Invacare Corporation Reports Improved Earnings and Strong Cash Flow for Its Second Quarter and First Half of 2009
ELYRIA, Ohio--(BUSINESS WIRE)--Invacare Corporation (NYSE: IVC) today announced its financial results for the quarter ended June 30, 2009.

HIGHLIGHTS FOR THE SECOND QUARTER

•Earnings per share on a GAAP basis for the quarter increased 41% to $0.24 versus $0.17 last year
•Adjusted earnings per share(a) for the quarter increased 36% to $0.30 versus $0.22 last year
•Free cash flow(d) of $39.6 million in the second quarter this year as compared to $11.4 million in the second quarter last year
•Organic sales decreased 0.7% in the quarter
•Adjusted EBITDA(e) of $32.3 million for the quarter
•Reduction in debt outstanding of $20.7 million for the quarter
CONSOLIDATED RESULTS

Earnings per share on a GAAP basis for the second quarter were $0.24 ($7.7 million net earnings) as compared to earnings per share for the same period last year of $0.17 ($5.3 million net earnings). Adjusted earnings per share(a) were $0.30 for the second quarter of 2009 as compared to $0.22 for the second quarter of 2008. Adjusted net earnings(b) for the quarter were $9.6 million versus $7.0 million last year. Adjusted earnings before income taxes(c) for the second quarter were $12.7 million as compared to $10.9 million for the second quarter last year. Adjusted net earnings(b) for the quarter were positively impacted by an improved gross margin, reduced net interest expense and a lower effective tax rate, which were partially offset by unfavorable foreign currency translation and transactions.

Net sales for the quarter decreased 7.7% to $412.5 million versus $447.2 million last year. Foreign currency translation decreased net sales by seven percentage points while acquisitions increased net sales by less than a percentage point. Organic net sales for the quarter declined 0.7% over the same period last year driven primarily by organic net sales declines in Asia/Pacific, Europe and Institutional Products Group, which were partially offset by organic net sales increases for Invacare Supply Group and North America/Home Medical Equipment.

Gross margin as a percentage of net sales for the second quarter was higher by 0.8 of a percentage point compared to last year’s second quarter. The margin improvement was the result of cost reduction activities, selective price increases implemented in the second half of 2008 and reduced freight costs which were partially offset by unfavorable product mix and reimbursement pressures in Europe and unfavorable foreign currency impact from the weakness of the Euro as compared to the U.S. dollar and the British pound as compared to the Euro.

Selling, general and administrative expense (SG&A) decreased 6.3% to $97.9 million in the quarter compared to $104.5 million in the second quarter last year. Foreign currency translation decreased SG&A expense by eight percentage points, while acquisitions increased SG&A expense by one percentage point. Excluding foreign currency translation and acquisitions, SG&A expense increased by 0.7% when compared to the second quarter of last year.

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