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Table of Contents PART I
Item 1. Business
This annual report on Form 10−K and the documents that we incorporate by reference in this report contains “forward−looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. These forward−looking statements are subject to risks and uncertainties
and are based on the beliefs and assumptions of our management and information currently available to our management. Use of words such as
“believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” goal,” “should,” “likely” or similar expressions, indicate a forward−looking
statement. While we may elect to update these forward−looking statements, we specifically disclaim any obligation to do so, even if our
expectations change. Important factors that could cause actual results to differ materially from the forward−looking statements include, but are not
limited to, those set forth under the heading “Risk Factors.”
Overview
We are a leading online supplier of high−quality graphic design services and customized printed products to small businesses and
consumers worldwide with over 7,000,000 customers served in more than 120 countries. We offer a broad spectrum of products ranging from
business cards and brochures to invitations and holiday cards. We seek to offer compelling value to our customers through an innovative use of
technology, a broad selection of customized printed products, low pricing and personalized customer service. Through our use of proprietary
Internet−based graphic design software, localized websites, proprietary order receiving and processing technologies and advanced computer
integrated printing facilities, we offer a meaningful economic advantage relative to traditional graphic design and printing methods. We believe that
our value proposition has allowed us to successfully penetrate the large, fragmented and geographically dispersed small business and consumer
markets.
We have standardized, automated and integrated the entire graphic design and print process, from design conceptualization to product
shipment. Customers visiting our websites can use our graphic design software to easily create and order full−color, personalized,
professional−looking printed products, without any prior graphic design training or experience. Customers have access to graphic designs, content
suggestions, logo design services, design templates and over 70,000 photographs and illustrations. In addition, our design support staff is
available to provide design assistance to customers at no charge. During the fiscal year ended June 30, 2006, customers used our design
technologies to regularly place over 15,000 customized orders per day.
Our proprietary Internet−based order processing systems receive and store thousands of individual print jobs on a daily basis and, using
complex algorithms, efficiently aggregate multiple individual print jobs for printing as a single press−run. Our systems intelligently search pending
individual print jobs, select jobs having similar printing parameters for combination into a single larger aggregate job and calculate the optimal
allocation of print orders that will result in the lowest production cost and on−time delivery. By combining this order aggregation technology with
our computer integrated print manufacturing facilities, we are able to significantly reduce the costs and inefficiencies associated with traditional
short run printing and can provide customized finished products in as little as three days from design to delivery.
Our customer base has increased from fewer than 500 customers in April 2000 to over 7,000,000 customers as of June 30, 2006, and,
over the past three years, we have regularly added more than 100,000 new customers per month. This large and diverse customer base reduces
our dependence on individual products and lessens the impact of shifts in demand for graphic design services and printed products by any
individual customer. Our total revenues have grown from $6.1 million for the fiscal year ended June 30, 2001 to $152.1 million for the fiscal year
ended June 30, 2006.
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