Invacare Corp. (IVC) Provides COVID-19 Business Update, Suspends Guidance

Invacare Corporation (NYSE: IVC) released today the following statement from Matt Monaghan, chairman, president and chief executive officer, regarding the impact of the novel COVID-19 on the company.

Business Update

“Invacare is uniquely positioned to be part of the solution combatting this global pandemic as we offer essential healthcare products for those impacted by this virus. Our long-term care beds enable patients to avoid being admitted to hospitals for treatment or to be transitioned out of hospitals and into other care settings, including their homes, to recover. And, our oxygen concentrators provide supplemental oxygen for respiratory care that is a critical part to COVID-19 therapy. These concentrators are effective in any care setting, and are an essential part of delivering care outside increasingly taxed hospital resources. The Invacare team is rising to the challenge of supporting people globally in this critical time.

Demand for these respiratory products and beds has increased dramatically worldwide. As of today, all of our global manufacturing facilities are operational as they have been deemed an Essential Business as defined by the U.S. Department of Homeland Security, or equivalent governmental agency in foreign jurisdictions. We are committed to doing all we can to increase production to meet demand and get those products into the hands of healthcare providers and ultimately patients. In order to accelerate production and distribution of products, we are working with local and federal agencies in seeking to expedite the process of securing the necessary materials, in addition to volunteering any assistance we can.

We realize the current business environment comes with increased responsibility to ensure care for our associates and the communities where we operate. In accordance with all local regulations, we have implemented responsible work practices for associates required to be present at our facilities, as well as those working remotely. I’d like to thank all of our associates for their dedication in ensuring an uninterrupted supply of essential healthcare products to improve patient outcomes.

While demand of our respiratory products and beds continues to spike, we have experienced a reduction in the momentum of our Mobility and Seating product line over the past few weeks. This has been caused by a shift in priorities of our institutional customers, as well as new restrictions on onsite commercial interactions at hospitals and long-term care facilities, all of which is reducing our sales force’s access to, and personal contacts with, our customers. We believe the underlying need for these products continues to exist as the end-user’s fundamental needs do not typically resolve. However, it may be some time before normal customer engagement and clinical fittings occur as clinical care areas focus on acute priorities related to this pandemic. We remain committed to continuing to grow our mobility product pipeline and launch new, innovative products that will help drive profitable growth over the long-term.”

Cost Management & Balance Sheet Update

“We are confident we have the right team and business model in place to be successful during this unprecedented challenge. Given the new operating environment, we are taking prudent actions to ensure we have appropriate resources allocated to those business units that are witnessing increased demand while taking steps to mitigate negative financial and operational impacts of COVID-19. These steps include identifying opportunities to manage our SG&A spend, such as deferring all non-essential investments, limiting capital expenditures to only critical projects, and re-allocating resources to those efforts which we believe will best advance our objectives.

Finally, we have taken steps to strengthen our balance sheet and preserve our liquidity position, including proactively drawing down approximately $22 million on our bank credit facility to provide financial flexibility. We expect our cash balances on hand, plus forecasted operating results, to provide sufficient liquidity to manage the business during this uncertainty.”

Q1 and FY 2020 Outlook Update

“As of March 20, 2020, we are pleased with our consolidated business performance to-date with first quarter results expected to be in-line with previous guidance, including flat year-over-year sales and free cash flow similar to 1Q19.

Looking ahead, given the uncertainty and variability of business operations in light of COVID-19, we are suspending our fiscal 2020 guidance that was provided on February 10, 2020. We will take opportunities to update our outlook as the year progresses and as circumstances evolve.”

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