Invacare Lowers ’05 Expectations

Invacare Lowers ’05 Expectations

Elyria, Ohio

Invacare has lowered its earnings per share guidance for 2005, citing Medicare reimbursement policies for power wheelchairs and slower purchasing by home care providers who are preparing for the year’s FEHBP-based reimbursement cuts.

CMS’ decision to postpone releasing new guidelines for power wheelchairs – originally expected to be out by the fourth quarter of 2004 – is partly to blame, the company said in a recent earnings summary. The guidelines may not be released until late this year.

Given these trends, combined with the confusion likely to result from Medicare’s plan to expand coding of the power wheelchair reimbursement from four codes to up to 40 codes, the company lowered its expected earnings for 2005 from $3 to $3.15 per share to $2.75 to $2.90.

In response to these trends, Invacare said it is working to improve the benefits from internal productivity programs and from the acquisition of European-based WP Domus GmbH. To lower costs further, the company said it plans to move additional production to China, including the manufacture of power wheelchair bases.

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