20181231 Form 8K









 



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): February 26, 2019





 

 



 

 

MercadoLibre, Inc.

(Exact name of Registrant as specified in Charter)

Commission file number 001-33647





 

 



 

 







 

 



 

 

Delaware

 

98-0212790

(State or other jurisdiction of

incorporation )

 

(I.R.S. Employer

Identification Number)

Arias 3751, 7th Floor

Buenos Aires, Argentina, C1430CRG

(Address of registrant’s principal executive offices) (ZIP Code)

(+5411) 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 February 26, 2019, 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 February 26, 2019


 

Signatures

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 thereunto duly authorized.



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

MERCADOLIBRE, INC.



 

 

 

Registrant



 

 

 

Date: February 26, 2019

 

 

 

By:

 

/s/ Pedro Arnt



 

 

 

 

 

Pedro Arnt



 

 

 

 

 

Chief Financial Officer






Exhibit 991



Imagen 2

MercadoLibre, Inc. Reports Fourth Quarter Financial Results



Net Revenues of $428.0 million, up 61.8% on an FX neutral basis

$5.3billion Total Payment Volume,  up 68.5% on an FX neutral basis

$3.2 billion Gross Merchandise Volume, up 17.6% on an FX neutral basis



BUENOS AIRES, Argentina, February 26, 2019 (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 December 31, 2018.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, I am pleased to report another quarter of solid performance in our business, across our key business units. During the 4Q’18 we have continued our efforts to re-calibrate our P&L with initiatives such as continued changes to our discounted shipping initiatives, and free listing caps, which allowed us to improved enhanced marketplace monetization. As a consequence our Net Revenues accelerated for the 3rd  consecutive quarter, reaching 61.8% YoY on an FX neutral basis.



Fourth Quarter 2018 Business Highlights1

·

Total payment volume through MercadoPago surpassed the $5 billion mark for the first time, reaching $5.3 billion, a year-over-year increase of 22.1% in USD and 68.5% on an FX neutral basis. Total payment transactions increased 71.7% year-over-year, totaling 125.6 million transactions for the quarter.

·

MercadoPago experienced continued success in execution of off-platform payments (online and offline) through merchant services, mobile point-of-sale (“MPOS”) devices, and mobile wallet business. On a consolidated basis, off-platform total payment volume grew 90.1% year-over-year in USD and 172.2% on an FX neutral basis.

·

For the first time ever, off-platform payments processed more than $2 billion in transactions, reaching almost 70 million payment transactions in a single quarter.

·

MPOS business is still one of the fastest growing non-marketplace business units, representing 46.6% of total off-platform payment volume for the quarter. On a consolidated basis, total payment volume grew 365.3% year-over-year on an FX neutral basis.

·

Our mobile wallet reached 4x more active payers during the fourth quarter than the same period of last year, while total payment volume from mobile wallet in Argentina, Brazil and Mexico is growing by triple digits year-over-year.

·

We launched our asset management product, MercadoFondo, in Brazil, the second country in which we have begun to offer our entire suite of FinTech solutions: MPOS devices, QR code in-store payments, mobile wallet and asset management.

·

Gross merchandise volume again surpassed the $3 billion mark, reaching $3.2 billion, a 10.6% year-over-year decrease in USD, and a 17.6% year-over-year increase on an FX neutral basis.

·

Items sold reached 85.6 million, growing 5.4% year-over-year versus 57.5% during the same period last year. The decrease year-over-year is attributable to Brazil, where last quarter we launched a R$5 flat listing fee on items below R$ 120 and removed listings below R$ 6 as we shift towards incentivizing buyers to purchase higher ticket items.

·

Unique buyers grew 7.5% year-over-year versus 9.4% in the third quarter. This declining growth rate is attributable primarily to pricing adjustments, including eliminating low-priced ticket items from our platform and making payments mandatory in Chile and Colombia, which also temporarily affected buyer growth.

·

Live listings offered on MercadoLibre’s marketplace grew to 182.1 million in the fourth quarter of 2018, a 59.7% year-over-year increase, surpassing the 150 million mark for the third time.

