UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 8, 2018  

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

Delaware001-3364798-0212790
(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 August 8, 2018, 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 August 8, 2018


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: August 8, 2018By: /s/ PEDRO ARNT        
  PEDRO ARNT
  Chief Financial Officer
  

EdgarFiling

EXHIBIT 99.1

MercadoLibre, Inc. Reports Second Quarter 2018 Financial Results

85.4 million Items Sold, up 38.8%,

85.5 million Total Payment Transactions, up 64.0%

Net Revenues of $335.4 million, up 43.7% on an FX neutral basis

BUENOS AIRES, Argentina, Aug. 08, 2018 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq: MELI) (http://www.mercadolibre.com), Latin America's leading e-commerce technology company, today reported financial results for the quarter ended June 30, 2018.

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “The outlook for our industry is as positive as ever, and our investment thesis remains intact. The internet is rapidly becoming a driving force that is increasing the pace of modernization in Latin America. This modernization presents us with the opportunity to turn a history of underdeveloped infrastructure in the areas of retail and banking from a disadvantage into an advantage, as it allows for innovation to flourish unencumbered by existing legacy players.”

Second Quarter 2018 Business Highlights

Adoption of ASC 606

             
    In millions
Gross
billings
 
  H1 2017*  H1 2018**  Q2 2017*  Q2 2018**
 $590.5 $865.5 $316.5 $432.0
             
    In millions
Adjustments
(Decrease)
 
  H1 2017*  H1 2018**  Q2 2017*  Q2 2018**
 $36.9 $209.2 $32.6 $96.6
             
             
   In millions
Net
Revenues
 
  H1 2017*  H1 2018**  Q2 2017*  Q2 2018**
 $553.6 $656.4 $283.9 $335.4
             
*As Recast  **As Reported
             
(*) The table above may not total due to rounding.
             

 The tables below present our gross billing and amounts paid by us in connection with our free shipping service.

      In millions
     H1 2017   H1 2018   Q2 2017   Q2 2018
Gross billings
Brazil  $339.8  $546.8  $180.1  $270.5
Argentina  $159.4  $211.9  $88.0  $105.9
Mexico  $35.7  $60.7  $20.2  $31.3
Venezuela  $28.6  $  $14.2  $
Others  $26.9  $46.1  $14.1  $24.3
      
      In millions
Adjustments
(Decrease)
    H1 2017   H1 2018   Q2 2017   Q2 2018
Brazil  $22.9  $166.8  $22.9  $74.7
 Argentina  $  $9.9  $  $5.7
 Mexico  $13.6  $26.1  $9.4  $13.8
 Venezuela  $  $  $  $
 Others  $0.4  $6.4  $0.4  $2.4
                  
      
      In millions
Net Revenues    H1 2017*   H1 2018**   Q2 2017*   Q2 2018**
Brazil  $317.0  $380.0  $157.2  $195.8
 Argentina  $159.4  $202.0  $88.0  $100.1
 Mexico  $22.1  $34.6  $10.8  $17.5
 Venezuela  $28.6  $  $14.2  $
 Others  $26.5  $39.7  $13.8  $21.9
                  
*As Recast  **As Reported                 
                  
(*) The table above may not total due to rounding.                 
                  

Second Quarter 2018 Financial Highlights

The following table summarizes certain key performance metrics for the three months ended June 30th, 2018 and 2017.

                
  Six-months Periods Ended
June 30,
   Three-month Periods Ended
June 30,
(in millions)  2018 (*)   2017 (*)   20182017
                
Number of confirmed registered users at end of period  234.9   191.2   234.9   191.2
Number of confirmed new registered users during period  23.0   17.0   11.8   9.0
Gross merchandise volume $6,276.6  $5,056.3  $3,135.4  $2,722.4
Number of successful items sold  165.6   114.7   85.4   61.5
Number of successful items shipped  105.3   60.7   52.8   33.4
Total payment volume $8,601.4  $5,721.8  $4,426.1  $3,152.0
Total volume of payments on marketplace $5,603.8  $4,027.4  $2,794.3  $2,201.6
Total payment transactions  159.8   96.4   85.5   52.1
Unique buyers  25.0   22.2   16.9   14.6
Unique sellers  8.6   6.5   4.2   4.2
Capital expenditures $46.8  $34.6  $23.7  $21.8
Depreciation and amortization $22.6  $19.1  $11.5  $10.1
                
(*) Percentages have been calculated using whole-dollar amounts rather than rounded amounts that appear in the table. The table above may not total due to rounding.
                

