MDC Partners Inc. reports results for the three and six months ended June 30,
2010

Increases Quarterly Dividend 10% to $0.11 per Share From $0.10 Previously

    
    SECOND QUARTER HIGHLIGHTS:

    -   Revenue increased to $170.0 million versus $134.9 million in Q2 2009,
        an increase of 26.0%
    -   Organic revenue increased 5.3% for Q2 2010, an over 500 basis point
        acceleration from Q1 2010
    -   EBITDA decreased slightly to $18.3 million versus $18.5 million in Q2
        2009 due to timing of client activity and investment in key talent
        and growth initiatives
    -   Net new business wins of $27.2 million for Q2 2010, an increase of
        over $20 million from Q1, to bring the year to date total to $33.8
        million
    -   Digital revenue increased to 43% of total revenues in Q2 2010 from
        41% in Q1 2010
    -   Adjusting fiscal 2010 guidance for change to consolidated EBITDA from
        MDC EBITDA
    -   Increasing 2010 revenue guidance to $640-655 million, an estimated
        increase of 17.2% to 20.0% from 2009
    -   2010 consolidated EBITDA guidance increased to $86-88 million, an
        estimated increase of 22.6% to 25.4% from 2009
    -   Increasing Total Free Cash Flow guidance to $61-63 million from $53-
        55 million due to increased improvement in Working Capital and Other
    -   Increasing quarterly dividend 10% to $0.11 per share from $0.10
    -   Agreed to acquire a majority interest in a leading experiential
        marketing firm
    

NEW YORK, July 29 /CNW/ - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three and six months ended June 30, 2010.

"We are very pleased with our second quarter financial performance, and particularly with the way our businesses performed in the latter part of the period," said Miles S. Nadal, Chairman and Chief Executive Officer of MDC Partners. "We're leading the industry in developing marketing strategies that deliver superior return on marketing investment. This success is enabling us to win new business at an unprecedented pace. We are building long-term and profitable relationships with some of the biggest and best marketing brands in the world. With business momentum picking up significantly in the second quarter, the second half of 2010 is shaping up to be particularly robust, and we are well on our way to an industry-leading financial performance with increased 2010 guidance on all financial metrics. We are very well positioned to continue our growth in 2011."

Guidance for 2010 is adjusted as follows to account for a change to consolidated EBITDA from MDC EBITDA due to the diminishing income from noncontrolling interests as a percent of the total business, acquisitions and expected improvements in cash generation:

    
                    ---------------------------------------------------------
                                         Implied                     Implied
                           Adjusted     Year over     Pro Forma     Year over
                             2010          Year          2010          Year
                           Guidance       Change       Estimate       Change
    -------------------------------------------------------------------------
                             $640 -       +17.2%         $675 -       +23.6%
    Revenue            $655 million    to +20.0%   $690 million    to +26.4%

                              $86 -       +22.6%          $96 -       +36.8%
    EBITDA              $88 million    to +25.4%    $98 million    to +39.7%

                              $41 -        +0.2%          $48 -       +17.3%
    Free Cash Flow      $43 million     to +5.1%    $50 million    to +22.2%

    + Change in
     Working Capital
     and Other         +$20 million                +$20 million
                       -------------               -------------
    Total Free                $61 -       +10.5%          $68 -       +23.2%
     Cash Flow          $63 million    to +14.1%    $70 million    to +26.8%
    -------------------------------------------------------------------------
    

Note: The "Pro Forma 2010 Estimate" section of the above table accounts for recent acquisitions as if financial contributions to MDC occur for the entirety of 2010.

