Slide 1: Management Presentation Second Quarter 2018 Results
August 2, 2018 Management Presentation Second Quarter 2018 Results
Slide 2: Forward Looking Statements & Other Information
1 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward - looking statements . Statements in this presentation that are not historical facts, including without limitation statements about the Company’s beliefs and expectations, earnings guidance, recent business and econo
Slide 3: Summary
2 SUMMARY » 2018 continues to be challenging and we are taking the necessary steps to improve our financial performance » Revenue decline reflects expected client cutbacks, delays, and slower conversion of our new business pipeline; positive 1H net new business and easing comparisons provide visibil
Slide 4: Second Quarter 2018 Highlights
3 » Adopted ASC 606 effective January 1, 2018 using the Modified Retrospective Method, therefore reported results are not comparable with the prior period (which continues to be reported under ASC 605). See slide 6 for a reconciliation. » Revenue of $379.7 million versus $390.5 million (as reported
Slide 5: Year-to-Date 2018 Highlights
4 » Adopted ASC 606 effective January 1, 2018 using the Modified Retrospective Method, therefore reported results are not comparable with the prior period (which continues to be reported under ASC 605). See slide 6 for a reconciliation. » Revenue of $706.7 million versus $735.2 million (as reported
Slide 6: Consolidated Revenue and Earnings
5 CONSOLIDATED REVENUE AND EARNINGS 1 Effective January 1, 2018, we adopted ASC Topic 606, “Revenue from Contracts with Customers” (ASC 606). ASC 606 was applied u sin g the modified retrospective method, with the cumulative effect of the initial adoption being recognized as an adjustment to opening
Slide 7: Impact of Adoption of ASC 606 on Reported Results
6 IMPACT OF ADOPTION OF ASC 606 ON REPORTED RESULTS 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition. 2 The above table summarizes the impact of the adoption of ASC 606 on our US GAAP and non - GAAP performance metrics. Note: Actuals may not foot due to rounding. (US$ in mi
Slide 8: Revenue Summary
7 » Organic revenue decline of - 1.7%, including a negligible impact from billable pass - through costs incurred on clients’ behalf » Organic revenue excluding the impact from billable pass - through costs improved sequentially, despite a nearly 300 basis points more difficult comparison REVENUE SUM
Slide 9: Revenue by Geography and Segment
8 REVENUE BY GEOGRAPHY AND SEGMENT » Excluding the impact of the adoption of ASC 606, Q2 revenue was $389.5 million » U.S. organic revenue decline similar to Q1 despite more difficult comparisons 1 Due to changes in the Company’s internal management and reporting structure during 2018, reportable se
Slide 10: Revenue by Client Industry
9 Year - over - Year Growth by Category » Best performing sectors: Financials, Healthcare, Transportation and Travel/Lodging » Top 10 clients decreased to 22.1% of revenue vs 24.6% a year ago (largest <4%) REVENUE BY CLIENT INDUSTRY Note: Actuals may not foot due to rounding. Year - over - year cate
Slide 11: Adjusted EBITDA
10 ADJUSTED EBITDA 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition. 2 Due to changes in the Company’s internal management and reporting structure during 2018, reportable segment results for perio ds presented prior to the second quarter of 2018 have been recasted to reflec
Slide 12: Summary of Cash Flow
11 SUMMARY OF CASH FLOW 1 Effective January 1, 2018, we adopted ASU 2016 - 15, "Statement of Cash Flows", which clarifies how cash receipts and cash payment s in certain transactions are presented and classified on the statement of cash flows. We applied ASU 2016 - 15 on a retrospective basis, and a
Slide 13: 2018 Financial Outlook
12 2018 FINANCIAL OUTLOOK Organic Revenue Growth Pass - through and Out - of Pocket Costs Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2018 guidance under the “unreasona ble efforts” exception in item 10(e)(1)( i )(B) of Regulation S - K. A reconciliatio
Slide 14: Appendix
13 APPENDIX
Slide 15: Application of ASC 606
14 APPLICATION OF ASC 606 » Adopted ASC 606 effective January 1, 2018 » Only the accounting changes » No change to our business model or performance metrics » No change to our client relationships or underlying client contracts » No change to cash or cash flow » No change to 2018 Adjusted EBITDA dol
Slide 16: Revenue Trending Schedule
15 REVENUE TRENDING SCHEDULE Note: See appendix for definitions of non - GAAP measures Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 YTD Revenue United States $252,199 $272,992 $274,506 $304,016 $1,103,712 $274,682 $304,463 $289
Slide 17: Adjusted EBITDA Trending Schedule
16 ADJUSTED EBITDA TRENDING SCHEDULE 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition 2 Prior to 2017, Adjusted EBITDA included an additional adjustment for acquisition deal costs. Beginning with 2017, on a prospe cti ve basis we no longer include the acquisition deal cost
Slide 18: Reconciliations
17 RECONCILIATIONS * GAAP revenue from prior year acquisitions for 2017 and 2016 relates to acquisitions which occurred in 2016 and 2015, respe cti vely. ** Contributions to organic revenue growth (decline) represents the change in revenue, measured on a constant currency basis , r elative to the co
Slide 19: Available Liquidity
18 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) June 30, 2018 December 31, 2017 Commitment Under Facility $325.0 $325.0 Drawn 115.2 - 26.7$ 26.7$ Undrawn Letters of Credit 5.2 5.1 Undrawn Commitments U
Slide 20: Current Credit Picture
19 CURRENT CREDIT PICTURE 1 These ratios and measures are not based on generally accepted accounting principles and are not presented as alternatives mea sur es of operating performance or liquidity. Some of these ratios and measures include, among other things, pro forma adjustments for acquisition
Slide 21: Temporal Put Obligations and Impact on Adjusted EBITDA
20 TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA 1 This amount is in addition to ( i ) $37.0 million of options to purchase only exercisable upon termination not within the control of the Company, or death, and (i i) the excess of the initial redemption value recorded in Redeemable Noncontr
Slide 22: Definition of Non-GAAP Measures
21 DEFINITION OF NON - GAAP MEASURES In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentati on certain financial results that the Securities and Exchange Commission defines as "non - GAAP financial measures." Management believes
Slide 23: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com