Mercadolibre, Inc.
Feb 25, 2016

MercadoLibre, Inc. Reports Fourth Quarter and Full Year 2015 Financial Results

* Fourth quarter Sold Items of 36.8 million, up 27%, 128.4 million for Full Year

* Fourth Quarter Net Revenues of $180.7 million, growing 12% in USD, 69% in local currencies

* Fourth Quarter Net Income of $39.0 million resulting in a $0.88 EPS.  

BUENOS AIRES, Argentina, Feb. 25, 2016 (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 fiscal year ended December 31, 2015.

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, "We exited 2015 on a favorable trajectory across all our major initiatives, allowing us to wrap up one of the strongest years ever in terms of executing the strategic vision we set forth for the company. As we delve into our 2016 plan and beyond, we remain constant in our belief that product driven innovation and a customer-centric culture across our BU's will be the cornerstones of our efforts during the year."

Full Year 2015 Business Highlights

Fourth Quarter 2015 Operational Highlights

  Exiting the year with increased user engagement of our ecosystem through improved product offerings:

Fourth Quarter 2015 Financial Highlights

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


The following table summarizes certain key performance metrics for the three months ended December 31, 2015 and 2014.

  
  Three months ended December 31, (in MM)
  2015  2014  %YoY  %YoY Local
Currency
             
Total confirmed registered users at the end of period 144.6  120.9  19.6% - 
New confirmed registered users during the period 6.3  5.7  9.2% - 
Gross merchandise volume$  2,006.1 $  1,797.3  11.6% 85.8%
Items sold 36.8  29.0  27.0% - 
Total payment volume$  1,556.4 $  1,098.6  41.7% 97.0%
Total payment transactions 25.4  14.2  78.6% - 
     

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

  
  YoY Growth rates
Consolidated Net
Revenues
     
 Q4'14Q1'15Q2'15Q3'15Q4'15
Brazil 61% 58% 58% 47% 42%
Argentina 98% 94% 90% 83% 79%
Mexico 21% 32% 26% 26% 29%
Venezuela 253% 284% 284% 281% 272%
Others 61% 33% 12% 3% 14%
Total 109% 100% 88% 68% 69%
      

Conference Call and Webcast

The Company will host a conference call and audio webcast on February 25, 2016 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing +(970) 315-0420 or +(877) 303-7209 (Conference ID 51641541) 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

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

Excluding Venezuela — Given the current currency distortions and hyperinflation present in Venezuela, the Company's growth data disclosed above excludes the impact of the results of operations from its Venezuelan subsidiaries. The disclosure of this data enables investors to evaluate the company's operating performance from period to period without the distortions caused by Venezuela's hyperinflation and foreign exchange policies.

Free Cash Flow — Defined as cash flows from operating activities less property, equipment, intangible assets net of financial liabilities and payment for acquired business net of cash acquired.

Currency devaluations impact — Constant currency analysis is used in order to provide a better understanding of the impact on margins of the currency fluctuations. Constant currency estimates are calculated using this quarter's exchange rate as the constant rate.

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.

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.

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 platform (including MercadoPago) 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 MercadoLibre platform (including MercadoPago) and confirmed their registration. Since July '12, registration and confirmation take place in the same step of the registration flow.

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

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

About MercadoLibre

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

MercadoLibre.com serves millions of users and creates a market for a wide variety of goods and services in an easy, safe and efficient way. The site is among the top 50 in the world in terms of page views and is the leading retail platform in unique visitors in the major countries in which it operates according to metrics provided by comScore Networks.  The Company is listed on NASDAQ (Nasdaq: MELI) following its initial public offering in 2007.

For more information about the Company visit: http://investor.mercadolibre.com.

