MercadoLibre, Inc. Reports Financial Results for Second Quarter 2013

MercadoLibre, Inc. Reports Financial Results for Second Quarter 2013

 * Gross Merchandise Volume of $1.7 Billion, a 45% Growth in Local Currencies

  * Total Payments Volume of 577.9 Million, a 54% Growth in Local Currencies

    * Net Revenues Grew to 112.2 Million, a 38% Growth in Local Currencies

                 * Earnings Per Share During Q2'13 Were $0.67

BUENOS AIRES, Argentina, Aug. 1, 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 second
quarter ended June 30, 2013.

Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc.,
commented, "Our strong performance this quarter validates the strength of our
ecosystem and highlights our ability to execute on our strategic initiatives.
We continue to focus on improving the user experience on our platform, making
it easier for consumers in the region to transition to on-line commerce,
reflected in this second consecutive quarter of accelerating growth in sold
items. We are pleased with our results thus far, and remain excited about the
opportunity ahead of us."

Financial Results Summary

MercadoLibre reported consolidated net revenues for the three months ended
June 30, 2013 of $112.2 million, representing a year-over-year growth of 38.3%
in local currencies, and 26.3% in USD.

For the three months ended June 30, 2013, gross merchandise volume grew to
$1,725.4 million, while total payment volume reached $577.9 million. In local
currencies, gross merchandise volume grew 45.0% year-over-year, while payment
volume grew 54.2% year-over-year, USD growth was 32.8% and 40.4% respectively.

Items sold on MercadoLibre during the second quarter 2013 increased 27.1% to
20.1 million, while total payments transactions through MercadoPago increased
34.7% to 7.4 million.

Gross profit for the second quarter of 2013 was $81.1 million. Gross profit
margin for the period was 72.3%, down from 73.1% during the second quarter of
2012.

Total operating expenses during the second quarter 2013 were $45.7 million.
Total operating expenses as a percentage of net revenues for the second
quarter of 2013 were 40.7%, an increment of 348 basis points compared to 37.2%
for the same quarter one year earlier.

Income from operations for the second quarter 2013 was $35.4 million,
representing a year-over-year growth of 23.0% in local currencies. Operating
income margin for the period was 31.6%, down from 35.9% during the second
quarter of 2012. Operating Income Margin was up 379 bps versus 27.8% in Q1'13.

Net income before taxes was $40.7 million. The blended tax rate for the
quarter was of 26.3%, as compared to 27.7% during the same quarter one year
earlier.

Consequently, Net income for the three months ended June 30, 2013, was $30.0
million. Earnings per share for the second quarter of 2013 were $0.67.

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 -$6.2 million for the three months ended
June 30, 2013, as a result of purchase of commercial real estate in Venezuela
and Argentina.*

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

The following table summarizes certain key performance metrics for the three
months ended June 30, 2013 and 2012.

Three month ended June 30, (in MM) 2013       2012       %YoY %YoY Constant
                                                                USD
Total confirmed registered users  90.2       73.2       23.3%  --
at the end of period
New confirmed registered users    4.5        3.7        21.9%  --
during the period
Gross merchandise volume         $1,725.4 $1,299.2 32.8%  45.0%
Items sold                       20.1       15.8       27.1%  --
Total payments volume            $577.9   $411.6   40.4%  54.2%
Total payments transactions      7.4        5.5        34.7%  --

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

                          YoY Growth rates at previous years exchange rates
Consolidated Net          
Revenues
                          Q2'12    Q3'12    Q4'12   Q1'13   Q2'13
Brazil                   36%        25%        19%       28%       22%
Argentina                81%        69%        62%       63%       66%
Mexico                   30%        29%        19%       15%       19%
Venezuela                72%        57%        43%       49%       68%
Others                   30%        20%        15%       13%       19%
Total                    47%        37%        31%       36%       38%

Conference Call and Webcast

The Company will host a conference call and audio webcast on August 1, 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 23056606) 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
                                                  June 30,      December 31,
                                                   2013          2012
Assets                                                          
Current assets:                                                 
Cash and cash equivalents                          $131,191,347 $101,489,002
Short-term investments                             71,299,941    93,694,805
Accounts receivable, net                           21,323,148    19,837,022
Credit cards receivables, net                      61,619,241    35,816,506
Prepaid expenses                                   3,522,020     2,080,079
Deferred tax assets                                12,650,847    11,040,543
Other assets                                       11,393,068    11,403,218
Total current assets                               312,999,612   275,361,175
Non-current assets:                                             
Long-term investments                              59,437,585    85,955,584
Property and equipment, net                        80,081,659    37,726,222
Goodwill                                           59,558,023    60,366,063
Intangible assets, net                             6,717,766     7,279,865
Deferred tax assets                                4,827,859     5,862,247
Other assets                                       5,959,728     6,118,120
Total non-current assets                           216,582,620   203,308,101
                                                               
Total assets                                       $529,582,232 $478,669,276
                                                               
Liabilities and Equity                                          
Current liabilities:                                            
Accounts payable and accrued expenses              $31,467,967  $23,976,613
Funds payable to customers                         114,370,081   101,472,662
Salaries and social security payable               19,395,436    19,974,463
Taxes payable                                      15,371,128    19,210,568
Loans payable and other financial liabilities      11,870,676    84,570
Dividends payable                                  6,313,869     4,812,396
Total current liabilities                          198,789,157   169,531,272
Non-current liabilities:                                        
Salaries and social security payable               6,324,543     3,452,445
Loans payable and other financial liabilities      33,977        59,493
Deferred tax liabilities                           8,134,726     8,975,290
Other liabilities                                 3,395,767     2,837,150
Total non-current liabilities                      17,889,013    15,324,378
Total liabilities                                  $216,678,170 $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 June 30, 2013 and
December 31, 2012, respectively
Additional paid-in capital                         120,491,485   120,468,759
Retained earnings                                  252,781,049  218,083,844
Accumulated other comprehensive loss               (64,412,625)  (48,783,128)
Total Equity                                      308,904,062   289,813,626
                                                               
Total Liabilities, Redeemable Noncontrolling       $529,582,232 $478,669,276
Interest and Equity



Consolidated statements of income
                      Six Months Ended June 30,   Three Months Ended June 30,
                      2013          2012          2013           2012
Net revenues           $214,909,107 $172,580,065 $112,183,360  $88,844,059
Cost of net revenues   (59,726,378)  (44,989,178)  (31,077,211)   (23,892,881)
Gross profit           155,182,729   127,590,887   81,106,149     64,951,178
                                                              
Operating expenses:                                            
Product and technology (19,142,610)  (13,719,892)  (9,760,220)    (6,133,819)
development
Sales and marketing   (43,161,483)  (34,233,040)  (20,823,546)   (16,805,362)
General and            (28,858,158)  (22,822,289)  (15,073,088)   (10,127,077)
administrative
Total operating        (91,162,251)  (70,775,221)  (45,656,854)   (33,066,258)
expenses
Income from operations 64,020,478    56,815,666    35,449,295     31,884,920
                                                              
Other income                                                   
(expenses):
Interest income and    5,596,320     6,070,862     2,202,314      2,982,303
other financial gains
Interest expense and   (892,020)     (551,617)     (531,668)      (474,300)
other financial losses
Foreign currency gains (2,648,848)   (283,969)     3,600,866      749,008
(losses)
Other gains (losses),  (2,340)       (11,263)      1,393          (7,009)
net
Net income before
income / asset tax     66,073,590    62,039,679    40,722,200     35,134,922
expense
                                                              
Income / asset tax     (18,529,981)  (17,007,817)  (10,701,182)   (9,740,098)
expense
Net income            $47,543,609  $45,031,862  $30,021,018   $25,394,824
                                                              
