PR Newswire
Strong quarterly revenue growth of 33% year-over-year to $346 million
Second quarter Net Income attributable to MDC Partners common shareholders of $1.7 million
Record second quarter Adjusted EBITDA of $60 million, up 67% from the prior period
SECOND QUARTER & YTD MDC PARTNERS INC. HIGHLIGHTS:
- GAAP revenue of $345.6 million in the second quarter versus $259.7 million in the prior year period, an increase of 33.1%; and $653.2 million in the six months ended June 30, 2021 versus $587.4 million in the prior year period, an increase of 11.2%.
- Organic revenue increased 31.3% in the second quarter and 10.0% in the six months ended June 30, 2021.
- Net revenue of $298.4 million in the second quarter versus. $231.9 million in the prior year period, an increase of 28.7%; and $569.1 million in the six months ended June 30, 2021 versus $506.4 million in the prior year period, an increase of 12.4%.
- Organic net revenue increased 26.9% in the second quarter and 11.2% for the six months ended June 30, 2021.
- Net income attributable to MDC Partners common shareholders of $1.7 million in the second quarter of 2021 versus net loss of $4.1 million in the prior year period; and $2.6 million in the six months ended June 30, 2021 versus net loss of $6.5 million in the prior year period.
- Adjusted EBITDA for the three months ended June 30, 2021 was $60.3 million versus $36.2 million in the prior year period, an increase of 66.7%. Adjusted EBITDA Margin was 17.4%, compared to 13.9% in the prior year period.
- Adjusted EBITDA for the six months ended June 30, 2021 was $112.2 million versus $75.7 million in the prior year period, an increase of 48.2%. Adjusted EBITDA Margin was 17.2%, compared to 12.9% in the prior year period.
- Covenant EBITDA (LTM) of $220.1 million in the second quarter, up from $193.3 million in the prior year period.
- Net New Business wins totaled $56.9 million in the second quarter against $20.5 million a year ago and totaled $128.5 million over the last twelve months.
NEW YORK, Aug. 4, 2021 /PRNewswire/ — (NASDAQ: STGW) – Stagwell Inc. (“Stagwell”) today announced MDC Partners Inc. (“MDC Partners,” “legacy MDC” or the “Company”) financial results for the three and six months ended June 30, 2021.
“Stagwell is coming out of the gate firing on all cylinders. We are pleased to report industry-leading revenue growth and record second quarter Adjusted EBITDA at legacy MDC,” said Mark Penn, Chairman and Chief Executive Officer of Stagwell. “We are encouraged by the continued strength through the first half of the year and saw broad-based growth across the network. Our digital businesses saw another quarter of high double-digit growth and our creative agencies won considerable new business during the active second quarter pitch season. These results show the potential of our combined platform that brings together culture-moving creativity and leading-edge technology onto a single, integrated platform.”
Second Quarter and Year-to-Date 2021
MDC Partners Standalone Financial Results
Revenue for the second quarter of 2021 was $345.6 million versus $259.7 million for the second quarter 2020, an increase of 33.1%. The effect on revenue of foreign exchange was positive 1.8% and the organic revenue increase was 31.3%, inclusive of $19.0 million or 446 basis points from higher billable costs. Organic revenue increased primarily due to a continuation of the recovery in spending by clients begun in the first quarter.
Revenue in the second quarter of 2021 increased 12.4% sequentially from the first quarter, as revenue continues to rebound from the impact of the pandemic. Net New Business wins in the second quarter of 2021 totaled $56.9 million as we capitalized on a particularly active pitch season.
Net income attributable to MDC Partners common shareholders for the second quarter of 2021 was $1.7 million versus a net loss of $4.1 million for the second quarter of 2020. The increase was primarily due to higher revenues in the quarter, as well as the favorable impact of foreign exchange. Diluted income per share attributable to MDC Partners common shareholders for the second quarter of 2021 was $0.02 versus diluted loss per share of $0.06 for the second quarter of 2020.
