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

Stocks in this article: IVC

EUROPE

For the fourth quarter, European net sales increased 4.1% to $144.8 million versus $139.2 million for the fourth quarter of last year. Organic net sales for the quarter increased 7.9%, principally due to increases across all three product categories. For the fourth quarter of 2012, earnings before income taxes decreased to $9.3 million, excluding restructuring charges of $1.3 million, as compared to $12.4 million last year, excluding restructuring charges of $4.2 million and intangible impairment charges of $0.4 million. The decrease in earnings before income taxes was largely attributable to an unfavorable sales mix toward lower margin product lines and lower margin customers, higher warranty expense and increased SG&A expenses, primarily in associate costs. These factors were partially offset by volume increases.

For the year ended December 31, 2012, European net sales increased 0.4% to $546.5 million versus $544.5 million last year. Organic net sales increased 7.0%, principally due to increases in respiratory therapy products partially offset by declines in lifestyle and mobility and seating products. For the year ended December 31, 2012, earnings before income taxes decreased to $33.6 million, excluding restructuring charges of $2.1 million, as compared to $39.5 million, excluding restructuring charges of $5.5 million and intangible impairment charges of $0.4 million last year. The decrease in earnings before income taxes was largely attributable to an unfavorable sales mix toward lower margin product lines and lower margin customers, pricing pressure, primarily in lifestyle and power mobility products, and increased warranty and associate costs. These factors were partially offset by volume increases.

ASIA/PACIFIC

For the fourth quarter, Asia/Pacific net sales decreased 26.3% to $13.8 million versus $18.7 million last year. Organic net sales for the quarter decreased 29.3%, caused by net sales declines in all three businesses in the segment. The Company's Australian and New Zealand distribution businesses experienced declines in mobility and seating and lifestyle products. The decline in the Company's subsidiary which produces microprocessor controllers was primarily related to its contract manufacturing business for companies outside of the healthcare industry, and to a lesser extent a decline in electronic components for mobility products. For the fourth quarter, loss before income taxes was $3.4 million, excluding restructuring charges of $4.3 million, as compared to earnings before income taxes of $1.1 million last year, excluding goodwill and intangible impairment charges of $39.9 million and restructuring charges of $0.2 million. The decrease in earnings before income taxes is primarily attributable to the reduction in net sales volumes for each of the businesses in this segment. As disclosed in the Company's third quarter 2012 Form 10-Q, the Company's management team began to restructure the Company's operations in the Asia/Pacific segment designed to return the segment to profitability. In Australia, the Company consolidated offices/warehouses, decreased staffing and exited various activities while returning to a focus on distribution. At the Company's subsidiary which produces microprocessor controllers, the Company plans to exit the contract manufacturing business for companies outside of the healthcare industry.

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