Invacare blames rehab, in part, for HME sales drop
Invacare reported earnings for the third quarter this week, and the news was good. Adjusted net earnings were $16.7 million for the quarter ended Sept. 30, 2009, compared to $13.4 million for the same period last year. Invacare also boasted of a 1.9 percentage point improvement in its growth margin and about $45 million of free cash flow.
For its North America/HME division, however, Invacare blamed rehab, in part, for a 3.2% decrease in net sales ($185.1 million vs. $191.2 million). The company stated:
Rehab product line net sales decreased by 1.8% compared to the third quarter last year, driven primarily by declines in sales of the Top End sports wheelchair, custom manual and consumer power product lines. Primarily drive by cash sales, Top End has been negatively impacted by the economic downturn.
The drop in sales was also driven by recent coverage rule changes:
Reliant on reimbursement, sales of custom manual wheelchairs have been negatively impacted by coverage rules, such as the state of Ohio's recent change related to ceasing reimbursement at nursing homes for HME products.