Welbilt Reports Fourth Quarter Operating Results

Welbilt, Inc. (NYSE:WBT), today announced financial results for its 2020 fourth quarter.

2020 Fourth Quarter Highlights ⁽¹⁾

• Net sales were $320.0 million, a decrease of 16.2 percent from the prior year; Organic Net Sales (a non-GAAP measure) decreased 17.6 percent from the prior year
• Earnings from operations were $40.6 million compared to $37.4 million in the prior year; as a percentage of net sales, earnings from operations were 12.7 percent compared to 9.8 percent in the prior year
• Adjusted Operating EBITDA (a non-GAAP measure) was $60.0 million compared to $71.2 million in the prior year; Adjusted Operating EBITDA margin was 18.8 percent compared to 18.6 percent in the prior year
• Net earnings were $20.2 million compared to net earnings of $18.4 million in the prior year; Adjusted Net Earnings (a non-GAAP measure) were $21.7 million compared to Adjusted Net Earnings of $27.1 million in the prior year
• Diluted net earnings per share was $0.14 compared to diluted net earnings per share of $0.13 in the prior year; Adjusted Diluted Net Earnings Per Share (a non-GAAP measure) was $0.15 compared to Adjusted Diluted Net Earnings Per Share of $0.19 in the prior year
• Net cash provided by operating activities was $41.9 million, compared to net cash provided by operating activities of $50.8 million in last year's fourth quarter; Free Cash Flow (a non-GAAP measure) was $37.7 million compared to $34.3 million in last year's fourth quarter

2020 Full-Year Highlights ⁽¹⁾

• Net sales were $1,153.4 million, a decrease of 27.6 percent from the prior year; Organic Net Sales decreased 27.8 percent from the prior year
• Earnings from operations were $63.1 million compared to $173.9 million in the prior year; as a percent of net sales, earnings from operations were 5.5 percent compared to 10.9 percent in the prior year
• Adjusted Operating EBITDA was $170.9 million compared to $286.2 million in the prior year; Adjusted Operating EBITDA margin was 14.8 percent compared to 18.0 percent in the prior year
• Net loss was $7.4 million compared to net earnings of $55.9 million in the prior year; Adjusted Net Earnings was $23.1 million compared to Adjusted Net Earnings of $96.3 million in the prior year
• Diluted net loss per share was $0.05 compared to diluted net earnings per share of $0.39 in the prior year; Adjusted Diluted Net Earnings Per Share was $0.16 compared to Adjusted Diluted Net Earnings Per Share of $0.68 in the prior year
• Net cash provided by operating activities was $15.0 million, compared to net cash used in operating activities of $269.7 million in the prior year; Free Cash Flow was a $5.1 million use of cash, compared to a $74.0 million increase of cash in the prior year
• Total liquidity was $375.0 million on December 31, 2020 and consisted of $125.0 million of cash and cash equivalents and $250.0 million of availability on the Revolving Credit Facility

(1) Definitions and reconciliations of the non-GAAP measures used herein are included in the schedules accompanying this release.

Summarizing the Company's fourth quarter performance, Bill Johnson, Welbilt's President and CEO, stated, "We are pleased with our fourth quarter operating results as our sales, margins and cash flow all improved sequentially from the third quarter as the commercial foodservice industry continued to gradually recover. We are particularly pleased that our Adjusted Operating EBITDA margin exceeded last year's level despite the dilutive effect of the sales decline, and that our free cash flow was higher than last year's fourth quarter. Both of these are attributable to the improvements we have made to date as part of our Business Transformation Program ("Transformation Program") and through the cost containment actions we put in place earlier in the year that continued to benefit us in the fourth quarter. Industry conditions and our results remain depressed relative to last year's fourth quarter due to the impact of the COVID-19 pandemic and we continue to closely monitor the global recovery and adjust our costs and investments accordingly."

Net sales declined 16.2 percent in the fourth quarter compared to last year's fourth quarter. Excluding the impact from foreign currency translation, Organic Net Sales decreased 17.6 percent, which was primarily driven by decreased volumes due to the impact of the COVID-19 pandemic on foodservice providers globally and the resulting decrease in demand for commercial foodservice equipment. The year-over-year monthly net sales comparisons improved through the quarter with December's decrease being the smallest since the pandemic started.

The fourth quarter Adjusted Operating EBITDA margin of 18.8 percent was 20 basis points higher than last year's fourth quarter with positive net p