Invacare 2006 Annual Report Download - page 28

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Additionally, the success of the company’s acquisition strategy is subject to other risks and costs, including the
following:
• the company’s ability to realize operating efficiencies, synergies, or other benefits expected from an
acquisition, and possible delays in realizing the benefits of the acquired company or products;
• diversion of management’s time and attention from other business concerns;
• difficulties in retaining key employees of the acquired businesses who are necessary to manage these
businesses;
• difficulties in maintaining uniform standards, controls, procedures and policies throughout acquired
companies;
• adverse effects on existing business relationships with suppliers or customers;
• the risks associated with the assumption of contingent or undisclosed liabilities of acquisition targets; and
• ability to generate future cash flows or the availability of financing.
In addition, an acquisition could materially impair the company’s operating results by causing the company to
incur debt or requiring the amortization of acquisition expenses and acquired assets.
The company is subject to certain risks inherent in managing and operating businesses in many different
foreign jurisdictions.
The company has significant international operations, including operations in Australia, New Zealand, Asia
and Europe. There are risks inherent in operating and selling products internationally, including:
• difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
• foreign customers who may have longer payment cycles than customers in the United States;
• tax rates in certain foreign countries that may exceed those in the United States and foreign earnings that
may be subject to withholding requirements;
• the imposition of tariffs, exchange controls or other trade restrictions including transfer pricing restrictions
when products produced in one country are sold to an affiliated entity in another country;
• general economic and political conditions in countries where the company operates or where end users of
the company’s products reside;
• difficulties associated with managing a large organization spread throughout various countries;
• difficulties in enforcing intellectual property rights and weaker intellectual property rights protection in
some countries;
• required compliance with a variety of foreign laws and regulations;
• different regulatory environments and reimbursement systems; and
• differing consumer product preferences.
The company’s revenues are subject to exchange rate fluctuations that could adversely affect its results of
operations or financial position.
Currency exchange rates are subject to fluctuation due to, among other things, changes in local, regional or
global economic conditions, the imposition of currency exchange restrictions, and unexpected changes in regu-
latory or taxation environments. The functional currency of the company’s subsidiaries outside the United States is
the predominant currency used by the subsidiaries to transact business. Through the company’s international
operations, the company is exposed to foreign currency fluctuations, and changes in exchange rates can have a
significant impact on net sales and elements of cost.
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