Company Responds Swiftly to Pandemic Conditions,
Dramatically Reduces Costs and Delivers Solid First Half
Results
NEW YORK, Aug. 6, 2020 /PRNewswire/ --
SECOND QUARTER & YTD HIGHLIGHTS:
- Revenue of $259.7 million in the
second quarter versus $362.1 million
in the prior period, a decline of 28.3%; and $587.4 million YTD versus $690.9 million in the prior year period, a
decline of 15.0%.
- Organic revenue declined 26.4% in the second quarter and 12.9%
YTD.
- Net loss attributable to MDC Partners common shareholders was
$4.1 million in the second quarter of
2020 versus $0.8 million in income a
year ago, driven by non-cash impairment charges taken in the
quarter.
- Net loss attributable to MDC Partners common shareholders was
$6.5 million in the six months ended
June 30, 2020 versus $1.4 million a year ago, driven by non-cash
impairment charges taken in the period.
- Adjusted EBITDA for the three months ended June 30, 2020 was $36.2
million versus $46.4 million a
year ago, a decline of 22.1%. Adjusted EBITDA Margin of 13.9%,
compared to 12.8% in the prior year quarter.
- Adjusted EBITDA for the six months ended June 30, 2020 was $75.7
million versus $67.9 million a
year ago, an increase of 11.5%. Adjusted EBITDA Margin of 12.9%,
compared to 9.8% a year ago.
- Excluding Kingsdale and Sloane, Adjusted EBITDA decreased 20.9%
in the second quarter and increased 17.2% in the first half of 2020
compared with the prior year period.
- Covenant EBITDA (LTM) of $193.3
million versus $200.7 million
at March 31, 2020, a decline of
3.7%.
- Net New Business wins totaled $20.5
million in the second quarter, and $28.9 million in the six months ended
June 30, 2020.
(NASDAQ: MDCA) – MDC Partners Inc. ("MDC Partners"
or the "Company") today announced financial results for the three
and six months ended June 30,
2020.
"Coming off of pace-setting growth in the first quarter, we
weathered the current effects of COVID-19 on GDP, our clients and
revenue with a diligent focus on cost reductions and restructuring
actions that helped preserve the underlying economics of the
business. This resulted in expanded margins and positions MDC to
rebound even more strongly once we return to growth," said
Mark Penn, Chairman and Chief
Executive Officer of MDC Partners.
"The expected declines in net revenue were met with better than
expected controls on costs and strong liquidity. On a half-year
basis, Adjusted EBITDA excluding divestitures increased 17 percent
against prior year despite the revenue decline," Mr. Penn
added.
Frank Lanuto, Chief Financial
Officer, added, "We continued to operate with significant financial
flexibility throughout the quarter. We extended our credit facility
and retired $87 million in
obligations in the second quarter, including semi-annual interest
on our Notes, scheduled M&A obligations and partial bond
repurchase. We maintained a positive net cash position of
$23 million at quarter end and
reduced our leverage from 4.9x year ago to 4.6x."
Lead Independent Director and Special Committee Chairman
Irwin Simon commented, "The special
committee is proceeding with its review of Stagwell's recent merger
proposal, assisted by independent advisors Moelis & Company and
DLA Piper. The committee will continue to act in the best
interests of the Company and our shareholders as we evaluate the
previously announced transaction proposed by Stagwell as well as
all alternatives available to the Company."
Second Quarter and Year-to-Date 2020 Financial
Results
Revenue for the second quarter of 2020 was $259.7 million versus $362.1 million for the second quarter of 2019, a
decline of 28.3%. The effect on revenue of foreign exchange due to
the strong US Dollar was negative 0.8%, the impact of non-GAAP
acquisitions (dispositions), net was negative 1.1%, and organic
revenue decline was 26.4%, inclusive of $29.1 million or 457 basis points from lower
billable costs. Organic revenue declined primarily due to reduced
spending by clients in connection with COVID-19. Net New Business
wins in the second quarter of 2020 totaled $20.5 million.
Net loss attributable to MDC Partners common shareholders for
the second quarter of 2020 was $4.1
million versus net income of $0.8 million for the second quarter of 2019.
The decline was primarily due to lower revenues, partially offset
by a reduction in expenses, which included a goodwill and lease
impairment charge of $18.8 million, a
gain of $7.4 million in connection
with the repurchase of a portion of our senior notes and a tax
benefit during the second quarter as compared to the same period in
the prior year. Diluted loss per share attributable to MDC Partners
common shareholders for the second quarter of 2020 was $0.06 versus diluted income per share of
$0.01 for the second quarter of
2019.
Adjusted EBITDA for the second quarter of 2020 was $36.2 million versus $46.4
million for the second quarter of 2019, a decline of 22.1%,
primarily due to lower revenues, partially offset by a reduction of
expenses. This led to a 110 basis point increase in Adjusted EBITDA
margin in the second quarter of 2020 to 13.9% from 12.8% in the
second quarter of 2019.
Covenant EBITDA for the last twelve months (LTM) was
$193.3 million as of June 30, 2020 versus $200.7 million at March
31, 2020, a decline of 3.7%. The change was primarily driven
by the decline in Adjusted EBITDA.
Revenue for the first six months of 2020 was $587.4 million versus $690.9 million for the first six months of 2019,
a decline of 15.0%. The effect on revenue of foreign exchange due
to the strong US Dollar was negative 0.7%, the impact of non-GAAP
acquisitions (dispositions), net was negative 1.4%, and organic
revenue decline was 12.9%, inclusive of $28.1 million or 239 basis points from lower
billable costs. Organic revenue declined primarily due to reduced
spending by clients in connection with COVID-19. Net New Business
wins for the first six months of 2020 totaled $28.9 million.
