Vistaprint 2010 Annual Report Download - page 57

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Form 10-K
and other general and administrative activities including recruitment. At June 30, 2010, we employed
199 employees in these organizations compared to 141 employees at June 30, 2009. The increase in
headcount has resulted in an increase in allocated overhead of $1.1 million as compared to fiscal
2009.
The increase in our general and administrative expenses of $9.7 million for fiscal 2009 as
compared to fiscal 2008 was primarily due to increased share-based compensation costs of
$3.5 million, increased payroll and benefit costs of $3.4 million, and increased third party professional
fees of $2.9 million. At June 30, 2009, we employed 141 employees in these organizations compared
to 132 employees at June 30, 2008.
Interest income
Interest income, which consists of interest income earned on cash, cash equivalents and
investments, was $0.4 million, $1.7 million and $4.2 million during fiscal 2010, 2009 and 2008,
respectively. The change in each year was primarily due to lower interest rate yields despite increased
cash and investments balances.
Other (expense) income, net
Other (expense) income, net, which primarily consists of gains and losses from currency
transactions or revaluation, was $1.5 million of expense, $0.8 million of expense and $0.4 million of
income for fiscal 2010, 2009 and 2008, respectively. Increases and decreases in other (expense)
income, net are due to changes in currency exchange rates on transactions or balances denominated
in currencies other than the functional currency of our subsidiaries.
Interest expense
Interest expense, which consists of interest and penalties paid to financial institutions on
outstanding balances on our credit facilities, was $0.8 million, $1.4 million and $1.7 million in fiscal
2010, 2009 and 2008, respectively. The decrease each year was due to a decrease in the outstanding
principal on our bank loans as compared to the prior year period. As a result of the early repayment
of $5.9 million of our euro revolving credit agreement, we incurred $0.1 million in prepayment
penalties for fiscal 2010.
Income tax provision
In thousands
2010 2009 2008
Year Ended June 30,
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . $ 7,273 $ 5,417 $ 4,261
Effective tax rate ............................. 9.7% 8.9% 9.7%
Income tax expense was $7.3 million, $5.4 million, and $4.3 million for fiscal 2010, 2009, and
2008, respectively. The increase in the effective tax rate for fiscal 2010 as compared to fiscal 2009 is
primarily attributable to the expiration of the U.S. federal research and development tax credit offset by
the benefit associated with geographic earnings mix.
The decrease in the effective tax rate in fiscal 2009 as compared to fiscal 2008 is due to a
geographic shift in profits, resulting in increased profits residing in jurisdictions with lower tax rates.
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