The company’s financial troubles stem in part from a 2012 consent decree it reached with the Food and Drug Administration that limited order volume from its manufacturing facility on Taylor Street in Elyria. The agency had issued two warning letters over concerns that the company did not meet good manufacturing practice requirements. Invacare has also reported product recalls and previous restructuring charges.
Invacare markets its products to home medical equipment providers or long-term-care providers, who then sell the products to consumers or residents, according to securities filings. It also markets its products to medical professionals such as physicians and occupational therapists.
The company said in July that net sales fell 5% to $640.3 million in the first six months of the year, compared with $676.2 million in the first half of 2013. Invacare reported a net loss of $31.5 million in the first six months of 2014, compared with a net profit of $22.7 million in the same period a year ago. The decline in sales of mobility and seating products was tied to the reduction of orders coming out of the Taylor Street facility.
At that time, Invacare’s then-president and CEO, Gerald Blouch, hinted at the restructuring, stating in a news release that the company was not pleased with the second quarter's financial results. He also announced plans to retire the same day.
“We are determined to turn around the business by focusing on improving free cash flow and restoring profitability” in the North America/home medical equipment and Asia/Pacific businesses, Blouch said in a July 24 news release.
A company spokeswoman said Invacare has completed two of the three third-party certification audits required by the consent decree. It’s unclear when the third audit will be finished, she said.
Follow Jaimy Lee on Twitter: @MHjlee