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INVACARE CORPORATION REPORTS 27% INCREASE IN EARNINGS PER SHARE AND $45 MILLION IN FREE CASH FLOW FOR ITS THIRD QUARTER

ELYRIA, Ohio – (October 22, 2009) – Invacare Corporation (NYSE: IVC) today announced its financial results for the quarter and nine months ended September 30, 2009.

HIGHLIGHTS FOR THE THIRD QUARTER

Earnings per share on a GAAP basis increased 27% to $0.42 versus $0.33 last year

Adjusted earnings per share(a) increased 24% to $0.52 versus $0.42 last year

Free cash flow(d) of $44.7 million as compared to $15.9 million last year

Organic sales decreased 2.2%

Adjusted EBITDA(e) of $40.1 million

Reduction in debt outstanding of $71.9 million

CONSOLIDATED RESULTS

Earnings per share on a GAAP basis for the third quarter were $0.42 ($13.5 million net earnings) as compared to earnings per share for the same period last year of $0.33 ($10.7 million net earnings). Adjusted earnings per share(a) were $0.52 for the third quarter of 2009 as compared to $0.42 for the third quarter of 2008. Adjusted net earnings(b) for the quarter were $16.7 million versus $13.4 million for the third quarter last year. Adjusted earnings before income taxes(c) for the third quarter were $21.0 million as compared to $17.5 million for the third quarter last year. Adjusted net earnings(b) for the quarter were positively impacted by an improved gross profit, reduced net interest expense and a lower effective tax rate, which were partially offset by reduced volumes, and unfavorable foreign currency translation and transactions.

Net sales for the quarter decreased 6.0% to $434.0 million versus $461.8 million last year. Foreign currency translation decreased net sales by four percentage points while acquisitions increased net sales by less than a percentage point. Organic net sales for the quarter declined 2.2% over the same period last year driven by organic net sales declines in North America/Home Medical Equipment, Asia/Pacific and Institutional Products Group, which were partially offset by an organic net sales increase for Invacare Supply Group.

Gross margin as a percentage of net sales for the third quarter was higher by 1.9 percentage points compared to last year’s third quarter and 1.7 percentage points compared to this year’s second quarter. The margin improvement compared to the prior year in virtually all segments was the result of cost reduction activities, including commodity cost and freight reductions, along with a favorable customer mix toward higher margin customers, which were partially offset by volume declines and currency weakness in Asia Pacific related to purchases of sourced product.

Selling, general and administrative (SG&A) expense decreased 1.7% to $104.3 million in the quarter compared to $106.2 million in the third quarter last year. Foreign currency translation decreased SG&A expense by four percentage points, while acquisitions increased SG&A expense by one percentage point. Excluding foreign currency translation and acquisitions, SG&A expense increased by 1.4% compared to the third quarter of last year, primarily due to an increase to the bad debt reserve, higher distribution costs, stock option expense and unfavorable foreign currency transactions.

Earnings per share on a GAAP basis for the nine months ended September 30, 2009 were $0.74 ($23.5 million net earnings) as compared to earnings per share for the same period last year of $0.57 ($18.3 million net earnings). Adjusted earnings per share(a) were $0.95 for the nine months ended September 30, 2009 as compared to $0.75 for the same period last year. Adjusted net earnings(b) for the first nine months of 2009 were $30.4 million versus $24.0 million last year. Adjusted earnings before income taxes(c) for the first nine months of 2009 were $39.9 million as compared to $34.6 million for the first nine months of last year. Adjusted net earnings(b) for the first nine months of 2009 were positively impacted by cost reduction activities, selective price increases implemented in the second half of 2008, reduced net interest expense and a lower effective tax rate, which were partially offset by volume declines and unfavorable foreign currency translation and transactions.

Net sales for the nine months ended September 30, 2009 decreased 6.1% to $1.24 billion versus $1.33 billion last year. Foreign currency translation decreased net sales by six percentage points while acquisitions increased net sales by less than a percentage point. Organic net sales for the nine months ended September 30, 2009 decreased 0.3% over the same period last year.

A. Malachi Mixon, III, Chairman and Chief Executive Officer, stated, “For the third quarter, the Company delivered a 25% improvement in adjusted net earnings(b), a 1.9 percentage point improvement in the gross margin and approximately $45 million of free cash flow(d). Operating margin continues to improve, while the Company efficiently managed its working capital. Using the free cash flow(d) generated in the quarter along with cash already on its balance sheet, the Company reduced debt by approximately $72 million in the quarter, bringing the Company’s ratio of debt to adjusted EBITDA(e) to 2.6 as of the end of the quarter.”

