-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PoEsOLVA3DGv5GDmF3GDDvwLjMpyP233WpF9F2YzqPviYbnmn37a4rdQgHosuouc RhlGp9aYcuPz82Bs2D8bYQ== 0001171843-10-000236.txt : 20100222 0001171843-10-000236.hdr.sgml : 20100222 20100222160117 ACCESSION NUMBER: 0001171843-10-000236 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100222 DATE AS OF CHANGE: 20100222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCADOLIBRE INC CENTRAL INDEX KEY: 0001099590 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33647 FILM NUMBER: 10622738 BUSINESS ADDRESS: STREET 1: 4890 SUBSUELO 1430 BUENOS AIRES CITY: BUENOS AIRES ARGENTINA STATE: C1 ZIP: 00000 BUSINESS PHONE: 000-000-0000 8-K 1 document.htm FORM 8-K FILING DOCUMENT Form 8-K Filing

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 22, 2010  


MercadoLibre, Inc.
(Exact name of registrant as specified in its charter)


Delaware
 
001-33647
 
98-0212790
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer Identification No.)


 
Tronador 4890, 8th Floor, Buenos Aires, Argentina
 
C1430DNN
 
  (Address of principal executive offices)   (Zip Code)  

Registrant's telephone number, including area code:   011-54-11-5352-8000



________________________________________________________________________________
(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))

Item 2.02. Results of Operations and Financial Condition.

On February 22, 2010, MercadoLibre, Inc. (the "Company") issued a press release regarding its earnings for the three months ended December 31, 2009 and full year 2009. A copy of this release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The disclosure contained in Item 2.02 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(c)       Exhibits.

99.1    Press Release issued by the Company on February 22, 2010.


SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    MercadoLibre, Inc.
(Registrant)

February 22, 2010
(Date)
  /s/   HERNÁN KAZAH
HERNÁN KAZAH
Chief Financial Officer


  Exhibit Index
  99.1 Press release dated February 22, 2010






EX-99.1 2 newsrelease.htm PRESS RELEASE MercadoLibre, Inc. Reports Financial Results for Fourth Quarter and Full Year 2009

EXHIBIT 99.1

MercadoLibre, Inc. Reports Financial Results for Fourth Quarter and Full Year 2009

Fourth quarter gross merchandise volume increases 50% to $786.9 million

Fourth quarter revenue increases 47% to $49.0 million, despite Venezuelan
translation impact of -$7 million in the quarter

Full year net income increases 77% to $33.2 million

BUENOS AIRES, Argentina, Feb. 22, 2010 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq:MELI) (http://www.mercadolibre.com), host of the largest online commerce platform in Latin America, today reported financial results for the fourth quarter and full year ended December 31, 2009.

Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc. commented, "We are extremely pleased with our results for 2009, as we have successfully executed against our growth plan for the year. During 2009,we continued to grow our business at an uninterrupted pace. Our strong performance highlights MercadoLibre's outstanding execution as well as our ability to leverage strong regional Internet growth trends."

Financial Results

Fourth Quarter Results Summary

Consolidated net revenues for the three months ended December 31, 2009 grew to $49.0 million, representing 46.5% year-over-year growth in US dollars. In local currencies year-over-year net revenues grew 48.8% for the quarter.

Results for the quarter were negatively impacted as the company decided to translate financial results from its Venezuelan operations at the "parallel" exchange rate of 5.67 bolivars instead of the official rate which was 2.15, and is now 4.3. Excluding the impact of these changes, consolidated net revenue would have been $56.0 million, a 67.5% year-over-year growth. 

Revenue growth was solid in both the Marketplace and Payments businesses. Specifically, Marketplace revenue grew 31.1% to $34.1 million while Payments revenue grew 100.9% to $14.9 million.

Both platforms benefited from strong growth in items sold, gross merchandise volume, total payments, and total payments volume. Items sold on MercadoLibre grew 47.3% to 8.6 million, representing the seventh consecutive quarter in which this key metric has accelerated. Gross merchandise volume grew 50.3% over the prior-year period to $786.9 million. Total payments transactions grew 107.7% to 1.0 million when compared to the fourth quarter of 2008. Total payments volume increased 145.7% to $135.8 million during the fourth quarter of 2009.

Gross profit grew 43.3% to $38.7 million compared with the fourth quarter of 2008. Gross profit margin contracted slightly to 78.9% from 80.7% for the prior year period, as the lower gross margin Payments business grew faster than the Marketplace business.

