Gmarket Inc. (NASDAQ: GMKT) ("Gmarket") announced today its
financial and operating results for the first quarter ended March
31, 2009.
Gmarket reported total revenues of Won 71.9 billion for the
first quarter of 2009, representing an 11% increase from total
revenues of Won 64.6 billion for the first quarter of 2008.
The Company's gross merchandise value ("GMV"), which represents
the total value of all items sold on Gmarket's website, increased
by 14% to Won 1,063.7 billion for the first quarter of 2009
compared to Won 933.4 billion for the same period in 2008.
Transaction fee revenues for the first quarter of 2009 were Won
40.0 billion, representing a 9% increase from Won 36.8 billion for
the first quarter in 2008. Advertising and other non-transaction
revenues for the first quarter of 2009 were Won 31.9 billion,
representing a 15% increase from Won 27.8 billion for the same
period in 2008.
Operating income for the first quarter of 2009 was Won 7.1
billion, representing a 31% decrease from Won 10.3 billion for the
same period in 2008.
Net income for the first quarter of 2009 was Won 9.7 billion,
representing a 6% decrease from Won 10.3 billion for the same
period in 2008. Earnings per diluted share for the first quarter of
2009 decreased to Won 191, or $0.14, down from Won 204 for the same
period in 2008.
On a pro forma non-GAAP basis, excluding the one-time effect of
the merger expenses, operating income and net income for the first
quarter of 2009 were Won 9.1 billion and Won 11.3 billion
respectively.
"Despite a relatively slow start to the first quarter, we ended
on a very strong note, setting a record monthly high in GMV in
March 2009," said Young Bae Ku, Chief Executive Officer of Gmarket.
"During the first quarter, we continued to grow our expanding and
developing categories while at the same time re-accelerating our
growth in categories such as clothing and accessories and computers
and electronics."
Investor Conference Call / Webcast Details
The Company's management will review detailed first quarter 2009
results on Tuesday, April 28, 2009 at 6:00 p.m. U.S. Eastern Time
(7:00 a.m., April 29, 2009 in Seoul, South Korea). A live webcast
of the conference call will be available on Gmarket's website at
www.gmarket.co.kr/IR/.
Dial-in details for the conference call are as follows:
US: +1 866 362 4829 or +1 617 597 5346
Hong Kong: +852 3002 1672
Singapore: +65 6823 2164
U.K.: +44 207 365 8426
Korea: +82 00 308 13 1153
Password for all regions: Gmarket
A replay of the call will be available beginning April 28 at
9:00 p.m. U.S. Eastern Time (10:00 a.m., April 29, 2009 in Seoul)
at www.gmarket.co.kr/IR/ and by telephone at +1 888 286 8010 or +1
617 801 6888 with passcode 32560894 (telephone replay available
through 10:59 a.m. on May 6, 2009 U.S. Eastern Time (11:59 p.m.,
May 6, 2009 in Seoul)).
Notes: (1) The Dollar amounts provided in this release are based
on an exchange rate of Won 1,372.30 to US$1.00, which is the noon
buying rate in effect on March 31, 2009 as quoted by the Federal
Reserve. (2) GMV should not be construed as an alternative to
revenues or any other measure of performance determined in
accordance with U.S. GAAP. Other companies may determine GMV in a
different manner than Gmarket does.
Pro forma Non-GAAP Information
To supplement the Company's financial results prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"),
certain pro forma non-GAAP financial measures are provided in this
press release. Specifically, we have provided pro forma non-GAAP
operating income and pro forma non-GAAP net income that exclude
certain merger expenses incurred, as well as the related income tax
effects of such items. The merger expenses were not recurring
expenses and are not directly attributable to the underlying
performance of our business operations. These pro forma non-GAAP
financial measures are provided to enhance the user's overall
understanding of our financial performance. The Company believes
that by excluding these charges, as well as the related income tax
effects, the pro forma non-GAAP measures provide supplemental
information to both management and investors that is useful in
assessing core operating performance, in evaluating our ongoing
business operations and in comparing results of operations on a
consistent basis from period to period. The presentation of this
additional information is not prepared in accordance with GAAP. The
information therefore may not necessarily be comparable to that of
other companies and should be considered as a supplement to, not a
substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP. Investors are encouraged to
review the reconciliations of GAAP to pro forma non-GAAP financial
measures which are included below in this press release.
