Despite fourth-quarter results that missed Wall Street projections and signaled increased losses, Invacare (NYSE:IVC) shares saw a sizeable bump on the markets today amid predictions of modest 2020 sales growth.
IVC Shares were up 14.5% at $8.67 per share in mid-afternoon trading.
The Elyria, Ohio-based company posted losses of -$18.7 million, or -56¢ per share, on sales of $232.9 million for the three months ended Dec. 31, 2019, for a bottom-line slide of more than $17 million on a sales decline of 4.8%.
Adjusted to exclude one-time items, losses per share were -28¢, 15¢ behind Wall Street, where analysts were looking for sales of $241.3 million.
“While I am encouraged by our continued progress, we didn’t achieve everything we had set out to do in 2019, as net sales growth fell short of our expectations,” chairman, president & CEO Matt Monaghan said in a news release. “To reach our full potential, we know we need profitable sales growth in 2020 and have many actions underway to do that.”
Actions this year include European and North American product launches in all categories — and salesforce and demonstration equipment advances.
Monaghan in an earnings call today described the new products as “top of the line in terms of performance and capabilities, modern aesthetics and the kinematics that help the occupant move very smoothly and seamlessly.” He was especially enthusiastic about Invacare’s standing system — cleared in the third quarter — which allows a person to move in a nearly vertical standing position, enabling them better interact with people as well as maintain bone and cardiovascular strength.
Invacare said it is maintaining its prior sales guidance for a run-rate adjusted EBITDA between $85-$105 million, with constant currency sales growth of 2–4%.
In November 2018, Invacare laid off 50 workers in Europe and followed that by laying off a further 75 in the U.S. and Europe in June 2019. In November 2019, the company also announced its plan to close its Porta Westfalica, Germany production and distribution facility at the end of 2020. Invacare expects the German plans consolidation to save the company $5.3 million a year before taxes.