MercadoLibre, Inc. Reports Financial Results for First Quarter 2013

MercadoLibre, Inc. Reports Financial Results for First Quarter 2013

  * Gross Merchandise Volume of $1.6 Billion, Accelerating to 30% Growth in
                               Local Currencies

* Total Payments Volume of 532.1 Million, Accelerating to 62% Growth in Local
                                  Currencies

    * Net Revenues Grew to 102.7 Million, a 36% Growth in Local Currencies

* Excluding the Non-Recurring Foreign Exchange Loss in Venezuela, Earnings Per
                   Share During Q1'13 Would Have Been $0.53

BUENOS AIRES, Argentina, May 6, 2013 (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, 2013.

Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc.,
commented, "MercadoLibre was off to a good start in 2013. We saw volume
accelerate across both our core marketplace and payments businesses, as we are
meeting the growing demands of a quickly expanding base of users. Our ongoing
initiatives are evidently raising the bar with respect to the ease, comfort
and quality of the experience shoppers can expect as they make the transition
to online shopping. We intend to keep driving this dynamic forward as the year
advances."

Financial Results Summary

MercadoLibre reported consolidated net revenues for the three months ended
March 31, 2013 of $102.7 million, representing a year-over-year growth of
36.3% in local currencies.

For the three months ended March 31, 2013, gross merchandise volume grew to
$1,563.3 million, while total payment volume reached $532.1 million. In local
currencies, gross merchandise volume grew 29.5% year-over-year, while payment
volume grew 62.4% year-over-year.

Items sold on MercadoLibre during the first quarter 2013 increased 20.5% to
18.1 million, while total payments transactions through MercadoPago increased
37.9% to 6.7 million.

Gross profit for the first quarter of 2013 was $74.1 million. Gross profit
margin for the period was 72.1%, down from 74.8% during the first quarter of
2012, driven primarily by growth in the lower margin payment business and
investments in customer services and technology.

Total operating expenses during the first quarter 2013 were $45.5 million.
Total operating expenses as a percentage of net revenues for the first quarter
of 2013 were 44.3%, an improvement of 74 basis points compared to 45.0% for
the same quarter one year earlier.

Income from operations for the first quarter 2013 was $28.6 million,
representing a year-over-year growth of 26.2% in local currencies. Operating
income margin for the period was 27.8%, down from 29.8% during the first
quarter of 2012, as operational leverage did not offset gross margin
compression during the quarter.

Foreign exchange losses for the first quarter of 2013 were $6.2 million
primarily resulting from the devaluation of the Venezuelan Bolivar during the
quarter.

As a result, net income before taxes was $25.4 million. The blended tax rate
for the quarter was of 30.9%, as compared to 27.0% during the same quarter one
year earlier, driven by the non-deductible nature of the foreign exchange
losses incurred in Venezuela.

Consequently, Net income for the three months ended March 31, 2013, was $17.5
million. Earnings per share for the first quarter of 2013 were $0.40.
Excluding the non-recurring foreign exchange loss from Venezuela's
devaluation, Net income would have been $23.4 million, a 31.5% growth over the
previous year quarter in local currencies. Earnings per share, excluding the
foreign exchange loss, would have been $0.53.

Free cash flow, defined as cash from operating activities less payment for the
acquisition of property, equipment, intangible assets and payment for acquired
business net of cash acquired, was $24.0 million for the three months ended
March 31, 2013, an increase of 57% over the first quarter of 2012.*

(*) See note on "Non-GAAP Financial Measures"

The following table summarizes certain key performance metrics for the three
months ended March 31, 2013 and 2012.

Three months ended March 31, (in   2013       2012       %YoY %YoY Constant
MM)                                                             USD
Total confirmed registered users  85.7       69.5       23.4%  --
at the end of period
New confirmed registered users    4.2        3.6        16.6%  --
during the period
Gross merchandise volume         $1,563.3 $1,321.7 18.3%  29.5%
Items sold                       18.1       15.0       20.5%  --
Total payments volume            $532.1   $370.1   43.8%  62.4%
Total payments transactions      6.7        4.9        37.9%  --

Table of Year-on-Year Local Currency Revenue Growth Rates by Quarter

                         YoY Growth rates at previous years' exchange rates
Consolidated Net         
Revenues
                         Q1'12    Q2'12    Q3'12    Q4'12   Q1'13
Brazil                  29%        36%        25%        19%       28%
Argentina               85%        81%        69%        62%       63%
Mexico                  35%        30%        29%        19%       15%
Venezuela               66%        72%        57%        43%       49%
Others                  34%        30%        20%        15%       13%
Total                   44%        47%        37%        31%       36%

Conference Call and Webcast

The Company will host a conference call and audio webcast on May 6, 2013 at
4:30 p.m. Eastern Time. The conference call may be accessed by dialing +(970)
315-0420 or +(877) 303-7209 (Conference ID 52887747) 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 platform (including MercadoPago) and
confirmed their registration. As of July'12, registration and confirmation
take place in the same step of the registration flow.