·

Mobile gross merchandise volume grew 42.5% on an FX neutral basis year-over-year reaching 60.9% of GMV.

·

Items shipped through MercadoEnvíos reached 62.1 million, a 28.5% year-over-year increase, driven primarily by increases in our free shipping program. The number of items shipped in Argentina, Mexico, Chile and Colombia were highlights of the quarter, growing 84.0%, 88.3%, 72.0%, and 54.7% respectively year-over-year.



 1 Percentages have been calculated using whole amounts rather than rounded amounts.


 

Adoption of ASC 606

Effective January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers related to revenue recognition (“ASC 606”) issued by the Financial Accounting Standards Board (“FASB”). The Company has adopted ASC 606 using the full retrospective transition method and has accordingly revised its consolidated financial statements for the year ended December 31, 2017, and applicable interim periods within the year ended December 31, 2017, as if ASC 606 had been effective for those periods. Because the Company did not offer free shipping in 2016, net revenue for that year does not need to be recast.

As a result of adopting ASC 606, the Company must present net revenue net of amounts paid in connection with the Company’s free shipping initiative, when the Company acts as an agent, rather than including these amounts in the cost of net sales, as previously recorded. For the three-month period ended December 31, 2018 the Company incurred $108.1 million of shipping subsidies that have been netted from revenues.

As a result of adopting ASC 606, our net revenues for the periods indicated below have been recast as presented below. Our adoption of 606 does not affect our operating or net income/loss.





 

 

 

 

 

 

 

 



 

In Millions***



 

YTD 2017*

 

YTD 2018**

 

Q4 2017*

 

Q4 2018**

Gross Billings

$

1,398.1

$

1,864.5

$

437.0

$

536.2

 

 

 

 

 

 

 

 

 

 

 

In Millions***



 

YTD 2017*

 

YTD 2018**

 

Q4 2017*

 

Q4 2018**

Adjustments (Decrease)

$

(181.6)

$

(424.8)

$

(78.9)

$

(108.1)

 

 

 

 

 

 

 

 

 

 

 

In Millions***



 

YTD 2017*

 

YTD 2018**

 

Q4 2017*

 

Q4 2018**

Net Revenues

$

1,216.5

$

1,439.7

$

358.1

$

428.0

*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***



 

 

YTD 2017

 

YTD 2018

 

Q4 2017

 

Q4 2018



Brazil

$

831.4 

$

1,213.8 

$

262.1 

$

358.1 

Gross

Argentina

$

359.4 

$

402.1 

$

108.7 

$

99.0 

Billings

Mexico

$

86.5 

$

150.3 

$

28.2 

$

50.4 



Venezuela

$

54.3 

$

0.0 

$

16.0 

$

0.0 



Others

$

66.5 

$

98.3 

$

22.1 

$

28.7 







 

 

 

 

 

 

 

 

 



 

 

In Millions***



 

 

YTD 2017

 

YTD 2018

 

Q4 2017

 

Q4 2018



Brazil

$

(140.6)

$

(347.7)

$

(64.8)

$

(92.7)

Adjustments

Argentina

$

 -

$

(25.5)

$

 -

$

(8.2)

(Decrease)

Mexico

$

(35.2)

$

(41.2)

$

(10.4)

$

(4.9)



Venezuela

$

 -

$

 -

$

 -

$

 -



Others

$

(5.8)

$

(10.5)

$

(3.7)

$

(2.3)







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

 

In Millions***



 

 

YTD 2017*

 

YTD 2018**

 

Q4 2017*

 

Q4 2018**



Brazil

$

690.8 

 

866.2 

 

197.3 

 

265.4 

Net

Argentina

$

359.4 

 

376.6 

 

108.7 

 

90.8 

Revenues

Mexico

$

51.3 

 

109.1 

 

17.7 

 

45.5 



Venezuela

$

54.3 

 

0.0 

 

16.0 

 

0.0 



Others

$

60.7 

 

87.8 

 

18.4 

 

26.3 



 

 

 

 

 

 

 

 

 

*As Recast **As Reported
***The table above may not total due to rounding.




