ELYRIA, Ohio (April 14, 2020)--Demand for respiratory products, beds and therapeutic support surfaces are all up during the COVID-19 health emergency, Invacare's head said in a news release, while seating and mobility products are expected to see a decline in orders.
Matt Monaghan, chairman, president and CEO of Invacare, discussed the impact of the pandemic while participating in the Needham Healthcare Conference; he provided a business update and shared preliminary financial results for the first quarter, which ended March 31.
"We continue to see extraordinarily high demand globally for our respiratory products, beds and therapeutic support surfaces, which are vital in the fight against the COVID-19 pandemic," he said in a news release that reported his statements. "These products are being deployed in expanded medical facilities to relieve the strain on hospital systems by providing more medical beds and access to purified oxygen needed in respiratory care. We are working to increase our capacity to produce these critical products and resolve especially difficult global supply chain challenges compounded by the effects of this pandemic. As a result, there are practical limits to the extent we can increase output. And, we are taking steps to offset cost increases from pandemic-related supply chain disruptions."
However, he said, the crisis has shifted health care away from elective procedures
"As a result, and combined with various stay-at-home orders, we have begun experiencing a global decline in quotes for mobility and seating products, and we expect a decline in orders will follow," Monaghan said. "Because our products are generally employed for non-elective and chronic or persistent conditions, we expect consumer needs to be durable and, therefore, we expect demand to rebound once COVID-19 related priority care and public health policies are relaxed.”
In addition, Monaghan said, the company is continuing to operate through the pandemic.
“As an 'essential business' making medical devices, Invacare has continued to operate in nearly all of its facilities, having taken the recommended public health measures to ensure worker and workplace safety. We have a remarkably engaged team of associates who have quickly adapted to this new environment and who have continued to enable us to supply critical products used directly in the COVID-19 response, as well as medical solutions for non-elective conditions. I am especially proud of how well our team has reacted to this critical situation," he said.
According to the release, for first quarter 2020, Invacare expects to report unaudited and preliminary net sales of approximately $218.0 million, a decrease of roughly 2.2% compared to the prior year. When adjusted for the negative foreign currency impact and the divestiture impact from Dynamic Controls in March 2020, constant currency net sales increased 0.1% compared to the prior year. Preliminary results in 1Q20 were largely ahead of the influence of COVID-19 and reflect growth in respiratory and mobility and seating products offset by a decline in lifestyle products.
“I am pleased with our first quarter performance, particularly in light of the significant changes everywhere as a result of the pandemic. Our team continues to rise to the challenge of supporting our customers globally,” said Monaghan. “
"As we navigate the uncertain business environment, we continue to allocate more resources to the business units experiencing increased demand and expect to continue taking actions to mitigate the potential negative financial and operational impacts on other parts of our business that may decline. In the medium-term, we still expect to execute on the previously planned steps in our transformation. Given the broad and dynamic consequences of COVID-19, we will provide additional information during our upcoming first quarter 2020 earnings announcement and conference call.”