SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2000
----------------------------------------------------------
Commission File Number 0-12938
Invacare Corporation
(Exact name of registrant as specified in its charter)
Ohio 95-2680965
(State or other jurisdiction of (IRS Employer Identification No)
incorporation or organization)
One Invacare Way, P.O. Box 4028, Elyria, Ohio 44036
(Address of principal executive offices)
(440) 329-6000
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if change since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 12 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
As of August 10, 2000, the company had 28,707,893 Common Shares and 1,412,031
Class B Common Shares outstanding.
1
<PAGE>
INVACARE CORPORATION
INDEX
Part I. FINANCIAL INFORMATION: Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet -
June 30, 2000 and December 31, 1999..........................3
Condensed Consolidated Statement of Earnings -
Three and Six Months Ended June 30, 2000 and 1999............4
Condensed Consolidated Statement of Cash Flows -
Six Months Ended June 30, 2000 and 1999......................5
Notes to Condensed Consolidated Financial
Statements - June 30, 2000...................................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................9
Item 3. Quantitative and Qualitative Disclosure of Market Risk...............13
Part II. OTHER INFORMATION:
Item 4. Result of Votes of Security Holders..................................14
Item 6. Exhibits and Reports on Form 8-K.....................................14
SIGNATURES....................................................................14
2
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
<TABLE>
<CAPTION>
INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet - (unaudited)
June 30, December 31,
2000 1999
(In thousands)
--------------------------------
ASSETS
------
<S> <C> <C>
CURRENT ASSETS
.........Cash and cash equivalents $ 15,292 $18,258
.........Marketable securities 1,142 1,593
.........Trade receivables, net 187,063 181,550
.........Installment receivables, net 72,345 70,378
.........Inventories 110,980 108,535
.........Deferred income taxes 25,761 26,561
.........Other current assets 11,777 11,745
------- --------
......... TOTAL CURRENT ASSETS 424,360 418,620
OTHER ASSETS 80,208 71,316
PROPERTY AND EQUIPMENT, NET 138,503 137,132
GOODWILL, NET 311,821 328,217
------- --------
......... TOTAL ASSETS $954,892 $955,285
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
.........Accounts payable $76,379 $58,367
.........Accrued expenses 78,527 97,156
.........Accrued income taxes 15,395 15,547
.........Current maturities of long-term obligations 5,861 6,401
------- --------
......... TOTAL CURRENT LIABILITIES 176,162 177,471
LONG-TERM DEBT 425,023 440,795
OTHER LONG-TERM OBLIGATIONS 18,301 18,147
SHAREHOLDERS' EQUITY
.........Preferred shares 0 0
.........Common shares 7,286 7,282
.........Class B common shares 358 358
.........Additional paid-in-capital 78,784 79,470
.........Retained earnings 274,870 251,955
.........Accumulated other comprehensive earnings (17,221) (8,976)
.........Treasury shares (8,671) (11,217)
------- --------
......... TOTAL SHAREHOLDERS' EQUITY 335,406 318,872
------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $954,892 $955,285
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Earnings - (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
(In thousands, except per share data)
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $246,253 $202,195 $490,556 $398,287
Cost of products sold 166,584 140,110 338,007 279,465
------- ------- ------- -------
Gross profit 79,669 62,085 152,549 118,822
Selling, general and administrative expense 52,120 39,802 103,545 79,549
------- ------- ------- -------
Income from operations 27,549 22,283 49,004 39,273
Interest income 1,841 2,091 3,578 3,963
Interest expense (6,950) (4,836) (13,791) (9,776)
------- ------- ------- -------
Earnings before income taxes 22,440 19,538 38,791 33,460
Income taxes 8,751 7,624 15,128 13,054
------- ------- ------- -------
NET EARNINGS $ 13,689 $ 11,914 $ 23,663 $ 20,406
======== ======== ======== ========
DIVIDENDS DECLARED PER
COMMON SHARE .0125 .0125 .0250 .0250
======== ======== ======== ========
Net earnings per share - basic $ 0.46 $ 0.39 $ 0.79 $ 0.68
======== ======== ======== ========
Weighted average shares outstanding - basic 30,085 30,179 30,042 30,068
======== ======== ======== ========
Net earnings per share - assuming dilution $ 0.45 $ 0.39 $ 0.77 $ 0.67
======== ======== ======== ========
Weighted average shares outstanding -
assuming dilution 30,688 30,675 30,595 30,594