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

Consolidated balance sheets

    
 December 31, December 31,
  2015   2014 
Assets(In thousands)
Current assets:   
Cash and cash equivalents$ 166,881  $ 223,144 
Short-term investments  202,112    148,810 
Accounts receivable, net  28,428    46,672 
Credit cards receivables, net  131,946    85,162 
Prepaid expenses  6,007    3,458 
Inventory  222    
Deferred tax assets  12,290    11,520 
Other assets  9,577    13,984 
Total current assets  557,463    532,750 
Non-current assets:   
Long-term investments  187,621    205,265 
Property and equipment, net  81,633    91,545 
Goodwill  86,545    68,829 
Intangible assets, net  28,991    23,171 
Deferred tax assets  17,398    21,554 
Other assets  43,955    23,734 
Total non-current assets  446,143    434,098 
Total assets$ 1,003,606  $ 966,848 
    
Liabilities and Equity   
Current liabilities:   
Accounts payable and accrued expenses$ 62,038  $ 58,006 
Funds payable to customers  203,247    165,034 
Salaries and social security payable  32,918    28,777 
Taxes payable  10,092    26,013 
Loans payable and other financial liabilities  1,965    1,642 
Deferred tax liabilities  2,551    1,645 
Other liabilities  7,667    4,176 
Dividends payable  4,548    7,330 
Total current liabilities  325,026    292,623 
Non-current liabilities:   
Salaries and social security payable  10,422    11,326 
Loans payable and other financial liabilities  294,342    282,184 
Deferred tax liabilities  24,498    18,746 
Other liabilities  9,860    6,181 
Total non-current liabilities  339,122    318,437 
Total liabilities$ 664,148  $ 611,060 
    
Commitments and contingencies -   - 
    
Equity:   
    
Common stock, $0.001 par value, 110,000,000 shares authorized,   
44,156,854 and 44,154,572 shares issued and outstanding at December 31,   
2015 and December 31, 2014, respectively$ 44  $ 44 
Additional paid-in capital  137,923    137,645 
Retained earnings  440,770    353,173 
Accumulated other comprehensive loss  (239,279)   (135,074)
Total Equity  339,458    355,788 
Total Liabilities and Equity$ 1,003,606  $ 966,848 
        


Consolidated statements of income

 Year Ended December 31, Three Months Ended December 31,
  2015   2014   2013   2015   2014 
   (In thousands)   (In thousands)
Net revenues$651,790  $556,536  $472,595  $180,732  $161,370 
Cost of net revenues (214,994)  (158,978)  (130,077)  (63,162)  (47,665)
Gross profit 436,796   397,558   342,518   117,570   113,705 
          
Operating expenses:         
Product and technology development (76,423)  (53,600)  (40,888)  (22,497)  (16,027)
Sales and marketing (128,609)  (111,627)  (90,484)  (42,167)  (33,400)
General and administrative (76,342)  (62,364)  (57,607)  (19,215)  (19,041)
Impairment of Long-Lived Assets (16,226)  (49,496)         
Total operating expenses (297,600)  (277,087)  (188,979)  (83,879)  (68,468)
Income from operations 139,196   120,471   153,539   33,691   45,237 
          
Other income (expenses):         
Interest income and other financial gains 20,561   15,336   10,668   5,792   4,366 
Interest expense and other financial losses (20,391)  (11,659)  (2,356)  (4,229)  (4,941)
Foreign currency gains (losses) 11,125   (2,352)  1,258   17,772   5,299 
Net income before income / asset tax expense 150,491   121,796   163,109   53,026   49,961 
          
Income / asset tax expense (44,702)  (49,143)  (45,583)  (14,062)  (15,800)
Net income$105,789  $72,653  $117,526  $38,964  $34,161 
          
          
Less: Net Income attributable to Redeemable Noncontrolling Interest    72   19      16 
Net income attributable to MercadoLibre, Inc. shareholders$105,789  $72,581  $117,507  $38,964  $34,145 
          

 

 Year Ended December 31, Three Months Ended December 31,
  2015   2014   2013   2015   2014 
Basic EPS         
Basic net income attributable to MercadoLibre, Inc.         
Shareholders per common share$2.40  $1.63  $2.66  $0.88  $0.76 
Weighted average of outstanding common shares 44,155,680   44,153,884   44,152,600   44,156,800   44,154,412 
          
Diluted EPS         
Diluted net income attributable to MercadoLibre, Inc.         
Shareholders per common share$2.40  $1.63  $2.66  $0.88  $0.76 
Weighted average of outstanding common shares 44,155,680   44,153,884   44,152,600   44,156,800   44,154,412 
          