Income from operations grew 60.2% to $17.9 million in the fourth quarter compared to the fourth quarter of 2008. Operating income margin improved to 36.5% for the fourth quarter of 2009 from 33.4% for the same period in 2008.

Net income for the three-month period ending December 31, 2009 increased 42.5% when compared to the same period of 2008 to $11.3 million. Earnings per share were $0.26 for the fourth quarter of 2009 and $0.18 for the fourth quarter of 2008. Excluding the impact of the Venezuelan translation effect, net income would have grown 71.1% year over year.

Full Year Results Summary

Revenue for the full year ended December 31, 2009 increased 26.1% to $172.8 million compared with $137.0 million for the full year ended December 31, 2008. In local currencies, year-over-year net revenues grew 42.6%. 

Marketplace revenue for the full year 2009 grew 17.0% over 2008 to $128.2 million, while Payments revenue grew 62.6% to $44.6 million. 

Gross profit increased 25.0% to $136.9 million for 2009 from $109.5 million for the prior year. Gross profit margin was 79.2% for the full year of 2009 and 79.9% for the full year of 2008.

Income from operations increased 49.3% to $56.0 million for 2009 from $37.5 million in 2008. Operating income margin for the full year 2009 increased to 32.4% and 27.4% for 2008.

Net income for the full year ended December 31, 2009 was $33.2 million, compared to $18.8 million during 2008, an increase of 76.5%. Earnings per basic share were $0.75 for 2009 and $0.43 for 2008. 

Net cash provided by operating activities decreased 10.9% to $49.7 million for 2009 compared to $55.8 million for 2008. Cash provided by operating activities in 2008 included approximately $35M mostly related to the one-off effect of discounting previous quarters MercadoPago credit cards receivables in October. Free cash flow, a non-GAAP metric defined as net cash provided by operating activities less property and equipment investments, totaled $45.9 million for 2009 compared to $50.9 million for 2008.

As of December 31, 2009, cash and cash equivalents, short-term investments and long-term investments totaled $91.0 million.

Key Performance Metrics

The following table summarizes certain key performance metrics for the year and quarter ended December 31 2009 and 2009:

 (in millions of dollars) Year ended
December 31,
Three Months
ended
December 31,
  2008 2009 2008 2009
Total confirmed registered users at end of period/year 33.7 42.6 33.7 42.6
New confirmed registered users during period/year 8.8 8.8 1.7 2.4
Gross merchandise volume $2,078.9 $2,750.7 $523.7 $786.9
Number of items sold 21.1 29.5 5.8 8.6
Total payment volume $255.9 $382.5 $55.3 $135.8
Total payment transactions 1.9 3.1 0.5 1.0

Venezuelan translation impact

The following table summarizes each of net revenue, income from operations, net income, earnings per basic share, for the quarter ended December 31, 2009 and 2008 using the parallel exchange rate and using the exchange rate of Bolivars $2.15 per U.S. dollar.

(in millions of dollars except for EPS) Quarter ended December 31,
using exchange rate of
Bs. 2.15 per dollar
Quarter ended
December 31,
using
exchange
rate of
Bs. 5.67
per dollar
  2008 (1) 2009 (1) 2009 (2)
Net revenues 33.4 56.0 49.0
Income from operations 11.2 20.7 17.9
Net Income 7.9 13.6 11.3
Earnings per basic share 0.18 0.31 0.26

(1) Using the exchange rate of Bolivars $2.15 per U.S. dollar.
(2) Using the parallel exchange rate for the quarter Bolivars $ 5.67 per U.S. dollar.

Conference Call and Webcast

MercadoLibre will host a conference call and audio webcast on February 22, 2010 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (970) 315-0420  and requesting inclusion in the MercadoLibre conference call. The live conference call can also 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 (Successful items) ― 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.

Gross profit margin ― Defined as gross profit as a percentage of net revenues.

Operating income 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.

Blended tax rate ― Defined as income and alternative income taxes plus deferred income tax as a percentage of pre-tax income.

Effective tax rate ― Defined as the provision for income taxes as a percentage of pre-tax income.

Local currency financial metric growth ― Calculated by applying the average 2008 monthly exchange rates for each month of the period during 2008 to the results during the corresponding months in 2009, so as to calculate what the growth would have been had exchange rates been the same throughout both periods.

