Company Quick10K Filing
MDC Partners
Price2.96 EPS-1
Shares72 P/E-3
MCap213 P/FCF-37
Net Debt868 EBIT-29
TEV1,081 TEV/EBIT-38
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-10-29
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-05
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-18
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-07
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-01
10-Q 2017-06-30 Filed 2017-08-14
10-K 2016-12-31 Filed 2017-03-01
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-04-30
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-04-29
10-K 2013-12-31 Filed 2014-03-10
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-08
10-K 2012-12-31 Filed 2013-03-07
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-15
10-Q 2011-09-30 Filed 2011-11-03
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-02
10-K 2010-12-31 Filed 2011-03-14
10-Q 2010-09-30 Filed 2010-10-29
10-Q 2010-06-30 Filed 2010-07-30
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-03-10
8-K 2020-10-29
8-K 2020-10-19
8-K 2020-10-06
8-K 2020-09-17
8-K 2020-08-31
8-K 2020-08-31
8-K 2020-08-06
8-K 2020-07-15
8-K 2020-06-26
8-K 2020-06-25
8-K 2020-05-29
8-K 2020-05-11
8-K 2020-04-29
8-K 2020-02-27
8-K 2020-01-20
8-K 2019-11-05
8-K 2019-09-25
8-K 2019-09-19
8-K 2019-09-09
8-K 2019-08-07
8-K 2019-06-03
8-K 2019-05-22
8-K 2019-05-07
8-K 2019-05-06
8-K 2019-04-30
8-K 2019-04-18
8-K 2019-04-08
8-K 2019-03-14
8-K 2019-01-18
8-K 2018-12-21
8-K 2018-12-11
8-K 2018-11-28
8-K 2018-11-12
8-K 2018-10-29
8-K 2018-09-20
8-K 2018-09-09
8-K 2018-08-02
8-K 2018-07-24
8-K 2018-06-18
8-K 2018-06-06
8-K 2018-05-09
8-K 2018-04-26
8-K 2018-04-02
8-K 2018-02-22

MDCA 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-4.1 mdca-20200930xexhibit41.htm
EX-31.1 mdca-20200930xexhibit3.htm
EX-31.2 mdca-20200930xex312xflanuto.htm
EX-32.1 mdca-20200930xex321xmpenn.htm
EX-32.2 mdca-20200930xex322xflanuto.htm
EX-99.1 mdca-20200930xexhibit9.htm

MDC Partners Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
1.91.40.90.4-0.1-0.62012201420172020
Assets, Equity
0.50.40.30.10.0-0.12012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.0-0.1-0.22012201420172020
Ops, Inv, Fin

mdca-20200930
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 001-13718 
MDC Partners Inc.
(Exact name of registrant as specified in its charter)
Canada 98-0364441
(State or other jurisdiction of
incorporation or organization)
 (IRS Employer Identification No.)
   
One World Trade Center, Floor 65
 
New York,New York10007
(Address of principal executive offices) (Zip Code)
(646) 429-1800
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Subordinate Voting Shares, no par valueMDCANASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated Filer  Accelerated Filer
Non-accelerated Filer  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No  
The number of common shares outstanding as of October 23, 2020 was 73,528,105 Class A subordinate voting shares and 3,743 Class B multiple voting shares.


Table of Contents

MDC PARTNERS INC.
 
QUARTERLY REPORT ON FORM 10-Q
 
TABLE OF CONTENTS
 
  Page
 PART I. FINANCIAL INFORMATION 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
   
 PART II. OTHER INFORMATION 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

References in this Quarterly Report on Form 10-Q to “MDC Partners,” “MDC,” the “Company,” “we,” “us” and “our” refer to MDC Partners Inc. and, unless the context otherwise requires or otherwise is expressly stated, its subsidiaries. References in this Quarterly Report on Form 10-Q to “Partner Firms” generally refer to the Company’s subsidiary agencies.
All dollar amounts are stated in U.S. dollars unless otherwise stated.
                
