Gerald B. Blouch, Invacare president and CEO, says in a release about the company’s first quarter: “While the European business segment continued its strong performance, it was more than offset by the continued impact of the company’s consent decree with the United States Food and Drug Administration (FDA), which limits the company’s ability to manufacture products at its Taylor Street facility in Elyria, Ohio. The ongoing pressure on our higher margin custom power wheelchair sales outside of Europe, combined with a lack of significant new product introductions, were primary drivers in our first quarter financial results of adjusted loss per share of $0.49 compared to adjusted loss per share of $0.41 in the first quarter of 2013. Organic net sales in the first quarter declined by 7.2% compared to the same period last year. These factors resulted in free cash flow for the quarter of negative $8.7 million compared to free cash flow of negative $36.1 million in the first quarter of last year.”

Regarding the status of the company’s consent decree with the FDA, Blouch continued, ”We are continuing our work with the third-party expert auditor, as it proceeds with the final certification audit process. This audit is the most comprehensive and challenging of the three third-party certification audits, and it encompasses all areas of our corporate and Taylor Street quality system, including the two areas where the third-party expert had previously indicated more work was required. We respect the comprehensive nature of the audit process and are working diligently with the third-party expert auditor with the ultimate goal of demonstrating our compliance to the FDA.”

The consent decree at the corporate and Taylor Street facilities in Elyria requires that a third-party expert perform three separate certification audits. In order to resume full operations, the third-party certification audit reports must be submitted to the FDA for review and acceptance. The company has already received the FDA’s acceptance of two of the three certification reports, and the final third-party certification is in progress.

For the first quarter of 2014, European net sales increased 3.7% to $142.8 million versus $137.6 million for the first quarter of last year. Organic net sales for the quarter increased 1.4% primarily related to increases in net sales of mobility and seating and lifestyle products, which were partially offset by declines in respiratory products. For the first quarter, earnings before income taxes increased to $9.6 million, excluding restructuring charges of $0.4 million, as compared to $6.0 million last year, excluding restructuring charges of $0.1 million. The increase in earnings before income taxes was largely attributable to volume increases, favorable product mix, favorable product costs, and decreased SG&A expenses primarily attributable to favorable foreign currency transactions as compared to last year.