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

    YoY Growth rates
     
Consolidated Net Revenues   Q2’17  Q3’17  Q4’17  Q1’18  Q2’18
Brazil   53%  35%  37%  15%  25%
Argentina   30%  30%  42%  43%  14%
Mexico   (6)%  (3)%  48%  51%  62%
                 

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

    YoY Growth rates
     
Consolidated Net Revenues   Q2’17  Q3’17  Q4’17  Q1’18  Q2’18
Brazil   40%  31%  35%  19%  40%
Argentina   44%  51%  62%  80%  68%
Mexico   (3)%  (7)%  41%  39%  71%
                 

Conference Call and Webcast

The Company will host a conference call and audio webcast on Aug 8th, 2018 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing +(970) 315-0420 or +(877) 303-7209 (Conference ID 2498798) 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

Gross Billings - Total accrued fees, commissions, interest, and other sales received from users

Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2017 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 paid for 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, including marketplace and non-marketplace transactions.

Enhanced Marketplace - Revenues from the Enhanced Marketplace service, include the final value fees and shipping fees charged to the Company’s customers.

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 Marketplace and confirmed their registration.

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 Marketplace and confirmed their registration.

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 listing 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

Forward-Looking Statements

Any statements herein regarding MercadoLibre, Inc. that are not historical or current facts are forward-looking statements. These forward-looking statements convey MercadoLibre, Inc.’s current expectations or forecasts of future events. Forward-looking statements regarding MercadoLibre, Inc. involve known and unknown risks, uncertainties and other factors that may cause MercadoLibre, Inc.’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Note Regarding Forward-Looking Statements” sections of MercadoLibre, Inc.’s annual report on Form 10-K for the year ended December 31, 2017, and any of MercadoLibre, Inc.’s other applicable filings with the Securities and Exchange Commission. Unless required by law, MercadoLibre, Inc. undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.

            
Consolidated statements of income
(In thousands of U.S. dollars, except for share data)
            
  Six Months Ended June 30,  Three Months Ended June 30,
    2018    2017    2018    2017 
Net revenues $  656,353   $ 553,558   $ 335,377   $ 283,882 
Cost of net revenues    (333,847)    (213,148)    (175,628)    (112,328)
Gross profit    322,506     340,410     159,749     171,554 
Operating expenses:           
Product and technology development    (71,833)    (60,639)    (33,437)    (30,338)
Sales and marketing    (231,939)    (123,786)    (121,216)    (76,856)
General and administrative    (76,395)    (59,808)    (33,337)    (31,498)
Impairment of Long-Lived Assets    —     (2,837)    —     (2,837)
Total operating expenses    (380,167)    (247,070)    (187,990)    (141,529)
(Loss) income from operations    (57,661)    93,340     (28,241)    30,025 
            
Other income (expenses):           
Interest income and other financial gains    19,110     22,820     9,915     10,663 
Interest expense and other financial losses    (23,936)    (12,977)    (13,202)    (6,506)
Foreign currency gains (losses)    18,178     (21,097)    12,577     (21,760)
Net (loss) income before income tax gain (expense)    (44,309)    82,086     (18,951)    12,422 
            
Income tax gain (expense)    20,138     (28,252)    7,700     (7,106)
Net (loss) income $  (24,171)  $ 53,834   $ (11,251)  $ 5,316 


