Invacare 2006 Annual Report Download - page 9

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The company is directly affected by government regulation and reimbursement policies in virtually every
country in which the company operates. In the United States, the growth of health care costs has increased at rates in
excess of the rate of inflation and as a percentage of GDP for several decades. A number of efforts to control the
federal deficit have impacted reimbursement levels for government sponsored health care programs, and private
insurance companies often imitate changes made in federal programs. Similar efforts are being undertaken in other
countries, including for example Germany. Reimbursement guidelines in the home health care industry have a
substantial impact on the nature and type of equipment an end-user can obtain and, thus, affect the product mix,
pricing and payment patterns of our customers who are medical equipment providers. The company believes its
strong market position and technical expertise will allow it to respond to ongoing regulatory changes. However, the
issues described above will likely continue to have significant impacts on the pricing of the company’s products.
GEOGRAPHICAL SEGMENTS AND PRODUCT CATEGORIES
North America
In the fourth quarter of 2006, the company expanded its number of reporting segments from three to five due to
organizational changes within the former North American geographic operating segment and changes in how the
chief operating decision maker (as that term is defined in FASB SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information) assesses performance and makes resource allocation decisions. North America
now includes: North America/Home Medical Equipment (NA/HME), Invacare Supply Group (ISG) and Institu-
tional Products Group (IPG). The company has modified its operating segments and reportable segments in 2006
with the corresponding prior year amounts being reclassified to conform to the 2006 presentation.
North America/HME
This segment includes: Rehab, Standard and Respiratory product lines as discussed below.
REHAB PRODUCTS
Power Wheelchairs. Invacare manufactures a complete line of power wheelchairs for individuals who
require independent powered mobility. The range includes products that can be significantly customized to
meet an individual’s specific needs, as well as products that are inherently versatile and meet a broad range of
individual requirements. Power wheelchair lines are marketed under the Invacare»Storm Series»and TDX
TM
brand names and include a full range of powered mobility products. The Storm Series»TDX
TM
line of power
wheelchairs offer an unprecedented combination of power, stability and maneuverability. The Pronto»
Series Power Wheelchairs with SureStep
TM
feature center-wheel drive performance for exceptional maneu-
verability and intuitive driving. Power tilt and recline systems are offered as well.
Custom Manual Wheelchairs. Invacare manufactures and markets a range of custom manual wheel-
chairs for everyday, sports and recreational uses. These lightweight chairs are marketed under the Invacare»
and Invacare Top End»brand names. The chairs provide mobility for people with moderate to severe
disabilities in their everyday activities as well as for use in various sports such as basketball, racing and tennis.
Personal Mobility. Invacare manufactures the AT’m portable power wheelchair for consumers needing
light duty powered mobility with the ability to quickly disassemble and be transported even in a compact or
mid-sized vehicle. In addition, Invacare distributes two portable, compact scooters for consumers needing
powered mobility and capable of operating a tiller. The Lynx model scooters are available in three-wheel and
four-wheel versions.
Seating and Positioning Products. Invacare markets seat cushions, back supports and accessories under
three series. Invacare»Absolute
TM
Series provides simple seating solutions for comfort, fit and function.
Invacare InTouch
TM
Series includes versatile modular seating, providing optimal rehab solutions. Invacare
PinDot
TM
Series offers custom seating solutions personalized for the most challenged clients. The company
also has a product line of seating products and wheelchairs for the pediatric market.
I-5