Vistaprint 2010 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2010 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 145

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145

depreciation and hosting services expense of $2.4 million, increased third-party consulting services of
$0.8 million, and increased other expenses of $3.0 million for fiscal 2010 as compared to fiscal 2009.
Fiscal 2010 included $0.9 million of expense related to the abandonment of certain acquired
intangibles recorded in conjunction with the Soft Sight acquisition that were measured at fair value
based on the perspective of a market participant, but were determined not to have an economic use
for Vistaprint and were abandoned.
The increase in our technology and development expenses of $16.1 million for fiscal 2009 as
compared to fiscal 2008 was primarily due to increased payroll and benefit costs of $8.8 million and
increased share-based compensation costs of $1.0 million associated with increased employee hiring
in our technology development and information technology support organizations. At June 30, 2009,
we employed 302 employees in these organizations compared to 239 employees at June 30, 2008.
The increase in headcount has resulted in an increase in allocated overhead of $1.7 million compared
to fiscal 2008. Allocated overhead consists primarily of facility-related expenses. In addition, to support
our continued revenue growth during this period, we continued to invest in our website infrastructure,
which resulted in increased depreciation and hosting service expenses of $3.4 million for fiscal 2009
as compared to fiscal 2008.
Marketing and selling expense
Marketing and selling expense consists primarily of advertising and promotional costs; payroll
and related expenses for our employees engaged in marketing, sales, customer support and public
relations activities; and third party payment processor and credit card fees.
The increase in our marketing and selling expenses of $57.4 million for fiscal 2010 as
compared to fiscal 2009 was driven primarily by increases of $39.5 million in advertising costs and
commissions related to new customer acquisition and costs of promotions targeted at our existing
customer base, and increases in payroll and benefits related costs of $12.9 million. During this period,
we continued to expand our marketing organization and our design, sales and services centers
including the addition of our facilities in Berlin, Germany and Tunis, Tunisia. At June 30, 2010, we
employed 806 employees in these organizations compared to 609 employees at June 30, 2009. In
addition, payment processing fees paid to third-parties increased by $2.8 million during fiscal 2010, as
compared to fiscal 2009 due to increased order volumes.
The increase in our marketing and selling expenses of $31.2 million for fiscal 2009 as
compared to fiscal 2008 was driven primarily by increases of $21.4 million in advertising costs related
to new customer acquisition and costs of promotions targeted at our existing customer base,
increases in payroll and benefits related costs of $5.4 million, and increased share-based
compensation costs of $0.3 million. During this period, we continued to expand our total marketing
organization and design, sales and customer support operations. At June 30, 2009, we employed
609 employees in these organizations compared to 594 employees at June 30, 2008.
General and administrative expense
General and administrative expense consists primarily of general corporate costs, including
third party professional fees and payroll and related expense of employees involved in finance, legal,
human resource and general executive management. Third party professional fees include finance,
legal, human resources, and insurance.
The increase in our general and administrative expenses of $15.8 million for fiscal 2010 as
compared to fiscal 2009 was primarily due to increased payroll and benefit costs of $8.0 million
resulting from the continued growth of our executive management, finance, legal and human resource
organizations to support our expansion and growth, and increased third-party professional fees of
$5.6 million related to ongoing litigation, the execution of our change of domicile to the Netherlands,
52