MercadoLibre, Inc. Reports Financial Results for First Quarter 2012

MercadoLibre, Inc. Reports Financial Results for First Quarter 2012   * Items sold during Q1'12 increased by 38.1% year-over-year to 15.0 million   * Net Revenues in Q1'12 increased by 36.2% year-over-year to 83.7 million, a                        43.6% growth in local currencies  * Q1'12 net income increased by 39.7% year-over-year to $19.6 million, a 47.0%                           growth in local currencies  BUENOS AIRES, Argentina, May 8, 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 first quarter ended March 31, 2012.  Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc., commented, "It was a solid start to the year for MercadoLibre as we look to sustain last year's business momentum. Our strong results during the first quarter of 2012 are a result of continued execution against the strategic plan we have established for the company. Shoppers increased their activity on our marketplace as we remained focused on user experience, continuing to strengthen our technology while posting visible improvements to our services. I look forward to the rest of 2012, as we keep driving innovation on top of the success of our current initiatives, with the goal of delivering sustained top and bottom line growth during 2012".  Financial Results Summary  MercadoLibre reported consolidated net revenues for the three months ended March 31, 2012 of $83.7 million, representing a year-over-year growth of 36.2% in USD, and 43.6% in local currencies.  For the three months ended March 31, 2012, gross merchandise volume grew 38.6% year-over-year to $1,321.7 million, while total payment volume grew 50.9% year-over-year to $370.1 million. In local currencies, gross merchandise volume grew 45.3% year-over-year, while payment volume grew 61.0% year-over-year.  Items sold on MercadoLibre during the first quarter 2012 increased 38.1% to 15.0 million, while total payments transactions through MercadoPago increased 84.6% to 4.9 million.  Gross profit for the first quarter of 2012 was $62.6 million, a 32.9% increase over the previous year quarter. Gross profit margin for the period was 74.8%, down from 76.7% during the first quarter of 2011.  Total operating expenses during the first quarter 2012 increased 35.5% from $27.8 million to $37.7 million. Total operating expenses as percentage of net revenues for the first quarter of 2012 were 45.0%, down from 45.3% for the same quarter one year earlier.  Income from operations for the first quarter 2012 was $24.9 million, representing a year-over-year growth of 29.2% in USD, and 36.1% in local currencies. Operating income margin for the period was 29.8%, down from 31.4% during the first quarter of 2011, driven by gross profit margin contraction.  Net Income before taxes was $26.9 million, an increase of 34.2% over the first quarter of 2011. The blended tax rate for the quarter was of 27.0%, as compared to 29.9% during the same quarter one year earlier.  Net income for the three months ended March 31, 2012, increased 39.7% year-over-year to $19.6 million, a local currency growth of 47.0%. Net income margin was 23.5% for the first quarter of 2012, compared to 22.9% for the same period last year. Earnings per share for the first quarter of 2012 were $0.45 compared to $0.32 for the prior year quarter.  Free cash flow, defined as cash from operating activities less purchases of property, equipment and intangible assets, was $15.3 million for the three months ended March 31, 2012.  The following table summarizes certain key performance metrics for the three months ended March 31, 2012 and 2011.  Three month ended March 31, (in MM)                   2012     2011   %YOY                                                                     Total confirmed registered users at the end of period 69.5     55.6   25.0% New confirmed registered users during the period      3.6      2.7    36.6% Gross merchandise volume                              $1,321.7 $954.0 38.6% Items sold                                            15.0     10.9   38.1% Total payments volume                                 $370.1   $245.2 50.9% Total payments transactions                           4.9      2.6    84.6%  Table of Year-on-Year Local Currency Revenue Growth Rates by Quarter                          YoY Growth rates at previous years exchange rates                                                                  Consolidated Net                                                  Revenues                         Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Brazil                   35%   26%   7%    15%   22%   15%   38%   39%   29% Argentina                67%   62%   48%   52%   33%   37%   55%   70%   85% Mexico                   25%   19%   11%   12%   11%   7%    14%   31%   35% Venezuela                59%   69%   61%   57%   58%   39%   57%   64%   66% Others                   47%   24%   14%   22%   22%   32%   37%   35%   34% Total                    45%   39%   23%   25%   26%   22%   41%   46%   44%  Conference Call and Webcast  The Company will host a conference call and audio webcast on May 8, 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 76688140) 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.  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 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                                                                                                                                                        March 31,     December 31,                                                   2012          2011                                                   (Unaudited)   (Audited) Assets                                                           Current assets:                                                  Cash and cash equivalents                          $75,874,938  $67,381,677 Short-term investments                             82,722,150    74,928,620 Accounts receivable, net                           16,338,071    16,815,087 Credits Cards Receivables                          23,964,431    23,855,689 Prepaid expenses                                   1,955,533     1,269,594 Deferred tax assets                                9,949,385     9,131,638 Other assets                                       6,394,655     6,863,250 Total current