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): November 2, 2017  

MercadoLibre, Inc.
(Exact Name of Registrant as Specified in Charter)

Delaware 001-33647 98-0212790
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)

 

Arias 3751, 7th Floor, Buenos Aires, Argentina C1430CRG
(Address of Principal Executive Offices) (Zip Code)

011-54-11-4640-8000
(Registrant's telephone number, including area code)


(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:

  [ ]   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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [    ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [    ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On November 2, 2017, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated November 2, 2017


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  MercadoLibre, Inc.
     
   
Date: November 2, 2017 By:  /s/ PEDRO ARNT        
    PEDRO ARNT
    Chief Financial Officer
   

EdgarFiling

EXHIBIT 99.1

MercadoLibre, Inc. Reports Third Quarter Financial Results

74.2 million Sold Items, up 55.8%, 62.3 million Total Payment Transactions, up 69.4%

Net Revenues of $370.7 million, growing 60.6% in USD, 79.4% on an FX neutral basis

Net Income of $27.7million, resulting in EPS of $0.63

BUENOS AIRES, Argentina, Nov. 02, 2017 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq:MELI) (http://www.mercadolibre.com), Latin America's leading e-commerce technology company, today reported financial results for the third quarter ended September 30, 2017.

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “Mercado Libre is now positioned more clearly than ever as one of the central engines of the digital revolution of the retail and fintech landscape in Latin America. In many ways, this quarter has been our best this year so far, and we are delighted to witness firsthand how the company is executing against the ambitious set of goals it has set forth. Our aspirations are clear. We will strive to become the preferred platform for our users facilitating their digital commerce, payments, and credit activities.”

Third Quarter 2017 Business Highlights

Third Quarter 2017 Financial Highlights

(*) Three month period ended September 30th is calculated by taking the difference between nine months ended September 30th and six months ended June 30th

Third Quarter 2017 Corporate Highlights

The company declared a quarterly dividend of $0.150 per share; this quarterly dividend is payable on January 16, 2018 to stockholders of record as of the close of business on December 31, 2017.

The following table summarizes certain key performance metrics for the three months ended September 30th, 2017 and 2016.

   Three months ended September 30, (in MM) 
                                                           2016     2017     %YoY    %YoY Local
Currency
 
Total confirmed registered users at the end of period  166.3  201.2 21.0% 
New confirmed registered users during the period  7.7  10.0 29.5% 
Gross merchandise volume $2,040.2 $3,075.3 50.7%93.8%
Number of successful items sold  47.6  74.2 55.8% 
Number of successful items shipped  23.1  41.7 80.4% 
Total payment volume $2,114.0 $3,667.1 73.5%86.0%
Total volume of payments on marketplace $1,519.9 $2,592.9 70.6% 
Tota payments transactions  36.8  62.3 69.4% 
Unique Buyers  12.4  16.3 31.1% 
Unique Sellers  4.0  4.6 14.1% 
      
(*) The table above may not total due to rounding.     
      

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

  YoY Growth rates 
 Consolidated Net Revenues      
  Q3'16  Q4'16  Q1'17  Q2'17  Q3'17 
 Brazil 62%64%66%60%71%
 Argentina 68%60%58%44%51%
 Mexico 36%29%55%80%82%
 Venezuela 152%199%291%353%571%
 Others 33%42%36%34%55%
 Total 66%68%79%65%79%
      

 Table of Year-on-Year USD Revenue Growth Rates by Quarter 

  YoY Growth rates 
 Consolidated Net Revenues      
  Q3'16  Q4'16  Q1'17  Q2'17  Q3'17 
 Brazil 76%92%106%75%75%
 Argentina 4%4%48%30%30%
 Mexico 19%8%40%76%91%
 Venezuela -22%-10%19%90%42%
 Others 33%46%47%39%57%
 Total 37%42%74%59%61%
      

Conference Call and Webcast

The Company will host a conference call and audio webcast on November 2nd, 2017 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing +(970) 315-0420 or +(877) 303-7209 (Conference ID 58231198) and requesting inclusion in the call for Mercado Libre. 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

Blended tax rate – Defined as income and asset tax expense as a percentage of income before income and assets tax.

Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2016 and applying it to the corresponding months in the current year, so as to calculate what the results would have been had exchange rates remained constant. Intercompany allocations are excluded from this calculation. These calculations do not include any other macroeconomic effect such as local currency inflation effects or any price adjustment to compensate local currency inflation or devaluations.

Gross merchandise volume – Measure of the total U.S. dollar sum of all transactions completed through the Mercado Libre Marketplace, excluding motor vehicles, vessels, aircraft, real estate, and services.

Total payment transactions – Measure of the number of all transactions completed using MercadoPago.

Total volume of payments on marketplace - Measure of the total U.S. dollar sum of all marketplace transactions paid for using MercadoPago, excluding shipping and financing fees.

Total payment volume – Measure of total U.S. dollar sum of all transactions paid for using MercadoPago.

Items sold – Measure of the number of items sold/purchased through the Mercado Libre Marketplace.

Items shipped- Measure of the number of items that were shipped through our shipping service.

Local Currency Growth Rates – Refer to FX Neutral definition.

Net income margin – Defined as net income as a percentage of net revenues.

New confirmed registered users – Measure of the number of new users who have registered on the Mercado Libre platform (including Mercado Pago) and confirmed their registration. Since July’12, registration and confirmation take place in the same step of the registration flow.

Operating margin – Defined as income from operations as a percentage of net revenues.

Total confirmed registered users – Measure of the cumulative number of users who have registered on the Mercado Libre platform (including Mercado Pago) and confirmed their registration. Since July ’12, registration and confirmation take place in the same step of the registration flow.

Unique Buyers – New or existing buyers with at least one purchase made in the period.

Unique Sellers – New or existing sellers with at least one sale made in the period.

About Mercado Libre

Founded in 1999, Mercado Libre is Latin America's leading e-commerce technology company. Through its primary platforms, Mercado Libre.com and Mercado Pago.com, it provides solutions to individuals and companies buying, selling, advertising, and paying for goods and services online.

Mercado Libre.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 Mercado Libre, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4193


Consolidated balance sheets
(In thousands of U.S. dollars, except par value)

    
 September 30, December 31,
  2017   2016 
Assets   
Current assets:   
Cash and cash equivalents$461,198  $234,140 
Short-term investments 175,165   253,321 
Accounts receivable, net 28,564   25,435 
Credit cards receivables, net 406,883   307,904 
Loans receivable, net 51,843   6,283 
Prepaid expenses 8,199   15,060 
Inventory 2,309   1,103 
Other assets 47,995   26,215 
Total current assets 1,182,156   869,461 
Non-current assets:   
Long-term investments 45,550   153,803 
Property and equipment, net 136,101   124,261 
Goodwill 95,249   91,797 
Intangible assets, net 24,642   26,277 
Deferred tax assets 66,163   45,017 
Other assets 68,431   56,819 
Total non-current assets 436,136   497,974 
Total assets$1,618,292  $1,367,435 
Liabilities and Equity   
Current liabilities:   
Accounts payable and accrued expenses$181,557  $105,106 
Funds payable to customers 519,420   370,693 
Salaries and social security payable 61,168   48,898 
Taxes payable 27,923   27,338 
Loans payable and other financial liabilities 24,701   11,583 
Other liabilities 1,400   6,359 
Dividends payable 6,624   6,624 
Total current liabilities 822,793   576,601 
Non-current liabilities:   
Salaries and social security payable 22,124   16,173 
Loans payable and other financial liabilities 309,444   301,940 
Deferred tax liabilities 40,435   34,059 
Other liabilities 17,340   9,808 
Total non-current liabilities 389,343   361,980 
Total liabilities$1,212,136  $938,581 
    
