Vistaprint 2012 Annual Report Download - page 49

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The increase in our technology and development expenses of $15.2 million for fiscal 2011 as compared to
fiscal 2010 was primarily due to increased payroll and facility-related costs of $9.3 million associated with additional
headcount in our technology development and information technology support organizations. At June 30, 2011, we
employed 454 employees in these organizations compared to 375 employees at June 30, 2010. In addition, during
the fiscal year ended June 30, 2011, we continued to invest in our website infrastructure, which resulted in
increased depreciation, hosting services expense and other website related expenses of $5.8 million as compared
to the same periods in fiscal 2010. The increase in other website related expenses during fiscal 2011 includes the
impact of a legal settlement of a patent claim, offset by expenses in the prior year related to the abandonment of
certain acquired intangible assets recorded in conjunction with the Soft Sight, Inc. acquisition.
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;
amortization of certain acquired intangible assets, including customer relationships and trade names; and third-party
payment processing fees.
The increase in our marketing and selling expenses of $103.7 million for fiscal 2012 as compared to fiscal
2011 was driven primarily by increases of $74.2 million in advertising costs and commissions related to new
customer acquisition and costs of promotions targeted at our existing customer base, an integral component of our
long-term growth strategy, as well as increases in payroll and facility-related costs of $20.7 million. We continued to
expand our marketing organization and our customer service, sales and design support centers and at June 30,
2012, we employed 1,515 employees in these organizations compared to 1,017 employees at June 30, 2011. In
addition, payment processing fees paid to third parties increased by $3.1 million during fiscal 2012, as compared to
fiscal 2011 due primarily to increased order volumes. Other marketing and selling expenses also increased by $2.2
million due to increased employee travel and training costs, recruitment costs, and professional fees. Furthermore,
the year ended June 30, 2012 includes $3.5 million of amortization of acquired customer and brand name intangible
assets related to the Albumprinter and Webs acquisitions.
The increase in our marketing and selling expenses of $55.3 million for fiscal 2011 as compared to fiscal
2010 was driven primarily by increases of $41.9 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
facility-related costs of $11.4 million. We continued to expand our marketing organization and our customer service,
sales and design support centers and at June 30, 2011, we employed 1,017 employees in these organizations
compared to 806 employees at June 30, 2010. In addition, payment processing fees paid to third parties increased
by $3.2 million during fiscal 2011, as compared to fiscal 2010 due primarily to increased order volumes. These
increases were partially offset by a charge of $1.5 million related to indirect taxes that is included in the fiscal year
ended June 30, 2010.
General and administrative expense
General and administrative expense consists primarily of general corporate costs, including third-party
professional fees, insurance and payroll and related expenses of employees involved in executive management,
finance, legal, and human resources.
The increase in our general and administrative expenses of $34.5 million for fiscal 2012 as compared to
fiscal 2011 was primarily due to increased payroll and facility-related costs of $24.6 million resulting from the
continued investment in our executive management, finance, legal and human resource organizations to support
our expansion and growth as well as certain one-time termination benefits. At June 30, 2012, we employed 369
employees in these organizations compared to 267 employees at June 30, 2011. In addition, third-party professional
fees increased $5.1 million for the year ended June 30, 2012, primarily due to transaction costs associated with the
Albumprinter and Webs acquisitions and increased costs of litigation relating to a patent infringement trial that
concluded in July 2011.
The increase in our general and administrative expenses of $12.6 million for fiscal 2011 as compared to
fiscal 2010 was primarily due to increased payroll and facility-related costs of $12.8 million resulting from the
continued investment in our general and administrative organizations to support our expansion and growth. At
Form 10-K