Invacare Sees Potential in Long-Term Care Equipment Rentals Market

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

As Invacare (NYSE: IVC  ) grapples with what it calls "slowness" in its markets, the medical equipment supplier illustrated with a recent acquisition one market in which it sees potential: rentals to long-term care providers like nursing homes and assisted-living facilities.

The Elyria, Ohio-based company (pdf) announced last week when releasing its third-quarter earnings that it had purchased for $41.5 million California-based Dynamic Medical Systems, which specializes in wound-care and safe-patient-handling products, such as lifts.

The purchase opens up the Western U.S. rentals market to Invacare, which already has a presence in the business in the East, spokeswoman Lara Mahoney said. "This allows us to have nationwide footprint of rental capabilities," she said.

More importantly, though, demand for rentals by long-term care providers could help offset the stagnant economy and weakness in other markets Invacare sells to, such as home health care.

"Uncertainty related to health care reform and slowing health care spending related to difficult economic conditions around the globe are causing an unanticipated slowness in Invacare's markets," CEO Gerald Blouch said in discussing Invacare's third-quarter earnings.

As a result, the company reduced the upper end of its guidance on 2011 adjusted earnings per share. Invacare now expects a range between $2.05 and $2.10, down from its previous estimate of $2.05 to $2.15.

Blough also cited changing market dynamics as a reason for the Dynamic Medical Systems acquisition.

Mahoney wouldn't say whether Invacare anticipates greater near-term growth in the sales or rentals market to long-term care providers. Clearly, though, Invacare wants to be ready when and if there's an upsurge in demand for rentals of products like those sold by Dynamic Medical Systems, such as beds, therapeutic mattresses, bariatric lifts, and patient-transfer products.

"Markets are changing and reimbursements are changing," Mahoney said. "More people like having the option to rent because, without knowing reimbursements, they may not want to [incur] the capital expense of purchasing."

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1582171, ~/Articles/ArticleHandler.aspx, 10/27/2016 5:14:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:02 PM
IVC $9.60 Down -0.50 -4.95%
Invacare CAPS Rating: No stars