Invacare Corporation (Invacare), a developer of health care products for the non-acute care, has reported net sales of $398 million for the first quarter of 2009, up 4.4%, compared with the net sales of $416.3 million in the year-ago quarter. It reported net earnings of $2.3 million, or $0.08 per share, for the first quarter of 2009, compared with the net earnings of $2.2 million, or $0.07 per share, in the year-ago quarter.
Highlights For The Quarter
Organic sales increase of 2.1% in the quarter
Adjusted earnings per share(a) for the quarter increased 18% to $0.13 versus $0.11 last year
Free cash flow(d) of negative $5 million in the quarter this year as compared to negative $24 million in the quarter last year
Adjusted EBITDA(e) of $27 million for the quarter
Reduction in debt outstanding of $13.4 million for the quarter
Consolidated Results
Selling, general and administrative expense (SG&A) decreased 3.6% to $94.1 million in the quarter against $97.7 million in the first quarter last year.
A. Malachi Mixon, III, chairman and chief executive officer, stated, “In line with our expectations, the Company delivered a 14% improvement in first quarter adjusted net earnings(b) despite continued reimbursement pressures, particularly in Europe, and the negative impact on the Company’s earnings of the strengthening U.S. dollar. Equally important, free cash flow(d) of negative $5 million improved significantly as compared to negative $24 million for the first quarter of last year. This improvement was largely the result of higher accounts receivable collections and improved inventory management compared to the first quarter of 2008. With improved profitability and strong management of working capital during the rest of the year, free cash flow(d) is projected to be on plan for the year.”
Updated Guidance For 2009
Organic growth in net sales of 4% to 6%, excluding the impact from acquisitions and foreign currency translation adjustments.
Previous guidance had been for 5% to 7%.
Effective tax rate on adjusted annual earnings of 25%. Similar to 2008, the Company expects that its effective tax rate for each period in 2009 will fluctuate depending on the mix of earnings between countries with and without tax valuation allowances.
Adjusted earnings per share(a) of $1.38 to $1.48.
Free cash flow(d) between $35 million and $40 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)(e) between $140 million and $150 million.
Commenting on the company’s anticipated performance, Mixon noted that “Invacare has started the year with strong first quarter results on both earnings and cash flow. Building on that momentum, we expect that cost reductions, including global rationalization of Invacare’s product lines, will drive further improvements during the year. Despite a stronger U.S. dollar compared to 2008 and some reimbursement and pricing pressures in certain markets, we continue to project growth in organic sales and adjusted net earnings(b), along with strong free cash flow(d) performance, for the year.”