                Note About Forward-Looking Statements
This document contains forward-looking statements. The Company’s representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company’s beliefs and expectations, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, 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. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. 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.
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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 international, national and regional unfavorable economic conditions that could affect the Company or its clients, including as a result of the novel coronavirus pandemic (“COVID-19”);
the effects of the outbreak of COVID-19, including the measures to reduce its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
developments involving the proposal by Stagwell Media LP to enter into a business combination with the Company (the “Potential Transaction”), including the impact of the announcement of the formation of the special committee, the reaching of an agreement in principle on certain aspects of a Potential Transaction, and the continuing discussion and review of a Potential Transaction on the Company’s business, whether any Potential Transaction will occur, and/or the ability to implement any Potential Transaction or other transaction;
the Company’s ability to attract new clients and retain existing clients;
reduction in client spending and changes in client advertising, marketing and corporate communications requirements;
financial failure of the Company’s clients;
the Company’s ability to retain and attract key employees;
the Company’s ability to achieve the full amount of its stated cost saving initiatives;
the Company’s implementation of strategic initiatives;
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 redeemable noncontrolling interests and deferred acquisition consideration;
the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities; and
foreign currency fluctuations.
Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in the Company’s 2019 Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2020 and accessible on the SEC’s website at www.sec.gov., under the caption “Risk Factors,” and in the Company’s other SEC filings.

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PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of United States dollars, except per share amounts)
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Revenue:  
Services$283,423 $342,907 $870,843 $1,033,828 
Operating Expenses:
Cost of services sold172,531 222,448 560,856 700,351 
Office and general expenses72,512 79,726 205,075 234,120 
Depreciation and amortization9,332 9,368 27,437 28,869 
Impairment and other losses159 1,944 19,159 1,944 
 254,534 313,486 812,527 965,284 
Operating income28,889 29,421 58,316 68,544 
Other Income (Expenses):
Interest expense and finance charges, net(15,266)(16,110)(46,819)(49,284)
Foreign exchange gain (loss)2,159 (3,973)(7,256)4,401 
Other, net505 (431)22,723 (4,559)
 (12,602)(20,514)(31,352)(49,442)
Income before income taxes and equity in earnings of non-consolidated affiliates16,287 8,907 26,964 19,102 
Income tax expense1,452 3,457 7,029 6,292 
Income before equity in earnings of non-consolidated affiliates14,835 5,450 19,935 12,810 
Equity in earnings (losses) of non-consolidated affiliates(31)63 (829)352 
Net income14,804 5,513 19,106 13,162 
Net income attributable to the noncontrolling interest(10,728)(7,265)(14,620)(10,737)
Net income (loss) attributable to MDC Partners Inc. 4,076 (1,752)4,486 2,425 
Accretion on and net income allocated to convertible preference shares(3,716)(3,306)(10,528)(8,931)
Net income (loss) attributable to MDC Partners Inc. common shareholders$360 $(5,058)$(6,042)$(6,506)
Income (loss) Per Common Share:  
Basic  
Net income (loss) attributable to MDC Partners Inc. common shareholders$ $(0.07)$(0.08)$(0.10)
Diluted
Net income (loss) attributable to MDC Partners Inc. common shareholders$ $(0.07)$(0.08)$(0.10)
Weighted Average Number of Common Shares Outstanding:  
Basic73,207,619 72,044,480 72,713,257 68,154,306 
Diluted73,476,779 72,044,480 72,713,257 68,154,306 
See notes to the Unaudited Condensed Consolidated Financial Statements.
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MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(thousands of United States dollars)
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Comprehensive Income (Loss) 
Net income$14,804 $5,513 $19,106 $13,162 
Other comprehensive income (loss), net of applicable tax:  
Foreign currency translation adjustment2,375 (1,461)11,171 (7,505)
Other comprehensive income (loss)2,375 (1,461)11,171 (7,505)
Comprehensive income for the period17,179 4,052 30,277 5,657 
Comprehensive income attributable to the noncontrolling interests(10,962)(6,969)(14,755)(10,830)
Comprehensive income (loss) attributable to MDC Partners Inc.$6,217 $(2,917)$15,522 $(5,173)
See notes to the Unaudited Condensed Consolidated Financial Statements.
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Table of Contents
MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars)
 September 30, 2020December 31, 2019
 
