Welbilt (WBT)

Rich Sheffer Vice President of Investor Relations
Bill Johnson President & Chief Executive Officer
Marty Agard Chief Financial Officer
Jeff Hammond KeyBanc Capital Markets
Mig Dobre Baird
Larry De Maria William Blair
Rob Wertheimer Melius Research
Walter Liptak Seaport
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the Welbilt, Inc. 2020 Q4 Earnings Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Mr. Rich Sheffer. Please go ahead.

Rich Sheffer

to Fourth welcome and Earnings and Webcast. morning, Welbilt's Quarter XXXX Call Good

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

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

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

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

Bill Johnson

and morning. good Rich, Thanks,

the details we environment. Before want I get into our current market on results, share some fourth to quarter

to crisis their see XX% you week historic embracing also drive-through QSRs been at recovery sales and drop have the sales X, second their now July. than the in early on the are can began the prior QSR through of come the consistently Looking Most restaurant MillerPulse have same-store same-store since windows that sales weekly of in positive since Slide delivery. more March. market the graph

their recovered quarter the XX% just momentum the year. dining they been sales much last compared since have of The XX% lost to began slightly casual the in nearly to prior loss down dine-in down November are tied of the precrisis, who than more saw bottomed They've they to dining ground down majority restaurants result, Same-store compared now first at than resilient December. casual year. beginning restaurants, sales year more and in of to a As traffic. XX% the XX%

X.X dining most a in million below on also conditions or to National expect rooms continued share to due in will restaurants as several delivery dining recovered XXXX on away-from-home, of dining reopen. colder shifting casual comment with improving vaccines opportunity to operations markets distribution warm they have will and this and or casual enough as permanently. vaccinating been quarter remains indoor reduced begin make Australia that pre-COVID as or on primarily significantly operating reported are still countries have Restaurant rely will be We model. few late start second the We've those to their we new and beginning eased earnings growth sales QSRs impacted restaurant and globally they begin their population these focus the still takeout recent allowing that COVID are no estimates through with restrictions EMEA, In also further of Asia expectations for and temperatures service, Market to Association more these temporarily help They compared pandemic, indoor XXX,XXX to pre-COVID delivery-only of weakness same-store Majority between outdoor the that in that that this countries population. builds most XX% headcount are and they restaurant China calls those APAC, closed The by that progress spring. areas In last publicly to in have the India. restrictions closing split during up takeout a allow quarter. like Increased their QSRs that Southeast operators dining. to restrictions have there's have heard of the dining levels. employment to on and see the

Given our chains, to this with the strong these again. starts position we most expand expect segment market of of benefit

seen Looking at other from beverage their C-stores end markets, about expanding we've interest increased and offerings. food

major continue We a programs new are to the expand markets recover. with optimistic that and have of as number C-store will this chains

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

basis of fourth increase compared margin to non-repeating a high-speed XX global driven year's the cash we with seen performance of EBITDA made of months delivered declined from sales. possible that team QX. continuation that million in the quarter. last decreasing sales by the that to attributable on The This Merrychef point few containment of year. quarter, rollout X, in XX% the Americas are delivered quarter, in mid-teens XX.X%, fourth which with decreased year's increased majority that the fourth quarter the and the the over free ovens, quarter took transformation last in customer in operating an XX.X% program this a We the by pandemic. chain net is is The On year progress in that prior launched actions the sales the organic continued made XX.X% primarily $XX.X in large year-over-year XX.X%. still increase Slide by quarter. a since of cost program to we have rollout from the with increased flow the Welbilt sales Sales This increase a net the percent. was in QSRs of March. an margin, sales fourth Along first the Our operating the into improvement we adjusted with gradual down last

sales begin the such education, the health uptick quarter, building ovens leisure combi impact market, an remain the rollouts QSR. excited due very We and rising in areas large Merrychef the ovens, and C-store travel also We with about in general from a machines. as the momentum the general in we Other Garland restaurants, smoothie see clamshell saw COVID of sales some did segment. end to of in markets Blends but Fresh Convotherm cases. quarter segment the casual decreased grills C-store to care, were softer and market, the within In

aftermarket parts from sales due the primarily KitchenCare QX. bulk master distributors decreased any buys this in year's parts Finally, of to absence

Looking the at Large dine-out market in EMEA due on general QSR Slide X. down restrictions. sales Declines by impacted XX.X%. XX.X%, chain of strong year. Sales decreased organic similar the local sales were to re-imposition net were sales last with

