Form 8-K MDC PARTNERS INC For: Oct 28
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or
15(d)
of the Securities Exchange Act of 1934
Date of Report (Date Earliest Event reported) — October 28, 2015 (October 28, 2015)
MDC PARTNERS INC.
(Exact name of registrant as specified in its charter)
| Canada (Jurisdiction of Incorporation) |
001-13718 (Commission File Number)
|
98-0364441 (IRS Employer Identification No.) |
745 Fifth Avenue, 19th Floor,
New York, NY 10151
(Address of principal executive offices and zip code)
(646) 429-1800
(Registrant’s Telephone Number)
Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12) |
| ¨ | Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b)) |
| ¨ | Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On October 28, 2015, MDC Partners Inc. (the “Company”) issued an earnings release reporting its financial results for the three and nine months ended September 30, 2015. A copy of this earnings release and related investor presentation materials are furnished hereto as Exhibit 99.1 and Exhibit 99.2.
The Company has posted the materials furnished as Exhibit 99.2 on its web site (www.mdc-partners.com). The information found on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this Current Report on Form 8-K. The foregoing information (including the exhibits hereto) is being furnished under “Item 2.02 - Results of Operations and Financial Condition.” Such information (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
The foregoing information and the exhibits hereto contain forward-looking statements within the meaning of the federal securities laws. These statements are based on present expectations, and are subject to the limitations listed therein and in the Company's other SEC reports, including that actual events or results may differ materially from those in the forward-looking statements. The Company does not undertake any duty to update these forward looking statements, except as required by law.
Item 7.01 Regulation FD Disclosure.
On October 28, 2015, the Company issued a press release announcing that its Board of Directors has declared a cash dividend of $0.21 per share on all of its outstanding Class A shares and Class B shares. The quarterly dividend will be payable on or about November 25, 2015, to shareholders of record at the close of business on November 11, 2015.
Item 8.01. Other Events.
SEC Investigation Update
The Company continues to fully cooperate with the SEC in connection with its ongoing investigation concerning expenses and payments to the Company’s former CEO. As previously disclosed by the Company, Miles Nadal resigned from his position as CEO and as a Director of the Company’s Board of Directors, in each case effective July 20, 2015. Through September 30, 2015, Mr. Nadal has paid to the Company an aggregate amount equal to $9,538,500 for expenses and other payments.
In addition, pursuant to the terms of his Separation Agreement with the Company, Mr. Nadal agreed to pay the Company $10,581,605 in connection with repayment obligations pursuant to prior cash bonus awards. Through September 30, 2015, Mr. Nadal has paid $1 million of this amount, and is obligated to repay to the Company the remaining balance over the period of time beginning October 31, 2015 and ending December 31, 2017.
Following Mr. Nadal’s resignation, and as part of the ongoing investigation, the Special Committee and management undertook to review third-party payments and identify assets purchased by the Company that were used exclusively by or may still have been in Mr. Nadal’s possession. In October 2015, Mr. Nadal paid an additional $808,001 for, among other things, travel-related expenses that were paid on his behalf and for certain assets that the Company determined had no ongoing business purpose, including computer and IT equipment.
| 2 |
Voluntary Delisting from Toronto Stock Exchange
The Company’s Class A shares are currently traded on both the NASDAQ (symbol: “MDCA”) and the Toronto Stock Exchange (the “TSX”). Approximately 99% of the trading volume for the Company’s Class A shares are transacted on NASDAQ. On October 28, 2015, the Company announced that it has applied for a voluntary delisting of its Class A shares from the TSX. Effective at the close of markets on November 11, 2015, the Company’s shares will no longer be traded on the TSX but will continue to trade on NASDAQ under the symbol “MDCA”. Canadian shareholders will be able to continue to trade their shares on NASDAQ. The Company believes that the relatively low trading volume of its shares on the TSX over a sustained period no longer justifies the financial and administrative costs associated with maintaining a dual listing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press release dated October 28, 2015, relating to the Company’s earnings for the three and nine months ended September 30, 2015. |
| 99.2 | Investor presentation materials, dated October 28, 2015. |
| 99.3 | Press Release dated October 28, 2015, relating to the announcement of the Company’s dividend. |
| 3 |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed by the undersigned hereunto duly authorized.
| Date: October 28, 2015 | MDC Partners Inc. | |
| By: |
/s/ Matthew Speiser Matthew Speiser | |
| 4 |
Exhibit 99.1
PRESS RELEASE
| FOR: | MDC Partners Inc. | CONTACT: | Matt Chesler, CFA |
| 745 Fifth Avenue, 19th Floor | VP, Investor Relations | ||
| New York, NY 10151 | 646-412-6877 | ||
| [email protected] |
MDC
PARTNERS INC. REPORTS RESULTS FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015
- ACCELERATING DOMESTIC AND GLOBAL NEW BUSINESS WINS -
THIRD QUARTER HIGHLIGHTS:
| · | Revenue increased to $328.4 million from $309.4 million, an increase of 6.1% |
| · | Net loss attributable to MDC Partners of ($8.6) million versus ($4.9) million in the same period last year |
| · | Organic revenue increased 5.7%, after a roughly 400 basis points reduction from significantly lower billable pass-through costs |
| · | Adjusted EBITDA increased to $53.5 million from $42.9 million, an increase of 24.6% (see Schedules 2 and 3) |
| · | Adjusted EBITDA margin of 16.3% versus 13.9% in the same period last year (see Schedules 2 and 3) |
| · | Adjusted EBITDA Available for General Capital Purposes increased to $30.9 million from $15.4 million, an increase of 100.3% (see Schedule 6) |
| · | Net New Business wins totaled $34.1 million |
| · | Declared cash dividend of $0.21 per share |
YEAR-TO-DATE HIGHLIGHTS:
| · | Revenue increased to $967.2 million from $883.6 million, an increase of 9.5% |
| · | Net loss attributable to MDC Partners of ($11.1) million versus income of $2.7 million in the same period last year |
| · | Organic revenue increased 7.1%, after a roughly 170 basis points reduction from significantly lower billable pass-through costs |
| · | Adjusted EBITDA increased to $132.1 million versus $127.6 million, an increase of 3.5% (see Schedules 4 and 5) |
| · | Adjusted EBITDA margin of 13.7% versus 14.4% in the same period last year (see Schedules 4 and 5) |
| · | Adjusted EBITDA Available for General Capital Purposes increased to $68.9 million from $67.7 million, an increase of 1.8% (see Schedule 6) |
| · | Net New Business wins totaled $89.4 million |
New York, NY, October 28, 2015 (NASDAQ: MDCA; TSX: MDZ.A) – MDC Partners Inc. (“MDC Partners” or the “Company”) today announced financial results for the three and nine months ended September 30, 2015.