Net loss attributable to MDC Partners common shareholders for
the first six months of 2020 was $6.5
million versus $1.4
million for the first six months of 2019. This change was
primarily due to the decline in revenue, partially offset by a
reduction in expenses. Diluted loss per share attributable to MDC
Partners common shareholders for the six months of 2020 was
$0.09 versus diluted loss per share
of $0.02 for the first six months of
2019.
Adjusted EBITDA for the first six months of 2020 was
$75.7 million versus $67.9 million for the first six months of 2019,
an increase of 11.5%. The improvement was primarily due to a
reduction in expenses to combat the impact of COVID-19 on the
business, partially offset by lower revenues. This led to a 310
basis point improvement in Adjusted EBITDA margin in the first six
months of 2020 to 12.9% from 9.8% in the first six months of
2019.
Financial Outlook
Given the uncertainties in the global business environment
arising from the COVID-19 pandemic, the Company is not providing a
2020 outlook for Revenue and Covenant EBITDA at this time.
Conference Call
Management will host a conference call on Thursday, August 6, 2020, at 8:30 a.m. (ET) to discuss its results. The
conference call will be accessible by dialing 1-862-298-0702 or
toll free 1-888-390-3967. An investor presentation has been
posted on our website at www.mdc-partners.com and may be referred
to during the conference call.
A recording of the conference call will be accessible within one
business day after the conference call until 12:00 a.m. (ET), August
13, 2020, by dialing 1-754-333-7735 or toll free
1-888-539-4649 (passcode 153080), or by visiting our website at
www.mdc-partners.com.
About MDC Partners Inc.
MDC Partners is one of the most influential marketing and
communications networks in the world. As "The Place Where Great
Talent Lives," MDC Partners is celebrated for its innovative
advertising, public relations, branding, digital, social and event
marketing agency partners, which are responsible for some of the
most memorable and effective campaigns for the world's most
respected brands. By leveraging technology, data analytics,
insights and strategic consulting solutions, MDC Partners drives
creative excellence, business growth and measurable 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 (SEC) 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 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 that 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 financial
measure that represents Net income (loss) attributable to MDC
Partners Inc. common shareholders plus or minus adjustments to
operating income (loss) plus depreciation and amortization,
stock-based compensation, deferred acquisition consideration
adjustments, distributions from non-consolidated affiliates, and
other items, net which includes items such as severance expense and
other restructuring expenses, including costs for leases that will
either be terminated or sublet in connection with the
centralization of our New York
real estate portfolio.
(4) Covenant EBITDA: Covenant EBITDA is a measure that includes
pro forma adjustments for acquisitions, one-time charges, permitted
dispositions and other items, as defined in the Company's Credit
Agreement. We believe that the presentation of Covenant EBITDA is
useful to investors as it eliminates the effect of certain non-cash
and other items not necessarily indicative of a company's
underlying operating performance. In addition, the presentation of
Covenant EBITDA provides additional information to investors about
the calculation of, and compliance with, certain financial
covenants in the Company's Credit Agreement.
Included in this earnings release are tables reconciling MDC
Partners' reported results to arrive at certain of these non-GAAP
financial measures.
This press release contains forward-looking statements.
Statements in this press release that are not historical facts,
including without limitation the information under the heading
"Financial Outlook" and statements about the Company's beliefs and
expectations, earnings (loss) guidance, recent business and
economic trends, potential acquisitions, and estimates of amounts
for redeemable noncontrolling interests and deferred acquisition
consideration, constitute forward-looking statements. Words such as
"estimates", "expects", "contemplates", "will", "anticipates",
"projects", "plans", "intends", "believes", "forecasts", "may",
"should", and variations of such words or similar expressions are
intended to identify 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 international, national and regional
unfavorable economic conditions that could affect the Company or
its clients, including as a result of the novel coronavirus
pandemic ("COVID-19");
- the effects of the outbreak of COVID-19, including the
measures to reduce its spread, and the impact on the economy and
demand for our services, which may precipitate or exacerbate other
risks and uncertainties;
- developments involving the proposal by Stagwell Media LP to
enter into a business combination with the Company;
- the Company's ability to attract new clients and retain
existing clients;
- reduction in client spending and changes in client
advertising, marketing and corporate communications
requirements;
- financial failure of the Company's clients;
- the Company's ability to retain and attract key
employees;
- the Company's ability to achieve the full amount of its
stated cost saving initiatives;
- the Company's implementation of strategic
initiatives;
- 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;
and
- foreign currency fluctuations.
Investors should carefully consider these risk factors, other
risk factors described herein, and the additional risk factors
outlined in more detail in the Company's 2019 Form 10-K, filed with
the Securities and Exchange Commission (the "SEC") on March 5, 2020 and accessible on the SEC's website
at www.sec.gov, under the caption "Risk Factors," and in the
Company's other SEC filings.
