MDC Partners Inc. Reports Results For The Three And Nine Months Ended September 30, 2012

MDC Partners Inc. Reports Results For The Three And Nine Months Ended 
September 30, 2012 
NEW YORK, Nov. 5, 2012 /CNW/ - 
THIRD QUARTER HIGHLIGHTS: 


    --  Revenue increased to $267.8 million versus $235.7 million in Q3
        2011, an increase of 13.6%
    --  Organic revenue increased 6.7% for Q3 2012
    --  EBITDA increased to $33.7 million versus $17.3 million in Q3
        2011, an increase of 94.7%
    --  EBITDA margin increased 530 basis points to 12.6% versus 7.3%
        in Q3 2011
    --  Free Cash Flow (as defined) increased to $17.4 million versus
        an outflow of ($3.7) million in Q3 2011
    --  Net new business wins of $23.4 million for Q3 2012

NINE MONTHS HIGHLIGHTS:
    --  Revenue increased to $777.3 million versus $686.3 million in
        the nine months ended September 30, 2011, an increase of 13.2%
    --  Organic revenue increased 7.2% year to date for 2012
    --  EBITDA increased to $73.4 million versus $66.7 million in the
        nine months ended September 30, 2011, an increase of 10.0%
    --  Free Cash Flow improved to $24.2 million versus $15.7 million
        in the nine months ended September 30, 2011, an increase of
        54.2%
    --  Net new business wins of $103.2 million in the nine months
        ended September 30, 2012, an increase of 36.4%

MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial 
results for the three and nine months ended September 30, 2012.

Miles S. Nadal, Chairman and Chief Executive Officer of MDC Partners, said, 
"We are very pleased with our third quarter financial performance.  Following 
a three-year period of investment in our business, our results in the third 
quarter, and particularly our growth in EBITDA and margin, are proof that our 
plan to broaden our service offering and to build new platforms that represent 
the future of the industry is working.  We are well on our way to continued 
margin expansion in the periods to come as we leverage the investments we have 
made."

Guidance for 2012 is maintained as follows:
                                                   Implied
                          2012                     Year over Year
                          Guidance                 Change

Revenue                   $1,050 - $1,075 million  +11.3% to +14.0%

EBITDA                    $110 - $115 million      +21.2% to +26.7%

Free Cash Flow            $35 - $40 million        +50.8% to +72.3%

+ Change in Working       +$25 million
Capital and Other

Total Free Cash Flow      $60 - $65 million        +10.6% to +19.8%



Implied EBITDA Margin     10.5% - 10.7%            +90 to +110 basis
                                                   points

Consolidated revenue for the third quarter of 2012 was $267.8 million, an 
increase of 13.6% compared to $235.7 million in the third quarter of 2011.  
EBITDA (as defined) for the third quarter of 2012 was $33.7 million, an 
increase of 94.7% compared to $17.3 million in the third quarter of 2011, as 
the company realized 530 basis points of EBITDA margin expansion from the 
leveraging of prior investments in growth initiatives.  Loss attributable to 
MDC Partners in the third quarter was ($14.5) million compared to a loss of 
($19.6) million in the third quarter of 2011.  Diluted loss per share from 
continuing operations attributable to MDC Partners common shareholders for the 
third quarter of 2012 was ($0.45) compared to ($0.65) per share in the same 
period of 2011.  Free cash flow from operations (as defined) was $17.4 million 
in the third quarter of 2012, compared with an outflow of ($3.7) million in 
the third quarter of 2011.

For the nine month period ended September 30, 2012, consolidated revenue was 
$777.3 million, an increase of 13.2% compared to $686.3 million in the nine 
months ended September 30, 2011.  EBITDA (as defined) for the nine months 
ended 2012 increased 10.0% to $73.4 million compared to $66.7 million in the 
same period of 2011.  Loss attributable to MDC Partners in the nine months 
ended 2012 was ($60.9) million compared to a loss of ($26.9) million in the 
nine months ended 2011.  Diluted loss per share from continuing operations 
attributable to MDC Partners common shareholders for the nine months ended 
2012 was ($1.89) compared to a loss of ($0.86) per share in the same period of 
2011.  Free cash flow from operations (as defined) was $24.2 million in the 
nine months ended 2012, compared with $15.7 million in the same period of 2011.

David Doft, CFO of MDC Partners, said, "We are making significant progress 
reducing our balance sheet leverage, which was at 3.46 times net 
debt-to-pro-forma-EBITDA as of the end of the quarter.  Our focus over the 
next several quarters is to bring our leverage down further, and we expect it 
to be between 3.0 and 3.5 times net debt-to-pro-forma-EBITDA by year-end and 
2.5 to 3 times net debt-to-pro-forma-EBITDA by the end of 2013.  We believe 
that a stronger balance sheet in conjunction with expanding EBITDA and margin 
growth will result in stronger equity returns for shareholders over time."

