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Welbilt (WBT)

Participants
Rich Sheffer Vice President of Investor Relations
William Johnson President and Chief Executive Officer
Martin Agard Executive Vice President and Chief Financial Officer
Jeffrey Hammond KeyBanc Capital Markets
Mig Dobre Baird
Todd Brooks CL King
Joel Tiss BMO Capital Markets
Lawrence De Maria William Blair
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Welbilt 2020 Q2 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today. Mr. begin. may you Sheffer, Rich

Rich Sheffer

Good morning call second earnings Welbilt's welcome webcast. to and XXXX quarter and

Joining call Agard, on Chief Officer. me the Executive President Johnson, Officer; and our and Marty our Financial today Chief is Bill

we of statement Slide can that our Any Harbor be website, Before our in the slides, the on our www.welbilt.com. refer could X are discussion, and statements to materially not begin facts in our Investor this or statements, results Safe call presentation found are of which forward-looking today. expressed please our any Relations business section future or statements differ regarding from forward-looking projections historical implied made

measures. our discussion may non-GAAP uncertainties whether do earnings presentation not SEC both including other be results result publicly many by undertake GAAP risks other circumstances. reconciliations any of actual obligation non-GAAP regarding of identified Today's important important or statement, non-GAAP refer press measures. events, and our or and forward-looking information new to revise the will include information, for any factors, in filings. our Please use Our and in update financial as to We future affected and a and release our release

call the turn to to like I'd Bill. over Now

William Johnson

morning. Thanks, Rich, and good

a great ghost difficult dealers, sense ever to develop quarter resiliency on most industry. second dealing We're a how a high on company reps how kitchen faced people focused demonstrated Our by a business success and and strong on they improvement once to conditions made crisis as with Program, while We the of progress our conditions Transformation with remained during and a are trained with the culture consultants executing that strategy way our our our customers, begin as and to in this stronger enhanced developing that safety continuous available to normalize. our many factor companies emerge brands. of our on features abates we'll well performing is key improve sanitation

Before and responses to maintain I'm second results, pandemic also we commercial you environment color quarter responses quarter. to position our Starting X, item want we our shared you allowed the the crisis not on Slide on I Welbilt's the little in give magnitude current slide, early review us more Welbilt crisis, see individual liquidity to of of get responses the out going would COVID which across profitable the some that company for the industry. foodservice last business the with entire point created a each into stable you to cover can our that within and create to a an recognition meaningful quarter. this to of urgency but our remain on

On date. the by permanently to third and over will Program adjust structure. X, the that we environment. made in a the made of helping have be quarter some our us were are quarters, Transformation impact have current cost actions we've Now couple the we These not in to better detail reduction the our on we quarter pandemic narrower provided a from taking in that are further improvements Slide productivity a third possible the understanding the and market on of little lock in cost progress set actions are achieved

Notable market in the of MillerPulse graph, the the windows the drop above prior QSRs since March. through second year see to the their more same-store at week the that in began levels. crisis sales drive-through sales now who XX% prior can now embraced delivery. restaurant Looking QSR weekly had recovery also have their of are same-store historic sales we that than come Most

than resilient have result, casual they been a dine-in restaurants. As more

the traffic. dine-in saw to tied majority of pre-crisis, So their sales

restaurants down dine-in from now more speaking around improved to the being equipment and quarter. at March seen compared about the year interest restarting some prospectively Casual sales rollouts drop seeing end XX%. recovered have the have prior to same-store XX% activity We next

since in rise case same-store diners begin in equipment be equipment difficult reliability, it market begin recent warranty Until in plateaued location, the of to no to been dine-in due regain a June. historically meals back big restaurants. can commercial and hasn't COVID-XX restaurants, and With sales reopenings late safety counts in cases in see to will food casual some fall, foodservice part reopenings concerns. for COVID-XX recovery eating additional same-store Used again have sales rolled and confidence certain the

volumes. localized any used In discernible even addition, used have sell the their equipment industry considered We've impact are in the be equipment footprints to significant Most and presence. seen refurbish wouldn't used to geographic from a market. equipment in in not does not dealers infrastructure regional have the and

that financially temporarily However, purchases be that of It's it the to possible clarity it for period case, and while crisis could continue to ready equipment mute operators and rather on see this is new as increase replacing defer if it. than KitchenCare we'll repairing would will possible to demand a new in In sales demand equipment time aftermarket spend we new equipment existing see happening. they for operators also environment. it recover the on respond an get from expect the we more