NORTH AMERICA/HOME MEDICAL EQUIPMENT (NA/HME)

For the quarter ended September 30, 2009, NA/HME net sales decreased 3.2% to $185.1 million compared to $191.2 million in the same period last year, driven by sales decreases in Respiratory and Rehab product lines. Foreign currency translation decreased net sales by less than one percentage point while acquisitions increased net sales by approximately one percentage point. Standard product line net sales for the third quarter increased 2.5% compared to the third quarter of last year, driven by increased volumes in home care beds and low air loss therapy products. Rehab product line net sales decreased by 1.8% compared to the third quarter last year, driven primarily by declines in sales of the Top End® sports wheelchair, custom manual and consumer power product lines. Primarily driven by cash sales, Top End® has been negatively impacted by the economic downturn. Reliant on reimbursement, sales of custom manual wheelchairs have been negatively impacted by coverage rules, such as the State of Ohio’s recent change related to ceasing reimbursement at nursing homes for HME products. Respiratory product line net sales decreased 20.2%, primarily driven by lower sales of HomeFill® oxygen delivery systems, largely due to continued inventory adjustments by some customers.

For the third quarter, NA/HME earnings before income taxes were $9.6 million, excluding restructuring charge adjustments of $0.1 million pre-tax, as compared to earnings before income taxes of $3.6 million last year, excluding restructuring charge adjustments of $0.2 million pre-tax. The increase in earnings before income taxes was primarily the result of cost reduction activities including commodity cost and freight reductions, and a favorable customer mix toward higher margin customers, partially offset by lower volumes.

For the first nine months of 2009, NA/HME net sales increased 1.0% to $559.9 million compared to $554.2 million for the same period last year. Foreign currency translation decreased net sales by approximately one percentage point while acquisitions increased net sales by approximately one percentage point. Earnings before income taxes were $25.2 million, excluding restructuring charges of $0.3 million pre-tax, as compared to earnings before income taxes of $11.0 million last year, excluding restructuring charges of $0.1 million pre-tax. The increase in earnings before income taxes was primarily the result of increased volumes, selective price increases implemented in the second half of 2008, a favorable customer mix toward higher margin customers and cost reduction initiatives.

INVACARE SUPPLY GROUP (ISG)

ISG net sales for the third quarter increased 4.8% to $70.8 million compared to $67.6 million for the same period last year. The net sales increase was primarily in wound care, incontinence and enteral products. In addition, increased home delivery program sales were offset in part by decreased sales to larger providers. Earnings before income taxes for the third quarter increased to $1.6 million, excluding restructuring charges of $0.1 million pre-tax, as compared to $1.3 million last year, excluding restructuring charges of $1.6 million pre-tax, as a result of volume increases, cost reduction initiatives including freight cost reduction programs and reduced discounts associated with lower sales to larger providers.

For the first nine months of 2009, ISG net sales increased 3.7% to $204.7 million compared to $197.4 million for the same period last year. Earnings before income taxes for the first nine months of 2009 increased to $3.5 million, excluding restructuring charges of $0.1 million pre-tax, as compared to $2.1 million last year, excluding restructuring charges of $1.6 million pre-tax, as a result of volume increases, freight cost reduction programs and reduced discounts associated with lower sales to larger providers.

INSTITUTIONAL PRODUCTS GROUP (IPG)

IPG net sales for the third quarter decreased by 10.9% to $23.5 million compared to $26.3 million last year. Foreign currency translation decreased net sales by less than one percentage point. The net sales decrease was largely driven by continued weakness in capital expenditures by nursing home customers, due primarily to budgetary pressures in state Medicaid programs. Earnings before income taxes increased to $3.6 million as compared to $1.7 million last year as a result of cost reduction programs, including commodity and freight costs, partially offset by the unfavorable foreign currency exchange rate movement of the Canadian dollar.

For the first nine months of 2009, IPG net sales decreased 9.8% to $67.5 million compared to $74.8 million for the same period last year. Foreign currency translation decreased net sales by two percentage points. Earnings before income taxes for the first nine months of 2009 increased to $6.9 million, excluding restructuring charges of $0.2 million pre-tax, as compared to $3.1 million last year, excluding restructuring charges of $0.1 million pre-tax, largely as a result of selective price increases implemented in the second half of 2008, freight and other cost reduction programs, partially offset by unfavorable foreign currency exchange rate movement of the Canadian dollar.