Consolidated revenue for the second quarter of 2010 was $170.0 million, an increase of 26.0% compared to $134.9 million in the second quarter of 2009. EBITDA (as defined) for the second quarter of 2010 was $18.3 million, a decrease of 1.1% compared to $18.5 million in the second quarter of 2009 driven by the timing of client wins and losses and our planned investment in talent and other growth initiatives. Net income (loss) attributable to MDC Partners Inc. in the second quarter was a loss of ($5.8) million compared to nominal income in the second quarter of 2009. Diluted earnings (loss) per share from continuing operations attributable to MDC Partners Inc. common shareholders for the second quarter of 2010 was a loss of ($0.19) compared with $0.01 per share in the same period of 2009. Free cash flow (as defined) was $5.5 million in the second quarter of 2010, compared with $12.9 million in the second quarter of 2009.

For the six month ended June 30, 2010 consolidated revenue was $306.2 million, an increase of 17.0% compared to $261.6 million in the same period of 2009. EBITDA (as defined) for the first six months of 2010 was $27.1 million, a decrease of 10.0% compared to $30.1 million in the first six months of 2009. Net income (loss) attributable to MDC Partners Inc. for the first six months of 2010 was a loss of ($16.0) million compared to nominal income in the first half of 2009. Diluted earnings (loss) per share from continuing operations attributable to MDC Partners Inc. common shareholders for the six months ended June 30, 2010 was a loss of ($0.55) compared with $0.02 per share in the same period of 2009.

"Our strategy to deliver solid organic growth and to strategically invest capital was reinforced in the first half of the year," said David Doft, Chief Financial Officer. "The strategic acquisitions that we have completed are all operating on or ahead of expectations, and contributing positively to our financial performance. Additionally, the 5.3% organic revenue growth accelerated throughout the second quarter and our overall financial performance for the quarter exceeded our internal expectations. In particular, our results for June were up dramatically year over year and give us great confidence in our momentum for the rest of 2010. While our investment in talent and infrastructure weighed on our profitability metrics in the first two quarters of 2010, we are beginning to see significant positive returns. We also fully expect that the robust new business pipeline and wins we are experiencing now will significantly enhance our organic growth and our financial performance in the second half of 2010, and for the full year 2011."

MDC Partners Announces $0.11 per Share Cash Dividend

MDC Partners today also announced that its Board of Directors has declared a cash dividend of $0.11 per share on all of its outstanding Class A shares and Class B shares. The dividend will be payable on August 27, 2010 to shareholders of record at the close of business on August 13, 2010.

"As we previously stated in the first quarter of 2010, we are dedicated to rewarding all of our shareholders for their loyalty and commitment," said Mr. Nadal. "The payment of cash dividends remains an important part of our ongoing strategy to maximize shareholder value. The new dividend of $0.11 per share represents a 10% increase above MDC Partners' last dividend payment and is representative of the significant increase in free cash flow that MDC has achieved to date. As free cash flow continues to increase over time, we expect dividend payments to continue to increase as well."

Conference Call

Management will host a conference call on July 30, 2010 at 8:00 a.m. (EST) to discuss our results. The conference call will be accessible by dialing 1-647-427-7450 or toll free 1-888-231-8191. An investor presentation has been posted on our website www.mdc-partners.com and will be referred to during the conference call.

A recording of the conference call will be available until Friday, August 13, 2010 by dialing 1-416-849-0833 or toll free 1-800-642-1687 (passcode 86728867No.) or by visiting our website.

About MDC Partners Inc.

MDC Partners is a progressive Marketing and Communications Network, championing the most innovative entrepreneurial talent. MDC Partners provides strategic solutions and services to multinational clients in North America, Europe and Latin America. Our philosophy emphasizes the utilization of Strategy and High Value Creativity to drive growth and measurable impact for our clients. "MDC Partners is The Place Where Great Talent Lives." The company's Class A shares are publicly traded on the NASDAQ under the symbol "MDCA" and on the Toronto Stock Exchange under the symbol "MDZ.A".

