MDC Partners Inc. reports strong results for the three months and year ended December 31, 2006



    
    QUARTER HIGHLIGHTS:   Revenues up 22% to $124 million
                          Organic revenue growth of 17%
                          $10 million Net New Business
                          MDC EBITDA up 57% to $15 million
                          Cash EPS up 86% to $0.39

    ANNUAL HIGHLIGHTS:    Revenues up 17% to $424 million
                          Organic revenue growth of 11%
                          $75 million Net New Business
                          MDC EBITDA up 40% to $36 million
                          Cash EPS up 35% to $1.16
    

    NEW YORK, March 8 /CNW/ - MDC Partners Inc. ("MDC Partners" or the
"Company") today announced its financial results for the periods ended
December 31, 2006.
    Consolidated revenues for the three months ended December 31, 2006 were
$124.3 million, an increase of 21.5% compared to $102.3 million in the same
period of 2005. Operating income for the fourth quarter of 2006 was
$8.0 million versus $8.6 million reported for the fourth quarter of 2005.
Operating income included non-cash impairment charges of $6.3 million and
$0.5 million in 2006 and 2005, respectively. Net loss from continuing
operations for the quarter ended December 31, 2006 was ($6.5) million versus a
loss of ($3.3) million for the same period in 2005. Diluted loss per share
from continuing operations for the fourth quarter of 2006 was ($0.27) compared
to ($0.14) last year.
    MDC Partners' share of EBITDA (as defined) increased 56.9% to
$15.1 million in the fourth quarter of 2006 compared with $9.6 million in the
fourth quarter of 2005. Cash earnings per share from continuing operations (as
defined) for the fourth quarter of 2006 increased 85.7% to $0.39 compared with
$0.21 in the fourth quarter of 2005.
    "We are extremely pleased with the strong performance delivered by our
businesses during the fourth quarter that resulted in annual results ahead of
our expectations," said Miles S. Nadal, Chairman & CEO of MDC Partners.
    Consolidated revenues for the twelve months ended December 31, 2006 were
$423.7 million, an increase of 16.6% compared to $363.4 million in the same
period of 2005. Operating income for the year ended 2006 was $13.3 million
versus $20.0 million reported in 2005. Included in operating income were
non-cash impairment charges of $6.3 million and $0.5 million for 2006 and
2005, respectively. Non-cash stock based compensation included in operating
income was $8.4 million and $3.3 million for 2006 and 2005, respectively. Net
loss from continuing operations for the twelve months ended December 31, 2006
was ($14.8) million versus ($8.1) million for the same period in 2005. Diluted
loss per share from continuing operations for 2006 was ($0.62) compared to
($0.35) last year.
    MDC Partners' share of EBITDA (as defined) for the year ended 2006
increased 40.3% to $36.0 million from $25.6 million in 2005. Cash earnings per
share from continuing operations (as defined) was up 34.9% to $1.16 for 2006,
from $0.86 in 2005.
    Cash flow was strong and resulted in debt repayment of $28.5 million for
the year. Outstanding borrowings under our credit facility were $45.0 million
at the end of the year, down from $73.5 million at year end 2005.
    "Our Partner firms have had robust revenue and EBITDA growth. Combined
with a reduction of MDC's corporate expenditures, this has resulted in
improved operating results and debt reduction," said Steven Berns, President
and Chief Financial Officer.
    The Company will provide significant additional details on its operations
and financial results on its conference call (see details below).

    Conference Call

    Management will host a conference call today at 4:15 p.m. (EST) to
discuss our quarter and year end results. The conference call will be
accessible by dialing 1-416-644-3425 or toll free 1-800-732-9303. An investor
presentation has been posted on our website www.mdc-partners.com and will be
referred to during the conference call.

    About MDC Partners Inc.

    MDC Partners is a leading provider of marketing communications services
to clients in the United States, Canada, Mexico and the United Kingdom.
Through its partnership of entrepreneurial firms it provides advertising,
specialized communication and consulting services to clients. MDC Partners
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 growth. These non-GAAP
financial measures relate to: (1) presenting MDC's share of EBITDA (as
defined) for the three and twelve months ended December 31, 2006 and
December 31, 2005; and (2) presenting Cash Earnings per Share from continuing
operations (as defined) for the three and twelve months ended December 31,
2006 and 2005. 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 effects of national and regional economic
        conditions;
    -   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 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 rights;
    -   risks arising from identified significant deficiencies in internal
        control over financial reporting;
    -   the Company's ability to retain and attract key employees;
    -   the successful completion and integration of acquisitions which
        complement and expand the Company's business capabilities;
    -   foreign currency fluctuations; and
    -   risks arising from the Company's historical option grant practices.
    