About Gmarket
Gmarket Inc. is a leading retail e-commerce marketplace in
Korea, offering buyers a wide selection of products at competitive
prices and sellers a comprehensive and flexible sales solution.
Gmarket's e-commerce marketplace is highly scalable and facilitates
the sale of products in small or large quantities to a large number
of potential buyers in a convenient, cost effective and secure
manner. Gmarket's e-commerce marketplace is located primarily at
www.gmarket.co.kr.
Safe Harbor Under the Private Securities Litigation Reform Act
of 1995
Certain statements contained in this Form 6-K may include, in
addition to historical information, "forward-looking statements"
within the meaning of the "safe-harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can generally be identified by the use of
forward-looking terminology, such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe," "project,"
"continue," "plan" or "predict" or the negative thereof or other
similar words, although not all forward-looking statements will
contain these words. These forward-looking statements are based on
the Company's current assumptions, expectations and projections
about future events. All forward-looking statements involve risks
and uncertainties that may cause the Company's actual performance,
financial condition or results of operations to be materially
different from those suggested by the forward-looking statements,
including, but not limited to, the Company's ability to diversify
revenues; the Company's ability to compete effectively in a highly
competitive industry; the Company's ability to anticipate and
access technological developments in the Company's industry; the
Company's ability to recruit and retain quality employees as the
Company grows; the Company's ability to implement the Company's
growth strategies; and economic and political conditions in and
outside of Korea. Recent global economic events including, but not
limited to, the downturn in global economic and financial markets,
changes in political, business and economic conditions,
fluctuations in foreign exchange rates, tightening of the global
credit markets, decreasing consumer confidence and slowing of
ecommerce growth could also cause or contribute to such material
differences in our actual performance, financial condition or
results from those contained in this Form 6-K. Investors should
consider the information contained in the Company's submissions and
filings with the SEC, including the Company's most recent annual
report on Form 20-F, together with such other documents as the
Company may submit to or file with the SEC from time to time,
including on Forms 6-K. The forward-looking statements speak only
as of this filing on Form 6-K and the Company assumes no duty to
update them to reflect new, changing or unanticipated events or
circumstances. You should not unduly rely on the forward-looking
statements contained in this Form 6-K.
The tender offer contemplated by the pending business
combination transaction with eBay Inc. has not yet commenced. This
communication is not an offer, a solicitation or a recommendation
with respect to such tender offer. No statement in this
announcement is an offer to purchase or a solicitation of an offer
to sell securities. The Company intends to file a Schedule 14D-9
solicitation/recommendation statement with the U.S. Securities and
Exchange Commission ("SEC") relating to this tender offer. The
Company understands that eBay Inc. and Internet Auction Company
intend to file a Schedule TO tender offer statement with the SEC
relating to this tender offer. Security holders and investors are
urged to read carefully the tender offer statement (including the
offer to purchase, a related letter of transmittal and certain
other tender offer documents) and the Company's
solicitation/recommendation statement when they are available
because they will contain important information about the tender
offer and related transactions. Security holders and investors may
obtain a free copy of Gmarket's solicitation/recommendation
statement when it becomes available, and other documents filed by
the Company or eBay Inc. with the SEC, at the SEC's web site at
http://www.sec.gov. Free copies of the Company's
solicitation/recommendation statement, when it becomes available,
and other filings made with the SEC by the Company may also be
obtained by directing a request to Gmarket Inc., 9th Floor, LIG
Tower, 649-11 Yeoksam-Dong, Gangnam-Gu, Seoul 135-912, Korea,
Attention: Investor Relations.
GMARKET INC.