Less: Net Income
attributable to                                                
Redeemable
 Noncontrolling    84,715        18,060        42,377         15,632
Interest
Net income
attributable to        $47,458,894  $45,013,802  $29,978,641   $25,379,192
MercadoLibre, Inc.
shareholders
                                                              
                                                              
                      Six Months Ended June 30,   Three Months Ended June 30,
                      2013          2012          2013           2012
Basic EPS                                                      
Basic net income
attributable to                                                 
MercadoLibre, Inc.
Shareholders per       $1.07        $1.02        $0.67         $0.57
common share
                                                              
Weighted average of
outstanding common     44,152,132    44,145,038    44,152,933     44,147,999
shares
                                                              
                                                              
Diluted EPS                                                    
Diluted net income
attributable to                                                
MercadoLibre, Inc.
Shareholders per       $ 1.07        $ 1.02        $ 0.67         $ 0.57
common share
                                                              
Weighted average of
outstanding common     44,152,132    44,149,178    44,152,933     44,152,133
shares



Consolidated statements of cash flows
                                                Six Months Ended June 30,
                                                2013           2012
Cash flows from operations:                                    
Net income attributable to MercadoLibre, Inc.    $47,458,894  $45,013,802
Shareholders
Adjustments to reconcile net income to net cash                
provided by operating activities:
Net Income attributable to Redeemable            84,715        18,060
Noncontrolling Interest
Net Devaluation Loss in Venezuela                6,420,929     --
Depreciation and amortization                    5,456,023     4,057,471
Accrued interest                                 (2,985,764)   (6,221,322)
LTRP accrued compensation                       4,297,543     2,202,842
Deferred income taxes                            (1,815,001)   145,970
Changes in assets and liabilities:                             
Accounts receivable                             (8,218,798)   (3,034,916)
Credit Card Receivables                          (31,226,712)  (5,810,748)
Prepaid expenses                                 (1,604,294)   (730,975)
Other assets                                     (1,761,828)   (453,355)
Accounts payable and accrued expenses            12,375,483    5,682,625
Funds payable to customers                       21,955,337    13,461,760
Other liabilities                                2,333,387     548,167
Interest received from investments               6,391,850     3,609,409
Net cash provided by operating activities        59,161,764    58,488,790
Cash flows from investing activities:                          
Purchase of investments                          (411,974,519) (205,377,324)
Proceeds from sale and maturity of investments   449,386,936   186,841,187
Payment for acquired businesses, net of cash     (3,224,162)   --
acquired
Purchases of intangible assets                   (12,657)      (1,390,738)
Purchases of property and equipment (*)          (38,093,323)  (8,323,905)
Net cash provided by (used in) investing         (3,917,726)   (28,250,780)
activities
Cash flows from financing activities:                          
Dividends paid                                   (11,126,265)  (8,343,398)
Repurchase of Common Stock                       (1,012,216)   --
Stock options exercised                          3,020         2,400
Net cash used in financing activities           (12,135,461)  (8,340,998)
Effect of exchange rate changes on cash and cash (13,406,232)  (1,682,959)
equivalents
Net increase in cash and cash equivalents        29,702,345    20,214,053
Cash and cash equivalents, beginning of the      101,489,002   67,381,677
period
                                                              
Cash and cash equivalents, end of the period     $131,191,347 $87,595,730
                                                              
(*) Net of financial liabilities, see Note 5 "Office building acquisition
agreement in Buenos Aires"



Financial results of reporting segments
            Three Months Ended June 30, 2013
            Brazil       Argentina    Mexico      Venezuela   Other       Total
                                                               Countries
                                                                     
Net revenues $51,116,153 $ 29,000,836 $7,823,566 $           $6,679,258 $
                                                   17,563,547              112,183,360
Direct costs (27,849,992) (16,203,748) (5,122,425) (6,478,796) (3,215,003) (58,869,964)
Direct       23,266,161   12,797,088   2,701,141   11,084,751  3,464,255   53,313,396
contribution
                                                                     
