2018 Q4 Form 10-K Financial Statement

#000156276219000047 Filed on February 28, 2019

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2018 Q2
Revenue $428.0M $355.3M $335.4M
YoY Change 19.54% 16.52% 18.14%
Cost Of Revenue $223.2M $185.6M $175.6M
YoY Change 44.28% 43.74% 56.39%
Gross Profit $204.8M $169.7M $159.7M
YoY Change 0.7% -3.47% -6.88%
Gross Profit Margin 47.84% 47.77% 47.63%
Selling, General & Admin $166.6M $145.2M $154.6M
YoY Change 12.49% 25.31% 42.58%
% of Gross Profit 81.35% 85.58% 96.75%
Research & Development $39.00M $35.48M $33.44M
YoY Change 14.37% 9.5% 10.35%
% of Gross Profit 19.04% 20.9% 20.93%
Depreciation & Amortization $11.90M $11.30M $11.50M
YoY Change 9.17% 3.67% 13.86%
% of Gross Profit 5.81% 6.66% 7.2%
Operating Expenses $205.6M $180.7M $188.0M
YoY Change 12.84% 21.87% 35.44%
Operating Profit -$817.0K -$11.00M -$28.24M
YoY Change -103.86% -139.95% -186.22%
Interest Expense -$6.000M -$3.300M $9.300M
YoY Change 5900.0% -136.26% -152.84%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$6.800M -$14.31M -$18.95M
YoY Change -89.49% -139.05% -252.84%
Income Tax -$4.500M -$4.234M -$7.700M
% Of Pretax Income
Net Earnings -$2.337M -$10.08M -$11.25M
YoY Change -96.55% -136.43% -311.64%
Net Earnings / Revenue -0.55% -2.84% -3.35%
Basic Earnings Per Share -$0.05 -$0.23 -$0.25
Diluted Earnings Per Share -$0.05 -$0.23 -$0.25
COMMON SHARES
Basic Shares Outstanding 45.20M 44.59M 44.16M
Diluted Shares Outstanding 45.20M 44.59M 44.16M

Balance Sheet

Concept 2018 Q4 2018 Q3 2018 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $901.9M $1.096B $558.6M
YoY Change 50.9% 72.16% -5.16%
Cash & Equivalents $440.3M $1.029B $524.0M
Short-Term Investments $461.5M $67.00M $69.40M
Other Short-Term Assets $61.57M $54.07M $111.5M
YoY Change 5.96% -3.79% 110.38%
Inventory $4.612M $7.395M $7.900M
Prepaid Expenses $27.48M $11.01M
Receivables $35.15M $27.14M $335.1M
Other Receivables $95.70M $90.80M $112.1M
Total Short-Term Assets $1.511B $1.602B $1.125B
YoY Change 17.42% 35.48% 17.43%
LONG-TERM ASSETS
Property, Plant & Equipment $165.6M $138.4M $113.2M
YoY Change 44.22% 1.7% -13.32%
Goodwill $88.88M $88.65M
YoY Change -3.68%
Intangibles $18.58M $18.72M
YoY Change -19.82%
Long-Term Investments $276.1M $2.800M $11.40M
YoY Change 695.68% -93.86% -93.88%
Other Assets $37.74M $42.54M $166.8M
YoY Change -40.96% -68.39% 42.69%
Total Long-Term Assets $728.4M $416.7M $394.2M
YoY Change 88.57% -4.45% -28.74%
TOTAL ASSETS
Total Short-Term Assets $1.511B $1.602B $1.125B
Total Long-Term Assets $728.4M $416.7M $394.2M
Total Assets $2.240B $2.018B $1.519B
YoY Change 33.85% 24.72% 0.53%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $266.8M $231.0M $226.1M
YoY Change 20.67% 27.2% 46.44%
Accrued Expenses $60.40M $57.40M $50.00M
YoY Change -7.22% -6.21% 5.26%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $132.9M $141.5M $146.7M
YoY Change 136.06% 472.87% 706.04%
Total Short-Term Liabilities $1.166B $989.5M $975.1M
YoY Change 20.47% 20.26% 44.25%
LONG-TERM LIABILITIES
Long-Term Debt $602.2M $554.8M $333.4M
YoY Change 92.95% 79.31% 8.71%
Other Long-Term Liabilities $19.51M $16.53M $33.10M
YoY Change 5.64% -58.16% 3.44%
Total Long-Term Liabilities $736.6M $687.1M $366.5M
YoY Change 94.16% 96.92% 8.21%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.166B $989.5M $975.1M
Total Long-Term Liabilities $736.6M $687.1M $366.5M
Total Liabilities $1.903B $1.677B $1.365B
YoY Change 41.22% 38.32% 29.68%
SHAREHOLDERS EQUITY
Retained Earnings $503.4M $505.8M
YoY Change -6.41%
Common Stock $45.00K $45.00K
YoY Change 2.27%
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00
YoY Change
Treasury Stock Shares
Shareholders Equity $336.7M $341.8M $154.7M
YoY Change
Total Liabilities & Shareholders Equity $2.240B $2.018B $1.519B
YoY Change 33.85% 24.72% 0.53%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2018 Q2
OPERATING ACTIVITIES
Net Income -$2.337M -$10.08M -$11.25M
YoY Change -96.55% -136.43% -311.64%
Depreciation, Depletion And Amortization $11.90M $11.30M $11.50M
YoY Change 9.17% 3.67% 13.86%
Cash From Operating Activities $34.80M $88.90M $144.2M
YoY Change 30.83% 452.17% 18.68%
INVESTING ACTIVITIES
Capital Expenditures -$28.00M -$23.00M -$23.80M
YoY Change 22.81% 31.43% 9.17%
Acquisitions
YoY Change
Other Investing Activities -$666.6M $16.30M $76.70M
YoY Change 626.14% -89.17% 285.43%
Cash From Investing Activities -$694.6M -$6.800M $53.00M
YoY Change 507.17% -105.12% -2750.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 38.30M 491.1M 55.50M
YoY Change 39.78% -802.58% -1834.38%
NET CHANGE
Cash From Operating Activities 34.80M 88.90M 144.2M
Cash From Investing Activities -694.6M -6.800M 53.00M
Cash From Financing Activities 38.30M 491.1M 55.50M
Net Change In Cash -621.5M 573.2M 252.7M
YoY Change 928.97% 624.65% 117.28%
FREE CASH FLOW
Cash From Operating Activities $34.80M $88.90M $144.2M
Capital Expenditures -$28.00M -$23.00M -$23.80M
Free Cash Flow $62.80M $111.9M $168.0M
YoY Change 27.13% 233.04% 17.24%

