Invacare — Investor Presentation (June 2011)
34 slides from Invacare's investor presentation, June 2011
Slide 1: 2011 Investor Presentation
Invacare Corporation (NYSE: IVC) 2011 Investor Presentation 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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,” “could”, “plan,” “intend,” “expect,” “continue,” “forecast,” “believe,” “anticipate
Slide 3: World's Largest Manufacturer and Distributor of Home Medical Equipment
World’s Largest Manufacturer and Distributor of Home Medical Equipment $1.7 billion company (NYSE: IVC) selling to over 25,000 home healthcare and medical equipment providers worldwide. Five primary product groups: Rehab Products Standard Products Respiratory Products Medical Supplies
Slide 4: One-Stop Shopping
One-Stop Shopping Sales by Product – (12/31/10) Continuing Care / Other Standard 9% 36% Rehab 30% Medical Supplies Respiratory 17% 8% 4
Slide 5: Industry Leading Worldwide Market Positions
Industry Leading Worldwide Market Positions We are the #1 player in most product lines Handi- Res- Invacare Sunrise* DeVilbiss* Pride* Drive* Medline* care* Permobil* pironics Powered Mobility #1 #2 (excluding scooters) Manual Mobility #1 #2 (active) Manual Mobility #1 (low-active) Personal Care #
Slide 6: Geographically Diverse
Geographically Diverse Sales & Earnings Before Taxes by Geography - (12/31/10) Europe 29% of Sales 33% of EBT North America 66% of Sales 61% of EBT Asia / Pacific 5% of Sales 6% of EBT Based on 2010 segment data as reported in February 3, 2011 earnings release. EBT excludes unallocated corporate SG&
Slide 7: Global Product Innovator
Global Product Innovator Invacare® Solo2® Invacare® XPO2™ Portable Transportable Oxygen Invacare® HomeFill® Oxygen Concentrator Concentrator System with Perfecto2® Oxygen Concentrator and M2 Cylinder Invacare® Action™ Manual Wheelchair Invacare® FDX® (Introducing this chair as the Power Wheelchair 7
Slide 8: Expanding Opportunities - Services
Expanding Opportunities - Services Invacare Corporation now offers services to help U.S. home and long-term care providers respond to the challenges associated with accreditation, escalating operating costs and changes in Medicare reimbursement. Invacare Rentals Short term renting of products such
Slide 9: Focus – Near Term Objectives
Focus – Near Term Objectives Improve profitability and report adjusted EPS in 2011 of $2.05 - $2.15 (2) (1) In 2011, approximately 3% - 4% organic net sales growth Reduce cost by continuing to rationalize product complexity in the supply chain (1) All guidance constitutes forward-looking state
Slide 10: Historic Results & 2011 Financial Objectives
Historic Results & 2011 Financial Objectives 2008 Result 2009 Result 2010 Result 2011 Guidance(1) Organic Growth 7% -0.2% 1% 3% - 4% Adjusted EPS(2): Target / Actual $1.35(3) $1.58(3) $1.84(3) $2.05 - $2.15 21% 17% 16% 11% - 17% % Incr. vs Prior Year Free Cash Flow(2) $60 million $142 million $105 m
Slide 11: Focus - Long Term Objectives
Focus - Long Term Objectives Return to 4 – 5% Organic Net Sales Growth Expand our core business – Maximize existing product categories within existing geographies. Increase spending in research and development through glocalization reinvestment. Explore new business opportunities beyond our tr
Slide 12: Globalization - Timeline
Globalization - Timeline Achieve $100 Million 2015 Execute 2011 - 2014 Realign 2010 Over the course of the five year Visioning program, where does the $100 million 2009 benefit come from? Grow the Core Cost Out Operational & Lean 12 SG&A
Slide 13: Globalization - Transformation Cycle
Globalization - Transformation Cycle Product Engineering Commercial Operations Supply Chain Local Global 2009 2014 13
Slide 14: Investment Highlights
Investment Highlights Invacare is a well positioned company … Industry leading market positions Strong brand reputation with superior and innovative products Complete range of home healthcare products Strong sales and marketing coverage without major exposure to single customer Geographica
Slide 15: Appendix A: Innovative Products
Appendix A: Innovative Products 15
Slide 16: Evolution of Portable Oxygen
Evolution of Portable Oxygen When a consumer wanted to be active and needed oxygen, they had to resort to e-tanks that are large, bulky and had to be pulled behind them. Providers had a large inventory of tanks that they kept in their warehouse and had to deliver weekly to oxygen patients. New porta
Slide 17: Invacare HomeFill Oxygen System and Perfecto2 Concentrator
Invacare® HomeFill® Oxygen System and Invacare® Perfecto2™ Concentrator ® HomeFill Oxygen System HomeFill oxygen system has substantial share of transfilling segment, but only 18% (approximately) penetration to date By the end of 2010, have sold over 180,000 HomeFill systems Perfecto2™ Oxygen Co
Slide 18: Invacare XPO2 Portable Concentrator
