The Elyria, Ohio-based maker of home medical products announced last week that the $20 million implementation of Oracle software would cause financial performance to dip below expectations in its fourth quarter.

The reason, detailed when the company released its fourth-quarter earnings guidance, was an 'extensive but temporary' disruption of order-to-cash processes and 'inefficiencies' stemming from the ERP installation in the North American home care product units. As a result, Invacare lowered its estimated earnings per share for the quarter from the previous range of between $0.55 and $0.70 to a range of between $0.30 and $0.40.

The ERP implementation, which replaces a number of homegrown systems, has been under way for several years, a company spokesman said yesterday. Invacare has been using Oracle 11i E-Business Suite financial software for four years and started the next phase of the rollout -- the installation of purchase-to-payable software -- about a year and half ago. After that was in place, Invacare went live with order-to-cash applications. That part of the implementation led to a number of issues, the spokesman said. Call center personnel, for instance, were unable to respond to customer queries in a timely fashion or share with them information about their order status; Invacare also was unable to make shipment deadlines.

'We never expected it to be perfect, but we didn't expect the magnitude of issues we experienced,' said the spokesman, who declined to offer details about what caused the problems. "We're still working with the challenges. We haven't pulled together all the lessons learned yet, but we should have done more testing than we did in everything.'

Invacare has spent additional money on overtime for manufacturing, distribution and customer service operations. It spent extra money to expedite customer orders and had to process a higher-than-normal level of returns. The company now expects to have the problems resolved by the start of 2006.