MDC Partners Inc. Reports Results For The Three And Six Months Ended June 30, 2016

NEW YORK, July 28, 2016 /CNW/ --

SECOND QUARTER HIGHLIGHTS:

  • Reported revenue increased 0.1% to $337.0 million; Organic revenue growth of 0.3%, 20 basis points negative impact from decreased billable pass-through costs
  • Net income attributable to MDC Partners of $1.2 million vs $29.6 million
  • Adjusted EBITDA decreased 11.8% to $41.9 million, with margins of 12.4% (See Schedules 2 and 3)
  • Company revises 2016 financial guidance to reflect lowered full year expectations

YEAR-TO-DATE HIGHLIGHTS:

  • Reported revenue increased 1.1% to $646.1 million; Organic revenue growth of 1.2%, 120 basis point negative impact from decreased billable pass-through costs
  • Net loss attributable to MDC Partners of ($22.1) million vs. ($2.5) million
  • Adjusted EBITDA decreased 5.0% to $74.7 million, with margins of 11.6% (See Schedules 4 and 5)
  • Net New Business wins totaled $36.9 million in Q2 and $56.8 million year-to-date

(NASDAQ: MDCA) – MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three and six months ended June 30, 2016.

Scott Kauffman, Chairman and Chief Executive Officer of MDC Partners, said, "This was a challenging quarter for our business.  While our financial results in the second quarter were below our expectations, there's no doubt that we have a very strong underlying business that is positioned for meaningful growth in the second half of the year and beyond.  Our partners are building deep relationships with blue chip, increasingly global clients, including net new business of $57 million year-to-date. Our media business is beginning to break through, and our partners are attracting innovative talent with several recent significant hires.  Importantly, we continue to take strategic actions that are making our business stronger and more efficient.  We are confident that the steps we are taking, combined with the strength of our partners, will quickly return us to an attractive run rate, leading to solid shareholder returns."

David Doft, CFO of MDC Partners, said, "We believe that it is prudent to revise our full-year 2016 guidance to reflect our softer-than-anticipated second quarter results.  At the midpoint, our annual guidance implies a revenue increase of 5.9% and an Adjusted EBITDA increase of 6.2% as we continue to anticipate that there will be an acceleration in growth in the third and fourth quarters as recently won accounts come online.  In addition, our recent payment of approximately $84 million of deferred acquisition consideration in the second quarter was a meaningful step toward strengthening our balance sheet.  Notwithstanding our financial results thus far this year, we remain confident in the strength of our business model."

Second Quarter and Year-to-Date Financial Results

Revenue for the second quarter of 2016 was $337.0 million, an increase of 0.1%, compared to $336.6 million in the second quarter of 2015.  The effect of foreign currency translation was negative 0.7%, the impact of net acquisitions was positive 0.6%, and the resulting organic revenue growth was 0.3%. Organic revenue growth for the period was negatively impacted by 20 basis points from decreased billable pass-through costs incurred on client's behalf from certain of our partner firms acting as principal.

Net income attributable to MDC Partners in the second quarter of 2016 was $1.2 million compared to $29.6 million in the second quarter of 2015.  Diluted income per share from continuing operations attributable to MDC Partners common shareholders for the second quarter of 2016 was $0.02 compared to $0.56 per share in the second quarter of 2015.  Adjusted EBITDA for the second quarter of 2016 was $41.9 million, a decrease of 11.8% compared to $47.5 million in the second quarter of 2015.  Adjusted EBITDA Available for General Capital Purposes was $16.2 million in the second quarter of 2016, a decrease of 41.5%, compared to $27.8 million in the second quarter of 2015.

Revenue for the first six months of 2016 was $646.1 million, an increase of 1.1%, compared to $638.8 million in the first six months of 2015.  The effect of foreign currency translation was negative 1.0%, the impact of net acquisitions was positive 0.9%, and the resulting organic revenue growth was 1.2%. Organic revenue growth for the period was negatively impacted by 120 basis points from decreased billable pass-through costs incurred on client's behalf from certain of our partner firms acting as principal.