Equity:   
    
Common stock, $0.001 par value, 110,000,000 shares authorized,   
44,157,364 shares issued and outstanding at September 30,   
2017 and  December 31, 2016$44  $44 
Additional paid-in capital 70,674   137,982 
Retained earnings 612,269   550,641 
Accumulated other comprehensive loss (276,831)  (259,813)
Total Equity 406,156   428,854 
Total Liabilities and Equity$1,618,292  $1,367,435 
 


Consolidated statements of cash flows
(In thousands of U.S. dollars, except par value)

     
  Nine Months Ended September 30
   2017     2016 
   
Cash flows from operations:    
Net income $81,500  $85,017 
Adjustments to reconcile net income to net cash provided by operating activities:    
Unrealized Devaluation Loss, net  28,463   5,162 
Impairment of Long-Lived Assets  2,837   13,717 
Depreciation and amortization  29,953   20,698 
Accrued interest  (16,391)  (12,643)
Non cash interest and convertible bonds amortization of debt discount and
amortization of debt issuance costs
  9,234   9,122 
LTRP accrued compensation  28,734   19,251 
Deferred income taxes  (14,769)  (5,895)
Changes in assets and liabilities:    
Accounts receivable  (13,380)  (2,409)
Credit Card Receivables  (113,514)  (92,811)
Prepaid expenses  6,800   (272)
Inventory  (1,172)  (1,048)
Other assets  (31,528)  (15,865)
Accounts payable and accrued expenses  71,794   13,852 
Funds payable to customers  151,635   100,322 
Other liabilities  3,703   136 
Interest received from investments  18,490   11,348 
Net cash provided by operating activities  242,389   147,682 
Cash flows from investing activities:    
Purchase of investments  (3,180,633)  (2,548,060)
Proceeds from sale and maturity of investments  3,371,543   2,525,118 
Payment for acquired businesses, net of cash acquired     (7,284)
Purchases of intangible assets  (84)  (49)
Advance for property and equipment  (12,777)  (6,129)
Changes in principal of loans receivable, net  (46,951)   
Purchases of property and equipment  (39,280)  (55,510)
Net cash provided by (used in) investing activities  91,818   (91,914)
Cash flows from financing activities:    
Proceeds from loans payable and other financial liabilities  13,153   3,892 
Payments on loans payable and other financing liabilities  (4,304)  (6,492)
Dividends paid  (19,871)  (17,795)
Purchase of convertible note capped call  (67,308)   
Net cash used in financing activities  (78,330)  (20,395)
Effect of exchange rate changes on cash and cash equivalents  (28,819)  (14,259)
Net increase in cash and cash equivalents  227,058   21,114 
Cash and cash equivalents, beginning of the period $234,140  $166,881 
Cash and cash equivalents, end of the period $461,198  $187,995 
 


Consolidated statements of income
(In thousands of U.S. dollars, except for share data)

          
  Nine Months Ended September 30  Three Months Ended September 30,
   2017   2016    2017   2016 
Net revenues $961,117  $588,121   $370,661  $230,847 
Cost of net revenues  (444,879)  (213,993)   (194,834)  (85,199)
Gross profit  516,238   374,128    175,827   145,648 
Operating expenses:         
Product and technology development  (93,019)  (72,223)   (32,380)  (26,066)
Sales and marketing  (207,925)  (107,743)   (84,139)  (39,723)
General and administrative  (91,575)  (64,061)   (31,766)  (26,150)
Impairment of Long-Lived Assets  (2,837)  (13,717)       
Total operating expenses  (395,356)  (257,744)   (148,285)  (91,939)
Income from operations  120,882   116,384    27,542   53,709 
          
Other income (expenses):         
Interest income and other financial gains  37,020   25,192    14,200   9,892 
Interest expense and other financial losses  (19,686)  (18,807)   (6,709)  (6,492)
Foreign currency (loss) / gain  (19,475)  (5,062)   1,622   (4,823)
Net income before income tax expense  118,741   117,707    36,655   52,286 
          
