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• Revenues increased 21.4% to $143.3 million in Q1 2008 vs. $118.1 million in Q1 2007
• Organic revenue growth was 14.6% for Q1 2008
• Net new business wins were $40 million for Q1 2008
• MDC EBITDA increased 78.4% to $9.8 million in Q1 2008 vs. $5.5 million in Q1 2007
NEW YORK, NY (May 1, 2008) – MDC Partners Inc. (“MDC Partners” or the “Company”) today announced financial results for the three months ended March 31, 2008.
Consolidated revenues for the first quarter of 2008 were $143.3 million, an increase of 21.4% compared to $118.1 million in the first quarter of 2007. MDC EBITDA (as defined) for the first quarter of 2008 was $9.8 million, an increase of 78.4% compared to $5.5 million in the first quarter of 2007. Free cash flow (as defined) was $2.6 million in the first quarter of 2008 compared with ($1.9) million in the first quarter of 2007.
“We are very pleased with our tremendous performance during the first quarter of 2008 and are confident in our continuing momentum and ability to achieve increasing profitability and free cash flow as we continue to leverage our infrastructure and demonstrate the scalability of our model,” said Miles S. Nadal, Chairman & CEO of MDC Partners.
Management will host a conference call on Friday, May 2, at 8:30 a.m. (EST) to discuss our results. The conference call will be accessible by dialing 1-416-644-3414 or toll free 1-800-732-6179. An investor presentation will be posted on our website www.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 solutions and services to clients in North America, Europe and Latin America. Through its partnership of entrepreneurial firms it provides advertising, specialized communications and consulting services to leading brands. MDC Partners’ philosophy emphasizes the utilization of strategy and creativity to drive growth for its clients. “MDC Partners is The Place Where Great Talent Lives”. 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.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 MDC’s share of EBITDA (as defined) for the three months ended March 31, 2008 and March 31, 2007; and (2) presenting Free Cash Flow (as defined) for the three months ended March 31, 2008 and 2007. 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, 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 effects of national and regional economic conditions;
• the Company’s ability to attract new clients and retain existing clients;
• the 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 payment obligations when due and payable, including but not limited to those relating to “put” option rights;
• the Company’s ability to retain and attract key employees;
• the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities;
• foreign currency fluctuations; and
• risks arising from the Company’s historical option grant practices.
In addition to improving organic growth for its existing operations, 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.
Director, Finance & Investor Relations