Vistaprint 2015 Annual Report Download - page 28

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• enter into transactions with affiliates;
• alter the businesses we conduct;
• enter into agreements restricting our subsidiaries’ ability to pay dividends; and
• consolidate, merge, or sell all or substantially all of our assets.
As a result of these restrictions, we may be limited in how we conduct our business, grow in accordance
with our strategy, compete effectively, or take advantage of new business opportunities. In addition, the restrictive
covenants in the credit facility require us to maintain specified financial ratios and satisfy other financial condition
tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we may
be unable to meet them.
A breach of the covenants or restrictions under the indenture that governs our senior notes or under the
credit facility could result in an event of default under the applicable indebtedness. Such a default may allow the
creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-
acceleration or cross-default provision applies. In addition, an event of default under our credit facility would permit
the lenders under the credit facility to terminate all commitments to extend further credit under that facility.
Furthermore, if we were unable to repay the amounts due and payable under our credit facility, those lenders could
proceed against the collateral granted to them to secure that indebtedness. If our lenders or senior noteholders
accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that
indebtedness. In addition, our financial results, our substantial indebtedness, and our credit ratings could adversely
affect the availability and terms of our financing.
Our material indebtedness and interest expense could adversely affect our financial condition.
As of June 30, 2015, our total debt was $522.5 million, made up of $275 million of senior unsecured notes,
$231.5 million of loan obligations under our credit facility and $16.0 million of other debt. We had unused
commitments of $610.4 million under our credit facility (after giving effect to letter of credit obligations).
Subject to the limits contained in the credit facility, the indenture that governs our senior unsecured notes,
and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance
working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks
related to our level of debt could intensify. Specifically, our level of debt could have important consequences,
including the following:
• making it more difficult for us to satisfy our obligations with respect to our debt;
• limiting our ability to obtain additional financing to fund future working capital, capital expenditures,
acquisitions, or other general corporate requirements;
• requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of
other purposes, thereby reducing the amount of cash flows available for working capital, capital
expenditures, acquisitions, and other general corporate purposes;
• increasing our vulnerability to general adverse economic and industry conditions;
• exposing us to the risk of increased interest rates as some of our borrowings, including borrowings under
our credit facility, are at variable rates of interest;
• limiting our flexibility in planning for and reacting to changes in the industry in which we compete;
• placing us at a disadvantage compared to other, less leveraged competitors; and
• increasing our cost of borrowing.