Invacare 2012 Annual Report Download - page 37

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event that a claim of infringement against the company is successful, the company may be required to pay
royalties or license fees to continue to use technology or other intellectual property rights that the company was
using, or the company may be unable to obtain necessary licenses from third parties at a reasonable cost or within
a reasonable time. If the company is unable to obtain licenses on reasonable terms, it may be forced to cease
selling or using the products that incorporate the challenged intellectual property, or to redesign or, in the case of
trademark claims, rename its products to avoid infringing the intellectual property rights of third parties, which
may not be possible, or if possible, may be time-consuming. Any litigation of this type, whether successful or
unsuccessful, could result in substantial costs to the company and adversely affect the company’s business and
financial condition.
The company also holds patent and other intellectual property licenses from third parties for some of its
products and on technologies that are necessary in the design and manufacture of some of the company’s
products. The loss of these licenses could prevent the company from, or could cause additional disruption or
expense in, manufacturing, marketing and selling these products, which could harm the company’s business.
The company’s research and development and manufacturing processes are subject to federal, state, local
and foreign environmental requirements.
The company’s research and development and manufacturing processes are subject to federal, state, local
and foreign environmental requirements, including requirements governing the discharge of pollutants into the
air or water, the use, handling, storage and disposal of hazardous substances and the responsibility to investigate
and clean up contaminated sites. Under some of these laws, the company also could be held responsible for costs
relating to any contamination at the company’s past or present facilities and at third-party waste disposal sites.
These could include costs relating to contamination that did not result from any violation of law and, in some
circumstances, contamination that the company did not cause. The company may incur significant expenses
relating to the failure to comply with environmental laws. The enactment of stricter laws or regulations, the
stricter interpretation of existing laws and regulations or the requirement to undertake the investigation or
remediation of currently unknown environmental contamination at the company’s own or third-party sites may
require the company to make additional expenditures, which could be material.
Since the company’s ability to obtain further financing may be limited, the company may be unable to make
strategic acquisitions.
The company’s plans typically include identifying, analyzing, acquiring, and integrating other strategic
businesses. There are various reasons for the company to acquire businesses or product lines, including providing
new products or new manufacturing and service capabilities, to add new customers, to increase penetration with
existing customers, and to expand into new geographic markets. The company’s ability to successfully grow
through acquisitions depends upon its ability to identify, negotiate, complete and integrate suitable acquisitions
and to obtain any necessary financing. The costs of acquiring other businesses could increase if competition for
acquisition candidates increases. Further, the provisions of the company’s existing credit facility impose
limitations regarding acquisitions, which could prevent significant acquisitions, without entering into
amendments with regard to those provisions. If the company is unable to obtain the necessary financing, it may
miss opportunities to grow its business through strategic acquisitions.
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;
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