Supplemental Guarantor Information

9 Months Ended

Sep. 30, 2011

Supplemental Guarantor Information [Abstract]

Supplemental Guarantor Information

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% Senior Subordinated Debentures due 2027 (the "Convertible Notes") with an initial aggregate principal amount of $135,000,000. The majority of the Company's subsidiaries, which are primarily foreign subsidiaries of the Company, are not guaranteeing the repayment of the Convertible Notes (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 Convertible Notes 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

(in thousands)	The Company (Parent)			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations			Total
Three month period ended September 30, 2011
Net sales	$	96,992		$	191,595	$	193,007	$	(25,075	)	$	456,519
Cost of products sold		70,548			149,783		130,001		(24,890	)		325,442
Gross Profit		26,444			41,812		63,006		(185	)		131,077
Selling, general and administrative expenses		30,314			14,069		47,145		12,607			104,135
Loss on debt extinguishment including debt finance charges and associated fees		7,462			0		0		0			7,462
Charges related to restructuring activities		0			465		846		0			1,311
Income (loss) from equity investee		24,452			8,210		8		(32,670	)		0
Interest expense—net		(180	)		363		836		0			1,019
Earnings (loss) before Income Taxes		13,300			35,125		14,187		(45,462	)		17,150
Income taxes		500			100		3,750		0			4,350
Net Earnings (loss)	$	12,800		$	35,025	$	10,437	$	(45,462	)	$	12,800
Three month period ended September 30, 2010
Net sales	$	105,143		$	180,297	$	176,793	$	(24,757	)	$	437,476
Cost of products sold		73,400			139,855		117,485		(24,831	)		305,909
Gross Profit		31,743			40,442		59,308		74			131,567
Selling, general and administrative expenses		32,911			28,784		40,251		0			101,946
Loss on debt extinguishment including debt finance charges and associated fees		3,711			0		0		0			3,711
Income (loss) from equity investee		25,227			8,973		6		(34,206	)		0
Interest expense—net		4,170			227		590		0			4,987
Earnings (loss) before Income Taxes		16,178			20,404		18,473		(34,132	)		20,923
Income taxes		580			109		4,636		0			5,325
Net Earnings (loss)	$	15,598		$	20,295	$	13,837	$	(34,132	)	$	15,598

CONSOLIDATING CONDENSED STATEMENTS OF OPERATIONS

(in thousands)	The Company (Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Total
Nine month period ended September 30, 2011
Net sales	$	286,969	$	576,799	$	562,331		$	(74,670	)	$	1,351,429
Cost of products sold		208,162		449,838		378,691			(74,263	)		962,428
Gross Profit		78,807		126,961		183,640			(407	)		389,001
Selling, general and administrative expenses		99,464		44,186		141,955			36,724			322,329
Loss on debt extinguishment including debt finance charges and associated fees		24,198		0		0			0			24,198
Charges related to restructuring activities		0		465		1,277			0			1,742
Income (loss) from equity investee		78,902		26,271		1,065			(106,238	)		0
Interest expense—net		1,532		1,144		2,641			0			5,317
Earnings (loss) before Income Taxes		32,515		107,437		38,832			(143,369	)		35,415
Income taxes		1,600		300		2,600			0			4,500
Net Earnings (loss)	$	30,915	$	107,137	$	36,232		$	(143,369	)	$	30,915
Nine month period ended September 30, 2010
Net sales	$	300,383	$	535,735	$	509,575		$	(75,149	)	$	1,270,544
Cost of products sold		212,173		418,825		339,008			(75,232	)		894,774
Gross Profit		88,210		116,910		170,567			83			375,770
Selling, general and administrative expenses		100,124		81,987		126,032			0			308,143
Loss on debt extinguishment including debt finance charges and associated fees		22,145		0		0			0			22,145
Income (loss) from equity investee		67,674		17,807		(377	)		(85,104	)		0
Interest expense—net		13,950		536		2,353			0			16,839
Earnings (loss) before Income Taxes		19,665		52,194		41,805			(85,021	)		28,643
Income taxes		1,572		662		8,316			0			10,550
Net Earnings (loss)	$	18,093	$	51,532	$	33,489		$	(85,021	)	$	18,093