We small previously allowed to most open to impact As have as kitchens in rollouts what shift the were year's in customer year. for the coffee in spring was as We growth a takeout sales Crem quarter, On net the sales did and for in sales bad recovered. time in with pandemic. governmental from Australia European fourth Malaysia a China of that as view XX%, I and as the included during down to the again of comparisons experienced XX.X%. first decreased the since remain growth delivery of fully APAC Japan two in mentioned, rollout market decreased the Sales countries. the the EMEA tough quarter. sales wasn't saw had in we organic and continuation APAC the in China with entity Slide last last beginning this We still results quarter due to X,

pandemic. are impacted by and the Philippines being Asia, Southeast highly still the India However,

our program for a slide again $X our impacted made eight. this The delivered had to in-period progress rate. approximately million quarter. Moving transformation once quarter, million positively run of on the $XX is in we fourth We results savings which

work product has testing implemented team procurement our opportunities are initiatives, the going suppliers various implementing now responses, on new of and presented and current many RFQ continuing our to at processes. is by through Looking most agreements remaining with qualification the new which and

fourth our early to quarter, savings quarter. to now are which and they from capitalized see the up us onto procurement to from were that so kept balance P&L. ramp when in the inflation netted More continue of the increase into the sheet, beginning began initially against our inventory activities benefits flow We positive commodity in the

with see logistics ship generating. to continue fully by the will cost. inventory as we the be should are of escalation Those costs recent offset we transitional now We and savings not suppliers, obsolescence along some

the to they of emerge confident the but of line our are initiatives manufacturing the that lag RFQ we as gains we value the our VAVE, plants process will The lessons time transforming process improvement. identified example original to deploying returns seen site-led great these not make continuous pre-COVID accelerate moving progress to how right We for businesses. a in five close additional we at We analysis, until North We've learned the will our of activities RFQ our solution are full didn't savings program forward. globally in company, to the our or a continued one value have our procurement help us most sites sites provide when actual initiatives This own American only currently levels. and have dollar continuing are to is savings broadly remain clean that savings transformation of opportunities are of VAVE and improvements. part our productivity business culture that develop embraces keep pipeline the for the opportunities engineering, supplement to

of and These leaner workforce, productivity led work and that volumes been productivity lower facilities. us have these production dealing in gains operations with smaller Some inconsistent have some gains shifts by of against substantial in to reductions XXXX. XXXX equipment. and headcount and anticipate some began with headcount QX fabrication new through quarter We that installed some additional We've reductions continuing related each continued XXXX. into taken delivery productivity of a

for than has the of of impacts spending However, due anticipated capital slower been additional the to equipment COVID. pace fabrication originally

capital XXXX, of savings. on catch in planned pace will the us expect up We these to spending increase allowing

currently. support we in on have where working two consolidations are had Louisiana, plants and Frymaster is We This to Shreveport, one businesses. plant our Merco additional

the of in and first this have the those the process during into of plants year. consolidating expect half are completed one other of one to We this

to remain rate. delivering basis savings the program. As step-up in-period run a a in the increasing improvement $XX fully XXX approximately to the million, with transformation points $X fourth committed did see I quarter mentioned, million in savings transformation is We program margin in which of we

drive all execution XXXX. complete actions that will to end savings the by expect of the We the planned

of EBITDA However, when of in levels. creating to manufacturing will will with the be due uncertainty realizing full the million related the pause savings $XX the volumes XX% pandemic of timing margin pre-COVID the return of to and terms, sales dollar all-in target cost to experienced delayed along

some new the developments on turn strategic introduced other product the I want controller recent common into KitchenConnect over launched I Slide and we X, call On the our quarter. our initiatives. of of Marty, to first last to lines Before our share version some of newest

can we digital is stable, operators this service data environment. As other food our reminder, platforms an commercial connect to open connectivity equipment cloud-based brings platform KitchenConnect solution, Because to to in of competitors' open cloud-based digital benefits Welbilt's share that a a the secured with management kitchen is KitchenConnect.

Our of new products and controller new all integrated X.X now connects our brands. KitchenConnect is to common being into across

products we interest their More The our into brands, will integrated platform. with on is the with the KitchenConnect offer across operators using their to to future be with only that grow retrofitting openings ghost X,XXX in estimate adopt the last We're express update for on in in We see operators multiple will have digital Slide who in of example capabilities a another designs equipment planned adopting controllers, of team was efforts. item kitchens XX, developed We majority edge what advantage place industry. new new kitchen The ghost to kitchen grow dual the kitchen capabilities you rapidly quarter, to standard with On take platforms they an controller of of same and our in in is approach kitchens, digitally data that ghost quarters. agreements years is with one market Since and segment. store and Americas integrated had an for Welbilt today customers operation several having along estimated turn of ghost operators kits equipment. these launch these expected retrofit equipment to kitchen where our controller last operators in cover ghost also us testing the will next are currently of with million to and equipment by leadership their KitchenConnect. want of leading choosing can for their $XXX our in call Marty. existing Welbilt this some their increasingly the XXXX. system operations. This leading have with we with digital its within emerging field help that of yet four modular our operations. ghost when kitchen kitchen of equipment cloud-based want an digital the to by on over that, I I'll openings our help the over efficient, Welbilt's have representing our operating chain is enabled digital kitchens Demand launch use in we'll all the approximately demanding an operators several With at layout working management