About MercadoLibre

Founded in 1999 and headquartered in Buenos Aires, Argentina, 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 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 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

Forward-Looking Statements

Any statements contained in this press release that are not statements of historical fact, including statements about the company's beliefs and expectations, are forward looking statements and should be evaluated as such. Such forward-looking statements reflect, among other things, the company's current expectations, plans, projections and strategies, anticipated financial results, future events and financial trends affecting the company's business, all of which are subject to known or unknown risk and uncertainties that may cause the company's actual results to differ materially from those expressed or implied by these forward-looking statements, including general market conditions, adverse changes in the company's markets as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the company's Annual Report on Form 10-K for the year ended December 31, 2009 which it expects to file with the SEC in February 2010, and will be available on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of February 22, 2010 and MercadoLibre undertakes no duty to update this information. Because of the risks, uncertainties and assumptions, investors should not place undue reliance on any forward-looking statements.

Financial Results Tables

Consolidated balance sheets
              December 31,
2009
  December 31,
2008
Assets      
Current assets:              
  Cash and cash equivalents       $ 49,803,402   $ 17,474,112
  Short-term investments       14,580,185    31,639,400
  Accounts receivable, net       4,868,377    3,856,392
  Funds receivable from customers     3,785,802    2,322,416
  Prepaid expenses       547,138    426,869
  Deferred tax assets       5,481,182    1,628,871
  Other assets         3,068,930    2,953,164
    Total current assets       82,135,016   60,301,224
Non-current assets:              
  Long-term investments       26,627,357   9,218,153
  Property and equipment, net       5,948,276   5,940,160
  Goodwill and intangible assets, net     64,338,564   72,911,546
  Deferred tax assets       2,897,492   14,270
  Other assets         667,944   8,353,396
    Total non-current assets       100,479,633   96,437,525
                   
    Total assets         $ 182,614,649   $ 156,738,749
                   
Liabilities and Shareholders' Equity      
Current liabilities:              
  Accounts payable and accrued expenses     $ 11,583,053   $ 16,941,173
  Funds payable to customers       31,453,410    14,727,891
  Social security payable       7,428,340    4,387,943
  Taxes payable         6,797,516    4,989,704
  Loans payable and other financial liabilities     3,213,992    14,963,421
  Provisions         16,581    299,753
    Total current liabilities       60,492,892   56,309,885
Non-current liabilities:            
  Social security payable       1,355,006   339,854
  Loans payable          --   3,050,061
  Deferred tax liabilities       5,170,799   2,556,120
  Other liabilities          1,402,715   1,058,848
    Total non-current liabilities       7,928,520   7,004,883
    Total liabilities       $ 68,421,412   $ 63,314,768
                   
Shareholders' equity:            
                   
  Common stock, $0.001 par value,
 110,000,000 shares authorized,
       
   44,120,269 and 44,070,367 shares issued
 and outstanding at December 31, 2009
     
   and December 31, 2008, respectively     $ 44,120   $ 44,071
  Additional paid-in capital       120,257,998    119,807,007
  Retained earnings / (Accumulated deficit)       17,656,537    (15,552,256)
  Accumulated other comprehensive loss     (23,765,418)    (10,874,841)
    Total shareholders' equity       114,193,237   93,423,981
    Total liabilities and shareholders' equity     $ 182,614,649   $ 156,738,749
   Consolidated statements of income
            Year Ended December 31,
            2009   2008   2007
             
Net revenues     $ 172,843,621   $ 137,022,620   $ 85,126,341
Cost of net revenues     (35,958,050)   (27,536,573)   (18,272,940)
Gross profit     136,885,571   109,486,047   66,853,401
                     
Operating expenses:              
  Product and technology development   (12,140,521)   (7,307,008)   (4,369,376)
  Sales and marketing      (42,861,735)   (39,975,307)   (27,598,683)
  General and administrative     (25,849,596)   (22,759,931)   (13,223,522)
  Compensation cost related to acquisitions   --   (1,919,870)   --
   Total operating expenses              (80,851,852)   (71,962,116)   (45,191,581)
Income from operations     56,033,719   37,523,931   21,661,820
                     
Other income (expenses):              
  Interest income and other financial gains   2,695,109   1,822,385   1,609,403
  Interest expense and other financial charges   (13,357,554)   (8,442,427)   (2,737,901)
  Foreign currency loss     (2,658,476)   (1,531,144)   (3,106,515)
  Other income (expenses), net    --   73,159   (3,006,416)
Net income before income / asset tax expense  42,712,798   29,445,904   14,420,391
                     
