Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q3 2006 Earnings Presentation
18 slides from Stagwell's earnings presentation, Nov 8, 2006
Slide 1: Management Presentation – Third Quarter 2006 Results
Management Presentation November 7, 2006 Third Quarter 2006 Results MDC(K)PARTNERS
Slide 2: Forward Looking Statements and Other Information
MDC(K)PARTNERS Forward Looking Statements and Other Information This presentation contains forward-looking statements. The Company's representatives may also make forward-looking statements orally fiom time to time. Statements in this ‘presentation that are not historical facts, including statements
Slide 3: Q3 Update
Nv MDC(()PARTNERS Q3 Update " Definitive agreement to sell Secure Products International = Zyman Group rebuilding pipeline = 2 new CRM service centers
Slide 4: SPI Overview
MDC(K)PARTNERS SPI Overview = Sale of all four SPI businesses = Consideration: $27 million for 92.5% of business *$20 million at closing *$1 million annually for 5 years related to a consulting arrangement "7.5% equity interest in the newly formed SPI = Expected Close Date: mid-November
Slide 5: Summary of Consolidated Results
Summary of Consolidated Results MDC(K)PARTNERS 25S 0 mitions) Three Months Ended September 30, Nine Months Ended September 30, 2006 2005 _% Change 2006 2005, % Change Revenue S li $970 43° $ 293 $ 2610 147 Operating Expenses Cost of services sold 572 555 30 1778 155.2 146 Office and general expenses
Slide 6: Non-recurring Q3 Charges
MDC(K)PARTNERS Non-recurring Q3 Charges (USS in milions) ‘Non-recurring / Unusual Items: West Coast Office Shut-down Costs $2.9 Options Review Professional Fees 04 CRM Start Up Costs (2 new centers) 04 Total Non-Recurring / Unusual Items 37 Q3 Reported Operating Income 06 Adjusted Q3 Operating Incom
Slide 7: Summary of Segment Results — Revenue
Summary of Segment Results — Revenue MDC(K)PARTNERS (US$ inmilions) ‘Three Months Ended September 30, Nine Months Ended September 30, 2006 2005, % Change_ 2006 2005 % Change ‘Revenue Strategic Marketing Services $ 617 $597 33° $ 1803 $ 1538 172 Customer Relationship Management 209 16.6 25.8 60.7 49.
Slide 8: Q3 2006 Components of Revenue Growth by Segment
MDC(K)PARTNERS Q3 2006 Components of Revenue Growth by Segment Strategic Customer Specialized Weighted Marketing Relationship Communication Average Services ‘Management Services Total Acquisition Growth = = 23% 0.5% Foreign Exchange Growth 0.6% = 3.0% 1.0% Change in Accounting 0.8% = 0.5% Organic Gr
Slide 9: Nine Months Components of Revenue Growth by Segment
MDC(K)PARTNERS Strategic Customer Specialized Weighted Marketing Relationship Communication Average Services Management Services Total Acquisition Growth 7.6% : 1.6% 49% Foreign Exchange Growth 0.7% E 3.2% 1.2% Change in Accounting 03% P : 0.2% Organic Growth 8.5% 23.6% 4.5% Cs 35%)
Slide 10: Summary of Group Results — Total EBITDA
Summary of Group Results — Total EBITDA MDC(K)PARTNERS Amounts and percentages may not fot due 0 rounding. (USS in millions) Three Months Ended September 30, Nine Months Ended September 30, 2006 2005 % Change 2006 2005 % Change EBITDA Strategic Marketing Services $ 93 $15.1 (38.3) 30.4 $ 33.7 (9.7)
Slide 11: Summary of Segment Results — MDC's Share of EBITDA
10 MDC(K)PARTNERS Summary of Segment Results — MDC’s Share of EBITDA (8S in milion) Three Months Ended September 30, Nine Months Ended September 30, 2006 2005 % Change 2006 2005 % Change MDC EBITDA Strategic Marketing Services $ 80 $ 98 (18.8) $ 22.5 $ 218 32 Customer Relationship Management 13 14 (
Slide 12: Cash EPS Reconciliation
11 (USS in millions, except per share amounts) Cash EPS Reconciliation MDC(K)PARTNERS ‘Three Months Ended September 30, ‘Nine Months Ended September 30, 2006 2005 2006 2005 ‘Net Loss from Continuing Operations S31) 623) 8.4) 48) Depreciation & Amortization 7S 72 202 176 Stock Based Compensation 16 0
Slide 13: Free Cash Flow
12 Free Cash Flow (USS in millions) MDC(K)PARTNERS Three Months Ended September 30, ‘Nine Months Ended September 30, 3006 3008 7006 2005 Sources of Cask ‘MDC EBITDA - Continuing Operations $72 STA $209 $16.0 MDC EBITDA - Discontinued Operations 23 2 38 24 Cash Distributions to MDC from ‘aconsotidate
Slide 14: Liquidity Profile
13 Liquidity Profile Available Liquidity at September 30, 2006 (USS in lone) ‘Commitment Under Credit Facility $100.0 Borrowings Under Credit Facility 89.5 Letters of Credit 39 Funds Available Under Credit Facility $6.6 Available Cash 46 Liquidity $2 MDC(K)PARTNERS
Slide 15: Appendix
Appendix MDC(K)PARTNERS
Slide 16: Potential Contractual Put Obligations and Estimated Impact on EBITDA
15 MDC(K)PARTNERS Potential Contractual Put Obligations and Estimated Impact on EBITDA Estimated Put Impact at September 30, 2006 (USS in thousands) Cash Stock EBITDA 2006 $6,099 $206 $2,160 2007 6.618 1,206 3,481 2008 28,151 7,329 8,577 2009 31,689 8,564 4123 2010 10.650 3,935 2m Thereafter 2.578 1
Slide 17: Summary of Segments — Marketing Communications
16 MDC(K)PARTNERS Summary of Segments — Marketing Communications Strategic Marketing Services Allard Johnson ACLC Colle & McVoy Crispin Porter Bogusky Fletcher Martin Kirshenbaum Bond + Partners Margeotes Fertitta Powell Mono Vitro Robertson Zyman Group Customer Relationshi Management Accent Special
Slide 18: Definition of Non-GAAP Metrics
- EBITDA: EBITDA is a non-GAAP measure, that represents operating income (loss) plus depreciation » MDC’s Share of EBITDA: Represents EBITDA less minority interest. - Organic Revenue Growth: Organic revenue growth is a non-GAAP measure that refers to growth in - Cash Earnings: Cash earings is a non-