Company Website:
http://www.invacare.com
ELYRIA, Ohio -- (Business Wire)
Invacare Corporation (NYSE: IVC) today announced its financial results
for the quarter and year ended December 31, 2013.
Except for free cash flow(a), the financial information for
all periods excludes the results of discontinued operations.
Discontinued operations include Invacare Supply Group, Inc., the
Company's former domestic medical supplies business that was divested on
January 18, 2013 and Champion Manufacturing, Inc., the Company's former
domestic medical recliner business for dialysis clinics that was
divested on August 6, 2013. Champion was a part of the Institutional
Products Group segment. For more information, see the detailed condensed
consolidated financial statements at the end of this release.
CEO SUMMARY
Commenting on the Company's 2013 financial results, Gerald B. Blouch,
President and Chief Executive Officer, stated, ''Our European business
segment was the key contributor to our financial performance in 2013,
and I want to publicly thank our European associates for successfully
improving their business results throughout the year. However, the
excellent performance in Europe was more than offset by the financial
results of our remaining three business segments, which struggled
primarily as a result of the Company's consent decree with the United
States Food and Drug Administration (FDA), lack of significant new
product introductions and unfavorable sales mix. Overall 2013 financial
performance resulted in adjusted net loss per share(b) of
$1.20 compared to adjusted net earnings per share(b) of $0.22
in 2012. Organic net sales for the year decreased 6.3% compared to last
year. Despite these challenges, we achieved free cash flow(a) in
2013 of $6.3 million and successfully reduced total debt outstanding by
$190.1 million to $48.0 million as of December 31, 2013.''
Regarding the status of the consent decree, Blouch continued,
''Throughout 2013, we continued to make progress on demonstrating our
quality systems improvements to our third-party expert auditor, and we
received the FDA's acceptance of two of the three required third-party
certification reports. We anticipate that the expert auditor will
re-commence the final certification audit at the end of this month. Our
top priority is to resume full production at our Taylor Street
wheelchair manufacturing facility in Elyria, Ohio, and we appreciate the
ongoing support of our associates, customers and shareholders, as we
work through this process.''
STATUS OF THE CONSENT DECREE
The consent decree covers the corporate and Taylor Street facilities in
Elyria, Ohio. It requires a third-party expert to perform three separate
certification audits. In order to resume full operations, the expert
certification audit reports must be submitted to the FDA for review and
acceptance. In the first two audits in 2013, the third-party expert
certified that the Company's equipment and process validation procedures
and its design control systems were compliant with the FDA's Quality
System Regulation (QSR). The Company has received the FDA's acceptance
of these first two reports. During the final expert certification audit,
the auditor indicated that some additional work was required primarily
in the Company's updated complaint and risk review processes before the
final, and most comprehensive, certification report could be completed
and provided to the FDA, as the Company discussed in its December 23,
2013 press release. The Company has been executing its action plan
relating to these comments, and it anticipates that the third-party
expert will return at the end of February to re-commence this final
certification audit.
The Company cannot predict the timing of the completion or the outcome
of the third-party expert’s final certification report. However, when
the expert's certification report is completed and submitted to the FDA,
along with the Company’s own report related to its compliance status
together with its responses to any observations in the certification
report, the FDA will inspect the Company's corporate and Taylor Street
facilities to determine whether they are in compliance with the FDA's
QSR. The FDA has the authority to reinspect these facilities at any
time. If the FDA is satisfied with the Company's compliance, the FDA
will provide written notification that the Company is permitted to
resume full operations at the impacted facilities.
CONTINUING OPERATIONS FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER
-
Loss per share on a GAAP basis was $0.48 compared to loss per share of
$0.36 last year.
-
Adjusted net loss per share(b) was $0.19 compared to an
adjusted net loss per share(b) of $0.10 last year.
-
Free cash flow(a) was $9.9 million compared to $31.2
million last year.
-
Net sales decreased 5.6% while organic net sales decreased 6.6%
compared to last year.
-
Adjusted EBITDA(d) was $8.9 million compared to $13.3
million last year.
CONTINUING OPERATIONS FINANCIAL HIGHLIGHTS FOR THE YEAR
-
Loss per share on a GAAP basis was $1.60 compared to loss per share of
$0.35 in 2012.
-
Adjusted net loss per share(b) was $1.20 compared to
adjusted net earnings per share(b) of$0.22 for
the full year 2012.
-
Free cash flow(a) was $6.3 million compared to $49.1
million in 2012.
-
Net sales decreased 5.6% while organic net sales decreased 6.3%
compared to 2012.
-
Adjusted EBITDA(d) was $19.8 million compared to $75.5
million in 2012.
-
Debt outstanding decreased by $190.1 million, resulting in a ratio of
debt to adjusted EBITDA(d) of 2.2, compared to 2.0 as of
September 30, 2013, and 2.7 as of December 31, 2012.
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
Net loss per share on a GAAP basis for the fourth quarter of 2013 was
$0.48 ($15.4 million net loss) as compared to net loss per share for the
same period last year of $0.36 ($11.4 million net loss). The net loss
for the current quarter was negatively impacted by incremental warranty
expense of $0.10 per share ($3.3 million after-tax expense) related to
the Company's power wheelchair joystick recall, charges related to
restructuring of $0.06 per share ($2.0 million after-tax expense), asset
write-downs related to intangible assets of $0.04 per share ($1.2
million after-tax expense) and increased tax expense of $0.32 per share
($10.0 million tax expense) resulting from an intraperiod tax allocation
associated with discontinued operations. The incremental warranty
expense related to the joystick recall was recorded in the North
America/Home Medical Equipment (HME) and Asia/Pacific segments ($2.1
million and $1.2 million after-tax expense, respectively). Net loss for
the fourth quarter of 2013 benefited by $1.4 million ($0.04 per share)
related to an amended value added tax (VAT) filing recognized in the
European segment. Net loss for the fourth quarter of 2012 was
unfavorably impacted by restructuring charges of $0.24 per share ($7.6
million after-tax expense) and asset write-downs related to intangible
assets of $0.02 per share ($0.7 million after-tax expense) and
positively impacted by $0.07 per share ($2.2 million tax benefit)
resulting from an intraperiod tax allocation associated with
discontinued operations.
