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Press Release

MDC Partners Reports Strong Results for the Three and Nine Months Ended September 30, 200

To view/print the full release with schedules, click here

THIRD QUARTER HIGHLIGHTS:
• Revenues decreased to $134.6 million vs. $142.1 million in Q3 2008, a decrease of 5.3%
• Organic revenues declined 4.4% in Q3 2009
• MDC EBITDA increased to $17.7 million vs. $16.1 million in Q3 2008, an increase of 9.9%
• Free Cash Flow increased to $13.8 million vs. $12.1 million in Q3 2008, an increase of 14.1%
• Free Cash Flow per Share increased to $0.48 vs. $0.44 in Q3 2008, an increase of 9.1%
• EBITDA margin increased to 14.8% vs. 12.3% in Q3 2008, an increase of 250 basis points

YEAR-TO-DATE HIGHLIGHTS:
• Revenues decreased to $396.2 million vs. $439.9 million in the first nine months of 2008, a decrease of 9.9%
• Organic revenues declined 7.9% in the first nine months of 2009
• MDC EBITDA increased to $46.5 million vs. $43.9 million in the first nine months of 2008, an increase of 5.9%
• Free Cash Flow increased to $34.5 million vs. $23.7 million in the first nine months of 2008, an increase of 45.6%
• Free Cash Flow per Share increased to $1.24 vs. $0.87 in the first nine months of 2008, an increase of 42.5%
• EBITDA margin increased to 12.6% vs. 11.5% in the first nine months of 2008, an increase of 110 basis points

NEW YORK, NY (October 29, 2009) – MDC Partners Inc. (“MDC Partners” or the “Company”) today announced financial results for the three and nine months ended September 30, 2009.

Consolidated revenues for the third quarter of 2009 were $134.6 million, a decrease of 5.3% compared to $142.1 million in the third quarter of 2008. MDC EBITDA (as defined) for the third quarter of 2009 was $17.7 million, an increase of 9.9% compared to $16.1 million in the third quarter of 2008. Net income attributable to MDC Partners Inc. in the third quarter was minimal compared to $3.3 million in the third quarter of 2008. Diluted earnings per share attributable to MDC Partners Inc. common shareholders for the third quarter of 2009 was $0.00 compared with $0.12 per share in the same period of 2008. Free cash flow (as defined) was $13.8 million in the third quarter of 2009, compared with $12.1 million in the third quarter of 2008.

Consolidated revenues for the first nine months of 2009 were $396.2 million, a decrease of 9.9% compared to $439.9 million in the first nine months of 2008. MDC EBITDA (as defined) for the first nine months of 2009 was $46.5 million, an increase of 5.9% compared to $43.9 million in the first nine months of 2008. Net income attributable to MDC Partners Inc. in the first nine months was $0.1 million compared to a loss of ($4.6) million in the first nine months of 2008. Diluted earnings per share attributable to MDC Partners Inc. common shareholders for the first nine months of 2009 was $0.01 compared with a loss of ($0.17) per share in the same period of 2008. Free cash flow (as defined) was $34.5 million in the first nine months of 2009 compared with $23.7 million in the first nine months of 2008.

“We are thrilled with our best in class financial performance in the third quarter,” said Miles S Nadal, Chairman and Chief Executive Officer of MDC Partners. “We are especially pleased with the organic growth of our core Strategic Marketing Services Group of positive 6.6%. This, coupled with our strong new business pipeline is expected to position the company for a strong 2010. Our success in leveraging our infrastructure and improving our efficiency and productivity, as well as our investment in thought leadership talent, resulted in our delivering excellent growth in EBITDA, Free Cash Flow and margin improvement for the quarter, despite the continued challenges in the advertising industry. Never in the Company’s history has the momentum in the business or financial results been as strong. As of today we have over $200 million of liquidity and we have put in place a permanent capital structure that will allow us to build our business with a patient view toward building shareholder value creation.”

http://74.205.124.74/uploads/pdf/EarningsRelease_Q32009-2.pdf

Conference Call

Management will host a conference call on October 30, 2009 at 8:30 a.m. (EST) to discuss our results. The conference call will be accessible by dialing 1-416-644-3423 or toll free 1-866-250-4892. 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 until Friday, November 13, 2009 by dialing 1-416-640-1917 or toll free 1-877-289-8525 (passcode 4175719#) or by visiting our website.

About MDC Partners Inc.

MDC Partners is a progressive Marketing and Communications Network, championing the most innovative entrepreneurial talent. MDC Partners provides strategic solutions and services to multinational clients in North America, Europe and Latin America. Our philosophy emphasizes the utilization of Strategy and High Value Creativity to drive growth and measurable impact for our clients. “MDC Partners is The Place Where Great Talent Lives.” The company’s 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 and EBITDA margin (as defined) for the three and nine months ended September 30, 2009 and 2008; and (2) presenting Free Cash Flow and Free Cash Flow per Share (as defined) for the three and nine months ended September 30, 2009 and 2008. 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 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.

Contact:
Donna Granato
VP, Finance & Corporate Development
646-429-1809