and X, assets equipment safety industry our drivers market while will end Slide the the that cost an However, view equipment for On repairs, keep producing of in equipment concerns we sales demand lives food the over both have of hang and foodservice updated check. and is exposures. are likely down income lost operators extended

of parts, equipment industry kitchens are This XX% coming been from the On the years. to or a annual has in long-term for see foodservice have average assets operators lives commercial that stability you XX of the as the demand can sales. demand, driver in side, approximately equipment of our useful eight income-producing and replacement the drives whether equipment

expect for will new drive the take-out delivery dark and emphasis increased on kitchens. that We builds ghost and remodels

for protocols and equipment kitchens. implement occur to new sanitation We that safety in expect also remodeling will

biggest next demand. the are builds New driver of

largest items, across holding chart delivered had original and end-market foods. require prepared while the slide menu is multiple have the for change to expected restaurants, cook low the fully restaurants. the gradually operators year year very are again that times, most as QSR changes. driver to least from and or existing levels. industry of of maintaining service can the many exposure many an as it of and gets demand is driven by to within spending from and These freshly New These back up exposure different or menus a form prior of equipment delivery, can be on start pandemic QSRs to the take-out cooked. majority impacted be quality The above revamping food, items of to recover can recovers requires the to sales The kitchen the making be exposure. take-out in Pizza to used ago. extend may drive-through, seeing are end above categories when quality final the faster Operators with that the improve although also while, pandemic our builds into Starting times equipment new adding for markets This through their them both improve by that menu a speed increasingly menu and their is next to our or produce. revenue are sales with same-store

have delivery revenue have and as casual the bans and Our These chains. of operators take-out capacity in next bar other focusing but a more independent in relied during sales. These their improving the their and and The to of their but The orders. sector the casual They've have been and reduced most revenue dine-in rely their the percentage operators mitigated dine-in impacted exposures on is been include for operators. fine a would have take-out of for larger the be the than grills. base, delivery a largest lost fast operators to operations sales the smallest QSRs large of restaurant options. XXX% restaurant severely portion adopted ongoing Many traditionally for on been exposure nearly sector. of dining, and dine-in majority these impacted and portion have would casual and

non-restaurant to Moving operators.

focused C-store, staff they and and have should has to foreseeable for maintain strong Healthcare education, to healthcare strength and keep a education, facilities. In when to necessary are students are government reopen. some making changes the exposures see biggest schools remained on correctional and four continued future. as safe demand Our we the

sanitation. We a segments. of with exposure, have on weakest seen sector is C-stores expanded travel and our The back, is still smallest and end is spend it leisure, which the government one correctional and our its segments on X% flat market of

to to Slide presentation results. X of review our our Moving financial

most net on the to our declined COVID-XX in second of impact global markets. end the being Our XX.X% quarter pandemic from due sales organic the with decline

which delivered and XX% performance margin was the the the previously reported, operating decreases, Transformation decrease. sales unimaginable previously On Americas and adjusted was us of This we progress over declining possible with on the XX% June X.X%. May sales April As the quarter. flow the and containment from decreased first by quarter. the cash helped XX.X% some quarter Slide liquidity prior deliver also the our quarter year. year sales we keep of This in free in were cost operating worst an improving EBITDA XX% sales took we Program. Program March, we've made which by stable also the enabled X, made the last the Despite in Transformation With by in month to actions positive declined of the

in the end weakest have healthcare, second the and Ice in begin of prior-year We general sales. other improve our sequentially Those April did quarter. did market We in demand will than large costs each all in the less little which machines sales a Manitowoc comparison. for markets. general improved rollouts second to were decreases the performing due education C-store third strong some end of Sales Americas with better were half market quarter, month. see the than chain in the quarter our supported and As also regions, easing markets

soft customers declines half through in were of quarter. shipping much quarter, X, the In by APAC first XX.X%. with in first by On has their should to business, in and In already Sales countries on smaller decreased XXXX. impacted and highly Looking Sales market, Large certain were to shut down Japan were gradually X. which Slide the outperforming to net organic at of Australia down net the Slide sales large sales with decreased recover. our XX.X%. sales China, the impacted now sales XX% some in second carbonated the begin have XX.X% APAC areas impacted original third and with were be close to later. expectation them the the pandemic improved Other who of led sequentially general new in particular, organic quarter. has the sales totally very customer low. drink were for won Crem were as the Crem some chain EMEA the started quarter to

name some Southeast to the areas or were of the overall APACs most Philippines second Asia, closed and impacted India, for few. a results. and These quarter

to Moving Slide XX.

