Annual Revenue
U.S. Dollars in Millions
Diluted Earnings Per Share
U.S. Dollars
$1,494
$2.73
$1,270
$1,167
$1,020
$817
$670
$516
$401
$256
$152
$1.83
$1.49
$1.25
$1.28
$1.13
$0.85
$0.87
$0.60
$0.45
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
Free Cash Flow*
U.S. Dollars in Millions
GAAP Weighted Average Diluted Shares
Outstanding in Millions
$144
$119
$89
$66
$53
$46
$37
$18
$7
$(13)
45.4
46.0
44.6
45.3
45.0
42.6
39.0
34.5
34.2
33.8
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
*Please see non-GAAP reconciliation at the end of this Annual Report and proxy statement.
Dear Fellow Investor:
This year, we celebrated the 20th anniversary of our company’s founding. We have much to be proud
of, much to be excited about, and much still to learn as we strive to build an enduring and
transformational business that serves the mutual interests of our customers, our team members, our
society and our long-term shareholders. We seek to do this through two objectives:
(cid:120) Strategically, to be the world leader in mass customization
By mass customization, we mean producing, with the reliability, quality and affordability of mass
production, small individual orders where each and every one embodies the personal relevance
inherent to customized physical products.
(cid:120) Financially, to maximize intrinsic value per share
This is our uppermost financial objective, to which we subordinate all other financial objectives.
We define intrinsic value per share as (a) the unlevered free cash flow per share that, in our
best judgment, will occur between now and the long-term future, appropriately discounted to
reflect our cost of capital, minus (b) net debt per share.
This annual report and its associated proxy statement are important documents: they provide extensive
detail and information about our company. But if you are considering investing your capital with us I
encourage you to also study my letter to investors of July 29, 2015 and the documents from our annual
investor day held on August 5, 2015. Those documents explain and illustrate, qualitatively and
quantitatively, how we think about our business. Below, I summarize some important parts of these
more detailed documents, which are available at ir.cimpress.com.
A central objective of our strategy since the inception of the company has been the pursuit of greater
scale because we believe that it is the single biggest driver of competitive advantage for our business
model and that the market opportunity for mass customization remains enormous.
Looking back at the past several years, our execution against the goals we outlined in 2011 has been
mixed. Our successes and our failures during the past four years taught us a great deal about how to
operate as a larger company, what we do well, how we believe we can win, the competitive landscape
beyond our traditional business model, where we want to play and what capabilities we need to build
and/or acquire.
As we enter fiscal 2016, Cimpress is in a position of strength in terms of our technology, our
manufacturing and supply chain operations, our international operations, the reputation of our brands, a
pipeline of strategically attractive and reasonably-priced M&A targets, and the talent of our team
members. Very importantly, we are also in a position of strength due to the clarity of our strategic and
financial objectives: this drives strong alignment of our supervisory and management boards, our
executive leaders and our team members as we make decisions and about the many subsidiary
strategies and tactics to achieve our top-level priorities.
In addition to operating and growing our business, a significant portion of our long-term intrinsic value
per share will come from intelligent capital allocation. With our significant steady state after tax-free
cash flow discussed below and our borrowing capacity, we have substantial capital at our disposal. We
endeavor to invest large amounts of capital into a portfolio of investments that we believe will generate
returns that are, on average, well above our weighted average cost of capital which, for fiscal 2016, we
estimate to be 8.5%. We consider any use of cash that we expect to require more than 12 months to
return our invested capital to be an allocation of capital.
Our capital allocation can be grouped into several broad categories: organic long-term investments
(which we also refer to as discretionary growth spending), share repurchases, M&A, and repayment of
debt. We consider our capital to be fungible across all of these categories. Because of the
attractiveness of these categories we do not intend to pay dividends for the foreseeable future.
Given the significant investments and acquisitions that we need and expect to make as we execute on
our multi-decade opportunity, over the past year we've spent significant time thinking about a concept
we refer to as our steady state after-tax free cash flow per share. We define “steady state” as having a
sustainable and defensible business over the long term capable of growing after-tax free cash flow per
share at the rate of inflation.
We believe our steady state free cash flow for fiscal year 2015 lay somewhere between $210 million
and $385 million1. Note that we had 33.8 million weighted average diluted shares outstanding for the
year ended June 30, 2015. Since our uppermost financial objective is per-share based, we evaluate our
steady state free cash flow at a per-share level. Our analysis of the steady state concept is relatively
new and is inherently subjective but, over time, we will seek to become more precise about our public
estimates of the prior fiscal year’s steady state free cash flow. Importantly, in my July 29, 2015 letter to
investors and in our August 5, 2015 investor day presentation we provided significant amount of detail
that we believe enables an investor to make his or her own judgments of a narrower range of steady
state free cash flow per share.
Estimates of steady state are important for us and shareholders to understand because the difference
between the actual after-tax free cash flow and an estimate of steady state after-tax free cash flow
represents an estimate of discretionary growth spending that we invest in the anticipation of earning a
return above our cost of capital. We look to the future with optimism because we see the opportunity to
make large amounts of such value-creating investments for years to come.
I would like to thank each of our team members for their hard work and dedication last year. As of June
30, 2015, we employed over 6,500 team members in more than 20 different locations across 19
countries. Without their talents we could never have grown into this company, and we could never
achieve the objectives set out above.
Sincerely,
Robert S. Keane
Chairman of the Management Board, President and CEO
1 Please see reconciliation of non-GAAP financial measures at the end of this letter.
Special Note Regarding Forward-Looking Statements
The statements in this letter concerning our expectations for the future growth and development of our business and
anticipated effects of our strategy and investments constitute forward-looking statements for purposes of the safe harbor
provisions under the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from those
indicated by these forward-looking statements as a result of various important factors, including but not limited to those
contained in the Risk Factors section of this Annual Report.
About Non-GAAP Measures
To supplement Cimpress’ consolidated financial statements presented in accordance with U.S. generally accepted accounting
principles, or GAAP, Cimpress has used the following measures defined as non-GAAP financial measures by Securities and
Exchange Commission, or SEC, rules: free cash flow and steady-state free cash flow.
(cid:120)
Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and
equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website
development costs, plus payment of contingent consideration in excess of acquisition-date fair value.
(cid:120) Steady-state free cash flow is defined as free cash flow as defined above, adjusted for the pro-forma inclusion of
recent M&A activity and non-steady state working capital change, minus our estimated range of discretionary growth
spending that we invest in the anticipation of earning a return above our cost of capital.
The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial
measures, please see the tables captioned “Reconciliations of Non-GAAP Financial Measures” in this release. The tables
have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and
the related reconciliation between these financial measures.
Cimpress’ management believes that these non-GAAP financial measures provide meaningful supplemental information in
assessing our performance and liquidity by excluding certain items that may not be indicative of our recurring core business
operating results, which could be non-cash charges or discrete cash charges that are infrequent in nature. These non-GAAP
financial measures also have facilitated management’s internal comparisons to Cimpress’ historical performance and our
competitors’ operating results.
Non-GAAP Reconciliation of Estimated Steady State Free Cash Flow
Steady State Free Cash Flow
in $USD millions
Free Cash Flow as reported (reconciliation below)
Adjustments for pro-forma of recent M&A and non-steady state working capital change
Pro forma Free Cash Flow normalized for M&A and WC through June 2015
Add back Major Long Term Investments
Free Cash Flow without Major LT Investments
Add back Diverse Other LT Investments
Free Cash Flow with neither Major nor Diverse Other Investments
Free Cash Flow
in $USD millions
Net cash provided by operating activities
Purchases of property, plant and equipment
Purchases of intangible assets not related to acquisitions
Capitalization of software and website development costs
Payment of contingent consideration in excess of acquisition-date fair value
Free cash flow
FY2015
$144
(14)
$130
80
$210
175
$385
FY2015
$229
(76)
(0)
(17)
8
$144
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
Form 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2015
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-51539
_________________________________
Cimpress N.V.
(Exact Name of Registrant as Specified in Its Charter)
_________________________________
The Netherlands
(State or Other Jurisdiction of
Incorporation or Organization)
98-0417483
(I.R.S. Employer
Identification No.)
Hudsonweg 8
5928 LW Venlo
The Netherlands
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: 31-77-850-7700
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
Ordinary Shares, €0.01 par value
Name of Exchange on Which Registered
NASDAQ Global Select Market
_________________________________
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934. Yes
No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company (as defined in Exchange Act Rule 12b-2).
Large accelerated filer
Accelerated filer
Smaller reporting company
Non-accelerated filer
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes
No
The aggregate market value of the ordinary shares held by non-affiliates of the registrant was approximately $2.31 billion on December 31,
2014 (the last business day of the registrant’s most recently completed second fiscal quarter) based on the last reported sale price of the registrant’s
ordinary shares on the NASDAQ Global Select Market.
As of August 7, 2015, there were 32,449,801 of Cimpress N.V. ordinary shares, par value €0.01 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended
June 30, 2015. Portions of such proxy statement are incorporated by reference into Items 10, 11, 12, 13, and 14 of Part III of this Annual Report on
Form 10-K
CIMPRESS N.V.
ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended June 30, 2015
TABLE OF CONTENTS
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Signatures
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market for Registrant's Common Equity, Related Stockholder Matters and Issued Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis of Financial Condition and Results of Operations . . . .
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements With Accountants and Financial Disclosure . . . . . . . . . . . . . . .
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Item 1. Business
Overview
PART I
We are a technology and manufacturing-driven company that aggregates, via the Internet, large volumes of
small, individually customized orders for a broad spectrum of print, signage, apparel and similar products. We
produce those orders in highly automated, capital and technology intensive production facilities in a manner that we
believe makes our production techniques significantly more competitive than those of traditional suppliers. We bring
our products to market through a portfolio of focused brands serving the needs of small and medium businesses
and consumers. These brands include Vistaprint, our global brand for micro business marketing products and
services, as well as brands that we have acquired that serve the needs of various market segments, including
resellers, small and medium businesses with differentiated service needs, and consumers purchasing products for
themselves and their families.
Our Priorities
Extending our history of success into our third decade, and beyond, is important to us. To that end we work
to optimize our business according to two priorities:
1. Strategic Objective: To be the world leader in mass customization.
2. Financial Objective: To maximize intrinsic value per share, defined as (a) the unlevered free cash flow per
share that, in our best judgment, will occur between now and the long-term future, appropriately discounted
to reflect our cost of capital, minus (b) net debt per share.
World Leader in Mass Customization
Cimpress’ strategic objective is to defend and extend our position as the world leader in mass
customization. Mass customization is a business model that allows companies to deliver major improvements to
customer value across a wide variety of product categories. Companies that master mass customization are able to
produce, with the reliability, quality and affordability of mass production, small individual orders where each one
embodies the personal relevance inherent to customized products.
The chart illustrates this concept. The horizontal
axis represents the volume of production of a given
product; the vertical axis represents the cost of
producing one unit of that product. Traditionally, the
only way to manufacture at a low unit cost was to
produce a large volume of that product: mass-produced
products fall in the lower right hand corner of the chart.
Custom-made products (i.e., those produced in small
volumes for a very specific purpose) historically
incurred very high unit costs: they fall in the upper left
hand side of the chart.
Mass customization breaks this trade off,
enabling low volume, low cost production of individually
unique products. Very importantly, mass customization
creates value in many ways, not just lower cost. Other
advantages can include faster production, more
personal relevance, elimination of obsolete stock,
better design, flexible shipping options, more product
choice, and higher quality.
Mass customization delivers a breakthrough in customer value particularly in markets in which the worth of
a physical product is inherently tied to a specific, unique use or application. For instance, there is no value to a
small business brochure that is the same brochure as is used by many other companies: the business owner needs
to describe what is unique about their business. Likewise, a photo mug is only relevant if it shows pictures of
1
someone’s own friends and family. Before mass customization, producing a high quality custom product required a
high per-order setup cost, so it simply was not economical to produce a customized product in low quantities.
Our Focus Areas
Cimpress’ focus on mass customization lies at the intersection of three overlapping areas:
• Empowering People to Make an Impression (what we are passionate about) - Cimpress empowers
people to make an impression through individually meaningful physical products. In other words, we make it
easy and affordable for our customers to convey, in tangible and enduring media, the thoughts, design
aesthetics, messages and/or sentiments that are important to them, their customers, their organization or
their loved ones.
• Computer Integrated Manufacturing (where we can be the best in the world) - Computer integrated
manufacturing (CIM) harnesses the power of software and IT networks to automate the flow of information,
allowing individual processes to exchange information with each other, to schedule activities, to initiate
actions, and to route and control all aspects of our manufacturing process. Throughout our history, a
differentiating capability of Cimpress has been our ability to develop software systems to integrate every
step of the value chain, from browser-based design creation and ordering through to shipment. This greatly
reduces the marginal cost of processing information related to each individual, customized order. Low-
volume custom products traditionally have a very high per-unit cost of production because, in the absence
of computer integration, there are significant fixed costs related to conveying information that is required to
process each order.
• Large Scale in Small Quantities (what drives our economic engine) - The third aspect of the Cimpress
focus on mass customization is an understanding of how we generate economic value. Mass customization
enables the production of small quantities, but large scale is the most important driver of competitive
advantage in the Cimpress business model. When we have increased the volume of orders that we process
and produce we have seen material improvement to quality, product selection, speed and cost. In fiscal
2015, we processed over 46 million unique ordered items, and during peak production weeks we produced
well over 1 million orders per week.
Market and Industry Background
Large traditional markets undergoing disruptive innovation
There is a wide diversity of product applications to which mass customization applies, including marketing
materials, soft goods and apparel, signage and displays, promotional products, packaging and labels, photo
products, invitations and announcements, and gifts and keepsakes. High quality, customized products in these
categories are valued by many different types of customers around the world, including:
• Businesses (micro, small, medium and large)
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• Hobbyists and consumers (home and family)
• Teams, associations and groups (TAG)
• Administration and governmental bodies
• Educational institutions
•
Low-volume producers using mass customization products as an input to their own product
• Resellers and advisors who serve customers in the above groups
The product categories and customers listed above represent a large market opportunity that is highly
fragmented. Though we believe Cimpress is the largest single player in this market, and there are many other
sizeable companies who are pursuing mass customization via an e-commerce approach, we believe that a vast
majority of the markets to which mass customization applies are still served by traditional business models that
force customers to produce in large quantities per order, or to pay a very high price per unit.
Cimpress and other competitors who have built their business around a mass customization model are
“disruptive innovators” to these large markets because we enable small volume production of personalized high
quality products at an affordable price. Disruptive innovation, a term of art coined by Harvard Business School
professor Clayton Christensen, describes a process by which a product or service takes root initially in simple
applications at the bottom of a market (such as free business cards for the most price sensitive of micro-
businesses) and then moves up market, eventually displacing established competitors (such as the markets
mentioned above).
We believe there is a shift taking place in the large and fragmented printing market, with printing jobs
moving away from small traditional printers that fulfill a relatively small number of customer orders as they are
placed, toward companies with an online presence, such as ourselves, that use the reach of the Internet to
aggregate a relatively large number of orders and fulfill them in large, centralized and automated production
facilities, such as those we describe above. According to a 2012 PRIMIR market research study conducted by
InfoTrends, the dollar value of product shipments of North American online printing companies are growing against
a backdrop of a decline in the number of North American printing companies. We believe this trend is also taking
place in Europe.
We believe this opportunity to disrupt very large traditional industries can translate into tremendous future
opportunity for growth for the companies who execute this model well over a long period of time. To date, we have
primarily focused on a narrow set of customers within the list above (micro businesses, hobbyists and consumers).
With recent acquisitions, we have extended our ability to serve these microbusiness, hobbyists and consumers, and
have also added an ability to serve low-volume producers and resellers, who in turn serve micro, small and medium
businesses.
As we continue to evolve as a business, our understanding of these markets and their relative
attractiveness will also evolve. Below are descriptions of the marketplaces in which we have traditionally competed.
The marketplace for micro business marketing products and services
The primary market for our Vistaprint brand is the micro business market, generally businesses or
organizations with fewer than 10 employees and usually 2 or fewer. We believe that there are approximately
60 million businesses with fewer than 10 employees in the United States, Canada, and the European Union and
that these micro businesses undergo frequent changes with many forming and dissolving each year, creating a
large market for business identity and marketing products and services. We estimate that these micro businesses
spend approximately $30 billion per year on marketing products and services. We also believe that, in response to
the growth of the Internet and the emergence of digital production technologies, many micro businesses are shifting
from traditional suppliers of customized marketing products and media toward online alternatives.
Through customer research, we have analyzed the market opportunity related to micro businesses with
fewer than 10 employees into three conceptual market segments:
3
• Price Primary Market Segment: This part of the market has a sizable number of small businesses but the
lowest per-customer annual spend. These businesses choose a customized product primarily based on the
price of the product offered, and are often incentivized to purchase through a promotional discounted direct
marketing approach and cross-selling of products. The Vistaprint brand has historically gained the most
traction in this segment, and we believe our biggest competition in this space is either non-consumption or
printing from a desktop or photocopier. It remains an important part of our business as we are able to
aggregate millions of orders from customers in this segment, enabling scale advantages in our business.
• Higher Expectations Market Segment: This part of the market is made up of a similar number of small
businesses as the Price Primary segment, but with higher per-customer annual spend. We believe the
segment is highly fragmented in terms of suppliers and several times the total revenue opportunity of the
Price Primary market segment, as these customers typically purchase a broader spectrum of marketing and
promotional products from multiple vendors. These customers have more sophisticated marketing needs
and choose their marketing providers not solely on price, but on a blend of value, supplier reputation,
product quality and selection, customer service and overall experience. We believe this segment represents
the most significant growth opportunity for our Vistaprint brand over the long term.
•
Locally Focused Market Segment: We believe the third market segment is the largest and most fragmented
among the micro businesses. The customers in this segment often choose to work with local graphic
designers, agencies, resellers and local, offline print shops to meet their marketing needs as their primary
purchase consideration is personal service. Many of these graphic designers and resellers, or the
customers themselves, have a level of graphic design sophistication that enables these customers to create
and manipulate images in professional publishing and design programs, rather than rely on design
templates. They also typically require a broader selection of specifications. Our Vistaprint brand serves very
few of these customers in comparison with the Price Primary and Higher Expectations market segments.
However, we are now serving this segment through brands that are managed by our druck.at, Easyflyer,
Exagroup, Pixartprinting and Printdeal business units.
The Marketplace for Customized Products and Services for the Home and Family
While the market focus of our Vistaprint brand is primarily on micro business marketing products and
services, many of our product formats are also purchased by consumers seeking customized announcements,
greeting cards, calendars, stationery, apparel, personalized gifts, photo books and related photo products. In the
past, many such products were supplied by an industry comprising print manufacturing wholesalers and local
retailers, such as stationery stores. Compared with today’s Internet-based alternatives, traditional offerings were
relatively limited, prices were significantly higher, and delivery often required long lead times. Graphic designs were
limited and it was rarely possible to incorporate full color photography into the design. We serve the home and
family market through the Vistaprint brand, as well as through our Albumprinter business unit, which in turn operates
through the Albelli, Bonusprint, Allfoto, Onskefoto, and FotoKnudsen brands.
Our Brands
We are increasingly adopting a multi-brand/multi-merchant approach, which we believe will help us
effectively develop value propositions that resonate strongly with very different parts of our large and heterogeneous
addressable market for mass customization. As such, we have structured our organization to provide significant
autonomy and decentralization for the individual business units who manage our brands. We believe that this
autonomy will allow for greater customer responsiveness, greater focus, and more innovation than if we were to
manage our customer value proposition centrally.
There are many types of customer needs that can be addressed differentially. Some examples of where we
expect differential approaches by our various business units and brands are customer targets, nationally or
regionally-specific content or product formats, creation methods for graphic designs, website user experience,
quality attributes, delivery speed, price, service, quantity focus, product breadth and depth, advertising levels and
methods, and merchandising.
We have many localized websites serving countries in North America, Europe, Asia Pacific and South
America. We recognize that our customers have differing needs, skills, and expertise, and we offer a corresponding
range of products, price points and customer service options. Our websites offer a full complement of tools and
features allowing customers to create a product design or upload their own complete design, and place an order on
a completely self-service basis or with varying levels of assistance.
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Brands that target small and micro businesses
Our brands like Vistaprint, druck.at, and Easyflyer help
small and micro businesses create beautiful,
professional quality marketing products at affordable
prices and at low volumes. Today, small businesses
make up a large part of our business. To help our
customers market in the digital world, our Pagemodo
and Webs brands engineer intuitive DIY solutions that
are brought to market via their own brands as well as
via the Vistaprint brand.
Brands that target graphic professionals
Businesses regularly turn to trusted graphic
professionals for advice and design services in order
to create great looking, customized products like
flyers, catalogs, packaging, posters, presentation
folders, signs, banners, logo apparel, business cards,
labels, corporate gifts and more. These Cimpress
brands focus on serving graphic professionals: local
printers, print resellers, graphic artists, advertising
agencies and other customers with professional
desktop publishing skillsets.
Brands that target consumers (home & family)
Our photo and consumer product brands help
preserve and share memories of friends and loved
ones, commemorate important life events, and more.
Each brand goes to market in a specific country or set
of countries. But together, these brands constitute one
of the world’s leading suppliers of photo merchandise
such as photo books, wall décor, photo gifts,
calendars, invitations, announcements, Christmas
cards, New Year cards and other seasonal greeting
cards.
Our Products
Customers visiting our websites can select the type of product they wish to design from our broad range of
available products and services for the business and home and family markets. The combined product assortment
across our brands is extensive, including offerings in the following product categories: business cards, marketing
materials such as flyers and postcards, digital and marketing services, signage, decorated apparel, promotional
products and gifts, packaging, textiles and magazines and catalogues. Currently, each brand offers a subset of the
total assortment, but over time we expect to be able to combine the full assortment into a single product catalogue,
to enable us to offer any product through any brand.
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Our Mass Customization Platform
We believe that we can generate significant customer value by building a mass customization platform that
combines the strengths of the production technologies and processes from all of our business units into a shared
platform we can leverage across all of our brands. This shared platform is under construction, and is being designed
to enable us to aggregate orders from multiple brands to improve our ability to achieve further scale benefits in the
future. Until then, we are operating a set of individual mass customization platforms, the largest of which was
created for our Vistaprint brand.
Our high-volume, standardized, scalable mass customization processes are driven by sophisticated
proprietary software. Our technologies are designed to readily scale as the number of orders received per day
increases. In particular, the more individual jobs we receive in a time period, the more efficiently aggregations, or
gangs, of similar jobs can be assembled and moved to the printing system, thereby maximizing the efficient use of
the production capacity and increasing overall system throughput. We believe that our strategy of seeking to
automate and systematize our service and production systems enables us to reach and serve small-scale
customers more effectively than our competitors.
With the improvements we have made in automating the design and production process and with the global
scale of our production facilities, located in Canada, the Netherlands, Austria, Australia, France, Italy, Norway, and
India, we can produce and ship an order the same day we receive it, which results in minimal inventory levels and
reduced working capital requirements. In most of our manufacturing facilities, technology facilitates the production
of complementary customized products in a highly synchronized manner, allowing us to produce and deliver multi-
part orders quickly and efficiently.
As orders are received, we automatically route production jobs to the type and location of the production
system that is most appropriate and cost efficient for the type of product ordered. Our proprietary software and
sophisticated automation solutions combined with software from our suppliers allow us to integrate and automate
the manufacturing process from pre-production through fulfillment. Requiring as little as 14 seconds of pre-press,
printing, cutting and boxing labor for a typical order of 250 business cards, versus an hour or more for traditional
printers, our manufacturing processes enable us to print high quality customized orders using a fraction of the labor
of typical traditional printers. Our quality assurance systems are designed to ensure that we consistently deliver
quality products on time through a variety of principles of world-class manufacturing, such as Lean and Kaizen™.
Supply chain management
We are focused on achieving the lowest total cost in our strategic sourcing efforts by concentrating on
quality, logistics, technology and cost, while also striving to use responsible sourcing practices within our supply
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chain. Our efforts include the procurement of high quality materials and equipment that meet our strict specifications
at a low total cost across a growing number of manufacturing locations, with an increasing focus on supplier
compliance with our sustainable paper procurement policy as well as our Supplier Code of Conduct. Additionally, we
work to develop and implement logistics, warehousing, and outbound shipping strategies to provide a balance of
low-cost material availability while limiting our inventory exposure. We believe investing in a strategic supply chain
management capability that is tightly integrated with our other manufacturing teams helps us benefit from our large
scale and improve efficiency and reduce costs.
Our Proprietary Technology
We rely on our advanced proprietary technology to market to, attract and retain our customers, enable
customers to create graphic designs and place orders on our websites, and aggregate and produce multiple orders
from all over the world. This technology includes:
Design and Document Creation Technologies
Our design creation technologies, primarily deployed through our Vistaprint-branded websites, enable
customers, by themselves or together with the assistance of our design support staff, to design and create high
quality marketing materials from their homes or offices.
• Our document model architecture and technology employs Internet-compatible data structures to define,
process and store product designs as a set of separately searchable, combinable and modifiable
component elements and allows us to generate customized initial and later matching product design options
automatically in real time. This browser-based software provides immediate client-side editing capabilities
plus extensive system scalability. A wide variety of layouts, color schemes and fonts are provided and an
extensive selection of high quality photographs and illustrations are currently available for use by customers
in product design. Customers can also upload their own images and logos for incorporation into their
product designs.
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• Our dynamic image preview technology
allows customers to see their designs in on-
screen simulations of real-world settings in
real time in order to gain an appreciation for
what the finished product will look like. The
above image shows such a dynamically
generated business card that, although it has
not yet been produced, appears as if it is part
of a photograph or video in which it is being
held by a human hand.
• Our auto-matching design software
algorithmically generates customized product
designs in real time based on key-word
searches, enabling professional-looking
graphic layouts to be easily and quickly
created by customers without the need for
graphic arts training.
Pre-Press and Print Production Technologies
Across our multiple brands, our pre-production and production technologies efficiently process and
aggregate customer orders, prepare orders for high-quality production and manage production, addressing and
shipment of these orders. These technologies allow us to efficiently store, process and aggregate tens of thousands
of Internet orders every day. Automated workflows help lower production cost but still ensure on-time delivery to our
customers.
Cross-Selling and Content Management Technologies
On our Vistaprint-branded websites, we combine the above-discussed proprietary document creation
technologies with proprietary cross-selling technologies to automatically generate and display additional products
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incorporating the customer’s initial design, facilitating the cross-sale of related products and services. In addition,
through a global content management system, we ensure that changes and updates to our site experience are
reflected across our network of localized Vistaprint websites in multiple languages and currencies. Our Vistaprint
software automatically generates and displays one or more additional customized product designs based upon a
customer’s existing design.
Technology Development
We intend to continue developing and enhancing our proprietary and licensed software programs and our
manufacturing processes. We have designed our website technologies and infrastructure to scale to accommodate
future geographic expansion and growth in the number of customer visits, orders, and product and service offerings.
This Internet-based architecture makes our applications highly scalable and offers our customers fast system
responsiveness. In addition, our production technologies for aggregating jobs in preparation for manufacturing are
designed to readily scale as we grow. We have an engineering and research and development center in Winterthur,
Switzerland that is constantly seeking to strengthen our manufacturing and supply chain capabilities through
engineering disciplines such as automation, manufacturing, facilities and new product design, materials science,
process control and color control. We also have software engineering teams located around the world. Our
technology and development expenses were approximately $194 million (13% of total revenues), $176 million (14%
of total revenues) and $165 million (14% of total revenues) in the years ended June 30, 2015, 2014, and 2013,
respectively.
Intellectual Property
We seek to protect our proprietary rights through a combination of patents, copyrights, trade secrets, and
trademarks and contractual restrictions, such as confidentiality agreements and proprietary rights agreements. We
enter into confidentiality and proprietary rights agreements with our employees, consultants and business partners,
and control access to, and distribution of, our proprietary information.
As of June 30, 2015 we held 224 issued patents worldwide, and we continue to file new patent applications
around the world. Subject to our continued payment of required patent maintenance fees, our currently issued
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patents will expire between December 2017 and January 2033. We hold 61 trademark registrations in various
jurisdictions globally.
Competition
The markets for micro, small and medium business customized marketing products and services, and home
and family customized products, including the printing and graphic design market, are intensely competitive, highly
fragmented and geographically dispersed, with many existing and potential competitors. We compete on the basis
of breadth and depth of product offerings; price; convenience; quality; design content, tools, and assistance;
customer service; ease of use; and production and delivery speed. It is our intention to offer high-quality design,
production and marketing services at low price points and in doing so, offer our customers an attractive value
proposition. Our current competition includes one or a combination of the following:
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traditional offline printers and graphic design providers;
online printing and graphic design companies, many of which provide printed products and services similar
to ours;
office superstores, drug store chains, food retailers and other major retailers targeting small business and
consumer markets;
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• wholesale printers;
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self-service desktop design and publishing using personal computer software with a laser or inkjet printer
and specialty paper;
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email marketing services companies;
• website design and hosting companies;
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suppliers of customized apparel, promotional products and gifts;
online photo product companies;
internet firms and retailers;
online providers of custom printing services that outsource production to third party printers; and
providers of other digital marketing such as social media, local search directories and other providers.
As we expand our geographic reach, product and service portfolio and customer base, our competition
increases. Our geographic expansion creates competition with competitors with a multi-national presence as well as
experienced local vendors. Product offerings such as signage, websites, email marketing, apparel, promotional
products and photo products have resulted in new competition as a result of us entering those markets. We
encounter competition from large retailers offering a wide breadth of products and highly focused companies
concentrated on a subset of our customers or product offerings. Given the state of maturity of the online mass
customization market, we believe our biggest competition is still offline providers.
Business Segment and Geographic Information
As of June 30, 2015, our reportable operating segments consisted of the Vistaprint Business Unit and All
Other Business Unit, which includes the operations of our Albumprinter, druck.at, Exagroup, Easyflyer, Printdeal,
Pixartprinting, and Most of World business units. Our Most of World business unit is focused on our emerging
market portfolio, including operations in Brazil, India and Japan. For more segment and geographic information
about our revenues, operating income and long-lived assets, see Item 8 of Part II, “Financial Statements and
Supplementary Data — Note 17 — Segment Information” and Item 7 of Part II, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.” The descriptions of our business, products, and markets
in this section apply to all of our operating segments.
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Seasonality
Our profitability has historically been highly seasonal. Our second fiscal quarter, ending December 31,
includes the majority of the holiday shopping season and has become our strongest quarter for sales of our
consumer-oriented products, such as holiday cards, calendars, photo books, and personalized gifts. Operating
income during the second fiscal quarter represented 62%, 61%, and 72% of annual operating income in the years
ended June 30, 2015, 2014, and 2013, respectively.
Government Regulation
We are currently subject to the regulations that are applicable to businesses generally and to online
commerce specifically. The adoption or modification of laws or regulations relating to the Internet, consumer
protection, or other areas of our business could limit or otherwise adversely affect the manner in which we currently
conduct our business.
Employees
As of June 30, 2015, we had approximately 6,200 full-time and approximately 400 temporary employees
worldwide.
Corporate Information
Cimpress N.V. was incorporated under the laws of the Netherlands on June 5, 2009 and on August 30,
2009 became the publicly traded parent company of the Cimpress group of entities. We maintain our registered
office at Hudsonweg 8, 5928 LW Venlo, the Netherlands. Our telephone number in the Netherlands is
+31-77-850-7700. As a result of our change of domicile from Bermuda to the Netherlands on August 30, 2009, the
common shareholders of Vistaprint Limited became ordinary shareholders of Vistaprint N.V. and Vistaprint N.V.
became the publicly traded parent company of the Vistaprint group of entities. Vistaprint Limited, the immediate
predecessor corporation to Vistaprint N.V., was incorporated under the laws of Bermuda in April 2002.
Available Information
We are registered as a reporting company under the U.S. Securities Exchange Act of 1934, as amended,
which we refer to as the Exchange Act. Accordingly, we file or furnish with the U.S. Securities and Exchange
Commission, or the SEC, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-
K and proxy statements as required by the Exchange Act and the rules and regulations of the SEC. The public may
read and copy our reports, proxy statements and other materials we file with the SEC at the SEC’s Public
Reference Room at 100 F Street, NE, Washington, DC 20549. Information on the operation of the Public Reference
Room is available by calling 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains
reports, proxy and information statements and other information regarding issuers, such as Cimpress N.V, that file
electronically with the SEC. The address of this website is www.sec.gov. We make available, free of charge through
our United States website, the reports, proxy statements, amendments and other materials we file with or furnish to
the SEC as soon as reasonably practicable after we electronically file or furnish such materials with or to the SEC.
The address of our United States website is www.cimpress.com. We are not including the information contained on
our website, or information that can be accessed by links contained on our website, as a part of, or incorporating it
by reference into, this Annual Report on Form 10-K.
Item 1A. Risk Factors
Our future results may vary materially from those contained in forward-looking statements that we make in
this Report and other filings with the SEC, press releases, communications with investors, and oral statements due
to the following important factors, among others. Our forward-looking statements in this Report and in any other
public statements we make may turn out to be wrong. These statements can be affected by, among other things,
inaccurate assumptions we might make or by known or unknown risks and uncertainties or risks we currently deem
immaterial. Consequently, no forward-looking statement can be guaranteed. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future events or otherwise.
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Risks Related to Our Business
If our long-term growth strategy is not successful or if our financial projections relating to the effects of our
strategy turn out to be incorrect, our business and financial results could be harmed.
We may not achieve the objectives of our long-term investment and financial strategy, our financial
projections relating to the growth and development of our business may turn out to be incorrect, and our
investments in our business may fail to impact our results and growth as anticipated. Some of the factors that could
cause our business strategy to fail to achieve our objectives include, among others:
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our failure to adequately execute our operational strategy or anticipate and overcome obstacles to
achieving our strategic goals;
our failure to make our intended investments because the investments are more costly than we
expected or because we are unable to devote the necessary operational and financial resources;
our inability to purchase or develop technologies and production platforms to increase our efficiency,
enhance our competitive advantage and scale our operations;
the failure of our current supply chain to provide the resources we need at the standards we require
and our inability to develop new or enhanced supply chains;
our failure to acquire new customers and enter new markets, retain our current customers, and sell
more products to current and new customers;
our failure to manage the growth, complexity, and pace of change of our business and expand our
operations;
our failure to acquire businesses that enhance the growth and development of our business or to
effectively integrate the businesses we do acquire into our business;
our failure to identify and address the causes of our revenue weakness in some markets;
our failure to sustain growth in relatively mature markets;
our failure to promote, strengthen, and protect our brands;
the failure of our current and new marketing channels to attract customers;
our failure to realize expected returns on our capital allocation decisions;
unanticipated changes in our business, current and anticipated markets, industry, or competitive
landscape;
our failure to attract and retain skilled talent needed to execute our strategy and sustain our growth;
and
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general economic conditions.
In addition, projections are inherently uncertain and are based on assumptions and judgments by
management that may be flawed or based on information about our business and markets that may change in the
future in ways that may be beyond our control. Our actual results may differ materially from our projections due to
various factors, including the factors listed immediately above and in the risk factor below entitled "Our quarterly
financial results will often fluctuate," which is also applicable to longer-term results.
If our strategy is not successful, or if there is a market perception that our strategy is not successful, then
our revenue, earnings, and value may not grow as anticipated or may decline, we may not be profitable, our
reputation and brand may be damaged, and the price of our shares may decline. In addition, we may change our
strategy from time to time, which can cause fluctuations in our financial results and volatility in our share price.
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If we are unable to attract visitors to our websites and convert those visitors to customers, our business
and results of operations could be harmed.
Our success depends on our ability to attract new and repeat customers in a cost-effective manner. We rely
on a variety of methods to draw visitors to our websites and promote our products and services, such as purchased
search results from online search engines such as Google and Yahoo!, email, direct mail, advertising banners and
other online links, broadcast media, and word-of-mouth customer referrals. If the search engines on which we rely
modify their algorithms, terminate their relationships with us, or increase the prices at which we may purchase
listings, our costs could increase, and fewer customers may click through to our websites. If we are not effective at
reaching new and repeat customers, if fewer customers click through to our websites, or if the costs of attracting
customers using our current methods significantly increase, then traffic to our websites would be reduced, our
revenue and net income could decline, and our business and results of operations would be harmed.
Purchasers of micro business marketing products and services, including graphic design and customized
printing, may not choose to shop online, which would prevent us from acquiring new customers that are
necessary to the success of our business.
The online market for micro business marketing products and services is less developed than the online
market for other business and home and family products, and our success depends in part on our ability to attract
customers who have historically purchased products and services we offer through offline channels. Specific factors
that could prevent prospective customers from purchasing from us as an online retailer include:
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concerns about buying graphic design services and marketing products without face-to-face interaction
with sales personnel;
the inability to physically handle and examine product samples;
delivery time associated with Internet orders;
concerns about the security of online transactions and the privacy of personal information;
delayed shipments or shipments of incorrect or damaged products;
limited access to the Internet; and
the inconvenience associated with returning or exchanging purchased items.
In addition, our internal research shows that an increasing number of current and potential customers
access our websites using smart phones or tablet computing devices and that our website visits using traditional
desktop computers may be declining. Designing and purchasing custom designed products on a smart phone,
tablet, or other mobile device is more difficult than doing so with a traditional computer due to limited screen sizes
and bandwidth constraints. If our customers and potential customers have difficulty accessing and using our
websites and technologies, then our revenue could decline.
We may not succeed in promoting and strengthening our brands, which could prevent us from acquiring
new customers and increasing revenues.
A primary component of our business strategy is to promote and strengthen our brands to attract new and
repeat customers to our websites, and we face significant competition from other companies in our markets who
also seek to establish strong brands. To promote and strengthen our brands, we must incur substantial marketing
expenses and establish a relationship of trust with our customers by providing a high-quality customer experience.
Providing a high-quality customer experience requires us to invest substantial amounts of resources in our website
development, design and technology, graphic design operations, production operations, and customer service
operations. Our ability to provide a high-quality customer experience is also dependent on external factors over
which we may have little or no control, including the reliability and performance of our suppliers, third-party carriers,
and communication infrastructure providers. If we are unable to promote our brands or provide customers with a
high-quality customer experience, we may fail to attract new customers, maintain customer relationships, and
sustain or increase our revenues.
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We manage our business for long-term results, and our quarterly financial results, especially our GAAP
results, will often fluctuate, which may lead to volatility in our share price.
Our revenues and operating results often vary significantly from quarter to quarter due to a number of
factors, and as a result comparing our financial results on a period-to-period basis may not be meaningful. Many of
the factors that lead to period-to-period fluctuations are outside of our control; however, some factors are inherent in
our business strategies. Additionally, we prioritize longer-term results over shorter-term results and generally do not
manage our business to maximize current period GAAP profitability metrics. Some of the specific factors that could
cause our operating results to fluctuate include among others:
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seasonality-driven or other variations in the demand for our products and services, in particular during
our second fiscal quarter;
currency and interest rate fluctuations, which affect our revenues, costs, and fair value of our assets;
our hedging activity;
our ability to attract visitors to our websites and convert those visitors into customers;
our ability to retain customers and generate repeat purchases;
shifts in product mix toward less profitable products;
the commencement or termination of agreements with our strategic partners, suppliers, and others;
our ability to manage our production, fulfillment, and support operations;
costs to produce and deliver our products and provide our services, including the effects of inflation;
our pricing and marketing strategies and those of our competitors;
investments in our business in the current period intended to generate or support revenues and
operations in future periods;
expenses and charges related to our compensation agreements with our executives and employees;
costs and charges resulting from litigation;
significant increases in credits, beyond our estimated allowances, for customers who are not satisfied
with our products;
changes in our income tax rate;
costs to acquire businesses or integrate our acquired businesses;
impairments of our tangible and intangible assets including goodwill; and
the results of our minority investments and joint ventures.
Some of our expenses, such as office leases, depreciation related to previously acquired property and
equipment, and personnel costs, are relatively fixed, and we may be unable to, or may not choose to, adjust
operating expenses to offset any revenue shortfall. Accordingly, any shortfall in revenue may cause significant
variation in operating results in any quarter. Our operating results may sometimes be below the expectations of
public market analysts and investors, in which case the price of our ordinary shares will likely decline.
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Our global operations and expansion place a significant strain on our management, employees, facilities,
and other resources and subject us to additional risks.
We are a global company with production facilities, offices, and localized websites in multiple countries
across six continents. We expect to establish operations, acquire or invest in businesses, and sell our products and
services in additional geographic regions, including emerging markets, where we may have limited or no
experience. We may not be successful in all regions in which we invest or where we establish operations, which
may be costly to us. We are subject to a number of risks and challenges that relate to our global operations and
expansion, including, among others:
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difficulty managing operations in, and communications among, multiple locations and time zones;
difficulty complying with multiple tax laws, treaties, and regulations and limiting our exposure to onerous
or unanticipated taxes, duties, and other costs;
local regulations that may restrict or impair our ability to conduct our business as planned;
protectionist laws and business practices that favor local producers and service providers;
our inexperience in marketing and selling our products and services within unfamiliar countries and
cultures;
challenges of working with local business partners in some regions, such as Japan and Brazil;
our failure to properly understand and develop graphic design content and product formats appropriate
for local tastes;
disruptions caused by political and social instability that may occur in some countries;
corrupt business practices, such as bribery or the willful infringement of intellectual property rights, that
may be common in some countries;
difficulty expatriating cash from some countries;
difficulty importing and exporting our products across country borders and difficulty complying with
customs regulations in the many countries where we sell products;
disruptions or cessation of important components of our international supply chain;
the challenge of complying with disparate laws in multiple countries;
restrictions imposed by local labor practices and laws on our business and operations; and
failure of local laws to provide a sufficient degree of protection against infringement of our intellectual
property.
To manage our operations and anticipated growth, we must continue to refine our operational, financial, and
management controls, human resource policies, reporting systems, and procedures in the locations in which we
operate. If we are unable to implement improvements to these systems and controls in an efficient or timely manner
or if we discover deficiencies in our existing systems and controls, then our ability to manage our business and
provide a high-quality customer experience could be harmed, which would damage our reputation and brands and
substantially harm our business and financial results.
In addition, we are exposed to fluctuations in currency exchange rates that may impact items such as the
translation of our revenues and expenses, remeasurement of our intercompany balances, and the value of our cash
and cash equivalents and other assets and liabilities denominated in currencies other than the U.S. dollar, our
reporting currency. While we engage in hedging activities to mitigate some of the net impact of currency exchange
rate fluctuations, our financial results may differ materially from expectations as a result of such fluctuations.
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Acquisitions and strategic investments may be disruptive to our business and may fail to achieve our
goals.
An important component of our strategy is to selectively pursue acquisitions of businesses, technologies, or
services and invest in businesses and joint ventures. The time and expense associated with finding suitable
businesses, technologies, or services to acquire or invest in can be disruptive to our ongoing business and divert
our management's attention. In addition, we have needed in the past, and may need in the future, to seek financing
for acquisitions and investments, which may not be available on terms that are favorable to us, or at all, and can
cause dilution to our shareholders, cause us to incur additional debt, or subject us to covenants restricting the
activities we may undertake.
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Integrating newly acquired businesses, technologies, and services and monitoring and managing our
investments and joint ventures are complex, expensive, time consuming, and subject to many risks, including the
following:
• We may not be able to retain customers and key employees of the acquired businesses, and we and
the businesses we acquire or invest in may not be able to cross sell products and services to each
other's customers.
• An acquisition or investment may fail to achieve our goals and expectations for a number of reasons
including the following: We may fail to integrate acquired businesses, technologies, services, or internal
systems effectively, or the integration may be more expensive or take more time than we anticipated.
The management of our investments may be more expensive or may take more resources than we
expected. We may encounter unexpected cultural or language challenges in integrating an acquired
business or managing our investment in a business. The business we acquired or invested in may not
perform as well as we expected.
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In some cases, our acquisitions and investments are dilutive for a period of time, leading to reduced
earnings.
• Acquisitions and investments can result in increased expenses including impairments of goodwill and
intangible assets if financial goals are not achieved, assumptions of contingent or unanticipated
liabilities, or increased tax costs.
• We generally assume the liabilities of businesses we acquire, which could include liability for an
acquired business' violation of law that occurred before we acquired it. In addition, we have historically
acquired smaller, privately held companies that may not have as strong a culture of legal compliance as
a larger, publicly traded company like Cimpress, and if we fail to implement adequate training, controls,
and monitoring of the acquired companies, we could also be liable for post-acquisition legal violations.
The accounting for our acquisitions requires us to make significant estimates, judgments, and assumptions
that can change from period to period, based in part on factors outside of our control, and can create volatility in our
financial results. For example, we often pay a portion of the purchase price for our acquisitions in the form of an
earn-out based on performance targets for the acquired companies, which can be difficult to forecast. We accrue
liabilities for estimated future contingent earn-out payments based on an evaluation of the likelihood of achievement
of the contractual conditions underlying the earn-out and weighted probability assumptions of the required
outcomes. If in the future our assumptions change and we determine that higher levels of achievement are likely
under our earn-outs, we will need to pay and record additional amounts to reflect the increased purchase price.
These additional amounts could be significant and could adversely impact our results of operations. In addition,
earn-out provisions can lead to disputes with the sellers about the achievement of the earn-out performance
targets, and earn-out performance targets can sometimes create inadvertent incentives for the acquired company's
management to take actions designed to maximize the earn-out instead of benefiting the business.
We may not be successful in developing our mass customization platform or in realizing the anticipated
benefits of a mass customization platform, once it has been developed.
A key component of our strategy is the development of a mass customization platform that combines the
strengths of the production technologies and processes from all of our subsidiaries into a shared platform we can
leverage across all of our brands. The process of developing new technology is complex, costly, and uncertain, and
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the development effort could be disruptive to our business and existing systems. We must make long-term
investments, develop or obtain appropriate intellectual property, and commit significant resources before knowing
whether our mass customization platform will be successful and make us more effective and competitive. As a
result, there can be no assurance that we will successfully develop the platform nor that we will realize expected
returns on the capital expended to develop the platform.
Seasonal fluctuations in our business place a strain on our operations and resources.
Our profitability has historically been highly seasonal. Our second fiscal quarter includes the majority of the
holiday shopping season and accounts for a disproportionately high portion of our earnings for the year, primarily
due to higher sales of home and family products such as holiday cards, calendars, photo books, and personalized
gifts. Our operating income during the second fiscal quarter represented 62%, 61%, and 72% of annual operating
income in the years ended June 30, 2015, 2014, and 2013, respectively. In anticipation of increased sales activity
during our second fiscal quarter holiday season, we typically incur significant additional capacity related expenses
each year to meet our seasonal needs, including facility expansions, equipment purchases and leases, and
increases in the number of temporary and permanent employees. Lower than expected sales during the second
quarter would likely have a disproportionately large impact on our operating results and financial condition for the
full fiscal year. In addition, if our manufacturing and other operations are unable to keep up with the high volume of
orders during our second fiscal quarter, we and our customers can experience delays in order fulfillment and
delivery and other disruptions. If we are unable to accurately forecast and respond to seasonality in our business,
our business and results of operations may be materially harmed.
Our hedging activity could negatively impact our results of operations and cash flows.
We have entered into derivatives to manage our exposure to interest rate and currency movements. If we
do not accurately forecast our results of operations, execute contracts that do not effectively mitigate our economic
exposure to interest rates and currency rates, elect to not apply hedge accounting, or fail to comply with the
complex accounting requirements for hedging, our results of operations and cash flows could be volatile, as well as
negatively impacted. Also, our hedging objectives may be targeted at non-GAAP financial metrics, which could
result in increased volatility in our GAAP results.
We face risks related to interruption of our operations and lack of redundancy.
Our production facilities, websites, infrastructure, supply chain, customer service centers, and operations
may be vulnerable to interruptions, and we do not have redundancies or alternatives in all cases to carry on these
operations in the event of an interruption. In addition, because we are dependent in part on third parties for the
implementation and maintenance of certain aspects of our communications and production systems, we may not be
able to remedy interruptions to these systems in a timely manner or at all due to factors outside of our control.
Some of the events that could cause interruptions in our operations or systems are, among others:
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fire, natural disasters, or extreme weather - for example, the computer hardware for our websites is
located in Bermuda, and our largest customer service center is located in Jamaica, both of which
locations are subject to the risk of hurricanes
labor strike, work stoppage, or other issues with our workforce
political instability or acts of terrorism or war
power loss or telecommunication failure
attacks on our external websites or internal network by hackers or other malicious parties
undetected errors or design faults in our technology, infrastructure, and processes that may cause our
websites to fail
inadequate capacity in our systems and infrastructure to cope with periods of high volume and demand
human error, including poor managerial judgment or oversight
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Any interruptions to our systems or operations could result in lost revenue, increased costs, negative
publicity, damage to our reputation and brand, and an adverse effect on our business and results of operations.
Building redundancies into our infrastructure, systems and supply chain to mitigate these risks may require us to
commit substantial financial, operational, and technical resources, in some cases before the volume of our business
increases with no assurance that our revenues will increase.
We face intense competition, and we expect our competition to continue to increase.
