Supplemental Guarantor Information

Effective February 12, 2007, substantially all of the domestic subsidiaries (the “Guarantor Subsidiaries”) of the company became guarantors of the indebtedness of Invacare Corporation under its 4.125% Convertible Senior Subordinated Debentures due 2027 (the “Debentures”) with an original aggregate principal amount of $135,000,000. The majority of the company’s wholly owned subsidiaries are not guaranteeing the indebtedness of the Debentures (the “Non-Guarantor Subsidiaries”). Each of the Guarantor Subsidiaries has fully and unconditionally guaranteed, on a joint and several basis, to pay principal, premium, and interest related to the Debentures and each of the Guarantor Subsidiaries are directly or indirectly wholly-owned subsidiaries of the company.

Presented below are the consolidating condensed financial statements of Invacare Corporation (Parent), its combined Guarantor Subsidiaries and combined Non-Guarantor Subsidiaries with their investments in subsidiaries accounted for using the equity method. The company does not believe that separate financial statements of the Guarantor Subsidiaries are material to investors and accordingly, separate financial statements and other disclosures related to the Guarantor Subsidiaries are not presented.

CONSOLIDATING CONDENSED STATEMENTS OF OPERATIONS



	The Company (Parent)			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Total
	(in thousands)
Year ended December 31, 2012
Net sales	$	357,184		$	491,960	$	724,641		$	(118,324	)	$	1,455,461
Cost of products sold	274,439			352,689		500,855			(117,423		)	1,010,560
Gross Profit	82,745			139,271		223,786			(901		)	444,901
Selling, general and administrative expenses	134,170			89,562		186,244			4,526			414,502
Charge related to restructuring activities	4,859			406		5,639			—			10,904
Loss on debt extinguishment including debt finance charges and associated fees	312			—		—			—			312
Asset write-downs to intangibles and investments	—			—		773			—			773
Income (loss) from equity investee	62,637			2,278		499			(65,414		)	—
Interest expense—net	2,725			2,627		3,084			—			8,436
Earnings from Continuing Operations Before Income Taxes	3,316			48,954		28,545			(70,841		)	9,974
Income taxes	1,489			112		16,642			—			18,243
Net Earnings (Loss) from Continuing Operations	$	1,827		$	48,842	$	11,903		$	(70,841	)	$	(8,269	)
Net Earnings from Discontinued Operations	—			10,096		—			—			10,096
Net Earnings (Loss)	$	1,827		$	58,938	$	11,903		$	(70,841	)	$	1,827

Other Comprehensive Income (Loss), net of Tax	(12,133		)	2,245		(14,288		)	12,043			(12,133		)

Comprehensive Income (Loss)	$	(10,306	)	$	61,183	$	(2,385	)	$	(58,798	)	$	(10,306	)



	The Company (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Eliminations			Total
	(in thousands)
Year ended December 31, 2011
Net sales	$	379,570		$	476,614		$	746,359	$	(100,904	)	$	1,501,639
Cost of products sold	276,164			341,945			503,050		(100,664		)	1,020,495
Gross Profit	103,406			134,669			243,309		(240		)	481,144
Selling, general and administrative expenses	131,145			28,317			182,510		54,560			396,532
Charge related to restructuring activities	3,854			426			5,977		—			10,257
Loss on debt extinguishment including debt finance charges and associated fees	24,200			—			—		—			24,200
Asset write-downs to intangibles and investments	5,531			3,592			40,357		—			49,480
Income (loss) from equity investee	58,155			3,364			1,523		(63,042		)	—
Interest expense—net	38			6,350			3,425		—			9,813
Earnings (Loss) from Continuing Operations Before Income Taxes	(3,207		)	99,348			12,563		(117,842		)	(9,138		)
Income taxes (benefit)	906			(244		)	8,718		—			9,380
Net Earnings (Loss) from Continuing Operations	$	(4,113	)	$	99,592		$	3,845	$	(117,842	)	$	(18,518	)
Net Earnings from Discontinued Operations	—			14,405			—		—			14,405
Net Earnings (Loss)	$	(4,113	)	$	113,997		$	3,845	$	(117,842	)	$	(4,113	)