Conference Call

Management will host a conference call on Monday, November 5, 2012 at 4:30 
p.m. (EST) to discuss results.  The conference call will be accessible by 
dialing 1-412-858-4600 or toll free 1-800-860-2442.  An investor presentation 
has been posted on our website www.mdc-partners.com and will 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.November 19, 2012, by dialing 1-412-317-0088 or toll free 
1-877-344-7529 (passcode 10019812) or by visiting our website at 
www.mdc-partners.com.

About MDC Partners Inc.

MDC is a Business Transformation Organization that utilizes technology, 
marketing communications, data analytics and insights and strategic consulting 
solutions to drive meaningful returns on Marketing and Communications 
Investments for multinational clients in the United States, Canada, Europe, 
Latin America and the Caribbean.

MDC's durable competitive advantage is to Empower the Most Talented 
Entrepreneurial Thought Leaders to Drive Business Success to new levels of 
Achievement, for both our Clients and our Shareholders, reinforcing MDC's 
reputation as "The Place Where Great Talent Lives."

MDC Partners' Class A shares are publicly traded on NASDAQ under the symbol 
"MDCA" and on the Toronto Stock Exchange under the symbol "MDZ.A".

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 EBITDA and EBITDA margin 
(as defined) for the three and nine months ended September 30, 2012 and 2011; 
and (2) presenting Total Free Cash Flow, Free Cash Flow and Free Cash Flow per 
Share (as defined) for the three and nine months ended September 30, 2012 and 
2011.  Included in this earnings release are tables reconciling MDC's reported 
results to arrive at these non-GAAP financial measures.

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 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 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, 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 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.

SCHEDULE 1



MDC PARTNERS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(US$ in 000s, except share and per share amounts)
                  Three Months Ended     Nine Months Ended September
                  September 30,          30,
                  2012       2011        2012       2011
    Revenue           $267,817   $235,706    $777,269   $686,335



Operating
Expenses:

Cost of services  180,888    173,526     546,117    489,207
sold

Office and        73,168     55,373      207,297    152,093
general expenses

Depreciation and  12,435     9,778       36,071     29,645
amortization
                  266,491    238,677     789,485    670,945



Operating profit  1,326      (2,971)     (12,216)   15,390
(loss)



Other Income
(Expenses):

Other expense,    (433)      (3,112)     (1,242)    (2,350)
net

Interest expense  (11,594)   (10,800)    (34,420)   (31,030)

Interest income   70         51          183        152



Loss from
continuing
operations
before income
taxes

and equity in     (10,631)   (16,832)    (47,695)   (17,838)
affiliates



Income tax
expense           2,207      (42)        6,014      904
(recovery)



Loss from
continuing
operations        (12,838)   (16,790)    (53,709)   (18,742)
before equity in
affiliates

Equity in
earnings (loss)
of                93         (120)       399        214
non-consolidated
affiliates



Loss from
continuing        (12,745)   (16,910)    (53,310)   (18,528)
operations

Loss from
discontinued      (630)      (608)       (3,153)    (1,869)
operations, net
of taxes

Net loss          (13,375)   (17,518)    (56,463)   (20,397)

Net income
attributable to
the               (1,121)    (2,056)     (4,428)    (6,537)
noncontrolling
interests

Net loss
attributable to   ($14,496)  ($19,574)   ($60,891)  ($26,934)
MDC Partners
Inc.



Loss Per Common
Share:

Basic and
Diluted:

Loss from
continuing
operations
attributable to
MDC

Partners Inc.
common            ($0.45)    ($0.65)     ($1.89)    ($0.86)
shareholders

Discontinued
operations
attributable to
MDC

Partners Inc.
common            ($0.02)    ($0.02)     ($0.10)    ($0.07)
shareholders

Loss
attributable to
MDC Partners
Inc.

common            ($0.47)    ($0.67)     ($1.99)    ($0.93)
shareholders


Weighted Average
Number of Common
Shares: 
Basic and         31,051,561 29,158,703  30,606,146 29,051,450
Diluted 
SCHEDULE 2 
MDC PARTNERS INC. 
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA 
(US$ in 000s, except percentages) 
For the Three Months Ended
September 30, 2012 


                            Strategic  Performance
                            Marketing  Marketing
                            Services   Services     Corporate  Total
    Revenue                     $176,672   $91,145      -          $267,817


