Third Quarter GAAP Revenue growth of 104.6%
Third Quarter Pro Forma Organic Net Revenue growth of
22.8%, 27.9% excluding Advocacy
Third Quarter Net Loss attributable to Stagwell was
$2.1 million
Third Quarter Pro Forma Adjusted EBITDA of $100 million
Company Raises Full Year Pro Forma Adjusted EBITDA
outlook
REPORTED THIRD QUARTER & YTD HIGHLIGHTS:
- GAAP revenue of $466.6 million in
the third quarter versus $228.1
million in the prior year period, an increase of 104.6%; and
$857.4 million in the nine months
ended September 30, 2021 versus
$575.0 million in the prior year
period, an increase of 49.1%.
- Net revenue of $409.1 million in
the third quarter versus $152.9
million in the prior year period, an increase of 167.6%; and
$749.2 million in the nine months
ended September 30, 2021 versus
$434.1 million in the prior year
period, an increase of 72.6%.
- Net loss attributable to Stagwell Inc. common shareholders of
$2.1 million in the third quarter of
2021 versus net income of $17.8
million in the prior year period; and income of $14.1 million in the nine months ended
September 30, 2021 versus
$34.1 million in the prior year
period.
- Adjusted EBITDA of $87.5 million
in the third quarter versus $37.1
million in the prior year period, an increase of 135.8%; and
$150.1 million in the nine months
ended September 30, 2021 versus
$79.0 million in the prior year
period, an increase of 90.0%.
PRO FORMA REPORTED THIRD QUARTER & YTD STAGWELL INC.
HIGHLIGHTS:
- Pro Forma GAAP revenue of $568.3
million in the third quarter versus $511.5 million in the prior year period, an
increase of 11.1%; and $1,612.4
million in the nine months ended September 30, 2021 versus $1,445.8 million in the prior year period, an
increase of 11.5%.
- Pro Forma net revenue of $498.1
million in the third quarter versus $397.8 million in the prior year period, an
increase of 25.2%; and $1,407.1
million in the nine months ended September 30, 2021 versus $1,185.4 million in the prior year period, an
increase of 18.7%.
- Pro Forma organic net revenue increased 22.8% in the third
quarter and 15.6% for the nine months ended September 30, 2021.
- Pro Forma adjusted EBITDA for the three months ended
September 30, 2021 was $100.3 million versus $89.3 million in the prior year period, an
increase of 12.4%. Pro forma adjusted EBITDA Margin was 20.1%,
compared to 22.4% in the prior year period. Excluding the impact of
the advocacy business, adjusted EBITDA margins would have been
20.1% in the third quarter of 2021 and 19.3% the third quarter of
2020.
- Pro Forma adjusted EBITDA for the nine months ended
September 30, 2021 was $275.3 million versus $205.9 million in the prior year period, an
increase of 33.7%. Adjusted EBITDA Margin was 19.6%, compared to
17.4% in the prior year period.
- Net New Business wins totaled $63.7
million in the third quarter.
NEW YORK, Nov. 3, 2021 /CNW/ -- (NASDAQ: STGW) –
Stagwell Inc. ("Stagwell") today announced financial results for
the three and nine months ended September
30, 2021.
"Stagwell's third quarter results make one thing very clear: the
combination is working. We delivered pro forma organic net revenue
growth of 23%, a pro forma adjusted EBITDA margin over 20%, and are
pleased to raise our full year adjusted EBITDA guidance on the
basis of our results to date," said Mark
Penn, Chairman and Chief Executive Officer of Stagwell. "Our
growth this quarter was driven by double-digit, pro forma net
revenue growth across nearly all our client offerings, including
digital transformation, communications, media and data analytics.
On a year-over-year basis excluding the advocacy business, pro
forma organic net revenue grew 28%. With net new business of
$64 million, this is a strong first
quarter as a newly combined company."
Frank Lanuto, Chief Financial
Officer, commented: "The Company reported strong third quarter pro
forma results with GAAP revenue of $568
million, net revenue of $498
million and Adjusted EBITDA of $100
million. Organic pro forma net revenue growth of 23% for the
quarter, as well as growth from 2019 of 14%, are evidence of the
Company's recovery from the pandemic and transition to a new phase
of overall growth."
