Earnings: FDA negotiations weigh heavily on Invacare
ELYRIA, Ohio - Invacare can't provide guidance for 2012 until it has hammered out an agreement with the U.S. Food and Drug Administration, company officials told investors during a conference call last week to discuss recent earnings.
"The company is currently unable to provide guidance for 2012 and does not expect to be able to do so until it is able to analyze the final terms of the FDA's proposed consent decree of injunction," said Gerald Blouch, president and CEO.
Invacare announced in December that the FDA has proposed it suspend certain operations at its corporate headquarters and wheelchair facility in Elyria, Ohio. Since then, the two parties have been trying to hammer out an agreement.
During the call, Invacare officials told investors there is little else they can say about the negotiations. They're not sure how long the negotiations will last. They're not sure how much revenue could be impacted.
"It's not something that we can control," Blouch said. "If it were, we'd want to get it done. Clarity is good for the market and the management team, as well. We're working with the FDA, and we're both interested in getting this wrapped up quickly."
Additionally, Invacare officials told investors that the company's decision to move manufacturing of its Solara line of manual wheelchairs to Invamex, its facility in Reynosa, Mexico, wasn't related to its negotiations with the FDA. They said it's part of streamlining the company's product lines and simplifying its globalization efforts.
Invacare reported net sales of $449.7 million for the fourth quarter of 2011, compared to $451.5 million for the same period in 2010. It reported a net loss of $35 million for the quarter in 2011 vs. net earnings of $7.2 million for the quarter in 2010.
The company reported net sales of $1.8 billion for 2011, compared to $1.72 billion for 2010. It reported a net loss of $4.1 million for 2011 vs. net earnings of $25 million for 2010.
For North American HME, Invacare reported net sales of $181.8 million for the fourth quarter of 2011 compared to $187.9 million for the same period in 2010, a 3.3% decrease. It reported net earnings (before income taxes) of $16.7 million for the quarter, excluding restructuring charges of $4.4 million and write-offs of $8.5 million, compared to $17.3 million for the quarter in 2010.
Net sales were driven by declines in custom and consumer power wheelchairs, low-active wheelchairs and personal care, partially offset by increases in stationary and portable oxygen concentrators and HomeFill Oxygen Systems.
For North American HME, Invacare reported net sales of $746.8 million for 2011 compared to $738.4 million for 2010. It reported earnings (before taxes) of $55.5 million in 2011, excluding charges and write-offs, compared to $54.7 million in 2010.