Income / asset tax expense     (9,504,005)   (10,634,243)   (4,727,451)
Net income      $ 33,208,793   $ 18,811,661   $ 9,692,940
                     
Accretion of preferred stock     --   --   (309,299)
Net income available to common shareholders     $ 33,208,793   $ 18,811,661   $ 9,383,641
            Year Ended December 31,
            2009   2008   2007
Basic EPS              
  Basic net income per common share   $ 0.75   $ 0.43   $ 0.22
                     
  Weighted average shares          44,086,892        44,239,443        25,149,405
                     
                     
Diluted EPS              
  Diluted net income per common share               $ 0.75   $ 0.42   $ 0.22
  Weighted average shares     44,144,368   44,348,950   25,478,336
  Consolidated statements of income
            Three Months Ended December 31,
            2009   2008
             
Net revenues         $ 49,020,045   $ 33,449,739
Cost of net revenues       (10,337,916)    (6,460,230)
Gross profit         38,682,129   26,989,509
                 
Operating expenses:            
  Product and technology development      (3,124,460)    (2,089,803)
  Sales and marketing        (11,519,475)    (9,070,276)
  General and administrative       (6,163,963)    (4,671,508)
  Compensation cost related to acquisitions     --    -- 
   Total operating expenses        (20,807,898)   (15,831,587)
Income from operations       17,874,231   11,157,922
                 
Other income (expenses):            
  Interest income and other financial gains     580,300    472,317
  Interest expense and other financial charges     (3,639,552)    (4,988,757)
  Foreign currency loss       112,249    4,158,793
  Other income (expenses), net      --    31,286
Net income before income / asset tax expense  14,927,228   10,831,561
                 
Income / asset tax expense       (3,641,659)    (2,910,464)
Net income          $ 11,285,569   $ 7,921,097
                 
Accretion of preferred stock       --   --
Net income available to common shareholders     $ 11,285,569   $ 7,921,097
                 
                 
            Three Months Ended December 31,
            2009   2008
Basic EPS              
  Basic net income per common share     $ 0.26   $ 0.18
                 
  Weighted average shares       44,108,207   44,264,906
                 
                 
Diluted EPS              
  Diluted net income per common share     $ 0.26   $ 0.18
  Weighted average shares       44,143,281   44,369,635
  Consolidated statements of cash flows
              Year Ended December 31,
              2009   2008   2007
               
Cash flows from operations:              
  Net income         $33,208,793   $18,811,661   $9,692,940
  Adjustments to reconcile net income
 to net cash provided by
         
   operating activities:              
    Depreciation and amortization      3,893,752   3,335,673   2,307,649
    Foreign currency gains     --   (7,827,112)   --
    Interest expense      213,878   300,368   --
    Stock-based compensation expense -
 stock options
 1,752   4,719   15,477
    Stock-based compensation expense -
 restricted shares
 74,382   105,560   15,966
    LTRP accrued compensation       1,924,149    839,303   --
    Change in fair value of warrants    --    --   3,045,992
    Deferred income taxes      (3,607,292)   (2,151,858)   (198,368)
    Changes in assets and liabilities,
 excluding the effect of acquisitions:
         
      Accounts receivable       (2,974,890)   4,026,218   (736,431)
      Funds receivable from customers    (942,407)   26,573,209   (15,517,486)
      Prepaid expenses      (287,836)   (153,582)   56,399
      Other assets        (2,591,353)   (1,415,575)   (967,264)
      Accounts payable and accrued expenses    8,686,334   10,610,141   4,282,955
      Funds payable to customers      12,421,412   2,294,847   5,423,976
      Provisions        302,987   (1,277,664)   (274,101)
      Other liabilities      (713,014)   1,645,976   689,154
      Accrued interest      90,339   57,293   (228,877)
    Net cash provided by operating activities    49,700,986   55,779,177   7,607,981
Cash flows from investing activities:            
  Purchase of investments      (80,060,909)   (110,056,368)   (75,267,070)
  Proceeds from sale and maturity of investments    81,728,485   115,342,531   28,920,382
  Payment for businesses acquired,
 net of cash acquired
 --    (39,181,473)   --
  Purchases of intangible assets      (955,679)   (58,238)   (28,748)
  Purchases of property and equipment    (3,798,170)   (4,904,991)   (3,058,813)
    Net cash used in investing activities     (3,086,273)   (38,858,539)   (49,434,249)
Cash flows from financing activities:            
  Increase in short term debt      --    --   8,883,104
  Decrease in short term debt      (310,634)   (9,137,223)   --
  Loans paid        (15,000,000)   --   (9,000,000)
  Repurchase of Treasury Stock      --    (2,598,223)   --
  Stock options exercised      28,354   83,089   38,576
  Exercise of warrants      --    --   749,991
  Issuance of common stock      --    --   49,573,239
Net cash (used in) provided by financing activities   (15,282,280)   (11,652,357)   50,244,910
  Effect of exchange rate changes on cash
 and cash equivalents
 996,857   (3,471,576)   115,738
Net increase in cash and cash equivalents    32,329,290   1,796,705   8,534,380
Cash and cash equivalents, beginning of the year  17,474,112   15,677,407   7,143,027
                       
