UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 2, 2012
MercadoLibre, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33647 | 98-0212790 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| Arias 3751, 7th Floor Buenos Aires, Argentina C1430CRG |
| (Address and zip code of principal executive offices) |
Registrant's telephone number, including area code: 011-54-11-4640-8000
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On August 2, 2012, MercadoLibre, Inc. (the "Company") issued a press release regarding its earnings for the three months ended June 30, 2012. A copy of this release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
The disclosure contained in Item 2.02 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release issued by the Company on August 2, 2012.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MercadoLibre, Inc. (Registrant) |
||
|
Date: August 2, 2012 |
By: | /s/ PEDRO ARNT PEDRO ARNT Chief Financial Officer |
| Exhibit Index | ||
| 99.1 | Press release dated August 2, 2012 | |
EXHIBIT 99.1
* Items sold during Q2'12 increased by 35.6% year-over-year to 15.8 million
* Net Revenues in Q2'12 grew to 88.8 million, a 47.1% growth in local currencies
* Q2'12 net income increased to $25.4 million, a 90.8% growth in local currencies
BUENOS AIRES, Argentina, Aug. 2, 2012 (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, 2012.
Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc., commented, "Wrapping up the first half of 2012 I am very pleased with our solid performance, achieved despite currency and macro headwinds, confirming the strong secular tailwinds behind e-commerce growth, as well as our solid execution on top of a flexible business model that captures this growth through multiple channels. We are more focused than ever on building for the long term, growing our user base by providing them with a great experience, and with the new solutions they require, convinced that this is the right way to generate value going forward."
Financial Results Summary
MercadoLibre reported consolidated net revenues for the three months ended June 30, 2012 of $88.8 million, representing a year-over-year growth of 28.1% in USD, and 47.1% in local currencies.
For the three months ended June 30, 2012, gross merchandise volume grew 21.7% year-over-year to $1,299.2 million, while total payment volume grew 39.1% year-over-year to $411.6 million. In local currencies, gross merchandise volume grew 37.3% year-over-year, while payment volume grew 64.4% year-over-year.
Items sold on MercadoLibre during the second quarter 2012 increased 35.6% to 15.8 million, while total payments transactions through MercadoPago increased 78.5% to 5.5 million.
Gross profit for the second quarter of 2012 was $65.0 million, a 23.9% increase over the previous year quarter. Gross profit margin for the period was 73.1%, down from 75.6% during the second quarter of 2011, driven primarily by the growth in the lower margin payment business.
Total operating expenses during the second quarter 2012 were $33.1 million, a 7.1% increase over the previous year quarter. Total operating expenses as percentage of net revenues for the second quarter of 2012 were 37.2%, down from 44.5% for the same quarter one year earlier.
Strong operating expense leverage led to Income from operations for the second quarter 2012 of $31.9 million, representing a year-over-year growth of 47.9% in USD, and 66.4% in local currencies. Operating income margin for the period was 35.9%, up from 31.1% during the second quarter of 2011.
Net income before taxes was $35.1 million, an increase of 56.4% over the second quarter of 2011. The blended tax rate for the quarter was of 27.7%, as compared to 34.0% during the same quarter one year earlier.
Net income for the three months ended June 30, 2012, increased 71.3% year-over-year to $25.4 million, a local currency growth of 90.8%. Net income margin was 28.6% for the second quarter of 2012, compared to 21.4% for the same period last year. Earnings per share for the second quarter of 2012 were $0.57 compared to $0.34 for the prior year quarter.
Free cash flow, defined as cash from operating activities less payment for the acquisition of property, equipment and intangible assets, was $33.5 million for the three months ended June 30, 2012.
