Vistaprint 2009 Annual Report Download - page 83

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VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
gains and losses and re-measurement of assets and liabilities denominated in currencies other than an
entities functional currency are included in other income (expense), net. Foreign currency transaction
(losses) gains included in other (expense) income, net for the years ended June 30, 2009, 2008 and
2007 were $(803), $427 and $(45), respectively.
Net Income Per Share
The Company calculates net income per share in accordance with SFAS No. 128, Earnings Per
Share. Basic net income per share is computed by dividing the net income attributable to common
shareholders by the weighted-average number of common shares outstanding for the fiscal period.
Diluted net income per share for all years presented gives effect to all potentially dilutive securities,
including share options and restricted share units using the treasury stock method. Common share
equivalents of 2,096,825, 864,968 and 1,103,614 were excluded from the determination of potentially
dilutive shares for the years ended June 30, 2009, 2008 and 2007, respectively, due to their anti-
dilutive effect.
The following table sets forth the reconciliation of the weighted-average number of common
shares:
Year Ended June 30,
2009 2008 2007
Basic .................................................... 43,330,166 43,913,119 42,445,991
Effect of dilutive securities ................................. 1,304,025 2,103,245 2,918,266
Diluted................................................... 44,634,191 46,016,364 45,364,257
Share-Based Compensation
At June 30, 2009, the Company had three share-based compensation plans (see Note 7). The
Company grants share options for a fixed number of shares to employees and certain other individuals
with exercise prices as determined by the Board of Directors on the date of grant. For all share option
grants in fiscal years 2009 and prior, the exercise price has been equal to the closing price on the date
of grant.
The Company recorded share-based compensation costs of $19,473, $14,747 and $8,765 for the
years ended June 30, 2009, 2008 and 2007, respectively. Share-based compensation costs capitalized
as part of software and website development costs were $994, $697 and $434 for the years ended
June 30, 2009, 2008 and 2007, respectively.
At June 30, 2009, there was $45,157 of total unrecognized compensation cost related to
non-vested, share-based compensation arrangements, net of estimated forfeitures. This cost is
expected to be recognized over a weighted average period of 2.5 years.
The fair value of each option award is estimated on the date of grant using the Black-Scholes
option pricing model. For option awards in fiscal year 2009, expected volatility is based upon historical
77
Form 10-K