Vistaprint 2013 Annual Report Download - page 24

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cause us to be unable to borrow under the credit facility and may result in the acceleration of the maturity of our
outstanding indebtedness under the facility. If we were unable to borrow further under the facility, we may not be
able to make investments in our business to support our strategy. If the maturities were accelerated, we may not
have sufficient funds available for repayment, and we could end up in bankruptcy proceedings or other similar
processes. In addition, our shareholders would be detrimentally impacted as shareholder value could decrease to a
point of limited return. Each scenario would result in significant negative implications to our business, liquidity, and
results of operations.
Our hedging activity could negatively impact our results of operations and cash flows.
We have entered into interest rate swap and currency forward contracts to manage differences in the
amount, timing, and duration of our known or expected cash payments related to our long-term debt and operating
cash flows. Our objective in using these derivatives is to add stability to our net income and to manage our
exposure to interest rate and currency movements. If we do not accurately forecast our future long-term debt or
expenditure levels, execute contracts that do not effectively mitigate our economic exposure to variable interest and
currency rates, elect not to apply hedge accounting, or fail to comply with the complex accounting requirements for
hedging, our results of operations and cash flows could be volatile, as well as negatively impacted.
Our business and results of operations may be negatively impacted by general economic and financial
market conditions, and these conditions may increase the other risks that affect our business.
Many of the markets in which we operate are still in an economic downturn that we believe may have a
negative impact on our business. Additionally, a significant portion of our revenues and costs are in Europe where
the volatility of the capital markets and the state of government finances has continued to result in uncertainty for
the outlook of the region and potential for one or more countries to exit the Eurozone. Turmoil in the world's
financial markets has materially and adversely impacted the availability of financing to a wide variety of businesses,
including micro businesses, and the resulting uncertainty led to reductions in capital investments, marketing
expenditures, overall spending levels, future product plans, and sales projections across industries and markets.
These trends could have a material and adverse impact on the demand for our products and services, our financial
results from operations, and our ability to attract and retain employees in jurisdictions where we have significant
operations.
The United States government may further increase border controls and impose duties or restrictions on
cross-border commerce that may substantially harm our business by impeding our shipments into the
United States from our Canadian manufacturing facility.
For the fiscal years ended June 30, 2013 and June 30, 2012 we derived 52% and 51% of our revenue,
respectively, from sales to customers made through Vistaprint.com, our United States-focused website. We produce
substantially all physical products for our United States customers at our facility in Windsor, Ontario, and the United
States imposes restrictions on shipping goods into the United States from Canada. The United States also imposes
protectionist measures such as customs duties and tariffs that limit free trade, some of which may apply directly to
product categories that comprise a material portion of our revenues. The customs laws, rules and regulations that
we are required to comply with are complex and subject to unpredictable enforcement and modification. We have
from time to time experienced delays in shipping our manufactured products into the United States as a result of
these restrictions which have, in some instances, resulted in delayed delivery of orders.
In the future, the United States could impose further border controls, tariffs, and restrictions, interpret or
apply regulations in a manner unfavorable to the importation of products from outside of the U.S., or take other
actions that have the effect of restricting the flow of goods from Canada and other countries to the United States, up
to and including shutting down the U.S.-Canadian border for an extended period of time. If we experienced greater
difficulty or delays shipping products into the United States or were foreclosed from doing so, or if our costs and
expenses materially increased, our business and results of operations could be harmed.
If we are unable to protect our intellectual property rights, our reputation and brands could be damaged,
and others may be able to practice our technology, which could substantially harm our business and
results of operations.
We rely on a combination of patent, trademark, trade secret and copyright law and contractual restrictions
to protect our intellectual property, but these protective measures afford only limited protection. Despite our efforts
Form 10-K