Invacare Corporation Provides Business Update and Revised Financial Guidance

Invacare Corporation (NYSE:IVC) (“Invacare” or the “company”) will participate today in the 19^th Annual Morgan Stanley Global Healthcare Conference with management available for 1x1 meetings with interested investors.

Third Quarter 2021 Update

Providing an update on the current business environment, Matt Monaghan, chairman, president and chief executive officer stated, “We are pleased to see increased customer activity as the world adapts to varying degrees of recovery from COVID-19. As we work to meet demand, the challenges related to labor, material and freight, which are affecting both our business and a wide variety of industries, are moderating our near-term outlook for revenue growth. We think it is prudent to update our investors on the measures we are taking to address these headwinds and on our sustained positive outlook for our business.

When we reconfirmed full-year guidance at the end of 2Q21, we had assumed an improvement in external factors which have not materialized as expected. These included moderation on cost and availability of freight and labor, which would have enabled us to capitalize on reducing backlog and generating higher revenue growth for the third quarter. In the short-term, we expect to maintain elevated levels of inventory and incur higher conversion costs. Management is working with customers on price increases as appropriate to defray significantly higher input costs; however, the benefit of those actions will not be realized until 4Q21.”

As a result of these near-term challenges, the company anticipates third quarter 2021 results in the following ranges:

Third Quarter 2021 Guidance

• Constant currency net sales^(a) of 0% to growth of 4% year-over-year.
• Adjusted EBITDA^(b) in the range of $6 to $9 million; and,
• Free cash flow^(c) usage of $4 to $7 million.

Fourth Quarter 2021 Update

Monaghan continued, “It is difficult to determine exactly when the pandemic-induced global supply chain turmoil will stabilize. However, we expect 4Q21 to improve sequentially from the third quarter, albeit more gradually than initially anticipated. Increases in our workforce at key locations to improve throughput, as well as an increase in the number of freight carriers to expedite order delivery, should reduce our currently elevated backlog, driving revenue growth and adjusted EBITDA improvement. We continue to take actions to repurpose our resources as necessary to focus on products with high demand. We expect cash flow will also improve materially compared to the third quarter, driven by improved profitability and reduced working capital. However, we anticipate inventory will remain elevated to mitigate continued supply chain challenges expected through year-end. During this period, we also expect higher receivables from increased sales.”