ELYRIA, Ohio (November 8, 2022)—Invacare Corporation will stop producing respiratory products by the end of the year and will focus instead on lifestyle and mobility and seating categories, the company announced Monday.
The discontinuation is part of the company’s “multi-faceted transformation plan,” a shift in strategic priorities designed to “generate a return to profitability,” the company said in a news release ahead of Invacare’s third quarter earnings call. The move is expected to simplify operations and improve profitability by enabling the company to focus resources on its core business, the company said.
“This will allow us to further streamline our operations and, we expect, to improve profitability by focusing resources on lifestyle and mobility & seating products, which continue to experience strong demand," said acting president and CEO Geoffrey Purtill. "We will also continue to take a hard look at every aspect of our business, leaving no stone unturned as we position Invacare for the future."
Invacare expects to discontinue the production of respiratory products in the fourth quarter of this year and to fulfill existing customer orders with inventory on hand. The company will continue to operate its respiratory parts and service business and honor its respiratory-related warranty and regulatory obligations, it said.
As a result of transformation actions taken in the first half of 2022, the company reduced operating costs by $4.1 million in the third quarter. This was offset by lower net sales and gross profit, as well as the unfavorable impact from foreign exchange.
Net sales were down 24% year over year, and adjusted EBITDA loss was $11.8 million, the company reported. Revenues declined in all product categories in North America—but most significantly in respiratory.
Purtill said that demand for lifestyle and mobility and seating products was resilient in the third quarter but supply chain challenges and component shortages limited Invacare’s ability to fulfill existing orders. The company had $80.5 million in open orders in the category at the end of the third quarter, compared to $60.5 million at the end of 2021.
“We anticipate that the incremental financing received in October will enable us to further improve output and convert open orders into sales more efficiently,” he said.
The company continues to focus on executing its transformation plan to drive revenue growth and deliver significant improvement in financial performance to enhance long-term shareholder value.
