Invacare Corp. (IVC, Financial) filed Quarterly Report for the period ended 2009-09-30.
Invacare Corporation is the world's leading manufacturer and distributor ofnon-acute health care products based upon its distribution channels the breadth of its product line and sales. The company designs manufactures and distributes an extensive line of health care products for the non-acute care environment including the home health care retail and extended care markets. The company's products are sold through its world-wide distribution network byits sales force telemarketing employees and various organizations of independent manufacturer's representatives. Invacare Corp. has a market cap of $703.1 million; its shares were traded at around $22.67 with a P/E ratio of 14.6 and P/S ratio of 0.4. The dividend yield of Invacare Corp. stocks is 0.2%. Invacare Corp. had an annual average earning growth of 0.4% over the past 10 years.
Selling, general and administrative (“SG&A”) expense as a percentage of net sales for the three and nine months ended September 30, 2009 was 24.0% and 23.8%, respectively, compared to 23.0% and 23.3% for the same periods a year ago. The dollar decreases were $1,837,000 and $11,980,000, or 1.7% and 3.9%, respectively, for the quarter and first nine months of the year, as compared to the same period a year ago. Acquisitions increased these expenses by $574,000 in the quarter and $1,804,000 in the first nine months of the year, while foreign currency translation decreased these expenses by $3,879,000 in the quarter and $19,017,000 in the first nine months of the year compared to the same periods a year ago. Excluding the impact of foreign currency translation and acquisitions, selling, general and administrative expense increased 1.4% for the quarter and 1.7% for the first nine months of 2009 as compared to the same periods a year ago. The dollar increase, excluding foreign currency translation and acquisitions, was $1,468,000 and $5,233,000 for the quarter and first nine months of the year, as compared to the same periods a year ago. The year to date increase is primarily attributable to increases in bad debt and stock compensation expense as well as unfavorable foreign currency transactions related to the Euro and the British Pound.
North American/HME SG&A expense increased $2,621,000, or 4.9%, for the quarter and $5,249,000, or 3.4%, in the first nine months of 2009 compared to the same periods a year ago. For the quarter, foreign currency translation decreased SG&A expense by $225,000, or .4%, while acquisitions increased SG&A expense by $574,000, or 1.1%. For the first nine months of 2009, foreign currency translation decreased SG&A expense by $1,578,000 or 1.0% while acquisitions increased SG&A by $1,804,000 or 1.2%. Excluding the impact of foreign currency translation and acquisitions, SG&A expense increased by 4.3% for the quarter and increased by 3.3% year to date. The year to date increase is primarily attributable to increased bad debt expense and stock compensation expense.
Asia/Pacific SG&A expense decreased $1,174,000, or 15.8%, for the quarter and $3,170,000, or 14.4%, in the first nine months of the year compared to the same periods a year ago. For the quarter, foreign currency translation decreased SG&A expense by $427,000, or 5.8%. For the first nine months of 2009, foreign currency translation decreased SG&A by $4,732,000, or 21.4%. Excluding the impact of foreign currency translation, SG&A expense decreased 10.1% for the quarter and increased by 7.1% for first nine months of 2009, respectively as compared to last year. The year to date decrease is primarily attributable to unfavorable foreign currency transactions related to the Euro.
For the first nine months of 2009, restructuring charges included $255,000 in NA/HME, $60,000 in ISG, $171,000 in IPG, $2,434,000 in Europe and $1,135,000 in Asia/Pacific. Of the total charges incurred to date, $1,509,000 remained unpaid as of September 30, 2009 with $107,000 unpaid related to NA/HME; $115,000 unpaid related to IPG; and $1,287,000 unpaid related to Europe. There have been no material changes in accrued balances related to the charge, either as a result of revisions in the plan or changes in estimates, and the company expects to utilize the accruals recorded through September 30, 2009 during 2009. With additional actions to be undertaken during the remainder of 2009, the company anticipates recognizing pre-tax restructuring charges of approximately $6,000,000 for the year.
On May 9, 2008, Convertible Debt, ASC 470-20, was issued to provide clarification of the accounting for convertible debt that can be settled in cash upon conversion. The FASB believed this clarification was needed because the accounting that was being applied for convertible debt prior to ASC 470-20 did not fully reflect the true economic impact on the issuer since the conversion option was not captured as a borrowing cost and its full dilutive effect was not included in earnings per share. ASC 470-20 requires separate accounting for the liability and equity components of the convertible debt in a manner that would reflect Invacare s nonconvertible debt borrowing rate. Accordingly, the company had to bifurcate a component of its convertible debt as a component of stockholders equity ($59,012,000 as of the retrospective adoption date of February 12, 2007) and will accrete the resulting debt discount as interest expense. The company adopted ASC 470-20 effective January 1, 2009 and, as a result, reported interest expense increased and net earnings decreased by $1,050,000 ($0.03 per share) and $936,000 ($0.03 per share) for the quarters ended September 30, 2009 and 2008, respectively; by $3,062,000 ($0.10 per share) and $2,730,000 ($0.09 per share) for the nine month periods ended September 30, 2009 and 2008, respectively and by $3,695,000 ($0.12 per share) and $2,904,000 ($0.09 per share) for the years 2008 and 2007, respectively. ASC 470-20 required retrospective application upon adoption and accordingly, amounts for 2008 and 2007 are being and will continue to be restated in the 2009 financial statements.