The markets for small business marketing products and services and home and family custom products,
including the printing and graphic design market, are intensely competitive, highly fragmented, and geographically
dispersed. The competitive landscape for e-commerce companies continues to change as new e-commerce
businesses are introduced and traditional “bricks and mortar” businesses establish an online presence. Competition
may result in price pressure, reduced profit margins and loss of market share and brand recognition, any of which
could substantially harm our business and financial results. Current and potential competitors include (in no
particular order):
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traditional offline printers and graphic design providers;
online printing and graphic design companies, many of which provide printed products and services
similar to ours;
office superstores, drug store chains, food retailers and other major retailers targeting small business
and consumer markets;
• wholesale printers;
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self-service desktop design and publishing using personal computer software;
email marketing services companies;
• website design and hosting companies;
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suppliers of customized apparel, promotional products and gifts;
online photo product companies;
Internet firms and retailers;
online providers of custom printing services that outsource production to third party printers; and
providers of other digital marketing such as social media, local search directories and other providers.
Many of our current and potential competitors have advantages over us, including longer operating
histories, greater brand recognition or loyalty, more focus on a given subset of our business, or significantly greater
financial, marketing, and other resources. Many of our competitors currently work together, and additional
competitors may do so in the future through strategic business agreements or acquisitions. Competitors may also
develop new or enhanced products, technologies or capabilities that could render many of the products, services
and content we offer obsolete or less competitive, which could harm our business and financial results.
In addition, we have in the past and may in the future choose to collaborate with some of our existing and
potential competitors in strategic partnerships that we believe will improve our competitive position and financial
results, such as through a retail in-store or web-based collaborative offering. It is possible, however, that such
ventures will be unsuccessful and that our competitive position and financial results will be adversely affected as a
result of such collaboration.
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Failure to meet our customers' price expectations would adversely affect our business and results of
operations.
Demand for our products and services, in particular in the Price Primary Market Segment where we have
historically generated most of our business, is sensitive to price, and changes in our pricing strategies have a
significant impact on our revenues and results of operations. Many factors can significantly impact our pricing and
marketing strategies, including the costs of running our business, our competitors' pricing and marketing strategies,
and the effects of inflation. For example, recent changes to our pricing and marketing strategies in our Vistaprint
brand have adversely affected our revenue growth and the numbers of customers and orders in some regions. If we
fail to meet our customers' price expectations, our business and results of operations will suffer.
Failure to protect our networks and the confidential information of our customers, employees, and
business partners against security breaches could damage our reputation and brands and substantially
harm our business and results of operations.
Businesses like ours are increasingly becoming targets for cyber attacks and other thefts of data. We may
need to expend significant resources to protect against security breaches or to address problems caused by
breaches. Any compromise or breach of our network, websites, or retail locations, our employee personal data, or
our customer transaction data, including credit and debit card information, could, among other things:
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damage our reputation and brand;
expose us to losses, litigation, and possible liability;
result in a failure to comply with legal and industry privacy regulations and standards;
lead to the misappropriation of our and our customers' proprietary or personal information; or
cause interruptions in our operations.
In addition, some of our partners also collect information from transactions with our customers, and we may
be liable or our reputation may be harmed if our partners fail to protect our customers' information or use it in a
manner that is inconsistent with legal and industry privacy regulations or our practices.
If we fail to address risks associated with payment fraud, our reputation and brands could be damaged, and
our business and results of operations could be harmed.
We may be liable for fraudulent transactions conducted on our websites, such as through the use of stolen
credit card numbers. To date, quarterly losses from payment fraud have not exceeded 1% of total revenues in any
quarter, but we continue to face the risk of significant losses from this type of fraud.
We rely heavily on email to market to and communicate with customers, and email communications are
subject to regulatory and reputation risks.
Various private entities attempt to regulate the use of commercial email solicitation by blacklisting
companies that the entities believe do not meet their standards, which results in those companies' emails being
blocked from some Internet domains and addresses. Although we believe that our commercial email solicitations
comply with all applicable laws, from time to time some of our Internet protocol addresses appear on some of these
blacklists, which can interfere with our ability to market our products and services, communicate with our
customers, and operate and manage our websites and corporate email accounts. In addition, as a result of being
blacklisted, we have had disputes with, or concerns raised by, various service providers who perform services for
us, including co-location and hosting services, Internet service providers and electronic mail distribution services.
Further, we have contractual relationships with partners that market our products and services on our
behalf, and some of our marketing partners engage third-party email marketers with which we do not have any
contractual or other relationship. Although we believe we comply with all applicable laws relating to email
solicitations and our contracts with our partners require that they do the same, we do not always have control over
the third-party email marketers that our partners engage. If such a third party were to send emails marketing our
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products and services in violation of applicable anti-spam or other laws, then our reputation could be harmed and
we could potentially be liable for their actions.
We are subject to safety, health, and environmental laws and regulations, which could result in
liabilities, cost increases or restrictions on our operations.
We are subject to a variety of safety, health and environmental, or SHE, laws and regulations in each of the
jurisdictions in which we operate. These laws and regulations govern, among other things, air emissions,
wastewater discharges, the storage, handling and disposal of hazardous and other regulated substances and
wastes, soil and groundwater contamination and employee health and safety. We use regulated substances such
as inks and solvents, and generate air emissions and other discharges at our manufacturing facilities, and some of
our facilities are required to hold environmental permits. If we fail to comply with existing SHE requirements, or new,
more stringent SHE requirements applicable to us are imposed, we may be subject to monetary fines, civil or
criminal sanctions, third-party claims, or the limitation or suspension of our operations. In addition, if we are found to
be responsible for hazardous substances at any location (including, for example, offsite waste disposal facilities or
facilities at which we formerly operated), we may be responsible for the cost of cleaning up contamination,
regardless of fault, as well as to claims for harm to health or property or for natural resource damages arising out of
contamination or exposure to hazardous substances.
Our customers create products that incorporate images, illustrations and fonts that we license from third
parties, and any loss of the right to use these licensed materials may substantially harm our business and
results of operations.
Many of the images, illustrations, and fonts incorporated in the design products and services we offer are
the copyrighted property of other parties that we use under license agreements. If one or more of our licenses
covering a significant amount of content were terminated, the amount and variety of content available on our
websites would be significantly reduced, and we may not be able to find, license, and introduce substitute content in
a timely manner, on acceptable terms, or at all.
The loss of key personnel or an inability to attract and retain additional personnel could affect our ability to
successfully grow our business.
We are highly dependent upon the continued service and performance of our senior management team and
key technical, marketing, and production personnel, any of whom may cease their employment with us at any time
with minimal advance notice. We face intense competition for qualified individuals from many other companies in
diverse industries. The loss of one or more of our key employees may significantly delay or prevent the
achievement of our business objectives, and our failure to attract and retain suitably qualified individuals or to
adequately plan for succession could have an adverse effect on our ability to implement our business plan.
Our credit facility and the indenture that governs our senior notes restrict our current and future
operations, particularly our ability to respond to changes or to take certain actions.
Our senior secured credit facility, which we refer to as our credit facility, and the indenture that governs our
7.0% senior unsecured notes due 2022, which we refer to as our senior notes, contain a number of restrictive
covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in
acts that may be in our best interest, including restrictions on our ability to:
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incur additional indebtedness, guarantee indebtedness, and incur liens;
• pay dividends or make other distributions or repurchase or redeem capital stock;
• prepay, redeem, or repurchase certain subordinated debt;
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issue certain preferred stock or similar redeemable equity securities;
• make loans and investments;
• sell assets;
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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;
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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;
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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;
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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
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increasing our cost of borrowing.
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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.
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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.
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If we are unable to protect our intellectual property rights, our reputation and brands could be damaged,
and others may be able to use our technology, which could substantially harm our business and financial
results.
We rely on a combination of patents, trademarks, trade secrets and copyrights and contractual restrictions
to protect our intellectual property, but these protective measures afford only limited protection. Despite our efforts
to protect our proprietary rights, unauthorized parties may be able to copy or use technology or information that we
consider proprietary. There can be no guarantee that any of our pending patent applications or continuation patent
applications will be granted, and from time to time we face infringement, invalidity, intellectual property ownership,
or similar claims brought by third parties with respect to our patents. In addition, despite our trademark registrations
throughout the world, our competitors or other entities may adopt names, marks, or domain names similar to ours,
thereby impeding our ability to build brand identity and possibly leading to customer confusion. For example, some
of our competitors purchase the term “Vistaprint” and other terms incorporating our proprietary trademarks from
Google and other search engines as part of their search listing advertising, and courts do not always side with the
trademark owners in cases involving search engines. Enforcing our intellectual property rights can be extremely
costly, and a failure to protect or enforce these rights could damage our reputation and brands and substantially
harm our business and financial results.
Intellectual property disputes and litigation are costly and could cause us to lose our exclusive rights,
subject us to liability, or require us to stop some of our business activities.
From time to time, we receive claims from third parties that we infringe their intellectual property rights, that
we are required to enter into patent licenses covering aspects of the technology we use in our business, or that we
improperly obtained or used their confidential or proprietary information. Any litigation, settlement, license, or other
proceeding relating to intellectual property rights, even if we settle it or it is resolved in our favor, could be costly,
divert our management's efforts from managing and growing our business, and create uncertainties that may make
it more difficult to run our operations. If any parties successfully claim that we infringe their intellectual property
rights, we might be forced to pay significant damages and attorney's fees, and we could be restricted from using
certain technologies important to the operation of our business.
Our business is dependent on the Internet, and unfavorable changes in government regulation of the
Internet, e-commerce, and email marketing could substantially harm our business and financial results.
Due to our dependence on the Internet for our sales, laws specifically governing the Internet, e-commerce
and email marketing may have a greater impact on our operations than other more traditional businesses. Existing
and future laws, such as laws covering pricing, customs, privacy, consumer protection, or commercial email, may
impede the growth of e-commerce and our ability to compete with traditional “bricks and mortar” retailers. It is not
always clear how existing laws governing these and other issues apply to the Internet and e-commerce, as the vast
majority of applicable laws were adopted before the advent of the Internet and do not contemplate or address the
unique issues raised by the Internet or e-commerce. Those laws that do reference the Internet, such as the
Bermuda Electronic Transactions Act 1999, the U.S. Digital Millennium Copyright Act, and the U.S. CAN SPAM Act
of 2003, are only beginning to be interpreted by the courts, and their applicability and reach are therefore uncertain.
Those current and future laws and regulations or unfavorable resolution of these issues may substantially harm our
business and financial results.
Our suppliers' failure to use legal and ethical business practices could negatively impact our business.
We source the raw materials for the products we sell from an expanding number of suppliers in an
increasing number of jurisdictions worldwide, and we require our suppliers to operate in compliance with all
applicable laws, including those regarding corruption, working conditions, employment practices, safety and health,
and environmental compliance. However, we cannot control our suppliers' business practices, and we may not be
able to adequately monitor and audit our many suppliers throughout the world. If any of our suppliers violates labor,
environmental, or other laws or implements business practices that are regarded as unethical, our reputation could
be severely damaged, and our supply chain could be interrupted, which could harm our sales and results of
operations.
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If we were required to review the content that our customers incorporate into our products and interdict the
shipment of products that violate copyright protections or other laws, our costs would significantly
increase, which would harm our results of operations.
Because of our focus on automation and high volumes, the vast majority of our sales do not involve any
human-based review of content. Although our websites' terms of use specifically require customers to make
representations about the legality and ownership of the content they upload for production, there is a risk that a
customer may supply an image or other content for an order we produce that is the property of another party used
without permission, that infringes the copyright or trademark of another party, or that would be considered to be
defamatory, hateful, obscene, or otherwise objectionable or illegal under the laws of the jurisdiction(s) where that
customer lives or where we operate. If we were to become legally obligated to perform manual screening of
customer orders, our costs would increase significantly, and we could be required to pay substantial penalties or
monetary damages for any failure in our screening process.
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We are subject to customer payment-related risks.
We accept payments for our products and services on our websites by a variety of methods, including
credit or debit card, PayPal, check, wire transfer or other methods. In some geographic regions, we rely on one or
two third party companies to provide payment processing services. If any of the payment processing or other
companies with which we have contractual arrangements became unwilling or unable to provide these services to
us or they or we are unable to comply with our contractual requirements under such arrangements, then we would
need to find and engage replacement providers, which we may not be able to do on terms that are acceptable to us
or at all, or to process the payments ourselves. Any of these scenarios could be disruptive to our business as they
could be costly and time consuming and may unfavorably impact our customers.
As we offer new payment options to our customers, we may be subject to additional regulations,
compliance requirements and fraud risk. For some payment methods, including credit and debit cards, we pay
interchange and other fees, which may increase over time and raise our operating costs and lower our profit
margins or require that we charge our customers more for our products. We are also subject to payment card
association and similar operating rules and requirements, which could change or be reinterpreted to make it difficult
or impossible for us to comply. If we fail to comply with these rules and requirements, we may be subject to fines
and higher transaction fees and lose our ability to accept credit and debit card payments from our customers or
facilitate other types of online payments, and our business and operating results could be materially adversely
affected.
We may be subject to product liability claims if people or property are harmed by the products we sell.
Some of the products we sell may expose us to product liability claims relating to personal injury, death, or
property damage, and may require product recalls or other actions. Any claims, litigation, or recalls relating to
product liability could be costly to us and damage our brands and reputation.
Our inability to acquire or maintain domain names in each country or region where we currently or intend
to do business could negatively impact our brands and our ability to sell our products and services in that
country or region.
From time to time we have difficulty obtaining a domain name using Cimpress, Vistaprint, or our other
trademarks in a particular country or region, and we may not be able to prevent third parties from acquiring domain
names that infringe or otherwise decrease the value of our trademarks and other proprietary rights. If we are unable
to use a domain name in a particular country, then we could be forced to purchase the domain name from an entity
that owns or controls it, which we may not be able to do on commercially acceptable terms or at all; we may incur
significant additional expenses to develop a new brand to market our products within that country; or we may elect
not to sell products in that country.
We do not collect indirect taxes in all jurisdictions, which could expose us to tax liabilities.
In some of the jurisdictions where we sell products and services, we do not collect or have imposed upon
us sales, value added or other consumption taxes, which we refer to as indirect taxes. The application of indirect
taxes to e-commerce businesses such as Cimpress is a complex and evolving issue, and in many cases, it is not
clear how existing tax statutes apply to the Internet or e-commerce. For example, some state governments in the
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United States have imposed or are seeking to impose indirect taxes on Internet sales. A successful assertion by
one or more governments in jurisdictions where we are not currently collecting sales or value added taxes that we
should be, or should have been, collecting indirect taxes on the sale of our products could result in substantial tax
liabilities for past sales.
If we are unable to retain security authentication certificates, which are supplied by a limited number of
third party providers over which we exercise little or no control, our business could be harmed.
We are dependent on a limited number of third party providers of website security authentication certificates
that are necessary for conducting secure transactions over the Internet. Despite any contractual protections we may
have, these third party providers can disable or revoke, and in the past have disabled or revoked, our security
certificates without our consent, which would render our websites inaccessible to some of our customers and could
discourage other customers from accessing our sites. Any interruption in our customers' ability or willingness to
access our websites if we do not have adequate security certificates could result in a material loss of revenue and
profits and damage to our brands.
Risks Related to Our Corporate Structure
Challenges by various tax authorities to our international structure could, if successful, increase our
effective tax rate and adversely affect our earnings.
We are a Dutch limited liability company that operates through various subsidiaries in a number of countries
throughout the world. Consequently, we are subject to tax laws, treaties and regulations in the countries in which we
operate, and these laws and treaties are subject to interpretation. From time to time, we are subject to tax audits,
and the tax authorities in these countries could claim that a greater portion of the income of the Cimpress N.V.
group should be subject to income or other tax in their respective jurisdictions, which could result in an increase to
our effective tax rate and adversely affect our results of operations. For more information about audits to which we
are currently subject refer to Note 14 “Income Taxes” in the accompanying notes to the consolidated financial
statements included in Item 8 of Part II of this Report.
Changes in tax laws, regulations and treaties could affect our tax rate and our results of operations.
A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate
could result in a higher tax rate on our earnings, which could result in a significant negative impact on our earnings
and cash flow from operations. We continue to assess the impact of various international tax reform proposals and
modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material
impact on our income taxes. We cannot predict whether any specific legislation will be enacted or the terms of any
such legislation. However, if such proposals were enacted, or if modifications were to be made to certain existing
treaties, the consequences could have a materially adverse impact on us, including increasing our tax burden,
increasing costs of our tax compliance or otherwise adversely affecting our financial condition, results of operations
and cash flows.
Our intercompany arrangements may be challenged, which could result in higher taxes or penalties and an
adverse effect on our earnings.
We operate pursuant to written intercompany service and related agreements, which we also refer to as
transfer pricing agreements, among Cimpress N.V. and its subsidiaries. These agreements establish transfer prices
for production, marketing, management, technology development and other services performed by these
subsidiaries for other group companies. Transfer prices are prices that one company in a group of related
companies charges to another member of the group for goods, services or the use of property. If two or more
affiliated companies are located in different countries, the tax laws or regulations of each country generally will
require that transfer prices be consistent with those between unrelated companies dealing at arm's length. With the
exception of certain jurisdictions where we have obtained rulings or advance pricing agreements, our transfer
pricing arrangements are not binding on applicable tax authorities, and no official authority in any other country has
made a determination as to whether or not we are operating in compliance with its transfer pricing laws. If tax
authorities in any country were successful in challenging our transfer prices as not reflecting arm's length
transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these
revised transfer prices. A reallocation of taxable income from a lower tax jurisdiction to a higher tax jurisdiction
24
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would result in a higher tax liability to us. In addition, if the country from which the income is reallocated does not
agree with the reallocation, both countries could tax the same income, resulting in double taxation.
Our Articles of Association, Dutch law and the independent foundation, Stichting Continuïteit Cimpress,
may make it difficult to replace or remove management, may inhibit or delay a change of control or may
dilute your voting power.
Our Articles of Association, or Articles, as governed by Dutch law, limit our shareholders' ability to suspend
or dismiss the members of our management board and supervisory board or to overrule our supervisory board's
nominees to our management board and supervisory board by requiring a supermajority vote to do so under most
circumstances. As a result, there may be circumstances in which shareholders may not be able to remove members
of our management board or supervisory board even if holders of a majority of our ordinary shares favor doing so.
In addition, an independent foundation, Stichting Continuïteit Cimpress, or the Foundation, exists to
safeguard the interests of Cimpress N.V. and its stakeholders, which include but are not limited to our shareholders,
and to assist in maintaining Cimpress' continuity and independence. To this end, we have granted the Foundation a
call option pursuant to which the Foundation may acquire a number of preferred shares equal to the same number
of ordinary shares then outstanding, which is designed to provide a protective measure against unsolicited take-
over bids for Cimpress and other hostile threats. If the Foundation were to exercise the call option, it may prevent a
change of control or delay or prevent a takeover attempt, including a takeover attempt that might result in a
premium over the market price for our ordinary shares. Exercise of the preferred share option would also effectively
dilute the voting power of our outstanding ordinary shares by one half.
We have limited flexibility with respect to certain aspects of capital management and certain corporate
transactions.
Dutch law requires shareholder approval for the issuance of shares and grants preemptive rights to existing
shareholders to subscribe for new issuances of shares. In November 2011, our shareholders granted our
supervisory board and management board the authority to issue ordinary shares as the boards determine
appropriate, without obtaining specific shareholder approval for each issuance, and to limit or exclude shareholders'
preemptive rights. However, this authorization expires in November 2016. Although we plan to seek re-approval
from our shareholders from time to time in the future, we may not succeed in obtaining future re-approvals. In
addition, subject to specified exceptions, Dutch law requires shareholder approval for many corporate actions, such
as the approval of dividends, authorization to purchase outstanding shares, and corporate acquisitions of a certain
size. Situations may arise where the flexibility to issue shares, pay dividends, purchase shares, acquire other
companies, or take other corporate actions without a shareholder vote would be beneficial to us, but is not available
under Dutch law.
Because of our corporate structure, our shareholders may find it difficult to pursue legal remedies against
the members of our supervisory board or management board.
Our Articles and our internal corporate affairs are governed by Dutch law, and the rights of our shareholders
and the responsibilities of our supervisory board and management board are different from those established under
United States laws. For example, under Dutch law derivative lawsuits are generally not available, and our
supervisory board and management board are responsible for acting in the best interests of the company, its
business and all of its stakeholders generally (including employees, customers and creditors), not just shareholders.
As a result, our shareholders may find it more difficult to protect their interests against actions by members of our
supervisory board or management board than they would if we were a U.S. corporation.
Because of our corporate structure, our shareholders may find it difficult to enforce claims based on United
States federal or state laws, including securities liabilities, against us or our management team.
We are incorporated under the laws of the Netherlands, and the vast majority of our assets are located
outside of the United States. In addition, some of our officers and management board members reside outside of
the United States. In most cases, a final judgment for the payment of money rendered by a U.S. federal or state
court would not be directly enforceable in the Netherlands. Although there is a process under Dutch law for
petitioning a Dutch court to enforce a judgment rendered in the United States, there can be no assurance that a
Dutch court would impose civil liability on us or our management team in any lawsuit predicated solely upon U.S.
securities or other laws. In addition, because most of our assets are located outside of the United States, it could be
25
difficult for investors to place a lien on our assets in connection with a claim of liability under U.S. laws. As a result,
it may be difficult for investors to enforce U.S. court judgments or rights predicated upon U.S. laws against us or our
management team outside of the United States.
We may not be able to make distributions or purchase shares without subjecting our shareholders to Dutch
withholding tax.
A Dutch withholding tax may be levied on dividends and similar distributions made by Cimpress N.V. to its
shareholders at the statutory rate of 15% if we cannot structure such distributions as being made to shareholders in
relation to a reduction of par value, which would be non-taxable for Dutch withholding tax purposes. We have
purchased our shares and may seek to purchase additional shares in the future. Under our Dutch Advanced Tax
Ruling, a purchase of shares should not result in any Dutch withholding tax if we hold the purchased shares in
treasury for the purpose of issuing shares pursuant to employee share awards or for the funding of acquisitions.
However, if the shares cannot be used for these purposes, or the Dutch tax authorities successfully challenge the
use of the shares for these purposes, such a purchase of shares may be treated as a partial liquidation subject to
the 15% Dutch withholding tax to be levied on the difference between our average paid in capital per share for
Dutch tax purposes and the redemption price per share, if higher.
We may be treated as a passive foreign investment company for United States tax purposes, which may
subject United States shareholders to adverse tax consequences.
If our passive income, or our assets that produce passive income, exceed levels provided by law for any
taxable year, we may be characterized as a passive foreign investment company, or a PFIC, for United States
federal income tax purposes. If we are treated as a PFIC, U.S. holders of our ordinary shares would be subject to a
disadvantageous United States federal income tax regime with respect to the distributions they receive and the
gain, if any, they derive from the sale or other disposition of their ordinary shares.
We believe that we were not a PFIC for the tax year ended June 30, 2015 and we expect that we will not
become a PFIC in the foreseeable future. However, whether we are treated as a PFIC depends on questions of fact
as to our assets and revenues that can only be determined at the end of each tax year. Accordingly, we cannot be
certain that we will not be treated as a PFIC for our current tax year or for any subsequent year.
If a United States shareholder acquires 10% or more of our ordinary shares, it may be subject to increased
United States taxation under the “controlled foreign corporation” rules. Additionally, this may negatively
impact the demand for our ordinary shares.
If a United States shareholder owns 10% or more of our ordinary shares, it may be subject to increased
United States federal income taxation (and possibly state income taxation) under the “controlled foreign
corporation” rules. In general, each U.S. person who owns (or is deemed to own) at least 10% of the voting power
of a non-U.S. corporation, “10% U.S. Shareholder,” and if such non-U.S. corporation is a “controlled foreign
corporation”, or “CFC,” for an uninterrupted period of 30 days or more during a taxable year, then such 10% U.S.
Shareholder who owns (or is deemed to own) shares in the CFC on the last day of the CFC's taxable year, must
include in its gross income for United States federal income tax (and possibly state income tax) purposes its pro
rata share of the CFC's “subpart F income”, even if the "subpart F income" is not distributed. In general, a non-U.S.
corporation is considered a CFC if one or more 10% U.S. Shareholders together own more than 50% of the voting
power or value of the corporation on any day during the taxable year of the corporation. “Subpart F income”
consists of, among other things, certain types of dividends, interest, rents, royalties, gains, and certain types of
income from services and personal property sales.
The rules for determining ownership for purposes of determining 10% U.S. Shareholder and CFC status are
complicated, depend on the particular facts relating to each investor, and are not necessarily the same as the rules
for determining beneficial ownership for SEC reporting purposes. For taxable years in which we are a CFC for an
uninterrupted period of 30 days or more, each of our 10% U.S. Shareholders will be required to include in its gross
income for United States federal income tax purposes its pro rata share of our "subpart F income", even if the
subpart F income is not distributed by us. We currently do not believe we are a CFC. However, whether we are
treated as a CFC can be affected by, among other things, facts as to our share ownership that may change.
Accordingly, we cannot be certain that we will not be treated as a CFC for our current tax year or any subsequent
tax year.
26
The risk of being subject to increased taxation as a CFC may deter our current shareholders from acquiring
additional ordinary shares or new shareholders from establishing a position in our ordinary shares. Either of these
scenarios could impact the demand for, and value of, our ordinary shares.
We will pay taxes even if we are not profitable on a consolidated basis, which would harm our results of
operations.
The intercompany service and related agreements among Cimpress N.V. and its direct and indirect
subsidiaries ensure that many of the subsidiaries realize profits based on their operating expenses. As a result, if
the Cimpress group is less profitable, or even not profitable on a consolidated basis, many of our subsidiaries will
be profitable and incur income taxes in their respective jurisdictions.
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Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We own real property including for the following manufacturing operations:
• A 582,000 square foot facility located near Windsor, Ontario, Canada primarily services our Vistaprint
Business Unit in the North American market.
• A 362,000 square foot facility located in Venlo, the Netherlands services our Vistaprint Business Unit and All
Other Business Units in the European market.
• A 124,000 square foot facility located in Deer Park, Australia primarily services our Vistaprint Business Unit
in the Asia-Pacific markets.
• Two facilities, a total of 125,000 square feet, located near Montpellier, France primarily service our All Other
Business Units throughout the French market.
As of June 30, 2015, a summary of our currently occupied leased spaces is as follows:
Business Segment
Square Feet
Type
Lease Expirations
Vistaprint
Business Unit (1)
493,281
Technology development, marketing, customer service
and administrative
December 2015 - June 2024
All Other
Business Units
512,660
Technology development, marketing, customer service,
manufacturing and administrative
October 2015 - July 2024
Other (2)
77,720
Corporate strategy, technology development and
prototyping laboratory
January 2018 - June 2023
___________________
(1) Includes our current lease of a 202,000 square foot facility in Lexington, Massachusetts, which contains technology development, marketing
and administrative employees and is included in the Vistaprint Business Unit, although also used by Corporate and Global Functions. In the first
quarter of fiscal 2016 we will commence an eleven year lease and will move our Lexington operations to a new 302,000 square foot facility in
Waltham, Massachusetts. See Note 6 in our accompanying financial statements in this Report for a discussion of this transaction.
(2) Includes locations that are exclusively corporate or global functions.
We believe that the total space available to us in the facilities we own or lease, and space that is obtainable
by us on commercially reasonable terms, will meet our needs for the foreseeable future.
Item 3. Legal Proceedings
The information required by this item is incorporated by reference to the information set forth in Item 8 of
Part II, “Financial Statements and Supplementary Data — Note 18 — Commitments and Contingencies,” in the
accompanying notes to the consolidated financial statements included in this Report.
Item 4. Mine Safety Disclosures
None.
27
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
PART II
The ordinary shares of Cimpress N.V. are traded on the NASDAQ Global Select Market (the "NASDAQ")
under the symbol “CMPR.” As of July 31, 2015, there were approximately 15 holders of record of our ordinary
shares, although there is a much larger number of beneficial owners. The following table sets forth, for the periods
indicated, the high and low sale price per share of our ordinary shares on the NASDAQ:
Fiscal 2014:
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fiscal 2015:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
First Quarter
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
High
Low
56.78 $
57.66 $
55.20 $
53.42 $
55.06 $
76.68 $
86.78 $
91.75 $
48.37
51.92
46.95
38.58
37.05
52.13
67.41
79.81
Dividends
We have never paid or declared any cash dividends on our ordinary shares, and we do not anticipate
paying any cash dividends in the foreseeable future. We currently intend to retain all future earnings to finance the
growth and operations of our business, purchase our ordinary shares, or pay down our debt. Under Dutch law, we
may pay dividends only out of profits shown on our annual accounts prepared in accordance with Dutch generally
accepted accounting principles and adopted by our shareholders, and only to the extent our equity exceeds the
sum of the paid and called up portion of our ordinary share capital and the reserves that must be maintained in
accordance with provisions of Dutch law and our articles of association.
Issuer Purchases of Equity Securities
On December 11, 2014, in order to provide us with flexibility to repurchase our ordinary shares at times
when our management believes it may be beneficial for our business, our Supervisory Board authorized the
repurchase of up to 6,400,000 of our issued and outstanding ordinary shares on the open market (including block
trades that satisfy the safe harbor provisions of Rule 10b-18 pursuant to the U.S. Securities Exchange Act of 1934),
through privately negotiated transactions, or in one or more self-tender offers. This share repurchase authorization
expires on May 12, 2016, and we may suspend or discontinue the repurchase program at any time. Our
Supervisory Board approved this repurchase program pursuant to the authorization we received from our
shareholders in November 2014.
We did not repurchase any shares during the three months ended June 30, 2015, and 6,400,000 shares
remain available for repurchase under this program, subject to certain limitations imposed by our debt covenants.
28
Performance Graph
The following graph compares the cumulative total return to shareholders of Cimpress N.V. ordinary shares
relative to the cumulative total returns of the NASDAQ Composite index and the RDG Internet Composite index. An
investment of $100 (with reinvestment of all dividends) is assumed to have been made in our ordinary shares and in
each of the indexes on June 30, 2010 and the relative performance of each investment is tracked through June 30,
2015.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Cimpress N.V., the NASDAQ Composite Index
and the RDG Internet Composite Index
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Cimpress N.V.
NASDAQ Composite
RDG Internet Composite
Year Ended June 30,
2010
$ 100.00
100.00
100.00
2011
$ 100.76
132.14
147.84
$
2012
68.01
142.90
155.42
2013
$ 103.96
169.55
199.93
$
2014
85.20
223.20
277.95
2015
$ 177.22
253.21
301.80
The share price performance included in this graph is not necessarily indicative of future share price performance.
29
Item 6. Selected Financial Data
The following financial data should be read in conjunction with our consolidated financial statements, the
related notes and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” included elsewhere in this Report. The historical results are not necessarily indicative of the results to
be expected for any future period.
Year Ended June 30,
2015 (a)
2014 (b)(c)
2013 (c)
2012 (d)
2011
(In thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,494,206
$
Net income attributable to Cimpress N.V.. . . . . . . . . . . . . . .
92,212
Net income per share attributable to Cimpress N.V.:
1,270,236
43,696
$
1,167,478
$
1,020,269
$
817,009
29,435
43,994
82,109
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2.82
2.73
$
$
1.33
1.28
$
$
0.89
0.85
$
$
1.16
1.13
$
$
1.89
1.83
Shares used in computing net income per share
attributable to Cimpress N.V.:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,644,870
32,873,234
33,209,172
37,813,504
43,431,326
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,816,498
34,239,909
34,472,004
38,953,179
44,951,199
2015 (a)
2014 (b)(c)
2013 (c)
2012 (d)
2011
Year Ended June 30,
(In thousands)
Consolidated Statements of Cash Flows Data:
Net cash provided by operating activities . . . . . . . . . . . . . . . $
Purchases of property, plant and equipment . . . . . . . . . . . .
Purchases of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . .
Business acquisitions, net of cash acquired . . . . . . . . . . . . .
Net proceeds (payments) of debt . . . . . . . . . . . . . . . . . . . . .
228,876
(75,813)
—
(123,804)
54,207
$
148,580
$
140,012
$
140,641
$
162,633
(72,122)
(42,016)
(216,384)
207,946
(78,999)
(64,351)
—
8,051
(46,420)
(309,701)
(180,675)
227,181
(37,405)
(56,935)
—
(5,222)
2015 (a)
2014 (b)(c)
2013 (c)
2012 (d)
2011
(In thousands)
As of June 30,
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities (e) . . . . . $
Working capital (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term debt, excluding current portion (f) . . . . . . . .
Total shareholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . .
110,494
(89,580)
1,308,242
499,941
249,419
$
76,365
$
50,065
$
62,203
$
(83,560)
988,985
410,484
232,457
(54,795)
601,567
230,000
189,561
(26,381)
592,429
229,000
189,287
237,081
178,485
555,900
—
450,093
___________________
(a) Includes the impact of the acquisitions of FotoKnudsen AS on July 1, 2014, FL Print SAS on April 9, 2015, Exagroup SAS on April 15, 2015
and druck.at Druck-und Handelsgesellschäft mbH on April 17, 2015, as well as our investment in Printi LLC on August 7, 2014. See Notes 8,
15 and 16 in our accompanying financial statements in this Report for a discussion of these transactions.
(b) Includes the impact of the acquisitions of Printdeal B.V. (formerly known as People & Print Group B.V.) on April 1, 2014 and Pixartprinting
S.p.A. on April 3, 2014, as well as our investment in a joint business arrangement with Plaza Create Co. Ltd. in February 2014. See Notes 8
and 15 in our accompanying financial statements in this Report for a discussion of these transactions.
(c) Includes the impact of our July 10, 2012 equity investment in Namex Limited. During the fourth quarter of fiscal 2014 we disposed of this
investment and recognized a loss on the sale of $12.7 million. See Note 16 in our accompanying financial statements in this Report for a
discussion of this investment.
(d) Includes the impact of the acquisitions of Albumprinter Holding B.V. on October 31, 2011 and Webs, Inc. on December 28, 2011. See Note 8
in our accompanying financial statements in this Report for a discussion of these acquisitions.
(e) We define working capital as current assets less current liabilities. Our working capital profile has evolved since fiscal 2011 as we have made
long-term investments that seek to drive shareholder value through acquisitions, ordinary share purchases, and other strategic initiatives. We
have financed these investments through a mix of cash on hand, cash flows generated from operations and external debt financing.
(f) On March 24, 2015, we completed a private placement of $275.0 million of 7.0% senior unsecured notes due 2022. The proceeds from the
sales of the notes were used to repay existing outstanding indebtedness under our unsecured line of credit, the indebtedness outstanding
under our senior secured credit facility and for general corporate purposes. See Note 11 in our accompanying financial statements in this
Report for additional discussion.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Report contains forward-looking statements that involve risks and uncertainties. The statements
contained in this Report that are not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not
limited to our statements about anticipated income and revenue growth rates, future profitability and market share,
new and expanded products and services, geographic expansion and planned capital expenditures. Without limiting
the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-
looking statements. All forward-looking statements included in this Report are based on information available to us
up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking
statements. Our actual results could differ materially from those anticipated in these forward-looking statements as
a result of certain important factors, including those set forth in this “Management's Discussion and Analysis of
Financial Condition and Results of Operations” and “Risk Factors” and elsewhere in this Report. You should
carefully review those factors and also carefully review the risks outlined in other documents that we file from time
to time with the United States Securities and Exchange Commission.
Executive Overview
On November 14, 2014, pursuant to our shareholders’ approval, we amended our articles of association to
change our name to Cimpress N.V. and began trading on The Nasdaq Stock Market under the "CMPR" ticker
symbol shortly afterward. Cimpress, the world leader in mass customization, is a technology and manufacturing-
driven company that aggregates, via the Internet, large volumes of small, individually customized orders for a broad
spectrum of print, signage, apparel and similar products. We produce those orders in highly automated, capital and
technology intensive production facilities in a manner that we believe makes our production techniques significantly
more competitive than those of traditional suppliers. We bring our products to market through a portfolio of focused
brands serving the needs of small and medium businesses and consumers. These brands include Vistaprint, our
global brand for micro business marketing products and services, as well as brands that we have acquired that
serve the needs of various market segments, including resellers, small and medium businesses with differentiated
service needs, and consumers purchasing products for themselves and their families.
In July 2014, we changed our internal management reporting structure from geographic-based segments to
brand-based segments, resulting in the Vistaprint Business Unit and the All Other Business Units reportable
segments. The Vistaprint Business Unit represents our core Vistaprint brand focused on the North America, Europe,
Australia and New Zealand markets, and our Webs branded business, which is managed with the Vistaprint-
branded digital business. The All Other Business Unit is an aggregation of the smaller businesses in our portfolio -
Albumprinter, Printdeal (formerly known as People & Print Group), Pixartprinting and the Most of World business
units, as well as the operations of our fiscal 2015 acquisitions of FotoKnudsen AS, FL Print SAS (referred to as
Easyflyer), Exagroup SAS and druck.at Druck-und Handelsgesellschäft mbH (referred to as druck.at).
For the fiscal year ended June 30, 2015, we reported consolidated revenue of $1,494 million representing
18% reported revenue growth over the prior year and 23% growth in constant-currency terms. During fiscal 2015 we
made several strategic acquisitions to help us reach differentiated customers through distinct brands and give us
access to a broader product offering over time. Consolidated constant-currency revenue growth, excluding the
revenue of businesses and brands that do not have a comparable revenue in the prior twelve months, was 9% for
the year ended June 30, 2015.
Diluted earnings per share for the year ended June 30, 2015 increased 113% to $2.73 as compared to the
prior year. This increase was driven by the improved operating performance of our Vistaprint brand as well as the
results of our other brands acquired in fiscal 2014 and 2015. These improvements were partially offset by continued
investments in product quality and software development in our core business, as well as investments in markets in
which we seek to develop a long-term presence such as India, Japan and Brazil. We believe investments such as
these, as well as our other key initiatives, will collectively enable us to scale and strengthen our competitive position
and enhance long-term shareholder value. In addition, we recognized $14.9 million of expense during the year
ended June 30, 2015 for changes in the contingent consideration liabilities associated with our acquisitions of
Printdeal and Pixartprinting, $11.5 million of additional acquisition related amortization expense, as well as $9.0
31
million of incremental interest expense primarily due to our increased borrowing levels under our credit facility and
the issuance of our senior unsecured notes in March 2015. We also recognized significant gains from currency
movements in fiscal 2015, as compared to losses in fiscal 2014, principally as a result of changes in the fair value of
our derivative instruments for which we have not elected hedge accounting and currency gains on non-functional
currency activity, principally from intercompany transactional and financing relationships. During fiscal 2014 we
recognized a $12.7 million loss on the sale of our investment in Namex Limited that did not occur in fiscal 2015.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. generally accepted accounting principles
(“GAAP”). To apply these principles, we must make estimates and judgments that affect our reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In some
instances, we reasonably could have used different accounting estimates and, in other instances, changes in the
accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ
significantly from our estimates. We base our estimates and judgments on historical experience and other
assumptions that we believe to be reasonable at the time under the circumstances, and we evaluate these
estimates and judgments on an ongoing basis. We refer to accounting estimates and judgments of this type as
critical accounting policies and estimates, which we discuss further below. This section should be read in
conjunction with Note 2, "Summary of Significant Accounting Policies," of our audited consolidated financial
statements included elsewhere in this Report.
Revenue Recognition. We generate revenue primarily from the sale and shipping of customized
manufactured products, as well as providing digital services, website design and hosting, email marketing services,
and order referral fees. We recognize revenue arising from sales of products and services, net of discounts and
applicable indirect taxes, when it is realized or realizable and earned. We consider revenue realized or realizable
and earned when there is persuasive evidence of an arrangement, a product has been shipped or service rendered
with no significant post-delivery obligation on our part, the net sales price is fixed or determinable and collection is
reasonably assured. For arrangements with multiple deliverables, we allocate revenue to each deliverable based on
the relative selling price for each deliverable. We determine the relative selling price using a hierarchy of (1)
company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling
price. Shipping, handling and processing charges billed to customers are included in revenue at the time of
shipment or rendering of service. Revenues from sales of prepaid orders on our websites are deferred until
shipment of fulfilled orders or until the prepaid service has been rendered.
For promotions through discount voucher websites, we recognize revenue on a gross basis, as we are the
primary obligor, when redeemed items are shipped. As the vouchers do not expire, any unredeemed vouchers are
recorded as deferred revenue. We recognize revenue on the portion of unredeemed vouchers when the likelihood
of redemption becomes remote (referred to as "breakage") and we determine there is no legal obligation to remit the
value of the unredeemed coupons to government agencies. We estimate the breakage rate based upon the pattern
of historical redemptions. Prior to the fourth quarter of fiscal 2015, we did not have sufficient historical redemption
data to reasonably estimate breakage and, therefore, did not recognize any breakage revenue. During the fourth
quarter of fiscal 2015, we concluded that we have now accumulated sufficient historical data from a large pool of
homogeneous transactions to allow us to reasonably and objectively determine a pattern of historical redemptions
in accordance with our accounting policy. Accordingly, we recognized $4.0 million of breakage revenue during the
quarter as a result of this change in estimate. We will apply this approach prospectively for future unredeemed
voucher activity.
A reserve for estimated sales returns and allowances is recorded as a reduction of revenue, based on
historical experience or specific identification of an event necessitating a reserve. This reserve is dependent upon
customer return practices and will vary during the year due to volume or specific reserve requirements. Sales
returns have not historically been significant to our net revenue and have been within our estimates.
Share-Based Compensation. We measure share-based compensation costs at fair value, including
estimated forfeitures, and recognize the expense over the period that the recipient is required to provide service in
exchange for the award, which generally is the vesting period. We use the Black-Scholes option pricing model to
measure the fair value of most of our share options and use a lattice model to measure the fair value of share
options with a market condition, as well as the subsidiary share option liability award granted in conjunction with the
Pixartprinting acquisition. The Black-Scholes model requires significant estimates related to the award’s expected
32
life and future share price volatility of the underlying equity security. The lattice model considers market condition
attributes in its valuation assessment where relevant and simulates various sources of uncertainty in order to
determine an average value based on the range of resultant outcomes. The lattice model requires estimation of
inputs such as future share price volatility, future operating performance, and a forfeiture rate assessment. The fair
value of restricted share units and restricted share awards is determined based on the number of shares granted
and the quoted price of our ordinary shares on the date of the grant. In determining the amount of expense to be
recorded, we also estimate forfeiture rates for all awards based on historical experience to reflect the probability that
employees will complete the required service period. Employee retention patterns could vary in the future and result
in a change to our estimated forfeiture rate which would directly impact share-based compensation expense. As a
measure of sensitivity, a 100 basis point change in our forfeiture rate estimate would have resulted in an immaterial
impact on our consolidated statement of operations for all periods.
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For awards with a performance condition vesting feature, when achievement of the performance condition
is deemed probable, we recognize compensation cost on a graded-vesting basis over the awards' expected vesting
periods. Management continually monitors the probability of vesting that is impacted by the achievement of certain
business targets and milestones. Independent factors such as market acceptance, technological feasibility or
economic market volatility could impact the achievement of such awards and contribute to variability in
management's estimate and the recognition of the underlying share-based compensation expense. As the
recognition of the compensation expense is reliant upon management's estimate of the likelihood of achievement of
the award, if the probability increases during any given period, the compensation cost associated with that award
would be accelerated in order to match the estimated outcome. These changes in estimate could result in expense
volatility.
Income Taxes. As part of the process of preparing our consolidated financial statements, we estimate our
income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax
expense, including assessing the risks associated with tax positions, together with assessing temporary and
permanent differences resulting from differing treatment of items for tax and financial reporting purposes. We
recognize deferred tax assets and liabilities for the temporary differences using the enacted tax rates and laws that
will be in effect when we expect temporary differences to reverse. We assess the ability to realize our deferred tax
assets based upon the weight of available evidence both positive and negative. To the extent we believe that it is
more likely than not that some portion or all of the deferred tax assets will not be realized, we establish a valuation
allowance. Our estimates can vary due to the profitability mix of jurisdictions, foreign exchange movements,
changes in tax law, regulations or accounting principles, as well as certain discrete items. In the event that actual
results differ from our estimates or we adjust our estimates in the future, we may need to increase or decrease
income tax expense, which could have a material impact on our financial position and results of operations.
We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which,
additional taxes will be due. These reserves are established when we believe that certain positions might be
challenged despite our belief that our tax return positions are in accordance with applicable tax laws. We adjust
these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation,
or the change of an estimate based on new information. To the extent that the final outcome of these matters is
different than the amounts recorded, such differences will affect the provision for income taxes in the period in which
such determination is made. Interest and, if applicable, penalties related to unrecognized tax benefits are recorded
in the provision for income taxes.
Software and Website Development Costs. We capitalize eligible salaries and payroll-related costs of
employees who devote time to the development of our websites and internal-use computer software. Capitalization
begins when the preliminary project stage is complete, management with the relevant authority authorizes and
commits to the funding of the software project, and it is probable that the project will be completed and the software
will be used to perform the function intended. These costs are amortized on a straight-line basis over the estimated
useful life of the software, which is three years. Our judgment is required in determining whether a project provides
new or additional functionality, the point at which various projects enter the stages at which costs may be
capitalized, assessing the ongoing value and impairment of the capitalized costs, and determining the estimated
useful lives over which the costs are amortized. Historically we have not had any significant impairments of our
capitalized software and website development costs.
Business Combinations. We recognize the tangible and intangible assets acquired and liabilities assumed
based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is
33
based on detailed cash flow valuations that use information and assumptions provided by management. The
valuations are dependent upon a myriad of factors including historical financial results, estimated customer renewal
rates, projected operating costs and discount rates. We estimate the fair value of contingent consideration at the
time of the acquisition using all pertinent information known to us at the time to assess the probability of payment of
contingent amounts. We allocate any excess purchase price over the fair value of the net tangible and intangible
assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our fiscal 2014 and
2015 acquisitions may differ materially from actual results depending on performance of the acquired businesses
and other factors. While we believe the assumptions used were appropriate, different assumptions in the valuation
of assets acquired and liabilities assumed could have a material impact on the timing and extent of impact on our
statements of operations.
Goodwill is assigned to reporting units as of the date of the related acquisition. If goodwill is assigned to
more than one reporting unit, we utilize a method that is consistent with the manner in which the amount of goodwill
in a business combination is determined. Costs related to the acquisition of a business are expensed as incurred.
Goodwill, Indefinite-Lived Intangible Assets, and Other Definite Lived Long-Lived Assets. We evaluate
goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs or
circumstances change that indicate that the carrying value may not be recoverable. We have the option to first
assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less
than its carrying amount. For our annual impairment test as of January 1, 2015, we evaluated each of our five
reporting units with goodwill individually. We considered the timing of our most recent fair value assessment and
associated headroom, the actual operating results as compared to the cash flow forecasts used in those fair value
assessments, the current long-term forecasts for each reporting unit, and the general market and economic
environment of each reporting unit. Our qualitative assessment for fiscal 2015 determined that there was no
indication that the carrying value of any of our reporting units exceeded its fair value. In addition, there have been
no indications of impairment that would require an updated analysis as of June 30, 2015. In addition to the specific
factors mentioned above, we assess the following individual factors on an ongoing basis such as:
• A significant adverse change in legal factors or the business climate;
• An adverse action or assessment by a regulator;
• Unanticipated competition;
• A loss of key personnel; and
• A more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold
or otherwise disposed of.
If the results of the qualitative analysis were to indicate that the fair value of a reporting unit is less than its
carrying value, the quantitative test is required. Under the quantitative approach, we estimate the fair values of our
reporting units using a discounted cash flow methodology. The discounted cash flows are based on our strategic
plans and best estimates of revenue growth and operating profit by each reporting unit. Our annual analysis
requires significant judgment, including the identification and aggregation of reporting units, discount rate and
perpetual growth rate assumptions, and the amount and timing of expected future cash flows. While we believe our
assumptions are reasonable, actual results could differ from our projections.
We are required to evaluate the estimated useful lives and recoverability of definite lived long-lived assets
(for example, customer relationships, developed technology, property, and equipment) on an ongoing basis when
indicators of impairment are present. For purposes of the recoverability test, long-lived assets are grouped with
other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash
flows of other assets and liabilities. The test for recoverability compares the undiscounted future cash flows of the
long-lived asset group to its carrying value. If the carrying values of the long-lived asset group exceed the
undiscounted future cash flows, the assets are considered to be potentially impaired. The next step in the
impairment measurement process is to determine the fair value of the individual net assets within the long-lived
asset group. If the aggregate fair values of the individual net assets of the group are less than the carrying values,
an impairment charge is recorded equal to the excess of the aggregate carrying value of the group over the
aggregate fair value. The loss is allocated to each long-lived asset within the group based on their relative carrying
34
values, with no asset reduced below its fair value. The identification and evaluation of a potential impairment
requires judgment and is subject to change if events or circumstances pertaining to our business change.
Recently Issued or Adopted Accounting Pronouncements
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 2 — Summary of Significant
Accounting Policies — Recently Issued or Adopted Accounting Pronouncements."
Results of Operations
The following table presents our operating results for the periods indicated as a percentage of revenue:
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As a percentage of revenue:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and loss in equity interests . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss in equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Net loss attributable to noncontrolling interests . . . . . . . . . . . . .
Net income attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . .
In thousands
Year Ended June 30,
2015
2014
2013
100.0 %
38.1 %
13.0 %
32.8 %
9.7 %
6.4 %
1.3 %
(1.1)%
6.6 %
0.6 %
— %
6.0 %
0.2 %
6.2 %
100.0 %
35.5 %
13.9 %
34.6 %
9.2 %
6.8 %
(1.7)%
(0.6)%
4.5 %
0.8 %
0.2 %
3.5 %
— %
3.5 %
100.0 %
34.3 %
14.1 %
38.2 %
9.4 %
4.0 %
— %
(0.5)%
3.5 %
0.8 %
0.2 %
2.5 %
— %
2.5 %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
1,494,206
$
1,270,236
$
1,167,478
18%
9%
Year Ended June 30,
Year Ended June 30,
2015
2014
2013
2015 vs. 2014
2014 vs. 2013
Revenue
We generate revenue primarily from the sale and shipping of customized manufactured products, and by
providing digital services, website design and hosting, email marketing services, as well as a small percentage from
order referral fees and other third-party offerings.
Total revenue by reportable segment for the fiscal years ended June 30, 2015, 2014 and 2013 are shown in
the following table. Fiscal 2015 includes the impact of FotoKnudsen, Easyflyer, Exagroup and druck.at from their
respective acquisition dates in our All Other Business Units segment. Fiscal 2014 includes the impact of Printdeal
and Pixartprinting from their respective acquisition dates in our All Other Business Units segment:
35
In thousands
Year Ended June 30,
2015
2014
Currency
Impact:
%
Change
(Favorable)/
Unfavorable
Vistaprint Business Unit . . . . $ 1,194,393
$ 1,144,030
299,813
All Other Business Units. . . .
Total revenue . . . . . . . . . . . . $ 1,494,206
126,206
$ 1,270,236
4%
138%
18%
5%
17%
5%
In thousands
Year Ended June 30,
2014
2013
Currency
Impact:
%
Change
(Favorable)/
Unfavorable
Vistaprint Business Unit . . . . $ 1,144,030
$ 1,091,900
126,206
All Other Business Units. . . .
Total revenue . . . . . . . . . . . . $ 1,270,236
75,578
$ 1,167,478
5%
67%
9%
(1)%
(4)%
(1)%
___________________
Constant-
Currency
Revenue
Growth (1)
9%
155%
23%
Constant-
Currency
Revenue
Growth (1)
4%
63%
8%
Impact of
Acquisitions:
Constant-
Currency
Revenue
Growth
(Favorable)/
Unfavorable
Excluding
Acquisitions (2)
—%
(139)%
(14)%
Impact of
Acquisitions:
9%
16%
9%
Constant-
Currency
Revenue
Growth
(Favorable)/
Unfavorable
Excluding
Acquisitions (2)
—%
(56)%
(4)%
4%
7%
4%
(1) Constant-currency revenue growth, a non-GAAP financial measure, represents the change in total revenue between current and prior year
periods at constant-currency exchange rates by translating all non-U.S. dollar denominated revenue generated in the current period using the
prior year period’s average exchange rate for each currency to the U.S. dollar.
(2) Constant-Currency Revenue Growth Excluding Acquisitions excludes revenue results for businesses and brands in the period in which there
is no comparable year over year revenue. For example, revenue from Pixartprinting and Printdeal, which we acquired in Q4 2014, is
excluded from Q1, Q2, and Q3 2015 revenue growth but included in Q4 2015 revenue growth. Similarly, since we acquired Fotoknudsen,
Easyflyer, Exagroup, and druck.at in fiscal 2015, revenues from these businesses are excluded from both fiscal 2014 and 2015 revenue
growth, and revenues from Pixartprinting and Printdeal are excluded from fiscal 2014 revenue growth.
We have provided these non-GAAP financial measures because we believe they provide meaningful information regarding our results on a
consistent and comparable basis for the periods presented. Management uses these non-GAAP financial measures, in addition to GAAP
financial measures, to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to and not a
substitute for our reported financial results prepared in accordance with GAAP.
Vistaprint Business Unit
Reported revenue for the year ended June 30, 2015 increased 4% to $1,194.4 million as compared to the
year ended June 30, 2014 as the Vistaprint Business Unit experienced growth from the higher expectations market
segment, increased average order value and improved activity from our repeat customer base. During the year we
delivered improved revenue growth trends in the U.S., U.K., French and German markets where we made major
pricing and channel marketing changes in fiscal 2014. Our reported revenue growth was negatively affected by
currency impacts of 5% during the year ended June 30, 2015 resulting in constant-currency revenue growth of 9%.
Our constant-currency revenue growth for the Vistaprint Business Unit more than doubled from fiscal 2014 to fiscal
2015. In addition we have seen year over year improvement in our customer Net Promoter Score™ (which polls our
customers on their willingness to recommend us to friends and colleagues based on a score of 0 to 10).
We are starting to see net reductions in fiscal 2015 of the major headwinds caused by our transformation
efforts of our customer value proposition in our largest business, the Vistaprint brand. This multi-year transformation
began in 2011 and is intended over time to improve customer loyalty and long-term returns through improvements
to pricing consistency and transparency, site experience, customer communications, product selection, product
quality, merchandising, marketing messaging and customer service. Although some of these efforts continue to
create revenue headwinds in certain markets we have started to realize benefits from these investments in fiscal
2015 through improved customer retention rates and our increased Net Promoter Score.
Revenue for the year ended June 30, 2014 increased 5% to $1,144.0 million compared to the year ended
June 30, 2013 due to increases in sales across our product and service offerings. During the third quarter of 2014,
we rolled out significant pricing changes in two of our top markets: the U.S. and Germany. These changes were
designed to help us improve customer lifetime value and loyalty over time, but created near-term revenue
headwinds in the Vistaprint Business Unit for the second half of fiscal 2014, particularly in our third fiscal quarter.
The Vistaprint Business Unit delivered annual reported and constant-currency revenue growth of 4% during the
fiscal year ended June 30, 2014, as successful programs to drive customer value that we started two years ago
helped to offset the negative impact of the pricing changes.
36
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.
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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
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38.1%
Technology and development expense . . . . . . . . . . $ 194,360
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.0%
Marketing and selling expense . . . . . . . . . . . . . . . . . $ 489,743
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32.8%
General and administrative expense . . . . . . . . . . . . $ 145,180
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.7%
$ 451,093
$ 400,293
26%
13%
35.5%
34.3%
$ 176,344
$ 164,859
10%
7%
13.9%
14.1%
$ 440,311
$ 446,116
11%
(1)%
34.6%
38.2%
$ 116,574
$ 110,086
25%
6%
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.
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Technology and development expense
Technology and development expense consists primarily of payroll and related expenses for our employees
engaged in software and manufacturing engineering, information technology operations and content development;
amortization of capitalized software, website development costs and certain acquired intangible assets, including
developed technology, hosting of our websites, asset depreciation, patent amortization, legal settlements in
connection with patent-related claims, and other technology infrastructure-related costs. Depreciation expense for
information technology equipment that directly supports the delivery of our digital marketing services products is
included in cost of revenue.
The growth in our technology and development expenses of $18.0 million for the year ended June 30, 2015
as compared to the year ended June 30, 2014 was primarily due to increased payroll and facility-related costs of
$13.9 million as a result of increased headcount in our technology development and information technology support
organizations. The increase in headcount is partly due to hiring in this strategic investment area, and partly due to
headcount from acquired businesses. At June 30, 2015, we employed 1,008 employees in these organizations,
inclusive of employees of the businesses we acquired in 2015, compared to 887 employees at June 30, 2014.
Amortization expense increased by $1.6 million primarily due to a full year of expense related to our fiscal 2014
acquisitions, as well as the fourth quarter impact of Exagroup and druck.at. Other technology and development
expense increased $9.3 million primarily due to increased consulting fees and severance related expenses. These
expenses were partially offset by a decline in share-based compensation expense of $2.9 million for the year ended
June 30, 2015, as the restricted share awards granted as part of our fiscal 2012 Webs acquisition were fully vested
as of December 31, 2013. Also during the year ended June 30, 2015, we had higher net capitalization of software
costs of $3.9 million due to an increase in costs that qualified for capitalization during the fiscal 2015 as compared
to fiscal 2014.
The growth in our technology and development expenses of $11.5 million for the year ended June 30, 2014
as compared to the year ended June 30, 2013 was primarily due to increased payroll and facility-related costs
of $9.5 million as a result of an increase in headcount in our technology development and information technology
support organizations. At June 30, 2014, we employed 887 employees in these organizations compared to
786 employees at June 30, 2013. Other technology and development expenses increased $4.0 million in fiscal 2014
as compared to the fiscal 2013 primarily due to restructuring charges of $1.3 million as well as increased
recruitment, hosting services and other costs related to continued investment in our infrastructure. In addition,
amortization expense increased by $1.1 million as a result of the Printdeal and Pixartprinting acquisitions. These
expense increases were partially offset during fiscal 2014 by a decline in share-based compensation expense of
$2.1 million as the restricted share awards granted as part of our fiscal 2012 Webs acquisition were fully vested as
of December 31, 2013. Also during fiscal 2014, we had higher net capitalization of software costs of $1.0 million due
to an increase in current costs that qualified for capitalization during the fiscal year.
Marketing and selling expense
Marketing and selling expense consists primarily of advertising and promotional costs; payroll and related
expenses for our employees engaged in marketing, sales, customer support and public relations activities;
amortization of certain acquired intangible assets, including customer relationships and trade names; and third-party
payment processing fees.
The increase in our marketing and selling expenses of $49.4 million during the year ended June 30, 2015,
as compared to the year ended June 30, 2014, was partially due to increased advertising costs of $18.5 million. Our
advertising cost increase was primarily due to the Vistaprint Business Unit as it launched its first brand-orientated
television ad in both the U.S. and UK, as well as increased activity from our acquired operations. Our payroll and
facility-related costs increased by $13.9 million, as we expanded our marketing and customer service, sales and
design support organization through our recent acquisitions and continued investment in Vistaprint Business Unit
customer service resources in order to provide higher value services to our customers. At June 30, 2015, we
employed 2,429 employees in these organizations, inclusive of employees of the businesses we acquired in 2015,
compared to 2,038 employees at June 30, 2014. Amortization expense increased by $10.1 million for the year
ended June 30, 2015 as a result of the customer and trademark related intangible assets related to our 2014 and
2015 acquisitions. Other marketing and selling expenses also increased by $10.0 million due to increased payment
processing fees, depreciation costs, employee travel, training, and recruitment costs. The increase in marketing and
selling expense was partially offset by decreased share-based compensation expense of $3.1 million during the
38
year ended June 30, 2015 influenced by the restricted share awards granted as part of our fiscal 2012 Webs
acquisition that were fully vested at December 31, 2013.
The decrease in our marketing and selling expenses of $5.8 million for the year ended June 30, 2014, as
compared to the year ended June 30, 2013, was primarily due to decreased advertising costs of $19.5 million as we
executed more strategically focused spend during the year, particularly in Europe. Additionally, share-based
compensation expense decreased during fiscal 2014 by $1.3 million as the restricted share awards granted as part
of our fiscal 2012 Webs acquisition were fully vested at December 31, 2013. This reduction in expense was partially
offset by increased payroll and facility-related costs of $6.9 million as we continued to expand our marketing
organization and our customer service, sales and design support centers. At June 30, 2014, we employed 2,038
employees in these organizations compared to 1,672 employees at June 30, 2013. In addition, other marketing and
selling expenses increased by $6.1 million, inclusive of $1.3 million of restructuring related expenses, as well as
increased outside service costs, payment processing fees, and other marketing costs. Fiscal 2014 also includes
$2.0 million of additional amortization expense for the customer and trademark related intangible assets acquired
with the Printdeal and Pixartprinting businesses.
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General and administrative expense
General and administrative expense consists primarily of transaction 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 year ended June 30, 2015 our general and administrative expenses increased as compared to
fiscal 2014 by $28.6 million primarily due to an increase of $14.9 million attributable to the increase in the fair value
of the contingent consideration liabilities for Printdeal and Pixartprinting since June 30, 2014. Payroll and share-
based compensation expense increased by $10.7 million and $2.5 million, respectively during the year ended
June 30, 2015 as compared to the prior year. At June 30, 2015 we employed 451 employees in these organizations
compared to 416 employees at June 30, 2014. Other general and administrative expenses also increased by $2.9
million due to increased employee travel, training, and recruitment costs. The increase in general and administrative
expense was partially offset by decreased professional fees of $2.4 million during fiscal 2015, as fiscal 2014
included more expenses incurred primarily for certain strategic initiatives.
During the year ended June 30, 2014 our general and administrative expenses increased as compared to
the year ended June 30, 2013 by $6.5 million, primarily due to an increase of $5.9 million in professional fees for
costs incurred related to our acquisitions and strategic investments during the year, as well as $3.2 million of
employee and facility related restructuring costs. In addition, we recognized $2.2 million of expense for the increase
in the fair value of the earn-out liability for both Printdeal and Pixartprinting since the dates of acquisition. These
increases were partially offset by a net decrease of $4.8 million primarily related to reduced share-based
compensation, recruiting costs, and other corporate charges. At June 30, 2014 we employed 416 employees in
these organizations compared to 400 employees at June 30, 2013.
Other income (expense), net
Other income (expense), net generally 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, as well as the realized and unrealized gains and losses on our derivative instruments for which we do
not apply hedge accounting. In evaluating our currency hedging program and ability to achieve hedge accounting in
light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional
economic cost of trade execution and administrative burden. Based on this analysis, we decided to execute
currency forward contracts that do not qualify for hedge accounting.The following table summarizes the components
39
of other income (expense), net:
Gains (losses) on derivative instruments . . . . . . . . . . . . . . . . . . . . . . $
9,317 $
(7,473) $
Currency related gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of Namex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,245
—
572
(1,764)
(12,681)
288
20,134 $
(21,630) $
29
(92)
—
—
(63)
Year Ended June 30,
2015
2014
2013
During fiscal 2015, we recognized $20.1 million of other income as compared to $21.6 million of losses
during fiscal 2014. The increase in other income (expense), net is due in part to net gains of $9.3 million recognized
on our currency forward contracts, of which $1.9 million is unrealized, as compared to net losses of $7.5 million that
were recognized during fiscal 2014. We expect this volatility to continue in future periods as we do not currently
apply hedge accounting for our currency forward contracts. In fiscal 2013 we elected hedge accounting for all of our
currency forward contracts and therefore did not have similar results.
Changes in our corporate entity operating structure, effective on October 1, 2013, required us to alter our
intercompany transactional and financing activities in fiscal 2014. As a result, we have significant non-functional
currency intercompany relationships subject to currency exchange rate volatility that resulted in a gain of $10.2
million during fiscal 2015, as compared to $1.8 million loss during fiscal 2014.
In addition, in fiscal 2014 we recognized a loss of $12.7 million on the sale of our equity investment in
Namex Limited which did not occur in fiscal 2015 or fiscal 2013.
Interest expense, net
Interest expense, net was $16.7 million, $7.7 million and $5.3 million for the years ended June 30, 2015,
2014 and 2013, respectively. Interest expense, net primarily consists of interest paid on outstanding debt balances
and amortization of debt issuance costs. The increase in interest expense, net from fiscal 2014 to 2015 is primarily
a result of increased borrowing levels under our credit facility and the issuance of our senior unsecured notes in
March 2015. The increase in interest expense, net from fiscal 2013 to 2014 is a result of increased borrowing levels
under our credit facility. We expect interest expense, net to increase in future periods relative to historical trends as
a result of our senior unsecured notes.
Income tax provision
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2015
10,441
$
2014
10,590
2013
$
9,387
10.5%
18.7%
23.0%
For the year ended June 30, 2015, our effective tax rate is 10.5% as compared to the prior year effective
tax rate of 18.7%. The main causes for this decrease are higher tax benefits in fiscal 2015 related to changes to our
corporate entity operating structure as described in further detail in Note 14, combined with an increase in our
consolidated pre-tax income and a more favorable geographical mix of earnings as compared to fiscal 2014. These
benefits to the fiscal 2015 tax rate were offset by greater losses incurred in fiscal 2015 as compared to fiscal 2014 in
certain jurisdictions where we are unable to recognize a tax benefit. For the year ended June 30, 2014, we
recognized a loss on our investment in Namex for which there was no tax benefit and this adversely impacted the
effective tax rate for fiscal 2014.
Our cash paid for income taxes for fiscal 2015 is higher than our income tax expense primarily as a result of
non-cash tax benefits relating to tax losses for which the cash benefit is expected to occur in a future period. This
was partially offset by cash tax benefits from stock-based compensation deductions that are recorded in
shareholder’s equity.
We are currently under income tax audits in various jurisdictions. We believe that our income tax reserves
associated with these matters are adequate as the positions reported on our tax returns will be sustained on their
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technical merits. However, final resolution is uncertain and there is a possibility that it could have a material impact
on our financial condition, results of operations or cash flows. See Note 14 in our accompanying consolidated
financial statements for additional discussion.
Liquidity and Capital Resources
Consolidated Statements of Cash Flows Data:
In thousands
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . $
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . .
Year Ended June 30,
2015
228,876 $
(217,190)
38,312
2014
148,580 $
(306,984)
169,608
2013
140,012
(98,931)
(53,255)
At June 30, 2015, we had $103.6 million of cash and cash equivalents and $522.5 million of outstanding
debt. Cash and cash equivalents increased by $41.1 million during the year ended June 30, 2015. This increase is
primarily attributable to the cash held by the businesses we acquired during fiscal 2015 and the timing of funding for
certain intercompany cash requirements. We expect cash and cash equivalents to fluctuate over time depending on
our working capital needs and acquisition activity. The cash flows during the year ended June 30, 2015 related
primarily to the following items:
Cash inflows:
• Net income of $89.3 million;
• Adjustments for non-cash items of $104.2 million primarily related to positive adjustments for depreciation
and amortization of $97.5 million, share-based compensation costs of $24.1 million, and the change in the
fair value of contingent consideration liabilities of $14.9 million, offset by negative adjustments for non-cash
tax items of $28.1 million and unrealized currency-related gains of $6.5 million;
• Proceeds of debt of $54.2 million, net of payments;
• Changes in working capital balances of $43.4 million primarily driven by improved management of prepaid
expenses and accrued expenses; and
• Proceeds from the issuance of shares in connection with the exercise of outstanding equity awards of $13.1
million.
Cash outflows:
• Capital expenditures of $75.8 million of which $33.7 million were related to the purchase of manufacturing
and automation equipment for our production facilities, $18.3 million were related to the purchase of land,
facilities and leasehold improvements, and $23.8 million were related to purchases of other capital assets,
including facility improvements and office equipment;
• Payments for our acquisition and minority investment activity, net of cash acquired, of $123.8 million;
• Payments of withholding taxes in connection with share awards of $29.4 million;
• Payment of contingent consideration obligation of $19.2 million;
•
Internal costs for software and website development that we have capitalized of $17.3 million; and
• Payments for capital lease arrangements of $5.8 million.
Additional Liquidity and Capital Resources Information. During the year ended June 30, 2015, we financed
our operations and strategic investments through internally generated cash flows from operations and debt
financing. As of June 30, 2015, approximately $102.9 million of our cash and cash equivalents was held by our
41
subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were
$59.0 million. We do not intend to repatriate such funds as the cash and cash equivalent balances are generally
used and available, without legal restrictions, to fund ordinary business operations and investments of the
respective subsidiaries. If there is a change in the future, the repatriation of undistributed earnings from certain
subsidiaries, in the form of dividends or otherwise, could have tax consequences that could result in material cash
outflows. See Note 14 in our accompanying consolidated financial statements for additional discussion.
Debt. On March 24, 2015, we completed a private placement of $275.0 million of 7.0% senior unsecured
notes due 2022. The proceeds from the sales of the notes were used to repay existing outstanding indebtedness
under our unsecured line of credit and senior secured credit facility and for general corporate purposes. As of June
30, 2015, we have aggregate loan commitments from our senior secured credit facility totaling $844.0 million. The
loan commitments consist of revolving loans of $690.0 million and the remaining term loans of $154.0 million.
We have other financial obligations that constitute additional indebtedness based on the definitions within
the credit facility. As of June 30, 2015, the amount available for borrowing under our senior secured credit facility
was as follows:
In thousands
Maximum aggregate available for borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Outstanding borrowings of senior secured credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remaining amount
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limitations to borrowing due to debt covenants and other obligations (1) . . . . . . . . . . . . . . . . . . . .
Amount available for borrowing as of June 30, 2015 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_________________
(1) Our borrowing ability under our senior secured credit facility can be limited by our debt covenants each quarter. These covenants may limit
our borrowing capacity depending on our leverage, other indebtedness, such as notes, capital leases, letters of credit, and any other debt,
as well as other factors that are outlined in the credit agreement.
844,000
(232,000)
612,000
(22,403)
589,597
(2) The use of available borrowings for share purchases, dividend payments, or corporate acquisitions is subject to more restrictive covenants
that can lower available borrowings for such purposes relative to the general availability described in the above table.
June 30, 2015
Debt Covenants. Our credit agreement contains financial and other covenants, including but not limited to
the following:
(1) The credit agreement contains financial covenants calculated on a trailing twelve month, or TTM, basis that:
•
•
•
our total leverage ratio, which is the ratio of our consolidated total indebtedness (*) to our TTM
consolidated EBITDA (*), will not exceed 4.50 to 1.00.
our senior secured leverage ratio, which is the ratio of our consolidated senior secured indebtedness (*)
to our TTM consolidated EBITDA (*), will not exceed 3.25 to 1.00.
our interest coverage ratio, which is the ratio of our consolidated EBITDA to our consolidated interest
expense, will be at least 3.00 to 1.00.
(2) Purchases of our ordinary shares, payments of dividends, and corporate acquisitions and dispositions are
subject to more restrictive consolidated leverage ratio thresholds than those listed above when calculated on a
proforma basis in certain scenarios. Also, regardless of our leverage ratio, the credit agreement limits the amount
of purchases of our ordinary shares, payments of dividends, corporate acquisitions and dispositions, investments
in joint ventures or minority interests, and consolidated capital expenditures that we may make. These limitations
can include annual limits that vary from year-to-year and aggregate limits over the term of the credit facility.
Therefore, our ability to make desired investments may be limited during the term of our senior secured credit
facility.
(3) The credit agreement also places limitations on additional indebtedness and liens that we may incur, as well as
on certain intercompany activities.
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(*) The definitions of EBITDA, consolidated total indebtedness, and consolidated senior secured indebtedness are maintained in our credit
agreement included as an exhibit to our Form 8-K filed on February 13, 2013, as amended by amendments no. 1 and no. 2 to the credit
agreement included as exhibits to our Forms 8-K filed on January 22, 2014 and September 25, 2014.
The indenture under which our 7.0% senior unsecured notes due 2022 are issued contains various
covenants, including covenants that, subject to certain exceptions, limit our and our restricted subsidiaries’ ability to
incur and/or guarantee additional debt; pay dividends, repurchase shares or make certain other restricted
payments; enter into agreements limiting dividends and certain other restricted payments; prepay, redeem or
repurchase subordinated debt; grant liens on assets; enter into sale and leaseback transactions; merge, consolidate
or transfer or dispose of substantially all of our consolidated assets; sell, transfer or otherwise dispose of property
and assets; and engage in transactions with affiliates.
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Our credit agreement and senior unsecured notes indenture also contain customary representations,
warranties and events of default. As of June 30, 2015, we were in compliance with all financial and other covenants
under the credit agreement and senior unsecured notes indenture.
Other debt. During the fourth quarter of fiscal 2015 we assumed term loans as part of the druck.at,
Exagroup and Easyflyer acquisitions. As of June 30, 2015 we had $11.5 million outstanding for those obligations
that are payable through September 2024.
In addition, we have an uncommitted line of credit with Santander Bank, N.A., and under the terms of the
agreement we may borrow up to $25.0 million at any time, with a maturity date of up to 90 days from the loan
origination date. Under the terms of our uncommitted line of credit, borrowings bear interest at a variable rate of
interest that may change from time to time. As of June 30, 2015 we had $4.5 million outstanding borrowings under
this line of credit.
Our expectations for fiscal year 2016. Our current liabilities continue to exceed our current assets; however,
we believe that our available cash, cash flows generated from operations, and our debt financing capacity will be
sufficient to satisfy our liabilities and planned investments to support our long-term growth strategy for the
foreseeable future. We endeavor to invest large amounts of capital that we believe will generate returns that are
above our weighted average cost of capital. We consider any use of cash that we expect to require more than 12
months to return our invested capital to be an allocation of capital. For fiscal 2016 we expect to allocate capital to
the following broad categories and consider our capital to be fungible across all of these categories:
•
Large, discrete, internally developed projects that we believe can, over the longer term provide us with
materially important competitive capabilities and/or positions in new markets, such as investments in our
software, service operations and other supporting capabilities for our integrated platform, costs incurred for
post-merger integration efforts and expansion into new geographic markets.
• Other organic investments intended to maintain or improve our competitive position or support growth, such
as costs to develop new products and expand product attributes, production and IT capacity expansion,
VBU related advertising costs and the continued investment in our employees.
• Share purchases
• Corporate acquisitions and similar Investments
• Reduction of debt
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Contractual Obligations
Contractual obligations at June 30, 2015 are as follows:
In thousands
Payments Due by Period
Operating leases, net of subleases . . . . . . $
Build-to-suit lease . . . . . . . . . . . . . . . . . . .
Purchase commitments. . . . . . . . . . . . . . .
Senior unsecured notes and interest
payments . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt and interest payments . . . . . . .
Capital leases . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . $
___________________
Total
39,227 $
Less
than 1
year
7,697 $
131,769
27,052
410,178
269,852
24,103
24,195
10,475
27,052
19,678
28,964
9,150
11,102
926,376 $
114,118 $
1-3
years
3-5
years
More
than 5
years
10,469 $
25,138
—
8,120 $
25,138
—
12,941
71,018
—
38,500
52,382
11,937
9,694
148,120 $
38,500
186,615
2,981
3,399
264,753 $
313,500
1,891
35
—
399,385
(1) We may be required to make cash outlays related to our uncertain tax positions. However, due to the uncertainty of the timing of future cash
flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if
any, with the respective taxing authorities. Accordingly, uncertain tax positions of $5.7 million as of June 30, 2015 have been excluded from
the contractual obligations table above. For further information on uncertain tax positions, see Note 14 to the accompanying consolidated
financial statements.
Operating Leases. We rent office space under operating leases expiring on various dates through 2024.
Future minimum rental payments required under our leases are an aggregate of approximately $39.2 million. The
terms of certain lease agreements require security deposits in the form of bank guarantees and a letter of credit in
the amount of $1.7 million and $0.6 million, respectively.
Build-to-suit lease. In July 2013, we executed a lease for an eleven-year term to move our Lexington,
Massachusetts, USA operations to a new facility in Waltham, Massachusetts, USA, that will commence in the first
quarter of fiscal 2016. Please refer to Note 6 in the accompanying consolidated financial statements for additional
details.
Purchase Commitments. At June 30, 2015, we had unrecorded commitments under contract of $27.1
million, which were composed of inventory purchase commitments of approximately $1.9 million, production and
computer equipment purchases of approximately $14.5 million, and other unrecorded purchase commitments of
$10.6 million.
Senior unsecured notes and interest payments. Our 7.0% senior unsecured notes due 2022 bear interest at
a rate of 7.0% per annum and mature on April 1, 2022. Interest on the notes will be payable semi-annually on April 1
and October 1 of each year, commencing on October 1, 2015 and has been included in the table above.
Other debt and interest payments. The term loans of $154.0 million outstanding under our credit agreement
have repayments due on various dates through September 23, 2019, with the revolving loans outstanding of $77.5
million due on September 23, 2019. Interest payable included in this table is based on the interest rate as of
June 30, 2015 and assumes all revolving loan amounts outstanding will not be paid until maturity, but that the term
loan amortization payments will be made according to our defined schedule. Interest payable includes the estimated
impact of our interest rate swap agreements. In addition, we assumed term loan debt as part of certain of our fiscal
2015 acquisitions and as of June 30, 2015 we had $11.5 million outstanding for those obligations that have
repayments due on various dates through September 2024.
Capital leases. We lease certain machinery and plant equipment under capital lease agreements that
expire at various dates through 2020. The aggregate carrying value of the leased equipment under capital leases
included in property, plant and equipment, net in our consolidated balance sheet at June 30, 2015, is $27.7 million,
net of accumulated depreciation of $4.7 million. The present value of lease installments not yet due included in
other current liabilities and other liabilities in our consolidated balance sheet at June 30, 2015 amounts to $23.6
million.
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Other Obligations. Other obligations include an installment obligation of $13.3 million related to the fiscal
2012 intra-entity transfer of the intellectual property of our subsidiary Webs, Inc., which resulted in tax being paid
over a 7.5 year term and has been classified as a deferred tax liability in our consolidated balance sheet as of
June 30, 2015. Other obligations also include the fair value of the contingent consideration payments related to our
fiscal 2014 acquisition of Printdeal of $7.8 million and the deferred payment for our fiscal 2015 acquisition of
druck.at of $3.0 million. Please refer to Note 3 and 8 in the accompanying consolidated financial statements for
additional details.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk. Our exposure to interest rate risk relates primarily to our cash, cash equivalents and
debt.
As of June 30, 2015, our cash and cash equivalents consisted of standard depository accounts which are
held for working capital purposes. We do not believe we have a material exposure to interest rate fluctuations
related to our cash and cash equivalents.
As of June 30, 2015, we had $232.0 million of variable rate debt and $13.3 million of variable rate
installment obligation related to the fiscal 2012 intra-entity transfer of Webs' intellectual property. As a result, we
have exposure to market risk for changes in interest rates related to these obligations. In order to mitigate our
exposure to interest rate changes related to our variable rate debt, we execute interest rate swap contracts to fix the
interest rate on a portion of our outstanding long-term debt with varying maturities. 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.
Currency Exchange Rate Risk. We conduct business in multiple currencies through our worldwide
operations but report our financial results in U.S. dollars. We manage these risks through normal operating activities
and, when deemed appropriate, through the use of derivative financial instruments. We have policies governing the
use of derivative instruments and do not enter into financial instruments for trading or speculative purposes. The
use of derivatives is intended to reduce, but do not entirely eliminate, the impact of adverse currency exchange rate
movements. A summary of our currency risk is as follows:
• Translation of our non-U.S. dollar revenues and expenses: Revenue and related expenses generated in
currencies other than the U.S. dollar could result in higher or lower net income when, upon consolidation,
those transactions are translated to U.S. dollars. When the value or timing of revenue and expenses in a
given currency are materially different, we may be exposed to significant impacts on our net income and
non-GAAP financial metrics, such as EBITDA.
Our most significant net currency exposures by volume are in the British Pound, Canadian Dollar, Euro and
Swiss Franc, although our exposures to these and other currencies fluctuate, particularly in our fiscal
second quarter. Beginning in the fourth quarter of fiscal 2015, our currency hedging objectives are targeted
at reducing volatility in our forecasted U.S. dollar-equivalent EBITDA in order to protect our debt covenants.
Since EBITDA excludes non-cash items such as depreciation and amortization that are included in net
income, we may experience increased, not decreased, volatility in our GAAP results.
In addition, we elect to execute currency forward contracts that do not qualify for hedge accounting. As a
result, we may experience volatility in our consolidated statements of operations due to (i) the impact of
unrealized gains and losses reported in other income (expense), net on the mark-to-market of outstanding
contracts and (ii) realized gains and losses recognized in other income (expense), net, whereas the
offsetting economic gains and losses are reported in the line item of the underlying cash flow, for example,
revenue.
• Translation of our non-U.S. dollar assets and liabilities: Each of our subsidiaries translates its assets and
liabilities to U.S. dollars at current rates of exchange in effect at the balance sheet date. The resulting gains
and losses from translation are included as a component of accumulated other comprehensive (loss)
income on the consolidated balance sheet. Fluctuations in exchange rates can materially impact the
carrying value of our assets and liabilities.
45
We have currency exposure arising from our net investments in foreign operations. We enter into cross-
currency swap contracts to mitigate the impact of currency rate changes on certain net investments.
• Remeasurement of monetary assets and liabilities: Transaction gains and losses generated from
remeasurement of monetary assets and liabilities denominated in currencies other than the functional
currency of a subsidiary are included in other income (expense), net on the consolidated statements of
operations. Certain of our subsidiaries hold intercompany loans with another group company, which may be
different from the functional currency of one of the subsidiary loan parties. Due to the significance of these
balances, the revaluation of intercompany loans can have a material impact on other income (expense),
net. We expect these impacts may be volatile in the future, although they do not have a U.S. dollar cash
impact for the consolidated group and therefore have currently elected not to hedge this exposure. A
hypothetical 10% change in currency exchange rates was applied to total net monetary assets
denominated in currencies other than the functional currencies at the balance sheet dates to compute the
impact these changes would have had on our income before taxes in the near term. A hypothetical
decrease in exchange rates of 10% against the functional currency of our subsidiaries would have resulted
in an increase of $18.8 million, $10.1 million, and $2.5 million on our income before taxes for the fiscal
years ended June 30, 2015, 2014 and 2013, respectively.
46
Item 8. Financial Statements and Supplementary Data
CIMPRESS N.V.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
50
51
52
53
54
56
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Supervisory Board and Shareholders of
Cimpress N.V.
In our opinion, the accompanying consolidated balance sheet as of June 30, 2015 and the related
consolidated statements of operations, of comprehensive income (loss), of shareholders’ equity and of cash flows
for the year then ended present fairly, in all material respects, the financial position of Cimpress N.V. and its
subsidiaries at June 30, 2015, and the results of their operations and their cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2015,
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for
these financial statements, for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control
Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial
statements and on the Company's internal control over financial reporting based on our integrated audit. We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement and whether effective internal control over financial
reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
As described in Management's Report on Internal Control Over Financial Reporting appearing under Item
9A, management has excluded FotoKnudsen AS (“FotoKnudsen”), Exagroup SAS and its subsidiaries (“Exagroup”)
and druck.at Druck-und Handelsgesellschäft mbH (“druck.at”) from its assessment of internal control over financial
reporting as of June 30, 2015 because they were acquired by the Company in purchase business combinations
during fiscal 2015. We have also excluded FotoKnudsen, Exagroup and druck.at from our audit of internal control
over financial reporting. FotoKnudsen and druck.at are wholly-owned subsidiaries and Exagroup is a 70% owned
subsidiary, whose aggregated total assets and total revenues represent approximately $74.3 million and $44.1
million, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30,
2015.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
August 14, 2015
48
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Supervisory Board and Shareholders of
Cimpress N.V.
We have audited the accompanying consolidated balance sheet of Cimpress N.V. (formerly known as
Vistaprint N.V.) as of June 30, 2014, and the related consolidated statements of operations, comprehensive income,
shareholders’ equity and cash flows for each of the two years in the period ended June 30, 2014. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Cimpress N.V. at June 30, 2014, and the consolidated results of its operations and
its cash flows for each of the two years in the period ended June 30, 2014, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
August 15, 2014
Except for Notes 9 and 17, as to which the date is
August 14, 2015
49
CIMPRESS N.V.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30,
2015
June 30,
2014
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances of $372 and $212, respectively . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and web site development costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,308,242 $
Liabilities, noncontrolling interests and shareholders’ equity
Current liabilities:
103,584 $
6,910
32,145
18,356
56,648
217,643
467,511
22,109
17,172
400,629
151,063
32,115
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease financing obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 18)
Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity:
65,875 $
172,826
23,407
1,043
22,602
21,470
307,223
48,007
93,841
499,941
52,073
1,001,085
62,508
13,857
23,515
12,138
45,923
157,941
352,221
14,016
8,762
317,187
110,214
28,644
988,985
52,770
121,177
26,913
2,178
37,575
888
241,501
30,846
18,117
410,484
44,420
745,368
57,738
11,160
Preferred shares, par value €0.01 per share, 100,000,000 shares authorized;
none issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary shares, par value €0.01 per share, 100,000,000 shares authorized;
44,080,627 shares issued; and 33,203,065 and 32,329,244 shares outstanding,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury shares, at cost, 10,877,562 and 11,751,383 shares, respectively . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities, noncontrolling interests and shareholders’ equity . . . . . . . . . . . . . . . . $ 1,308,242 $
615
(412,132)
324,281
435,052
(98,909)
248,907
512
249,419
—
—
615
(423,101)
309,990
342,840
2,113
232,457
—
232,457
988,985
See accompanying notes.
50
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
F
o
r
m
1
0
-
K
Year Ended June 30,
2015
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,494,206
568,599
Cost of revenue (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
194,360
Technology and development expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
489,743
Marketing and selling expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145,180
General and administrative expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96,324
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,134
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,705)
Income before income taxes and loss in equity interests . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss in equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Net loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net income per share attributable to Cimpress N.V.. . . . . . . . . . . . . . . . . . . . . $
Diluted net income per share attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . $
Weighted average shares outstanding — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares outstanding — diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .
99,753
10,441
—
89,312
2,900
92,212
2.82
2.73
32,644,870
33,816,498
2014
$ 1,270,236
451,093
176,344
440,311
116,574
85,914
(21,630)
(7,674)
56,610
10,590
2,704
43,316
380
43,696
1.33
1.28
32,873,234
34,239,909
$
$
$
2013
$ 1,167,478
400,293
164,859
446,116
110,086
46,124
(63)
(5,329)
40,732
9,387
1,910
29,435
—
29,435
0.89
0.85
33,209,172
34,472,004
$
$
$
____________________________________________
(1) Share-based compensation is allocated as follows:
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
$
251
$
4,139
1,952
17,906
7,041
5,082
15,412
398
9,209
6,354
16,967
Year Ended June 30,
2015
2014
2013
See accompanying notes.
51
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss), net of hedges . . . . . . . . . . . . . . . . . . .
Net unrealized loss on derivative instruments designated and qualifying as
cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive income to net
income on derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain (loss) on available-for-sale-securities . . . . . . . . . . . . . . . . . . .
Unrealized gain (loss) on pension benefit obligation . . . . . . . . . . . . . . . . . . . . .
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Comprehensive loss attributable to noncontrolling interests . . . . . . . . . . .
Total comprehensive income (loss) attributable to Cimpress N.V. . . . . . . . . . . . . . $
Year Ended June 30,
2015
2014
2013
89,312
$
43,316
$
29,435
(93,627)
8,019
(1,417)
(1,285)
815
(6,275)
(388)
(11,580)
2,770
396
9,246
(2,724)
56,968
397
(910)
483
(397)
—
—
28,611
—
(8,810) $
57,365
$
28,611
See accompanying notes.
52
F
o
r
m
1
0
-
K
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
Ordinary Shares
Treasury Shares
Number
of Shares
Issued
Amount
Number
of
Shares
Amount
Additional
Paid-in
Capital
Retained
Earnings
Balance at June 30, 2012 . . . . . . . . .
49,950
$
699
(15,831) $(378,941) $ 285,633
$ 292,628
Issuance of ordinary shares due to
share option exercises . . . . . . . . . . . .
281
Cancellation of treasury shares . . . . .
(5,870)
(84)
5,870
8,715
30,262
(3,910)
(7,259)
(22,919)
Restricted share units vested, net of
shares withheld for taxes . . . . . . . . . .
Excess tax benefits from share-
based compensation . . . . . . . . . . . . .
Share-based compensation expense
Purchase of ordinary shares . . . . . . .
Net income attributable to Cimpress
N.V. . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gain on derivative
instruments designated and
qualifying as cash flow hedges . . . . .
Foreign currency translation . . . . . . .
242
6,014
(9,570)
1,796
32,969
(1,851)
(64,351)
29,435
Accumulated
Other
Comprehensive
Income (Loss)
$
(10,732) $
Total
Shareholders’
Equity
189,287
4,805
—
(3,556)
1,796
32,969
(64,351)
29,435
86
(910)
86
(910)
Balance at June 30, 2013 . . . . . . . . .
44,080
$
615
(11,289) $(398,301) $ 299,659
$ 299,144
$
(11,556) $
189,561
Issuance of ordinary shares due to
share option exercises, net of shares
withheld for taxes . . . . . . . . . . . . . . . .
Restricted share units vested, net of
shares withheld for taxes . . . . . . . . . .
Excess tax benefits from share-
based compensation . . . . . . . . . . . . .
Share-based compensation expense
Purchase of ordinary shares . . . . . . .
Net income attributable to Cimpress
N.V. . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized loss on derivative
instruments designated and
qualifying as cash flow hedges . . . . .
Adjustment to contributed capital of
noncontrolling interest . . . . . . . . . . . .
Unrealized gain on marketable
securities . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . .
Unrealized loss on pension benefit
obligation, net of tax. . . . . . . . . . . . . .
297
285
9,011
(8,001)
8,205
(14,220)
(1,044)
(42,016)
5,159
27,449
(56)
43,696
1,010
(6,015)
5,159
27,449
(42,016)
43,696
(889)
(56)
9,246
8,036
(889)
9,246
8,036
(2,724)
(2,724)
Balance at June 30, 2014 . . . . . . . . .
44,080
$
615
(11,751) $(423,101) $ 309,990
$ 342,840
$
2,113
$
232,457
Issuance of ordinary shares due to
share option exercises, net of shares
withheld for taxes . . . . . . . . . . . . . . . .
Restricted share units vested, net of
shares withheld for taxes . . . . . . . . . .
Excess tax benefits from share-
based compensation . . . . . . . . . . . . .
Share-based compensation expense
Net income attributable to Cimpress
N.V. . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized loss on derivative
instruments designated and
qualifying as cash flow hedges . . . . .
Unrealized gain on marketable
securities . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation, net of
hedges . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized loss on pension benefit
obligation, net of tax. . . . . . . . . . . . . .
Balance at June 30, 2015 . . . . . . . . .
672
201
6,689
(16,468)
4,280
(10,728)
20,763
20,724
92,212
(9,779)
(6,448)
20,763
20,724
92,212
(602)
(602)
(6,275)
(6,275)
(93,757)
(93,757)
(388)
(388)
44,080
$
615
(10,878) $(412,132) $ 324,281
$ 435,052
$
(98,909) $
248,907
53
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended June 30,
2015
2014
2013
Operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments to reconcile net income to net cash provided by operating activities:
89,312
$
43,316
$
29,435
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits derived from share-based compensation awards . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of equity method investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss in equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash gain on equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abandonment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized (gain) loss on derivative instruments included in net income . . . . . . . . . . . . . .
Change in fair value of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of contingent consideration in excess of acquisition-date fair value . . . . . . . . . .
Effect of exchange rate changes on monetary assets and liabilities denominated in non-
functional currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities excluding the effect of business acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,500
24,075
(13,146)
(14,940)
—
—
—
—
(1,868)
14,890
(8,055)
(6,455)
4,130
2,057
(4,491)
8,597
(4,026)
41,296
228,876
72,282
27,786
(5,159)
(12,807)
12,681
2,704
—
7
425
2,192
—
748
1,328
4,008
(1,055)
(15,336)
14,945
515
148,580
64,325
32,928
(1,796)
(8,626)
—
1,910
(1,414)
1,529
—
(588)
—
29
1,329
(1,532)
(525)
10,791
557
11,660
140,012
(75,813)
(72,122)
(78,999)
Business acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(123,804)
(216,384)
(250)
—
(17,323)
—
—
(217,190)
(Purchases of) proceeds from the sale of intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of software and website development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities
367,500
Proceeds from borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
275,000
Proceeds from issuance of senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(581,920)
Payments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,373)
Payments of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,105)
Payment of contingent consideration included in acquisition-date fair value . . . . . . . . . . . . . . . .
(29,351)
Payments of withholding taxes in connection with equity awards . . . . . . . . . . . . . . . . . . . . . . . .
(5,750)
Payments of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,146
Excess tax benefits derived from share-based compensation awards. . . . . . . . . . . . . . . . . . . . .
—
Purchase of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,123
Proceeds from issuance of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,160
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital contribution from noncontrolling interest
(118)
Issuance of dividend to noncontrolling interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38,312
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,922)
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . .
41,076
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62,508
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 103,584
(116)
(4,629)
(9,749)
(4,994)
1,010
(306,984)
482,800
—
(273,491)
(1,363)
—
(9,430)
(1,297)
5,159
(42,016)
4,425
4,821
—
169,608
1,239
12,443
50,065
62,508
$
—
1,000
—
(7,667)
(12,753)
(512)
(98,931)
113,712
—
(104,125)
(1,536)
—
(3,556)
—
1,796
(64,351)
4,805
—
—
(53,255)
36
(12,138)
62,203
50,065
$
See accompanying notes.
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CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
Year Ended June 30,
2015
2014
2013
Supplemental disclosures of cash flow information:
Cash paid during the period for:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
8,520
$
6,446
$
4,762
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,284
18,485
13,656
Supplemental schedule of non-cash investing and financing activities:
Capitalization of construction costs related to financing lease obligation . . . . . . . . . . . . . $
86,198
$
18,117
$
Property and equipment acquired under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts due for acquisitions of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,194
20,122
—
21,582
—
—
—
See accompanying notes.
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CIMPRESS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 2015, 2014 and 2013
(in thousands, except share and per share data)
1. Description of the Business
We are a technology and manufacturing-driven company that aggregates, via the Internet, large volumes of
small, individually customized orders for a broad spectrum of print, signage, apparel and similar products. We
produce those orders in highly automated, capital and technology intensive production facilities in a manner that we
believe makes our production techniques significantly more competitive than those of traditional suppliers. We bring
our products to market through a portfolio of focused brands serving the needs of small and medium businesses
and consumers. These brands include Vistaprint, our global brand for micro business marketing products and
services, as well as brands we have acquired that serve the needs of various market segments including resellers,
small and medium businesses with differentiated service needs, and consumers purchasing products for
themselves and their families.
On November 14, 2014, pursuant to our shareholders’ approval, we amended our articles of association to
change our name to Cimpress N.V. and began trading on The Nasdaq Stock Market under the "CMPR" ticker
symbol shortly afterward.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Cimpress N.V., its wholly owned subsidiaries,
entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest
and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in
entities in which we can exercise significant influence, but do not own a majority equity interest or otherwise control,
are accounted for using the equity method and are included as investments in equity interests on the consolidated
balance sheets.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles
("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. We believe our most significant estimates are
associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful
lives of assets, share-based compensation, accounting for business combinations, and income taxes and related
valuation allowances, among others. By their nature, estimates are subject to an inherent degree of uncertainty.
Actual results could differ from those estimates.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less to be
the equivalent of cash for the purpose of balance sheet and statement of cash flows presentation. Cash equivalents
consist of depository accounts and money market funds. Cash and cash equivalents restricted for use were $543
and $823 as of June 30, 2015 and 2014, respectively, and are included in other assets in the accompanying
consolidated balance sheets.
Marketable Securities
We determine the appropriate classification of marketable securities at the date of purchase and reevaluate
the classification at each balance sheet date. Our marketable securities are classified as "available-for-sale" and
carried at fair value, with the unrealized gains and losses, net of taxes if applicable, reported as a separate
component of accumulated other comprehensive (loss) income. We review our investments for other-than-
temporary impairment whenever the fair value of the investment is less than the amortized cost and evidence
indicates that the investment's carrying amount is not recoverable within a reasonable period of time. Any decline in
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value that is determined to be other than temporary is recognized as expense in our consolidated statement of
operations in the period the impairment is identified.
Accounts Receivable
Accounts receivable includes amounts due from customers and partners. We offset gross trade accounts
receivable with an allowance for doubtful accounts, which is our best estimate of the amount of probable credit
losses in existing accounts receivable. Account balances are charged off against the allowance when the potential
for recovery is no longer reasonably assured.
Inventories
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Inventories consist primarily of raw materials and are recorded at the lower of cost or market value using
the first-in, first-out method. Costs to produce free products are included in cost of revenues as incurred.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Additions
and improvements that substantially extend the useful life of a particular asset are capitalized while repairs and
maintenance costs are expensed as incurred. Assets that qualify for the capitalization of interest cost during their
construction period are evaluated on a per project basis and, if material, the costs are capitalized. No interest costs
associated with our construction projects were capitalized in fiscal 2015 or 2014 as the amounts were not material.
Depreciation of plant and equipment is recorded on a straight-line basis over the estimated useful lives of the
assets.
Software and Web Site Development Costs
We capitalize eligible salaries and payroll-related costs of employees who devote time to the development
of websites and internal-use computer software. Capitalization begins when the preliminary project stage is
complete, management with the relevant authority authorizes and commits to the funding of the software project,
and it is probable that the project will be completed and the software will be used to perform the function intended.
These costs are amortized on a straight-line basis over the estimated useful life of the software. Costs associated
with preliminary stage software development, repair, maintenance or the development of website content are
expensed as incurred.
Amortization of previously capitalized amounts in the years ended June 30, 2015, 2014 and 2013 was
$8,666, $4,985 and $3,118, respectively, resulting in accumulated amortization of $21,608 and $13,538 at June 30,
2015 and 2014, respectively.
Leases
We categorize leases at their inception as either operating or capital leases. Costs for operating leases that
include incentives such as payment escalations or rent abatements are recognized on a straight-line basis over the
term of the lease. Additionally, inducements received are treated as a reduction of our costs over the term of the
agreement. Leasehold improvements are capitalized at cost and amortized over the shorter of their expected useful
life or the life of the lease, excluding renewal periods.
Capital leases are accounted for as an acquisition of an asset and incurrence of an obligation. Assets held
under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value
of the leased asset at the inception of the lease, and amortized over the useful life of the asset. The corresponding
capital lease obligation is recorded at the present value of the minimum lease payments at inception of the lease.