Cash Dividends declared 0.412   0.664   0.572   0.103   0.166 
          

 

Consolidated statements of cash flows             

       
  Year Ended December 31,
   2015   2014   2013 
  (In thousands)
Cash flows from operations:      
Net income attributable to MercadoLibre, Inc. Shareholders $105,789  $72,581  $117,507 
Adjustments to reconcile net income to net cash provided by operating activities:      
Net income attributable to Redeemable Noncontrolling Interest  -   72   19 
Unrealized Devaluation Loss, net  14,717   13,808   6,421 
Impairment of Long-Lived Assets  16,226   49,496  
Depreciation and amortization  23,209   16,947   11,879 
Accrued interest  (12,783)  (9,029)  (9,883)
Convertible bonds accrued interest and amortization of debt discount  17,272   7,874  
LTRP accrued compensation  10,213   11,852   11,645 
Deferred income taxes  4,354   (20,237)  (7,848)
Changes in assets and liabilities:      
Accounts receivable  (36,476)  (36,120)  (22,764)
Credit Card Receivables  (109,139)  (45,521)  (27,315)
Prepaid expenses  (3,907)  (157)  (2,075)
Inventory  (237)  
Other assets  (2,340)  (5,982)  (23,127)
Accounts payable and accrued expenses  63,668   68,780   26,037 
Funds payable to customers  119,353   61,072   47,558 
Other liabilities  1,765   1,675   2,986 
Interest received from investments  9,686   9,682   11,473 
Net cash provided by operating activities  221,370   196,793   142,513 
Cash flows from investing activities:      
Purchase of investments  (1,949,769)  (2,577,130)  (1,135,941)
Proceeds from sale and maturity of investments  1,875,516   2,330,836   1,174,790 
Payment for acquired businesses, net of cash acquired  (45,009)  (36,814)  (3,423)
Payment of remaining amount from business acquisition  -   (4,000) 
Purchases of intangible assets  (1,746)  (857)  (459)
Advance for property and equipment  (23,380)  
Purchases of property and equipment  (39,150)  (34,426)  (113,756)
Net cash used in investing activities  (183,538)  (322,391)  (78,789)
Cash flows from financing activities:      
Funds received from the issuance of convertible notes  -   330,000  
Transaction costs from the issuance of convertible notes  -   (8,084) 
Purchase of convertible note capped call  -   (19,668) 
Proceeds from loans payable and other finanacial liabilities  5,033    31,454 
Payments on loans payable and other financial liabilities  (9,059)  (7,704)  (15,937)
Dividends paid  (20,974)  (28,303)  (23,754)
Repurchase of Common Stock  (2,714)  (1,944)  (1,012)
Stock options exercised    3 
Net cash (used in) provided by financing activities  (27,714)  264,297   (9,246)
Effect of exchange rate changes on cash and cash equivalents  (66,381)  (55,840)  (15,682)
Net (decrease) increase in cash and cash equivalents  (56,263)  82,859   38,796 
Cash and cash equivalents, beginning of the year $223,144   140,285   101,489 
Cash and cash equivalents, end of the year $166,881  $223,144  $140,285 
             

Financial results of reporting segments

 Year Ended December 31, 2015
 Brazil Argentina Mexico Venezuela Other
Countries
 Total
 (In thousands)
Net revenues$  290,602  $  245,011  $  40,338  $  40,475  $  35,364  $  651,790 
Direct costs (180,394)  (134,750)  (31,282)  (15,287)  (24,605)  (386,318)
Impairment of Long-lived Assets -   -   -   (16,226)  -   (16,226)
Direct contribution 110,208   110,261   9,056   8,962   10,759   249,246 
            
Operating expenses and indirect costs of net revenues           (110,050)
Income from operations           139,196 
            
Other income (expenses):           
Interest income and other financial gains           20,561 
Interest expense and other financial losses           (20,391)
Foreign currency gain           11,125 
Net income before income / asset tax expense          $  150,491 
            
