| Invacare posts 'solid' first quarter |
| No significant impact from competitive bidding, company says |
04.28.2011  |
ELYRIA, Ohio - Invacare this week reported net earnings of $7.45 million for the first quarter ended March 1, 2011, compared to $3.1 million for the same period last year. It reported net sales of $428.5 million vs. $402.2 million, a 6.5% increase. "Invacare is off to a solid start in 2011," stated President and CEO Gerald Blouch in a release. "Invacare is confident that the momentum from this quarter will continue to deliver positive results for its shareholders in 2011." Net earnings were positively impacted by net sales growth and reduced interest expense. That growth was partially offset by a reduced gross margin, higher selling, general and administrative expenses and a higher effective tax rate on adjusted pre-tax earnings. Helping to boost net sales was the North America/HME division. Earnings before income taxes were $13.3 million for the first quarter of 2011 compared to $11.5 million for the same period in 2010. Net sales were $185.6 million vs. $175 million. Growth was driven by increases in rehab, respiratory and standard product lines. Also helping: Invacare Supply Group. Net sales were $74 million for the first quarter of 2011 compared to $69.7 million for the same period last year, a 6.2% increase. As part of its earnings report, Invacare provided the following outlook: * The company is "actively managing" exposure to commodity pressures with adjustments to pricing and freight, including for certain products in its North America/HME division. * The company is closely monitoring the tragedy in Japan. It's developing "supplier and component alternatives to be implemented if necessary." * The company is providing updates to the Food & Drug Administration regarding compliance concerns raised in 2010. "The company is in the process of adding resources to its regulatory affairs and corporate compliance departments and engaging outside experts to accelerate implementation of its corrective actions," the release states. * The company has not seen a significant impact on its business in the first quarter due to Round 1 of competitive bidding. It continues to work with the industry to implement changes to the program. Invacare's guidance for 2011 includes organic net sales growth between 3% and 4% (narrowed from original 2% to 4%); adjusted earnings per share between $2.05 and $2.15; free cash flow between $85 million and $95 million; effective tax rate of about 30% on adjusted pre-tax and annual earnings; and adjusted EBITDA between $145 million and $155 million. |
Joel Solkoff wrote a guest commentary for our February issue commending HME providers for all the work they do to help people like him live as independently as possible.
Joel turned up on my radar again last week when John Shirvinsky, the executive director of the Pennsylvania Association of Medical Suppliers, sent me the link to Joel’s latest blog entry, which derides the competitive bidding program.
I’m going to include the blog here in full, because Joel makes some good points and, like John, I think you’ll get a kick out of it:
What’s the fuss?
I originally created this blog as a convenient way for readers to have access to my monthly column in Voices of Central Pennsylvania, published from October 2009 to February 2011. While recovering from minor cardiac surgery where the medical standard of “do no harm” was once again violated, I decided to quit my column rather than continue to be a person unable to change Medicare and thus always angry all the time. I wanted to love.
I am a frequenter of hospitals for pneumonia, rehabilitation to a right shoulder that cannot be repaired, diabetes, etc.—invariably released by Medicare dictate before it is necessary; frequently saved by homecare agencies now foolishly required to reduce their services.
In writing my column for February (the one below that begins with bull riding), I opted to reject anger.
Similarly, the once favorable economic conditions in downtown State College, PA where I live had given me the hope that government favorable to the disabled and elderly might provide us with the infrastructure, training, and understanding required to develop and benefit from the talent of those of us who are broken in body but sound in mind.
It is foolish to be angry at my fellow-town mates (in a place that is rapidly turning into a Bruce Springsteen song) who are so beset with troubles of their own.
So, I gave up the column to work with engineers, architects, and designers who are planning a future that follows the Americans with Disabilities Act (ADA) and where segregation of the sort I experience daily at Ye Olde College Diner and the like (whose lack of access is grandfathered ) does not exist.
What does exist is that I continue to live an independent life. I cannot get from my bed to the bathroom without a scooter or other mobility device. Yes, there is a point where reality requires that I cannot engage in submission, cheerful or otherwise.
I must have access to mobility devices. President Obama, for whom I worked and voted, should be ashamed of himself for not only tolerating, but personally advocating a competitive bidding program for durable medical equipment.
This plan, which the President inherited from President Bush (who used it as part of an effort to gut Medicare) is already, in Pittsburgh and other locations, so altering the process of providing medical supplies such as oxygen, wheelchairs, power chairs, scooters and other mobility devices that local suppliers, such as the three here in State College, would only be able to serve the rich.
The rest of us are or would be at the mercy of often out-of-state suppliers of dubious reputation who would take their sweet time providing batteries and maintenance, resulting in people like me falling and going into assisted living facilities. Thus savings in Part B of Medicare would result in large costs in Part A.
Last year’s measure to end competitive bidding received the bipartisan support of so many members of the House that if the Democratic leadership had called it up for a vote it would have passed. The Senate followed the lead of Senator Robert Casey, Jr. (D-PA) and no member of the Democratically-controlled senate endorsed the legislation.
While Sen. Casey publicly dithered about his position on the subject, his real position appeared to become clear. Sen. Casey is reportedly a friend of the President. The President, for reasons of his own, an informed source told me, personally believes in competitive bidding. Sen. Casey is not going to take a position that would make his friend angry.
Two columns below express the views of Rep. Jim Langevin, a liberal Democrat from Rhode Island, and Rep. Glenn Thompson, a conservative Republican who represent me here in the Fifth Congressional District of Pennsylvania, expressing their opposition to competitive bidding. Their specific advocacy was to the legislation introduced last year, but this year’s legislation is déjà vu all over again.
My friends who meet regularly at the Corner Room in this sliver of left wing political power here in the small borough of State College (surrounded on all sides by Republicans; Republicans to the north; Republicans to the south; Republicans to the east, and Republicans to the west) cherish the liberal’s dream that someday these evil Republicans will turn into progressive Democrats.
My fixation on competitive bidding has made me a source of jest and some mistrust. My support of Rep. Thompson, especially, has made some Democrats suspect my loyalty to the party.
I am a loyal Democrat who believes in the party of Eleanor Roosevelt and Adlai Stevenson. I have no trouble picturing Eleanor Roosevelt shaking her trademark index finger at President Obama and Senator Casey. If they want my vote, they had better start acting like Democrats. Democrats don’t treat people who cannot walk in a way that causes us to feel like cripples.
Shame on you President Obama. Shame on you Senator Casey.
I will pray that you find your way back to the ideals of the Democratic party.
Shame. Shame. Shame.
Liz Beaulieu
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