Third Quarter and Year-to-Date 2021 Pro Forma
Financial Results
Pro Forma net revenue for the third quarter of 2021 was
$498.1 million versus
$397.8 million for the third
quarter of 2020, an increase of 25.2%.
Pro Forma organic net revenue increased 22.8%, and foreign
exchange and acquisitions, net of dispositions, had a positive
impact of 0.7% and 1.6%, respectively. Organic net revenue
increased primarily due to a continuation of the recovery in
spending by clients begun in the first quarter.
Net New Business wins in the third quarter of 2021 totaled
$63.7 million.
Pro Forma adjusted EBITDA for the third quarter of 2021 was
$100.3 million versus
$89.3 million for the third
quarter of 2020, an increase of 12.4%, primarily driven by strong
revenue growth. Pro Forma adjusted EBITDA margin in the third
quarter of 2021 was 20.1%, down from 22.4% compared to the same
period in 2020. Excluding the impact of the advocacy business,
adjusted EBITDA margins would have been 20.1% for the third quarter
of 2021 and 19.3% for the third quarter of 2020.
Pro Forma net revenue for the first nine months of 2021 was
$1,407.1 million versus
$1,185.4 million in the prior
year period.
Pro Forma organic net revenue for the nine months ended 2021
increased by 15.6% and foreign exchange and acquisitions,
net of dispositions, had a positive impact of 1.3% and 1.8%,
respectively.
Pro Forma adjusted EBITDA for the first nine months of 2021 was
$275.3 million versus
$205.9 million in the first nine
months of 2020, an increase of 33.7%. This led to an Adjusted
EBITDA Margin of 19.6% versus 17.4% in prior year period.
Financial Outlook
2021 financial guidance is as follows:
- Revenue for 2021, on a pro forma basis giving effect to the
combination as if it was completed on January 1, 2021, is estimated to be $2.150 to $2.180
billion, including approximately $755
million for legacy MDC for the seven-month period ended
July 31, 2021.
- Adjusted EBITDA for 2021, on a pro forma basis giving effect to
the combination as if it was completed on January 1, 2021, is estimated to be $370 to $380
million, including approximately $124
million for legacy MDC for the seven-month period ended
July 31, 2021.
- Guidance assumes no impact from foreign exchange or
acquisitions or dispositions.
* The Company has
excluded a quantitative reconciliation with respect to the
Company's 2021 guidance under the "unreasonable efforts" exception
in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial
Measures" below for additional information.
|
Conference Call
Management will host a video webcast and conference call on
Wednesday, November 3, 2021, at 8:30
a.m. (ET) to discuss results for Stagwell Inc. for the three
and nine months ended September 30,
2021. The video webcast will be accessible at
https://kvgo.com/corporate-services/stagwell-group-earnings-call-q3.
An investor presentation has been posted on our website at
www.stagwellglobal.com and may be referred to during the conference
call.
A recording of the conference call will be accessible one hour
after the call and available for ninety days at
www.stagwellglobal.com.
Stagwell Inc.
Stagwell is the challenger network built to transform marketing.
We deliver scaled creative performance for the world's most
ambitious brands, connecting culture-moving creativity with
leading-edge technology to harmonize the art and science of
marketing. Led by entrepreneurs, our 10,000+ specialists in
20+ countries are unified under a single purpose: to drive
effectiveness and improve business results for their clients. Join
us at www.stagwellglobal.com.
Basis of Presentation
The acquisition of MDC Partners (MDC) by Stagwell Marketing
Group (SMG) was completed on August 2,
2021. The results of MDC are included within the Statement
of Operations for the period beginning on the date of the
acquisition through the end of the respective period presented and
the results of SMG are included for the entire period
presented.
