Mercadolibre, Inc.
Feb 23, 2012

MercadoLibre, Inc. Reports Financial Results for Fourth Quarter and Full Year 2011

* Q4'11 gross merchandise volume grew by 46.7% year-over-year to $1,450.0 million

* Items sold during Q4'11 increased by 40.9% year-over-year to 15.9 million

* During Q4'11 total payment transactions grew by 94.9% to 4.7 million

BUENOS AIRES, Argentina, Feb. 23, 2012 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq:MELI) (http://www.mercadolibre.com), Latin America's leading e-commerce technology company, today reported financial results for the fourth quarter and full year ended December 31, 2011.

Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc., commented, "The vast improvements to our platform that were carried out throughout this past year continued to drive innovation and growth throughout MercadoLibre in the fourth quarter of 2011. We are proud of the significant steps we have taken to consolidate our position of leadership in the Latin American e-commerce market, and are also excited about the challenges and opportunities that 2012 will bring."

Financial Results Summary

MercadoLibre reported consolidated net revenues for the three months ended December 31, 2011 of $86.5 million, representing 38.8% year-over-year growth while in local currencies growth was 46.5%.

For the three months ended December 31, 2011, gross merchandise volume grew 46.7% year-over-year to $1,450.0 million, while total payment volume grew 70.4% year-over-year to $402.3 million. In local currencies, gross merchandise volume grew 54.4% year-over-year, while payment volume grew 81.1% year-over-year.

Items sold on MercadoLibre during the fourth quarter 2011 increased 40.9% to 15.9 million, while total payments transactions through MercadoPago increased 94.9% to 4.7 million.

Gross profit for the fourth quarter of 2011 was $65.7 million, a 35.5% increase over the previous year quarter. Gross profit margin for the period was 76.0%, down from 77.9% during the fourth quarter of 2010, as the lower margin payments volume continued to grow at a faster pace than the merchandise volume.

Income from operations grew 38.1% to $29.0 million in the fourth quarter of 2011 compared to $21.0 million in the fourth quarter of 2010. Operating income margin for the fourth quarter of 2011 was 33.5%. Net Income before taxes was $30.8 million, an increase of 39.7% over the fourth quarter of 2010.

Net income for the three months ended December 31, 2011, increased 35.6% year-over-year to $21.6 million while in local currencies increased 42.0%. Net income margin was 25.0% for the fourth quarter of 2011, compared to 25.6% for the same period last year. Earnings per share for the fourth quarter of 2011 were $0.47 compared to $0.36 for the prior year quarter.

Free cash flow, defined as cash from operating activities less purchases of property, equipment, intangible asset and business acquired, was $25.1 million for the three months ended December 31, 2011.

For the full year, MercadoLibre generated $4.8 billion in gross merchandise volume, consolidated net revenues of $298.9 million, and net income of $76.8 million, or $1.73 per share. Gross merchandise volume was up 41.5% in 2011 when compared to the full year 2010, while net revenues increased 37.9% and net income increased 37.1%.

The following table summarizes certain key performance metrics for the three months ended December 31, 2011 and 2010.

Three month ended December 31, (in MM) 2011 2010 %YOY
Total confirmed registered users at the end of period 65.8 52.9 24.4%
New confirmed registered users during the period 3.8 2.7 42.9%
Gross merchandise volume $ 1,450.0 $ 988.1 46.7%
Items sold 15.9 11.3 40.9%
Total payments volume $ 402.3 $ 236.1 70.4%
Total payments transactions  4.7  2.4 94.9%

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

 YoY Growth rates at previous years exchange rates
Consolidated Net Revenues         
  Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4`11
Brazil 38% 35% 26% 7% 15% 22% 15% 38% 39%
Argentina 60% 67% 62% 48% 52% 33% 37% 55% 70%
Mexico 36% 25% 19% 11% 12% 11% 7% 14% 31%
Venezuela 68% 59% 69% 61% 57% 58% 39% 57% 64%
Others 68% 47% 24% 14% 22% 22% 32% 37% 35%
Total49%45%39%23%25%26%22%41%46%

Conference Call and Webcast

The Company will host a conference call and audio webcast on February 23, 2012 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (970) 315-0420 or (877) 303-7209 (Conference ID 53123204) 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 Marketplace and confirmed their registration.

New confirmed registered users — Measure of the number of new users who have registered on the MercadoLibre Marketplace and confirmed their registration.

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 transactions paid for using MercadoPago.

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

Net Income margin — Defined as net income as a percentage of net revenues.