CONTACT:
|
Erica
Bartsch
|
|
Sloane &
Company
|
|
212-446-1875
|
|
IR@mdc-partners.com
|
SCHEDULE
1 MDC PARTNERS INC. UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS (US$ in 000s, Except per Share
Amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
Services
|
$
|
259,678
|
|
|
$
|
362,130
|
|
|
$
|
587,420
|
|
|
$
|
690,921
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Cost of services
sold
|
165,632
|
|
|
240,749
|
|
|
388,325
|
|
|
477,903
|
|
Office and general
expenses
|
66,210
|
|
|
87,276
|
|
|
132,563
|
|
|
154,394
|
|
Depreciation and
amortization
|
8,899
|
|
|
10,663
|
|
|
18,105
|
|
|
19,501
|
|
Impairment and other
losses
|
18,839
|
|
|
—
|
|
|
19,000
|
|
|
—
|
|
|
259,580
|
|
|
338,688
|
|
|
557,993
|
|
|
651,798
|
|
Operating
income
|
98
|
|
|
23,442
|
|
|
29,427
|
|
|
39,123
|
|
Other Income
(Expenses):
|
|
|
|
|
|
|
|
Interest expense and
finance charges, net
|
(15,941)
|
|
|
(16,413)
|
|
|
(31,553)
|
|
|
(33,172)
|
|
Foreign exchange gain
(loss)
|
5,342
|
|
|
2,932
|
|
|
(9,415)
|
|
|
8,374
|
|
Other, net
|
5,884
|
|
|
(746)
|
|
|
22,218
|
|
|
(4,128)
|
|
|
(4,715)
|
|
|
(14,227)
|
|
|
(18,750)
|
|
|
(28,926)
|
|
Income (loss) before
income taxes and equity in earnings of non-consolidated
affiliates
|
(4,617)
|
|
|
9,215
|
|
|
10,677
|
|
|
10,197
|
|
Income tax expense
(benefit)
|
(7,923)
|
|
|
2,088
|
|
|
5,577
|
|
|
2,837
|
|
Income before equity
in earnings of non-consolidated affiliates
|
3,306
|
|
|
7,127
|
|
|
5,100
|
|
|
7,360
|
|
Equity in earnings
(losses) of non-consolidated affiliates
|
(798)
|
|
|
206
|
|
|
(798)
|
|
|
289
|
|
Net income
|
2,508
|
|
|
7,333
|
|
|
4,302
|
|
|
7,649
|
|
Net income
attributable to the noncontrolling interest
|
(3,101)
|
|
|
(3,043)
|
|
|
(3,892)
|
|
|
(3,472)
|
|
Net income (loss)
attributable to MDC Partners Inc.
|
(593)
|
|
|
4,290
|
|
|
410
|
|
|
4,177
|
|
Accretion on and net
income allocated to convertible preference shares
|
(3,509)
|
|
|
(3,515)
|
|
|
(6,949)
|
|
|
(5,625)
|
|
Net income (loss)
attributable to MDC Partners Inc. common shareholders
|
$
|
(4,102)
|
|
|
$
|
775
|
|
|
$
|
(6,539)
|
|
|
$
|
(1,448)
|
|
Income (loss) Per
Common Share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Net income (loss)
attributable to MDC Partners Inc. common shareholders
|
$
|
(0.06)
|
|
|
$
|
0.01
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.02)
|
|
Diluted
|
|
|
|
|
|
|
|
Net income (loss)
attributable to MDC Partners Inc. common shareholders
|
$
|
(0.06)
|
|
|
$
|
0.01
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.02)
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
72,528,455
|
|
|
71,915,832
|
|
|
72,463,058
|
|
|
66,118,749
|
|
Diluted
|
72,528,455
|
|
|
72,024,689
|
|
|
72,463,058
|
|
|
66,118,749
|
|
SCHEDULE
2 MDC PARTNERS INC. UNAUDITED REVENUE
RECONCILIATION (US$ in 000s, except
percentages)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Revenue
$
|
|
%
Change
|
|
Revenue
$
|
|
%
Change
|
June 30,
2019
|
$
|
362,130
|
|
|
|
|
$
|
690,921
|
|
|
|
Organic revenue
(1)
|
(95,437)
|
|
|
(26.4)
|
%
|
|
(89,003)
|
|
|
(12.9)
|
%
|
Non-GAAP acquisitions
(dispositions), net
|
(4,106)
|
|
|
(1.1)
|
%
|
|
(9,789)
|
|
|
(1.4)
|
%
|
Foreign exchange
impact
|
(2,909)
|
|
|
(0.8)
|
%
|
|
(4,709)
|
|
|
(0.7)
|
%
|
Total
change
|
(102,452)
|
|
|
(28.3)
|
%
|
|
(103,501)
|
|
|
(15.0)
|
%
|
June 30,
2020
|
$
|
259,678
|
|
|
|
|
$
|
587,420
|
|
|
|
|
|
(1)
|
Organic revenue
refers to the positive results 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
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. See
"Non-GAAP Financial Measures" herein.
|
|
|
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)
|
|
For the Three
Months Ended June 30, 2020
|
|
Integrated
Networks
- Group A
|
|
Integrated
Networks
- Group B
|
|
Media &
Data
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Revenue
|
$
|
82,735
|
|
|
$
|
93,398
|
|
|
$
|
28,551
|
|
|
$
|
54,994
|
|
|
$
|
—
|
|
|
$
|
259,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to MDC Partners Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(4,102)
|
|
Adjustments to
reconcile to operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Accretion on
convertible preference shares
|
|
|
|
|
|
|
|
|
|
|
3,509
|
|
Net income
attributable to the noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
3,101
|
|
Equity in losses of
non-consolidated affiliates
|
|
|
|
|
|
|
|
|
|
|
798
|
|
Income tax
benefit
|
|
|
|
|
|
|
|
|
|
|
(7,923)
|
|
Interest expense and
finance charges, net
|
|
|
|
|
|
|
|
|
|
|
15,941
|
|
Foreign exchange
gain
|
|
|
|
|
|
|
|
|
|
|
(5,342)
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
(5,884)
|
|
Operating income
(loss)
|
$
|
14,605
|
|
|
$
|
(7,717)
|
|
|
$
|
46
|
|
|
$
|
4,987
|
|
|
$
|
(11,823)
|
|
|
$
|
98
|
|
margin
|
17.7
|
%
|
|
(8.3)
|
%
|
|
0.2
|
%
|
|
9.1
|
%
|
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
1,566
|
|
|
$
|
4,387
|
|
|
$
|
807
|
|
|
$
|
1,903
|
|
|
$
|
236
|
|
|
$
|
8,899
|
|
Impairment and other
losses
|
—
|
|
|
17,468
|
|
|
35
|
|
|
207
|
|
|
1,129
|
|
|
18,839
|
|
Stock-based
compensation
|
(105)
|
|
|
746
|
|
|
4
|
|
|
118
|
|
|
276
|
|
|
1,039
|
|
Deferred acquisition
consideration adjustments
|
1,139
|
|
|
1,503
|
|
|
—
|
|
|
(330)
|
|
|
—
|
|
|
2,312
|
|
Distributions from
non-consolidated affiliates (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,079
|
|
|
1,079
|
|
Other items, net
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,895
|
|
|
3,895
|
|
Adjusted EBITDA
(1)
|
$
|
17,205
|
|
|
$
|
16,387
|
|
|
$
|
892
|
|
|
$
|
6,885
|
|
|
$
|
(5,208)
|
|
|
$
|
36,161
|
|
Adjusted EBITDA
margin
|
20.8
|
%
|
|
17.5
|
%
|
|
3.1
|
%
|
|
12.5
|
%
|
|
|
|
13.9
|
%
|
|
|
(1)
|
Adjusted EBITDA is a
non-GAAP financial measure, and as shown above it represents
operating income (loss) plus depreciation and amortization,
stock-based compensation, deferred acquisition consideration
adjustments, distributions from non-consolidated affiliates,
impairment and other items. See "Non-GAAP Financial Measures"
herein.