 Year Ended December 31, 2014
 Brazil Argentina Mexico Venezuela Other Countries Total
 (In thousands)
Net revenues$  273,638  $  150,668  $  37,669  $  58,026  $  36,535  $  556,536 
Direct costs (158,412)  (81,273)  (24,068)  (16,584)  (20,163)  (300,500)
Impairment of Long-lived Assets -   -   -   (49,496)  -   (49,496)
Direct contribution 115,226   69,395   13,601   (8,054)  16,372   206,540 
            
Operating expenses and indirect costs of net revenues           (86,069)
Income from operations           120,471 
            
Other income (expenses):           
Interest income and other financial gains           15,336 
Interest expense and other financial losses           (11,659)
Foreign currency gain           (2,352)
Net income before income / asset tax expense          $121,796 
            
 Year Ended December 31, 2013
 Brazil Argentina Mexico Venezuela Other Countries Total
 (In thousands)
Net revenues$  206,394  $  122,123  $  32,843  $  84,572  $  26,663  $  472,595 
Direct costs (119,423)  (66,493)  (18,558)  (29,579)  (12,339)  (246,392)
Direct contribution 86,971   55,630   14,285   54,993   14,324   226,203 
            
Operating expenses and indirect costs of net revenues           (72,664)
Income from operations           153,539 
            
Other income (expenses):           
Interest income and other financial gains           10,668 
Interest expense and other financial losses           (2,356)
Foreign currency gain           1,258 
Net income before income / asset tax expense          $163,109 
            


 Three Months December 31, 2015
 Brazil Argentina Mexico Venezuela Other Countries Total
 (In thousands)
Net revenues$  74,951  $  73,515  $  11,030  $  11,946  $  9,290  $  180,732 
Direct costs (52,988)  (42,203)  (10,107)  (4,787)  (8,178)  (118,263)
Direct contribution 21,963   31,312   923   7,159   1,112   62,469 
            
Operating expenses and indirect costs of net revenues           (28,777)
Income from operations           33,692 
            
Other income (expenses):           
Interest income and other financial gains           5,793 
Interest expense and other financial losses           (4,229)
Foreign currency gain           17,772 
Net income before income / asset tax expense          $  53,028 
            
 Three Months December 31, 2014
 Brazil Argentina Mexico Venezuela Other Countries Total
 (In thousands)
Net revenues$  79,628  $  48,486  $  10,365  $  12,842  $  10,049  $  161,370 
Direct costs (46,884)  (26,359)  (7,102)  (3,463)  (5,636)  (89,444)
Direct contribution 32,744   22,127   3,263   9,379   4,413   71,926 
            
Operating expenses and indirect costs of net revenues           (26,689)
Income from operations           45,237 
            
Other income (expenses):           
Interest income and other financial gains           4,366 
Interest expense and other financial losses           (4,941)
Foreign currency gain           5,299 
Net income before income / asset tax expense          $  49,961 
              

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (U.S. GAAP), we use free cash flows as non-GAAP measures.

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

Reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure can be found in the tables included in this press release.

Non-GAAP financial measures are provided to enhance investors' overall understanding of our current financial performance. Specifically, we believe that free cash flow provides useful information to both management and investors by excluding payments for the acquisition of property, equipment, of intangible assets and of acquired businesses net of cash acquired, that may not be indicative of our core operating results. In addition, we report free cash flows to investors because we believe that the inclusion of this measure provides consistency in our financial reporting.

Free cash flow represents cash from operating activities less payment for the acquisition of property, equipment and intangible assets and acquired businesses net of cash acquired. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our operations after the purchase of property, equipment, of intangible assets and of acquired businesses net of cash acquired. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in our cash balance for the period.

Reconciliation of Operating Cash Flows to Free Cash Flows:

     
  Three Months Ended December 31,
  
   2015   2014 
  (In millions)
     
Net Cash provided by Operating Activities $110.1  $58.4 
     
Payment for acquired businesses, net of cash acquired    (8.7)
     
Purchase of intangible assets  (0.2)  (0.3)
     
Purchases of property and equipment  (20.1)  (10.0)
     
Advance for property and equipment  (5.6)  
     
Free cash flow $84.2  $39.4 
     
The table above may not total due to rounding.    
     
     
CONTACT:

MercadoLibre, Inc.

Investor Relations

investor@mercadolibre.com

http://investor.mercadolibre.com