======== ======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows - (unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
(In thousands)
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 23,663 $ 20,406
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 15,416 12,113
Provision for losses on receivables 3,872 2,917
Provision for deferred income taxes 1,116 (1,150)
Provision for other deferred liabilities (122) 969
Changes in operating assets and liabilities:
Trade receivables (11,249) 4,187
Inventories (5,785) (6,983)
Other current assets (331) 1,488
Accounts payable 18,659 304
Accrued expenses (13,604) 1,690
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 31,635 35,941
INVESTING ACTIVITIES
Purchases of property and equipment (14,204) (17,120)
Proceeds from sale of property and equipment 108 538
Installment sales contracts written (33,818) (44,392)
Payments received on installment sales contracts 33,042 36,372
Marketable securities purchased (166) (435)
Marketable securities sold 608 660
Increase in other investments (3,383) (404)
Increase in other long term assets (8,332) (7,254)
Business acquisitions, net of cash acquired (696) 0
Other (659) 266
-------- --------
NET CASH REQUIRED BY INVESTING ACTIVITIES (27,500) (31,769)
FINANCING ACTIVITIES
Proceeds from revolving lines of credit and long-term borrowings 56,918 52,874
Principal payments on revolving lines of credit, long-term debt
and capital lease obligations (63,601) (58,502)
Proceeds from exercise of stock options 1,353 2,682
Purchase of treasury stock 0 (470)
Payment of Dividends (747) (747)
-------- --------
NET CASH (REQUIRED)/PROVIDED BY FINANCING ACTIVITIES (6,077) (4,163)
Effect of exchange rate changes on cash (1,024) 662
-------- --------
Increase in cash and cash equivalents (2,966) 671
Cash and cash equivalents at beginning of period 18,258 9,460
-------- --------
Cash and cash equivalents at end of period $ 15,292 $ 10,131
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
5
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INVACARE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated
Financial Statements
(Unaudited)
June 30, 2000
Nature of Operations - Invacare Corporation and its subsidiaries (the "company")
is the world's leading manufacturer and distributor of non-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 include
standard manual wheelchairs, motorized and lightweight prescription wheelchairs,
motorized scooters, patient aids, home care and institutional beds, low air loss
therapy products, home respiratory products, seating and positioning products,
bathing equipment and distributed products.
Principles of Consolidation - In the opinion of the company, the accompanying
unaudited condensed consolidated financial statements are prepared in accordance
with generally accepted accounting principles which require management to make
estimates and assumptions that affect the amounts reported in the financial
statements. Actual results may differ from these estimates. The accompanying
financial statements include all adjustments, which were of a normal recurring
nature, necessary to present fairly the financial position of the company as of
June 30, 2000 and December 31, 1999, and the results of its operations for the
three and six months ended June 30, 2000 and 1999 and changes in its cash flows
for the six months ended June 30, 2000 and 1999. The results of operations for
the three and six months ended June 30, 2000, are not necessarily indicative of
the results to be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements contained in the company's annual financial statements and notes.
Business Segments - The company operates in three primary business segments
based on geographical area: North America, Europe and Australasia. The three
reportable segments represent operating groups which offer products to different
geographic regions.
The North America segment consists of five operating groups which sell the
following products: wheelchairs, scooters, seating products, self care patient
aids, home care beds, low air loss therapy products, patient transport products,
distributed products, extended care and furniture products, respiratory and
other products. The Europe segment consists of one operating group that sells
primarily wheelchairs, scooters, beds, seating, self care patient aids, patient
lifts and slings and respiratory products. The Australasia segment consists of
two operating groups which sell custom power wheelchairs, electronic wheelchair
components and patient aids. Each business segment sells to the home health
care, retail and extended care markets.
