Invacare 2006 Annual Report Download - page 4

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INVACARE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET EARNINGS PER SHARE
TO ADJUSTED EARNINGS PER SHARE (1)
(In thousands, except per share data) 2006 2005
Year Ended
December 31,
Net earnings (loss) per share – assuming dilution*..................... $ (10.00) $ 1.51
Weighted average shares outstanding – assuming dilution* .............. 31,789 32,452
Net earnings (loss) ............................................ $(317,774) $48,852
Income taxes ................................................ 8,250 22,450
Earnings (loss) before income taxes ............................... (309,524) 71,302
Restructuring charges .......................................... 21,250 7,533
Debt finance charges, interest and fees associated with debt refinancing .... 3,745 —
Incremental reserve against accounts receivable ...................... 26,775 —
Asset write-downs related to goodwill and other intangible assets ......... 300,417 —
Adjusted earnings before income taxes ............................. 42,663 78,835
Income taxes ................................................ 4,910 24,833
Adjusted net earnings.......................................... 37,753 54,002
Weighted average shares outstanding – assuming dilution ............... 32,061 32,452
Adjusted earnings per share – assuming dilution ...................... $ 1.18 $ 1.66
(1) Adjusted Earnings per share (EPS) is a non-GAAP financial measure which is defined as net earnings excluding
the impact of restructuring charges, debt finance charges, interest and fees associated with the Company’s debt
refinancing, incremental write-down of accounts receivable and asset write-downs related to goodwill and other
intangible assets divided by weighted average shares outstanding – assuming dilution. It should be noted that
the Company’s definition of Adjusted EPS may not be comparable to similar measures disclosed by other
companies because not all companies and analysts calculate Adjusted EPS in the same manner. We believe that
these types of exclusions are also recognized by the industry in which we operate as relevant in computing
Adjusted EPS as a supplementary non-GAAP financial measure widely used by financial analysts and others in
our industry to meaningfully evaluate a company’s operating performance.
* Net earnings (loss) per share assuming dilution calculated for the year ended December 31, 2006 utilizing
weighted average shares outstanding – basic as a result of the Company being in a loss situation.