good to Program. progress Transformation We are continuing really our make on

Our team support RFQs the savings. of responses. the we planned and our targeted issued have has to been our estimates for continue majority receiving Responses procurement procurement embedding

have with value agreements lag original and another pre-COVID now sourcing a right is that both improvement. until small embrace will process one timeline for procurement savings site-led and to also culture from implement the the didn't that levels. complete solutions example provide businesses. actual are developing suppliers to our returns these second delivered may for activities of we our transforming to great in our we confident business We've remain new the We company the current quarter. but net own that We engineering the initiatives how RFQ begun new our dollar been This savings close continuous this in our to activities of

the to currently plants North at make Program. are the five of American continue part We progress that Transformation manufacturing

steps layouts Program where improve assembly headcount of done seen continue times reductions manufacturing focus as management. a capital reductions recognizing the quarters new fully of the planned of slow of more some productivity to fabrication we've additional improve remain will to equipment, with and delivery XXXX We plant and that activities over the liquidity points to from of we of pace beginning over however, These the additional and by of contributed with we've spending in to combined We a that, improvement slow savings lead the taken lines, furloughs by margin basis in expect the from will for QX on in savings the balance our few of of quarters. QX drive installed XXXX, investment, all will the Transformation coming delivering committed fabrication capital We've year. our end significantly. XXXX. temporary shutdowns few next and the Slowdown pace complete XXX

uncertainty of However, of all-in I'll levels EBITDA of sales target million with to along Marty. over the XX% the that, return realizing delayed call levels. when the the in full may due margin be pre-COVID to savings terms, $XX With timing volume cost dollar to and of turn

Martin Agard

morning start and Bill with of going XX everyone. EBITDA Slide adjusted operating Thanks, and our discussion results. good I'm to the margin

drop year. headwind basis mostly comparison have benefit we ruling year's positive prior at on and quarter second were against As drivers. imported our in level net held the in from slightly application by XX% favorable of the the price you and X,XXX the costs, the on expect, of a sales decline China. points received decline a point to reflects as up measure these throughout year, in pricing second in a mitigated products impacts of volume quarter netted in prior might margin certain basis XX drove point we January is pricing XXX tariffs, our Volume, quarter. Section reflects the This compared Material only from which including profit versus the system XXX impact a that gross the was had quarter. net this tariffs This last increases basis being

impact In due increase capacity rates as us new addition, faced the to freight tariffs in we responded some disruptions. quarter saw we XXXX finally to began to and that inbound COVID feared carriers in adjustments

coming growing through some Program our positive of benefit a plants components headwinds, a year early Transformation the cost did we've wins procurement from at than we On some into lower mitigating breadth see ago. side, these of and achieved our

to basis were point savings will Other warranty this normalcy, expansion. As are to our to return quarter. contribute a mainly impact expenses we these patterns overhead production confident procurement margin margin manufacturing and XXX labor,

volume quarter. and we the production this We adjusted we experienced match how expenses aggressively with are pleased to our quickly declines

with plants fixed throughout declines the temporary three pull implemented the a Bill result were closures of mostly Program. of was the made far a dollar production we some in mentioned, to demand March. As force, volume, closures at is we've reduce to quarter ahead Transformation us our take week We improvements demand. end our the this one labor we've made year It match the of temporary reduction direct dollar later This as to in sharp a again almost through in of what end for helped at despite of to improvements actions not the plant the and and plants deleveraging. volume. sporadic cost planned we a March impact implemented lower there could at had we productivity the margin causing proportionately maintained thereby so But degree with remainder of

strategies critically adjusting to are our encouraged to Transformation see. our remain revisiting and creatively by execute plants QX plant across other Program We our related also structural demand progress We're and labor continuing the reviewing we are we costs. the in ensure cost to

as basis its Like $XX basis individual of prior-year each to the from in Employee-related the our expenses, and Program. an on most the all favorable. manufacturing year the adjusted footprint, SG&A SG&A travel to expect contain categories was additional progresses by marketing we actions the contributor to quarter early fees down us took half X,XXX Transformation in within enabled plant spending restructuring Those We favorability million aggressive and in or the actions real continue SG&A, take actions margin point in actions March. second pandemic's quarter. of to professional also impact quarter. on show emerged were as the in expenses, to in

EBITDA. the the the income reading you're face SG&A investments excluded if are adjusted includes Transformation from Program reminder, operating statement, that a of our As

track the schedules. specifics non-GAAP reconciliation can through You the

million a Remember positive quarter. March define $X we XX. accounts Free our the program in cash flow less cash Slide to adjustments cash free that included operating activities, flow receivable terminated unique in was have that by historically as of provided securitization capital but was for Moving spending, XXXX.