Net loss attributable to MDC Partners in the first six months of 2016 was ($22.1) million compared to ($2.5) million in the first six months of 2015.  Diluted loss per share from continuing operations attributable to MDC Partners common shareholders for the first six months of 2016 was ($0.44) compared to income of $0.05 per share in the first six months of 2015.  Adjusted EBITDA for the first six months of 2016 was $74.7 million, a decrease of 5.0%, compared to $78.6 million in the first six months of 2015.  Adjusted EBITDA Available for General Capital Purposes was $29.0 million in the first six months of 2016, a decrease of 23.8%, compared to $38.0 million in the first six months of 2015.

Financial Guidance

Guidance for 2016 is revised as follows:

Prior

Revised

Implied

2015

2016

2016

Year over Year

Actuals

Guidance

Guidance

Change

Revenue

 $1.326 billion 

 $1.410 - $1.440 billion 

 $1.390 - $1.420 billion 

 +4.8% to +7.1% 

Adjusted EBITDA

 $197.7 million 

 $225 - $235 million 

 $205 - $215 million 

 +3.7% to +8.8% 

Implied Adjusted EBITDA Margin

14.9%

15.8% to 16.4%

14.7% to 15.1%

-15 to +25 basis points

Adjusted EBITDA Available for

 $113.4 million 

 $130 - $140 million 

 $110 - $120 million 

 -3.0% to +5.8% 

General Capital Purposes

MDC Partners Announces $0.21 per Share Quarterly Cash Dividend

MDC Partners today also announced that its Board of Directors has declared a cash dividend of $0.21 per share on all of its outstanding Class A shares and Class B shares.  The quarterly dividend will be payable on or about August 24, 2016, to shareholders of record at the close of business on August 10, 2016.

Conference Call

Management will host a conference call on Thursday, July 28, 2016, at 4:30 p.m. (ET) to discuss results.  The conference call will be accessible by dialing 1-412-902-4266 or toll free 1-888-346-6216.  An investor presentation has been posted on our website www.mdc-partners.com and may be referred to during the conference call.

A recording of the conference call will be available one hour after the call until 12:00 a.m. (ET), August 4, 2016, by dialing 1-412-317-0088 or toll free 1-877-344-7529 (passcode 10090304), or by visiting our website at www.mdc-partners.com.

About MDC Partners Inc.

MDC Partners is one of the fastest-growing and most influential marketing and communications networks in the world.  Its 50+ advertising, public relations, branding, digital, social and event marketing agencies are responsible for some of the most memorable and engaging campaigns for the world's most respected brands.  As "The Place Where Great Talent Lives," MDC Partners is known for its unique partnership model, empowering the most entrepreneurial and innovative talent to drive competitive advantage and business growth for clients.  By leveraging technology, data analytics, insights, and strategic consulting solutions, MDC Partners drives measurable results and optimizes return on marketing investment for over 1,700 clients worldwide.  For more information about MDC Partners and its partner firms, visit our website at www.mdc-partners.com and follow us on Twitter at http://www.twitter.com/mdcpartners.

Non-GAAP Financial Measures

In addition to its reported results, MDC Partners has included in this earnings release certain financial results that the Securities and Exchange Commission defines as "non-GAAP financial measures."  Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures for the three and six months ended June 30, 2016, and 2015, include the following:

(1) Organic Revenue: "Organic revenue growth" and "organic revenue decline" refer to the positive or negative results, respectively, of the following calculation: (i) the change in revenue during the relevant time period, less (ii) for each business acquired in the current year, the incremental impact on revenue for the comparable period prior to the Company's ownership of such acquired business, less revenue from each business acquired by the Company in the previous year through the twelve month anniversary of the Company's ownership, plus (iii) for each business disposed of in the current year, the incremental impact on revenue for the comparable period after the Company's disposition of such disposed business, plus revenue from each business disposed of by the Company in the previous year through the twelve month anniversary of the Company's disposition, less (iv) foreign exchange impacts.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that represents operating profit plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

 (4) Adjusted EBITDA Available for General Capital Purposes: Adjusted EBITDA Available for General Capital Purposes is a non-GAAP measure that represents Adjusted EBITDA less net income attributable to the noncontrolling interests, capital expenditures net of landlord reimbursements, cash taxes, and cash interest, net & other.

(5) Net Bank Debt or Net Debt: Debt due pertaining to the revolving credit facility plus debt pertaining to the Senior Notes less total cash and cash equivalents.

