Invacare 2013 Annual Report Download - page 65

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I-59
On January 31, 2014, the Company entered into the Amended and Restated Credit Agreement which provides for a
$100,000,000 senior secured revolving credit facility maturing in October 2015 at variable rates. As of December 31, 2013, the
Company had outstanding $13,350,000 in principal amount of 4.125% Convertible Senior Subordinated Debentures due in February
2027, of which $2,709,000 is included in equity. Accordingly, while the Company is exposed to increases in interest rates, its
exposure to the volatility of the current market environment is limited as the Company does not currently need to re-finance any
of its debt. However, the Company’s Amended and Restated Credit Agreement contains covenants with respect to, among other
items, consolidated funded indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA)
and interest coverage, as defined in the agreement. The Company is in compliance with all covenant requirements, but should it
fall out of compliance with these requirements, the Company would have to attempt to obtain alternative financing and thus likely
be required to pay much higher interest rates.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets,
Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Cash Flows, Consolidated Statement of
Shareholders’ Equity, Notes to Consolidated Financial Statements and Financial Statement Schedule, which appear on pages FS-1
to FS-58 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
As of December 31, 2013, an evaluation was performed, under the supervision and with the participation of the Company’s
management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation
of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that
evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the
Company’s disclosure controls and procedures were effective as of December 31, 2013, in ensuring that information required to
be disclosed by the Company in the reports it files and submits under the Exchange Act is (1) recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms and (2) accumulated and communicated to
the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow for
timely decisions regarding required disclosure.
(b) Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining a system of adequate internal control over financial reporting
that provides reasonable assurance that assets are safeguarded and that transactions are authorized, recorded and reported properly.
The system includes self-monitoring mechanisms; regular testing by the Company’s internal auditors; a Code of Conduct; written
policies and procedures; and a careful selection and training of employees. Actions are taken to correct deficiencies as they are
identified. An effective internal control system, no matter how well designed, has inherent limitations—including the possibility
of the circumvention or overriding of controls—and therefore can provide only reasonable assurance that errors and fraud that
can be material to the financial statements are prevented or would be detected on a timely basis. Further, because of changes in
conditions, internal control system effectiveness may vary over time.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting is based on the
Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission
(1992 framework).
In management’s opinion, internal control over financial reporting is effective as of December 31, 2013.
(c) Attestation Report of the Independent Registered Public Accounting Firm
The Company’s independent registered public accounting firm, Ernst & Young LLP, audited the Company’s internal control
over financial reporting and, based on that audit, issued an attestation report regarding the Company’s internal control over financial
reporting, which is included in this Annual Report on Form 10-K on page FS-2.