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Gmarket Reports First Quarter 2008 Financial Results Revenues Increased to Won 64.6 Billion ($65.4 Million), up 35% Year-Over-Year Operating Income Increased to Won 10.3 Billion ($10.4 Million), up 89% Year-Over-Year SEOUL, SOUTH KOREA--(MARKET WIRE)--Apr 29, 2008 -- Gmarket Inc. (NasdaqGS:GMKT - News) ("Gmarket")
announced today its financial and operating results for
the first quarter
ended March 31, 2008.
Gmarket reported total revenues of Won 64.6 billion ($65.4 million) for the first quarter of 2008, representing a 35% increase from total revenues of Won 48.1 billion for the first quarter of 2007. The Company's gross merchandise value ("GMV"), which represents the total value of all items sold on Gmarket's website, increased by 29% to Won 933.4 billion ($944.2 million) for the first quarter of 2008 compared to Won 723.0 billion for the same period in 2007. Transaction fee revenues for the first quarter of 2008 were Won 36.8 billion ($37.2 million), representing a 22% increase from Won 30.3 billion for the first quarter in 2007. Advertising and other non-transaction revenues for the first quarter of 2008 were Won 27.8 billion ($28.2 million), representing a 56% increase from Won 17.8 billion for the same period in 2007. Operating income for the first quarter of 2008 was Won 10.3 billion ($10.4 million), representing an 89% increase from Won 5.5 billion for the same period in 2007. Net income for the first quarter of 2008 was Won 10.3 billion ($10.4 million), representing a 55% increase from Won 6.7 billion for the same period in 2007. Earnings per diluted share for the first quarter of 2008 increased to Won 204 or, $0.21, up from Won 132 for the same period in 2007. "We are off to a good start in 2008," said Young Bae Ku, Chief Executive Officer of Gmarket. "In the first quarter, we achieved record-high operating income and solid revenue growth in a typically slow period as compared to the fourth quarter. We believe that these results reflect our strong market position and have put us on track for another successful year." During the first quarter of 2008, the Company's registered user base grew to approximately 14.3 million from 13.7 million registered users at the end of the fourth quarter of 2007. In addition, the Company averaged 18.0 million monthly unique visitors in the first quarter of 2008, compared to 16.9 million unique visitors during the first quarter of 2007. Investor Conference Call / Webcast Details The Company's management will review detailed first quarter 2008 results on Tuesday, April 29, 2008 at 6:00 p.m. U.S. Eastern Time (7:00 a.m., April 30, 2008 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: +1 800 295 3991 or +1 617 614 3924
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: GmarketA replay of the call will be available beginning April 29 at 9:00 p.m. U.S. Eastern Time (10:00 a.m., April 30, 2008 in Seoul) at www.gmarket.co.kr/IR/ and by telephone at +1 888 286 8010 or +1 617 801 6888 with passcode 46625355 (telephone replay available through 10:59 a.m. on May 7, 2008 U.S. Eastern Time (11:59 p.m., May 7, 2008 in Seoul)). Notes: (1) The Dollar amounts provided in this release are based on an exchange rate of Won 988.60 to US$1.00, which is the noon buying rate in effect on March 31, 2008 as quoted by the Federal Reserve Bank of New York. (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. 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 in this filing on 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. Investors should consider the information contained in the Company's submissions and filings with the SEC, including the Company's registration statement on Form F-1, as amended, together with such other documents as the Company may submit to or file with the SEC from time to time, including on Forms 20-F and 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.
GMARKET INC.
UNAUDITED BALANCE SHEETS
(in millions of Korean Won and in thousands of US dollars)
December 31, March 31, March 31,
2007 2008 2008
=========== =========== ===========
Assets
Current assets:
Cash and cash equivalents \48,367 \57,407 $ 58,069
Cash on deposit 190,000 201,500 203,824
Restricted cash 8,110 10,100 10,216
Accounts receivable, net 52,565 53,154 53,767
Other current assets 8,120 8,990 9,093
=========== =========== ===========
Total current assets 307,162 331,151 334,969
Property and equipment, net 23,577 24,026 24,303
Other assets 6,305 7,058 7,140
=========== =========== ===========
Total assets \337,044 \362,235 $ 366,412
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Amounts payable to sellers \147,300 \159,724 $ 161,566
Accounts payable 22,727 21,893 22,146
Deferred revenue and advances 5,196 5,751 5,817
Loyalty program reserves 8,619 9,077 9,182
Other current liabilities 8,336 9,495 9,603
=========== =========== ===========
Total current liabilities 192,178 205,940 208,314
Other liabilities 3,268 3,884 3,928
=========== =========== ===========
Total liabilities 195,446 209,824 212,242
=========== =========== ===========
Shareholders' equity:
Common shares 4,975 4,978 5,036
Additional paid-in capital 88,080 88,569 89,590
Retained earnings 48,543 58,864 59,544
=========== =========== ===========
Total shareholders' equity 141,598 152,411 154,170
=========== =========== ===========
Total liabilities and shareholders'
equity \337,044 \362,235 $ 366,412
=========== =========== ===========
GMARKET INC.
