Invacare 2013 Annual Report Download - page 108

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-34
Net Earnings (Loss) Per Common Share
The following table sets forth the computation of basic and diluted net earnings (loss) per common share.
2013 2012 2011
(In thousands except per share data)
Basic
Average common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,915 31,641 31,958
Net loss from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (51,000) $ (11,075) $ (21,760)
Net earnings from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,051 $ 12,902 $ 17,647
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,051 $ 1,827 $ (4,113)
Net loss per common share from continuing operations. . . . . . . . . . . . . . . . . . . . $ (1.60) $ (0.35) $ (0.68)
Net earnings per common share from discontinued operations . . . . . . . . . . . . . . $ 2.63 $ 0.41 $ 0.55
Net earnings (loss) per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.04 $ 0.06 $ (0.13)
Diluted
Average common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,915 31,641 31,958
Stock options and awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 230 397
Average common shares assuming dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,043 31,871 32,355
Net loss from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (51,000) $ (11,075) $ (21,760)
Net earnings from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,051 $ 12,902 $ 17,647
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,051 $ 1,827 $ (4,113)
Net loss per common share from continuing operations * . . . . . . . . . . . . . . . . . . $ (1.60) $ (0.35) $ (0.68)
Net earnings per common share from discontinued operations . . . . . . . . . . . . . . $ 2.62 $ 0.40 $ 0.55
Net earnings (loss) per common share *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.03 $ 0.06 $ (0.13)
* Net earnings (loss) per share assuming dilution calculated utilizing weighted average shares outstanding - basic in periods in
which there is a net loss.
At December 31, 2013, 2012 and 2011, 4,307,458, 4,537,282 and 2,355,567 shares associated with stock options, respectively
were excluded from the average common shares assuming dilution, as they were anti-dilutive. At December 31, 2013, the majority
of the anti-dilutive shares were granted at an exercise price of $41.87, which was higher than the average fair market value price
of $16.48 for 2013. For the 2013, 2012 and 2011 Net Earnings (Loss) per Share from continuing operations calculation, all of the
shares associated with stock options were anti-dilutive because of the Company's loss. In 2012, the majority of the anti-dilutive
shares were granted at an exercise price of $41.87, which was higher than the average fair market value price of $15.27 for 2012.
In 2011, the majority of the anti-dilutive shares were granted at an exercise price of $24.45, which was lower than the average fair
market value price of $27.40 for 2011. Shares necessary to settle a conversion spread on the convertible notes were not included
in the common shares assuming dilution as the average market price of the Company stock in 2013, 2012 and 2011 did not exceed
the conversion price.
Concentration of Credit Risk
The Company manufactures and distributes durable medical equipment and supplies to the home health care, retail and
extended care markets. The Company performs credit evaluations of its customers’ financial condition. Invacare utilizes De Lage
Landen, Inc. (“DLL”), a third party financing company, to provide the majority of future lease financing to Invacare’s North
America customers. The DLL agreement provides for direct leasing between DLL and the Invacare customer. The Company retains
a recourse obligation of $4,518,000 at December 31, 2013 to DLL for events of default under the contracts, which total $43,823,000
at December 31, 2013. Guarantees, ASC 460, requires the Company to record a guarantee liability as it relates to the limited
recourse obligation. As such, the Company has recorded a liability of $153,000 for this guarantee obligation within accrued
expenses. The Company monitors the collections status of these contracts and has provided amounts for estimated losses in its