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| 8-K - FORM 8-K FILING DOCUMENT - MERCADOLIBRE INC | document.htm |
EXHIBIT 99.1
MercadoLibre, Inc. Reports Financial Results for Second Quarter 2011
* Q2'11 gross merchandise volume grew by 33.8% year-over-year to $1.1 billion
* Items sold during Q2'11 increased by 26.3% year-over-year to 11.6 million
* Revenues, on a comparable basis, increased by 42.9% to 69.4 million
BUENOS AIRES, Argentina, Aug. 3, 2011 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq:MELI) (http://www.mercadolibre.com), Latin America's leading e-commerce technology company, today reported financial results for the second quarter ended June 30, 2011.
Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc., commented, "Our last three months have seen strong volume and revenue growth that accelerated as the quarter advanced. I look forward to this continued momentum as we keep focusing on our own business and execution as the single most relevant way to drive growth and generate value, while we benefit from the sustained tailwinds behind e-commerce growth in Latin America."
Financial Results Summary
MercadoLibre reported consolidated net revenues for the three months ended June 30, 2011 of $69.4 million, representing 32.1% year-over-year growth.Revenue growth continued to be negatively impacted by the pre-sale of credit card receivables beginning in the third quarter of 2010. Had the company carried out similar pre-sales of credit card receivables during 2010, revenue growth on a comparable basis would have been 42.9% during the second quarter of 2011 as compared to the prior year quarter.
For the three months ended June 30, 2011, gross merchandise volume grew 33.8% year-over-year to $1,067.8 million, while total payment volume grew 100.2% year-over-year to $295.8 million. Items sold on MercadoLibre during the second quarter 2011 grew 26.3% to 11.6 million, while total payments transactions through MercadoPago grew 139.6% to 3.1 million.
Gross profits for the second quarter of 2011 were $52.4 million, a 27.6% increase over the previous year quarter. Gross profit margin for the period was 75.6%, down from 78.3% during the second quarter of 2010, as the lower margin payments volume continued to grow at a faster pace than the merchandise volume.
Income from operations grew 14.5% to $21.6 million in the second quarter of 2011 compared to $18.8 million in the second quarter of 2010. Operating income margin for the second quarter of 2011 was 31.1%. Growth in income from operations, as net revenues, was also negatively impacted by the pre-sale of credit card receivables.
Net Income before taxes was $22.5 million, an increase of 37.4% over the second quarter of 2010. The blended tax rate for the quarter was of 34%, as compared to 29% during the same quarter one year earlier. The higher tax rate was a consequence of certain one time, non-deductible costs incurred during the quarter.
Net income for the three months ended June 30, 2011, was $14.8 million, representing 27.0% growth over the prior year quarter. Net income margin was 21.4% for the second quarter of 2011, compared to 22.2% for the same period last year. Earnings per share for the second quarter of 2011 were $0.34 compared to $0.26 for the prior year quarter.
Free cash flow, defined as cash from operating activities less purchases of property, equipment and intangible asset, was $8.2 million for the three months ended June 30, 2011.
The following table summarizes certain key performance metrics for the three months ended June 30, 2010 and 2011.
| Three month ended June 30, (in millions) | 2010 | 2011 | %YOY |
| Total confirmed registered users at the end of period | 47.4 | 58.4 | 23.2% |
| New confirmed registered users during the period | 2.5 | 2.8 | 12.1% |
| Gross merchandise volume | $ 798.1 | $ 1,067.8 | 33.8% |
| Items sold | 9.2 | 11.6 | 26.3% |
| Total payments volume | $ 147.8 | $ 295.8 | 100.2% |
| Total payments transactions | 1.3 | 3.1 | 139.6% |
Change in MercadoPago Financing Operations
Starting in the third quarter of 2010, the company began to pre-sell credit card receivables from its MercadoPago financing operations. For this reason, starting in the third quarter of 2010, MercadoPago financing revenues now represent the net amount received from financing institutions as a result of pre-selling these installments-related financing receivables. Credit card receivables are being pre-sold in order to better manage credit risk; generate increased predictability of the associated cost; and not assume any financing risk.