Cash and cash equivalents, end of the year    $49,803,402   $17,474,112   $15,677,407
  Consolidated statements of cash flows
              Year Ended December 31,
              2009   2008   2007
                       
  Supplemental cash flow information:              
    Cash paid for interest       $ 12,332,592   $ 7,138,402   $ 1,572,909
    Cash paid for income taxes       $ 11,650,007    7,921,206    3,864,908
                       
  Non-cash financing activities:                
    Accretion of preferred stock       $ --   $ --   $ 309,299
    Conversion of mandatorily
  redeemable convertible
           
    preferred stock into common stock     $ --   $ --   $ 64,385,844
    Reclassifications of warrants       $ --   $ --   $ 4,636,456
                       
  Acquisition of DeRemate and
 Classified Media Group: 
           
    Cash and cash equivalents       $ --   $ 691,632   $ --
    Funds receivable from customers     --   117,473   --
    Accounts receivable       --   6,569,098   --
    Tax credits         --   604,419   --
    Other current assets       --   918,856   --
    Non current assets       --   504,927   --
    Total assets acquired       --   9,406,405   --
    Accounts payable and accrued expenses          --   4,578,830   --
    Funds payable to customers       --   146,191   --
    Taxes payable       --   1,204,479   --
    Social security payable       --   395,112   --
    Other liabilities       --   1,590,371   --
    Non current liabilities       --   14,000   --
    Provisions         --   1,548,391   --
    Total liabilities assumed       --   9,477,374   --
    Net assets acquired       --   (70,969)   --
    Goodwill         --   52,638,036   --
    Trademarks         --   5,622,188   --
    Customer lists       --   1,227,600   --
    Non Compete Agreement       --   573,484   --
    Deferred income tax on intangible assets     --   (2,598,145)   --
    Total purchase price       --   57,392,194   --
    Cash and cash equivalents acquired     --   (691,632)   --
                       
    Payment for businesses acquired, net
 of cash acquired
  $ --   $ 39,181,473   $ --
                       
    Seller financing for DeRemate
 business acquisition
  $ --   $ 17,519,088   $ --

The following tables summarize the financial results of our reporting segments

        Year Ended December 31, 2009
        Marketplaces
        Brazil Argentina Mexico Venezuela
               
Net revenues     $ 54,035,937  $23,857,421 $ 13,699,140 $ 26,219,636
Direct costs     (32,714,623) (8,917,016) (7,924,863) (12,995,971)
Direct contribution     21,321,314 14,940,405 5,774,277 13,223,665
               
Operating expenses and indirect costs of net revenues        
Income from operations            
               
Other income (expenses):            
  Interest income and other financial gains        
  Interest expense and other financial results        
  Foreign currency loss            
Net income before income / asset tax expense        
        Year Ended December 31, 2009
        Marketplaces      
        Other Countries Total Payments Adjustments Consolidated
                 
Net revenues     $ 10,804,299 $ 128,616,433 $ 44,621,465 $ (394,277) $ 172,843,621
Direct costs     (4,533,878) (67,086,351) (22,825,008) -- (89,911,359)
Direct contribution     6,270,421 61,530,082 21,796,457 (394,277) 82,932,262
                 
Operating expenses and indirect costs of net revenues         (26,898,543)
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)
Net income before income / asset tax expense         $ 42,712,798
        Year Ended December 31, 2008
        Marketplaces
        Brazil Argentina Mexico Venezuela
               
Net revenues     $ 50,509,927 $ 18,254,621 $ 12,473,883 $ 21,972,235
Direct costs     (32,367,688) (8,710,260) (7,909,615) (11,455,690)
Direct contribution     18,142,239 9,544,361 4,564,268 10,516,545
               