Other Comprehensive Income (Loss), net of Tax	12,245			(2,026		)	14,828		(12,802		)	12,245

Comprehensive Income (Loss)	$	8,132		$	111,971		$	18,673	$	(130,644	)	$	8,132



	The Company (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Total
	(in thousands)
Year ended December 31, 2010
Net sales	$	403,227		$	425,885		$	693,463		$	(98,011	)	$	1,424,564
Cost of products sold	283,859			303,591			462,776			(98,032		)	952,194
Gross Profit	119,368			122,294			230,687			21			472,370
Selling, general and administrative expenses	132,177			44,620			169,114			39,320			385,231
Charge related to restructuring activities	—			—			—			—			—
Loss on debt extinguishment including debt finance charges and associated fees	40,164			—			—			—			40,164
Asset write-downs to intangibles and investments	—			—			—			—			—
Income (loss) from equity investee	97,602			37,438			(591		)	(134,449		)	—
Interest expense—net	16,208			3,837			2,986			—			23,031
Earnings from Continuing Operations Before Income Taxes	28,421			111,275			57,996			(173,748		)	23,944
Income taxes (benefit)	3,080			(360		)	9,620			—			12,340
Net Earnings (Loss) from Continuing Operations	$	25,341		$	111,635		$	48,376		$	(173,748	)	$	11,604
Net Earnings from Discontinued Operations	—			13,737			—			—			13,737
Net Earnings (Loss)	$	25,341		$	125,372		$	48,376		$	(173,748	)	$	25,341

Other Comprehensive Income (Loss), net of Tax	(61,573		)	4,681			(58,923		)	54,242			(61,573		)

Comprehensive Income (Loss)	$	(36,232	)	$	130,053		$	(10,547	)	$	(119,506	)	$	(36,232	)

CONSOLIDATING CONDENSED BALANCE SHEETS



	The Company (Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations			Total
	(in thousands)
December 31, 2012
Assets
Current Assets
Cash and cash equivalents	$	5,774	$	1,018	$	31,999	$	—		$	38,791
Trade receivables, net	71,622		37,223		89,946		—			198,791
Installment receivables, net	—		829		1,359		—			2,188
Inventories, net	40,278		31,455		114,169		(2,656		)	183,246
Deferred income taxes	—		—		—		—			—
Other current assets	12,727		473		34,606		(6,030		)	41,776
Assets held for sale - current	—		103,157		—		—			103,157
Total Current Assets	130,401		174,155		272,079		(8,686		)	567,949
Investment in subsidiaries	1,536,898		523,176		6,888		(2,066,962		)	—
Intercompany advances, net	81,533		874,567		238,270		(1,194,370		)	—
Other Assets	41,006		314		942		—			42,262
Other Intangibles	663		22,211		48,778		—			71,652
Property and Equipment, net	39,911		19,957		58,363		—			118,231
Goodwill	—		32,937		429,263		—			462,200
Total Assets	$	1,830,412	$	1,647,317	$	1,054,583	$	(3,270,018	)	$	1,262,294
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	63,812	$	9,465	$	59,771	$	—		$	133,048
Accrued expenses	36,716		18,155		86,348		(6,030		)	135,189
Accrued income taxes	1,545		—		1,168		—			2,713
Short-term debt and current maturities of long-term obligations	4,552		7		868		—			5,427
Liabilities held for sale - current	—		23,358		—		—			23,358
Total Current Liabilities	106,625		50,985		148,155		(6,030		)	299,735
Long-Term Debt	223,014		143		6,218		—			229,375
Other Long-Term Obligations	52,957		—		59,238		—			112,195
Intercompany advances, net	826,827		271,353		96,190		(1,194,370		)	—
Total Shareholders’ Equity	620,989		1,324,836		744,782		(2,069,618		)	620,989
Total Liabilities and Shareholders’ Equity	$	1,830,412	$	1,647,317	$	1,054,583	$	(3,270,018	)	$	1,262,294

