Invacare’s sales top $300 million in 2nd quarter

Sunday, August 10, 2003

August 11 , 2003

ELYRIA, Ohio - Invacare earned $15.4 million on sales of $300.1 million in the second quarter this year. Sales for both the quarter and the first six months of the year were up 10%. Earning for the first six months were flat.

In North America, Invacare sales climbed by 5% to $213.0 million versus $202.1 million last year. Respiratory products sales increased 41% due to strong performance in oxygen concentrators and the HomeFill(TM) product line. Sales of the rehab products line increased 15%, due largely to the continued strength of sales of consumer power products.

Invacare Supply Group sales increased 11%, returning to the double-digit increases delivered during most of last year. These sales increases were offset by declines in two product areas. Standard products sales declined 12%, primarily due to continued pricing pressures, and sales to nursing homes through Invacare Continuing Care Group decreased 8%, primarily due to continued uncertainty surrounding governmental reimbursement programs.

The company’s DSO stood at 64 days for the quarter, improving by 2 days compared with the end of last year and improving by 4 days compared with the end of the second quarter last year. Inventory turns were 6.0, declining from 6.2 at the end of last year and the end of the second quarter last year. The decline was primarily due to inventory increases related to new product introductions.

"The Company is attacking its costs in order to respond to the pricing pressures from Asian knock-offs of Invacare products,” said Invacare CEO Mal Mixon. “We have completed the planned move of all remaining steel wheelchair manufacturing to Mexico. Additionally, the Company will establish manufacturing capacity in China in 2004."

Newly introduced products in total accounted for 59% of North America's second quarter equipment sales in the homecare channel, up from 48% in the first quarter. The IVC Homecare Bed and the Storm Series TDX, Invacare's most advanced customized power wheelchair, were both introduced on time during the second quarter.

In the second half of the year, the company is introducing a new sleep apnea product line, including Invacare's own designed mask. With these introductions, Invacare believes it’s on track to achieve its fourth quarter 2003 target of replacing 90% of North American equipment sales in the homecare channel from new products introduced since October 2001.