Marty Agard

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

prior As in fourth you the of although be might increases decline this This gross had including partially positive was the XX pricing progress pricing, net price profit up. This rising measure basis drove commodity in volume of these program's activities hold at to we we've point net the the quarter procurement and continue margin and which mitigated XXXX year, up, our year-over-year the in savings basis the contributor the mitigated a transformation reflects the Volume, as ramping in decline versus this program. throughout the year. reflection compared expect, by tariffs, Material to executing against of our impacts drivers, but by which to our a XX% XXX than transformation sales prior made in costs level is impact points a are costs, our more drop beginning quarter. coming system netted quarter. from is through offset still is net positive

both pressures of vendor related operating overseas. so first logistics quarter in XXXX We the and constraints to have particularly seen pandemic-related costs, inflationary more far

basis labor, half to were be headwinds in XXXX. warranty that, through our will our and expanding we expect mainly through increase these and the Other program year, XXXX proceed contributor transformation XXXX of expenses, believe to we We first be positive but from this a manufacturing point margin the present despite margin effective price our that XX efforts upcoming overhead as quarter.

production environment quarter. flex our We expenses to volume continued the lower to effectively again this

anticipated reminder, As both as QX on the force a further but addressed in productivity action demand. made in we that implemented gains progress plants took early on at and and in visibility productivity a improving and upcoming of volume reduction we March gained additional, our end an smaller lower more

As sequentially impact still and of have productivity proportionate volume but improved to minimized made. brought the held we on of the to quarter, the back in cost our less that plants headcount we to that gains volumes. many degree this fixed in not we've volume, We impactful that was due could a was this quarter higher

execute plants the We program-related few labor next to more across and are strategies equipment upgrades the planned over continuing XXXX transformation in our several quarters. have

a focus. remain we by mentioned, we facility Bill and are lean encouraged consolidations, As executing the organization's few

manufacturing in most SG&A impact points an quarters on also to footprint, took in Many transformation basis continue to towards margin expect as the continue of enabled early the actions action quarter. SG&A progresses restructuring Like XX marketing We in aggressive SG&A contain and expenses next categories pandemic's we quarter us within our over plant additional the few fees, each actions as to as improvement and its taking the March. individual lower actions of to travel professional on emerged to basis program. spending the contributed adjusted those were SG&A, contribute favorable. in all favorability show costs in the and

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

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

by a million in fourth the increased slight year's was Working and a to quarter, capital inventory, Overall, free slightly from XX% accounts XX. working in program. remains with flow of managed. a reduction Slide investment offset was cash flow capital cash the the well cash larger spending is our quarter. in and positive in capital use Moving impacting Free traditional payable. program $XX Also quarter both transformation decrease in last

the from We XXXX. the we quarter, in million the down down $XX year in restrictions. capital, million the XXXX, $XX through from pandemic $XX activity spent million in reduced at capital finished reflecting For $X spending, million

levels to be IT XXXX investment The investments new reflected and will to ramp planned program facility restructuring. this investments, product spending initiatives. XXXX similar more equipment is for innovation upgrades, in both SG&A in up back We and with transformation

million reported $XX spend the million $XX had $XX million in original range of $X.X with the since we QX, SG&A, since program investments million to of incurred spent after the the began XXXX. we charges in For And approximately million now combined in restructuring $XX $X million May have of planned. transformation-related inception,

range One be life traditionally our later the quarter the finish inventory to full program. remaining incentive cash We volumes. customer it and generate the that stronger spending XXXX in lower the expect reminder free cash cash to then incremental of a annual of seasonally for as We and the seasonal is the in on is we in use quarters. build flow half in and three last first of compensation, rebates lower experience pay seasonally flow the

chart, beginning this positive As free the the cash remained have shown we since on flow pandemic. of

not it While cash in expect we XXXX. today cash to to pre-pandemic achieve a abrupt be XXXX, nor are flow forecast flow expecting materially we disruption, levels improved absent free providing an market in free

our of are the close Moving where we ended on while capital in to in liquidity our availability expenditure decreased $XX total through and cash quarter which short-term agreements December restricted with our In three $XX the debt this investments covenants in by the We the quarter. we summary, cash overall We in we providing well cash very remain last compliance liquidity, with with and XXXX. on EBITDA plus cash million amended even the of the credit increased as which is liquidity, Cash quarter, plus revolver. were with free our significant the to equivalents million ahead million, flow and performance liquidity define by and with end during improvement fourth $XXX liquidity, pleased XXXX. and $X at million pandemic of balance quarters headroom.

