PRESS RELEASE
FOR IMMEDIATE RELEASE
FOR: | MDC Partners Inc. | CONTACT: | Donna Granato |
| | 950 Third Avenue, 5th Floor | | Director, Finance & Investor Relations |
| | New York, NY 10022 | | 646-429-1809 |
| | | | dgranato@mdc-partners.com |
MDC PARTNERS INC. REPORTS RESULTS FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007
QUARTERLY HIGHLIGHTS:
| | · | Revenues increased 38.5% to $140.1 million vs. $101.1 million in Q3 2006 |
| | · | Organic revenue growth of 26.4% for Q3 2007 and 23.5% for the first nine months of 2007 |
| | · | MDC Adjusted EBITDA increased 38.0% to $11.3 million vs. $8.2 million in Q3 2006 |
| | · | Adjusted Cash EPS increased 43% to $0.43 vs. $0.30 in Q3 2006 |
| | · | Net new business wins for Q3 were $30.0 million |
NEW YORK, NY (November 7, 2007) - MDC Partners Inc. (“MDC Partners” or the “Company”) today announced record financial results for the three and nine months ended September 30, 2007.
Consolidated revenues for the three months ended September 30, 2007 were $140.1 million, an increase of 38.5% compared to $101.1 million in the same period of 2006. Operating income for the third quarter of 2007 was $2.1 million versus $0.6 million for the third quarter of 2006. Net loss from continuing operations for the quarter ended September 30, 2007 was ($6.8) million versus a loss of ($2.9) million for the same period in 2006. The loss during 2007 included a non-cash unrealized foreign exchange charge of $3.6 million due to the decline of the U.S. dollar relative to the Canadian dollar. Diluted loss per share from continuing operations for the third quarter of 2007 was ($0.27) compared to ($0.12) in the same period last year.
MDC Partners’ share of EBITDA (as defined) increased to $9.3 million in the third quarter of 2007 compared with $7.2 million in the third quarter of 2006. Adjusting for unusual or non-recurring items, MDC Adjusted EBITDA (as defined) is $11.3 million in the quarter compared with $8.2 million last year, an increase of 38.0%. Cash earnings per share from continuing operations (as defined) for the third quarter of 2007 increased to $0.38 compared with $0.28 in the third quarter of 2006, a 35.7% increase. Adjusted cash earnings per share (as defined) increased to $0.43 from $0.30 during the same period last year, a 43.3% increase.
Consolidated revenues for the nine months ended September 30, 2007 were $394.8 million, an increase of 31.9% compared to $299.3 million in the same period of 2006. Operating income for the first nine months of 2007 was $3.6 million versus $5.3 million during the same period of 2006. Excluding a goodwill impairment charge, operating income in the first nine months of the year was $8.1 million. Net loss from continuing operations for the nine months ended September 30, 2007 was ($18.2) million versus a loss of ($8.4) million for the same period in 2006. The loss during 2007 included a non-cash unrealized foreign exchange charge of $7.1 million due to the decline of the U.S. dollar relative to the Canadian dollar. Diluted loss per share from continuing operations for the first nine months of 2007 was ($0.74) compared to ($0.35) last year.
MDC Partners’ share of EBITDA (as defined) was $21.3 million in the first nine months of 2007 compared with $20.9 million in the same period of 2006. Adjusting for unusual or non-recurring items, MDC Adjusted EBITDA (as defined) was $28.8 million in the first nine months of 2007, compared with $18.6 million in the same period last year, a 54.6% increase. Year to date cash earnings per share from continuing operations (as defined) in 2007 increased 20.3% to $0.95 from $0.79 in 2006. Adjusted cash earnings per share (as defined) increased 56.2% to $1.14 from $0.73 during the same period last year.
“We are pleased with another consecutive quarter of extraordinary organic growth. This accelerating growth has positioned us well for the fourth quarter and, more importantly, 2008 as a number of these new business wins will more significantly impact our 2008 results,” said Miles S. Nadal, Chairman & CEO of MDC Partners.
Conference Call
Management will host a conference call on November 8, at 8:30 a.m. (EST) to discuss our results. The conference call will be accessible by dialing 1-416-644-3421 or toll free 1-866-249-5221. 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 solutions and services to clients in North America, Europe and Latin America. Through its partnership of entrepreneurial firms it provides advertising, specialized communications and consulting services to leading brands. MDC Partners’ philosophy emphasizes the utilization of strategy and creativity to drive growth for its clients. “MDC Partners is The Place Where Great Talent Lives”. 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 and MDC Adjusted EBITDA (as defined) for the three and nine months ended September 30, 2007 and September 30, 2006; and (2) presenting Cash Earnings per Share from Continuing Operations and Adjusted Cash Earnings per Share from Continuing Operations (as defined) for the three and nine months ended September 30, 2007 and 2006. 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; |
| | · | 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 September 30, | | Nine Months Ended September 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Revenue | | $ | 140,050 | | $ | 101,122 | | $ | 394,838 | | $ | 299,333 | |
| | | | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | | |
| Cost of services sold | | | 90,853 | | | 57,150 | | | 257,225 | | | 177,790 | |
| Office and general expenses | | | 36,633 | | | 36,666 | | | 106,777 | | | 97,672 | |
| Depreciation and amortization | | | 10,496 | | | 6,696 | | | 22,741 | | | 18,595 | |
| Goodwill impairment | | | - | | | - | | | 4,475 | | | - | |
| | | | 137,982 | | | 100,512 | | | 391,218 | | | 294,057 | |
| | | | | | | | | | | | | | |
| Operating Income | | | 2,068 | | | 610 | | | 3,620 | | | 5,276 | |
| | | | | | | | | | | | | | |
| Other Income (Expenses) | | | | | | | | | | | | | |
| Other income (expense) | | | (3,146 | ) | | 625 | | | (4,913 | ) | | 1,697 | |
| Interest expense | | | (3,691 | ) | | (3,351 | ) | | (10,182 | ) | | (8,244 | ) |
| Interest income | | | 219 | | | 171 | | | 1,448 | | | 429 | |
Income (Loss) from Continuing Operations Before Income Taxes, Equity in Affiliates and Minority Interests | | | (4,550 | ) | | (1,945 | ) | | (10,027 | ) | | (842 | ) |
| | | | | | | | | | | | | | |
| Income Tax Recovery | | | 2,816 | | | 685 | | | 6,596 | | | 1,751 | |
| | | | | | | | | | | | | | |
| Loss from Continuing Operations Before Equity in Affiliates and Minority Interests | | | (1,734 | ) | | (1,260 | ) | | (3,431 | ) | | 909 | |
| Equity in Earnings of Non-consolidated Affiliates | | | 124 | | | 129 | | | 134 | | | 630 | |
| Minority Interests in Income of Consolidated Entities | | | (5,163 | ) | | (1,780 | ) | | (14,873 | ) | | (9,965 | ) |
| | | | | | | | | | | | | | |
| Loss From Continuing Operations | | | (6,773 | ) | | (2,911 | ) | | (18,170 | ) | | (8,426 | ) |
| Loss from Discontinued Operations | | | - | | | (9,998 | ) | | - | | | (20,120 | ) |
| Net Loss | | | ($6,773 | ) | | ($12,909 | ) | | ($18,170 | ) | | ($28,546 | ) |
| | | | | | | | | | | | | | |
| Loss Per Common Share | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | |
| Continuing Operations | | | ($0.27 | ) | | ($0.12 | ) | | ($0.74 | ) | | ($0.35 | ) |
| Discontinued Operations | | | - | | | (0.42 | ) | | - | | | (0.84 | ) |
| Net Loss | | | ($0.27 | ) | | ($0.54 | ) | | ($0.74 | ) | | ($1.19 | ) |
| | | | | | | | | | | | | | |
| Diluted: | | | | | | | | | | | | | |
| Continuing Operations | | | ($0.27 | ) | | ($0.12 | ) | | ($0.74 | ) | | ($0.35 | ) |