UNAUDITED BALANCE SHEETS
(in millions of Korean Won and in thousands of US dollars)
December 31, March 31, March 31,
2008 2009 2009
----------- --------- ---------
Assets
Current assets:
Cash and cash equivalents W 79,470 W 50,028 $ 36,456
Cash on deposit 217,000 236,508 172,345
Restricted cash 10,100 7,650 5,575
Accounts receivable, net 51,725 56,804 41,393
Current held-to-maturity securities 34,000 46,000 33,520
Other current assets 13,256 13,115 9,556
----------- --------- ---------
Total current assets 405,551 410,105 298,845
Property and equipment, net 30,546 28,163 20,523
Held-to-maturity securities 6,000 6,000 4,372
Other assets 10,093 10,969 7,993
----------- --------- ---------
Total assets W 452,190 W 455,237 $ 331,733
----------- --------- ---------
Liabilities and Shareholders' Equity
Current liabilities:
Amounts payable to sellers W 184,221 W 177,105 $ 129,057
Accounts payable 28,358 32,702 23,830
Deferred revenue and advances 6,000 5,838 4,254
Sales incentive liabilities 10,955 11,107 8,094
Income tax payable 5,711 2,017 1,470
Other current liabilities 7,568 6,107 4,450
----------- --------- ---------
Total current liabilities 242,813 234,876 171,155
----------- --------- ---------
Accrued severance benefit 4,467 4,866 3,546
Other liabilities 1,085 1,097 799
----------- --------- ---------
Total liabilities 248,365 240,839 175,500
----------- --------- ---------
Shareholders' equity:
Common shares 5,033 5,035 3,669
Additional paid-in capital 93,782 94,606 68,940
Accumulated other comprehensive income 79 118 86
Retained earnings 104,931 114,639 83,538
----------- --------- ---------
Total shareholders' equity 203,825 214,398 156,233
----------- --------- ---------
Total liabilities and shareholders' equity W 452,190 W 455,237 $ 331,733
----------- --------- ---------
GMARKET INC.
UNAUDITED STATEMENTS OF INCOME
(in millions of Korean Won and thousands of US dollars, except per share
data)
Three Months Ended March 31,
--------------------------------
2008 2009 2009
---------- ---------- ----------
Revenues:
Transaction fees W 36,813 W 39,999 $ 29,148
Advertising and others 27,836 31,949 23,281
---------- ---------- ----------
Total revenues 64,649 71,948 52,429
Costs and expenses:
Cost of revenues 34,120 39,256 28,606
Sales and marketing 12,925 14,950 10,894
General and administrative 7,288 8,686 6,330
Merger expenses 1) - 1,974 1,438
---------- ---------- ----------
Total costs and expenses 54,333 64,866 47,268
---------- ---------- ----------
Operating income 10,316 7,082 5,161
Other income:
Interest income 3,143 4,678 3,409
Others, net 133 440 320
---------- ---------- ----------
Income before income tax expense 13,592 12,200 8,890
Income tax expense 3,271 2,493 1,816
---------- ---------- ----------
Net income W 10,321 W 9,707 $ 7,074
Net income per share - basic W 207 W 193 $ 0.14
Net income per share - diluted 204 191 0.14
Weighted average number of shares - basic 49,752,548 50,352,319 50,352,319
Weighted average number of shares -
diluted 50,613,952 50,848,986 50,848,986
1) Merger expenses represent advisor fees incurred with respect to the
business combination transaction with eBay, Inc. These expenses are
deemed to be non-recurring in nature. The Company has submitted a 6-K
with respect to such business combination with the United States
Securities Exchange Commission on April 16, 2009.
GMARKET INC.
