MercadoLibre, Inc. Reports Financial Results for Fourth Quarter 2013 and Full Year 2013
* Accelerating Net Revenues of
* Gross Merchandise Volume of
* Accelerating Total Payments Volume of
* Earnings per share during Q4'13 were
Financial Results Summary
For the three months ended
Items sold on
Gross profit for the fourth quarter of 2013 was
Total operating expenses during the fourth quarter 2013 were
Income from operations for the fourth quarter 2013 was
Net income before taxes was
Consequently, net income for the three months ended
Free cash flow, defined as cash from operating activities less payment for the acquisition of property, equipment, intangible assets and payment for acquired business net of cash acquired, was -
For the full year,
(*) See note on "Non-GAAP Financial Measures"
The following table summarizes certain key performance metrics for the three months ended
| Three months ended |
2013 | 2012 | %YoY | %YoY Constant USD |
| Total confirmed registered users at the end of period | 99.5 | 81.5 | 22.1% | -- |
| New confirmed registered users during the period | 4.5 | 4.3 | 4.2% | -- |
| Gross merchandise volume | 29.9% | 49.3% | ||
| Items sold | 22.8 | 19.0 | 20.1% | -- |
| Total payments volume | 42.1% | 66.1% | ||
| Total payments transactions | 9.0 | 6.7 | 33.8% | -- |
Table of Year-on-Year Local Currency Revenue Growth Rates by Quarter
| YoY Growth rates at previous years exchange rates | |||||
| Consolidated Net Revenues | |||||
| Q4'12 | Q1'13 | Q2'13 | Q3'13 | Q4'13 | |
| Brazil | 19% | 28% | 22% | 28% | 29% |
| Argentina | 62% | 63% | 66% | 66% | 69% |
| Mexico | 19% | 15% | 19% | 19% | 20% |
| Venezuela | 43% | 49% | 68% | 92% | 104% |
| Others | 15% | 13% | 19% | 13% | 15% |
| Total | 31% | 36% | 38% | 45% | 50% |
Conference Call and Webcast
The Company will host a conference call and audio webcast on
Definition of Selected Operational Metrics
Total confirmed registered users – Measure of the cumulative number of users who have registered on the
New confirmed registered users – Measure of the number of new users who have registered on the
Gross merchandise volume – Measure of the total U.S. dollar sum of all transactions completed through the
Items sold – Measure of the number of items sold/purchased through the
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 completed using MercadoPago.
Operating margin – Defined as income from operations as a percentage of net revenues.
Blended tax rate – Defined as income and asset tax expense as a percentage of income before income and assets tax.
Net income margin – Defined as net income as a percentage of net revenues.
Free
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
Founded in 1999,
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
For more information about the company visit: http://investor.mercadolibre.com.
The
Consolidated balance sheets
| 2013 | 2012 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 140,285,104 | $ 101,489,002 |
| Short-term investments | 76,593,214 | 93,694,805 |
| Accounts receivable, net | 25,884,260 | 19,837,022 |
| Credit cards receivables, net | 52,045,851 | 35,816,506 |
| Prepaid expenses | 3,836,081 | 2,080,079 |
| Deferred tax assets | 16,030,880 | 11,040,543 |
| Other assets | 11,488,845 | 11,403,218 |
| Total current assets | 326,164,235 | 275,361,175 |
| Non-current assets: | ||
| Long-term investments | 45,719,737 | 85,955,584 |
| Property and equipment, net | 131,371,909 | 37,726,222 |
| Goodwill | 55,101,218 | 60,366,063 |
| Intangible assets, net | 6,591,585 | 7,279,865 |
| Deferred tax assets | 3,014,905 | 5,862,247 |
| Other assets | 24,399,184 | 6,118,120 |
| Total non-current assets | 266,198,538 | 203,308,101 |