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

reinstate not will sufficiently we and become First, stabilize conditions predictable. year until guidance full more

We are and providing XX% sales XX% first expect quarter from down be we to XXXX. guidance, which between

will XXXX We external to to we sales some particularly absent quarter or but back we to expect mentioned seasonality, growth COVID EBITDA to setback be that other first won't will are the growth year be to against not from degree to reach We sales show our expansion believe guidance quarter, but the we markets. pressures, our in expect next fight pre-pandemic level. our provide negative some And to be a Similarly, inflationary related currently significant that evident. will likely the to levels quarter, last XXXX full and of expect compared the XXXX pre-pandemic XXXX. in shock still able a this or XXXX, of of comparisons, are earlier, XXXX we where deliver margin, meaningful related I end

expected We from about pattern want have doubt program. have transformation effect taken yet. reminder not and do I suggest price any seasonally just three means, sales, This quarterly the the years, and is last a increases of to our lower no by our

clearly cost and stronger hopefully, positioning both temporary profitable are year. logistics remain and transformation Under the market and declines, and through the efforts of quarters volume more we a benefits confident actions has and Bill are confident we be move in that our materializing, transactional actions mature the savings company transformation the ahead us pandemic-related working. when to headwinds those can inflationary pressures, will stated, On are As we we our recovered. see are the as accelerate the level, are

Operator, our lost not improvement concludes call open point That to the my nor for now XXX sight basis comments. we'll of have it. path questions. We our goal


[Operator Instructions].

the today So comes with Markets. of KeyBanc Capital first question line Jeff our Hammond from

Jeff Hammond

of and January, how shutting disruption on trying COVID the down? seeing all Just into restaurants Any into from reemergence kind this seasonality? in, of that And read to February, of guide? better what momentum order get a you're from sequential perspective, kind understanding plays kind trends

Bill Johnson


shutdowns the given the February. order There's quarter kind But a So that patterns guide period was are it's of January noise yes, fourth we for you be effect. right now. in than actual, in we've choppy say which of having the to will an slight in better XX.X%. the from here. the think that sure, The We it's time week-to-week that normalize March amount

Jeff Hammond

of companies we etcetera. then and mentioned come Okay. that Like you as rebuild to to you on start of and for ahead we about out kind to store just momentum get talk And new reemergence. when start I see? of kind plans -- some do move vaccines, will starting think

Bill Johnson

effect, we're in in everything little bit XXXX of a some the XXXX. saw rollouts. hearing of it -- quarter. delayed we fourth -- we will -- them the some -- had in smaller the Well, that taking out that QSRs from that take And In the little XXXX was rollouts from Americas, place of what a is

it's there's type an think half the we'll I that a of second -- of but activity. really some happening to kind it's small see pickup first more in start of event things half, that

Jeff Hammond

rate just exit XXXX the Where exiting savings think that and exit on XXXX? good savings for about And gave run exiting thinking you're -- million XXXX. $XX of or rate run are incremental you you Okay. as hear you -- kind to then savings, on how you do track, that

Martin Agard

Yes. of to should We're I build. but is around kind mean quarter, specific ready range a not give we to that, it sort each in. ramping of think, continue you

this, parts continuing are of buy to of We parts continuing a to those the cost, little talked the procurement expand. side as qualification about, we lower productivity, to more of at continues new the bit and and finish

the So give can't going quite like. you it's continue I say, let's to of to kind range But just you'd advance. just,

QX than from faster advance probably will did It faster. probably fact, In QX.

at $XX million. I were now a in million recall, million we rate quarter, run and think QX you $X If $XX

little as XXXX. pick will through pace we that a think get bit I up

Bill Johnson

somewhere just still of that can the back. that right taken, the margins. numbers, kind we've don't quarters And stride. we Investor right? I volume the it's -- effect of feels hold around the there on volume hitting like said all what when longer it we of be And And a at the constraints, now. in that subject the But and know couple them having kind materializing Day, it's is taking But said kind see actions to XXXX are of coming than as material you end will what probably we of


And question our line the from comes today Baird. Dobre next Mig of with

Mig Dobre

you I color guess a I'd onetime maybe a quarter. you trying noted of out a little little called where helped fourth the like materialize. to you to is as demand out the more it replacement bit relative that to sounds of start the starting rollout, of a quarter the in item release on with in also impact press that which actual sort I'm separate to is that to me like your