Scott Kauffman, Chairman and Chief Executive Officer of MDC Partners, said, “Our partners are defining the future of this industry by building solutions that unite creativity and technology. This is translating into significant market share gains and an accelerating number of both domestic and global new business wins. The $89 million of net new business we posted in the first nine months of the year is converting into solid financial results. Year-to-date, we delivered an industry leading 7.1% organic revenue growth, $132 million in Adjusted EBITDA and strong cash flow generation that is sufficient to satisfy our dividend, invest behind our partners, build on our M&A strategy, and continue to de-lever our balance sheet. We are confident that our business momentum, as well as the actions we are taking to make our company more efficient, position us for superior financial performance in the years to come.”
| Page 1 |
Guidance for 2015 is reaffirmed as follows:
| Implied | ||||||
| 2014 | 2015 | Year over Year | ||||
| Actuals | Guidance | Change | ||||
| Revenue | $1.22 billion | $1.30 - $1.33 billion | +6.5% to +8.5% | |||
| Adjusted EBITDA | $179.4 million | $195 - $205 million | +8.7% to +14.3% | |||
| Implied Adjusted EBITDA Margin | 14.7% | 15.0% to 15.4% | +35 to +75 basis points | |||
| Adjusted EBITDA Available for | $98.8 million | $109 - $119 million | +10.3% to +20.4% | |||
| General Capital Purposes |
Consolidated revenue for the third quarter of 2015 was $328.4 million, an increase of 6.1%, compared to $309.4 million in the third quarter of 2014. Adjusted EBITDA for the third quarter of 2015 was $53.5 million, an increase of 24.6% compared to $42.9 million in the third quarter of 2014. Net loss attributable to MDC Partners in the third quarter was ($8.6) million compared to ($4.9) million in the third quarter of 2014. Diluted loss per share from continuing operations attributable to MDC Partners common shareholders for the third quarter of 2015 was ($0.15) compared to ($0.07) per share in the third quarter of 2014. Adjusted EBITDA Available for General Capital Purposes was $30.9 million in the third quarter of 2015, an increase of 100.3% compared to $15.4 million in the third quarter of 2014.
For the nine-month period ended September 30, 2015, consolidated revenue was $967.2 million, an increase of 9.5% compared to $883.6 million in the nine months ended September 30, 2014. Adjusted EBITDA for the nine months ended September 30, 2015 was $132.1 million, an increase of 3.5% compared to $127.6 million in the same period of 2014. Net loss attributable to MDC Partners in the nine months ended September 30, 2015 was ($11.1) million compared to income of $2.7 million in the same period of 2014. Diluted loss per share from continuing operations attributable to MDC Partners common shareholders for the nine months ended September 30, 2015 was ($0.10) compared to diluted income per share of $0.11 in the same period of 2014. Adjusted EBITDA Available for General Capital Purposes was $68.9 million in the nine months ended September 30, 2015, an increase of 1.8% compared to $67.7 million in the same period of 2014.
David Doft, CFO of MDC Partners, said, “Our topline grew nicely despite a $7 million decline in billable pass-through revenue in the quarter, which did not affect profitability. Net new business wins also accelerated to $34 million in the quarter. The volatility of working capital that we saw this quarter is due to the success of our growing media business, and should reverse in the seasonally stronger fourth quarter. We expect to finish the year out of the revolver and with a healthy positive cash position. We are reiterating guidance despite proactively taking a number of operational efficiency actions that will negatively impact this year, but will position us for accelerated performance in 2016 and beyond.”
| Page 2 |
MDC Partners Announces $0.21 per Share Quarterly Cash Dividend
MDC Partners today also announced that its Board of Directors has declared a cash dividend of $0.21 per share on all of its outstanding Class A shares and Class B shares. The quarterly dividend will be payable on or about November 25, 2015, to shareholders of record at the close of business on November 11, 2015.
Voluntary Delisting from Toronto Stock Exchange
The Company announced today that it has applied for a voluntary delisting of its Class A Subordinate Voting Shares from the Toronto Stock Exchange (“TSX”) in Canada. Effective at the close of markets on November 11, 2015, the Company’s shares will no longer be traded on the TSX but will continue to trade on NASDAQ under the symbol “MDCA”. Canadian shareholders will be able to continue to trade their shares on NASDAQ. The Company believes that the relatively low trading volume of its shares on the TSX over a sustained period no longer justifies the financial and administrative costs associated with maintaining a dual listing. The TSX has neither approved nor disapproved the information contained herein.
Shareholders are encouraged to contact Canadian Stock Transfer Trust Company, the transfer agent and registrar for the Company’s stock, at 1-800-387-0825 or 1-416-643-5500 for further information.
Conference Call
Management will host a conference call on Wednesday, October 28, 2015, at 4:30 p.m. (ET) to discuss results. Access the conference call by dialing 1-412-902-4266 or toll free 1-888-346-6216. An investor presentation has been posted on our website www.mdc-partners.com and may be referred to during the conference call.
A recording of the conference call will be available one hour after the call until 9:00 a.m. (ET), November 4, 2015, by dialing 1-412-317-0088 or toll free 1-877-344-7529 (passcode 10075056), or by visiting our website at www.mdc-partners.com.
About MDC Partners Inc.
MDC Partners is one of the fastest-growing and most influential marketing and communications networks in the world. Its 50+ advertising, public relations, branding, digital, social and event marketing agencies are responsible for some of the most memorable and engaging campaigns for the world’s most respected brands. By leveraging technology, data analytics, insights, and strategic consulting solutions, MDC Partners drives measurable results and optimizes return on marketing investment for over 1,500 clients worldwide.
As “The Place Where Great Talent Lives,” MDC Partners is known for its unique partnership model, empowering the most entrepreneurial and innovative talent to drive competitive advantage and business growth for clients. For more information about MDC Partners and its partner firms, visit www.mdc-partners.com and follow us on Twitter: http://www.twitter.com/mdcpartners.
