Earnings: Invacare, ResMed

Invacare posts 'solid' first quarter

ELYRIA, Ohio - Invacare last week reported net earnings of $7.45 million for the first quarter ended March 1, 2011, compared to $3.1 million for the same period last year.

It reported net sales of $428.5 million vs. $402.2 million, a 6.5% increase.

"Invacare is off to a solid start in 2011," stated President and CEO Gerald Blouch in a release. "Invacare is confident that the momentum from this quarter will continue to deliver positive results for its shareholders in 2011."

Net earnings were positively impacted by net sales growth and reduced interest expense. That growth was partially offset by a reduced gross margin, higher selling, general and administrative expenses and a higher effective tax rate on adjusted pre-tax earnings.

Helping to boost net sales was the North America/HME division. Earnings before income taxes were $13.3 million for the first quarter of 2011 compared to $11.5 million for the same period in 2010. Net sales were $185.6 million vs. $175 million. Growth was driven by increases in rehab, respiratory and standard product lines.

Also helping: Invacare Supply Group. Net sales were $74 million for the first quarter of 2011 compared to $69.7 million for the same period last year, a 6.2% increase.

As part of its earnings report, Invacare provided the following outlook:

* The company is "actively managing" exposure to commodity pressures with adjustments to pricing and freight, including for certain products in its North America/HME division.

* The company is closely monitoring the tragedy in Japan. It's developing "supplier and component alternatives to be implemented if necessary."

* The company is providing updates to the Food & Drug Administration regarding compliance concerns raised in 2010. "The company is in the process of adding resources to its regulatory affairs and corporate compliance departments and engaging outside experts to accelerate implementation of its corrective actions," the release states.

* The company has not seen a significant impact on its business in the first quarter due to Round 1 of competitive bidding. It continues to work with the industry to implement changes to the program.

Invacare's guidance for 2011 includes organic net sales growth between 3% and 4% (narrowed from original 2% to 4%); adjusted earnings per share between $2.05 and $2.15; free cash flow between $85 million and $95 million; effective tax rate of about 30% on adjusted pre-tax and annual earnings; and adjusted EBITDA between $145 million and $155 million.

ResMed posts 12% increase in revenues

SAN DIEGO - ResMed last week reported revenues of $313.3 million in revenue for the quarter ended March 31, 2011, a 12% increase over the same period last year. Net income was $53.4 million, a 9% increase. Revenues in the Americas, specifically, were $160.5 million for the quarter, a 9% increase. "Americas' revenue continued to be adversely impacted by reduced bilevel sales, but we expect that the recent launch of the S9 bilevel series will help to reverse this trend," Chairman and CEO Peter Farrell stated in a release. "We expect the growth of all of our products to continue to benefit from the vastly under-penetrated and growing sleep-disordered breathing market." Another sign pointing toward continued growth: "Increasingly, there is evidence coming to light that early intervention in the treatment of sleep-disordered breathing may slow or prevent the progression of chronic diseases," Farrell states. ResMed reported revenues of $901.3 million for the nine months ended March 31, 2011, a 13% increase over the same period last year. Net income was $168.5 million, a 23% increase.