Invacare 2014 Annual Report Download - page 31

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assets and liabilities, the results of audits and examinations of previously filed tax returns and continuing assessments of its tax
exposures. The Company's future cash flows may be negatively impacted by cash payments required to settle tax liabilities,
including the potential settlement of disputed tax liabilities. Corporate tax reform and tax law changes continue to be analyzed in
the United States and in many other jurisdictions.
The Company’s reported results may be adversely affected by increases in reserves for uncollectible accounts receivable.
The Company has a large balance of accounts receivable and has established a reserve for the portion of such accounts
receivable that the Company estimates will not be collected because of the Company’s customers’ non-payment. The specific
reserve is based on historical trends and current relationships with the Company’s customers and providers. Changes in the
Company’s collection rates can result from a number of factors, including turnover in personnel, changes in the payment policies
or practices of payors, changes in industry rates or pace of reimbursement or changes in the financial health of the Company’s
customers. As a result of past changes in Medicare reimbursement regulations, specifically changes to the qualification processes
and reimbursement levels of consumer power wheelchairs and custom power wheelchairs, the business viability of some the
Company’s customers may be at risk. Further, as National Competitive Bidding is implemented in additional areas, the number
of start-up or new providers who have three-year contracted pricing will increase. The Company’s reserve for uncollectible
receivables has fluctuated in the past and will continue to fluctuate in the future. Changes in rates of collection, even if they are
small in absolute terms, could require the Company to increase its reserve for uncollectible receivables beyond its current level.
The Company has reviewed the accounts receivables, including those receivables financed through DLL, associated with many
of its customers that are most exposed to these issues. If the business viability of certain of the Company’s customers deteriorates
or the Company’s credit policies are ineffective in reducing the Company’s exposures to credit risk, additional increases in reserves
for uncollectible accounts may be necessary, which could adversely affect the Company’s financial results.
The loss of the services of the Company’s key management and personnel could adversely affect its ability to operate the
Company’s business.
The Company’s future success will depend, in part, upon the continued service of key managerial, research and development
staff and sales and technical personnel. In addition, the Company’s future success will depend on its ability to continue to attract
and retain other highly qualified personnel, including personnel experienced in quality systems and regulatory affairs. If the
Company is not successful in retaining its current personnel or in hiring or retaining qualified personnel in the future, the Company’s
business may be adversely affected. The Company’s future success depends, to a significant extent, on the abilities and efforts of
its executive officers and other members of its management team, such as the Company's new incoming President and Chief
Executive Officer and its interim President and Chief Executive Officer and Chief Financial Officer, as well as other members of
its management team. The Company had significant turnover in its management team during 2014 and cannot be certain that its
executive officers and other key employees will continue in their respective capacities for any period of time, and these employees
may be difficult to replace. If the Company loses the services of any of its management team, the Company’s business may be
adversely affected.
Certain provisions of the Company’s debt agreements, its charter documents, and Ohio law could delay or prevent the sale
or change in control of the Company.
Provisions of the Company’s credit agreements, its charter documents, 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.
Not applicable.