MDC Partners Inc. Reports Results For The Three Months Ended March 31, 2020

Company's Strategic Plan Delivering Significant Performance Improvements on Key Metrics

NEW YORK, April 29, 2020 /PRNewswire/ --

FIRST QUARTER HIGHLIGHTS:

    --  Revenue of $327.7 million in the first quarter versus $328.8 million in
        the prior period, a decline of 0.3%.
    --  Organic revenue increased 2.0% in the first quarter from the first
        quarter of 2019.
    --  Net loss attributable to MDC Partners common shareholders was $2.4
        million in the first quarter of 2020 versus $2.5 million a year ago.
    --  Net loss attributable to MDC Partners common shareholders for the last
        twelve months (LTM) of $17.2 million as of March 31, 2020 versus $17.3
        million as of December 31, 2019.
    --  Adjusted EBITDA of $39.6 million versus $21.5 million a year ago, an
        increase of 84.3%. Adjusted EBITDA Margin of 12.1%, compared with 6.5% a
        year ago.
    --  Excluding Kingsdale and Sloane, Adjusted EBITDA increased 110.1% in the
        first quarter of 2020 compared with the prior year period.
    --  Covenant EBITDA (LTM) of $200.7 million versus $180.5 million at year
        end 2019, an increase of 11.2%.
    --  Net New Business wins totaled a positive $8.4 million in the first
        quarter.

(NASDAQ: MDCA) - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three months ended March 31, 2020.

"MDC delivered significant improvements in the first quarter of 2020, returning to organic growth of 2%, nearly doubling Adjusted EBITDA, and boosting margins 560 basis points," said Mark Penn, Chairman and Chief Executive Officer of MDC Partners. "These results were game-changing for us in terms of implementing our New World Strategy, putting us in a much stronger position to manage through the pandemic that has enveloped the economy and the world. Many of the changes we made last year are reflected in our results over the last two quarters as our plans have been realized."

"We are operating on the basis of safety first and business second as we act to safeguard our people and advance our business in a radically new environment. Our agencies have adapted well to the new work from home policies and delivered significant new campaigns for clients as we help them navigate through these uncertain times with the best in cloud-based production tools and data-based creativity."

"Our efforts to reform and reshape MDC in the last year at all levels and to create a more cohesive, collaborative and efficient organization position us well to navigate this crisis now and prepare us for eventual recovery," Mr. Penn added.

Frank Lanuto, Chief Financial Officer, added, "Our new network structure and our cost-savings initiatives paid off in the first quarter, with significant improvements over the prior year period across our income statement and balance sheet. We ended the first quarter with a solid cash balance and reduced leverage from year end, down to 4.3x. We remain deeply committed to addressing all our clients' needs going forward and continuing to reduce costs in response to current market conditions."

First Quarter and Year-to-Date 2019 Financial Results

Revenue for the first quarter of 2020 was $327.7 million versus $328.8 million for the first quarter of 2019, a decline of 0.3%. The effect on revenue of foreign exchange due to the strong US Dollar was negative 0.5%, the impact of non-GAAP acquisitions (dispositions), net was negative 1.7%, and organic revenue was positive 2.0%. Organic revenue was unfavorably impacted by 7 basis points from higher billable pass-through costs incurred on clients' behalf from certain of our partner firms acting as principal.

Net New Business wins in the first quarter of 2020 totaled $8.4 million.

Net loss attributable to MDC Partners common shareholders for the first quarter of 2020 was $2.4 million versus a net loss of $2.5 million for the first quarter of 2019. This improvement was primarily due to a decline in expenses principally driven by a reduction in staff costs, offset by the change in foreign exchange gain and losses. Diluted loss per share attributable to MDC Partners common shareholders for the first quarter of 2020 was $0.03 versus diluted loss per share of $0.04 for the first quarter of 2019.

Adjusted EBITDA for the first quarter of 2020 was $39.6 million versus $21.5 million for the first quarter of 2019, an increase of 84.3%. The increase was primarily driven by a reduction in staff costs, partially offset by a decline in revenues. This led to a 560 basis point increase in Adjusted EBITDA margin in the first quarter of 2020 to 12.1% from 6.5% in the first quarter of 2019. Excluding the impact of the Kingsdale and Sloane divestitures, Adjusted EBITDA increased 110.1% in the first quarter of 2020 compared with the prior year period.