assets                               217,199,163   200,245,555 Non-current assets:                                              Long-term investments                              43,084,473    43,933,316 Property and equipment, net                        33,117,055    30,877,719 Goodwill, net                                      63,935,487    62,093,948 Intangible assets, net                             6,626,787     6,494,857 Deferred tax assets                                6,537,804     6,491,646 Other assets                                       6,068,687     5,794,395 Total non-current assets                           159,370,293   155,685,881                                                                 Total assets                                       $376,569,456 $355,931,436                                                                 Liabilities and Equity                                           Current liabilities:                                             Accounts payable and accrued expenses              $21,727,978  $20,251,313 Funds payable to customers                         70,486,512    69,216,185 Payroll and social security payable                13,145,102    13,525,293 Taxes payable                                      9,888,797     11,633,178 Loans payable and other financial liabilities      142,687       146,194 Dividends payable                                  4,812,036     3,531,362 Total current liabilities                          120,203,112   118,303,525 Non-current liabilities:                                         Payroll and social security payable                3,950,099     3,844,172 Loans payable and other financial liabilities      101,249       136,227 Deferred tax liabilities                           8,481,593     8,670,606 Other liabilities                                 2,153,587     1,797,890 Total non-current liabilities                      14,686,528    14,448,895 Total liabilities                                  $134,889,640 $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, 44,147,120 and 44,142,020 shares       $44,147      $44,142 issued and outstanding at March 31, 2012 and December 31, 2011, respectively Additional paid-in capital                         120,463,063   120,452,032 Retained earnings                                  150,867,488  135,726,188 Accumulated other comprehensive loss               (33,694,882)  (37,043,346) Total Equity                                      237,679,816   219,179,016                                                                 Total liabilities, redeemable noncontrolling       $376,569,456 $355,931,436 interest and equity                                                                  Consolidated statements of income                                                                                                                                                Three Months Ended March 31,                                                  2012           2011                                                  (Unaudited) Net revenues                                      $83,736,006   $61,459,668 Cost of net revenues                              (21,096,297)   (14,331,703) Gross profit                                      62,639,709     47,127,965                                                                 Operating expenses:                                              Product and technology development                (7,586,074)    (5,156,890) Sales and marketing                              (17,427,679)   (13,228,942) General and administrative                        (12,695,212)   (9,450,977) Total operating expenses                         (37,708,965)   (27,836,809) Income from operations                            24,930,744     19,291,156                                                                 Other income (expenses):                                         Interest income and other financial gains         3,088,560      1,873,768 Interest expense and other financial charges      (77,317)       (628,950) Foreign currency loss                            (1,032,978)    (500,655) Other income / (loss), net                       (4,252)        20,344 Net income before income / asset tax expense     26,904,757     20,055,663                                                                 Income / asset tax expense                        (7,267,719)    (5,998,029) Net income                                       $19,637,038   $14,057,634                                                                 Less: Net Income attributable to Noncontrolling   2,428          -- Interest Net income attributable to MercadoLibre, Inc.     $19,634,610   $14,057,634                                                                                                                                                                                  Three Months Ended March 31,                                                  2012           2011                                                  (Unaudited) Basic EPS                                                        Basic net income attributable to MercadoLibre,    $0.45         $0.32 Inc. per common share                                                                 Weighted average shares                           44,142,076     44,131,383                                                                                                                                 Diluted EPS                                                      Diluted net income attributable to MercadoLibre,  $0.45         $0.32 Inc. per common share                                                                 Weighted average shares                           44,147,796     44,147,667                                                                  Consolidated statements of cash flows                                                                                                                  Three Months Ended March 31,                                                  2012           2011                                                  (Unaudited) Cash flows from operations:                                      Net income                                       $19,637,038  $14,057,634 Adjustments to reconcile net income to net cash provided by operating