NEW YORK, Aug. 7, 2017 /PRNewswire/ --
SECOND QUARTER HIGHLIGHTS:
- Reported revenue increased 15.9% to $390.5 million
- Organic revenue growth of 11.7%
- Net income attributable to MDC Partners common shareholders
increased to $9.3 million from
$0.8 million last year
- Adjusted EBITDA increased 12.2% to $47.0
million, with margins of 12.0% (See Schedule 3)
- Net New Business wins totaled $26.0
million
- Updated 2017 financial guidance to approximately 7% organic
revenue growth and approximately 60 basis points increase in
Adjusted EBITDA margin; on track to achieve 2017 Adjusted EBITDA
target
YEAR-TO-DATE HIGHLIGHTS:
- Reported revenue increased 13.8% to $735.2 million
- Organic revenue growth of 8.7%
- Net loss attributable to MDC Partners common shareholders
improved to ($1.7) million vs
($22.8) million last year
- Adjusted EBITDA increased 10.8% to $82.8
million, with margins of 11.3% (See Schedule 3)
- Net New Business wins totaled $51.6
million
(NASDAQ: MDCA) – MDC Partners Inc. ("MDC Partners" or the
"Company") today announced financial results for the three and six
months ended June 30, 2017.
Scott Kauffman, Chairman and
Chief Executive Officer of MDC Partners, said, "Our business
performed very well in the second quarter, highlighted by an
acceleration of organic revenue growth to nearly 12%, including a
benefit from higher pass-through costs. Our portfolio of
world-class agencies is meaningfully expanding existing client
relationships and winning new business at a strong pace. This
industry-leading growth is testament to MDC's modern and flexible
operating model, and our unique culture and entrepreneurial
mindset. As we look ahead, we are well positioned to remain a
leader as our industry continues to evolve at a time of accelerated
change for advertising, content and commerce."
David Doft, Chief Financial
Officer of MDC Partners, said, "We are exiting the quarter in a
significantly stronger financial position with a stronger balance
sheet and attractive cash flow profile. In addition to closing the
previously-announced sale of Convertible Preference shares in the
first quarter, this quarter we made $84
million of acquisition-related payments, thereby reducing
our deferred consideration and minority interest to the lowest
level in over five years. At this point, we have passed the
inflection point whereby our future annual obligation comes down
considerably. This should result in stronger overall cash
generation, which will further strengthen our balance sheet and
provide investment capital for long-term value creation
initiatives. We are confident that we are on the right path to
deliver solid returns for our stakeholders."
Second Quarter and Year-to-Date 2017 Financial
Results
Revenue for the second quarter of 2017 was $390.5 million, an increase of 15.9%, compared to
$337.0 million in the second quarter
of 2016. The effect of foreign exchange was negative 1.5%,
the impact of non-GAAP acquisitions (dispositions), net was
positive 5.7%, and the resulting organic revenue growth was 11.7%.
Organic revenue growth for the period was favorably impacted by 360
basis points from increased billable pass-through costs incurred on
clients' behalf from certain of our partner firms acting as
principal.
Net income attributable to MDC Partners common shareholders in
the second quarter of 2017 was $9.3
million compared to $0.8
million in the second quarter of 2016. Diluted income
per share attributable to MDC Partners common shareholders for the
second quarter of 2017 was $0.14
compared to $0.02 per share in the
second quarter of 2016. Adjusted EBITDA for the second
quarter of 2017 was $47.0 million, an
increase of 12.2% compared to $41.9
million in the second quarter of 2016.
Revenue for the first six months of 2017 was $735.2 million, an increase of 13.8%, compared to
$646.1 million in the first six
months of 2016. The effect of foreign exchange was negative
1.1%, the impact of non-GAAP acquisitions (dispositions), net was
positive 6.1%, and the resulting organic revenue growth was 8.7%.
Organic revenue growth for the period was favorably impacted by 210
basis points from increased billable pass-through costs incurred on
clients' behalf from certain of our partner firms acting as
principal.