Non-GAAP Financial Measures
In addition to its reported results, MDC Partners has included in this earnings release certain financial results that the Securities and Exchange Commission defines as “non-GAAP financial measures.” Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. These non-GAAP financial measures relate to: (1) presenting Adjusted EBITDA and EBITDA margin (as defined) for the three and nine months ended September 30, 2015, and 2014; and (2) presenting Adjusted EBITDA Available for General Capital Purposes for the three and nine months ended September 30, 2015, and 2014. Included in this earnings release are tables reconciling MDC Partners’ reported results to arrive at these non-GAAP financial measures.
| Page 3 |
This press release contains forward-looking statements. The Company’s representatives may also make forward-looking statements orally from time to time. Statements in this press release that are not historical facts, including statements about the Company’s beliefs and expectations, earnings guidance, recent business and economic trends, potential acquisitions, estimates of amounts for deferred acquisition consideration and “put” option rights, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:
| · | risks associated with the SEC’s ongoing investigation and the related class action litigation claims; |
| · | risks associated with severe effects of international, national and regional economic downturn; |
| · | the Company’s ability to attract new clients and retain existing clients; |
| · | the spending patterns and financial success of the Company’s clients; |
| · | the Company’s ability to retain and attract key employees; |
| · | the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to “put” option right and deferred acquisition consideration; |
| · | the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities; and |
| · | foreign currency fluctuations. |
The Company’s business strategy includes ongoing efforts to engage in acquisitions of ownership interests in entities in the marketing communications services industry. The Company intends to finance these acquisitions by using available cash from operations, from borrowings under its credit facility and through incurrence of bridge or other debt financing, any of which may increase the Company’s leverage ratios, or by issuing equity, which may have a dilutive impact on existing shareholders proportionate ownership. At any given time the Company may be engaged in a number of discussions that may result in one or more acquisitions. These opportunities require confidentiality and may involve negotiations that require quick responses by the Company. Although there is uncertainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of the Company’s securities.
Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Annual Report on Form 10-K under the caption “Risk Factors” and in the Company’s other SEC filings.
| Page 4 |
| SCHEDULE 1 | ||||||
| MDC PARTNERS INC. | ||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (US$ in 000s, except share and per share amounts) | ||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue | $ | 328,415 | $ | 309,391 | $ | 967,243 | $ | 883,601 | ||||||||
| Operating Expenses: | ||||||||||||||||
| Cost of services sold | 212,925 | 205,549 | 648,386 | 575,892 | ||||||||||||
| Office and general expenses | 78,786 | 70,815 | 206,169 | 213,587 | ||||||||||||
| Depreciation and amortization | 13,086 | 11,684 | 39,393 | 32,083 | ||||||||||||
| 304,797 | 288,048 | 893,948 | 821,562 | |||||||||||||
| Operating profit | 23,618 | 21,343 | 73,295 | 62,039 | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Other, net | (15,623 | ) | (9,641 | ) | (29,315 | ) | (8,648 | ) | ||||||||
| Interest expense and finance charges | (14,638 | ) | (14,022 | ) | (43,022 | ) | (40,663 | ) | ||||||||
| Interest income | 114 | 105 | 338 | 287 | ||||||||||||
| Income (loss) from continuing operations before income taxes and equity in non-consolidated affiliates | (6,529 | ) | (2,215 | ) | 1,296 | 13,015 | ||||||||||
| Income tax expense (benefit) | (1,191 | ) | (266 | ) | (566 | ) | 2,764 | |||||||||
| Income (loss) from continuing operations before equity in non-consolidated affiliates | (5,338 | ) | (1,949 | ) | 1,862 | 10,251 | ||||||||||
| Equity in earnings of non-consolidated affiliates | 172 | 81 | 627 | 223 | ||||||||||||
| Income (loss) from continuing operations | (5,166 | ) | (1,868 | ) | 2,489 | 10,474 | ||||||||||
| Loss from discontinued operations attributable to MDC Partners Inc., net of taxes | (1,316 | ) | (1,369 | ) | (6,281 | ) | (2,976 | ) | ||||||||
| Net income (loss) | (6,482 | ) | (3,237 | ) | (3,792 | ) | 7,498 | |||||||||
| Net income attributable to the noncontrolling interests | (2,122 | ) | (1,685 | ) | (7,343 | ) | (4,796 | ) | ||||||||
| Net income (loss) attributable to MDC Partners Inc. | $ | (8,604 | ) | $ | (4,922 | ) | $ | (11,135 | ) | $ | 2,702 | |||||
| Income (loss) Per Common Share: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Income (loss) from continuing operations attributable to MDC | ||||||||||||||||
| Partners Inc. common shareholders | $ | (0.15 | ) | $ | (0.07 | ) | $ | 0.10 | ) | $ | 0.11 | |||||
| Discontinued operations attributable to MDC | ||||||||||||||||
| Partners Inc. common shareholders | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.06 | ) | ||||
| Net income (loss) attributable to MDC Partners Inc. | ||||||||||||||||
| common shareholders | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.22 | ) | $ | 0.05 | |||||
| Diluted: | ||||||||||||||||
| Income (loss) from continuing operations attributable to MDC | ||||||||||||||||
| Partners Inc. common shareholders | $ | (0.15 | ) | $ | (0.07 | ) | $ | (0.10 | ) | $ | 0.11 | |||||
| Discontinued operations attributable to MDC | ||||||||||||||||
| Partners Inc. common shareholders | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.06 | ) | ||||
| Net Income (loss) attributable to MDC Partners Inc. | ||||||||||||||||
| common shareholders | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.22 | ) | $ | 0.05 | |||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
| Basic | 49,915,807 | 49,630,532 | 49,843,980 | 49,506,427 | ||||||||||||