| Discontinued Operations | | | - | | | (0.42 | ) | | - | | | (0.84 | ) |
| Net Loss | | | ($0.27 | ) | | ($0.54 | ) | | ($0.74 | ) | | ($1.19 | ) |
| | | | | | | | | | | | | | |
| Weighted Average Number of Common Shares: | | | | | | | | | | | | | |
| Basic | | | 24,957,704 | | | 23,911,327 | | | 24,664,159 | | | 23,849,571 | |
| Diluted | | | 24,957,704 | | | 23,911,327 | | | 24,664,159 | | | 23,849,571 | |
SCHEDULE 2 |
|
MDC PARTNERS INC. |
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA* |
(US$ in 000s) |
|
For the Three Months Ended September 30, 2007 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| Revenue | | $ | 79,110 | | $ | 29,885 | | $ | 31,055 | | | - | | $ | 140,050 | |
| | | | | | | | | | | | | | | | | |
| Operating Income (Loss) as Reported | | $ | 6,357 | | $ | 1,140 | | $ | 1,787 | | | ($7,216 | ) | $ | 2,068 | |
| | | | | | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 7,143 | | | 1,680 | | | 1,429 | | | 244 | | | 10,496 | |
| Stock-based compensation | | | 306 | | | - | | | (7 | ) | | 1,574 | | | 1,873 | |
| | | | | | | | | | | | | | | | | |
| EBITDA * | | | 13,806 | | | 2,820 | | | 3,209 | | | (5,398 | ) | | 14,437 | |
| | | | | | | | | | | | | | | | | |
| Less: Minority Interests | | | (4,172 | ) | | (42 | ) | | (949 | ) | | - | | | (5,163 | ) |
| | | | | | | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 9,634 | | $ | 2,778 | | $ | 2,260 | | | ($5,398 | ) | $ | 9,274 | |
| * | EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization, and stock-based compensation. |
| ** | MDC's Share of EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization and stock-based compensation less minority interests. |
MDC PARTNERS INC. |
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA* |
(US$ in 000s) |
|
For the Three Months Ended September 30, 2006 |
| | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| Revenue | | $ | 58,890 | | $ | 20,934 | | $ | 21,298 | | | - | | $ | 101,122 | |
| | | | | | | | | | | | | | | | | |
| Operating Income (Loss) as Reported | | $ | 4,944 | | | ($2 | ) | $ | 691 | | | ($5,023 | ) | $ | 610 | |
| | | | | | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 4,945 | | | 1,240 | | | 449 | | | 62 | | | 6,696 | |
| Stock-based compensation | | | 128 | | | 6 | | | - | | | 1,515 | | | 1,649 | |
| | | | | | | | | | | | | | | | | |
| EBITDA* | | | 10,017 | | | 1,244 | | | 1,140 | | | (3,446 | ) | | 8,955 | |
| | | | | | | | | | | | | | | | | |
| Less: Minority Interests | | | (1,370 | ) | | 11 | | | (421 | ) | | - | | | (1,780 | ) |
| | | | | | | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 8,647 | | $ | 1,255 | | $ | 719 | | | ($3,446 | ) | $ | 7,175 | |
| * | EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization, and stock-based compensation. |
| ** | MDC's Share of EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization and stock-based compensation less minority interests. |
SCHEDULE 3 |
|
MDC PARTNERS INC. |
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA* |
(US$ in 000s) |
|
For the Nine Months Ended September 30, 2007 |
| | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| (US$ in 000s) | | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| Revenue | | $ | 228,117 | | $ | 79,134 | | $ | 87,587 | | | - | | $ | 394,838 | |
| | | | | | | | | | | | | | | | | |
| Operating Income (Loss) as Reported | | $ | 22,364 | | $ | 2,234 | | | ($486 | ) | | ($20,492 | ) | $ | 3,620 | |
| | | | | | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 14,740 | | | 4,759 | | | 2,813 | | | 429 | | | 22,741 | |
| Stock-based compensation | | | 797 | | | 5 | | | - | | | 4,540 | | | 5,342 | |
