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Invacare Corporation Announces Financial Results For The Quarter And Year Ended December 31, 2012

Stocks in this article: IVC

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 6,000 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, are forward-looking in nature 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 design, production and/or distribution of Invacare's products, inability to bid on or win certain contracts, or other adverse effects of the FDA consent decree of injunction; unexpected circumstances or developments that might delay or adversely impact the results of the third party expert certification audits or FDA inspections of Invacare'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 necessary certification forms required by the exceptions to the consent decree; 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 an additional 91 metropolitan statistical areas beginning in July 2013), impacts of the U.S. Affordable Care Act that was enacted in 2010 (such as, for example, the expected annual impact on Invacare of the excise tax beginning in 2013 on certain medical devices and Invacare's ability to successfully offset such impact); legal actions, regulatory proceedings or Invacare's failure to comply with regulatory requirements or receive regulatory clearance or approval for Invacare's products or operations in the United States or abroad; product liability claims; 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 Invacare'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; potential product recalls; possible adverse effects of being leveraged, including interest rate or event of default risks (particularly as might result from the impacts associated with the FDA consent decree); decreased availability or increased costs of materials which could increase Invacare's costs of producing or acquiring Invacare'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 Invacare'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 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 EndedDecember 31,

Twelve Months EndedDecember 31,

2012   2011 2012   2011
Net sales $ 360,423 $ 374,190 $ 1,455,461 $ 1,501,639
Cost of products sold * 253,353   254,362   1,010,560   1,020,495  
Gross Profit 107,070 119,828 444,901 481,144
Selling, general and administrative expenses 105,273 94,266 414,502 396,532
Charges related to restructuring activities 7,162 8,574 10,904 10,257

Loss on debt extinguishment including debt finance charges and associated fees

2 312 24,200
Asset write-downs to intangibles and investments 773 49,480 773 49,480
Interest expense - net 2,055   2,064   8,436   9,813  
Earnings (Loss) from Continuing Operations before Income Taxes (8,193 ) (34,558 ) 9,974 (9,138 )
Income taxes 2,583   5,120   18,243   9,380  
Net Earnings (Loss) from Continuing Operations (10,776 ) (39,678 ) (8,269 ) (18,518 )
 
Earnings from Discontinued Operations before Income Taxes 5,535 4,730 16,238 14,725
Income taxes 2,052   80   6,142   320  

Net Earnings from Discontinued Operations

$

3,483

 

$

4,650

 

$

10,096

 

$

14,405

 
                       
Net Earnings (Loss) $ (7,293 ) $ (35,028 ) $ 1,827   $ (4,113 )
 
Net Earnings (Loss) per Share—Basic
Continuing Operations $ (0.34 ) $ (1.25 ) $ (0.26 ) $ (0.58 )
Discontinued Operations $ 0.11   $ 0.15   $ 0.32   $ 0.45  
Net Earnings (Loss) per Share—Basic $ (0.23 ) $ (1.10 ) $ 0.06   $ (0.13 )
Weighted Average Shares Outstanding—Basic 31,856   31,834   31,641   31,958  
 
Net Earnings (Loss) per Share—Assuming Dilution
Continuing Operations ** $ (0.34 ) $ (1.25 ) $ (0.26 ) $ (0.58 )
Discontinued Operations $ 0.11   $ 0.15   $ 0.32   $ 0.45  
Net Earnings (Loss) per Share—Assuming Dilution ** $ (0.23 ) $ (1.10 ) $ 0.06   $ (0.13 )
Weighted Average Shares Outstanding—Assuming Dilution 31,933   31,866   31,871   32,355  
 

* Cost of products sold includes inventory markdowns resulting from restructuring of $491,000 for the three and twelve months ended December 31, 2012 and $277,000 for the three and twelve months ended December 31, 2011.

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