EUROPE

For the third quarter, European net sales decreased 11.1% to $134.6 million versus $151.5 million last year. Foreign currency translation decreased net sales by eleven percentage points. Organic net sales for the quarter were basically flat, with sales growth in the U.K. and certain other markets, offset primarily by a sales decline in France, where the sales of beds and wheelchairs into nursing homes continued to weaken as a result of changed funding rules. For the third quarter, earnings before income taxes were $14.2 million, excluding restructuring charges of $1.8 million pre-tax, as compared to $16.0 million last year, excluding restructuring charges of $0.2 million pre-tax. This decrease in earnings is largely attributable to foreign currency impact from the weakness of the British pound as compared to the Euro and the Euro as compared to the U.S. dollar.

For the first nine months of 2009, European net sales decreased 14.9% to $360.2 million compared to $423.5 million for the same period last year. Foreign currency translation decreased net sales by fourteen percentage points. Earnings before income taxes for the first nine months of 2009 decreased to $25.8 million, excluding restructuring charges of $2.4 million pre-tax, as compared to $34.3 million last year, excluding restructuring charges of $1.0 million pre-tax, as a result of lower sales, unfavorable product mix toward lower margin product and unfavorable foreign currency impact from the weakness of the British pound as compared to the Euro and the Euro as compared to the U.S. dollar, partially offset by cost reduction activities including lower commodity costs and freight costs.

ASIA/PACIFIC

For the third quarter, Asia/Pacific net sales decreased 20.4% to $20.1 million versus $25.2 million last year. Foreign currency translation decreased net sales by five percentage points. The sales decline at the Company’s subsidiary which manufactures controllers was largely due to external customers whose demand for inventory remained weak in the current economic environment. The Company’s Australian distribution business had lower sales due in large part to weak demand from long-term care facilities which continue to delay capital purchases. For the quarter ended September 30, 2009, earnings before income taxes were $0.8 million, excluding restructuring charges of $0.4 million pre-tax, as compared to $2.8 million last year, excluding restructuring charges of $0.2 million pre-tax. The decrease in earnings is primarily attributable to volume declines and an unfavorable foreign currency impact due primarily to the strengthening of the U.S. dollar.

For the first nine months of 2009, Asia/Pacific net sales decreased 30.6% to $52.4 million compared to $75.5 million for the same period last year. Foreign currency translation decreased net sales by sixteen percentage points. Earnings before income taxes for the first nine months of 2009 decreased to $1.3 million, excluding restructuring charges of $1.1 million pre-tax, as compared to $7.3 million last year, excluding restructuring charges of $0.5 million pre-tax, primarily as a result of volume declines and unfavorable foreign currency impact due primarily to the strengthening of the U.S. dollar.

FINANCIAL CONDITION

Total debt outstanding (including the debt discount as described below) was $372.8 million at September 30, 2009, as compared to $478.8 million at the end of 2008 and as compared to $508.2 million at September 30, 2008. The Company’s balance sheet reflects the adoption of FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments (FSP APB 14-1). As a result of adopting FSP APB 14-1, the Company recorded a debt discount, which reduced debt and increased equity by $49.4 million as of September 30, 2009, by $52.4 million as of December 31, 2008, and by $53.4 million as of September 30, 2008.

The decrease in debt outstanding of $71.9 million during the quarter was the result of improved cash flow during the quarter and use of cash already on the balance sheet. The Company’s cash and cash equivalents at the end of the quarter were approximately $28.1 million compared to $49.9 million at the end of the second quarter this year and $47.6 million at the end of last year. The Company’s ratio of debt to adjusted EBITDA(e) improved to 2.6 as of September 30, 2009, as compared to 3.3 as of the end of 2008 and 3.5 as of September 30, 2008.

Invacare reported $44.7 million of free cash flow(d) in the third quarter of 2009 as compared to $15.9 million of free cash flow(d) in the third quarter of 2008. The improvement in free cash flow was principally due to improved profitability and better working capital management as accounts receivable collections were higher and accounts payable increased as a result of improved asset management. For the first nine months of 2009, Invacare reported $79.8 million of free cash flow(d) as compared to $3.4 million of free cash flow(d) in the first nine months of 2008.