For further information on our outstanding capital lease assets and obligations please refer to Note 18
Commitments and Contingencies.
For lease arrangements where we are deemed to be involved in the construction of structural improvements
prior to the commencement of the lease or take some level of construction risk, we are considered the owner of the
assets during the construction period. Accordingly, as the lessor incurs the construction project costs, the assets
and corresponding financial obligation are recorded in our consolidated balance sheet. Once the construction is
completed, if the lease meets certain “sale-leaseback” criteria, we will remove the asset and related financial
obligation from the balance sheet and treat the building lease as either an operating or capital lease based on our
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assessment of the guidance. If upon completion of construction, the project does not meet the “sale-leaseback”
criteria, the lease will be treated as a financing obligation and we will depreciate the asset over its estimated useful
life for financial reporting purposes.
Intangible Assets
We capitalize the costs of purchasing patents from unrelated third parties and amortize these costs over
the estimated useful life of the patent. The costs related to patent applications, pursuing others who we believe
infringe on our patents, and defending against patent-infringement claims are expensed as incurred.
We record acquired intangible assets at fair value on the date of acquisition and amortize such assets
using the straight-line method over the expected useful life of the asset, unless another amortization method is
deemed to be more appropriate. We evaluate the remaining useful life of intangible assets on a periodic basis to
determine whether events and circumstances warrant a revision to the remaining useful life. If the estimate of an
intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset
prospectively over the revised remaining useful life.
Long-Lived Assets
Long-lived assets with a finite life are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would
necessitate an impairment assessment include a significant decline in the observable market value of an asset, a
significant change in the extent or manner in which an asset is used, or any other significant adverse change that
would indicate that the carrying amount of an asset or group of assets may not be recoverable.
For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying
amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the
impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets
are considered held for sale when certain criteria are met, including when management has committed to a plan to
sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of
the reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell. At June 30,
2015, we had a building with a carrying value of $1,913 that met the asset held for sale criteria and as such we
have classified the asset in other current assets in the consolidated balance sheet. We did not have any assets held
for sale as of June 30, 2014.
No material impairment charges were recorded for the years ended June 30, 2015, 2014 or 2013.
Business Combinations
We recognize the assets acquired and liabilities assumed in business combinations on the basis of their fair
values at the date of acquisition. We assess the fair value of assets, including intangible assets, using a variety of
methods and each asset is measured at fair value from the perspective of a market participant. The method used to
estimate the fair values of intangible assets incorporates significant assumptions regarding the estimates a market
participant would make in order to evaluate an asset, including a market participant’s use of the asset and the
appropriate discount rates for a market participant. Assets recorded from the perspective of a market participant
that are determined to not have economic use for us are expensed immediately. Any excess purchase price over
the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and
restructuring costs associated with a business combination are expensed as incurred.
The consideration for our acquisitions often includes future payments that are contingent upon the
occurrence of a particular event. For acquisitions that qualify as business combinations, we record an obligation for
such contingent payments at fair value on the acquisition date. We estimate the fair value of contingent
consideration obligations through valuation models that incorporate probability adjusted assumptions related to the
achievement of the milestones and thus likelihood of making related payments. We revalue these contingent
consideration obligations each reporting period. Changes in the fair value of our contingent consideration
obligations are recognized within general and administrative expense in our consolidated statements of operations.
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Goodwill
The evaluation of goodwill for impairment is performed at a level referred to as a reporting unit. A reporting
unit is either the “operating segment level” or one level below, which is referred to as a “component.” The level at
which the impairment test is performed requires an assessment as to whether the operations below the operating
segment should be aggregated as one reporting unit due to their similarity or reviewed individually. Goodwill is
evaluated for impairment on an annual basis during the fiscal third quarter or more frequently when an event occurs
or circumstances change that indicate that the carrying value may not be recoverable. Goodwill is considered to be
impaired when the carrying amount of a reporting unit exceeds its estimated fair value.
We have the option to first assess qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying value. If the results of this analysis indicate that the fair value of
a reporting unit is less than its carrying value, the quantitative impairment test is required; otherwise, no further
assessment is necessary. To perform the quantitative approach, we estimate the fair value of our reporting units
using a discounted cash flow methodology. If the carrying value of the net assets assigned to the reporting unit
exceeds the fair value of the reporting unit, then a second step of the impairment test is performed in order to
determine the implied fair value of our reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill
exceeds its implied fair value, then we would record an impairment loss equal to the difference.
For our annual impairment test as of January 1, 2015, we evaluated each of our five reporting units with
goodwill individually. We considered the timing of our most recent fair value assessment and associated headroom,
the actual operating results as compared to the cash flow forecasts used in those fair value assessments, the
current long-term forecasts for each reporting unit, and the general market and economic environment of each
reporting unit. Our qualitative assessment for fiscal 2015 determined that there was no indication that the carrying
value of any of our reporting units exceeded its fair value. There have been no indications of impairment that would
require an updated analysis as of June 30, 2015.
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Debt Issuance Costs
Expenses associated with the issuance of debt instruments are capitalized and are amortized over the
terms of the respective financing arrangement using the effective interest method, or on a straight-line basis
through the maturity date for our revolving credit facility. During the years ended June 30, 2015 and 2014, we
capitalized debt issuance costs related to our senior secured credit facility and senior unsecured notes of $6,229
and $1,319, respectively. Amortization and write-off of these costs is included in interest expense, net in the
consolidated statements of operations and amounted to $1,272, $765 and $556, for the years ended June 30,
2015, 2014 and 2013, respectively. Unamortized debt issuance costs were $8,447 and $3,490 as of June 30, 2015
and 2014, respectively. When we make changes to our financing arrangements, we re-evaluate the capitalization of
these costs which could result in the immediate recognition of any unamortized debt issuance costs in our
statement of operations.
Investments in Equity Interests
We record our share of the results of investments in equity interests and any related amortization, within
loss in equity interests on the consolidated statements of operations. We review our investments for other-than-
temporary impairment whenever events or changes in business circumstances indicate that the carrying value of
the investment may not be fully recoverable. Investments identified as having an indication of impairment are
subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires
estimating the fair value of the investment, which involves considering factors such as comparable valuations of
public companies similar to the entity in which we have an equity investment, current economic and market
conditions, the operating performance of the entities including current earnings trends and forecasted cash flows,
and other entity and industry specific information.
Derivative Financial Instruments
We record all derivatives on the consolidated balance sheet at fair value. We apply hedge accounting to
arrangements that qualify and are designated for hedge accounting treatment, which includes cash flow and net
investment hedges. Hedge accounting is discontinued prospectively if the hedging relationship ceases to be effective
or the hedging or hedged items cease to exist as a result of maturity, sale, termination or cancellation.
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Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows,
or other types of forecasted transactions, are considered cash flow hedges which could include interest rate swap
contracts and forward currency contracts. In a cash flow hedging relationship, the effective portion of the change in
the fair value of the hedging derivative is initially recorded in accumulated other comprehensive (loss) income, while
any ineffective portion is recognized directly in earnings, as a component of other income (expense). The portion of
gain or loss on the derivative instrument previously recorded in accumulated other comprehensive (loss) income
remains in accumulated other comprehensive (loss) income until the forecasted transaction is recognized in earnings.
Derivatives designated and qualifying as hedges of currency exposure of a net investment in a foreign operation,
are considered net investment hedges which could include cross-currency swap contracts. In hedging the currency
exposure of a net investment in a foreign operation, the effective portion of gains and losses on the hedging instruments
is recognized in accumulated other comprehensive (loss) income as part of currency translation adjustment, while any
ineffective portion is recognized directly in earnings, as a component of other income (expense). The portion of gain
or loss on the derivative instrument previously recorded in accumulated other comprehensive (loss) income remains
in accumulated other comprehensive (loss) income until we reduce our investment in the hedged foreign operation
through a sale or substantial liquidation.
We also enter into derivative contracts that are intended to economically hedge certain of our risks, even
though we may not elect to apply hedge accounting or the instrument may not qualify for hedge accounting. When
hedge accounting is not applied, the changes in the fair value of the derivatives are recorded directly in earnings as
a component of other income (expense), net.
In accordance with the fair value measurement guidance, our accounting policy is to measure the credit risk
of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty
portfolio. We execute our derivative instruments with financial institutions that we judge to be credit-worthy, defined
as institutions that hold an investment grade credit rating.
Restructuring
Restructuring costs are recorded in connection with initiatives designed to improve efficiency or enhance
competitiveness. Restructuring initiatives require us to make estimates in several areas, including expenses for
severance and other employee separation costs and our ability to generate sublease income to enable us to
terminate lease obligations at the estimated amounts. One-time termination benefits are expensed at the date we
notify the employee, unless the employee must provide future service beyond the statutory minimum retention
period, in which case the benefits are expensed ratably over the future service period. Liabilities for costs
associated with a facility exit or disposal activity are recognized when the liability is incurred, as opposed to when
management commits to an exit plan, and are measured at fair value. Restructuring costs are included as a
component of each related operating expense within our consolidated statement of operations. We recognized
$3,202 and $5,980 in restructuring related expenses for the years ended June 30, 2015 and 2014, respectively.
There were no such charges during the year ended June 30, 2013.
Shareholders’ Equity
Comprehensive Income (loss)
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) is
composed of net income, unrealized gains and losses on marketable securities and derivatives, unrealized loss on
pension benefit obligation, and cumulative foreign currency translation adjustments, which are included in the
accompanying consolidated statements of comprehensive income.
Treasury Shares
Treasury shares are accounted for using the cost method and are included as a component of
shareholders' equity. We reissue treasury shares as part of our share-based compensation programs, and upon
issuance we determine the cost using the average cost method. Effective January 28, 2013, 5,869,662 of our
ordinary shares issued and held in our treasury account were canceled and have become authorized but unissued
ordinary shares, as authorized by our shareholders on November 8, 2012. These canceled shares represent the
remaining balance as of November 8, 2012 of the ordinary shares that were held in treasury at the date of the
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redomiciliation of our publicly traded parent company from Bermuda to the Netherlands in August 2009. The
cancellation of the treasury shares resulted in a reduction of additional paid in capital and retained earnings for the
year ended June 30, 2013.
Revenue Recognition
We generate revenue primarily from the sale and shipping of customized manufactured products, as well
as providing digital services, website design and hosting, email marketing services, order referral fees and other
third party offerings. We recognize revenue arising from sales of products and services when we have persuasive
evidence of an arrangement, the product has been shipped or service rendered with no significant post-delivery
obligations on our part, the net sales price is fixed or determinable and collectability is reasonably assured. For
subscription services we recognize revenue for the fees charged to customers ratably over the term of the service
arrangement. Revenue is recognized net of discounts we offer to our customers as part of advertising campaigns.
Revenue from sales of prepaid orders on our websites are deferred until shipment of fulfilled orders or until the
prepaid service has been rendered.
For arrangements with multiple deliverables, we allocate revenue to each deliverable if the delivered item(s)
has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative
to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially
within our control. The stand-alone selling price for a deliverable is determined using a hierarchy of (1) Company
specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price. We
allocate total arrangement fee to each of the deliverables based on their relative stand-alone selling prices.
Shipping, handling and processing costs billed to customers are included in revenue and the related costs
are included in cost of revenue at the time of shipment or rendering of service. Sales and purchases in jurisdictions
which are subject to indirect taxes, such as value added tax (“VAT”), are recorded net of tax collected and paid as
we act as an agent for the government.
For promotions through discount voucher websites, we recognize revenue on a gross basis, as we are the
primary obligor, when redeemed items are shipped. As the vouchers do not expire, any unredeemed vouchers are
recorded as deferred revenue. We recognize revenue on the portion of unredeemed vouchers when the likelihood
of redemption becomes remote (referred to as "breakage") and we determine there is no legal obligation to remit
the value of the unredeemed coupons to government agencies. We estimate the breakage rate based upon the
pattern of historical redemptions. Prior to the fourth quarter of fiscal 2015, we did not have sufficient historical data
to reasonably estimate breakage and, therefore, did not recognize any breakage revenue. During the fourth quarter
of fiscal 2015, we concluded that we have now accumulated sufficient historical data from a large pool of
homogeneous transactions to allow us to reasonably and objectively determine an estimated pattern of historical
redemptions in accordance with our accounting policy. Accordingly, we recognized $3,997 of breakage revenue
during the quarter as a result of this change in estimate and our basic and diluted earnings per share for fiscal 2015
increased by $0.12. We will apply this approach prospectively for future unredeemed voucher activity.
A reserve for sales returns or replacements and allowances is recorded based on historical experience or
specific identification of an event necessitating a reserve.
Advertising Expense
Advertising costs are expensed as incurred and included in marketing and selling expense. Advertising
expense for the years ended June 30, 2015, 2014 and 2013 was $286,132, $267,655 and $287,167, respectively,
which consisted of external costs related to customer acquisition and retention marketing campaigns.
Research and Development Expense
Research and development costs are expensed as incurred and included in technology and development
expense. Research and development expense for the years ended June 30, 2015, 2014 and 2013 was $30,849,
$26,423 and $24,690, respectively, which consisted of costs related to enhancing our manufacturing engineering
and technology capabilities.
61
Income Taxes
As part of the process of preparing our consolidated financial statements, we estimate our income taxes in
each of the jurisdictions in which we operate. This process involves estimating our current tax expense and
deferred tax expense based on assessing temporary and permanent differences resulting from differing treatment
of items for tax and financial reporting purposes. We recognize deferred tax assets and liabilities for the temporary
differences using the enacted tax rates and laws that will be in effect when we expect temporary differences to
reverse. We assess the ability to realize our deferred tax assets based upon the weight of available evidence both
positive and negative. To the extent we believe that it is more likely than not that some portion or all of the deferred
tax assets will not be realized, we establish a valuation allowance. In the event that actual results differ from our
estimates or we adjust our estimates in the future, we may need to increase or decrease income tax expense,
which could have a material impact on our financial position and results of operations.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax
position. The tax benefits recognized in our financial statements from such positions are measured as the largest
benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The unrecognized tax
benefits will reduce our effective tax rate if recognized. Interest and, if applicable, penalties related to unrecognized
tax benefits are recorded in the provision for income taxes.
Foreign Currency Translation
Our non-U.S. dollar functional currency subsidiaries translate their assets and liabilities denominated in
their functional currency to U.S. dollars at current rates of exchange in effect at the balance sheet date, and
revenues and expenses are translated at average rates prevailing throughout the period. The resulting gains and
losses from translation are included as a component of accumulated other comprehensive (loss) income.
Transaction gains and losses and remeasurement of assets and liabilities denominated in currencies other than an
entity’s functional currency are included in other income (expense), net in our consolidated statements of
operations.
Other Income (expense), net
The following table summarizes the components of other income (expense), net:
Year Ended June 30,
2015
2014
2013
Gains (losses) on derivative instruments (1) . . . . . . . . . . . . . . . . . $
9,317 $
(7,473) $
Currency related gains (losses), net (2) . . . . . . . . . . . . . . . . . . . .
Loss on disposal of Namex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . $
_____________________
(1) Includes both realized and unrealized gains (losses) on derivative instruments.
10,245
—
572
(1,764)
(12,681)
288
20,134 $
(21,630) $
29
(92)
—
—
(63)
(2) We have significant non-functional currency intercompany financing relationships subject to currency exchange rate volatility primarily due to
changes in our corporate entity operating structure, effective October 1, 2013, which required us to alter our intercompany transactional and
financing activities. The net currency related gains for the year ended June 30, 2015 are partially driven by this intercompany activity.
Net Income Per Share Attributable to Cimpress N.V.
Basic net income per share attributable to Cimpress N.V. is computed by dividing net income attributable to
Cimpress N.V. by the weighted-average number of ordinary shares outstanding for the respective period. Diluted
net income per share attributable to Cimpress N.V. gives effect to all potentially dilutive securities, including share
options, restricted share units (“RSUs”) and restricted share awards ("RSAs"), if the effect of the securities is
dilutive using the treasury stock method. Awards with performance or market conditions are included using the
treasury stock method only if the conditions would have been met as of the end of the reporting period and their
effect is dilutive.
62
The following table sets forth the reconciliation of the weighted-average number of ordinary shares:
Weighted average shares outstanding, basic . . . . . . . . . . . . . . . . .
Weighted average shares issuable upon exercise/vesting of
outstanding share options/RSUs/RSAs . . . . . . . . . . . . . . . . . . . . .
Shares used in computing diluted net income per share
attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average anti-dilutive shares excluded from diluted net
income per share attributable to Cimpress N.V. . . . . . . . . . . . . . . .
Compensation Expense
Share-Based Compensation
Year Ended June 30,
2015
2014
2013
32,644,870
32,873,234
33,209,172
1,171,628
1,366,675
1,262,832
33,816,498
34,239,909
34,472,004
289,356
953,100
1,740,542
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Compensation expense for all share-based awards expected to vest is measured at fair value on the date
of grant and recognized over the requisite service period. The fair value of share options is determined using the
Black-Scholes valuation model, or lattice model for share options with a market condition or subsidiary share
options, and the fair value of RSUs and RSAs is determined based on the number of shares granted and the
quoted price of our ordinary shares on the date of the grant. Such value is recognized ratably as expense over the
requisite service period, or on an accelerated method for awards with a performance or market condition, net of
estimated forfeitures. For awards that are ultimately settable in cash, we treat as liability awards and mark the
award to market each reporting period recognizing any gain or loss in our statements of operations. The estimation
of share awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates
differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates
are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee
class, and historical experience. For awards with a performance condition vesting feature, compensation cost is
recorded if it is probable that the performance condition will be achieved.
Sabbatical Leave
Compensation expense associated with a sabbatical leave, or other similar benefit arrangements, is
accrued over the requisite service period during which an employee earns the benefit, net of estimated forfeitures,
and is included in other liabilities on our consolidated balance sheets.
Concentrations of Credit Risk
We monitor the creditworthiness of our customers to which we grant credit terms in the normal course of
business. We had one channel partner that represented 13% and 24% of our total accounts receivable as of
June 30, 2015 and 2014, respectively. We do not have any customers that accounted for greater than 10% of our
revenue for the years ended June 30, 2015, 2014 or 2013.
We maintain an allowance for doubtful accounts for potential credit losses based upon specific customer
accounts and historical trends, and such losses to date in the aggregate have not materially exceeded our
expectations.
Recently Issued or Adopted Accounting Pronouncements
In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update No.
2015-03,"Interest- Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs," (ASU 2015-03), which requires an entity to present debt issuance costs related to recognized debt liability in
the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective
for us on July 1, 2016 and early adoption is permitted. The standard requires the application on a retrospective
basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-
specific effects of the standard. We do not expect it to have a material impact on our consolidated financial
statements.
63
In February 2015, the Financial Accounting Standards Board issued Accounting Standards Update No.
2015-02,"Consolidation (Topic 810): Amendments to the Consolidation Analysis," (ASU 2015-02) which places more
emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal
investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE,
written put options on the assets of the VIE, or similar obligations. The new standard is effective for us on July 1,
2016. The standard permits early adoption and the use of a modified retrospective approach by recording a
cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. We are currently evaluating
the effect ASU 2015-02 will have on our consolidated financial statements but do not expect it to have a material
impact.
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No.
2014-09,"Revenue from Contracts with Customers," (ASU 2014-09) which requires an entity to recognize the
amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.
This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.
The FASB has elected to defer the effective date to fiscal years beginning after December 15, 2017, which would
result in an effective date for us of July 1, 2018, with early application permitted to one year earlier. The standard
permits the use of either the retrospective or cumulative catch-up transition method. We are currently evaluating the
adoption method and effect that ASU 2014-09 will have on our consolidated financial statements but do not expect
it to have a material impact.
3. Fair Value Measurements
The following table summarizes our investments in available-for-sale securities:
Available-for-sale securities
Plaza Create Co. Ltd. common shares (1) . . . . . . . . . . . . . . . . . . . . . $
Total investments in available-for-sale securities . . . . . . . . . . . . . . . . $
3,939 $
3,939 $
2,971 $
2,971 $
6,910
6,910
Amortized Cost
Basis
June 30, 2015
Unrealized gain
Estimated Fair
Value
Amortized Cost
Basis
June 30, 2014
Unrealized gain
Estimated Fair
Value
Available-for-sale securities
Plaza Create Co. Ltd. common shares (1) . . . . . . . . . . . . . . . . . . . . . $
Total investments in available-for-sale securities . . . . . . . . . . . . . . . . $
4,611 $
4,611 $
9,246 $
9,246 $
13,857
13,857
________________________
(1) On February 28, 2014, we purchased shares in our publicly traded Japanese joint venture partner. Refer to Note 15 for further discussion of
the separate joint business arrangement.
We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement
disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the
valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
•
•
•
Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities
in active markets.
Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active
markets, quoted prices for identical or similar assets in markets that are not active and inputs that are
observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
instrument.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input
that is significant to the fair value measurement.
64
The following tables summarize our assets and liabilities that are measured at fair value on a recurring
basis and are categorized using the fair value hierarchy:
Assets
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . $
Currency forward contracts . . . . . . . . . . . . . . . . . . . .
Total assets recorded at fair value . . . . . . . . . . . . . . . $
Liabilities
Interest rate swap contracts . . . . . . . . . . . . . . . . . . . . $
Cross-currency swap contracts . . . . . . . . . . . . . . . . .
Currency forward contracts . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . .
Total liabilities recorded at fair value . . . . . . . . . . . . . $
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June 30, 2015
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
6,910 $
1,902
8,812 $
6,910 $
—
6,910 $
— $
1,902
1,902 $
(1,150) $
— $
(1,150) $
(8,433)
(407)
(7,833)
—
—
—
(8,433)
(407)
—
(17,823) $
— $
(9,990) $
—
—
—
—
—
—
(7,833)
(7,833)
June 30, 2014
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . $
Currency forward contracts . . . . . . . . . . . . . . . . . . . .
Total assets recorded at fair value . . . . . . . . . . . . . . . $
13,857 $
382
14,239 $
13,857 $
—
13,857 $
— $
382
382 $
Liabilities
Interest rate swap contracts . . . . . . . . . . . . . . . . . . . . $
Currency forward contracts . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . .
Total liabilities recorded at fair value . . . . . . . . . . . . . $
(745) $
(806)
(16,072)
(17,623) $
— $
(745) $
—
—
(806)
—
— $
(1,551) $
—
—
—
—
—
(16,072)
(16,072)
During the years ended June 30, 2015 and 2014, there were no significant transfers in or out of Level 1,
Level 2 and Level 3 classifications.
The valuations of the derivatives intended to mitigate our interest rate and currency risk are determined
using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of
each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate
volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the
period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own
nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In
adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the
impact of netting and any applicable credit enhancements.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2
of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs,
such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the
respective counterparties' nonperformance risk in the fair value measurement. However, as of June 30, 2015, we
have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our
derivative positions and have determined that the credit valuation adjustments are not significant to the overall
65
valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are
classified in Level 2 in the fair value hierarchy.
During the fiscal year ended June 30, 2015, we amended the terms of our contingent consideration
arrangement related to our fiscal 2014 acquisition of Printdeal (formerly known as People & Print Group). The
original terms provided for contingent consideration payable based upon the achievement of an initial calendar year
2014 earnings before interest, taxes, depreciation and amortization (EBITDA) margin threshold but ultimately
payable based on revenue and EBITDA performance for calendar year 2015. We amended the terms to pay a fixed
amount of €15,000, of which €8,000 was paid in March 2015 ($8,270 based on the exchange rate as of the date of
payment) and the remaining €7,000 ($7,833 based on the exchange rate as of June 30, 2015) is payable during the
fourth quarter of fiscal 2016.
Our fiscal 2014 acquisition of Pixartprinting provided for contingent consideration payable based on the
achievement of revenue and EBITDA performance metrics for calendar year 2014. Based on Pixartprinting's 2014
results, we paid the maximum amount achievable of €9,600 ($10,890 based on the exchange rate as of the date of
payment) during the fourth quarter of fiscal 2015.
The contingent consideration obligations are measured at fair value and are based on significant inputs not
observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of
contingent consideration uses assumptions and estimates to forecast a range of outcomes and probabilities for the
contingent consideration. We assess these assumptions and estimates on a quarterly basis as additional data
impacting the assumptions is obtained. Any changes in the fair value of contingent consideration related to updated
assumptions and estimates will be recognized within general and administrative expenses in the consolidated
statements of operations during the period in which the change occurs. As the Printdeal contingent liability is no
longer variable, we do not expect any additional adjustments to fair value prior to payment.
The following table represents the changes in fair value of Level 3 contingent consideration:
Total contingent
consideration
Balance at June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fair value at acquisition date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value adjustment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at June 30, 2014 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fair value adjustment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at June 30, 2015 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_____________________
(1) Of the total contingent consideration outstanding as of June 30, 2015 and 2014, $7,833 and $6,276 was classified as a current liability,
respectively. As of June 30, 2014, $9,796 was classified as a long-term liability.
14,006
2,192
(126)
16,072
14,890
(19,160)
(3,969)
7,833
—
As of June 30, 2015 and 2014, the carrying amounts of our cash and cash equivalents, accounts
receivables, accounts payable, and other current liabilities approximated their estimated fair values. As of June 30,
2015 and 2014 the carrying value of our debt was $522,543 and $448,059, respectively, and the fair value was
$539,752 and $460,098, respectively. Our debt at June 30, 2015 includes a variable rate debt instrument indexed to
LIBOR that resets periodically and a fixed rate debt instruments. The estimated fair value of our debt was
determined using available market information based on recent trades or activity of debt instruments with
substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy. The
estimated fair value of assets and liabilities disclosed above may not be representative of actual values that could
have been or will be realized in the future.
66
4. Derivative Financial Instruments
Hedges of Interest Rate Risk
We enter into interest rate swap contracts to manage variability in the amount of our known or expected cash
payments related to our debt. Our objective in using interest rate derivatives is to add stability to interest expense and
to manage our exposure to interest rate movements. We designate our interest rate swaps as cash flow hedges.
Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in
exchange for us making fixed-rate payments over the life of the derivative agreements without exchange of the
underlying notional amount. Realized gains or losses from interest rate swaps are recorded in earnings, as a component
of interest expense, net.
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During the year ended June 30, 2015, two interest rate derivative instruments were de-designated as they
became ineffective and one was subsequently re-designated during the period. As of June 30, 2015, the amount of
unrecognized loss included in accumulated other comprehensive (loss) income for de-designated cash flow hedge
instruments is $123. During the year ended June 30, 2014 we did not hold any interest rate derivative instruments
that were determined to be ineffective.
Amounts reported in accumulated other comprehensive (loss) income related to interest rate swap contracts
will be reclassified to interest expense as interest payments are accrued or made on our variable-rate debt. As of
June 30, 2015, we estimate that $816 will be reclassified from accumulated other comprehensive (loss) income to
interest income during the twelve months ending June 30, 2016. As of June 30, 2015, we had eight outstanding interest
rate swap contracts indexed to one-month LIBOR. These instruments include seven interest rate swap contracts that
were designated and one interest rate swap contract that was de-designated as a cash flow hedge of interest rate risk
and have varying start dates and maturity dates from July 2015 through June 2019. Since the start date of certain
contracts has not yet commenced and contracts have been de-designated, the notional amount of our outstanding
contracts is in excess of the variable-rate debt being hedged as of the balance sheet date.
Interest rate swap contracts outstanding:
Notional Amounts
Contracts accruing interest as of June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Contracts with a future start date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
240,000
65,000
305,000
Hedges of Currency Risk
Cross-Currency Swap Contracts
From time to time, we execute cross-currency swap contracts in order to mitigate our currency exposure of
net investments in subsidiaries that have reporting currencies other than U.S. dollar. Cross-currency swaps
designated as net investment hedges involve an initial receipt of the notional amount in the hedge currency in
exchange for our reporting currency based on a contracted exchange rate. Subsequently we receive fixed rate
payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the
derivative contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the
notional amount in the hedged currency.
During the year ended June 30, 2015, we entered into two cross-currency swap contracts that were
designated for hedge accounting and were used to hedge the risk of changes in the U.S. Dollar equivalent value of
a portion of our net investment in a consolidated Euro functional subsidiary. As of June 30, 2015, we had two
outstanding cross-currency swap contracts with a total notional amount of $122,969, both maturing during April
2019. During the year ended June 30, 2015, we recorded unrealized losses, net of tax in accumulated other
comprehensive (loss) income as a component of cumulative translation adjustment in the amount $7,779.
Currency Forward Contracts
We execute currency forward contracts in order to mitigate our exposure to fluctuations in various
currencies against our reporting currency, the U.S. dollar. We do not elect hedge accounting for our current
currency forward contract activity; however, we may elect to apply hedge accounting in future scenarios. The
change in the fair value of currency forward contracts is recognized directly in earnings, as a component of other
67
income (expense), net. During the years ended June 30, 2015 and 2014, we have experienced volatility within other
income (expense), net in our consolidated statements of operations from unrealized gains and losses on the mark-
to-market of outstanding currency forward contracts. We expect this volatility to continue in future periods for
contracts for which we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at
non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may
experience increased, not decreased, volatility in our GAAP results as a result of our currency hedging program.
As of June 30, 2015, we had the following outstanding currency forward contracts that were not designated
for hedge accounting and were used to hedge fluctuations in the U.S. Dollar value of forecasted transactions
denominated in Australian Dollar, Canadian Dollar, Danish Krone, Euro, Great British Pound, Indian Rupee, New
Zealand Dollar, Norwegian Krone, Swedish Krona, and Swiss Franc:
Notional Amount
Effective Date
Maturity Date
Number of Instruments
Index
$285,770
September 2014 through
June 2015
Various dates through
December 2016
436
Various
Financial Instrument Presentation
The table below presents the fair value of our derivative financial instruments as well as their classification
on the balance sheet as of June 30, 2015 and 2014:
Asset Derivatives
June 30, 2015
Derivatives designated as
hedging instruments
Balance
Sheet line
item
Gross
amounts of
recognized
assets
Gross amount
offset in
consolidated
balance sheet
Net amount
Other
non-
current
assets
Other
non-
current
assets
Other
non-
current
assets
Other
current
assets /
other
assets
Interest rate swaps . . . .
Cross-currency swaps .
Total derivatives
designated as hedging
instruments . . . . . . . . . .
Derivatives not
designated as hedging
instruments
Interest rate swaps . . . .
Currency forward
contracts . . . . . . . . . . . .
Total derivatives not
designated as hedging
instruments . . . . . . . . . .
$
— $
— $
—
—
—
$
— $
— $
—
—
$
— $
— $
—
3,256
(1,354)
1,902
Liability Derivatives
Gross
amounts of
recognized
liabilities
Gross amount
offset in
consolidated
balance sheet
Net amount
$
(1,087) $
— $
(1,087)
(8,433)
—
(8,433)
$
(9,520) $
— $
(9,520)
$
(63) $
— $
(63)
(1,792)
1,385
(407)
Balance
Sheet line
item
Other
current
liabilities /
other
liabilities
Other
liabilities
Other
liabilities
Other
current
liabilities /
other
liabilities
$
3,256
$
(1,354) $
1,902
$
(1,855) $
1,385
$
(470)
68
Asset Derivatives
June 30, 2014
Derivatives designated as
hedging instruments
Balance
Sheet line
item
Gross
amounts of
recognized
assets
Gross amount
offset in
consolidated
balance sheet
Net amount
Other
non-
current
assets
Other
current
assets
Interest rate swaps . . . .
Total derivatives
designated as hedging
instruments . . . . . . . . . .
Derivatives not
designated as hedging
instruments
Currency forward
contracts . . . . . . . . . . . .
Total derivatives not
designated as hedging
instruments . . . . . . . . . .
$
$
$
$
Balance
Sheet line
item
Other
current
liabilities /
other
liabilities
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Liability Derivatives
Gross
amounts of
recognized
liabilities
Gross amount
offset in
consolidated
balance sheet
Net amount
$
$
$
$
(771) $
26
$
(745)
(771) $
26
$
(745)
(1,058) $
252
$
(806)
(1,058) $
252
$
(806)
— $
— $
— $
— $
—
—
410
$
(28) $
382
Other
current
liabilities
410
$
(28) $
382
The following table presents the effect of our derivative financial instruments designated as hedging
instruments and their classification within comprehensive income (loss) for the years ended June 30, 2015, 2014
and 2013:
Derivatives in Hedging Relationships
In thousands
Amount of Gain (Loss) Recognized in Comprehensive
(Loss) Income on Derivatives (Effective Portion)
Year Ended June 30,
2015
2014
2013
Currency contracts that hedge revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency contracts that hedge cost of revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency contracts that hedge technology and development expense. . . . . . . . . . . . . . . . .
Currency contracts that hedge general and administrative expense. . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cross-currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
(1,417)
(7,779)
(107)
59
70
12
(1,319)
—
$
(9,196) $
(1,285) $
280
(263)
80
(1)
387
—
483
The following table presents reclassifications out of accumulated other comprehensive (loss) income for the
years ended June 30, 2015, 2014 and 2013:
Details about Accumulated Other
Comprehensive (Loss) Income Components
Amount Reclassified from Accumulated Other
Comprehensive (Loss) Income to Net Income
Gain/(Loss)
Affected line item in the
Statement of Operations
In thousands
2015
2014
2013
Currency contracts that hedge revenue. . . . . . . . $
— $
(120) $
293
Revenue
Year Ended June 30,
Currency contracts that hedge cost of revenue . .
Currency contracts that hedge technology and
development expense . . . . . . . . . . . . . . . . . . . . .
Currency contracts that hedge general and
administrative expense . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . .
Total before income tax
Income tax
Total $
—
—
—
(1,087)
(1,087)
272
(815) $
(112)
122
11
(372)
(471)
75
(396) $
(92)
27
1
189
418
(21)
397
Cost of revenue
Technology and development expense
General and administrative expense
Interest expense, net
Income (loss) before income taxes and
loss in equity interests
Income tax provision
69
The following table presents the adjustment to fair value recorded within the consolidated statements of
operations for derivative instruments for which we did not elect hedge accounting, as well as the effect of our de-
designated derivative financial instruments that no longer qualify as hedging instruments in the period:
Derivatives not classified as hedging instruments
Amount of Gain (Loss) Recognized in Income
Location of Gain (Loss) Recognized in
Income (Ineffective Portion)
In thousands
2015
2014
2013
Currency contracts. . . . . . . . . . . . . . . . . . . . . . . . $
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . .
$
9,370 $
(53)
9,317 $
(7,473) $
—
(7,473) $
29
—
29
Year Ended June 30,
Other income (expense), net
Other income (expense), net
5. Accumulated Other Comprehensive (Loss) Income
The following table presents a roll forward of amounts recognized in accumulated other comprehensive
(loss) income by component, net of tax of $195 and $218, for the years ended June 30, 2015 and June 30, 2014,
respectively:
Balance as of June 30, 2013 . . . . . . . . . . . . . . . . $
86
$
— $
— $
(11,642) $
(11,556)
Gains (losses)
on cash flow
hedges
Gains (losses)
on available for
sale securities
Losses on
pension benefit
obligation
Translation
adjustments, net
of hedges (1)
Total
Other comprehensive (loss) income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
comprehensive (loss) income to net income . . .
Net current period other comprehensive (loss)
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2014 . . . . . . . . . . . . . . . .
Other comprehensive (loss) income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
comprehensive (loss) income to net income . . .
Net current period other comprehensive (loss)
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2015 . . . . . . . . . . . . . . . . $
________________________
(1,285)
9,246
(2,724)
8,036
13,273
396
(889)
(803)
—
9,246
9,246
—
—
396
(2,724)
(2,724)
8,036
(3,606)
13,669
2,113
(1,417)
(6,275)
(388)
(93,757)
(101,837)
815
—
—
—
815
(602)
(6,275)
(388)
(93,757)
(101,022)
(1,405) $
2,971
$
(3,112) $
(97,363) $
(98,909)
(1) Translation adjustment is inclusive of the effects of our net investment hedges, of which, unrealized losses, net of tax of $7,779 have been
included in other comprehensive (loss) income for the year ended June 30, 2015. There was no effect for the year ended June 30, 2014.
6. Waltham and Lexington Lease Arrangements
In July 2013, we executed a lease agreement to move our Lexington, Massachusetts, USA operations to a
yet to be constructed facility in Waltham, Massachusetts, USA. The Waltham lease will commence upon completion
of the building, scheduled for the first quarter of fiscal 2016, and will extend eleven years from the commencement
date. We expect to pay approximately $131,769 in cash ratably over the initial 11-year term of the lease, starting in
September 2015.
Concurrent with the Waltham lease negotiations, we amended our current Lexington lease, as both leases
are held with the same landlord. The amendment to the Lexington lease contained a contingent feature to shorten
the current term of the lease to coincide with the rent commencement date of the Waltham lease, and a second
contingent feature to adjust the remaining annual rental amounts. Both of the arrangements were contingent upon
the lessor obtaining certain building permits for the Waltham lease. During the quarter ended March 31, 2014, the
lessor obtained all of the requisite building permits for the Waltham building construction.
For accounting purposes, we are deemed to be the owner of the Waltham building during the construction
period and, accordingly, as of June 30, 2015 and 2014 we have recorded $104,315 and $18,117 of construction
project costs incurred by the landlord as an asset with a corresponding financing obligation, respectively. The asset
is included as construction in progress in property, plant and equipment, net in the consolidated balance sheet. We
70
do not believe that the Waltham lease will meet the criteria for "sale-leaseback" treatment. We will finalize our
assessment once the construction is completed in the first quarter of fiscal 2016 and accordingly depreciate the
asset and incur interest expense related to the financing obligation recorded on our consolidated balance sheet.
Although we will not begin making cash lease payments until the lease commencement date, a portion of the
Waltham lease obligation attributable to the land is treated for accounting purposes as an operating lease that
commenced during the second quarter of fiscal 2014. We bifurcated our future lease payments pursuant to the
lease into (i) a portion that is allocated to the building and (ii) a portion that is allocated to the land on which the
building is being constructed, which will be recorded as rental expense during the construction period. We
recognized non-cash rent expense of $1,197 and $875 in our consolidated statements of operations for the land
operating lease during the years ended June 30, 2015 and 2014, respectively.
F
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0
-
K
7. Property, Plant and Equipment, Net
Property, plant and equipment, net consists of the following:
Estimated useful lives
2015
2014
June 30,
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years
Building and building improvements . . . . . . . . . . . . . . . . . 10 - 30 years
Machinery and production equipment . . . . . . . . . . . . . . . . 4 - 10 years
Machinery and production equipment under capital lease 4 - 10 years
Computer software and equipment . . . . . . . . . . . . . . . . . . 3 - 5 years
. . . . . . . . . . . . . . 5 - 7 years
Furniture, fixtures and office equipment
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of lease term or
expected life of the asset
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation, inclusive of assets under
capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant, and equipment, net. . . . . . . . . . . . . . . . . .
$
2,146 $
2,382
162,468
251,366
27,693
125,520
22,957
36,747
138,582
767,479
144,658
229,927
13,513
112,815
21,780
28,327
59,627
613,029
(331,209)
(293,145)
436,270
31,241
319,884
32,337
$
467,511 $
352,221
Depreciation expense, inclusive of assets under capital leases, totaled $62,970, $54,060 and $50,602 for
the years ended June 30, 2015, 2014 and 2013, respectively.
8. Business Combinations
Fiscal 2015 Acquisitions
Acquisition of Exagroup SAS
On April 15, 2015, we completed our acquisition of 70% of the shares of Exagroup SAS, a French simplified
joint stock company, for a purchase price of €91,305 ($97,012 based on the exchange rate as of the date of
acquisition), plus an estimated post-closing adjustment of €4,549 ($4,832 based on the exchange rate as of the
date of acquisition) based on Exagroup's working capital and debt to be paid during the first quarter of fiscal 2016.
All shareholders of Exagroup sold the entirety of their Exagroup holdings to us at the closing, with the exception of
Nicolas Dematté and Marise Dematté (the “Remaining Shareholders”), who each retained a 15% ownership interest
in Exagroup. We utilized proceeds from our credit facility to finance the acquisition. The acquisition supports our
strategy of building a software-enabled operational platform that aggregates and optimizes the supply chain and
production of mass customized products such as signage, printing, apparel and promotional products. Exagroup
brings a large variety of high quality products and a sophisticated network of outsourcing partners that we expect,
over time, to significantly expand the breadth and depth of the selection available on our mass customization
platform.
71
Our consolidated financial statements include Exagroup from April 15, 2015, the date of acquisition.
Exagroup's revenue included in our consolidated revenues for the year ended June 30, 2015 was $18,155.
Exagroup's net income included in our consolidated net income attributable to Cimpress N.V. for the year ended
June 30, 2015 was $563, inclusive of amortization of identifiable intangible assets.
Noncontrolling Interest
At the closing, we entered into reciprocal put and call options with the Remaining Shareholders with respect
to the 30% of Exagroup shares held by the Remaining Shareholders, pursuant to which each of the Remaining
Shareholders has the right to put his or her Exagroup shares to us for a period of 30 days beginning on April 15,
2019. If one or both of the Remaining Shareholders does not exercise his or her put option, then we have the right
to exercise our call option on such Remaining Shareholder's Exagroup shares for a period of 30 days beginning on
January 10, 2020. If the put or call options are exercised, the aggregate purchase and sale price for such shares
will be €39,000. We may pay an additional €8,000 contingent payment that is dependent on Exagroup’s
achievement of certain revenue targets for calendar year 2017, as well as the continued employment of the
Remaining Shareholders. As this potential additional payment is contingent upon the Remaining Shareholders'
post-acquisition employment it will be recognized as compensation expense over the vesting period (through
December 31, 2017). We estimate the value of the potential payment as of June 30, 2015 to be $1,243, which will
be accrued over the vesting period. We have recognized an immaterial amount in general and administrative
expense for the year ended June 30, 2015.
The table below details the consideration transferred to acquire Exagroup:
Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Working capital and debt adjustment
Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,012
4,832
101,844
The excess of the purchase price paid over the fair value of Exagroup's net assets was recorded as
goodwill, which is primarily attributable to cost synergies expected from manufacturing and tax efficiency
opportunities, as well as the value of the workforce of Exagroup. Goodwill is not expected to be deductible for tax
purposes, and has been attributed to our All Other Business Units reportable segment. The fair value of the assets
acquired and liabilities assumed was:
Amount
Useful Life in Years
Weighted Average
Tangible assets acquired and liabilities assumed: . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other current assets (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and other current liabilities . . . . . . . . . . . . . . . .
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible assets:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Developed technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(1) Includes real estate assets classified as held for sale of $1,971.
18,991
14,318
18,711
(21,008)
(21,655)
(9,966)
35,434
11,900
9,669
(43,354)
88,804
101,844
n/a
n/a
n/a
n/a
n/a
n/a
7-9
10-14
3
n/a
72
Other fiscal 2015 acquisitions
FotoKnudsen AS
On July 1, 2014, we acquired 100% of the outstanding shares of FotoKnudsen AS, a Norwegian photo
product company focused primarily on the Norwegian markets. This acquisition expands our presence in the
European home and family market. At closing, we paid €14,045 ($19,224 based on the exchange rate as of the
date of acquisition) in cash, subject to certain post-acquisition escrow adjustments. We have recognized the assets
and liabilities on the basis of their fair values at the date of our acquisition, with any excess of the purchase price
paid over the fair value of the net assets recorded as goodwill. Of the total purchase price of $19,224, $11,754 was
allocated to goodwill, $9,218 to acquired intangible assets and $1,748 to net liabilities. Goodwill is not expected to
be deductible for tax purposes, and has been attributed to our All Other Business Units reportable segment. The
revenue and earnings included in our consolidated financial statements since the acquisition date are not material
for the year ended June 30, 2015.
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FL Print SAS
On April 9, 2015, we acquired 100% of the outstanding shares of FL Print SAS (which we refer to as
Easyflyer), a French web-to-print business focused primarily on large format products. At closing, we paid €4,800
($5,174 based on the exchange rate as of the date of acquisition) in cash, subject to certain post-acquisition escrow
adjustments. We have recognized the assets and liabilities on the basis of their fair values at the date of our
acquisition, with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill. Of
the total purchase price of $5,174, $3,592 was allocated to goodwill, $2,003 to acquired intangible assets and $421
to net liabilities. Goodwill is not expected to be deductible for tax purposes, and has been attributed to our All Other
Business Units reportable segment. The revenue and earnings included in our consolidated financial statements
since the acquisition date are not material for the year ended June 30, 2015.
In addition, we agreed to two additional payments based on Easyflyer's calendar year 2015 and 2018
revenue and EBITDA targets. As these additional payments are contingent upon the sellers' post-acquisition
employment, they are not included as part of the consideration but will be recognized as compensation expense
over the required employment period.
druck.at Druck-und Handelsgesellschäft mbH
On April 17, 2015, we acquired 100% of the outstanding shares of druck.at Druck-und Handelsgesellschäft
mbH (which we refer to as druck.at), a web-to-print business focused primarily on the Austrian market. This
acquisition supports our strategy to leverage a common platform across multiple brands like druck.at, which offers a
wide variety of high quality printed products. We paid €20,000 ($21,537 based on the exchange rate as of the date
of acquisition) in cash at closing, and we will pay a fixed deferred payment of €3,300 ($3,554 based on the
exchange rate as of the date of acquisition) in cash or ordinary shares of Cimpress N.V., at our option. The deferred
payment is payable in July 2017 if the seller continues to be employed by druck.at through the payable date or in
April 2019 if the sellers are no longer employed by druck.at. As the timing of the deferred payment is contingent
upon the sellers post-acquisition employment, an immaterial portion of the deferred payment is not included as part
of the acquisition consideration but will be recognized as compensation expense over the required employment
period. The fair value of the deferred payment of $2,980 was included as a component of the purchase price
utilizing a present value model and excluding the compensation component of $233.
We have recognized the assets and liabilities on the basis of their fair values at the date of the acquisition,
with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill. Of the total
purchase price of $24,517, $10,877 was allocated to goodwill, $12,491 to acquired intangible assets and $1,149 to
net assets. Goodwill is not expected to be deductible for tax purposes, and has been attributed to our All Other
Business Units reportable segment. The revenue and earnings included in our consolidated financial statements
since the acquisition date are not material for the year ended June 30, 2015.
We utilized proceeds from various debt sources to finance our fiscal 2015 acquisitions. In connection with
these acquisitions, we incurred transaction costs related to investment banking, legal, financial, and other
professional services of $2,576 and $394 which were recorded during the year ended June 30, 2015 and 2014,
respectively, in general and administrative expenses. Pro forma results of the operations have not been presented
because the effects of the fiscal 2015 acquisitions are not material to the consolidated financial statements.
73
Fiscal 2014 Acquisitions
Acquisition of Pixartprinting S.p.A.
On April 3, 2014, we acquired 97% of the outstanding corporate capital of Pixartprinting S.p.A., a joint stock
corporation incorporated under the laws of Italy, as follows;
• We acquired all of the Pixartprinting corporate capital held by Alcedo III, a close-ended investment fund,
representing 72.75% of Pixartprinting’s outstanding corporate capital.
• We acquired a portion of the Pixartprinting corporate capital held by Cap2 S.r.l., a company controlled by
Pixartprinting’s founder, representing 21.25% of Pixartprinting’s outstanding corporate capital, and Cap2
retained 3% of Pixartprinting’s outstanding corporate capital (the “Cap2 Retained Equity”).
• We acquired all of the Pixartprinting corporate capital held by Alessandro Tenderini, Pixartprinting’s Chief
Executive Officer, at closing representing 3% of Pixartprinting’s outstanding corporate capital. Mr. Tenderini
had the right to purchase 1% of the corporate capital of Pixartprinting from Cimpress (the “CEO Retained
Equity”) for an aggregate purchase price of €10 during the 10 business days after April 3, 2015, so long as
Mr. Tenderini remained a Cimpress Italy employee on that date, and Mr. Tenderini exercised this purchase
right in April 2015.
Cimpress agreed to pay an aggregate base purchase price of €127,850 ($175,896 based on the exchange
rate as of the date of acquisition) in cash, subject to working capital and other adjustments, and a sliding-scale
earn-out of up to €9,600 ($13,208 based on the exchange rate as of the date of acquisition) in cash on or after
December 31, 2014 based upon the acquired business achieving certain revenue and EBITDA targets for calendar
year 2014. The estimated fair value of the earn-out payment of $4,953 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. Based on Pixartprinting's 2014 results, we paid the maximum amount
achievable of €9,600 ($10,890 based on the exchange rate as of the date of payment) during the fourth quarter of
fiscal 2015.
Our consolidated financial statements include the accounts of Pixartprinting from April 3, 2014, the date of
acquisition. Pixartprinting’s revenue included in our consolidated revenues for the year ended June 30, 2014 was
$27,208. Pixartprinting's net income included in our consolidated net income attributable to Cimpress N.V. for the
year ended June 30, 2014 was $2,687, inclusive of amortization of identifiable intangible assets.
Noncontrolling Interest
We entered into a Put and Call Option Agreement with Cap2, with respect to the Cap2 Retained Equity.