Adjusted EBITDA for the second quarter of 2021 was $60.3 million versus $36.2 million for the second quarter of 2020, an increase of 66.7%, primarily due to higher revenues, partially offset by an increase in operating expense. This led to a 350 basis point increase in Adjusted EBITDA margin in the second quarter of 2021 to 17.4% from 13.9% in the second quarter of 2020.
Covenant EBITDA for the last twelve months (LTM) was $220.1 million as of June 30, 2021, up from $193.3 million in the second quarter of 2020.
Revenue for the first six months of 2021 was $653.2 million versus $587.4 million in the prior year period. The effect on revenue of foreign exchange was positive 1.6%, the impact of non-GAAP acquisitions (dispositions), net was negative 0.4%, and the organic revenue increase was 10.0%.
Net income attributable to MDC Partners Inc. common shareholders for the first six months of 2021 was $2.6 million versus net loss of $6.5 million for the first six months of 2020. The increase was primarily due to higher revenues, partially offset by an increase in operating expenses. Diluted income per share attributable to MDC Partners common shareholders for the six months of 2021 was $0.03 versus diluted loss per share of $0.09 for the first six months of 2020.
Adjusted EBITDA for the first six months of 2021 was $112.2 million versus $75.7 million in the first six months of 2020, an increase of 48.2%. This lead to an Adjusted EBITDA Margin of 17.2% versus 12.9% in prior year period, an increase of 430 basis points.
Stagwell Inc. 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 $2.135 to $2.180 billion, including an estimated $762 million for MDC for the seven-month period ending 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 $342 to $357 million, including an estimated $128 million for MDC for the seven-month period ending July 31, 2021.
- Guidance assumes no impact from foreign exchange or acquisitions or dispositions.
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* Stagwell 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. |
Stagwell Inc. Conference Call
Management will host a video webcast and conference call on Wednesday, August 4, 2021, at 8:30 a.m. (ET) to discuss standalone results for Stagwell Marketing Group LLC and MDC Partners Inc for the three and six months ended June 30, 2021. The video webcast will be accessible at https://kvgo.com/openexchange-inc/mdca-stagwell-earnings-call. 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.
About Stagwell Inc.
Stagwell is the challenger holding company 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 30+ countries are unified under a single purpose: to drive effectiveness and improve business results for our clients. Stagwell Inc. is the successor SEC Registrant to MDC Partners Inc. Join us at www.stagwellglobal.com.
Non-GAAP Financial Measures
In addition to its MDC Partners Inc. 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:
(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 non-operating items 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 merger related costs, severance 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.
(5) 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 MDC Partners 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”) or the occurrence of difficulties in connection with 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 risk of parties challenging the Transactions or the impact of the Transactions on the Company’s debt arrangements;
- 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 2020 Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 16, 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.
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Revenue: |
|||||||||||||||
|
Services |
$ |
345,605 |
$ |
259,677 |
