MDC Partners (MDCA) Reports Q1 Loss of $0.03, Revenues Miss

MDC Partners (NASDAQ: MDCA) reported Q1 EPS of ($0.03), versus ($0.04) reported last year. Revenue for the quarter came in at $327.7 million versus the consensus estimate of $375.3 million.

FIRST QUARTER HIGHLIGHTS:

• Revenue of $327.7 million in the first quarter versus $328.8 million in the prior period, a decline of 0.3%.
• Organic revenue increased 2.0% in the first quarter from the first quarter of 2019.
• Net loss attributable to MDC Partners common shareholders was $2.4 million in the first quarter of 2020 versus $2.5 million a year ago.
• Net loss attributable to MDC Partners common shareholders for the last twelve months (LTM) of $17.2 million as of March 31, 2020 versus $17.3 million as of December 31, 2019.
• Adjusted EBITDA of $39.6 million versus $21.5 million a year ago, an increase of 84.3%. Adjusted EBITDA Margin of 12.1%, compared with 6.5% a year ago.
• Excluding Kingsdale and Sloane, Adjusted EBITDA increased 110.1% in the first quarter of 2020 compared with the prior year period.
• Covenant EBITDA (LTM) of $200.7 million versus $180.5 million at year end 2019, an increase of 11.2%.
• Net New Business wins totaled a positive $8.4 million in the first quarter.

"MDC delivered significant improvements in the first quarter of 2020, returning to organic growth of 2%, nearly doubling Adjusted EBITDA, and boosting margins 560 basis points," said Mark Penn, Chairman and Chief Executive Officer of MDC Partners. "These results were game-changing for us in terms of implementing our New World Strategy, putting us in a much stronger position to manage through the pandemic that has enveloped the economy and the world. Many of the changes we made last year are reflected in our results over the last two quarters as our plans have been realized."

"We are operating on the basis of safety first and business second as we act to safeguard our people and advance our business in a radically new environment. Our agencies have adapted well to the new work from home policies and delivered significant new campaigns for clients as we help them navigate through these uncertain times with the best in cloud-based production tools and data-based creativity."

"Our efforts to reform and reshape MDC in the last year at all levels and to create a more cohesive, collaborative and efficient organization position us well to navigate this crisis now and prepare us for eventual recovery," Mr. Penn added.

Frank Lanuto, Chief Financial Officer, added, "Our new network structure and our cost-savings initiatives paid off in the first quarter, with significant improvements over the prior year period across our income statement and balance sheet. We ended the first quarter with a solid cash balance and reduced leverage from year end, down to 4.3x. We remain deeply committed to addressing all our clients' needs going forward and continuing to reduce costs in response to current market conditions."

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.

For earnings history and earnings-related data on MDC Partners (MDCA) click here.

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