The following table may prove helpful to analyze the annual evolution of the company's revenue growth, as it shows consolidated net revenues since Q2 of 2009 net of MercadoPago financing cost:
| Figures in US dollars | Q2 2009 | Q3 2009 | Q4 2009 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 |
| Consolidated Net Revenues | 40,901,799 | 50,599,276 | 49,020,045 | 45,937,774 | 52,510,331 | 55,951,378 | 62,316,231 | 61,459,668 | 69,378,160 |
| MercadoPago Financing Costs (*) | 3,246,008 | 3,927,577 | 3,990,072 | 3,383,142 | 3,949,545 | -- | -- | -- | -- |
| Consolidated Net Revenues Net of | 37,655,791 | 46,671,699 | 45,029,973 | 42,554,632 | 48,560,786 | 55,951,378 | 62,316,231 | 61,459,668 | 69,378,160 |
| MercadoPago Financing Costs | |||||||||
| Growth % Over Prior Year | n/a | 19.6% | 58.2% | 41.9% | 29.0% | 19.9% | 38.4% | 44.4% | 42.9% |
| (*) Included in Cost of Net Revenues and Interest Expense and Other Financial Charges. | |||||||||
MercadoLibre provides consolidated net revenues net of MercadoPago financing costs because it believes that such presentation is a beneficial supplemental disclosure to investors in analyzing and assessing the historical revenue growth of the company.
Conference Call and Webcast
The Company will host a conference call and audio webcast on August 3, 2011 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (970) 315-0420 or (877) 303-7209 (Conference ID 86860708) and requesting inclusion in the call for MercadoLibre. The live conference call can be accessed via audio webcast at the investor relations section of the Company's website, at http://investor.mercadolibre.com. An archive of the webcast will be available for one week following the conclusion of the conference call.
Definition of Selected Operational Metrics
Total confirmed registered users – Measure of the cumulative number of users who have registered on the MercadoLibre Marketplace and confirmed their registration.
New confirmed registered users – Measure of the number of new users who have registered on the MercadoLibre Marketplace and confirmed their registration.
Gross merchandise volume – Measure of the total U.S. dollar sum of all transactions completed through the MercadoLibre Marketplace, excluding motor vehicles, vessels, aircraft, real estate, and services.
Items sold – Measure of the number of items sold/purchased through the MercadoLibre Marketplace.
Total payment volume – Measure of total U.S. dollar sum of all transactions paid for using MercadoPago.
Total payment transactions – Measure of the number of all transactions paid for using MercadoPago.
Gross profit margin – Defined as gross profit as a percentage of revenues.
Operating margin – Defined as income from operations as a percentage of net revenues.
Net Income margin – Defined as net income as a percentage of net revenues.
Free Cash Flow – Defined as cash flow from operating activities less purchases of property, equipment and intangible asset.
About MercadoLibre
Founded in 1999, MercadoLibre is Latin America's leading e-commerce technology company. Through its primary platforms, MercadoLibre.com and MercadoPago.com, it provides solutions to individuals and companies buying, selling, advertising, and paying for goods online.
MercadoLibre.com serves millions of users and creates a market for a wide variety of goods and services in an easy, safe and efficient way. The site is among the top 50 in the world in terms of page views and is the leading retail platform in unique visitors in each country in which it operates according to metrics provided by comScore Networks. MercadoLibre maintains a leadership position in 12 Latin American countries. The Company is listed on NASDAQ (Nasdaq:MELI) following its initial public offering in 2007.
For more information about the company visit: http://investor.mercadolibre.com.
The MercadoLibre, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4193
Consolidated balance sheets
| June 30, | December 31, | |
| 2011 | 2010 | |
| Assets | (Unaudited) | (Audited) |
| Current assets: | ||
| Cash and cash equivalents | $ 44,250,132 | $ 56,830,466 |
| Short-term investments | 72,384,019 | 5,342,766 |
| Accounts receivable, net | 14,984,136 | 12,618,173 |
| Funds receivable from customers | 7,910,434 | 6,151,518 |
| Prepaid expenses | 1,331,890 | 913,262 |
| Deferred tax assets | 12,396,948 | 12,911,256 |
| Other assets | 5,964,157 | 6,867,767 |
| Total current assets | 159,221,716 | 101,635,208 |
| Non-current assets: | ||
| Long-term investments | 50,201,025 | 78,846,281 |
| Property and equipment, net | 31,316,388 | 20,817,712 |
| Goodwill, net | 61,356,716 | 60,496,314 |