customer receipts of the flow adjusted the for that the use free XXXX this three terminating the a amount sold the investing stronger reflected remaining seasonally in program rebates payout seasonal was the as quarter $XX be in use reminder last operating as adjustments, quarter. that on section no where We will the unique annual free well to quarterly lower prior in the as of traditionally XXXX in first collected million interest quarters. of the inventory in is the cash generate the cash were flow quarter source experienced then receivables build paid same year's prior last is was sold of flow One the section that we as of we cash beneficial as cash and the a balance adjustment seasonally receivables cash cash statement, a While flow This to volumes. it is in on of our cash results. has incentives, the prior cash in

We flow have quarter our which demonstrated seeing flow to cash this testament We despite ability by is our cash that the sales in free cash by decline a over of business. ability generation free averaged approximately $XXX inherent since each in spin-off, positive XX% strong million year flow quarter. the generating again

selectively due by also carrying increasing any, generating with in and demand between addition with with to managing are with safety our risk. of due sales. inventory materials manage stock support increased as in buildup ice of machine materials coupled dropped, the support plants due levels extra to In changes during two did the working to the higher to sourcing EBITDA, our rise successfully customers, Raw to transit to of we Inventory our challenges some support few, payables finished and positive vendors. if extending collections delayed goods terms up canceled and quarter capital orders

it we've four we of seen forecast of this and pandemic cash in to quarter a adds achieve to terms we confidence the not the providing years, the While today, relative our believe our flow toughest levels expecting liquidity. are to nor free the last

agreement as short-term revolver, availability the touching cash in headroom. Cash overall with which the $XXX balance on million even year and cash we we decreased our cash a So on plus by ended expenditure investments quarter were by We with where define during quarter, of million which plus with of million. liquidity, we first is ago. decreased while of liquidity EBITDA start total in quarter XX were and and capital the roughly our and the amended with at our the restricted credit equivalents significant as compliance $X $XX covenants debt June, liquidity,

Slide Finally to updated share few thoughts on XX, like a I'd on XXXX.

at we we First, and is investments second balance last don't the we'll guidance in until full experience but quarter XX% quarter not and key expect will that along we guidance. understandably is we traditional decrease it initiatives we'll quarter than March the initiatives worst XXXX clarity with we that environment. will in current withdrew to be We a we to XXXX product reinstate our the afford with only guidance are what today sales digital thought have are this not our sufficiently new a estimate providing third share in stabilized. XX% this but quarter that we transformation expect abandoning to our and conditions time, against on innovation have less prove can year strategic The our crisis. our between nor sales The fourth

top-line and points and the a we just base. margin we uncertainties on not stated, actions that at open goal. confident are questions. for that call That and will due of up of this for to target that how SG&A, we'll the we with operator savings But, track my XXX expansion cannot, fixed basis set interacts manufacturing concludes transformation end reliable now Bill realized, be time, As and but comments the sight have costs goal XXXX the trust, the lost from achieving remain

Operator

Capital first your Your proceed question Markets. KeyBanc with Instructions] of line the comes from [Operator today question. Hammond Jeff with Please

Jeffrey Hammond

Hey, good morning gentlemen.

William Johnson

Jeff. Hey,

Martin Agard

Jeff. Hey,

Jeffrey Hammond

Hey.

bit better guide. understand the want just So, to little a

June I July, XX% talk XX% into June down of versus decline. just rate you we're exit and XX%, to plateauing maybe think kind said about So where in the that

up. that square to trying Just

William Johnson

we see that. with came July with XX% is we so line for up XX% a in to the Yeah, quarter,

Jeffrey Hammond

if do volumes there the pricing normalize would just here interplay you with how extend industry curious the you'd pricing? of I'm as and that gradually expect to hopefully kind and recover,

William Johnson

-- comments I we've second think was by we earlier, Marty's a on the positively impacted pricing. the pricing been results. quarter factor were definitely call in

right to up the longer, this to now, think continues -- went out increases course, price seem holding tougher we in pricing be January more becomes I expected. as So going get this the look, everybody hungry it's -- of But if that the drags gets.

Jeffrey Hammond

good. right. Very All you. Thank

Operator

comes line the of today question from Please Baird. Mig next with Dobre Your proceed your with question.

Mig Dobre

XX% hear Good guidance -- morning. with Good orders this guess down did Bill, Yes. I that that July that you're saying are correctly that I XX% morning, Marty. Bill, in you consistent provided? to

William Johnson

Yes.