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<div> <div style="margin-left:0pt;margin-right:0pt;"> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:0pt;"> <tr> <td valign="top" style="width:23.95pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:1.00pt;padding:0pt;"> <p style="margin:0pt;font-family:Times New Roman;line-height:110%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="top" style="width:552.05pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:1.00pt;padding:0pt;"> <p style="margin:0pt;font-family:Times New Roman;line-height:110%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:23.95pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt 0.8pt 0pt 0pt;font-family:Times New Roman;line-height:110%;font-size: 10pt"> <font style="display: inline;font-weight:bold;">2.</font></p> </td> <td valign="top" style="width:552.05pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt 0.8pt 0pt 0pt;font-family:Times New Roman;line-height:110%;font-size: 10pt"> <font style="display: inline;font-weight:bold;">Summary of significant accounting policies (continued)</font></p> </td> </tr> </table></div> <p style="margin:10pt 0pt 0pt 22.95pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;font-weight:bold;">Concentration of credit risk</font> </p> <p style="margin:10pt 0pt 0pt 22.95pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">Cash and cash equivalents,</font><font style="display: inline;"> restricted cash and cash equivalents,</font><font style="display: inline;"> short-term and long-term investments, credit card receivables, accounts receivable and loans receivable are potentially subject to concentration of credit risk. Cash and cash equivalents and investments are placed wi</font><font style="display: inline;">th financial institutions and financial instruments that M</font><font style="display: inline;">anagement believes are of high credit quality. Accounts receivable are derived from revenue earned from customers located internationally. Accounts receivable balances are settled through customer credit cards, debit cards, and MercadoPago accounts, with the majority of accounts receivable collected upon processing of credit card transactions. Loans receivable are granted to several loyal</font><font style="display: inline;color:#000000;"> merchants with the best reputation on the site and certain loyalty buyers. </font><font style="display: inline;">The Company maintains an allowance for doubtful accounts receivable, loans receivable and credit cards receivables based upon its historical experience and current aging of customers. Historically, such charges have bee</font><font style="display: inline;">n within M</font><font style="display: inline;">anagement expectations. However, unexpected or significant future changes in trends could result in a material impact to future statements of income or cash flows. Due to the relatively small dollar amount of individual accounts receivable and loans receivable, the Company generally does not require collateral on these balances. The allowance for doubtful accounts is recorded as a charge to sales and marketing expense.</font> </p> <p style="margin:10pt 0pt 0pt 22.95pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">During the years ended December&nbsp;31, 2018, 2017 and 2016, </font><font style="display: inline;">no</font><font style="display: inline;"> single customer accounted for more than </font><font style="display: inline;">5%</font><font style="display: inline;"> of net revenues. As of December&nbsp;31, 2018 and 2017, </font><font style="display: inline;">no</font><font style="display: inline;"> single customer, except for high credit quality credit card processing companies, accounted for more than </font><font style="display: inline;">5%</font><font style="display: inline;"> of accounts receivable and loans receivable.</font> </p> <p><font size="1"> </font></p> </div> </div>
