For the year ended December 31, 2012, North America/HME net sales decreased 7.2% to $693.3 million compared to $746.8 million in the same period last year. Organic net sales decreased 7.1% compared to last year primarily driven by declines in all three product categories. Earnings before income taxes for the year ended December 31, 2012 were $7.9 million, excluding restructuring charges of $4.2 million and intangible impairment charges of $0.1 million, as compared to earnings before income taxes of $48.7 million last year, excluding goodwill and intangible impairment charges of $8.5 million and restructuring charges of $4.8 million. The reduction in 2012 earnings before income taxes is primarily a result of the incremental costs mentioned previously related to quality systems improvements, volume declines, unfavorable sales mix toward lower margin customers and unfavorable product mix away from higher margin products. These factors were partially offset by reduced bad debt expense and reduced associate costs.
INSTITUTIONAL PRODUCTS GROUP (IPG)
IPG net sales for the fourth quarter increased by 4.3% to $36.0 million compared to $34.5 million last year. Organic net sales increased 4.1% driven primarily by strong net sales for interior design projects for long-term care facilities, dialysis chairs and therapeutic support surfaces partially offset by declines in institutional beds. Earnings before income taxes were $3.0 million, excluding intangible impairment charges of $0.7 million, compared to $1.7 million in the fourth quarter of 2011, excluding intangible impairment charges of $0.6 million and restructuring charges of $0.1 million, as volume increases and favorable foreign currency transactions were partially offset by increased freight expense and research and development costs. The increased research and development expenses for this segment included the costs of contracted engineering for negative pressure wound therapy products.
For the year ended December 31, 2012, IPG net sales increased by 19.8% to $148.6 million compared to $124.1 million last year. Organic net sales increased 6.7% with increases in interior design projects for long-term care facilities and dialysis chairs, which were partially offset by declines in institutional beds. Earnings before income taxes for the year ended December 31, 2012 were $11.7 million, excluding intangible impairment charges of $0.7 million, as compared to $13.1 million last year, excluding intangible impairment charges of $0.6 million and restructuring charges of $0.1 million. The increase in earnings before income taxes resulted as increased SG&A expenses, primarily in associate costs, were partially offset by volume increases and the benefit of an acquisition finalized during the third quarter of 2011.
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