Adjusted net loss per share(b) was $0.19 for the fourth
quarter of 2013 as compared to adjusted net loss per share(b) of
$0.10 for the fourth quarter of 2012. The adjusted net loss(c)
for the quarter was $6.1 million versus adjusted net loss(c)
of $3.1 million for the fourth quarter of last year. Adjusted net loss(c)
for the quarter was negatively impacted primarily by lower net sales,
reduced gross margin, including increased warranty expense, partially
offset by reduced selling, general and administrative (SG&A) and
interest expenses.
Net sales for the quarter decreased 5.6% compared to the same quarter
last year. Organic net sales for the quarter decreased 6.6% over the
same period last year, as increases for the European segment were offset
by declines for all other segments. The Company estimates that sales of
products manufactured from the Taylor Street facility, which includes
products sold outside of North America/HME segment, were approximately
$11.8 million in the fourth quarter compared to approximately $32.8
million in the fourth quarter of last year. Net sales by segment and for
the consolidated company, as reported and as adjusted to exclude the
impact of foreign currency translation comparing the quarter-end and
year-to-date periods ended December 31, 2013 as compared to December 31,
2012, are provided in a table accompanying this release.
Gross margin as a percentage of net sales from continuing operations for
the fourth quarter was lower by 1.7 percentage points compared to last
year's fourth quarter. The fourth quarter of 2013 gross margin reflects
an incremental warranty expense for the power wheelchair joystick recall
of $3.4 million pre-tax or 1.0 percentage point. The incremental
warranty expense was recorded in the North America/HME and Asia/Pacific
reporting segments. Thus far, the customer response to the joystick
recall, which officially launched in October 2013, has surpassed the
anticipated response rate, which was based on historic recalls. As
previously indicated, the reserve is subject to adjustment as new
developments change the Company's estimate of the total cost of this
matter. In addition, the gross margin was negatively impacted by the
North America/HME sales decline in custom power wheelchairs, which
historically is one of the Company's higher margin product lines, and
unfavorable net sales mix toward lower margin customers. The current
quarter gross margin benefited by $1.4 million or 0.4 of a percentage
point, related to an amended VAT filing recognized in the European
segment.
SG&A expense decreased 8.3% to $95.8 million in the fourth quarter
compared to $104.5 million in the fourth quarter last year. Foreign
currency translation increased SG&A expense by 0.6 of a percentage
point. Excluding the impact of foreign currency translation ($0.6
million pre-tax expense), SG&A expense decreased by 8.9% compared to the
fourth quarter of last year primarily related to a reduction in
regulatory and compliance costs and reduced associate costs.
The Company incurred restructuring charges in the fourth quarter of 2013
of $2.0 million after-tax, principally related to severance costs in the
North America/HME and European segments, compared to restructuring
charges related to continuing operations of $7.6 million after-tax in
the fourth quarter of 2012, principally related to severance costs in
the North America/HME and Asia/Pacific segments, as well as asset
write-downs related to facility closures in the European and
Asia/Pacific segments. These restructuring charges are excluded from
adjusted earnings per share(b).
Net loss per share on a GAAP basis for the fiscal year 2013 was $1.60
($51.0 million net loss) as compared to the 2012 net loss per share of
$0.35 ($11.1 million net loss). The net loss for the year ended
December 31, 2013 was largely attributable to lower net sales, reduced
gross margin, charges related to restructuring from continuing
operations of $0.23 per share ($7.5 million after-tax expense),
incremental warranty expense of $0.22 per share ($7.2 million after-tax
expense) related to the Company's power wheelchair joystick recall,
asset write-downs related to intangible assets of $0.04 per share ($1.3
million after-tax expense), and increased amortization expense to write
off debt fees related to a debt amendment of $0.04 per share ($1.2
million after-tax expense). The incremental warranty expense related to
the joystick recall was recorded in the North America/HME and
Asia/Pacific segments ($2.6 million and $4.6 million after-tax expense,
respectively). Net loss for 2013 benefited by $0.04 per share ($1.4
million) related to an amended VAT filing recognized in the European
segment in the fourth quarter and decreased tax expense of $0.04 per
share ($1.2 million tax benefit) resulting from an intraperiod tax
allocation associated with discontinued operations. The net loss for
2012 included a discrete 2012 tax expense related to prior years of
$0.30 per share ($9.3 million tax expense) for a matter that is under
audit and being contested by the Company, restructuring charges of $0.36
per share ($11.3 million after-tax expense), asset write-downs related
to intangible assets of $0.02 per share ($0.7 million after-tax
expense), and an expense of $0.01 per share ($0.3 million after-tax
expense) for early debt extinguishment charges. These were offset by a
positive impact of $0.23 per share ($7.1 million tax benefit) as a
result of an intraperiod tax allocation associated with discontinued
operations.
Adjusted net loss per share(b) was $1.20 for the year ended
December 31, 2013 as compared to adjusted net earnings per share(b)
of $0.22 for 2012. Adjusted net loss(c) for 2013 was $38.3
million versus adjusted net earnings(c) of $6.9 million in
2012. The decline in adjusted net earnings(c) was primarily
the result of lower net sales, reduced gross margin, including higher
warranty expense, partially offset by decreased SG&A and interest
expenses.
Net sales for the year ended December 31, 2013 decreased 5.6% to $1.35
billion versus $1.43 billion for the same period last year while organic
net sales decreased 6.3% as a result of increases for the European
segment being offset by declines for all other segments. The Company
estimates that sales of products manufactured from the Taylor Street
facility, which included some products sold outside of North America/HME
segment, were approximately $55.5 million for the full year 2013
compared to approximately $147.1 million in the full year 2012.
NORTH AMERICA/HOME MEDICAL EQUIPMENT (HME)
For the quarter ended December 31, 2013, North America/HME net sales
decreased 12.5% to $144.8 million compared to $165.6 million in the same
period last year. Organic net sales decreased 12.1% compared to last
year driven by declines in mobility and seating and lifestyle products
partially offset by increases in respiratory products, primarily driven
by a large order of Invacare® HomeFill® oxygen
systems by a national account. The sales decline in mobility and seating
products was primarily driven by the impact of the FDA consent decree,
which limits sales of previously disclosed mobility products from the
Taylor Street manufacturing facility to products having properly
completed verification of medical necessity (VMN) documentation. The VMN
is a signed document from a clinician, and in some instances a
physician, that certifies that the product is deemed medically necessary
for a particular patient's condition, which cannot be adequately
addressed by another manufacturer's product. The number of new orders
that were fulfilled in the fourth quarter of 2013 represented only 14.0%
of the Company's unit volume of domestic power wheelchair shipments from
the facility in the same period last year. Loss before income taxes for
the fourth quarter of 2013 was $10.7 million, excluding restructuring
charges of $1.1 million, as compared to loss before income taxes of $1.6
million in the fourth quarter of 2012, excluding intangible impairment
charges of $0.1 million and restructuring charges of $2.0 million. The
loss before income taxes for the quarter was primarily a result of
volume declines, unfavorable sales mix toward lower margin customers and
unfavorable product mix away from higher margin products and higher
warranty expense primarily due to the joystick recall. These factors
were partially offset by reduced regulatory and compliance costs, as
well as lower associate costs.