Non-GAAP Financial Measures
In addition to its reported results, Stagwell Inc 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:
Pro Forma Results: The Pro Forma amounts presented for each
period were prepared by combining the historical standalone
statements of operations for each of legacy MDC and SMG. The
unaudited pro forma results are provided for illustrative purposes
only and do not purport to represent what the actual consolidated
results of operations or consolidated financial condition would
have been had the combination actually occurred on the date
indicated, nor do they purport to project the future consolidated
results of operations or consolidated financial condition for any
future period or as of any future date. The Company has excluded a
quantitative reconciliation of adjusted Pro Forma EBITDA to net
income under the "unreasonable efforts" exception in Item
10(e)(1)(i)(B) of Regulation S-K.
(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 defined as Net income
excluding non-operating income or expense to achieve operating
income, plus depreciation and amortization, stock-based
compensation, deferred acquisition consideration adjustments, and
other items. Other items include restructuring costs,
acquisition-related expenses, and non-recurring items.
(4) Financial Guidance: The Company provides guidance on a
non-GAAP basis as it cannot predict certain elements which are
included in reported GAAP results.
Included in this earnings release are tables reconciling
reported Stagwell Inc. 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;
- an inability to realize expected benefits of the
redomiciliation of the Company from the federal jurisdiction of
Canada to the State of Delaware (the "Redomiciliation") and
the subsequent combination of the Company's business with the
business of the subsidiaries of Stagwell Media LP ("Stagwell") that
own and operate a portfolio of marketing services companies (the
"Business Combination" and, together with the Redomiciliation, the
"Transactions");
- adverse tax consequences in connection with the Transactions
for the Company, its operations and its shareholders, that may
differ from the expectations of the Company, including that future
changes in tax law, potential increases to corporate tax rates in
the United States and
disagreements with the tax authorities on the Company's
determination of value and computations of its attributes may
result in increased tax costs;
- the occurrence of material Canadian federal income tax
(including material "emigration tax") as a result of the
Transactions;
- the impact of uncertainty associated with the Transactions
on the Company's businesses;
- direct or indirect costs associated with the Transactions,
which could be greater than expected;
- risks associated with severe effects of international,
national and regional economic conditions;
- 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 Exhibit 99.2 to our Current Report on
Form 8-K, filed with the Securities and Exchange Commission (the
"SEC") on August 10, 2021, and
accessible on the SEC's website at www.sec.gov.,
under the caption "Risk Factors," and in the Company's other SEC
filings.
SCHEDULE
1
STAGWELL
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(US$ in 000s,
Except per Share Amounts)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
466,634
|
|
|
$
|
228,097
|
|
|
$
|
857,436
|
|
|
$
|
574,970
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Cost of
services
|
324,782
|
|
|
149,011
|
|
|
558,856
|
|
|
373,064
|
|
Office and general
expenses
|
121,770
|
|
|
42,666
|
|
|
226,720
|
|
|
127,181
|
|
Depreciation and
amortization
|
24,790
|
|
|
9,974
|
|
|
46,122
|
|
|
29,848
|
|
Impairment and other
losses
|
14,926
|
|
|
—
|
|
|
14,926
|
|
|
—
|
|
|
486,268
|
|
|
201,651
|
|
|
846,624
|
|
|
530,093
|
|
Operating income
(loss)
|
(19,634)
|
|
|
26,446
|
|
|
10,812
|
|
|
44,877
|
|
Other Income
(expenses):
|
|
|
|
|
|
|
|
Interest expense,
net
|
(11,912)
|
|
|
(1,778)
|
|
|
(15,197)
|
|
|
(4,655)
|
|
Foreign exchange,
net
|
(893)
|
|
|
(856)
|
|
|
(1,955)
|
|
|
794
|
|
Other, net
|
45,621
|
|
|
263
|
|
|
46,806
|
|
|
948
|
|
|
32,816
|
|
|
(2,371)
|
|
|
29,654
|
|
|
(2,913)
|
|
Income before income
taxes and equity in earnings of non-consolidated
affiliates
|
13,182
|
|
|
24,075
|
|
|
40,466
|
|
|
41,964
|
|
Income tax
expense
|
5,183
|
|
|
2,618
|
|
|
9,205
|
|
|
3,211
|
|
Income before equity
in earnings of non-consolidated affiliates
|
7,999
|
|
|
21,457
|
|
|
31,261
|
|
|
38,753
|
|
Equity in losses
(income) of non-consolidated affiliates
|
(76)
|
|
|
(35)
|
|
|
(75)
|
|
|
7
|
|
Net income
|
7,923
|
|
|
21,422
|
|
|
31,186
|
|
|
38,760
|
|
Net income
attributable to the noncontrolling interest
|
(9,994)
|
|
|
(3,614)
|
|
|
(10,987)
|
|
|
(4,636)
|
|
Net income (loss)
attributable to Stagwell Inc.