| Impairment charges | | | - | | | - | | | 4,475 | | | - | | | 4,475 | |
| | | | | | | | | | | | | | | | | |
| EBITDA * | | | 37,901 | | | 6,998 | | | 6,802 | | | (15,523 | ) | | 36,178 | |
| | | | | | | | | | | | | | | | | |
| Less: Minority Interests | | | (12,138 | ) | | (68 | ) | | (2,667 | ) | | - | | | (14,873 | ) |
| | | | | | | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 25,763 | | $ | 6,930 | | $ | 4,135 | | | ($15,523 | ) | $ | 21,305 | |
| * | 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. |
| ** | 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 (LOSS) TO EBITDA* |
(US$ in 000s) |
|
For the Nine Months Ended September 30, 2006 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| (US$ in 000s) | | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| Revenue | | $ | 171,415 | | $ | 60,747 | | $ | 67,171 | | | - | | $ | 299,333 | |
| | | | | | | | | | | | | | | | | |
| Operating Income (Loss) as Reported | | $ | 18,196 | | $ | 882 | | $ | 3,704 | | | ($17,506 | ) | $ | 5,276 | |
| | | | | | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 13,697 | | | 3,429 | | | 1,310 | | | 159 | | | 18,595 | |
| Stock-based compensation | | | 619 | | | 18 | | | 2,338 | | | 4,006 | | | 6,981 | |
| | | | | | | | | | | | | | | | | |
| EBITDA* | | | 32,512 | | | 4,329 | | | 7,352 | | | (13,341 | ) | | 30,852 | |
| | | | | | | | | | | | | | | | | |
| Less: Minority Interests | | | (8,047 | ) | | (27 | ) | | (1,891 | ) | | - | | | (9,965 | ) |
| | | | | | | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 24,465 | | $ | 4,302 | | $ | 5,461 | | | ($13,341 | ) | $ | 20,887 | |
| * | EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization, and stock-based compensation. |
| ** | MDC's Share of EBITDA is a non-GAAP measure, but as shown above it represents operating income (loss) plus depreciation and amortization and stock-based compensation less minority interests. |
SCHEDULE 4 |
|
MDC PARTNERS INC. |
RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA |
(US$ in 000s) |
|
For the Three Months Ended September 30, 2007 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| MDC's Share of EBITDA* | | $ | 9,634 | | $ | 2,778 | | $ | 2,260 | | | ($5,398 | ) | $ | 9,274 | |
| | | | | | | | | | | | | | | | | |
| Costs related to CFO change | | | - | | | - | | | - | | | 1,883 | | | 1,883 | |
| | | | | | | | | | | | | | | | | |
| Retention payments and other | | | 350 | | | - | | | - | | | (236 | ) | | 114 | |
| | | | | | | | | | | | | | | | | |
| MDC Adjusted EBITDA** | | $ | 9,984 | | $ | 2,778 | | $ | 2,260 | | | ($3,751 | ) | $ | 11,271 | |
| * | MDC's Share of EBITDA is a non-GAAP measure, and represents operating income (loss) plus depreciation and amortization and stock-based compensation less minority interests. |
| ** | MDC's Adjusted EBITDA is a non-GAAP measure, and represents MDC's Share of EBITDA plus unusual and non-recurring charges during the quarter. |
MDC PARTNERS INC. |
RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA |
(US$ in 000s) |
| |
For the Three Months Ended September 30, 2006 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| MDC's Share of EBITDA* | | $ | 8,647 | | $ | 1,255 | | $ | 719 | | | ($3,446 | ) | $ | 7,175 | |
| | | | | | | | | | | | | | | | | |
| Losses from Margeotes Fertitta Powell (ceased operations) | | | - | | | - | | | 676 | | | - | | | 676 | |
| | | | | | | | | | | | | | | | | |
| Consolidation of Equity Affiliates | | | 315 | | | - | | | - | | | - | | | 315 | |
| | | | | | | | | | | | | | | | | |
| MDC Adjusted EBITDA** | | $ | 8,962 | | $ | 1,255 | | $ | 1,395 | | | ($3,446 | ) | $ | 8,166 | |