Included in this earnings release are tables reconciling MDC Partners' reported results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. The Company's representatives may also make forward-looking statements orally from time to time. Statements in this press release that are not historical facts, including statements about the Company's beliefs and expectations, earnings guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements.  These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section.  Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties.  A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

  • risks associated with the SEC's ongoing investigation and the related class action litigation claims;
  • risks associated with severe effects of international, national and regional economic downturn;
  • the Company's ability to attract new clients and retain existing clients;
  • the spending patterns and financial success of the Company's clients;
  • the Company's ability to retain and attract key employees;
  • the Company's ability to remain in compliance with its debt agreements and the Company's ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests and deferred acquisition consideration;
  • the successful completion and integration of acquisitions which complement and expand the Company's business capabilities; and
  • foreign currency fluctuations.

The Company's business strategy includes ongoing efforts to engage in acquisitions of ownership interests in entities in the marketing communications services industry.  The Company intends to finance these acquisitions by using available cash from operations, from borrowings under its credit facility and through incurrence of bridge or other debt financing, any of which may increase the Company's leverage ratios, or by issuing equity, which may have a dilutive impact on existing shareholders proportionate ownership.  At any given time the Company may be engaged in a number of discussions that may result in one or more acquisitions.  These opportunities require confidentiality and may involve negotiations that require quick responses by the Company.  Although there is uncertainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of the Company's securities. 

Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Annual Report on Form 10-K under the caption "Risk Factors" and in the Company's other SEC filings.

 

SCHEDULE 1

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(US$ in 000s, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30, 

2016

2015

2016

2015

Revenue

$                    337,047

$                    336,606

$                    646,089

$                    638,828

Operating Expenses:

Cost of services sold

228,835

225,042

440,281

435,461

Office and general expenses

72,709

53,075

150,537

127,383

Depreciation and amortization

11,436

14,007

22,656

26,307

312,980

292,124

613,474

589,151

Operating profit

24,067

44,482

32,615

49,677

Other Income (Expense):

Other, net

26

4,348

15,538

(13,692)

Interest expense and finance charges

(17,174)

(13,288)

(32,749)

(28,384)

Loss on redemption of notes

-

-

(33,298)

-

Interest income

203

105

381

224

Income (loss) from continuing operations before income taxes

  and equity in earnings of non-consolidated affiliates

7,122

35,647

(17,513)

7,825

Income tax expense

4,405

4,679

2,433

625

Income (loss) from continuing operations before equity in

  earnings of non-consolidated affiliates

2,717

30,968

(19,946)

7,200

Equity in earnings (loss) of non-consolidated affiliates

(290)

104

(61)

455

Income (loss) from continuing operations

2,427

31,072

(20,007)

7,655

Income (loss) from discontinued operations attributable to

  MDC Partners Inc., net of taxes

-

1,329

-

(4,965)

Net income (loss)

2,427

32,401

(20,007)

2,690

Net income attributable to the noncontrolling interests

(1,254)

(2,841)

(2,113)

(5,221)

Net income (loss) attributable to MDC Partners Inc.

$                       1,173

$                     29,560

$                    (22,120)

$                      (2,531)

Income (Loss) Per Common Share:

Basic:

Income (loss) from continuing operations attributable to

   MDC Partners Inc. common shareholders

$                         0.02

$                         0.57

$                       (0.44)

$                         0.05

Discontinued operations attributable to MDC

   Partners Inc. common shareholders

-

0.03

-

(0.10)

Net income (loss) attributable to MDC Partners Inc.

   common shareholders

$                         0.02

$                         0.60

$                       (0.44)

$                       (0.05)

Diluted:

Income (loss) from continuing operations attributable to

   MDC Partners Inc. common shareholders

$                         0.02

$                         0.56

$                       (0.44)

$                         0.05

Discontinued operations attributable to MDC

   Partners Inc. common shareholders

-

0.03

-

(0.10)

Net income (loss) attributable to MDC Partners Inc.

   common shareholders

$                         0.02

$                         0.59

$                       (0.44)

$                       (0.05)

Weighted Average Number of Common Shares Outstanding:

Basic

50,322,757

49,859,300

50,162,654

49,807,419

Diluted

50,703,548

50,399,936

50,162,654

50,365,119

 

 

SCHEDULE 2

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Three Months Ended June 30, 2016

Advertising and

Communications

Corporate

Total

Revenue

$                  337,047

$                           -

$                  337,047

Net income attributable to MDC Partners Inc.

