Invacare 2015 Annual Report Download - page 63

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Agreement. The Amended and Restated Credit Agreement contains customary default provisions, with certain grace periods and
exceptions, which provide that events of default that include, among other things, failure to pay amounts due, breach of covenants,
representations or warranties, bankruptcy, the occurrence of a material adverse effect, exclusion from any medical reimbursement
program, and an interruption of any material manufacturing facilities for more than ten consecutive days. Should the company
fail to comply with these requirements, the company would potentially have to attempt to obtain alternative financing and thus
likely be required to pay much higher interest rates.
As of December 31, 2015, the company had no borrowings outstanding under its Amended and Restated Credit Agreement,
which provides for a senior secured revolving credit facility for U.S. and Canadian borrowers of up to $100,000,000 at variable
rates, subject to availability based on a borrowing base formula, and in addition provides for a revolving credit, letter of credit
and swing line loan facility for European borrowers allowing borrowing up to an aggregate principal amount of $30,000,000 at
variable rates, subject to availability based on a borrowing base formula. As of December 31, 2015, the company had $13,350,000
outstanding in principal on its 4.125% Convertible Senior Subordinated Debentures due in February 2027, of which $1,203,000
is included in equity.
On February 23, 2016, the company issued $130,000,000 aggregate principal amount of 5.00% convertible senior notes due
2021 in a private offering. The notes bear interest at a rate of 5.00% per year payable semi-annually and will mature in February
2021, unless repurchased or converted in accordance with their terms prior to such date. See Subsequent Events in the Notes to
the Consolidated Financial Statements for more information regarding the 5.00% convertible senior notes due 2021 and the related
convertible note hedge and warrant transactions.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets,
Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Cash Flows, Consolidated Statement of
Shareholders’ Equity, Notes to Consolidated Financial Statements and Financial Statement Schedule, which appear on pages FS-1
to FS-61 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
As of December 31, 2015, an evaluation was performed, under the supervision and with the participation of the company’s
management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation
of the company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that
evaluation, the company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the
company’s disclosure controls and procedures were effective as of December 31, 2015, in ensuring that information required to
be disclosed by the company in the reports it files and submits under the Exchange Act is (1) recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms and (2) accumulated and communicated to
the company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely
decisions regarding required disclosure.
(b) Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining a system of adequate internal control over financial reporting
that provides reasonable assurance that assets are safeguarded and that transactions are authorized, recorded and reported properly.
The system includes self-monitoring mechanisms; regular testing by the company’s internal auditors; a Code of Conduct; written
policies and procedures; and a careful selection and training of employees. Actions are taken to correct deficiencies as they are
identified. An effective internal control system, no matter how well designed, has inherent limitations—including the possibility
of the circumvention or overriding of controls—and therefore can provide only reasonable assurance that errors and fraud that
can be material to the financial statements are prevented or would be detected on a timely basis. Further, because of changes in
conditions, internal control system effectiveness may vary over time.
Management’s assessment of the effectiveness of the company’s internal control over financial reporting is based on the
Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework).