Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q1 2019 Earnings Presentation
21 slides from Stagwell's earnings presentation, May 7, 2019
Slide 1: Management Presentation First Quarter 2019 Results
May 7, 2019 Management Presentation First Quarter 2019 Results
Slide 2: Forward Looking Statements & Other Information
2 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
3 SUMMARY • Mark Penn joined MDC as CEO on March 18, 2019 following the $100 million investment from The Stagwell Group on March 14, 2019 • 1Q 2019 Revenue growth impacted by timing of client wins and losses; Company expects improved organic revenue growth for remainder of 2019 • Cost control initia
Slide 4: First Quarter 2019 Financial Highlights
4 ----- DRAFT ----- • Revenue of $328.8 million versus $327.0 million a year ago • Organic revenue decreased 0.9%, including a 242 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners common shareholders of $2.5 million in the first quarter of 2019 versus a lo
Slide 5: Consolidated Revenue and Earnings
5 CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended March 31, 2019 2018 % Change Revenue: $ 328.8 $ 327.0 0.6 % Operating expenses: Cost of services sold 237.2 243.0 (2.3 ) % Office and general expenses 67.1 83.9 (20.3 ) % Depreciation and amortization 8.8 12
Slide 6: Revenue Summary
6 Organic revenue decline of 0.9%, including a 242 basis points benefit from increased billable pass - through costs incurred on clients’ behalf from certain of our partner firms acting as principal. REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Revenue $ % Change March 31
Slide 7: Revenue by Geography and Segment
7 REVENUE BY GEOGRAPHY AND SEGMENT 1 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses betw
Slide 8: Revenue by Client Industry
8 Top 10 clients remained flat at approximately 23% of revenue versus a year ago (largest <5%) REVENUE BY CLIENT INDUSTRY Note: Actuals may not foot due to rounding. Year - over - year category growth shown on a reported basis. Q1 2019 Above 10% Communications, Financials, Transportation 0% to 10% F
Slide 9: Adjusted EBITDA
9 ADJUSTED EBITDA 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition. 2 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods presented have been recast
Slide 10: Covenant EBITDA
COVENANT EBITDA 2019 Q1 Q2 Q3 Q4 Q1 Q4-2018 - LTM Q1-2019 - LTM Net income (loss) attributable to MDC Partners Inc. common shareholders (31,443) 1,133 (18,234) (83,749) $ (2,497) $ (132,293) $ (103,347) Adjustments to reconcile to operating profit (loss): Accretion on and net income allocated to con
Slide 11: Summary of Cash Flow
11 SUMMARY OF CASH FLOW (US$ in millions) Three Months Ended March 31, 2019 2018 Net cash used in operating activities $ (81.2 ) $ (61.0 ) Net cash provided by (used in) investing activities 18.1 (3.9 ) Net cash provided by financing activities 60.8 47.6 Effect of exchange rate changes on cash, cash
Slide 12: 2019 Financial Outlook
12 2019 FINANCIAL OUTLOOK Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2019 guidance under the “unreasona ble efforts” exception in item 10(e)(1)(i)(B) of Regulation S - K. Note: See appendix for definitions of non - GAAP measures 2019 Outlook Commentary
Slide 13: Appendix
13 APPENDIX
Slide 14: Revenue Trending Schedule
14 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 Revenue United States $274,682 $304,463 $289,701 $303,517 $1,172,364 $256,524 $295,268 $296,544 $3
Slide 15: Adjusted EBITDA Trending Schedule
15 ADJUSTED EBITDA TRENDING SCHEDULE 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition . (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 ADVERTISING AND COMMUNICATIONS GROUP Revenue $344,700 $390,532 $375,800 $402,747 $1,513,779 $326,968 $379,743 $375
Slide 16: Reconciliations
16 RECONCILIATIONS (US$ in millions) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Non-GAAP acquisitions (dispositions), net GAAP revenue from current year acquisitions -$ -$ -$ -$ -$ -$ 11,066$ 12,734$ 12,317$ 36,117 15,685$ GAAP revenue from prior year acquisitions * 18,552 24,983 - - 43,535 - - - - - - Impact
Slide 17: Available Liquidity
17 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) March 31, 2019 December 31, 2018 Commitment Under Facility $ 250.0 $ 325.0 Drawn 32.8 68.1 Undrawn Letters of Credit 4.7 4.7 Undrawn Commitments Under Fa
Slide 18: Current Credit Picture
18 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 19: Temporal Put Obligations and Impact on Adjusted EBITDA
19 TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA 1 This amount is in addition to (i) $28.9 million of options to purchase only exercisable upon termination not within the contr ol of the Company, or death, and (ii) the excess of the initial redemption value recorded in Redeemable Noncontrol
Slide 20: Definition of Non-GAAP Measures
20 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 21: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com