Invacare 2009 Annual Report Download - page 53

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CASH FLOWS
Cash flows provided by operating activities were $155,663,000 in 2009, compared to $76,414,000 in the
previous year. The significant improvement in operating cash flows in 2009 was primarily attributable to
increased profits, improved working capital management as evidenced by an increased rate in collections of
accounts receivable and improved inventory management.
Cash flows used for investing activities were $16,682,000 in 2009, compared to $22,485,000 in 2008. The
decrease in cash used was primarily attributable to the fact that there were no acquisition costs in 2009 compared
to $8,420,000 in 2008 and decreased capital expenditures, partially offset by the liquidation of a portion of
insurance investments in 2008.
Cash flows required by financing activities in 2009 were $153,290,000, compared to cash flows required of
$61,686,000 in 2008. The increase in cash used was primarily attributable to the company paying down more
debt in 2009 compared to 2008.
During 2009, the company generated free cash flow of $141,598,000 compared to free cash flow of
$59,879,000 in 2008. The increase is due primarily to increased earnings, collection of accounts receivable and
better inventory management. Free cash flow is a non-GAAP financial measure that is comprised of net cash
provided by operating activities, excluding net cash impact related to restructuring activities, less net purchases
of property and equipment, net of proceeds from sales of property and equipment. Management believes that this
financial measure provides meaningful information for evaluating the overall financial performance of the
company and its ability to repay debt or make future investments (including acquisitions, etc.).
The non-GAAP financial measure is reconciled to the GAAP measure as follows (in thousands):
Twelve Months Ended
December 31,
2009 2008
Net cash provided by operating activities ....................................... $155,663 $ 76,414
Plus: Net cash impact related to restructuring activities ............................ 2,771 3,211
Less: Purchases of property and equipment—net ................................. (16,836) (19,746)
Free Cash Flow ........................................................... $141,598 $ 59,879
CONTRACTUAL OBLIGATIONS
The company’s contractual obligations as of December 31, 2009 are as follows (in thousands):
Payments due by period
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
9.75% Senior Notes due 2015 ...................... $262,446 $17,063 $34,125 $34,125 $177,133
4.125% Convertible Senior Subordinated Debentures due
2027 ........................................ 230,366 5,569 11,138 11,138 202,521
Revolving Credit Agreements due 2012 .............. 1,725 — 1,725 — —
Operating lease obligations ........................ 58,990 21,584 22,728 9,584 5,094
Capital lease obligations .......................... 15,683 1,819 3,412 3,162 7,290
Purchase obligations (primarily computer systems
contracts) .................................... 4,460 2,903 1,557 — —
Product liability ................................. 23,989 4,232 9,268 4,461 6,028
SERP ......................................... 26,068 391 1,960 1,960 21,757
Other, principally deferred compensation ............. 10,364 111 3,201 192 6,860
Total .......................................... $634,091 $53,672 $89,114 $64,622 $426,683
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