| Total assets | $ 592,362,773 | $ 478,669,276 |
| Liabilities and Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 34,405,333 | $ 23,976,613 |
| Funds payable to customers | 129,038,663 | 101,472,662 |
| Salaries and social security payable | 23,182,811 | 19,974,463 |
| Taxes payable | 17,854,110 | 19,210,568 |
| Loans payable and other financial liabilities | 13,370,823 | 84,570 |
| Dividends payable | 6,313,869 | 4,812,396 |
| Total current liabilities | 224,165,609 | 169,531,272 |
| Non-current liabilities: | ||
| Salaries and social security payable | 9,185,269 | 3,452,445 |
| Loans payable and other financial liabilities | 2,489,819 | 59,493 |
| Deferred tax liabilities | 5,339,359 | 8,975,290 |
| Other liabilities | 3,699,109 | 2,837,150 |
| Total non-current liabilities | 20,713,556 | 15,324,378 |
| Total liabilities | $ 244,879,165 | $ 184,855,650 |
| Commitments and contingencies (Note 15) | ||
| Redeemable noncontrolling interest | $ 4,000,000 | $ 4,000,000 |
| Equity: | ||
|
Common stock, |
$ 44,153 | $ 44,151 |
| Additional paid-in capital | 121,562,193 | 120,468,759 |
| Treasury stock | (1,012,216) | -- |
| Retained earnings | 310,345,448 | 218,083,844 |
| Accumulated other comprehensive loss | (87,455,970) | (48,783,128) |
| Total Equity | 343,483,608 | 289,813,626 |
| Total Liabilities, Redeemable Noncontrolling Interest and Equity | $ 592,362,773 | $ 478,669,276 |
Consolidated statements of income
| Year Ended |
|||
| 2013 | 2012 | 2011 | |
| Net revenues | $ 472,594,709 | $ 373,601,494 | $ 298,931,625 |
| Cost of net revenues | (130,076,879) | (98,085,644) | (72,055,835) |
| Gross profit | 342,517,830 | 275,515,850 | 226,875,790 |
| Operating expenses: | |||
| Product and technology development | (40,888,139) | (28,626,880) | (23,349,787) |
| Sales and marketing | (90,484,296) | (72,002,954) | (64,968,755) |
| General and administrative | (57,606,340) | (45,228,145) | (38,785,083) |
| Total operating expenses | (188,978,775) | (145,857,979) | (127,103,625) |
| Income from operations | 153,539,055 | 129,657,871 | 99,772,165 |
| Other income (expenses): | |||
| Interest income and other financial gains | 10,668,593 | 11,877,375 | 9,905,829 |
| Interest expense and other financial losses | (2,355,929) | (1,138,379) | (3,648,733) |
| Foreign currency gains | 1,258,476 | 11,597 | 2,353,005 |
| Other (losses) gains, net | (751) | (190,938) | 73,894 |
| Net income before income / asset tax expense | 163,109,444 | 140,217,526 | 108,456,160 |
| Income / asset tax expense | (45,583,181) | (38,871,379) | (31,659,821) |
| Net income | $ 117,526,263 | $ 101,346,147 | $ 76,796,339 |
| Less: Net Income attributable to Redeemable Noncontrolling Interest | 18,825 | 98,849 | 16,286 |
|
Net income attributable to |
$ 117,507,438 | $ 101,247,298 | $ 76,780,053 |
| Year Ended |
|||
| 2013 | 2012 | 2011 | |
| Basic EPS | |||
|
Basic net income attributable to |
$ 2.66 | $ 2.30 | $ 1.73 |
| Weighted average of outstanding common shares | 44,152,600 | 44,147,861 | 44,138,397 |
| Diluted EPS | |||
|
Diluted net income attributable to |
$ 2.66 | $ 2.30 | $ 1.73 |
| Weighted average of outstanding common shares | 44,152,600 | 44,149,838 | 44,151,437 |
| Three Months Ended |
||
| 2013 | 2012 | |
| (Unaudited) | ||
| Net revenues | $ 134,630,171 | $ 103,754,645 |
| Cost of net revenues | (36,205,508) | (27,402,861) |
| Gross profit | 98,424,663 | 76,351,784 |
| Operating expenses: | ||
| Product and technology development | (9,670,938) | (6,686,830) |
| Sales and marketing | (23,147,365) | (19,182,428) |
| General and administrative | (13,487,284) | (11,354,005) |
| Total operating expenses | (46,305,587) | (37,223,263) |
| Income from operations | 52,119,076 | 39,128,521 |