Operating expenses and indirect costs of net revenues        
Income from operations            
               
Other income (expenses):            
  Interest income and other financial gains        
  Interest expense and other financial results        
  Foreign currency loss            
  Other income, net            
Net income before income / asset tax expense        
        Year Ended December 31, 2008
        Marketplaces    
        Other Countries Total Payments Consolidated
               
Net revenues     $ 6,369,111 $ 109,579,777 $ 27,442,843 $ 137,022,620
Direct costs     (4,184,088) (64,627,341) (16,125,593)  (80,752,934)
Direct contribution     2,185,023 44,952,436 11,317,250 56,269,686
               
Operating expenses and indirect costs of net revenues       (18,745,755)
Income from operations           37,523,931
               
Other income (expenses):            
  Interest income and other financial gains       1,822,385
  Interest expense and other financial results       (8,442,427)
  Foreign currency loss           (1,531,144)
  Other income, net           73,159
Net income before income / asset tax expense       $ 29,445,904
        Three Months Ended December 31, 2009
        Marketplaces
        Brazil Argentina Mexico Venezuela
               
Net revenues     $ 16,072,507 $ 6,706,880 $ 3,846,081 $ 4,101,170
Direct costs     (9,863,810) (2,510,329) (2,267,724) (1,957,825)
Direct contribution     6,208,697 4,196,551 1,578,357 2,143,345
               
Operating expenses and indirect costs of net revenues        
Income from operations            
               
Other income (expenses):            
  Interest income and other financial gains        
  Interest expense and other financial results        
  Foreign currency loss            
Net income before income / asset tax expense        
        Three Months Ended December 31, 2009
        Marketplaces      
        Other Countries Total Payments Adjustments Consolidated
                 
Net revenues     $ 3,800,336 $ 34,526,974 $ 14,872,927 $ (379,856) $ 49,020,045
Direct costs     (1,219,060)  (17,818,748) (7,000,352) -- (24,819,100)
Direct contribution     2,581,276 16,708,226 7,872,575 (379,856) 24,200,945
                 
Operating expenses and indirect costs of net revenues         (6,326,713)
Income from operations             17,874,232
                 
Other income (expenses):              
  Interest income and other financial gains         580,300
  Interest expense and other financial results         (3,639,552)
  Foreign currency loss             112,249
  Other income, net             --
Net income before income / asset tax expense         $ 14,927,229
        Three Months Ended December 31, 2008
        Marketplaces
        Brazil Argentina Mexico Venezuela
               
Net revenues     $ 10,062,014 $ 5,070,476 $ 2,864,378 $ 6,390,457
Direct costs     (6,127,876) (2,325,166) (1,678,670) (3,314,515)
Direct contribution     3,934,138 2,745,310 1,185,708 3,075,942
               
Operating expenses and indirect costs of net revenues        
Income from operations            
               
Other income (expenses):            
  Interest income and other financial gains        
  Interest expense and other financial results        
  Foreign currency loss            
  Other income, net            
Net income before income / asset tax expense        
        Three Months Ended December 31, 2008
        Marketplaces    
        Other Countries Total Payments Consolidated
               
Net revenues     $ 1,659,115 $ 26,046,440 $ 7,403,299 $ 33,449,739
Direct costs     (1,241,169) (14,687,396) (3,311,230) (17,998,626)
Direct contribution     417,946 11,359,044 4,092,069 15,451,113
               
Operating expenses and indirect costs of net revenues       (4,293,191)
Income from operations           11,157,922
               
Other income (expenses):            
  Interest income and other financial gains       472,317
  Interest expense and other financial results       (4,988,756)
  Foreign currency loss           4,158,793
  Other income, net           31,286
Net income before income / asset tax expense       $ 10,831,562

Non-GAAP Measures of Financial Performance

This press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) Rules to supplement the company's consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP.

These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are 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 MercadoLibre's results of operations as the corresponding GAAP measures.

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

These non-GAAP measures are provided to enhance investors overall understanding of the company's current financial performance. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain compensation expenses and unusual foreign currency effects that may not be indicative of its core operating results, thereby enhancing an investor's ability to make period over period comparisons of the company's results. The company believes the inclusion of these non-GAAP measures provides an element of consistency in the company's financial reporting and uses these measures in internal budgets and models and in determining executive compensation benchmarks.