|
|
|
(2)
|
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).
|
|
|
(3)
|
Other items, net
includes items such as severance expense and other restructuring
expenses. See Schedule 10 for a reconciliation of
amounts.
|
|
|
Note:
|
Effective in
the first quarter of 2020, the Company reorganized its management
structure resulting in the aggregation of certain Partner Firms
into integrated groups ("Networks"). In connection with the
reorganization, we reassessed our reportable segments to align our
external reporting with how we operate the Networks under our new
organizational structure. Prior periods presented have been recast
to reflect the change in reportable segments.
|
|
|
Note:
|
Actuals may not
foot due to rounding.
|
SCHEDULE
4 MDC PARTNERS INC. UNAUDITED RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED EBITDA (US$ in 000s, except
percentages)
|
|
For the Six Months
Ended June 30, 2020
|
|
Integrated
Networks
- Group A
|
|
Integrated
Networks
- Group B
|
|
Media &
Data
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Revenue
|
$
|
173,356
|
|
|
$
|
211,105
|
|
|
$
|
69,609
|
|
|
$
|
133,350
|
|
|
$
|
—
|
|
|
$
|
587,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to MDC Partners Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(6,539)
|
|
Adjustments to
reconcile to operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Accretion on
convertible preference shares
|
|
|
|
|
|
|
|
|
|
|
6,949
|
|
Net income
attributable to the noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
3,892
|
|
Equity in losses of
non-consolidated affiliates
|
|
|
|
|
|
|
|
|
|
|
798
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
5,577
|
|
Interest expense and
finance charges, net
|
|
|
|
|
|
|
|
|
|
|
31,553
|
|
Foreign exchange
loss
|
|
|
|
|
|
|
|
|
|
|
9,415
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
(22,218)
|
|
Operating income
(loss)
|
$
|
26,637
|
|
|
$
|
9,444
|
|
|
$
|
663
|
|
|
$
|
12,844
|
|
|
$
|
(20,161)
|
|
|
$
|
29,427
|
|
margin
|
15.4
|
%
|
|
4.5
|
%
|
|
1.0
|
%
|
|
9.6
|
%
|
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
3,307
|
|
|
$
|
8,913
|
|
|
$
|
1,615
|
|
|
$
|
3,802
|
|
|
$
|
468
|
|
|
$
|
18,105
|
|
Impairment and other
losses
|
—
|
|
|
17,629
|
|
|
35
|
|
|
207
|
|
|
1,129
|
|
|
19,000
|
|
Stock-based
compensation
|
1,856
|
|
|
1,646
|
|
|
(9)
|
|
|
198
|
|
|
418
|
|
|
4,109
|
|
Deferred acquisition
consideration adjustments
|
1,707
|
|
|
(4,109)
|
|
|
375
|
|
|
(261)
|
|
|
—
|
|
|
(2,288)
|
|
Distributions from
non-consolidated affiliates (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|
1,065
|
|
Other items, net
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,311
|
|
|
6,311
|
|
Adjusted EBITDA
(1)
|
$
|
33,507
|
|
|
$
|
33,523
|
|
|
$
|
2,679
|
|
|
$
|
16,790
|
|
|
$
|
(10,770)
|
|
|
$
|
75,729
|
|
Adjusted EBITDA
margin
|
19.3
|
%
|
|
15.9
|
%
|
|
3.8
|
%
|
|
12.6
|
%
|
|
|
|
12.9
|
%
|
|
|
(1)
|
Adjusted EBITDA is a
non-GAAP financial measure, and as shown above it represents
operating income (loss) plus depreciation and amortization,
stock-based compensation, deferred acquisition consideration
adjustments, distributions from non-consolidated affiliates,
impairment and other items. See "Non-GAAP Financial Measures"
herein.
|
|
|
(2)
|
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).
|
|
|
(3)
|
Other items, net
includes items such as severance expense and other restructuring
expenses. See Schedule 10 for a reconciliation of
amounts.
|
|
|
Note:
|
Effective in
the first quarter of 2020, the Company reorganized its management
structure resulting in the aggregation of certain Partner Firms
into integrated groups ("Networks"). In connection with the
reorganization, we reassessed our reportable segments to align our
external reporting with how we operate the Networks under our new
organizational structure. Prior periods presented have been recast
to reflect the change in reportable segments.
|
|
|
Note:
|
Actuals may not
foot due to rounding.
