Invacare 2013 Annual Report Download - page 103

Download and view the complete annual report

Please find page 103 of the 2013 Invacare annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-29
resulting from the impact of the FDA consent decree. The savings from these charges will be reflected primarily in reduced selling,
general and administrative expenses and manufacturing expenses for the Company. In Europe, severance incurred for elimination
of certain sales and supply chain positions. In Asia/Pacific, severance principally incurred at the Company's subsidiary, which
produces microprocessor controllers, as a result of the Company's decision in 2012 to cease the contract manufacturing business
for companies outside of the healthcare industry. The lease termination costs were principally related to Australia as a result of
the restructuring announced in 2012. Payments for the year ended December 31, 2013 were $11,844,000 and were funded with
operating cash flows and cash on hand. The majority of the 2013 charges are expected to be paid out within the next 12 months.
To date, the Company's liquidity has not been materially impacted.
There have been no material changes in accrued balances related to the charges, either as a result of revisions in the plan
or changes in estimates. In addition, the savings anticipated as a result of the Company's restructuring plans have been or are
expected to be achieved, primarily resulting in reduced salary and benefit costs principally impacting Selling, General and
Administrative expenses, and to a lesser extent, Costs of Products Sold. However, in 2011, 2012 and into 2013, these savings
have been more than offset by continued margin decline, principally as a result of product mix, and higher regulatory and compliance
costs related to quality system improvements and reduced net sales volumes primarily related to mobility and seating products
impacted by the consent decree, which are unrelated to the restructuring actions. A progression by reporting segment of the accruals
recorded as a result of the restructuring is as follows (in thousands):
Severance Inventory Lease
Terminations Other Total
December 31, 2010 Balance
Total. . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ — $ — $ —
Charges
North America/HME. . . . . . . . . . 4,755 — — 4 4,759
IPG. . . . . . . . . . . . . . . . . . . . . . . . 123 — — — 123
Europe . . . . . . . . . . . . . . . . . . . . . 3,288 277 1,788 113 5,466
Asia/Pacific . . . . . . . . . . . . . . . . . 186 — — — 186
Total. . . . . . . . . . . . . . . . . . . . . . . 8,352 277 1,788 117 10,534
Payments
North America/HME. . . . . . . . . . (1,663) — — (4)(1,667)
IPG. . . . . . . . . . . . . . . . . . . . . . . . (52) — — — (52)
Europe . . . . . . . . . . . . . . . . . . . . . (1,546) (277)(1,714)(113)(3,650)
Asia/Pacific . . . . . . . . . . . . . . . . . (186) — — — (186)
Total. . . . . . . . . . . . . . . . . . . . . . . (3,447) (277)(1,714)(117)(5,555)
December 31, 2011 Balance
North America/HME. . . . . . . . . . 3,092 — — — 3,092
IPG. . . . . . . . . . . . . . . . . . . . . . . . 71———71
Europe . . . . . . . . . . . . . . . . . . . . . 1,742 — 74 — 1,816
Asia/Pacific . . . . . . . . . . . . . . . . . —————
Total. . . . . . . . . . . . . . . . . . . . . . 4,905 — 74 — 4,979
Charges
North America/HME. . . . . . . . . . 4,242 — 5 — 4,247
IPG. . . . . . . . . . . . . . . . . . . . . . . . 35———35
Europe . . . . . . . . . . . . . . . . . . . . . 817 — 53 1,223 2,093
Asia/Pacific . . . . . . . . . . . . . . . . . 1,681 491 1,667 1,181 5,020
Total. . . . . . . . . . . . . . . . . . . . . . 6,775 491 1,725 2,404 11,395