In this press release MercadoLibre also includes each of income from operations, net income, earnings per basic and diluted share, blended and effective tax rates and certain margin percentages for the quarter and year ended December 31, 2009 after excluding (or adding back) the following charges required by GAAP:

Compensation Costs Related to Acquisitions

This amount relates to the purchase price of the shares of CMG and its subsidiaries. Under US GAAP we have recognized a contingent consideration paid to former shareholders as compensation for services. As of December 31, 2008 the year to date total accrued compensation costs amounted to $1.9 million. The following tables show a reconciliation of this exclusion from the GAAP measures to the non-GAAP measures.

Long term retention plan compensation

(a) On August 8, 2008, the Board of Directors approved a long-term employee retention program (the 2008 LTRP) for certain executives based on 2008 performance that will be payable 50% in cash and 50% in MercadoLibre common stock, in addition to their annual salary and bonus. Payments will be made during the first quarter on an annual basis according to the following vesting schedule: year 1 (2009): 17%, year 2 (2010): 22%, year 3 (2011): 27%, year 4 (2012): 34%. (b) On June 10, 2009 the Board of Directors approved a long-term employee retention (the 2009 LTRP) program for certain executives based on 2009 performance. If earned, payments to eligible employees under the 2009 LTRP will be in addition to payments of base salary and cash bonus, if earned, made to these employees. In order to receive an award under the 2009 LTRP, each eligible employee must satisfy the performance conditions established by the board of directors for him or her. If these conditions are satisfied, the eligible employee will, s ubject to his or her continued employment as of each applicable payment date, receive the full amount of his 2009 LTRP bonus, payable as follows: (I) the eligible employee will receive a fixed cash payment equal to 6.25% of his or her 2009 LTRP bonus once a year during eight years starting in 2010 (the "Fixed Payment"); and  (II) on each date the company pays the Fixed Payment to an eligible employee, he or she will also receive a cash payment (the "Variable Payment") equal to the product of (i) 6.25% of the applicable 2009 LTRP bonus and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the 2008 Stock Price, defined as $13.81, which was the average closing price of the Company's common stock on the NASDAQ Global Market during the final 60 trading days of 2008. The "Applicable Year Stock Price" shall equal the average closing price of the Company's common stock on the NASDAQ Global Market during t he final 60 trading days of the year preceding the applicable payment date. For the 2008 LTRP and the Variable Payment of the 2009 LTRP, the US GAAP compensation cost is recognized in accordance with the graded-vesting attribution method and is accrued up to each payment day. For the Fixed Payment of the 2009 LTRP, the compensation cost is recognized in a straight-line basis. The non-GAAP measures were calculated with the cost for each year being accrued in the full fiscal year immediately preceding the payment date according to the same payment schedule in which 22% of the cost of the 2008 LTRP plan vests during the year ended December 31 2009, and 12.5% of the cost of the 2009 LTRP vests during the year ended December 31, 2009. The following tables show a reconciliation of this cost from the GAAP measures to the non-GAAP measures.

Venezuelan foreign currency re-measurement effect:

This amount relates to re-measurement of assets and liabilities in U.S. dollars in the Venezuelan statutory Financial Statements. Until September 30, 2009, the Venezuelan subsidiaries have re-measured the assets and liabilities outstanding in U.S. dollar balances at the parallel exchange rate and translated them to the official exchange rate. Starting in the fourth quarter of 2009, as a result of the changes in facts and circumstances that affect the Company's ability to convert currency for dividends remittances using the official exchange rate in Venezuela, the Venezuelan subsidiaries assets, liabilities, income and expense accounts have been translated using the parallel exchange rate, for that reason there is no longer a mismatch between the re-measurement exchange rate and the translation exchange rate. The following tables exclude the foreign currency re-measurement effect generated until September 30, 2009 from applying different exchange rates in order to facilitate comparisons to other quarter s, or year to date figures, and to highlight this exchange rate matter.

Venezuelan translation impact

Additionally, this press release contains a table that sets forth each of net revenue, income from operations, net income, earnings per basic and diluted share, for the quarter ended December 31, 2009 using the exchange rate of Bolivars $2.15 per U.S. dollar. This table is provided to enhance investors overall understanding of the company's current financial performance. Specifically, the company believes the table provides useful information to both management and investors by allowing them to compare the year over year evolution of certain financial metrics without taking into account the impact on the business brought about by changes in accounting methods in Venezuela. These changes came about as a consequence of the growing instability in foreign exchange markets in Venezuela during the fourth quarter of 2009. As a consequence of these changes the Company decided to start reporting its Venezuelan business at the parallel exchange rate, 5.7 Bolivars to the USD, instead of continuing to use the official exchange rate of 2.15.

