NEW PORT RICHEY, Fla.--(BUSINESS WIRE)--Welbilt, Inc. (NYSE:WBT) announced today that the recent outbreak of the novel coronavirus, or COVID-19, is disrupting the commercial foodservice equipment end markets in the Americas and EMEA. While many professional kitchens remain open for takeout, drive-thru and delivery, many have closed to dine-in customers while others have closed completely. Accordingly, the demand for commercial foodservice equipment and aftermarket parts is anticipated to be negatively impacted through the second quarter of 2020 and possibly beyond. Due to the rapidly changing environment, we are withdrawing our previous 2020 full-year guidance that was provided with our 2019 fourth quarter earnings release and discussed on our 2019 fourth quarter earnings call on February 25, 2020. Based on our current view of the business, we are expecting our 2020 first quarter net sales to decrease between 10 and 15 percent compared to the prior year.
We have developed contingency plans for our operations and are taking appropriate steps to reduce operating expenses and capital spending, as necessary. We have also conducted stress tests on our business model for a range of severe sales decrease scenarios, along with various assumptions on working capital and capital expenditures. After working through those various scenarios, we continue to believe that our future cash generated from operations, together with our capacity under our existing senior secured revolving credit facility and our cash on hand, will provide adequate resources to meet our working capital needs and cash requirements for at least the next 12 months. We expect to be in compliance with the financial covenants in our senior secured revolving credit facility (“Revolver”) at the end of our 2020 first quarter on March 31, 2020; however, given the uncertainty of conditions during our second quarter of 2020 and the reasonable risk of non-compliance with our covenants at that quarter-end, we have had and will continue to have conversations with the bank group around a potential amendment of the financial covenants in the Revolver and are encouraged by those conversations to date.
We have implemented steps to protect our employees in our plants, distribution centers and offices by prohibiting visitors from entering our facilities without having passed a screening process, encouraging office personnel to work from home, implementing social distancing protocols, rigorously cleaning our facilities between shifts, providing hand sanitization stations and encouraging our employees to follow the recommendations issued by the Centers for Disease Control to minimize the risk of transmission of COVID-19. All 20 of our global manufacturing plants are currently open and operating, as are our distribution centers. We will continue to closely evaluate the status of our facilities and will react quickly due to either safety or demand conditions. Our supply chain has seen minimal disruption and has not caused significant production delays to date.
We remain confident that consumers’ interest in safe and unique dining experiences will return along with the demand for commercial foodservice equipment that supports that interest. Our industry has historically been very stable and profitable, and we fully expect that to be the case in the near future.
About Welbilt, Inc.
Welbilt, Inc. provides the world’s top chefs, premier chain operators and growing independents with industry-leading equipment and solutions. Our innovative products and solutions are powered by our deep knowledge, operator insights, and culinary expertise. Our portfolio of award-winning product brands includes Cleveland™, Convotherm®, Crem®, Delfield®, Frymaster®, Garland®, Kolpak®, Lincoln™, Manitowoc® Ice, Merco®, Merrychef® and Multiplex®. These product brands are supported by two service brands: FitKitchen®, our fully-integrated kitchen systems brand, and KitchenCare®, our aftermarket parts and service brand. Headquartered in the Tampa Bay region of Florida and operating 20 manufacturing facilities throughout the Americas, Europe and Asia, we sell through a global network of over 5,000 distributors and dealers in over 100 countries. We have approximately 5,100 employees and generated sales of $1.6 billion in 2019. For more information, visit www.welbilt.com.
