Business Segments

9 Months Ended

Sep. 30, 2011

Business Segments [Abstract]

Business Segments

Business Segments - The Company operates in five primary business segments: North America/Home Medical Equipment (NA/HME), Invacare Supply Group (ISG), Institutional Products Group (IPG), Europe and Asia/Pacific. The NA/HME segment sells each of three primary product lines, which includes: standard, rehab and respiratory products. Invacare Supply Group sells distributed product and the Institutional Products Group sells or rents health care furnishings and accessory products. Europe and Asia/Pacific sell the same product lines as NA/HME and the Institutional Products Group. Each business segment sells to the home health care, retail and extended care markets.

The Company evaluates performance and allocates resources based on profit or loss from operations before income taxes for each reportable segment. 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. Therefore, intercompany profit or loss on intersegment sales and transfers is not considered in evaluating segment performance, except for Asia/Pacific due to its significant intercompany sales volume.

During the quarter and as a result of an acquisition that expanded the Company's North American rental operations, management re-evaluated its rental operations and determined that sales are more closely aligned with institutional customers and as a result, these operations are now included and evaluated as part of the Institutional Products Group. As a result of this change, IPG revenues for the quarter and nine months ended September 30, 2010 were increased by $3,496,000 and $5,489,000, respectively, with an offsetting decrease in revenues for the North America / HME segment. In addition, earnings before income taxes for the quarter and nine months ended September 30, 2010 were decreased by $21,000 and $275,000, respectively, with an offsetting increase in earnings before income taxes for the North America / HME segment. The information by segment is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues from external customers
North America / HME	$	188,428		$	187,429		$	564,996		$	550,511
Invacare Supply Group		74,197			75,201			223,980			217,745
Institutional Products Group		28,048			23,273			89,579			70,244
Europe		142,107			128,613			405,354			369,446
Asia/Pacific		23,739			22,960			67,520			62,598
Consolidated	$	456,519		$	437,476		$	1,351,429		$	1,270,544
Intersegment Revenues
North America / HME	$	21,699		$	20,717		$	64,766		$	64,060
Invacare Supply Group		18			29			58			61
Institutional Products Group		1,450			1,335			4,765			4,332
Europe		2,635			2,036			7,267			7,369
Asia/Pacific		7,407			8,821			25,350			24,605
Consolidated	$	33,209		$	32,938		$	102,206		$	100,427
Restructuring charges before income taxes
North America / HME	$	406		$	0		$	406		$	0
Invacare Supply Group		59			0			59			0
Europe		846			0			1,277			0
Consolidated	$	1,311		$	0		$	1,742		$	0
Earnings (loss) before income taxes
North America / HME	$	11,454		$	15,112		$	38,332		$	37,392
Invacare Supply Group		2,302			2,249			4,986			4,448
Institutional Products Group		3,865			1,843			11,448			6,727
Europe		11,379			12,769			25,819			26,596
Asia/Pacific		933			2,893			3,826			6,244
All Other *		(12,783	)		(13,943	)		(48,996	)		(52,764	)
Consolidated	$	17,150		$	20,923		$	35,415		$	28,643

* "All Other" consists of un-allocated corporate selling, general and administrative costs, which do not meet the quantitative criteria for determining reportable segments. In addition, "All Other" loss before income taxes includes loss on debt extinguishment including finance charges and associated fees.