TORONTO, Ontario (August 5, 2005) – MDC Partners Inc. (“MDC Partners”) today announced its financial results for the three and six months ended June 30, 2005.
Consolidated revenues for the three months ended June 30, 2005 were $108.5 million, an increase of 45% compared to $74.7 million in the same period of 2004. Operating income was $3.6 million versus $5.6 million reported in the second quarter of 2004. Net loss from continuing operations for the three months ended June 30, 2005 was ($1.3) million versus income from continuing operations of $3.2 million for the same period in 2004. Diluted loss per share from continuing operations for the second quarter of 2005 was ($0.06), compared to diluted earnings per share of $0.13 last year.
Consolidated revenues for the six months ended June 30, 2005 were $200.9 million, an increase of 40% compared to $143.1 million in the same period of 2004. Operating income was $2.2 million versus $1.3 million reported in the first half of 2004, an increase of 70%. Net loss from continuing operations for the six months ended June 30, 2005 was ($5.1) million versus income from continuing operations of $13.0 million for the same period in 2004. The first half 2005 loss from continuing operations included pre-tax other income of $1.0 million, compared to a pre-tax net gain on asset sales and settlement of debt of $16.2 million in the first half of 2004. Excluding the impact of these gains, the loss from continuing operations would have been ($5.8) million in the first half of 2005 versus income from continuing operations of $2.5 million in the same period of 2004.
Diluted loss per share from continuing operations for the first six months of 2005 was ($0.23), compared to diluted earnings per share of $0.57 reported last year.
“We are pleased with our achievements during the first half of 2005 including continued success with new business and EBITDA margin improvement of our marketing agencies from 16.2% in the second quarter of 2004 to 17.6% in the second quarter of 2005,” said Miles S. Nadal, Chairman & CEO of MDC Partners.
Revenue for MDC’s Marketing Communications’ segment was $91.8 million for the second quarter of 2005 compared to $57.5 million in 2004, representing a year-over-year increase of 60%. This increase included organic revenue growth of 5.4% for the quarter. O perating profit for Marketing Communications for the second quarter of 2005 increased by approximately 39 % to $ 10.1 million from $ 7.3 million. Marketing Communications revenue for the first half of 2005 increased 55% to $167.0 million from $107.8 million and operating profit for the same period increased 34% to $15.4 million from $11.5 million from the first half of 2004. The increase in Marketing Communications revenues during the first half of 2005 included organic revenue growth of 11.1%.
Revenues recorded by Secure Products International for the second quarter of 2005 were $16.7 million, representing a decrease of $0.5 million compared to 2004. The Secure Products International Group posted an operating loss of ($1.3) million, compared with a profit of $0.6 million in 2004. For the first half of 2005, Secure Products reported revenue of $33.9 million versus $35.3 million in the first half of 2004. Operating loss for the first half of 2005 was ($1.9) million compared to operating profit in the first half of 2004 of $0.9 million.
“Significant accomplishments during the first half of 2005 included the acquisition of the Zyman Group, improvement of the balance sheet through the issuance of a convertible debenture and the completion of our 2004 Sarbanes-Oxley testing and subsequent filing of our report. The Company has also made substantial improvements through the attraction of management and creative talent throughout our operations. This positions us for a strong second half of 2005 and beyond,” said Steven Berns, Vice Chairman and Executive Vice President.
The Company will provide significant additional details on its business results on its conference call (see details below).
Management will host a conference call today at 8:30 a.m. (EST) to discuss the results and will be accessible by dialing 416-640-4127 or toll free 800-814-4853 . An investor presentation has been posted to our websitewww.mdc-partners.com and will be referred to during the conference call.
About MDC Partners Inc.
MDC Partners is a leading provider of marketing communications services, and secure transaction products and services, to clients in the North America, Europe, Australia and Latin America. Through its partnership of entrepreneurial firms, its Marketing Communications Group provides advertising and specialized communication services to leading brands. The Secure Products Group provides security products and services in three primary areas including electronic transaction products, secure ticketing products and stamps. MDC Partners Class A shares are publicly traded on the NASDAQ under the symbol “MDCA” and on the Toronto Stock Exchange under the symbol “MDZ.SV.A”.