 

Fourth Quarter 2018 Financial Highlights

·

Net revenues for the fourth quarter grew to $428.0 million, a year-over-year increase of 19.5% in USD and 61.8% on an FX neutral basis.

·

Enhanced marketplace revenues increased 13.5% year-over-year in USD, and increased 51.9% on an FX neutral basis, while non-marketplace revenues increased 27.0% year-over-year in USD and 74.2% on an FX neutral basis.

·

Gross profit was $204.8 million with a margin of 47.8%, compared to 56.8% in the fourth quarter of 2017. Most of the gross margin compression is attributed to an increase in free shipping subsidies.

·

Total operating expenses were $205.6 million, down 23.3% year-over-year. As a percentage of revenues, operating expenses were 48.0%, as compared to 74.8% during the fourth quarter of 2017.

·

Loss from operations was $0.8 million, down 92.6% from last quarter and 98.8% year-over-year in USD. As a percentage of revenues, loss from operations was 0.2%, compared to a loss of 18.0% during the fourth quarter of 2017.

·

Interest income was $14.3 million, a 60.9% increase year-over-year, mainly attributable to the effect of a stable FX in Argentina, a significant rise in interest rates, an increase in volume managed in Brazil and the proceeds of the convertible note issued in August 2018, which generated more invested volume and interest gains.

·

The company incurred $16.4 million in financial expenses in the fourth quarter of 2018, mainly attributable to financial interest related to the 2028 Convertible Notes and financial loans in Argentina, Uruguay and Chile.

·

The foreign exchange loss for the fourth quarter of 2018 was $3.9 million, mainly as a consequence of a $4.7 million loss from the U.S. Dollar revaluation over our Argentine Peso net asset position in Argentina, which was partially offset by a $0.9 million gain arising from the appreciation of the Mexican Peso over our U.S. Dollar net liability position in Mexico.

·

Net loss before taxes was $6.8 million, up 89.5% year-over-year.

·

Income tax gain was $4.5 million during the fourth quarter, yielding a blended tax rate for the period of 65.8%.

·

Net loss as reported for the fourth quarter was $2.3 million, resulting in basic net loss per share of $0.05.

·

Operating cash flow was $34.8 million. Net decrease in cash, restricted cash and cash equivalents was $613.0 million during the fourth quarter of 2018.



The following table summarizes certain key performance metrics for the twelve and three months ended December 31, 2018 and 2017.





 

 

 

 

 

 

 

 

 

 

 



  

Years Ended
December 31,

 

 

Three months Ended
December 31,

(in millions) (*)

  

 

2018

 

2017 (**)

 

 

2018

2017 (**)



  

 

 

 

 

  

 

 

  

 

 

Number of confirmed registered users at end of period

  

 

267.4 

 

211.9 

  

 

267.4 

  

 

211.9 

Number of confirmed new registered users during period

  

 

55.5 

 

37.7 

  

 

18.8 

  

 

10.7 

Gross merchandise volume

  

$

12,504.9 

$

11,749.3 

  

$

3,233.0 

  

$

3,617.7 

Number of successful items sold

  

 

334.7 

 

270.1 

  

 

85.6 

  

 

81.2 

Number of successful items shipped

 

 

221.7 

 

150.7 

 

 

62.1 

 

 

48.3 

Total payment volume

  

$

18,455.9 

$

13,731.7 

  

$

5,302.1 

  

$

4,342.8 

Total volume of payments on marketplace

  

$

11,274.5 

$

9,627.6 

  

$

2,950.4 

  

$

2,947.4 

Total payment transactions

 

 

389.3 

 

231.4 

 

 

125.6 

 

 

73.2 

Unique buyers

 

 

37.4 

 

33.7 

 

 

19.0 

 

 

17.7 

Unique sellers

 

 

10.8 

 

10.1 

 

 

4.1 

 

 

4.6 

Capital expenditures

  

$

102.0 

$

83.5 

  

$

21.5 

  

$

31.4 

Depreciation and amortization

  

$

45.8 

$

40.9 

  

$

11.9 

  

$

11.0 



(*) Figures have been expressed using rounding amounts. Growth calculations using this table may not total due to rounding.
(**) Data for 2017 includes Venezuelan metrics up to November 30, 2017 due to deconsolidation. Please refer to Note 2 of our audited consolidated financial statements for additional detail.


