Vistaprint 2007 Annual Report Download - page 31

controls. If we are unable to manage future expansion, our ability to provide a high-quality customer
experience could be harmed, which would damage our reputation and brand and substantially harm
our business and results of operations.
The United States government may substantially increase border controls and impose
restrictions on cross-border commerce that may substantially harm our business.
For the fiscal year ended June 30, 2007, we derived 68% of our revenue from sales to customers
made through our United States website. We produce printed products for our United States customers
at our Windsor, Ontario facility. Restrictions on shipping goods into the United States from Canada
pose a substantial risk to our business. Particularly since the terrorist attacks on September 11, 2001,
the United States government has substantially increased border surveillance and controls. We have
from time to time experienced significant delays in bringing our manufactured products into the
United States as a result of these controls, which has, in some instances, resulted in delayed delivery
of orders. The United States also has in the past imposed protectionist measures, such as tariffs, that
limit free trade. If the United States were to impose further border controls and restrictions, impose
quotas, tariffs or import duties, increase the documentation requirements applicable to cross border
shipments or take other actions that have the effect of restricting the flow of goods from Canada to the
United States, we may have greater difficulty shipping products into the United States or be foreclosed
from doing so, experience shipping delays, or incur increased costs and expenses, all of which would
substantially impair our ability to serve the United States market and harm our business and results of
operations.
If we are unable to manage the challenges associated with our international operations, the
growth of our business could be negatively impacted.
We have a limited history of managing operations in multiple countries. From 2001 to 2004, all of
our business was conducted from one facility located in the United States and from our website
operations in Bermuda. Since that time, we have expanded our business to include operations in six
different countries. For example, we operate printing facilities in Venlo, the Netherlands and Windsor,
Ontario, Canada, a customer support, sales and service, and graphic design center in Montego Bay,
Jamaica, website operations in Devonshire, Bermuda, a marketing office in Barcelona, Spain, and
technology development, marketing, finance and administrative operations in Lexington,
Massachusetts, United States. We have localized websites to serve many additional international
markets. For the fiscal year ended June 30, 2007, we derived 32% of our revenue from our
non-United States websites. We are subject to a number of risks and challenges that specifically relate
to our international operations. Our international operations may not be successful if we are unable to
meet and overcome these challenges, which could limit the growth of our business and may have an
adverse effect on our business and operating results. We also have limited experience in confronting
and addressing the risks and challenges we face in operating in several countries. These risks and
challenges include:
‰fluctuations in foreign currency exchange rates that may increase the United States dollar cost
of, or reduce United States dollar revenue from, our international operations;
‰difficulty managing operations in, and communications among, multiple locations and time
zones;
‰local regulations that may restrict or impair our ability to conduct our business as planned;
‰protectionist laws and business practices that favor local producers and service providers;
‰failure to properly understand and develop graphic design content and product formats
appropriate for local tastes;
Form 10-K
27