| Diluted | 49,915,807 | 49,630,532 | 49,843,980 | 50,134,263 | ||||||||||||
| Page 5 |
| SCHEDULE 2 |
| MDC PARTNERS INC. |
| UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA |
| (US$ in 000s, except percentages) |
| For the Three Months Ended September 30, 2015 |
| Strategic | Performance | |||||||||||||||
| Marketing | Marketing | |||||||||||||||
| Services | Services | Corporate | Total | |||||||||||||
| Revenue | $ | 264,552 | $ | 63,863 | $ | - | $ | 328,415 | ||||||||
| Net loss attributable to MDC Partners Inc. | $ | (8,604 | ) | |||||||||||||
| Adjustments to reconcile to Operating profit (loss): | ||||||||||||||||
| Net income attributable to the noncontrolling interests | 2,122 | |||||||||||||||
| Loss from discontinued operations attributable to | ||||||||||||||||
| MDC Partners Inc., net of taxes | 1,316 | |||||||||||||||
| Equity in earnings of non-consolidated affiliates | (172 | ) | ||||||||||||||
| Income tax benefit | (1,191 | ) | ||||||||||||||
| Interest expense and finance charges, net | 14,524 | |||||||||||||||
| Other, net | 15,623 | |||||||||||||||
| Operating profit (loss) | $ | 36,807 | $ | 2,951 | $ | (16,140 | ) | $ | 23,618 | |||||||
| margin | 13.9 | % | 4.6 | % | 7.2 | % | ||||||||||
| Additional adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Depreciation and amortization | 6,445 | 5,577 | 1,064 | 13,086 | ||||||||||||
| Stock-based compensation | 2,594 | 508 | 164 | 3,266 | ||||||||||||
| Acquisition deal costs | 88 | 21 | 619 | 728 | ||||||||||||
| Deferred acquisition consideration adjustments to P&L | 4,378 | 549 | - | 4,927 | ||||||||||||
| Profit distributions from non-consolidated affiliates | 30 | 37 | 30 | 97 | ||||||||||||
| Other items, net ** | - | - | 7,751 | 7,751 | ||||||||||||
| Adjusted EBITDA * | $ | 50,342 | $ | 9,643 | $ | (6,512 | ) | $ | 53,473 | |||||||
| margin | 19.0 | % | 15.1 | % | 16.3 | % | ||||||||||
* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments, profit distributions from affiliates, and other non-recurring items.
** Other items includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses ($1.9 million), (ii) legal fees and related expenses relating to the ongoing SEC investigation ($2.7 million) and (iii) one-time charge for the balance of prior cash bonus bonus award amounts paid to the former CEO and CAO ($5.8 million) that will not be recovered; and (iv) write-off of certain assets related to the CEO and CAO termination ($1.1 million).
| Page 6 |
| SCHEDULE 3 |
| MDC PARTNERS INC. |
| UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA |
| (US$ in 000s, except percentages) |
|
| For the Three Months Ended September 30, 2014 |
| Strategic | Performance | |||||||||||||||
| Marketing | Marketing | |||||||||||||||
| Services | Services | Corporate | Total | |||||||||||||
| Revenue | $ | 238,419 | $ | 70,972 | $ | - | $ | 309,391 | ||||||||
| Net loss attributable to MDC Partners Inc. | $ | (4,922 | ) | |||||||||||||
| Adjustments to reconcile to Operating profit (loss): | ||||||||||||||||
| Net income attributable to the noncontrolling interests | 1,685 | |||||||||||||||
| Loss from discontinued operations attributable to | ||||||||||||||||
| MDC Partners Inc., net of taxes | 1,369 | |||||||||||||||
| Equity in earnings of non-consolidated affiliates | (81 | ) | ||||||||||||||
| Income tax benefit | (266 | ) | ||||||||||||||
| Interest expense and finance charges, net | 13,917 | |||||||||||||||
| Other, net | 9,641 | |||||||||||||||
| Operating profit (loss) | $ | 26,333 | $ | 6,368 | $ | (11,358 | ) | $ | 21,343 | |||||||
| margin | 11.0 | % | 9.0 | % | 6.9 | % | ||||||||||
| Additional adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Depreciation and amortization | 6,895 | 4,368 | 421 | 11,684 | ||||||||||||
| Stock-based compensation | 1,816 | 477 | 1,144 | 3,437 | ||||||||||||
| Acquisition deal costs | 742 | 192 | 724 | 1,658 | ||||||||||||
| Deferred acquisition consideration adjustments to P&L | 3,874 | (1,251 | ) | - | 2,623 | |||||||||||
| Profit distributions from non-consolidated affiliates | - | 38 | 2,127 | 2,165 | ||||||||||||
| Adjusted EBITDA * | $ | 39,660 | $ | 10,192 | $ | (6,942 | ) | $ | 42,910 | |||||||
| margin | 16.6 | % | 14.4 | % | 13.9 | % | ||||||||||
*Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments and profit distributions from affiliates.
| Page 7 |
| SCHEDULE 4 |
| MDC PARTNERS INC. |
| UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA |
| (US$ in 000s, except percentages) |
| For the Nine Months Ended September 30, 2015 |
| Strategic | Performance | |||||||||||||||
| Marketing | Marketing | |||||||||||||||
| Services | Services | Corporate | Total | |||||||||||||
| Revenue | $ | 775,079 | $ | 192,164 | $ | - | $ | 967,243 | ||||||||
| Net loss attributable to MDC Partners Inc. | $ | (11,135 | ) | |||||||||||||
| Adjustments to reconcile to Operating profit (loss): | ||||||||||||||||
| Net income attributable to the noncontrolling interests | 7,343 | |||||||||||||||
| Loss from discontinued operations attributable to | ||||||||||||||||
| MDC Partners Inc., net of taxes | 6,281 | |||||||||||||||
| Equity in earnings of non-consolidated affiliates | (627 | ) | ||||||||||||||
| Income tax benefit | (566 | ) | ||||||||||||||
| Interest expense and finance charges, net | 42,684 | |||||||||||||||
| Other, net | 29,315 | |||||||||||||||
| Operating profit (loss) | $ | 89,072 | $ | 20,019 | $ | (35,796 | ) | $ | 73,295 | |||||||
| margin | 11.5 | % | 10.4 | % | 7.6 | % | ||||||||||
| Additional adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Depreciation and amortization | 19,360 | 16,797 | 3,236 | 39,393 | ||||||||||||
| Stock-based compensation | 9,205 | 2,467 | 1,353 | 13,025 | ||||||||||||
| Acquisition deal costs | 752 | 117 | 1,575 | 2,444 | ||||||||||||
| Deferred acquisition consideration adjustments to P&L | 3,726 | (9,292 | ) | - | (5,566 | ) | ||||||||||
| Profit distributions from non-consolidated affiliates | 334 | 243 | 150 | 727 | ||||||||||||
| Other items, net ** | - | - | 8,795 | 8,795 | ||||||||||||
| Adjusted EBITDA * | $ | 122,449 | $ | 30,351 | $ | (20,687 | ) | $ | 132,113 | |||||||
| margin | 15.8 | % | 15.8 | % | 13.7 | % | ||||||||||
* Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments, profit distributions from affiliates, and other non-recurring items.
