As losses climb and FDA scrutiny persists, Invacare ($IVC) is ditching another business unit, selling its Champion Manufacturing segment for $45 million in order to pay down debt.
Champion makes medical chairs for dialysis procedures, and the business generated $22.1 million last year and $12.8 million in the first half of 2013. Despite that growth, Invacare's mounting debt takes precedence, and CEO Gerald Blouch said the proceeds will help his company strengthen its balance sheet in the face of middling financial performances.
''As we continue to reduce complexity in our business and focus on our core global product lines for the home and long-term care setting, Champion's specialized focus on the domestic medical recliner business for dialysis clinics no longer fits that streamlined portfolio," Blouch said in a statement.
Invacare isn't disclosing Champion's buyer.
The Ohio device manufacturer has been struggling since the FDA hit it with a consent decree over wheelchair manufacturing last year, and Invacare is still working through a series of independent audits to get back in the agency's good graces and back to full capacity.
In its latest update on the process, Invacare said it expects to submit its third and final audit report to the FDA in February, hopeful to restore manufacturing at its Elyria, OH, plant not long after.
Over the past 6 months, Invacare has slashed hundreds of jobs and whittled down its business, in January closing a deal that sent its medical supplies business to AssuraMed for $150.8 million.
Last quarter, Invacare's net loss increased nearly 500% to $9.3 million while net sales slipped 5.4% to $351.8 million.
- read Invacare's statement