Net loss attributable to MDC Partners common shareholders in the
first six months of 2017 was ($1.7)
million compared to ($22.8)
million in the first six months of 2016. Diluted loss
per share attributable to MDC Partners common shareholders for the
first six months of 2017 was ($0.03)
compared to ($0.45) per share in the
first six months of 2016. Adjusted EBITDA for the first six
months of 2017 was $82.8 million, an
increase of 10.8% compared to $74.7
million in the first six months of 2016.
Financial Outlook
Doft continued, "Given the strong topline trend, we are pacing
ahead of the organic growth target that we provided at the
beginning of the year. At the same time, a combination of higher
than expected billable pass-through expenses and incremental costs
associated with our robust new business and growth activities is
translating to more modest margin expansion for the current year.
Accordingly, we are updating our formal guidance. We are now
targeting approximately 7% organic revenue growth and an
improvement in Adjusted EBITDA margins of approximately 60 basis
points. Taken together, we remain on track to achieve our 2017
Adjusted EBITDA target."
|
2017
|
2017
|
|
Initial
Guidance
|
Revised
Guidance
|
|
February 27,
2017
|
August 7,
2017
|
Organic
Revenue
|
approximately
4% growth
|
approximately
7% growth
|
|
|
|
Adjusted EBITDA
Margin
|
approximately
100 basis points increase
|
approximately
60 basis points increase
|
|
|
|
* The Company has
excluded a quantitative reconciliation with respect to the
Company's 2017 guidance under the "unreasonable efforts"
exception in item 10(e)(1)(i)(B) of Regulation S-K.
|
Conference Call
Management will host a conference call on Monday, August 7, 2017, at 4:30 p.m. (ET) to discuss results. The
conference call will be accessible by dialing 1-412-902-4266 or
toll free 1-888-346-6216. An investor presentation has been
posted on our website www.mdc-partners.com and may be referred to
during the conference call.
A recording of the conference call will be available one hour
after the call until 12:00 a.m. (ET),
August 14, 2017, by dialing
1-412-317-0088 or toll free 1-877-344-7529 (passcode 10111029), or
by visiting our website at www.mdc-partners.com.
About MDC Partners Inc.
MDC Partners is one of the fastest-growing and most influential
marketing and communications networks in the world. Its 50+
advertising, public relations, branding, digital, social and event
marketing agencies are responsible for some of the most memorable
and engaging campaigns for the world's most respected brands.
As "The Place Where Great Talent Lives," MDC Partners is known for
its unique partnership model, empowering the most entrepreneurial
and innovative talent to drive competitive advantage and business
growth for clients. By leveraging technology, data analytics,
insights, and strategic consulting solutions, MDC Partners drives
measurable results and optimizes return on marketing investment for
over 1,700 clients worldwide. For more information about MDC
Partners and its partner firms, visit our website at
www.mdc-partners.com and follow us on Twitter at
http://www.twitter.com/mdcpartners.
Non-GAAP Financial Measures
In addition to its reported results, MDC Partners has included
in this earnings release certain financial results that the
Securities and Exchange Commission defines as "non-GAAP financial
measures." Management believes that such non-GAAP financial
measures, when read in conjunction with the Company's reported
results, can provide useful supplemental information for investors
analyzing period to period comparisons of the Company's results.
Such non-GAAP financial measures for the three and six months ended
June 30, 2017, include the
following:
(1) Organic Revenue: "Organic revenue growth" and "organic
revenue decline" refer to the positive or negative results,
respectively, of subtracting both the foreign exchange and
acquisition (disposition) components from total revenue growth. The
acquisition (disposition) component is calculated by aggregating
prior period revenue for any acquired businesses, less the prior
period revenue of any businesses that were disposed of during the
current period. The organic revenue growth (decline) component
reflects the constant currency impact of (a) the change in revenue
of the partner firms which the Company has held throughout each of
the comparable periods presented, and (b) "non-GAAP acquisitions
(dispositions), net". Non-GAAP acquisitions (dispositions), net
consists of (i) for acquisitions during the current year, the
revenue effect from such acquisition as if the acquisition had been
owned during the equivalent period in the prior year and (ii) for
acquisitions during the previous year, the revenue effect from such
acquisitions as if they had been owned during that entire year (or
same period as the current reportable period), taking into account
their respective pre-acquisition revenues for the applicable
periods, and (iii) for dispositions, the revenue effect from such
disposition as if they had been disposed of during the equivalent
period in the prior year.