ASSETS  
Current Assets:  
Cash and cash equivalents$37,075 $106,933 
Accounts receivable, less allowance for doubtful accounts of $3,703 and $3,304403,636 449,288 
Expenditures billable to clients21,884 30,133 
Other current assets67,585 35,613 
Total Current Assets530,180 621,967 
Fixed assets, at cost, less accumulated depreciation of $138,859 and $129,57987,908 81,054 
Right of use assets - operating leases227,362 223,622 
Goodwill710,013 731,691 
Other intangible assets, net46,600 54,893 
Deferred tax assets82,576 84,900 
Other assets21,493 30,179 
Total Assets$1,706,132 $1,828,306 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS’ DEFICIT 
Current Liabilities:  
Accounts payable$128,643 $200,148 
Accruals and other liabilities323,414 353,575 
Advance billings157,101 171,742 
Current portion of lease liabilities - operating leases40,038 48,659 
Current portion of deferred acquisition consideration39,321 45,521 
Total Current Liabilities688,517 819,645 
Long-term debt860,422 887,630 
Long-term portion of deferred acquisition consideration6,824 29,699 
Long-term lease liabilities - operating leases257,107 219,163 
Other liabilities38,439 25,771 
Total Liabilities1,851,309 1,981,908 
Redeemable Noncontrolling Interests25,172 36,973 
Commitments, Contingencies, and Guarantees (Note 9)
Shareholders’ Deficit:
Convertible preference shares, 145,000 authorized, issued and outstanding at September 30, 2020 and December 31, 2019152,746 152,746 
Common stock and other paid-in capital106,037 101,469 
Accumulated deficit(476,293)(480,779)
Accumulated other comprehensive loss (income)6,768 (4,269)
MDC Partners Inc. Shareholders' Deficit(210,742)(230,833)
Noncontrolling interests40,393 40,258 
Total Shareholders' Deficit(170,349)(190,575)
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Deficit$1,706,132 $1,828,306 
See notes to the Unaudited Condensed Consolidated Financial Statements.
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MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars)

 Nine Months Ended September 30,
20202019
Cash flows from operating activities:  
Net income$19,106 $13,162 
Adjustments to reconcile net income to cash used in operating activities:
Stock-based compensation10,568 12,632 
Depreciation and amortization27,437 28,869 
Impairment and other losses19,159 1,944 
Adjustment to deferred acquisition consideration515 (3,627)
Deferred income taxes2,263 6,292 
Gain on sale of assets and other(4,199)(2,649)
Changes in working capital:
Accounts receivable43,708 835 
Expenditures billable to clients8,248 3,716 
Prepaid expenses and other current assets1,991 3,280 
Accounts payable, accruals and other current liabilities(109,256)(96,527)
Acquisition related payments(7,514)(4,816)
Advance billings(14,517)31,049 
Net cash used in operating activities(2,491)(5,840)
Cash flows from investing activities:
Capital expenditures(11,474)(13,786)
Proceeds from sale of assets19,616 23,050 
Acquisitions, net of cash acquired(1,816)(5,778)
Other (1,777)(179)
Net cash provided by investing activities4,549 3,307 
Cash flows from financing activities:  
Repayments of borrowings under revolving credit facility(456,428)(1,172,909)
Proceeds from borrowings under revolving credit facility456,428 1,112,857 
Proceeds from issuance of common and convertible preference shares, net of issuance costs 98,620 
Acquisition related payments(35,331)(30,155)
Distributions to noncontrolling interests and other(14,639)(10,615)
Repurchase of Senior Notes(21,999) 
Net cash used in financing activities(71,969)(2,202)
Effect of exchange rate changes on cash, cash equivalents, and cash held in trusts53 8 
Net decrease in cash and cash equivalents, including cash classified within current assets held for sale(69,858)(4,727)
Change in cash and cash equivalents held in trusts classified within held for sale (3,307)
Change in cash and cash equivalents classified within assets held for sale 4,441 
Net decrease in cash and cash equivalents(69,858)(3,593)
Cash and cash equivalents at beginning of period106,933 30,873 
Cash and cash equivalents at end of period$37,075 $27,280 
Supplemental disclosures:  
Cash income taxes paid$2,700 $3,631 
Cash interest paid$29,311 $32,525 
See notes to the Unaudited Condensed Consolidated Financial Statements.
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MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT
(thousands of United States dollars, except share amounts)