Operating income (loss) as  $8,158     ($214)       ($6,618)   $1,326
reported 
margin                      4.6%       -0.2%                   0.5% 
Add: 
Depreciation and            7,813      4,292        330        12,435
amortization 
Stock-based compensation    2,769      2,009        355        5,133 
Acquisition deal costs      213        160          438        811 
Deferred acquisition
consideration adjustments   10,964     2,667        -          13,631
to P&L 
Profit distributions from   -          -            376        376
affiliates 
EBITDA *                    $29,917    $8,914       ($5,119)   $33,712 
margin                      16.9%      9.8%                    12.6% 
* EBITDA is a non-GAAP measure, but as shown above it
represents operating income (loss) plus depreciation and
amortization,
stock-based compensation, acquisition deal costs, deferred
acquisition consideration adjustments and profit
distributions from affiliates. 
MDC PARTNERS INC. 
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA 
(US$ in 000s, except percentages) 
For the Three Months Ended
September 30, 2011 


                            Strategic  Performance
                            Marketing  Marketing
                            Services   Services     Corporate  Total
    Revenue                     $146,130   $89,576      -          $235,706


Operating income (loss) as  ($183)     $6,726       ($9,514)   (2,971)
reported 
margin                      -0.1%      7.5%                    -1.3% 
Add: 
Depreciation and            5,353      4,200        225        9,778
amortization 
Stock-based compensation    2,173      1,608        3,990      7,771 
Acquisition deal costs      52         251          494        797 
Deferred acquisition
consideration adjustments   2,871      (1,027)      -          1,844
to P&L 
Profit distributions from   -          -            100        100
affiliates 
EBITDA*                     $10,266    $11,758      ($4,705)   $17,319 
margin                      7.0%       13.1%                   7.3% 
* EBITDA is a non-GAAP measure, but as shown above it
represents operating income (loss) plus depreciation and
amortization,
stock-based compensation, acquisition deal costs, deferred
acquisition consideration adjustments and profit
distributions from affiliates. 
SCHEDULE 3 
MDC PARTNERS INC. 
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA 
(US$ in 000s, except percentages) 
For the Nine Months Ended
September 30, 2012 


                           Strategic  Performance
                           Marketing  Marketing
                           Services   Services     Corporate  Total
    Revenue                    $520,518   $256,751     -          $777,269


Operating income (loss)    $22,044    ($2,057)     ($32,203)  ($12,216)
as reported 
margin                     4.2%       -0.8%                   -1.6% 
Add: 
Depreciation and           21,738     13,326       1,007      36,071
amortization 
Stock-based compensation   6,602      5,587        14,181     26,370 
Acquisition deal costs     863        448          1,170      2,481 
Deferred acquisition
consideration adjustments  17,820     2,306        -          20,126
to P&L 
Profit distributions from  -          -            542        542
affiliates 
EBITDA *                   $69,067    $19,610      ($15,303)  $73,374 
margin                     13.3%      7.6%                    9.4% 
* EBITDA is a non-GAAP measure, but as shown above it
represents operating income (loss) plus depreciation and
amortization,
stock-based compensation, acquisition deal costs, deferred
acquisition consideration adjustments and profit
distributions from affiliates. 
MDC PARTNERS INC. 
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA 
(US$ in 000s, except percentages) 
For the Nine Months Ended
September 30, 2011 


                            Strategic  Performance
                            Marketing  Marketing
                            Services   Services     Corporate  Total
    Revenue                     $442,580   $243,755     -          $686,335


Operating income (loss) as  $30,840    $11,594      ($27,044)  $15,390
reported 
margin                      7.0%       4.8%                    2.2% 
Add: 
Depreciation and            16,342     12,857       446        29,645
amortization 
Stock-based compensation    3,896      2,591        11,333     17,820 
Acquisition deal costs      451        635          1,352      2,438 
Deferred acquisition
consideration adjustments   3,428      (2,562)      -          866
to P&L 
Profit distributions from   -          -            548        548
affiliates 
EBITDA*                     $54,957    $25,115      ($13,365)  $66,707 
margin                      12.4%      10.3%                   9.7% 
* EBITDA is a non-GAAP measure, but as shown above it
represents operating income (loss) plus depreciation and
amortization,
stock-based compensation, acquisition deal costs, deferred
acquisition consideration adjustments and profit
distributions from affiliates. 
SCHEDULE 4 
MDC PARTNERS INC. 
FREE CASH FLOW 
(US$ in 000s, except share and per share amounts) 


                Three Months Ended          Nine Months Ended September
                September 30,               30,
                2012       2011             2012       2011

EBITDA          $33,712    $17,319          $73,374    $66,707

Net Income
Attributable to (1,121)    (2,056)          (4,428)    (6,537)
Noncontrolling
Interests