So what is I understand similar quarter. on third trying revenue ask quarter, midpoint, you right? like dollar going it understand And sort Because the your the there? to guidance in of for what's seems very can the I help first reported you this the look to us at in if

stepping you Trying in onetime is to of have rollout something down So, natural fourth the might that that, of that seasonality helped channel the maybe understand effect the stocking like the relative the of we're quarter? maybe sequentially. to or business or how much

Bill Johnson


-- in a were dollars. I kind in compared of that range rollouts of billion quarter couple a the kind that -- of of million the think couple we which $XX in is were had to fourth of QX total XXXX, --

that QSR the of kind So kind fourth of in and that's segment. magnitude tailwind of quarter rollouts kind order happened of the the that for

Mig Dobre

they their And distributors sense the your of helpful. goes? did get year do than stocking you own That's sort that in differently far behaved prior as any the as

Bill Johnson


course, no didn't there I announce we was of price think increase. --

on we after that -- -- sometimes after first quarter. it the done for in year, first quarter. it This do it X, we've do quarter. This effective is the first we Sometimes, January the

inventory Marty So is we They issues. liquidity and have weren't partly there'd low price ramp that, on channel of ice to doing right the some of -- didn't any products. particularly constraints the and third for The relatively we're demand a for And second because do right increase now. ice seasonality announced, their And as own sometimes, quarter, inventory prebuys cash said, there's to quarter mainly, and stocking. starting now, up, they in that. because second demand be

the levels start inventory when and the market And just to -- side of up any their up. point. of so talk distributors we'll general anything. think ramping dealers, I to low to But just carrying really on you levels get in with stocking They're at inventories this working the our things, their general, not are

Mig Dobre

what And in different higher you're it build end and the see. QX in we're the pure this for based just guidance experiencing sequentially progression far business markets? sequentially point look QX quarter Do from a think sequential first of terms as the I Or revenues to clarify to on here. as as here, can in seeing seasonality the the of that downtick revenue, then you at and like sounds me QX? this is are at thinking you you

Bill Johnson


-- first to in think It's right. grow we'll the is pegged I it there. from quarter. seasonality you've got And be there able

Mig Dobre

way should we think my transformation the and follow-up on about margins. Great. the program Then is

eight understand spend So I maybe correctly, to to closer going if you're Slide million. $XX

implication is that need volume. You here we spent the is maybe behind is million. done, $XX most already us, of work The now is and all

revenue. on So margin XX% margin XXXX at margin the on reiterated that you've million incremental of look close -- I additional imply would that guess is if XX% levels. this I EBITDA $XXX here, revenue targets to XX

incrementals savings the incrementals we the say, kind incrementals these -- and Should we the the ramp recovery? see should Thank incrementals Are my how think should higher in up? different should carry Or about subsequent are this, So $XXX ramping higher first, $XXX as maturing revenue? with of way sort be earlier is million? revenues of question the your than you. million later in

Martin Agard

What rebound exactly time would savings recovery and the ramp-up. the revenue Marty. the in the say it's of is not I paces Mig, Yes, is same pattern as

and the of So the gains little we're half in of the quarter, revenue steeper particularly their productivity I the some procurement course side of really in will the, be against as XXXX the happen in be of course, comparing its will depths second steeper rebound whereas run the will kind cycle the second incrementals steepest. think when revenue a runs the the

So come into of SG&A and this just get basis BTP But real drive of quarter for second the from the, the margin as forth so second natural that the points in kind half towards and year-over-year. the in year the will XX% XXX really you'll and some sure matures scaling in as bounce XXXX.

Bill Johnson

still is be the work a some we that things installed, out. all And to and have, and spent, amount Yes. be of even fully like worked up been equipment I fabrication though Mig. of of would significant dollars bugs running, that that, done, say for It's, yet to CapEx is operational, lot a the there have have

the procurement side still we there's see we the after all as just don't the on to year. that of for stop. in terms towards see And bit work things fill quite ongoing that accomplishing back the more side that, right? then So of we'll the of So be we've mature this And taken. Marty the funnels right? of year a again said, that's fight, that, actions done end everyday that productivity of And on that an things, up

Mig Dobre

counterintuitive. little I a that. Yes. It's just appreciate

If we you should But that saying in sounds back incrementals as and ask me get come back opposite I'll moderate then to me, queue. starting the like are I thinking volumes to be it expect over maybe the time. higher would to here. you're be just

