Invacare: ‘We deliver in tough times’

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Friday, October 30, 2020

ELYRIA, Ohio – COVID-19 may be flaring up again in different parts of the world, including the U.S., but Invacare officials don’t expect the impact of these subsequent waves to be as severe as the first wave, helping them to see the fourth quarter and full-year 2020 more optimistically. 

When the pandemic first hit earlier this year, “we didn’t have a playbook,” said Matthew Monaghan, chairman, president and CEO, but now “we’ve learned to deal with it.” Health care facilities have found a way to continue elective and other less essential care, he said, helping to revive referral streams, bit by bit, for the company’s products. 

“Invacare typically serves non-perishable health care needs,” he said during a conference call to discuss the company’s third quarter financial results. “Those needs haven’t gone away. Somebody had a diagnosis that was a permanent reduction in abilities say in May or June – they’re going to have to have that health care provided at some point. So we think that accumulation of need and access to health care…(will likely result in a) more benign (impact) than in the second quarter. It’ll come and go through the winter, and I think we’re prepared for that.” 

This outlook, as well as an expected continued sequential improvement in overall sales in the fourth quarter, has led Invacare to improve its updated full-year guidance for 2020 to $840 million in net sales, up from the previous range of $810 million to $840 million; and adjusted EBITDA of $28 million to $32 million, up from $27 million to $30 million. 

Invacare expects to see a boost in the fourth quarter for sales of mobility and seating products, in particular. Because of the longer quote-to-order cycle for these products, restrictions in the second quarter limited assessments and dampened quotas. But as restrictions have eased, the company says it saw “significantly higher quotes” in the third quarter, which it expects to result in strong sales in the fourth quarter. 

“In mobility and seating, we’re seeing a general recovery in demand,” said Monaghan, who pointed out the company already saw a 38% increase in net sales for these products in Europe in the third quarter. 

Bigger picture, Invacare highlighted that the third quarter represented its 12th consecutive quarter of adjusted EBITDA improvement. 

“We’ve been showing (improvements) for a long time,” Monaghan said. “People have come to appreciate that, we don’t just deliver in the easy times; we deliver in the tough times. To have the first three quarters of this year and still (be) carrying on, going 10, 11, 12 consecutive quarters of improvement with a pandemic – we’re definitely going to keep doing this. We know how to improve business and, if after 12 quarters, people are still looking for evidence of whether we can improve I’m not sure what kind of billboards we’re going to need to light up.”