| * | MDC's Share of EBITDA is a non-GAAP measure, and represents operating income (loss) plus depreciation and amortization, stock-based compensation and impairment charges less minority interests. |
| ** | MDC's Adjusted EBITDA is a non-GAAP measure, and represents MDC's Share of EBITDA plus unusual and non-recurring charges during the quarter. |
SCHEDULE 5 |
|
MDC PARTNERS INC. |
RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA |
(US$ in 000s) |
| |
For the Nine Months Ended September 30, 2007 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 25,763 | | $ | 6,930 | | $ | 4,135 | | | ($15,523 | ) | $ | 21,305 | |
| | | | | | | | | | | | | | | | | |
| Costs related to CFO change | | | - | | | - | | | - | | | 1,883 | | | 1,883 | |
| | | | | | | | | | | | | | | | | |
| Losses from Margeotes Fertitta Powell (ceased operations) | | | - | | | - | | | 2,945 | | | - | | | 2,945 | |
| | | | | | | | | | | | | | | | | |
| Retention payments and other | | | 2,100 | | | - | | | - | | | 587 | | | 2,687 | |
| | | | | | | | | | | | | | | | | |
| MDC Adjusted EBITDA** | | $ | 27,863 | | $ | 6,930 | | $ | 7,080 | | | ($13,053 | ) | $ | 28,820 | |
| * | MDC's Share of EBITDA is a non-GAAP measure, and represents operating income (loss) plus depreciation and amortization, stock-based compensation and impairment charges less minority interests. |
| ** | MDC's Adjusted EBITDA is a non-GAAP measure, and represents MDC's Share of EBITDA plus unusual and non-recurring charges during the period. |
MDC PARTNERS INC. |
RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA |
(US$ in 000s) |
|
For the Nine Months Ended September 30, 2006 |
| | | Strategic | | Customer | | Specialized | | | | | |
| | Marketing | | Relationship | | Communication | | Corporate & | | | |
| | Services | | Management | | Services | | Other | | Total | |
| | | | | | | | | | | | |
| MDC's Share of EBITDA** | | $ | 24,465 | | $ | 4,302 | | $ | 5,461 | | | ($13,341 | ) | $ | 20,887 | |
| | | | | | | | | | | | | | | | | |
| Losses from Margeotes Fertitta Powell (ceased operations) | | | - | | | - | | | 1,962 | | | - | | | 1,962 | |
| | | | | | | | | | | | | | | | | |
| Client Termination Payment | | | (5,250 | ) | | - | | | - | | | - | | | (5,250 | ) |
| | | | | | | | | | | | | | | | | |
| Consolidation of Equity Affiliates | | | 808 | | | - | | | 232 | | | - | | | 1,040 | |
| | | | | | | | | | | | | | | | | |
| MDC Adjusted EBITDA** | | $ | 20,023 | | $ | 4,302 | | $ | 7,655 | | | ($13,341 | ) | $ | 18,639 | |
| * | MDC's Share of EBITDA is a non-GAAP measure, and represents operating income (loss) plus depreciation and amortization and stock-based compensation less minority interests. |
| ** | MDC's Adjusted EBITDA is a non-GAAP measure, and represents MDC's Share of EBITDA plus unusual and non-recurring charges during the period. |
SCHEDULE 6 |
|
MDC PARTNERS INC. |
RECONCILIATION OF LOSS FROM CONTINUING |
OPERATIONS TO CASH EARNINGS PER SHARE |
(US$ in 000s, except per share amounts) |
| |
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
| Loss from Continuing Operations | | | ($6,773 | ) | | ($2,911 | ) | | ($18,170 | ) | | ($8,426 | ) |
| Depreciation & Amortization | | | 10,817 | | | 7,469 | | | 24,721 | | | 20,193 | |
| Stock-Based Compensation | | | 1,873 | | | 1,649 | | | 5,342 | | | 6,981 | |
| Non-cash Unrealized Foreign Exchange | | | 3,629 | | | 400 | | | 7,070 | | | 99 | |
| Impairment Charges | | | - | | | - | | | 4,550 | | | - | |
| Cash Earnings | | $ | 9,546 | | $ | 6,607 | | $ | 23,513 | | $ | 18,847 | |
| | | | | | | | | | | | | | |