The following table summarizes certain key performance metrics for the three months ended June 30, 2012 and 2011.
| Three month ended June 30, (in MM) | 2012 | 2011 | %YoY | %YoY Constant USD |
| Total confirmed registered users at the end of period | 73.2 | 58.4 | 25.3% | -- |
| New confirmed registered users during the period | 3.7 | 2.8 | 30.5% | -- |
| Gross merchandise volume | $ 1,299.2 | $ 1,067.8 | 21.7% | 37.3% |
| Items sold | 15.8 | 11.6 | 35.6% | -- |
| Total payments volume | $ 411.6 | $ 295.8 | 39.1% | 64.4% |
| Total payments transactions | 5.5 | 3.1 | 78.5% | -- |
Table of Year-on-Year Local Currency Revenue Growth Rates by Quarter
| YoY Growth rates at previous years exchange rates | |||||
| Consolidated Net Revenues | |||||
| Q2'11 | Q3'11 | Q4'11 | Q1'12 | Q2'12 | |
| Brazil | 15% | 38% | 39% | 29% | 36% |
| Argentina | 37% | 55% | 70% | 85% | 81% |
| Mexico | 7% | 14% | 31% | 35% | 30% |
| Venezuela | 39% | 57% | 64% | 66% | 72% |
| Others | 32% | 37% | 35% | 34% | 30% |
| Total | 22% | 41% | 46% | 44% | 47% |
Conference Call and Webcast
The Company will host a conference call and audio webcast on August 2, 2012 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing +(970) 315-0420 or +(877) 303-7209 (Conference ID 13764311) 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 payment completed transactions using MercadoPago.
Operating margin – Defined as income from operations as a percentage of net revenues.
Blended tax rate – Defined as income and asset tax expense as a percentage of income before income and asset tax.
Net income margin – Defined as net income as a percentage of net revenues.
Free Cash Flow – Defined as cash flows from operating activities less property, equipment and intangible asset.
Local Currency Growth Rates – Calculated by using the average monthly exchange rate for each month during the previous year and applying it to the corresponding month in the current year, so as to calculate what the growth would have been had exchange rates been the same throughout both periods.
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 and services 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, | |
| 2012 | 2011 | |
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 87,595,730 | $ 67,381,677 |
| Short-term investments | 83,016,176 | 74,928,620 |
| Accounts receivable, net | 16,559,972 | 16,815,087 |
| Credits Cards Receivables | 28,021,663 | 23,855,689 |
| Prepaid expenses | 1,940,811 | 1,269,594 |
| Deferred tax assets | 9,366,084 | 9,131,638 |
| Other assets | 7,043,968 | 6,863,250 |
| Total current assets | 233,544,404 | 200,245,555 |
| Non-current assets: | ||
| Long-term investments | 49,571,882 | 43,933,316 |
| Property and equipment, net | 35,103,153 | 30,877,719 |
| Goodwill, net | 61,112,402 | 62,093,948 |
| Intangible assets, net | 7,622,698 | 6,494,857 |
| Deferred tax assets | 5,965,641 | 6,491,646 |
| Other assets | 5,631,553 | 5,794,395 |
| Total non-current assets | 165,007,329 | 155,685,881 |
| Total assets | $ 398,551,733 | $ 355,931,436 |
| Liabilities and Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 24,303,699 | $ 20,251,313 |
| Funds payable to customers | 77,697,708 | 69,216,185 |
| Salaries and social security payable | 14,723,722 | 13,525,293 |
| Taxes payable | 10,346,811 | 11,633,178 |
| Loans payable and other financial liabilities | 146,604 | 146,194 |
| Dividends payable | 4,812,036 | 3,531,362 |
| Total current liabilities | 132,030,580 | 118,303,525 |
| Non-current liabilities: | ||
| Salaries and social security payable | 3,818,275 | 3,844,172 |
| Loans payable and other financial liabilities | 94,093 | 136,227 |
| Deferred tax liabilities | 8,554,494 | 8,670,606 |
| Other liabilities | 2,213,237 | 1,797,890 |
| Total non-current liabilities | 14,680,099 | 14,448,895 |
