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Invacare reports loss as major plant remains largely offline


By John N. Frank
Posted: April 24, 2014 - 6:30 pm ET
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Medical-products manufacturer Invacare Corp. is two-thirds of the way to getting Food and Drug Administration permission to resume full-scale production at a key U.S. facility. But with that wheelchair-producing plant still hobbled by a 2012 FDA consent decree, the company reported a net loss of $18 million in its first quarter compared to a net loss of $5.7 million in the same period last year.

The loss came as net sales for the quarter fell 6.7% to $309.1 million from $331.4 million in the same period last year. The company in late 2012 entered into a FDA consent decree to limit production of custom power and manual wheelchairs, wheelchair components and wheelchair subassemblies at its Taylor Street plant in its headquarters city of Elyria, Ohio, after what were termed “inspectional observations” by the FDA. Following the decree, it laid off 40% of its hourly workers at the plant.

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The consent decree requires three certification audits by outside experts at the plant before full operations can resume, the company detailed in its earnings release Thursday. The audits must be submitted to and accepted by the FDA. The agency has accepted two of the three needed audits to date, the company said. No forecast was made regarding when the third audit will be complete and submitted to the FDA.

The number of units shipped domestically from the Taylor Street plant in the first quarter was 9.5% of the level of pre-consent decree shipments in the first quarter of 2012, the company said.

Separately, “the intensity of ongoing pre- and post-payment Medicare audits of home medical equipment providers is impacting utilization for certain of the company's lifestyle products. In addition, the segment has been negatively impacted by a shift toward lower cost products for certain national competitive bidding lifestyle products,” the company said.

Follow John N. Frank on Twitter: @MHJFrank


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