(2) Net New Business: Estimate of annualized revenue for new
wins less annualized revenue for losses incurred in the period.
(3) Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that
represents operating profit plus depreciation and amortization,
stock-based compensation, deferred acquisition consideration
adjustments, distributions from non-consolidated affiliates, and
other items. Prior to 2017, Adjusted EBITDA included an additional
adjustment for acquisition deal costs. Beginning with 2017, on a
prospective basis we no longer include the acquisition deal cost
adjustment but we continue to disclose this metric on Schedule 6
for your reference.
Included in this earnings release are tables reconciling MDC
Partners' reported results to arrive at certain of these non-GAAP
financial measures. We are unable to reconcile our projected 2017
organic revenue growth to the corresponding GAAP measure because we
are unable to predict the 2017 impact of foreign exchange due to
the unpredictability of future changes in foreign exchange rates
and because we are unable to predict the occurrence or impact of
any acquisitions, dispositions, or other potential changes.
We are unable to reconcile our projected 2017 increase in Adjusted
EBITDA margin to the corresponding GAAP measure because the amount
and timing of many future charges that impact these measures (such
as amortization of future acquired intangible assets, foreign
exchange transaction gains or losses, impairment charges, provision
or benefit for income taxes, and certain assumptions used in the
calculation of deferred acquisition consideration) are variable,
uncertain, or out of our control and therefore cannot be reasonably
predicted without unreasonable effort, if at all. As a result, we
are unable to provide reconciliations of these measures. In
addition, we believe such reconciliations could imply a degree of
precision that might be confusing or misleading to
investors.
This press release contains forward-looking statements. The
Company's representatives may also make forward-looking statements
orally from time to time. Statements in this press release that are
not historical facts, including statements about the Company's
beliefs and expectations, earnings guidance, recent business and
economic trends, potential acquisitions, and estimates of amounts
for redeemable noncontrolling interests and deferred acquisition
consideration, constitute forward-looking statements. These
statements are based on current plans, estimates and projections,
and are subject to change based on a number of factors, including
those outlined in this section. Forward-looking statements
speak only as of the date they are made, and the Company undertakes
no obligation to update publicly any of them in light of new
information or future events, if any.
Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause
actual results to differ materially from those contained in any
forward-looking statements. Such risk factors include, but are not
limited to, the following:
- risks associated with severe effects of international,
national and regional economic conditions;
- the Company's ability to attract new clients and retain
existing clients;
- the spending patterns and financial success of the Company's
clients;
- the Company's ability to retain and attract key
employees;
- the Company's ability to remain in compliance with its debt
agreements and the Company's ability to finance its contingent
payment obligations when due and payable, including but not limited
to those relating to redeemable noncontrolling interests and
deferred acquisition consideration;
- the successful completion and integration of acquisitions
which complement and expand the Company's business
capabilities;
- foreign currency fluctuations; and
- risks associated with the one Canadian securities class
action litigation claim.
The Company's business strategy includes ongoing efforts to
engage in acquisitions of ownership interests in entities in the
marketing communications services industry. The Company
intends to finance these acquisitions by using available cash from
operations, from borrowings under its credit facility and through
incurrence of bridge or other debt financing, any of which may
increase the Company's leverage ratios, or by issuing equity, which
may have a dilutive impact on existing shareholders proportionate
ownership. At any given time, the Company may be engaged in a
number of discussions that may result in one or more
acquisitions. These opportunities require confidentiality and
may involve negotiations that require quick responses by the
Company. Although there is uncertainty that any of these
discussions will result in definitive agreements or the completion
of any transactions, the announcement of any such transaction may
lead to increased volatility in the trading price of the Company's
securities.
Investors should carefully consider these risk factors and
the additional risk factors outlined in more detail in the Annual
Report on Form 10-K under the caption "Risk Factors" and in the
Company's other SEC filings.
