Invacare 2006 Annual Report Download - page 13

website speed and reliability, a new web server and hardware upgrades were installed. During the fourth quarter of
2006, e-commerce began developing a new website design and structure for www.invacare.com and Invacare»Pro
that is more focused on usability, increasing order conversion, and creating a more consumer-oriented approach for
the company’s corporate identity and brand online. The primary focus of 2007 will be the release of this redesigned
website and the concentration on providing e-commerce “services intelligence” to the organization. Additional
2007 projects will include improved product literature search functionality and installation of a new analytics
platform to better monitor website statistics and allow for more detailed analysis of visitor activities.
Also in 2006, the company continued its strategic advertising campaign in key trade publications that reach the
providers of home medical equipment. The company also contributed extensively to editorial coverage in trade
publications concerning the products we manufacture and our representatives attended numerous trade shows and
conferences on a national and regional basis in which Invacare products were displayed to providers, health care
professionals and consumers.
The company continues to generate greater consumer awareness of our products. This was evidenced by the
company’s sponsorship of a variety of wheelchair sporting events and support of various philanthropic causes
benefiting the consumers of our products. For the thirteenth consecutive year, Invacare continued as a National
Corporate Partner with Easter Seals, one of the most recognized charities in the United States that meets the needs of
both children and adults with various types of disabilities. The company continued its sponsorships of 25 individual
wheelchair athletes and teams, including several of the top-ranked male and female racers, hand cyclists, and
wheelchair tennis players in the world. Invacare was the title sponsor for the eighth year in a row of the Invacare
World Team Cup of Wheelchair Tennis Tournament, which took place in May in Brasilia, Brazil. The company also
continued its support of disabled veterans through its sponsorship of the 26th National Veterans Wheelchair Games,
the largest annual wheelchair sports event in the world. The games bring a competitive and recreational sports
experience to military service veterans who use wheelchairs for their mobility needs due to spinal cord injury,
neurological conditions or amputation.
The company’s top 10 customers accounted for approximately 12% of 2006 net sales. The loss of business of
one or more of these customers or buying groups may have a significant impact on the company, although no single
customer accounted for more than 3% of the company’s 2006 net sales. Providers who are part of a buying group
generally make individual purchasing decisions and are invoiced directly by the company.
Europe
The company’s European operations consist primarily of manufacturing, marketing and distribution oper-
ations in Western Europe and export sales activities through local distributors elsewhere in the world. The company
has a sales force and where appropriate, distribution centers, in the United Kingdom, France, Germany, Belgium,
Portugal, Spain, Italy, Denmark, Sweden, Switzerland, Austria, Norway and the Netherlands, and sells through
distributors elsewhere in Europe. In markets where the company has its own sales force, product sales are typically
made through dealers of medical equipment and, in certain markets, directly to government agencies. In 2006, the
expected consolidation of big buying groups tending to develop their business on a European scale has confirmed
itself. As a result, Invacare is generalizing the application of pan-European pricing policies.
PRODUCT LIABILITY COSTS
The company’s captive insurance company, Invatection Insurance Co., currently has a policy year that runs
from September 1 to August 31 and insures annual policy losses of $10,000,000 per occurrence and $13,000,000 in
the aggregate of the company’s North American product liability exposure. The company also has additional layers
of external insurance coverage insuring up to $75,000,000 in annual aggregate losses arising from individual claims
anywhere in the world that exceed the captive insurance company policy limits or the limits of the company’s per
country foreign liability limits, as applicable. There can be no assurance that Invacare’s current insurance levels will
continue to be adequate or available at affordable rates.
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