Marty Agard

through a, full buy It's done, been even has will and around out through at inventory say, Yes. them qualifying getting the as products, in buy cycle more quarters and buying that just, them several exercise, though Mig, on to into them has the mean lag I'll procurement scale run. spending starting getting capitalization transformation volume opposed procurement, inventory, to, follow-through the I then been and that's to what them P&L. quarters, them them in it's that going that go. several powerful, particular, it's getting

be into of margins P&L lag the getting drive so And the to just is incremental not the that underestimated. and


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

Larry De Maria

question. First

of kind to about you government few cash, assistance, credit, first had the through that guys. in think et million I cetera, quarters, flowed you $XX through

that do we what that was back the that? 'XX? obviously, And how Or year we full And So does to headwind? secondly, do have fourth quarter? overcome, in benefit of I'm a any the then do multimillion-dollar impacted if was, curious come

Bill Johnson

scrambling for XXXX XXXX, you there. We not Marty's see Marty do give obviously, we I'll the in here. that of the you numbers some have the exact did let in was, benefit magnitude the but tell the that numbers the, I'll benefit in Well, kind fourth to quarter. still

Marty Agard

there in down. imminently, cost to get footnote. in going in There fourth We're see it it's was K lower Yes. tapering the of SG&A. quarter, you'll a the some It's and out in and goods both

things opportunity. an the year back little bit in where really bit more still get to this we analysis. So that a as some a as but We these the, come markets international of just little in to you'll it much K and I the won't now, be able around scramble don't do expect your access number you'll soon, for see in next of

Larry De Maria

know give lot in that, raise to obviously, because, going we us across there's you have that's are of mid-teens of seems in the the, I Can the through considering again? and just awful price increase to the are the your number product price. probably come like portfolio, it in some XXXX all first first confidence price End out through. magnitude XX% chain price industry? big guess, enough? and low supply I overcome broad and switching an of, much have quarters. how few Or there have you of EBIT the you And seems It increases an a order Okay. like, we But over inflation to maybe quarter, to inefficiencies in guess how overall,

Bill Johnson


business on out a spare So increase price we the parts our of January. piece with in went

So just we of starts in customer. can that line, from range. did XX% in we we implemented quarter. get the that, timing out rest in contracts on depending product X%, part issues anywhere the number like the global be strategic market depending And and and general the issues, go by The the the of based it of accounts, to XX% typically in on quarter with it different on net X% is on that first the the the line, and to varies And product second second, GSA, that.

Larry De Maria

was the part indicative Okay. legs? And Or well one-off Merrychef leave that And of I'll last question. some that that more of versatile that, or Is cooking equipment is year-over-year industry did have things moving some that help? XQ. obviously there. the towards helped may it

Bill Johnson

No. We maintain seeing share progress sustained that what we're growing you're Merrychef. believe share is that in being Merrychef and with to able and

Rich Sheffer

impact we drop, overcome, thousand for that SG&A. full sales, evenly assistance. governmental to year, But we thing cost most costs one million, want was bit a just remember, a The I were QX over under I without the of number couple and cost in think the a in you of would further. hundred to to more And revisit of between just while little that, reduced of just $X before million, $XX have just sales at split it's SG&A. Larry,

I allowed actions, or think, other, keep folks government the have of a to or still way us one we positive furloughed without other have had otherwise taken absence just assistance. so would we impact would that the the, So that in around


question comes of Research. the next with Rob Wertheimer Your line Melius from

Rob Wertheimer

value-add larger the have. but the the what next for are comments as ignite just conversations if of month you on just expand and a just not you're of sense your over cetera, kind general wanted a your mean of on from people refurbishment the developing? sort next or years, sort just I that technology Thanks having. And seeing are customers to role change it of saying next connectivity, some does content on to are average customer of I some the the that. or discussion on of next et whether on just of quarter, you're customers the week or things in few sense urgency

Bill Johnson


cloud. the it cloud. in once and our affordable piece to it our they So of everybody right they other of for in making start to important connect of be thrust smaller is devices and of analytics start connecting equipment players that's the is, else born-digital once start is the I kind think important. people people's the now as customer We're it wanting becomes our where initial will and future It's you or now connected it, because capable to at is more able larger happening and Every equipment cloud either QSRs prominent. terms for