    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     Twelve Months Ended
                                    December 31,            December 31,
                              ----------------------- -----------------------
                                  2006        2005        2006        2005
    -------------------------------------------------------------------------

    Revenue                     $124,338    $102,320    $423,671    $363,362

    Operating Expenses
      Cost of services sold       69,009      56,631     246,799     211,811
      Office and general
       expenses                   34,851      30,150     132,523     107,976
      Depreciation and
       amortization                6,162       6,468      24,757      23,143
      Goodwill and intangible
       impairment                  6,306         473       6,306         473
                              ----------------------- -----------------------
                                 116,328      93,722     410,385     343,403
                              ----------------------- -----------------------

    Operating Income               8,010       8,598      13,286      19,959

    Other Income (Expenses)
      Gain (loss) on sale of
       assets, and other              59         (58)      1,756         558
      Interest expense            (3,144)     (2,896)    (11,278)     (7,822)
      Interest income                 85         118         514         348
                              ----------------------- -----------------------
    Income from Continuing
     Operations Before Income
     Taxes, Equity in Affiliates
     and Minority Interests        5,010       5,762       4,278      13,043

    Income Taxes                   4,272       3,011       2,561       1,335
                              ----------------------- -----------------------

    Income from Continuing
     Operations Before Equity
     in Affiliates and Minority
     Interests                       738       2,751       1,717      11,708
    Equity in Earnings (Losses)
     of Affiliates                  (462)        778         168       1,402
    Minority Interests in Income
     of Consolidated Entities     (6,743)     (6,818)    (16,708)    (21,192)
                              ----------------------- -----------------------

    Loss From Continuing
     Operations                   (6,467)     (3,289)    (14,823)     (8,082)
    Income (Loss) from
     Discontinued Operations       1,474       1,742     (18,716)        133
                              ----------------------- -----------------------
    Net Loss                     ($4,993)    ($1,547)   ($33,539)    ($7,949)
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (Loss) Per
     Common Share
      Basic:
      Continuing Operations       ($0.27)     ($0.14)     ($0.62)     ($0.35)
      Discontinued Operations       0.06        0.08       (0.78)       0.01
                              ----------------------- -----------------------
    Net Loss                      ($0.21)     ($0.06)     ($1.40)     ($0.34)
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Diluted:
      Continuing Operations       ($0.27)     ($0.14)     ($0.62)     ($0.35)
      Discontinued Operations       0.06        0.08       (0.78)       0.01
                              ----------------------- -----------------------
      Net Loss                    ($0.21)     ($0.06)     ($1.40)     ($0.34)
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Weighted Average Number
     of Common Shares:
      Basic                   23,934,901  23,734,913  23,875,286  23,298,795
      Diluted                 23,934,901  23,734,913  23,875,286  23,298,795
    -------------------------------------------------------------------------



                                 SCHEDULE 2

                              MDC PARTNERS INC.
               RECONCILIATION OF OPERATING INCOME TO EBITDA(*)
                                (US$ in 000s)

    For the Three Months Ended December 31, 2006

                   Marketing Communications Group
               -------------------------------------
               Strategic    Customer    Specialized
               Marketing  Relationship Communication  Corporate &
                Services   Management    Services        Other        Total
    -------------------------------------------------------------------------

    Revenue      $70,065       $24,170       $30,102            -   $124,337
               --------------------------------------------------------------
               --------------------------------------------------------------

    Operating
     Income
     (Loss) as
     Reported    $16,111        $1,083       ($2,343)     ($6,841)    $8,010

    Add:
      Depreciation
       and amorti-
       zation      3,859         1,573           593          137      6,162
      Stock-based
       compen-
       sation        391             6             1          982      1,380
      Impairment
       charges         -             -         6,306            -      6,306
               --------------------------------------------------------------

    EBITDA(*)     20,361         2,662         4,557       (5,722)    21,858

    Less:
     Minority
     Interests    (5,030)          (46)       (1,667)           -     (6,743)
               --------------------------------------------------------------

    MDC's
     Share of
     EBITDA(xx)  $15,331        $2,616        $2,890      ($5,722)   $15,115
    -------------------------------------------------------------------------
    (*)  EBITDA is a non-GAAP measure, but as shown above it represents
         operating income (loss) plus depreciation and amortization,
         stock-based compensation and impairment charges.
    (xx) MDC's Share of EBITDA is a non-GAAP measure, but as shown above it
         represents operating income (loss) plus depreciation and
         amortization, stock-based compensation and impairment charges less
         minority interests.