New confirmed registered users – Measure of the number of new users who have
registered on the MercadoLibre platform (including MercadoPago) and confirmed
their registration. As of July'12, registration and confirmation take place in
the same step of the registration flow.

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 assets 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, intangible assets and payment for acquired business net
of cash acquired.

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 the major countries in which it operates
according to metrics provided by comScore Networks. 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,
                                                   2013          2012
Assets                                                          
Current assets:                                                 
Cash and cash equivalents                          $122,167,381 $101,489,002
Short-term investments                             75,545,528    93,694,805
Accounts receivable, net                           20,438,433    19,837,022
Credit cards receivables, net                      40,679,729    35,816,506
Prepaid expenses                                   3,082,814     2,080,079
Deferred tax assets                                11,585,582    11,040,543
Other assets                                       15,065,592    11,403,218
Total current assets                               288,565,059   275,361,175
Non-current assets:                                             
Long-term investments                              94,956,562    85,955,584
Property and equipment, net                        38,017,200    37,726,222
Goodwill                                           62,818,466    60,366,063
Intangible assets, net                             7,167,610     7,279,865
Deferred tax assets                                5,367,752     5,862,247
Other assets                                       6,328,143     6,118,120
Total non-current assets                           214,655,733   203,308,101
                                                               
Total assets                                       $503,220,792 $478,669,276
                                                               
Liabilities and Equity                                          
Current liabilities:                                            
Accounts payable and accrued expenses              $26,744,961  $23,976,613
Funds payable to customers                         110,349,603   101,472,662
Salaries and social security payable               23,147,748    19,974,463
Taxes payable                                      16,057,779    19,210,568
Loans payable and other financial liabilities      115,017       84,570
Dividends payable                                  6,313,869     4,812,396
Total current liabilities                          182,728,977   169,531,272
Non-current liabilities:                                        
Salaries and social security payable               4,130,101     3,452,445
Loans payable and other financial liabilities      46,463        59,493
Deferred tax liabilities                           8,731,036     8,975,290
Other liabilities                                 3,575,796     2,837,150
Total non-current liabilities                      16,483,396    15,324,378
Total liabilities                                  $199,212,373 $184,855,650
                                                               
Commitments and contingencies (Note 7)                          
Redeemable noncontrolling interest                 $4,000,000   $4,000,000
Equity:                                                         
Common stock, $0.001 par value, 110,000,000 shares
authorized, 44,152,933 and 44,150,920 shares       $44,153      $44,151
issued and outstanding at March 31, 2013 and
December 31, 2012, respectively
Additional paid-in capital                         120,471,777   120,468,759
Retained earnings                                  229,466,188  218,083,844
Accumulated other comprehensive loss               (49,973,699)  (48,783,128)
Total Equity                                      300,008,419   289,813,626
                                                               
Total Liabilities, Redeemable Noncontrolling       $503,220,792 $478,669,276
Interest and Equity



Consolidated statements of income
                                                               
                                                 Three Months Ended March 31,
                                                 2013           2012
Net revenues                                      $102,725,747  $83,736,006
Cost of net revenues                              (28,649,167)   (21,096,297)
Gross profit                                      74,076,580     62,639,709
                                                               
Operating expenses:                                             
Product and technology development                (9,382,389)    (7,586,074)
Sales and marketing                              (22,337,937)   (17,427,679)
General and administrative                        (13,785,070)   (12,695,212)
Total operating expenses                         (45,505,396)   (37,708,965)
Income from operations                           28,571,184     24,930,744
                                                               
Other income (expenses):                                        
Interest income and other financial gains         3,394,006      3,088,560
Interest expense and other financial losses       (360,352)      (77,317)
Foreign currency losses                           (6,249,714)    (1,032,978)
Other losses, net                                (3,733)        (4,252)
Net income before income / asset tax expense     25,351,391     26,904,757
                                                               
Income / asset tax expense                        (7,828,800)    (7,267,719)
Net income                                       $17,522,591   $19,637,038
                                                               