** Other items includes (i) one-time gains related to the former CEO's repayment to the Company for certain perquisites and expenses ($10.5 million), (ii) legal fees and related expenses relating to the ongoing SEC investigation ($12.4 million) and (iii) one-time charge for the balance of prior cash bonus award amounts paid to the former CEO and CAO ($5.8 million) that will not be recovered; and (iv) write-off of certain assets related to the CEO and CAO termination ($1.1 million).
| Page 8 |
| SCHEDULE 5 |
| MDC PARTNERS INC. |
| UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA |
| (US$ in 000s, except percentages) |
| For the Nine Months Ended September 30, 2014 |
| Strategic | Performance | |||||||||||||||
| Marketing | Marketing | |||||||||||||||
| Services | Services | Corporate | Total | |||||||||||||
| Revenue | $ | 683,340 | $ | 200,261 | $ | - | $ | 883,601 | ||||||||
| Net income attributable to MDC Partners Inc. | $ | 2,702 | ||||||||||||||
| Adjustments to reconcile to Operating profit (loss): | ||||||||||||||||
| Net income attributable to the noncontrolling interests | 4,796 | |||||||||||||||
| Loss from discontinued operations attributable to | ||||||||||||||||
| MDC Partners Inc., net of taxes | 2,976 | |||||||||||||||
| Equity in earnings of non-consolidated affiliates | (223 | ) | ||||||||||||||
| Income tax expense | 2,764 | |||||||||||||||
| Interest expense and finance charges, net | 40,376 | |||||||||||||||
| Other, net | 8,648 | |||||||||||||||
| Operating profit (loss) | $ | 86,330 | $ | 10,090 | $ | (34,381 | ) | $ | 62,039 | |||||||
| margin | 12.6 | % | 5.0 | % | 7.0 | % | ||||||||||
| Additional adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Depreciation and amortization | 17,182 | 13,545 | 1,356 | 32,083 | ||||||||||||
| Stock-based compensation | 6,067 | 2,684 | 3,482 | 12,233 | ||||||||||||
| Acquisition deal costs | 1,338 | 978 | 1,397 | 3,713 | ||||||||||||
| Deferred acquisition consideration adjustments to P&L | 9,440 | 5,276 | - | 14,716 | ||||||||||||
| Profit distributions from non-consolidated affiliates | - | 321 | 2,481 | 2,802 | ||||||||||||
| Adjusted EBITDA * | $ | 120,357 | $ | 32,894 | $ | (25,665 | ) | $ | 127,586 | |||||||
| margin | 17.6 | % | 16.4 | % | 14.4 | % | ||||||||||
*Adjusted EBITDA is a non-GAAP measure, but as shown above it represents operating profit (loss) plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments and profit distributions from affiliates.
| Page 9 |
| SCHEDULE 6 |
| MDC PARTNERS INC. |
| UNAUDITED ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES |
| (US$ in 000s) |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Adjusted EBITDA (1) | $ | 53,473 | $ | 42,910 | $ | 132,113 | $ | 127,586 | ||||||||
| Net income attributable to noncontrolling interests | (2,122 | ) | (1,685 | ) | (7,343 | ) | (4,796 | ) | ||||||||
| Capital expenditures, net (2) | (6,902 | ) | (12,978 | ) | (16,014 | ) | (18,078 | ) | ||||||||
| Cash taxes | (685 | ) | (241 | ) | (1,400 | ) | (359 | ) | ||||||||
| Cash interest, net & other (3) | (12,879 | ) | (12,589 | ) | (38,423 | ) | (36,643 | ) | ||||||||
| Adjusted EBITDA Available for General Capital Purposes (4) | $ | 30,885 | $ | 15,417 | $ | 68,933 | $ | 67,710 | ||||||||
(1) Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 for a reconciliation of Net income (loss) to Adjusted EBITDA.
(2) Capital expenditures, net represents capital expenditures net of landlord reimbursements.
(3) Cash interest, net & other represents the quarterly accrual of cash interest under our Senior Notes.
(4) Adjusted EBITDA Available for General Capital Purposes is a non-GAAP measure, and represents funds available for repayment of debt, acquisitions, deferred acquisition consideration, dividends, and other general corporate initiatives.