 

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





 

 

 

 

 

 

 

 

 

 

 



 

Year-over-year Growth rates



 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q4’17

 

Q1’18

 

Q2’18

 

Q3’18

 

Q4’18

 



 

 

 

 

 

 

 

 

 

 

 

Brazil

 

37

%

15

%

25

%

25

%

34

%



 

 

 

 

 

 

 

 

 

 

 

Argentina

 

42

%

43

%

14

%

(8)

%

(16)

%



 

 

 

 

 

 

 

 

 

 

 

Mexico

 

48

%

51

%

62

%

152

%

157

%



 

 

 

 

 

 

 

 

 

 

 



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





 

 

 

 

 

 

 

 

 

 

 



 

Year-over-year Growth rates



 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q4’17

 

Q1’18

 

Q2’18

 

Q3’18

 

Q4’18

 



 

 

 

 

 

 

 

 

 

 

 

Brazil

 

35

%

19

%

40

%

56

%

58

%



 

 

 

 

 

 

 

 

 

 

 

Argentina

 

62

%

80

%

68

%

68

%

77

%



 

 

 

 

 

 

 

 

 

 

 

Mexico

 

41

%

39

%

71

%

168

%

170

%



 

 

 

 

 

 

 

 

 

 

 





Conference Call and Webcast

The Company will host a conference call and audio webcast on Feb 26th, 2019 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID 3497822) 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

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 MercadoLibre Marketplace, excluding Classifieds transactions.

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 that were sold/purchased through the MercadoLibre Marketplace, excluding Classifieds items.

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 MercadoLibre Marketplace and confirmed their registration, excluding Classifieds users.

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 MercadoLibre Marketplace and confirmed their registration, excluding Classifieds users.

Unique Buyers – New or existing users with at least one purchase made in the period, including Classifieds users.

Unique Sellers – New or existing users with at least one new listing in the period, including Classifieds users.



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 https://resource.globenewswire.com/Resource/Download/6ab227b7-693f-4b17-b80c-552ae45c76bf?size=0

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, 2018, 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.






 



MercadoLibre, Inc.

Consolidated Balance Sheets

As of December 31, 2018 and 2017

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























 

 

 



December 31,

 

December 31,



2018

 

2017

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                       440,332

 

$                       388,260

Restricted cash and cash equivalents

24,363 

 

 —

Short-term investments (284,317 held in guarantee - see Note 4)

461,541 

 

209,432 

Accounts receivable, net

35,153 

 

28,168 

Credit cards receivable, net

360,298 

 

521,130 

Loans receivable, net

95,778 

 

73,409 

Prepaid expenses

27,477 

 

5,864 

Inventory

4,612 

 

2,549 

Other assets

61,569 

 

58,107 

Total current assets

1,511,123 

 

1,286,919 

Non-current assets:

 

 

 

Long-term investments

276,136 

 

34,720 

Property and equipment, net

165,614 

 

114,837 

Goodwill

88,883 

 

92,279 

Intangible assets, net

18,581 

 

23,174 

Deferred tax assets

141,438 

 

57,324 

Other assets

37,744 

 

63,934 

Total non-current assets

728,396 

 

386,268 

Total assets

$                    2,239,519

 

$                    1,673,187



 

 

 

Liabilities and Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                       266,759

 

$                       221,095

Funds payable to customers

640,954 

 

583,107 

Salaries and social security payable

60,406 

 

65,053 

Taxes payable

31,058 

 

32,150 

Loans payable and other financial liabilities

132,949 

 

56,325 

Other liabilities

34,098 

 

3,678 

Dividends payable

 —

 

6,624 

Total current liabilities

1,166,224 

 