Free Cash Flow — Defined as cash flow from operating activities less property, equipment, intangible asset purchases and business 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 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 each country in which it operates according to metrics provided by comScore Networks. MercadoLibre maintains a leadership position in 12 Latin American countries. 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    
     
 December 31,
2011
December 31,
2010
Assets  
Current assets:    
Cash and cash equivalents $ 67,381,677 $ 56,830,466
Short-term investments 74,928,620 5,342,766
Accounts receivable, net 16,815,087 12,618,173
Credits Cards Receivables 23,855,689 6,151,518
Prepaid expenses 1,269,594 913,262
Deferred tax assets 9,131,638 12,911,256
Other assets 6,863,250 6,867,767
Total current assets 200,245,555 101,635,208
Non-current assets:    
Long-term investments 43,933,316 78,846,281
Property and equipment, net 30,877,719 20,817,712
Goodwill, net 62,093,948 60,496,314
Intangible assets, net 6,494,857 4,141,167
Deferred tax assets 6,491,646 2,975,118
Other assets 5,794,395 771,223
Total non-current assets 155,685,881 168,047,815
Total assets $ 355,931,436 $ 269,683,023
     
Liabilities and Equity    
Current liabilities:    
Accounts payable and accrued expenses $ 20,251,313 $ 17,232,103
Funds payable to customers 69,216,185 48,788,225
Payroll and social security payable 13,525,293 10,786,534
Taxes payable 11,633,178 11,487,574
Loans payable and other financial liabilities 146,194 100,031
Dividends payable 3,531,362 -- 
Total current liabilities 118,303,525 88,394,467
Non-current liabilities:    
Payroll and social security payable 3,844,172 2,562,343
Loans payable and other financial liabilities 136,227 188,846
Deferred tax liabilities 8,670,606 5,167,699
Other liabilities  1,797,890 1,651,398
Total non-current liabilities 14,448,895 9,570,286
Total liabilities $ 132,752,420 $ 97,964,753
     
Commitments and contingencies    
Redeemable Noncontrolling Interest             $  4,000,000 $ --
Equity:    
Common stock, $0.001 par value, 110,000,000 shares authorized,    
44,142,020 and 44,131,376 shares issued and outstanding at December 31,    
2011 and December 31, 2010, respectively $ 44,142 $ 44,131
Additional paid-in capital 120,452,032 120,391,622
Retained earnings 135,726,188 73,681,556
Accumulated other comprehensive loss (37,043,346) (22,399,039)
Total Equity  219,179,016 171,718,270
Total liabilities, redeemable noncontrolling interest and equity $ 355,931,436 $ 269,683,023
   
Consolidated statements of income  
   
 Year Ended December 31,
 201120102009
  
Net revenues $ 298,931,625 $ 216,715,713 $ 172,843,621
Cost of net revenues (72,055,835) (46,549,845) (35,958,050)
Gross profit 226,875,790 170,165,868 136,885,571
       
Operating expenses:    
Product and technology development (23,349,787) (15,855,992) (12,140,521)
Sales and marketing  (64,968,755) (48,883,167) (42,861,735)
General and administrative (38,785,083) (30,828,146) (25,849,596)
Total operating expenses  (127,103,625) (95,567,305) (80,851,852)
Income from operations 99,772,165 74,598,563 56,033,719
       
Other income (expenses):    
Interest income and other financial gains 9,905,829 4,931,215 2,695,109
Interest expense and other financial charges (3,648,733) (7,601,671) (13,357,554)
Foreign currency gain / (loss)  2,353,005 (62,447) (2,658,476)
Other income, net  73,894 --  -- 
Net income before income / asset tax expense  108,456,160 71,865,660 42,712,798
       
Income / asset tax expense (31,659,821) (15,840,641) (9,504,005)
Net income  $ 76,796,339 $ 56,025,019 $ 33,208,793
       
Less: Net Income attributable to Noncontrolling Interest 16,286 --  -- 
Net income attributable to MercadoLibre, Inc. $ 76,780,053 $ 56,025,019 $ 33,208,793
   
 Year Ended December 31,
 201120102009
       
Basic EPS      
Basic net income attributable to MercadoLibre, Inc. per common share $1.73 $1.27 $0.75
       
Weighted average shares 44,138,397 44,124,018 44,086,892
       
Diluted EPS      
       
Diluted net income attributable to MercadoLibre, Inc. per common share $1.73 $1.27 $0.75
       