| Page 10 |
| SCHEDULE 7 |
| MDC PARTNERS INC. |
| UNAUDITED CONSOLIDATED BALANCE SHEETS |
| (US$ in 000s) |
| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 15,758 | $ | 113,348 | ||||
| Cash held in trusts | 5,667 | 6,419 | ||||||
| Accounts receivable, net | 418,725 | 355,295 | ||||||
| Expenditures billable to clients | 56,715 | 40,202 | ||||||
| Other current assets | 30,465 | 36,978 | ||||||
| Total Current Assets | 527,330 | 552,242 | ||||||
| Fixed assets, net | 62,109 | 60,240 | ||||||
| Investment in non-consolidated affiliates | 10,805 | 6,110 | ||||||
| Goodwill | 869,869 | 851,373 | ||||||
| Other intangible assets, net | 74,833 | 86,121 | ||||||
| Deferred tax assets | 21,849 | 18,758 | ||||||
| Other assets | 50,406 | 74,046 | ||||||
| Total Assets | $ | 1,617,201 | $ | 1,648,890 | ||||
| Liabilities, Redeemable Noncontrolling Interests and Shareholders' Deficit | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 293,491 | $ | 316,285 | ||||
| Trust liability | 5,667 | 6,419 | ||||||
| Accruals and other liabilities | 313,349 | 264,854 | ||||||
| Advance billings | 134,867 | 142,608 | ||||||
| Current portion of long term debt | 508 | 534 | ||||||
| Current portion of deferred acquisition consideration | 105,986 | 90,804 | ||||||
| Total Current Liabilities | 853,868 | 821,504 | ||||||
| Long-term debt, less current portion | 826,678 | 742,593 | ||||||
| Long-term portion of deferred acquisition consideration | 185,741 | 114,564 | ||||||
| Other liabilities | 43,782 | 45,861 | ||||||
| Deferred tax liabilities | 83,869 | 77,997 | ||||||
| Total Liabilities | 1,993,938 | 1,802,519 | ||||||
| Redeemable Noncontrolling Interests | 71,326 | 194,951 | ||||||
| Shareholders' Deficit | ||||||||
| Common shares | 269,558 | 265,818 | ||||||
| Charges in excess of capital | (302,385 | ) | (209,668 | ) | ||||
| Accumulated deficit | (500,768 | ) | (489,633 | ) | ||||
| Accumulated other comprehensive income (loss) | 5,519 | (7,752 | ) | |||||
| MDC Partners Inc. Shareholders' Deficit | (528,076 | ) | (441,235 | ) | ||||
| Noncontrolling Interests | 80,013 | 92,655 | ||||||
| Total Shareholders' Deficit | (448,063 | ) | (348,580 | ) | ||||
| Total Liabilities, Redeemable Noncontrolling | ||||||||
| Interests and Shareholders' Deficit | $ | 1,617,201 | $ | 1,648,890 | ||||
| Page 11 |
| SCHEDULE 8 |
| MDC PARTNERS INC. |
| UNAUDITED SUMMARY CASH FLOW DATA |
| (US$ in 000s) |
| Nine Months Ended September 30, | ||||||||
| 2015 | 2014 | |||||||
| Cash flows provided by (used in) continuing operating activities | $ | (9,147 | ) | $ | 38,955 | |||
| Discontinued operations | (1,342 | ) | (3,571 | ) | ||||
| Net cash provided by (used in) operating activities | (10,489 | ) | 35,384 | |||||
| Cash flows used in continuing investing activities | (42,723 | ) | (77,267 | ) | ||||
| Discontinued operations | 17,101 | (1,956 | ) | |||||
| Net cash used in investing activities | (25,622 | ) | (79,223 | ) | ||||
| Net cash used in continuing financing activities | (63,633 | ) | (15,472 | ) | ||||
| Discontinued operations | (40 | ) | (40 | ) | ||||
| Net cash used in financing activities | (63,673 | ) | (15,512 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 2,194 | (194 | ) | |||||
| Net decrease in cash and cash equivalents | $ | (97,590 | ) | $ | (59,545 | ) | ||
| Page 12 |
Exhibit 99.2
October 28, 2015 Management Presentation Third Quarter 2015 Results
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “ 2015 Financial Outlook”, contains forward - looking statements . The Company’s representatives may also make forward - looking statements orally from time to time . Statements in this presentation that are not historical facts, including statements about the Company’s beliefs and expectations, earnings guidance, recent business and economic trends, potential acquisitions, estimates of amounts for deferred acquisition consideration and “put” option rights, constitute forward - looking statements . These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section . Forward - looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any . Forward - looking statements involve inherent risks and uncertainties . A number of important factors could cause actual results to differ materially from those contained in any forward - looking statements . Such risk factors include, but are not limited to, the following : • risks associated with the SEC’s ongoing investigation and the related class action litigation claims ; • risks associated with severe effects of international, national and regional economic downturn ; • the Company’s ability to attract new clients and retain existing clients; • the spending patterns and financial success of the Company’s clients; • the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent pa yme nt obligations when due and payable, including but not limited to those relating to “put” option rights and deferred acquisition co nsideration; • the successful completion and integration of acquisitions which compliment and expand the Company’s business capabilities; an d • foreign currency fluctuations. The Company’s business strategy includes ongoing efforts to engage in material acquisitions of ownership interests in entities in the marketing communications services industry . The Company intends to finance these acquisitions by using available cash from operations and through incurrence of bridge or other debt financing, either of which may increase the Company’s leverage ratios, or by issuing equity, which may have a dilutive impact on existing shareholders proportionate ownership . At any given time the Company may be engaged in a number of discussions that may result in one or more material acquisitions . These opportunities require confidentiality and may involve negotiations that require quick responses by the Company . Although there is uncertainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of the Company’s securities . Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Annual Report on Form 10 - K under the caption “Risk Factors” and in the Company’s other SEC filings .
3 • Industry leading topline growth continues • Adjusted EBITDA growth and margin expansion now reflecting the recognition of incremental revenue from recent new business • Clear visibility for continued market share gains from strong new business results and robust pipeline of pitches • Ongoing progress across key strategic growth initiatives such as International, Media Buying & Planning, and Data Science & Technology • Continued focus on prudent capital allocation and achievement of leverage target • On track to deliver on financial targets THIRD QUARTER 2015 SUMMARY
