In addition, we intend to move the TinyPrints and Wedding Paper Divas technology base to this new Shutterfly platform. We believe this will enable the company to accelerate the rate of adoption of ThisLife’s features and functionality through a simpler customer experience (one service, one site, one set of apps, and one well-known brand) and drive greater usage and monetization. This project will incorporate our ThisLife service directly into and consolidate our ThisLife and Shutterfly mobile apps. In 2015, we are beginning a 15 to 18 month process to build the next generation of Shutterfly: a world-class memory management service connected to our personalized e-commerce solutions. Our Share Sites platform, as well as our integrated marketing campaigns and Internet marketing are also a significant source of our new customer registrations. In 2012, we acquired over five billion of Kodak Gallery customer photos and migrated those customers onto the Shutterfly platform. In 2013, we acquired BorrowLenses and MyPublisher and began to introduce their customer base to the other products and services of our Shutterfly and Tiny Prints brands. Design Studio supports ecommerce and conversion by enabling a more personalized and tailored shopping experience by room, style, or decoration, as well as adding styling tips and do-it-yourself ideas. In addition, we introduced a new shopping experience for our Home Décor collection called Design Studio. We also introduced laser-cut cards and letterpress on our Tiny Prints brand. During 2014, we increased total transacting customers 14%, and we launched several new products including ¾ folded cards, premium card options like foil-stamping and edge treatments, and metal and glass prints. We have a primary strategy to grow our core Shutterfly and Tiny Prints brands by acquiring new customers, expanding the lifetime value of our existing customers, improving conversion rates, and introducing innovative new products. We generate substantially all of our revenue from sales originating in the United States and our sales cycle has historically been highly seasonal as we generate more than 50% of our total net revenues during our fiscal fourth quarter. Additionally, we sell a variety of photo-based merchandise that is currently manufactured for us by third parties, such as calendars, mugs, canvas prints, mouse pads, magnets, and puzzles. By controlling the production process in our own production facilities, we are able to produce high-quality products, innovate rapidly, maintain a favorable cost structure and ensure timely shipment to customers, even during peak periods of demand. In 2013, we entered into a lease for a new production facility in Tempe, Arizona, which is expected to be operational in 2015. We manufacture most of these items in our Fort Mill, South Carolina, Phoenix, Arizona, and Shakopee, Minnesota production facilities. We generate the majority of our revenues by producing and selling professionally-bound photo books, greeting and stationery cards, personalized calendars, other photo-based merchandise and high-quality prints ranging in size from wallet-sized to jumbo-sized 20x30 enlargements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to: (i) that the information is of a preliminary nature and may be subject to further adjustment (ii) those risks and uncertainties identified in this annual report on Form 10-K under “Risk Factors ” and (iii) the other risks detailed from time-to-time in our reports and registration statements filed with the Securities and Exchange Commission, or SEC. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks, uncertainties and other factors, some of which are beyond our control actual results could differ materially from those indicated by such forward-looking statements. Such statements include declarations regarding our intent, belief, or current expectations and those of management. Except for historical financial information contained herein, the matters discussed in this annual report on Form 10-K may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.
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