So kitchen from to kitchen a and platform. the because very be it's which an you open it has to equipment different that manufacturers there open different have have pieces platform are of so many in

this buy their things customer and monitor you monitor And on all onto ability those from dynamics maintenance, if the to at their back connected where got that's There's it's what And it's get delivery, never now. for has everybody they've capabilities. connected going storage to all landscape, And get on how enables that can their up specifically I they're touch hour more gets food the outlets at in some other across from year look just code out. anything cabinet centered their all it equipment was ago. Merco brand you around phone loaded right to pull have to picking they and to having, they political again, the double now the food. scan many be the retail too $XX and connected of a people orders especially, monitor around as never all and going is it than people our having the connected. things, benefits connected options, equipment digital and of digital with just second working to that. things out units see more to usage, then not equipment, thousands their quarter, the product cabinets a And And coming almost tell having if really from labor, right? of that, somewhere digital, technology have exponentially labor the the start we brings. do energy, new We accelerating X,XXX on out takeout and up this kitchens kitchens right kitchens, And We're improving an is they people that you focusing in

of So a result common controller, user same user they same and a holding the as a and the can having They in lot using coming common with a And fryer, operators. controller think can of of very same connected cabinet amount multiple that training operate ability innovation interface, we're controller. our a using the leadership for operate strong grill, we the connect position they same operate devices to kitchen. Welbilt can interface a

accelerate. So to it's just going


from the of Longbow comes next Research. Your line MacGregor David question with

Unidentified Analyst

various around on environment. [indiscernible] challenging commentary pretty guess, is navigating Good morning. fourth of activity quoting way this you still you little start, end describe QSRs, at year-to-date And This Great through work are the with is in what the cancellations? I new looking to across a Can builds to seeing the compared on you're quarter encouraging. the markets? seeing for David. order

Bill Johnson

But lot question there's projects reasonable of said, recent I see forward. projects the slowed news a the up a activity of around lockdowns, we're know and like point. cancellations. would half there's lot we'll a of still We moving And that them there. the trigger with Yes. second are I and all I the I the half projects, bit. just mean of in order think not they seeing in that of start year. think, that I of the when them I say the the pick this a larger cases a big But But this COVID they're hold. little pipeline out on pull just is that see on to second think year it expectation the at pretty

Unidentified Analyst

did Okay. Or forward mentioned next? a lower going levels you maybe taking back place carry distributor lean. profile expect gradual do it that was will kind then pre-COVID a year this and inventories build And than that Do of previously? they anticipate dealers remained you to

Bill Johnson

dealers some vaccinations -- so closer are he and I And in those are normal. right? I to think there that cases, be interesting hold more they that has going in you'll sale dynamics, put will because some taking inventory it's the -- more see operating who got get right, faith to as are think inventory people you the have

guy, quarters right, And in next then see this to call inventory, they so I you'll careful who time, that have their up so that see and we we the significant pretty have during think in ice all and really a to the the make go them have to the if they does third because the is inventories ice that have distributors quick it. which sure somebody can the that ramp make quarter. will And and our why inventory to demands meet start volume second in it all don't be are

Unidentified Analyst

the call market terms it, are in Okay. far in closures of full your closures a What for initial the year? 'XX quarter me. seeing the compared thoughts in permanent you one to, on then And fourth rate? last restaurant what And are for exit so

Bill Johnson

idea. Yes. no I have

closed. I think that I came restaurants have just the just -- restaurant out association it XXX,XXX think

them. a hurting I even second they going were think of withstand a ability people is exhausted really and to having round closures difficult second worse round of used and and the natural up to pandemic this just -- lot the really their from round their on because of is cash be first

but subside keep be, know lockdowns they it's going closure going to their rate what don't I these So if is to not going.


of next question Your from comes Walter Liptak line with Seaport. the

Walter Liptak

wondered the sold the channel? if about -- a are kind to customer of million. the through opportunity, wanted ask centrally kitchen or $XXX those are to direct I And ghost sold dealer just I those first

Bill Johnson

There's restaurant-operated a types bit kitchens. mean incubators. There's of It of happens. There's kitchens-as-a-service. little There's both. I there's kitchens. different kitchen ghost

most and just kind But with do know goes on don't the direct direct. any the dealers way I deal for of we of that area the and it channel. type format to it of actually. part depends So this not sales in

Walter Liptak

Okay. Got it.


sound the there? of $XXX of going there were a doesn't into have competitive like small because there general versus chains -- you except an idea mix -- about that anything sales are have million. that all sort It maybe market jump advantage is large you customers -- are it's for ghost a -- there's So do your of specific kitchens these that

Bill Johnson

on mix that have people don't different doing I a that there's can give I mean I things. No. are you that. different

But somewhere, And a you. operated restaurant-operated we like line in some other just -- of are kitchen are their you of adding for these that a things, got then a it back You've putting people in other just kind parking have right, lot kind I the for a of an restaurant don't what it's extra to right? format. restaurants their would standard And triple different. call kitchens, have of in

Rich Sheffer

Okay. -- think this Rich. is Walt, I

really, operators, top-tier to think equipment. have have model though, more make them. these of I they're going to focus is on an absolute their Connectivity it ghost the for They kitchen to certainty work.