4 • Organic revenue growth of 5.7%, after a roughly 400 basis points reduction from significantly lower billable pass - through costs • Revenue increased 6.1% to $328.4 million from $309.4 million • Net loss attributable to MDC Partners of ($8.6) million versus ($4.9) million a year ago • Adjusted EBITDA increased 24.6% to $53.5 million from $42.9 million • Adjusted EBITDA margin at 16.3% versus 13.9% a year ago • Net new business wins of $34.1 million • Adjusted EBITDA Available for General Capital Purposes increased 100.3 % to $30.9 million from $15.4 million • Declared cash dividend of $0.21 per share THIRD QUARTER 2015 FINANCIAL HIGHLIGHTS
5 • Organic revenue growth of 7.1%, after a roughly 170 basis points reduction from significantly lower billable pass - through costs • Revenue increased 9.5% to $967.2 million from $883.6 million • Net loss attributable to MDC Partners of ($11.1) million versus income of $2.7 million a year ago • Adjusted EBITDA increased 3.5% to $132.1 million from $127.6 million • Adjusted EBITDA margin at 13.7% versus 14.4% a year ago • Net new business wins of $89.4 million • Adjusted EBITDA Available for General Capital Purposes increased 1.8% to $68.9 million from $67.7 million YEAR - TO - DATE FINANCIAL HIGHLIGHTS
6 Note: Actuals may not foot due to rounding CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) 2015 2014 2015 2014 Revenue 328.4$ 309.4$ 6.1 % 967.2$ 883.6$ 9.5 % Operating Expenses Cost of services sold 212.9 205.5 3.6 % 648.4 575.9 12.6 % Office and general expenses 78.8 70.8 11.3 % 206.2 213.6 (3.5) % Depreciation and amortization 13.1 11.7 12.0 % 39.4 32.1 22.8 % Operating Profit 23.6 21.3 10.7 % 73.3 62.0 18.1 % Other, net (15.6) (9.6) (29.3) (8.6) Interest expense and finance charges (14.6) (14.0) (43.0) (40.7) Interest income 0.1 0.1 0.3 0.3 Income tax benefit (expense) 1.2 0.3 0.6 (2.8) Equity in earnings of non-consolidated affiliates 0.2 0.1 0.6 0.2 Income (loss) from Continuing Operations (5.2) (1.9) 2.5 10.5 Loss from discontinued operations, net of taxes (1.3) (1.4) (6.3) (3.0) Net Income (loss) (6.5) (3.2) (3.8) 7.5 Net income attributable to non- (2.1) (1.7) (7.3) (4.8) controlling interests Net Income (loss) Attributable to MDC Partners Inc. (8.6)$ (4.9)$ (11.1)$ 2.7$ % Change Three Months Ended September 30, Nine Months Ended September 30, % Change
7 • Q3 2015 revenue of $328.4 million represents 6.1% YoY growth • Strength across disciplines, most notably Advertising and Technology & Data Science, slightly offset by declines in Experiential, Promotions and Design • Geographical growth led by the US and ROW, offset by declines in Canada SUMMARY OF SEGMENT RESULTS - REVENUE Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2015 2014 2015 2014 Revenue Strategic Marketing Services 264.6$ 238.4$ 11.0 % 775.1$ 683.3$ 13.4 % Performance Marketing Services 63.9 71.0 (10.0) % 192.2 200.3 (4.0) % Total Revenue 328.4$ 309.4$ 6.1 % 967.2$ 883.6$ 9.5 % % Change Three Months Ended September 30, Nine Months Ended September 30, % Change
8 ORGANIC REVENUE GROWTH BY SEGMENT Note: Actuals may not foot due to rounding • Organic growth of +5.7%; negatively impacted by roughly 400 basis points from a $6.6 million decline in billable pass - through costs • Continued double - digit organic growth in SMS driven by net new business wins • PMS negatively impacted by an $8.5 million decline in billable pass - through costs; PMS organic revenue nearly flat net of this impact Strategic Performance Weighted Strategic Performance Weighted Marketing Marketing Average Marketing Marketing Average Services Services Total Services Services Total Organic Growth 10.8% -11.4% 5.7% 10.3% -4.1% 7.1% Acquisition Growth 2.9% 5.1% 3.4% 5.4% 3.1% 4.9% Foreign Exchange Impact -2.7% -3.7% -2.9% -2.3% -3.0% -2.5% Total 11.0% -10.0% 6.1% 13.4% -4.0% 9.5% Three Months Ended September 30, Nine Months Ended September 30,
9 Q3 2015 Mix Year - over - Year Growth by Category • Fastest growing sectors: Healthcare, Automotive, Technology • Diversification continues: Top 10 clients declined to 23.5% of revenue in Q3 2015 from 25.2% a year ago (largest ~4%) THIRD QUARTER REVENUE BY CLIENT INDUSTRY * Excludes discontinued operations Note : Actuals may not foot due to rounding. Year - over - year category growth shown on a reported basis. Q3 2015 YTD 2015 Above 10% Healthcare, Automotive, Technology, Other Healthcare, Consumer Products, Technology, Automotive, Other 0% to 10% Consumer Products, Food & Beverage Food & Beverage, Communications Below 0% Communications, Retail, Financials Retail, Financials
10 ORGANIC GROWTH HIGHLIGHTS SUSTAINED MARKET SHARE GAINS Notes: (1) MDC organic growth excludes Accent (sold in Q2 2015) in all periods. (2) Peers include Omnicom, IPG, WPP, Havas and Publicis .
11 Note: Actuals may not foot due to rounding • Q3 Adjusted EBITDA growth and margin expansion, as expected, due in part to successful recognition of incremental revenue from recent new business SUMMARY OF SEGMENT RESULTS – ADJUSTED EBITDA * Other items include ( i ) one - time gain related to the former CEO's repayment to the Company for certain perquisites and expenses ($1.9 million and $10.5 million for the three and nine months ended September 30, 2015, respectively); (ii) legal fees and related expenses relating to the ongoing SEC investigation ($2.7 million and $12.4 million for the three and nine months ended September 30, 2015, respectively ); (iii) one - time charge for the balance of prior cash bonus award amounts paid to the former CEO and CAO ($5.8 million for the three months ended September 30, 2015) that will not be recovered; and (iv) write - off of certain assets related to the CEO and CAO termination ($1.1 million for the three months ended September 30, 2015 ). (US$ in millions, except percentages) 2015 2014 2015 2014 Adjusted EBITDA Strategic Marketing Services 50.3$ 39.7$ 26.9 % 122.4$ 120.4$ 1.7 % margin 19.0% 16.6% 15.8% 17.6% Performance Marketing Services 9.6 10.2 (5.4) % 30.4 32.9 (7.7) % margin 15.1% 14.4% 15.8% 16.4% Marketing Communications 60.0 49.9 20.3 % 152.8 153.3 (0.3) % margin 18.3% 16.1% 15.8% 17.3% Corporate Expenses (14.3) (9.1) 57.6 % (29.6) (28.1) 5.3 % Profit Distributions from Affiliates 0.0 2.1 (98.6) % 0.2 2.5 (94.0) % Other Items, net 7.8 0.0 NM % 8.8 0.0 NM % Total Adjusted EBITDA 53.5$ 42.9$ 24.6 % 132.1$ 127.6$ 3.5 % margin 16.3% 13.9% 13.7% 14.4% % Change Three Months Ended September 30, Nine Months Ended September 30, % Change
