ivc-202205040000742112FALSE00007421122022-05-042022-05-04
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 4, 2022
INVACARE CORPORATION
(Exact name of Registrant as specified in its charter)
| | | | | | | | |
| Ohio | 001-15103 | 95-2680965 |
(State or other Jurisdiction of
Incorporation or Organization) | (Commission
File Number) | (I.R.S. Employer
Identification Number) |
One Invacare Way, Elyria, Ohio 44035
(Address of principal executive offices, including zip code)
(440) 329-6000
(Registrant’s telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Exchange Act:
| | | | | | | | |
| Title of each class | Trading Symbol | Name of exchange on which registered |
| Common Shares, without par value | IVC | New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.05. Costs Associated with Exit or Disposal Activities.
On May 4, 2022, Invacare Corporation (the "Company") announced a restructuring focused on improving its cost structure by streamlining its operations in the U.S., primarily related to headcount reductions which will simplify the business. As a result, the Company anticipates annual pre-tax savings of approximately $2.8 million, with approximately $1.9 million to be realized in 2022. The Company will incur restructuring charges of $0.8 million and expects to make cash payments in the same amount, primarily related to severance costs which will be paid out over the second and third quarters.
During the first quarter of 2022, the Company executed restructuring actions that are expected to reduce operating expenses and improve profitability. In Europe, the actions were primarily related to headcount reductions at the Company's Swiss headquarters. The expected annual pre-tax savings is approximately $3.0 million, with approximately $1.7 million to be realized in the second half of 2022. In North America, the Company's executed actions were primarily related to headcount reductions. The expected annual pre-tax savings is approximately $2.7 million, with approximately $2.1 million to be realized over the remainder of 2022. As a result, the Company incurred total restructuring charges in the first quarter of approximately $3.8 million and expects to make cash payments in the same amount, with the majority of the severance costs related to these actions to be paid in 2022.
In aggregate, strategic actions announced and implemented to date will result in approximately $4.6 million of restructuring costs and cash expenditures, with the expected pre-tax benefit of approximately $5.7 million in cost savings in 2022, and approximately $8.7 million in annual pre-tax cost savings thereafter.
The Company continues a thoughtful strategic review of projects, processes, and organization design to improve customer service, efficiency and financial performance. Since the beginning of 2022, this has yielded changes as mentioned above. As it has done for the past several years, the Company continues to develop plans for further transformative actions that will create sustainable long-term shareholder value.
“Forward-Looking Statements"
This Form 8-K contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Terms such as “will,” “should,” “could,” “plan,” “intend,” “expect,” “continue,” “believe,” and “anticipate,” as well as similar comments, denote forward-looking statements that are subject to inherent uncertainties that are difficult to predict. Actual results and events may differ significantly from those expressed or anticipated as a result of various risks and uncertainties, which include, but are not limited to, the following: the duration and scope of the COVID-19 pandemic, the pace of resumption of access to healthcare, including clinics and elective care, and loosening of public health restrictions, or any reimposed restrictions on access to healthcare or tightening of public health restrictions, which could impact the demand for the Company’s products; global shortages in, or increasing costs for, transportation and logistics services and capacity; the availability and cost of needed products, components or raw materials from the Company’s suppliers; actions that governments, businesses and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions; the impact of the pandemic, or political or geopolitical crises such as Russia's invasion of Ukraine, and actions taken in response on global and regional economies and economic activity; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth, including negative conditions attributable to inflationary economic conditions; the effects of steps the Company takes to reduce operating costs; the inability of the Company to sustain profitable sales growth, achieve anticipated improvements in segment operating performance, convert high inventory levels to cash or reduce its costs; lack of market acceptance of the Company's new product innovations; potential adverse effects of revised product pricing and/or
product surcharges on revenues or the demand for the Company's products; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives, in particular the key elements of its growth plan such as its new product introductions, commercialization plans, additional investments in sales force and demonstration equipment, product distribution strategy in Europe, supply chain actions and global information technology outsourcing and ERP implementation activities; possible adverse effects on the Company's liquidity, including the Company's ability to address future debt maturities or other obligations; increases in interest rates or the costs of borrowing; adverse changes in government and third-party payor reimbursement levels and practices; decreased availability or increased costs of materials which could increase the Company's costs of producing or acquiring the Company's products, including the adverse impacts of tariffs and increases in commodity costs or freight costs; regulatory proceedings or the Company's failure to comply with regulatory requirements or receive regulatory clearance or approval for the Company's products or operations in the United States or abroad; adverse effects of regulatory or governmental inspections of the Company's facilities at any time and governmental enforcement actions; exchange rate fluctuations, particularly in light of the relative importance of the Company's foreign operations to its overall financial performance; and those other risks and uncertainties expressed in the cautionary statements and risk factors in the Company's annual report on Form 10-K and from time to time in the Company’s reports as filed with the Securities and Exchange Commission. Except to the extent required by law, the Company does not undertake and specifically declines any obligation to review or update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments or otherwise.
Item 9.01. Financial Statements and Exhibits.
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| (d) Exhibits. | |
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| Exhibit Number | Description |
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| INVACARE CORPORATION |
| (Registrant) |
| | |
| Date: May 4, 2022 | By: | /s/ Kathleen P. Leneghan |
| Name: | Kathleen P. Leneghan |
| Title: | Senior Vice President and Chief Financial Officer |
Exhibit Index
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| Exhibit Number | Description of Exhibit |
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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