Q3 Results: Invacare Up, Lincare Down

ELYRIA, Ohio, and CLEARWATER, Fla. — The industry's largest manufacturer and one of its largest providers posted third-quarter financials last week. While Invacare reported a 27 percent earnings increase, officials at Lincare said net revenues had dropped $13.1 million compared to last year's Q3.

Elyria, Ohio-based Invacare reported net earnings of $16.7 million for the quarter ended Sept. 30 compared to $13.4 million for the same period last year. Net sales for the quarter decreased 6 percent to $434 million versus $461.8 million last year. Organic net sales for the quarter dipped 2.2 percent over the same period in 2008.

“The company has delivered nine months of improved earnings, despite a difficult and uncertain reimbursement environment for many of its key markets,” said Mal Mixon, Invacare chairman and CEO, via official press release. “For the full year, Invacare projects a solid improvement in adjusted net earnings compared to 2008 and to be at least at the high end of the company's original earnings guidance range for 2009. Equally important, the company's performance in generating free cash flow has been substantially above expectations, with results for nine months almost double the original guidance for the full year. With strong debt reduction and expanding margins, the company is focused on delivering improved performance to its shareholders.”

Invacare highlights for the third quarter:

• Earnings increase of  27 percent.
• Free cash flow rose to $44.7 million compared to $15.9 million last year.
• Organic sales decreased 2.2 percent.
• Debt reduction of $71.9 million.

According to the company, earnings were in line with internal planning and ahead of plan on cash flow and debt repayment. For the fourth quarter, the company continues to expect improvements from cost reduction activities compared to last year. Commodity costs have started to rise recently compared to earlier in 2009. Compared to the third quarter, the higher costs will pressure margins in the fourth quarter. Offsetting that impact, foreign currency rates have recently strengthened against the U.S. dollar.

At Clearwater, Fla.-based Lincare, net revenues fell more than $13 million compared to the same quarter last year. Specific tallies for 2009 were $392.6 million as opposed to $405.7 million in 2008. Net income for the quarter was $36 million compared to $53.3 million for the third quarter of 2008.