Vistaprint 2015 Annual Report Download - page 29

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We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take
other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations depends on our financial
condition and operating performance, which are subject to economic and competitive conditions and to various
financial, business, legislative, regulatory, and other factors beyond our control. We may be unable to maintain a
level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest
on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face
substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to
dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our
indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially
reasonable terms or at all, and, even if successful, those alternative actions may not allow us to meet our scheduled
debt service obligations. The credit facility and the indenture that governs our senior notes restrict our ability to
dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or
equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate
those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
In addition, we conduct a substantial portion of our operations through our subsidiaries, which may not be
able to make distributions to enable us to make payments in respect of our indebtedness because of legal
restrictions in some cases. If we do not receive distributions from our subsidiaries, we may be unable to make
required principal and interest payments on our indebtedness.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our
indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial
position and results of operations.
If we cannot make scheduled payments on our debt, we will be in default and our lenders could declare all
outstanding principal and interest to be due and payable, the lenders under our credit facility could terminate their
commitments to loan money, our secured lenders could foreclose against the assets securing their borrowings, and
we could be forced into bankruptcy or liquidation.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service
obligations to increase significantly.
Borrowings under our credit facility are at variable rates of interest and expose us to interest rate risk. If
interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even
if the amount borrowed remained the same, and our net income and cash flows, including cash available for
servicing our indebtedness, will correspondingly decrease. As of June 30, 2015, a hypothetical 100 basis point
increase in rates, inclusive of our outstanding interest rate swaps, would result in an increase of interest expense of
approximately $0.9 million over the next 12 months. Although we generally enter into interest rate swaps that
involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility, we might
not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into
may not fully mitigate our interest rate risk.
Border controls and duties and restrictions on cross-border commerce may impede our shipments across
country borders.
Many governments impose restrictions on shipping goods into their countries, as well as protectionist
measures such as customs duties and tariffs that may apply directly to product categories comprising a material
portion of our revenues. The customs laws, rules and regulations that we are required to comply with are complex
and subject to unpredictable enforcement and modification. As a result of these restrictions, we have from time to
time experienced delays in shipping our manufactured products into certain countries. For example, we produce
substantially all physical products for our United States customers at our facility in Ontario, Canada and have
occasionally experienced delays shipping from Canada into the United States, where we have historically derived
more than half of our annual revenue. If we experience difficulty or delays shipping products into the United States
or other key markets, or are prevented from doing so, or if our costs and expenses materially increased, our
business and results of operations could be harmed.
Form 10-K