Throughout the fourth quarter, the Company continued to closely monitor
the roll-out of the second round of National Competitive Bidding (NCB),
which became effective in 91 additional metropolitan statistical areas
(MSAs) on July 1, 2013. The impact of NCB on net sales is hard to
measure, as the Company does not have zip code level visibility into
customers' sales, rental data or Medicare fulfillment data. However,
excluding the large order of HomeFill® oxygen systems, the
Company estimates that net sales in the 91 impacted MSAs were slightly
weaker than outside areas due to continued uncertainty as the industry
realigns and adjusts itself to the small number of bid contracts
awarded. However, the Company believes that the increase in sales of
HomeFill® oxygen systems indicates that providers are
actively seeking opportunities to reduce costs and transform their
business model.
For the year ended December 31, 2013, North America/HME net sales
decreased 12.4% to $607.1 million compared to $692.7 million in the same
period last year. Organic net sales decreased 12.1% compared to last
year primarily driven by declines in the mobility and seating and
lifestyle products partially offset by increases in respiratory
products, partially driven by a large order of HomeFill®
oxygen systems by a national account. Loss before income taxes for the
year ended December 31, 2013 were $39.3 million, excluding restructuring
charges of $5.9 million and intangible impairment charges of $0.2
million, as compared to earnings before income taxes of $8.7 million
last year, excluding restructuring charges of $4.2 million and
intangible impairment charges of $0.1 million. The loss before income
taxes in 2013 is primarily a result of volume declines, unfavorable
sales mix toward lower margin customers, unfavorable product mix away
from higher margin products, increased warranty expense related to the
joystick recall and unfavorable absorption of fixed costs at the Taylor
Street manufacturing facility as a result of reduced order volume. These
factors were partially offset by reduced regulatory and compliance costs.
INSTITUTIONAL PRODUCTS GROUP (IPG)
IPG net sales for the fourth quarter decreased by 18.3% to $25.2 million
compared to $30.8 million last year. Organic net sales decreased 18.1%
driven by declines in all product categories partially as a result of
the delay in new product introductions and strong net sales for interior
design projects in the fourth quarter of 2012 that did not repeat in the
current quarter. Earnings before income taxes were $0.8 million,
excluding intangible impairment charges of $1.4 million, compared to
$1.9 million in the fourth quarter of 2012, excluding intangible
impairment charges of $0.7 million, as volume declines and increased
depreciation expense were partially offset by favorable product mix
toward higher margin products, and decreased freight and research and
development expenses.
For the year ended December 31, 2013, IPG net sales decreased by 11.2%
to $112.3 million compared to $126.5 million last year. Organic net
sales decreased 11.1% driven primarily by declines in all product
categories. Earnings before income taxes for the year ended December 31,
2013 were $3.0 million, excluding restructuring charges of $0.3 million
and intangible impairment charges of $1.4 million, as compared to
earnings of $6.7 million last year, excluding intangible impairment
charges of $0.7 million. The decreased earnings before income taxes
resulted from decreased volumes and higher SG&A expenses, primarily
related to associate costs, partially offset by favorable product mix
toward higher margin products.
EUROPE
For the fourth quarter, European net sales increased 6.0% to $153.5
million versus $144.8 million for the fourth quarter of last
year. Organic net sales for the quarter increased 2.8%, principally due
to increases in lifestyle and mobility and seating products partially
offset by a decline in respiratory products. For the fourth quarter of
2013, earnings before income taxes increased to $14.0 million, excluding
restructuring charges of $0.9 million, as compared to $9.3 million last
year, excluding restructuring charges of $1.3 million. The increase in
earnings before income taxes was largely attributable to higher sales
volumes and reduced purchasing and freight costs partially offset by
increased SG&A expense related to associate costs and unfavorable
foreign currency transactions. The fourth quarter of 2013 also benefited
by $1.4 million related to an amended VAT filing.
For the year ended December 31, 2013, European net sales increased 6.7%
to $583.1 million versus $546.5 million last year. Organic net sales
increased 4.4%, principally due to increases in lifestyle and mobility
and seating products partially offset by a decline in respiratory
products. For the year ended December 31, 2013, earnings before income
taxes increased to $42.1 million, excluding restructuring charges of
$1.6 million, as compared to $33.6 million, excluding restructuring
charges of $2.1 million last year. The increase in earnings before
income taxes was largely attributable to higher sales volumes and
reduced purchasing and freight costs partially offset by increased SG&A
expense related to associate costs and unfavorable foreign currency
transactions. Earnings for 2013 also benefited by $1.4 million related
to an amended VAT filing.
ASIA/PACIFIC
For the fourth quarter, Asia/Pacific net sales decreased 16.4% to $11.5
million versus $13.8 million last year. Organic net sales for the
quarter decreased 13.2%. The decline in the Company's subsidiary which
produces microprocessor controllers was primarily related to its
decision to exit the contract manufacturing business for companies
outside of the healthcare industry. The Company's Australian and New
Zealand distribution businesses experienced a decline in net sales,
primarily in lifestyle and mobility and seating products. For the fourth
quarter, loss before income taxes was $3.1 million, excluding
restructuring charges of $0.3 million, as compared to loss before income
taxes of $3.4 million last year, excluding restructuring charges of $4.3
million. The reduced loss before income taxes is primarily attributable
to lower SG&A expense, primarily associate costs, as a result of the
company's restructuring efforts, partially offset by higher warranty
expense primarily due to the joystick recall and reduced sales volumes.
The loss before income taxes for the fourth quarter of 2013 was reduced
as compared to the same period last year for the Company's Australian
and New Zealand distribution businesses as a result of a significant
restructure to the business implemented in the fourth quarter of 2012.