6
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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 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 are not
considered in evaluating segment performance. Intersegment revenue for
reportable segments was $15,635,000 and $31,848,000 for the three and six months
ended June 30, 2000 respectively.
The information by segment is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues from external customers
North America $177,870 $159,680 $354,100 $318,533
Europe 60,137 35,260 120,609 67,214
Australia/Asia 8,246 6,665 15,847 11,942
All Other * 0 590 0 598
-------- -------- -------- --------
Consolidated $246,253 $202,195 $490,556 $398,287
Earnings (loss) before income taxes
North America $ 28,438 $ 25,531 $ 56,490 $ 49,374
Europe 1,993 745 2,387 (994)
Australia/Asia 2,674 2,177 4,963 3,698
All Other * (10,665) (8,915) (25,049) (18,618)
-------- -------- -------- --------
Consolidated $ 22,440 $ 19,538 $ 38,791 $ 33,460
</TABLE>
* Consists of the domestic export unit, corporate selling, general and
administrative costs, and the Invacare captive insurance unit, which do not
meet the quantitative criteria for determining reportable segments.
Comprehensive Earnings - Total comprehensive earnings were as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net earnings $13,689 $11,914 $23,663 $20,406
Foreign currency translation (6,685) (1,907) (8,575) (2,044)
Unrealized gain or (loss) on available
for sale securities (138) (26) 330 (578)
-------- -------- ------- --------
Total comprehensive earnings $ 6,866 $ 9,981 $15,418 $17,784
======= ======= ======= =======
</TABLE>
7
<PAGE>
Net Income Per Common Share - The following table sets forth the computation of
basic and diluted net earnings per common share for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands except per share data)
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Basic
Weighted average common shares outstanding 30,085 30,179 30,042 30,068
Net income $13,689 $11,914 $23,663 $20,406
Net income per common share $ .46 $ .39 $ .79 $ .68
Diluted
Weighted average common shares outstanding 30,085 30,179 30,042 30,068
Stock options 603 496 553 526
-------- -------- -------- --------
Weighted average common shares assuming dilution 30,688 30,675 30,595 30,594
Net income $13,689 $11,914 $23,663 $20,406
Net income per common share $ .45 $ .39 $ .77 $ .67
</TABLE>
Recently Issued Accounting Pronouncements - In June, 1998, the Financial
Accounting Standards Board (FASB) issued SFAS No. 133, Accounting for Derivative
Instruments and for Hedging Activities. This statement requires all derivatives
to be recorded on the balance sheet at fair value and establishes "special
accounting" for certain types of hedges. The company must adopt the statement no
later than the first quarter of 2001. Management is currently studying the
potential effects of the adoption of this statement but does not anticipate a
significant impact on the company's financial position or results of operations.
Statement of Cash Flows - The company made payments (in thousands) of :
Six Months Ended
June 30,
2000 1999
-------- --------
Interest $13,915 $10,014
Income taxes 13,592 8,317
Inventories - Inventories consist of the following components (in thousands):
June 30, December 31,
2000 1999
-------- --------
Raw materials $ 31,681 $ 33,564
Work in process 17,159 16,825
Finished goods 62,140 58,146
-------- --------
$ 110,980 $ 108,535
========= =========
8
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The final inventory determination under the LIFO method is made at the end of
each fiscal year based on the inventory levels and cost at that point,
therefore, interim LIFO determinations are based on management's estimates of
expected year-end inventory levels and costs.
Property and Equipment - Property and equipment consist of the following (in
thousands):
June 30, December 31,
2000 1999
-------- --------
Land, buildings and improvements $ 57,364 $ 58,974
Machinery and equipment 170,947 163,717
Furniture and fixtures 16,076 14,776
Leasehold improvements 10,185 9,985
-------- --------
254,572 247,452
Less allowance for depreciation (116,069) (110,320)
-------- --------
$138,503 $137,132
======== ========
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
NET SALES
Net sales for the three months ended June 30, 2000 were $246,253,000 compared to
$202,195,000 the same period a year ago. Excluding the net impact from
acquisitions and currency translation, overall net sales increased 10%. North
American and Australasia posted solid sales increases, which positively impacted
net sales for the quarter. For the first half, net sales increased to
$490,556,000 compared to $398,287,000 the same period a year ago, representing a
23% increase, with currency having a negative impact of 2%. Excluding the net
impact from acquisitions and currency translation, overall first half-net sales
increased 9% from the same period a year ago. The increase in the first half was
driven by continued strong sales increases in North America and Australasia.
