Invacare 2012 Annual Report Download - page 32

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• 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;
• fluctuations in foreign currency exchange rates;
• 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;
• government control of capital transactions, including the borrowing of funds for operations or the
expatriation of cash;
• potential adverse tax consequences;
• security concerns and potential business interruption risks associated with political and/or social
unrest in foreign countries where the company’s facilities or assets are located;
• 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; and
• differing consumer product preferences.
The factors described above also could disrupt the company’s product manufacturing/assembling and key
suppliers located outside of the United States. For example, the company increasingly relies on its manufacturing
and sourcing operations in China for the production of its products. Disruptions in the company’s foreign
operations, particularly those in China or Mexico, may impact the company’s revenues and profitability.
The company may be adversely affected by legal actions or regulatory proceedings.
In addition to the risks associated with the impact of the FDA consent decree, the company may be subject
to claims, litigation or other liabilities as a result of injuries caused by allegedly defective products, acquisitions
the company has completed or in the intellectual property area. Any such claims or litigation against the
company, regardless of the merits, could result in substantial costs and could harm the company’s business or its
reputation. Intellectual property litigation or claims also could require the company to:
• cease manufacturing and selling any of the company’s products that incorporate the challenged
intellectual property;
• obtain a license from the holder of the infringed intellectual property right alleged to have been
infringed, which license may not be available on commercially reasonable terms, if at all; or
• redesign or rename the company’s products, which may not be possible, and could be costly and
time consuming and could result in lost revenues and market share.
The results of legal proceedings are difficult to predict and the company cannot provide any assurance that
an action or proceeding will not be commenced against the company, or that the company will prevail in any
such action or proceeding. An unfavorable resolution of any legal action or proceeding could materially and
adversely affect the company’s business, results of operations, liquidity or financial condition or its reputation.
I-26