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Invacare Corporation is the world's leading manufacturer and distributor ofnon-acute health care products based upon its distribution channels the breadth of its product line and sales. The company designs manufactures and distributes an extensive line of health care products for the non-acute care environment including the home health care retail and extended care markets. The company's products are sold through its world-wide distribution network byits sales force telemarketing employees and various organizations of independent manufacturer's representatives. Invacare Corp. has a market cap of $703.1 million; its shares were traded at around $22.67 with a P/E ratio of 14.6 and P/S ratio of 0.4. The dividend yield of Invacare Corp. stocks is 0.2%. Invacare Corp. had an annual average earning growth of 0.4% over the past 10 years.
Highlight of Business Operations:
Asia/Pacific net sales decreased 20.4% for the quarter to $20,068,000 as compared to $25,216,000 for the same period a year ago. Foreign currency translation decreased net sales by five percentage points. The sales decline at the Company s subsidiary which manufactures controllers was largely due to external customers whose demand for inventory remained weak in the current economic environment. The Company s Australian distribution business had lower sales due in large part to weak demand from long-term care facilities which continue to delay capital purchases. For the first nine months of 2009, net sales decreased 30.6% to $52,350,000 as compared to $75,469,000 for the same period a year ago. Foreign currency translation decreased net sales by sixteen percentage points.Selling, general and administrative (“SG&A”) expense as a percentage of net sales for the three and nine months ended September 30, 2009 was 24.0% and 23.8%, respectively, compared to 23.0% and 23.3% for the same periods a year ago. The dollar decreases were $1,837,000 and $11,980,000, or 1.7% and 3.9%, respectively, for the quarter and first nine months of the year, as compared to the same period a year ago. Acquisitions increased these expenses by $574,000 in the quarter and $1,804,000 in the first nine months of the year, while foreign currency translation decreased these expenses by $3,879,000 in the quarter and $19,017,000 in the first nine months of the year compared to the same periods a year ago. Excluding the impact of foreign currency translation and acquisitions, selling, general and administrative expense increased 1.4% for the quarter and 1.7% for the first nine months of 2009 as compared to the same periods a year ago. The dollar increase, excluding foreign currency translation and acquisitions, was $1,468,000 and $5,233,000 for the quarter and first nine months of the year, as compared to the same periods a year ago. The year to date increase is primarily attributable to increases in bad debt and stock compensation expense as well as unfavorable foreign currency transactions related to the Euro and the British Pound.
North American/HME SG&A expense increased $2,621,000, or 4.9%, for the quarter and $5,249,000, or 3.4%, in the first nine months of 2009 compared to the same periods a year ago. For the quarter, foreign currency translation decreased SG&A expense by $225,000, or .4%, while acquisitions increased SG&A expense by $574,000, or 1.1%. For the first nine months of 2009, foreign currency translation decreased SG&A expense by $1,578,000 or 1.0% while acquisitions increased SG&A by $1,804,000 or 1.2%. Excluding the impact of foreign currency translation and acquisitions, SG&A expense increased by 4.3% for the quarter and increased by 3.3% year to date. The year to date increase is primarily attributable to increased bad debt expense and stock compensation expense.
Asia/Pacific SG&A expense decreased $1,174,000, or 15.8%, for the quarter and $3,170,000, or 14.4%, in the first nine months of the year compared to the same periods a year ago. For the quarter, foreign currency translation decreased SG&A expense by $427,000, or 5.8%. For the first nine months of 2009, foreign currency translation decreased SG&A by $4,732,000, or 21.4%. Excluding the impact of foreign currency translation, SG&A expense decreased 10.1% for the quarter and increased by 7.1% for first nine months of 2009, respectively as compared to last year. The year to date decrease is primarily attributable to unfavorable foreign currency transactions related to the Euro.
For the first nine months of 2009, restructuring charges included $255,000 in NA/HME, $60,000 in ISG, $171,000 in IPG, $2,434,000 in Europe and $1,135,000 in Asia/Pacific. Of the total charges incurred to date, $1,509,000 remained unpaid as of September 30, 2009 with $107,000 unpaid related to NA/HME; $115,000 unpaid related to IPG; and $1,287,000 unpaid related to Europe. There have been no material changes in accrued balances related to the charge, either as a result of revisions in the plan or changes in estimates, and the company expects to utilize the accruals recorded through September 30, 2009 during 2009. With additional actions to be undertaken during the remainder of 2009, the company anticipates recognizing pre-tax restructuring charges of approximately $6,000,000 for the year.
On May 9, 2008, Convertible Debt, ASC 470-20, was issued to provide clarification of the accounting for convertible debt that can be settled in cash upon conversion. The FASB believed this clarification was needed because the accounting that was being applied for convertible debt prior to ASC 470-20 did not fully reflect the true economic impact on the issuer since the conversion option was not captured as a borrowing cost and its full dilutive effect was not included in earnings per share. ASC 470-20 requires separate accounting for the liability and equity components of the convertible debt in a manner that would reflect Invacare s nonconvertible debt borrowing rate. Accordingly, the company had to bifurcate a component of its convertible debt as a component of stockholders equity ($59,012,000 as of the retrospective adoption date of February 12, 2007) and will accrete the resulting debt discount as interest expense. The company adopted ASC 470-20 effective January 1, 2009 and, as a result, reported interest expense increased and net earnings decreased by $1,050,000 ($0.03 per share) and $936,000 ($0.03 per share) for the quarters ended September 30, 2009 and 2008, respectively; by $3,062,000 ($0.10 per share) and $2,730,000 ($0.09 per share) for the nine month periods ended September 30, 2009 and 2008, respectively and by $3,695,000 ($0.12 per share) and $2,904,000 ($0.09 per share) for the years 2008 and 2007, respectively. ASC 470-20 required retrospective application upon adoption and accordingly, amounts for 2008 and 2007 are being and will continue to be restated in the 2009 financial statements.
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