22 April 2020

NEW PORT RICHEY, FL - Welbilt, Inc. announced today several actions we are taking to address the impact of the global COVID-19 pandemic

Our top priority is the health and safety of our employees as we address the unprecedented economic challenges facing us and the commercial foodservice industry. We are temporarily closing some of our plants, beginning with one- to two-week closures in early April for five of our ten Americas region plants and three of our six EMEA region plants. All four of our APAC region plants are currently operating on normal schedules. We will continue to adjust these schedules based on governmental requirements, health, safety and demand factors on an ongoing basis as we proceed through the COVID-19 pandemic and related market impacts.

We are taking other measures to manage our costs in line with changing demand. Accordingly, we have executed a reduction in force in the Americas region and Corporate functions of approximately 200 people. We expect to record restructuring charges related to these and other previous actions of between $3.5 and $4.5 million in our first quarter of 2020 and expect that these costs will mostly be paid out over the next 12 months.

Our leadership team is also participating in the cost reduction efforts. Our Board of Directors voluntarily reduced their cash-based fees by 50 percent and our Executive Leadership voluntarily reduced their base salaries by 50 percent for the months of April and May of 2020. Other salaried employees are taking voluntary salary reductions of generally between 10 and 25 percent during this period. In addition, some salaried and hourly office and production employees have been, or will be, temporarily furloughed for various periods.

As previously disclosed, we are continuing our discussions with the senior secured revolving credit facility (“Revolver”) bank group to amend the financial covenants due to the risk of non-compliance with those covenants at the end of our second quarter based on the outlook for the commercial foodservice industry and the related impact to demand for our products. We remain encouraged by the discussions to date. We continue to have full access to our Revolver, without limitation.

We are pursuing financial and tax-based opportunities from the recently enacted Coronavirus Aid, Relief and Economic Security (“CARES”) Act including payroll tax deferrals and credits, pension funding deferrals, and the increase to the interest deduction limitation. We plan to provide further details on potential CARES Act benefits during our first quarter earnings release.

Finally, we are updating our outlook for 2020 first quarter net sales, which are now expected to decrease between 13 and 14 percent compared to the prior year. Net sales weakened during the second half of March in the Americas and EMEA, while net sales gradually improved in APAC during March as the region began recovering from the impacts of COVID-19. Overall, consolidated net sales were weaker in the second half of March than for the quarter as a whole.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200406005172/en/

Rich Sheffer
Vice President Investor Relations, Risk Management and Treasurer
Welbilt, Inc.
+1 (727) 853-3079
Richard.sheffer@welbilt.com