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. These non-GAAP financial measures relate to: (1) presenting EBITDA and EBITDA margin (as defined) for the three months and six months ended June 30, 2010 and 2009; and (2) presenting Free Cash Flow and Free Cash Flow per Share (as defined) for the three months and six months ended June 30, 2010 and 2009. Included in this earnings release are tables reconciling MDC's reported results to arrive at 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, recent business and economic trends, potential acquisitions, estimates of amounts for deferred acquisition consideration and "put" option rights, 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 severe effects of national and regional
        economic downturn;
    -   the Company's ability to attract new clients and retain existing
        clients;
    -   the 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 "put" option right and deferred acquisition
        consideration;
    -   the successful completion and integration of acquisitions which
        complement and expand the Company's business capabilities; and
    -   foreign currency fluctuations.
    

In addition to improving organic growth for its existing operations, the Company's business strategy includes ongoing efforts to engage in material 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 and through incurrence of bridge or other debt financing, either 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 material 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.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              (US$ in 000s, except share and per share amounts)

                                 Three Months Ended       Six Months Ended
                                     June 30,                June 30,
                              ----------------------- -----------------------
                                    2010        2009        2010        2009
    -------------------------------------------------------------------------
    Revenue                     $169,989    $134,882    $306,171    $261,620

    Operating Expenses:
      Cost of services sold      116,766      88,238     213,735     174,117
      Office and general
       expenses                   39,110      30,173      73,735      61,325
      Depreciation and
       amortization                8,039       7,604      13,872      15,197
                              ----------------------- -----------------------
                                 163,915     126,015     301,342     250,639
                              ----------------------- -----------------------

    Operating profit               6,074       8,867       4,829      10,981

    Other Income (Expenses):
      Other income (expense)        (287)     (2,541)       (900)         89
      Interest expense and
       finance charges            (8,425)     (3,723)    (15,453)     (7,484)
      Interest income                 57          70          78         272
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations
     before income taxes and
     equity in affiliates         (2,581)      2,673     (11,446)      3,858

    Income tax expense               552       1,608         801       2,223
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations
     before equity in
     affiliates                   (3,133)      1,065     (12,247)      1,635
    Equity in earnings (loss)
     of non-consolidated
     affiliates                      (39)        105        (143)        198
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations        (3,172)      1,170     (12,390)      1,833
    Loss from discontinued
     operations, net of taxes       (647)       (108)       (647)       (361)
                              ----------------------- -----------------------
    Net income (loss)             (3,819)      1,062     (13,037)      1,472
    Net income attributable
     to the noncontrolling
     interests                    (1,986)       (983)     (2,954)     (1,365)
                              ----------------------- -----------------------
    Net income (loss)
     attributable to MDC
     Partners Inc.               ($5,805)        $79    ($15,991)       $107
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (Loss) Per Common
     Share:
      Basic:
        Income (loss) from
         continuing operations
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.19)      $0.01      ($0.55)      $0.02
        Discontinued operations   ($0.02)     ($0.00)     ($0.02)     ($0.01)
                              ----------------------- -----------------------

        Net income (loss)
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.21)      $0.01      ($0.57)      $0.01
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (Loss) Per Common
     Share:
      Diluted:
        Income (loss) from
         continuing operations
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.19)      $0.01      ($0.55)      $0.02
        Discontinued operations   ($0.02)     ($0.00)     ($0.02)     ($0.01)
                              ----------------------- -----------------------
        Net income (loss)
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.21)      $0.01      ($0.57)      $0.01
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Weighted Average Number
     of Common Shares:
      Basic                   27,800,953  27,440,030  27,716,895  27,278,786
      Diluted                 27,800,953  27,684,194  27,716,895  27,278,786
    -------------------------------------------------------------------------




                                 SCHEDULE 2

                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Three Months Ended June 30, 2010

                               Strategic  Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------
    Revenue                     $106,980     $63,009           -    $169,989
                               ----------------------------------------------
                               ----------------------------------------------

    Operating income (loss)
     as reported                 $10,377      $1,338     ($5,641)     $6,074

    Add:
      Depreciation and
       amortization                4,238       3,707          94       8,039
      Stock-based compensation     1,078         399       1,411       2,888
      Acquisition deal costs          41         265          25         331
      Deferred acquisition
       consideration
       adjustments to P&L            113         738         126         977
                               ----------------------------------------------

    EBITDA*                     15,847       6,447      (3,985)     18,309
    margin                         14.8%       10.2%                   10.8%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization, stock-
        based compensation, acquisition deal costs and deferred acquisition
        consideration adjustments.



