Vistaprint 2012 Annual Report Download - page 71

67
4. Property, Plant and Equipment, Net
Property, plant and equipment, net consists of the following:
June 30,
Estimated useful lives 2012 2011
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years $ 1,280 $ 1,416
Building and building improvements . . . . . . . . . . . . . . . 10 - 30 years 114,357 119,233
Machinery and production equipment . . . . . . . . . . . . . . 4 - 10 years 172,628 165,261
Computer software and equipment . . . . . . . . . . . . . . . . 3 - 5 years 76,640 60,822
Furniture, fixtures and office equipment. . . . . . . . . . . . . 5 - 7 years 13,111 11,075
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . Shorter of lease term or
expected life of the asset
12,036 7,645
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . 33,071 13,422
423,123 378,874
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . (188,500) (145,724)
234,623 233,150
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,605 28,954
Property, plant, and equipment, net . . . . . . . . . . . . . . . . $ 261,228 $ 262,104
Depreciation expense totaled $46,572, $43,410 and $37,199 for the years ended June 30, 2012, 2011 and
2010, respectively.
5. Business Combinations
Acquisition of Albumprinter Holding B.V.
On October 31, 2011, we acquired 100% of the outstanding shares of Albumprinter Holding B.V.
(“Albumprinter”), a leading provider of photo books and other photo products to consumers in Europe. At the
closing, we paid €60,000 ($85,019 based on the exchange rate as of the date of acquisition) in cash for
Albumprinter’s shares, which we funded using cash on hand and borrowings under our credit facility, and we may
pay up to an additional €5,000 ($7,085 based on the exchange rate as of the date of acquisition) in cash on or after
December 31, 2012 based upon the acquired business achieving revenue and earnings targets for calendar year
2012. The estimated fair value of the earn-out payment of $583 was included as a component of the purchase price
based on an evaluation of the likelihood of achievement of the contractual conditions and weighted probability
assumptions of these outcomes and has not changed as of June 30, 2012 other than for changes in currency
exchange rates. Any future changes in the fair value of the earn-out payment will be recorded in our consolidated
statements of income. In connection with the acquisition, we incurred transaction costs related to investment
banking, legal, financial, and other professional services of approximately $1,700 in the year ended June 30, 2012,
which have been recorded in general and administrative expenses.
The amount paid at closing was subject to a post-closing adjustment based on Albumprinter’s working
capital and net debt as of the closing date. These adjustments resulted in a reduction of purchase price of €3,165
($4,485 based on the exchange rate as of the date of acquisition) and the proceeds have been received.
Our consolidated financial statements include the accounts of Albumprinter from October 31, 2011, the date
of acquisition. Albumprinter’s revenue included in our consolidated revenues for the year ended June 30, 2012 is
$40,386. Albumprinter's net income included in our consolidated net income for the year ended June 30, 2012 is
$165.
Purchase Price Allocation
The excess of the purchase price paid over the fair value of Albumprinter’s net assets is recorded as
goodwill, which is primarily attributable to revenue synergies expected from cross-selling opportunities and the
Form 10-K