$ |
653,190 |
$ |
587,419 |
|||||||
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Operating Expenses |
|||||||||||||||
|
Cost of services sold |
224,411 |
165,631 |
411,332 |
388,325 |
|||||||||||
|
Office and general expenses |
80,546 |
66,210 |
164,492 |
132,564 |
|||||||||||
|
Depreciation and amortization |
8,005 |
8,898 |
16,181 |
18,104 |
|||||||||||
|
Impairment and other losses |
— |
18,840 |
875 |
19,001 |
|||||||||||
|
312,962 |
259,579 |
592,880 |
557,994 |
||||||||||||
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Operating income |
32,643 |
98 |
60,310 |
29,425 |
|||||||||||
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Other Income (expenses): |
|||||||||||||||
|
Interest expense and finance charges, net |
(19,512) |
(15,942) |
(38,577) |
(31,553) |
|||||||||||
|
Foreign exchange gain (loss) |
1,902 |
5,342 |
3,982 |
(9,415) |
|||||||||||
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Other, net |
842 |
5,883 |
1,456 |
22,217 |
|||||||||||
|
(16,768) |
(4,717) |
(33,139) |
(18,751) |
||||||||||||
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Income (loss) before income taxes and equity in earnings of non-consolidated affiliates |
15,875 |
(4,619) |
27,171 |
10,674 |
|||||||||||
|
Income tax expense (benefit) |
1,387 |
(7,923) |
2,689 |
5,577 |
|||||||||||
|
Income before equity in earnings of non-consolidated affiliates |
14,488 |
3,304 |
24,482 |
5,097 |
|||||||||||
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Equity in losses of non-consolidated affiliates |
(151) |
(798) |
(644) |
(798) |
|||||||||||
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Net income |
14,337 |
2,506 |
23,838 |
4,299 |
|||||||||||
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Net income attributable to the noncontrolling interest |
(8,231) |
(3,101) |
(12,722) |
(3,892) |
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Net income (loss) attributable to MDC Partners Inc. |
6,106 |
(595) |
11,116 |
407 |
|||||||||||
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Accretion on and net income allocated to convertible preference shares |
(4,451) |
(3,509) |
(8,540) |
(6,949) |
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Net income (loss) attributable to MDC Partners Inc. common shareholders |
$ |
1,655 |
$ |
(4,104) |
$ |
2,576 |
$ |
(6,542) |
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Income (loss) Per Common Share: |
|||||||||||||||
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Basic |
|||||||||||||||
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Net income (loss) attributable to MDC Partners Inc. common shareholders |
$ |
0.02 |
$ |
(0.06) |
$ |
0.03 |
$ |
(0.09) |
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Diluted |
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Net income (loss) attributable to MDC Partners Inc common shareholders |
$ |
0.02 |
$ |
(0.06) |
$ |
0.03 |
$ |
(0.09) |
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Weighted Average Number of Common Shares Outstanding: |
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Basic |
75,078,755 |
72,528,455 |
74,240,447 |
72,463,058 |
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Diluted |
78,459,483 |
72,528,455 |
77,001,526 |
72,463,058 |
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|
$ |
259,677 |
$ |
587,419 |
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Organic revenue (1) |
81,335 |
31.3 |
% |
58,720 |
10.0 |
% |
|||||||
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Non-GAAP acquisitions (dispositions), net |
— |
— |
% |
(2,101) |
(0.4) |
% |
|||||||
|
Foreign exchange impact |
4,593 |
1.8 |
% |
9,152 |
1.6 |
% |
|||||||
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Total Change |
85,928 |
33.1 |
% |
65,771 |
11.2 |
% |
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|
