Invacare Corporation (NYSE: IVC) today announced its financial results for the quarter and six months ended June 30, 2012.
Commenting on Invacare's second quarter 2012 results, Gerald B. Blouch, President and Chief Executive Officer, stated, ``The Company continued to invest in and make significant progress on its quality systems improvements related to previously disclosed observations made by the United States Food and Drug Administration (FDA). Primarily as a result of the related regulatory and compliance costs, adjusted earnings per share (a) decreased 33% to $0.30 in the second quarter of 2012 compared to $0.45 in the second quarter of 2011. If the impact of the incremental regulatory and compliance costs, which aggregated approximately $0.15 per share ($4.7 million after-tax expense), were excluded, adjusted earnings per share (a) would have been approximately $0.45 in the second quarter. Also in the second quarter, gross margin as a percentage of net sales declined by 1.2 percentage points compared to last year primarily related to sales mix favoring lower margin product lines and lower margin customers. In addition, organic net sales for the quarter decreased by 1.2% compared to last year and free cash flow (c) was $4.8 million.''
Blouch continued, ``I am proud of the Invacare team for driving the Company toward the successful remediation of its quality systems while continuing to hold the business results steady despite multiple pressures facing the Company. These pressures include the previously disclosed delay of new product introductions due to the Company's diversion of internal resources in order to accelerate the progress on its remediation effort. The Company also felt the impact of external challenges, including ongoing reimbursement pressures faced by Invacare's customers, most notably the United States National Competitive Bidding program that is expected to be rolled out to 91 metropolitan statistical areas in July 2013 that is causing customers to be more cautious in their capital spending, and the strengthening of the U.S. dollar.''