                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Three Months Ended June 30, 2009

                               Strategic  Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------
    Revenue                      $88,248     $46,634           -    $134,882
                               ----------------------------------------------
                               ----------------------------------------------

    Operating income
     (loss) as reported          $11,491      $1,596     ($4,220)     $8,867

    Add:
      Depreciation and
       amortization                5,480       2,043          81       7,604
      Stock-based compensation       371         184       1,490       2,045
      Acquisition deal costs           -           -           -           -
      Deferred acquisition
       consideration
       adjustments to P&L              -           -           -           -
                               ----------------------------------------------

    EBITDA*                     17,342       3,823      (2,649)     18,516
    margin                         19.7%        8.2%                   13.7%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,
        stock-based compensation, acquisition deal costs and deferred
        acquisition consideration adjustments.



                                 SCHEDULE 3

                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Six Months Ended June 30, 2010

                               Strategic  Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------
    Revenue                     $198,505    $107,666           -    $306,171
                               ----------------------------------------------
                               ----------------------------------------------

    Operating income (loss)
     as reported                 $16,660     ($1,314)   ($10,517)     $4,829

    Add:
      Depreciation and
       amortization                7,539       6,146         187      13,872
      Stock-based compensation     2,831         765       2,759       6,355
      Acquisition deal costs          41         664          25         730
      Deferred acquisition
       consideration
       adjustments to P&L            309         876         126       1,311
                               ----------------------------------------------

    EBITDA*                     27,380       7,137      (7,420)     27,097
    margin                         13.8%        6.6%                    8.9%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,stock-
        based compensation, acquisition deal costs and deferred acquisition
        consideration adjustments.



                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Six Months Ended June 30, 2009

                               Strategic  Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------
    Revenue                     $172,711     $88,909           -    $261,620
                               ----------------------------------------------
                               ----------------------------------------------

    Operating income (loss)
     as reported                 $18,290        $917     ($8,226)    $10,981

    Add:
      Depreciation and
       amortization               10,852       4,170         175      15,197
      Stock-based compensation       804         374       2,764       3,942
      Acquisition deal costs           -           -           -           -
      Deferred acquisition
       consideration
       adjustments to P&L              -           -           -           -
                               ----------------------------------------------

    EBITDA*                      29,946      5,461      (5,287)     30,120
    margin                          17.3%       6.1%                   11.5%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization, stock-
        based compensation, acquisition deal costs and deferred acquisition
        consideration adjustments.



                                 SCHEDULE 4

                              MDC PARTNERS INC.
                               FREE CASH FLOW
              (US$ in 000s, except share and per share amounts)

                                Three Months Ended       Six Months Ended
                                     June 30,                June 30,
                              ----------------------- -----------------------
                                    2010        2009        2010        2009
    -------------------------------------------------------------------------
    EBITDA                       $18,309     $18,516      27,097     $30,120
    Net Income Attibutable to
     Noncontrolling Interests    ($1,986)      ($983)     (2,954)    ($1,365)
    Capital Expenditures          (2,958)     (1,257)     (5,720)     (2,087)
    Cash Taxes                      (158)       (468)       (803)       (402)
    Cash Interest, net & Other    (7,694)     (2,931)    (13,982)     (5,584)
                               ----------------------------------------------

    Free Cash Flow*             $5,513     $12,877      $3,638     $20,682
                               ----------------------------------------------
                               ----------------------------------------------

    Diluted Common Shares
     Outstanding              27,800,953  27,684,194  27,716,895  27,278,786

