Exhibit 99.1
Investor Inquiries:
Gregory C. Thompson
440-329-6111
Media Inquiries:
Lara Mahoney
440-329-6393
PRESS RELEASE
INVACARE CORPORATION RESPONDS TO ADMINISTRATION'S PROPOSED FY 2008 BUDGET: GOOD
NEWS FOR HOMEFILL OXYGEN TECHNOLOGY; AND REITERATES COMPANY OUTLOOK
ELYRIA, Ohio - (March 5, 2007) - In response to President Bush's FY 2008 budget
proposal outlined February 5, 2007, Invacare Corporation (NYSE: IVC) applauded
the Administration's proposal to encourage seniors to have greater access to new
home oxygen technology such as the Invacare(R) HomeFill(TM) oxygen system.
According to an official Administration document, the President's proposed
budget to Congress would maintain payment for new oxygen technology at current
levels, while decreasing payment for traditional oxygen systems from 36 to 13
months. While Invacare supports the Administration's promotion of new
technology, Invacare remains opposed to the proposal of further payment cuts to
home oxygen therapy and power wheelchairs that may erode beneficiary access.
"The President clearly recognizes the cost effective benefits of new oxygen
technology as well as the fact that consumers strongly prefer new oxygen systems
such as the HomeFill oxygen system. This technology enables consumers to achieve
greater independence and mobility," said A. Malachi Mixon, III, chairman and
chief executive officer of Invacare. "Although many details need to be worked
out, we are excited that the Administration understands the benefits of the new
technology, and that it clearly desires more seniors to have access to this
patient-preferred system. At the same time, this technology will save money over
the long term for the Medicare system."
The President's budget proposal is consistent with the Administration's new
payment system for home oxygen that took effect January 1, 2007. The new rule
promotes the provision of new oxygen technology such as Invacare's Homefill
oxygen system with a 9% higher level of reimbursement than older technologies.
At the same time, the Administration's budget proposal does not support
continuation of the policy enacted by the Deficit Reduction Act that requires
seniors to assume ownership and responsibility of oxygen equipment after 36
months. The budget proposal's silence on this issue sends a clear signal to
Congress that the Administration does not oppose reversal of the mandatory
beneficiary ownership provision.
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Invacare was disappointed to see the Administration's budget proposal to
eliminate the first month purchase option for power wheelchairs that
beneficiaries with long-term needs typically exercise. Congress first rejected
this proposal in 2005. We recommend that Congress again reject this proposal and
maintain the current policy of allowing the beneficiary to purchase the
equipment in the first month in order to ensure beneficiary access.
Any specific recommendation in the President's budget would require that
Congress introduce and pass legislation to enact the recommendation.
After commenting on the Administration's budget proposal, Mixon also took the
opportunity to give an update on Invacare's 2007 full year and quarterly
outlook. "We are on track with our internal expectations two months into the
year and expect our results to be consistent with the previously announced full
year guidance issued in our February 1, 2007 press release. We anticipate
earnings declines in the quarter to quarter comparisons in the first half of the
year as we experience the same intense margin pressures as evidenced in our
fourth quarter and little to no organic growth driven by reimbursement impacts
and competitive pricing pressures. Our guidance contemplates $30 million of
pricing declines during the year as we are resolved to maintain market share.
Cost reduction benefits are on track and expected to yield $38 million in
incremental benefit for the year; however, they are heavily weighted to the
second half of the year."
Invacare Corporation (NYSE:IVC), headquartered in Elyria, Ohio, is the global
leader in the manufacture and distribution of innovative home and long-term care
medical products that promote recovery and active lifestyles. The company has
6,000 associates and markets its products in 80 countries around the world. For
more information about the company and its products, visit Invacare's website at
www.invacare.com.
This press release contains forward-looking statements within the meaning of the
"Safe Harbor" provisions of the Private Securities Litigation Reform Act of
1995. Terms such as "will," "should," "plan," "intend," "expect," "continue,"
"forecast", "believe," "anticipate" and "seek," as well as similar comments, are
forward-looking in nature. Actual results and events may differ significantly
from those expressed or anticipated as a result of risks and uncertainties which
include, but are not limited to, the following: possible adverse effects of
being substantially leveraged, which could impact our ability to raise capital,
limit our ability to react to changes in the economy or our industry or expose
us to interest rate risks; changes in government and other third-party payor
reimbursement levels and practices; consolidation of health care customers and
our competitors; ineffective cost reduction and restructuring efforts; inability
to design, manufacture, distribute and achieve market acceptance of new products
with higher functionality and lower costs; extensive government regulation of
our products; lower cost imports; increased freight costs; failure to comply
with regulatory requirements or receive regulatory clearance or approval for our
products or operations in the United States or abroad; potential product
recalls; uncollectible accounts receivable; difficulties in implementing a new
Enterprise Resource Planning system; legal actions or regulatory proceedings and
governmental investigations; product liability claims; inadequate patents or
other intellectual property protection; incorrect assumptions concerning
demographic trends that impact the market for our products; provisions in our
bank credit agreements or other debt instruments that may prevent or delay a
change in control; the loss of the services of our key management and personnel;
decreased availability or increased costs of raw materials could increase our
costs of producing our products; inability to acquire strategic acquisition
candidates because of limited financing alternatives; risks inherent in managing
and operating businesses in many different foreign jurisdictions; exchange rate
fluctuations, as well as the risks described from time to time in Invacare's
reports as filed with the Securities and Exchange Commission. Except to the
extent required by law, we do not undertake and specifically decline any
obligation to review or update any forward-looking statements or to publicly
announce the results of any revisions to any of such statements to reflect
future events or developments or otherwise.
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