Days sales outstanding were 54 days at the end of the third quarter of 2009 versus 58 days at the end of last year and 59 days at the end of the third quarter of 2008. Inventory turns were 5.3, improved from 5.1 at the end of last year and 4.9 as of the end of the third quarter of 2008.

OUTLOOK

For the nine months ended September 30, 2009, the Company’s earnings were in line with internal planning on a consolidated basis and ahead of plan on both cash flow and debt repayment. For the fourth quarter, the Company continues to expect improvements from cost reduction activities compared to last year. However, commodity costs have started to rise recently compared to earlier in 2009. Compared to the third quarter, these higher costs will pressure margins in the fourth quarter. Offsetting that impact, foreign currency rates have recently strengthened against the U.S. dollar.

The Company remains more focused on delivering cash flow and operating performance over sales growth, in some cases, limiting business with customers who do not provide an adequate return. Additionally, pricing and reimbursement pressures are expected to continue in certain European markets, particularly in France where funding rules have changed for nursing homes. For the IPG business and the Australian distribution business, delays in purchases by long-term care facilities will likely continue to negatively impact sales growth. In the NA/HME region, organic sales growth in the fourth quarter should improve compared to the third quarter in part due to higher Respiratory product line sales.

With these factors in mind, the Company is providing updated guidance for the 2009 year as follows:

·	Organic net sales change of -1% to 0%, excluding the impact from acquisitions and foreign currency translation adjustments. Previous guidance had been for growth of 2% to 4%.

·	Effective tax rate of 25% on adjusted annual earnings. The Company expects that its effective tax rate will fluctuate depending on the mix of earnings between countries with and without tax valuation allowances.

Adjusted earnings per share(a) of $1.48 to $1.55. Despite projected lower organic sales growth, the earnings range has increased due to cost reduction activities, a weakening U.S. dollar and lower interest expense as the Company has exceeded its expectations on debt reduction so far this year. Previous guidance had been for $1.38 to $1.48.

·	Free cash flow(d) between $95 million and $105 million. Without organic sales growth as originally forecast, the Company has been able to collect cash on its receivables while managing its inventory in the lower demand environment. Previous guidance had been between $50 million and $60 million.

·	Adjusted EBITDA(e) between $140 million and $150 million.

Commenting on the Company’s anticipated performance, Mixon noted that “The Company has delivered nine months of improved earnings, despite a difficult and uncertain reimbursement environment for many of its key markets. For the full year, Invacare projects a solid improvement in adjusted net earnings(b) compared to 2008 and to be at least at the high end of the Company’s original earnings guidance range for 2009. Equally important, the Company’s performance in generating free cash flow(d) has been substantially above expectations, with results for nine months almost double the original guidance for the full year. With strong debt reduction and expanding margins, the Company is focused on delivering improved performance to its shareholders.”

(a) Adjusted earnings per share (EPS) is a non-GAAP financial measure which is defined as net earnings excluding the impact of restructuring charges ($2.2 million and $4.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $1.9 million and $3.3 million pre-tax for the quarter and nine months ended September 30, 2008, respectively), amortization of the convertible debt discount ($1.1 million and $3.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $0.9 million and $2.7 million pre-tax for the quarter and nine months ended September 30, 2008, respectively, recorded in interest expense) and tax valuation allowances, divided by weighted average shares outstanding – assuming dilution. This financial measure is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the Condensed Consolidated Statement of Operations included in this press release.

(b) Adjusted net earnings for the quarter is a non-GAAP financial measure which is defined as net earnings excluding the impact of restructuring charges ($2.2 million and $4.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $1.9 million and $3.3 million pre-tax for the quarter and nine months ended September 30, 2008, respectively), amortization of the convertible debt discount ($1.1 million and $3.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $0.9 million and $2.7 million pre-tax for the quarter and nine months ended September 30, 2008, respectively, recorded in interest expense) and tax valuation allowances. This financial measure is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the Condensed Consolidated Statement of Operations included in this press release.

(c) Adjusted earnings before income taxes is a non-GAAP financial measure which is defined as earnings before income taxes excluding the impact of restructuring charges ($2.2 million and $4.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $1.9 million and $3.3 million pre-tax for the quarter and nine months ended September 30, 2008, respectively), amortization of the convertible debt discount ($1.1 million and $3.1 million pre-tax for the quarter and nine months ended September 30, 2009, respectively, as compared to $0.9 million and $2.7 million pre-tax for the quarter and nine months ended September 30, 2008, respectively, recorded in interest expense). This financial measure is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the Condensed Consolidated Statement of Operations included in this press release.