Weighted average shares 44,151,437 44,146,858 44,144,368
   
Consolidated statements of income  
   
 Three Months Ended December 31,
 20112010
 (Unaudited)
Net revenues $ 86,465,653 $ 62,316,230
Cost of net revenues (20,724,539) (13,794,314)
Gross profit 65,741,114 48,521,916
     
Operating expenses:    
Product and technology development (6,748,985) (4,430,275)
Sales and marketing  (19,401,416) (14,019,551)
General and administrative (10,624,821) (9,103,067)
Total operating expenses  (36,775,222) (27,552,893)
Income from operations 28,965,891 20,969,023
     
Other income (expenses):    
Interest income and other financial gains 2,868,565 1,857,787
Interest expense and other financial charges (1,086,099) (682,363)
Foreign currency gain / (loss)  272,183 (69,722)
Other income, net  (179,255) -- 
Net income before income / asset tax expense  30,841,285 22,074,725
     
Income / asset tax expense (9,219,854) (6,135,233)
Net income  $ 21,621,431 $ 15,939,493
     
Less: Net Income attributable to Noncontrolling Interest 15,764 -- 
Net income attributable to MercadoLibre, Inc. $ 21,605,667 $ 15,939,492
   
 Three Months Ended December 31,
 20112010
 (Unaudited)  
Basic EPS    
Basic net income attributable to MercadoLibre, Inc. per common share $0.47 $0.36
     
Weighted average shares 44,142,020 44,131,376
     
Diluted EPS    
Diluted net income attributable to MercadoLibre, Inc. per common share $0.47 $0.36
     
Weighted average shares 44,152,658 44,151,762
       
Consolidated statements of cash flows      
       
 Year Ended December 31,
 201120102009
       
Cash flows from operations:      
Net income  $76,780,053 $56,025,019 $33,208,793
Adjustments to reconcile net income to net cash provided by operating activities:      
Net Income attributable to noncontrolling Interest 16,286 --  -- 
Depreciation and amortization 7,268,075 4,921,650 3,893,752
Interest expense   --  213,878
Accrued interest (3,177,578) (504,874) 90,339
Stock-based compensation expense - stock options  --  244 1,752
Stock-based compensation expense - restricted shares  --  37,696 74,382
LTRP accrued compensation  4,079,265 3,479,066 1,924,149
Deferred income taxes 1,022,797 (7,053,030) (3,607,292)
Changes in assets and liabilities, net of the effect of the acquired business :      
Accounts receivable  (9,274,653) (7,063,942) (2,974,890)
Credit Card Receivables (19,494,707) (2,324,575) (942,407)
Prepaid expenses (436,310) (333,755) (287,836)
Other assets (6,532,978) (3,463,650) (2,591,353)
Accounts payable and accrued expenses 10,808,788 9,051,139 8,686,334
Funds payable to customers 27,875,755 15,458,416 12,421,412
Provisions  --  (63,549) 302,987
Other liabilities 490,838 (89,402) (713,014)
Net cash provided by operating activities 89,425,631 67,896,453 49,700,986
Cash flows from investing activities:      
Purchase of investments (379,044,395) (121,266,157) (80,060,909)
Proceeds from sale and maturity of investments 336,835,026 76,062,629 81,728,485
Payment for acquired businesses, net of cash acquired (5,468,180) --  -- 
Purchases of intangible assets (280,706) (416,450) (955,679)
Purchases of property and equipment (18,924,161) (13,214,043) (3,798,170)
Net cash used in investing activities  (66,882,416) (58,834,021) (3,086,273)
Cash flows from financing activities:      
Decrease in short term debt  --  --  (310,634)
Loans paid  --  (3,000,000) (15,000,000)
Dividends distribution (10,593,206) --  -- 
Stock options exercised 11,175 18,199 28,354
Net cash used in financing activities  (10,582,031) (2,981,801) (15,282,280)
Effect of exchange rate changes on cash and cash equivalents (1,409,973) 946,433 996,857
Net increase in cash and cash equivalents 10,551,211 7,027,064 32,329,290
Cash and cash equivalents, beginning of the year 56,830,466 49,803,402 17,474,112
       
Cash and cash equivalents, end of the year $67,381,677 $56,830,466 $49,803,402
       
 Year Ended December 31,
 201120102009
       
Supplemental cash flow information:      
Cash paid for interest $58,559 $5,781,058 $12,332,592
Cash paid for income and asset taxes $31,050,206 $22,253,947 $11,650,007
       
