Invacare Corporation Announces Restructuring Initiative
21 August 2014 - 6:30AM
Business Wire
Invacare Corporation (NYSE: IVC) today announced a restructuring
initiative that is expected to generate $14 to $15 million in
annualized pre-tax savings when fully instituted in 2015. The
initiative includes a reduction to the Company’s workforce of
approximately 150 associates and 40 temporary associates from the
North America/Home Medical Equipment (HME), Institutional Products
Group and Asia/Pacific segments.
''Invacare is committed to improving free cash flow(a) and
restoring profitability in the North America/HME and Asia/Pacific
businesses. While the decision to downsize our workforce is
extremely difficult, it is a necessary step toward achieving these
objectives in light of our financial results for the first six
months of 2014 and the slow sales start to the third quarter,''
said Robert K. Gudbranson, Invacare interim president and chief
executive officer. ''All of our associates, including those
affected by this restructuring, have been committed to Invacare. As
always, we will provide support to our impacted associates during
this transition period.''
Due to the realignment, the Company expects to incur
restructuring charges not to exceed $6 million on a pre-tax
basis.
(a) Free cash flow is a non-GAAP financial measure which is
defined as net cash provided (used) by operating activities,
excluding net cash flow impact related to restructuring activities,
less purchases of property and equipment, net of proceeds from
sales of property and equipment. Management believes that this
financial measure provides meaningful information for evaluating
the overall financial performance of the Company and its ability to
repay debt or make future investments (including, for example,
acquisitions).
Invacare Corporation (NYSE:IVC), headquartered in Elyria, Ohio,
is the global leader in the manufacture and distribution of
innovative home and long-term care medical products that promote
recovery and active lifestyles. The Company had approximately
5,400 associates as of June 30, 2014, and markets its products in
approximately 80 countries around the world. For more information
about the Company and its products, visit Invacare's website at
www.invacare.com.
This press release 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 risks and uncertainties, which include,
but are not limited to, the following: ineffective cost reduction
and restructuring efforts or inability to realize anticipated cost
savings from such efforts; delays, disruptions or excessive costs
incurred in facility closures or consolidations; compliance costs,
limitations on the production and/or distribution of the Company's
products, inability to bid on or win certain contracts, unabsorbed
capacity utilization, including fixed costs and overhead, or other
adverse effects of the FDA consent decree of injunction; any
circumstances or developments that might further delay or adversely
impact the results of the final, most comprehensive third-party
expert certification audit or FDA inspection of the Company's
quality systems at the Elyria, Ohio, facilities impacted by the FDA
consent decree, including any possible requirement to perform
additional remediation activities or further resultant delays in
receipt of the written notification to resume operations (which
could have a material adverse effect on the Company's business,
financial condition, liquidity or results of operations); the
failure or refusal of customers or healthcare professionals to sign
verification of medical necessity (VMN) documentation or other
certification forms required by the exceptions to the FDA consent
decree; possible adverse effects of being leveraged, including
interest rate or event of default risks, including those relating
to the Company's financial covenants under its credit facility
(particularly as might result from the impacts associated with the
FDA consent decree); the Company's inability to satisfy its
liquidity needs, including efforts to negotiate a new bank
agreement, or additional costs to do so; adverse changes in
government and other third-party payor reimbursement levels and
practices both in the U.S. and in other countries (such as, for
example, more extensive pre-payment reviews and post-payment audits
by payors, or the Medicare National Competitive Bidding program);
impacts of the U.S. Affordable Care Act that was enacted in 2010
(such as, for example, the impact on the Company of the excise tax
on certain medical devices, which began on January 1, 2013, and the
Company's ability to successfully offset such impact); legal
actions, governmental enforcement actions, 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; product liability or
warranty claims; product recalls, including more extensive recall
experience than expected; exchange rate or tax rate fluctuations;
inability to design, manufacture, distribute and achieve market
acceptance of new products with greater functionality or lower
costs or new product platforms that deliver the anticipated
benefits; consolidation of health care providers; lower cost
imports; uncollectible accounts receivable; difficulties in
implementing/upgrading Enterprise Resource Planning systems; risks
inherent in managing and operating businesses in many different
foreign jurisdictions; decreased availability or increased costs of
materials which could increase the Company's costs of producing or
acquiring the Company's products, including possible increases in
commodity costs or freight costs; heightened vulnerability to a
hostile takeover attempt arising from depressed market prices for
Company shares; provisions of Ohio law or in the Company's debt
agreements, shareholder rights plan or charter documents that may
prevent or delay a change in control, as well as the risks
described 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.
Invacare CorporationLara Mahoney, 440-329-6393
Invacare (NYSE:IVC)
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