|
(2,071)
|
|
|
17,808
|
|
|
20,199
|
|
|
34,124
|
|
Net income allocated
to convertible preference shares
|
—
|
|
|
—
|
|
|
(6,113)
|
|
|
—
|
|
Net income (loss)
attributable to Stagwell Inc. common shareholders
|
$
|
(2,071)
|
|
|
$
|
17,808
|
|
|
$
|
14,086
|
|
|
$
|
34,124
|
|
Income (loss) Per
Common Share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Stagwell Inc. common shareholders
|
$
|
(0.03)
|
|
|
N/A
|
|
|
$
|
0.27
|
|
|
N/A
|
|
Diluted
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Stagwell Inc. common shareholders
|
$
|
0.02
|
|
|
N/A
|
|
|
$
|
0.11
|
|
|
N/A
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
76,105,807
|
|
|
N/A
|
|
|
76,105,807
|
|
|
N/A
|
|
Diluted
|
231,042,044
|
|
|
N/A
|
|
|
197,217,241
|
|
|
N/A
|
|
SCHEDULE
2
STAGWELL
INC.
UNAUDITED PRO
FORMA COMPONENTS OF NET REVENUE CHANGE
(US$ in 000s,
except percentages)
|
|
|
|
|
Components of
Change
|
|
|
|
|
|
Change
|
|
Three Months
Ended
September 30,
2020
|
|
Foreign
Currency
|
|
Net
Acquisitions
(Divestitures)
|
|
Organic
|
|
Total
Change
|
|
Three Months
Ended
September 30,
2021
|
|
Organic
|
|
Total
|
|
|
|
|
|
|
Integrated Agencies
Network
|
$
|
250,459
|
|
|
$
|
2,759
|
|
|
$
|
5,652
|
|
|
$
|
66,452
|
|
|
$
|
74,863
|
|
|
$
|
325,322
|
|
|
26.5
|
%
|
|
29.9
|
%
|
Media
Network
|
84,856
|
|
|
(1,438)
|
|
|
—
|
|
|
27,679
|
|
|
26,241
|
|
|
111,097
|
|
|
32.6
|
%
|
|
30.9
|
%
|
Communications
Network
|
57,408
|
|
|
293
|
|
|
—
|
|
|
(3,509)
|
|
|
(3,216)
|
|
|
54,192
|
|
|
(6.1)
|
%
|
|
(5.6)
|
%
|
All Other
|
5,118
|
|
|
1,343
|
|
|
805
|
|
|
173
|
|
|
2,321
|
|
|
7,439
|
|
|
3.4
|
%
|
|
45.3
|
%
|
|
$
|
397,841
|
|
|
$
|
2,957
|
|
|
$
|
6,457
|
|
|
$
|
90,795
|
|
|
$
|
100,209
|
|
|
$
|
498,050
|
|
|
22.8
|
%
|
|
25.2
|
%
|
|
|
|
Components of
Change
|
|
|
|
|
|
Change
|
|
Nine Months
Ended
September 30,
2020
|
|
Foreign
Currency
|
|
Net
Acquisitions
(Divestitures)
|
|
Organic
|
|
Total
Change
|
|
Nine Months
Ended
September 30,
2021
|
|
Organic
|
|
Total
|
|
|
|
|
|
|
Integrated Agencies
Network
|
$
|
755,530
|
|
|
$
|
10,837
|
|
|
$
|
20,604
|
|
|
$
|
145,141
|
|
|
$
|
176,582
|
|
|
$
|
932,112
|
|
|
19.2
|
%
|
|
23.4
|
%
|
Media
Network
|
264,997
|
|
|
(1,911)
|
|
|
—
|
|
|
34,869
|
|
|
32,958
|
|
|
297,955
|
|
|
13.2
|
%
|
|
12.4
|
%
|
Communications
Network
|
149,265
|
|
|
1,122
|
|
|
—
|
|
|
3,664
|
|
|
4,786
|
|
|
154,051
|
|
|
2.5
|
%
|
|
3.2
|
%
|
All Other
|
15,597
|
|
|
4,920
|
|
|
805
|
|
|
1,666
|
|
|
7,391
|
|
|
22,988
|
|
|
10.7
|
%
|
|
47.4
|
%
|
|
$
|
1,185,389
|
|
|
$
|
14,968
|
|
|
$
|
21,409
|
|
|
$
|
185,340
|
|
|
$
|
221,717
|
|
|
$
|
1,407,106
|
|
|
15.6
|
%
|
|
18.7
|
%
|
|
Note: Actuals may not
foot due to rounding.
|
SCHEDULE
3
STAGWELL
INC.
UNAUDITED PRO
FORMA SEGMENT OPERATING RESULTS
(US$ in 000s,
except percentages)
|
|
For the Three
Months Ended September 30, 2021
|
|
|
Integrated
Agencies
Network
|
|
Media
Network
|
|
Communications
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Net Revenue
|
$
|
325,322
|
|
|
$
|
111,097
|
|
|
$
|
54,192
|
|
|
$
|
7,439
|
|
|
$
|
—
|
|
|
$
|
498,050
|
|
Billable
Costs
|
43,119
|
|
|
5,336
|
|
|
21,847
|
|
|
(6)
|
|
|
—
|
|
|
70,296
|
|
Revenue
|
368,441
|
|
|
116,433
|
|
|
76,039
|
|
|
7,433
|
|
|
—
|
|
|
568,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billable
Costs
|
$
|
43,119
|
|
|
$
|
5,336
|
|
|
$
|
21,847
|
|
|
$
|
(6)
|
|
|
$
|
—
|
|
|
$
|
70,296
|
|
Staff costs
|
211,186
|
|
|
74,187
|
|
|
34,978
|
|
|
5,212
|
|
|
8,845
|
|
|
334,408
|
|
Administrative
costs
|
30,739
|
|
|
14,354
|
|
|
6,479
|
|
|
2,104
|
|
|
(567)
|
|
|
53,109
|
|
Other direct
costs
|
3,948
|
|
|
5,524
|
|
|
789
|
|
|
(222)
|
|
|
163
|
|
|
10,202
|
|
Adjusted EBITDA
(1)
|
79,449
|
|
|
17,032
|
|
|
11,946
|
|
|
345
|
|
|
(8,441)
|
|
|
100,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
32,565
|
|
|
2,629
|
|
|
15,445
|
|
|
16
|
|
|
3,184
|
|
|
53,839
|
|
Depreciation and
amortization
|
15,799
|
|
|
6,738
|
|
|
2,174
|
|
|
492
|
|
|
1,555
|
|
|
26,758
|
|
Deferred acquisition
consideration
|
3,422
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
3,558
|
|
Impairment and other
losses
|
81
|
|
|
14,846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,927
|
|
Other items, net
(1)
|
1,085
|
|
|
571
|
|
|
(349)
|
|
|
—
|
|
|
21,578
|
|
|
22,885
|
|
Operating
income
|
$
|
26,497
|
|
|
$
|
(7,752)
|
|
|
$
|
(5,460)
|
|
|
$
|
(163)
|
|
|
$
|
(34,758)
|
|
|
$
|
(21,636)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
Non-GAAP Financial Measures section above for the definition of
Adjusted EBITDA, Other items, net and Pro Forma adjusted
EBITDA.
|
|
Note: Actuals may not
foot due to rounding.
|
SCHEDULE
4
STAGWELL
INC.