(d) Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, excluding cash related restructuring activities, less purchases of property and equipment, net of proceeds from sales of property and equipment. This financial measure is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the Condensed Consolidated Balance Sheets included in this press release.

(e) Adjusted EBITDA or Adjusted earnings before interest, taxes, depreciation and amortization is a non-GAAP financial measure which is defined as net earnings excluding the following: interest expense, income taxes, depreciation and amortization, as further adjusted to exclude restructuring charges, amortization of the convertible debt discount (recorded in interest expense), bank fees, and stock option expense. This financial measure is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the Condensed Consolidated Statement of Operations included in this press release.

Invacare Corporation (NYSE:IVC), headquartered in Elyria, Ohio, is the global leader in the manufacture and distribution of innovative home and long-term care medical products that promote recovery and active lifestyles. The Company has 6,000 associates and markets its products in 80 countries around the world. The Company was named to the 2009 Fortune 1000 list (ranking 983) and to the 2009 IndustryWeek U.S. Manufacturing 500 (ranking 393). For more information about the Company and its products, visit Invacare's website at www.invacare.com.

This press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Terms such as “will,” “should,” “could”, “plan,” “intend,” “expect,” “continue,” “forecast,” “believe,” “anticipate” and “seek,” as well as similar comments, are forward-looking in nature. Actual results and events may differ significantly from those expressed or anticipated as a result of risks and uncertainties which include, but are not limited to, the following: possible adverse effects of being substantially leveraged, which could impact our ability to raise capital, limit our ability to react to changes in the economy or our industry or expose us to interest rate or event of default risks; adverse changes in government and other third-party payor reimbursement levels and practices, including any health care reform legislation that may be enacted (such as, for example, recently proposed health care reform legislation contemplating a tax on medical device manufacturers that, if adopted, could have an adverse impact on the Company); consolidation of health care providers and our competitors; loss of key health care providers; ineffective cost reduction and restructuring efforts; inability to design, manufacture, distribute and achieve market acceptance of new products with higher functionality and lower costs; extensive government regulation of our products; lower cost imports; increased freight costs; failure to comply with regulatory requirements or receive regulatory clearance or approval for our products or operations in the United States or abroad; potential product recalls; uncollectible accounts receivable; the uncertain impact on our providers, on our suppliers and on the demand for our products of the recent global economic downturn and general volatility in the credit and stock markets; difficulties in implementing an Enterprise Resource Planning system; legal actions or regulatory proceedings and governmental investigations; product liability claims; inadequate patents or other intellectual property protection; incorrect assumptions concerning demographic trends that impact the market for our products; provisions of Ohio law or in our debt agreements, our shareholder rights plan or our charter documents that may prevent or delay a change in control; the loss of the services of our key management and personnel; decreased availability or increased costs of raw materials which could increase our costs of producing our products; inability to acquire strategic acquisition candidates because of limited financing alternatives; risks inherent in managing and operating businesses in many different foreign jurisdictions; increased security concerns and potential business interruption risks associated with political and/or social unrest in foreign countries where the company’s facilities or assets are located; exchange rate and tax rate fluctuations, as well as the risks described from time to time in Invacare’s reports as filed with the Securities and Exchange Commission. Except to the extent required by law, we do not undertake and specifically decline any obligation to review or update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments or otherwise.

INVACARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share data)	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
Net sales	$	434,031		$	461,836		$	1,244,567		$	1,325,266
Cost of products sold		302,577	*		330,905	*		886,590	*		956,954	*
Gross profit		131,454			130,931			357,977			368,312
Selling, general and administrative expense		104,344			106,181			296,416			308,396
Charge related to restructuring activities		1,857			283			3,757			1,653
Interest expense – net		7,477			9,817			25,020			29,717
Earnings before income taxes		17,776			14,650			32,784			28,546
Income taxes		4,300			3,925			9,250			10,265
Net earnings	$	13,476		$	10,725		$	23,534		$	18,281

Net earnings per share – basic	$	0.42		$	0.34		$	0.74		$	0.57
Weighted average shares outstanding – basic		31,970			31,908			31,945			31,896

Net earnings per share – assuming dilution	$	0.42		$	0.33		$	0.74		$	0.57
Weighted average shares outstanding – assuming dilution		32,004			32,031			31,952			31,977

* Cost of products sold includes inventory markdowns resulting from restructuring of $298 for both the three and nine-month periods ending September 30, 2009, respectively, and $1,598 and $1,669 for the three and nine-month periods ending September 30, 2008, respectively.