CONSOLIDATING CONDENSED BALANCE SHEETS



	The Company (Parent)		Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries		Eliminations			Total
	(in thousands)
December 31, 2011
Assets
Current Assets
Cash and cash equivalents	$	3,642	$	2,104		$	29,178	$	—		$	34,924
Trade receivables, net	83,522		36,578			90,291		—			210,391
Installment receivables, net	—		1,180			5,491		—			6,671
Inventories, net	45,937		25,295			99,006		(1,518		)	168,720
Deferred income taxes	422		45			1,153		—			1,620
Other current assets	10,171		528			33,812		(5,680		)	38,831
Assets held for sale - current	—		67,613			—		—			67,613
Total Current Assets	143,694		133,343			258,931		(7,198		)	528,770
Investment in subsidiaries	1,560,693		524,800			—		(2,085,493		)	—
Intercompany advances, net	79,598		846,829			200,157		(1,126,584		)	—
Other Assets	40,813		699			1,136		—			42,648
Other Intangibles	821		26,838			55,661		—			83,320
Property and Equipment, net	45,459		16,398			66,483		—			128,340
Goodwill	—		31,820			441,711		—			473,531
Assets held for sale - non-current	—		24,445			—		—			24,445
Total Assets	$	1,871,078	$	1,605,172		$	1,024,079	$	(3,219,275	)	$	1,281,054
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	73,948	$	5,724		$	56,779	$	—		$	136,451
Accrued expenses	37,708		17,136			79,529		(5,680		)	128,693
Accrued income taxes	508		(680		)	987		—			815
Short-term debt and current maturities of long-term obligations	4,210		4			830		—			5,044
Liabilities held for sale - current	—		16,936			—		—			16,936
Total Current Liabilities	116,374		39,120			138,125		(5,680		)	287,939
Long-Term Debt	252,855		227			7,358		—			260,440
Other Long-Term Obligations	47,873		7,312			50,965		—			106,150
Liabilities held for sale - non-current	—		—			—		—			—
Intercompany advances, net	827,451		210,005			89,128		(1,126,584		)	—
Total Shareholders’ Equity	626,525		1,348,508			738,503		(2,087,011		)	626,525
Total Liabilities and Shareholders’ Equity	$	1,871,078	$	1,605,172		$	1,024,079	$	(3,219,275	)	$	1,281,054

CONSOLIDATING CONDENSED STATEMENTS OF CASH FLOWS



	The Company (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Total
	(in thousands)
Year ended December 31, 2012
Net Cash Provided (Used) by Operating Activities	$	(46,194	)	$	26,243		$	14,326		$	67,916		$	62,291
Investing Activities
Purchases of property and equipment	(2,266		)	(9,643		)	(8,182		)	—			(20,091		)
Proceeds from sale of property and equipment	12			23			124			—			159
Business acquisitions, net of cash acquired	—			(9,000		)	—			—			(9,000		)
Other long-term assets	(381		)	—			116			—			(265		)
Other	82,999			(10,849		)	46			(72,441		)	(245		)
Net Cash Provided (Used) for Investing Activities	80,364			(29,469		)	(7,896		)	(72,441		)	(29,442		)
Financing Activities
Proceeds from revolving lines of credit and long-term borrowings	337,044			2,140			130			—			339,314
Payments on revolving lines of credit and long-term borrowings	(367,500		)	—			—			—			(367,500		)
Proceeds from exercise of stock options	—			—			—			—			—
Payment of financing costs	(1		)	—			—			—			(1		)
Payment of dividends	(1,581		)	—			(4,525		)	4,525			(1,581		)
Purchase of treasury stock	—			—			—			—			—
Net Cash Provided (Used) by Financing Activities	(32,038		)	2,140			(4,395		)	4,525			(29,768		)
Effect of exchange rate changes on cash	—			—			786			—			786
Increase (Decrease) in cash and cash equivalents	2,132			(1,086		)	2,821			—			3,867
Cash and cash equivalents at beginning of year	3,642			2,104			29,178			—			34,924
Cash and cash equivalents at end of year	$	5,774		$	1,018		$	31,999		$	—		$	38,791

CONSOLIDATING CONDENSED STATEMENTS OF CASH FLOWS



	The Company (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Total
	(in thousands)
Year ended December 31, 2011
Net Cash Provided (Used) by Operating Activities	$	38,724		$	49,396		$	65,516		$	(54,558	)	$	99,078
Investing Activities
Purchases of property and equipment	(6,887		)	(5,316		)	(9,957		)	—			(22,160		)
Proceeds from sale of property and equipment	—			16			48			—			64
Business acquisitions, net of cash acquired	—			(42,430		)	—			—			(42,430		)
Other long-term assets	(731		)	—			7			—			(724		)
Other	(219		)	73			133			—			(13		)
Net Cash Used for Investing Activities	(7,837		)	(47,657		)	(9,769		)	—			(65,263		)
Financing Activities
Proceeds from revolving lines of credit and long-term borrowings	450,595			—			—			—			450,595
Payments on revolving lines of credit and long-term borrowings	(438,766		)	(2,111		)	(13,690		)	—			(454,567		)
Proceeds from exercise of stock options	4,139			—			—			—			4,139
Payment of financing costs	(24,113		)	—			—			—			(24,113		)
Payment of dividends	(1,588		)	—			(54,558		)	54,558			(1,588		)
Purchase of treasury stock	(21,548		)	—			—			—			(21,548		)
Net Cash Provided (Used) by Financing Activities	(31,281		)	(2,111		)	(68,248		)	54,558			(47,082		)
Effect of exchange rate changes on cash	—			—			(271		)	—			(271		)
Decrease in cash and cash equivalents	(394		)	(372		)	(12,772		)	—			(13,538		)
Cash and cash equivalents at beginning of year	4,036			2,476			41,950			—			48,462
Cash and cash equivalents at end of year	$	3,642		$	2,104		$	29,178		$	—		$	34,924

CONSOLIDATING CONDENSED STATEMENTS OF CASH FLOWS



	The Company (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Total
	(in thousands)
Year ended December 31, 2010
Net Cash Provided (Used) by Operating Activities	$	101,658		$	15,427		$	44,442		$	(39,320	)	$	122,207
Investing Activities
Purchases of property and equipment	(7,281		)	(1,567		)	(8,505		)	—			(17,353		)
Proceeds from sale of property and equipment	—			—			36			—			36
Business acquisitions, net of cash acquired	—			(13,725		)	—			—			(13,725		)
Other long-term assets	291			(11		)	521			—			801
Other	153			(174		)	(355		)	—			(376		)
Net Cash Used for Investing Activities	(6,837		)	(15,477		)	(8,303		)	—			(30,617		)
Financing Activities
Proceeds from revolving lines of credit and long-term borrowings	689,022			—			19,720			—			708,742
Payments on revolving lines of credit and long-term borrowings	(751,660		)	—			—			—			(751,660		)
Payment of financing costs	(30,329		)	—			—			—			(30,329		)
Proceeds from exercise of stock options	2,912			—			—			—			2,912
Payment of dividends	(1,612		)	—			(39,320		)	39,320			(1,612		)
Purchase of treasury stock	(5,687		)	—			—			—			(5,687		)
Net Cash Provided (Used) by Financing Activities	(97,354		)	—			(19,600		)	39,320			(77,634		)
Effect of exchange rate changes on cash	—			—			(2,995		)	—			(2,995		)
Increase (Decrease) in cash and cash equivalents	(2,533		)	(50		)	13,544			—			10,961
Cash and cash equivalents at beginning of year	6,569			2,526			28,406			—			37,501
Cash and cash equivalents at end of year	$	4,036		$	2,476		$	41,950		$	—		$	48,462