Vistaprint 2010 Annual Report Download - page 82

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The currency forward contracts settled during fiscal 2010, resulting in a gain of $49 as of
June 30, 2010. The cash flow hedge was considered to be highly effective and all of the gain was
recorded within AOCI on the Consolidated Balance Sheet at June 30, 2010. The net gain recorded
within AOCI will be reclassified into net income over the useful life of the long-lived asset as a
reduction in depreciation expense. No amounts have been reclassified into earnings during the year
ended June 30, 2010 as the long-lived asset has not been placed in service. Reclassifications into
depreciation expense in the future will not be material. The Company has no derivative contracts
outstanding at June 30, 2010.
4. Property, Plant and Equipment
Property, plant and equipment consist of the following:
Estimated useful lives 2010 2009
June 30,
Land improvements. . . . . . . . . . . . . . . . . 10 years $ 1,172 $ 1,117
Building and building improvements . . . . 10 - 30 years 82,619 61,024
Machinery and production equipment . . . 4 - 10 years 143,338 116,168
Computer software and equipment . . . . . 3 - 5 years 48,689 31,221
Furniture, fixtures and office equipment. . 5 - 7 years 9,353 7,731
Shorter of lease term or
Leasehold improvements . . . . . . . . . . . . remaining life of the asset 4,663 3,447
Construction in progress . . . . . . . . . . . . . 37,910 27,654
327,744 248,362
Less accumulated depreciation . . . . . . . . (96,945) (66,349)
230,799 182,013
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,162 11,609
Property, plant, and equipment, net . . . . . $ 249,961 $ 193,622
At June 30, 2010 and 2009 construction in progress consisted mainly of expansion of the
Canadian, Dutch, and Jamaican facilities, the purchase of production equipment for the Company’s
production facilities and the purchase of information technology related assets. Depreciation expense
totaled $37,199, $29,236 and $20,348 for the years ended June 30, 2010, 2009 and 2008,
respectively.
5. Acquisition of Soft Sight, Inc.
On December 30, 2009, the Company acquired 100% of the outstanding equity of Soft Sight, a
privately held developer of embroidery digitization software based in the United States, for $6,500 in
cash. Soft Sight’s proprietary software enables a customer’s uploaded graphic artwork to be
automatically converted into embroidery stitch patterns for subsequent manufacturing.
The transaction was accounted for under the acquisition method of accounting. All of the
assets acquired and liabilities assumed in the transaction are recognized at their acquisition-date fair
values, while transaction costs and restructuring costs associated with the transaction are expensed
as incurred. The transaction and restructuring costs did not have a material impact on the Company’s
consolidated results of operations or cash flows. The Company plans to launch a line of embroidered
products to customers in fiscal 2011. Pro forma results of operations for the fiscal years ended
June 30, 2010 and 2009 assuming the acquisition of Soft Sight had taken place at the beginning of
each period would not differ significantly from the Company’s actual reported results.
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