$                      1,173

Adjustments to reconcile to Operating profit (loss):

   Net income attributable to the noncontrolling interests

1,254

   Loss from discontinued operations attributable to  

MDC Partners Inc., net of taxes

-

   Equity in losses of non-consolidated affiliates

290

   Income tax expense

4,405

   Interest expense and finance charges, net

16,971

   Loss on redemption of notes

-

   Other, net

(26)

Operating profit (loss)

$                    36,868

$                  (12,801)

$                    24,067

margin

10.9%

7.1%

Additional adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization

10,926

510

11,436

Stock-based compensation

4,880

650

5,530

Acquisition deal costs

402

505

907

Deferred acquisition consideration adjustments

(299)

-

(299)

Distributions from non-consolidated affiliates **

-

-

-

Other items, net ***

-

252

252

Adjusted EBITDA *

$                    52,777

$                  (10,884)

$                    41,893

margin

15.7%

12.4%

* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based 

compensation, acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

** Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

*** Other items, net includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses, (ii) legal fees and

related expenses, net of insurance proceeds, relating to the ongoing SEC investigation and related class action litigation claims, (iii) one-time charge for the

balance of prior cash bonus award amounts paid to the former CEO and CAO that will not be recovered, and (iv) write-off of certain assets related to the

CEO and CAO termination.  See Schedule 9 for reconciliation of amounts.

 

 

SCHEDULE 3

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Three Months Ended June 30, 2015

Advertising and

Communications

Corporate

Total

Revenue

$                  336,606

$                           -

$                  336,606

Net income attributable to MDC Partners Inc.

$                    29,560

Adjustments to reconcile to Operating profit (loss):

   Net income attributable to the noncontrolling interests

2,841

   Income from discontinued operations attributable to 

MDC Partners Inc., net of taxes

(1,329)

   Equity in earnings of non-consolidated affiliates

(104)

   Income tax expense

4,679

   Interest expense and finance charges, net

13,183

   Other, net

(4,348)

Operating profit (loss)

$                    54,372

$                    (9,890)

$                    44,482

margin

16.2%

13.2%

Additional adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization

13,554

453

14,007

Stock-based compensation

4,863

451

5,314

Acquisition deal costs

255

587

842

Deferred acquisition consideration adjustments

(12,741)

-

(12,741)

Distributions from non-consolidated affiliates **

176

112

288

Other items, net ***

-

(4,718)

(4,718)

Adjusted EBITDA *

$                    60,479

$                  (13,005)

$                    47,474

margin

18.0%

14.1%

* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based 

compensation, acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

** Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

*** Other items, net includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses, (ii) legal fees and

related expenses, net of insurance proceeds, relating to the ongoing SEC investigation and related class action litigation claims, (iii) one-time charge for the

balance of prior cash bonus award amounts paid to the former CEO and CAO that will not be recovered, and (iv) write-off of certain assets related to the

CEO and CAO termination.  See Schedule 9 for reconciliation of amounts.

 

 

SCHEDULE 4

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Six Months Ended June 30, 2016

Advertising and

Communications

Corporate

Total

Revenue

$                  646,089

$                           -

$                  646,089

Net loss attributable to MDC Partners Inc.

$                  (22,120)

Adjustments to reconcile to Operating profit (loss):

   Net income attributable to the noncontrolling interests

2,113

   Loss from discontinued operations attributable to 

MDC Partners Inc., net of taxes

-

   Equity in losses of non-consolidated affiliates

61

   Income tax expense

2,433

   Interest expense and finance charges, net

32,368

   Loss on redemption of notes

33,298

   Other, net

(15,538)

Operating profit (loss)

$                    58,546

$                  (25,931)

$                    32,615

margin

9.1%

5.0%

Additional adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization

21,749

907

22,656

Stock-based compensation

8,761

1,454

10,215

Acquisition deal costs

467

993

1,460

Deferred acquisition consideration adjustments

6,028

-

6,028

Distributions from non-consolidated affiliates **

-

-

-

Other items, net ***

-

1,738

1,738

Adjusted EBITDA *

$                    95,551

$                  (20,839)

$                    74,712

margin

14.8%

11.6%

* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation,

acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

** Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

*** Other items, net includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses, (ii) legal fees and

related expenses, net of insurance proceeds, relating to the ongoing SEC investigation and related class action litigation claims, (iii) one-time charge for the

balance of prior cash bonus award amounts paid to the former CEO and CAO that will not be recovered, and (iv) write-off of certain assets related to the

CEO and CAO termination.  See Schedule 9 for reconciliation of amounts.

