Invacare : Lytham Partners Conference – 10.7.20

C O R P O R A T I O N

Presentation (NYSE: IVC)

Lytham Partners Conference

c t o b e r 7 , 2 0 2 0

I N V A C A R E

I N V A C A R E C O R P O R A T I O N

This presentation contains forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that describe future outcomes or expectations that are usually identified by words such as "will," "should," "could," "plan," "intend," "expect," "continue," "forecast," "believe," and "anticipate" and include, for example, any statement made regarding the company's future results. Actual results may differ materially as a result of various risks and uncertainties, including those expressed in the cautionary statement in the company's earnings press release for the second quarter 2020 posted on www.invacare.com/investorrelations, as well as in the company's annual reports on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. The company may not be able to predict and may have little or no control over many factors or events that may influence its future results and, except as required by law, shall have no obligation to update any forward-looking statements.

Financial results presented are as of June 30, 2020, unless otherwise noted.

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

ABOUT US

Headquartered in Elyria, OH (outside of Cleveland), Invacare is proudly celebrating its 40th year of providing clinically complex medical devices and solutions which Make Life's Experiences Possible

As of June 30, 2020, the company had TTM revenue of $883M and 3,600 associates worldwide

The company primarily targets western-based reimbursement geographies in Europe, North America and Asia Pacific

WHAT WE DO

Invacare is a leading manufacturer and distributor in its markets for medical equipment used in non-acute care settings

The company's durable medical devices and solutions are designed for congenital, acquired, degenerative,

conditions that help people to move, breathe, rest and perform essential hygiene for 24-hours of care

Invacare sells its products to private and government medical equipment providers and residential care providers

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I O N

Solutions Across The Continuum Of Care

Providing essential clinical solutions for broad range of conditions

Solution Areas (24-Hours of Care)

C O R P O R A T

Move

Custom power and manual wheelchairs and custom seating

• Alternative drive controls and touch-screen technology
• Informatics

Rest

Home care and long-term care beds and therapeutic support surfaces

• Pressure relief for wound healing and prevention
• Continued pressure monitoring

	Breathe	Hygiene
Respiratory therapy products	Safe patient handling and hygiene
▪	Stationary and portable	▪ Patient transfer and bathing
	oxygen concentrators	equipment ensures resident and
▪	HomeFill® Oxygen systems	caregiver safety
		▪ Daily hygiene products

I N V A C A R E

Conditions	Congenital	Acquired	Degenerative
		Stroke	Multiple Sclerosis
	Cerebral Palsy	Spinal Cord Injury	ALS
	Muscular Dystrophy	Traumatic Brain Injury	COPD
	Spina Bifida	Post Acute Recovery	Bariatric
		Pressure Ulcers	Age Related
Settings
High Acuity		Invacare provides solutions outside high acuity settings	Low Acuity

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Reported Net Sales *

ON		$450		$883
	$414
I		$400		Million*
T		$366
A		$350
O R
	$300
O R P	millions)	$250
$200
C	(in
E		$150
A R		$100	$78
C		$50
A			$25
V		$0
N
	Lifestyles	Mobility & Respiratory	Other
I
		Seating

* TTM sales as of June 30, 2020

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Broad Product Line with High Clinical Value

Lifestyles

Globally focused on home healthcare and post-acute care, including aids for daily living, walking aids, lifts, wheelchairs, beds and surfaces

Mobility & Seating

Custom power and custom manual wheelchairs, seating and positioning, and power add-ons

Respiratory

Stationary concentrators and ambulatory oxygen such as portable concentrators and refilling devices for portable tanks

Other

Services and rentals

C O R P O R A T I O N

Strong Global Presence

$497M

$346M

Europe (56%)*

North America (39%)*

$40M

Asia Pacific (5%)*

I N V A C A R E

Primarily single payor reimbursement systems which appreciate durable medical equipment and total lowest cost of ownership

Key markets focused on Western Europe: France, Germany, UK, Benelux and the Nordic countries with a smaller presence in southern Europe

Manufacturing facilities in Germany, France, Portugal, UK and Sweden

* TTM sales as of June 30, 2020

Primarily sell to durable medical equipment providers, equipment fleet owners, residential care facilities and government agencies

Manufacturing facilities in the U.S., Mexico and Canada

Primarily target western-based reimbursement countries, such as Australia and New Zealand