North American Operations
North American sales, consisting of Rehab (power wheelchairs, custom manual
wheelchairs and seating), Standard (manual wheelchairs, personal care and
retail), Beds and Continuing Care (beds, low air loss therapy and furniture and
patient transport equipment), Respiratory (oxygen concentrators, liquid oxygen,
aerosol therapy and associated respiratory) and Distributed (ostomy,
incontinence, wound care and other medical supplies) products, increased 11% for
the quarter and first half of the year compared to the same periods a year ago.
The increase was due principally to unit volume increases in Rehab, Standard and
Distributed.
9
<PAGE>
European Operations
European sales increased to $60,137,000 from $35,260,000 for the quarter
primarily due to the acquisition of Scandinavian Mobility International AS
(SMI). On a pro-forma basis taking into consideration SMI, European sales,
excluding a negative impact of 12% from foreign currency, increased 2% from the
same period a year ago. In the first half, on a pro-forma basis, net sales
increased 4% excluding a negative impact of 12% from foreign currency
translation.
Australasia Operations
The Australasia products group consists of Invacare Australia, which imports and
distributes the Invacare range of products and manufactures and distributes the
Rollerchair range of custom power wheelchairs, Dynamic Controls, a New Zealand
manufacturer of operating components used in power wheelchairs and Invacare New
Zealand, a distribution business. Net sales for the Australasia group increased
$1,581,000 or 24% for the quarter, including a negative 31% impact from foreign
currency translation. In the first half, net sales increased 33% including a 5%
negative impact from foreign currency translation.
GROSS PROFIT
Gross profit as a percentage of net sales for the three and six-month periods
ended June 30, 2000 was 32.4% and 31.1%, respectively, compared to 30.7% and
29.8% in the same periods last year. Margins for North America, Europe and
Australasia operations each increased for the three and six-month periods as the
company's focus on productivity improvements and cost controls in manufacturing
operations, coupled with the realization of synergies from the SMI acquisition
resulted in an increase in gross profit as a percentage of sales.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expense as a percentage of net sales for the
three and six months ending June 30, 2000 was 21.2% and 21.1%, respectively,
compared to 19.7% and 20.0% in the same periods a year ago. The overall dollar
increase was $12,318,000 (31%) for the quarter and $23,996,000 (30%) for the six
months with acquisitions contributing $8,213,000 (20.6%) and $16,630,000 (20.9%)
respectively. Excluding the impact of acquisitions and foreign currency,
selling, general and administrative expense as a percent of sales remained
relatively flat with the prior year.
North American selling, general and administrative costs, as a percent of sales,
for the three and six months ending June 30, 2000 increased by approximately one
percentage point compared to the same periods a year ago. The increase was due
in part to costs associated with the company's e-commerce and branding
initiatives designed to increase the general publics awareness of home medical
equipment products and specifically the Invacare brand name. European
operations' selling, general and administrative costs, adjusted for acquisition
and foreign currency impact, grew at a slower rate than sales for the quarter
and first half compared to the same periods a year ago. As a percent of sales,
cost were 24.1% and 24.7% compared to 25.0% and 26.6% respectively in the prior
periods. Australasia operations' costs increased $681,000 and $1,056,000 for the
quarter and first half respectively, compared to the same periods a year ago. As
a percent of sales, cost were 25.5% and 26.6% compared to 21.3% and 26.4%
respectively in the prior periods.