UNAUDITED STATEMENTS OF INCOME
(in millions of Korean Won and in thousands of US dollars, except per share
data)
Three Months Ended March 31,
================================
2007 2008 2008
========== ========== ==========
Revenues:
Transaction fees \30,237 \36,813 $ 37,237
Advertising and other 17,814 27,836 28,158
========== ========== ==========
Total revenues 48,051 64,649 65,395
Costs and expenses:
Cost of revenues 25,595 34,120 34,513
Sales and marketing 12,247 12,925 13,074
General and administrative 4,759 7,288 7,373
========== ========== ==========
Total costs and expenses 42,601 54,333 54,960
========== ========== ==========
Operating income 5,450 10,316 10,435
Other income:
Interest income 2,053 3,143 3,179
Others, net 74 133 135
========== ========== ==========
Income before income tax expenses 7,577 13,592 13,749
Income tax expenses 898 3,271 3,309
========== ========== ==========
Net income \6,679 \10,321 $ 10,440
Net income per share - basic \135 \207 $ 0.21
Net income per share - diluted 132 204 0.21
Weighted average number of shares - basic 49,506,210 49,752,548 49,752,548
Weighted average number of shares -
diluted 50,529,648 50,613,952 50,613,952
GMARKET INC.
UNAUDITED STATEMENTS OF CASH FLOWS
(in millions of Korean Won and in thousands of US dollars)
Three Months Ended March 31,
============================
2007 2008 2008
======== ======== ========
Cash flows from operating activities:
Net income \6,679 \10,321 $ 10,440
Adjustments
Depreciation and amortization 1,471 2,129 2,153
Stock-based compensation expense 237 470 475
Provision for bad debt 51 133 135
Provision for severance benefits 418 688 696
Deferred tax assets (455) 4 4
Provision for loyalty program reserves 844 1,383 1,399
Others, net 5 5 6
Changes in operating assets and liabilities
Accounts receivable (590) (722) (730)
Amounts payable to sellers 5,694 12,424 12,567
Accounts payable (2,625) (834) (844)
Deferred revenue and advances 446 554 561
Other current assets (735) (933) (944)
Other current liabilities 1,464 236 239
Payment of accrued severance benefits (26) (79) (80)
======== ======== ========
Net cash provided by operating activities 12,878 25,779 26,077
======== ======== ========
Cash flows from investing activities:
(Increase) in cash on deposit, net (7,420) (11,500) (11,633)
(Increase) in restricted cash, net (110) (1,990) (2,013)
Purchase of property and equipment (2,433) (2,564) (2,593)
Decrease (Increase) in other assets, net 109 (708) (717)
======== ======== ========
Net cash used in investing activities (9,854) (16,762) (16,956)
======== ======== ========
Cash flows from financing activities:
Issuance of common shares, net - 23 23
======== ======== ========
Net cash provided by financing activities - 23 23
======== ======== ========
Net increase in cash and cash equivalents 3,024 9,040 9,144
======== ======== ========
Cash and cash equivalents
Beginning of year 34,930 48,367 48,925
======== ======== ========
End of period \37,954 \57,407 $ 58,069
======== ======== ========
GMARKET INC.
UNAUDITED SUPPLEMENTAL OPERATING DATA
2007 2008
=========================== ======
1Q 2Q 3Q 4Q 1Q
====== ====== ====== ====== ======
G M V (in billions of Won)(1) 723.0 780.0 775.6 970.0 933.4
------ ------ ------ ------ ------
Registered Users(2) (000) 11,754 12,408 12,981 13,674 14,260
====== ====== ====== ====== ======
Average Monthly Unique Visitors(3)(000) 16,931 17,581 17,925 18,712 18,036
------ ------ ------ ------ ------
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.Contact: Contacts
Paul J. Lee
Gmarket Inc.
+82-2-3016-4372
Email Contact
In the U.S.
Tyler Wilson
The Ruth Group
+1-646-536-7018
Email Contact
Source: Gmarket
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