Welbilt (WBT) Misses Q1 EPS by 4c, Revenues Beat; Confirms FY19 EPS Mid-Point Guidance Below Cosnensus

Welbilt (NYSE: WBT) reported Q1 EPS of $0.05, $0.04 worse than the analyst estimate of $0.09. Revenue for the quarter came in at $375.3 million versus the consensus estimate of $373.74 million.

2019 First Quarter Highlights

• Net sales were $375.3 million, an increase of 7.1 percent from prior year; Organic Net Sales increased 3.5 percent
• Earnings from operations were $24.5 million, a decrease of 41.1 percent; as a percent of net sales, earnings from operations were 6.5 percent, a decrease of 540 basis points
• Adjusted Operating EBITDA was $50.1 million, a decrease of 9.4 percent; Adjusted Operating EBITDA margin was 13.3 percent, a decrease of 250 basis points and was negatively impacted by 40 basis points from the Crem® acquisition
• Net loss was $2.6 million, a decrease of 121.0 percent; Adjusted Net Earnings were $7.4 million, a decrease of 65.1 percent
• Diluted net loss per share was $0.02, a decrease of 122.2 percent; Adjusted Diluted Net Earnings Per Share were $0.05, a decrease of 66.7 percent
• Net cash used in operating activities was $357.0 million, compared to $158.7 million in last year\'s first quarter; Free Cash Flow was an outflow of $68.9 million, compared to an outflow of $34.5 million in last year's first quarter.

Management Commentary

"We are pleased to deliver another quarter of strong Organic Net Sales growth,” said Bill Johnson, Welbilt’s President and CEO. "Both EMEA and APAC delivered double-digit Organic Net Sales increases while the Americas decreased due to lower large chain sales following 2018\'s rollouts. Operationally, our Adjusted Operating EBITDA margin was particularly suppressed in the quarter primarily due to higher material costs and tariffs, the dilutive impact from the Crem acquisition and increased FX/Other expenses. The majority of these cost issues are either specific to the first quarter or will be mitigated by our March pricing actions as we proceed through the year."

"We reiterated our 2019 full-year guidance today. We have good top-line momentum following five consecutive quarters of solid organic growth. The Transformation Program\'s operational review we just concluded gives us confidence in our ability to deliver the 2019 Adjusted Operating EBITDA margin guidance and to execute the detailed plans to drive profitable growth going forward. We will provide our long-term targets and more details about these plans at our Investor Day," concluded Johnson.

GUIDANCE:

Welbilt sees FY2019 EPS of $0.71-$0.81, versus the consensus of $0.79.

• Net sales growth: between 3.0 and 6.0 percent (organic +2.0 to +5.0 percent, acquisition +1.0 percent, foreign currency translation +0.0 percent)
• Adjusted Operating EBITDA margin: between 18.5 and 19.5 percent

For earnings history and earnings-related data on Welbilt (WBT) click here.

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