For the year ended December 31, 2013, Asia/Pacific net sales decreased
25.6% to $49.8 million versus $67.0 million last year. Organic net sales
decreased 24.2%. The decline in the Company's subsidiary which produces
microprocessor controllers was primarily related to its decision to exit
the contract manufacturing business for companies outside of the
healthcare industry, as well as reduced sales of electronic components
for mobility products. The Company's Australian and New Zealand
distribution businesses experienced a decline in net sales, primarily in
lifestyle and mobility and seating products. The year-to-date loss
before income taxes was $11.8 million, excluding restructuring charges
of $1.5 million, as compared to loss before income taxes of $6.8 million
last year, excluding restructuring charges of $5.0 million. The increase
in the loss before income taxes is primarily attributable to lower sales
volume and higher warranty expense primarily due to the joystick recall
partially offset by reduced SG&A expense, primarily associate costs, as
a result of the Company's restructuring efforts. The loss for the full
year 2013 was reduced as compared to the same period last year for the
Company's Australian and New Zealand distribution businesses as a result
of a significant restructure to the business implemented in the fourth
quarter of 2012.
FINANCIAL CONDITION
Total debt outstanding was $48.0 million as of December 31, 2013, as
compared to $238.1 million as of December 31, 2012 (including the
convertible debt discount, which reduced convertible debt and increased
equity by $2.7 million as of December 31, 2013 and by $3.3 million as of
December 31, 2012). The Company's total debt outstanding as of
December 31, 2013 consisted of $28.1 million drawn on the revolving
credit facility, $13.4 million in convertible debt and $6.5 million of
other debt.
The Company reported $9.9 million of free cash flow(a) in the
fourth quarter of 2013 as compared to $31.2 million of free cash flow(a)
in the fourth quarter of 2012. The fourth quarter 2013 free cash flow(a)
was positively impacted by lower accounts receivable and inventory and
negatively impacted principally by a net loss for the period. Free cash
flow(a) for the year ended December 31, 2013 was $6.3 million
compared to $49.1 million for the year ended December 31, 2012.
The Company's ratio of debt to adjusted EBITDA(d) was 2.2 as
of December 31, 2013 compared to 2.7 as of December 31, 2012.
As more fully described in the Company's February 3, 2014 press release
and related filing with the United States Securities and Exchange
Commission, the Company has successfully amended its credit agreement.
The amended agreement increases the Company's maximum leverage ratio for
the first three quarters of 2014 compared to the prior credit agreement.
In calculating the Company's EBITDA for purposes of determining the
ratios, the credit agreement amendment also allows the Company to add
back to EBITDA up to $20.0 million for one-time cash restructuring
charges, representing an incremental increase of $5.0 million from prior
credit agreement terms. In order to align its debt capacity and related
costs with anticipated needs, the Company also has reduced its revolving
credit facility to $100.0 million from $250.0 million through the
October 2015 maturity date of the facility.
Days sales outstanding associated with continuing operations were 49
days as of December 31, 2013 compared to 49 days as of December 31,
2012. Inventory turns from continuing operations as of December 31, 2013
were 5.1, compared to 4.6 as of December 31, 2012.
(a) Free cash flow is a non-GAAP financial measure which is
defined as net cash provided by operating activities, excluding net cash
flow 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). 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.
(b) Adjusted net earnings (loss) per share (EPS) is a
non-GAAP financial measure which is defined as adjusted net earnings
(loss)(b) 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. The Company believes that these types
of exclusions are also recognized by the industry in which it operates
as relevant in computing Adjusted EPS as a supplementary non-GAAP
financial measure used by financial analysts and others in the Company's
industry to meaningfully evaluate operating performance. 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 net earnings (loss) is a non-GAAP financial
measure which is defined as net earnings (loss) from continuing
operations excluding the impact of restructuring charges ($2.3 million
and $9.3 million pre-tax for the three and twelve months ended
December 31, 2013 compared to $7.7 million and $11.4 million pre-tax for
the three and twelve months ended December 31, 2012, respectively),
amortization of the convertible debt discount recorded in interest ($0.2
million and $0.6 million pre-tax for the three and twelve months ended
December 31, 2013 compared to $0.1 million and $0.6 million pre-tax for
the three and twelve months ended December 31, 2012, respectively),
asset write-downs related to intangibles ($1.4 million and $1.5 million
pre-tax for the three and twelve months ended December 31, 2013 compared
to $0.8 million pre-tax for the three and twelve months ended
December 31, 2012, respectively), loss on debt extinguishment including
debt finance charges and fees ($0.0 million pre-tax for the three and
twelve months ended December 31, 2013 compared to $0.0 million and $0.3
million pre-tax for the three and twelve months ended December 31, 2012,
respectively), add back of additional interest expense allocation as a
result of the sale of Champion ($0.0 million and $0.4 million pre-tax
for the three and twelve months ended December 31, 2013 compared to $0.2
million and $0.8 million pre-tax for the three and twelve months ended
December 31, 2012, respectively), a discrete tax expense in 2012 related
to prior years for a foreign tax matter under audit ($0.2 million and
$9.3 million for the three and twelve months ended December 31, 2012,
respectively), the intraperiod domestic tax allocation between
continuing and discontinued operations, and changes in 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.
(d) Adjusted EBITDA (adjusted earnings (loss) before
interest, taxes, depreciation and amortization) is a non-GAAP financial
measure which is defined as net earnings (loss) from continuing
operations excluding the following: interest expense, income taxes
(benefit), depreciation and amortization, as further adjusted to exclude
restructuring charges ($2.3 million and $9.3 million for the three and
twelve months ended December 31, 2013 and $7.7 million and $11.4 million
for the three and twelve months ended 2012, respectively) as adjusted
for debt covenant limitations regarding cash charges ($0.0 million and
$3.9 million for the three and twelve months ended December 31, 2013,
respectively), amortization of the convertible debt discount (recorded
in interest expense), bank fees ($1.2 million and $4.9 million for the
three and twelve months ended December 31, 2013 and $1.4 million and
$4.8 million for the three and twelve months ended 2012, respectively),
stock option expense ($1.2 million and $6.0 million for the three and
twelve months ended December 31, 2013 and $1.3 million and $6.5 million
for the three and twelve months ended 2012, respectively), asset
write-downs for intangible assets ($1.4 million and $1.5 million for the
three and twelve months ended December 31, 2013 and $0.8 million for the
three and twelve months ended December 31, 2012, respectively) and loss
on debt extinguishment including debt finance charges and fees ($0.3
million for the year ended December 31, 2012). 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. The Company
believes that these types of exclusions are also recognized by the
industry in which it operates as relevant in computing Adjusted EBITDA
as a supplementary non-GAAP financial measure widely used by financial
analysts and others in the Company's industry to meaningfully evaluate a
company's future operating performance. Moreover, the definition of
Adjusted EBITDA as presented herein also may be useful in reflecting
certain debt covenant measurements under the Company's senior secured
credit facility, although, in particular, a larger acquisition or
divestiture during a given year may make it difficult to replicate the
exact calculations for the covenants. In addition to these recognized
purposes, the Company also uses EBITDA and Adjusted EBITDA to evaluate
the Company's performance. 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.