| Total liabilities | $ 146,710,679 | $ 132,752,420 |
| Commitments and contingencies | ||
| Redeemable noncontrolling interest | $ 4,000,000 | $ 4,000,000 |
| Equity: | ||
| Common stock, $0.001 par value, 110,000,000 shares authorized, 44,148,720 and 44,142,020 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively | $ 44,149 | $ 44,142 |
| Additional paid-in capital | 120,465,461 | 120,452,032 |
| Retained earnings | 171,253,118 | 135,726,188 |
| Accumulated other comprehensive loss | (43,921,674) | (37,043,346) |
| Total Equity | 247,841,054 | 219,179,016 |
| Total liabilities, redeemable noncontrolling interest and equity | $ 398,551,733 | $ 355,931,436 |
| Consolidated statements of income | ||||
| Six Months Ended June 30, | Three Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| (Unaudited) | (Unaudited) | |||
| Net revenues | $ 172,580,065 | $130,837,828 | $ 88,844,059 | $69,378,160 |
| Cost of net revenues | (44,989,178) | (31,270,822) | (23,892,881) | (16,939,118) |
| Gross profit | 127,590,887 | 99,567,006 | 64,951,178 | 52,439,042 |
| Operating expenses: | ||||
| Product and technology development | (13,719,892) | (10,675,783) | (6,133,819) | (5,518,892) |
| Sales and marketing | (34,233,040) | (28,865,357) | (16,805,362) | (15,636,413) |
| General and administrative | (22,822,289) | (19,183,316) | (10,127,077) | (9,732,340) |
| Total operating expenses | (70,775,221) | (58,724,456) | (33,066,258) | (30,887,645) |
| Income from operations | 56,815,666 | 40,842,550 | 31,884,920 | 21,551,397 |
| Other income (expenses): | ||||
| Interest income and other financial gains | 6,070,862 | 4,123,668 | 2,982,303 | 2,249,898 |
| Interest expense and other financial losses | (551,617) | (1,509,769) | (474,300) | (880,819) |
| Foreign currency (loss) gains | (283,969) | (1,203,369) | 749,008 | (702,714) |
| Other income / (loss), net | (11,263) | 260,441 | (7,009) | 240,097 |
| Net income before income / asset tax expense | 62,039,679 | 42,513,521 | 35,134,922 | 22,457,859 |
| Income / asset tax expense | (17,007,817) | (13,635,062) | (9,740,098) | (7,637,033) |
| Net income | $ 45,031,862 | $ 28,878,459 | $ 25,394,824 | $14,820,826 |
| Less: Net Income attributable to Noncontrolling Interest | 18,060 | -- | 15,632 | -- |
| Net income attributable to MercadoLibre, Inc. | $ 45,013,802 | $ 28,878,459 | $ 25,379,192 | $14,820,826 |
| Six Months Ended June 30, | Three Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| (Unaudited) | (Unaudited) | |||
| Basic EPS | ||||
| Basic net income attributable to MercadoLibre, Inc. per common share | $ 1.02 | $ 0.65 | $ 0.57 | $ 0.34 |
| Weighted average shares | 44,145,038 | 44,134,763 | 44,147,999 | 44,138,105 |
| Diluted EPS | ||||
| Diluted net income attributable to MercadoLibre, Inc. per common share | $ 1.02 | $ 0.65 | $ 0.57 | $ 0.34 |
| Weighted average shares | 44,149,178 | 44,149,911 | 44,152,133 | 44,152,296 |
| Consolidated statements of cash flows | ||
| Six Months Ended June 30, | ||
| 2012 | 2011 | |
| (Unaudited) | ||
| Cash flows from operations: | ||
| Net income attributable to MercadoLibre, Inc. | $ 45,013,802 | $ 28,878,459 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Net Income attributable to Noncontrolling Interest | 18,060 | -- |
| Depreciation and amortization | 4,057,471 | 3,305,795 |
| Accrued interest | (2,611,913) | (2,353,234) |
| LTRP accrued compensation | 2,202,842 | 2,303,542 |
| Deferred income taxes | 145,970 | 1,484,213 |
| Changes in assets and liabilities: | ||
| Accounts receivable | (3,034,916) | (164,556) |
| Credit Card Receivables | (5,810,748) | (1,779,329) |
| Prepaid expenses | (730,975) | (393,477) |
| Other assets | (453,355) | 1,067,637 |
| Accounts payable and accrued expenses | 5,682,625 | (5,766,185) |
| Funds payable to customers | 13,461,760 | 6,718,843 |