UNAUDITED STATEMENTS OF CASH FLOWS
(in millions of Korean Won and in thousands of US dollars)
Three Months Ended March 31,
----------------------------
2008 2009 2009
-------- -------- --------
Cash flows from operating activities:
Net income W 10,321 W 9,707 $ 7,074
Adjustments
Depreciation and amortization 2,129 2,830 2,062
Stock-based compensation expense 470 681 496
Provision for bad debt 133 16 12
Provision for severance benefits 688 662 483
Deferred tax assets 4 (80) (58)
Provision for loyalty program reserves 1,383 1,744 1,271
Others, net 5 (401) (293)
Changes in operating assets and liabilities
Accounts receivable (722) (5,056) (3,684)
Amounts payable to sellers 12,424 (7,115) (5,185)
Accounts payable (834) 4,347 3,168
Deferred revenue and advances 554 (162) (118)
Other assets, net (933) (80) (57)
Other current liabilities 236 (6,748) (4,918)
Payment of accrued severance benefits (79) (263) (192)
-------- -------- --------
Net cash provided by operating activities 25,779 82 61
-------- -------- --------
Cash flows from investing activities:
Increase in cash on deposit, net (11,500) (19,073) (13,898)
Decrease (increase) in restricted cash, net (1,990) 2,450 1,785
Increase in current held-to-maturity
securities - (12,000) (8,744)
Purchase of property and equipment (2,564) (430) (314)
Increase in other assets, net (708) (617) (449)
-------- -------- --------
Net cash used in investing activities (16,762) (29,670) (21,620)
-------- -------- --------
Cash flows from financing activities:
Issuance of common shares, net 23 146 106
Increase in short-term borrowing - 5,200 3,789
Decrease in short-term borrowing - (5,200) (3,789)
-------- -------- --------
Net cash provided by financing activities 23 146 106
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents 9,040 (29,442) (21,453)
-------- -------- --------
Cash and cash equivalents:
Beginning of period 48,367 79,470 57,909
-------- -------- --------
End of period W 57,407 W 50,028 $ 36,456
-------- -------- --------
GMARKET INC.
UNAUDITED SUPPLEMENTAL OPERATING DATA
2008 2009
--------------------------- ------
1Q 2Q 3Q 4Q 1Q
------ ------ ------ ------ ------
G M V (in billions of Won)(1) 933 971 975 1,107 1,064
------ ------ ------ ------ ------
Registered Users (2) (000) 14,260 14,735 15,204 15,685 16,129
------ ------ ------ ------ ------
Average Monthly Unique Visitors (3)(000) 17,861 18,651 17,840 18,092 17,243
------ ------ ------ ------ ------
(1) Represents the aggregate value of all products sold on the Company's
website for the period. GMV is commonly used in the e-commerce industry
to measure a company's operating performance as transaction fees depend
in part on GMV. GMV should not be construed as an alternative to any
measure of performance determined in accordance with U.S. GAAP.
Other companies may determine GMV in a different manner to Gmarket.
(2) Registered Users include both buyers and sellers who have registered
with the Company as of the end of the period.
(3) Average monthly unique visitors represents the average number of
monthly unique visitors to the Company's website during the period,
measured and announced by Metrix Corporation, a Korean Internet
research company. Other research companies' results may differ.
Pro forma Non-GAAP Information and Reconciliation to Comparable GAAP
Financial Measures
(in millions except per share data)
Operating income - GAAP 7,082
Merger expenses (a) 1,974
------
Operating income - Pro forma Non-GAAP 9,056
------
Net income - GAAP 9,707
Merger expenses (a) 1,974
Tax effect of excluding merger expenses (b) (401)
------
Net income - Pro forma Non-GAAP 11,280
------
Pro Forma Non-GAAP Net Income Per Diluted Share 222
------
Shares Used in Non-GAAP Diluted Share Calculation 50.85
------
(a) Merger expenses represent advisor fees relating to the business
combination transaction with eBay, Inc. These expenses are not
directly attributable to the underlying performance of our business
operations. We believe that by excluding the merger expenses,
investors are provided with supplemental information that is useful
in evaluating our ongoing operations and performance. These expenses
are deemed to be non-recurring in nature. Management also excludes
this expense when evaluating current performance, forecasting future
results, measuring core operating results, and making operating and
strategic decisions.
(b) Tax effect of excluding merger expenses from net income.
Contacts Paul J. Lee Gmarket Inc. +82-2-3016-4372 Email Contact
In the U.S. Joseph Villalta The Ruth Group +1-646-536-7003 Email
Contact
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