|
SCHEDULE
5 MDC PARTNERS INC. UNAUDITED RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED EBITDA (US$ in 000s, except
percentages)
|
|
For the Three
Months Ended June 30, 2019
|
|
Integrated
Networks
- Group A
|
|
Integrated
Networks
- Group B
|
|
Media &
Data
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Revenue
|
$
|
103,248
|
|
|
$
|
133,394
|
|
|
$
|
39,456
|
|
|
$
|
86,032
|
|
|
$
|
—
|
|
|
$
|
362,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to MDC Partners Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
775
|
|
Adjustments to
reconcile to operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Accretion on
convertible preference shares
|
|
|
|
|
|
|
|
|
|
|
3,515
|
|
Net income
attributable to the noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
3,043
|
|
Equity in earnings of
non-consolidated affiliates
|
|
|
|
|
|
|
|
|
|
|
(206)
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
2,088
|
|
Interest expense and
finance charges, net
|
|
|
|
|
|
|
|
|
|
|
16,413
|
|
Foreign exchange
gain
|
|
|
|
|
|
|
|
|
|
|
(2,932)
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
746
|
|
Operating income
(loss)
|
$
|
14,963
|
|
|
$
|
17,338
|
|
|
$
|
278
|
|
|
$
|
7,494
|
|
|
$
|
(16,631)
|
|
|
$
|
23,442
|
|
margin
|
14.5
|
%
|
|
13.0
|
%
|
|
0.7
|
%
|
|
8.7
|
%
|
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
2,348
|
|
|
$
|
4,318
|
|
|
$
|
1,335
|
|
|
$
|
2,441
|
|
|
$
|
221
|
|
|
$
|
10,663
|
|
Stock-based
compensation
|
639
|
|
|
1,627
|
|
|
6
|
|
|
170
|
|
|
1,192
|
|
|
3,634
|
|
Deferred acquisition
consideration adjustments
|
291
|
|
|
1,565
|
|
|
(615)
|
|
|
832
|
|
|
—
|
|
|
2,073
|
|
Distributions from
non-consolidated affiliates (2)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
31
|
|
|
31
|
|
Other items, net
(3)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6,594
|
|
|
6,594
|
|
Adjusted EBITDA
(1)
|
$
|
18,241
|
|
|
$
|
24,848
|
|
|
$
|
1,004
|
|
|
$
|
10,937
|
|
|
$
|
(8,593)
|
|
|
$
|
46,437
|
|
Adjusted EBITDA
margin
|
17.7
|
%
|
|
18.6
|
%
|
|
2.5
|
%
|
|
12.7
|
%
|
|
|
|
12.8
|
%
|
|
|
(1)
|
Adjusted EBITDA is a
non-GAAP financial measure, and as shown above it represents
operating income (loss) plus depreciation and amortization,
stock-based compensation, deferred acquisition consideration
adjustments, distributions from non-consolidated affiliates,
impairment and other items. See "Non-GAAP Financial Measures"
herein.
|
|
|
(2)
|
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).
|
|
|
(3)
|
Other items, net
includes items such as severance expense and other restructuring
expenses. See Schedule 10 for a reconciliation of
amounts.
|
|
|
Note:
|
Effective in the
first quarter of 2020, the Company reorganized its management
structure resulting in the aggregation of certain Partner Firms
into integrated groups ("Networks"). In connection with the
reorganization, we reassessed our reportable segments to align our
external reporting with how we operate the Networks under our new
organizational structure. Prior periods presented have been recast
to reflect the change in reportable segments.
|
|
|
Note:
|
Actuals may not foot
due to rounding.
|
SCHEDULE
6 MDC PARTNERS INC. UNAUDITED RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED EBITDA (US$ in 000s, except
percentages)
|
|
For the Six Months
Ended June 30, 2019
|
|
Integrated
Networks
- Group A
|
|
Integrated
Networks
- Group B
|
|
Media &
Data
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Revenue
|
$
|
176,987
|
|
|
$
|
266,564
|
|
|
$
|
82,688
|
|
|
$
|
164,682
|
|
|
$
|
—
|
|
|
$
|
690,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to MDC Partners Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,448)
|
|
Adjustments to
reconcile to operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Accretion on
convertible preference shares
|
|
|
|
|
|
|
|
|
|
|
5,625
|
|
Net income
attributable to the noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
3,472
|
|
Equity in earning of
non-consolidated affiliates
|
|
|
|
|
|
|
|
|
|
|
(289)
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
2,837
|
|
Interest expense and
finance charges, net
|
|
|
|
|
|
|
|
|
|
|
33,172
|
|
Foreign exchange
gain
|
|
|
|
|
|
|
|
|
|
|
(8,374)
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
4,128
|
|
Operating income
(loss)
|
$
|
11,112
|
|
|
$
|
36,700
|
|
|
$
|
(1,371)
|
|
|
$
|
14,135
|
|
|
$
|
(21,453)
|
|
|
$
|
39,123
|
|
margin
|
6.3
|
%
|
|
13.8
|
%
|
|
(1.7)
|
%
|
|
8.6
|
%
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
4,289
|
|
|
$
|
8,092
|
|
|
$
|
2,328
|
|
|
$
|
4,354
|
|
|
$
|
438
|
|
|
$
|
19,501
|
|
Stock-based
compensation
|
4,234
|
|
|
2,491
|
|
|
6
|
|
|
256
|
|
|
(381)
|
|
|
6,606
|
|
Deferred acquisition
consideration adjustments
|
(478)
|
|
|
(4,156)
|
|
|
73
|
|
|
(1,009)
|
|
|
—
|
|
|
(5,570)
|
|
Distributions from
non-consolidated affiliates (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
Other items, net
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,220
|
|
|
8,220
|
|
Adjusted EBITDA
(1)
|
$
|
19,157
|
|
|
$
|
43,127
|
|
|
$
|
1,036
|
|
|
$
|
17,737
|
|
|
$
|
(13,145)
|
|
|
$
|
67,911
|
|
Adjusted EBITDA
margin
|
10.8
|
%
|
|
16.2
|
%
|
|
1.3
|
%
|
|
10.8
|
%
|
|
|
|
9.8
|
%
|
|
|
(1)
|
Adjusted EBITDA is a
non-GAAP financial measure, and as shown above it represents
operating income (loss) plus depreciation and amortization, other
asset impairment, stock-based compensation, deferred acquisition
consideration adjustments, distributions from non-consolidated
affiliates, impairment and other items. See "Non-GAAP Financial
Measures" herein.