UNAUDITED PRO
FORMA SEGMENT OPERATING RESULTS
(US$ in 000s,
except percentages)
|
|
For the Nine
Months Ended September 30, 2021
|
|
|
Integrated
Agencies
Network
|
|
Media
Network
|
|
Communications
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Net Revenue
|
$
|
932,112
|
|
|
$
|
297,955
|
|
|
$
|
154,051
|
|
|
$
|
22,988
|
|
|
$
|
—
|
|
|
$
|
1,407,106
|
|
Billable
Costs
|
120,967
|
|
|
24,715
|
|
|
59,611
|
|
|
—
|
|
|
—
|
|
|
205,293
|
|
Revenue
|
1,053,079
|
|
|
322,670
|
|
|
213,662
|
|
|
22,988
|
|
|
—
|
|
|
1,612,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billable
Costs
|
$
|
120,967
|
|
|
$
|
24,715
|
|
|
$
|
59,611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
205,293
|
|
Staff costs
|
613,052
|
|
|
204,873
|
|
|
100,962
|
|
|
15,644
|
|
|
25,889
|
|
|
960,420
|
|
Administrative
costs
|
93,738
|
|
|
41,972
|
|
|
16,575
|
|
|
8,649
|
|
|
82
|
|
|
161,016
|
|
Other direct
costs
|
2,819
|
|
|
7,520
|
|
|
(2)
|
|
|
14
|
|
|
6
|
|
|
10,357
|
|
Adjusted EBITDA
(1)
|
222,503
|
|
|
43,590
|
|
|
36,516
|
|
|
(1,319)
|
|
|
(25,977)
|
|
|
275,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
35,740
|
|
|
2,712
|
|
|
15,687
|
|
|
16
|
|
|
4,368
|
|
|
58,523
|
|
Depreciation and
amortization
|
33,648
|
|
|
18,096
|
|
|
5,586
|
|
|
2,013
|
|
|
4,927
|
|
|
64,270
|
|
Deferred acquisition
consideration
|
26,839
|
|
|
102
|
|
|
(52)
|
|
|
—
|
|
|
—
|
|
|
26,889
|
|
Impairment and other
losses
|
956
|
|
|
14,846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,802
|
|
Other items, net
(1)
|
4,700
|
|
|
3,081
|
|
|
(93)
|
|
|
—
|
|
|
32,050
|
|
|
39,738
|
|
Operating
income
|
$
|
120,620
|
|
|
$
|
4,753
|
|
|
$
|
15,388
|
|
|
$
|
(3,348)
|
|
|
$
|
(67,322)
|
|
|
$
|
70,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
Non-GAAP Financial Measures section above for the definition of
Adjusted EBITDA, Other items, net and Pro Forma adjusted
EBITDA.
|
|
Note: Actuals may not
foot due to rounding.
|
SCHEDULE
5
STAGWELL
INC.
UNAUDITED PRO
FORMA SEGMENT OPERATING RESULTS
(US$ in 000s,
except percentages)
|
|
For the Three
Months Ended September 30, 2020
|
|
|
Integrated
Agencies
Network
|
|
Media
Network
|
|
Communications
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Net Revenue
|
$
|
250,459
|
|
|
$
|
84,856
|
|
|
$
|
57,408
|
|
|
$
|
5,118
|
|
|
$
|
—
|
|
|
$
|
397,841
|
|
Billable
Costs
|
32,321
|
|
|
10,778
|
|
|
70,581
|
|
|
—
|
|
|
—
|
|
|
113,680
|
|
Revenue
|
282,780
|
|
|
95,634
|
|
|
127,989
|
|
|
5,118
|
|
|
—
|
|
|
511,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billable
Costs
|
$
|
32,321
|
|
|
$
|
10,778
|
|
|
$
|
70,581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113,680
|
|
Staff costs
|
153,409
|
|
|
54,489
|
|
|
29,549
|
|
|
5,348
|
|
|
6,540
|
|
|
249,335
|
|
Administrative
costs
|
32,324
|
|
|
15,342
|
|
|
4,331
|
|
|
3,077
|
|
|
2,712
|
|
|
57,786
|
|
Other direct
costs
|
456
|
|
|
3,789
|
|
|
200
|
|
|
(3,025)
|
|
|
—
|
|
|
1,420
|
|
Adjusted EBITDA
(1)
|
64,270
|
|
|
11,236
|
|
|
23,328
|
|
|
(282)
|
|
|
(9,252)
|
|
|
89,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
2,389
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
1,421
|
|
|
3,827
|
|
Depreciation and
amortization
|
10,367
|
|
|
5,681
|
|
|
1,737
|
|
|
815
|
|
|
708
|
|
|
19,308
|
|
Deferred acquisition
consideration
|
3,661
|
|
|
—
|
|
|
(710)
|
|
|
—
|
|
|
—
|
|
|
2,951
|
|
Impairment and other
losses
|
158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
Other items, net
(1)
|
(579)
|
|
|
27
|
|
|
(35)
|
|
|
—
|
|
|
6,207
|
|
|
5,620
|
|
Operating
income
|
$
|
48,274
|
|
|
$
|
5,528
|
|
|
$
|
22,319
|
|
|
$
|
(1,097)
|
|
|
$
|
(17,588)
|
|
|
$
|
57,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
Non-GAAP Financial Measures section above for the definition of
Adjusted EBITDA, Other items, net and Pro Forma adjusted
EBITDA.