$ |
345,605 |
$ |
653,190 |
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Note: Actuals may not foot due to rounding. |
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Revenue: |
$ |
117,984 |
$ |
123,486 |
$ |
37,517 |
$ |
66,618 |
$ |
— |
$ |
345,605 |
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Net income attributable to MDC Partners Inc. common shareholders |
$ |
1,655 |
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Adjustments to reconcile to operating income (loss): |
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Accretion on and net income allocated to convertible preference shares |
4,451 |
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Net income attributable to the noncontrolling interest |
8,231 |
||||||||||||||||||||||
|
Equity in losses of non-consolidated affiliates |
151 |
||||||||||||||||||||||
|
Income tax expense |
1,387 |
||||||||||||||||||||||
|
Interest expense and finance charges, net |
19,512 |
||||||||||||||||||||||
|
Foreign exchange gain |
(1,902) |
||||||||||||||||||||||
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Other, net |
(842) |
||||||||||||||||||||||
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Operating income (loss) |
$ |
14,273 |
$ |
21,326 |
$ |
5,052 |
$ |
6,036 |
$ |
(14,044) |
$ |
32,643 |
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Adjustments: |
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Depreciation and amortization |
$ |
1,322 |
$ |
3,589 |
$ |
457 |
$ |
1,452 |
$ |
1,185 |
$ |
8,005 |
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Impairment and other losses |
— |
— |
— |
— |
— |
— |
|||||||||||||||||
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Stock-based compensation |
4,756 |
1,384 |
63 |
181 |
554 |
6,938 |
|||||||||||||||||
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Deferred acquisition consideration |
5,382 |
49 |
102 |
79 |
— |
5,612 |
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Distributions from non-consolidated affiliates (1) |
— |
— |
— |
— |
463 |
463 |
|||||||||||||||||
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Other items, net (2) |
1,517 |
196 |
1,221 |
483 |
3,202 |
6,619 |
|||||||||||||||||
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Adjusted EBITDA (3) |
$ |
27,250 |
$ |
26,544 |
$ |
6,895 |
$ |
8,231 |
$ |
(8,640) |
$ |
60,280 |
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|
17.4 |
% |
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Note: Actuals may not foot due to rounding. |
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Revenue: |
$ |
220,370 |
$ |
234,637 |
$ |
74,300 |
$ |
123,883 |
$ |
— |
$ |
653,190 |
|||||||||||
|
Net income attributable to MDC Partners Inc. common shareholders |
$ |
2,576 |
|||||||||||||||||||||
|
Adjustments to reconcile to operating income (loss): |
|||||||||||||||||||||||
|
Accretion on and net income allocated to convertible preference shares |
8,540 |
||||||||||||||||||||||
|
Net income attributable to the noncontrolling interests |
12,722 |
||||||||||||||||||||||
|
Equity in losses of non-consolidated affiliates |
644 |
||||||||||||||||||||||
|
Income tax expense |
2,689 |
||||||||||||||||||||||
|
Interest expense and finance charges, net |
38,577 |
||||||||||||||||||||||
|
Foreign exchange gain |
(3,982) |
||||||||||||||||||||||
|
Other, net |
(1,456) |
||||||||||||||||||||||
|
Operating income (loss) |
$ |
25,723 |
$ |
41,236 |
$ |
8,444 |
$ |
10,693 |
$ |
(25,786) |
$ |
60,310 |
|||||||||||
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|
|
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|
|
|||||||||||||
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Adjustments: |
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Depreciation and amortization |
$ |
2,616 |
$ |
7,246 |
