Invacare Corporation, a leading manufacturer and distributor in its markets for medical equipment used in non-acute care settings, reported results for the quarter ended June 30, 2022.
Reflecting on the quarter, Matt Monaghan, chairman, president, and chief executive officer, Invacare, said, “In 2Q22, we achieved sequential revenue growth of 4.7% in mobility & seating products driven by increased adoption of our compelling product portfolio. We continue to experience elevated backlog across all product categories and regions, and see strong demand in mobility & seating and lifestyle products. We are working diligently to increase output and convert order backlog into sales.
We continue to make good progress on our business transformation initiative as demonstrated by sequential improvement in gross margin and lower SG&A expense. The sequential improvement in gross margin was driven by increased price effectiveness and favorable product mix. Importantly, as guided, we achieved sequential improvement in Adjusted EBITDA and free cash flow even as we endured supply chain challenges and foreign exchange headwinds.
To further accelerate our business evolution and growth strategy, we are pleased to have secured additional capital in July which provides increased liquidity and flexibility. We expect this strategic funding will enable us to more efficiently address our elevated backlog and better serve customer demand. We look forward to providing updates in the coming quarters on additional transformative actions intended to drive increased profitability and enhance shareholder value.”
- Reported net sales were $189.0 million, a decrease of 16.3% and constant currency net sales(a) decreased 10.7%, compared to the 2Q21.
- Gross margin was 25.4%, an increase of 160 basis points on a sequential basis and a decrease of 150 basis points compared to 2Q21.
- SG&A expense of $58.6 million decreased 8.1%, and constant currency SG&A(b) decreased 3.8% compared to 2Q21 primarily attributable to lower employment costs.
- Operating loss was $14.8 million compared to a loss of $3.5 million in 2Q21; improvement of $1.8 million sequentially.
- Adjusted EBITDA(c) loss was $4.8 million, compared to positive $5.5 million in 2Q21; improvement of $3.8 million sequentially.
- Free cash flow(d) generated was $0.1 million, an improvement of $29.9 million sequentially and improved $27.3 million from 2Q21.
Commenting on the company’s financial results, Kathy Leneghan, senior vice president and chief financial officer, Invacare, stated, “We achieved significant improvement in free cash flow compared to 2Q21 and sequentially as we diligently managed our working capital driving improved cash conversion including lower accounts receivable and inventory levels. At the same time, our new credit facility increases our financial flexibility and provides additional liquidity to address near-term supply chain challenges and accelerate our transformation initiatives. In addition, the convertible debt exchange results in both debt discount recapture and a path for future debt reduction.”
[Source(s): Invacare, PR Newswire]