Pursuant to the Put and Call Option Agreement, Cap2 has the right to sell to us all (but not less than all) of the Cap2
Retained Equity at the end of Pixartprinting’s fiscal years ending June 30, 2015, 2016 and 2017 for a purchase
price based on Pixartprinting’s EBITDA and net financial position (as reflected in its annual financial statements) for
the fiscal year as to which the put option is exercised. We have the right to buy from Cap2 all (but not less than all)
of the Cap2 Retained Equity at the end of Pixartprinting’s fiscal years ending June 30, 2017 and 2018 for a
purchase price based on Pixartprinting’s EBITDA and net financial position (as reflected in its annual financial
statements) for the fiscal year as to which the call option is exercised. The parties’ put and call rights are also
triggered by certain other events and are exercisable during 30-day periods following the determination of the
option purchase price for the relevant fiscal year. Due to the presence of the put arrangement, the noncontrolling
interest is presented as temporary equity in our consolidated balance sheet. Upon acquisition, we recognized the
noncontrolling interest at fair value of $5,728 and will adjust the balance for the pro rata impact of the Pixartprinting
earnings or loss, as well as adjustments to increase the balance to the redemption value, if necessary.
CEO Retained Equity
We entered into a Put and Call Option Agreement with Mr. Tenderini with respect to the CEO Retained
Equity. Because this purchase right is contingent upon Mr. Tenderini's post-acquisition employment, it is not
included as part of the consideration but will be recognized as share-based compensation over the vesting period.
The award is considered a liability award and will be marked to fair value each reporting period. In order to estimate
the fair value of the award we utilize a lattice model with a Monte Carlo simulation. Pursuant to the Put and Call
74
Option Agreement, Mr. Tenderini has the right to sell to us all (but not less than all) of the CEO Retained Equity at
the end of Pixartprinting’s fiscal years ending June 30, 2015, 2016 and 2017 for a purchase price based on
Pixartprinting’s EBITDA and net financial position (as reflected in its annual financial statements) for the fiscal year
as to which the put option is exercised. We have the right to buy from Mr. Tenderini all (but not less than all) of the
CEO Retained Equity at the end of Pixartprinting’s fiscal years ending June 30, 2017 and 2018 for a purchase price
based on Pixartprinting’s EBITDA and net financial position (as reflected in its annual financial statements) for the
fiscal year as to which the call option is exercised. The parties’ put and call rights are also triggered by certain other
events and are exercisable during 30-day periods following the determination of the option purchase price for the
relevant fiscal year. The total fair value of the award as of June 30, 2015 is $2,616 and we have recognized $2,177
and $439 in general and administrative expense for the year ended June 30, 2015 and 2014, respectively.
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K
The table below details the consideration transferred to acquire Pixartprinting:
Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Shareholder loans assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
175,896
20,227
4,953
201,076
The excess of the purchase price paid over the fair value of Pixartprinting’s net assets was recorded as
goodwill, which is primarily attributable to expected synergies and the value of the workforce of Pixartprinting.
Goodwill is not expected to be deductible for tax purposes, and has been attributed to our All Other Business Units
reportable segment. The fair value of the assets acquired and liabilities assumed was:
Amount
Useful Life in Years
Weighted Average
Tangible assets acquired and liabilities assumed:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and other current liabilities . . . . . . . . . . . . . . . . .
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible assets:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Developed technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6,913
5,601
20,582
(17,681)
(20,640)
(9,943)
42,375
16,372
8,943
(5,728)
154,282
201,076
n/a
n/a
n/a
n/a
n/a
n/a
6
10
3
n/a
Acquisition of Printdeal B.V. (formerly known as People & Print Group B.V.)
On April 1, 2014, we acquired 100% of the outstanding shares of Printdeal B.V. (formerly known as People
& Print Group B.V.), an online Dutch printing company focused primarily on the Dutch and Belgian markets. At the
closing, we paid €20,545 ($28,300 based on the exchange rate as of the date of acquisition) in cash, subject to
working capital and other adjustments, and an additional €4,000 ($5,509 based on the exchange rate as of the date
of acquisition), is payable in Cimpress shares in January 2016 subject to warranties and claims made by the seller.
In addition to the initial purchase consideration, we agreed to a sliding scale earn-out that is based on calendar year
2015 revenue and EBITDA targets. The estimated acquisition date fair value of the earn-out payment of $9,053 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. During the third quarter of fiscal
2015, we amended the terms to pay a fixed amount of €15,000, of which €8,000 was paid in March 2015 ($8,270
based on the exchange rate as of the date of payment) and the remaining €7,000 ($7,833 based on the exchange
rate as of June 30, 2015) is payable during the fourth quarter of fiscal 2016.
75
We recognized the assets and liabilities on the basis of their fair values at the date of our the acquisition,
with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill. Of the total
purchase price of $42,862, $20,605 was allocated to goodwill, $23,968 to acquired intangible assets and $1,711 to
net liabilities. Goodwill is not expected to be deductible for tax purposes, and has been attributed to our All Other
Business Units reportable segment. The revenue and earnings included in our fiscal 2014 consolidated financial
statements since the acquisition date are not material.
We utilized proceeds from our credit facility to finance our fiscal 2014 acquisitions. In connection with these
acquisitions, we incurred transaction costs related to investment banking, legal, financial, and other professional
services of approximately $4,530 in the year ended June 30, 2014, which were recorded in general and
administrative expenses.
Identifiable Intangible Assets
We used the income approach to value the trade names, customer relationships and customer network and
a replacement cost approach to value developed technology. The income approach calculates fair value by
discounting the forecasted after-tax cash flows back to a present value using an appropriate discount rate. The
baseline data for this analysis was the cash flow estimates used to price the transaction.
In estimating the useful life of the acquired assets, we reviewed the expected use of the assets acquired,
factors that may limit the useful life of an acquired asset or may enable the extension of the useful life of an
acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic
factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
We amortize acquired intangible assets over their economic useful lives using either a method that is based on
estimated future cash flows or a straight-line basis over the periods benefited.
9. Goodwill and Acquired Intangible Assets
Goodwill
The carrying amount of goodwill by segment as of June 30, 2014 and June 30, 2015 is as follows:
Balance as of June 30, 2013 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . $
Acquisitions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of currency translation adjustments (3) . . . . . . . . . . . . . . .
Balance as of June 30, 2014 (1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of currency translation adjustments (3) . . . . . . . . . . . . . . .
Balance as of June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_________________
Vistaprint
Business Unit
All Other
Business Units
Total
135,122 $
5,771 $
—
2,885
138,007
—
—
(9,353)
174,887
(1,478)
179,180
122,319
(113)
(29,411)
140,893
174,887
1,407
317,187
122,319
(113)
(38,764)
128,654 $
271,975 $
400,629
(1) Our segment reporting has been revised as of July 1, 2014 and, as such, we have re-allocated our goodwill by segment for the periods
ended June 30, 2014 and 2013. See Note 17 for additional details.
(2) See Notes 8 and 16 for additional details.
(3) Relates to goodwill held by subsidiaries whose functional currency is not the U.S. Dollar.
76
Acquired Intangible Assets
June 30, 2015
June 30, 2014
Gross
Carrying
Amount
Trade Name . . . . . . . . . . . . . . . . . . . . . $ 45,743 $ (7,581) $ 38,162 $ 32,092 $
13,801
Developed Technology . . . . . . . . . . . . .
65,610
Customer Relationships . . . . . . . . . . . .
3,206
Customer Network . . . . . . . . . . . . . . . .
Total Intangible Assets . . . . . . . . . . . . . $ 198,458 $ (47,395) $ 151,063 $ 141,947 $ (31,733) $ 110,214
(13,404)
(12,164)
(1,670)
(15,466)
(21,966)
(2,382)
33,270
114,616
4,829
27,205
77,774
4,876
17,804
92,650
2,447
(4,495) $ 27,597
Accumulated
Amortization
Accumulated
Amortization
Gross
Carrying
Amount
Net
Carrying
Amount
Net
Carrying
Amount
F
o
r
m
1
0
-
K
Acquired intangible assets amortization expense for the years ended June 30, 2015, 2014 and 2013 was
$24,264, $12,723 and $10,778, respectively. Estimated intangible assets amortization expense for each of the five
succeeding fiscal years is as follows:
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,351
25,329
21,680
16,469
13,471
$
110,300
10. Other Balance Sheet Components
Accrued expenses included the following:
Compensation costs (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income and indirect taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition-related consideration payable (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shipping costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_____________________
June 30, 2015
June 30, 2014
62,759 $
25,495
20,275
17,400
5,731
2,471
3,030
2,396
33,269
172,826 $
46,375
23,190
19,299
6,276
375
4,104
3,687
2,224
15,647
121,177
(1) The increase in compensation costs is primarily due to an increase in accrued bonus and long-term incentive payments of $10,097, as well
as an increase of $4,282 due to the operations we acquired in fiscal 2015.
(2) The increase is due to the reclassification of the contingent consideration liability of $7,833 and deferred consideration payable in shares of
$4,477 to short-term as of June 30, 2015, as well as the working capital and net debt adjustment relating to our Exagroup acquisition of
$5,090, partially offset by a contingent consideration payment during the period.
(3) The increase is primarily due to the vesting of certain liability based equity awards, as well as an increase in miscellaneous accruals from the
operations we acquired in fiscal 2015.
Other current liabilities included the following:
Short-term portion of lease financing obligation . . . . . . . . . . . . . . . . . . . . . . . . . . $
Short-term capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,475 $
7,497
3,498
21,470 $
—
—
888
888
June 30, 2015
June 30, 2014
77
Other liabilities included the following:
Long-term capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Long-term derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
18,304 $
9,816
23,953
52,073 $
8,875
665
34,880
44,420
June 30, 2015
June 30, 2014
11. Debt
7.0% Senior unsecured notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Senior secured credit facility (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Uncommitted credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less short-term debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_____________________
June 30, 2015
June 30, 2014
275,000 $
231,507
11,536
4,500
522,543
22,602
499,941 $
—
426,859
—
21,200
448,059
37,575
410,484
(1) Balances as of June 30, 2015 are inclusive of short-term and long-term debt discounts of $116 and $377, respectively.
(2) Balance as of June 30, 2015 represents various term loans assumed in conjunction with certain fiscal 2015 acquisitions.
Our Debt
Our various debt arrangements described below contain customary representations, warranties and events
of default. As of June 30, 2015, we were in compliance with all financial and other covenants related to our debt.
Indenture and Senior Unsecured Notes due 2022
On March 24, 2015, we completed a private placement of $275,000 in aggregate principal amount of 7.0%
senior unsecured notes due 2022 (the “Notes”). We issued the Notes pursuant to a senior notes indenture dated as
of March 24, 2015 among Cimpress N.V., our subsidiary guarantors, and MUFG Union Bank, N.A., as trustee (the
"Indenture"). We used the proceeds from the Notes to pay outstanding indebtedness under our unsecured line of
credit and our senior secured credit facility and for general corporate purposes.
The Notes bear interest at a rate of 7.0% per annum and mature on April 1, 2022. Interest on the Notes is
payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2015, to the holders of
record of the Notes at the close of business on March 15 and September 15, respectively, preceding such interest
payment date.
The Notes are senior unsecured obligations and rank equally in right of payment to all our existing and
future senior unsecured debt and senior in right of payment to all of our existing and future subordinated debt. The
Notes are effectively subordinated to any of our existing and future secured debt to the extent of the value of the
assets securing such debt. Subject to certain exceptions, each of our existing and future subsidiaries that is a
borrower under or guarantees our senior secured credit facilities will guarantee the Notes.
The Indenture contains various covenants, including covenants that, subject to certain exceptions, limit our
and our restricted subsidiaries’ ability to incur and/or guarantee additional debt; pay dividends, repurchase shares
or make certain other restricted payments; enter into agreements limiting dividends and certain other restricted
payments; prepay, redeem or repurchase subordinated debt; grant liens on assets; enter into sale and leaseback
transactions; merge, consolidate or transfer or dispose of substantially all of our consolidated assets; sell, transfer
or otherwise dispose of property and assets; and engage in transactions with affiliates.
78
At any time prior to April 1, 2018, we may redeem some or all of the Notes at a redemption price equal to
100% of the principal amount redeemed, plus a make-whole amount as set forth in the Indenture, plus, in each
case, accrued and unpaid interest to, but not including, the redemption date. In addition, at any time prior to April 1,
2018, we may redeem up to 35% of the aggregate outstanding principal amount of the Notes at a redemption price
equal to 107.0% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the
redemption date, with the net proceeds of certain equity offerings by Cimpress. At any time on or after April 1, 2018,
we may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and
unpaid interest to, but not including, the redemption date.
Senior Secured Credit Facility
As of June 30, 2015, we have a senior secured credit facility of $844,000 as follows:
• Revolving loans of $690,000 with a maturity date of September 23, 2019
F
o
r
m
1
0
-
K
• Term loan of $154,000 amortizing over the loan period, with a final maturity date of September 23, 2019
Under the terms of our credit agreement, borrowings bear interest at a variable rate of interest based on
LIBOR plus 1.50% to 2.25% depending on our leverage ratio, which is the ratio of our consolidated total
indebtedness to our consolidated EBITDA, as defined by the credit agreement. As of June 30, 2015, the weighted-
average interest rate on outstanding borrowings was 2.43%, inclusive of interest rate swap rates. We must also pay
a commitment fee on unused balances of 0.225% to 0.400% depending on our leverage ratio. We have pledged the
assets and/or share capital of several of our subsidiaries as collateral for our outstanding debt as of June 30, 2015.
Our credit agreement contains financial and other covenants, including but not limited to limitations on (1)
our incurrence of additional indebtedness and liens, (2) the consummation of intercompany activities or certain
fundamental organizational changes, for example acquisitions, (3) investments and restricted payments including
the amount of purchases of our ordinary shares or payments of dividends, and (4) the amount of consolidated
capital expenditures that we may make in each of our fiscal years through June 30, 2019. The credit agreement
also contains financial covenants calculated on a trailing twelve month, or TTM, basis that:
•
•
•
our total leverage ratio, which is the ratio of our consolidated total indebtedness to our TTM
consolidated EBITDA, will not exceed 4.50 to 1.00.
our senior secured leverage ratio, which is the ratio of our consolidated senior secured indebtedness to
our TTM consolidated EBITDA, will not exceed 3.25 to 1.00.
our interest coverage ratio, which is the ratio of our consolidated EBITDA to our consolidated interest
expense, will be at least 3.00 to 1.00.
Additional line of credit
We have an uncommitted line of credit with Santander Bank, N.A, and under the terms of the agreement
we may borrow up to $25,000 at any time, with a maturity date of up to 90 days from the loan origination date.
Under the terms of our uncommitted line of credit, borrowings bear interest at a variable rate of interest that may
change from time to time. As of June 30, 2015 the weighted-average interest rate on outstanding borrowings of
$4,500 was 1.35%.
12. Shareholders’ Equity
Share purchases
On December 11, 2014, we announced that our Supervisory Board authorized the purchase of up to
6,400,000 of our ordinary shares. We have not repurchased any shares under this program through June 30, 2015.
Share-based awards
The 2011 Equity Incentive Plan (the “2011 Plan”) became effective upon shareholder approval on June 30,
2011 and allows us to grant share options, share appreciation rights, restricted shares, restricted share units and
other awards based on our ordinary shares to our employees, officers, non-employee directors, consultants and
79
advisors. Among other terms, the 2011 Plan requires that the exercise price of any share option or share
appreciation right granted under the 2011 Plan be at least 100% of the fair market value of the ordinary shares on
the date of grant; limits the term of any share option or share appreciation right to a maximum period of 10 years;
provides that shares underlying outstanding awards under the Amended and Restated 2005 Equity Incentive Plan
that are canceled, forfeited, expired or otherwise terminated without having been issued in full will become available
for the grant of new awards under the 2011 Plan; and prohibits the repricing of any share options or share
appreciation rights without shareholder approval. In addition, the 2011 Plan provides that the number of ordinary
shares available for issuance under the plan will be reduced by (i) 1.56 ordinary shares for each share subject to a
restricted share or other share-based award with a per share or per unit purchase price lower than 100% of the fair
market value of the ordinary shares on the date of grant and (ii) one ordinary share for each share subject to any
other award under the 2011 Plan.
Our 2005 Non-Employee Directors’ Share Option Plan provides for non-employee directors to receive
share option grants upon initial appointment as a director and annually thereafter in connection with our annual
general meeting of shareholders if they are continuing to serve as a director at such time.
We also have one additional plan with options outstanding from which we will not grant any additional
awards. An aggregate of 2,387,435 ordinary shares are available for future awards under all of our share-based
award plans as of June 30, 2015. A combination of new shares and treasury shares has historically been used in
fulfillment of option exercises and issuance of shares upon RSU award vesting.
Share options
We grant options to purchase ordinary shares at prices that are at least equal to the fair market value of the
shares on the date the option is granted and have a contractual term of approximately eight to ten years. Options
generally vest quarterly over 3 years for non-employee directors and 25% after one year and quarterly for 12
quarters thereafter for employees.
The fair value of each option award subject only to service period vesting is estimated on the date of grant
using the Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the
requisite service period, net of estimated forfeitures based on historical experience. Use of a valuation model
requires management to make certain assumptions with respect to inputs. The expected volatility assumption is
based upon historical volatility of our share price. The expected term assumption is based on the contractual and
vesting term of the option and historical experience. The risk-free interest rate is based on the U.S. Treasury yield
curve with a maturity equal to the expected life assumed at the grant date. We value share options with a market
condition using a lattice model with compensation expense recorded on an accelerated basis over the requisite
service period.
Weighted-average values used for option grants in fiscal 2015, 2014 and 2013 were as follows:
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average fair value of options granted . . . . . . . . . . . . . . . . . $
1.67%
—%
6.00
50%
1.56%
—%
5.75
56%
0.81%
—%
6.00
58%
35.84
$
28.14
$
17.23
Year Ended June 30,
2015
2014
2013
80
A summary of our share option activity and related information for the year ended June 30, 2015 is as
follows:
Outstanding at the beginning of the period . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited/cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at the end of the period. . . . . . . . . . . . . . . . .
Vested or expected to vest at the end of the period . . . . .
Exercisable at the end of the period . . . . . . . . . . . . . . . . .
Shares
Pursuant to
Options
3,959,353 $
18,135
(1,057,015)
(7,081)
2,913,392 $
2,811,830 $
1,686,223 $
Weighted-
Average
Exercise
Price
38.43
73.28
20.58
51.84
45.09
44.90
41.34
Weighted-
Average
Remaining
Contractual
Term (years)
5.1
Aggregate
Intrinsic
Value
F
o
r
m
1
0
-
K
4.3 $
113,840
4.3 $
110,396
3.8 $
72,207
The intrinsic value in the table above represents the total pre-tax amount, net of exercise price, which would
have been received if all option holders exercised in-the-money options on June 30, 2015. The total intrinsic value
of options exercised during the fiscal years ended June 30, 2015, 2014 and 2013 was $61,531, $14,860, and
$6,648, respectively.
Restricted share units
The fair value of RSU grants is equal to the fair market value of our ordinary shares on the date of grant
and is recognized as expense on a straight-line basis over the requisite service period, net of estimated forfeitures
based on historical experience. RSUs generally vest quarterly for two to three years for non-employee directors and
25% after one year and quarterly for 12 quarters thereafter for employees. For awards with a performance
condition, we recognize compensation cost on an accelerated basis over the requisite service period when
achievement of the performance condition is deemed probable. As of June 30, 2015, we had 210,000 RSUs
outstanding that vest based on the achievement of various performance targets through fiscal 2022. The
performance criteria for 180,000 of these RSUs are currently deemed not probable of achievement. Future changes
in our probability conclusions could result in volatility of our share-based compensation expense as the awards
have a maximum compensation of $7,169.
A summary of our unvested RSU activity and related information for the fiscal year ended June 30, 2015 is
as follows:
Unvested at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested and distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-
Average
Grant Date Fair
Value
Aggregate
Intrinsic
Value
RSUs
837,131 $
310,255
(297,054)
(83,052)
42.10
63.28
42.72
44.20
767,280 $
50.19 $
64,574
The weighted average fair value of RSUs granted during the fiscal years ended June 30, 2015, 2014 and
2013 was $63.28, $48.06 and $39.72, respectively. The total intrinsic value of RSUs vested during the fiscal years
ended June 30, 2014, 2013 and 2012 was $19,846, $20,629 and $12,397, respectively.
Restricted share awards
In conjunction with the December 2011 acquisition of Webs, we granted RSAs to the founding shareholders
of Webs that vested 50% on December 28, 2012 and 50% on December 28, 2013, subject to continued
employment on each vesting date with possible accelerated vesting or forfeiture under certain circumstances. The
fair value of the RSAs of $15,843 was determined based on our share price on the date of acquisition and was
recognized as share-based compensation expense over the two year vesting period.
81
Share-based compensation
Total share-based compensation costs were $24,075, $27,786 and $32,928 for the years ended June 30,
2015, 2014 and 2013, respectively. See footnotes 8 and 17 for information related to liability based awards issued
in conjunction with our acquisition of Pixartprinting and our capital investment in our variable interest entity Printi
LLC. Share-based compensation costs capitalized as part of software and website development costs were $477,
$254 and $130 for the years ended June 30, 2015, 2014 and 2013, respectively.
As of June 30, 2015, there was $40,272 of total unrecognized compensation cost related to non-vested,
share-based compensation arrangements, net of estimated forfeitures. This cost is expected to be recognized over
a weighted average period of 2.7 years.
13. Employees’ Savings Plans
Defined contribution plans
We maintain certain government mandated and defined contribution plans throughout the world. The most
significant is our defined contribution retirement plan in the U.S. (the “Plan”) that complies with Section 401(k) of the
Internal Revenue Code. Substantially all employees in the U.S. are eligible to participate in the Plan. Under the
provisions of the Plan, employees may voluntarily contribute up to 80% of eligible compensation, subject to IRS
limitations. We match 50% of each participant’s voluntary contributions, subject to a maximum company
contribution of 3% of the participant’s eligible compensation. Employee contributions are fully vested when
contributed. Company matching contributions vest over 4 years.
We expensed $8,619, $8,178 and $7,158 for our government mandated and defined contribution plans in
the years ended June 30, 2015, 2014 and 2013, respectively. Our expenses from these plans have increased
during the year ended June 30, 2015 due to increased headcount, as well as the full year impact of our business
acquisitions during the prior period.
Defined benefit plan
We currently have a defined benefit plan that covers substantially all of our employees in Switzerland. Our
Swiss plan is a government-mandated retirement fund with benefits generally earned based on years of service and
compensation during active employment; however, the level of benefits varies within the Plan. Eligibility is
determined in accordance with local statutory requirements. Under this plan, both we and certain of our employees
with annual earnings in excess of government determined amounts are required to make contributions into a fund
managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to
the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary,
and gender. As of June 30, 2015 and 2014, the plan had an unfunded net pension obligation of approximately
$4,252 and $3,338, respectively and plan assets which totaled approximately $9,596 and $11,602, respectively. For
the years ended June 30, 2015, 2014 and 2013 we recognized expense totaling $2,043, $1,921, and $1,417,
respectively, related to our Swiss plan. During fiscal 2015, a component of the total expense relates to a settlement
loss of $456 as a result of headcount reductions in our Switzerland office.
14. Income Taxes
The following is a summary of our income before income taxes and loss in equity interests by geography:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
21,567 $
78,186
14,382 $
42,228
99,753 $
56,610 $
8,730
32,002
40,732
Year Ended June 30,
2015
2014
2013
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The components of the provision (benefit) for income taxes are as follows:
Year Ended June 30,
2015
2014
2013
Current:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,680 $
10,438 $
2,313
12,496
27,489
(4,505)
(1,070)
(11,473)
(17,048)
3,880
8,273
22,591
(3,754)
(897)
(7,350)
(12,001)
10,441 $
10,590 $
6,816
1,762
3,477
12,055
(274)
(163)
(2,231)
(2,668)
9,387
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The following is a reconciliation of the standard U.S. federal statutory tax rate and our effective tax rate:
U.S. federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate differential on non-U.S. earnings. . . . . . . . . . . . . . . . . . . . . .
Compensation related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible (taxable) acquisition-related payments . . . . . . . . . . . .
Notional interest deduction (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net tax (benefit) expense on intellectual property transfer . . . . . . . . .
Tax benefit from Canadian tax currency election . . . . . . . . . . . . . . . .
Nondeductible loss on investment in Namex . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2015
2014
2013
35.0%
0.8
(24.0)
1.1
8.0
3.7
(2.5)
(12.2)
—
—
0.6
35.0%
3.4
(19.3)
4.3
4.8
0.3
(0.1)
(16.4)
—
3.8
2.9
35.0%
2.6
(23.8)
6.5
5.0
(0.3)
—
3.2
(4.7)
—
(0.5)
10.5%
18.7%
23.0%
For the year ended June 30, 2015, our effective tax rate is 10.5% as compared to the prior year effective
tax rate of 18.7%. The main causes for this decrease are higher tax benefits in fiscal 2015 related to the transfer of
intellectual property described in further detail below, combined with an increase in our consolidated pre-tax income
and a more favorable geographical mix of earnings as compared to fiscal 2014. These benefits to the fiscal 2015
tax rate were partially offset by greater losses incurred in fiscal 2015 as compared to fiscal 2014 in certain
jurisdictions where we are unable to recognize a tax benefit. For the year ended June 30, 2014, we recognized a
loss on our investment in Namex for which there was no tax benefit and this adversely impacted the effective tax
rate for fiscal 2014.
On October 1, 2013, we made changes to our corporate entity operating structure, including transferring
our intellectual property among certain of our subsidiaries, primarily to align our corporate entities with our evolving
operations and business model. The transfer of assets occurred between wholly owned legal entities within the
Cimpress group that are based in different tax jurisdictions. As the impact of the transfer was the result of an intra-
entity transaction, any resulting gain or loss and immediate tax impact on the transfer is eliminated and not
recognized in the consolidated financial statements under U.S. GAAP. The transferor entity recognized a gain on
the transfer of assets that was not subject to income tax in its local jurisdiction. However, the recipient entity will
receive a tax benefit associated with the future amortization of the fair market value of the intellectual property
received, which for tax purposes will occur over a period of five years in accordance with the applicable tax laws.
83
In the year ended June 30, 2012, one of our subsidiaries purchased certain intellectual property and
intangible assets of Webs, Inc., and we recognize the tax expense associated with the intra-entity transfer of these
assets over a period equal to the expected economic lives of the assets. We elected to fund the transfer of these
assets using an installment obligation payable over a 7.5-year period, and accordingly we recorded a deferred tax
liability for the entire tax liability owed but not yet paid as of the date of the transaction with a corresponding asset in
"Other Assets" to reflect the deferred tax charge to be recognized over the expected remaining lives of the assets.
Significant components of our deferred income tax assets and liabilities consist of the following at June 30,
2015 and 2014:
Deferred tax assets:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit and other carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal
Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IP installment obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2015
2014
31,547 $
15,066
836
4,691
15,580
114
2,396
1,598
56,762
(16,612)
40,150
(55,026)
(13,325)
(1,345)
(772)
(70,468)
373
5,112
14,712
146
142
1,227
36,778
(6,890)
29,888
(35,639)
(16,557)
(1,162)
(75)
(53,433)
(23,545)
Net deferred tax liabilities
$
(30,318) $
The current portion of the net deferred taxes at June 30, 2015 and 2014 consisted of an asset of $1,559
and $717, respectively, included in prepaid expenses and other current assets and a liability of $1,043 and $2,178,
respectively, which is included in current liabilities in the accompanying consolidated balance sheet.
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The increase in the valuation allowance from the prior
year relates primarily to losses incurred in certain jurisdictions (mainly Brazil, India, Japan and the Netherlands) for
which management has determined, based on current profitability projections, that it is more likely than not that
these losses will not be utilized within the applicable carryforward periods available under local law. We have not
recorded a valuation allowance against $10,578 of deferred tax asset associated with current and prior year tax
losses generated in Switzerland. Management believes there is sufficient positive evidence in the form of historical
and future projected profitability to conclude that it is more likely than not that all of the losses in Switzerland will be
utilized against future taxable profits within the available carryforward period. Our assessment is reliant on the
attainment of our future operating profit goals. Failure to achieve these operating profit goals may change our
assessment of this deferred tax asset, and such change would result in an additional valuation allowance and an
increase in income tax expense to be recorded in the period of the change in assessment. We will continue to
review our forecasts and profitability trends on a quarterly basis.
Additionally, we have recorded a full valuation allowance against the $2,396 deferred tax asset related to an
interest rate derivative instrument for which management has determined, based on current profitability projections,
that it is more likely than not that it will not be recognized in the foreseeable future. The impact of this deferred tax
asset and associated valuation allowance has been recorded in accumulated other comprehensive (loss) income
on the balance sheet.
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No valuation allowance has been recorded against the $15,580 deferred tax asset associated with share-
based compensation charges at June 30, 2015. However, in the future, if the underlying awards expire, are
released or are exercised with an intrinsic value less than the fair value of the awards on the date of grant, some or
all of the benefit may not be realizable.
Based on the weight of available evidence at June 30, 2015, management believes that it is more likely
than not that all other net deferred tax assets will be realized in the foreseeable future. We will continue to assess
the realization of the deferred tax assets based on operating results.
A reconciliation of the beginning and ending amount of the valuation allowance for the year ended June 30,
2015 is as follows:
Balance at June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Charges to earnings (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges to other accounts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_________________
6,890
7,940
1,782
16,612
(1) Amount is primarily related to non-U.S. net operating losses.
(2) Amount is primarily related to unrealized losses on cross-currency swap contracts included in other comprehensive income (loss) and non-
U.S. net operating losses recorded in purchase accounting, partially offset by a decrease in deferred tax assets on non-U.S. net operating
losses due to currency exchange rate changes.
The deferred tax liabilities increased by $28,010 in fiscal 2015 as a result of intangible and other assets
from our fiscal 2015 acquisitions.
As of June 30, 2015, we had gross U.S. federal and state net operating losses of approximately $1,850 that
expire on various dates from fiscal 2030 through fiscal 2034. We had gross non-U.S. net operating loss and other
carryforwards of $180,263, a significant amount of which expire in fiscal 2021, with the remaining amounts expiring
on various dates from fiscal 2019 through fiscal 2031. The benefits of these carryforwards are dependent upon the
generation of taxable income in the jurisdictions where they arose. During fiscal 2015, we recognized excess tax
deductions related to share-based compensation resulting in a net operating loss that can be carried back to
reclaim prior year taxes paid. Accordingly, we have recorded a receivable of $7,617 in prepaid expenses and other
current assets and recognized the benefit through shareholders’ equity. In addition, we have $28,777 of state net
operating losses and $1,031 of federal and state R&D credit carryforwards as a result of excess tax deductions
related to share-based compensation. We will realize the benefit of these excess tax deductions through increases
to shareholders’ equity in the periods in which these carryforward losses are utilized to reduce cash tax payments.
As of June 30, 2015, no tax provision has been made for $59,010 of undistributed earnings of certain of our
subsidiaries as these earnings are considered indefinitely reinvested. If, in the future, we decide to repatriate the
undistributed earnings from these subsidiaries in the form of dividends or otherwise, we could be subject to
withholding taxes payable in the range of $7,000 to $8,000 at that time. A deferred tax liability of $361 has been
recorded attributable to undistributed earnings of recently-acquired subsidiaries that we have deemed are not
indefinitely reinvested. The remaining undistributed earnings of our subsidiaries are not deemed to be indefinitely
reinvested and can be repatriated at no tax cost. Accordingly, there has been no provision for income or withholding
taxes on these earnings.
85
A reconciliation of the gross beginning and ending amount of unrecognized tax benefits is as follows:
Balance at June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions based on tax positions related to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to audit settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions based on tax positions related to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to audit settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,682
152
1,244
(334)
6,744
208
73
(1,240)
(75)
5,710
For the years ended June 30, 2015 and 2014, the amount of unrecognized tax benefits (exclusive of
interest) that, if recognized, would impact the effective tax rate is $2,383 and $3,061, respectively. We recognize
interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. The accrued
interest and penalties recognized as of June 30, 2015 and 2014 were $110 and $298, respectively.
It is reasonably possible that a further change in unrecognized tax benefits may occur within the next twelve
months related to the settlement of one or more audits or the lapse of applicable statutes of limitations. However, an
estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time. We believe we
have appropriately provided for all tax uncertainties.
We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in
multiple jurisdictions globally. The years 2012 through 2014 remain open for examination by the United States
Internal Revenue Service (“IRS”) and the years 2006 through 2014 remain open for examination in the various
states and non-US tax jurisdictions in which we file tax returns.
We are currently under income tax audit in various jurisdictions globally. One of our subsidiaries, Vistaprint
Limited, had recently been under income tax audit and subsequent administrative appeal by the IRS for the 2007 to
2009 tax years. In November 2014, we received Form 870-AD from the IRS Office of Appeals that presented a
finding of no additional tax owed by Vistaprint Limited. Accordingly, this audit is now closed with no tax adjustments.
Additionally, Cimpress USA Incorporated (formerly known as Vistaprint USA, Incorporated) was under audit by the
IRS for the 2012 and 2013 tax years. This audit was concluded in March 2015 with no material tax adjustments to
the financial statements.
Cimpress USA Incorporated is also currently under income tax audit by the Massachusetts Department of
Revenue ("DOR"). Cimpress USA Incorporated received Notices of Assessment from the DOR for the tax years
2006-2008 and 2010-2011. The Notices contain adjustments to taxable income for these years. The issue in dispute
is whether the DOR has the right to impute royalty income to Cimpress USA Incorporated in the years at issue
associated with the use of certain intangible property by Vistaprint Limited, even though that intangible property was
transferred for a lump-sum payment to Vistaprint Limited in an earlier year that is closed to adjustment by virtue of
the governing statute of limitations. In July 2014, we filed an Application for Abatement with the DOR Office of
Appeals to appeal the DOR’s findings; however, our appeal was denied. In August 2014, we filed a petition to have
our case heard by the Massachusetts Appellate Tax Board. The hearing for our case is set to begin in December
2015. We continue to believe that the DOR’s position has no merit, and we intend to contest these assessments to
the fullest extent possible.
We continuously evaluate our income tax reserves in light of recent developments in our income tax audits
and believe that the positions reported on our tax returns will be sustained on their technical merits. However, final
resolution is uncertain and there is a possibility that the final resolution could have a material impact on our financial
condition, results of operations or cash flows.
15. Noncontrolling Interests
In certain of our strategic investments we have purchased a controlling equity stake, but there remains a
minority portion of the equity that is owned by a third party. The balance sheet and operating activity of these
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entities are included in our consolidated financial statements and we adjust the net income in our consolidated
statement of operations to exclude the noncontrolling interests' proportionate share of results. We present the
proportionate share of equity attributable to the redeemable noncontrolling interests as temporary equity within our
consolidated balance sheet and the proportionate share of noncontrolling interests not subject to a redemption
provision that is outside of our control as equity.
Redeemable noncontrolling interests
On April 15, 2015 we acquired 70% of the outstanding shares of Exagroup. The remaining 30% is
considered a redeemable noncontrolling equity interest, as it is redeemable in the future and not solely within our
control. The redeemable noncontrolling interest was recorded at its fair value as of the acquisition date and will be
adjusted to its redemption value on a periodic basis, if that amount exceeds its fair value. As of June 30, 2015, the
redemption value is less than the carrying value and therefore no adjustment has been made. For additional details
please refer to Note 8 Business Combinations.
On April 3, 2014 we acquired 97% of the outstanding corporate capital of Pixartprinting S.p.A. The
remaining 3% is considered a redeemable noncontrolling equity interest, as it is redeemable for cash based on
future financial results and not solely within our control. The redeemable noncontrolling interest was recorded at its
fair value as of the acquisition date and will be adjusted to its redemption value on a periodic basis, if that amount
exceeds its fair value. As of June 30, 2015, the redemption value is less than carrying value and therefore no
adjustment has been made. For additional details please refer to Note 8 Business Combinations.
We own a 51% controlling interest in a joint business arrangement with Plaza Create Co. Ltd., a leading
Japanese retailer of photo products, to expand our market presence in Japan. During fiscal 2014, we contributed
$4,891 in cash and $1,100 in assets, and Plaza Create made an initial capital contribution of $4,818 in cash and
$955 in assets. We have a call option to acquire the remaining 49% of the business if Plaza Create materially
breaches any of its contracts with us. If we materially breach any of our contracts with Plaza Create, Plaza Create
has an option to put its shares to us. As the exercise of this put option is not solely within our control, the
noncontrolling equity interest in the business is presented as temporary equity in our consolidated balance sheet.
As of June 30, 2015, it is not probable that the noncontrolling interest will be redeemable.
Noncontrolling interest
On August 7, 2014, we made a capital investment in Printi LLC as described in Note 16. The noncontrolling
interest was recorded at its estimated fair value as of the investment date. The net income (loss) of the operations
allocated to the noncontrolling interest considers our stated liquidation preference in applying the income or loss to
each party.
The following table presents the reconciliation of changes in our noncontrolling interests:
Balance as of June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital contribution from noncontrolling interest
. . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss attributable to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Capital contribution from noncontrolling interest
Acquisition of noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend paid to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss attributable to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
Redeemable
noncontrolling interests
$
— $
5,773
56
5,728
(380)
(17)
11,160
4,160
42,951
(118)
(700)
285
57,738
$
$
Noncontrolling interest
—
—
—
—
—
—
—
—
2,867
—
(2,200)
(155)
512
$
$
16. Variable Interest Entities ("VIE")
VIE of which we are the Primary Beneficiary
Investment in Printi LLC
On August 7, 2014, we made a capital investment in Printi LLC, which operates in Brazil. This investment
provides us access to a new market and the opportunity to drive longer-term growth in Brazil. We paid $5,360 in
cash for preferred shares and made a $2,850 capital contribution in exchange for a 41.6% equity interest in Printi
with call options to increase our ownership incrementally over a 9-year period by purchasing equity interests either
directly from Printi or from certain employee shareholders. We exercised the first contingent call option in the fourth
quarter of fiscal 2015 to acquire newly issued preferred shares which increased our ownership to 49.99% as of
June 30, 2015.
Based upon the level of equity investment at risk, Printi is considered a variable interest entity. The
shareholders share profits and voting control on a pro-rata basis. While we do not manage the day to day
operations of Printi, we do have the unilateral ability to exercise participating voting rights for specific transactions
and as such no one shareholder is considered to be the primary beneficiary. However, certain significant
shareholders cannot transfer their equity interests without our approval and as a result are considered de facto
agents on our behalf in accordance with ASC 810-10-25-43.
In aggregating our rights, as well as those of our de facto agents, the group as a whole has both the power
to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb
losses and the right to receive benefits from the entity. In situations where a de facto agency relationship is present,
one party is required to be identified as the primary beneficiary and the evaluation requires significant judgment.
The factors considered include the presence of a principal/agent relationship, the relationship and significance of
activities to the reporting entity, the variability associated with the VIE's anticipated economics and the design of the
VIE. The analysis is qualitative in nature and is based on weighting the relative importance of each of the factors in
relation to the specifics of the VIE arrangement. Upon our investment we performed an analysis and concluded that
we are the party that is most closely associated with Printi, as we are most exposed to the variability of the
economics and therefore considered the primary beneficiary.
As we are the primary beneficiary, our consolidated financial statements include the accounts of Printi from
August 7, 2014. The results are immaterial to our consolidated statements of operations for the year ended June
30, 2015. We have recognized the assets and liabilities on the basis of their fair values at the date of our
investment, with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill. Of
the total purchase price of $5,360, $7,469 was allocated to goodwill, $2,465 to noncontrolling interests, $697 to
acquired intangible assets and $341 to net liabilities.
We have call options to increase our ownership in Printi incrementally over a nine-year period with certain
employee shareholders. As the employees' restricted stock in Printi is contingent on post-acquisition employment,
share-based compensation will be recognized over the four-year vesting period. The awards are considered liability
awards and will be marked to fair value each reporting period. In order to estimate the fair value of the award as of
June 30, 2015, we utilized a lattice model with a Monte Carlo simulation. The current fair value of the award is
$6,066 and we have recognized $1,405 in general and administrative expense for the year ended June 30, 2015.
VIE of Which We are Not the Primary Beneficiary
Namex Limited
In the fourth quarter of fiscal 2014, we disposed of our investment in Namex Limited and its related
companies, as discussions with management identified different visions in the execution of the long-term strategic
direction of the business. We sold all of our Namex shares to Namex's majority shareholder and recognized a loss
of $12,681, in other income (expense), net in our consolidated statement of operations for the year ended June 30,
2014. Prior to the sale, our investment was accounted for using the equity method, as the investment was
considered a VIE and we were not the primary beneficiary. We recorded in net income a proportionate share of the
earnings or losses of Namex, as well as related amortization, with a corresponding increase or decrease in the
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carrying value of the investment. For the years ended June 30, 2014 and 2013 we recorded a loss of $2,704 and
$1,910 respectively, attributable to Namex in our consolidated statement of operations.
17. Segment Information
During the first quarter of fiscal 2015 we revised our internal management organizational and reporting
structure to better align to our strategy of delivering mass customized products to multiple customer segments via
various brands. Our operating segments are based upon our internal organization structure, the manner in which
our operations are managed and the availability of separate financial information reported internally to the Chief
Executive Officer, who is our Chief Operating Decision Maker (“CODM”) for purposes of making decisions about
how to allocate resources and assess performance. The CODM measures and evaluates the performance of our
operating segments based on revenue and income (loss) from operations. We have identified several operating
segments under our new management reporting structure which are reported in the following two reportable
segments:
• Vistaprint Business Unit - Aggregates the operations of our core Vistaprint-branded business in the North
America, Europe, Australia and New Zealand markets, and our Webs-branded business, which is managed
with the Vistaprint-branded digital business in the previously listed geographies.
• All Other Business Units - Includes the operations of our Albumprinter, druck.at, Exagroup, Easyflyer,
Printdeal, Pixartprinting, and Most of World business units. Our Most of World business unit is focused on
our emerging market portfolio, including operations in Brazil, India and Japan. These business units have
been combined into one reportable segment based on materiality.
Consistent with our historical reporting, the cost of our global legal, human resource, finance, facilities
management, software and manufacturing engineering, and the global component of our IT operations functions
are generally not allocated to the reporting segments and are instead reported and disclosed under the caption
"Corporate and global functions." Corporate and global functions is a cost center and does not meet the definition of
an operating segment.
During the fourth quarter of fiscal 2015, we transferred a group of software and manufacturing engineers
from the corporate and global functions cost center to the Vistaprint Business Unit due to changes in our internal
organizational structure. We have revised our presentation of all prior periods presented to reflect our revised
segment reporting.
There are no internal revenue transactions between our operating segments, and we do not allocate non-
operating income to our segment results. All intersegment transfers are recorded at cost for presentation to the
CODM, for example, we allocate costs related to products manufactured by our global network of production
facilities to the applicable operating segment. There is no intercompany profit or loss recognized on these
transactions.
The following factors, among others, may limit the comparability of income from operations by segment:
• We do not allocate support costs across operating segments or corporate and global functions.
• Some of our recently acquired business units are burdened by the costs of their local finance, HR, and
other administrative support functions, whereas other business units leverage our global functions and
do not receive an allocation for these services.
• Our All Other Business Units reporting segment includes our Most of World business unit, which has
operating losses as it is in its early stage of investment relative to the scale of the underlying business.
It also includes amortization of intangible assets resulting from our various acquisitions.
Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do
not present asset information by segment.
Revenue by segment is based on the business unit-specific websites through which the customer’s order
was transacted. The following tables set forth revenue and income from operations by reportable segment.
89
Revenue:
Year Ended June 30,
2015
2014
2013
Vistaprint Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,194,393 $ 1,144,030 $ 1,091,900
75,578
All Other Business Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,494,206 $ 1,270,236 $ 1,167,478
126,206
299,813
Income (loss) from operations:
Vistaprint Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
All Other Business Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and global functions . . . . . . . . . . . . . . . . . . . . . . . . . . .
346,161 $
314,255 $
246,863
(12,379)
(17,930)
(14,921)
(237,458)
(210,411)
(185,818)
Total income from operations . . . . . . . . . . . . . . . . . . . . . . . . . $
96,324 $
85,914 $
46,124
Year Ended June 30,
2015
2014
2013
Depreciation and amortization:
Vistaprint Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
All Other Business Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and global functions . . . . . . . . . . . . . . . . . . . . . . . . . .
40,075 $
34,782 $
39,797
17,628
19,154
18,346
Total depreciation and amortization. . . . . . . . . . . . . . . . . . . . $
97,500 $
72,282 $
34,789
12,460
17,076
64,325
Year Ended June 30,
2015
2014
2013
Enterprise Wide Disclosures:
The following tables set forth revenues by geographic area and groups of similar products and services:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-United States (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
561,232
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,494,206 $ 1,270,236 $ 1,167,478
617,020
776,134
Year Ended June 30,
2015
2014
2013
718,072 $
653,216 $
606,246
Year Ended June 30,
2015
2014
2013
Physical printed products and other (2) . . . . . . . . . . . . . . . . . . . . $ 1,423,110 $ 1,189,905 $ 1,084,698
82,780
Digital products/services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,494,206 $ 1,270,236 $ 1,167,478
71,096
80,331
___________________
(1) Our non-United States revenue includes the Netherlands, our country of domicile. Revenue earned in any other individual country other than
the United States was not greater than 10% of consolidated revenue for the periods presented.
(2) Other revenue includes miscellaneous items which account for less than 1% of revenue.
90
The following tables set forth long-lived assets by geographic area:
June 30,
2015
June 30,
2014
Long-lived assets (3):
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99,474 $
98,288
41,357
31,417
28,548
26,908
23,814
21,449
16,219
29,946
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
417,420 $
100,369
106,918
31,201
30,920
20,356
35,367
25,431
—
—
26,202
376,764
___________________
(3) Excludes goodwill of $400,629 and $317,187, intangible assets, net of $151,063 and $110,214, project construction costs of $104,315 and
$18,117 related to our Waltham lease, and deferred tax assets of $17,172 and $8,762 as of June 30, 2015 and 2014, respectively.
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18. Commitments and Contingencies
Lease Commitments
We have commitments under operating leases for our facilities that expire on various dates through 2026,
including the Waltham lease arrangement discussed in Note 6. Total lease expense, net of sublease income for the
years ended June 30, 2015, 2014 and 2013 was $16,926, $14,151 and $11,720, respectively.
We also lease certain machinery and plant equipment under both capital and operating lease agreements
that expire at various dates through 2020. The aggregate carrying value of the leased equipment under capital
leases included in property, plant and equipment, net in our consolidated balance sheet at June 30, 2015, is
$27,693, net of accumulated depreciation of $4,681; the present value of lease installments not yet due included in
other current liabilities and other liabilities in our consolidated balance sheet at June 30, 2015 amounts to $23,633.
Future minimum payments required for our lease obligations for the next five fiscal years and thereafter are
as follows at June 30, 2015:
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
___________________
Operating lease
obligations
Build-to-suit lease
obligations (1)
Capital lease
obligations
7,697 $
10,475 $
6,169
4,300
3,775
4,345
12,941
12,569
12,569
12,569
12,569
71,018
9,150
7,083
4,854
2,419
562
35
39,227 $
131,769 $
24,103
(1) Minimum payments relate to our Waltham lease obligation, please refer to Note 6 for additional details.
Purchase Obligations
At June 30, 2015, we had unrecorded commitments under contract of $27,052, which were principally
composed of inventory purchase commitments of approximately $1,924, production and computer equipment
purchases of approximately $14,519, and other unrecorded purchase commitments of $10,609.
91
Debt
The required principal payments due during the next five years and thereafter under our outstanding long-
term debt obligations (excluding our short-term uncommitted credit facility) at June 30, 2015 are as follows:
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
18,217
17,995
23,585
78,995
102,819
276,925
518,536
Other Obligations
We have an outstanding installment obligation of $13,325 related to the fiscal 2012 intra-entity transfer of
the intellectual property of our subsidiary Webs, Inc., which results in tax being paid over a 7.5 year term and has
been classified as a deferred tax liability in our consolidated balance sheet as of June 30, 2015. Other obligations
also include the remaining fixed contingent consideration payment related to our fiscal 2014 acquisition of Printdeal
of $7,833 payable during the fourth quarter of fiscal 2016 and the deferred payment for our fiscal 2015 acquisition of
druck.at of $2,980.
Legal Proceedings
We are not currently party to any material legal proceedings. Although we cannot predict with certainty the
results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any
of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or
financial position. In all cases, at each reporting period, we evaluate whether or not a potential loss amount or a
potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that
addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs are
incurred.
19. Quarterly Financial Data (unaudited)
Year Ended June 30, 2015
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Cimpress N.V. . . . . . . . . .
Net income (loss) per share attributable to Cimpress N.V.:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
333,932 $
439,905 $
339,901 $
380,468
130,221
23,417
23,694
156,620
62,862
63,609
125,540
156,218
7,925
8,611
(4,892)
(3,702)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.73 $
0.71 $
1.96 $
1.89 $
0.26 $
0.25 $
(0.11)
(0.11)
Year Ended June 30, 2014
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Cimpress N.V. . . . . . . . . . . . . . .
Net income per share attributable to Cimpress N.V.:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
275,089 $
95,790
412
412
370,807 $
120,789
40,875
286,185 $
100,903
1,341
40,875
1,375
338,155
133,611
688
1,034
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.01 $
0.01 $
1.24 $
1.18 $
0.04 $
0.04 $
0.03
0.03
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Basic and diluted net income (loss) per share attributable to Cimpress N.V. are computed independently for
each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not
equal annual basic and diluted net income per share.