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NON-RECURRING CHARGE
During the fourth quarter of 1999, the company announced non-recurring and
unusual charges of $14,800,000 ($9,028,000 or $.29 diluted per share after-tax)
primarily related to the acquisition of Scandinavian Mobility International AS
(SMI). Of these charges, $7,091,000 has been utilized through June 30, 2000
including $536,000 and $42,000 in the second quarter of 2000 for exit costs, and
asset write-downs and other non-recurring items, respectively. The company
anticipates all of the remaining charge to be utilized in 2000.
INTEREST
Interest income in the three months ended June 30, 2000 declined by
approximately $250,000 and by $385,000 for the first half, when compared to the
same periods a year ago, as decreased volume in customer loan refinancing was
offset by an overall increase in the portfolio's effective rate. The company has
significantly tightened its refinancing policy thereby reducing the number of
refinances written in the quarter. The company believes its overall long-term
profitability will be positively impacted by the change in policy.
For the quarter and first half, interest expense increased compared to the same
periods a year ago, due to higher average outstanding borrowings resulting
primarily from the acquisition of Scandinavian Mobility International AS (SMI)
in the third quarter of 1999, coupled with an overall increase in borrowing
rates between years.
INCOME TAXES
The company had an effective tax rate of 39.0% for the three and six months
periods ended June 30, 2000 and 1999 respectively.
LIQUIDITY AND CAPITAL RESOURCES
The company's reported overall level of long-term obligations decreased $15.8
million to $425.0 million for the six months ended June 30, 2000. The company
continues to maintain an adequate liquidity position to fund its working capital
and capital requirements through its cash flow from operations and its bank
lines. As of June 30, 2000, the company had approximately $123.5 million
available under its lines of credit. Pursuant to the most restrictive covenant
of its debt arrangements the company could borrow up to an additional $198
million.
The company's financing arrangements require it to maintain certain conditions
with respect to net worth, working capital, funded debt to capitalization and
interest coverage as defined. The company is in compliance with all of the
conditions
CAPITAL EXPENDITURES
There were no material capital expenditure commitments outstanding as of June
30, 2000. The company expects to invest in capital projects at a rate that
equals or exceeds depreciation and amortization in order to maintain and improve
the company's competitive position. The company estimates that capital
investments for 2000 will approximate $28 million. The company believes that its
balances of cash and cash equivalents, together with funds generated from
operations and existing borrowing facilities will be sufficient to meet its
operating cash requirements and fund required capital expenditures for the
foreseeable future.
11
<PAGE>
ACQUISITIONS
Effective July 31, 1999, IVC Holdings Denmark A/S ("Holdings"), a wholly owned
subsidiary of Invacare Corporation, acquired substantially all of the
outstanding shares of common stock of Scandinavian Mobility International AS
(SMI), a Danish corporation for approximately $142 million in cash. The
acquisition was accounted for under the purchase method of accounting. The
excess of the purchase price over the estimated fair value of the common stock
acquired is being amortized over 40 years. SMI is a producer and distributor of
rehabilitation products, mobility aids and related products in Europe.
CASH FLOWS
Cash flows provided by operating activities were $31.6 million for the first
half of 2000 compared to $35.9 million in 1999. Operating cash flows decreased
in 2000 as a result of a change in trade receivables offset to some extent by
the net change in accounts payable and accrued expenses, as the timing of
certain expenses varied between periods. Operating cash flows were also
positively impacted by increased net earnings.
Cash flows required for investing activities decreased by $4.3 million for the
first half of 2000 when compared to 1999. The decrease is principally a result
of a decrease in installment sales contracts written as the company continues to
tighten its credit policies. The decrease is also attributable to reduced
capital spending in the current year as capitalized consulting costs relating to
systems initiatives completed in the prior year did not recur.
Cash flows required by financing activities were $6.1 million compared to $4.2
million in 1999. Financing activities in 2000 were impacted by payments on
revolving lines of credit and long term borrowings which exceeded proceeds from
long term borrowings for the first six months of the year.
The effect of foreign currency translation may result in amounts being shown for
cash flows in the Condensed Consolidated Statement of Cash Flows that are
different from the changes reflected in the respective balance sheet captions
DIVIDEND POLICY
On May 24, 2000, the Board of Directors for Invacare Corporation declared a
quarterly cash dividend of $.0125 per Common Share to shareholders of record as
of July 3, 2000, to be paid on July 14, 2000. At the current rate, the cash
dividend will amount to $.05 per Common Share on an annual basis.
