Sales suffer at Invacare

‘Our new orders aren’t what they were a year ago’
Tuesday, April 9, 2013

ELYRIA, Ohio – In a big sign that an agreement with the Food and Drug Administration (FDA) is dampening sales, Invacare has announced that it has laid off an additional 68 employees at its manufacturing facility on Taylor Street.

Sales have been impacted by a provision in the agreement that requires providers to document that a wheelchair or seating system made specifically by Invacare is medically necessary for a particular condition.

“We didn’t know what to expect and now, with a few months under our belts, we know it’s a struggle for people to complete the forms,” said Lara Mahoney, director of investor relations and corporate communications. “We’re still out there educating people about the forms and there are people who want to fill them out, but we have to take this step to align our workforce.

“Our new orders aren’t what they were a year ago,” she added.

This most recent layoff follows the layoff of 143 employees in December, when Invacare announced its agreement with the FDA. The company now employs about 150 at the facility compared to about 350 a year ago.

Between the first and second layoffs, Invacare had shifted employees at the facility from full-time (five-day shifts) to part-time (three-day shifts), but that wasn’t enough, Mahoney said.

“These are talented associates, so we were trying to make adjustments to the business based on production demands and keep as many employees as we could,” she said. “But we realized we needed to reduce the number of employees rather than spreading them across shifts.”

Mahoney declined to quantify the decrease in sales, noting that Invacare execs will “give color” to that on April 25, when the company releases its first quarter earnings. She also declined to comment on whether or not, once the FDA agreement is lifted, Invacare will resume prior employment levels at the facility.

“Our first priority is to demonstrate compliance to our third-party auditor and then to the FDA,” she said. “Once we have the FDA’s approval, we will resume operations and then resume our marketshare.”

Invacare expects to complete two audits in the first quarter and a third audit in the second quarter. After completing the second audit, the company may resume design activities.