CONFERENCE CALL
As previously announced, the Company will host a conference call for
investors and other interested parties today at 8:30 AM ET to discuss
the Company's performance. Those wishing to participate in the live call
should dial 888-364-3109, or for international callers 719-325-2435, and
enter Conference ID 6359856. A digital recording will be available two
hours after completion of the conference call from February 6, 2014
through February 13, 2014. To access the recording, US/Canada callers
should dial 888-203-1112 or 719-457-0820 for international callers, and
enter the Conference ID 6359856.
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 currently has 5,400 associates and markets its
products in approximately 80 countries around the world. 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,'' ''believe''
and ''anticipate,'' as well as similar comments, denote forward-looking
statements that are subject to inherent uncertainties that are difficult
to predict. 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: compliance costs,
limitations on the production and/or distribution of the Company's
products, inability to bid on orwin certain contracts, or other
adverse effects of the FDA consent decree of injunction; unexpected
circumstances or developments that might further delay or adversely
impact the results of the final, most comprehensive third-party expert
certification audit or FDA inspections of the Company's quality systems
at the Elyria, Ohio, facilities impacted by the FDA consent decree,
including any possible requirement to perform additional remediation
activities; the failure or refusal of customers or healthcare
professionals to sign verification of medical necessity (VMN)
documentation or other certification forms required by the exceptions to
the FDA consent decree; possible adverse effects of being leveraged,
including interest rate or event of default risks, including those
relating to the Company's financial covenants under its credit facility
(particularly as might result from the impacts associated with the FDA
consent decree); the Company's inability to satisfy its liquidity needs,
or additional costs to do so; adverse changes in government and other
third-party payor reimbursement levels and practices both in the U.S.
and in other countries (such as, for example, more extensive pre-payment
reviews and post-payment audits by payors, or the Medicare National
Competitive Bidding program covering nine metropolitan statistical areas
that started in 2011 and the additional 91 metropolitan statistical
areas that started on July 1, 2013); impacts of the U.S. Affordable Care
Act that was enacted in 2010 (such as, for example, the impact on the
Company of the excise tax on certain medical devices, which began on
January 1, 2013, and the Company's ability to successfully offset such
impact); legal actions, regulatory proceedings or the Company's failure
to comply with regulatory requirements or receive regulatory clearance
or approval for the Company's products or operations in the United
States or abroad; product liability or warranty claims; product recalls,
including more extensive recall experience than expected; exchange rate
or tax rate fluctuations; inability to design, manufacture, distribute
and achieve market acceptance of new products with greater functionality
or lower costs or new product platforms that deliver the anticipated
benefits of the Company's globalization strategy; consolidation of
health care providers; lower cost imports; uncollectible accounts
receivable; difficulties in implementing/upgrading Enterprise Resource
Planning systems; risks inherent in managing and operating businesses in
many different foreign jurisdictions; ineffective cost reduction and
restructuring efforts; decreased availability or increased costs of
materials which could increase the Company's costs of producing or
acquiring the Company's products, including possible increases in
commodity costs or freight costs; heightened vulnerability to a hostile
takeover attempt arising from depressed market prices for Company
shares; provisions of Ohio law or in the Company's debt agreements,
shareholder rights plan or charter documents that may prevent or delay a
change in control, as well as the risks described from time to time in
the Company's reports as filed with the Securities and Exchange
Commission. Except to the extent required by law, the Company does not
undertake and specifically declines 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) |
|
|
| |
| |
| | |
Three Months Ended
| |
Twelve Months Ended
|
(In thousands, except per share data)
| | |
December 31,
| |
December 31,
|
| | |
2013
|
|
2012
| |
2013
|
|
2012
|
Net sales
| | |
$
|
334,986
| | |
$
|
354,926
| | |
$
|
1,352,359
| | |
$
|
1,432,693
| |
Cost of products sold *
| | |
241,485
|
| |
249,849
|
| |
974,893
|
| |
996,218
|
|
Gross Profit | | |
93,501
| | |
105,077
| | |
377,466
| | |
436,475
| |
Selling, general and administrative expenses
| | |
95,781
| | |
104,477
| | |
401,823
| | |
411,232
| |
Charges related to restructuring activities
| | |
2,338
| | |
7,162
| | |
9,336
| | |
10,904
| |
Loss on debt extinguishment including debt finance charges and
associated fees
| | |
—
| | |
—
| | |
—
| | |
312
| |
Asset write-downs to intangible assets
| | |
1,356
| | |
773
| | |
1,523
| | |
773
| |
Interest expense - net
| | |
686
|
| |
1,825
|
| |
3,124
|
| |
7,554
|
|
Earnings (Loss) from Continuing Operations before Income Taxes | | |
(6,660
|
)
| |
(9,160
|
)
| |
(38,340
|
)
| |
5,700
| |
Income taxes
| | |
8,760
|
| |
2,289
|
| |
12,660
|
| |
16,775
|
|
Net Loss from Continuing Operations | | |
$
|
(15,420
|
)
| |
$
|
(11,449
|
)
| |
$
|
(51,000
|
)
| |
$
|
(11,075
|
)
|
| | | | | | | | |
|
Net Earnings (Loss) from Discontinued Operations (net of tax of
$213; $2,346; $450; and $7,610, respectively)
| | |
$
|
(213
|
)
| |
$
|
4,156
| | |
$
|
3,108
| | |
$
|
12,902
| |
Gain on Sale of Discontinued Operations (net of a tax of ($9,863)
and $1,220, respectively)
| | |
9,863
|
| |
—
|
| |
80,943
|
| |
—
|
|
Net Earnings from Discontinued Operations | | |
$
|
9,650
|
| |
$
|
4,156
|
| |
$
|
84,051
|
| |
$
|
12,902
|
|
| | | | | | | | |
|
Net Earnings (Loss) | | |
$
|
(5,770
|
)
| |
$
|
(7,293
|
)
| |
$
|
33,051
|
| |
$
|
1,827
|
|
| | | | | | | | |
|
Net Earnings (Loss) per Share—Basic | | | | | | | | | |
Continuing Operations
| | |
$
|
(0.48
|
)
| |
$
|
(0.36
|
)
| |
$
|
(1.60
|
)
| |
$
|
(0.35
|
)
|
Discontinued Operations
| | |
$
|
0.30
|
| |
$
|
0.13
|
| |
$
|
2.63
|
| |
$
|
0.41
|
|
Net Earnings (Loss) per Share—Basic
| | |
$
|
(0.18
|
)
| |
$
|
(0.23
|
)
| |
$
|
1.04
|
| |
$
|
0.06
|
|
| | | | | | | | |
|
Weighted Average Shares Outstanding—Basic
| | |
31,954
| | |
31,856
| | |
31,915
| | |
31,641
| |
| | | | | | | | |
|
Net Earnings (Loss) per Share—Assuming Dilution | | | | | | | | | |
Continuing Operations **
| | |
$
|
(0.48
|
)
| |
$
|
(0.36
|
)
| |
$
|
(1.60
|
)
| |
$
|
(0.35
|
)
|
Discontinued Operations
| | |
$
|
0.30
|
| |
$
|
0.13
|
| |
$
|
2.62
|
| |
$
|
0.40
|
|
Net Earnings (Loss) per Share—Assuming Dilution **
| | |
$
|
(0.18
|
)
| |
$
|
(0.23
|
)
| |
$
|
1.03
|
| |
$
|
0.06
|
|
| | | | | | | | |
|
Weighted Average Shares Outstanding—Assuming Dilution
| | |
32,285
| | |
31,933
| | |
32,043
| | |
31,871
| |
| | | | | | | | | | | | |
|
* Cost of products sold includes inventory markdowns resulting from
restructuring of $491,000 for the three and twelve months ended
December 31, 2012.