    Free Cash Flow per Share       $0.20       $0.47       $0.13       $0.76
                               ----------------------------------------------
                               ----------------------------------------------

    * As defined by MDC Partners



                                 SCHEDULE 5

                              MDC PARTNERS INC.
                         CONSOLIDATED BALANCE SHEETS
                                (US$ in 000s)

                                                       June 30,  December 31,
                                                          2010          2009
    -------------------------------------------------------------------------
    Assets
      Current Assets:
        Cash and cash equivalents                      $47,454       $51,926
        Accounts receivable, net                       146,346       118,211
        Expenditures billable to clients                44,708        24,003
        Other current assets                            10,603         8,105
                                                -----------------------------
      Total Current Assets                             249,111       202,245

      Fixed assets, net                                 37,073        35,375
      Investment in affiliates                           1,385         1,547
      Goodwill                                         415,541       301,632
      Other intangible assets, net                      57,164        34,715
      Deferred tax assets                               12,546        12,542
      Other assets                                      19,166        16,463
                                                -----------------------------
    Total Assets                                      $791,986      $604,519
                                                -----------------------------
                                                -----------------------------


    Liabilities and Shareholders' Equity
      Current Liabilities:
        Accounts payable                               $88,721       $77,450
        Accrued and other liabilities                   59,299        66,967
        Advance billings                               122,957        65,879
        Current portion of long term debt                1,502         1,456
        Current portion of deferred
         acquisition consideration                      23,640        30,645
                                                -----------------------------
      Total Current Liabilities                        296,119       242,397

      Revolving credit facility                              -             -
      Long-term debt                                   284,640       216,490
      Long-term portion of deferred
       acquisition consideration                        40,328             -
      Other liabilities                                  8,519         8,707
      Deferred tax liabilities                           8,989         9,051
                                                -----------------------------
      Total Liabilities                                638,595       476,645
                                                -----------------------------

    Redeemable Noncontrolling Interests                 34,626        33,728
                                                -----------------------------

      Shareholders' Equity:
        Common shares                                  220,030       218,533
        Additional paid in capital                       6,491         9,174
        Accumulated deficit                           (147,151)     (131,160)
        Stock subscription receivable                     (217)         (341)
        Accumulated other comprehensive loss            (5,420)       (5,880)
                                                -----------------------------
        MDC Partners Inc. Shareholders' Equity          73,733        90,326
        Noncontrolling Interests                        45,032         3,820
                                                -----------------------------
      Total Equity                                     118,765        94,146
                                                -----------------------------

    Total Liabilities, Redeemable Noncontrolling
      Interests and Equity                            $791,986      $604,519
                                                -----------------------------
                                                -----------------------------


                                 SCHEDULE 6

                              MDC PARTNERS INC.
                           SUMMARY CASH FLOW DATA
                                (US$ in 000s)

                                                    Six Months Ended June 30,
                                                   --------------------------
                                                          2010          2009
    -------------------------------------------------------------------------
    Cash flows provided by continuing operating
     activities                                         ($2,464)     $21,721
      Discontinued operations                              (269)        (290)
                                                   --------------------------
    Net cash provided by (used in) operating
     activities                                          (2,733)      21,431
                                                   --------------------------

    Net cash used in continuing investing
     activities                                         (63,230)      (5,760)
    Discontinued operations                                (710)           -
                                                   --------------------------
    Net cash used in investing activities               (63,940)      (5,760)

    Net cash provided by continuing financing
     activities                                          62,128          873

    Effect of exchange rate changes on cash
     and cash equivalents                                    73           59
                                                   --------------------------

    Net increase (decrease) in cash and cash
     equivalents                                        ($4,472)     $16,603
                                                   --------------------------
                                                   --------------------------
    

SOURCE MDC Partners Inc.

For further information: For further information: David Doft, Chief Financial Officer, 646-429-1818, ddoft@mdc-partners.com


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