Vistaprint 2009 Annual Report Download - page 63

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which resulted in increased depreciation and hosting service expenses of $3.4 million for fiscal 2009 as
compared to fiscal 2008.
The increase in our technology and development expenses of $17.7 million for fiscal 2008 as
compared to fiscal 2007 was primarily due to increased payroll and benefit costs of $10.3 million and
increased share-based compensation costs of $1.9 million associated with increased employee hiring
in our technology development and information technology support organizations. At June 30, 2008,
we employed 239 employees in these organizations compared to 175 employees at June 30, 2007.
The increase in headcount has resulted in an increase in allocated overhead of $1.3 million compared
to fiscal 2007. Allocated overhead consists primarily of facility-related expenses. In addition, to support
our continued revenue growth during this period, we continued to invest in our website infrastructure,
which resulted in increased depreciation and hosting service expenses of $2.6 million for fiscal 2008 as
compared to fiscal 2007.
Marketing and selling expense
Marketing and selling expense consists primarily of advertising and promotional costs; payroll and
related expenses for our employees engaged in sales, marketing, customer support and public
relations activities; and third party payment processor and credit card fees.
The increase in our marketing and selling expenses of $31.2 million for fiscal 2009 as compared
to fiscal 2008 was driven primarily by increases of $21.4 million in advertising costs related to new
customer acquisition and costs of promotions targeted at our existing customer base, increases in
payroll and benefits related costs of $5.4 million, and increased share-based compensation costs of
$0.3 million. During this period, we continued to expand our total marketing organization and design,
sales and customer support operations. At June 30, 2009, we employed 609 employees in these
organizations compared to 594 employees at June 30, 2008.
The increase in our marketing and selling expenses of $40.1 million for fiscal 2008 as compared
to fiscal 2007 was driven primarily by increases of $24.0 million in advertising costs related to new
customer acquisition and costs of promotions targeted at our existing customer base, increases in
payroll and benefits related costs of $7.7 million, and increased share-based compensation costs of
$0.5 million. During this period, we continued to expand our marketing organization and our design,
sales and customer support operations. At June 30, 2008, we employed 594 employees in these
organizations compared to 422 employees at June 30, 2007. The increase in headcount has resulted
in an increase in allocated overhead of $1.8 million compared to fiscal 2007. Allocated overhead
consists primarily of facility-related expenses. In addition, payment processing fees paid to third-parties
increased by $3.8 million during this period due to increased order volumes.
General and administrative expense
General and administrative expense consists primarily of general corporate costs, including third
party professional fees and salary and related expense of employees involved in finance, accounting,
human resource and general executive management. Third party professional fees include accounting,
legal, recruiting, insurance and organizational consulting service fees.
The increase in our general and administrative expenses of $9.7 million for fiscal 2009 as
compared to fiscal 2008 was primarily due to increased share-based compensation costs of $3.5
million, increased payroll and benefit costs of $3.4 million, and increased third party professional fees
of $2.9 million. At June 30, 2009, we employed 141 employees in these organizations compared to 132
employees at June 30, 2008.
Form 10-K
57