Vistaprint 2009 Annual Report Download - page 78

VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
1. Description of the Business
The Vistaprint group of companies (the “Company”), offers small businesses the ability to market
their business with a broad range of brand identity and promotional products, marketing services and
electronic solutions. Through the use of proprietary Internet-based graphic design software, localized
websites, proprietary order receiving and processing technologies and advanced computer integrated
production facilities, the Company offers a broad spectrum of products ranging from business cards,
website hosting, brochures and invitations to marketing and creative services. The Company focuses
on serving the marketing, graphic design and printing needs of the small business market, generally
businesses or organizations with fewer than 10 employees. The Company also provides similar
products and services to the consumer market.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Vistaprint Limited,
the predecessor to Vistaprint N.V., and its wholly owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation. Vistaprint Limited was the parent company of the
Vistaprint group as of June 30, 2009 and for all fiscal periods presented in the accompanying financial
statements. On August 31, 2009, Vistaprint Limited became a wholly-owned subsidiary of Vistaprint
N.V., with Vistaprint N.V. becoming the parent company of the Vistaprint group of companies (see
Note 13).
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes. Actual results could differ from those
estimates. Periodically, the Company evaluates its estimates, including those related to the accounts
receivable and sales returns allowance, useful lives of property and equipment, income taxes and
litigation and contingencies, among others. The Company bases its estimates on historical experience
and on various other assumptions that are believed to be reasonable at the time they are made, the
results of which form the basis for making judgments about the carrying values of assets and liabilities.
Cash, Cash Equivalents and Marketable Securities
The Company considers all highly liquid investments purchased with an original maturity of three
months or less to be the equivalent of cash for the purpose of balance sheet and statement of cash
flows presentation. Cash equivalents consist of money market funds and commercial paper. Cash and
cash equivalents restricted under terms of the Company’s facility leases and other financing
arrangements were $2,315 and $1,617 as of June 30, 2009 and 2008, respectively and are included in
other assets in the accompanying consolidated balance sheets.
Marketable securities, when held, consist primarily of investment-grade corporate bonds, U.S.
government agency issues and municipal auction rate securities, are classified as “available-for-sale
securities” in accordance with Statement of Financial Accounting Standards (“SFAS 115”), Accounting
for Certain Investments in Debt and Equity Securities and carried at fair value, with the unrealized
gains and losses reported in a separate component of accumulated other comprehensive income in
shareholders’ equity in the accompanying balance sheets. The cost of securities sold is based on the
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