968,032 

Non-current liabilities:

 

 

 

Salaries and social security payable

23,161 

 

25,002 

Loans payable and other financial liabilities

602,228 

 

312,089 

Deferred tax liabilities

91,698 

 

23,819 

Other liabilities

19,508 

 

18,466 

Total non-current liabilities

736,595 

 

379,376 

Total liabilities

$                    1,902,819

 

$                    1,347,408



 

 

 

Equity:

 

 

 



 

 

 

Common stock, $0.001 par value, 110,000,000 shares authorized,

 

 

 

45,202,859 and 44,157,364 shares issued and outstanding at December 31,

 

 

 

2018 and December 31, 2017

$                                45

 

$                                44

Additional paid-in capital

224,800 

 

70,661 

Retained earnings

503,432 

 

537,925 

Accumulated other comprehensive loss

(391,577)

 

(282,851)

Total Equity

336,700 

 

325,779 

Total Liabilities and Equity

$                    2,239,519

 

$                    1,673,187


 







MercadoLibre, Inc.

Consolidated Statements of Income

For the years ended December 31, 2018, 2017 and 2016

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





 

 

 

 

 

 

 

 

 

 



 

Year Ended December 31,

 

Three Months Ended December 31,



 

2018

 

2017

 

2016

 

2018

 

2017

Net revenues

 

$1,439,653 

 

$1,216,542 

 

$844,396 

 

$428,019 

 

$358,064 

Cost of net revenues

 

(742,645)

 

(496,942)

 

(307,538)

 

(223,235)

 

(154,701)

Gross profit

 

697,008 

 

719,600 

 

536,858 

 

204,784 

 

203,363 



 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Product and technology development

 

(146,273)

 

(127,160)

 

(98,479)

 

(38,963)

 

(34,161)

Sales and marketing

 

(482,447)

 

(325,375)

 

(156,296)

 

(140,035)

 

(117,433)

General and administrative

 

(137,770)

 

(122,194)

 

(87,310)

 

(26,605)

 

(30,621)

Impairment of Long-Lived Assets

 

 

 

(2,837)

 

(13,717)

 

 —

 

 —

Loss on deconsolidation of Venezuelan subsidiaries

 

 

 

(85,761)

 

 —

 

 —

 

(85,761)

Total operating expenses

 

(766,490)

 

(663,327)

 

(355,802)

 

(205,603)

 

(267,976)

(Loss) income from operations

 

(69,482)

 

56,273 

 

181,056 

 

(819)

 

(64,613)



 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

42,039 

 

45,901 

 

35,442 

 

14,292 

 

8,881 

Interest expense and other financial losses

 

(56,249)

 

(26,469)

 

(25,605)

 

(16,443)

 

(6,783)

Foreign currency gains (losses)

 

18,240 

 

(21,635)

 

(5,565)

 

(3,862)

 

(2,157)

Net (loss) income before income tax gain (expense)

 

(65,452)

 

54,070 

 

185,328 

 

(6,832)

 

(64,672)



 

 

 

 

 

 

 

 

 

 

Income tax gain (expense)

 

28,867 

 

(40,290)

 

(48,962)

 

4,496 

 

(3,048)



 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$(36,585)

 

$13,780 

 

$136,366 

 

$(2,336)

 

$(67,720)











 

 

 

 

 

 

 

 

 

 



 

Year Ended December 31,

 

Three Months Ended December 31,



 

2018

 

2017

 

2016

 

2018

 

2017

Basic EPS

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income

 

 

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$(0.82)

 

$0.31 

 

$3.09 

 

$(0.05)

 

$(1.53)

Weighted average of outstanding common shares

 

44,529,614 

 

44,157,364 

 

44,157,251 

 

45,202,859 

 

44,157,364 

Diluted EPS

 

 

 

 

 

 

 

 

 

 

Diluted net (loss) income

 

 

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$(0.82)

 

$0.31 

 

$3.09 

 

$(0.05)

 

$(1.53)

Weighted average of outstanding common shares

 

44,529,614 

 

44,157,364 

 

44,157,251 

 

45,202,859 

 

44,157,364 



 

 

 

 

 

 

 

 

 

 

Cash Dividends declared (per share)

 

 

 

0.600 

 

0.600 

 

 —

 

 —








 

MercadoLibre, Inc.