** Net earnings (loss) per share assuming dilution calculated utilizing
weighted average shares outstanding - basic in periods in which there is
a net loss.
|
|
INVACARE CORPORATION AND SUBSIDIARIES RECONCILIATION
OF NET LOSS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA (1) |
|
|
| |
| |
| | |
Three Months Ended
| |
Twelve Months Ended
|
(In thousands) | | |
December 31,
| |
December 31,
|
| | |
2013
|
|
2012
| |
2013
|
|
2012
|
Continuing Operations:
| | | | | | | | | |
Net loss
| | |
$
|
(15,420
|
)
| |
$
|
(11,449
|
)
| |
$
|
(51,000
|
)
| |
$
|
(11,075
|
)
|
Interest expense
| | |
831
| | |
1,901
| | |
3,508
| | |
8,240
| |
Income taxes
| | |
8,760
| | |
2,289
| | |
12,660
| | |
16,775
| |
Depreciation and amortization
| | |
8,553
|
| |
9,347
|
| |
36,733
|
| |
37,724
|
|
EBITDA
| | |
2,724
| | |
2,088
| | |
1,901
| | |
51,664
| |
Restructuring charges
| | |
2,338
| | |
7,653
| | |
9,336
| | |
11,395
| |
Cash restructuring charges covenant limitation adjustment
| | |
—
| | |
—
| | |
(3,871
|
)
| |
—
| |
Bank fees
| | |
1,246
| | |
1,413
| | |
4,906
| | |
4,781
| |
Loss on debt extinguishment including debt finance charges and
associated fees
| | |
—
| | |
—
| | |
—
| | |
312
| |
Asset write-downs related to intangible assets
| | |
1,356
| | |
773
| | |
1,523
| | |
773
| |
Stock option expense
| | |
1,236
|
| |
1,347
|
| |
5,957
|
| |
6,545
|
|
Adjusted EBITDA(1) | | |
$
|
8,900
|
| |
$
|
13,274
|
| |
$
|
19,752
|
| |
$
|
75,470
|
|
| | | | | | | | | | | | | | | | |
|
(1) Adjusted EBITDA (earnings (loss) before interest, taxes,
depreciation and amortization) is a non-GAAP financial measure which is
defined as net earnings (loss) from continuing operations excluding the
following: interest expense, income taxes, depreciation and
amortization, as further adjusted to exclude restructuring charges, as
adjusted for debt covenant limitations regarding cash charges,
amortization of the convertible debt discount (recorded in interest
expense), bank fees, stock option expense, asset write-downs of
intangible assets and loss on debt extinguishment including debt finance
charges and fees. 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. The Company believes that these
types of exclusions are also recognized by the industry in which it
operates as relevant in computing Adjusted EBITDA as a supplementary
non-GAAP financial measure widely used by financial analysts and others
in the Company's industry to meaningfully evaluate a Company's future
operating performance. Moreover, the definition of Adjusted EBITDA as
presented herein also may be useful in reflecting certain debt covenant
measurements under the Company's senior secured credit facility,
although, in particular, a larger acquisition or divestiture during a
given year may make it difficult to replicate the exact calculations for
the covenants. In addition to these recognized purposes, the Company
also uses EBITDA and Adjusted EBITDA to evaluate the Company's
performance.
