Invacare 2008 Annual Report Download - page 33

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• 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 and profits 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
regulatory 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. The company conducts a significant number of
transactions in currencies other than the U.S. dollar. In addition, because certain of the company’s costs and
revenues are denominated in other currencies, the company’s results of operations are exposed to foreign
exchange rate fluctuations as the financial results of those operations are translated from local currency into U.S.
dollars upon consolidation. In particular, during 2009, the company expects that its reported results of operations
will be adversely affected as a result of the relative strengthening of the U.S. dollar.
The company uses forward contracts to help reduce its exposure to exchange rate variation risk. Despite the
company’s efforts to mitigate these risks, however, the company’s revenues and profitability may be materially
adversely affected by exchange rate fluctuations. The company also is exposed to market risk through various
financial instruments, including fixed rate and floating rate debt instruments. The company uses interest swap
agreements to mitigate its exposure to interest rate fluctuations, but those efforts may not adequately protect the
company from significant interest rate risks.
Certain provisions of the company’s debt agreements, its charter documents, its shareholder rights plan and
Ohio law could delay or prevent the sale of the company.
Provisions of the company’s debt agreements, its charter documents, its shareholder rights plan and Ohio
law may make it more difficult for a third party to acquire, or attempt to acquire, control of the company even if a
change in control would result in the purchase of shares of the company at a premium to market price. In
addition, these provisions may limit the ability of shareholders of the company to approve transactions that they
may deem to be in their best interest.
Item 1B. Unresolved Staff Comments.
None.
I-27