 

 

SCHEDULE 5

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Six Months Ended June 30, 2015

Advertising and

Communications

Corporate

Total

Revenue

$                  638,828

$                           -

$                  638,828

Net loss attributable to MDC Partners Inc.

$                    (2,531)

Adjustments to reconcile to Operating profit (loss):

   Net income attributable to the noncontrolling interests

5,221

   Loss from discontinued operations attributable to 

MDC Partners Inc., net of taxes

4,965

   Equity in earnings of non-consolidated affiliates

(455)

   Income tax expense

625

   Interest expense and finance charges, net

28,160

   Other, net

13,692

Operating profit (loss)

$                    80,385

$                  (30,708)

$                    49,677

margin

12.6%

7.8%

Additional adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization

25,408

899

26,307

Stock-based compensation

8,363

1,396

9,759

Acquisition deal costs

539

1,177

1,716

Deferred acquisition consideration adjustments

(10,493)

-

(10,493)

Distributions from non-consolidated affiliates **

510

120

630

Other items, net ***

-

1,044

1,044

Adjusted EBITDA *

$                  104,712

$                  (26,072)

$                    78,640

margin

16.4%

12.3%

* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation,

acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

** Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

*** Other items, net includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses, (ii) legal fees and

related expenses, net of insurance proceeds, relating to the ongoing SEC investigation and related class action litigation claims, (iii) one-time charge for the

balance of prior cash bonus award amounts paid to the former CEO and CAO that will not be recovered, and (iv) write-off of certain assets related to the

CEO and CAO termination.  See Schedule 9 for reconciliation of amounts.

 

 

SCHEDULE 6

MDC PARTNERS INC.

UNAUDITED ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES

(US$ in 000s)

Three Months Ended June 30,

Six Months Ended June 30, 

2016

2015

2016

2015

Adjusted EBITDA (1)

$                     41,893

$                     47,474

$                     74,712

$                     78,640

Net income attributable to the noncontrolling interests

(1,254)

(2,841)

(2,113)

(5,221)

Capital expenditures, net (2)

(7,038)

(3,812)

(12,577)

(9,112)

Cash taxes

(664)

(175)

(807)

(715)

Cash interest, net & other (3)

(16,689)

(12,893)

(30,219)

(25,544)

Adjusted EBITDA Available for General Capital Purposes (4)

$                     16,248

$                     27,753

$                     28,996

$                     38,048

(1) Adjusted EBITDA is a non GAAP measure.  See schedules 2 through 5 for a reconciliation of Net income (loss) to Adjusted EBITDA.  

(2) Capital expenditures, net represents capital expenditures net of landlord reimbursements.  See Schedule 9 for reconciliation of amounts.

(3) Cash interest, net & other represents the cash interest paid for our borrowings, less interest income, adjusted for the quarterly accrual of cash interest under our Senior Notes.  See Schedule 9 for reconciliation of amounts.

(4) Adjusted EBITDA Available for General Capital Purposes is a non-GAAP measure, and represents funds available for repayment of debt, acquisitions, deferred acquisition consideration, dividends, and other general corporate initiatives.

 

 

SCHEDULE 7

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(US$ in 000s)

June 30,

December 31,

2016

2015

Assets

Current Assets:

Cash and cash equivalents

$           16,062

$           61,458

Cash held in trusts

5,345

5,122

Accounts receivable, net

421,270

361,044

Expenditures billable to clients

51,708

44,012

Other current assets

51,327

37,109

Total Current Assets

545,712

508,745

Fixed assets, net

66,763

63,557

Investment in non-consolidated affiliates

6,392

6,263

Goodwill

876,644

870,301

Other intangible assets, net

61,418

72,382

Deferred tax assets

20,159

15,367

Other assets

39,065

41,010

Total Assets

$       1,616,153

$       1,577,625

Liabilities, Redeemable Noncontrolling Interests and Shareholders' Deficit

Current Liabilities:

