Invacare 2008 Annual Report Download - page 47

Restructuring charges of $11,408,000 were incurred during 2007 of which $1,817,000 was recorded in cost
of goods sold, since it relates to inventory markdowns and the remaining charge amount was included in the
Charge Related to Restructuring Activities in the Consolidated Statement of Operations. The costs incurred
during 2007 were principally for severance, product line discontinuation and costs associated with facility
closures.
Net Sales. Consolidated net sales for 2007 increased 7.0% for the year, to $1,602,237,000 from
$1,498,035,000 in 2006. Acquisitions accounted for a one percentage point increase in net sales while foreign
currency translation increased net sales by three percentage points. The remaining increase was primarily driven
by sales increases in the European and Invacare Supply Group (ISG) segments. European net sales growth
resulted from volume increases in most regions, while ISG growth was mainly due to home delivery program
sales to large providers and volume increases in diabetic, incontinence and enterals product lines.
North America/Home Medical Equipment
NA/HME net sales declined 1.0% in 2007 versus the prior year to $669,364,000 from $676,326,000 with
foreign currency translation and acquisitions increasing net sales by one percentage point and less then one
percentage point, respectively. Standard product line net sales improved by 1.9% in 2007, driven by increased
volumes in manual wheelchairs and beds, partially offset by pricing reductions. Rehab product line net sales
declined by 2.3% in 2007, primarily driven by volume declines in our consumer power product line, principally
with national providers, along with competitive pricing reductions implemented in late 2006 due to Medicare
reimbursement changes for custom and consumer power wheelchairs. Respiratory product line sales declined by
9.0% in 2007, primarily attributable to reduced unit volumes of oxygen concentrators resulting from the loss of
one large national provider, continued inventory utilization programs by providers and pricing declines in
concentrators. However, HomeFill®oxygen system net sales increased for the year by 30.4% due to increased
purchases by two national providers.
Invacare Supply Group
ISG net sales increased 12.6% in 2007 over the prior year to $256,993,000 from $228,236,000. Acquisitions
and foreign currency translation had no impact on the sales increase. The increase was primarily attributable to
home delivery program sales to large providers and volume increases in our diabetic, incontinence and enterals
product lines.
Institutional Products Group
IPG net sales decreased 5.9% in 2007 over the prior year to $87,967,000 from $93,455,000. Foreign
currency translation increased net sales by one percentage point while acquisitions had no impact net sales. The
decrease was primarily attributable reduced purchasing by a national account.
Europe
European net sales increased 15.7% in 2007 compared to the prior year to $498,109,000 from $430,427,000
with foreign currency translation increasing net sales by eight percentage points. Net sales were strong in most of
the regions as sales volumes increased with growth in Standard, Rehab and Respiratory product lines.
Asia/Pacific
Asia/Pacific net sales increased 29.0% in 2007 from the prior year to $89,804,000 from $69,591,000.
Acquisitions increased net sales by nineteen percentage points and foreign currency translation increased net
sales by thirteen percentage points. Performance in this region continued to be negatively impacted by
U.S. reimbursement uncertainty in the consumer power wheelchair market. This resulted in decreased sales of
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