Operating
expenses and
indirect                                                              (17,864,101)
costs of net
revenues
Income from                                                           35,449,295
operations
                                                                     
Other income                                                          
(expenses):
Interest
income and
other                                                                 2,202,314
financial
gains
Interest
expense and
other                                                                 (531,668)
financial
losses
Foreign
currency                                                              3,600,866
gain
Other gains,                                                          1,393
net
Net income
before
income /                                                              $40,722,200
asset tax
expense
                                                                     
            Three Months Ended June 30, 2012
            Brazil       Argentina    Mexico      Venezuela   Other       Total
                                                               Countries
                                                                     
Net revenues $44,205,857 $ 20,561,213 $6,046,812 $           $5,612,859 $88,844,059
                                                   12,417,318
Direct costs (25,066,435) (9,543,476)  (3,269,574) (3,728,913) (2,896,426) (44,504,824)
Direct       19,139,422   11,017,737   2,777,238   8,688,405   2,716,433   44,339,235
contribution
                                                                     
Operating
expenses and
indirect                                                              (12,454,315)
costs of net
revenues
Income from                                                           31,884,920
operations
                                                                     
Other income                                                          
(expenses):
Interest
income and
other                                                                 2,982,303
financial
gains
Interest
expense and
other                                                                 (474,300)
financial
losses
Foreign
currency                                                              749,008
gain
Other                                                                 (7,009)
losses, net
Net income
before
income /                                                              $35,134,922
asset tax
expense

            
            Six Months Ended June 30, 2013
            Brazil       Argentina    Mexico      Venezuela    Other        Total
                                                                Countries
                                                                       
Net revenues $98,881,836 $54,621,583 $           $ 32,694,097 $13,097,724 $214,909,107
                                       15,613,867
Direct costs (58,843,536) (29,679,458) (9,239,252) (12,486,903) (6,082,984)  (116,332,133)
Direct       40,038,300   24,942,125   6,374,615   20,207,194   7,014,740    98,576,974
contribution
                                                                       
Operating
expenses and
indirect                                                                (34,556,496)
costs of net
revenues
Income from                                                             64,020,478
operations
                                                                       
Other income                                                            
(expenses):
Interest
income and
other                                                                   5,596,320
financial
gains
Interest
expense and
other                                                                   (892,020)
financial
losses
Foreign
currency                                                                (2,648,848)
loss
Other                                                                   (2,340)
losses, net
Net income
before
income /                                                                $66,073,590
asset tax
expense
                                                                       
            Six Months Ended June 30, 2012
            Brazil       Argentina    Mexico      Venezuela    Other        Total
                                                                Countries
                                                                       
Net revenues $86,370,511 $38,677,682 $           $ 23,658,890 $11,242,304 $172,580,065
                                       12,630,678
Direct costs (50,809,649) (17,666,411) (6,916,211) (8,576,248)  (5,712,094)  (89,680,613)
Direct       35,560,862   21,011,271   5,714,467   15,082,642   5,530,210    82,899,452
contribution
                                                                       
Operating
expenses and
indirect                                                                (26,083,786)
costs of net
revenues
Income from                                                             56,815,666
operations
                                                                       
Other income                                                            
(expenses):
Interest
income and
other                                                                   6,070,862
financial
gains
Interest
expense and
other                                                                   (551,617)
financial
losses
Foreign
currency                                                                (283,969)
loss
Other                                                                   (11,263)
losses, net
Net income
before
income /                                                                $62,039,679
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 June 30,
                                                  2013           2012
                                                                
                                                                
Net Cash provided by Operating Activities          $29.1        $39.5
                                                                
Payment for acquired businesses, net of cash       --           --
acquired
                                                                
Purchase of intangible assets                      (0.0)         (1.4)
                                                                
Purchases of property and equipment                (35.2)        (4.6)
                                                                
 Free cash flows                   $(6.2)       $33.5
                                                                
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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