|
|
Note: Actuals may not
foot due to rounding.
|
SCHEDULE
6
STAGWELL
INC.
UNAUDITED PRO
FORMA SEGMENT OPERATING RESULTS
(US$ in 000s,
except percentages)
|
|
For the Nine
Months Ended September 30, 2020
|
|
|
Integrated
Agencies
Network
|
|
Media
Network
|
|
Communications
Network
|
|
All
Other
|
|
Corporate
|
|
Total
|
Net Revenue
|
$
|
755,530
|
|
|
$
|
264,997
|
|
|
$
|
149,265
|
|
|
$
|
15,597
|
|
|
$
|
—
|
|
|
$
|
1,185,389
|
|
Billable
Costs
|
105,560
|
|
|
28,329
|
|
|
126,535
|
|
|
—
|
|
|
—
|
|
|
260,424
|
|
Revenue
|
861,090
|
|
|
293,326
|
|
|
275,800
|
|
|
15,597
|
|
|
—
|
|
|
1,445,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billable
Costs
|
$
|
105,560
|
|
|
$
|
28,329
|
|
|
$
|
126,535
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
260,424
|
|
Staff costs
|
496,451
|
|
|
188,542
|
|
|
85,224
|
|
|
16,208
|
|
|
16,124
|
|
|
802,549
|
|
Administrative
costs
|
96,264
|
|
|
44,522
|
|
|
13,646
|
|
|
8,708
|
|
|
6,055
|
|
|
169,195
|
|
Other direct
costs
|
5,333
|
|
|
8,962
|
|
|
1,912
|
|
|
(8,423)
|
|
|
—
|
|
|
7,784
|
|
Adjusted EBITDA
(1)
|
157,482
|
|
|
22,971
|
|
|
48,483
|
|
|
(896)
|
|
|
(22,179)
|
|
|
205,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
5,859
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
1,839
|
|
|
7,770
|
|
Depreciation and
amortization
|
30,251
|
|
|
17,105
|
|
|
5,101
|
|
|
2,696
|
|
|
2,133
|
|
|
57,286
|
|
Deferred acquisition
consideration
|
1,302
|
|
|
375
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
1,785
|
|
Impairment and other
losses
|
17,994
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
1,129
|
|
|
19,158
|
|
Other items, net
(1)
|
148
|
|
|
1,746
|
|
|
(11)
|
|
|
1
|
|
|
12,470
|
|
|
14,354
|
|
Operating
income
|
$
|
101,928
|
|
|
$
|
3,710
|
|
|
$
|
43,213
|
|
|
$
|
(3,593)
|
|
|
$
|
(39,750)
|
|
|
$
|
105,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
Non-GAAP Financial Measures section above for the definition of
Adjusted EBITDA, Other items, net and Pro Forma adjusted
EBITDA.
|
|
Note: Actuals may not
foot due to rounding.
|
SCHEDULE
7
STAGWELL
INC.