|
|
|
(2)
|
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).
|
|
|
(3)
|
Other items, net
includes items such as severance expense and other restructuring
expenses. See Schedule 10 for a reconciliation of
amounts.
|
|
|
Note:
|
Effective in
the first quarter of 2020, the Company reorganized its management
structure resulting in the aggregation of certain Partner Firms
into integrated groups ("Networks"). In connection with the
reorganization, we reassessed our reportable segments to align our
external reporting with how we operate the Networks under our new
organizational structure. Prior periods presented have been recast
to reflect the change in reportable segments.
|
|
|
Note:
|
Actuals may not
foot due to rounding.
|
SCHEDULE
7 MDC PARTNERS INC. UNAUDITED RECONCILIATION OF
NET INCOME (LOSS) TO COVENANT EBITDA (US$ in
000s)
|
|
|
2019
|
|
2020
|
|
Covenant
EBITDA
(LTM) (1)
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Q1
|
|
Q2
|
|
Q1-2020-
LTM
|
|
Q2-2020 -
LTM
|
Net income (loss)
attributable to MDC Partners Inc. common shareholders
|
$
|
776
|
|
|
$
|
(5,058)
|
|
|
$
|
(10,488)
|
|
|
$
|
(2,437)
|
|
|
$
|
(4,102)
|
|
|
$
|
(17,207)
|
|
|
$
|
(22,085)
|
|
Adjustments to
reconcile to operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion on and net
income allocated to convertible preference shares
|
3,515
|
|
|
3,306
|
|
|
3,373
|
|
|
3,440
|
|
|
3,509
|
|
|
13,634
|
|
|
13,628
|
|
Net income
attributable to the noncontrolling interests
|
3,043
|
|
|
7,265
|
|
|
5,419
|
|
|
791
|
|
|
3,101
|
|
|
16,518
|
|
|
16,576
|
|
Equity in losses
(earnings) of non-consolidated affiliates
|
(206)
|
|
|
(63)
|
|
|
—
|
|
|
—
|
|
|
798
|
|
|
(269)
|
|
|
735
|
|
Income tax expense
(benefit)
|
2,088
|
|
|
3,457
|
|
|
4,241
|
|
|
13,500
|
|
|
(7,923)
|
|
|
23,286
|
|
|
13,275
|
|
Interest expense and
finance charges, net
|
16,413
|
|
|
16,110
|
|
|
15,658
|
|
|
15,612
|
|
|
15,941
|
|
|
63,793
|
|
|
63,321
|
|
Foreign exchange loss
(gain)
|
(2,932)
|
|
|
3,973
|
|
|
(4,349)
|
|
|
14,757
|
|
|
(5,342)
|
|
|
11,449
|
|
|
9,039
|
|
Other, net
|
745
|
|
|
431
|
|
|
(2,158)
|
|
|
(16,334)
|
|
|
(5,884)
|
|
|
(17,316)
|
|
|
(23,945)
|
|
Operating
income
|
$
|
23,442
|
|
|
$
|
29,421
|
|
|
$
|
11,696
|
|
|
$
|
29,329
|
|
|
$
|
98
|
|
|
$
|
93,888
|
|
|
$
|
70,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
10,663
|
|
|
$
|
9,368
|
|
|
$
|
9,460
|
|
|
$
|
9,206
|
|
|
$
|
8,899
|
|
|
$
|
38,697
|
|
|
$
|
36,933
|
|
Impairment and other
losses
|
—
|
|
|
1,944
|
|
|
5,875
|
|
|
161
|
|
|
18,839
|
|
|
7,980
|
|
|
26,819
|
|
Stock-based
compensation
|
3,634
|
|
|
6,026
|
|
|
18,408
|
|
|
3,070
|
|
|
1,039
|
|
|
31,138
|
|
|
28,543
|
|
Deferred acquisition
consideration adjustments
|
2,073
|
|
|
1,943
|
|
|
9,030
|
|
|
(4,600)
|
|
|
2,312
|
|
|
8,446
|
|
|
8,685
|
|
Distributions from
non-consolidated affiliates
|
31
|
|
|
(202)
|
|
|
2,219
|
|
|
(14)
|
|
|
1,079
|
|
|
2,034
|
|
|
3,082
|
|
Other items, net
(2)
|
6,594
|
|
|
705
|
|
|
349
|
|
|
2,416
|
|
|
3,895
|
|
|
10,064
|
|
|
7,365
|
|
Adjusted
EBITDA
|
$
|
46,437
|
|
|
$
|
49,205
|
|
|
$
|
57,037
|
|
|
$
|
39,568
|
|
|
$
|
36,161
|
|
|
$
|
192,247
|
|
|
$
|
181,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile to Covenant EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma dispositions
(3)
|
$
|
(729)
|
|
|
$
|
(996)
|
|
|
$
|
(1,294)
|
|
|
$
|
(124)
|
|
|
$
|
—
|
|
|
$
|
(3,143)
|
|
|
$
|
(2,414)
|
|
Severance due to
eliminated positions
|
2,346
|
|
|
1,956
|
|
|
3,221
|
|
|
2,133
|
|
|
5,233
|
|
|
9,656
|
|
|
12,543
|
|
Other adjustments,
net (4)
|
989
|
|
|
228
|
|
|
368
|
|
|
357
|
|
|
207
|
|
|
1,942
|
|
|
1,160
|
|
Covenant adjusted
EBITDA
|
$
|
49,043
|
|
|
$
|
50,393
|
|
|
$
|
59,332
|
|
|
$
|
41,934
|
|
|
$
|
41,601
|
|
|
$
|
200,702
|
|
|
$
|
193,260
|
|
|
|
|
(1)
|
Covenant EBITDA is a
measure that includes pro forma adjustments for acquisitions,
one-time charges, permitted dispositions and other adjustments, as
defined in the Company's Credit Agreement. Covenant EBITDA is
calculated as the aggregate of operating results for the rolling
last twelve months (LTM). Each quarter is presented to provide the
information utilized to calculate Covenant EBITDA. Historical
Covenant EBITDA may be re-casted in the current period for any
proforma adjustments related to acquisitions and/or dispositions in
the current period. See "Non-GAAP Financial Measures"
herein.