SCHEDULE
1
|
|
|
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(US$ in 000s,
except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
2016
(1)
|
|
2017
|
2016
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
390,532
|
$
337,047
|
|
$
735,232
|
$
646,089
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Cost of services
sold
|
|
267,822
|
228,835
|
|
505,385
|
440,281
|
Office and general
expenses
|
|
85,563
|
72,709
|
|
173,403
|
150,537
|
Depreciation and
amortization
|
|
10,766
|
11,436
|
|
21,664
|
22,656
|
|
|
364,151
|
312,980
|
|
700,452
|
613,474
|
Operating
profit
|
|
26,381
|
24,067
|
|
34,780
|
32,615
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
Other, net
|
|
6,596
|
26
|
|
9,163
|
15,538
|
Interest expense and
finance charges
|
|
(15,688)
|
(17,174)
|
|
(32,456)
|
(32,749)
|
Loss on redemption of
notes
|
|
-
|
-
|
|
-
|
(33,298)
|
Interest
income
|
|
178
|
203
|
|
405
|
381
|
|
|
(8,914)
|
(16,945)
|
|
(22,888)
|
(50,128)
|
Income (loss) before
income taxes and equity in earnings of non-consolidated
affiliates
|
|
17,467
|
7,122
|
|
11,892
|
(17,513)
|
Income tax
expense
|
|
4,641
|
4,744
|
|
8,610
|
3,110
|
Income (loss) before
equity in earnings of non-consolidated affiliates
|
|
12,826
|
2,378
|
|
3,282
|
(20,623)
|
Equity in earnings
(losses) of non-consolidated affiliates
|
|
641
|
(290)
|
|
502
|
(61)
|
Net income
(loss)
|
|
13,467
|
2,088
|
|
3,784
|
(20,684)
|
Net income
attributable to the noncontrolling interests
|
|
(2,214)
|
(1,254)
|
|
(3,097)
|
(2,113)
|
Net income (loss)
attributable to MDC Partners Inc.
|
|
11,253
|
834
|
|
687
|
(22,797)
|
Accretion on
convertible preference shares
|
|
(1,910)
|
-
|
|
(2,417)
|
-
|
Net income (loss)
attributable to MDC Partners Inc. common
|
|
|
|
|
|
|
shareholders
|
|
$
9,343
|
$
834
|
|
$
(1,730)
|
$
(22,797)
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
Net income (loss)
attributable to MDC Partners Inc. common
|
|
|
|
|
|
|
shareholders
|
|
$
0.14
|
$
0.02
|
|
$
(0.03)
|
$
(0.45)
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
Net income (loss)
attributable to MDC Partners Inc.
|
|
|
|
|
|
|
common
shareholders
|
|
$
0.14
|
$
0.02
|
|
$
(0.03)
|
$
(0.45)
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
55,332,497
|
50,322,757
|
|
53,480,144
|
50,162,654
|
Diluted
|
|
55,622,194
|
50,703,548
|
|
53,480,144
|
50,162,654
|
|
|
|
|
|
|
|
(1)
Revised due to the correction of prior period financial statements
relating to the Company's deferred tax liability and income tax
expense.
|
SCHEDULE
2
|
|
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED ORGANIC
REVENUE GROWTH RECONCILIATION
|
(US$ in 000s,
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Revenue
$
|
%
Change
|
|
Revenue
$
|
%
Change
|
June 30,
2016
|
$
337,047
|
|
|
$
646,089
|
|
|
|
|
|
|
|
Organic revenue
growth
|
39,318
|
11.7%
|
|
56,504
|
8.7%
|
Impact of Non-GAAP
acquisitions (dispositions), net
|
19,265
|
5.7%
|
|
39,642
|
6.1%
|
Foreign exchange
impact, net
|
(5,098)
|
(1.5%)
|
|
(7,003)
|
(1.1%)
|
GAAP revenue
growth
|
53,485
|
15.9%
|
|
89,143
|
13.8%
|
|
|
|
|
|
|
June 30,
2017
|
$
390,532
|
|
|
$
735,232
|
|
|
Note: Actuals may not
foot due to rounding
|
SCHEDULE
3
|
|
|
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED
EBITDA
|
(US$ in 000s,
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
2016
(1)
|
|
2017
|
2016
(1)
|
|
|
|
|
|
|
|
Revenue
|
|
$
390,532
|
$
337,047
|
|
$
735,232
|
$
646,089
|
|
|
|
|
|
|
|
Net income
attributable to MDC Partners Inc.
|
|
$
11,253
|
$
834
|
|
$
687
|
$
(22,797)
|
Adjustments to
reconcile to operating profit (loss):
|
|
|
|
|
|
|
Net
income attributable to the noncontrolling interests
|
|
2,214
|
1,254
|
|
3,097
|
2,113
|
Equity
in losses of non-consolidated affiliates
|
|
(641)
|
290
|
|
(502)
|
61
|
Income
tax expense
|
|
4,641
|
4,744
|
|
8,610
|
3,110
|
Interest
expense and finance charges, net
|
|
15,510
|
16,971
|
|
32,051
|
32,368
|
Loss on
redemption of notes
|
|
-
|
-
|
|
-
|
33,298
|
Other,
net
|
|
(6,596)
|
(26)
|
|
(9,163)
|
(15,538)
|
Operating profit
(loss)
|
|
$
26,381
|
$
24,067
|
|
$
34,780
|
$
32,615
|
margin
|
|
6.8%
|
7.1%
|
|
4.7%
|
5.0%
|
|
|
|
|
|
|
|
Additional
adjustments to reconcile to Adjusted EBITDA:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
10,766
|
11,436
|
|
21,664
|
22,656
|
Stock-based
compensation
|
|
5,540
|
5,530
|
|
10,490
|
10,215
|
Acquisition deal
costs
|
|
-
|
907
|
|
-
|
1,460
|
Deferred acquisition
consideration adjustments
|
|
4,306
|
(299)
|
|
15,737
|
6,028
|
Distributions from
non-consolidated affiliates **
|
|
105
|
-
|
|
105
|
-
|
Other items, net
***
|
|
(100)
|
252
|
|
35
|
1,738
|
|
|
|
|
|
|
|
Adjusted EBITDA
*
|
|
$
46,998
|
$
41,893
|
|
$
82,811
|
$
74,712
|
margin
|
|
12.0%
|
12.4%
|
|
11.3%
|
11.6%
|
|
|
|
|
|
|
|
*
Adjusted EBITDA is a non-GAAP measure, but as shown above it
represents operating profit (loss) plus depreciation and
amortization, stock-based compensation, deferred
acquisition consideration
adjustments, distributions from non-consolidated affiliates, and
other items. Prior to 2017, Adjusted EBITDA included an additional
adjustment for acquisition deal costs. Beginning with 2017, on a prospective basis, we no
longer include the acquisition deal cost adjustment but we continue
to disclose this metric on Schedule 6 for your
reference.
|
** Distributions from
non-consolidated affiliates includes (i) cash received for profit
distributions from non-consolidated affiliates, and (ii)
consideration from the sale of ownership
interests in non-consolidated
affiliates less contributions to date plus undistributed earnings
(losses).
|
*** Other
items, net includes legal fees and related expenses, net of
insurance proceeds, relating to the SEC investigation and related
class action litigation claims. See Schedule 6
for reconciliation of
amounts.
|
(1) Revised due
to the correction of prior period financial statements relating to
the Company's deferred tax liability and income tax expense. This
correction has no impact on Adjusted EBITDA.
