Invacare 2012 Annual Report Download - page 17

systems, sold by dedicated sales specialists, continue to be an investment area for Invacare Europe in the United
Kingdom, France, Spain and Germany. The company continues to drive operational efficiencies with particular
focus on centralizing product distribution through its European Distribution Center.
In 2012, Invacare Europe continued its sponsorship of wheelchair tennis for an 18th successive year by
becoming the title sponsor of the International Tennis Federation Doubles Masters event hosted in Amsterdam
(Netherlands).
Asia/Pacific
The company’s Asia/Pacific segment is comprised of revenues from Australia, New Zealand and China.
In the fourth quarter of 2012, Invacare Australia made a significant change to the way it markets Invacare
product. Direct-to-consumer sites in Melbourne, Adelaide, Perth and Brisbane were closed and all warehousing
and distribution were consolidated into the company’s Australian headquarters in Sydney, Australia. The
Invacare Australia business sells through three distribution channels:
• Mobility and Seating products are sold via a dealer network. Almost all sales are directly
government funded;
• Homecare products are sold via a dealer network that sells products to the consumer market; and
• Long-Term Care products are sold directly to aged care facilities.
Invacare New Zealand is a market leader for mobility and rehabilitation products in New Zealand. A
significant portion of the direct sales are government funded and controlled by capped budgets. Invacare New
Zealand sells through three distribution channels:
• Mobility and Seating products are sold directly to end users via government-funded providers;
• Homecare products are sold via a dealer network that sells products to the consumer market; and
• Long-Term Care products are sold directly to aged care facilities.
Invacare Australia and New Zealand have invested heavily in marketing efforts to increase demand for
Invacare product in 2013. Customer relationship management (CRM) and On Demand Marketing (ODM) tools
have been introduced to improve the effectiveness and efficiency of the sales force and the marketing efforts
within Australia and New Zealand. Invacare Australia and New Zealand focused their respective sponsorship
efforts around a small number of key athletes who participated in the 2012 Paralympics. They have continued the
athletic sponsorships in 2013. Invacare also is a sponsor of the “Oz Day 10K” classic where the streets of Sydney
are closed for a wheelchair race on Australia Day.
Invacare China sells almost exclusively through the homecare channel via a distributor and dealer network
focused in the major provinces and cities of Shanghai, Beijing and Guangzhou. The primary product sold is
oxygen concentrators, with some minor sales in wheelchairs and bathing aids. Invacare China has established a
government affairs team to capitalize on the increasing levels and localized funding of aids and equipment for the
elderly and disabled. Marketing efforts are focused on supporting the dealer network to increase consumer sales.
PRODUCT LIABILITY COSTS
The company is self-insured through its captive insurance company, Invatection Insurance Company,
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
aggregate losses per policy year 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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