Vistaprint 2013 Annual Report Download - page 45

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$4.4 million due to increased depreciation costs, payment processing fees, and professional fees. Furthermore,
fiscal 2013 includes increased amortization expense of $3.3 million as compared to fiscal 2012 from acquired
customer and brand name intangible assets related to the acquisitions of Albumprinter and Webs. The increase in
amortization expense is due to an acceleration of $1.4 million associated with a change in the expected usage of an
asset, in addition to a full annual period of expense in fiscal 2013 related to the Albumprinter and Webs acquisitions.
The increase in our marketing and selling expenses of $103.7 million for fiscal 2012 as compared to fiscal
2011 was driven primarily by increases of $74.2 million in advertising costs and commissions related to new
customer acquisition and costs of promotions targeted at our existing customer base, an integral component of our
long-term growth strategy, as well as increases in payroll and facility-related costs of $20.7 million. We continued to
expand our marketing organization and our customer service, sales and design support centers and at June 30,
2012, we employed 1,515 employees in these organizations compared to 1,017 employees at June 30, 2011. In
addition, payment processing fees paid to third parties increased by $3.1 million during fiscal 2012, as compared to
fiscal 2011 due primarily to increased order volumes. Other marketing and selling expenses also increased by $2.2
million due to increased employee travel and training costs, recruitment costs, and professional fees. Furthermore,
the year ended June 30, 2012 includes $3.5 million of amortization of acquired customer and brand name intangible
assets related to the Albumprinter and Webs acquisitions.
General and administrative expense
General and administrative expense consists primarily of general corporate costs, including third-party
professional fees, insurance and payroll and related expenses of employees involved in executive management,
finance, legal, and human resources.
During the fiscal year ended June 30, 2013, our general and administrative expenses increased as
compared to fiscal 2012 by $4.9 million, primarily due to increased payroll and facility-related costs of $6.1 million
resulting from the continued investment in our executive management, finance, legal and human resource
organizations to support our expansion and growth. At June 30, 2013 we employed 400 employees in these
organizations compared to 369 employees at June 30, 2012. These additional payroll related costs were offset by a
$1.2 million decrease in professional fees, as the fiscal 2012 comparable period included transaction costs
associated with our Albumprinter and Webs acquisitions, as well as expenses associated with a patent infringement
trial, which did not recur in fiscal 2013 as well as certain one-time termination benefits.
The increase in our general and administrative expenses of $34.5 million for fiscal 2012 as compared to
fiscal 2011 was primarily due to increased payroll and facility-related costs of $24.6 million resulting from the
continued investment in our executive management, finance, legal and human resource organizations to support
our expansion and growth as well as certain one-time termination benefits. At June 30, 2012, we employed 369
employees in these organizations compared to 267 employees at June 30, 2011. In addition, third-party
professional fees increased $5.1 million for the year ended June 30, 2012, primarily due to transaction costs
associated with the Albumprinter and Webs acquisitions and increased costs of litigation relating to a patent
infringement trial that concluded in July 2011.
Other income (expense), net
Other income (expense), net, primarily consists of gains and losses from currency exchange rate
fluctuations on transactions or balances denominated in currencies other than the functional currency of our
subsidiaries. Currency transaction activity for the fiscal year ended June 30, 2013 was $0.1 million of expense as
compared to $2.4 million of income for fiscal 2012 and $2.2 million of expense for year ended June 30, 2011. The
variation in activity for the comparative periods is primarily related to a gain in fiscal 2012 from Euro currency
transactions relating to the funding of the Albumprinter acquisition, which did not occur in 2013 or 2011.
Interest income (expense), net
Interest income (expense), net, which consists primarily of interest paid to financial institutions on
outstanding balances on our credit facility and amortization of debt issuance costs was $5.3 million and $1.7 million
of net expense for fiscal 2013 and 2012, respectively. The increase in interest expense in fiscal 2013 as compared
to fiscal 2012 is a result of increased borrowing levels under our credit facility throughout the respective years.