XML 174 R34.htm IDEA: XBRL DOCUMENT v3.20.1
Business Segments
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Business Segments
Business Segments
The company operates in two primary business segments: North America and Europe with each selling the company's primary product categories, which include: lifestyle, mobility and seating and respiratory therapy products. Sales in Asia Pacific are reported in All Other and include products similar to those sold in North America and Europe. The accounting policies of each segment are the same as those described in the summary of significant accounting policies for the company's consolidated financial statements. Intersegment sales and transfers are based on the costs to manufacture plus a reasonable profit element.

Segment performance is measured and resources are allocated based on a number of factors, with the primary profit or loss measure being segment operating profit (loss). Segment operating profit (loss) represents net sales less cost of products sold less selling general and administrative expenses. Segment operating profit (loss) excludes unallocated corporate general and administrative expenses not allocated to the segments and intersegment sales and profit eliminations, which are included in All Other. In addition, segment operating profit (loss) further excludes charges related to restructuring activities, asset impairments and gain on sale of business (as applicable).

This performance measure, segment operating income (loss), is used by the Chief Operating Decision Maker (CODM) for purposes of making decisions about allocating resources to a segment and assessing its performance. In addition, this metric is reviewed by the company's Board of
Directors regarding segment performance and is a key metric in the performance management assessment of the company's employees.

In the first quarter of 2019, the company reassessed the alignment of its reporting segments and combined the North America/Home Medical Equipment (NA/HME) and Institutional Products Group (IPG) segments into a single operating segment, referred to as North America. This change better reflects how the company manages, allocates resources and assesses performance of the businesses contained in the North America segment. Additionally, the company reassessed the activity of the businesses in its former Asia Pacific segment and began reporting the Asia Pacific businesses as part of the All Other segment, since those businesses, individually and collectively, are not large enough relative to the company's overall business to merit disclosure as a separate reporting segment. The company believes that these changes provide improved transparency of the company’s business results to its shareholders, and are better aligned with how the company manages its businesses. Segment results for 2018 and 2017 have been reclassified to reflect the realignment of the company’s reporting segments and be comparable to the segment results for 2019.

As part of the company's realignment of its reportable and operating segments, the company considered whether the reporting units used for purposes of assessing impairment of goodwill should be changed and concluded that no changes were necessary.

The information by segment is as follows (in thousands): 
 
2019
 
2018
 
2017
Revenues from external customers
 
 
 
 
 
Europe
$
533,048

 
$
558,518

 
$
535,326

North America
348,201

 
364,590

 
380,290

All Other (Asia Pacific)
46,715

 
49,239

 
50,881

Consolidated
$
927,964

 
$
972,347

 
$
966,497

Intersegment revenues
 
 
 
 
 
Europe
$
14,185

 
$
15,784

 
$
13,815

North America
80,727

 
90,944

 
84,799

All Other (Asia Pacific)
13,033

 
17,737

 
15,312

Consolidated
$
107,945

 
$
124,465

 
$
113,926

Restructuring charges before income taxes
 
 
 
 
 
Europe
$
9,579

 
$
1,773

 
$
1,975

North America
1,617

 
1,359

 
8,889

All Other
633

 
349

 
1,410

Consolidated
$
11,829

 
$
3,481

 
$
12,274

 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
2017
Depreciation and amortization
 
 
 
 
 
Europe
$
7,851

 
$
8,125

 
$
7,446

North America
6,429

 
6,228

 
5,745

All Other (1)
1,283

 
1,203

 
1,440

Consolidated
$
15,563

 
$
15,556

 
$
14,631

Net interest expense
 
 
 
 
 
Europe
$
368

 
$
225

 
$
229

North America
28,070

 
27,355

 
22,006

All Other
209

 
222

 
199

Consolidated
$
28,647

 
$
27,802

 
$
22,434

Operating income (loss)
 
 
 
 
 
Europe
$
36,174

 
$
32,673

 
$
33,160

North America
(7,592
)
 
(32,506
)
 
(36,992
)
All Other (1)
(26,576
)
 
(14,397
)
 
(23,733
)
Charge related to restructuring activities
(11,829
)
 
(3,481
)
 
(12,274
)
Asset write-off
(587
)
 
(583
)
 
(320
)
Consolidated operating loss
(10,410
)
 
(18,294
)
 
(40,159
)
Net gain (loss) on convertible derivatives
1,197

 
11,994

 
(3,657
)
Loss on debt extinguishment including debt finance charges and fees
(6,165
)
 
—

 
—

Net Interest expense
(28,647
)
 
(27,802
)
 
(22,434
)
Loss before income taxes
$
(44,025
)
 
$
(34,102
)
 
$
(66,250
)
Assets
 
 
 
 
 
Europe
$
602,471

 
$
611,230

 
$
646,085

North America (2)
212,733

 
242,341

 
388,021

All Other
36,922

 
32,284

 
31,927

Consolidated
$
852,126

 
$
885,855

 
$
1,066,033

Long-lived assets
 
 
 
 
 
Europe
$
408,847

 
$
407,021

 
$
430,998

North America (2)
79,369

 
77,009

 
173,578

All Other
8,033

 
4,415

 
4,543

Consolidated
$
496,249

 
$
488,445

 
$
609,119

Expenditures for assets
 
 
 
 
 
Europe
$
6,041

 
$
5,348

 
$
5,819

North America
3,679

 
3,648

 
7,755

All Other
1,154

 
827

 
995

Consolidated
$
10,874

 
$
9,823

 
$
14,569

   ________________________
(1) Consists of un-allocated corporate SG&A costs and intercompany profits, which do not meet the quantitative criteria for determining reportable segments.
(2) Total assets and long-lived assets materially impacted by change in the fair value of the company's convertible note hedge assets.


Net sales by product, are as follows (in thousands):
 
2019
 
2018
 
2017
Europe
 
 
 
 
 
Lifestyle
$
245,987

 
$
263,340

 
$
266,290

Mobility and Seating
249,144

 
252,997

 
225,909

Respiratory Therapy
19,258

 
23,736

 
26,261

Other(1)
18,659

 
18,445

 
16,866


$
533,048

 
$
558,518

 
$
535,326

North America
 
 
 
 
 
Lifestyle
$
173,039

 
$
172,622

 
$
179,563

Mobility and Seating
121,955

 
122,013

 
112,448

Respiratory Therapy
51,649

 
67,797

 
85,760

Other(1)
1,558

 
2,158

 
2,519


$
348,201

 
$
364,590

 
$
380,290

All Other (Asia Pacific)
 
 
 
 
 
Mobility and Seating
$
28,448

 
$
31,286

 
$
29,096

Lifestyle
10,831

 
10,829

 
14,003

Respiratory Therapy
1,283

 
1,330

 
1,640

Other(1)
6,153

 
5,794

 
6,142

 
$
46,715

 
$
49,239

 
$
50,881

 
 
 
 
 
 
Total Consolidated
$
927,964

 
$
972,347

 
$
966,497

   ________________________
(1)
Includes various services, including repair services, equipment rentals and external contracting.
 
No single customer accounted for more than 5.2% of the company's sales.