Income tax expense  (37,241)  (32,690)   (8,989)  (13,374)
Net income $81,500  $85,017   $27,666  $38,912 


           
  Nine Months Ended September 30 Three Months Ended September 30,
   2017  2016  2017  2016
Basic EPS        
Basic net income        
Available to shareholders per common share $ 1.85 $ 1.93 $ 0.63 $ 0.88
Weighted average of outstanding common shares   44,157,364   44,157,215   44,157,364   44,157,341
Diluted EPS        
Diluted net income        
Available to shareholders per common share $ 1.85 $ 1.93 $ 0.63 $ 0.88
Weighted average of outstanding common shares   44,157,364   44,157,215   44,157,364   44,157,341
         
Cash Dividends declared (per share)  0.450  0.450  0.150  0.150
 


Financial results of reporting segments

             
  Three Months Ended September 30, 2017
  Brazil Argentina Mexico Venezuela Other Countries Total
  (In thousands)
Net revenues $ 229,475   $ 91,308   $ 22,604   $ 9,751   $ 17,523   $ 370,661  
Direct costs  (182,858)  (56,210)  (36,038)  (4,582)  (14,409)  (294,097)
Direct contribution  46,617   35,098   (13,434)  5,169   3,114   76,564 
             
Operating expenses and indirect costs of net revenues            (49,022)
Income from operations            27,542 
             
Other income (expenses):            
Interest income and other financial gains            14,200 
Interest expense and other financial losses            (6,709)
Foreign currency gains            1,622 
Net income before income tax expense  $36,655 
             


             
  Three Months Ended September 30, 2016
  Brazil Argentina Mexico Venezuela Other Countries Total
  (In thousands)
Net revenues $131,003  $69,983  $11,807  $6,885  $11,169  $230,847 
Direct costs  (77,012)  (39,026)  (10,353)  (3,462)  (7,943)  (137,796)
Direct contribution  53,991   30,957   1,454   3,423   3,226   93,051 
             
Operating expenses and indirect costs of net revenues            (39,342)
Income from operations            53,709 
             
Other income (expenses):            
Interest income and other financial gains            9,892 
Interest expense and other financial losses            (6,492)
Foreign currency losses            (4,823)
Net income before income tax expense           $52,286 
           

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use foreign exchange (“FX”) neutral measures as non-GAAP measure.

This non-GAAP measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is 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 our results of operations as determined in accordance with U.S. GAAP. This non-GAAP financial measure should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.

Reconciliation of this non-GAAP financial measure to the most comparable U.S. GAAP financial measures can be found in the tables included in this quarterly report.

The Company believes that reconciliation of FX neutral measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future. Specifically, we believe this non-GAAP measure provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.

The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2016 and applying them to the corresponding months in 2017, so as to calculate what our results would have been had exchange rates remained stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, this measure does not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations or any price adjustment to compensate local currency inflation or devaluations.

The following table sets forth the FX neutral measures related to our reported results of the operations for the three-month periods ended September 30, 2017:

             
  Three-months Periods Ended
September 30, (*)
  As reported FX Neutral Measures
(In millions, except percentages) 2017  2016 Percentage
Change
 2017  2016 Percentage
Change

  (Unaudited)   (Unaudited)  
Net revenues $370.7  $230.8  60.6% $414.0  $230.8  79.4%
Cost of net revenues  (194.8)  (85.2) 128.7%  (202.0)  (85.2) 137.1%
Gross profit                  175.8   145.6  20.7%  212.0   145.6  45.6%
            
Operating expenses  (148.3)  (91.9) 61.3%  (160.9)  (91.9) 75.0%
Income from operations  27.5   53.7  -48.7%  51.2   53.7  -4.8%
 
(*) The table above may not total due to rounding.


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