Less: Net Income attributable to Redeemable       42,338         2,428
Noncontrolling Interest
Net income attributable to MercadoLibre, Inc.     $17,480,253   $19,634,610
shareholders
                                                               
                                                               
                                                               
                                                 Three Months Ended March 31,
                                                 2013           2012
Basic EPS                                                       
Basic net income attributable to MercadoLibre,    $0.40         $0.45
Inc. Shareholders per common share
                                                               
Weighted average of outstanding common shares     44,151,323     44,142,076
                                                               
                                                               
Diluted EPS                                                     
Diluted net income attributable to MercadoLibre,  $0.40         $0.45
Inc. Shareholders per common share
                                                               
Weighted average of outstanding common shares     44,151,357     44,147,796



Consolidated statements of cash flows

                                                 Three Months Ended March 31,
                                                 2013           2012
Cash flows from operations:                                     
Net income attributable to MercadoLibre, Inc.     $17,480,253  $19,634,610
Shareholders
Adjustments to reconcile net income to net cash                 
provided by operating activities:
Net Income attributable to Reedemable             42,338        2,428
Noncontrolling Interest
Net Devaluation Loss in Venezuela                 6,420,929     --
Depreciation and amortization                     2,621,339     1,966,624
Accrued interest                                  954,560       (816,543)
LTRP accrued compensation                        1,710,752     1,849,633
Deferred income taxes                             (140,238)     (190,810)
Changes in assets and liabilities:                              
Accounts receivable                              (994,003)     1,803,522
Credit Card Receivables                           (5,734,899)   (116,468)
Prepaid expenses                                  (1,069,904)   (673,723)
Other assets                                      (4,595,498)   493,886
Accounts payable and accrued expenses             2,243,694     (6,375,961)
Funds payable to customers                        8,854,986     (159,063)
Other liabilities                                 2,297,188     1,568,047
Net cash provided by operating activities         30,091,497    18,986,182
Cash flows from investing activities:                           
Purchase of investments                           (136,522,055) (86,658,793)
Proceeds from sale and maturity of investments    146,413,859   83,583,664
Payment for acquired businesses, net of cash      (3,224,162)   --
acquired
Purchases of intangible assets                    --           (31,508)
Purchases of property and equipment               (2,861,295)   (3,696,281)
Net cash provided by (used in) investing          3,806,347     (6,802,918)
activities
Cash flows from financing activities:                           
Dividends paid                                    (4,812,396)   (3,531,362)
Stock options exercised                           3,020         --
Net cash used in financing activities            (4,809,376)   (3,531,362)
Effect of exchange rate changes on cash and cash  (8,410,089)   (158,641)
equivalents
Net increase in cash and cash equivalents         20,678,379    8,493,261
Cash and cash equivalents, beginning of the       101,489,002   67,381,677
period
                                                               
Cash and cash equivalents, end of the period      $122,167,381 $75,874,938



Financial results of reporting segments

            Three Months Ended March 31, 2013
            Brazil       Argentina    Mexico      Venezuela   Other       Total
                                                               Countries
                                                                     
Net revenues $47,765,683 $ 25,620,747 $7,790,301 $           $6,418,465 $
                                                   15,130,551              102,725,747
Direct costs (30,993,544) (13,475,710) (4,116,828) (6,008,108) (2,867,981) (57,462,171)
Direct       16,772,139   12,145,037   3,673,473   9,122,443   3,550,484   45,263,576
contribution
                                                                     
Operating
expenses and
indirect                                                              (16,692,392)
costs of net
revenues
Income from                                                           28,571,184
operations
                                                                     
Other income                                                          
(expenses):
Interest
income and
other                                                                 3,394,006
financial
gains
Interest
expense and
other                                                                 (360,352)
financial
results
Foreign
currency                                                              (6,249,714)
loss
Other                                                                 (3,733)
losses, net
Net income
before
income /                                                              $25,351,391
asset tax
expense
                                                                     
                                                                     
            Three Months Ended March 31, 2012
            Brazil       Argentina    Mexico      Venezuela   Other       Total
                                                               Countries
                                                                     
Net revenues $42,164,654 $ 18,116,469 $6,583,865 $           $5,629,446 $83,736,006
                                                   11,241,572
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

Non-GAAP Financial Measures

To supplement the Company's condensed consolidated financial statements
presented in accordance with generally accepted accounting principles (GAAP),
MercadoLibre uses free cash flows, adjusted net income before income / asset
tax, adjusted income / asset tax, adjusted net income, adjusted blended tax
rate and adjusted earnings per share as non-GAAP measures.

