Vistaprint 2012 Annual Report Download - page 75

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7. Accrued Expenses
Accrued expenses included the following:
June 30,
2012 2011
Compensation costs (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,513 $ 23,142
Advertising costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,355 21,407
Income and indirect taxes (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,402 8,427
Shipping costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,614 2,694
Professional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,277 1,716
Purchases of property, plant and equipment (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,952 1,236
Other (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,289 10,367
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,402 $ 68,989
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(1) The increase in accrued compensation costs is principally a result of our expansion in headcount and the associated increase in payroll and
benefit related costs to support our growth.
(2) The increase in accrued income taxes and indirect taxes is principally a result of the timing of payments of income and indirect taxes as well
as revenue growth for indirect taxes.
(3) The increase in accrued purchases of property, plant and equipment is as a result of expansion efforts in several of our locations, most
notably Montego Bay, Jamaica and Venlo, the Netherlands.
(4) The increase in other accrued expenses is principally as a result of increased activity of acquired entities, and also includes contingent
consideration and other acquisition-related liabilities.
8. Long-Term Debt
On October 21, 2011, we entered into a senior credit agreement, which we refer to as the credit agreement,
with a syndicate of lenders led by JPMorgan Chase Bank, N.A., as administrative agent, that provided for an
unsecured revolving credit facility of up to $250,000 in aggregate loan commitments with letter of credit and swing
line loan sublimits of $25,000 each. On April 13, 2012, we increased the aggregate loan commitments under the
credit agreement by $137,500, to a total of $387,500, by adding new lenders and increasing the commitments of
several existing lenders. We may from time to time, so long as no default or event of default has occurred and is
continuing, further increase the loan commitments under the credit agreement by up to $150,000 by adding new
commitments or increasing the commitment of willing lenders. The maturity date of the credit agreement is October
21, 2016.
Long-term borrowings under the facility will bear interest at LIBOR plus 1.25% to 1.50%, depending on our
leverage ratio, which is the ratio of our consolidated total indebtedness to our consolidated earnings before interest,
taxes, depreciation and amortization (“EBITDA”). As of June 30, 2012, the weighted-average interest rate on
outstanding borrowings was 1.50%. We must also pay a commitment fee on unused balances of 0.175% to 0.225%
depending on our leverage ratio.
The credit agreement, as filed as an exhibit to Form 8-K on October 26, 2011, contains financial and other
covenants, including but not limited to (1) limitations on our incurrence of additional indebtedness and liens, the
consummation of certain fundamental organizational changes or intercompany activities, investments and restricted
payments including purchases of our ordinary shares or payments of dividends, and the amount of consolidated
capital expenditures that we may make in each of our fiscal years ending June 30, 2012 through 2016 and (2)
financial covenants calculated on a trailing twelve month basis that:
• our consolidated leverage ratio, which is the ratio of our consolidated indebtedness (*) to our trailing twelve-
month, or TTM, consolidated EBITDA (*), will not exceed 3.5;
• our consolidated senior leverage ratio, which is the ratio of our consolidated indebtedness that is not
subordinated to our indebtedness under the credit agreement to our TTM consolidated EBITDA, will not
exceed 2.75; and
Form 10-K