MDC Partners Inc. reports strong results for the three months ended March 31,
2010

    
    FIRST QUARTER HIGHLIGHTS:
    -   Revenue increased to $136.2 million versus $126.7 million in Q1 2009,
        an increase of 7.5%
    -   Organic revenue flat for Q1 2010 and trending to solid growth for the
        year
    -   MDC EBITDA decreased to $7.8 million versus $11.2 million in the
        first quarter of 2009 due to timing of client wins and losses and
        investment in key talent
    -   Net new business wins of $6.6 million for Q1 2010
    -   Digital revenue reached 40.5% of total revenues in Q1 2010
    -   Acquired majority stakes in TEAM Enterprises, a leading national
        experiential marketing platform; Sloane & Company, a strategic
        corporate public relations firm; and Allison & Partners, an award
        winning national public relations firm
    -   Raising fiscal 2010 guidance due to improving trends and completion
        of accretive acquisitions
    -   2010 revenue guidance raised to $620-635 million, an estimated
        increase of 13.6% to 16.3%
    -   2010 MDC EBITDA guidance raised to $78-80 million, an estimated
        increase of 20.4% to 23.5%
    

NEW YORK, May 4 /CNW/ - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three months ended March 31, 2010.

"We are very pleased with our first quarter results, particularly the market share gains we continue to achieve and our success in investing in great talent and in new partner firms, all of which further enhances our ability to generate free cash flow and earnings growth," said Miles S Nadal, Chairman and Chief Executive Officer of MDC Partners. "Our new business pipeline is strong; our financial discipline is paying off; we continue to make strategic, accretive acquisitions; and we have a set of assets already in place that are well situated to take advantage of the numerous market opportunities in front of us. As such, we are significantly raising our fiscal 2010 financial guidance."

Guidance for 2010 is adjusted as follows:

    
                  -----------------------------------------------------------
                                              Implied                Implied
                     Initial       Revised   Year over   Pro Forma  Year over
                       2010          2010       Year        2010       Year
                     Guidance      Guidance    Change     Estimate    Change
    -------------------------------------------------------------------------
                                               +13.6%                 +18.1%
                        $573 -        $620 -       to        $645 -       to
    Revenue       $584 million  $635 million   +16.3%  $660 million   +20.9%

                                               +20.4%                 +32.7%
                         $69 -         $78 -       to         $86 -       to
    MDC EBITDA     $71 million   $80 million   +23.5%   $88 million   +35.8%

                                                +0.2%                 +14.9%
    Free Cash            $35 -         $41 -       to         $47 -       to
     Flow          $37 million   $43 million    +5.1%   $49 million   +19.8%

    + Change in
     Working
     Capital and
     Other         +$5 million  +$12 million           +$12 million
                  ---------------------------         --------------
    Total Free           $40 -         $53 -                  $59 -
     Cash Flow     $42 million   $55 million            $61 million
    -------------------------------------------------------------------------
    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 first quarter of 2010 was $136.2 million, an increase of 7.5% compared to $126.7 million in the first quarter of 2009. MDC EBITDA (as defined) for the first quarter of 2010 was $7.8 million, a decrease of 30.3% compared to $11.2 million in the first quarter of 2009 driven by the timing of client wins and losses and our planned investment in talent. Net income (loss) attributable to MDC Partners Inc. in the first quarter was a loss of ($10.2) million compared to nominal income in the first quarter of 2009. Diluted earnings (loss) per share from continuing operations attributable to MDC Partners Inc. common shareholders for the first quarter of 2010 was a loss of ($0.38) compared with $0.01 per share in the same period of 2009. Free cash flow (as defined) was an outflow of $1.9 million in the first quarter of 2010, compared with an inflow of $7.8 million in the first quarter of 2009.

"We continue to execute on our disciplined financial plan which we believe will lead to another year of industry leading growth, continued margin expansion, and increased free cash flow generation," said David Doft, Chief Financial Officer. "Our focus remains on optimizing our organic growth opportunities and supplementing them with highly accretive strategic acquisitions. We believe that the combination of organic growth and the responsible deployment of capital will set us apart from other industry participants and will drive continued significant improvements in shareholder value creation."