Capital
Expenditures,   (4,736)    (9,145)          (13,679)   (16,168)
net (1)

Cash Taxes      (572)      (29)             (919)      (164)

Cash Interest,  (9,871)    (9,744)          (30,138)   (28,142)
net & Other



Free Cash Flow  $17,412    ($3,655)         $24,210    $15,696
(2)



Changes in
Working Capital 17,742     14,257           96,421     (14,811)
(3)

Total Free Cash $35,154    $10,602          $120,631   $885
Flow (2)



Diluted Common
Shares          31,051,561 29,158,703       30,606,146 29,051,450
Outstanding



Total Free Cash
Flow per Share  $1.13      $0.36            $3.94      $0.03
(2)



(1) Capital Expenditures, net represents
capital expenditures net of landlord
reimbursements.

(2) Free Cash Flow and Total Free Cash
Flow are non-GAAP measures. As shown
above, Free Cash Flow represents EBITDA
less net income attributable to
noncontrolling interests, less capital
expenditures, less cash taxes, less net
cash interest (including interest paid and
other)

(3) Changes in Working Capital includes
cash acquired in acquisitions.

SCHEDULE 5



MDC PARTNERS INC.

CONSOLIDATED BALANCE SHEETS

(US$ in 000s)
                                           September 30,  December 31,
                                           2012           2011



Assets

Current Assets:

Cash and cash equivalents                  $72,799        $8,096

Accounts receivable, net                   313,540        238,592

Expenditures billable to clients           52,554         39,067

Other current assets                       17,634         12,657

Total Current Assets                       456,527        298,412



Fixed assets, net                          51,852         47,737

Investment in affiliates                   18             99

Goodwill                                   718,196        605,244

Other intangible assets, net               75,985         57,980

Deferred tax assets                        15,500         15,380

Other assets                               33,663         30,893

Total Assets                               $1,351,741     $1,055,745


Liabilities and Shareholders'
Equity (Deficit) 
Current Liabilities: 
Accounts payable                           $311,023       $178,282 
Accrued and other liabilities              87,682         72,930 
Advance billings                           127,636        122,021 
Current portion of long term debt          1,871          1,238 
Current portion of deferred acquisition    82,765         51,829
consideration 
Total Current Liabilities                  610,977        426,300 
Long-term debt                             469,780        383,936 
Long-term portion of deferred acquisition  85,804         85,394
consideration 
Other liabilities                          49,778         14,900 
Deferred tax liabilities                   55,248         50,724 
Total Liabilities                          1,271,587      961,254 
Redeemable Noncontrolling                  100,455        107,432
Interests 
Shareholders' Equity (Deficit) 
Common shares                              253,245        228,209 
Shares to be issued                        424            424 
Charges in excess of capital               (58,234)       (45,102) 
Accumulated deficit                        (292,165)      (231,274) 
Stock subscription receivable              (55)           (55) 
Accumulated other comprehensive            (933)          (4,658)
loss 
MDC Partners Inc. Shareholders'            (97,718)       (52,456)
Deficit 
Noncontrolling Interests                   77,417         39,515 
Total Deficit                              (20,301)       (12,941) 
Total Liabilities, Redeemable
Noncontrolling 
Interests and Deficit                      $1,351,741     $1,055,745 
SCHEDULE 6 
MDC PARTNERS INC. 
SUMMARY CASH FLOW DATA 
(US$ in 000s) 
                                 Nine Months Ended September 30, 
                                 2012    2011 
Cash flows provided by (used in)     $18,119 ($3,770)
continuing operating activities 
Discontinued operations              (2,313) (2,411) 
Net cash provided by (used in)       15,806  (6,181)
operating activities 
Net cash provided by (used in)       13,727  (37,660)
continuing investing activities 
Discontinued operations              46      (252) 
Net cash provided by (used in)       13,773  (37,912)
investing activities 
Net cash provided by continuing      35,143  41,162
financing activities 
Effect of exchange rate changes on   (19)    (673)
cash and cash equivalents 
Net increase (decrease) in cash and  $64,703 ($3,604)
cash equivalents 
 ____________________________________________________________________________________________________________
|CONTACT:|David Doft                                                                                         |
|________|___________________________________________________________________________________________________|
|        |Chief Financial Officer                                                                            |
|________|___________________________________________________________________________________________________|
|        |646-429-1818                                                                                       |
|________|___________________________________________________________________________________________________|
|        |ddoft@mdc-partners.com|
|________|___________________________________________________________________________________________________| 
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SOURCE: MDC Partners Inc. 
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CO: MDC Partners Inc.
ST: New York
NI: FIN ADV PUB ERN CONF  
-0- Nov/05/2012 21:08 GMT
 
 
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