| Other income (expenses): | ||
| Interest income and other financial gains | 2,295,481 | 2,880,600 |
| Interest expense and other financial losses | (976,413) | (273,902) |
| Foreign currency gains | 2,331,729 | 489,094 |
| Other gains, net | 43,806 | 31 |
| Net income before income / asset tax expense | 55,813,679 | 42,224,344 |
| Income / asset tax expense | (14,977,714) | (11,977,955) |
| Net income | $ 40,835,965 | $ 30,246,388 |
| Less: Net Income attributable to Redeemable Noncontrolling Interest | 72,037 | 55,985 |
|
Net income attributable to |
$ 40,763,928 | $ 30,190,403 |
| Three Months Ended |
||
| 2013 | 2012 | |
| (Unaudited) | ||
| Basic EPS | ||
|
Basic net income attributable to |
$ 0.93 | $ 0.69 |
| Weighted average of outstanding common shares | 44,153,185 | 44,150,920 |
| Diluted EPS | ||
|
Diluted net income attributable to |
$ 0.93 | $ 0.69 |
| Weighted average of outstanding common shares | 44,153,185 | 44,152,895 |
| Consolidated statements of cash flows | |||
| Year Ended |
|||
| 2013 | 2012 | 2011 | |
| Cash flows from operations: | |||
|
Net income attributable to |
$ 117,507,438 | $ 101,247,298 | $ 76,780,053 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Net income attributable to Redeemable Noncontrolling Interest | 18,825 | 98,849 | 16,286 |
|
Net Devaluation Loss in |
6,420,929 | -- | -- |
| Depreciation and amortization | 11,878,565 | 8,959,293 | 7,268,075 |
| Accrued interest | (9,882,991) | (7,630,203) | (7,354,746) |
| LTRP accrued compensation | 11,645,077 | 4,442,822 | 4,079,265 |
| Deferred income taxes | (7,847,513) | (492,362) | 1,022,797 |
| Changes in assets and liabilities: | |||
| Accounts receivable | (22,764,177) | (8,651,951) | (9,274,653) |
| Credit Card Receivables | (27,315,403) | (15,570,142) | (19,494,707) |
| Prepaid expenses | (2,074,543) | (898,959) | (436,310) |
| Other assets | (23,127,493) | (5,809,218) | (6,532,978) |
| Accounts payable and accrued expenses | 26,037,488 | 18,061,683 | 10,808,788 |
| Funds payable to customers | 47,557,504 | 39,889,201 | 27,875,755 |
| Other liabilities | 2,986,452 | 1,153,610 | 490,838 |
| Interest received from investments | 11,473,203 | 5,091,468 | 4,177,168 |
| Net cash provided by operating activities | 142,513,361 | 139,891,389 | 89,425,631 |
| Cash flows from investing activities: | |||
| Purchase of investments | (1,135,940,553) | (539,355,434) | (379,044,395) |
| Proceeds from sale and maturity of investments | 1,174,789,615 | 472,871,652 | 336,835,026 |
| Payment for acquired businesses, net of cash acquired | (3,423,439) | -- | (5,468,180) |
| Purchases of intangible assets | (458,804) | (1,390,654) | (280,706) |
| Purchases of property and equipment | (113,755,566) | (16,747,746) | (18,924,161) |
| Net cash used in investing activities | (78,788,747) | (84,622,182) | (66,882,416) |
| Cash flows from financing activities: | |||
| Proceeds from loans payable and other financial liabilities | 31,453,613 | -- | -- |
| Payments on loans payable and other financial liabilities | (15,936,551) | -- | -- |
| Dividends paid | (23,754,005) | (17,968,004) | (10,593,206) |
| Common Stock repurchased | (1,012,225) | -- | -- |
| Stock options exercised | 3,020 | 5,700 | 11,175 |
| Net cash used in financing activities | (9,246,148) | (17,962,304) | (10,582,031) |
| Effect of exchange rate changes on cash and cash equivalents | (15,682,364) | (3,199,578) | (1,409,973) |
| Net increase in cash and cash equivalents | 38,796,102 | 34,107,325 | 10,551,211 |
| Cash and cash equivalents, beginning of the year | 101,489,002 | 67,381,677 | 56,830,466 |
| Cash and cash equivalents, end of the year | $ 140,285,104 | $ 101,489,002 | $ 67,381,677 |