Mig Dobre

Okay.

got still I though it right. better point, that's versus your So get June

William Johnson

Yes.

Mig Dobre

thank on you that the breakdown provided Slide X. And, you

leisure pieces retail us down the and how here. only are I'm year-over-year? this of And Pizza, you looking at mean, I they me question, wondering, first down here it For far in others guess, you've one look maybe granularity kind but breakdown. QX modestly received these QSR point pie to say guess us if fair you're its I to casual be you your do that I is give for helpful. outlook that moving and charts and you've business recognize of in my not I you very this terms able give to market kind some and going about that provided of we that given -- perfect the and rather the a we're significantly. how you of -- trending orders July, you're at Is travel about and thinking thus think portion are that have here? can here, color and

would I be think that very helpful.

William Johnson

Yes.

of four that for you parts terms what would give the the that flat you which opportunity verticals, are rebound. correctional, kind most is are and are look just be opportunity if tranche I kind rebound better leisure. now in that kind I of of probably verticals casual, rebounding ones back has the or next of it faster, in of at for a would of there kind education their right you tier travel Healthcare kind QSR, C-store, The and government, the think, are on rebound. of mix say Then what have pizza, of

Mig Dobre

currently can a enough different. business QX Let OK, this will have go-forward is is for in if better, doing things can question to and end markets into generate sequential less bad improve? On Pizza, ask that or being we little verticals? generated are similar we meaning and basis, improvement a we're, thinking of to XXXX, by more me there QSR to upside think some back should I recovery that coming question or about we in still if say on again still order that improvement get see those the into Or my get areas of depressed count your

William Johnson

I to No, be think to get they're have going forward kind levels the I and guidance enough are looking quarter. going QSRs closing. think, ones leading the to that the going restaurants is end opportunity generate ones in maybe these some share some at taking to that we're argument the us of of the And from what up that there is to improvement for third

win opportunities, And may expansion more to they so rollout more there shares. as be opportunities continue

and course segment. position of we that of determined that a I really segment. be -- -- to we're strong the share take But guys in of some actually yet much those how they from very it's think think are that have I it's

Mig Dobre

trended this, be more related any lastly, over would does. business to this be the business, so? to And growth XX say to And color the Okay. do have get terms next little on to at maybe expect in through you or back the parts mode helpful parts point able where of months It a quarter?

William Johnson

Yes.

quarter overhang a created Parts the operation. enormous the So inventory was from KitchenCare. tough second the Town-Heritage really, for build Town quarter merger really Parts at an The

slow so aftermarket parts. was And the really for quarter second

of the Now and that their chunk sales gone will had quarter. end off quarter. rebounded They a big of they the be off I think it burn that of by most the to burned third actually in but overhang, second

some aftermarket of so we second as going rebound there. terms sales to generate in help our work that I our generate aftermarket the of of from partnership quarter help with business and and into there more said third to working improvement levels Jeff, to more to piece, is how the the our And continuing and with of strategies suppliers we're the the We're get get use can digital want become it too. where our more it leads kind we and to quarter drive

Mig Dobre

Okay. one cold last you that between and of wondering one. variances are the there And hot is business. I then any may cold seasonality if there seeing your the if squeeze Obviously of I'm side the business. are the side side on

the that business to half you. forward? love as you kind other the And of of your at think I'd side different So going hear you thoughts? look actions, Thank one actions versus cost are is back required do that there sets of

William Johnson

Yes.

some a lot the for into side. a touches coming a colder do the with we got and that the for ice here little There there, of, of some the the to the and high margin seasonal has that tends up do hotter less is summer have and a little to there was side Anything to margin. pretty is than bill product periods bit our hot of it's some the higher there profile in food better you -- is months but of bit a months. saw hot the inventory in work seasonality been a ice the So business several terms of, last has so

the -- stuff where it's when hot lot with of So food side, cold the is it's in direct storaged. cold contact the

side, our in Michigan. hot more nicely. sensitive very is in the than I'm So it well has the the doing price quite operation cold Delfield been pleased side up a tends to up holding business be been little ice both but with have -- and

Mig Dobre

you. Thank

Operator

question with comes next of line Longbow MacGregor Your proceed from David today Please the Research. your question. with

Unidentified Analyst

having Good trouble Tong off, to guess in installation question. businesses, you taking on especially I still Florida hot It's the seeing spots are MacGregor. like for getting you and crews Thanks for Texas? morning. David still recent start -- Hi. those located [ph] my and into service are

William Johnson

more I any say as up problems, heard part haven't improving. is repair think certainly, have would and I if restaurants businesses they the difficulty. mean the the I indicator I that open we have best

the So to to got level there get -- in put that that somebody those is in. means parts service

would aftermarket say would only my of I the So side be on that it. indicator service

Unidentified Analyst

said Okay. two as used take equipment liquidation, quarter And that first bankruptcy, a all, the see impacts on up believe, go quarter any would likely meaningful to or through time, the the closing discussion at etc. then I Thanks. the came Bill of and permanently restaurants it most

in August, in market? there are the you're how can what things us provide seeing we're that equipment an used and out you update Now on playing

William Johnson

non-event It's we to We us. if is impact. quantify unable for impact, see there an are don't really a any

supplying You is are business likely going stuff. out are the chain well it's of as used the and equipment the used the know independent people buyers restaurants as most who the for equipment, ones independent that small

right a in pretty said lot for I watch of non-event I So anybody and and industry it -- that there I us heard listen pretty is I closely have the closely equipment everybody a being that purchased it's now. think and used to haven't

Unidentified Analyst

experienced can stand supply I Okay. extent you that ahead? the if color does supply chain and the quarter to that And during on you you chain any as where risk today may, can, challenges then provide the some look the lastly, you to

William Johnson

or run a a cases have to and you for down couple in a supplier or they whatever. days into COVID peak clean a facility now and their has Every shut to who then Yes. maybe of

is if of kind say week types us or just that two, would we've where our able through risk. Program we've supply They throughout point this a and been misses, source of that suppliers push dual can't that our RFP point, we in base improve event but there fantastic. that down process any it's of shut any I maybe really don't of expectations. But crisis out have and terms been Transformation where at undergoing been suppliers those I us So whole and this really causing customer have needed -- where this the times lead disruptions helping are had a critical meet we are to our aggravation, lot really --

Unidentified Analyst

color. Thank much very Okay. the you for

William Johnson

Sure.

Operator

Your next Please question. the with proceed of Brooks CL question line comes Todd of your from King.

Todd Brooks

Hey, good morning gentlemen.

for you. a questions few Just

First, improvement QX. sequential showing you early positive commentary Asia some made markets in about some in suffer to

you I'm the American what Japan, do as look like should you businesses forward? curve that's of European for planning like in feel China, Australia, North business are kind and going just and instructive the wondering, if So at recovery you the look

William Johnson

Yes.

so way people of us it's I attack for differences virus these there the think keeping to the more a regions. any way the EMEA I at. down EMEA is a US is to aggressive And area, of react. things it a shut certainly bit look the shutting has than and of down Asian probably kind the even most Europe and government's think the proxy taken approach -- culturally or the

So doing still I think is everybody of way I think they're you'll EMEA to lag things. going just see -- because the

that recovery think meal of will like UK that give to feel to if note will that for Europe the see so In Help each a I the to of some China solutions will and have program also bit. they like I get to a so country. the for think got restaurant programs. need the is Out traffic But goes and just they financial to the reason that up of drive people need like recover where it's faster and I to Now, the people the GBPXX meal, that and drive more pay four is restaurant subsidizes, creative getting in announced helps it's problem lag XX% creative a to GBPXX Out regions, a to because government you'll restaurants, people, and person government hopefully they you real I look But, goes Eat they the get restaurant GBPXX way you think I family if will it Asian waiting out, probably safe the just right there driving and to a see the recovery -- that, a US have and is faster. which that think just big if out that than somebody interesting, think

Todd Brooks

helpful. That's Thanks.

question. Second

at back chart goes If - X. the on pie to you this and look Page

the survival that's kind If the challenged more in you XX% the pandemic? of latest the of What look as the we your of the head toward thoughts at rate of side are and contraction on business buckets maybe industry. door restaurant back

William Johnson

the they're it's things. food, it to all they're I to mean it's hotels cases rethink verticals really and going really particular to to in prepare going and Yes. those have know over are how be and kinds of to rethink challenged, the and right. that like map, present have they to of leisure, We travel I be - going think going those

So that's there the think of tent. kind why in the I long is pole

XX% do. closures, talking over moment, of kind restaurant same number XX read data of next closures, number I the closures, of talking is restaurant you terms know but don't kind exactly In this They're the months. I at what which can the they're range of about that's that

Todd Brooks

The on just Okay. working a final receivable Great. cap side. question. the then strong And performance was

increases of You canceled or inventory orders. reasons in the some between orders called raw couple for delayed the quarter out and materials a

If you're a cash inventory you from to be cash flow looking standpoint, QX? in at substantial QX contributor expect will a do

Martin Agard

receivables It again will substantial know if and back. don't grow will coming be the contributor. be will revenues it a as I the

will it quarter third be So more the quarter. I supportive think working neutral the how to in probably second capital relative in was

Todd Brooks

Okay. Great. much. very Thanks

Operator

Capital line Markets. with proceed BMO the question today Please next your Your from Joel Tiss question. with of comes

Joel Tiss

All taking you my question. for right. Thank

view? that those -- the are just on on sort So now is those up-to-date, more that charts historical or where I'll we X, Page of is are

William Johnson

bigger a of term. get was of some of look growing And to in markets what there's I Mig to just said, where sectors a get smaller? view the of taking a of from has QSR, going to I going things at is the pie that's think share other are Are more think QSR -- as or I trending? think trying where the kind they It's of are. I historical is at and these get snapshot chance -- a think medium pizza kind the I And near our to --

Joel Tiss

big fit enough mentioned? And even to where that's Or get would in cafeterias not there?

William Johnson

school big cafeterias, It like probably like not cafeterias? probably enough. -- into It's falls

Joel Tiss

cafeterias Yes. things that. like office and And

William Johnson

that Like probably the it's like throughout. education -- has and stuff sprinkled

Joel Tiss

about generically of the kind Can being you competitors and than opportuinities smaller bigger industry? maybe speak bit of the lot you and more under pressure a guys the a for setting kind for more and up little you or that then the competitors

William Johnson

at a a competitors sure right pressure don't and people -- we're everybody of are the be on for and you're at to an best competitors term down look factories are can their want this done the things. I or think pressure. point. keep you or that Well, now everybody environment, going at. when all downturn. a early got this I But this leadership to lot do And head and exceptional managing I make forward of markets products survive small big think point they and in I will are call open, keep those the whether Welbilt for they just job everybody little down, at think safe of right teams all I you're kind. look think think I going has that has any trying the I think feels regions at it's to long to their to managing But there too think, I think under XX% is here opportunities But

Joel Tiss

stuff. be do some on that drivers are truck do maybe And Like that runs think of restaurant there's about help a to lag like you PPP the like other you things us be closures there's we -- and from to out Like as industries you think think like can that. going this. hearing going money like kind of

for think or how lag we potential just the I that? wonder like do a lag for the about So

William Johnson

Yes.

if and or a -- month shuts for and on they'll operate I they day think and up a your you you when up And down. ready down, right operate problem operating, for a two operate the down, you start then shut and down, start comes get the up you shut you now then to them obviously are week and stop, their your lose food think and that's and you what's And for let probably government all kind start kill all basically. holding and got start and shut is and and just them it's they better have chance. the of -- can But they and up to reduced they'll time. even capital that -- all going your get food and stop that working to much have people, all start spoilage at rehire levels load we I got all when if a you keep

that just it stop. is stop, start from better and it's down shut So than and be to start

that's more them think and we out what for drive I watch than that So down. just will to stress being on got shut

Joel Tiss

Thank you much. All right. That's super helpful. so

Operator

with question your line William next the proceed question. Larry from Your comes Maria Blair. of De with Please

Lawrence De Maria

good and Thanks Hi. morning everybody.

William Johnson

Hey Larry.

Lawrence De Maria

Hi guys.

in them, restaurants. First to question, Joel, of legislative and what you see of do help domestically the on the following kind front by help restaurants

and could the actually another is necessary hoping for see maybe stimulus. that help act debating, think Obviously close are out the realistic I industry? that not there and there. What's a guys restaurant out you there

William Johnson

earlier restaurants meal but prices. program the into Obviously, people I restaurants driving essentially the half the any vouchers to helps, think I about kind by of giving pay mentioned stimulus UK the

a of up been and The restaurants. on I've menu have because you you I pull don't think you regions at should the that's at I different the phone. government that people people just and there, a to look feel safe have It's our really ones QSR once look menu even they'll something to -- there, your getting try anymore, scan help to, should restaurants. think get code these

ever drive I to cleaner we if to the get the I've people seen lifetime. restaurants. So, are And there the is ways traffic a my restaurants could once them wearing It's think initial fear get think figure I the restaurants, than the of over just in mask. out out everybody's and

I think people will become more comfortable.

need promoting I So governments. thinking the about kind of to and think those to we actions our are be

Lawrence De Maria

now, sound been like the the domestic, has hopeful there in there It very something stimulus you -- debated. that pipeline Besides right? doesn't guys is the specifically are right