|
|
|
|
|
(2)
|
Other items, net
includes items such as severance expense and other restructuring
expenses. See Schedule 10 for a reconciliation of
amounts.
|
|
|
|
|
(3)
|
Represents Kingsdale
and Sloane EBITDA for the respective period.
|
|
|
|
|
(4)
|
Other adjustments,
net primarily includes one-time professional fees and costs
associated with real estate consolidation.
|
|
|
|
|
Note:
|
Actuals may not foot
due to rounding.
|
|
SCHEDULE
8 MDC PARTNERS INC. UNAUDITED CONSOLIDATED
BALANCE SHEETS (US$ in 000s)
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
|
|
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
85,483
|
|
|
$
|
106,933
|
|
Accounts receivable,
less allowance for doubtful accounts of $1,875 and
$3,304
|
359,306
|
|
|
449,288
|
|
Expenditures billable
to clients
|
19,426
|
|
|
30,133
|
|
Other current
assets
|
66,318
|
|
|
35,613
|
|
Total Current
Assets
|
530,533
|
|
|
621,967
|
|
Fixed assets, at
cost, less accumulated depreciation of $134,529 and
$129,579
|
70,787
|
|
|
81,054
|
|
Right of use assets -
operating leases
|
238,230
|
|
|
223,622
|
|
Goodwill
|
706,946
|
|
|
731,691
|
|
Other intangible
assets, net
|
48,904
|
|
|
54,893
|
|
Deferred tax
assets
|
82,695
|
|
|
88,486
|
|
Other
assets
|
27,356
|
|
|
30,179
|
|
Total
Assets
|
$
|
1,705,451
|
|
|
$
|
1,831,892
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS'
DEFICIT
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
148,349
|
|
|
$
|
200,148
|
|
Accruals and other
liabilities
|
264,572
|
|
|
357,162
|
|
Advance
billings
|
136,196
|
|
|
171,742
|
|
Current portion of
lease liabilities - operating leases
|
38,377
|
|
|
48,659
|
|
Current portion of
deferred acquisition consideration
|
36,655
|
|
|
45,521
|
|
Total Current
Liabilities
|
624,149
|
|
|
823,232
|
|
Long-term
debt
|
922,537
|
|
|
887,630
|
|
Long-term portion of
deferred acquisition consideration
|
2,597
|
|
|
29,699
|
|
Long-term lease
liabilities - operating leases
|
267,559
|
|
|
219,163
|
|
Other
liabilities
|
36,503
|
|
|
25,771
|
|
Total
Liabilities
|
1,853,345
|
|
|
1,985,495
|
|
Redeemable
Noncontrolling Interests
|
36,710
|
|
|
36,973
|
|
Commitments,
Contingencies, and Guarantees
|
|
|
|
Shareholders'
Deficit:
|
|
|
|
Convertible
preference shares, 145,000 authorized, issued and outstanding at
June 30, 2020 and December 31, 2019
|
152,746
|
|
|
152,746
|
|
Common stock and
other paid-in capital
|
98,234
|
|
|
101,469
|
|
Accumulated
deficit
|
(480,369)
|
|
|
(480,780)
|
|
Accumulated other
comprehensive loss (income)
|
4,627
|
|
|
(4,269)
|
|
MDC Partners Inc.
Shareholders' Deficit
|
(224,762)
|
|
|
(230,834)
|
|
Noncontrolling
interests
|
40,158
|
|
|
40,258
|
|
Total Shareholders'
Deficit
|
(184,604)
|
|
|
(190,576)
|
|
Total Liabilities,
Redeemable Noncontrolling Interests and Shareholders'
Deficit
|
$
|
1,705,451
|
|
|
$
|
1,831,892
|
|
SCHEDULE
9 MDC PARTNERS INC. UNAUDITED SUMMARY CASH FLOW
DATA (US$ in 000s)
|
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
Net cash used in
operating activities
|
$
|
(33,678)
|
|
|
$
|
(40,237)
|
|
Net cash provided by
investing activities
|
14,643
|
|
|
9,818
|
|
Net cash provided by
(used in) financing activities
|
(1,434)
|
|
|
25,712
|
|
Effect of exchange
rate changes on cash, cash equivalents, and cash held in
trusts
|
(981)
|
|
|
4
|
|
Net decrease in cash,
cash equivalents, and cash held in trusts including cash classified
within assets held for sale
|
$
|
(21,450)
|
|
|
$
|
(4,703)
|
|
Change in cash and
cash equivalents held in trusts classified within held for
sale
|
—
|
|
|
(3,307)
|
|
Change in cash and
cash equivalents classified within assets held for sale
|
—
|
|
|
4,441
|
|
Net decrease in cash
and cash equivalents
|
(21,450)
|
|
|
(3,569)
|
|
Cash and cash
equivalents at beginning of period
|
106,933
|
|
|
30,873
|
|
Cash and cash
equivalents at end of period
|
$
|
85,483
|
|
|
$
|
27,304
|
|
Supplemental
disclosures:
|
|
|
|
Cash income taxes
paid
|
$
|
2,566
|
|
|
$
|
3,494
|
|
Cash interest
paid
|
$
|
28,736
|
|
|
$
|
31,643
|
|
|
|
Note:
|
Actuals may not foot
due to rounding.