Conference Call

Management will host a conference call on May 5, 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 Wednesday, May 19, 2010 by dialing 1-416-849-0833 or toll free 1-800-642-1687 (passcode 69738546 followed by the number sign) 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 MDC EBITDA and EBITDA margin (as defined) for the three months ended March 31, 2010 and 2009; and (2) presenting Free Cash Flow and Free Cash Flow per Share (as defined) for the three months ended March 31, 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 March 31,
                                                -----------------------------
                                                       2010          2009
    -------------------------------------------------------------------------

    Revenue                                           $136,182      $126,738

    Operating Expenses:
      Cost of services sold                             96,969        85,879
      Office and general expenses                       34,625        31,152
      Depreciation and amortization                      5,833         7,593
                                                -----------------------------
                                                -----------------------------
                                                       137,427       124,624
                                                -----------------------------

    Operating profit (loss)                             (1,245)        2,114

    Other Income (Expenses):
      Other income (expense)                              (613)        2,629
      Interest expense and finance charges              (7,028)       (3,761)
      Interest income                                       21           203
                                                -----------------------------

    Income (loss) from continuing operations
     before income taxes and equity in
     affiliates                                         (8,865)        1,185

    Income tax expense                                     249           615
                                                -----------------------------

    Income (loss) from continuing operations
     before equity in affiliates                        (9,114)          570
    Equity in earnings (loss) of non-
     consolidated affiliates                              (104)           93
                                                -----------------------------
                                                -----------------------------

    Income (loss) from continuing operations            (9,218)          663
    Loss from discontinued operations,
     net of taxes                                            -          (252)
                                                -----------------------------
    Net income (loss)                                   (9,218)          411
    Net income attributable to the non-
     controlling interests                                (968)         (382)
                                                -----------------------------
                                                -----------------------------
    Net income (loss) attributable to
     MDC Partners Inc.                                ($10,186)          $29
                                                -----------------------------
                                                -----------------------------

    Income (Loss) Per Common Share:
      Basic:
        Income (loss) from continuing
         operations attributable to MDC
         Partners Inc. common shareholders              ($0.38)        $0.01
        Discontinued operations                              -        ($0.01)
                                                -----------------------------
        Net income (loss) attributable to
         MDC Partners Inc. common shareholders          ($0.38)        $0.00
                                                -----------------------------
                                                -----------------------------

    Income (Loss) Per Common Share:
      Diluted:
        Income (loss) from continuing
         operations attributable to MDC
         Partners Inc. common shareholders              ($0.38)        $0.01
        Discontinued operations                              -        ($0.01)
                                                -----------------------------
        Net income (loss) attributable to
         MDC Partners Inc. common shareholders          ($0.38)        $0.00
                                                -----------------------------
                                                -----------------------------

    Weighted Average Number of Common Shares:
      Basic                                         27,631,903    27,115,751
      Diluted                                       27,631,903    27,115,751
    -------------------------------------------------------------------------



                                 SCHEDULE 2

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

    For the Three Months Ended March 31, 2010

                            Strategic   Performance
                            Marketing    Marketing
                             Services     Services    Corporate        Total
    -------------------------------------------------------------------------

    Revenue                   $91,525      $44,657            -     $136,182
                           --------------------------------------------------
                           --------------------------------------------------

    Operating income (loss)
     as reported               $6,283      ($2,652)     ($4,876)     ($1,245)

    Add:
      Depreciation and
       amortization             3,301        2,439           93        5,833
      Stock-based
       compensation             1,753          366        1,349        3,468
      Acquisition deal costs        -          399            -          399
      Deferred acquisition
       consideration
       adjustments to P&L         196          138            -          334
                           --------------------------------------------------
                           --------------------------------------------------

    EBITDA*                  11,533          690       (3,434)       8,789
    margin                      12.6%         1.5%                      6.5%

    Less income attributable
     to noncontrolling
     interests                   (927)         (41)           -         (968)
                           --------------------------------------------------
                           --------------------------------------------------

    MDC's Share of
     EBITDA(xx)               $10,606         $649      ($3,434)      $7,821
    -------------------------------------------------------------------------
    *  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.
    (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, acquisition deal costs and
         deferred acquisition consideration adjustments less net income
         attributable to noncontrolling interests.



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

    For the Three Months Ended March 31, 2009

                            Strategic   Performance
                            Marketing    Marketing
                             Services     Services    Corporate        Total
    -------------------------------------------------------------------------

    Revenue                   $84,463      $42,275            -     $126,738
                           --------------------------------------------------
                           --------------------------------------------------

    Operating income
     (loss) as reported        $6,799        ($679)     ($4,006)      $2,114

    Add:
      Depreciation and
       amortization             5,372        2,127           94        7,593
      Stock-based
       compensation               433          190        1,274        1,897
                           --------------------------------------------------

    EBITDA*                  12,604        1,638       (2,638)      11,604
    margin                      14.9%         3.9%                      9.2%

    Less income attributable
     to noncontrolling
     interests                   (676)         294            -         (382)
                           --------------------------------------------------

    MDC's Share of
     EBITDA(xx)               $11,928       $1,932      ($2,638)     $11,222
    -------------------------------------------------------------------------
    *  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.
    (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, acquisition deal costs and
         deferred acquisition consideration adjustments less net income
         attributable to noncontrolling interests.