                              MDC PARTNERS INC.
               RECONCILIATION OF OPERATING INCOME TO EBITDA(*)
                                (US$ in 000s)

    For the Three Months Ended December 31, 2005

                   Marketing Communications Group
               -------------------------------------
               Strategic    Customer    Specialized
               Marketing  Relationship Communication  Corporate &
                Services   Management    Services        Other        Total
    -------------------------------------------------------------------------

    Revenue      $58,911       $18,094       $25,315            -   $102,320
               --------------------------------------------------------------
               --------------------------------------------------------------

    Operating
     Income
     (Loss) as
     Reported    $11,746          $688        $2,827      ($6,663)    $8,598

    Add:
      Depreciation
      and amorti-
      zation       5,102           944           399           23      6,468
      Stock-based
       compen-
       sation        497            13             -          400        910
      Impairment
       charges         -             -           473            -        473
               --------------------------------------------------------------

    EBITDA(*)     17,345         1,645         3,699       (6,240)    16,449

    Less:
     Minority
     Interests    (6,241)          (22)         (555)           -     (6,818)
               --------------------------------------------------------------

    MDC's
     Share of
     EBITDA(xx)  $11,104        $1,623        $3,144      ($6,240)    $9,631
    -------------------------------------------------------------------------
    (*)  EBITDA is a non-GAAP measure, but as shown above it represents
         operating income (loss) plus depreciation and amortization,
         stock-based compensation and impairment charges.
    (xx) MDC's Share of EBITDA is a non-GAAP measure, but as shown above it
         represents operating income (loss) plus depreciation and
         amortization, stock-based compensation and impairment charges less
         minority interests.


                                 SCHEDULE 3

                              MDC PARTNERS INC.
               RECONCILIATION OF OPERATING INCOME TO EBITDA(*)
                                (US$ in 000s)

    For the Twelve Months Ended December 31, 2006

                   Marketing Communications Group
               -------------------------------------
               Strategic    Customer    Specialized
               Marketing  Relationship Communication  Corporate &
                Services   Management    Services        Other        Total
    -------------------------------------------------------------------------

    Revenue      $241,481      $84,917       $97,273            -   $423,671
               --------------------------------------------------------------
               --------------------------------------------------------------

    Operating
     Income
     (Loss) as
     Reported     $34,307       $1,964        $1,361     ($24,346)   $13,286

    Add:
      Depreciation
       and amorti-
       zation      17,567        5,003         1,903          284     24,757
      Stock-based
       compen-
       sation       1,010           24         2,339        4,988      8,361
      Impairment
       charges          -            -         6,306            -      6,306
               --------------------------------------------------------------

    EBITDA(*)      52,884        6,991        11,909      (19,074)    52,710

    Less:
     Minority
     Interests    (13,077)         (73)       (3,558)           -    (16,708)
               --------------------------------------------------------------

    MDC's
     Share of
     EBITDA(xx)   $39,807       $6,918        $8,351     ($19,074)   $36,002
    -------------------------------------------------------------------------
    (*)  EBITDA is a non-GAAP measure, but as shown above it represents
         operating income (loss) plus depreciation and amortization,
         stock-based compensation and impairment charges.
    (xx) MDC's Share of EBITDA is a non-GAAP measure, but as shown above it
         represents operating income (loss) plus depreciation and
         amortization, stock-based compensation and impairment charges less
         minority interests.


                              MDC PARTNERS INC.
               RECONCILIATION OF OPERATING INCOME TO EBITDA(*)
                                (US$ in 000s)

    For the Twelve Months Ended December 31, 2005

                   Marketing Communications Group
               -------------------------------------
               Strategic    Customer    Specialized
               Marketing  Relationship Communication  Corporate &
                Services   Management    Services        Other        Total
    -------------------------------------------------------------------------

    Revenue      $203,944      $67,240       $92,178            -   $363,362
               --------------------------------------------------------------
               --------------------------------------------------------------

    Operating
     Income
     (Loss) as
     Reported     $33,926       $1,322       $10,211     ($25,500)   $19,959