activities: Net Income attributable to Noncontrolling         2,428         -- Interest Depreciation and amortization                     1,966,624     1,541,143 Accrued interest                                  (816,543)     (575,613) LTRP accrued compensation                        1,849,633     1,170,710 Deferred income taxes                             (190,810)     316,866 Changes in assets and liabilities:                               Accounts receivable                              1,803,522     (378,620) Credit Card Receivables                           (116,468)     479,325 Prepaid expenses                                  (673,723)     71,641 Other assets                                      493,886       (70,095) Accounts payable and accrued expenses             (6,375,961)   (4,754,255) Funds payable to customers                        (159,063)     3,072,102 Provisions                                        1,407,480     18,026 Other liabilities                                 158,139       220,113 Net cash provided by operating activities         18,986,182    15,168,977 Cash flows from investing activities:                            Purchase of investments                           (86,658,793)  (99,069,739) Proceeds from sale and maturity of investments    83,583,664    80,823,544 Purchases of intangible assets                    (31,508)      (73,405) Purchases of property and equipment               (3,696,281)   (2,886,154) Net cash used in investing activities            (6,802,918)   (21,205,754) Cash flows from financing activities:                            Dividends paid                                    (3,531,362)   -- Stock options exercised                           --           885 Net cash provided in financing activities        (3,531,362)   885 Effect of exchange rate changes on cash and cash  (158,641)     173,684 equivalents Net increase in cash and cash equivalents         8,493,261     (5,862,208) Cash and cash equivalents, beginning of the       67,381,677    56,830,466 period                                                                 Cash and cash equivalents, end of the period      $75,874,938  $50,968,258                                                                                                                                                                                                                                                  Three Months Ended March 31,                                                  2012           2011                                                  (Unaudited) Supplemental cash flow information:                              Cash paid for interest                            $20,646       $13,889 Cash paid for income and asset taxes              $10,015,712   $7,898,283                                                                         Financial results of reporting segments                                                                                    Three Months Ended March 31, 2012             Brazil       Argentina    Mexico      Venezuela    Other       Total                                                                 Countries                                                                        Net revenues $42,164,654 $18,116,469 $6,583,865 $11,241,572 $5,629,446 $83,736,006 Direct costs (25,743,214) (8,122,935)  (3,646,637) (4,847,335)  (2,815,667) (45,175,788) Direct       16,421,440   9,993,534    2,937,228   6,394,237    2,813,779   38,560,218 contribution                                                                        Operating expenses and indirect                                                               (13,629,474) costs of net revenues Income from                                                            24,930,744 operations                                                                        Other income                                                            (expenses): Interest income and other                                                                  3,088,560 financial gains Interest expense and other                                                                  (77,317) financial results Foreign currency                                                               (1,032,978) loss Other                                                                  (4,252) losses, net Net income before income /                                                               $26,904,757 asset tax expense                                                                                                                                                           Three Months Ended March 31, 2011             Brazil       Argentina    Mexico      Venezuela    Other       Total                                                                 Countries                                                                        Net revenues $34,723,195 $10,579,932 $5,234,333 $6,770,453  $4,151,755 $61,459,668 Direct costs (20,075,608) (4,427,098)  (2,716,359) (3,069,739)  (2,100,316) (32,389,120) Direct       14,647,587   6,152,834    2,517,974   3,700,714    2,051,439   29,070,548 contribution                                                                        Operating expenses and indirect                                                               (9,779,392) costs of net revenues Income from                                                            19,291,156 operations                                                                        Other income                                                            (expenses): Interest income and other                                                                  1,873,768 financial gains Interest expense and other                                                                  (628,950) financial results Foreign currency                                                               (500,655) loss Other                                                                  20,344 income, net Net income before income /                                                               $20,055,663 asset tax expense  CONTACT: MercadoLibre, Inc.          Investor Relations          investor@mercadolibre.com          http://investor.mercadolibre.com  company logo  
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