20. Subsequent Event
Pursuant to the share repurchase authorization approved on December 11, 2014 we have purchased
1,027,625 of our ordinary shares subsequent to June 30, 2015 and through August 13, 2015 for a total cost of
$69,751, inclusive of transaction costs.
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Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated
the effectiveness of our disclosure controls and procedures as of June 30, 2015. The term “disclosure controls and
procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other
procedures of a company that are designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the company’s management,
including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding
required disclosure. Management recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving their objectives and management necessarily
applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the
evaluation of our disclosure controls and procedures as of June 30, 2015, our chief executive officer and chief
financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the
reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2015 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting for the company. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f)
promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s chief
executive officer and chief financial officer and effected by the company’s supervisory board, management and
other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
The scope of management's assessment of the effectiveness of internal control over financial reporting as
of June 30, 2015 excluded an assessment of the internal control over financial reporting of FotoKnudsen AS,
Exagroup SAS and its subsidiaries, and druck.at Druck-und Handelsgesellschäft mbH, which we acquired during
fiscal 2015. The results of these acquired companies are included in our 2015 consolidated financial statements
and represent approximately $74.3 million and $17.3 million of consolidated total assets and net assets,
respectively, as of June 30, 2015 and $44.1 million and $0.9 million of consolidated revenue and net income
attributable to Cimpress N.V., respectively, for the year then ended.
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Our management assessed the effectiveness of our internal control over financial reporting as of June 30,
2015. In making this assessment, our management used the criteria set forth in the Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on our assessment, management concluded that, as of June 30, 2015, our internal control over
financial reporting is effective based on criteria in Internal Control - Integrated Framework (2013) issued by the
COSO.
PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the
effectiveness of our internal control over financial reporting as of June 30, 2015, as stated in their report included on
page 48.
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Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the information in the sections
captioned “Information about our Supervisory Board members and Executive Officers,” “Corporate Governance”
and “Section 16(a) Beneficial Ownership Reporting Compliance” contained in our definitive proxy statement for our
2015 Annual General Meeting of Shareholders, which we refer to as our 2015 Proxy Statement.
We have adopted a written code of business conduct and ethics that applies to all of our employees,
including our principal executive officer, principal financial officer and principal accounting officer, and is available on
our website at www.cimpress.com. We did not waive any provisions of this code during the fiscal year ended
June 30, 2015. If we amend, or grant a waiver under, our code of business conduct and ethics that applies to our
principal executive, financial or accounting officers, or persons performing similar functions, we will post information
about such amendment or waiver on our website at www.cimpress.com.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the information contained in the
sections of our 2015 Proxy Statement captioned “Executive Compensation,” “Compensation of Supervisory Board
Members” and “Compensation Committee Interlocks and Insider Participation.”
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item is incorporated by reference to the information contained in the
sections of our 2015 Proxy Statement captioned “Security Ownership of Certain Beneficial Owners and
Management” and “Securities Authorized for Issuance Under Equity Compensation Plans.”
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the information contained in the
sections of our 2015 Proxy Statement captioned “Certain Relationships and Related Transactions” and “Corporate
Governance.”
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the information contained in the
section of our 2015 Proxy Statement captioned “Independent Registered Public Accounting Firm Fees and Other
Matters.”
Item 15. Exhibits, Financial Statement Schedules
(a) Consolidated Financial Statements.
PART IV
95
For a list of the consolidated financial information included herein, see Index to the Consolidated Financial
Statements on page 47 of this Report.
(b) List of Exhibits.
See the Exhibit Index attached to this Report.
(c) Financial Statement Schedules.
All schedules have been omitted because the information required to be set forth therein is not applicable
or is shown in the accompanying consolidated financial statements or notes thereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
August 14, 2015
Cimpress N.V.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
/s/ Robert S. Keane
Robert S. Keane
Chief Executive Officer
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Signature
/s/ Robert S. Keane
Robert S. Keane
/s/ Ernst J. Teunissen
Ernst J. Teunissen
/s/ Sean E. Quinn
Sean E. Quinn
Paolo De Cesare
/s/ John J. Gavin Jr.
John J. Gavin Jr.
/s/ Peter Gyenes
Peter Gyenes
/s/ Eric C. Olsen
Eric C. Olsen
/s/ Richard T. Riley
Richard T. Riley
/s/ Nadia Shouraboura
Nadia Shouraboura
/s/ Mark T. Thomas
Mark T. Thomas
/s/ Scott Vassalluzzo
Scott Vassalluzzo
Title
Date
President and Chief Executive Officer
August 14, 2015
(Principal executive officer)
Executive Vice President and
Chief Financial Officer
(Principal financial officer)
Vice President and
Chief Accounting Officer
(Principal accounting officer)
Member, Supervisory Board
August 14, 2015
August 14, 2015
Member, Supervisory Board
August 14, 2015
Member, Supervisory Board
August 14, 2015
Member, Supervisory Board
August 14, 2015
Chairman, Supervisory Board
August 14, 2015
Member, Supervisory Board
August 14, 2015
Member, Supervisory Board
August 14, 2015
Member, Supervisory Board
August 14, 2015
97
Exhibit
No.
3.1
4.1
10.1*
10.2*
10.3*
10.4*
10.5*
10.6*
10.7*
10.8*
10.9*
10.10*
10.11*
10.12*
10.13*
10.14*
10.15*
10.16*
10.17*
10.18*
10.19*
10.20*
10.21*
10.22*
10.23*
EXHIBIT INDEX
Description
Articles of Association of Cimpress N.V., as amended, is incorporated by reference to our Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31, 2014
Senior Notes Indenture (including Form of Notes), dated as of March 24, 2015, between Cimpress N.V., certain
subsidiaries of Cimpress N.V. as guarantors thereto, and MUFG Union Bank, N.A., as trustee, is incorporated by
reference to our Current Report on Form 8-K filed with the SEC on March 24, 2015
2005 Non-Employee Directors’ Share Option Plan, as amended, is incorporated by reference to our Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2010 (File No. 000-51539)
Form of Nonqualified Share Option Agreement under our 2005 Non-Employee Directors’ Share Option Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009
(File No. 000-51539)
Amended and Restated 2005 Equity Incentive Plan, as amended, is incorporated by reference to our Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2010 (File No. 000-51539)
Form of Nonqualified Share Option Agreement under our Amended and Restated 2005 Equity Incentive Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009
(File No. 000-51539)
2011 Equity Incentive Plan is incorporated by reference to Appendix A to our Definitive Proxy Statement on
Schedule 14A dated and filed with the SEC on June 8, 2011
Form of Nonqualified Share Option Agreement under our 2011 Equity Incentive Plan is incorporated by reference
to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011
Form of Restricted Share Unit Agreement for employees and executives under our 2011 Equity Incentive Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011
Form of Restricted Share Unit Agreement for Supervisory Board members under our 2011 Equity Incentive Plan
2015 Inducement Share Plan
Form of Restricted Share Award Agreement under 2015 Inducement Share Plan
Amended and Restated Performance Incentive Plan for Covered Employees is incorporated by reference to
Appendix A to our Definitive Proxy Statement on Schedule 14A dated and filed with the SEC on October 16, 2013
Form of Annual Award Agreement for fiscal year 2015 under our Performance Incentive Plan for Covered
Employees is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2014
Form of Four-Year Award Agreement for fiscal years 2012-2015 under our Performance Incentive Plan for
Covered Employees is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2011
Form of Indemnification Agreement between Cimpress N.V. and each of our executive officers and members of
our Supervisory Board and Management Board is incorporated by reference to our Current Report on Form 8-K
filed with the SEC on August 31, 2009 (File No. 000-51539)
Amended and Restated Executive Retention Agreement between Cimpress N.V. (formerly Vistaprint N.V.) and
Robert S. Keane dated as of October 23, 2009 is incorporated by reference to our Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 2009 (File No. 000-51539)
Executive Retention Agreement between Cimpress N.V. and Ernst Teunissen dated as of March 1, 2011 is
incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended June 30, 2011
Form of Executive Retention Agreement between Cimpress N.V. and each of Katryn Blake and Donald Nelson is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009
(File No. 000-51539)
Employment Agreement between Cimpress USA Incorporated (formerly Vistaprint USA, Incorporated) and Robert
S. Keane effective September 1, 2009 is incorporated by reference to our Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2010 (File No. 000-51539)
Amendment No. 1 to Employment Agreement between Cimpress USA Incorporated and Robert S. Keane dated
June 14, 2010 is incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended June 30,
2010 (File No. 000-51539)
Amendment No. 2 to Employment Agreement between Cimpress USA Incorporated and Robert S. Keane dated
September 28, 2011 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2011
Amendment No. 3 to Employment Agreement between Cimpress USA Incorporated and Robert S. Keane dated
July 25, 2012 is incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended June 30,
2012
Amendment No. 4 to Employment Agreement between Cimpress USA Incorporated and Robert S. Keane dated
September 1, 2013 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2013
Amendment No. 5 to Employment Agreement between Cimpress USA Incorporated and Robert S. Keane dated
September 30, 2014 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2014
98
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10.24* Memorandum clarifying relative precedence of agreements between Cimpress N.V. and Robert S. Keane dated
May 6, 2010 is incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended June 30,
2010 (File No. 000-51539)
Employment Agreement between Cimpress USA Incorporated and Ernst Teunissen effective July 1, 2011 is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011
10.25*
10.26*
10.27*
10.28*
10.29*
10.30*
10.31*
10.32
10.33
10.34
10.35
10.36
10.37
21.1
23.1
23.2
31.1
31.2
32.1
101
Amendment No. 1 to Employment Agreement between Cimpress USA Incorporated and Ernst Teunissen dated
July 24, 2012 is incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended June 30,
2012
Amendment No. 2 to Employment Agreement between Cimpress USA Incorporated and Ernst Teunissen dated
September 1, 2013 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2013
Amendment No. 3 to Employment Agreement between Cimpress USA Incorporated and Ernst Teunissen dated
September 30, 2014 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2014
Form of Invention and Non-Disclosure Agreement between Cimpress and each of Robert Keane, Katryn Blake,
and Donald Nelson is incorporated by reference to our Registration Statement on Form S-1, as amended (File
No. 333-125470)
Form of Confidential Information and Non-Competition Agreement between Cimpress and each of Robert S.
Keane, Katryn Blake, and Donald Nelson is incorporated by reference to our Registration Statement on Form S-1,
as amended (File No. 333-125470)
Summary of Compensatory Arrangements with Members of the Supervisory Board is incorporated by reference to
our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013
Amendment and Restatement Agreement dated as of February 8, 2013 among Cimpress N.V., Vistaprint Limited,
Cimpress Schweiz GmbH (formerly Vistaprint Schweiz GmbH), Vistaprint B.V., and Cimpress USA Incorporated
(formerly Vistaprint USA, Incorporated), as borrowers (the “Borrowers”); the lenders named therein as lenders
(the “Lenders”); and JPMorgan Chase Bank N.A., as administrative agent for the Lenders (the “Administrative
Agent”), which amends and restates the senior Credit Agreement dated as of October 21, 2011, as amended,
among the Borrowers, the Lenders, and the Administrative Agent is incorporated by reference to our Current
Report on Form 8-K filed with the SEC on February 13, 2013
Amendment No. 1 dated as of January 17, 2014 to Credit Agreement dated as of October 21, 2011, as amended
and restated as of February 8, 2013, among Cimpress N.V., Vistaprint Limited, Cimpress Schweiz GmbH,
Vistaprint B.V., and Cimpress USA Incorporated, as borrowers; the lenders named therein as lenders; and
JPMorgan Chase Bank N.A., as administrative agent for the lenders is incorporated by reference to our Current
Report on Form 8-K filed with the SEC on January 22, 2014
Amendment No. 2 dated as of September 23, 2014 to Credit Agreement dated as of October 21, 2011, as
amended and restated as of February 8, 2013, among Cimpress N.V., Vistaprint Limited, Cimpress Schweiz
GmbH, Vistaprint B.V., and Cimpress USA Incorporated, as borrowers; the lenders named therein as lenders; and
JPMorgan Chase Bank N.A., as administrative agent for the lenders, is incorporated by reference to our Current
Report on Form 8-K filed with the SEC on September 25, 2014
Amendment No. 3 dated as of March 10, 2015 to Credit Agreement dated as of October 21, 2011, as amended
and restated as of February 8, 2013, among Cimpress N.V., Vistaprint Limited, Cimpress Schweiz GmbH,
Vistaprint B.V., and Cimpress USA Incorporated, as borrowers; the lenders named therein as lenders; and
JPMorgan Chase Bank N.A., as administrative agent for the lenders, is incorporated by reference to our Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2015
Form of Pledge and Security Agreement dated as of February 8, 2013 between each of Cimpress USA
Incorporated and Webs, Inc. and the Administrative Agent is incorporated by reference to our Current Report on
Form 8-K filed with the SEC on February 13, 2013
Call Option Agreement between Cimpress N.V. and Stichting Continuïteit Cimpress (formerly Stichting Continuïteit
Vistaprint) dated November 16, 2009 is incorporated by reference to our Current Report on Form 8-K filed with the
SEC on November 19, 2009 (File No. 000-51539)
Subsidiaries of Cimpress N.V.
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief
Executive Officer
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief
Financial Officer
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, by Chief Executive Officer and Chief Financial Officer
The following materials from this Annual Report on Form 10-K, formatted in Extensible Business Reporting
Language (XBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of
Operations, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated
Financial Statements.
__________________
*
Management contract or compensatory plan or arrangement
99
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Cimpress
NOTICE AND PROXY STATEMENT
2015
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CIMPRESS N.V.
Hudsonweg 8
5928 LW Venlo
The Netherlands
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Cimpress N.V. will hold its 2015 Annual General Meeting of Shareholders:
on Tuesday, November 17, 2015
at 7:00 p.m. Central European Time
at the offices of Cimpress N.V.
Hudsonweg 8
5928 LW Venlo
The Netherlands
MATTERS TO BE ACTED UPON AT THE ANNUAL GENERAL MEETING:
(1) Reappoint Eric C. Olsen to our Supervisory Board to serve for a term of four years ending on the date of our
annual general meeting of shareholders in 2019;
(2) Reappoint Katryn S. Blake to our Management Board to serve for a term of four years ending on the date of
our annual general meeting of shareholders in 2019;
(3) Reappoint Donald R. Nelson to our Management Board to serve for a term of four years ending on the date of
our annual general meeting of shareholders in 2019;
(4) Following a discussion on the application of the remuneration policy over the fiscal year ended June 30, 2015,
hold a non-binding, advisory “say on pay” vote regarding the compensation of our named executive officers, as
described in the Compensation Discussion and Analysis, executive compensation tables, and accompanying
narrative disclosures in this proxy statement;
(5) Adopt our statutory annual accounts, as prepared in accordance with Dutch law, for the fiscal year ended
June 30, 2015;
(6) Discharge the members of our Management Board from liability with respect to the exercise of their duties
during the fiscal year ended June 30, 2015;
(7) Discharge the members of our Supervisory Board from liability with respect to the exercise of their duties
during the fiscal year ended June 30, 2015;
(8) Authorize our Management Board, acting with the approval of our Supervisory Board, to repurchase up to
6,500,000 of our issued and outstanding ordinary shares (which represents approximately 20% of our 33.2 million
shares outstanding as of June 30, 2015) until May 17, 2017 on the open market (including block trades that satisfy
the safe harbor provisions of Rule 10b-18 pursuant to the United States Securities Exchange Act of 1934, or the
Exchange Act), through privately negotiated transactions, or in one or more self-tender offers at prices per share
between an amount equal to €0.01 and an amount equal to 120% of the market price of our ordinary shares on the
Nasdaq Global Select Market, or Nasdaq, or any other securities exchange where our shares are then traded (the
market price being deemed to be the average of the closing price on each of the consecutive days of trading during
a period no shorter than one trading day and no longer than 10 trading days immediately preceding the date of
repurchase, as reasonably determined by the Management Board);
(9) Authorize our Management Board, acting with the approval of our Supervisory Board, until May 17, 2017 to
issue ordinary shares or grant rights to subscribe for ordinary shares up to a maximum of (i) 10% of our outstanding
share capital at the time of issue for general corporate purposes including but not limited to equity compensation,
acquisitions, and financings, and (ii) an additional 10% of our outstanding share capital at the time of issue in
connection with our acquisition of all or a majority of the equity or assets of another entity;
(10) Renew the authorization of our Management Board, acting with the approval of our Supervisory Board, until
May 17, 2017 to resolve to exclude or restrict our shareholders’ preemptive rights under Dutch law with respect to
ordinary shares and rights to subscribe for ordinary shares that the Management Board may issue or grant pursuant
to any authorization of our shareholders;
(11) Appoint PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal
year ending June 30, 2016; and
(12) Transact other business, if any, that may properly come before the meeting or any adjournment of the
meeting.
Our Management Board and Supervisory Board have no knowledge of any other business to be transacted at the
annual general meeting.
Shareholders of record at the close of business on October 20, 2015 are entitled to vote at the annual general
meeting. Your vote is important regardless of the number of shares you own. Whether or not you expect to attend
the meeting, please complete, sign, date, and promptly return the enclosed proxy card in the envelope that we or
your bank or brokerage firm have provided. Your prompt response will ensure that your shares are represented at
the annual general meeting. You can change your vote and revoke your proxy by following the procedures
described in this proxy statement.
All shareholders are cordially invited to attend the annual general meeting.
By order of the Management Board,
Chairman of the Management Board, President and
Chief Executive Officer
October 26, 2015
CIMPRESS N.V.
Hudsonweg 8
5928 LW Venlo
The Netherlands
PROXY STATEMENT FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
to be held on November 17, 2015
This proxy statement contains information about the 2015 Annual General Meeting of Shareholders of Cimpress
N.V., which we refer to in this proxy statement as the annual meeting or the meeting. We will hold the annual
meeting on Tuesday, November 17, 2015 at the offices of Cimpress N.V. at Hudsonweg 8, 5928 LW Venlo, the
Netherlands. The meeting will begin at 7:00 p.m. Central European Time.
We are furnishing this proxy statement to you in connection with the solicitation of proxies by the Management
Board of Cimpress N.V. (which is also referred to as we, us, or Cimpress in this proxy statement) for use at the
annual meeting and at any adjournment of the annual meeting.
We are first mailing the Notice of Annual General Meeting, this proxy statement, and our Annual Report to
Shareholders for the fiscal year ended June 30, 2015 on or about October 26, 2015.
Important Notice Regarding the Availability of Proxy Materials for the 2015 Annual General Meeting of
Shareholders:
This Proxy Statement and the 2015 Annual Report to Shareholders are available for viewing, printing and
downloading at http://proxy.ir.CIMPRESS.com.
In addition, our statutory annual accounts and
accompanying annual report, as prepared in accordance with Dutch law and including biographical
information about the candidates nominated for appointment as members of our Supervisory Board and
our Management Board, are available at our offices at the address above and for viewing, printing, and
downloading at http://proxy.ir.CIMPRESS.com.
We will furnish without charge a copy of this proxy statement and our Annual Report on Form 10-K for
the fiscal year ended June 30, 2015, as filed with the United States Securities and Exchange Commission,
or SEC, to any shareholder who requests it in writing to Cimpress N.V., c/o Cimpress USA Incorporated,
Attention: Investor Relations, 275 Wyman Street, Waltham, MA 02451, USA. This proxy statement and our
Annual Report on Form 10-K are also available on the SEC’s web site at www.sec.gov.
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INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
What is the purpose of the annual meeting?
At the annual meeting, our shareholders will consider and act upon the 11 proposals listed in the Notice of Annual
General Meeting of Shareholders that appears on the first two pages of this proxy statement. Our Management
Board and Supervisory Board are not aware of any other business to be transacted at the annual meeting.
Who can vote?
To be able to vote on the matters listed in the Notice of Annual General Meeting of Shareholders on the first two
pages of this proxy statement, you must have held ordinary shares of Cimpress at the close of business on
October 20, 2015, which is the record date for the annual meeting. Shareholders of record at the close of business
on October 20, 2015 are entitled to vote on each proposal at the meeting. The number of outstanding ordinary
shares entitled to vote on each proposal at the meeting is 31,402,943.
How many votes do I have?
Each ordinary share of Cimpress that you owned on the record date entitles you to one vote on each matter that
is voted on at the annual meeting.
Is my vote important?
Your vote is important regardless of how many ordinary shares you own. Please take a moment to read the
instructions below, vote your shares, and submit your proxy as soon as possible to ensure that your shares are
represented and voted at the annual meeting.
How do I vote?
If you are a holder of record and your shares are not held in “street name” by a bank or brokerage firm, you may
vote by completing and signing the proxy card that accompanies this proxy statement and promptly mailing it in the
enclosed postage-prepaid envelope. For your vote to be counted at the meeting, our transfer agent, Computershare
Trust Company, Inc., must receive your proxy no later than 4:00 p.m. Eastern Standard Time on the last business
day before the meeting.
If your shares are held in street name by a bank or brokerage firm, then you will need to follow the directions your
bank or brokerage firm provides to you in order to vote your shares. Many banks and brokerage firms offer the
option of voting by mail, over the Internet, or by telephone, which will be explained in the voting instruction form you
receive from your bank or brokerage firm.
The shares you own will be voted according to the instructions you return to Computershare Trust Company or
your bank or brokerage firm. If you are a holder of record and sign and return the proxy card, but do not give any
instructions on a particular matter to be voted on as described in this proxy statement, then the shares you own will
be voted in accordance with the recommendations of our Management Board and Supervisory Board. The
Management Board and Supervisory Board recommend that you vote FOR Proposals 1 - 11.
If you are a record holder and attend the annual meeting in person, then you may also vote in person. If you hold
your shares in street name, then you must follow the instructions below under “How do I attend the meeting and
vote in person?” if you wish to attend the meeting or vote in person.
Can I change my vote after I have mailed my proxy card?
Yes. If your shares are held in street name by a bank or brokerage firm and you wish to revoke or change your
voting instructions, then you must follow the directions you receive from your bank or brokerage firm. If you are a
holder of record and your shares are not held in street name, then you can revoke your proxy and change your vote
by doing any one of the following things:
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• signing another proxy card with a later date and delivering the new proxy card to our Chief Legal Officer at the
offices of our subsidiary Cimpress USA Incorporated, 275 Wyman Street, Waltham, MA 02451 USA no later
than 4:00 p.m. Eastern Standard Time on the last business day before the meeting;
• delivering to our Chief Legal Officer written notice no later than 4:00 p.m. Eastern Standard Time on the last
business day before the meeting that you want to revoke your proxy; or
• voting in person at the meeting.
Your attendance at the meeting alone will not revoke your proxy.
Can I vote if my shares are held in “street name”?
If the shares you own are held in street name by a bank or brokerage firm, then your bank or brokerage firm, as
the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your
shares, you will need to follow the directions your bank or brokerage firm provides to you. If you hold your shares in
street name, then you must follow the instructions below under “How do I attend the meeting and vote in person?” if
you wish to attend the meeting or vote in person.
How do I attend the meeting and vote in person?
If you wish to attend our annual meeting in Venlo, the Netherlands in person, please send our Chief Legal Officer
written notice at the offices of our subsidiary Cimpress USA Incorporated, 275 Wyman Street, Waltham, MA 02451
USA no later than November 12, 2015. If you need directions to the meeting, please call Investor Relations at +1
781-652-6480.
If you wish to attend the meeting and your shares are held in street name by a bank or brokerage firm, then you
must provide the written notice referenced above and also bring with you to the meeting an account statement or
letter from your bank or brokerage firm showing that you are the beneficial owner of the shares as of the record
date in order to be admitted to the meeting. To be able to vote your shares held in street name at the meeting, you
will need to obtain a proxy card from the holder of record, i.e., your bank or brokerage firm.
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What vote is required?
Under our articles of association, holders of at least one third of our outstanding ordinary shares must be
represented at the annual meeting to constitute a quorum, and the following vote is required to approve each of the
proposals described in this proxy statement:
• Proposals 1 through 3 (appointments of members of our Supervisory Board and Management Board): In
accordance with our articles of association, our Supervisory Board adopted unanimous resolutions to make
binding nominations of the candidates for Supervisory Board and Management Board. Our shareholders may
set aside any of these binding nominations only by a vote of at least two thirds of the votes cast at a meeting
representing more than half of our share capital.
• Proposal 4 (advisory “say on pay”): This proposal requires the approval of a majority of votes cast at a
meeting at which a quorum is present. This vote is non-binding and advisory in nature, but our Compensation
Committee will take into account the outcome of the vote when considering future executive compensation
arrangements.
• Proposal 10 (authority to exclude or restrict pre-emptive rights): This proposal requires the approval of a
majority of votes cast at a meeting at which a quorum is present, unless less than half of our issued capital is
present or represented at the meeting, in which case this proposal requires a vote of at least two thirds of the
votes cast.
• Proposals 5 through 9 and 11: These proposals require the approval of a majority of votes cast at a meeting at
which a quorum is present.
For all proposals, Dutch law and our articles of association provide that ordinary shares represented at the
meeting and abstaining from voting will count as shares present at the annual meeting but will not count for the
purpose of determining the number of votes cast. Broker non-votes will not count as shares present at the annual
meeting or for the purpose of determining the number of votes cast. “Broker non-votes” are shares that are held in
3
street name by a bank or brokerage firm that indicates on its proxy that it does not have discretionary authority to
vote on a particular matter.
How will votes be counted?
Each ordinary share will be counted as one vote according to the instructions contained on a properly completed
proxy or on a ballot voted in person at the annual meeting. Shares will not be voted in favor of a proposal if either
the shareholder abstains from voting on a particular matter, or the shares are broker non-votes.
Who will count the votes?
Computershare Trust Company, Inc., our transfer agent, will count, tabulate, and certify the votes.
How do the Management Board and Supervisory Board recommend that I vote on the proposals?
The Management Board and Supervisory Board recommend that you vote FOR all of the proposals listed in the
Notice of Annual General Meeting of Shareholders on the first two pages of this proxy statement.
Will any other business be conducted at the meeting or will other matters be voted on?
Our Management Board and Supervisory Board do not know of any other matters that may come before the
meeting. If any other matter properly comes before the meeting, then, to the extent permitted by applicable law, the
persons named in the proxy card that accompanies this proxy statement may exercise their judgment in deciding
how to vote, or otherwise act, at the meeting with respect to that matter or proposal.
Where can I find the voting results?
Within four business days after the annual meeting, we will report the voting results on a Current Report on
Form 8-K that we will file with the SEC.
How and when may I submit a shareholder proposal, including a shareholder nomination for a Supervisory
Board position, for the 2016 annual general meeting?
Because we are a Dutch limited company whose shares are traded on a U.S. securities exchange, both U.S. and
Dutch rules and timeframes apply if you wish to submit a candidate to be considered for election to our Supervisory
Board at our 2016 annual general meeting or if you wish to submit another kind of proposal for consideration by
shareholders at our 2016 annual general meeting.
Under our articles of association, if you are interested in submitting a proposal, you must fulfill the requirements
set forth in our articles of association, including satisfying both of the following criteria:
• We must receive your proposal at our registered offices in Venlo, the Netherlands as set forth below no later
than 60 days before the 2016 annual general meeting, and
• The number of ordinary shares you hold must equal at least 3% of our issued share capital.
Under our articles of association, shareholders do not have the right to nominate or appoint their own candidates
for positions on our Supervisory Board directly, but if you submit information about a potential candidate for the
Supervisory Board to our Nominating and Corporate Governance Committee, as described in the section of this
proxy statement entitled “Supervisory Board Nomination Process,” then our Nominating and Corporate Governance
Committee will consider whether he or she is appropriate for nomination to our Supervisory Board.
Under U.S. securities laws, if you wish to have a proposal included in our proxy statement for the 2016 annual
general meeting, then in addition to the above requirements, you also need to follow the procedures outlined in
Rule 14a-8 of the Exchange Act, and the deadline for submitting your proposal to us is earlier than the deadline
specified above: For your proposal to be eligible for inclusion in our 2016 proxy statement, we must receive your
proposal at our registered offices in Venlo, the Netherlands as set forth below no later than June 29, 2016.
4
Any proposals, nominations or notices under our articles of association or pursuant to Rule 14a-8 should be sent
to:
Secretary, Cimpress N.V.
Hudsonweg 8
5928 LW Venlo
The Netherlands
With a copy to:
Chief Legal Officer
Cimpress USA Incorporated
275 Wyman Street
Waltham, MA 02451
USA
What are the costs of soliciting these proxies?
We will bear the costs of solicitation of proxies. We have retained Alliance Advisors for a fee of $9,000 plus
expenses to assist us in soliciting proxies from our shareholders and to verify certain records relating to the
solicitation. We and our Supervisory Board members, officers, and selected other employees may also solicit
proxies by mail, telephone, e-mail, or other means of communication. Supervisory Board members, officers, and
employees who help us in soliciting proxies will not be specially compensated for those services, but they may be
reimbursed for their reasonable out-of-pocket expenses incurred in connection with their solicitation. We will request
brokers, custodians, and fiduciaries to forward proxy soliciting material to the owners of our ordinary shares that
they hold in their names and will reimburse these entities for their out-of-pocket expenses incurred in connection
with the distribution of our proxy materials.
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Householding of Annual Meeting Materials
Some banks, brokers, and other nominee record holders may participate in the practice of “householding” proxy
statements and annual reports. This means that only one copy of our proxy statement and annual report to
shareholders may be sent to multiple shareholders in your household. We will promptly deliver a separate copy of
either document to you if you contact us at the following address or telephone number: Investor Relations,
Cimpress, 275 Wyman Street, Waltham, MA 02451 USA, telephone no. +1 781-652-6480. If you want to receive
separate copies of the proxy statement or annual report to shareholders in the future, or if you are receiving multiple
copies and would like to receive only one copy per household, you should contact your bank, broker, or other
nominee record holder if you hold your shares in street name, or you may contact us at the above address or
telephone number if you are a holder of record.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information regarding the beneficial ownership of our ordinary shares as of
September 3, 2015 by:
• each shareholder we know to own beneficially more than 5% of our outstanding ordinary shares;
• each member of, and nominee for appointment to, our Supervisory Board;
• our named executive officers who are listed in the Summary Compensation Table in this proxy statement; and
• all of our Supervisory Board members and executive officers as a group.
Name and Address of Beneficial Owner(1)
Brave Warrior Advisors, LLC(4) .......................................................................................
Number of Ordinary
Shares Beneficially
Owned(2)
Percent of Ordinary
Shares Beneficially
Owned(3)
3,790,361
11.7%
12 East 49th Street, 14th Floor
New York, NY 10017 USA
FMR LLC(5) ....................................................................................................................
3,260,364
10.1
245 Summer Street
Boston, MA 02210 USA
Janus Capital Management LLC(6) .................................................................................
2,381,048
7.4
151 Detroit Street
Denver, CO 80206 USA
Prescott General Partners LLC(7) ...................................................................................
4,316,300
13.4
2200 Butts Road, Suite 320
Boca Raton, FL 33431 USA
Spruce House Investment Management LLC(8) .............................................................
2,100,000
6.5
6 East 43rd Street, 23rd Floor
New York, NY 10017 USA
Executive Officers, Supervisory Board members, and Nominees for Supervisory
Board
Robert S. Keane(9)(10) ...................................................................................................
Katryn S. Blake(10) .........................................................................................................
Paolo De Cesare(10) .......................................................................................................
John J. Gavin, Jr.(10)(11) ................................................................................................
Peter Gyenes(10)(12) ......................................................................................................
Donald R. Nelson(10) ......................................................................................................
Eric C. Olsen(10) .............................................................................................................
Sean E. Quinn .................................................................................................................
Richard T. Riley(10) .........................................................................................................
Nadia Shouraboura(10) ...................................................................................................
Ernst J. Teunissen(10)(13) ..............................................................................................
Mark T. Thomas(10)(14) ..................................................................................................
Scott Vassalluzzo(10)(15) ...............................................................................................
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3,203,875
9.5
50,052
13,669
64,969
31,374
137,048
16,169
346
67,133
664
43,923
37,324
211,404
*
*
*
*
*
*
*
*
*
*
*
*
All current executive officers and Supervisory Board members as a group (12
persons) (10) ...................................................................................................................
_____________
3,834,027
11.3%
*
Less than 1%
(1) Unless otherwise indicated, the address of each executive officer, Supervisory Board member, and nominee for
Supervisory Board listed is c/o Cimpress N.V., Hudsonweg 8, 5928 LW Venlo, the Netherlands.
(2) For each person or entity in the table above, the “Number of Shares Beneficially Owned” column may include ordinary
shares attributable to the person or entity because of that holder’s voting or investment power or other relationship, as
determined under SEC rules. Under these rules, a person or entity is deemed to have “beneficial ownership” of any
shares over which that person or entity has or shares voting or investment power, plus any shares that the person or
entity may acquire within 60 days of September 3, 2015 (i.e., November 2, 2015), including through the exercise of share
options or through the vesting of restricted share units. Unless otherwise indicated, each person or entity referenced in
the table has sole voting and investment power over the shares listed or shares such power with his or her spouse. The
inclusion in the table of any shares, however, does not constitute an admission of beneficial ownership of those shares by
the named shareholder.
(3) The percentage ownership for each shareholder on September 3, 2015 is calculated by dividing (1) the total number of
shares beneficially owned by the shareholder by (2) 32,311,666, the number of ordinary shares outstanding on
September 3, 2015, plus any shares issuable to the shareholder within 60 days after September 3, 2015 (i.e., November
2, 2015), including restricted share units that vest and share options that are exercisable on or before November 2, 2015.
(4) This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on August 10, 2015.
(5) This information is based solely upon a Schedule 13G that the shareholder filed with the SEC on February 13, 2015.
(6) This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 18, 2015.
(7) This information is based solely upon a Schedule 13D that the shareholder filed with the SEC on January 22, 2015.
(8) This information is based solely upon a Schedule 13G that the shareholder filed with the SEC on August 7, 2015.
(9)
Includes an aggregate of (i) 1,648,072 shares held by irrevocable discretionary trusts and other entities established for
the benefit of Mr. Keane or members of his immediate family, or the Trusts, and (ii) 84,181 shares held by a charitable
entity established by Mr. Keane and his spouse. Trustees who are independent of Mr. Keane or his spouse hold exclusive
voting and investment power with respect to the ordinary shares owned by the Trusts and the ordinary shares issuable
pursuant to share options and restricted share units held by the Trusts; Mr. Keane and his spouse do not hold such
power with respect to the Trusts. Mr. Keane and his spouse share voting and investment power with respect to the
shares held by the charitable entity. Mr. Keane and his spouse disclaim beneficial ownership of the shares, share options
and restricted share units held by the Trusts and the charitable entity except to the extent of their pecuniary interest
therein.
(10) Includes the number of shares listed below that each executive officer and supervisory director has the right to acquire
under share options and restricted share units that vest on or before November 2, 2015:
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• Mr. Keane: 1,471,622 shares, held by the Trusts
• Ms. Blake: 35,904 shares
• Mr. De Cesare: 7,489 shares
• Mr. Gavin: 38,120 shares
• Mr. Gyenes: 18,749 shares
• Mr. Nelson: 99,480 shares
• Mr. Olsen: 7,489 shares
• Mr. Riley: 26,102 shares
• Dr. Shouraboura: 664 shares
• Mr. Teunissen: 12,822 shares
• Mr. Thomas: 12,289 shares
• Mr. Vassalluzzo: 664 shares
• All current executive officers and supervisory directors in the aggregate: 1,718,572 shares
(11)
Includes 25,334 shares owned by a trust that Mr. Gavin and his wife own.
(12) Includes 10,353 shares owned by a trust of which Mr. Gyenes is the sole trustee.
(13) Mr. Teunissen resigned as Chief Financial Officer in October 2015.
(14) Includes 1,800 shares owned by a family limited liability company of which Mr. Thomas is a manager. Mr. Thomas
disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.
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(15) Mr. Vassalluzzo has the sole power to vote or to direct the vote of and to dispose or to direct the disposition of 1,958
shares. In his capacity as investment manager for certain managed accounts, Mr. Vassalluzzo may be deemed to have
the shared power to vote or to direct the vote of 138,566 shares and to dispose or to direct the disposition of 208,782
shares. Voting and investment authority over managed accounts established for the benefit of certain family members
and friends of Mr. Vassalluzzo is subject to each beneficiary’s right, if so provided, to terminate or otherwise direct the
disposition of the managed account.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our Supervisory Board members, executive officers, and the holders
of more than 10% of our ordinary shares, referred to as reporting persons, to file reports with the SEC disclosing
their ownership of and transactions in our ordinary shares and other equity securities. SEC regulations also require
these reporting persons to furnish us with copies of all such reports that they file.
Based on written representations from the reporting persons and our review of the reports they filed, we believe
that all reporting persons complied with all Section 16(a) filing requirements during our fiscal year ended June 30,
2015.
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PROPOSAL 1 - REAPPOINT ERIC C. OLSEN TO OUR SUPERVISORY BOARD
The eight current members of our Supervisory Board serve for rotating terms of up to four years:
• The terms of Peter Gyenes and Eric C. Olsen expire at this 2015 annual general meeting, and we are
asking our shareholders to reappoint Mr. Olsen.
• The terms of Paolo De Cesare and Mark T. Thomas expire at our 2016 annual general meeting.
• The term of John J. Gavin, Jr. expires at our 2017 annual general meeting.
• The terms of Richard T. Riley and Scott Vassalluzzo expire at our 2018 annual general meeting.
• The term of Nadia Shouraboura expires at our 2019 annual general meeting.
None of the members of our Supervisory Board is an employee of Cimpress.
Under Dutch law and our articles of association, our Supervisory Board has the right to make binding
nominations for open positions on the Supervisory Board. In accordance with the recommendation of the
Nominating and Corporate Governance Committee of the Supervisory Board and pursuant to the invitation of our
Management Board, the Supervisory Board has adopted unanimous resolutions to make a binding nomination of
Eric C. Olsen to serve as a Supervisory Board member for a term of four years ending on the date of our annual
general meeting of shareholders in 2019.
The Supervisory Board recommends that shareholders vote for the reappointment of Mr. Olsen because of his
varied executive experience in international business, including his recent appointment as Chief Executive Officer of
LafargeHolcim, his strong background in executive talent development and executive compensation, and his
expertise in finance within an international business context. Mr. Olsen serves on the Compensation Committee of
the Supervisory Board.
The persons named in the enclosed proxy card will vote to reappoint Mr. Olsen as a member of our Supervisory
Board unless you withhold authority to vote for the reappointment by marking the proxy card to that effect. Mr.
Olsen has indicated his willingness to serve if appointed. You can find more information about Mr. Olsen and the
other members of our Supervisory Board in the section of this proxy statement entitled “INFORMATION ABOUT
OUR SUPERVISORY BOARD MEMBERS AND EXECUTIVE OFFICERS.”
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The Management Board and Supervisory Board recommend that you vote FOR the reappointment of Mr.
Olsen as a member of our Supervisory Board.
PROPOSALS 2 AND 3 - REAPPOINT TWO MEMBERS OF OUR MANAGEMENT BOARD
As a Dutch company, we have a two-tiered board structure consisting of a Supervisory Board, composed of
independent, non-employee directors, and a Management Board, composed of members of our senior
management team. The principal responsibility of the Management Board is to manage Cimpress, which means,
among other things, that it is responsible for implementing Cimpress' goals and strategy, managing Cimpress'
associated risk profile, operating Cimpress' business on a day-to-day basis, and addressing corporate social
responsibility issues that are relevant to Cimpress. The Management Board is accountable to the Supervisory
Board and to our shareholders.
Our Management Board consists of five members of our senior management team who serve on the
Management Board for four-year terms:
• The term of Robert S. Keane, our President, Chief Executive Officer, and Chairman of the Management
Board, expires at our 2017 annual general meeting.
• The terms of the following members of our Management Board expire at this 2015 annual general meeting,
and we are asking our shareholders to reappoint them:
(cid:405) Katryn S. Blake, our Executive Vice President and President, Vistaprint Business Unit
(cid:405) Donald R. Nelson, our Executive Vice President and Chief Operating Officer
• The term of Wilhelm G.A. Jacobs, our Senior Vice President and Chief Supply Chain Officer, expires at our
2018 annual general meeting.
• Ernst J. Teunissen, our former Executive Vice President and Chief Financial Officer, is resigning from the
Management Board effective November 4, 2015.
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Under Dutch law and our articles of association, our Supervisory Board has the right to make binding
nominations for open positions on the Management Board. In accordance with the recommendation of the
Nominating and Corporate Governance Committee of the Supervisory Board and pursuant to the invitation of our
Management Board, the Supervisory Board has adopted unanimous resolutions to make binding nominations of
Ms. Blake and Mr. Nelson to serve on the Management Board for terms of four years ending on the date of our
annual general meeting of shareholders in 2019.
The persons named in the enclosed proxy card will vote to reappoint Ms. Blake and Mr. Nelson as members of
our Management Board unless you withhold authority to vote for any or all of the reappointments by marking the
proxy card to that effect. Each nominee has indicated his or her willingness to serve if appointed. You can find more
information about Ms. Blake and Mr. Nelson and the other members of our Management Board in the section of this
proxy statement entitled “INFORMATION ABOUT OUR SUPERVISORY BOARD MEMBERS AND EXECUTIVE
OFFICERS.”
The Management Board and Supervisory Board recommend that you vote FOR the reappointments of
Ms. Blake and Mr. Nelson as members of our Management Board.
PROPOSAL 4 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
At the annual meeting, we are asking our shareholders to approve the compensation of our named executive
officers, as described in the Compensation Discussion and Analysis, or CD&A, executive compensation tables, and
accompanying narrative disclosures in this proxy statement. This is an advisory vote, meaning that this proposal is
not binding on us, but our Compensation Committee values the opinions expressed by our shareholders and will
carefully consider the outcome of the shareholder vote when making future compensation decisions for our named
executive officers.
Please carefully read the CD&A section of this proxy statement. As you cast your vote on this proposal, we would
like you to consider the following compensation program highlights, which are described in more detail in CD&A.
Our executive compensation program has not changed significantly since fiscal 2012.
• We pay our executive officers based on Cimpress' performance. For our fiscal year ended June 30, 2015,
93% of our Chief Executive Officer’s total compensation was at risk including an annualized portion of his
multi-year, premium-priced share options described below.
• For fiscal 2015, our Compensation Committee did not increase the annual cash compensation (base salary
and target amount for annual cash incentive award) of our Chief Executive Officer or any of our other
executive officers over their fiscal 2014 levels as part of our efforts to keep our costs within our budget and
also because our Compensation Committee believed that the executives' compensation was competitive at
current levels.
• Each year, we reach out to our major shareholders to solicit their feedback on our executive compensation
design. We believe this collaborative process has helped foster a better understanding and input into our
executive compensation program by our shareholders.
•
In 2012, based in part on feedback from our shareholders during the outreach process described above, our
Compensation Committee redesigned the long-term incentive compensation of our executive officers to
increase the emphasis on Cimpress' long-term performance and our growth strategy using share price as the
primary performance metric. As a result of this redesign, we granted to our executive officers multi-year,
premium-priced share options with an exercise price of $50.00 per share, which was significantly higher than
the fair market value of our ordinary shares on the grant dates. In addition, Robert Keane, our Chief
Executive Officer, may not exercise these options unless our share price on Nasdaq is at least $75.00 on the
exercise date. Our Supervisory Board passed resolutions that, until fiscal 2016 at the earliest, we will not
grant any additional long-term incentive award in any form to Mr. Keane or any additional share options to
our other current executive officers.
• As a result of our shareholders’ feedback in our 2011 “say on pay” vote, our Compensation Committee
decided that we would no longer include excess parachute payment tax gross-up provisions in any executive
retention agreements we enter into with new executives after August 1, 2012.
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As required by Dutch law, we have a shareholder-approved Remuneration Policy that applies to our Management
Board members, which you can find on the Corporate Governance page in the Investor Relations section of
www.cimpress.com, and the compensation of our named executive officers is in accordance with the Remuneration
Policy. This proposal provides, pursuant to Section 2:135(5a) of the Dutch Civil Code, for a discussion regarding the
implementation of the remuneration policy for the Management Board. The discussion takes place on the basis of
the information referred to in Section 2:383c up to and including Section 2:383e of the Dutch Civil Code, as included
in the explanatory notes to the financial statements included in our Dutch statutory annual accounts for the fiscal
year ended June 30, 2015. This advisory vote on executive compensation does not amend the Remuneration
Policy in any way.
In 2011, a majority of our shareholders voted to hold the advisory vote to approve our executive compensation on
an annual basis. Therefore, we intend to put forth at each annual general meeting of shareholders an advisory vote
on the compensation of our named executive officers for the immediately preceding fiscal year.
Our Management Board and Supervisory Board recommend that you vote FOR the approval of the
compensation of our named executive officers, as described in this proxy statement.
PROPOSAL 5 - ADOPT OUR ANNUAL ACCOUNTS
At the annual meeting, we are asking you to confirm and adopt our Dutch statutory annual accounts, or Annual
Accounts, for the fiscal year ended June 30, 2015, which are our audited consolidated financial statements
prepared in accordance with Dutch law. As a Dutch company, we are required by Dutch law and our articles of
association to prepare the Annual Accounts and submit them to our shareholders for confirmation and adoption. Our
Annual Accounts are different from our audited financial statements contained in our Annual Report on Form 10-K
for the year ended June 30, 2015 that were prepared in accordance with United States generally accepted
accounting principles, or U.S. GAAP, as required by United States law and Nasdaq listing standards for companies
with securities listed on U.S. stock markets.
The Annual Accounts contain some disclosures that are not required under U.S. GAAP. In addition, the report of
our Management Board that accompanies the Annual Accounts contains information included in this proxy
statement and our Annual Report on Form 10-K, as well as other information required by Dutch law.
It is important that our shareholders adopt our Annual Accounts because it is a Dutch law requirement and also
because we are not permitted under Dutch law to take certain corporate actions unless our Annual Accounts are
adopted.
You can access a copy of the Annual Accounts through our website at http://proxy.ir.CIMPRESS.com or by
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sending a written request to:
Investor Relations
c/o Cimpress USA Incorporated
275 Wyman Street
Waltham, MA 02451
USA
Our Management Board and Supervisory Board recommend that you vote FOR the confirmation and
adoption of the Annual Accounts.
PROPOSALS 6 AND 7 - DISCHARGE OUR MANAGEMENT BOARD AND
SUPERVISORY BOARD FROM CERTAIN LIABILITY
At the annual meeting, as permitted under Dutch law and customary for Dutch companies, we are asking you to
discharge the members of our Management Board and Supervisory Board from liability with respect to the exercise
of their management and supervisory duties during our fiscal year ended June 30, 2015. If our shareholders
approve this discharge of liability, then our Management Board and Supervisory Board members will not be liable to
Cimpress for actions that they took on behalf of the company in the exercise of their duties during fiscal 2015.
However, the discharge does not apply to matters that are not disclosed to our shareholders, and it does not affect
the liability, if any, of our Management Board and Supervisory Board to our shareholders. The discharge is also
subject to the provisions of Dutch laws relating to liability upon bankruptcy.
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Our Management Board and Supervisory Board recommend that you vote FOR the discharge of the
members of our Management Board and Supervisory Board from liability as described above.
PROPOSAL 8 - RENEW OUR AUTHORIZATION TO REPURCHASE SHARES
Under Dutch law and our articles of association, our shareholders may authorize our Management Board, with
the approval of our Supervisory Board and subject to certain Dutch statutory provisions, to repurchase outstanding
shares on our behalf in an amount, at prices, and in the manner authorized by the shareholders. This authorization
will give us the flexibility to repurchase our ordinary shares without the expense of calling further general meetings
of shareholders. Under Dutch law and our articles of association, a shareholder authorization to repurchase shares
may not continue for more than 18 months, but may be given on a rolling basis. On November 12, 2014, we
received authorization from our shareholders to repurchase up to 6,400,000 of our issued and outstanding ordinary
shares on the open market, through privately negotiated transactions, or in one or more self-tender offers at prices
per share between an amount equal to € 0.01 (or the U.S. dollar equivalent) and an amount equal to 120% of the
market price of our ordinary shares on Nasdaq. As of August 31, 2015, we have repurchased 1,028,690 ordinary
shares under this authority. We are now seeking a renewal of our authorization to repurchase our ordinary shares.
Our Management Board believes that we would benefit from a renewal of the grant of authority to repurchase our
ordinary shares. If the Management Board believes that our shares may be undervalued at the market levels at
which they are then trading, repurchases of our share capital may represent an attractive investment for us and our
shareholders. Our Management Board, with the prior approval of our Supervisory Board and within the parameters
described in this proposal, would determine the number of shares repurchased, if any, and the timing and manner
of any repurchases in light of prevailing market conditions, our available resources, and other factors that we cannot
now predict. The repurchased shares could be used for any valid corporate purpose, including the issuance of
shares under our equity compensation plans or for acquisitions, mergers or similar transactions. The reduction in
our issued and outstanding shares resulting from any repurchases would increase the proportionate interest of the
remaining shareholders in whatever future profits we may earn. Under Dutch law, the number of our ordinary shares
that we or our subsidiaries hold may never exceed 50% of the total number of our issued and outstanding shares.