12 Note: Actuals may not foot due to rounding ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES (1) Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 of the Q3 2015 press release for a reconciliation of Net Income (loss) to Adjusted EBITDA. (2) Capital Expenditures, net represents capital expenditures net of landlord reimbursements . (3) Cash Interest, net & Other represents the quarterly accrual of cash interest under our Senior Notes . (4) Adjusted EBITDA Available for General Capital Purposes is a non - GAAP measure, and represents funds available for repayment of de bt, acquisitions, deferred acquisition consideration, dividends, and other general corporate initiatives. (US$ in millions) 2015 2014 2015 2014 Adjusted EBITDA (1) $53.5 $42.9 $132.1 $127.6 Net Income Attibutable to Noncontrolling Interests (2.1) (1.7) (7.3) (4.8) Capital Expenditures, net (2) (6.9) (13.0) (16.0) (18.1) Cash Taxes (0.7) (0.2) (1.4) (0.4) Cash Interest, net & Other (3) (12.9) (12.6) (38.4) (36.6) Adjusted EBITDA Available for General Capital Purposes (4) $30.9 $15.4 $68.9 $67.7 Three Months Ended September 30, Nine Months Ended September 30,
13 AVAILABLE LIQUIDITY* * Subject to available borrowings under the Credit Facility. (US$ in millions) September 30, 2015 December 31, 2014 Commitment Under Facility $325.0 $325.0 Drawn 85.3 0.0 Undrawn Letters of Credit 5.0 4.8 Funds Available Under Facility $234.7 $320.2 Total Cash & Cash Equivalents 15.8 113.3 Liquidity $250.4 $433.5
14 2015 FINANCIAL OUTLOOK Note: See appendix for definitions of non - GAAP measures Revenue Adjusted EBITDA Adjusted EBITDA Available for General Capital Purposes Implied Adjusted EBITDA Margin $1.22 billion $179.4 million $98.8 million 14.7% $1.30 to $1.33 billion $195 to $205 million $109 to $119 million 15.0% to 15.4% +6.5% to +8.5% +8.7% to +14.3% +10.3% to +20.4% +35 to +75 basis points 2014 Actuals Implied Year over Year Change 2015 Guidance
15 APPENDIX
16 TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA (1) This amount is in addition to $52.7 million of ( i ) options to purchase only exercisable upon termination not within the control of the Company, or death, and (ii) the excess of the initial redemption value recorded in Redeemable Noncontrolling Interests over the amount the Company would be required to pay to the holders should the Company acquire the remaining ownership interests. Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2015 2.3 0.0 2.3 1.5 2016 1.9 0.0 1.9 0.0 2017 2.9 0.1 3.0 1.4 2018 1.8 0.0 1.8 0.0 Thereafter 9.6 0.0 9.6 1.4 Total $18.5 $0.1 $18.6(1) $4.3 Effective Multiple 4.3x Estimated Put Impact at September 30, 2015 Payment Consideration
17 Note: Actuals may not foot due to rounding SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2015 2014 Cash flows provided by (used in) continuing operating activities ($9.1) $39.0 Discontinued operations (1.3) (3.6) Net cash provided by (used in) operating activities ($10.5) $35.4 Cash flows used in continuing investing activities ($42.7) ($77.3) Discontinued operations 17.1 (2.0) Net cash used in investing activities ($25.6) ($79.2) Cash flows used in continuing financing activities ($63.6) ($15.5) Discontinued operations (0.0) (0.0) Net cash used in financing activities ($63.7) ($15.5) Effect of exchange rate changes on cash and cash equivalents $2.2 ($0.2) Net decrease in cash and cash equivalents ($97.6) ($59.5) Nine Months Ended September 30,
18 Note: Actuals may not foot due to rounding DEFINITION OF NON - GAAP MEASURES Adjusted EBITDA: Adjusted EBITDA is a non - GAAP measure, that represents operating profit plus depreciation and amortization, stock - based compensation, acquisition deal costs, deferred acquisition consideration adjustments, profit distributions from affiliates and other non - recurring items. Organic Growth: Organic revenue growth is a non - GAAP measure that refers to growth in revenues from sources other than acquisitions or foreign exchange impacts. Adjusted EBITDA Available for General Capital Purposes: Adjusted EBITDA Available for General Capital Purposes is a non - GAAP measure, and represents funds available for repayment of debt, acquisitions, deferred acquisition consideration, dividends, and other general corporate initiatives . Net Bank Debt or Net Debt: Debt due pertaining to the revolving credit facility plus debt pertaining to the Senior Notes less total cash and cash equivalents. Note: A reconciliation of Non - GAAP to US GAAP reported results has been provided by the Company in the tables included in the earnings release issued on October 28, 2015.
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com
Exhibit 99.3
PRESS RELEASE FOR IMMEDIATE ISSUE
| FOR: | MDC Partners Inc. | CONTACT: | Matt Chesler, CFA |
| 745 Fifth Avenue, 19th Floor | VP, Investor Relations | ||
| New York, NY 10151 | 646-412-6877 | ||
| [email protected] |
MDC Partners Declares Quarterly Dividend of $0.21 Per Share
New York, NY, October 28, 2015 (NASDAQ: MDCA; TSX: MDZ.A) – MDC Partners Inc. (“MDC Partners” or the “Company”) today announced that its Board of Directors has declared a cash dividend of $0.21 per share on all of its outstanding Class A shares and Class B shares. The quarterly dividend will be payable on or about November 25, 2015 to shareholders of record at the close of business on November 11, 2015.
About MDC Partners Inc.
MDC Partners is one of the fastest-growing and most influential marketing and communications networks in the world. Its 50+ advertising, public relations, branding, digital, social and event marketing agencies are responsible for some of the most memorable and engaging campaigns for the world’s most respected brands. By leveraging technology, data analytics, insights, and strategic consulting solutions, MDC Partners drives measurable results and optimizes return on marketing investment for over 1,500 clients worldwide.
As “The Place Where Great Talent Lives,” MDC Partners is known for its unique partnership model, empowering the most entrepreneurial and innovative talent to drive competitive advantage and business growth for clients. For more information about MDC Partners and its partner firms, visit www.mdc-partners.com and follow us on Twitter: http://www.twitter.com/mdcpartners.
This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties which may cause the actual results or objectives to be materially different from those expressed or implied by such forward-looking statements. Such risk factors include, among other things, the Company’s financial performance; risks associated with the SEC’s ongoing investigation of the Company; risks associated with the effects of economic downturns; ability to attract and retain key clients; ongoing compliance with debt agreements and the Company’s ability to satisfy contingent payment obligations when due; and other risk factors set forth in the Company’s Form 10-K for its fiscal year ended December 31, 2014 and subsequent SEC filings.
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