Sales and distribution facilities in Australia, New Zealand and Thailand

Invacare Presentation - Lytham Partners Conference: October 7, 2020

COVID-19 Business Dynamics

Driving Two Patterns of Demand; Phasing of Peak and Return with Recovery

I N V A C A R E C O R P O R A T I O N

Anatomy of Impact

Early ramp in Respiratory and Bed demand to support COVID-19 care

demand
normal%	2Q20

Elevated Respiratory demand continues

Past COVID-19 bed peak offset by limited long- term care access

time

Mobility & Seating past bottom as clinic / healthcare access returns

Respiratory and Beds/Lifestyles

• Strong demand for stationary oxygen concentrators for COVID-19 response; began in late 1Q20 and continues today
• Smaller peak for bed systems - initial strong demand for expanded medical facilities and post-discharge home care offset by lower demand from limited access to residential care facilities and lower demand for post-elective surgery care. 2Q20 COVID-19 peak has passed; residential care facility access and elective procedures expected to resume
• Timing of return to more normal sales rates TBD based on course of pandemic

Mobility & Seating

• Good momentum in 1Q20 driven by power mobility products with new product growth and improved commercial effectiveness
• Limited access to clinicians from late-1Q20 for custom fitting reduced sales
• Order volume expected to increase as access to clinicians enables custom fittings and deliveries

All Products

NB - For illustrative purposes only; not drawn to scale

• Overall, higher value sales mix due to lower demand of low acuity products and elective procedures, which were delayed due to public health measures

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Second Quarter 2020 Financial Highlights

I N V A C A R E C O R P O R A T I O N

Operating Loss

Improved $2.3 million due to:

• Reduced SG&A expenses
• Higher gross margin of 130 basis points partially offset by higher restructuring costs
• North America returned to profitability, generating $4.8 million of operating income

2Q19 2Q20

$0.0

($1.0)

($2.0)

($2.2)

($3.0)+50%

($4.0)

($5.0)($4.5)

Adjusted EBITDA

Improved $3.0 million driven by:

• $8.8 million reduction in constant currency SG&A expenses
• Partially offset by lower total sales and gross profit
• Favorable sales mix of higher acuity products

$8.0

$6.6

$6.0

+84%

$4.0$3.6

$2.0

$0.0

2Q19 2Q20

Free Cash Flow

Decreased by $2.1 million due to:

• Increased capital expenditures
• Higher inventory partially offset by higher A/P and payment deferrals

2Q19 2Q20

$1.0

$0.3

$0.0

($1.0)

($2.0)

($1.9)

Transformation initiatives and strong cost containment measures drive improved profitability

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

COVID-19: Financial and Operating Assumptions

Revenue

• Sequential increase in consolidated net sales in 2020, staying lower than prior year
• Europe expected to recover more slowly than the U.S. due to more stringent public healthcare restrictions
• Mobility & seating impacted by limited access to healthcare facilities, expected to begin recovery with the resumption of elective care
• Elevated demand for respiratory products related to the pandemic

Expenses & Margins

• Gross margins expected to be impacted as product mix returns to more normalized levels
• Operational and cost management actions implemented to mitigate margin dilution:
• • Limiting the number of product models being sold to improve manufacturing efficiency
  • Implemented salary reductions for senior executives and the Board of Directors
  • Added temporary surcharges on certain orders to mitigate increase from expediting materials
  • Reducing discretionary spending

Balance Sheet & Cash

• Preemptively borrowed under the bank credit facility
• Accessed government-based loans and other programs which bolster short-term liquidity, including loans and temporary delays of direct and indirect tax payments
• Extended a significant portion of convertible debt maturing in 2021 and 2022, to 2024

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

Initiatives Accelerating Our Transformation

Award winning clinical solutions and full product pipeline:

• Launched center-wheel and front-wheel drive standing positioning system with clinical and social benefits of vertical positioning, including pediatric standing system
• First wirelessly remote-controlled portable oxygen concentrator
• First with hydroforming technology that allows production of manual wheelchairs with significantly higher performance without increased weight
• Invacare Ampla Action bariatric wheelchair - winner of the Red Dot Award: Product Design 2019, Platinum A'Design Award, and German Design Award 2020

Operational improvements to expand margins and accelerate profitability:

• Benefit of expanded gross profit from plant consolidations in France
• Implementing plant consolidations in German facilities to be completed in late 2020
• Achieved significant improvement in material and freight costs through proactive supply chain actions

Partnership with Birlasoft Solutions to modernize business with flexible IT systems to:

• Drive operational efficiencies
• Improve our customers' experience
• Generate substantial cost savings

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Track Record of Optimization

Aligning footprint with new commercial strategy and sales level

C A R E C O R P O R A T I O N

Oct 31

Headcount

reduction

Jan 31

Kirkland, Ontario

manufacturing

facility closure;

Headcount

reduction

Dec 1

Dallas, Texas

May 30

DC closure

Aug 1

Cranberry, NJ

Headcount

DC Closure

reduction

2016

2017

Jun 26

Suzhou, China manufacturing facility closure announced

				Jan 31
				Headcount
				reduction
							2Q18
						Dio, Sweden
Dec 7
Headcount					wheelchair
reduction					production
							transfer
							completed

2018

4Q18

Headcount reduction

1Q19

Küschall Switzerland wheelchair production transfer completed

2019

Apr 30

Atlanta DC

Closure

Dec

Announced

German

plant

consolidation

2Q19

Headcount reduction

2020

I N V A

Jul 2
		Sep 30
Invacare Rentals
	Garden City Medical
divestiture
	divestiture
Annualized revenue
	Annualized revenue $36.4M
$28.8M at 2015 run
	at 2016 run rate
rate

$39 million in cost optimization actions executed from 2017 to date

Mar 7

Dynamic Controls divestiture Annualized revenue $17.2M

at 2019 run rate

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

Innovation Pipeline

Supporting sales growth with frequent introduction of clinically innovative solutions

Aug

Invacare® TDX® SP2 w/

LiNX® technology

Rovi® X3 with gyro and high-speed motors

Top End® EliminatorTM

May

Feb

Invacare® Top End®

NRG Racing Chair

SMOOV

Preliminator racing

One™ Power

wheelchair

May

Add On

May

E-pilot P15

Power Add

Cruise Mode

on Alber®

On

Mar

Twion® power

Invacare®

Sep

Orion

assist device

Invacare®

and Comet

Action® manual

Scooters

wheelchairs

2017

2019

2018

Apr

Jan

Invacare

Bed

Stand Assist

Oct

Sep

safety

Ocean Ergo

and

Enhanced

hygiene

Platinum®

Commode

May

May

products

Mobile®

chair

May

Birdie Evo

Birdie Evo

Outcomes by

concentrator

Xplus Lifter

Lifter

DesignTM

with

post-acute

Connectivity

NordBed

solutions

Rehab (Mobility and

Seating)

Post Acute Care (Lifestyle)

Respiratory

				Mar
				AVIVA FX /
				AVIVA RX
			Power
Sep
				Wheelchairs
MPS Maxx
Modular Power
Standing System					Apr
						MPS Mini
						Maxx
						Standing
						System

2020

Sep

Platinum®

Mobile® concentrator with remote control functionality

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Award Winning Mobility & Seating Products

I N V A C A R E C O R P O R A T I O N

MPS Maxx Modular Power

Standing System and Mini Maxx

• Innovative center-wheel drive powerchair with clinical and social benefits of vertical positioning
• Fits fully within Group 3 reimbursement in the U.S.

AVIVA FX (U.S.) and

AVIVA RX (Europe)

• Advanced seating and positioning systems
• Unique suspension systems resulting in a smooth stable ride
• Standing capabilities on FWD platform

Smoov one™

Power Assist

• Easy mounting to manual wheelchairs
• Small, lightweight, easy to travel with
• 6.2 mph top speed, 12.4 mile range and supports up to 309 lbs.
• Ergonomic user interface
• Connectivity app

Invacare Presentation - Lytham Partners Conference: October 7, 2020

Innovative Lifestyles Products

For home healthcare and long-term care settings

I N V A C A R E C O R P O R A T I O N

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

Transformation Highlights

We are transforming to regain market leadership

We have a clear roadmap to further enhance

Key	and simplify our operations

Takeaways

We have a strong pipeline of innovative products coming to market

Our financial performance is improving as a result of these initiatives

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

Thank You

Q&A

Invacare Presentation - Lytham Partners Conference: October 7, 2020

I N V A C A R E C O R P O R A T I O N

Convertible Debt Summary

Terms	2021	2022	2024 Series I	2024 Series II	Total
Amount (as of Sep 9, 2020)	$3.8M	$81.5M	$72.9M	$73.9M	$232.0M
Maturity date	Feb 15, 2021	Jun 1, 2022	Nov 15, 2024	Nov 15, 2024	--
Interest rate	5.0%	4.5%	5.0%	5.0%	4.8%
Conversion price	$16.65	$16.23	$14.78	$14.78	--
Soft call price	--	--	$19.21	$19.21	--
Contingent conversion price *	$21.65	$21.10	--	--	--
Warrant price	$22.42	$21.44	--	--	--
Maximum debt accretion**	--	--	--	$16.6M
Convertible debt quote at 9/30/20	100.3	87.3	83.4	89.4	--
Potential share dilution (in millions)***:
IVC stock at $10	0.00	0.00	0.00	0.00	0.00
IVC stock at $15	0.00	0.00	0.07	0.07	0.14
IVC stock at $20	0.00	0.00	1.29	1.31	2.60

*Price at which share dilution can occur

• The additional accretion is only payable in cash by Invacare if bond holders do not convert at or prior to the maturity date
• Based on 34.4 million shares outstanding as of 6/30/20 and assuming net share settlement

Invacare Presentation - Lytham Partners Conference: October 7, 2020