These non-GAAP measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP and
may be different from non-GAAP measures used by other companies. In addition,
these non-GAAP measures are not based on any comprehensive set of accounting
rules or principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with MercadoLibre's results of
operations as determined in accordance with GAAP. These non-GAAP financial
measures should only be used to evaluate MercadoLibre's results of operations
in conjunction with the most comparable GAAP financial measures.

Reconciliation of these non-GAAP financial measures to the most comparable
GAAP financial measure can be found in the tables included in this press
release.

Non-GAAP financial measures are provided to enhance investors' overall
understanding of the Company's current financial performance. Specifically, we
believe that free cash flow provides useful information to both management and
investors by excluding payments for the acquisition of property, equipment, of
intangible assets and of businesses net of cash acquired, that may not be
indicative of the Company's core operating results. In addition, we report
free cash flows to investors because we believe that the inclusion of this
measure provides consistency in the Company's financial reporting.

Free cash flow represents cash from operating activities less payment for the
acquisition of property, equipment and intangible assets and acquired
businesses net of cash acquired. MercadoLibre considers free cash flow to be a
liquidity measure that provides useful information to management and investors
about the amount of cash generated by the Company's operations after the
purchases of property, and equipment, of intangible assets and of acquired
businesses net of cash acquired. A limitation of the utility of free cash flow
as a measure of financial performance is that it does not represent the total
increase or decrease in the Company's cash balance for the period.

Reconciliation of Operating Cash Flows to Free Cash Flows

                                                 Three Months Ended March 31,
                                                 2013           2012
                                                               
                                                               
Net Cash provided by Operating Activities         $30.1        $19.0
                                                               
Payment for acquired businesses, net of cash      (3.2)         --
acquired
                                                               
Purchase of intangible assets                     --           (0.0)
                                                               
Purchases of property and equipment               (2.9)         (3.7)
                                                               
Free cash flows                                   $24.0        $15.3
                                                               
The table above may not total due to rounding.

Moreover, we believe that adjusted net income before income / asset tax,
adjusted income / asset tax, adjusted net income, adjusted blended tax rate
and adjusted earnings per share provide useful information to both management
and investors by excluding the foreign exchange loss attributable to the
devaluation in Venezuela, because it may not be indicative of our results of
operations. In addition, we report adjusted net income before income / asset
tax, adjusted income / asset tax, adjusted net income, adjusted blended tax
rate and adjusted earnings per share to investors because we believe that the
inclusion of these measures provides consistency in the Company's financial
reporting and because these financial measures provide useful information to
management and investors about what our adjusted net income before income /
asset tax, adjusted income / asset tax, adjusted net income, adjusted blended
tax rate and adjusted earnings per share, would have been, had the foreign
exchange loss in Venezuela not occurred.A limitation of the utility of
adjusted net income before income / asset tax, adjusted income / asset tax,
adjusted net income, adjusted blended tax rate and adjusted earnings per
share, as measures of financial performance, is that they do not represent the
total foreign exchange effect in our Income Statement for the period.

                                                               Three Months
                                                              Ended March
                                                               31, 2013 (**)
                                                              
Net income before income / asset tax expense as reported       $25.4
                                                              
Devaluation loss in Venezuela                                  6.4
                                                              
Adjusted Net income before income / asset tax expense         $31.7
                                                              
                                                              
                                                              
Income and asset tax as reported                               (7.8)
                                                              
Income tax effect on devaluation loss in Venezuela             (0.5)^(1)
                                                              
Adjusted Income and asset tax                                  $(8.4)
                                                              
                                                              
Net Income as reported                                         $17.5
                                                              
Devaluation loss in Venezuela                                  6.4
                                                              
Income tax effect on devaluation loss in Venezuela             (0.5)^(1)
                                                              
Adjusted Net Income                                            $23.4
                                                              
                                                              
Adjusted Blended Tax Rate                                      26.4%
                                                              
Weighted average of outstanding common shares                  44,151,323
                                                              
Adjusted Earnings per share                                    $0.53
                                                              
(**) Stated in millions of U.S. dollars.
^(1) Income tax charge related to the Venezuela devaluation under local tax
norms.
The table above may not total due to rounding.

CONTACT: MercadoLibre, Inc.
         Investor Relations
         investor@mercadolibre.com
         http://investor.mercadolibre.com

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