|
|
INVACARE CORPORATION AND SUBSIDIARIES RECONCILIATION
OF NET LOSS PER SHARE FROM CONTINUING OPERATIONS TO
ADJUSTED NET EARNINGS (LOSS) PER SHARE (2) |
|
|
| |
| |
| | |
Three Months Ended
| |
Twelve Months Ended
|
(In thousands, except per share data) | | |
December 31,
| |
December 31,
|
| | |
2013
|
|
2012
| |
2013
|
|
2012
|
Continuing Operations:
| | | | | | | | | |
Net loss per share - assuming dilution *
| | |
$
|
(0.48
|
)
| |
$
|
(0.36
|
)
| |
$
|
(1.60
|
)
| |
$
|
(0.35
|
)
|
Weighted average shares outstanding- assuming dilution
| | |
31,954
| | |
31,856
| | |
31,915
| | |
31,641
| |
Net loss
| | |
(15,420
|
)
| |
(11,449
|
)
| |
(51,000
|
)
| |
(11,075
|
)
|
Income taxes
| | |
8,760
|
| |
2,289
|
| |
12,660
|
| |
16,775
|
|
Earnings (loss) before income taxes
| | |
(6,660
|
)
| |
(9,160
|
)
| |
(38,340
|
)
| |
5,700
| |
Restructuring charges
| | |
2,338
| | |
7,653
| | |
9,336
| | |
11,395
| |
Amortization of discount on convertible debt
| | |
165
| | |
147
| | |
633
| | |
577
| |
Discontinued operations interest allocation reversal
| | |
—
| | |
(198
|
)
| |
(449
|
)
| |
(792
|
)
|
Asset write-downs related to intangible assets
| | |
1,356
| | |
773
| | |
1,523
| | |
773
| |
Loss on debt extinguishment including debt finance charges and
associated fees
| | |
—
|
| |
—
|
| |
—
|
| |
312
|
|
Adjusted earnings (loss) before income taxes
| | |
(2,801
|
)
| |
(785
|
)
| |
(27,297
|
)
| |
17,965
| |
Income taxes
| | |
3,300
|
| |
2,279
|
| |
11,050
|
| |
11,016
|
|
Adjusted net earnings (loss)
| | |
$
|
(6,101
|
)
| |
$
|
(3,064
|
)
| |
$
|
(38,347
|
)
| |
$
|
6,949
|
|
| | | | | | | | |
|
Weighted average shares outstanding - assuming dilution
| | |
31,954
| | |
31,856
| | |
31,915
| | |
31,871
| |
| | |
| |
| |
| |
|
Adjusted net earnings (loss) per share - assuming dilution (2)
*
| | |
$
|
(0.19
|
)
| |
$
|
(0.10
|
)
| |
$
|
(1.20
|
)
| |
$
|
0.22
|
|
| | | | | | | | | | | | | | | | |
|
(2) Adjusted Net Earnings (Loss) per share (EPS) is a
non-GAAP financial measure which is defined as net earnings (loss) from
continuing operations excluding the impact of restructuring charges,
amortization of the convertible debt discount (recorded in interest
expense), loss on debt extinguishment including debt finance charges and
fees, add back of additional interest expense allocation as a result of
the sale of Champion, asset write-downs related to intangible assets, a
discrete tax expense in 2012 related to prior years for a foreign tax
matter under audit, the intraperiod domestic tax allocation between
continuing and discontinued operations and changes in tax valuation
allowances divided by weighted average shares outstanding - assuming
dilution. As a result of the sale of Champion, the Company is required
to allocate a portion of interest expense to the discontinued operation.
However for purposes of adjusted earnings (loss), the Company is
reflecting its total interest expense in the calculation as this is
indicative of the historic continuing operations of the Company. 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. The Company believes that these types of exclusions are also
recognized by the industry in which it operates as relevant in computing
Adjusted EPS as a supplementary non-GAAP financial measure used by
financial analysts and others in the Company's industry to meaningfully
evaluate operating performance.
* Net earnings (loss) per share assuming dilution calculated utilizing
weighted average shares outstanding - basic for periods in which there
is a net loss.
Business Segments - The Company operates in four primary business
segments: North America / Home Medical Equipment (HME), Institutional
Products Group, Europe and Asia/Pacific. The four reportable segments
represent operating groups, which offer products to different geographic
regions. Intersegment revenue for reportable segments was $26,867,000
and $116,418,000 for the three and twelve months ended December 31,
2013, and $31,255,000 and $154,336,000 for the three and twelve months
ended December 31, 2012, respectively. The information by segment is as
follows:
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
(In thousands) | | |
December 31,
| |
December 31,
|
| | |
2013
|
|
2012
| |
2013
|
|
2012
|
Revenues from external customers
| | | | | | | | | |
North America / HME
| | |
$
|
144,833
| | |
$
|
165,554
| | |
$
|
607,094
| | |
$
|
692,657
| |
Institutional Products Group
| | |
25,155
| | |
30,782
| | |
112,290
| | |
126,508
| |
Europe
| | |
153,493
| | |
144,822
| | |
583,143
| | |
546,543
| |
Asia/Pacific
| | |
11,505
|
| |
13,768
|
| |
49,832
|
| |
66,985
|
|
Consolidated
| | |
$
|
334,986
|
| |
$
|
354,926
|
| |
$
|
1,352,359
|
| |
$
|
1,432,693
|
|
| | | | | | | | |
|
Earnings (loss) before income taxes
| | | | | | | | | |
North America / HME
| | |
$
|
(11,794
|
)
| |
$
|
(3,771
|
)
| |
$
|
(45,387
|
)
| |
$
|
4,315
| |
Institutional Products Group
| | |
(537
|
)
| |
1,183
| | |
1,418
| | |
6,003
| |
Europe
| | |
13,124
| | |
7,984
| | |
40,468
| | |
31,488
| |
Asia/Pacific
| | |
(3,387
|
)
| |
(7,656
|
)
| |
(13,258
|
)
| |
(11,795
|
)
|
All Other
| | |
(4,066
|
)
| |
(6,900
|
)
| |
(21,581
|
)
| |
(24,311
|
)
|
Consolidated
| | |
$
|
(6,660
|
)
| |
$
|
(9,160
|
)
| |
$
|
(38,340
|
)
| |
$
|
5,700
|
|
| | | | | | | | |
|
Restructuring charges before income taxes
| | | | | | | | | |
North America / HME
| | |
$
|
1,085
| | |
$
|
2,033
| | |
$
|
5,922
| | |
$
|
4,247
| |
Institutional Products Group
| | |
29
| | |
—
| | |
266
| | |
35
| |
Europe
| | |
918
| | |
1,321
| | |
1,640
| | |
2,093
| |
Asia/Pacific
| | |
306
|
| |
4,299
|
| |
1,508
|
| |
5,020
|
|
Consolidated
| | |
$
|
2,338
|
| |
$
|
7,653
|
| |
$
|
9,336
|
| |
$
|
11,395
|
|
| | | | | | | | |
|
Intangible impairment charges before income taxes
| | | | | | | | | |
North America / HME
| | |
$
|
—
| | |
$
|
96
| | |
$
|
167
| | |
$
|
96
| |
Institutional Products Group
| | |
1,356
|
| |
677
|
| |
1,356
|
| |
677
|
|
Consolidated
| | |
$
|
1,356
|
| |
$
|
773
|
| |
$
|
1,523
|
| |
$
|
773
|
|
| | | | | | | | |
|
Loss on debt extinguishment, including debt finance charges and
associated fees
| | | | | | | | | |
All Other
| | |
$
|
—
|
| |
$
|
—
|
| |
$
|
—
|
| |
$
|
312
|
|
Consolidated
| | |
$
|
—
|
| |
$
|
—
|
| |
$
|
—
|
| |
$
|
312
|
|
| | | | | | | | |
|
Earnings (loss) before income taxes excluding restructuring charges,
intangible impairment charges, and loss on debt extinguishment,
including debt finance charges and associated fees
| | | | | | | | | |
North America / HME
| | |
$
|
(10,709
|
)
| |
$
|
(1,642
|
)
| |
$
|
(39,298
|
)
| |
$
|
8,658
| |
Institutional Products Group
| | |
848
| | |
1,860
| | |
3,040
| | |
6,715
| |
Europe
| | |
14,042
| | |
9,305
| | |
42,108
| | |
33,581
| |
Asia/Pacific
| | |
(3,081
|
)
| |
(3,357
|
)
| |
(11,750
|
)
| |
(6,775
|
)
|
All Other
| | |
(4,066
|
)
| |
(6,900
|
)
| |
(21,581
|
)
| |
(23,999
|
)
|
Consolidated
| | |
$
|
(2,966
|
)
| |
$
|
(734
|
)
| |
$
|
(27,481
|
)
| |
$
|
18,180
|
|
| | | | | | | | | | | | | | | | |
|
''All Other'' consists of unallocated corporate selling, general and
administrative expenses, which do not meet the quantitative criteria for
determining reportable segments. In addition, ''All Other'' earnings
before income taxes includes loss on debt extinguishment including
finance charges and associated fees.