| Diluted Shares (1) | | | 24,958 | | | 23,911 | | | 24,664 | | | 23,850 | |
| | | | | | | | | | | | | | |
| Cash EPS | | $ | 0.38 | | $ | 0.28 | | $ | 0.95 | | $ | 0.79 | |
MDC PARTNERS INC. |
RECONCILIATION OF CASH EARNINGS TO |
ADJUSTED CASH EARNINGS PER SHARE |
(US$ in 000s, except per share amounts) |
|
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
| Cash Earnings | | $ | 9,546 | | $ | 6,607 | | $ | 23,513 | | $ | 18,847 | |
| Costs related to CFO change | | | 1,883 | | | - | | | 1,883 | | | - | |
| Losses from Margeotes Fertitta Powell (ceased operations) | | | - | | | 676 | | | 2,945 | | | 1,962 | |
| Retention payments and other | | | 114 | | | - | | | 2,687 | | | - | |
| Client termination payment | | | - | | | - | | | - | | | (5,250 | ) |
| Consolidation of equity affiliates | | | - | | | 315 | | | - | | | 1,040 | |
| Tax Effect on Adjustments | | | (799 | ) | | (396 | ) | | (3,006 | ) | | 899 | |
| Adjusted Cash Earnings | | $ | 10,744 | | $ | 7,202 | | $ | 28,022 | | $ | 17,498 | |
| | | | | | | | | | | | | | |
| Adjusted Cash EPS | | $ | 0.43 | | $ | 0.30 | | $ | 1.14 | | $ | 0.73 | |
| (1) | As calculated from the Statement of Operations. |
SCHEDULE 7 |
|
MDC PARTNERS INC. |
CONSOLIDATED BALANCE SHEETS |
(US$ in 000s) |
| | | (unaudited) | | | |
| | September 30, | | December 31, | |
| | 2007 | | 2006 | |
| | | | | | |
| Assets | | | | | |
| Current Assets: | | | | | |
| Cash and cash equivalents | | $ | 7,089 | | $ | 6,591 | |
| Accounts receivable, net | | | 148,124 | | | 125,744 | |
| Expenditures billable to clients | | | 14,167 | | | 28,077 | |
| Prepaid expenses | | | 7,609 | | | 4,816 | |
| Other current assets | | | 2,005 | | | 1,248 | |
| Total Current Assets | | | 178,994 | | | 166,476 | |
| | | | | | | | |
| Fixed assets | | | 46,428 | | | 44,425 | |
| Investment in affiliates | | | 394 | | | 2,058 | |
| Goodwill | | | 219,709 | | | 203,693 | |
| Other intangible assets, net | | | 40,132 | | | 48,933 | |
| Deferred tax assets | | | 14,493 | | | 13,332 | |
| Other assets | | | 16,938 | | | 14,584 | |
| Total Assets | | $ | 517,088 | | $ | 493,501 | |
| | | | | | | | |
| | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | |
| Current Liabilities: | | | | | | | |
| Short-term debt | | $ | - | | $ | 4,910 | |
| Revolving credit facility | | | - | | | 45,000 | |
| Accounts payable | | | 68,172 | | | 90,588 | |
| Accrued and other liabilities | | | 68,229 | | | 75,315 | |
| Advance billings | | | 47,339 | | | 51,804 | |
| Current portion of long term debt | | | 1,777 | | | 1,177 | |
| Deferred acquisition consideration | | | 320 | | | 2,721 | |
| Total Current Liabilities | | | 185,837 | | | 271,515 | |
| | | | | | | | |
| Revolving credit facility | | | 25,631 | | | - | |
| Long-term debt | | | 79,258 | | | 5,754 | |
| Convertible notes | | | 45,235 | | | 38,613 | |
| Other liabilities | | | 7,068 | | | 5,512 | |
| Deferred tax liabilities | | | 5,282 | | | 1,140 | |
| Total Liabilities | | | 348,311 | | | 322,534 | |
| | | | | | | | |
| Minority Interests | | | 48,093 | | | 46,553 | |
| | | | | | | | |
| Shareholders' Equity: | | | | | | | |
| Common stock | | | 194,455 | | | 184,699 | |
| Share capital to be issued | | | | | | | |
| Additional paid in capital | | | 25,792 | | | 26,216 | |
| Accumulated deficit | | | (104,784 | ) | | (86,614 | ) |
| Treasury stock | | | (765 | ) | | - | |
| Stock subscription receivable | | | (251 | ) | | (643 | ) |
| Accumulated other comprehensive income | | | 6,237 | | | 756 | |
| Total Shareholders' Equity | | | 120,684 | | | 124,414 | |
| | | | | | | | |
| Total Liabilities and Shareholders' Equity | | $ | 517,088 | | $ | 493,501 | |