William Johnson

of other know the that. don't in than I else And pipeline anything

Lawrence De Maria

are quarter. second about the be out in obviously what's kind capacity factory point for just about with open. closures more or and you had plans beyond would we structural obviously openings of on And in them second to we the having at half? rolling outlook now? worst, What's coming it the having or your efficient are the footprint production thinking the closures plant the you Now guys worst, your you're toward but continue move this And is Okay. more

William Johnson

that plant into it Well, easier to an so shifts and it's a it partial to play a than full there things lot operations is partial right. of run lines. is try perspective, From to run

means what of try better build up two straight you believe than you costs. I that to week, a to is, even if want of shut can down terms run and for for have in demand you do manufacturing three So to that's running partial weeks weeks

managing for can So we that now do we order we and per to with. pay and weeks. week look the two watched to least place hours have good so in to need week you a the to stay that hours of how earned employee per There a at the need we tools run some we for customer at all order job some our many where and what per programs, job qualify put can factories of per are down we countries in

making. down where decision So the down single went your into you a shift We've two itself. to time, it We course can't factors Then went just do rate we order had every at day shifts. of operations. so that

all -- that from planning. that you of done things we've So this all capacity the could do

be I can of conferencing about we've lessons and think men that, we as factories space is lot and you We've of and successful look and doing office a it. I think a like as learned there home think even, lot I at look our working from video that very our things at learned room. we

talk how as go some are need often think think look than we certainly, if there about that but forward, really nothing were they looking little it this point. space call going said, we at be. as to from and used we'll I do in quarter be for have there the But radical people home things more from we standpoint, in opportunities there's much some to we I a quarter a going cost some to at from capacity and out to at maybe are So we're office and third bit the working third

Lawrence De Maria

macro mentioned more near Any could headwind likely environment... its I The or consolidation one in run just or Town-Heritage be kind the term If you've more distribution or that is sneak in course, obviously last. sunsetted. that's could aftermarket more but the that is less - Parts of thanks. Okay, channel or that

William Johnson

think right. I -- its it's mean pretty run those two biggest ones course. the the I all were

small else So be deal. pretty anything would

Lawrence De Maria

Great. and Thank All right. luck. you good

William Johnson

Yes.

Operator

Please Your with Liptak your next question comes Global. Seaport Walter from -- sorry, question. with proceed the line of

Walter Liptak

Thanks. the this, what you restructuring year? of Hi. half Marty about in but second thought the I if I you apologize, costs missed be did talk the cash might

Martin Agard

say probably quarter, together what we and the would I as quarter. second will pick run the where is the that but the range the restructuring as in quarter. stuff and transformation middle in two fourth in first showed from the high pieces costs, those adding Yes. third not of somewhere will It up

levels. a quarter to second as But quarter continue spend both the they'll get as So to first won't be up but back won't it of was. the them, it on be quiet

Walter Liptak

if hitting this start levels fourth year, how look you impact buying got of more this quarter? get year, this think year, the to alluded you about you distributors hard How fourth there Okay, that and don't that pricing to think if it. competition, pricing. normal some to we or And know to just does there is do the impacts it do quarter leading usually will talking were when kind about the maybe volume which a -- is rebates, fourth and quarter -- could for of I have no be things quarter, groups their

Martin Agard

alluding was to I Now the quarter. fourth

people your the I this for in think business. the I general, think hunger out stretches just longer get the

cash distributors. and buys this of big that of end dealers position the the fourth it's the the muted, I buys anticipating think in not we just see at because industry distributors year. I'm historically in we're the not -- be uncertainty will quarter and from dealers

Walter Liptak

Okay. Thank you. Great.

Operator

for questions Johnson have we to turn time the all now closing back Mr. any will that's I for call remarks. the And today.

William Johnson

you. Thank

would end employees really up like stepping to entire the once again for your we I by Before team thank The call, our pandemic. to efforts. presented management appreciates today's COVID-XX the challenge

believe to want that will that stronger from crisis efficient. more company a reiterate this I structurally Next, as is Welbilt I emerge leaner and

grow. succeed opportunities We use to advantages we and our our will leadership digital help innovation focus on where of can and competitive customer

and business opportunities will arise of to win service. We culture continue new innovation our by as leveraging customer

delivering XXXX day. crisis morning for to call. profitable a will concludes and us earnings growth quarter Thanks This abates. the this joining again delevering and great second sheet this balance return have as We today's

Operator

Thank you call. your on participation for today's

may disconnect. You now