New product readies Invacare for comeback
ELYRIA, Ohio – Invacare still may have some work to do to lift a consent decree with the Food and Drug Administration (FDA), but it’s already staging a comeback.
Interim President and CEO Rob Gudbranson told investors during a Feb. 5 conference call to discuss Invacare’s fourth quarter and year-end financial results that the company has received 510(k) approval for an upgrade to its TDX line of power wheelchairs.
“Now we have a new product that, once we clear the consent decree, we can introduce it immediately,” he said.
Invacare reported a net loss of $9.39 million for the fourth quarter ended Dec. 31, 2014, compared to a net loss of $5.77 million for the same period in 2013. Net sales were $318.2 million vs. $330.8 million. It reported a net loss of $56.1 million for 2014 compared to net earnings of $33.1 million for 2013. Net sales were $1.27 billion vs. $1.33 billion.
The new product will provide a much-needed boost to Invacare’s North America HME division. Invacare reported a net loss of $9.1 million for the division for the fourth quarter compared to a net loss of $11.6 million for the same period in 2013. Net sales were $124.8 million vs. $140.7 million. It reported a net loss of $59.2 million for the division for 2014 compared to $44.4 million in 2013. Net sales were $507.9 million vs. $589.2 million.
“We still have good relationships with our customers,” Gudbranson said. “I’m not going to say it’s going to be an immediate turnaround, but I think our customers will be excited to have us back, and we’ll have a new product to talk to them about.”
In addition to the consent decree, which limits Invacare’s ability to manufacture and sell custom power wheelchairs and seating systems, the company’s earnings were impacted by a shift by providers to lower cost products due to competitive bidding; the loss of a significant order for HomeFill oxygen systems by a national account, and a recent decision to exit the scooter business in the U.S.
Invacare is still in the process of completing a third-party audit, the next-to-last step in lifting the consent decree. Once Invacare completes the audit, it must submit a report to the FDA for review and approval.
“We still have work to do, including process improvements for addressing complaint data, before we can verify the effectiveness of our solutions and complete the audit,” said Gudbranson.
While most of the FDA’s focus has been on Invacare’s Taylor Street facility, the company’s Sanford, Fla., facility has received warning letters* in the past. Gudbranson says the facility was audited by the FDA in the fourth quarter.
“We think it went well,” he said. “They made four observations and we responded to them on a timely basis.”