Invacare 2008 Annual Report Download - page 6

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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)
Twelve Months Ended
December 31,
2008 2007
Net earnings per share – assuming dilution ....................................... $ 1.21 $ 0.04
Weighted average shares outstanding- assuming dilution ............................ 31,953 31,927
Net earnings ................................................................ $38,551 $ 1,190
Income taxes ............................................................... 12,950 13,300
Earnings before income taxes .................................................. 51,501 14,490
Restructuring charges ........................................................ 4,766 11,408
Debt finance charges, interest and fees associated with debt refinancing ................ — 13,408
Adjusted earnings before income taxes ........................................... 56,267 39,306
Income taxes ............................................................... 13,200 3,620
Adjusted net earnings ........................................................ $43,067 $35,686
Weighted average shares outstanding- assuming dilution ............................ 31,953 31,927
Adjusted earnings per share – assuming dilution(1) .................................. $ 1.35 $ 1.12
(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 and tax valuation reserves divided by weighted average shares outstanding –
assuming dilution. For the year ended December 31, 2007, adjusted earnings per share also excludes the one-time
net tax benefit primarily attributable to new tax laws adopted in Germany which reduced the Company’s tax rates
and the corresponding German net deferred tax credits. 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.
(2) Doty, Pamela. “Cost-Effectiveness of Home and Community-Based Long-Term Care Services.” USHHS/
ASPE Office of Disability, Aging and Long-Term Care Policy. June 2000: 10.