INVACARE CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET EARNINGS TO ADJUSTED EBITDA (1)

(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2009		2008		2009		2008
Net earnings	$	13,476	$	10,725	$	23,534	$	18,281
Interest expense		7,760		10,570		26,096		32,060
Income taxes		4,300		3,925		9,250		10,265
Depreciation and amortization		10,027		10,753		29,852		33,305
EBITDA		35,563		35,973		88,732		93,911
Restructuring charges		2,155		1,881		4,055		3,322
Bank fees		903		749		2,885		2,318
Stock option expense		1,528		894		3,310		2,173
Adjusted EBITDA(1)	$	40,149	$	39,497	$	98,982	$	101,724

(1) Adjusted EBITDA or earnings before interest, taxes, depreciation and amortization is a non-GAAP financial measure which is defined as net earnings excluding the following: interest expense, income taxes, depreciation and amortization, as further adjusted to exclude restructuring charges, bank fees, stock option expense, and amortization of the convertible debt discount (recorded in interest expense). It should be noted that the Company’s definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate Adjusted EBITDA in the same manner. We believe that these types of exclusions are also recognized by the industry in which we operate as relevant in computing Adjusted EBITDA as a supplementary non-GAAP financial measure widely used by financial analysts and others in our industry to meaningfully evaluate a company’s future operating performance and cash flow. Moreover, our definition of Adjusted EBITDA as presented herein also may be useful in reflecting certain debt covenant measurements under our senior secured credit facility. In addition to these recognized purposes, we also use EBITDA and Adjusted EBITDA to evaluate our performance.

INVACARE CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET EARNINGS PER SHARE

TO ADJUSTED EARNINGS PER SHARE (2)

(In thousands, except per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2009		2008		2009		2008
Net earnings per share – assuming dilution	$	0.42	$	0.33	$	0.74	$	0.57
Weighted average shares outstanding- assuming dilution		32,004		32,031		31,952		31,977
Net earnings	$	13,476	$	10,725	$	23,534	$	18,281
Income taxes		4,300		3,925		9,250		10,265
Earnings before income taxes		17,776		14,650		32,784		28,546
Restructuring charges		2,155		1,881		4,055		3,322
Amortization of discount on convertible debt		1,050		936		3,062		2,730
Adjusted earnings before income taxes		20,981		17,467		39,901		34,598
Income taxes		4,250		4,070		9,500		10,600
Adjusted net earnings	$	16,731	$	13,397	$	30,401	$	23,998
Weighted average shares outstanding- assuming dilution		32,004		32,031		31,952		31,977
Adjusted earnings per share – assuming dilution(2)	$	0.52	$	0.42	$	0.95	$	0.75

(2) Adjusted Earnings per share (EPS) is a non-GAAP financial measure which is defined as net earnings excluding the impact of restructuring charges, amortization of the convertible debt discount (recorded in interest expense) and tax valuation allowances divided by weighted average shares outstanding – assuming dilution. It should be noted that the Company’s definition of Adjusted EPS may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate Adjusted EPS in the same manner. We believe that these types of exclusions are also recognized by the industry in which we operate as relevant in computing Adjusted EPS as a supplementary non-GAAP financial measure widely used by financial analysts and others in our industry to meaningfully evaluate a company’s operating performance.

Business Segments -The Company operates in five primary business segments: North America / Home Medical Equipment (“HME”), Invacare Supply Group, Institutional Products Group, Europe and Asia/Pacific. The five reportable segments represent operating groups, which offer products to different geographic regions. Intersegment revenue for reportable segments was $32,551,000 and $81,827,000 for the three and nine months ended September 30, 2009 and $27,387,000 and $80,401,000 for the three and nine months ended September 30, 2008, respectively. Effective January 1, 2009, segment earnings before income taxes have been changed to reflect changes in how management currently views earnings before income taxes for the segments. Specifically, Asia/Pacific earnings before income taxes now includes profit on intercompany sales with an offsetting adjustment to All Other and North America/HME now includes a greater allocation of interest expense with an offsetting reduction for Europe. The prior year has been reclassified to conform to the current year presentation. The information by segment is as follows:

(In thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
Revenues from external customers
North America / HME	$	185,072		$	191,218		$	559,851		$	554,162
Invacare Supply Group		70,825			67,604			204,688			197,383
Institutional Products Group		23,462			26,320			67,469			74,794
Europe		134,604			151,478			360,209			423,458
Asia/Pacific		20,068			25,216			52,350			75,469
Consolidated	$	434,031		$	461,836		$	1,244,567		$	1,325,266

Earnings (loss) before income taxes
North America / HME	$	9,679		$	3,720		$	24,986		$	10,905
Invacare Supply Group		1,567			(323	)		3,442			470
Institutional Products Group		3,629			1,654			6,721			3,023
Europe		12,372			15,736			23,393			33,344
Asia/Pacific		468			2,565			131			6,788
All Other		(9,939	)		(8,702	)		(25,889	)		(25,984	)
Consolidated	$	17,776		$	14,650		$	32,784		$	28,546

Restructuring charges before income taxes
North America / HME	$	(80	)	$	(153	)	$	255		$	102
Invacare Supply Group		60			1,598			60			1,598
Institutional Products Group		-			-			171			115
Europe		1,810			213			2,434			996
Asia/Pacific		365			223			1,135			511
Consolidated	$	2,155		$	1,881		$	4,055		$	3,322

Earnings (loss) before income taxes excluding restructuring charges
North America / HME	$	9,599		$	3,567		$	25,241		$	11,007
Invacare Supply Group		1,627			1,275			3,502			2,068
Institutional Products Group		3,629			1,654			6,892			3,138
Europe		14,182			15,949			25,827			34,340
Asia/Pacific		833			2,788			1,266			7,299
All Other		(9,939	)		(8,702	)		(25,889	)		(25,984	)
Consolidated	$	19,931		$	16,531		$	36,839		$	31,868

“All Other” consists of unallocated corporate selling, general and administrative expense, which do not meet the quantitative criteria for determining reportable segments.

INVACARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)	September 30, 2009		December 31, 2008
Current Assets
Cash, cash equivalents and marketable securities	$	28,137	$	47,588
Trade receivables – net		259,223		266,483
Inventories – net		183,426		178,737
Deferred income taxes and other current assets		53,528		58,250
Total Current Assets		524,314		551,058

Other Assets		143,547		145,217
Plant and equipment – net		139,573		143,512
Goodwill		534,365		474,686
Total Assets	$	1,341,799	$	1,314,473

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	135,083	$	119,633
Accrued expenses		128,279		143,612
Accrued income taxes		2,383		3,054
Short-term debt and current maturities of long-term debt		2,800		18,699
Total Current Liabilities		268,545		284,998

Long-Term Debt		320,696		407,707
Other Long-Term Obligations		95,076		88,826

Shareholders’ Equity		657,482		532,942
Total Liabilities and Shareholders’ Equity	$	1,341,799	$	1,314,473

INVACARE CORPORATION AND SUBSIDIARIES

RECONCILIATION FROM NET CASH PROVIDED BY

OPERATING ACTIVITIES TO FREE CASH FLOW (3)

(In thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
Net cash provided by operating activities	$	46,895		$	18,602		$	86,007		$	15,634
Plus:
Net cash impact related to restructuring activities		1,073			653			3,212			2,709
Less:
Purchases of property and equipment, net		(3,268	)		(3,349	)		(9,405	)		(14,949	)
Free Cash Flow	$	44,700		$	15,906		$	79,814		$	3,394

(3) Free cash flow is a non-GAAP financial measure that is comprised of net cash provided by operating activities, excluding net cash impact related to restructuring activities less purchases of property and equipment, net of proceeds from sales of property and equipment. Management believes that this financial measure provides meaningful information for evaluating the overall financial performance of the Company and its ability to repay debt or make future investments (including, for example, acquisitions).

Ohio	001-15103	95-2680965
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No)

One Invacare Way, P.O. Box 4028, Elyria, Ohio 44036
(Address of principal executive offices, including zip code)

(440) 329-6000
(Registrant's telephone number, including area code)

_____________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Exhibit Index

Exhibit Number	Description of Exhibit
99.1	Press Release dated October 22, 2009

	Invacare Corporation

Date: October 22, 2009	By:	/s/ Robert K. Gudbranson
		Name: Robert K. Gudbranson
		Title: Chief Financial Officer