| Year Ended |
|||
| 2013 | 2012 | 2011 | |
| Supplemental cash flow information: | |||
| Cash paid for interest | $ 657,776 | $ 68,916 | $ 58,559 |
| Cash paid for income and asset taxes | $ 55,995,590 | $ 38,837,721 | $ 31,050,206 |
| Non-cash financing activities: | |||
| Stock based compensation | $ 58,492 | $ -- | $ -- |
| LTRP shares issued | $ 1,031,933 | $ -- | $ -- |
| Acquisition of business | 2013 (1) | 2012 | 2011 (2) |
| Cash and cash equivalents | $ 31,058 | $ -- | $ 3,876 |
| Accounts receivable | 537,706 | -- | -- |
| Tax credits | -- | -- | 49,951 |
| Other current assets | 14,674 | -- | -- |
| Non current assets | 94,367 | -- | 99,522 |
| Fixed Assets | 5,800 | -- | -- |
| Total assets acquired | 683,605 | -- | 153,349 |
| Accounts payable and accrued expenses | 143,071 | -- | -- |
| Taxes payable | 179,545 | -- | -- |
| Payroll and social security payable | 123,098 | -- | -- |
| Total liabilities assumed | 445,714 | -- | -- |
| Net assets acquired | 237,891 | -- | 153,349 |
| Goodwill, Identifiable Intangible Assets and deferred tax liabilities | 2,668,661 | -- | 8,966,744 |
| Escrow for employment relationship | 547,945 | -- | -- |
| Non-controlling interest | -- | -- | (3,648,037) |
| Total purchase price | 3,454,497 | -- | 5,472,056 |
| Cash and cash equivalents acquired | 31,058 | -- | 3,876 |
| Payment for acquired businesses, net of cash acquired | $ 3,423,439 | $ -- | $ 5,468,180 |
| (1) Related to the acquisition of software development company - Neosur | |||
| (2) Related to the acquisition of Autoplaza.com | |||
| Financial results of reporting segments | ||||||
| Year Ended |
||||||
| Other Countries | Total | |||||
| Net revenues | $ 206,394,480 | $ 122,123,347 | $ 32,843,482 | $ 84,572,485 | $ 26,660,915 | $ 472,594,709 |
| Direct costs | (119,422,924) | (66,492,770) | (18,558,010) | (29,578,762) | (12,339,112) | (246,391,578) |
| Direct contribution | 86,971,556 | 55,630,577 | 14,285,472 | 54,993,723 | 14,321,803 | 226,203,131 |
| Operating expenses and indirect costs of net revenues | (72,664,076) | |||||
| Income from operations | 153,539,055 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 10,668,593 | |||||
| Interest expense and other financial losses | (2,355,929) | |||||
| Foreign currency gain | 1,258,476 | |||||
| Other losses, net | (751) | |||||
| Net income before income / asset tax expense | $ 163,109,444 | |||||
| Year Ended |
||||||
| Other Countries | Total | |||||
| Net revenues | $ 179,639,592 | $ 88,513,640 | $ 26,987,130 | $ 54,676,170 | $ 23,784,962 | $ 373,601,494 |
| Direct costs | (104,501,652) | (41,841,587) | (14,912,375) | (17,768,989) | (11,458,627) | (190,483,230) |
| Direct contribution | 75,137,940 | 46,672,053 | 12,074,755 | 36,907,181 | 12,326,335 | 183,118,264 |
| Operating expenses and indirect costs of net revenues | (53,460,393) | |||||
| Income from operations | 129,657,871 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 11,877,375 | |||||
| Interest expense and other financial losses | (1,138,379) | |||||
| Foreign currency gain | 11,597 | |||||
| Other losses, net | (190,938) | |||||
| Net income before income / asset tax expense | 140,217,526 | |||||
| Year Ended |
||||||
| Other Countries | Total | |||||
| 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 losses | (3,648,733) | |||||
| Foreign currency gain | 2,353,005 | |||||
| Other income, net | 73,894 | |||||
| Net income before income / asset tax expense | $ 108,456,160 | |||||
| Three Months Ended |
||||||
| Other Countries | Total | |||||
| (Unaudited) | ||||||
| Net revenues | $ 55,249,748 | $ 34,362,444 | $ 9,086,505 | $ 28,877,100 | $ 7,054,374 | $ 134,630,171 |
