing operations, workforce, or other key aspects of our operations.
The notes included herein should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K/A filed with the SEC on April 30, 2021 (the "2020 Form 10-K/A").
Held for Sale
During the third quarter of 2021, the Company determined a heavy industrial UPS business within the Europe, Middle East & Africa reportable segment, met the held for sale accounting and reporting criteria. As a result of the held for sale classification, the Company recorded a $8.7 impairment in "Asset impairment" on the Condensed Consolidated Statement of Earnings (Loss), to adjust the business to the current fair value, less expected costs to sell. As of September 30, 2021, current assets, property plant and equipment, net and other current assets of $30.9, $9.0 and $3.1, respectively have been classified as held for sale and included in "Other current assets", current liabilities and other long-term liabilities of $16.5 and $3.9, respectively, have been classified as held of sale and included in "Accrued expenses and other liabilities" on the Unaudited Condensed Consolidated Balance Sheets. In October 2021, the Company signed an agreement for approximately 20.0 EUR in cash proceeds from the transaction.
(3) REVENUE
The Company recognizes revenue from the sale of manufactured products and services when control of promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
7

Disaggregation of Revenues
Beginning in 2020, sales were moved within product and service offering categories to reflect a strategic realignment within the Company's matrix organizational structure. Comparative results for the three and nine months ended September 30, 2020 have been adjusted to reflect this modification. Additionally, product and service offering category names were revised as follows: Services & software solutions changed to Service & spares, and I.T. edge & infrastructure changed to Integrated rack solutions. There was no change in the description of the Critical infrastructure & solutions offering.
The following table disaggregates our revenue by business segment, product and service offering and timing of transfer of control:
Three Months Ended September 30, 2021
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$291.9 $234.0 $180.4 $706.3 
Services & spares180.2 104.4 80.8 365.4 
Integrated rack solutions65.1 56.2 35.9 157.2 
Total$537.2 $394.6 $297.1 $1,228.9 
Timing of revenue recognition:
Products and services transferred at a point in time$363.5 $316.0 $253.3 $932.8 
Products and services transferred over time173.7 78.6 43.8 296.1 
Total$537.2 $394.6 $297.1 $1,228.9 
Three Months Ended September 30, 2020
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering: (1)
Critical infrastructure & solutions$278.7 $239.6 $138.2 $656.5 
Services & spares168.3 94.8 77.9 341.0 
Integrated rack solutions85.0 45.2 34.3 164.5 
Total$532.0 $379.6 $250.4 $1,162.0 
Timing of revenue recognition:
Products and services transferred at a point in time$376.7 $302.6 $185.9 $865.2 
Products and services transferred over time155.3 77.0 64.5 296.8 
Total$532.0 $379.6 $250.4 $1,162.0 
(1)Comparative results for Critical infrastructure & solutions, Services & spares and Integrated rack solutions for the three months ended September 30, 2020 have been adjusted by $5.8, $0.9, and $(6.7), respectively, to reflect the strategic realignment described above.
Nine Months Ended September 30, 2021
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering:
Critical infrastructure & solutions$877.2 $690.0 $494.1 $2,061.3 
Services & spares513.4 305.8 229.9 1,049.1 
Integrated rack solutions213.0 154.1 110.1 477.2 
Total$1,603.6 $1,149.9 $834.1 $3,587.6 
Timing of revenue recognition:
Products and services transferred at a point in time$1,111.1 $913.3 $696.6 $2,721.0 
Products and services transferred over time492.5 236.6 137.5 866.6 
Total$1,603.6 $1,149.9 $834.1 $3,587.6 
8

Nine Months Ended September 30, 2020
AmericasAsia PacificEurope, Middle East, & AfricaTotal
Sales by Product and Service Offering: (1)
Critical infrastructure & solutions$769.9 $549.6 $343.0 $1,662.5 
Services & spares491.0 260.5 207.8 959.3 
Integrated rack solutions222.4 116.3 104.5 443.2 
Total$1,483.3 $926.4 $655.3 $3,065.0 
Timing of revenue recognition:
Products and services transferred at a point in time$1,022.3 $720.4 $505.1 $2,247.8 
Products and services transferred over time461.0 206.0 150.2 817.2 
Total$1,483.3 $926.4 $655.3 $3,065.0 
(1)Comparative results for Critical infrastructure & solutions, Services & spares and Integrated rack solutions for the nine months ended September 30, 2020 have been adjusted by $15.6, $5.6, and $(21.3), respectively, to reflect the strategic realignment described above.

The opening and closing balances of our current and long-term contract assets and current and long-term deferred revenue were as follows:
Balances at
September 30, 2021
Balances at December 31, 2020
Deferred revenue - current (1)
$234.4 $199.6 
Deferred revenue - noncurrent (2)
44.4 38.8 
Other contract liabilities - current (1)
61.8 36.1 
(1)    Current deferred revenue and contract liabilities are included within accrued expenses and other liabilities.
(2)    Noncurrent deferred revenue is recorded within other long-term liabilities.
Deferred revenue - noncurrent consists primarily of maintenance, extended warranty and other service contracts. We expect to recognize revenue of $9.1, $19.7 and $15.6 in fiscal year 2022, fiscal year 2023, and thereafter, respectively.
(4) RESTRUCTURING COSTS
Restructuring costs include expenses associated with the Company's efforts to continually improve operational efficiency and reposition its assets to remain competitive on a worldwide basis. Plant closing and other costs include costs of moving fixed assets, employee training, relocation, and facility costs.
Restructuring costs by business segment were as follows:
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Americas$0.3 $13.7 $2.4 $14.8 
Asia Pacific 10.6 3.4 10.8 
Europe, Middle East & Africa(1)
(4.1)41.4 (6.8)42.2 
Corporate 6.0 0.3 5.2 
Total$(3.8)$71.7 $(0.7)$73.0 
(1)    During the third quarter of 2021, a previously recorded restructuring reserve was reversed due to the planned sale of a heavy industrial UPS business, refer to Note 2 for more information.
The change in the liability for the restructuring of operations during the nine months ended September 30, 2021 were as follows:
December 31, 2020 ExpensePaid/Utilized September 30, 2021
Severance and benefits$68.9 $(4.8)$(21.0)$43.1 
Plant closing and other0.4 4.1 (3.9)0.6 
Total$69.3 $(0.7)$(