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<div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:0pt;font-family:Times New Roman;line-height:110%;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font> </p> <div style="width:100%"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:0pt;"> <tr> <td valign="top" style="width:23.95pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:1.00pt;padding:0pt;"> <p style="margin:0pt;font-family:Times New Roman;line-height:110%;height:1.00pt;overflow:hidden;font-size: 1pt"> <font style="display: inline;font-size:1pt;">&#xFEFF;</font></p> </td> <td valign="top" style="width:552.05pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;height:1.00pt;padding:0pt;"> <p style="margin:0pt;font-family:Times New Roman;line-height:110%;height:1.00pt;overflow:hidden;font-size:0pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:23.95pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt 0.8pt 0pt 0pt;font-family:Times New Roman;line-height:110%;font-size: 10pt"> <font style="display: inline;font-weight:bold;">1</font><a name="Notes"></a><font style="display: inline;font-weight:bold;">.</font></p> </td> <td valign="top" style="width:552.05pt;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt none #D9D9D9 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt 0.8pt 0pt 0pt;font-family:Times New Roman;line-height:110%;font-size: 10pt"> <font style="display: inline;font-weight:bold;">Nature of Business</font></p> </td> </tr> </table></div> <p style="margin:10pt 0pt 0pt 23.05pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">MercadoLibre, Inc. (&#x201C;MercadoLibre&#x201D; or the &#x201C;Company&#x201D;) was incorporated in the state of Delaware, in the United States of America, in October 1999. MercadoLibre </font><font style="display: inline;color:#000000;">is the largest online commerce ecosystem in Latin America</font><font style="display: inline;">, serving as an integrated regional platform and as a provider of necessary online and technology tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America.&nbsp;</font> </p> <p style="margin:10pt 0pt 0pt 23.05pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">Through MercadoPago</font><font style="display: inline;">, the FinTech solution</font><font style="display: inline;">, MercadoLibre enables individuals and businesses to send and receive online payments; through MercadoEnvios, MercadoLibre facilitates the shipping of goods from sellers to buyers; through our advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their product and services on the web; through MercadoShops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model; through MercadoCredito, MercadoLibre extends loans to certain merchants and consumers; and </font><font style="display: inline;color:#000000;">through MercadoFondo, MercadoLibre allows users to invest funds deposited in their MercadoPago accounts.</font><font style="display: inline;"> In addition, MercadoLibre develops and sells software enterprise solutions to e-commerce business clients in Brazil.</font> </p> <p style="margin:10pt 0pt 0pt 23pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;color:#000000;">As of December 31, 2018, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, </font><font style="display: inline;">Honduras, Nicaragua, El Salvador</font><font style="display: inline;color:#000000;">, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates an online payments solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile and Uruguay. In addition, the Company operates a real estate classified platform that covers some areas of State of Florida, in the United States of America.</font> </p> <p style="margin:6pt 0pt 0pt 23pt;font-family:Times New Roman;line-height:110%;font-size: 10pt"> <font style="display: inline;">&nbsp;</font> </p> <p><font size="1"> </font></p> </div> </div>
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<div> <div style="margin-left:0pt;margin-right:0pt;"> <p style="margin:10pt 0pt 0pt 22.95pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;font-weight:bold;">Use of estimates</font> </p> <p style="margin:10pt 0pt 0pt 22.95pt;line-height:100%;text-align:justify;text-justify:inter-ideograph;font-family:Times New Roman;font-size: 10pt"> <font style="display: inline;">The preparation of consolidated financial statements in conf</font><font style="display: inline;">ormity with U.S. GAAP requires M</font><font style="display: inline;">anagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to</font><font style="display: inline;">,</font><font style="display: inline;"> accounting for allowance for doubtful accounts and chargeback provisions, allowance for loans receivables, recoverability of goodwill, intangible assets with indefinite useful lives and tax loss carryforwards, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company&#x2019;s long term retention plan, fair value of convertible debt, fair value of investments, recognition of income taxes and contingencies. Actual results could differ from those estimates.</font> </p> <p><font size="1"> </font></p> </div> </div>
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45202859

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