Three Months Ended
September 30, 2020
 Convertible Preference SharesCommon SharesCommon Stock and Other Paid-inAccumulated DeficitAccumulated Other Comprehensive Income (Loss)MDC Partners Inc. Shareholders' DeficitNoncontrolling InterestsTotal Shareholder's Deficit
SharesAmountSharesCapital
Balance at June 30, 2020145,000 $152,746 72,587,390 $98,234 $(480,368)$4,627 $(224,761)$40,158 $(184,603)
Net income attributable to MDC Partners Inc.— — — — 4,076 — 4,076 — 4,076 
Other comprehensive income— — — — — 2,141 2,141 234 2,375 
Vesting of restricted awards— — 1,047,423  — —  —  
Shares acquired and cancelled— — (80,120)(129)— — (129)— (129)
Stock-based compensation— — — 4,210 — — 4,210 — 4,210 
Changes in redemption value of redeemable noncontrolling interests— — — 1,574 — — 1,574 — 1,574 
Business acquisitions and step-up transactions, net of tax— — — 2,129 — — 2,129 — 2,129 
Other— — — 19 (1)— 18 1 19 
Balance at September 30, 2020145,000 $152,746 73,554,693 $106,037 $(476,293)$6,768 $(210,742)$40,393 $(170,349)

Nine Months Ended
September 30, 2020
 Convertible Preference SharesCommon SharesCommon Stock and Other Paid-inAccumulated DeficitAccumulated Other Comprehensive Income (Loss)MDC Partners Inc. Shareholders' DeficitNoncontrolling InterestsTotal Shareholder's Deficit
 
SharesAmountSharesCapital
Balance at December 31, 2019 145,000 $152,746 72,154,603 $101,469 $(480,779)$(4,269)$(230,833)$40,258 $(190,575)
Net income attributable to MDC Partners Inc.— — — — 4,486 — 4,486 — 4,486 
Other comprehensive income— — — — — 11,036 11,036 135 11,171 
Vesting of restricted awards— — 1,807,984  — —  —  
Shares acquired and cancelled— — (407,894)(861)— — (861)— (861)
Stock-based compensation— — — 5,243 — — 5,243 — 5,243 
Changes in redemption value of redeemable noncontrolling interests— — — (1,056)— — (1,056)— (1,056)
Business acquisitions and step-up transactions, net of tax— — — 1,626 — — 1,626 — 1,626 
Other— — — (384) 1 (383) (383)
Balance at September 30, 2020145,000 $152,746 73,554,693 $106,037 $(476,293)$6,768 $(210,742)$40,393 $(170,349)












See notes to the Unaudited Condensed Consolidated Financial Statements.
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MDC PARTNERS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT - (continued)
(thousands of United States dollars, except share amounts)

Three Months Ended
September 30, 2019
 Convertible Preference SharesCommon SharesCommon Stock and Other Paid-inAccumulated DeficitAccumulated Other Comprehensive Income (Loss)MDC Partners Inc. Shareholders' DeficitNoncontrolling InterestsTotal Shareholder's Deficit
 
SharesAmountSharesCapital
Balance at June 30, 2019145,000 $152,746 71,947,743 $97,455 $(471,349)$(1,713)$(222,861)$40,261 $(182,600)
Net loss attributable to MDC Partners Inc.— — — — (1,752)— (1,752)— (1,752)
Other comprehensive loss— — — — — (1,165)(1,165)(296)(1,461)
Vesting of restricted awards— — 372,953 — — — — —  
Shares acquired and cancelled— — (174,279)(499)— — (499)— (499)
Stock-based compensation— — — 1,409 — — 1,409 — 1,409 
Changes in redemption value of redeemable noncontrolling interests— — — 767 — — 767 — 767 
Business acquisitions and step-up transactions, net of tax— — — (648)— — (648)— (648)
Changes in ownership interest— — — (109)— — (109) (109)
Other— — — (11)(5)— (16)(9)(25)
Balance at September 30, 2019 145,000 $152,746 72,146,417 $98,364 $(473,106)$(2,878)$(224,874)$