leading there think capabilities controller I for helps that but system, a the drive around a has manufacturer our So like does common preference that not Welbilt does that -- connectivity, cloud-based then just -- savings down for us to to and information to make and us cloud back cloud these usable the and the make the easiest the up connect as data get operators. drive operational the

Walter Liptak

Are to quarter. Great. the about What -- little XXXX Okay. are for more these that of growth openings sort down. comp the of Makes APAC the sense. a you on for They sooner APAC with you difficult us APAC guess? a detail it's does provide in in seeing was more in little QSR look U.S.? your than Can us. seem bit happening be ahead like outlook understand bit with fourth I China. The

Bill Johnson

significant we APAC, has in. good which two in China It in have are we that fourth little tough the just bit year was Yes. I recovered. down fully mean China particularly but in Australia, presence see comps, quarter had a a they markets because a and

Some a region. same where struggling are the bit. yes, in U.S., they're do see of APAC the little good But boat year the the a APAC as we for kind of other regions

Walter Liptak

right, All Thank you. great. Okay.


proceed the comes your with [Operator question next Please line Mig Dobre Instructions] of question. from Your with Baird.

Mig Dobre

covered does advance taking see this to you what in various have for kind a employ bought, raw color of give I'm follow-up. your us this what I know 'XX I material point? you of if point? And portion this little the guys on at how wanted you wondering program. that. are And Thanks cover you might hedging can at commodities program far

Marty Agard


four and we The at are are really, and, an a do out look the not relative typically we metals, Mig, hedge for the a right, really, then main price quarters percentages, further have higher little just bit we is the lower of the covering closer much to are and market we four it. or three looking and is out when bias percentages, to hedge. So and main outlier the metals general

outlier So know, less we're XX% do percentage somewhere this feels it there's movement know trying times I again, relatively sure, I unless of we're and if is And really there. but, an or looking outlier. don't to for than not there's of kind like that's say, half, I'm when some would small XXXX I don't covered.

Rich Sheffer

is Yes. Mig, this Rich.

little color on the more program. a hedging Just

in to new our the that the de-designated with late with comply in we complexities XXXX and So put they trying accounting and added hedges rules these.

it, we and five So ones the been new letting probably, adding call for roll quarters haven't off. existing hedges the

as still will through out have we continue but some wind to there the protection bit going here, down little it we So 'XX through move a year.

Mig Dobre


thinking in be So looking maybe like for pricing that, copper, it's aluminum, that like spot fair to you're QX, say we stainless, should QX, right? things kind things like for as of sure,

Rich Sheffer


Marty. ahead, predominantly think Go I spot. it's

Marty Agard

that We of volatile content, a of the moving. have realize as as are as as well that not kind direct It's commodity as but lot components not metal it's is we're that. buying these

Mig Dobre

does cost progresses? comfortable And you kind price with pricing then Understood. of the put situation that the you as Or fact in additional a action that, least will that for at are you X%, neutral can that the presented, the to that, year require 'XX? framework X%

Marty Agard


We the what quarter, got we the it covered. think really the took we time. think we happening to this some And impact evaluate we the in would time fourth took so saw I of be.

worsen, So, go but out to if do back and if something it. out, back correct we things have to go we'll

Mig Dobre

Understood. we years, going standpoint thoughts two fortunately. from fourth any still, to strategy the as well seen is about about three the I think recovered. to you're forward. the There's on quite of And we've stock What as margin how curious me. updated as Curious sheet finally then the has thinking board? for to from final and the I'm end And better a we doing your question guess recovering, there. as markets balance in are The a quarter know. bit view next all know, debt here as you're your

Bill Johnson


So self-help were debt. kind on program look we to that as at the a using pre-COVID, reduce it, we of our earnings we generated

course these couple still to of over see as delever of the this We level markets that's here think I to able right are action next years. acceptable being recovering. the an

that's to the of so course action And I we're that taking. going think be


turn in this And questions any at there further queue I the call time. to are Mr. closing no back for Johnson remarks.

Bill Johnson

you. Thank

more we Before our considering any the we I be end faced top to at that that of structurally performance lead. as want stronger my a the challenges to collectively been today's I efficient. and employees, consider like XXXX, continued I have call, Welbilt belief their I emerge to to will that from crisis company thank reiterate and group privileged is this leaner in would

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

culture our end service win to of customer leverage continue markets. and battle innovation will for brand outgrow our We to preference the and

Thanks We of delever concludes again our as call. a will XXXX promise and this this on joining for have us earnings morning, and margin today's sheet balance day. improvement abates. deliver This quarter fourth crisis great our