Vertiv(US:VRT)2023-04-27 16:00Financial Performance - Net sales for the first three months of 2023 were $1,521.1 million, an increase of $364.7 million or 31.5% compared to $1,156.4 million in the same period of 2022[84]. - Gross profit for Q1 2023 was $495.5 million, representing 32.6% of sales, up from $303.6 million or 26.3% of sales in Q1 2022[86]. - Net income for Q1 2023 was $50.3 million, a substantial increase of $41.8 million or 491.8% compared to $8.5 million in Q1 2022[83]. - Operating profit in the Americas for Q1 2023 was $190.6 million, reflecting a significant increase of $132.7 million or 229.2% year-over-year[94]. - Asia Pacific net sales decreased to $313.0 million, down $19.8 million or 5.9% from Q1 2022, primarily due to foreign currency impacts[95]. - Europe, Middle East & Africa net sales increased to $345.8 million, up $57.3 million or 19.9% compared to Q1 2022, driven by higher selling prices and increased volume[97]. Expenses and Costs - Selling, General and Administrative (SG&A) expenses were $308.7 million, an increase of $16.5 million, with SG&A as a percentage of sales decreasing to 20.3% from 25.3% year-over-year[87]. - Cost of sales increased to $1,025.6 million, up $172.8 million or 20.3% from the previous year, driven by higher commodity and logistic costs[86]. - The company experienced a significant increase in restructuring costs, which rose to $13.1 million from $0.8 million in the prior year, marking a 1,537.5% increase[83]. - Interest expense for Q1 2023 was $46.8 million, an increase of $17.5 million from $29.3 million in Q1 2022, primarily due to the Term Loan and ABL Revolving Credit Facility[90]. - Income tax expense for Q1 2023 was $37.4 million, up $25.5 million from $11.9 million in Q1 2022, influenced by changes in income mix and business performance[91]. Cash Flow and Capital Expenditures - The company reported a net cash provided by operating activities of $42.0 million in Q1 2023, a substantial increase of $174.2 million compared to a net cash used of $132.2 million in Q1 2022[106]. - Capital expenditures for the first three months of 2023 were approximately $29.8 million, with expectations of around $150 million for the full year[101]. - As of March 31, 2023, the company had $276.1 million in cash and cash equivalents, with $325.2 million available under the ABL Revolving Credit Facility[104][105]. - The company anticipates lease obligation payments of approximately $60 million for the full year 2023[102]. Market and Operational Insights - The company anticipates continued pricing realization in 2023 due to previously implemented pricing actions[82]. - Inventory levels are expected to be optimized in 2023 as part of working capital initiatives to support customer demand[82]. - The company noted improvements in the supply chain environment, leading to order normalization throughout 2023[82]. - Foreign currency impacts negatively affected net sales by $42.7 million in Q1 2023[84]. - In the first three months of 2023, net sales in the Americas reached $862.3 million, an increase of $327.2 million or 61.1% compared to the same period in 2022[93].