    Add:
      Depreciation
       and amorti-
       zation      17,892        3,578         1,311          362     23,143
      Stock-based
       compen-
       sation         519           81             -        2,672      3,272
      Impairment
       charges          -            -           473            -        473
               --------------------------------------------------------------

    EBITDA(*)      52,337        4,981        11,995      (22,466)    46,847

    Less:
     Minority
     Interests    (18,205)         (84)       (2,903)           -    (21,192)
               --------------------------------------------------------------

    MDC's
     Share of
     EBITDA(xx)   $34,132       $4,897        $9,092     ($22,466)   $25,655
    -------------------------------------------------------------------------
    (*)  EBITDA is a non-GAAP measure, but as shown above it represents
         operating income (loss) plus depreciation and amortization,
         stock-based compensation and impairment charges.
    (xx) MDC's Share of EBITDA is a non-GAAP measure, but as shown above it
         represents operating income (loss) plus depreciation and
         amortization, stock-based compensation and impairment charges less
         minority interests.


                                 SCHEDULE 4

                              MDC PARTNERS INC.
                 RECONCILIATION OF LOSS FROM CONTINUING
                    OPERATIONS TO CASH EARNINGS PER SHARE
                   (US$ in 000s, except per share amounts)

                                 Three Months Ended     Twelve Months Ended
                                    December 31,            December 31,
                              ----------------------- -----------------------
                                  2006        2005        2006        2005
    -------------------------------------------------------------------------
    Loss from Continuing
     Operations                  ($6,467)    ($3,289)   ($14,823)    ($8,082)
    Depreciation, Amortization
     & Other                       6,777       6,862      26,970      24,448
    Stock-Based Compensation       1,380         910       8,361       3,272
    Impairment Charges & Other     7,693         473       7,259         473
                              ----------------------- -----------------------
    Cash Earnings                 $9,383      $4,956     $27,767     $20,111

    Diluted Shares                23,935      23,735      23,875      23,299

    Cash EPS                       $0.39       $0.21       $1.16       $0.86


                                 SCHEDULE 5

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

                                                   December 31,  December 31,
                                                       2006          2005
    -------------------------------------------------------------------------
    Assets
      Current Assets:
        Cash and cash equivalents                       $6,591       $12,923
        Accounts receivable, net                       125,744       101,121
        Expenditures billable to clients                28,077         7,838
        Prepaid expenses                                 4,816         3,779
        Other current assets                             1,248           356
                                                  ---------------------------
      Total Current Assets                             166,476       126,017

      Fixed assets                                      44,425        34,241
      Investment in affiliates                           2,058        10,929
      Goodwill                                         203,693       195,026
      Other intangible assets                           48,933        57,139
      Deferred tax assets                               13,332        14,398
      Assets held for sale                                   -        59,017
      Other assets                                      14,584        10,548
                                                  ---------------------------
    Total Assets                                      $493,501      $507,315
                                                  ---------------------------
                                                  ---------------------------

    Liabilities and Shareholders' Equity
      Current Liabilities:
        Bank debt                                       $4,910        $3,739
        Revolving credit facility                       45,000        73,500
        Accounts payable                                90,588        56,982
        Accrued and other liabilities                   75,315        66,102
        Advance billings, net                           51,804        33,206
        Current portion of long term debt                1,177         1,645
        Deferred acquisition consideration               2,721         1,741
                                                  ---------------------------
      Total Current Liabilities                        271,515       236,915

      Long-term debt                                     5,754         5,571
      Convertible notes                                 38,613        38,694
      Liabilities related to assets held for sale            -        18,550
      Other liabilities                                  5,512         7,937
      Deferred tax liabilities                           1,140         2,446
                                                  ---------------------------
      Total Liabilities                                322,534       310,113
                                                  ---------------------------

      Minority Interests                                46,553        44,484
                                                  ---------------------------

      Shareholders' Equity:
        Common stock                                   184,699       178,590
        Share capital to be issued                           -         4,209
        Additional paid in capital                      26,216        20,028
        Accumulated deficit                            (86,614)      (53,075)
        Stock subscription receivable                     (643)            -
        Accumulated other comprehensive income             756         2,966
                                                  ---------------------------
      Total Shareholders' Equity                       124,414       152,718
                                                  ---------------------------

    Total Liabilities and Shareholders' Equity        $493,501      $507,315
                                                  ---------------------------
                                                  ---------------------------
    





For further information:

For further information: Donna Granato, Director, Finance & Investor
Relations, (646) 429-1809, dgranato@mdc-partners.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890