|
SCHEDULE
10 MDC PARTNERS INC. UNAUDITED RECONCILIATION
OF COMPONENTS OF NON-GAAP MEASURES (US$ in
000s)
|
|
|
2019
|
|
2020
|
|
Q1
|
Q2
|
Q3
|
Q4
|
YTD
|
|
Q1
|
Q2
|
YTD
|
NON-GAAP
ACQUISITIONS (DISPOSITIONS), NET
|
|
|
|
|
|
|
|
|
|
GAAP revenue from
current year acquisitions
|
$
|
—
|
|
$
|
698
|
|
$
|
1,347
|
|
$
|
1,396
|
|
$
|
3,441
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
GAAP revenue from
prior year acquisitions (1)
|
15,685
|
|
1,519
|
|
1,109
|
|
291
|
|
18,604
|
|
|
—
|
|
—
|
|
—
|
|
Foreign exchange
impact
|
—
|
|
—
|
|
470
|
|
(246)
|
|
224
|
|
|
(248)
|
|
—
|
|
(248)
|
|
Contribution to
organic revenue (growth) decline (2)
|
(4,008)
|
|
(440)
|
|
(2,185)
|
|
(1,694)
|
|
(8,327)
|
|
|
(411)
|
|
—
|
|
(411)
|
|
Prior year revenue
from dispositions (3)
|
(1,825)
|
|
(5,995)
|
|
(3,178)
|
|
(4,505)
|
|
(15,503)
|
|
|
(5,024)
|
|
(4,106)
|
|
(9,130)
|
|
Non-GAAP acquisitions
(dispositions), net
|
$
|
9,852
|
|
$
|
(4,218)
|
|
$
|
(2,437)
|
|
$
|
(4,758)
|
|
$
|
(1,561)
|
|
|
$
|
(5,683)
|
|
$
|
(4,106)
|
|
$
|
(9,789)
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Q1
|
Q2
|
Q3
|
Q4
|
YTD
|
|
Q1
|
Q2
|
YTD
|
OTHER ITEMS,
NET
|
|
|
|
|
|
|
|
|
|
Severance and other
restructuring expenses
|
$
|
—
|
|
$
|
6,703
|
|
$
|
705
|
|
$
|
—
|
|
$
|
7,408
|
|
|
$
|
1,334
|
|
$
|
2,969
|
|
$
|
4,303
|
|
Strategic review
process costs
|
1,626
|
|
(109)
|
|
—
|
|
349
|
|
1,866
|
|
|
1,082
|
|
926
|
|
2,008
|
|
Total other items,
net
|
$
|
1,626
|
|
$
|
6,594
|
|
$
|
705
|
|
$
|
349
|
|
$
|
9,274
|
|
|
$
|
2,416
|
|
$
|
3,895
|
|
$
|
6,311
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Q1
|
Q2
|
Q3
|
Q4
|
YTD
|
|
Q1
|
Q2
|
YTD
|
CASH INTEREST, NET
& OTHER
|
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
$
|
(1,629)
|
|
$
|
(30,014)
|
|
$
|
(882)
|
|
$
|
(29,698)
|
|
$
|
(62,223)
|
|
|
$
|
(145)
|
|
$
|
(28,591)
|
|
$
|
(28,736)
|
|
Bond interest accrual
adjustment
|
(14,625)
|
|
14,625
|
|
(14,625)
|
|
14,625
|
|
—
|
|
|
(14,625)
|
|
13,894
|
|
(731)
|
|
Adjusted cash
interest paid
|
(16,254)
|
|
(15,389)
|
|
(15,507)
|
|
(15,073)
|
|
(62,223)
|
|
|
(14,770)
|
|
(14,697)
|
|
(29,467)
|
|
Interest
income
|
149
|
|
138
|
|
165
|
|
162
|
|
614
|
|
|
114
|
|
190
|
|
304
|
|
Total cash interest,
net & other
|
$
|
(16,105)
|
|
$
|
(15,251)
|
|
$
|
(15,342)
|
|
$
|
(14,911)
|
|
$
|
(61,609)
|
|
|
$
|
(14,656)
|
|
$
|
(14,507)
|
|
$
|
(29,163)
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Q1
|
Q2
|
Q3
|
Q4
|
YTD
|
|
Q1
|
Q2
|
YTD
|
CAPITAL
EXPENDITURES, NET
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
(3,606)
|
|
$
|
(4,317)
|
|
$
|
(5,863)
|
|
$
|
(4,810)
|
|
$
|
(18,596)
|
|
|
$
|
(1,546)
|
|
$
|
(2,144)
|
|
$
|
(3,690)
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Q1
|
Q2
|
Q3
|
Q4
|
YTD
|
|
Q1
|
Q2
|
YTD
|
MISCELLANEOUS
OTHER DISCLOSURES
|
|
|
|
|
|
|
|
|
|
Net income
attributable to the noncontrolling interests
|
$
|
429
|
|
$
|
3,043
|
|
$
|
7,265
|
|
$
|
5,419
|
|
$
|
16,156
|
|
|
$
|
791
|
|
$
|
3,101
|
|
$
|
3,892
|
|
Cash taxes
|
$
|
1,677
|
|
$
|
1,817
|
|
$
|
137
|
|
$
|
(1,335)
|
|
$
|
2,296
|
|
|
$
|
849
|
|
$
|
1,717
|
|
$
|
2,566
|
|
|
|
(1)
|
GAAP revenue from
prior year acquisitions for 2020 and 2019 relates to acquisitions
which occurred in 2019 and 2018, respectively.
|
|
|
(2)
|
Contribution to
organic revenue represents the change in revenue, measured on a
constant currency basis, relative to the comparable pre-acquisition
period for acquired businesses that are included in the Company's
organic revenue growth (decline) calculation.
|
|
|
(3)
|
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.
|
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SOURCE MDC Partners Inc.