Acquisition of AutoPlaza.com      
Cash and cash equivalents $3,876 $ --  $ -- 
Tax credits 49,951 --  -- 
Noncurrent assets 99,522 --  -- 
Total assets acquired 153,349 --  -- 
Total liabilities assumed --  --  -- 
Net assets acquired 153,349 --  -- 
Goodwill and Identifiable Intangible Assets 8,966,744 --  -- 
Non-controlling interest (3,648,037)    
Total purchase price 5,472,056 --  -- 
Cash and cash equivalents acquired 3,876 --  -- 
Payment for acquired businesses, net of cash acquired $5,468,180 $ --  $ -- 
             
Financial results of reporting segments            
             
 Year Ended December 31, 2011
 BrazilArgentinaMexicoVenezuelaOther CountriesTotal
             
Net revenues $165,905,789 $56,714,941 $22,275,213 $34,828,878 $19,206,804 $298,931,625
Direct costs (96,910,310) (23,463,871) (12,472,204) (13,287,279) (10,062,446) (156,196,110)
Direct contribution 68,995,479 33,251,070 9,803,009 21,541,599 9,144,358 142,735,515
             
Operating expenses and indirect costs of net revenues           (42,963,350)
Income from operations           99,772,165
             
Other income (expenses):            
Interest income and other financial gains           9,905,829
Interest expense and other financial results           (3,648,733)
Foreign currency gains           2,353,005
Other income, net           73,894
Net income before income / asset tax expense           $108,456,160
             
 Year Ended December 31, 2010
 BrazilArgentinaMexicoVenezuelaOther CountriesTotal
             
Net revenues $122,825,076 $39,892,763 $18,950,450 $20,885,541 $14,161,883 $216,715,713
Direct costs (73,393,467) (19,649,506) (11,723,168) (9,875,510) (7,785,914) ($122,427,565)
Direct contribution 49,431,609 20,243,257 7,227,282 11,010,031 6,375,969 94,288,148
             
Operating expenses and indirect costs of net revenues           (19,689,585)
Income from operations           74,598,563
             
Other income (expenses):            
Interest income and other financial gains           4,931,215
Interest expense and other financial results           (7,601,671)
Foreign currency loss           (62,447)
Net income before income / asset tax expense           $71,865,660
             
 Year Ended December 31, 2009
        
 BrazilArgentinaMexicoVenezuelaOther CountriesTotal
             
Net revenues $93,087,758 $26,737,937 $15,314,982 $27,331,095 $10,371,849 $172,843,621
Direct costs (50,230,893) (12,506,604) (9,655,783) (13,717,899) (5,978,443) ($92,089,622)
Direct contribution 42,856,865 14,231,333 5,659,199 13,613,196 4,393,406 80,753,999
             
Operating expenses and indirect costs of net revenues           (24,720,280)
Income from operations           56,033,719
             
Other income (expenses):            
Interest income and other financial gains           2,695,109
Interest expense and other financial results           (13,357,554)
Foreign currency loss           (2,658,476)
Other expenses, net           -- 
Net income before income / asset tax expense           $42,712,798
             
Financial results of reporting segments            
             
 Three Months Ended December 31, 2011
 BrazilArgentinaMexicoVenezuelaOther CountriesTotal
             
Net revenues $45,246,546 $17,914,864 $6,062,213 $11,777,702 $5,464,328 $86,465,653
Direct costs (27,197,798) (7,618,197) (3,590,393) (4,190,282) (2,816,636) (45,413,306)
Direct contribution 18,048,748 10,296,667 2,471,820 7,587,420 2,647,692 41,052,347
             
Operating expenses and indirect costs of net revenues           (12,086,456)
Income from operations           28,965,891
             
Other income (expenses):            
Interest income and other financial gains           2,868,565
Interest expense and other financial results           (1,086,099)
Foreign currency gain           272,183
Other losses, net           (179,255)
Net income before income / asset tax expense           $30,841,285
             
 Three Months Ended December 31, 2010
 BrazilArgentinaMexicoVenezuelaOther CountriesTotal
             
Net revenues $34,614,541 $11,283,573 $5,088,529 $7,179,615 $4,149,973 $62,316,231
Direct costs (23,303,343) (5,663,817) (3,178,256) (3,115,680) (2,091,412) (37,352,508)
Direct contribution 11,311,198 5,619,756 1,910,273 4,063,935 2,058,561 24,963,723
             
Operating expenses and indirect costs of net revenues           (3,994,698)
Income from operations           20,969,025
             
Other income (expenses):            
Interest income and other financial gains           1,857,787
Interest expense and other financial results           (682,363)
Foreign currency loss           (69,722)
Net income before income / asset tax expense           $22,074,727
CONTACT: MercadoLibre, Inc.

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