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Press Release

MDC Partners Reports First Quarter 2006 Results

QUARTERLY HIGHLIGHTS:
• Consolidated Revenues up 28% to $117 million
• Marketing Communications Organic Revenue up 15.7%
• MDC EBITDA of $8.0 million up from $1.7 million
• Cash EPS of $0.28 up from $0.09

NEW YORK, NY (May 4, 2006) – MDC Partners Inc. (“MDC Partners” or the “Company”) today announced its financial results for the first quarter ended March 31, 2006.

Consolidated revenues for the quarter ended March 31, 2006 were $116.6 million, an increase of 28.3% compared to $90.9 million in the same period of 2005. Operating income for the first quarter of 2006 was $1.4 million versus a loss of ($1.0) million reported in the first quarter of 2005. Net loss from continuing operations for the quarter ended March 31, 2006 was ($5.1) million versus ($3.7) million for the same period in 2005. Diluted loss per share from continuing operations for the first quarter of 2006 was ($0.22) compared to ($0.17) last year.

MDC’s share of EBITDA (as defined) increased to $8.0 million in the first quarter of 2006 from $1.7 million in the first quarter of 2005.

Cash earnings per share from continuing operations for the first quarter of 2006 increased to $0.28 compared with $0.09 in the first quarter of 2005.

“We are extremely pleased that the great work our Partner firms have been doing for their clients is translating into strong financial results for the entire organization,” said Miles S. Nadal, Chairman & CEO of MDC Partners.

Group Results

Revenue for the Marketing Communications group was $98.1 million for the first quarter of 2006 compared to
$73.7 million in 2005, representing a year-over-year increase of 33.1%. This increase included organic revenue growth of 15.7% for the quarter. Operating income for the Marketing Communications group for the first quarter of 2006 increased by 36.8% to $7.8 million from $5.7 million.

Revenues recorded by the Secure Products group for the first quarter of 2006 were $18.6 million, representing an increase of 8.1% compared to 2005. The Secure Products group posted first quarter operating losses of ($0.4) million, an improvement of $0.2 million compared with the operating loss of ($0.6) million posted during the first quarter of 2005.

“We are pleased that our first quarter 2006 results have followed the favorable growth trend that began in the second half of 2005. In addition, we are proud to report that our recent new business successes have translated into industry leading organic growth results,” said Steven Berns, President and Chief Financial Officer.

The Company will provide significant additional details on its operations and financial results on its conference call (see details below).

Non-GAAP Financial Measures

In addition to its reported results, MDC 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 growth. These non-GAAP financial measures relate to: (1) presenting MDC’s share of EBITDA (as defined) for the first quarter of 2006 and 2005; and (2) presenting Cash Earnings per Share for the first quarter of 2006 and 2005. Included in this earnings release are tables reconciling MDC’s reported results to arrive at these non-GAAP financial measures.

Conference Call

Management will host a conference call today at 8:30 a.m. (EST) to discuss our first quarter results. The conference call will be accessible by dialing 1-416-644-3422 or toll free 1-800-814-4853. An investor presentation has been posted to 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 services, and secure transaction products and services, to clients in the United States, Canada, Australia and the United Kingdom. Through its partnership of entrepreneurial firms, its Marketing Communications group provides advertising, specialized communication and consulting services to clients. 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”

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 severe effects of national and regional economic downturn;
• 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 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.

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.

To read the full press release, click here