Invacare 2015 Annual Report Download - page 103

INVACARE CORPORATION AND SUBSIDIAIRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-31
Capital Stock
Capital stock activity for 2015, 2014 and 2013 consisted of the following (in thousands of shares):
Common Stock
Shares
Class B
Shares
Treasury
Shares
January 1, 2013 Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,952 1,085 (3,135)
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 — —
Restricted stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 — (23)
December 31, 2013 Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,084 1,085 (3,158)
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 — —
Restricted stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 — (29)
December 31, 2014 Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,219 1,085 (3,187)
Conversion of Class B to Common . . . . . . . . . . . . . . . . . . . . . . . 351 (351) —
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 — —
Restricted stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 — (7)
December 31, 2015 Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,024 734 (3,194)
Stock awards for 94,781, 77,591 and 12,925 shares were canceled in 2015, 2014 and 2013, respectively. In 2015, 2014 and
2013, 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 since 2011 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. In addition, restructuring decisions were also the result of reduced
profitability in the North America/HME and Asia/Pacific segments. 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, reduced volumes and 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
other costs as a result of pressures on the business.
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 a result of the closure of the Hong, Denmark facility. The facility closures were completed in 2012
in addition to the elimination of various positions principally in the North America/Home Medical Equipment (HME) and Asia/
Pacific segments.
Charges for the year ended December 31, 2011 totaled $10,534,000 including charges for severance ($8,352,000), contract
exit costs primarily related to the closure of the Hong, Denmark assembly facility ($1,788,000) and inventory write-offs ($277,000),
recorded in cost of products sold, and miscellaneous costs ($117,000). The majority of the 2011 North America/HME charges
were incurred for severance, primarily at the corporate headquarters as the result of the elimination of various positions principally
in sales and administration in Elyria, Ohio. These eliminations were permanent reductions in workforce which primarily resulted
in reduced selling, general and administrative expenses. In Europe, the charges were the result of the closure of the company's
Hong, Denmark facility. The assembly activities were transferred to other company facilities or outsourced to third parties. This
closure enabled the company to reduce fixed operating costs related to the facility and reduce headcount with the transfer of a
portion of the production to other company facilities. The 2011 charges have now been paid out and were funded with operating
cash flows.