$ |
929 |
$ |
2,989 |
$ |
2,401 |
$ |
16,181 |
|||||||||||
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Impairment and other losses |
— |
875 |
— |
— |
— |
875 |
|||||||||||||||||
|
Stock-based compensation |
1,128 |
2,337 |
84 |
242 |
1,184 |
4,975 |
|||||||||||||||||
|
Deferred acquisition consideration adjustments |
17,206 |
177 |
102 |
(188) |
— |
17,297 |
|||||||||||||||||
|
Distributions from non-consolidated affiliates (1) |
— |
— |
— |
— |
472 |
472 |
|||||||||||||||||
|
Other items, net (2) |
3,039 |
542 |
2,417 |
537 |
5,569 |
12,104 |
|||||||||||||||||
|
Adjusted EBITDA (3) |
$ |
49,712 |
$ |
52,413 |
$ |
11,976 |
$ |
14,273 |
$ |
(16,160) |
$ |
112,214 |
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Note: Actuals may not foot due to rounding. |
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Revenue: |
$ |
82,735 |
$ |
93,398 |
$ |
28,551 |
$ |
54,993 |
$ |
— |
$ |
259,677 |
|||||||||||
|
Net loss attributable to MDC Partners Inc. common shareholders |
$ |
(4,104) |
|||||||||||||||||||||
|
Adjustments to reconcile to operating income (loss): |
|||||||||||||||||||||||
|
Accretion on and net income allocated to convertible preference shares |
3,509 |
||||||||||||||||||||||
|
Net income attributable to the noncontrolling interest |
3,101 |
||||||||||||||||||||||
|
Equity in losses of non-consolidated affiliates |
798 |
||||||||||||||||||||||
|
Income tax benefit |
(7,923) |
||||||||||||||||||||||
|
Interest expense and finance charges, net |
15,942 |
||||||||||||||||||||||
|
Foreign exchange gain |
(5,342) |
||||||||||||||||||||||
|
Other, net |
(5,883) |
||||||||||||||||||||||
|
Operating income (loss) |
$ |
14,607 |
$ |
(7,717) |
$ |
46 |
$ |
4,985 |
$ |
(11,823) |
$ |
98 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Adjustments: |
|||||||||||||||||||||||
|
Depreciation and amortization |
$ |
1,566 |
$ |
4,387 |
$ |
807 |
$ |
1,902 |
$ |
236 |
$ |
8,898 |
|||||||||||
|
Impairment and other losses |
— |
17,468 |
35 |
208 |
1,129 |
18,840 |
|||||||||||||||||
|
Stock-based compensation |
(105) |
746 |
4 |
118 |
276 |
1,039 |
|||||||||||||||||
|
Deferred acquisition consideration |
1,138 |
1,503 |
— |
(329) |
— |
2,312 |
|||||||||||||||||
|
Distributions from non-consolidated affiliates (1) |
— |
— |
— |
— |
1,079 |
1,079 |
|||||||||||||||||
|
Other items, net (2) |
— |
— |
— |
— |
3,895 |
3,895 |
|||||||||||||||||
|
Adjusted EBITDA (3) |
$ |
17,206 |
$ |
16,387 |
$ |
892 |
$ |
6,884 |
$ |
(5,208) |
$ |
36,161 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
Note: Actuals may not foot due to rounding. |
|
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
|
Revenue |
$ |
173,356 |
$ |
211,105 |
$ |
69,609 |
$ |
133,349 |
$ |
— |
$ |
587,419 |
|||||||||||
|
Net loss attributable to MDC Partners Inc. common shareholders |
$ |
(6,542) |
|||||||||||||||||||||
|
Adjustments to reconcile to operating income (loss): |
|||||||||||||||||||||||
|
Accretion on and net income allocated to convertible preference shares |
6,949 |
||||||||||||||||||||||
|
Net income attributable to the noncontrolling interests |
3,892 |
||||||||||||||||||||||
|
Equity in earning 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 |
(22,217) |
||||||||||||||||||||||
|
Operating income (loss) |
$ |
26,637 |
$ |
9,444 |
$ |
663 |
$ |
12,842 |
$ |
(20,161) |
$ |
29,425 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Adjustments: |
|||||||||||||||||||||||
|
Depreciation and amortization |
$ |
3,307 |
$ |
8,913 |
$ |
1,615 |
$ |
3,801 |
$ |
468 |
$ |
18,104 |
|||||||||||
|
Impairment and other losses |
— |
17,629 |
35 |
208 |
1,129 |
19,001 |
|||||||||||||||||
|
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 (1) |
— |
— |
— |
— |
1,065 |
1,065 |
|||||||||||||||||
|
Other items, net (2) |
— |
— |
— |
— |
6,311 |
6,311 |
|||||||||||||||||
|