In order to provide us with maximum flexibility, we propose that our shareholders grant the Management Board,
acting with the approval of our Supervisory Board, authority to repurchase up to 6,500,000 of our issued and
outstanding ordinary shares (which represents approximately 20% of the 33.2 million shares outstanding as of
June 30, 2015) on the open market (including block trades that satisfy the safe harbor provisions of Rule 10b-18
pursuant to the Exchange Act), through privately negotiated transactions, or in one or more self-tender offers at
prices per share between an amount equal to €0.01 and an amount equal to 120% of the market price of our
ordinary shares on Nasdaq or any other securities exchange where our shares are then traded (the market price
being deemed to be the average of the closing price on each of the consecutive days of trading during a period no
shorter than one trading day and no longer than 10 trading days immediately preceding the date of repurchase, as
reasonably determined by the Management Board). This authority would begin on the date of the annual meeting
and extend for 18 months until May 17, 2017.
An authorization to repurchase up to 6,500,000 of our issued and outstanding ordinary shares would not
necessarily mean that we will repurchase this amount over the authorization period. We may choose to repurchase
fewer than all of the shares authorized or none at all, and we are seeking this authorization to have the flexibility to
make repurchases if we believe doing so would be in the best interests of Cimpress and our shareholders. Our
Supervisory Board and Management Board will analyze many factors relating to a repurchase decision, including
share price relative to our anticipated future cash flows, our ability to use operating cash flow or debt to repurchase
the shares while taking into account our debt covenants and other uses for our cash or debt capacity, general
shareholder concentration, and liquidity concerns, as well as other items.
If our shareholders do not approve this proposal, then we intend to continue to make share repurchases, if any,
under the previous authorization that our shareholders approved at our November 12, 2014 annual general
meeting, which will expire on May 12, 2016. If our shareholders do approve this proposal, then the repurchase
authorization described in this proposal will replace the November 2014 repurchase authorization, and we will make
any future share repurchases pursuant to this new authorization.
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Our Management Board and Supervisory Board recommend that you vote FOR the authorization of the
Management Board and Supervisory Board to repurchase our issued and outstanding ordinary shares as
described above.
PROPOSAL 9 - RENEW OUR AUTHORIZATION TO ISSUE ORDINARY SHARES
Dutch law and our articles of association require us to seek the approval of our shareholders each time we wish
to issue new shares from our authorized share capital, unless our shareholders have previously authorized our
Management Board, with the approval of our Supervisory Board, to issue shares. This authorization may not
continue for more than five years, but may be given on a rolling basis. On November 3, 2011, we received
authorization from our shareholders to issue ordinary shares, or grant rights to subscribe for ordinary shares, up to
a maximum of our authorized share capital at the time of issue, which is currently 100 million ordinary shares, €0.01
par value per share. This existing authorization expires on November 3, 2016, and it is common practice for Dutch
companies to seek to renew the authorization to issue shares periodically on a rolling basis.
At the annual meeting, we are asking our shareholders to authorize our Management Board, with the approval of
our Supervisory Board, until May 17, 2017 to issue ordinary shares, or grant rights to subscribe for ordinary shares,
up to a maximum of:
• 10% of our outstanding share capital at the time of issue for general corporate purposes including but not
limited to equity compensation, acquisitions, and financings; and
• an additional 10% of our outstanding share capital at the time of issue in connection with our acquisition of
all or a majority of the equity or assets of another entity.
Although we currently issue ordinary shares from our treasury account and have no plans to issue any new
ordinary shares from our authorized share capital, we are seeking this authorization to maintain our flexibility to
issue, or grant rights to subscribe for, 10% of our outstanding share capital at times when we believe doing so
would be in Cimpress' best interests, including for equity compensation purposes, in connection with acquisitions,
financings, and other transactions, and for other general corporate purposes. In addition, because an important
component of our strategy is to selectively pursue acquisitions of businesses that complement or enhance our
current business and operations, we are also seeking authorization to issue, or grant rights to subscribe for, up to
an additional 10% of our outstanding share capital in connection with the acquisition of other entities or their assets.
We believe it is important to our continued growth to retain the flexibility to issue securities in a timely manner
without the delay and uncertainty of obtaining specific shareholder approval for each issuance. Although our
existing authorization allows us to issue up to our maximum share capital, at this annual meeting we are seeking
the authorization to issue a more limited number of shares for a limited time (18 months) to balance our need for
flexibility to issue new shares against the potential dilution of our shareholders. Furthermore, because our ordinary
shares are listed on Nasdaq, our issuance of additional shares will remain subject to Nasdaq rules, which require,
among other things, shareholder approval for the issuance of shares in excess of 20% of our shares outstanding
(with several exceptions).
If our shareholders do not renew the Management Board’s authority, then the previous authorization would
remain in place, and we could continue to issue ordinary shares pursuant to that authorization until it expires on
November 3, 2016. If our shareholders do approve this proposal, then the authorization to issue ordinary shares
described in this proposal will replace the November 2011 authorization.
Our Management Board and Supervisory Board recommend that you vote FOR the renewal of our
authorization to issue ordinary shares and grant rights to subscribe for ordinary shares as described
above.
PROPOSAL 10 - RENEW OUR AUTHORIZATION TO EXCLUDE OR RESTRICT
SHAREHOLDERS' PREEMPTIVE RIGHTS
Under Dutch law, holders of our ordinary shares (other than our employees who receive ordinary shares under
our equity compensation plans) would generally have a pro rata preemptive right of subscription with respect to any
new ordinary shares we issue for cash or any grant of rights to subscribe for ordinary shares. A preemptive right of
subscription is the right of our current shareholders to maintain their percentage ownership of Cimpress' shares by
buying a proportional number of any new shares that Cimpress issues. However, Dutch law and our articles of
association permit our shareholders to authorize our Management Board, with the approval of our Supervisory
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Board, to exclude or restrict these preemptive rights. This authorization may not continue for more than five years,
but may be given on a rolling basis. On November 3, 2011, we received authorization from our shareholders to
exclude or restrict these preemptive rights, which authorization expires on November 3, 2016, and it is common
practice for Dutch companies to seek to renew this authorization periodically on a rolling basis.
At the annual meeting, we are asking our shareholders to renew the authority of our Management Board, with the
approval of our Supervisory Board, until May 17, 2017 to exclude or restrict preemptive rights with respect to
issuances of ordinary shares or grants of rights to subscribe for ordinary shares pursuant to any authorization of our
shareholders. Preemptive rights are uncommon for public companies domiciled in the United States. We
believe that if we are not granted the authority to limit preemptive rights, our ability to raise capital through sales of
our securities would be significantly affected because shareholders’ exercise of their preemptive rights would cause
delays in a transaction and may dissuade potential buyers of our securities from entering into a transaction with us.
Any limits or waivers of preemptive rights would apply equally to all holders of our ordinary shares.
If our shareholders do not renew the Management Board’s authority, then our previous authorization would
remain in place, and we could continue to exclude or restrict preemptive rights pursuant to that authorization until it
expires on November 3, 2016. If our shareholders do approve this proposal, then the authorization to exclude or
restrict preemptive rights described in this proposal will replace the November 2011 authorization.
Our Management Board and Supervisory Board recommend that you vote FOR the renewal of our
authorization to exclude or restrict our shareholders' preemptive rights.
PROPOSAL 11 - APPOINT OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected PricewaterhouseCoopers LLP, or PwC, as our independent registered public
accounting firm for the fiscal year ending June 30, 2016 with respect to our consolidated financial statements
prepared in accordance with U.S. generally accepted accounting principles, and we are asking our shareholders to
appoint PwC as our statutory auditor of Cimpress N.V. We do not expect that PwC will attend the annual meeting or
be available to answer questions.
During the summer of 2014, we engaged in a rigorous request for proposal process with the participation of
several auditing firms, including PwC and Ernst & Young, which had served as our independent registered public
accounting firm for our fiscal year ended June 30, 2014 and previous fiscal years. Upon reviewing the proposals we
received in this process, our Audit Committee selected PwC as our independent registered accounting firm for our
fiscal year ended June 30, 2015 and dismissed Ernst & Young. The reports of Ernst & Young as of and for our
consolidated financial statements for the years ended June 30, 2014 and 2013 did not contain an adverse opinion
or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the years ended June 30, 2014 and 2013, and through August 15, 2014, there were no (a) disagreements
with Ernst & Young on any matter of accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to Ernst & Young’s satisfaction, would have caused Ernst
& Young to make reference to the subject matter thereof in connection with its reports for such years; or
(b) reportable events, as described under Item 304(a)(1)(v) of Regulation S-K.
Our Management Board and Supervisory Board recommend that you vote FOR the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year
ending June 30, 2016.
Independent Registered Public Accounting Firm Fees and Other Matters
The following table presents the aggregate fees and expenses billed for services rendered by Ernst & Young LLP,
our independent registered public accounting firm for the fiscal year ended June 30, 2014, and by PwC, our
independent registered public accounting firm for the fiscal year ended June 30, 2015. The amounts reported for
each fiscal year represent the fees and expenses for services rendered during the applicable fiscal year, regardless
of when the fees and expenses were billed.
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Fiscal 2014
Audit Fees(1) .........................................................................................................................................$ 1,933,510 $ 2,196,600
Audit-Related Fees(2) ............................................................................................................................
31,300
Tax Fees(3) ............................................................................................................................................
All Other Fees ........................................................................................................................................
Total Fees ..............................................................................................................................................$ 3,139,560 $ 2,601,200
_____________
Fiscal 2015
883,950
373,300
317,500
4,600
—
(1) Audit fees and expenses consisted of fees and expenses billed by PwC for the year ended June 30, 2015 and fees and
expenses billed by Ernst & Young for the year ended June 30, 2014 for the audit of our consolidated financial statements,
statutory audits of Cimpress N.V. and certain of our subsidiaries, quarterly reviews of our financial statements, and the
audit of the effectiveness of internal control over financial reporting as promulgated by Section 404 of the U.S. Sarbanes-
Oxley Act.
(2) Audit-related fees and expenses consisted of fees and expenses for services that are reasonably related to the
performance of the audit and the review of our financial statements and that are not reported under “Audit Fees.” These
services relate principally to consultations regarding financial accounting and reporting matters and financial due diligence
assistance with acquisitions.
(3) Tax fees and expenses consisted of fees and expenses for tax compliance (including tax return preparation), tax advice,
tax planning and consultation services. Tax compliance services (assistance with tax returns, tax audits and appeals)
accounted for $172,680 of the total tax fees billed by PwC in fiscal 2015 and $210,725 of the total tax fees billed by Ernst
& Young in fiscal 2014.
Audit Committee’s Pre-approval Policy and Procedures
Our Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services
for the purpose of maintaining the independence of our registered public accounting firm. We may not engage the
independent registered public accounting firm to render any audit or non-audit service unless either the service is
approved in advance by the Audit Committee or the engagement to render the service is entered into pursuant to
the Audit Committee’s pre-approval policies and procedures. From time to time, the Audit Committee pre-approves
services that are expected to be provided to Cimpress by the independent registered public accounting firm during
the following 12 months. Any such pre-approval is detailed as to the particular service or type of services to be
provided and is also subject to a maximum dollar amount. At regularly scheduled meetings of the Audit Committee,
management or the independent registered public accounting firm report to the Audit Committee regarding services
actually provided to Cimpress.
During our fiscal year ended June 30, 2015, PwC did not provide any services to Cimpress other than in
accordance with the pre-approval policies and procedures described above.
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OTHER MATTERS
Our Management Board and Supervisory Board do not know of any other matters that may come before the
annual meeting. However, if any other matters are properly presented to the annual meeting, then, to the extent
permitted by applicable law, the persons named as proxies may vote, or otherwise act, in accordance with their
judgment on such matters.
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INFORMATION ABOUT OUR SUPERVISORY BOARD MEMBERS AND EXECUTIVE OFFICERS
Our Supervisory Board:
Our Supervisory Board currently consists of eight independent, non-employee directors.
Nominee for Member of our Supervisory Board whose term expires at this 2015 Annual General Meeting:
ERIC C. OLSEN, Director since March 2013
Mr. Olsen, age 51, has served since August 1999 in various executive capacities at LafargeHolcim (previously
Lafarge), a world leader in building materials. He has been Chairman, Chief Executive Officer, and Director of
Lafarge SA since July 2015 and served as Executive Vice President, Operations from September 2013 to July
2015. Mr. Olsen was previously Executive Vice President, Organization and Human Resources, Chief Executive
Officer and Executive Vice President of Lafarge North America in the United States (formerly NYSE LAF), and
President, Northeast Cement Region and Senior Vice President, Purchasing of Lafarge North America in Canada.
Mr. Olsen also currently serves on the boards of Ambuja Cements Ltd., one of India's leading cement
manufacturers, and ACC Limited, India's foremost manufacturer of cement and ready mixed concrete. A certified
public accountant, he started his career as a senior accountant at Deloitte & Touche in New York. Mr. Olsen brings
to the Supervisory Board his varied executive experience in international business, his strong background in
executive talent development and executive compensation, and his expertise in finance within an international
business context.
Member of our Supervisory Board whose term expires at this 2015 Annual General Meeting:
PETER GYENES, Director since February 2009
Mr. Gyenes, age 70, has served as the Chairman of Sophos Plc, a global security software company, from May
2006 to September 2012 and again from July 2015 to the present, and as its Lead Independent Director from
September 2012 to July 2015. Mr. Gyenes served as Chairman and Chief Executive Officer of Ascential Software
and its predecessor companies VMark Software, Ardent Software and Informix from 1996 until it was acquired by
IBM in April 2005. Mr. Gyenes also currently serves on the boards of Carbonite, Inc., a provider of cloud and hybrid
business continuity solutions; Intralinks Holdings, Inc., a provider of shared document and information exchanges;
Pegasystems Inc., a provider of business process management software and services; and RealPage, Inc., a
provider of property management software solutions for the multifamily industry. Mr. Gyenes previously served on
the boards of, among other companies, EnerNoc Inc., a provider of energy management solutions, from April 2013
to May 2015; Netezza Corporation, a provider of data warehouse appliances, from February 2008 to November
2010 when it was acquired by IBM; and Lawson Software, Inc., a provider of software and service solutions in the
manufacturing, distribution, maintenance and service sector industries, from May 2006 to July 2011 when it was
acquired by GGC Software Holdings, Inc. He is a trustee emeritus of the Massachusetts Technology Leadership
Council. Mr. Gyenes brings to the Supervisory Board his broad experience in leading companies as chief executive
officer and board member and his deep expertise on executive compensation matters through his service on
several compensation committees.
Members of our Supervisory Board whose terms will expire at our 2016 annual general meeting:
PAOLO DE CESARE, Director since March 2013
Mr. De Cesare, age 55, has served as Chief Executive Officer of Printemps Department Store Paris, a retailer
dedicated to fashion and luxury brands with department stores in France, since September 2007. Previously, Mr. De
Cesare served in various executive capacities at Procter & Gamble from 1983 to 2007, most recently as President
of Procter & Gamble Global Skin Care and, prior to that, as Vice President of Procter & Gamble Far East and
President Max Factor KK, the Cosmetic division of Procter in Japan. Mr. De Cesare also served on the board of
Indesit Company, a publicly traded company and leading European manufacturer and distributor of domestic
appliances, from 2009 until 2013. Mr. De Cesare brings to the Supervisory Board his strong knowledge of brand
and marketing strategy, his international business experience and perspective, and his operational, executive and
board experience in a variety of roles worldwide.
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MARK T. THOMAS, Director since November 2009
Mr. Thomas, age 61, has served as a Founder and Partner of Monitor Clipper Partners, a middle market private
equity firm, since December 1997 and also serves as a member of Monitor Clipper Partners’ Investment Committee
and as a director of several of its portfolio companies. In addition, Mr. Thomas was a co-founder of Monitor
Company Group LP, a global strategy and marketing consulting firm, where he served in various leadership
positions from 1983 to November 2012. In November 2012, Monitor Company Group LP entered into a Section 363
process under Chapter 11 of the U.S. Bankruptcy Code to sell its assets to Deloitte Consulting. The transaction was
consummated in January 2013. In addition to serving on the Supervisory Board of Cimpress N.V., Mr. Thomas also
serves on the supervisory board of Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Mr. Thomas
brings to the Supervisory Board his extensive strategy, investment and international experience, which includes
30 years of building companies, serving on boards and providing advice to top executives on strategic matters.
Member of our Supervisory Board whose term will expire at our 2017 annual general meeting:
JOHN J. GAVIN, Jr., Director since August 2006
Mr. Gavin, age 60, serves on the boards of BroadSoft, Inc., a global provider of residential and business Voice
over IP applications; Qlik Technologies Inc., a provider of business intelligence solutions; and Varonis Systems, Inc.,
a provider of data governance solutions for unstructured data. Mr. Gavin previously served as Chief Financial
Officer of BladeLogic, Inc., a provider of data center automation software, from January 2007 through June 2008,
when it was acquired by BMC Software; as Chief Financial Officer of Navisite, Inc., a provider of information
technology hosting, outsourcing and professional services, from April 2004 through December 2006; and as the
Senior Vice President and Chief Financial Officer of Cambridge Technology Partners, a consulting firm, from
February 2000 through December 2001. Mr. Gavin also spent ten years at Price Waterhouse LLP, an accounting
firm, in various accounting and audit positions including as Senior Manager in charge of multi-national audits. In
addition to serving on the Supervisory Board of Cimpress N.V., Mr. Gavin also serves on the supervisory board of
Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Mr. Gavin brings to the Supervisory Board his
extensive experience as chief financial officer of several growing companies, as well as ten years as an
independent auditor. Mr. Gavin is a certified public accountant.
Members of our Supervisory Board whose terms will expire at our 2018 annual general meeting:
RICHARD T. RILEY, Director since February 2005 and Chairman of the Supervisory Board since
August 2009
Mr. Riley, age 59, served in various capacities at LoJack Corporation, a publicly traded provider of tracking and
recovery systems, during the period from 2005 until 2013, including Chairman of the Board of Directors from
November 2006 to May 2012; Chief Executive Officer from November 2006 to February 2008 and again from May
2010 to November 2011; and President, Chief Operating Officer and a director from February 2005 through
November 2006 and again from May 2010 to November 2011. Mr. Riley also serves on the boards of Dorman
Products, Inc., a supplier of original equipment automotive replacement parts, and Tupperware Brands Corporation,
a direct-to-consumer marketer of various products across a range of brands and categories worldwide. From 1997
through 2004, Mr. Riley held a variety of positions with New England Business Service, Inc., a publicly traded
provider of products and services to small businesses, most recently serving as Chief Executive Officer, President,
Chief Operating Officer and director. In addition to serving on the Supervisory Board of Cimpress N.V., Mr. Riley
also serves on the supervisory board of Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Mr. Riley
brings to the Supervisory Board his extensive experience of leading companies as a chief executive officer and
board member.
SCOTT VASSALLUZZO, Director since January 2015
Mr. Vassalluzzo, age 44, is a Managing Member of Prescott General Partners LLC ("PGP"), an investment
adviser registered with the U.S. Securities and Exchange Commission that holds approximately 13% of Cimpress'
outstanding shares. PGP serves as the general partner of three private investment limited partnerships, including
Prescott Associates L.P. (together, the "Prescott Partnerships"). Mr. Vassalluzzo joined the Prescott organization in
1998 as an equity analyst, became a general partner of the Prescott Partnerships in 2000, and transitioned to
Managing Member of PGP following Prescott's reorganization in January 2012. Prior to 1998, Mr. Vassalluzzo
worked in public accounting at Coopers & Lybrand (now PricewaterhouseCoopers LLP). Mr. Vassalluzzo serves on
the boards of directors of Credit Acceptance Corporation, an auto finance company providing automobile loans and
other related financial products, and World Acceptance Corporation, a personal installment loan company. Mr.
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Vassalluzzo brings to the board his advocacy for the priorities of long-termism and intrinsic value per share and his
experience on the boards and compensation committees of other publicly traded companies.
Member of our Supervisory Board whose term will expire at our 2019 annual general meeting:
NADIA SHOURABOURA, Director since January 2015
Dr. Shouraboura, age 45, has served as the Founder and Chief Executive Officer of Hointer, Inc., a technology
company that brings together the best features of virtual shopping with in-store shopping, since August 2012.
Before founding Hointer, Dr. Shouraboura served on the senior management team responsible for overall direction
and operations at Amazon.com, Inc. from April 2004 to August 2012, including as Technology Vice President,
Global Supply Chain and Fulfillment Platform from 2008 to August 2012. Before joining Amazon.com, Dr.
Shouraboura served in technology and leadership roles at Diamond Technology Partners, Mobilicity, and Exelon
Corporation. Dr. Shouraboura brings to the board her strong advocacy and experience with building customer-
centric company cultures and her experience in operations and technology.
Our Management Board and Executive Officers:
Our Management Board consists of four of our executive officers and one senior member of management who is
not an executive officer of Cimpress.
ROBERT S. KEANE, President, Chief Executive Officer, and Chairman of the Management Board (executive
officer)
Mr. Keane, age 52, has served as our President and Chief Executive Officer since he founded Cimpress (then
Vistaprint) in January 1995. Mr. Keane served as the Chairman of our Board of Directors from January 1995 to
August 2009 and was appointed Chairman of the Management Board in September 2009. From 1988 to 1994,
Mr. Keane was an executive at Flex-Key Corporation, an OEM manufacturer of keyboards, displays and retail
kiosks used for desktop publishing. Mr. Keane holds a Bachelor of Arts in economics from Harvard College and a
Masters of Business Administration from INSEAD in Fontainebleau, France. Mr. Keane’s term as a member of our
Management Board will expire at our 2017 annual general meeting.
KATRYN “TRYNKA” S. BLAKE (née Shineman), Executive Vice President and President, Vistaprint
Business Unit (executive officer)
Ms. Blake, age 41, has served as Executive Vice President and President, Vistaprint Business Unit since July
2014. Ms. Blake previously served as our Executive Vice President, Global Marketing from July 2012 to June 2014,
Chief Customer Officer from June 2011 to June 2014, President of Vistaprint’s North American business unit from
November 2010 to June 2012, Chief Marketing Officer of Vistaprint's North American business unit from April 2008
to November 2010, and in a variety of marketing positions since joining Cimpress in March 2004 as Director,
Marketing. Before joining Cimpress, she served as a director and senior manager for PreVision Marketing from
1996 to March 2004. Ms. Blake holds a Bachelor of Arts in psychology from Cornell University and a Masters of
Business Administration degree from Columbia Business School. Ms. Blake’s term as a member of our
Management Board expires at this 2015 annual general meeting, and we are asking our shareholders to reappoint
her.
DONALD R. NELSON, Executive Vice President and Chief Operating Officer (executive officer)
Mr. Nelson, age 47, has served as our Executive Vice President since July 2012 and as Chief Operating Officer
since November 2014. Mr. Nelson previously served as our President, Mass Customization Platform from June
2014 to November 2014, Executive Vice President, Capabilities from July 2012 to June 2014, Chief Information
Officer from May 2008 to June 2014, and Senior Vice President of Capabilities Development from July 2006 to May
2008. Before joining Cimpress, Mr. Nelson served as Chief Information Officer at Sapient, where he started in 1993
as a software engineer, then later as vice president before assuming the role of Chief Information Officer in 2001.
Mr. Nelson received a Bachelor of Science in Computer Science from Gordon College. Mr. Nelson’s term as a
member of our Management Board expires at this 2015 annual general meeting, and we are asking our
shareholders to reappoint him.
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WILHELM ("WILL") G.A. JACOBS, Senior Vice President and Chief Supply Chain Officer (not an executive
officer)
Mr. Jacobs, age 50, has served as our Chief Supply Chain Officer since September 2015 and as a Senior Vice
President since July 2012. Mr. Jacobs previously served as our Senior Vice President, Manufacturing & Supply
Chain from June 2014 to September 2015; as General Manager of Columbus, a major engineering and product
development program, from July 2013 to June 2014; as Senior Vice President, Manufacturing Supply Chain
Operations from July 2012 to June 2013; and as Vice President, Plant Director from May 2011 to December 2012.
Before joining Cimpress, Mr. Jacobs served as Vice President, Operations Industrial Adhesives EMEA of Henkel
from January 2008 to April 2011. Mr. Jacobs received an Executive MBA at Henley College in the UK, an MSc IT at
de Montfort University in the UK, and Bachelor ICT at Hogeschool Breda in the Netherlands. Mr. Jacobs' term as a
member of our Management Board will expire at our 2018 annual general meeting.
ERNST J. TEUNISSEN, Former Executive Vice President and Chief Financial Officer (former executive
officer)
Ernst Teunissen resigned as executive officer in October 2015, and he is leaving Cimpress and resigning as a
Management Board member on November 4, 2015. Mr. Teunissen, age 49, served as our Executive Vice President
and Chief Financial Officer from March 2011 to October 2015 and as our Vice President of Strategy from
October 2009 through February 2011. Before joining Cimpress, Mr. Teunissen was a founder and director of two
corporate finance and management consulting firms: Manifold Partners from May 2007 through September 2009
and ThreeStone Ventures Limited from June 2003 through September 2009. From August 1999 to February 2003,
Mr. Teunissen served as an executive director in Morgan Stanley’s Investment Banking Division in London.
Mr. Teunissen holds a Master of Business Administration degree from the University of Oregon and a Bachelor of
Business Administration from Nijenrode University, The Netherlands School of Business.
Additional Executive Officer:
SEAN E. QUINN, Senior Vice President and Chief Financial Officer (executive officer)
Mr. Quinn, age 36, has served as our Senior Vice President and Chief Financial Officer since October 2015. Mr.
Quinn previously served as Chief Accounting Officer from November 2014 to October 2015, as Vice President,
Corporate Finance from January 2014 to October 2015, as Global Controller from April 2012 to November 2014, as
Director, External Reporting & Accounting from July 2010 to April 2012, and as Senior Manager, External Reporting
& Accounting from October 2009 to July 2010. Before joining Cimpress, Mr. Quinn was a Certified Public
Accountant with KPMG LLP from September 2001 to October 2009 in the firm’s Philadelphia, London, and Boston
offices, most recently as an Audit Senior Manager. Mr. Quinn holds a B.S. degree in accounting from Saint Joseph’s
University. Mr. Quinn is not a member of our Management Board.
There are no family relationships among any of the Supervisory Board members and executive officers of
Cimpress. No arrangements or understandings exist between any Supervisory Board member or any person
nominated for appointment as a Supervisory Board member and any other person pursuant to which such person is
to be selected as a Supervisory Board member or nominee for appointment to the Supervisory Board.
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Board Structure
CORPORATE GOVERNANCE
We have a two-tiered board structure consisting of a Supervisory Board and a separate Management Board. The
Supervisory Board consists of our independent, non-employee directors, and the Management Board consists of
members of our senior management team. The principal responsibility of the Supervisory Board is to oversee the
Management Board and its management of Cimpress and, in so doing, serve the best interests of Cimpress and its
stakeholders. The Supervisory Board is accountable to our shareholders. The principal responsibility of the
Management Board is to manage Cimpress, which means, among other things, that it is responsible for
implementing Cimpress' goals and strategy, managing Cimpress' associated risk profile, operating Cimpress'
business on a day-to-day basis, and addressing corporate social responsibility issues that are relevant to the
enterprise. The Management Board is accountable to both the Supervisory Board and our shareholders.
Each of our Supervisory Board and Management Board has its own chairman. The Chairman of our Supervisory
Board is Mr. Riley, an independent, non-employee director, and the Chairman of our Management Board is
Mr. Keane, who is also our Chief Executive Officer and President.
Governance Guidelines
We believe that good corporate governance is important to ensure that Cimpress is managed for the long-term
benefit of our stakeholders, including but not limited to our shareholders. The Management Board and Supervisory
Board have adopted Rules to assist each Board in the exercise of its duties and responsibilities and to serve the
best interests of Cimpress and our stakeholders. The Rules for each Board provide a framework for the conduct of
each Board’s business.
Among other things, the Rules for the Supervisory Board provide that:
• a majority of the members of the Supervisory Board must be independent directors, except as permitted by
Nasdaq rules;
• the Supervisory Board must meet at least twice a year in executive session;
• the Supervisory Board has full and free access to management and employees and, as necessary and
appropriate, to hire and consult with independent advisors;
• all members of the Supervisory Board are expected to participate in a mandatory orientation program and
continuing director education on an ongoing basis; and
• at least annually the Nominating and Corporate Governance Committee is required to oversee a self-
evaluation of the Supervisory Board to determine whether the Supervisory Board and its committees are
functioning effectively.
Among other things, the Rules for the Management Board provide that:
• the Management Board is responsible for managing Cimpress, including implementing Cimpress' goals and
strategy, managing risks, operating the business on a day-to-day basis, and addressing corporate social
responsibility issues that are relevant to the enterprise;
• the Management Board is responsible for determining that effective systems are in place for the periodic and
timely reporting to the Supervisory Board on important matters concerning Cimpress and its subsidiaries; and
• at least annually the Supervisory Board is required to conduct an evaluation of the Management Board to
determine whether the Management Board is functioning effectively.
You can find our Rules for the Supervisory Board, our Rules for the Management Board, our Code of Business
Conduct, our current articles of association, and the current charters for our Audit Committee, Compensation
Committee and Nominating and Corporate Governance Committee on the Corporate Governance Page in the
Investor Relations section of www.cimpress.com or by writing to:
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Investor Relations
c/o Cimpress USA Incorporated
275 Wyman Street
Waltham, MA 02451
USA
Email: ir@cimpress.com
In addition, the Dutch Corporate Governance Code, or Dutch Code, applies to Cimpress. The Dutch Code
emphasizes the principles of integrity, transparency, and accountability as the primary means of achieving good
corporate governance. The Dutch Code includes certain principles of good corporate governance, supported by
“best practice” provisions, and our Management Board and Supervisory Board agree with the fundamental
principles of the Dutch Code. However, as a company whose ordinary shares are traded on Nasdaq, we are also
subject to the corporate governance rules of the Nasdaq Stock Market and U.S. securities laws, and we may also
choose to follow certain market practices that are common for Nasdaq-traded companies. Some of the
U.S. corporate governance rules and market practices that we are required to or choose to follow conflict, in whole
or in part, with the best practice provisions of the Dutch Code. As a result, we do not apply some of the Dutch best
practice provisions. In accordance with the Dutch Code’s compliance principle of “apply or explain,” which permits
Dutch companies to be fully compliant with the Dutch Code either by applying the Dutch best practices or by
explaining why the company has chosen not to apply certain of the best practices, we are disclosing in our Dutch
annual report that accompanies our Annual Accounts to what extent we do not apply provisions of the Dutch Code,
together with the reasons for those deviations.
Code of Business Conduct
We have adopted a written code of business conduct that applies to our Supervisory Board, officers, and
employees, a current copy of which is posted on the Corporate Governance Page in the Investor Relations section
of our website, www.cimpress.com. In addition, we intend to post on our website all disclosures that are required by
law or Nasdaq stock market listing standards concerning any amendments to, or waivers from, any provision of the
code.
Determination of Independence
Under Nasdaq rules, members of our Supervisory Board qualify as “independent directors” only if, in the opinion
of our Supervisory Board, they do not have a relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. The Supervisory Board has determined that none of its
members has a relationship that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director and that all of its members during our fiscal year ended June 30, 2015 are “independent
directors” as defined under Nasdaq's Marketplace Rules.
In addition, all members of our Supervisory Board satisfy the criteria for independence under the Dutch Code,
other than Scott Vassalluzzo, who is a Managing Member of Prescott General Partners LLC, a major shareholder
of Cimpress.
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Oversight of Risk
Under the Rules for the Supervisory Board, our Supervisory Board is responsible for reviewing the integrity of our
internal control and management information systems, the main risks of our business, and the design and
effectiveness of our internal risk management and control systems. As set forth in its charter, our Audit Committee
assists the Supervisory Board in its review and oversight of risk by reviewing our policies with respect to risk
assessment and risk management, including the guidelines and policies that govern the process by which our
exposure to risk is handled. The Supervisory Board and Audit Committee regularly discuss with management our
major risk exposures, their potential impact on Cimpress, and the steps we take to manage them.
In addition, based on an internal risk assessment, we believe that any risks arising from our compensation
programs for our employees are not reasonably likely to have a material adverse effect on Cimpress.
Supervisory Board Nomination Process
The process that our Nominating and Corporate Governance Committee follows to identify and evaluate
candidates for members of our Supervisory Board includes requests to its members and others for
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recommendations, meetings from time to time to evaluate biographical information and background material relating
to potential candidates, and interviews of selected candidates by members of the Committee and the Supervisory
Board.
In considering whether to recommend any particular candidate for inclusion in the Supervisory Board’s slate of
nominees, the Nominating and Corporate Governance Committee applies, among other things, the criteria for
Supervisory Board members set forth as an attachment to the Rules for the Supervisory Board. These criteria
include among others the candidate’s integrity, business acumen, knowledge of our business and industry,
experience, diligence, absence of any conflicts of interest, and ability to act in the interests of all of Cimpress'
stakeholders. In addition, the Rules for the Supervisory Board specify that nominees shall not be discriminated
against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed
by law and that the Nominating and Corporate Governance Committee and Supervisory Board should consider the
value of diversity on the Supervisory Board. The Committee does not assign specific weights to particular criteria,
and no particular criterion other than integrity and good character is a prerequisite for each prospective nominee.
We believe that the backgrounds and qualifications of the members of our Supervisory Board, considered as a
group, should provide a composite mix of experience, knowledge and abilities that will allow the Supervisory Board
to fulfill its responsibilities. Accordingly, the Nominating and Corporate Governance Committee seeks nominees with
a broad diversity of experience, professions, skills and backgrounds. During fiscal 2015, the Committee engaged
MWM Consulting, an international recruiting firm, to assist the Committee in identifying, evaluating, and reaching
out to potential candidates for the Supervisory Board.
Shareholders may recommend individuals to the Nominating and Corporate Governance Committee for
consideration as potential candidates for the Supervisory Board by submitting their names, together with
appropriate biographical information and background materials and a statement as to whether the shareholder or
group of shareholders making the recommendation has beneficially owned more than 5% of our ordinary shares for
at least a year as of the date such recommendation is made, to Nominating and Corporate Governance Committee,
c/o Chief Legal Officer, Cimpress USA Incorporated, 275 Wyman Street, Waltham, MA 02451 USA. If appropriate
biographical and background material has been provided on a timely basis, the Nominating and Corporate
Governance Committee will evaluate shareholder-recommended candidates by following substantially the same
process, and applying substantially the same criteria, as it follows for candidates submitted by others.
If the Supervisory Board does not submit a binding nomination for a Supervisory Board position, then the
shareholders represented at the general meeting may select a nominee. The shareholders may appoint such a
nominee as a member of the Supervisory Board by the vote of at least two thirds of the votes cast at the meeting
representing more than half of our share capital.
Supervisory Board Meetings and Committees
During our fiscal year ended June 30, 2015, our Supervisory Board met four times, and each of the members of
our Supervisory Board, other than Nadia Shouraboura, attended at least 85% of the total number of meetings of the
Supervisory Board and the committees of which such director was a member during the period of time he or she
served on such committee. Dr. Shouraboura was appointed to our Supervisory Board in January 2015 and missed
one of the two meetings of the Supervisory Board that occurred during fiscal 2015 after her appointment. In
addition, it is our policy that one or more of the members of our Supervisory Board should attend annual general
meetings of shareholders to the extent practicable. All seven of the directors then serving on our Supervisory Board
attended our 2014 annual general meeting of shareholders.
The Supervisory Board has standing Audit, Compensation, and Nominating and Corporate Governance
Committees. Each committee has a charter that has been approved by the Supervisory Board, and each committee
must review the appropriateness of its charter at least annually. All members of all committees are non-employee
directors, and the Supervisory Board has determined that all of the members of our three standing committees are
independent as defined under Nasdaq's Marketplace Rules.
Audit Committee
The current members of our Audit Committee are Messrs. Gavin (Chair), Riley, and Thomas. Our Supervisory
Board has determined that Mr. Gavin qualifies as an “audit committee financial expert” under SEC rules, and all
three Audit Committee members meet the SEC’s independence criteria for audit committee members. The Audit
Committee met eight times during fiscal 2015. The Audit Committee’s responsibilities include:
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• retaining our independent registered public accounting firm, subject to shareholder ratification and approval;
• approving the compensation of, and assessing (or recommending that the Supervisory Board assess) the
independence of, our registered public accounting firm;
• overseeing the work of our independent registered public accounting firm, including the receipt and
consideration of certain reports from the firm;
• coordinating the Supervisory Board’s oversight of our internal control over financial reporting and disclosure
controls and procedures;
• overseeing our internal audit function;
• establishing procedures for the receipt, retention, and treatment of accounting-related complaints and
concerns;
• reviewing and approving any related person transactions;
• meeting independently with our independent registered public accounting firm and management; and
• preparing the Audit Committee report included in this proxy statement.
Compensation Committee
The current members of the Compensation Committee are Messrs. Vassalluzzo (Chair), Gyenes, Olsen, and
Thomas, and all four Compensation Committee members meet Nasdaq's independence criteria for compensation
committee members. The Compensation Committee met three times during fiscal 2015. The Compensation
Committee’s responsibilities include:
• reviewing and approving, or making recommendations to the Supervisory Board with respect to, the
compensation of our Chief Executive Officer and our other executive officers;
• overseeing and administering our cash and equity incentive plans;
• reviewing and making recommendations to the Supervisory Board with respect to Supervisory Board
compensation;
• reviewing and discussing with management the Compensation Discussion and Analysis section of the proxy
statement and considering whether to recommend to the Supervisory Board that the Compensation Discussion
and Analysis be included in the proxy statement; and
• preparing the Compensation Committee report included in this proxy statement.
Nominating and Corporate Governance Committee
The current members of the Nominating and Corporate Governance Committee are Messrs. Thomas (Chair), De
Cesare, Gyenes, and Riley. The Nominating and Corporate Governance Committee met three times during fiscal
2015. The responsibilities of the Nominating and Corporate Governance Committee include:
• identifying individuals qualified to become Supervisory Board members;
• recommending to the Supervisory Board the persons to be nominated for appointment as members of the
Supervisory Board and the Management Board and to each of the Supervisory Board’s committees;
• overseeing an annual evaluation of the Supervisory Board, the Management Board and all committees of the
Supervisory Board to determine whether each is functioning effectively;
• overseeing succession planning for the Supervisory Board; and
• reviewing and assessing the adequacy of the Rules of the Supervisory Board and of the Management Board.
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Report of the Audit Committee
The Audit Committee has reviewed Cimpress' audited consolidated financial statements for the fiscal year ended
financial statements with Cimpress' management and
June 30, 2015 and has discussed
these
PricewaterhouseCoopers LLP, our independent registered public accounting firm for fiscal 2015.
The Audit Committee has also received from, and discussed with, PwC various communications that PwC is
required to provide to the Audit Committee, including the matters required to be discussed by Public Company
Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees, as in effect for
Cimpress' fiscal year 2015.
PwC also provided the Audit Committee with the written disclosures and the letter required by PCAOB Rule 3526
(Communicating with Audit Committees Concerning Independence), as modified or supplemented. The Audit
Committee has discussed with the independent registered public accounting firm its independence from Cimpress.
The Audit Committee also considered whether the provision of other, non-audit related services referred to under
the heading “Independent Registered Public Accounting Firm Fees and Other Matters” under Proposal 11 is
compatible with maintaining the independence of our registered public accounting firm.
Based on its discussions with, and its review of the representations and information provided by, management
and PwC, the Audit Committee recommended to the Supervisory Board that the audited financial statements be
included in Cimpress' Annual Report on Form 10-K for the fiscal year ended June 30, 2015.
This Audit Committee Report is not incorporated by reference into any of our previous or future filings with the
SEC, unless any such filing explicitly incorporates this Report.
Audit Committee of the Supervisory Board
John J. Gavin, Jr., Chairman
Richard T. Riley
Mark T. Thomas
Certain Relationships and Related Transactions
Policies and Procedures for Related Person Transactions
We have a written related person transaction policy that sets forth the policies and procedures for the review and
approval or ratification of related person transactions. This policy covers any transaction, arrangement or
relationship, or any series of similar transactions, arrangements or relationships in which we are a participant, the
amount involved exceeds $25,000, and a related person has a direct or indirect material interest, including, without
limitation, purchases of goods or services by or from the related person or entities in which the related person has a
material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person. A related
person is any person who is or was a Cimpress executive officer or member of our Management Board or
Supervisory Board at any time since the beginning of our most recently completed fiscal year, the beneficial holder
of more than 5% of any class of our voting securities, or an immediate family member of anyone described in this
sentence.
All potential related person transactions that we propose to enter into must be reported to our Chief Legal Officer
(CLO) or Chief Accounting Officer (CAO), who will determine whether each reported transaction qualifies as a
related person transaction. If so, then the CLO and CAO will submit the transaction for review and approval by our
Audit Committee. If our CLO and CAO determine that advance approval of a related person transaction by the full
Audit Committee is not practicable under the circumstances, then they will submit the transaction to the Audit
Committee chair for review and approval, and the full Audit Committee will review and ratify the related person
transaction at the next Committee meeting.
In addition, the Audit Committee will review annually any previously approved or otherwise already existing
related person transaction that is ongoing in nature to ensure that such related person transaction has been
conducted in accordance with the Audit Committee’s previous approval, if any, and that all required disclosures
regarding the related person transaction are made.
When considering a proposed related person transaction, the Audit Committee will review and consider, to the
extent appropriate for the circumstances:
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• the related person’s interest in the related person transaction;
• the approximate dollar value of the amount involved in the related person transaction;
• the approximate dollar value of the amount of the related person’s interest in the transaction without regard to
the amount of any profit or loss;
• whether the transaction was undertaken in the ordinary course of business;
• whether the transaction with the related person is entered into on terms no less favorable to us than terms that
could have been reached with an unrelated third party;
• the purpose of, and the potential benefits to us of, the transaction; and
• any other information regarding the related person transaction or the related person that would be material to
investors in light of the circumstances of the particular transaction.
The Audit Committee will review all relevant information available to it about the related person transaction. The
Audit Committee may approve or ratify the related person transaction only if the Committee determines that, under
all of the circumstances, the transaction is in or is not inconsistent with our best interests. The Committee may, in its
sole discretion, impose conditions as it deems appropriate on us or the related person in connection with approval
of the related person transaction.
In addition, under Dutch law, any member of our Supervisory Board or Management Board who has a conflict of
interest is required to disclose that conflict to the Chairman of the Supervisory Board and to abstain from voting on
any resolution involving, or participating in any board discussion of, the conflict.
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Related Person Transaction
During fiscal 2015, there was one related person transaction, as defined under SEC rules: Katryn Blake’s
brother-in-law has been an employee of Cimpress since 2007, and he received cash compensation of $174,739 for
fiscal 2015. The Audit Committee has reviewed this relationship and concluded that it is consistent with our best
interests and does not constitute a conflict of interest.
Communicating with the Supervisory Board
Our Supervisory Board will give appropriate attention to written communications that are submitted by
shareholders, and will respond if and as appropriate. The chair of the Nominating and Corporate Governance
Committee, with the assistance of Cimpress' Chief Legal Officer, is primarily responsible for monitoring
communications from shareholders and for providing copies or summaries to the other directors as its members
consider appropriate.
The chair of the Nominating and Corporate Governance Committee will forward communications to the full
Supervisory Board if the communications relate to substantive matters and include suggestions or comments that
he considers to be important for the directors to know. In general, the chair is more likely to forward communications
relating to corporate governance and corporate strategy than communications relating to ordinary business affairs,
personal grievances, and matters as to which Cimpress may receive repetitive or duplicative communications.
Shareholders who wish to send communications on any topic to our Supervisory Board should address such
communications to:
Supervisory Board
c/o Corporate Secretary
Cimpress N.V.
Hudsonweg 8
5928 LW Venlo
The Netherlands
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Overview
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to motivate
that talent to achieve outstanding performance. In determining the compensation of our executive officers, our
Compensation Committee begins with an analysis of the competitiveness of our executive compensation program
and, as a starting point, seeks to pay our executives total compensation (including base salary, annual cash
incentive, and long-term incentive awards) at the 75th percentile of our peer group for extraordinary performance by
Cimpress. The Compensation Committee then applies its own discretion to take into account any other factors it
may deem relevant in any given fiscal year, such as general economic conditions, the internal equity of
compensation among our executives, each executive’s experience and role, and individual performance. The
Committee does not assign specific weights to particular factors but considers them together in determining
compensation.
Pay for performance. The total compensation package for our executive officers is weighted heavily toward
compensation based on Cimpress' operating and share price performance. Cimpress performed well in our fiscal
year ended June 30, 2015, and accordingly our executive officers earned above-market compensation for the year.
Below are some highlights of our performance over the last three fiscal years.
* Please see the non-GAAP reconciliations at the end of this proxy statement
The components of our executive officers' compensation that are at risk based on Cimpress' performance are the
annual and long-term cash incentives and equity compensation. Our annual and long-term cash incentive programs
are dependent on Cimpress' revenue and earnings per share performance, while our equity incentive programs are
dependent on the performance of our share price. Attainment of the annual and long-term cash incentives are
based on financial goals that the Compensation Committee believes are highly challenging, but achievable. The
charts below show the breakdown of the fiscal 2015 compensation of Robert Keane, our Chief Executive Officer, by
type, length, and form:
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No pay increase for our named executive officers. For our fiscal year ended June 30, 2015, the Compensation
Committee did not increase the annual cash compensation (base salary and target amount for annual cash
incentive award) of our Chief Executive Officer or any of our other named executive officers over their levels for our
fiscal year ended June 30, 2014 as part of our efforts to keep our costs within our budget and also because our
Compensation Committee believed that the executives' compensation was competitive at current levels.
Shareholder engagement. At each of our last three annual general meetings of shareholders, our executive
compensation program received more than 97% approval from our shareholders. We believe that two major
contributing factors to our strong shareholder approval levels were the collaborative process in which we reach out
to our major shareholders on an annual basis to solicit their feedback on our executive compensation design and
our emphasis on long-term, performance-based compensation.
Redesign of our long-term compensation program. In late fiscal 2012, based in part on our shareholders'
feedback from the outreach process described above, our Compensation Committee redesigned the long-term
incentive component of our executive compensation program to increase the emphasis on Cimpress' long-term
performance and our growth strategy using share price as the primary performance metric. The Committee believes
that the 2012 design has been working well and has not made any significant changes to our executive
compensation program since then, other than progressively increasing the emphasis on Cimpress' profitability over
revenue during the last two fiscal years. As a result of the 2012 redesign, we granted to our executive officers multi-
year, premium-priced share options designed to emphasize Cimpress' long-term performance and our growth
strategy using share price as the primary performance metric. The Compensation Committee believes that the
premium-priced share options provide strong alignment of performance-based compensation with long-term
shareholder value creation, significant downside risk for the executives if Cimpress performs poorly, and significant
upside potential if Cimpress performs well, through the following features:
• The options have an exercise price of $50.00 per share, which was at least 33% higher than the closing price
of Cimpress' ordinary shares on Nasdaq on the grant dates.
• Robert Keane, our Chief Executive Officer, has an additional share price hurdle before he can realize any
returns from his premium-priced options, which is that, in addition to the vesting schedule described below, he
can exercise his options only on dates when the high price per share of Cimpress' ordinary shares on Nasdaq
is at least $75.00, which was nearly double the closing price of Cimpress' ordinary shares on the grant dates.
• To emphasize long-term performance, the options vest over seven years. They have an eight-year term.
• Our Supervisory Board has passed resolutions that, until fiscal 2016 at the earliest, Cimpress shall not grant
any additional long-term incentive award in any form (including equity or long-term cash awards) to Mr. Keane
or any additional share options to our other current executive officers.
Discontinuation of certain pay practices. Some of our major shareholders consider the inclusion of excess
parachute payment tax gross-up provisions in our executive retention agreements with our executives to be a
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problematic pay practice. Accordingly, our Compensation Committee decided that we would no longer include such
tax gross-up provisions in any executive retention agreements we enter into with new executives after August 1,
2012.
Compensation Committee Approach
In determining the competitiveness of our executive compensation program, our Compensation Committee takes
into account the analysis and recommendations of the Committee’s independent compensation consultant
(currently Towers Watson), data from the comparison peer group described below, published compensation survey
data, and detailed tally sheets summarizing our executive officers’ current and historical compensation.
Each year, our Compensation Committee works with Towers Watson to update its comparison peer group
consisting of publicly traded companies that have characteristics that are currently comparable to Cimpress or
comparable to where Cimpress expects to be in the near future. Through a multi-step process, the Committee
considers a robust number of companies for inclusion in our peer group, including the consideration of, among
other attributes, each company’s ownership structure, industry groupings (including Global Industry Classification
Standards), annual revenue, and other financial metrics, as well as comparable companies identified on the Dow
Jones and Institutional Shareholder Services lists. For the comparison peer group our Compensation Committee
used in determining our executive officers' fiscal 2015 compensation, the financial criteria included annual revenue
in the range of $1.1 billion to $3.0 billion and market capitalization between $1.5 billion and $4.0 billion. The
Compensation Committee also considered companies with high growth and in the same general industry as
Cimpress. For fiscal 2015, the peer group consisted of the 23 companies listed below. Because the Compensation
Committee determined the peer group in November 2013, before the beginning of our fiscal year 2015, the
Committee used the most recent information that was available at that time for each peer group company.