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(US$ in
000s)
|
|
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
115,489
|
|
|
$
|
92,457
|
|
Accounts receivable,
net
|
669,612
|
|
|
225,733
|
|
Expenditures billable
to clients
|
37,101
|
|
|
11,063
|
|
Other current
assets
|
78,884
|
|
|
36,433
|
|
Total Current
Assets
|
901,086
|
|
|
365,686
|
|
Fixed assets,
net
|
118,526
|
|
|
35,614
|
|
Right-of-use lease
assets - operating leases
|
334,867
|
|
|
57,752
|
|
Goodwill
|
1,619,272
|
|
|
351,725
|
|
Other intangible
assets, net
|
945,081
|
|
|
186,035
|
|
Other
assets
|
24,789
|
|
|
17,043
|
|
Total
Assets
|
$
|
3,943,621
|
|
|
$
|
1,013,855
|
|
LIABILITIES, RNCI,
AND SHAREHOLDERS' DEFICIT
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
|
277,385
|
|
|
$
|
147,826
|
|
Accruals and other
liabilities
|
371,289
|
|
|
90,557
|
|
Advance
billings
|
286,790
|
|
|
66,418
|
|
Current portion of
lease liabilities - operating leases
|
74,162
|
|
|
19,579
|
|
Current portion of
deferred acquisition consideration
|
60,951
|
|
|
12,579
|
|
Total Current
Liabilities
|
1,070,577
|
|
|
336,959
|
|
Long-term
debt
|
1,265,747
|
|
|
198,024
|
|
Long-term portion of
deferred acquisition consideration
|
14,754
|
|
|
5,268
|
|
Long-term lease
liabilities - operating leases
|
328,048
|
|
|
52,606
|
|
Deferred tax
liabilities, net
|
134,288
|
|
|
16,050
|
|
Other
liabilities
|
59,190
|
|
|
5,801
|
|
Total
Liabilities
|
2,872,604
|
|
|
614,708
|
|
Redeemable
Noncontrolling Interests
|
29,787
|
|
|
604
|
|
Commitments,
Contingencies and Guarantees
|
|
|
|
Shareholder's
Equity:
|
|
|
|
Convertible
preference shares, 123,849 and 0 authorized, issued and outstanding
at September 30, 2021 and December 31, 2020,
respectively
|
209,980
|
|
|
—
|
|
Member's
capital
|
—
|
|
|
358,756
|
|
Common stock and other
paid-in capital
|
169,616
|
|
|
—
|
|
Accumulated
deficit
|
(6,153)
|
|
|
—
|
|
Accumulated other
comprehensive income
|
12,537
|
|
|
—
|
|
Stagwell Inc.
Shareholders' Equity
|
385,980
|
|
|
358,756
|
|
Noncontrolling
interests
|
655,250
|
|
|
39,787
|
|
Total Shareholders'
Equity
|
1,041,230
|
|
|
398,543
|
|
Total Liabilities,
Redeemable Noncontrolling Interests and Shareholders'
Equity
|
$
|
3,943,621
|
|
|
$
|
1,013,855
|
|
SCHEDULE
8
STAGWELL
INC.
UNAUDITED SUMMARY
CASH FLOW DATA
(US$ in
000s)
|
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
29,384
|
|
|
$
|
93,184
|
|
Net cash provided by
(used in) investing activities
|
153,987
|
|
|
(16,421)
|
|
Net cash used in
financing activities
|
(164,442)
|
|
|
(43,700)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
4,103
|
|
|
555
|
|
Net increase in cash
and cash equivalents
|
$
|
23,032
|
|
|
$
|
33,618
|
|
Cash and cash
equivalents at beginning of period
|
92,457
|
|
|
63,860
|
|
Cash and cash
equivalents at end of period
|
$
|
115,489
|
|
|
$
|
97,478
|
|
Supplemental
disclosures:
|
|
|
|
Cash income taxes
paid
|
$
|
42,346
|
|
|
$
|
(3,618)
|
|
Cash interest
paid
|
$
|
16,232
|
|
|
$
|
7,288
|
|
|
Note: Actuals may not
foot due to rounding.
|
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SOURCE Stagwell Inc.