| Other liabilities | 548,167 | 430,606 |
| Net cash provided by operating activities | 58,488,790 | 33,732,314 |
| Cash flows from investing activities: | ||
| Purchase of investments | (205,377,324) | (200,995,988) |
| Proceeds from sale and maturity of investments | 186,841,187 | 171,094,260 |
| Purchases of intangible assets | (1,390,738) | (108,823) |
| Purchases of property and equipment | (8,323,905) | (13,247,416) |
| Net cash used in investing activities | (28,250,780) | (43,257,967) |
| Cash flows from financing activities: | ||
| Dividends paid | (8,343,398) | (3,530,510) |
| Stock options exercised | 2,400 | 10,706 |
| Net cash provided in financing activities | (8,340,998) | (3,519,804) |
| Effect of exchange rate changes on cash and cash equivalents | (1,682,959) | 465,123 |
| Net increase in cash and cash equivalents | 20,214,053 | (12,580,334) |
| Cash and cash equivalents, beginning of the period | 67,381,677 | 56,830,466 |
| Cash and cash equivalents, end of the period | $ 87,595,730 | $ 44,250,132 |
| Six Months Ended June 30, | ||
| 2012 | 2011 | |
| (Unaudited) | ||
| Supplemental cash flow information: | ||
| Cash paid for interest | $ 34,218 | $ 26,426 |
| Cash paid for income and asset taxes | $ 19,037,776 | $ 14,806,871 |
| Financial results of reporting segments | ||||||
| Three Months Ended June 30, 2012 | ||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | |
| Net revenues | $ 44,205,857 | $ 20,561,213 | $6,046,812 | $ 12,417,318 | $ 5,612,859 | $88,844,059 |
| Direct costs | (25,066,435) | (9,543,476) | (3,269,574) | (3,728,913) | (2,896,426) | (44,504,824) |
| Direct contribution | 19,139,422 | 11,017,737 | 2,777,238 | 8,688,405 | 2,716,433 | 44,339,235 |
| Operating expenses and indirect costs of net revenues | (12,454,315) | |||||
| Income from operations | 31,884,920 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 2,982,303 | |||||
| Interest expense and other financial results | (474,300) | |||||
| Foreign currency gains | 749,008 | |||||
| Other losses, net | (7,009) | |||||
| Net income before income / asset tax expense | $35,134,922 | |||||
| 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 loss | (702,714) | |||||
| Other income, net | 240,097 | |||||
| Net income before income / asset tax expense | $22,457,859 | |||||
| Six Months Ended June 30, 2012 | ||||||
| Brazil | Argentina | Mexico | Venezuela | Other Countries | Total | |
| Net revenues | $86,370,511 | $ 38,677,682 | $12,630,678 | $ 23,658,890 | $ 11,242,304 | $ 172,580,065 |
| Direct costs | (50,809,649) | (17,666,411) | (6,916,211) | (8,576,248) | (5,712,094) | (89,680,613) |
| Direct contribution | 35,560,862 | 21,011,271 | 5,714,467 | 15,082,642 | 5,530,210 | 82,899,452 |
| Operating expenses and indirect costs of net revenues | (26,083,786) | |||||
| Income from operations | 56,815,666 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 6,070,862 | |||||
| Interest expense and other financial results | (551,617) | |||||
| Foreign currency loss | (283,969) | |||||
| Other loss, net | (11,263) | |||||
| Net income before income / asset tax expense | $ 62,039,679 | |||||
| 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 | $ 8,600,875 | $ 130,837,828 |
| Direct costs | (44,002,555) | (9,580,905) | (5,698,379) | (5,916,936) | (4,593,885) | $ (69,792,660) |
| 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 | (20,202,618) | |||||
| Income from operations | 40,842,550 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 4,123,668 | |||||
| Interest expense and other financial results | (1,509,769) | |||||
| Foreign currency loss | (1,203,369) | |||||
| Other income, net | 260,441 | |||||
| Net income before income / asset tax expense | 42,513,521.35 | |||||
CONTACT: MercadoLibre, Inc.
Investor Relations
investor@mercadolibre.com
http://investor.mercadolibre.com