                                 SCHEDULE 3

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

                                                 Three Months Ended March 31,
                                                -----------------------------
                                                       2010          2009
    -------------------------------------------------------------------------
    MDC EBITDA                                          $7,821       $11,222
    Capital Expenditures                                (2,762)         (830)
    Cash Taxes                                            (645)           66
    Cash Interest, net & Other                          (6,287)       (2,640)
                                                -----------------------------
    Free Cash Flow*                                  ($1,873)       $7,818
                                                -----------------------------
                                                -----------------------------

    Diluted Common Shares Outstanding               27,631,903    27,115,751

    Free Cash Flow per Share                            ($0.07)        $0.29
                                                -----------------------------
                                                -----------------------------
    * As defined by MDC Partners



                                 SCHEDULE 4

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

                                                      March 31,  December 31,
                                                        2010         2009
    -------------------------------------------------------------------------

    Assets
      Current Assets:
        Cash and cash equivalents                      $21,247       $51,926
        Accounts receivable, net                       131,944       118,211
        Expenditures billable to clients                23,226        24,003
        Other current assets                            10,706         8,105
                                                -----------------------------
      Total Current Assets                             187,123       202,245

      Fixed assets, net                                 36,327        35,375
      Investment in affiliates                           1,473         1,547
      Goodwill                                         338,142       301,632
      Other intangible assets, net                      39,765        34,715
      Deferred tax assets                               12,625        12,542
      Other assets                                      17,611        16,463
                                                -----------------------------
    Total Assets                                      $633,066      $604,519
                                                -----------------------------
                                                -----------------------------


    Liabilities and Shareholders' Equity
      Current Liabilities:
        Accounts payable                               $69,967       $77,450
        Accrued and other liabilities                   65,694        66,967
        Advance billings                                80,907        65,879
        Current portion of long term debt                1,308         1,456
        Current portion of deferred
         acquisition consideration                      21,258        30,645
                                                -----------------------------
      Total Current Liabilities                        239,134       242,397

      Revolving credit facility                         10,278             -
      Long-term debt                                   216,928       216,490
      Long-term portion of deferred
       acquisition consideration                        16,690             -
      Other liabilities                                  8,617         8,707
      Deferred tax liabilities                           9,005         9,051
                                                -----------------------------
      Total Liabilities                                500,652       476,645
                                                -----------------------------
                                                -----------------------------

    Redeemable Non-controlling Interests                29,868        33,728
                                                -----------------------------
                                                -----------------------------

      Shareholders' Equity:
        Common shares                                  219,993       218,533
        Additional paid in capital                       7,668         9,174
        Accumulated deficit                           (141,348)     (131,160)
        Stock subscription receivable                     (217)         (341)
        Accumulated other comprehensive loss            (4,462)       (5,880)
                                                -----------------------------
                                                -----------------------------
        MDC Partners Inc. Shareholders' Equity          81,634        90,326
        Non-controlling Interests                       20,912         3,820
                                                -----------------------------
                                                -----------------------------
      Total Equity                                     102,546        94,146
                                                -----------------------------

    Total Liabilities, Redeemable
     Non-controlling Interests and Equity             $633,066      $604,519
                                                -----------------------------
                                                -----------------------------



                                 SCHEDULE 5

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

                                                 Three Months Ended March 31,
                                                -----------------------------
                                                       2010          2009
    -------------------------------------------------------------------------
    Cash flows provided by continuing
     operating activities                             ($11,218)         $928
      Discontinued operations                                -          (368)
                                                -----------------------------
                                                -----------------------------
    Net cash provided by (used in) operating
     activities                                        (11,218)          560
                                                -----------------------------
                                                -----------------------------

    Net cash used in investing activities              (26,143)       (4,121)

    Net cash provided by continuing financing
     activities                                          6,788         8,924

    Effect of exchange rate changes on cash
     and cash equivalents                                 (106)         (447)
                                                -----------------------------
                                                -----------------------------

    Net increase (decrease) in cash and
     cash equivalents                                 ($30,679)       $4,916
                                                -----------------------------
    

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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