| Intangible assets, net | 3,819,064 | 4,141,167 |
| Deferred tax assets | 1,939,191 | 2,975,118 |
| Other assets | 671,876 | 771,223 |
| Total non-current assets | 149,304,260 | 168,047,815 |
| Total assets | $ 308,525,976 | $ 269,683,023 |
| Liabilities and Shareholders' Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 20,333,485 | $ 17,232,103 |
| Funds payable to customers | 58,176,211 | 48,788,225 |
| Payroll and social security payable | 10,545,802 | 10,786,534 |
| Taxes payable | 8,061,079 | 11,487,574 |
| Loans payable and other financial liabilities | 105,498 | 100,031 |
| Dividends payable | 3,531,337 | -- |
| Total current liabilities | 100,753,412 | 88,394,467 |
| Non-current liabilities: | ||
| Payroll and social security payable | 3,106,880 | 2,562,343 |
| Loans payable and other financial liabilities | 125,721 | 188,846 |
| Deferred tax liabilities | 4,726,032 | 5,167,699 |
| Other liabilities | 2,184,761 | 1,651,398 |
| Total non-current liabilities | 10,143,394 | 9,570,286 |
| Total liabilities | 110,896,806 | 97,964,753 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
|
Common stock, $0.001 par value, 110,000,000 shares authorized, 44,141,707 and 44,131,376 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |
$ 44,142 | $ 44,131 |
| Additional paid-in capital | 120,429,310 | 120,391,622 |
| Retained earnings | 95,498,168 | 73,681,556 |
| Accumulated other comprehensive loss | (18,342,450) | (22,399,039) |
| Total shareholders' equity | 197,629,170 | 171,718,270 |
| Total liabilities and shareholders' equity | $ 308,525,976 | $ 269,683,023 |
Consolidated statements of income
| Six Months Ended June 30, | Three Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| Net revenues | $ 130,837,828 | $ 98,448,105 | $ 69,378,160 | $ 52,510,331 |
| Cost of net revenues | (31,270,822) | (21,304,611) | (16,939,118) | (11,411,561) |
| Gross profit | 99,567,006 | 77,143,494 | 52,439,042 | 41,098,770 |
| Operating expenses: | ||||
| Product and technology development | (10,675,783) | (7,201,240) | (5,518,892) | (3,976,466) |
| Sales and marketing | (28,865,357) | (22,581,944) | (15,636,413) | (11,473,145) |
| General and administrative | (19,183,316) | (13,041,477) | (9,732,340) | (6,834,592) |
| Total operating expenses | (58,724,456) | (42,824,661) | (30,887,645) | (22,284,203) |
| Income from operations | 40,842,550 | 34,318,833 | 21,551,397 | 18,814,567 |
| Other income (expenses): | ||||
| Interest income and other financial gains | 4,123,668 | 1,711,529 | 2,249,898 | 917,388 |
| Interest expense and other financial charges | (1,509,769) | (6,351,339) | (880,819) | (3,355,921) |
| Foreign currency (loss) / gain | (1,203,369) | 361,494 | (702,714) | (35,478) |
| Other income, net | 260,441 | -- | 240,097 | -- |
| Net income before income / asset tax expense | 42,513,521 | 30,040,517 | 22,457,859 | 16,340,556 |
| Income / asset tax expense | (13,635,062) | (8,745,954) | (7,637,033) | (4,666,593) |
| Net income | $ 28,878,459 | $ 21,294,563 | $ 14,820,826 | $ 11,673,963 |
| Six Months Ended June 30, | Three Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| Basic EPS | ||||
| Basic net income per common share | $ 0.65 | $ 0.48 | $ 0.34 | $ 0.26 |
| Weighted average shares | 44,134,763 | 44,117,364 | 44,138,105 | 44,121,087 |
| Diluted EPS | ||||
| Diluted net income per common share | $ 0.65 | $ 0.48 | $ 0.34 | $ 0.26 |
| Weighted average shares | 44,149,911 | 44,142,829 | 44,152,296 | 44,145,255 |
Consolidated statements of cash flows
| Six Months Ended June 30, | ||
| 2011 | 2010 | |
| (Unaudited) | ||
| Cash flows from operations: | ||
| Net income | $ 28,878,459 | $ 21,294,563 |
| Adjustments to reconcile net income to net cash provided by | ||
| operating activities: | ||
| Depreciation and amortization | 3,305,795 | 2,187,353 |
| Accrued interest | (2,353,234) | (37,763) |
| Stock-based compensation expense - stock options | -- | 121 |
| Stock-based compensation expense - restricted shares | -- | 37,696 |
| LTRP accrued compensation | 2,303,542 | 1,515,662 |
| Deferred income taxes | 1,484,213 | (1,099,249) |
| Changes in assets and liabilities: | ||
| Accounts receivable | (164,556) | (4,578,556) |
| Funds receivable from customers | (1,779,329) | 247,441 |
| Prepaid expenses | (393,477) | 51,734 |
| Other assets | 1,067,637 | (1,735,721) |
| Accounts payable and accrued expenses | (5,766,185) | 5,249,442 |
| Funds payable to customers | 6,718,843 | 4,738,946 |
| Other liabilities | 430,606 | (1,779,899) |
| Net cash provided by operating activities | 33,732,314 | 26,091,770 |
| Cash flows from investing activities: | ||