| Direct costs | (30,193,588) | (18,427,699) | (4,207,763) | (9,169,908) | (3,391,509) | (65,390,467) |
| Direct contribution | 25,056,160 | 15,934,745 | 4,878,742 | 19,707,192 | 3,662,865 | 69,239,704 |
| Operating expenses and indirect costs of net revenues | (17,120,628) | |||||
| Income from operations | 52,119,076 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 2,295,481 | |||||
| Interest expense and other financial losses | (976,413) | |||||
| Foreign currency gain | 2,331,729 | |||||
| Other gains, net | 43,806 | |||||
| Net income before income / asset tax expense | $ 55,813,679 | |||||
| Three Months Ended |
||||||
| Other Countries | Total | |||||
| (Unaudited) | ||||||
| Net revenues | $ 47,067,048 | $ 25,713,148 | $ 7,620,346 | $ 16,803,819 | $ 6,550,285 | $ 103,754,646 |
| Direct costs | (26,395,391) | (12,884,121) | (3,745,018) | (5,134,006) | (2,890,020) | (51,048,556) |
| Direct contribution | 20,671,657 | 12,829,027 | 3,875,328 | 11,669,813 | 3,660,265 | 52,706,090 |
| Operating expenses and indirect costs of net revenues | (13,577,569) | |||||
| Income from operations | 39,128,521 | |||||
| Other income (expenses): | ||||||
| Interest income and other financial gains | 2,880,600 | |||||
| Interest expense and other financial losses | (273,902) | |||||
| Foreign currency loss | 489,094 | |||||
| Other gains, net | 31 | |||||
| Net income before income / asset tax expense | $ 42,224,344 | |||||
Non-GAAP Financial Measures
To supplement our interim condensed consolidated financial statements presented in accordance with generally accepted accounting principles in
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 |
||
| 2013 | 2012 | |
| Net Cash provided by Operating Activities | $ 19.7 | $ 56.2 |
| Purchase of intangible assets | (0.5) | (0.0) |
| Purchases of property and equipment | (37.9) | (5.1) |
| Free cash flows | $ (18.7) | $ 51.1 |
| The table above may not total due to rounding. | ||
As of December 31, 2013, the exchange rate used to re-measure our net monetary assets of our Venezuelan operations was the official rate of 6.30 Bolivares Fuertes per U.S. dollar and transactions carried out by the Company's Venezuelan subsidiaries were re-measured at the monthly average exchange rate for the year ended
On
As a result of the above described change in regulations, the Company will have to use the auction resulting SICAD exchange rate to re-measure the Venezuelan subsidiaries' non-U.S. dollar denominated monetary assets and liabilities from
Foreign Currency Sensitivity Analysis – Venezuela Segment
In order to assist investors in their overall understanding of the impact of a hypothetical Venezuelan devaluation on our Venezuelan segment reporting, we developed a scenario that approximates a 60% devaluation of the SICAD rate as of the date of this release. Under this analysis, the assumed exchange rate was applied starting on
| Year Ended |
Year Ended |
|||||
| Other Countries | Total | Other Countries | Total | |||
| Net revenues | $ 84,572,485 | $ 388,022,224 | $ 472,594,709 | $ 28,101,429 | $ 388,022,224 | $ 416,123,653 |
| Direct costs | (29,578,762) | (216,812,816) | (246,391,578) | (13,411,094) | (216,812,816) | (230,223,910) |
| Direct contribution | $ 54,993,723 | $ 171,209,408 | 226,203,131 | $ 14,690,335 | $ 171,209,408 | 185,899,744 |
| Operating expenses and indirect costs of net revenues | (72,664,076) | (72,664,076) | ||||
| Income from operations | $ 153,539,055 | $ 113,235,668 | ||||
| Direct Contribution Margin % | 65.0% | 44.1% | 47.9% | 52.3% | 44.1% | 44.7% |
| Income from operations Margin % | 32.5% | 27.2% | ||||
CONTACT:MercadoLibre, Inc. Investor Relations [email protected]http://investor.mercadolibre.com
Source: