Vistaprint 2015 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2015 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

37
All Other Business Units
Revenue for the year ended June 30, 2015 increased to $299.8 million from $126.2 million in the year
ended June 30, 2014, primarily due to the addition of aggregate revenues of $171.2 million from the companies we
acquired in fiscal 2014 and 2015. We also delivered continued growth in our Albumprinter brand, as well as in our
smaller markets in our Most of World business.
Revenue for the year ended June 30, 2014 increased to $126.2 million from $75.6 million in the prior
comparable period, primarily due to the addition of revenue from Printdeal and Pixartprinting, which we acquired in
the our fourth quarter fiscal 2014. The 67% increase in the reported revenue of our other business units was
primarily due to the addition of revenue from the companies we acquired in fiscal 2014.
The following table summarizes our comparative operating expenses for the period:
In thousands
Year Ended June 30,
2015 2014 2013 2015 vs. 2014 2014 vs. 2013
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 568,599 $ 451,093 $ 400,293 26% 13%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.1% 35.5% 34.3%
Technology and development expense . . . . . . . . . . $ 194,360 $ 176,344 $ 164,859 10% 7%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.0% 13.9% 14.1%
Marketing and selling expense . . . . . . . . . . . . . . . . . $ 489,743 $ 440,311 $ 446,116 11% (1)%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.8% 34.6% 38.2%
General and administrative expense . . . . . . . . . . . . $ 145,180 $ 116,574 $ 110,086 25% 6%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7% 9.2% 9.4%
Cost of revenue
Cost of revenue includes materials used to manufacture our products, payroll and related expenses for
production personnel, depreciation of assets used in the production process and in support of digital marketing
service offerings, shipping, handling and processing costs, third-party production costs, costs of free products and
other related costs of products sold by us. Cost of revenue as a percent of revenue increased during the year ended
June 30, 2015, as the operations we acquired in fiscal 2014 and 2015 have a lower gross margin profile than our
traditional business; however, these companies have lower marketing and selling costs.
The Vistaprint Business Unit cost of revenue increased to $381.0 million for the year ended June 30, 2015
from $377.4 million for the year ended June 30, 2014, due to increased costs associated with production volume
and product mix of $33.9 million. This increase was partially offset by currency related benefits, reductions in raw
material pricing, shipping costs and other productivity and efficiency gains of $30.3 million.
The remaining increase in cost of revenue for the year ended June 30, 2015 as compared to the year
ended June 30, 2014 was primarily due to incremental manufacturing costs of $115.4 million for the operations
acquired in fiscal 2014 and 2015.
The Vistaprint Business Unit cost of revenue increased to $377.4 million for the year ended June 30, 2014
from $364.1 million in the prior period, as we produced more revenue volume during fiscal 2014 as compared to the
same period in fiscal 2013. We incurred incremental shipping and overhead related costs in fiscal 2014 of $3.6
million and $9.7 million, respectively. These expense increases were offset by a decline in materials related costs of
$1.1 million and other productivity and efficiency gains. In addition, the fiscal 2013 period included a benefit from a
non-cash gain of $1.4 million related to a free piece of equipment in our European operations that did not occur in
fiscal 2014.
The remaining increase in cost of revenue for the year ended June 30, 2014 as compared to the year
ended June 30, 2013 was primarily due to additional manufacturing costs of $29.7 million for the acquired Printdeal
and Pixartprinting operations.
Form 10-K