Invacare 2012 Annual Report Download - page 54

$278,113,000 for the year ended December 31, 2011 and $244,417,000 for the year ended December 31, 2012.
However, not all the product lines included in these amounts were manufactured at the Taylor Street facility. The
company does not track net sales by production facility. Therefore, the company has estimated net sales
attributable to the Taylor Street facility by segregating the net sales for the North America/HME segment by
business unit and product line and then estimating whether the product lines were sourced from the Taylor Street
facility. Based on this methodology, the company estimates that total net sales related to products produced at the
Taylor Street facility were approximately $172,000,000 for the year ended December 31, 2011 and $147,000,000
for the year ended December 31, 2012. Even after the company receives the FDA notification that it may resume
full operations at its Taylor Street facility, it is uncertain as to whether, or how quickly, the company will be able
to rebuild net sales to more typical historical levels, irrespective of market conditions. Accordingly, the company
expects that these challenges could negatively impact the company’s operating results in 2013 to an even greater
degree than was experienced in 2012.
DISCONTINUED OPERATIONS
As part of the company’s globalization strategy, and to allow the company to focus on its core equipment
product lines, the company completed the sale of its medical supplies business, Invacare Supply Group (ISG), on
January 18, 2013. The transaction was completed pursuant to a share purchase agreement that was entered into
on December 21, 2012. Under the terms of the sale, the company received approximately $150,800,000 in cash,
which is subject to final post-closing adjustments, with net proceeds from the sale of approximately
$146,600,000, net of expenses.
The company will recognize, in its financial statements for the first quarter ended March 31, 2013, a net
after-tax gain of approximately $40,600,000 ($60,400,000 pre-tax) from the sale transaction, which represents
the excess of the net sales price over the book value of the assets and liabilities of ISG as of the date of
completion of the disposition. The company utilized the proceeds from the sale to reduce debt outstanding under
its revolving credit facility in the first quarter of 2013. Going forward, the sale of this business is expected to be
dilutive to the company’s results.
As a result of the company’s decision to sell the business in December 2012, the assets and liabilities of ISG
were reflected as assets and liabilities held for sale at the end of 2012 and 2011. Assets and liabilities held for
sale were comprised of the following:
(In thousands) December 31, 2012 December 31, 2011
Trade receivables, net ..................................... $ 44,196 $ 37,583
Inventories, net .......................................... 25,165 24,042
Other current assets ...................................... 9,355 5,988
Goodwill ............................................... 23,073 —
Property, plant and equipment, net ........................... 1,368 —
Assets held for sale - current ............................. $ 103,157 $ 67,613
Assets held for sale - non-current .......................... $ — $ 24,445
Accounts payable ........................................ $ 17,692 $ 12,354
Accrued expenses ........................................ 4,602 3,902
Accrued income taxes ..................................... 1,064 680
Liabilities held for sale - current .......................... $ 23,358 $ 16,936
Unless otherwise noted, the following discussions of the net results of the company and its segments
exclude the discontinued operation of ISG.
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