Reconciliation of certain Non-GAAP financial measures to the most comparable GAAP financial measures

The following provide a reconciliation of certain Non-GAAP financial measures to the most comparable GAAP financial measures.

       
  Year Ended
December 31,
  Three Months Ended
December 31,
  2009   2008   2009   2008
               
Net income  $ 33,208,793    $ 18,811,661    $ 11,285,569    $ 7,921,097
Long term retention plan compensation net of
 tax effect
743,396    407,747   247,389   218,880
Venezuelan foreign currency re-measurement effect     (1,482,719)    (2,390,963)    --    (3,292,033)
Compensation cost related to acquisitions  --    1,919,870    --    --
Non-GAAP net income   $ 32,469,470    $ 18,748,315    $ 11,532,958    $ 4,847,944
               
               
Basic net income per common share:  $ 0.75    $ 0.43    $ 0.26    $ 0.18
Non-GAAP basic net income per common share:  $ 0.74    $ 0.42    $ 0.26    $ 0.11
               
Shares used in basic net income per
 share calculation:
 44,086,892    44,239,443    44,108,207    44,264,906
               
               
Diluted net income per common share  $ 0.75    $ 0.42    $ 0.26    $ 0.18
Non-GAAP diluted net income per common share:  $ 0.74    $ 0.42    $ 0.26    $ 0.11
               
Shares used in diluted net income per
 share calculation:
           44,144,368           44,348,950           44,143,281          44,369,635
       
  Year Ended
December 31,
  Three Months Ended
December 31,
  2009   2008   2009   2008
               
Income and asset tax expense  $ 9,504,005    $ 10,634,243    $ 3,641,659    $ 2,910,464
Income taxes related with long term retention
 plan compensation
 136,081    68,061    115,506    36,536
Income taxes related with Venezuelan foreign
 currency effects
 (763,825)    (1,231,708)    --    (1,695,895)
Non-GAAP income and asset tax expense  $ 8,876,261    $ 9,470,596    $ 3,757,165    $ 1,251,105
               
Income before income taxes  $ 42,712,798    $ 29,445,904    $ 14,927,228    $ 10,831,561
Long term retention plan compensation  879,477    475,808    362,895    255,416
Venezuelan foreign currency re-measurement effect     (2,246,544)    (3,622,671)    --    (4,987,928)
Compensation cost related to acquisitions  --    1,919,870    --    --
Non-Gaap income before income taxes   $ 41,345,731    $ 28,218,911    $ 15,290,123    $ 6,099,049
               
               
Blended tax rate (1) 22.3%   36.1%   24.4%   26.9%
Non-GAAP Blended tax rate (1) 21.5%   33.6%   24.6%   20.5%
               
Effective tax rate (2) (3) 26.9%   27.7%   31.7%   9.2%
Non-Gaap Effective tax rate (2) (3) 27.8%   25.4%   31.0%   16.4%
               
1 - Blended tax rate defined as income and asset tax expense as a percentage of income before income and asset tax.
2 - Effective income tax rate defined as the provision for income taxes as a percentage of income before income tax.
3 - The effective tax rate does not include the effect of the Mexican Tax call Impuesto Empresarial a Tasa Unica (IETU).   
       
  Year Ended December 31,   Three Months Ended December 31,
  2009   2008   2009   2008
               
Net revenue $ 172,843,621   $ 137,022,620   $ 49,020,045   $ 33,449,739
GAAP              
Net Income  $ 33,208,793   $ 18,811,661   $ 11,285,569   $ 7,921,097
Earnings per share (basic) $ 0.75   $ 0.43   $ 0.26   $ 0.18
Earnings per share (diluted)                                              $ 0.75   $ 0.42   $ 0.26   $ 0.18
Non-GAAP              
Net Income  $ 32,469,470   $ 18,748,315   $ 11,532,958   $ 4,847,944
Earnings per share (basic) $ 0.74   $ 0.42   $ 0.26   $ 0.11
Earnings per share (diluted) $ 0.74   $ 0.42   $ 0.26   $ 0.11
CONTACT:  MercadoLibre, Inc.
          Investor Relations Contact:
          Pedro Arnt
            +541153528000
            investor@mercadolibre.com
          Media Relations Contact:
          Lorena Diaz Quijano
            +541153528026
            lorena.diazquijano@mercadolibre.com
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