Invacare® XPO2™ Portable Concentrator Weighs six pounds Quiet, simple operation Contemporary, non-medical look Exclusive, long life compressor and patent-pending, integrated conserver are designed to provide pulse dose delivery of oxygen Dimensions 10”H x 7”W x 4”D FAA Approved 18
Slide 19: Invacare Solo2 Transportable Oxygen Concentrator
Invacare® Solo2™ Transportable Oxygen Concentrator Continuous flow at 1-3 LPM Pulse dose at settings 1-5 Runs on AC, DC or battery power Small, quiet and reliable Gives patients the freedom to go just about anywhere without the fear of running out of oxygen FAA Approved 19
Slide 20: New Product: Invacare FDX
New Product: Invacare® FDX® Front-Wheel Drive Power Chair First global power wheelchair platform from Invacare. Front-wheel drive power wheelchair Features G-trac™ Electronic Gyroscope Module (keeps chairs on straight path when encountering rough terrain) Features MK6i™ electronics color dis
Slide 21: Appendix B: Home Care Industry Overview
Appendix B: Home Care Industry Overview 21
Slide 22: Positive Demographic Trends Driving Home Care
Positive Demographic Trends Driving Home Care The durable medical equipment (“DME”) industry will continue to experience favorable demographics due to the aging of the U.S. population The number of Americans aged 65 or older is expected to increase to approximately 40 million by 2010, approximat
Slide 23: Home Health Saves Medicare Billions
Home Health Saves Medicare Billions Patients with at least one chronic disease (diabetes, COPD, or congestive heart failure) who used home health care within three months of being discharged from a hospital saved Medicare $1.7 billion over a two-year period. In addition, these patients had 24,00
Slide 24: Long-Term Growth In DME Expenditures In U.S.
Long-Term Growth In DME Expenditures In U.S. The healthcare industry in the U.S. is a large, growing segment of the economy, and the DME sector represents a significant sub-segment of this industry According to the CMS, national health spending increased from 9.1% of GDP, or $255 billion, in 198
Slide 25: Benefits Of Home Care
Benefits Of Home Care Home care is a major part of the solution to rising costs of Medicare and Medicaid Patients U.S. Veterans Administration - Portland, OR : “Project at Home” Prefer 75% of eligible patients chose to receive treatment at home versus Home hospital admission Care Vermont has i
Slide 26: Appendix C: Historical Financial Review
Appendix C: Historical Financial Review 26
Slide 27: 2010 Performance Versus Guidance
2010 Performance Versus Guidance 2010 Guidance in 2010 Jan 2010 Actual Result Organic Growth 1% - 3% 1% Met (1) (2) Adjusted EPS $1.70 to $1.80 $1.84 Exceeded (1) (2) Free Cash Flow $65 - $75 million $105 million Exceeded (1) Adjusted EPS and Free Cash Flow are non-GAAP financial measures as defined
Slide 28: Historical Revenues And EPS
Historical Revenues And EPS (1) Historical Revenue Historical Adjusted EPS $2,000 $2.50 $2.33 $1,755.7 $1,800 $1,693.1 $1,722.1 $1,602.2 $1,529.7 $1,498.0 $1,600 $2.00 $1.84 $1,403.3 $1,400 $1.66 $1.58 $1,200 $1.50 $1.35 $1.18 (2) $1.12 $1,000 $800 $1.00 $600 $400 $0.50 $200 $0 $0.00 2004 2005 2006
Slide 29: Appendix D: Reimbursement & Government Issues
Appendix D: Reimbursement & Government Issues 29
Slide 30: U.S. Reimbursement Changes
U.S. Reimbursement Changes National Competitive Bidding – home medical equipment providers bid on product categories. CMS chooses the winners, who may then continue to bill Medicare for their services. “Winners” do not actually win business. In 2009, bidders in nine metropolitan areas bid severa
Slide 31: U.S. Healthcare Reform
U.S. Healthcare Reform The U.S. Health Care Reform bill includes a new tax on U.S. sales of medical device manufacturers or importers, such as Invacare: The law would impose a yearly 2.3% sales-based or excise tax on medical device manufacturers or importers starting January 1, 2013. Tax appli
Slide 32: FDA Warning Letter in Sanford, Florida
FDA Warning Letter in Sanford, Florida On December 21, 2011, Invacare received a warning letter following an inspection of its Sanford, Florida facility. Invacare is taking the situation very seriously, and is addressing all of the FDA’s concerns. The Company has assembled a team of internal qua
Slide 33: European Reimbursement Changes
European Reimbursement Changes In general, Invacare is not aware of any legislative plans by local governments to cut reimbursement to home medical equipment due to austerity measures. Germany Public insurance companies are required to pursue competitive bidding. New Health Funds were put in
Slide 34: European Reimbursement Changes
European Reimbursement Changes France As of August 2008, French social security started giving a flat fee to nursing homes to provide all necessary services to the patients in their facilities. Beforehand, each patient was given a new bed, wheelchair or lifter when they were admitted. Now nursin