          
  Six-Months Ended June 30,  Three-Months Ended June 30,
   2018   2017   2018   2017 
Basic EPS         
Basic net (loss) income         
Available to shareholders per common share $ (0.55) $ 1.22  $ (0.25) $ 0.12 
Weighted average of outstanding common shares   44,157,364    44,157,364    44,157,364    44,157,364 
Diluted EPS         
Diluted net (loss) income         
Available to shareholders per common share $ (0.55) $ 1.22  $ (0.25) $ 0.12 
Weighted average of outstanding common shares   44,157,364    44,157,364    44,157,364    44,157,364 
          
Cash Dividends declared (per share)   —   0.150    —   0.150 
                 


    
Consolidated balance sheets
(In thousands of U.S. dollars, except par value)
   
    
 June 30, December 31,
  2018   2017 
Assets   
Current assets:   
Cash and cash equivalents$ 489,157  $ 388,260 
Restricted cash and cash equivalents  34,854    — 
Short-term investments  69,432    209,432 
Accounts receivable, net  27,470    28,168 
Credit cards receivables, net  307,614    521,130 
Loans receivable, net  112,066    73,409 
Prepaid expenses  14,410    5,864 
Inventory  7,938    2,549 
Other assets  62,213    58,107 
Total current assets  1,125,154    1,286,919 
Non-current assets:   
Long-term investments  11,394    34,720 
Property and equipment, net  113,170    114,837 
Goodwill  83,637    92,279 
Intangible assets, net  19,256    23,174 
Deferred tax assets  106,330    57,324 
Other assets  60,500    63,934 
Total non-current assets  394,287    386,268 
Total assets$ 1,519,441  $ 1,673,187 
Liabilities and Equity   
Current liabilities:   
Accounts payable and accrued expenses$ 226,101  $ 221,095 
Funds payable to customers  498,623    583,107 
Salaries and social security payable  50,043    65,053 
Taxes payable  28,300    32,150 
Loans payable and other financial liabilities  146,655    56,325 
Other liabilities  25,342    3,678 
Dividends payable  —    6,624 
Total current liabilities  975,064    968,032 
Non-current liabilities:   
Salaries and social security payable  19,123    25,002 
Loans payable and other financial liabilities  333,364    312,089 
Deferred tax liabilities  23,166    23,819 
Other liabilities  13,987    18,466 
Total non-current liabilities  389,640    379,376 
Total liabilities$ 1,364,704  $ 1,347,408 
    
Equity:   
    
Common stock, $0.001 par value, 110,000,000 shares authorized,   
  44,157,364 shares issued and outstanding at June 30,   
2018 and December 31, 2017$ 44  $ 44 
Additional paid-in capital  24,969    70,661 
Retained earnings  515,846    537,925 
Accumulated other comprehensive loss  (386,122)   (282,851)
Total Equity  154,737    325,779 
Total Liabilities and Equity$ 1,519,441  $ 1,673,187 


       
Consolidated statements of cash flows
(In thousands of U.S. dollars, except par value)
       
   Six Months Ended June 30,
    2018    2017 
           
Cash flows from operations:      
Net (loss) income  $ (24,171)  $ 53,834 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Unrealized Devaluation Loss, net    6,976     25,502 
Impairment of Long-Lived Assets    —     2,837 
Depreciation and amortization    22,566     19,083 
Accrued interest    (7,845)    (10,930)
Non cash interest and convertible notes amortization of debt discount and amortization of debt issuance costs    9,684     4,798 
LTRP accrued compensation    16,792     22,068 
Deferred income taxes    (54,818)    (10,451)
Changes in assets and liabilities:      
Accounts receivable     (21,807)    (5,165)
Credit card receivables    97,097     34,161 
Prepaid expenses    (10,143)    5,462 
Inventory    (6,299)    102 
Other assets    (24,441)    (22,074)
Accounts payable and accrued expenses    42,771     33,633 
Funds payable to customers    32,513     63,164 
Other liabilities    20,213     (498)
Interest received from investments    8,066     10,788 
Net cash provided by operating activities    107,154     226,314 
Cash flows from investing activities:      
Purchase of investments    (1,248,452)    (2,186,528)
Proceeds from sale and maturity of investments    1,390,713     2,200,172 
Purchases of intangible assets    (242)    (74)
Advance for property and equipment    (4,426)    (8,351)
Changes in principal of loans receivable, net    (66,629)    (20,143)
Purchases of property and equipment    (42,092)    (26,147)
Net cash provided by (used in) investing activities    28,872     (41,071)
Cash flows from financing activities:      
Proceeds from loans payable and other financial liabilities    146,666     7,800 
Payments on loans payable and other financing liabilities    (14,893)    (2,969)
Dividends paid    (6,624)    (13,247)
Purchase of convertible note capped call    (45,692)    — 
Net cash provided by (used in) financing activities    79,457     (8,416)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents    (79,732)    (28,176)
Net increase in cash, cash equivalents, restricted cash and cash equivalents    135,751     148,651 
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period  $ 388,260   $ 234,140 
Cash, cash equivalents, restricted cash and cash equivalents, end of the period  $ 524,011   $ 382,791 
           


