Two of the largest food service companies headquartered in the Tampa-St. Petersburg metro area have pulled back on issuing financial expectations for 2020.
Both Bloomin’ Brands (Nasdaq: BLMN), the Tampa-based parent of Outback Steakhouse and other restaurant concepts, and Welbilt (NYSE: WBT), a commercial food equipment manufacturer in New Port Richey, said Friday morning they are withdrawing financial guidance for the year as Covid-19 coronavirus disrupts global markets.
They are among dozens of companies nationally that have told investors they are not sure how the pandemic will impact operations as the year goes on.
Restaurants in many locations face limited operations. In Florida, they have been ordered to reduce seating capacity. [UPDATE: After this story published, Gov. Ron DeSantis ordered all Florida restaurants to suspend on-premise consumption and move to take-out or delivery only.] Bloomin’ Brands is among the local public companies hurting the most. Its stock has fallen about 75 percent since its 52-week high of $24.29 in early December, closing Thursday at $5.80 a share.
The company has a cash position of over $400 million after drawing down substantially all of its revolving credit facility, it said in a news release. The increased borrowings were taken as a precautionary measure to provide additional financial flexibility.
In addition to withdrawing guidance for the year, Bloomin’ Brands board of directors has suspended the quarterly cash dividend. The company has taken actions to tightly manage costs, said Chris Meyer, chief financial officer. It’s also leveraging carry-out service and deliveries, CEO David Deno said.
While many professional kitchens remain open for takeout, drive-thru and delivery, many have closed to dine-in customers while others have closed completely, Welbilt said in a news release.
That likely means there won’t be as much demand for the commercial foodservice equipment and aftermarket parts that Welbilt makes at least through the end of June and possibly after that, the company said.
The demand for commercial foodservice equipment and aftermarket parts is anticipated to be negatively impacted through the second quarter of 2020 and possibly beyond, the company said.
Welbilt has developed contingency plans and is cutting operating expenses and capital spending, and believes it will have enough resources to meeting working capital needs and cash requirements for the next year.
Welbilt also is talking with its bankers about potential changes to its lending agreements and is “encouraged” by those conversations so far.
Jabil (NYSE: JBL), a manufacturing solutions provider and the largest company headquartered in St. Petersburg withdrew financial guidance for 2020 earlier this month, after incurring $53 million in expenses directly associated with business interruption caused by coronavirus in the second quarter of fiscal 2020.