ELYRIA, Ohio — Invacare Corp. in Elyria, Ohio, said today that profits rose and sales fell in the first quarter, compared with a year ago.
Several factors worked to boost net income 9 percent to $2.4 million, or 8 cents a diluted share, including a 2.1 percent rise in “organic sales,” which are sales without the effects of foreign currency exchanges and recent acquisitions.
The maker of home health care equipment and products also cut costs, and paid lower interest expenses and taxes during the quarter, compared with a year ago.
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Subtracting from Invacare profits: Higher prices for raw materials, and some foreign currency transactions and translations.
Net sales fell 4.4 percent to $398 million from a year ago.
Invacare’s profits rose in line with expectations “despite continued reimbursement pressures, particularly in Europe, and the negative impact on the company’s earnings of the strengthening U.S. dollar,” said A. Malachi Mixon III, the company’s chairman and chief executive, in a written statement.
Free cash flow — which Invacare defines as cash used in operations less restructuring costs, property and equipment purchases, and proceeds from property and equipment sales — was a negative $5 million in the recent quarter compared with a negative $24 million a year ago. “This improvement was largely the result of higher accounts receivable collections and improved inventory management compared with the first quarter of 2008,” Mixon said.
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The company did not see a meaningful impact from recent Medicare reimbursement cuts or limits on the sales of some medical and oxygen equipment and supplies.
Invacare lowered its forecast range for organic sales growth to between 4 percent and 6 percent for this year. Previously, the company had expected growth to be between 5 percent and 7 percent.
The company also expects adjusted earnings before interest, taxes, depreciation and amortization of between $140 million and $150 million for 2009. These figures omit the effects of restructuring charges, accounting changes and changes in tax allowances.
Free cash flow is expected to be between $35 million and $40 million for the year.
Invacare shares were down 8 percent to $15.29 in mid-morning trading on the New York Stock Exchange.