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The Compensation Committee engages an independent compensation consultant and manages the relationship
with that firm. During fiscal 2015, Towers Watson, the Committee's compensation consultant, provided the following
services to Cimpress and the Compensation Committee:
• Competitive analysis and recommendations to the Compensation Committee with respect to the
compensation of our executive officers;
• Competitive analysis and recommendations to our Compensation Committee and Chief Executive Officer
with respect to the compensation of some of our employees who are not executive officers;
• Competitive analysis and recommendations to our Compensation Committee with respect to the
compensation of members of our Supervisory Board;
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• Detailed equity utilization analysis comparing the number of shares that Cimpress grants per year pursuant
to equity compensation awards and the number of shares subject to outstanding equity compensation
awards and available for grant under our equity compensation plans with our peer group, to assist the
Compensation Committee in setting our practices of granting equity to our employees; and
• Follow-up assistance for a job leveling solution, including job evaluation technology and supporting tools.
The Compensation Committee took into account the above services as well as the fees paid to Towers Watson
when assessing the firm's independence and determined that Towers Watson was independent during fiscal 2015.
Compensation Components for Executives
The principal elements of our compensation program for our executive officers are the following:
• Base salary
• Annual cash incentive awards, which reward executives based on Cimpress' achievement of financial
performance goals for the current fiscal year
• Long-term incentive awards, which may include long-term cash incentives, share options, and restricted
share units, which reward executives based on Cimpress' achievement of longer term financial objectives
and the creation of value for our shareholders as reflected in our share price
• Standard health and welfare benefits that are applicable to all of our employees in each executive’s
geographic location
In addition, we have severance and change in control arrangements with our executives, and from time to time
we provide expatriate benefits for executives who are assigned to work in geographic locations outside of their
home countries.
Under our pay-for-performance philosophy, the compensation of our executives and other employees at higher
levels in the organization is more heavily weighted towards variable compensation based on our performance, and
base salary generally accounts for a smaller portion of these employees’ total compensation packages. The
percentiles below are designed to ensure that our executive officers will receive compensation significantly below
the median of our peer group if Cimpress does not perform well and significantly above the median for Cimpress'
extraordinary performance. In accordance with this philosophy, the Compensation Committee initially allocates the
compensation of our executive officers within the percentiles listed below, and then may use its discretion to adjust
each executive officer’s compensation to reflect other factors such as general economic conditions, the internal
equity of compensation among our executives, and the executive’s experience, role, and performance.
• Base salary of Mr. Keane, our Chief Executive Officer, at the 25th percentile of our peer group
• Base salaries of our other executive officers at the 35th percentile of our peer group and published
compensation surveys
• Annual cash compensation (base salary and annual cash incentive) of all executive officers including Mr.
Keane at the 50th percentile of our peer group and published compensation surveys
• Total compensation (base salary, annual cash incentive, and long-term incentive awards) of all executive
officers including Mr. Keane at the 75th percentile of our peer group and published compensation surveys
Base Salary
For fiscal 2015, the Compensation Committee did not increase the cash compensation, consisting of base salary
and target amount of annual cash incentive awards, of Mr. Keane or any of our other named executive officers over
their fiscal 2014 levels as part of our efforts to keep our costs within our budget for fiscal 2015 and also because the
Committee believes that the executives' compensation is competitive at the current levels.
Annual Cash Incentive Awards
The Compensation Committee grants annual cash incentive awards to our executive officers to provide an
incentive to executives to achieve financial goals that are tied to the current fiscal year. In particular, the
Compensation Committee has progressively revised the annual cash awards over the last two fiscal years to
encourage our executives to focus on Cimpress' profitability: For our fiscal year ended June 30, 2015, the annual
cash incentive awards were based 60% on Cimpress' achievement of a full-year adjusted EPS goal and 40% on
Cimpress' achievement of a full-year constant currency revenue goal determined by the Compensation Committee
based on our annual budget approved by the Supervisory Board. The awards for our fiscal year ended June 30,
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2014, by contrast, were based 30% on EPS and 70% on revenue, while the fiscal 2013 awards were based 10% on
EPS and 90% on revenue. For purposes of calculating these annual incentives, the Compensation Committee
defines “constant currency revenue” as consolidated net revenue for Cimpress and its subsidiaries for the fiscal
year, adjusted to exclude gains and losses in revenue generated from Cimpress' hedges of currency fluctuations
and to use the same currency exchange rates as set forth in Cimpress' budget for the fiscal year. “Adjusted
earnings per share” is defined as EPS on a diluted basis for the results of Cimpress' operations on a consolidated
basis for the fiscal year, calculated in accordance with U.S. GAAP with some exclusions for income or expenses
relating to certain specific events that the Committee believes would introduce inaccurate reflections of
management-driven performance.
The fiscal 2015 performance goals set by the Compensation Committee for our executive officers' annual cash
incentive awards were adjusted EPS of $2.53 - $2.77 (calculated using $2.65 as the target) and constant currency
revenue of $1,572,100,000. The Compensation Committee believed that the fiscal 2015 goals were highly
challenging but achievable. As set forth in the fiscal 2015 annual award agreements with our executive officers, the
actual amount payable for the annual cash incentives was a percentage of the fiscal 2015 target award for each
executive, listed in the table below, where the payout percentage equals the greater of:
(x)
(y)
-4.0000 + (2.0000 X Revenue Percentage) + (3.0000 X EPS Percentage); or
-6.1429 + (2.8571 X Revenue Percentage) + (4.2857 X EPS Percentage)
The Revenue Percentage and EPS Percentage were calculated by dividing the actual amounts for the
fiscal year by the constant currency revenue and adjusted EPS goals described above. If either
(1) Cimpress' actual constant currency revenue for fiscal 2015 were less than 92.5% of the goal, or
(2) actual adjusted EPS for fiscal 2015 were less than 80% of the goal, then the total annual cash incentive
payout would be zero even if the other goal were achieved. The fiscal 2015 payout percentage was capped
at a maximum of 200%.
As calculated under the fiscal 2015 annual cash incentive awards, Cimpress' adjusted EPS was $3.07, which
was an overachievement of the adjusted EPS goal of $2.53 - $2.77 described above, and its constant currency
revenue was $1,551,300,000, which was below the constant currency revenue goal of $1,572,100,000 described
above. The adjusted EPS was $0.34 higher than our U.S. GAAP EPS for fiscal 2015 of $2.73, calculated in
accordance with the annual cash incentive awards by:
• Subtracting from our U.S. GAAP EPS $0.37 for non-operational currency gains including unrealized
gains on our hedging programs and the related tax effects and $0.15 for the tax benefit of certain net
operating losses that were not assumed when we established our EPS goal; and
• Adding back to our U.S. GAAP EPS $0.73 relating to the impact of acquisition-related costs and $0.13
relating to incremental interest relative to our EPS goal from our financing that closed during fiscal
2015.
Based on the 60/40 weighting of our adjusted EPS and constant currency revenue goals and in accordance with
the formula set forth above, this level of achievement yielded a payout percentage of 162.5% of the executives’
targets, which is the same as the payout percentage we used for our non-executive employees' fiscal 2015 annual
cash incentive awards.
The Compensation Committee set Mr. Keane’s fiscal 2015 target annual incentive at a level to maintain his
annual cash compensation (base salary plus annual cash incentive) at the 50th percentile of our peer group. For
our other executive officers, the Compensation Committee initially determined the fiscal 2015 target annual
incentives that would maintain their annual cash compensation at the 50th percentile of our peer group and
published compensation surveys and then applied its own discretion to reflect each executive’s performance and
internal equity with other Cimpress executives.
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The following table sets forth the target annual cash incentive awards for our named executive officers and the
actual payouts on those awards for fiscal 2015.
Name
Target Annual
Incentive
Actual Annual
Incentive Paid
Robert S. Keane ...........................................................€
Katryn S. Blake .............................................................$
Donald R. Nelson .........................................................$
Ernst J. Teunissen ........................................................€
756,000 €
1,228,500
335,000 $
544,375
220,000 $
357,500
265,000 €
430,625
Long-Term Incentive Program
Our long-term incentive program is designed to focus our executives and employees on long-term performance
and value creation for the company and our shareholders. The Compensation Committee, with recommendations
from our independent compensation consultant, determines the mix among our three long-term incentive vehicles -
which may include share options, restricted share units, and long-term cash incentives - for our executives and
employees.
Share Options and Restricted Share Units for Executives
The Compensation Committee believes that granting equity awards is an effective way to motivate our
executives to manage the company in a manner that is consistent with the long-term interests of both the company
and our shareholders, with equity awards generating greater returns for our executives and employees as our share
price increases. Our share options and restricted share units also provide us with an important retention tool, as the
equity grants vest over a multiple-year period only if the executive continues to be employed by us on each vest
date.
As part of the Compensation Committee’s redesign of our long-term executive compensation program in fiscal
2012, which involved the grant to our executive officers of multi-year, premium-priced share option awards, our
Supervisory Board adopted resolutions that, until fiscal 2016 at the earliest, we will not grant any additional long-
term incentive award in any form to Mr. Keane or any additional share options to our other current executive
officers. Accordingly, in fiscal 2015 we did not grant any new share options to any of our executive officers, and we
did not grant any restricted share units to Mr. Keane. Our executive officers other than Mr. Keane received
restricted share units that vest over four years. Each unit that vests is automatically converted into an ordinary
share of Cimpress on a one-to-one basis.
In general, we grant equity awards to our executive officers annually at the regularly scheduled meeting of the
Compensation Committee held in the fourth quarter of each fiscal year. Accordingly, grants made in fiscal 2015
were approved at the May 2015 Compensation Committee meeting. We typically grant equity awards to employees
who are not executive officers during our first fiscal quarter after the conclusion of our annual performance review
cycle.
Long-Term Cash Incentive Compensation
The Compensation Committee did not grant any new long-term cash incentive awards to our executive officers in
fiscal 2015, in keeping with the 2012 redesign of our long-term incentive program to emphasize premium-priced
share options.
For several fiscal years before 2013, the Compensation Committee had granted long-term cash incentive awards
to reflect our pay-for-performance culture and philosophy, enhance our ability to manage the number of shares
available under our equity compensation plans, and balance the focus on share price appreciation created through
equity awards with cash awards based on the achievement of financial metrics that drive long-term company and
shareholder value creation. The last of these long-term cash incentive awards held by our executive officers were
originally granted in fiscal year 2012 with a performance cycle of four fiscal years, payable 25% for each of our
fiscal years ending June 30, 2012, 2013, 2014, and 2015 based on Cimpress' achievement of adjusted EPS targets
developed by the Compensation Committee for each of the four fiscal years. Adjusted EPS for the 2012-2015 cash
incentive awards has the same definition as adjusted EPS for the annual cash incentive awards described above.
We measure performance on an annual basis and make payments for each fiscal year in the performance cycle
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based on the level of goal achievement for that fiscal year. As set forth in the 2012-2015 award agreements with our
executive officers, our adjusted EPS goals for fiscal 2015 were as follows:
• Our lowest (minimum) EPS goal for fiscal 2015 was $2.67, which would have resulted in a payout of 50% of
the named executive officers’ targets for the year;
• Our medium EPS goal was $3.56, which would have resulted in a payout of 100% of the named executive
officers’ targets for the year; and
• Our highest (stretch) EPS goal was $4.45, which would have resulted in a payout of 250% of the named
executive officers’ targets for the year.
If Cimpress' adjusted EPS were less than the lowest (minimum) goal for the fiscal year, then our executive
officers would receive no payout for that performance period. If Cimpress' adjusted EPS were equal to or higher
than the highest (stretch) EPS goal, then our executives would receive the percentage payout for achievement of
the highest EPS goal. If Cimpress' adjusted EPS were greater than or equal to the lowest EPS goal but less than
the EPS highest goal, then the percentage payout for the fiscal year would be equal to:
•
the payout threshold percentage for the highest EPS target achieved with respect to the fiscal year, plus
• a number calculated as follows: (A) a percentage equal to a fraction, the numerator of which equals the
amount by which adjusted EPS exceeded such applicable EPS goal and the denominator of which equals
the difference between the next highest EPS goal that was not achieved and the highest EPS goal
achieved, multiplied by (B) the difference between the payout threshold percentage for the next highest
EPS goal that was not achieved and the payout threshold percentage for the highest EPS goal achieved.
Our adjusted EPS for fiscal 2015 was $3.07, calculated in the same way as our adjusted EPS for the annual cash
incentive awards as described above. This adjusted EPS was above the lowest EPS goal and below the medium
EPS goal under these 2012-2015 awards, so we paid 72.5% of target levels to our named executive officers based
on the formula set forth in their agreements, as follows:
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Name
Target Fiscal 2015
Incentive
($)
Actual Fiscal 2015
Incentive Paid
($)
Robert S. Keane ....................................................$
Katryn S. Blake ......................................................
Donald R. Nelson ..................................................
Ernst J. Teunissen .................................................
142,500 $
103,313
93,750
75,000
93,750
67,969
54,375
67,969
Benefit Programs
The Compensation Committee believes that all employees based in the same geographic location should have
access to similar levels of health and welfare benefits, and therefore our executive officers receive the same health
and welfare benefits, including medical, dental, vision, and disability plans, group life and accidental death and
disability insurance and other benefit plans, as those offered to other employees in their location. We do, however,
from time to time enter into arrangements with some of our named executive officers to reimburse them for living
and relocation expenses relating to their work outside of their home countries.
U.S. based employees may participate in a 401(k) plan that provides a company match of up to 50% on the first
6% of the participant’s eligible compensation that is contributed, subject to certain limits under the United States
Internal Revenue Code of 1986, or US Tax Code, with company matching contributions vesting over a four-year
period. We also provide customary pension plans to our European employees.
Perquisites
In general, executives are not entitled to benefits that are not otherwise available to all other employees who
work in the same geographic location.
Executive Retention and Other Agreements
We have entered into executive retention agreements with all of our executive officers. Under the executive
retention agreements, if we terminate an executive officer’s employment without cause (as defined in the
agreements) or the executive terminates his or her employment for good reason (as defined in the agreements)
33
before a change in control of Cimpress or within one year after a change in control (as defined in the agreements),
then the executive is entitled to receive:
• A lump sum severance payment equal to two years’ salary and bonus, in the case of Mr. Keane, or one year’s
salary and bonus, in the case of the other executive officers. These severance payments are based on the
executive’s then current base salary plus the greater of (1) the target bonus for the then current fiscal year, or
(2) the target bonus for the then current fiscal year multiplied by the average actual bonus payout percentage
for the previous three fiscal years.
• With respect to any outstanding annual cash incentive award under our Performance Incentive Plan, a pro rata
portion, based on the number of days from the beginning of the then current fiscal year until the date of
termination, of his or her target incentive for the fiscal year multiplied by the average actual payout percentage
for the previous two fiscal years. If there is no change in control of Cimpress during the fiscal year, this pro rata
portion is capped at the actual amount of annual cash incentive that the executive would have received had he
or she remained employed by Cimpress through the end of the fiscal year.
• With respect to any outstanding multi-year cash incentive award under our Performance Incentive Plan, a pro
rata portion, based on the number of days from the beginning of the then current performance period until the
date of termination, of his or her mid-range target incentive for the then current performance period multiplied
by the average actual payout percentage for the previous two fiscal years. If there is no change in control of
Cimpress during the applicable performance period, this pro rata portion is capped at the actual amount of
cash incentive for the performance period that the executive would have received had he or she remained
employed by Cimpress through the end of the performance period.
• The continuation of all other employment-related benefits for two years after the termination in the case of
Mr. Keane, or one year after the termination in the case of our other executive officers.
The executive retention agreements also provide that, upon a change in control of Cimpress, all equity awards
granted to each executive officer will accelerate and become fully vested; each executive’s multi-year cash
incentive awards under our Performance Incentive Plan will accelerate such that the executive will receive the mid-
range target bonus for the then current performance period and each performance period after the change in
control; and each executive will receive a pro rata portion, based on the number of days in the fiscal year before the
change in control, of his or her target annual cash incentive award for that fiscal year.
In addition, if after a change in control Cimpress' successor terminates the executive without cause, or the
executive terminates his or her employment for good reason (as defined in the agreements), then each of the
executive’s equity awards remains exercisable until the earlier of one year after termination or the original expiration
date of the award. If an executive is required to pay any excise tax pursuant to Section 280G of the US Tax Code as
a result of compensation payments made to him or her, or benefits obtained by him or her (including the
acceleration of equity awards), resulting from a termination or change in ownership or control of Cimpress, we are
required to pay the executive an amount, referred to as a gross-up payment, equal to the amount of such excise tax
plus any additional taxes attributable to such gross-up payment. However, if reducing the executive’s compensation
payments by up to $50,000 would eliminate the requirement to pay an excise tax under Section 280G of the US Tax
Code, then Cimpress has the right to reduce the payment by up to $50,000 to avoid triggering the excise tax and
thus avoid providing gross-up payments to the executive. Our Compensation Committee has decided that we would
no longer include such excise tax gross-up provisions in any executive retention agreements we enter into with new
executives after August 1, 2012.
The following table sets forth information on the potential payments to named executive officers upon their
termination or a change in control of Cimpress, assuming that a termination or change in control took place on
June 30, 2015.
34
Name
Robert S. Keane
•
Termination Without Cause or With
Good Reason ...........................................
• Change in Control ....................................
Change in Control w/ Termination
Without Cause or With Good Reason ......
•
Katryn S. Blake
•
Termination Without Cause or With
Good Reason ...........................................
• Change in Control ....................................
Change in Control w/ Termination
Without Cause or With Good Reason ......
•
Donald R. Nelson
•
Termination Without Cause or With
Good Reason ...........................................
• Change in Control ....................................
Change in Control w/ Termination
Without Cause or With Good Reason ......
•
Ernst J. Teunissen(6)
•
Termination Without Cause or With
Good Reason ...........................................
• Change in Control ....................................
Change in Control w/ Termination
Without Cause or With Good Reason ......
•
Accelerated
Vesting of
Share Options
($)(2)
Accelerated
Vesting of
Restricted
Share Units
($)(3)
Cash Payment
($)(1)
Welfare
Benefits
($)(4)
Tax
Gross-Up
Payment
($)(5)
Total
($)
2,653,871
—
—
26,142,238
— 55,824
—
—
—
2,709,695
— 26,142,238
2,653,871
26,142,238
— 55,824
— 28,851,933
700,000
—
—
3,175,924
— 22,665
—
4,266,155
700,000
3,175,924
4,266,155
22,665
560,000
—
—
4,124,581
— 22,381
—
2,922,204
560,000
4,124,581
2,922,204
22,381
594,485
—
—
—
4,811,948
3,083,622
3,941
—
594,485
4,811,948
3,083,622
3,941
P
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—
—
—
—
—
—
—
—
—
722,665
7,442,079
8,164,744
582,381
7,046,785
7,629,166
598,426
7,895,570
8,493,996
_____________
(1) Amounts in this column represent severance amounts payable under the executive retention agreements. Some of the
amounts would be payable to Messrs. Keane and Teunissen in Euros. For purposes of this table, we converted these
executive officers’ payments from Euros to U.S. dollars at a currency exchange rate of 1.12167 based on the 30-day
average currency exchange rate for June 1-30, 2015, which was the end of our most recent fiscal year.
(2) Amounts in this column represent the value of unvested, in-the-money share options that would vest upon the triggering
event described in the first column. The value of share options is based on the difference between the exercise price of
the options and $84.16 per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2015, the
last trading day of our fiscal year 2015.
(3) Amounts in this column represent the value of unvested restricted share units that would vest upon the triggering event
described in the first column, based on $84.16 per share, which was the closing price of our ordinary shares on Nasdaq
on June 30, 2015, the last trading day of our fiscal year 2015.
(4) Amounts reported in this column represent the estimated cost of providing employment related benefits (such as
insurance for medical, dental, and vision) during the period the named executive officer is eligible to receive those benefits
under the executive retention agreements, which is two years for Mr. Keane and one year for the other named executive
officers.
(5) Amounts in this column are estimates based on a number of assumptions and do not necessarily reflect the actual
amounts of tax gross-up payments that the named executive officers would receive. Our Compensation Committee
decided that we would no longer include such tax gross-up provisions in the executive retention agreements we enter into
with new executives after August 1, 2012.
(6) Mr. Teunissen resigned as an executive officer in October 2015.
We have also entered into indemnification agreements with our executive officers that provide the executives
with indemnification for actions they take in good faith as members of our management team.
35
The Role of Company Executives in the Compensation Process
Although the Compensation Committee manages and makes decisions about the compensation process, the
Committee also takes into account the views of our Chief Executive Officer, who makes initial recommendations
with respect to executive officers other than himself. Other employees of Cimpress also participate in the
preparation of materials presented to or requested by the Compensation Committee for use and consideration at
Compensation Committee meetings.
Share Ownership Guidelines
We have share ownership guidelines for all of our executive officers and members of our Supervisory Board. The
guidelines require our executive officers and Supervisory Board members to hold Cimpress equity, including
ordinary shares they hold directly or indirectly, unvested restricted share units and vested, unexercised, in-the-
money share options, with a value, based on the two-year trailing average of the closing prices of Cimpress'
ordinary shares on Nasdaq, equal to or greater than a multiple of the executive officer’s annual base salary or the
Supervisory Board member's annual retainer, as follows:
• Chief Executive Officer: 5 times annual base salary
• Other executive officers: 3 times annual base salary
• Supervisory Board: 5 times Supervisory Board annual cash retainer
We give each executive officer and Supervisory Board member four years from his or her initial appointment as a
Cimpress officer or director to comply with the share ownership guidelines. As of June 30, 2015, all executive
officers and Supervisory Board members had satisfied their ownership guideline requirement, other than Dr.
Shouraboura who has until January 2019 to increase her share ownership to the level described above.
Section 162(m)
The United States Internal Revenue Service, pursuant to Section 162(m) of the US Tax Code, generally disallows
a tax deduction for compensation in excess of $1.0 million paid to our Chief Executive Officer and to each other
named executive officer (other than the Chief Financial Officer) whose compensation is required to be reported to
our shareholders pursuant to SEC rules by reason of being among our three most highly paid executive officers.
This deduction limitation can apply to compensation paid by U.S. subsidiaries of Cimpress. Qualifying performance-
based compensation is not subject to the deduction limitation if certain requirements are met.
The Compensation Committee reserves the right to use its judgment to authorize compensation payments that
may be subject to the Section 162(m) limitation when it believes that such payments are appropriate and in the best
interests of Cimpress and its shareholders, after taking into account business conditions or the officer’s
performance. Although the Compensation Committee considers the impact of Section 162(m) when administering
Cimpress' compensation plans, it does not make decisions regarding executive compensation based solely on the
expected tax treatment of such compensation. As a result, the Compensation Committee has deemed it appropriate
at times to forego awarding compensation that may qualify as performance-based compensation under
Section 162(m) in favor of awards that may not be fully tax-deductible by Cimpress' subsidiaries.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and
Analysis contained in this proxy statement. Based on the Compensation Committee’s review and discussions with
management, the Compensation Committee recommended to the Supervisory Board that the Compensation
Discussion and Analysis be included in this proxy statement.
Compensation Committee of the
Supervisory Board
Scott Vassalluzzo, Chair
Peter Gyenes
Eric C. Olsen
Mark T. Thomas
36
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Summary Compensation Table
SUMMARY COMPENSATION TABLES
The following table summarizes the compensation earned in each of the last three fiscal years by:
(i) our principal executive officer,
(ii) our principal financial officer as of June 30, 2015, the end of our most recent fiscal year, and
(iii) our other two executive officers.
Throughout this proxy statement, we refer to the individuals listed in (i) through (iii) above as our named
executive officers.
Share
Awards
($)(1)
Option
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)(2)
All Other
Compensation
($)
Total
($)
Year
Name and Principal Position
Robert S. Keane(3) ..................... 2015 494,804
2014 581,430
President and Chief
2013 559,907
Executive Officer
Salary
($)
—
—
—
—
— 3,450,821
Katryn S. Blake ........................... 2015 365,000
2014 364,231
Executive Vice President and
2013 344,712
President, Vistaprint Business
Unit
1,205,954
937,986
1,004,972
Donald R. Nelson ........................ 2015 340,000
2014 339,808
Executive Vice President and
2013 329,808
Chief Operating Officer
Ernst J. Teunissen(3)(8) .............. 2015 310,683
2014 360,706
Executive Vice President
2013 320,023
and Chief Financial Officer
799,930
699,981
649,963
799,930
699,981
749,996
—
—
—
—
—
—
—
—
—
1,481,285
1,161,505
1,127,579
612,344
428,814
425,415
411,875
295,915
309,630
550,988
453,788
441,530
6,200(4)
1,982,289
3,109
3,192
1,746,044
5,141,499
1,104,617(5)
3,287,915
546,535
510,294
2,277,566
2,285,393
7,800(6)
1,559,605
7,800
7,650
1,343,504
1,297,051
35,067(7)
1,696,668
40,804
39,532
1,555,279
1,551,081
_____________
(1)
The amounts reported in these columns represent a dollar amount equal to the grant date fair value of the share awards
as computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations for
these amounts in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal
year ended June 30, 2015. Our Supervisory Board has passed resolutions that, until fiscal 2016 at the earliest, Cimpress
will not grant any additional long-term incentive award in any form (including equity or long-term cash awards) to Mr.
Keane or any additional share options to Ms. Blake or Messrs. Nelson or Teunissen.
(2)
(3)
The amounts reported in this column represent the aggregate amounts earned for each such fiscal year under each
named executive officer’s annual cash incentive award for that fiscal year and the component of each officer’s long-term
cash incentive award that is attributable to that fiscal year. You can find more information about the amounts paid for
fiscal 2015 to each executive officer under his or her annual and long-term cash incentive awards in the Compensation
Discussion and Analysis section of this Supervisory Board Report.
We paid the amounts under “Salary,” “Non-Equity Incentive Plan Compensation,” and “All Other Compensation” to
Messrs. Keane and Teunissen in whole or in part in Euros. For purposes of this table, we converted these amounts from
Euros to U.S. dollars at a currency exchange rate of 1.12167 based on the 30-day average currency exchange rate for
June 1-30, 2015, which was the end of our most recent fiscal year.
37
(4)
(5)
(6)
(7)
$4,783 of this amount represents the reimbursement of business travel expenses for Mr. Keane's attendance at
meetings of Cimpress' Management Board, tax preparation fees, and associated tax gross-up payments, and $1,417 of
this amount represents the payment of wire transfer fees for amounts being deposited in European accounts. Although
the reimbursement of business travel expenses would not be taxable to Mr. Keane in the United States and although Mr.
Keane is not a resident of the Netherlands, under his ruling with the Dutch tax authorities, this reimbursement is
considered taxable income to Mr. Keane. Because Mr. Keane should not be financially penalized as a result of taxation
by the country in which Cimpress is incorporated, we gross up the reimbursement payments to offset the increased tax
liability to him.
$860,604 of this amount represents a lump sum payment of taxes for 2013 and 2014 and associated tax gross-up
amounts relating to Ms. Blake's expatriate payments for her assignment in Paris, $236,213 of this amount represents
French taxes paid relating to the vesting of restricted share units during Ms. Blake's assignment in Paris, and $7,800 of
this amount represents our matching contributions under Cimpress USA’s 401(k) deferred savings plan.
This amount represents our matching contributions under Cimpress USA’s 401(k) deferred savings retirement plan.
$33,650 of this amount represents payments of school tuition for Mr. Teunissen’s children, and $1,417 of this amount
represents the payment of wire transfer fees for amounts being deposited in European accounts.
(8)
Mr. Teunissen resigned as an executive officer in October 2015.
Grants of Plan-Based Awards in the Fiscal Year Ended June 30, 2015
The following table contains information about plan-based awards granted to each of our named executive
officers during the fiscal year ended June 30, 2015.
Name
Robert S. Keane ............................. 9/28/2014(6)
Grant Date
Katryn S. Blake ............................... 9/28/2014
5/19/2015
Donald R. Nelson ........................... 9/28/2014
5/19/2015
Ernst J. Teunissen(7) ...................... 9/28/2014(6)
5/19/2015
_____________
Estimated Possible Payouts
Under Non-Equity Incentive Plan Awards
Target
($)(2)
Maximum
($)(3)
Threshold
($)(1)
All Other
Share Awards:
Number of
Shares or
Share Units
(#)(4)
Grant Date
Fair Value of
Share Awards
($)(5)
—
—
—
—
847,983
335,000
1,695,966
670,000
—
—
—
—
220,000
440,000
297,243
594,486
14,331
1,205,954
—
9,506
—
9,506
—
799,930
—
799,930
(1)
(2)
(3)
(4)
(5)
The amounts reported in this column represent the amounts that would have been payable under our named executive
officers’ annual cash incentive awards if we did not achieve our minimum constant currency revenue and adjusted EPS
goals.
These amounts represent payments that our named executive officers would have received under their fiscal 2015
annual cash incentive awards for 100% achievement of our adjusted EPS and constant currency revenue goals for
fiscal 2015. You can find more information on the amounts actually paid to our executive officers under their fiscal 2015
annual cash incentive awards above in the Compensation Discussion and Analysis section of this Supervisory Board
Report.
These amounts represent the maximum amounts that would have been payable under our named executive officers’
annual cash incentive awards for our fiscal year ended June 30, 2015. The payout under each executive officer's
annual cash incentive is capped at 200% of the executive officer’s target amount. In fact, based on our achievement of
our goals for fiscal 2015, our executive officers received payments that were less than these amounts. You can find
more information on the amounts actually paid to our executive officers under their annual cash incentive awards
above in the Compensation Discussion and Analysis section of this Supervisory Board Report.
The amounts reported in this column represent restricted share units granted under our 2011 Equity Incentive Plan that
vest over a period of four years: 25% one year after they are granted and 6.25% per quarter thereafter. As the
restricted share units vest, we automatically issue the vested shares to the employee; the employee does not need to
exercise them or pay any amount to us for the purchase of the shares.
The amounts reported in this column represent the grant date fair value for each executive officer’s share-based
awards computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations
for these amounts in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2015.
38
(6)
The estimated amounts in this row would be payable to Messrs. Keane and Teunissen in Euros. For purposes of this
table, we converted these estimated incentive payments from Euros to U.S. dollars at a currency exchange rate of
1.12167 based on the 30-day average currency exchange rate for June 1-30, 2015, which was the end of our most
recent fiscal year.
(7)
Mr. Teunissen resigned as an executive officer in October 2015.
Outstanding Equity Awards at June 30, 2015
The following table contains information about unexercised share options and unvested restricted share units as
of June 30, 2015 for each of our named executive officers.
Option Awards
Share Awards
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
(#) Unexercisable
Market
Value of
Shares or
Share
Units That
Have Not
Vested
($)(3)
Number
of Shares
or Share
Units
That
Have Not
Vested
(#)(2)
Option
Expiration
Date
8/4/2016
5/15/2017
5/2/2018
5/7/2019
5/6/2020
5/5/2021
5/4/2020(6)
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Option
Exercise
Price
($)(1)
23.31
37.51
34.87
34.25
47.91
54.02
—
—
—
—
—
—
765,288(5)
50.00(6)
—
54.02
92,972
50.00(6)
5/5/2021
5/4/2020(6)
—
—
33.47
54.02
120,743
50.00(6)
8/6/2017
5/5/2021
5/4/2020(6)
—
—
48.89
54.02
140,865
50.00(6)
3/1/2021
5/5/2021
5/4/2020(6)
—
—
50,691
4,266,155
34,722
2,922,204
36,640
3,083,622
Name
Robert S. Keane(4) ..............................
Katryn S. Blake ....................................
Donald R. Nelson ................................
Ernst J. Teunissen(7) ...........................
_____________
130,050
143,618
333,318
146,028
96,800
105,240
459,174
1,039
27,892
11,333
6,646
72,446
1,218
1,039
—
(1)
(2)
(3)
Except as set forth in footnote 6 below, each share option has an exercise price equal to the fair market value of our
ordinary shares on the date of grant and becomes exercisable, so long as the named executive officer continues to be
employed with us, as to 25% of the shares subject to the option after one year and 6.25% per quarter thereafter. Except
as set forth in footnote 6, each share option expires 10 years after the date on which it was granted.
So long as the named executive officer continues to be employed with us, each restricted share unit vests, and the
vested shares are issued to the named executive officer, over a period of four years: 25% of the shares subject to the unit
after one year and 6.25% per quarter thereafter.
The market value of the restricted share units is determined by multiplying the number of restricted share units by $84.16
per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2015, the last trading day of our
fiscal year 2015.
(4)
All of Mr. Keane’s awards are held by his Trusts.
39
(5)
(6)
Mr. Keane may not exercise his premium-priced options unless our share price on Nasdaq is at least $75.00 on the
exercise date.
These awards are premium-priced share options with an exercise price that is significantly higher than the closing price
of Cimpress' ordinary shares on Nasdaq on the grant dates. The Compensation Committee chose this exercise price in
part because it is higher than the highest of the three-, six-, and twelve-month trailing averages of Cimpress' share price
on Nasdaq as of the July 28, 2011 public announcement of our growth strategy. The premium-priced share options vest
over seven years and have an eight-year term.
(7)
Mr. Teunissen resigned as an executive officer in October 2015.
Option Exercises and Shares Vested in the Fiscal Year Ended June 30, 2015
The following table contains information about option exercises and vesting of restricted share units on an
aggregated basis during fiscal 2015 for each of our named executive officers.
Name
Robert S. Keane ................................................................
Katryn S. Blake ..................................................................
Donald R. Nelson ..............................................................
Ernst J. Teunissen(3) .........................................................
_____________
(1)
Option Awards
Share Awards
Number of Shares
Acquired on
Exercise
(#)
700,000
82,152
18,000
Value Realized
on Exercise
($)(1)
48,797,000
1,960,283
603,229
110,056
3,582,681
Number of Shares
Acquired on
Vesting
(#)
10,552
26,382
17,579
21,350
Value Realized
on Vesting
($)(2)
744,839
1,880,532
1,259,980
1,547,915
Represents the net amount realized from all option exercises during fiscal 2015. In cases involving an exercise and
immediate sale, the value was calculated on the basis of the actual sale price. In cases involving an exercise without
immediate sale, the value was calculated on the basis of our closing sale price of our ordinary shares on Nasdaq on the
date of exercise.
(2)
The value realized on vesting of restricted share units is determined by multiplying the number of shares that vested by
the closing sale price of our ordinary shares on Nasdaq on the vesting date.
(3)
Mr. Teunissen resigned as an executive officer in October 2015.
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COMPENSATION OF SUPERVISORY BOARD MEMBERS
We use a combination of cash and share-based incentive compensation to attract and retain qualified candidates
to serve on our Supervisory Board. When considering the compensation of our Supervisory Board, our
Compensation Committee considers the significant amount of time that directors expend in fulfilling their duties to
Cimpress, the skill level that we require of members of our Supervisory Board, and competitive compensation data
from our peer group.
Our Compensation Committee reviewed the current compensation of our Supervisory Board in fiscal 2015 and
decided not to recommend any changes to the compensation program because the Committee believes that our
Supervisory Board's compensation is competitive.
Fees
We pay the members of our Supervisory Board the following fees for their service on our Supervisory Board:
All members of the Supervisory Board
(cid:404)
(cid:404)
(cid:404)
$34,000 retainer per fiscal year
$10,000 retainer per fiscal year for each committee of the
Supervisory Board on which the director serves
$3,000 for each regularly scheduled Supervisory Board meeting that
the director physically attends
Chairman of the Supervisory Board
$15,000 retainer per fiscal year
Chairman of our Audit Committee
$15,000 retainer per fiscal year
Chairmen of our Compensation Committee and
Nominating and Corporate Governance
Committee
$10,000 retainer per fiscal year
We also reimburse our Supervisory Board for reasonable travel and other expenses incurred in connection with
attending meetings of our Supervisory Board and its committees, and we pay for their tax preparation fees and
filings for their Dutch income tax returns.
Equity Grants
Share Options. Upon his or her initial appointment to the Supervisory Board, each director receives a share
option to purchase a number of ordinary shares having a fair value equal to $150,000, up to a maximum of
50,000 shares. On the date of each annual general meeting, each incumbent Supervisory Board member receives
a share option to purchase a number of ordinary shares having a fair value equal to $50,000, up to a maximum of
12,500 shares. We grant options to our Supervisory Board under our 2005 Non-Employee Directors’ Share Option
Plan, as amended, with an exercise price equal to the fair market value of our ordinary shares on the date of grant.
The Supervisory Board's options vest at a rate of 8.33% per quarter over a period of three years from the date of
grant, so long as the director continues to serve as a director on each such vesting date, and expire upon the earlier
of ten years from the date of grant or 90 days after the director ceases to serve as a director.
Restricted Share Units. On the date of each annual general meeting, in addition to the share option described
above, each incumbent Supervisory Board member receives restricted share units having a fair value equal to
$110,000 granted under our 2011 Equity Incentive Plan. Restricted share units granted to members of our
Supervisory Board after July 1, 2013 vest at a rate of 12.5% per quarter over a period of two years from the date of
grant, so long as the director continues to serve as a director on each such vesting date.
For the purposes of determining the number of share options and restricted share units to be granted, we use the
fair value of each share option and restricted share unit using a generally accepted equity pricing valuation
methodology, such as the Black-Scholes model or binomial method for share options, with such modifications as it
may deem appropriate to reflect the fair market value of the equity awards. In fiscal 2015, we used the Black-
Scholes model to determine fair market value of share options.
41
Summary Compensation Table
The following contains information with respect to the compensation earned by our Supervisory Board members
in the fiscal year ended June 30, 2015:
Name
Paolo De Cesare ..................................................................................................
John J. Gavin, Jr. ..................................................................................................
Peter Gyenes ........................................................................................................
Eric C. Olsen ........................................................................................................
Richard T. Riley .....................................................................................................
Mark T. Thomas ....................................................................................................
Nadia Shouraboura...............................................................................................
Scott Vassalluzzo ..................................................................................................
George M. Overholser(2) ......................................................................................
_____________
(1)
Fees
Earned or
Paid in
Cash
($)
53,000
71,000
66,000
61,300
81,000
77,200
18,980
27,030
48,680
Share
Awards
($)(1)
109,955
109,955
109,955
109,955
109,955
109,955
Option
Awards
($)(1)
49,995
Total
($)
212,950
49,995
230,950
49,995
225,950
49,995
221,250
49,995
240,950
49,995
— 149,962
— 149,962
49,995
237,150
168,942
176,992
208,630
109,955
The value of the share awards equals their grant date fair value as computed in accordance with FASB ASC Topic 718.
You can find the assumptions we used in the calculations for these amounts in Note 12 to our audited financial
statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015. All share options
referenced in this table were granted with an exercise price equal to the closing price of our ordinary shares on Nasdaq
on the date of grant.
(2)
Mr. Overholser resigned as a director effective February 2015.
Outstanding Equity Awards Held by Supervisory Board members at June 30, 2015
The following table contains information about unexercised share options and unvested restricted share units as
of June 30, 2015 for each member of our Supervisory Board.
Option Awards
Share Awards
Name
Paolo De Cesare .........................................
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
(#) Unexercisable
4,669
888
241
John J. Gavin, Jr. .........................................
12,018
2,925
2,269
9,548
1,919
2,443
2,690
2,645
888
241
42
Number
of Shares
or Share
Units
That
Have Not
Vested
(2)(#)
Market
Value of
Shares or
Share
Units That
Have Not
Vested
(3)($)
Option
Expiration
Date
4/30/2023
11/7/2023
11/12/2024
8/21/2016
11/14/2016
11/2/2017
11/7/2018
11/17/2019
11/12/2020
11/3/2021
11/8/2022
11/7/2023
11/12/2024
2,735
230,178
2,319
195,167
Option
Exercise
Price
($)(1)
40.80
54.08
68.38
24.32
33.24
46.18
15.94
54.46
40.99
35.77
30.30
54.08
68.38
2,335
888
1210
—
—
—
—
—
—
—
530
888
1,210
Peter Gyenes ...............................................
Eric C. Olsen ...............................................
Richard T. Riley ............................................
Nadia Shouraboura......................................
Mark T. Thomas ...........................................
7,389
1,919
2,443
2,690
2,645
888
241
4,669
888
241
2,925
2,269
9,548
1,919
2,443
2,690
2,645
888
241
332
5,758
2,443
2,690
2,645
888
241
—
—
—
—
530
888
1210
2,335
888
1210
—
—
—
—
—
—
530
888
1,210
24.33
54.46
40.99
35.77
30.30
54.08
68.38
2/5/2019
11/17/2019
11/12/2020
11/3/2021
11/8/2022
11/7/2023
11/12/2024
40.80
54.08
68.38
4/30/2023
11/7/2023
11/12/2024
33.24
46.18
15.94
54.46
40.99
35.77
30.30
54.08
68.38
11/14/2016
11/2/2017
11/7/2018
11/17/2019
11/12/2020
11/3/2021
11/8/2022
11/7/2023
11/12/2024
3,657
79.52
2/3/2025
—
—
—
530
888
1210
54.46
40.99
35.77
30.30
54.08
68.38
11/17/2019
11/12/2020
11/3/2021
11/8/2022
11/7/2023
11/12/2024
2,319
195,167
2,735
230,178
2,319
195,167
P
r
o
x
y
S
t
a
t
e
m
e
n
t
2,319
195,167
Scott Vassalluzzo .........................................
332
3,657
79.52
2/3/2025
_____________
(1)
(2)
Each share option has an exercise price equal to the fair market value of our ordinary shares on the date of grant and
becomes exercisable at a rate of 8.33% per quarter over a period of three years from the date of grant, so long as the
Supervisory Board member continues to serve as a director on each such vesting date. Each share option expires
10 years after the date on which it was granted.
Upon the vesting of each restricted share unit, shares are issued to the director on a one-to-one basis. Restricted share
units issued to Supervisory Board members before July 1, 2013 vest as to 8.33% of the shares subject to the unit per
quarter over a period of three years, so long as the director continues to serve as a director on each such vesting date.
Restricted share units issued to Supervisory Board members after July 1, 2013 vest as to 12.5% of the shares subject to
the unit per quarter over a period of two years, so long as the director continues to serve as a director on each such
vesting date.
(3)
The market value of the restricted share units is determined by multiplying the number of restricted share units by $84.16
per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2015, the last trading day of our
fiscal year 2015.
43
Compensation Committee Interlocks and Insider Participation
During fiscal 2015, Messrs. Gyenes, Olsen, Overholser, Thomas, and Vassalluzzo served at various times as
members of our Compensation Committee. During fiscal 2015, no member of our Compensation Committee was an
officer or employee of Cimpress or of our subsidiaries or had any relationship with us requiring disclosure under
SEC rules.
During fiscal 2015, none of our executive officers served as a member of the board of directors or compensation
committee (or other committee serving an equivalent function) of any entity that had one or more executive officers
serving as a member of our Supervisory Board or Compensation Committee.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of June 30, 2015 about the securities issued or authorized for future
issuance under our equity compensation plans.
Equity Compensation Plan Information
Plan Category
Equity compensation plans approved by shareholders(1) .
Equity compensation plans not approved by
shareholders ......................................................................
Total ...................................................................................
_____________
(1)
(a)
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights(1)
2,913,392
(b)
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
$45.09
(c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column(a)
2,387,435(2)
—
2,913,392
—
$45.09
—
2,387,435(2)
Consists of our Amended and Restated 2005 Equity Incentive Plan, 2005 Non-Employee Directors’ Share Option Plan,
and 2011 Equity Incentive Plan. This column does not include an aggregate of 767,280 shares underlying restricted
share units that were unvested as of June 30, 2015.
(2)
Includes 2,329,411 shares available for future awards under our 2011 Equity Incentive Plan and 58,024 shares available
for future awards under our 2005 Non-Employee Directors’ Share Option Plan, as amended. No shares are available for
future award under our Amended and Restated 2005 Equity Incentive Plan.
44
About Non-GAAP Financial Measures
To supplement Cimpress’ consolidated financial statements presented in accordance with U.S. generally accepted
accounting principles, or GAAP, Cimpress has used the following measures defined as non-GAAP financial
measures by SEC rules: free cash flow and adjusted NOPAT.
• Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and
equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and
website development costs, plus payment of contingent consideration in excess of acquisition-date fair
value.
• Adjusted NOPAT is defined as GAAP Operating Income minus cash taxes attributable to the current period
(see definition below), with the following adjustments: exclude the impact of M&A related items including
amortization of acquisition-related intangibles, the change in fair value of contingent consideration, and
expense for deferred payments or equity awards that are treated as compensation expense; exclude the
impact of unusual items such as discontinued operations, restructuring charges, and impairments; and
include realized gains or losses from currency forward contracts that are not included in operating income
as we do not apply hedge accounting.
• As part of our calculation of Adjusted NOPAT, we subtract the cash taxes attributable to the current period
operations, which we define as the actual cash taxes paid or to be paid adjusted for any non-operational
items and excluding the excess tax benefit from equity awards.
The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute
for our financial information prepared and presented in accordance with GAAP. For more information on these non-
GAAP financial measures, please see the tables captioned “Reconciliations of Non-GAAP Financial Measures”
below. The tables have more details on the GAAP financial measures that are most directly comparable to non-
GAAP financial measures and the related reconciliation between these financial measures.
Cimpress’ management believes that these non-GAAP financial measures provide meaningful supplemental
information in assessing our performance and liquidity by excluding certain items that may not be indicative of our
recurring core business operating results, which could be non-cash charges or discrete cash charges that are
infrequent in nature. These non-GAAP financial measures also have facilitated management’s internal comparisons
to Cimpress’ historical performance and our competitors’ operating results.
P
r
o
x
y
S
t
a
t
e
m
e
n
t
Reconciliation of Non-GAAP Financial Measures
Free Cash Flow
Annual, in $ thousands
2013
2014
2015
Net cash provided by operating activities
$140,012 $148,580 $228,876
Purchase of property, plant, and equipment
(78,999)
(72,122)
(75,813)
Purchases of intangible assets not related to acquisitions
(750)
(253)
(250)
Capitalization of software and website development costs
(7,667)
(9,749)
(17,323)
Payment of contingent consideration in excess of acquisition-
date fair value
Free Cash Flow
0
0
8,055
$52,596
$66,456 $143,545
45
Reconciliation of Non-GAAP Financial Measures (cont.)
Adjusted NOPAT
Annual, in $ millions
GAAP operating income
Less: Cash taxes attributable to current period (see separate reconciliation below)
Exclude expense (benefit) impact of:
Amortization of acquisition-related intangible assets
Earn-out related charges Includes expense recognized for the change in fair value of
contingent consideration and compensation expense related to cash-based earn-out
mechanisms dependent upon continued employment.
Share-based compensation related to investment consideration
Restructuring charges
Include: Realized gain (loss) on currency forward contracts not included in operating income
Adjusted NOPAT
Cash taxes attributable to current period (used in NOPAT)
Annual, in $ millions
Cash taxes paid in the current period
Less: cash taxes related to prior periods
Plus: cash taxes attributable to the current period but not yet paid
Plus: cash impact of excess tax benefit on equity awards attributable to current period
Less: installment payment related to the transfer of IP in a prior year
Cash taxes attributable to current period
2013
2014
2015
$46.1
$(14.0)
10.9
(0.6)
7.9
-
-
$50.3
$85.9
$(20.1)
$96.3
$(25.0)
12.6
2.2
4.4
6.0
(7)
$84.0
24.3
15.3
3.6
3.2
7.4
$125.1
2013
2014
2015
$13.7
(0.5)
2.9
$1.4
$(3.4)
$14.0
$18.5
(6.5)
6.0
$5.6
$(3.4)
$20.1
$14.3
(5.5)
6.7
12.9
(3.4)
$25.0
46
CORPORATE INFORMATION
Management Board
Independent Registered Public Accounting Firm
Robert Keane
President & Chief Executive Officer
Chairman, Management Board
(Executive Officer)
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110
USA
Phone: +1-617-530-5000
Will Jacobs
Senior Vice President &
Chief Supply Chain Officer
(Non-executive Officer)
Don Nelson
Executive Vice President &
Chief Operating Officer
(Executive Officer)
Trynka Shineman Blake
Executive Vice President &
President, Vistaprint Business Unit
(Executive Officer)
Other Executive Officer
Sean Quinn
Senior Vice President &
Chief Financial Officer
(Executive Officer)
Supervisory Board
Richard T. Riley
Chairman, Supervisory Board
Paolo De Cesare
John J. Gavin, Jr.
Peter Gyenes
Eric C. Olsen
Dr. Nadia Shouraboura
Mark T. Thomas
Scott Vassalluzzo
Corporate Counsel
Stibbe
Stibbetoren
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
Phone: +31-20-546-06-06
Transfer Agent
WilmerHale
60 State Street
Boston, MA 02109
USA
Phone: +1-617-526-6000
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
USA
Phone: +1-800-962-4284
Financial Information
To request financial documents such as our 10-K for the
fiscal year ended June 30, 2015, as filed with the
Securities and Exchange Commission, please visit
ir.cimpress.com, call our investor relations line at
+1-781-652-6480 or send an email to ir@cimpress.com.
General Information
Members of the media or others seeking information on
the company should contact the public relations
department at mediarelations@cimpress.com
Annual General Meeting of Shareholders
November 17, 2015
Hudsonweg 8
5928 LW Venlo
The Netherlands
Address
Hudsonweg 8
5928 LW Venlo
The Netherlands
CIMPRESS N.V. | HUDSONWEG 8 | 5928 LW VENLO | THE NETHERLANDS