Vistaprint 2006 Annual Report Download - page 65

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Table of Contents VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2006, 2005 and 2004
(in thousands, except share and per share data)
The following table summaries unrealized gains and losses related to our investments in cash equivalents and marketable securities at
June 30, 2006 (in thousands):
Book
Value
Gross
Unrealized
Gains/
(Losses) Fair Value
Cash and cash equivalents $ 64,652 $ 1 $ 64,653
Marketable securities:
Asset−backed securities 500 (1) 499
Commercial Paper 1,596 — 1,596
Corporate Bonds 10,760 (25) 10,735
Certificates of Deposit 1,999 1 2,000
U.S. Government Agency Issues 7,477 (28) 7,449
Municipal auction rate securities 21,195 — 21,195
Total Marketable securities 43,527 (53) 43,474
Total $ 108,179 $ (52) $ 108,127
Fair Value of Financial Instruments
Carrying amounts of financial instruments held by the Company, which include cash equivalents, accounts receivable, accounts payable,
and accrued expenses approximate fair value due to the short period of time to maturity of those instruments. The Company’s floating−rate
long−term borrowings approximate fair value (see Note 5).
Concentrations of Credit Risk
Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, marketable securities and accounts
receivable. The risk with respect to cash and cash equivalents and marketable securities is reduced by the Company’s policy of investing in
financial instruments (i.e., cash equivalents) with short−term maturities issued by highly rated financial institutions. The risk with respect to
accounts receivables is reduced by the Company’s policy of monitoring the creditworthiness of its customers to which it grants credit terms in the
normal course of business. One customer accounted for 85% of the Company’s total accounts receivable at June 30, 2006, and one customer
accounted for 52% of the Company’s total accounts receivable at June 30, 2005.
The Company maintains an allowance for doubtful accounts for potential credit losses based upon specific customer accounts and
historical trends, and such losses in the aggregate have not exceeded the Company’s expectations.
Inventories
Inventories consist primarily of raw materials and are stated at the lower of first−in, first−out cost or market.
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