Consolidated Statement of Cash Flows

For the years ended December 31, 2018, 2017 and 2016

(In thousands of U.S. dollars)





 

 

 

 

 

 



 

Year Ended December 31,



 

2018

 

2017

 

2016



 

 

Cash flows from operations:

 

 

 

 

 

 

Net (loss) income

 

$            (36,585)

 

$             13,780

 

$       136,366

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Unrealized devaluation loss, net

 

11,131 

 

28,463 

 

4,967 

Impairment of Long-Lived Assets

 

 

 

2,837 

 

13,717 

Loss on deconsolidation of Venezuelan subsidiaries

 

 

 

85,761 

 

 —

Depreciation and amortization

 

45,792 

 

40,921 

 

29,022 

Accrued interest

 

(17,811)

 

(20,192)

 

(17,794)

Non cash interest and convertible bonds amortization of debt discount and amortization of debt issuance costs

 

11,408 

 

10,855 

 

9,837 

LTRP accrued compensation

 

27,525 

 

35,719 

 

22,983 

Deferred income taxes

 

(92,585)

 

(24,575)

 

(6,188)

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable 

 

(27,105)

 

(21,817)

 

(15,428)

Credit cards receivable

 

42,655 

 

(257,563)

 

(180,592)

Prepaid expenses

 

(23,342)

 

8,670 

 

(9,133)

Inventory

 

(3,015)

 

(1,549)

 

(787)

Other assets

 

(17,617)

 

(54,780)

 

(24,425)

Accounts payable and accrued expenses

 

90,123 

 

150,215 

 

47,980 

Funds payable to customers

 

175,398 

 

242,037 

 

164,060 

Other liabilities

 

28,202 

 

7,680 

 

(45)

Interest received from investments

 

16,733 

 

22,548 

 

15,719 

Net cash provided by operating activities

 

230,907 

 

269,010 

 

190,259 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of investments

 

(3,176,078)

 

(4,553,649)

 

(3,501,283)

Proceeds from sale and maturity of investments

 

2,662,800 

 

4,713,934 

 

3,508,293 

Payment for acquired businesses, net of cash acquired

 

(4,195)

 

(8,568)

 

(7,284)

Reduction of cash due to Venezuela deconsolidation

 

 

 

(27,230)

 

 —

Purchases of intangible assets

 

(192)

 

(33)

 

(431)

Changes in principal loans receivable, net

 

(57,232)

 

(72,244)

 

(6,599)

Advance for property and equipment

 

(4,426)

 

(19,695)

 

(8,412)

Purchases of property and equipment

 

(93,136)

 

(55,156)

 

(68,527)

Net cash used in investing activities

 

(672,459)

 

(22,641)

 

(84,243)

Cash flows from financing activities:

 

 

 

 

 

 

Funds received from the issuance of convertible notes

 

880,000 

 

 —

 

 —

Transaction costs from the issuance of convertible notes

 

(16,264)

 

 —

 

 —

Payments on convertible note

 

(348,123)

 

 —

 

 —

Purchase of convertible note capped calls

 

(148,943)

 

(67,308)

 

 —

Unwind of convertible note capped calls

 

136,108 

 

 —

 

 —

Proceeds from loans payable and other financial liabilities

 

236,873 

 

47,905 

 

11,435 

Payments on loans payable and other financing

 

(123,822)

 

(5,004)

 

(6,684)

Dividends paid

 

(6,624)

 

(26,496)

 

(24,419)

Payment of finance lease obligations

 

(323)

 

 —

 

 —

Net cash provided by (used in) financing activities

 

608,882 

 

(50,903)

 

(19,668)

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents

 

(90,895)

 

(41,346)

 

(19,089)

Net increase in cash, cash equivalents, restricted cash and cash equivalents

 