CONSOLIDATING CONDENSED BALANCE SHEETS

(in thousands) September 30, 2011	The Company  (Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor  Subsidiaries		Eliminations			Total
Assets
Current Assets
Cash and cash equivalents	$	5,329	$	2,601	$	33,350	$	0		$	41,280
Trade receivables, net		87,000		71,657		97,846		0			256,503
Installment receivables, net		0		1,183		4,805		0			5,988
Inventories, net		47,677		44,175		111,690		(1,685	)		201,857
Deferred income taxes		5,314		0		4,009		0			9,323
Other current assets		7,544		5,049		37,230		(8,520	)		41,303
Total Current Assets		152,864		124,665		288,930		(10,205	)		556,254
Investment in subsidiaries		1,615,511		574,717		0		(2,190,228	)		0
Intercompany advances, net		78,154		813,831		203,972		(1,095,957	)		0
Other Assets		41,599		1,111		1,247		0			43,957
Other Intangibles		985		27,439		61,016		0			89,440
Property and Equipment, net		46,397		16,731		71,588		0			134,716
Goodwill		5,023		57,982		508,546		0			571,551
Total Assets	$	1,940,533	$	1,616,476	$	1,135,299	$	(3,296,390	)	$	1,395,918
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$	74,584	$	16,680	$	62,483	$	0		$	153,747
Accrued expenses		36,222		27,899		86,398		(8,520	)		141,999
Accrued income taxes		734		0		379		0			1,113
Short-term debt and current maturities of long-term obligations		177		64		698		0			939
Total Current Liabilities		111,717		44,643		149,958		(8,520	)		297,798
Long-Term Debt		283,892		249		10,649		0			294,790
Other Long-Term Obligations		51,123		2,111		54,776		0			108,010
Intercompany advances, net		798,481		200,488		96,990		(1,095,959	)		0
Total Shareholders' Equity		695,320		1,368,985		822,926		(2,191,911	)		695,320
Total Liabilities and Shareholders' Equity	$	1,940,533	$	1,616,476	$	1,135,299	$	(3,296,390	)	$	1,395,918

CONSOLIDATING CONDENSED BALANCE SHEETS

(in thousands) December 31, 2010	The Company  (Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor  Subsidiaries		Eliminations			Total
Assets
Current Assets
Cash and cash equivalents	$	4,036	$	2,476	$	41,950	$	0		$	48,462
Trade receivables, net		95,673		68,504		87,827		0			252,004
Installment receivables, net		0		876		3,083		0			3,959
Inventories, net		72,499		39,299		63,873		(1,296	)		174,375
Deferred income taxes		3,289		0		2,489		0			5,778
Other current assets		12,274		6,895		27,685		(5,273	)		41,581
Total Current Assets		187,771		118,050		226,907		(6,569	)		526,159
Investment in subsidiaries		1,489,732		594,690		0		(2,084,422	)		0
Intercompany advances, net		77,990		745,991		226,421		(1,050,402	)		0
Other Assets		42,782		1,881		821		0			45,484
Other Intangibles		1,241		8,590		61,080		0			70,911
Property and Equipment, net		46,791		12,093		71,879		0			130,763
Goodwill		5,023		34,388		467,672		0			507,083
Total Assets	$	1,851,330	$	1,515,683	$	1,054,780	$	(3,141,393	)	$	1,280,400
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$	73,468	$	14,923	$	55,362	$	0		$	143,753
Accrued expenses		39,090		20,690		75,572		(5,273	)		130,079
Accrued income taxes		5,633		0		2,869		0			8,502
Short-term debt and current maturities of long-term obligations		7,149		83		742		0			7,974
Total Current Liabilities		125,340		35,696		134,545		(5,273	)		290,308
Long-Term Debt		217,164		0		20,926		0			238,090
Other Long-Term Obligations		48,645		1,123		49,823		0			99,591
Intercompany advances, net		807,770		180,743		61,889		(1,050,402	)		0
Total Shareholders' Equity		652,411		1,298,121		787,597		(2,085,718	)		652,411
Total Liabilities and Shareholders' Equity	$	1,851,330	$	1,515,683	$	1,054,780	$	(3,141,393	)	$	1,280,400

CONSOLIDATING CONDENSED STATEMENTS OF CASH FLOWS

(in thousands) Nine month period ended September 30, 2011	The Company  (Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Total
Net Cash Provided (Used) by Operating Activities	$	12,235		$	49,075		$	42,002		$	(36,724	)	$	66,588
Investing Activities
Purchases of property and equipment		(5,751	)		(3,127	)		(6,715	)		0			(15,593	)
Proceeds from sale of property and equipment		0			15			31			0			46
(Increase) decrease in other long-term assets		(1,021	)		0			3			0			(1,018	)
Business acquisitions, net of cash acquired		0			(41,465	)		0			0			(41,465	)
Other		(26	)		(2	)		28			0			0
Net Cash Used for Investing Activities		(6,798	)		(44,579	)		(6,653	)		0			(58,030	)
Financing Activities
Proceeds from revolving lines of credit and long-term borrowings		362,958			0			0			0			362,958
Payments on revolving lines of credit and long-term debt and capital lease obligations		(324,370	)		(4,371	)		(8,209	)		0			(336,950	)
Proceeds from exercise of stock options		4,126			0			0			0			4,126
Payment of financing costs		(24,116	)		0			0			0			(24,116	)
Payment of dividends		(1,191	)		0			(36,724	)		36,724			(1,191	)
Purchase of treasury stock		(21,551	)		0			0			0			(21,551	)
Net Cash Provided (Used) by Financing Activities		(4,144	)		(4,371	)		(44,933	)		36,724			(16,724	)
Effect of exchange rate changes on cash		0			0			984			0			984
Increase (decrease) in cash and cash equivalents		1,293			125			(8,600	)		0			(7,182	)
Cash and cash equivalents at beginning of period		4,036			2,476			41,950			0			48,462
Cash and cash equivalents at end of period	$	5,329		$	2,601		$	33,350		$	0		$	41,280

CONSOLIDATING CONDENSED STATEMENTS OF CASH FLOWS

(in thousands) Nine month period ended September 30, 2010	The Company  (Parent)			Combined Guarantor Subsidiaries			Combined Non- Guarantor Subsidiaries			Eliminations		Total
Net Cash Provided (Used) by Operating Activities	$	58,306		$	14,311		$	1,863		$	0	$	74,480
Investing Activities
Purchases of property and equipment		(5,251	)		(442	)		(5,632	)		0		(11,325	)
Proceeds from sale of property and equipment					(2	)		28			0		26
(Increase) decrease in other long-term assets		549			(11	)		520			0		1,058
Business acquisitions, net of cash acquired					(13,725	)		0			0		(13,725	)
Other		316			(517	)		(428	)		0		(629	)
Net Cash Used for Investing Activities		(4,386	)		(14,697	)		(5,512	)		0		(24,595	)
Financing Activities
Proceeds from revolving lines of credit and long-term borrowings		337,225			0			4,377			0		341,602
Payments on revolving lines of credit and long-term debt and capital lease obligations		(373,583	)		0			0			0		(373,583	)
Proceeds from exercise of stock options		1,137			0			0			0		1,137
Payment of financing costs		(20,052	)		0			0			0		(20,052	)
Payment of dividends		(1,212	)		0			0			0		(1,212	)
Net Cash Provided (Used) by Financing Activities		(56,485	)		0			4,377			0		(52,108	)
Effect of exchange rate changes on cash		0			0			(3,189	)		0		(3,189	)
Increase (decrease) in cash and cash equivalents		(2,565	)		(386	)		(2,461	)		0		(5,412	)
Cash and cash equivalents at beginning of period		6,569			2,526			28,406			0		37,501
Cash and cash equivalents at end of period	$	4,004		$	2,140		$	25,945		$	0	$	32,089