|
SCHEDULE
4
|
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
(US$ in
000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2017
|
|
2016
(1)
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
20,347
|
|
$
27,921
|
Cash held in
trusts
|
|
5,526
|
|
5,341
|
Accounts receivable,
net
|
|
456,229
|
|
388,340
|
Expenditures billable
to clients
|
|
42,341
|
|
33,118
|
Other current
assets
|
|
27,207
|
|
34,862
|
Total current
assets
|
|
551,650
|
|
489,582
|
Fixed assets,
net
|
|
88,010
|
|
78,377
|
Investments in
non-consolidated affiliates
|
|
5,247
|
|
4,745
|
Goodwill
|
|
851,135
|
|
844,759
|
Other intangible
assets, net
|
|
78,813
|
|
85,071
|
Deferred tax
assets
|
|
39,549
|
|
41,793
|
Other
assets
|
|
35,850
|
|
33,051
|
Total
assets
|
|
$
1,650,254
|
|
$
1,577,378
|
|
|
|
|
|
Liabilities,
redeemable noncontrolling interests, and shareholders'
deficit
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
266,568
|
|
$
251,456
|
Trust
liability
|
|
5,526
|
|
5,341
|
Accruals and other
liabilities
|
|
300,562
|
|
303,581
|
Advance
billings
|
|
163,639
|
|
133,925
|
Current portion of
long-term debt
|
|
289
|
|
228
|
Current portion of
deferred acquisition consideration
|
|
78,815
|
|
108,290
|
Total current
liabilities
|
|
815,399
|
|
802,821
|
Long-term debt, less
current portion
|
|
909,116
|
|
936,208
|
Long-term portion of
deferred acquisition consideration
|
|
90,865
|
|
121,274
|
Other
liabilities
|
|
55,576
|
|
56,012
|
Deferred tax
liabilities
|
|
115,381
|
|
110,359
|
Total
liabilities
|
|
1,986,337
|
|
2,026,674
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
62,955
|
|
60,180
|
|
|
|
|
|
Shareholders'
deficit
|
|
|
|
|
Convertible
preference shares (liquidation preference $97,417)
|
|
90,220
|
|
-
|
Common
shares
|
|
349,474
|
|
317,784
|
Shares to be
issued
|
|
-
|
|
2,360
|
Charges in excess of
capital
|
|
(310,051)
|
|
(311,581)
|
Accumulated
deficit
|
|
(581,161)
|
|
(581,848)
|
Accumulated other
comprehensive loss
|
|
(2,477)
|
|
(1,824)
|
MDC Partners Inc.
shareholders' deficit
|
|
(453,995)
|
|
(575,109)
|
Noncontrolling
interests
|
|
54,957
|
|
65,633
|
Total shareholders'
deficit
|
|
(399,038)
|
|
(509,476)
|
Total liabilities,
redeemable noncontrolling interests, and shareholders'
deficit
|
|
$
1,650,254
|
|
$
1,577,378
|
|
|
|
|
|
(1)
Revised due to the correction of prior period financial statements
relating to the Company's deferred tax liability and income tax
expense.
|
SCHEDULE
5
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED SUMMARY
CASH FLOW DATA
|
(US$ in
000s)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2017
|
2016
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
23,733
|
$
(110,197)
|
|
|
|
|
Net cash used in
investing activities
|
|
(22,882)
|
(16,762)
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
(7,331)
|
81,372
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(1,094)
|
191
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
$
(7,574)
|
$
(45,396)
|
SCHEDULE
6
|
|
|
|
|
|
|
|
|
|
|
MDC PARTNERS
INC.
|
UNAUDITED
RECONCILIATION OF COMPONENTS OF NON-GAAP MEASURES
|
(US$ in
000s)
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
Q2
|
YTD
|
NON-GAAP
ACQUISITIONS (DISPOSITIONS), NET
|
|
|
|
|
|
|
|
|
|
GAAP revenue from
prior year acquisitions *
|
$
6,556
|
$
2,817
|
$
17,083
|
$
24,657
|
$
51,113
|
|
$
18,552
|
$
24,983
|
$
43,535
|
Foreign exchange
impact
|
39
|
7
|
113
|
1,343
|
1,502
|
|
1,046
|
1,341
|
2,387
|
Contribution to
organic revenue (growth) decline **
