Vistaprint 2011 Annual Report Download - page 23

disproportionate amount of our revenue and earnings for the foreseeable future. In anticipation of
increased sales activity during our second fiscal quarter holiday season, we typically incur significant
additional capacity related expenses each year to meet our seasonal needs, including facility
expansions, equipment purchases and increases in the number of temporary and permanent
employees. Lower than expected sales during the second quarter would likely have a
disproportionately large impact on our operating results and financial condition for the full fiscal year. If
we are unable to accurately forecast and respond to seasonality in our business, our business and
results of operations may be materially harmed.
A significant portion of our revenues and operations are transacted in currencies other than
the U.S. dollar, our reporting currency. We therefore have currency exchange risk.
We are exposed to fluctuations in currency exchange rates that may impact items such as the
translation of our revenues and expenses, remeasurement of our intercompany balances, and the
value of our cash and cash equivalents denominated in currencies other than the U.S. dollar. For
example, when currency exchange movements are unfavorable to our business, the U.S. dollar
equivalent of our revenue and operating income recorded in other currencies is diminished. As we
have expanded and continue to expand our revenues and operations throughout the world and to
additional currencies, our exposure to currency exchange rate fluctuations has increased and we
expect will continue to increase. Our revenue and results of operations may differ materially from
expectations as a result of currency exchange rate fluctuations.
If we are unable to market and sell products and services beyond our existing target markets
and develop new products and services to attract new customers, our results of operations
may suffer.
We have developed products and services and implemented marketing strategies designed to
attract micro business owners and consumers to our websites and encourage them to purchase our
products and services. We believe we need to address additional markets and attract new customers
to further grow our business. To access new markets and customers, we expect that we will need to
develop, market and sell new products and services, expand our marketing and sales channels,
expand our business and operations geographically by introducing localized websites in different
countries, and develop new strategic relationships. Any failure in these areas could harm our
business, financial condition and results of operations.
If we are unable to manage our expected growth and expand our operations successfully, our
reputation would be damaged and our business and results of operations would be harmed.
In recent years, our number of employees and geographic footprint has grown rapidly, and we
expect the number of countries and facilities from which we operate to continue to increase in the
future. Our growth, combined with the geographical separation of our operations, has placed, and will
continue to place, a strain on our management, administrative and operational infrastructure. Our
ability to manage our operations and anticipated growth will require us to continue to refine our
operational, financial and management controls, human resource policies, reporting systems and
procedures in the locations in which we operate.
We may not be able to implement improvements to our management information and control
systems in an efficient or timely manner and may discover deficiencies in existing systems and
controls. If we are unable to manage expected 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.
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