Adjusted EBITDA (3) |
$ |
33,507 |
$ |
33,523 |
$ |
2,679 |
$ |
16,788 |
$ |
(10,770) |
$ |
75,727 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
Note: Actuals may not foot due to rounding. |
|
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Net income (loss) attributable to MDC Partners Inc. common shareholders |
$ |
(4,104) |
$ |
360 |
$ |
(237,108) |
$ |
921 |
$ |
1,655 |
$ |
(239,931) |
$ |
(234,172) |
||||||||||||||
|
Adjustments to reconcile to operating income (loss): |
||||||||||||||||||||||||||||
|
Accretion on and net income allocated to convertible preference shares |
3,509 |
3,716 |
3,651 |
4,089 |
4,451 |
14,965 |
15,907 |
|||||||||||||||||||||
|
Net income attributable to the noncontrolling interest |
3,101 |
10,728 |
7,154 |
4,491 |
8,231 |
25,474 |
30,604 |
|||||||||||||||||||||
|
Equity in losses of non-consolidated affiliates |
798 |
31 |
1,411 |
493 |
151 |
2,733 |
2,086 |
|||||||||||||||||||||
|
Income tax expense (benefit) |
(7,923) |
1,452 |
109,526 |
1,302 |
1,387 |
104,357 |
113,667 |
|||||||||||||||||||||
|
Interest expense and finance charges, net |
15,942 |
15,266 |
15,344 |
19,065 |
19,512 |
65,617 |
69,187 |
|||||||||||||||||||||
|
Foreign exchange gain |
(5,342) |
(2,159) |
(6,274) |
(2,080) |
(1,902) |
(15,855) |
(12,415) |
|||||||||||||||||||||
|
Other, net |
(5,883) |
(505) |
2,223 |
(614) |
(842) |
(4,779) |
262 |
|||||||||||||||||||||
|
Operating income (loss) |
$ |
98 |
$ |
28,889 |
$ |
(104,073) |
$ |
27,667 |
$ |
32,643 |
$ |
(47,419) |
$ |
(14,874) |
||||||||||||||
|
Adjustments to reconcile to Adjusted EBITDA: |
||||||||||||||||||||||||||||
|
Depreciation and amortization |
$ |
8,898 |
$ |
9,332 |
$ |
9,468 |
$ |
8,176 |
$ |
8,005 |
$ |
35,874 |
$ |
34,981 |
||||||||||||||
|
Impairment and other losses |
18,840 |
159 |
77,240 |
875 |
— |
97,114 |
78,274 |
|||||||||||||||||||||
|
Stock-based compensation |
1,039 |
6,459 |
3,611 |
(1,963) |
6,938 |
9,146 |
15,045 |
|||||||||||||||||||||
|
Deferred acquisition consideration |
2,312 |
2,803 |
41,672 |
11,685 |
5,612 |
58,472 |
61,772 |
|||||||||||||||||||||
|
Distributions from non-consolidated affiliates |
1,079 |
208 |
902 |
9 |
463 |
2,198 |
1,582 |
|||||||||||||||||||||
|
Other items, net (2) |
3,895 |
6,208 |
18,725 |
5,485 |
6,619 |
34,313 |
37,037 |
|||||||||||||||||||||
|
Adjusted EBITDA |
$ |
36,161 |
$ |
54,058 |
$ |
47,545 |
$ |
51,934 |
$ |
60,280 |
$ |
189,698 |
$ |
213,817 |
||||||||||||||
|
Adjustments to reconcile to Covenant EBITDA: |
||||||||||||||||||||||||||||
|
Severance due to eliminated positions |
5,233 |
2,336 |
1,987 |
532 |
709 |
10,088 |
5,564 |
|||||||||||||||||||||
|
Other adjustments, net (3) |
207 |
77 |
585 |
82 |
5 |
951 |
749 |
|||||||||||||||||||||
|
Covenant EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
Note: Actuals may not foot due to rounding. |
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|
||||||
|
|
|||||||
|
|
|||||||
|
Cash and cash equivalents |
$ |
108,280 |
$ |
60,757 |
|||
|
Accounts receivable, less allowance for doubtful accounts of $3,656 and $5,473 |
426,841 |
374,892 |
|||||
|
Expenditures billable to clients |
16,793 |
10,552 |
|||||
|
Other current assets |
31,312 |
40,938 |
|||||
|
Total Current Assets |
583,226 |
487,139 |
|||||
|
Fixed assets, at cost, less accumulated depreciation of $134,019 and $136,166 |
81,191 |
90,413 |
|||||
|
Right-of-use lease assets – operating leases |
198,556 |
214,188 |
|||||
|
Goodwill |
671,542 |
668,211 |
|||||
|
Other intangible assets, net |
29,405 |
33,844 |
|||||
|
Other assets |
23,258 |
17,517 |
|||||
|
Total Assets |
$ |
1,587,178 |
$ |
1,511,312 |
|||
|
|
|||||||
|
Current Liabilities |
|||||||
|
Accounts payable |
$ |
158,136 |
$ |
168,396 |
|||
|
Accruals and other liabilities |
250,070 |
274,968 |
|||||
|
Advance billings |
211,248 |
152,956 |
