Invacare Corporation (NYSE:IVC) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 08:30 am ET

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Invacare Corporation (NYSE:IVC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the InvoCare Third Quarter 2019 Conference Call and Webcast. After the management overview, we will be -- we will open the call to questions. Investors and analysts interested in asking a question will need to dial in as questions cannot be submitted via the webcast. For the first part of the call, all phone lines have been placed on mute. The conference is being recorded today, Thursday, November 7, 2019. And I would now like to turn the call over to Lois Lee, InvoCare's Director of Treasury and Investor Relations.

Executive
Lois Lee

Thank you, Savannah. Joining me on today's call from Invacare are Matt Monaghan, Chairman, President and Chief Executive Officer and Kathy Leneghan, Senior Vice President and Chief Financial Officer. Today, we will be reviewing our third quarter 2019 financial results and providing investors with an update on our transformation. To help investors follow along, we have created slides to accompany this webcast. For those dialing in, you can find a link to our webcast slide presentation at invacare.com/investorrelations. Further information can be found in our SEC filings.

Before Matt begins, I'd like to note that during today's call, we may make forward-looking statements about the company that by their nature, address matters that are uncertain. Actual future results may differ materially from those expressed in our statements today due to various uncertainties. And I refer you to the cautionary statements included in the second page of our webcast slide and in our third quarter earnings release. For an explanation of items on today's call that are considered to be non-GAAP financial information such as constant currency net sales, constant currency SG&A, free cash flow, adjusted EBITDA, and adjusted net loss, please see the notes in the appendix of our webcast slide and related reconciliations in the earnings release posted on our website.

I will now turn the call over to Matt Monaghan.

Executive
Matthew Monaghan

Thank you, Lois, and good morning. In the third quarter, we continue to make significant progress in our transformation plan. Our operating and financial results this quarter keep us on track to meet our annual 2019 and our long-term 2020 goal.

On slide 4, you'll see we achieved significant improvement in key financial performance metrics over the prior year. The company delivered consolidated operating income of $2.4 million in the quarter, an improvement of $7.7 million compared to last year, driven by a $9.6 million improvement in North America. Consolidated adjusted EBITDA increased significantly to $9.6 million, an improvement of $8.5 million or close to 800%. Stronger profitability was driven by reduced SG&A expenses and higher gross profit, despite unfavorable foreign exchange and the impact of tariffs.

Constant currency net sales, excluding respiratory, were up sequentially as expected and essentially flat over prior year as we prioritized margin. And in respiratory with lower sales, we again delivered higher margin. Importantly, revenue and profit for power mobility products grew globally as we continue to focus on providing