Business Segment Net Sales - The following table provides net
sales as reported and as adjusted to exclude the impact of foreign
currency translation comparing quarters ended December 31, 2013 to
December 31, 2012:
|
|
|
Reported
|
|
Foreign Currency Translation Impact
|
|
Adjusted*
|
North America / HME
| | |
(12.5
|
)%
| |
(0.4
|
)%
| |
(12.1
|
)%
|
Institutional Products Group
| | |
(18.3
|
)%
| |
(0.2
|
)%
| |
(18.1
|
)%
|
Europe
| | |
6.0
|
%
| |
3.2
|
%
| |
2.8
|
%
|
Asia/Pacific
| | |
(16.4
|
)%
| |
(3.2
|
)%
| |
(13.2
|
)%
|
Consolidated
| | |
(5.6
|
)%
| |
1.0
|
%
| |
(6.6
|
)%
|
| | | | | | | | | |
|
The following table provides net sales as reported and as adjusted to
exclude the impact of foreign currency translation comparing twelve
months ended December 31, 2013 to December 31, 2012:
|
|
|
Reported
|
|
Foreign Currency Translation Impact
|
|
Adjusted*
|
North America / HME
| | |
(12.4
|
)%
| |
(0.3
|
)%
| |
(12.1
|
)%
|
Institutional Products Group
| | |
(11.2
|
)%
| |
(0.1
|
)%
| |
(11.1
|
)%
|
Europe
| | |
6.7
|
%
| |
2.3
|
%
| |
4.4
|
%
|
Asia/Pacific
| | |
(25.6
|
)%
| |
(1.4
|
)%
| |
(24.2
|
)%
|
Consolidated
| | |
(5.6
|
)%
| |
0.7
|
%
| |
(6.3
|
)%
|
| | | | | | | | | |
|
*Adjusted net sales percent change equal to reported net sales change
less impact of foreign currency translation.
|
|
INVACARE CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|
|
| |
| |
| | |
December 31, 2013
| |
December 31, 2012
|
| | |
(In thousands)
|
Assets | | | | | |
Current Assets | | | | | |
Cash and cash equivalents
| | |
$
|
29,785
| | |
$
|
38,791
|
Trade receivables, net
| | |
188,622
| | |
198,791
|
Installment receivables, net
| | |
1,562
| | |
2,188
|
Inventories, net
| | |
155,637
| | |
183,246
|
Deferred income taxes and other current assets
| | |
43,933
| | |
41,776
|
Assets held for sale
| | |
—
|
| |
103,157
|
Total Current Assets | | |
419,539
| | |
567,949
|
Other Assets | | |
108,520
| | |
113,914
|
Property and Equipment, net | | |
106,149
| | |
118,231
|
Goodwill | | |
462,226
|
| |
462,200
|
Total Assets | | |
$
|
1,096,434
|
| |
$
|
1,262,294
|
Liabilities and Shareholders’ Equity | | | | | |
Current Liabilities | | | | | |
Accounts payable
| | |
$
|
116,704
| | |
$
|
133,048
|
Accrued expenses
| | |
133,100
| | |
135,189
|
Accrued income taxes
| | |
12,259
| | |
2,713
|
Short-term debt and current maturities of long-term obligations
| | |
14,102
| | |
5,427
|
Liabilities held for sale
| | |
—
|
| |
23,358
|
Total Current Liabilities | | |
276,165
| | |
299,735
|
Long-Term Debt | | |
31,184
| | |
229,375
|
Other Long-Term Obligations | | |
118,276
| | |
112,195
|
Shareholders’ Equity | | |
670,809
|
| |
620,989
|
Total Liabilities and Shareholders’ Equity | | |
$
|
1,096,434
|
| |
$
|
1,262,294
|
| | | | | | | |
|
|
|
INVACARE CORPORATION AND SUBSIDIARIES RECONCILIATION
FROM NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE
CASH FLOW (3) |
|
|
| |
| |
| | |
Three Months Ended
| |
Twelve Months Ended
|
(In thousands) | | |
December 31,
| |
December 31,
|
| | |
2013
|
|
2012
| |
2013
|
|
2012
|
Net cash provided by operating activities
| | |
$
|
11,299
| | |
$
|
35,469
| | |
$
|
10,054
| | |
$
|
62,291
| |
Plus:
| | | | | | | | | |
Net cash impact related to restructuring activities
| | |
1,668
| | |
985
| | |
9,473
| | |
6,735
| |
Less:
| | | | | | | | | |
Purchases of property and equipment, net
| | |
(3,043
|
)
| |
(5,254
|
)
|
|
(13,273
|
)
| |
(19,932
|
)
|
Free Cash Flow(3) | | |
$
|
9,924
|
| |
$
|
31,200
|
|
|
$
|
6,254
|
| |
$
|
49,094
|
|
| | | | | | | | | | | | | | | | |
|
(3) Free cash flow is a non-GAAP financial measure that is
comprised of net cash provided by operating activities, excluding net
cash flow 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).
Contacts:
Invacare Corporation
Lara Mahoney, 440-329-6393
Source: Invacare Corporation
© 2024 Canjex Publishing Ltd. All rights reserved.