Invacare Posts Big Q4

ELYRIA, Ohio — On Thursday, Invacare Corp. announced its
fourth-quarter profit rose 150 percent to $17.5
million, up from $7 million in the same quarter of 2007. Net
earnings for the year were $43.1 million versus $35.7 million in
2007. Net sales rose to $1.76 billion from. $1.6 billion, a 9.6
percent increase.

“The company delivered strong organic sales growth and robust
earnings for the quarter and the year,” said A. Malachi Mixon, III,
chairman and CEO, in a press release. “Adjusted earnings per share
at $1.35 was within the range of Invacare’s original guidance for
2008, despite increased commodity costs during the year and
weakening foreign currencies by year end. Equally important,
fourth-quarter free cash flow strengthened to $56 million as a
result of improved earnings and effective working capital
management for the quarter, enabling the company to exceed its
projections on free cash flow for the year.”

For its North America/ HME division in the quarter, the company
reported sales increased 8.2 percent to $187.3 million compared to
$173.1 million in 2007. Respiratory product net sales increased
15.2 percent, driven by volume increases in oxygen concentrators
and HomeFill oxygen systems with strong purchases by national
providers, Invacare said. Standard product net sales increased 15
percent on increased volumes in manual wheelchairs, patient aids
and beds. Rehab product net sales increased by 2 percent.

For the year, sales for the division increased 10.8 percent to
$741.5 million from $669.4 million for 2007.

To improve earnings in 2009, Invacare said it will continue to
make cost reductions, including global rationalization of product
lines “to offset the impacts from reimbursement and pricing
pressures, the global economic crisis and the potential volatility
of the U.S. dollar.”

Company execs acknowledged the effects of CMS’ 9.5 percent
reimbursement cuts for product categories in Round One of
Medicare’s competitive bidding program, along with the Deficit
Reduction Act’s 36-month cap on home oxygen rental payments.
“Separately, the financial crisis could impact the company’s
supplier and customer base, although there does not appear to be a
material change in either at this point,” the company said, adding
that Invacare “intends to remain judicious in its extension of
credit to customers” and to review supplier financial strength,
particularly on key products and components.

Given those factors, the company said it expects organic growth
sales growth of 5 to 7 percent for 2009.

“With cost reductions, including the global rationalization of
Invacare’s product lines, we envision 2009 as the next step in
stronger earnings at Invacare,” Mixon said.