| Purchase of investments | (200,995,988) | (64,252,379) |
| Proceeds from sale and maturity of investments | 171,094,260 | 26,860,341 |
| Purchases of intangible assets | (108,823) | (12,733) |
| Purchases of property and equipment | (13,247,416) | (3,906,287) |
| Net cash used in investing activities | (43,257,967) | (41,311,058) |
| Cash flows from financing activities: | ||
| Decrease in loans payable | -- | (2,993,985) |
| Dividends distribution | (3,530,510) | -- |
| Stock options exercised | 10,706 | 5,449 |
| Net cash used in financing activities | (3,519,804) | (2,988,536) |
| Effect of exchange rate changes on cash and cash equivalents | 465,123 | (26,858) |
| Net decrease in cash and cash equivalents | (12,580,334) | (18,234,682) |
| Cash and cash equivalents, beginning of the period | 56,830,466 | 49,803,402 |
| Cash and cash equivalents, end of the period | $ 44,250,132 | $ 31,568,720 |
| Supplemental cash flow information: | ||
| Cash paid for interest | $ 26,426 | $ 5,753,706 |
| Cash paid for income and asset taxes | $ 14,806,871 | 10,377,362 |
Financial results of reporting segments
| Three Months Ended June 30, 2011 | |||||||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | ||||||
| Net revenues | $ 39,932,132 | $ 12,391,873 | $ 5,370,095 | $ 7,234,940 | $ 4,449,120 | $ 69,378,160 | |||||
| Direct costs | (23,926,947) | (5,153,807) | (2,982,020) | (2,847,197) | (2,493,570) | (37,403,541) | |||||
| Direct contribution | 16,005,185 | 7,238,066 | 2,388,075 | 4,387,743 | 1,955,550 | 31,974,619 | |||||
| Operating expenses and indirect costs of net revenues | (10,423,222) | ||||||||||
| Income from operations | 21,551,397 | ||||||||||
| Other income (expenses): | |||||||||||
| Interest income and other financial gains | 2,249,898 | ||||||||||
| Interest expense and other financial results | (880,819) | ||||||||||
| Foreign currency losses | (702,714) | ||||||||||
| Other income, net | 240,097 | ||||||||||
| Net income before income / asset tax expense | $ 22,457,859 | ||||||||||
| Three Months Ended June 30, 2010 | |||||||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | ||||||
| Net revenues | $ 30,781,411 | $ 9,452,261 | $ 4,669,349 | $ 4,468,146 | $ 3,139,164 | $ 52,510,331 | |||||
| Direct costs | (15,992,598) | (4,686,452) | (2,830,282) | (2,192,418) | (1,741,164) | $ (27,442,914) | |||||
| Direct contribution | 14,788,813 | 4,765,809 | 1,839,067 | 2,275,728 | 1,398,000 | 25,067,417 | |||||
| Operating expenses and indirect costs of net revenues | (6,252,850) | ||||||||||
| Income from operations | 18,814,567 | ||||||||||
| Other income (expenses): | |||||||||||
| Interest income and other financial gains | 917,388 | ||||||||||
| Interest expense and other financial results | (3,355,921) | ||||||||||
| Foreign currency losses | (35,478) | ||||||||||
| Other income, net | -- | ||||||||||
| Net income before income / asset tax expense | $ 16,340,556 | ||||||||||
| Six Months Ended June 30, 2011 | ||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | |
| Net revenues | $ 74,655,327 | $ 22,971,805 | $ 10,604,428 | $ 14,005,393 | $ 8,600,876 | $ 130,837,829 |
| Direct costs | (44,002,555) | (9,580,905) | (5,698,379) | (5,916,936) | (4,593,886) | (69,792,661) |
| Direct contribution | 30,652,772 | 13,390,900 | 4,906,049 | 8,088,457 | 4,006,990 | 61,045,168 |
| Operating expenses and indirect costs of net revenues | (20,202,616) | |||||
| Income from operations | 40,842,552 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 4,123,668 | |||||
| Interest expense and other financial results | (1,509,769) | |||||
| Foreign currency losses | (1,203,369) | |||||
| Other income, net | 260,441 | |||||
| Net income before income / asset tax expense | $ 42,513,523 | |||||
| Six Months Ended June 30, 2010 | ||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | |
| Net revenues | $ 57,132,883 | $ 17,806,508 | $ 9,139,286 | $ 7,943,636 | $ 6,425,793 | $ 98,448,105 |
| Direct costs | (30,855,058) | (8,632,236) | (5,630,639) | (4,106,474) | (3,464,689) | $ (52,689,096) |
| Direct contribution | 26,277,825 | 9,174,271 | 3,508,647 | 3,837,162 | 2,961,104 | 45,759,009 |
| Operating expenses and indirect costs of net revenues | (11,440,176) | |||||
| Income from operations | 34,318,833 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 1,711,529 | |||||
| Interest expense and other financial results | (6,351,339) | |||||
| Foreign currency gains | 361,494 | |||||
| Other income, net | -- | |||||
| Net income before income / asset tax expense | $ 30,040,517 | |||||
CONTACT: MercadoLibre, Inc.
Investor Relations
investor@mercadolibre.com
http://investor.mercadolibre.com