12
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The company is exposed to market risk through various financial instruments,
including fixed rate and floating rate debt instruments. The Company uses
interest rate swap agreements to mitigate its exposure to interest rate
fluctuations. Based on June 30, 2000 debt levels, a 1% change in interest rates
would impact interest expense by approximately $1,482,000 over the next twelve
months. Additionally, the company operates internationally and as a result is
exposed to foreign currency fluctuations. Specifically, the exposure includes
intercompany loans, and third party sales or payments. In an attempt to reduce
this exposure, foreign currency forward contracts are utilized. The company does
not believe that any potential loss related to these financial instruments will
have a material adverse effect on the company's financial condition or results
of operations
EURO CONVERSION
On January 1, 1999, 11 of the 15 member countries of the European Union (the
"participating countries") established a fixed rate between their existing
sovereign currencies (the "legacy currencies") and the Euro. The legacy
currencies are scheduled to remain legal tender in the participating countries
between January 1, 1999 and July 1, 2002. Beginning January 1, 2002, the Euro
currency will be introduced and the legacy currencies withdrawn from circulation
six months later. The company believes with modifications to existing computer
software and conversion to new software, the Euro conversion issue will not pose
significant operational problems to its normal business activities. The company
does not expect costs associated with the Euro conversion project to have a
material effect on the company's results of operations or financial position.
FORWARD-LOOKING STATEMENTS
The statements contained in this form 10-Q constitute forward-looking statements
based on current expectations which are covered under the "Safe Harbor"
provision within the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include information concerning our possible or
assumed future results of operations and statements in which we use words such
as "expect," "will," "believe," "anticipate," "intend," "plan," "estimate,"
"project" or similar expressions. Actual results and events, including the
results from the acquisition and integration of Scandinavian Mobility
International AS (SMI) may differ significantly from those anticipated as a
result of risks and uncertainties which include, but are not limited to, pricing
pressures, increasing raw material costs, the consolidations of health care
customers and competitors, the availability of strategic acquisition candidates,
government reimbursement issues including those that affect the viability of
customers, the effect in offering customers competitive financing terms,
Invacare's ability to effectively integrate acquired companies, the difficulties
in managing and operating businesses in many different foreign jurisdictions,
the overall economic, market and industry growth conditions, foreign currency
and interest rate risk, as well as the risks described from time to time in
Invacare's reports as filed with the Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosure of Market Risk
The information called for by this item is provided under the same caption under
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
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Item 4. Results of Votes of Security Holders
On May 24, 2000, the company held its 2000 Annual Meeting of Shareholders to act
on proposals to elect a class of Directors; and to approve and adopt an
amendment to the Invacare Corporation 1994 Performance Plan to increase the
number of Common Shares reserved for issuance thereunder from 3,500,000 to
5,500,000.
James C. Boland, Whitney Evans, E.P. Nalley and William M. Weber were re-elected
for a three year term of office expiring in 2003, with 35,526,850, 35,530,675,
35,510,429 and 35,530,327 affirmative votes, respectively, (83 percent of the
total voting power). The candidates had 484,631, 480,806, 501,052 and 481,451
votes withheld, respectively, (1.1 percent of the total voting power).
The proposal to approve and adopt an amendment to the Invacare Corporation 1994
Performance Plan to increase the number of Common Shares reserved for issuance
thereunder from 3,500,000 to 5,500,000 received 27,161,969 affirmative votes
(84.3 percent of the total voting power), 4,921,355 negative votes (15.3 percent
of the total voting power) and 138,662 abstained votes (.4 percent of the total
voting power).
Item 6. Exhibits and Reports on Form 8-K
A Exhibits:
Official Exhibit No.
(27) Financial Data Schedule
B Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INVACARE CORPORATION
By:
Thomas R. Miklich
Chief Financial Officer
Date: August 11, 2000
14
