Invacare Reports Earnings within Guidance & Strong Free Cash Flow

ELYRIA, Ohio--(BUSINESS WIRE)--Invacare Corporation (NYSE: IVC) today announced its financial results for the fourth quarter and twelve months ended December 31, 2008.

HIGHLIGHTS FOR QUARTER AND YEAR

Organic sales increase of 5.7% in the quarter and 7.1% for the year
Adjusted earnings per share(a) for the quarter of $0.60 versus $0.59 last year and for the year of $1.35 versus $1.12 last year
Earnings per share on a GAAP basis for the quarter of $0.55 versus $0.22 last year and for the year of $1.21 versus $0.04 last year
Free cash flow(d) of $56 million generated in the quarter and $60 million for the year
Adjusted EBITDA(e) of $44 million for the quarter and $146 million for the year
Reduction in debt outstanding of $29 million for the quarter and $59 million for the year
CONSOLIDATED RESULTS

Earnings per share on a GAAP basis for the fourth quarter were $0.55 ($17.5 million net earnings) as compared to earnings per share for the same period last year of $0.22 ($7.0 million net earnings). Adjusted earnings per share(a) were $0.60 for the fourth quarter of 2008 as compared to adjusted earnings per share(a) for the same period last year of $0.59. Adjusted net earnings(b) for the quarter were $19.1 million versus $19.0 million for the fourth quarter last year. Both adjusted earnings per share(a) and adjusted net earnings(b) for the fourth quarter 2007 exclude a one-time net tax benefit primarily attributable to new tax laws adopted in Germany last year. Adjusted earnings before income taxes(c) for the fourth quarter were $21.7 million as compared to $20.4 million for the fourth quarter last year. The improvement in adjusted earnings before income taxes(c) resulted primarily from organic sales growth (both volume and selective price increases), cost reduction activities and reduced net interest expense, which were partially offset by increases in commodity costs and unfavorable foreign currency translation.

Net sales for the fourth quarter increased 0.9% to $430.4 million versus $426.8 million last year. Foreign currency translation decreased net sales by five percentage points and acquisitions increased net sales by less than a percentage point. Organic net sales for the quarter grew 5.7% over the same period last year driven by improved performance in virtually all segments, particularly for North America/Home Medical Equipment (NA/HME) and Institutional Products Group (IPG). Reflecting the improved stability and sequential improvement of this business segment, the NA/HME organic net sales increase of 8.7% for the quarter represents the fifth consecutive quarter over quarter increase. IPG’s organic net sales increase of 14.3% for the quarter was driven primarily by new product introductions.

Gross margin as a percentage of

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