                             
Financial results of reporting segments                            
  Three Months Ended June 30, 2018
      
  Brazil    Argentina    Mexico    Other Countries    Total      
  (In thousands)
      
Net revenues$ 195,839    $ 100,110    $ 17,540    $ 21,888    $ 335,377       
Direct costs (176,987)   (68,051)   (39,534)   (21,088)   (305,660)     
Direct contribution (loss) 18,852    32,059    (21,994)   800    29,717      
                             
Operating expenses and indirect costs of net revenues                     (57,958)     
Loss from operations                     (28,241)     
                             
Other income (expenses):                            
Interest income and other financial gains                     9,915      
Interest expense and other financial losses                     (13,202)     
Foreign currency gains                     12,577      
Net loss before income tax gain                    $ (18,951)     
                             
                             
  Three Months Ended June 30, 2017
  Brazil    Argentina    Mexico    Venezuela    Other Countries    Total 
  (In thousands)
Net revenues$ 157,152    $ 87,992    $ 10,803    $ 14,181    $ 13,754    $ 283,882  
Direct costs (97,200)   (49,697)   (33,420)   (5,708)   (12,555)   (198,580)
Impairment of Long-lived Assets -    -    -    (2,837)   -    (2,837)
Direct contribution (loss) 59,952    38,295    (22,617)   5,636    1,199    82,465 
                             
Operating expenses and indirect costs of net revenues                          (52,440)
Income from operations                          30,025 
                             
Other income (expenses):                            
Interest income and other financial gains                          10,663 
Interest expense and other financial losses                          (6,506)
Foreign currency losses                          (21,760)
Net income before income tax expense                         $ 12,422  
                             

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 2017 and applying them to the corresponding months in 2018, 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 period ended June 30, 2018:

   
  Three-month Periods Ended
June 30, (*)
  As reported FX Neutral Measures
(In millions, except percentages)  2018   2017  Percentage
Change
  2018   2017  Percentage
Change
  (Unaudited)   (Unaudited)  
Net revenues $ 335.4  $ 283.9  18.1% $ 407.9  $ 283.9  43.7%
Cost of net revenues   (175.6)   (112.3) 56.4%   (209.3)   (112.3) 86.3%
Gross profit   159.7    171.6  -6.9%   198.6    171.6  15.8%
             
Operating expenses   (188.0)   (138.7) 35.5%   (227.9)   (138.7) 64.4%
Impairment of Long-Lived Assets   —    (2.8) -100.0%   —    (2.8) -100.0%
Total operating expenses   (188.0)   (141.5) 32.8%   (227.9)   (141.5) 61.1%
Loss / Income from operations   (28.2)   30.0  -194.1%   (29.3)   30.0  -197.7%
                       
(*) The table above may not total due to rounding.
                       

CONTACT:

MercadoLibre, Inc.
Investor Relations
investor@mercadolibre.com

http://investor.mercadolibre.com


A pdf accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/e22643e1-25ab-469d-b4e1-460da6bfbf25