Accounts payable

$         308,909

$         359,568

Trust liability

5,345

5,122

Accruals and other liabilities

236,986

297,964

Advance billings

159,279

119,100

Current portion of long-term debt

361

470

Current portion of deferred acquisition consideration

102,985

130,400

Total Current Liabilities

813,865

912,624

Long-term debt, less current portion

987,381

728,413

Long-term portion of deferred acquisition consideration

129,059

216,704

Other liabilities

45,003

44,905

Deferred tax liabilities

98,191

92,581

Total Liabilities

2,073,499

1,995,227

Redeemable Noncontrolling Interests

65,367

69,471

Shareholders' Deficit

Common shares

275,883

269,842

Shares to be issued

2,360

-

Charges in excess of capital

(307,323)

(315,261)

Accumulated deficit

(549,110)

(526,990)

Accumulated other comprehensive income (loss)

(6,227)

6,257

MDC Partners Inc. Shareholders' Deficit

(584,417)

(566,152)

Noncontrolling Interests

61,704

79,079

Total Shareholders' Deficit

(522,713)

(487,073)

Total Liabilities, Redeemable Noncontrolling 

   Interests and Shareholders' Deficit

$       1,616,153

$       1,577,625

 

 

SCHEDULE 8

MDC PARTNERS INC.

UNAUDITED SUMMARY CASH FLOW DATA

(US$ in 000s)

Six Months Ended June 30, 

2016

2015

Cash flows provided by (used in) continuing operating activities

$                (138,497)

$                    69,478

Discontinued operations

-

(995)

Net cash provided by (used in) operating activities

(138,497)

68,483

Cash flows used in continuing investing activities

(16,762)

(36,073)

Discontinued operations

-

18,070

Net cash used in investing activities

(16,762)

(18,003)

Cash flows provided by (used in) continuing financing activities

109,672

(129,105)

  Discontinued operations

-

(40)

Net cash provided by (used in) financing activities

109,672

(129,145)

Effect of exchange rate changes on cash and cash equivalents

191

168

Net decrease in cash and cash equivalents

$                  (45,396)

$                  (78,497)

 

 

SCHEDULE 9

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF COMPONENTS OF NON-GAAP MEASURES

(US$ in 000s)

2015

2016

Q1

Q2

Q3

Q4

FY

Q1

Q2

YTD

OTHER ITEMS, NET

SEC investigation and class action litigation expenses

$      5,762

$      3,882

$      2,722

$      1,340

$    13,706

$      1,486

$      1,359

$      2,845

D&O insurance proceeds

-

-

-

(1,000)

(1,000)

-

(1,107)

(1,107)

CEO repayment for certain perquisites and expenses

-

(8,600)

(1,877)

(808)

(11,285)

-

-

-

CEO and CAO termination related expenses

-

-

6,906

-

6,906

-

-

-

Total other items, net

$      5,762

$    (4,718)

$      7,751

$       (468)

$      8,327

$      1,486

$         252

$      1,738

2015

2016

Q1

Q2

Q3

Q4

FY

Q1

Q2

YTD

CAPITAL EXPENDITURES, NET

Capital expenditures

$    (5,656)

$    (3,848)

$    (8,161)

$    (5,910)

$  (23,575)

$    (5,539)

$    (7,909)

$  (13,448)

Landlord reimbursements

356

36

1,259

805

2,456

-

871

871

Total capital expenditures, net

$    (5,300)

$    (3,812)

$    (6,902)

$    (5,105)

$  (21,119)

$    (5,539)

$    (7,038)

$  (12,577)

2015

2016

Q1

Q2

Q3

Q4

FY

Q1

Q2

YTD

CASH INTEREST, NET & OTHER

Cash interest paid

$       (367)

$  (25,401)

$       (590)

$  (26,308)

$  (52,666)

$  (25,703)

$    (1,212)

$  (26,915)

Bond interest accrual adjustment

(12,403)

12,403

(12,403)

12,403

-

11,995

(15,680)

(3,685)

Adjusted cash interest paid

(12,770)

(12,998)

(12,993)

(13,905)

(52,666)

(13,708)

(16,892)

(30,600)

Interest income

119

105

114

129

467

178

203

381

Other

-

-

-

-

-

-

-

-

Total cash interest, net & other

$  (12,651)

$  (12,893)

$  (12,879)

$  (13,776)

$  (52,199)

$  (13,530)

$  (16,689)

$  (30,219)

 

 

CONTACT:      Matt Chesler, CFA  VP, Investor Relations 646-412-6877  mchesler@mdc-partners.com

 

 

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SOURCE MDC Partners Inc.


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