Invacare 2012 Annual Report Download - page 111

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Capital Stock
Capital stock activity for 2012, 2011 and 2010 consisted of the following (in thousands of shares):
Common Stock
Shares
Class B
Shares
Treasury
Shares
January 1, 2010 Balance .............................................. 33,048 1,111 (1,834)
Exercise of stock options ......................................... 399 — (247)
Restricted stock awards .......................................... 87 — (33)
Purchase of shares for treasury ..................................... — — (205)
Conversion of Class B to Common ................................. 25 (25) —
December 31, 2010 Balance ........................................... 33,559 1,086 (2,319)
Exercise of stock options ......................................... 180 — —
Restricted stock awards .......................................... 96 — (31)
Purchase of shares for treasury ..................................... — — (750)
December 31, 2011 Balance ........................................... 33,835 1,086 (3,100)
Exercise of stock options ......................................... 10 — (8)
Restricted stock awards .......................................... 107 — (27)
December 31, 2012 Balance ........................................... 33,952 1,086 (3,135)
Stock awards for 10,631, 4,900 and 5,600 shares were canceled in 2012, 2011 and 2010. For 2012, 2011 and
2010, annualized dividends of $0.05 per Common Share and $0.045 per Class B Common Share were declared
and paid, respectively.
Charges Related to Restructuring Activities
The company’s restructuring charges recorded in 2011 and 2012 were necessitated primarily by continued
declines in Medicare and Medicaid reimbursement by the U.S. government, as well as similar healthcare
reimbursement pressures abroad, which negatively affect the company’s customers (e.g. home health care
providers) and continued pricing pressures faced by the company as a result of outsourcing by competitors to
lower cost locations. While the company’s restructuring efforts have been executed on a timely basis resulting in
operating cost savings, the savings have been more than offset by continued margin decline, principally as a
result of product mix, and higher regulatory and compliance costs related to quality system improvements which
are unrelated to the restructuring actions. The company expects any near-term cost savings from restructuring
will be offset by higher regulatory and compliance costs related to quality system improvements at least until the
company has completed its quality systems remediation efforts.
The company’s restructuring commenced in the second quarter of 2011 with the company’s decision to
close the Hong, Denmark assembly facility as part of the company’s ongoing globalization initiative to reduce
complexity in the company’s supply chain which is intended to reduce expenses to help offset pricing pressures.
In the third quarter of 2011, the company continued to execute on the closure of the Hong, Denmark assembly
facility and initiated the closure of a smaller facility in the U.S. Charges for the quarter ended December 31, 2011
were primarily incurred at the company’s corporate headquarters for severance, with additional costs incurred as
FS-31