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.