In Invacare’s ‘line of sight’: robust growth  

ELYRIA, Ohio – Invacare expects to ship $15 million worth of back orders in the next two quarters, which will give the company a nice lift going into the back half of 2021. 

Invacare reported a 10.2% decrease in net sales for the first quarter this year compared to the same period last year, primarily due to the impacts of the COVID-19 pandemic, including continued limited access to health care, and to supply chain disruptions. 

“Our first quarter results were impacted by the pandemic, while the same period last year was not,” said Matt Monaghan, chairman, president and CEO. “In addition, global supply chain issues were more extensive than originally expected, causing rolling back orders and extended lead times. As a result, reported net sales decreased and we accumulated a $15 million backlog of orders which did not ship and become revenue in the quarter. We expect to sell through this elevated backlog within the next two quarters, as lead times normalize.” 

For North American, Invacare reported a 13.1% decrease in net sales, with higher sales of respiratory products more than offset by lower sales of seating and mobility and lifestyle products. 

In subsequent quarters of 2021, Invacare expects the pandemic and supply chain disruptions to have less of an impact, due not only to vaccination rates increasing and economies opening back up, but also to the company’s mitigation efforts, Monaghan said. 

“Our team has certainly been well exercised, since 2018 when we were forced to mitigate short-term tariffs that we have fully offset in the meantime,” he said.  “They did that by looking at alternative sources and figuring out ways to revise our supply chain to be effective despite those increase costs. (We’ve faced) those same kind of challenges (with the pandemic), but now with new talent coming into the organization and new IT tools, that helped the organization plan better. So, we’ve taken steps like increasing inventory for fast-moving good so that we’re not so susceptible to containers being a day late. We have a better buffer.” 

Invacare also has product launches set for this year that will help drive patient demand and increase sales, including a new oxygen concentrator expected to launch in the second quarter, Monaghan said. 

“All of our products are designed with more value for our customers, which should afford a better value exchange for us, and they’re all designed to go smoothly through our supply chain at higher efficiencies and lower costs,” he said. 

These are all reasons why Invacare is maintaining its full year guidance for 2021 – constant currency net sales growth in the range of 4% to 7%; adjusted EBITDA improvement of 41%, to $45 million; and free cash flow of $5 million. 

“As we approach the second half of the year, which is seasonally our stronger half, we anticipate more robust growth as pandemic-related restrictions relax and the global supply chain is expected to improve,” Monaghan said.  “This is supported by the trends we’re seeing across our organizations and the line of sight we have. I’m incredibly excited about the road ahead.”