Invacare expects decline in net sales, but favorable adjusted EBITDA

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Tuesday, July 14, 2020

ELYRIA, Ohio – Invacare expects to report unaudited and preliminary net sales of about $196 million for the second quarter of 2020, a 17% decrease compared to the same quarter in 2019.

The company expects adjusted EBITDA in 2Q20 to be favorable to 2Q19, driven by higher gross margin as a percentage of net sales and lower SG&A expenses.

“Given the unprecedented nature of the current environment, we are pleased with our strategic execution,” said Matthew Monaghan, chairman, president and CEO. “With sales being impacted by a near complete shutdown of the global economy during the second quarter, we reoriented our business to optimize sales for those products where opportunities are more limited.”

To mitigate the decrease in net sales as a result of the pandemic, Invacare says it has initiated “strong cost containment actions” to conserve cash, including reducing employment costs and deferring tax payments—moves that are expected to drive sequential improvement in profitability and free cash flow in the second quarter.

Due to Invacare’s sudden shift in product mix and its long-lead supply chain, the company also expects a temporary increase in inventory.

“However, we anticipate this inventory will convert to cash in the remainder of 2020 and into 2021,” Monaghan said.  “Our associates continue to work through various challenges to procure materials and components necessary to support the pandemic response and other parts of our business.”