|||||
|
Current portion of lease liabilities – operating leases |
41,400 |
41,208 |
|||||
|
Current portion of deferred acquisition consideration |
59,612 |
53,730 |
|||||
|
Total Current Liabilities |
720,466 |
691,258 |
|||||
|
Long-term debt |
935,072 |
843,184 |
|||||
|
Long-term portion of deferred acquisition consideration |
8,056 |
29,335 |
|||||
|
Long-term lease liabilities – operating leases |
231,811 |
247,243 |
|||||
|
Other liabilities |
74,826 |
82,065 |
|||||
|
Total Liabilities |
1,970,231 |
1,893,085 |
|||||
|
Redeemable Noncontrolling Interests |
24,639 |
27,137 |
|||||
|
Commitments, Contingencies and Guarantees |
|||||||
|
Shareholder’s Deficit: |
|||||||
|
Convertible preference shares, 145,000 authorized, issued and outstanding at June 30, 2021 and December 31, 2020 |
152,746 |
152,746 |
|||||
|
Common stock and other paid-in capital |
97,783 |
104,367 |
|||||
|
Accumulated deficit |
(698,635) |
(709,751) |
|||||
|
Accumulated other comprehensive income |
39 |
2,739 |
|||||
|
MDC Partners Inc. Shareholders’ Deficit |
(448,067) |
(449,899) |
|||||
|
Noncontrolling interests |
40,375 |
40,989 |
|||||
|
Total Shareholders’ Deficit |
(407,692) |
(408,910) |
|||||
|
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Deficit |
$ |
1,587,178 |
$ |
1,511,312 |
|||
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|
||||||
|
Net cash provided by (used in) operating activities |
$ |
10,409 |
$ |
(33,681) |
|||
|
Net cash provided by (used in) investing activities |
(9,574) |
14,643 |
|||||
|
Net cash provided by (used in) financing activities |
46,898 |
(1,434) |
|||||
|
Effect of exchange rate changes on cash and cash equivalents |
(210) |
(981) |
|||||
|
Net increase in cash and cash equivalents |
$ |
47,523 |
$ |
(21,453) |
|||
|
Cash and cash equivalents at beginning of period |
60,757 |
106,933 |
|||||
|
Cash and cash equivalents at end of period |
$ |
108,280 |
$ |
85,480 |
|||
|
Supplemental disclosures: |
|||||||
|
Cash income taxes paid |
$ |
7,901 |
$ |
2,566 |
|||
|
Cash interest paid |
$ |
32,806 |
$ |
28,736 |
|||
|
Note: Actuals may not foot due to rounding. |
|
|
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Foreign exchange impact |
$ |
(248) |
$ |
— |
$ |
— |
$ |
— |
$ |
(248) |
$ |
— |
$ |
— |
$ |
— |
||||||||||
|
Contribution to organic revenue (growth) decline (1) |
(411) |
— |
— |
— |
(411) |
— |
— |
— |
||||||||||||||||||
|
Prior year revenue from dispositions (2) |
(5,024) |
(4,106) |
(4,076) |
(4,447) |
(17,653) |
(2,101) |
— |
(2,101) |
||||||||||||||||||
|
Non-GAAP Dispositions |
$ |
(5,683) |
$ |
(4,106) |
$ |
(4,076) |
$ |
(4,447) |
$ |
(18,312) |
$ |
(2,101) |
$ |
— |
$ |
(2,101) |
||||||||||
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Severance and other restructuring expenses |
$ |
1,334 |
$ |
2,969 |
$ |
3,270 |
$ |
1,072 |
$ |
8,645 |
$ |
2,345 |
$ |
2,632 |
$ |
4,977 |
||||||||||
|
Merger costs |
1,082 |
926 |
2,938 |
17,653 |
22,599 |
3,140 |
3,987 |
7,127 |
||||||||||||||||||
|
|
$ |
2,416 |
$ |
3,895 |
$ |
6,208 |
$ |
18,725 |
$ |
31,244 |
$ |
5,485 |
$ |
6,619 |
$ |
12,104 |
||||||||||
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Capital expenditures |
$ |
(1,546) |
$ |
(2,143) |
$ |
(24,188) |
$ |
(9,426) |
$ |
(37,303) |
$ |
(516) |
$ |
(1,567) |
$ |
(2,083) |
||||||||||
|
Net revenue, primarily consisting of fees, commissions and performance incentives, represents the amount of our gross billings excluding billable expenses charged to a client. Net revenue of $298,368 (exclusive of billable expenses of $47,237) for the quarter ended June 30, 2021, increased from $231,911 (exclusive of billable expenses of $27,766) from the quarter ended June 30, 2020. |
|
|
|
|
|
Note: Actuals may not foot due to rounding. |
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SOURCE Stagwell Inc.