|
(2,783)
|
(896)
|
(3,142)
|
(3,300)
|
(10,121)
|
|
1,470
|
(6,399)
|
(4,929)
|
Prior year revenue
from dispositions ***
|
-
|
-
|
-
|
(499)
|
(499)
|
|
(691)
|
(660)
|
(1,351)
|
Non-GAAP acquisitions
(dispositions), net
|
$
3,812
|
$
1,928
|
$
14,054
|
$
22,201
|
$
41,995
|
|
$
20,377
|
$
19,265
|
$
39,642
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
Q2
|
YTD
|
OTHER ITEMS,
NET
|
|
|
|
|
|
|
|
|
|
SEC investigation and
class action litigation expenses
|
$
1,486
|
$
1,359
|
$
767
|
$
454
|
$
4,066
|
|
$
339
|
$
382
|
$
721
|
SEC final settlement
payment
|
-
|
-
|
-
|
1,500
|
1,500
|
|
-
|
-
|
-
|
D&O insurance
proceeds
|
-
|
(1,107)
|
(3,230)
|
(1,583)
|
(5,920)
|
|
(204)
|
(482)
|
(686)
|
Total other items,
net
|
$
1,486
|
$
252
|
$
(2,463)
|
$
371
|
$
(354)
|
|
$
135
|
$
(100)
|
$
35
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
Q2
|
YTD
|
CASH INTEREST, NET
& OTHER
|
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
$
(25,703)
|
$
(1,212)
|
$
(1,063)
|
$
(36,692)
|
$
(64,670)
|
|
$
(999)
|
$
(1,317)
|
$
(2,316)
|
Bond interest accrual
adjustment
|
11,995
|
(15,680)
|
(14,625)
|
20,800
|
2,490
|
|
(14,625)
|
(14,625)
|
(29,250)
|
Adjusted cash
interest paid
|
(13,708)
|
(16,892)
|
(15,688)
|
(15,892)
|
(62,180)
|
|
(15,624)
|
(15,942)
|
(31,566)
|
Interest
income
|
178
|
203
|
218
|
209
|
808
|
|
227
|
178
|
405
|
Total cash interest,
net & other
|
$
(13,530)
|
$
(16,689)
|
$
(15,470)
|
$
(15,683)
|
$
(61,372)
|
|
$
(15,397)
|
$
(15,764)
|
$
(31,161)
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
Q2
|
YTD
|
CAPITAL
EXPENDITURES, NET
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
(5,539)
|
$
(7,909)
|
$
(6,275)
|
$
(9,709)
|
$
(29,432)
|
|
$
(9,413)
|
$
(11,743)
|
$
(21,156)
|
Landlord
reimbursements
|
-
|
871
|
248
|
3,651
|
4,770
|
|
75
|
3,146
|
3,221
|
Total capital
expenditures, net
|
$
(5,539)
|
$
(7,038)
|
$
(6,027)
|
$
(6,058)
|
$
(24,662)
|
|
$
(9,338)
|
$
(8,597)
|
$
(17,935)
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
Q2
|
YTD
|
MISCELLANEOUS
OTHER DISCLOSURES
|
|
|
|
|
|
|
|
|
|
Net income
attributable to the noncontrolling interests
|
$
859
|
$
1,254
|
$
1,059
|
$
2,046
|
$
5,218
|
|
$
883
|
$
2,214
|
$
3,097
|
Cash taxes
|
$
143
|
$
664
|
$
1,991
|
$
97
|
$
2,895
|
|
$
1,293
|
$
2,130
|
$
3,423
|
Acquisition deal
costs
|
$
553
|
$
907
|
$
806
|
$
374
|
$
2,640
|
|
$
234
|
$
242
|
$
476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* GAAP revenue from
prior year acquisitions for 2017 and 2016 relates to acquisitions
which occurred in 2016 and 2015, respectively.
|
** Contributions to
organic revenue growth (decline) represents the change in revenue,
measured on a constant currency basis, relative to the comparable
pre-acquisition period for
acquired businesses that is included in the Company's organic
revenue growth (decline) calculation
|
*** Prior year
revenue from dispositions reflects the incremental impact on
revenue for the comparable period after the Company's disposition
of such disposed business, plus revenue
from each business disposed
of by the Company in the previous year through the twelve month
anniversary of the disposition.
|
|
Note: Actuals may not
foot due to rounding
|
FOR:
|
MDC Partners
Inc.
|
CONTACT:
|
Matt Chesler,
CFA
|
|
745 Fifth Avenue,
19th Floor
|
|
VP, Investor
Relations and Finance
|
|
New York, NY
10151
|
|
646-412-6877
|
|
|
|
mchesler@mdc-partners.com
|
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SOURCE MDC Partners Inc.