76,435 

 

154,120 

 

67,259 

Cash, cash equivalents, restricted cash and cash equivalents, beginning of the year

 

388,260 

 

234,140 

 

166,881 

Cash,cash equivalents, restricted cash and cash equivalents, end of the year

 

$464,695 

 

$388,260 

 

$234,140 


 





Financial results of reporting segments





 

 

 

 

 

 

 

 

 

 

 



 

Year Ended December 31, 2018



 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

(In thousands)

Net revenues

 

$            866,175 

 

$            376,563 

 

$            109,096 

 

 

$                         87,819 

 

$              1,439,653 

Direct costs

 

(762,636)

 

(254,539)

 

(164,637)

 

 

(79,581)

 

(1,261,393)

Direct contribution

 

103,539 

 

122,024 

 

(55,541)

 

 

8,238 

 

178,260 



 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(247,742)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(69,482)



 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

42,039 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(56,249)

Foreign currency gains

 

 

 

 

 

 

 

 

 

 

18,240 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

$                 (65,452)







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Year Ended December 31, 2017 (*)



 

Brazil

 

Argentina

 

Mexico

 

Venezuela

 

Other Countries

 

Total



 

(In thousands)

Net revenues

 

$            690,808 

 

$            359,357 

 

$              51,335 

 

$             54,327 

 

$                         60,715 

 

$              1,216,542 

Direct costs

 

(471,588)

 

(215,831)

 

(107,408)

 

(22,101)

 

(53,201)

 

$               (870,129)

Impairment of Long-lived Assets

 

-

 

-

 

-

 

(2,837)

 

-

 

$                   (2,837)

Loss on deconsolidation of Venezuelan subsidiary

 

-

 

-

 

-

 

(76,617)

 

-

 

$                 (76,617)

Direct contribution

 

219,220 

 

143,526 

 

(56,073)

 

(47,228)

 

7,514 

 

266,959 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

 

(201,542)

Loss on Deconsolidation of Venezuelan's Intercompany balances

 

 

 

 

 

 

 

 

 

 

 

(9,144)

Income from operations

 

 

 

 

 

 

 

 

 

 

 

56,273 



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

 

45,901 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

 

(26,469)

Foreign currency losses

 

 

 

 

 

 

 

 

 

 

 

(21,635)

Net income before income tax expense

 

 

 

 

 

 

 

 

 

 

 

$                   54,070 

(*)Excludes results of operations for Venezuela for the month of December 2017.


 







 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended December 31, 2018

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

$265,353 

 

$90,800 

 

$45,529 

 

 

$26,337 

 

$428,019 

 

Direct costs

 

 

(218,497)

 

(68,783)

 

(63,550)

 

 

(22,397)

 

(373,227)

 

Direct contribution

 

 

46,856 

 

22,017 

 

(18,021)

 

 

3,940 

 

54,792 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

 

(55,611)

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

(819)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

 

14,292 

 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

 

(16,443)

 

Foreign currency losses

 

 

 

 

 

 

 

 

 

 

 

(3,862)

 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

 

$(6,832)

 



 

 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended December 31, 2017 (*)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Brazil

 

Argentina

 

Mexico

 

Venezuela

 

Other Countries

 

Total

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

$197,300 

 

$108,666 

 

$17,717 

 

$15,999 

 

$18,381 

 

$358,063 

 

Direct costs

 

 

(157,391)

 

(65,215)

 

(36,434)

 

(5,260)

 

(18,269)

 

(282,569)

 

'Loss on deconsolidation of Venezuelan subsidiary

 

 

-

 

-

 

-

 

(76,617)

 

-

 

(76,617)

 

Direct contribution

 

 

39,909 

 

43,451 

 

(18,717)

 

(65,878)

 

112 

 

(1,123)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

 

 

(54,346)

 

'Loss on Deconsolidation of Venezuelan's Intercompany balances

 

 

 

 

 

 

 

 

 

 

 

 

(9,144)

 

Income from operations

 

 

 

 

 

 

 

 

 

 

 

 

(64,613)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains