Invacare 2006 Annual Report Download - page 27

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The loss of the services of the company’s key management and personnel could adversely affect its ability
to operate the company’s business.
The company’s future success will depend, in part, upon the continued service of key managerial, research and
development staff and sales and technical personnel. In addition, the company’s future success will depend on its
ability to continue to attract and retain other highly qualified personnel. The company may not be successful in
retaining its current personnel or in hiring or retaining qualified personnel in the future. The company’s failure to do
so could have a material adverse effect on the company’s business. These executive officers have substantial
experience and expertise in the company’s industry. The company’s future success depends, to a significant extent,
on the abilities and efforts of its executive officers and other members of its management team. If the company loses
the services of any of its management team, the company’s business may be adversely affected.
The company’s Chief Executive Officer and certain members of management own shares representing a
substantial percentage of the company’s voting power and their interests may differ from other
shareholders.
The company has two classes of common stock. The Common Shares have one vote per share and the Class B
Common Shares have 10 votes per share. As of January 1, 2007 the company’s chairman and CEO, Mr. A. Malachi
Mixon, and certain members of management beneficially own up to approximately 34% of the combined voting
power of the company’s Common Shares and Class B Common Shares and could influence the outcome of any
corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations
and the sale of all or substantially all of the company’s assets. They will also have the power to influence or make
more difficult a change in control. The interests of Mr. Mixon and his relatives may differ from the interests of the
other shareholders and they may take actions with which shareholders disagree.
Decreased availability or increased costs of raw materials could increase the company’s costs of produc-
ing its products.
The company purchases raw materials, fabricated components and services from a variety of suppliers. Raw
materials such as plastics, steel, and aluminum are considered key raw materials. Where appropriate, the company
employs contracts with its suppliers, both domestic and international. In those situations in which contracts are not
advantageous, the company believes that its relationships with their suppliers are satisfactory and that alternative
sources of supply are readily available. From time to time, however, the prices and availability of these raw
materials fluctuate due to global market demands, which could impair the company’s ability to procure necessary
materials, or increase the cost of these materials. Inflationary and other increases in costs of these raw materials
have occurred in the past and may recur from time to time. In addition, freight costs associated with shipping and
receiving product and sales are impacted by fluctuations in the cost of oil and gas. A reduction in the supply or
increase in the cost of those raw materials could impact the company’s ability to manufacture its products and could
increase the cost of production.
Since the company’s ability to obtain further financing may be limited, the company may be unable to
acquire strategic acquisition candidates.
The company’s plans include identifying, acquiring, and integrating other strategic businesses. There are
various reasons for the company to acquire businesses or product lines, including providing new products or new
manufacturing and service capabilities, to add new customers, to increase penetration with existing customers, and
to expand into new geographic markets. The company’s ability to successfully grow through acquisitions depends
upon its ability to identify, negotiate, complete and integrate suitable acquisitions and to obtain any necessary
financing. The costs of acquiring other businesses could increase if competition for acquisition candidates
increases. If the company is unable to obtain the necessary financing, it may miss opportunities to grow its
business through strategic acquisitions.
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