Net loss attributable to MDC Partners common shareholders for the last twelve months (LTM) was $17.2 million as of March 31, 2020 versus a $17.3 million loss as of December 31, 2019.

Covenant EBITDA for the last twelve months (LTM) was $200.7 million at March 31, 2020 versus $180.5 million at December 31, 2019, an increase of 11.2%. The change was primarily driven by the increase in Adjusted EBITDA.

Financial Outlook

Given the uncertainties in the global business environment arising from the COVID-19 pandemic, the Company is not providing a 2020 outlook for Revenue and Covenant EBITDA at this time.

Conference Call

Management will host a conference call on Wednesday, April 29, 2020, at 8:30 a.m. (ET) to discuss its results. The conference call will be accessible by dialing 1-412-902-4266 or toll free 1-888-346-6216. An investor presentation has been posted on our website at www.mdc-partners.com and may be referred to during the conference call.

A recording of the conference call will be available one hour after the call until 12:00 a.m. (ET), May 6, 2020, by dialing 1-412-317-0088 or toll free 1-877-344-7529 (passcode 10136141), or by visiting our website at www.mdc-partners.com.

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communications networks in the world. As "The Place Where Great Talent Lives," MDC Partners is celebrated for its innovative advertising, public relations, branding, digital, social and event marketing agency partners, which are responsible for some of the most memorable and effective campaigns for the world's most respected brands. By leveraging technology, data analytics, insights and strategic consulting solutions, MDC Partners drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at www.mdc-partners.com and follow us on Twitter at http://www.twitter.com/mdcpartners.

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 (SEC) 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. Such non-GAAP financial measures include the following:

(1) Organic Revenue: "Organic revenue growth" and "organic revenue decline" refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) "non-GAAP acquisitions (dispositions), net". Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that represents operating profit plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items.

(4) Covenant EBITDA: Covenant EBITDA is a measure that includes pro forma adjustments for acquisitions, one-time charges, permitted dispositions and other items, as defined in the Company's Credit Agreement. Pro forma adjustments for our real estate consolidation to our new headquarters at 1 World Trade Center ("1WTC") are calculated to include the lease expense recognized as of the first period required by US GAAP for 1WTC and excluding the future costs of all leases that will either be terminated or sublet as permitted dispositions in connection with the relocation. We believe that the presentation of Covenant EBITDA is useful to investors as it eliminates the effect of certain non-cash and other items not necessarily indicative of a company's underlying operating performance. In addition, the presentation of Covenant EBITDA provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Company's Credit Agreement.

Included in this earnings release are tables reconciling MDC Partners' reported results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company's beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as "estimates", "expects", "contemplates", "will", "anticipates", "projects", "plans", "intends", "believes", "forecasts", "may", "should", and variations of such words or similar expressions are intended to identify 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 international, national and regional economic
        conditions that could affect the Company or its clients, including as a
        result of the recent COVID-19 outbreak;
    --  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;
    --  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 and the additional risk factors outlined in more detail in the Company's Annual Report on Form 10-K and in the Company's other SEC filings.


                                                                                              
            
              SCHEDULE 1
                                                                                               
              MDC PARTNERS INC.
                                                                                       
       UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                         
         (US$ in 000s, Except per Share Amounts)




                                                                                                                                                          Three Months Ended March 31,


                                                                                                                                                 2020                                   2019

                                                                                                                                                                                        ---


     Revenue:



     Services                                                                                                                                        $
         327,742                            $
      328,791



     Operating Expenses:



     Cost of services sold                                                                                                                   222,693                                  237,153



     Office and general expenses                                                                                                              66,353                                   67,118



     Depreciation and amortization                                                                                                             9,206                                    8,838



     Other asset impairment                                                                                                                      161


                                                                                                                                              298,413                                  313,109



     Operating income                                                                                                                         29,329                                   15,682




     Other Income (Expenses):



     Interest expense and finance charges, net                                                                                              (15,612)                                (16,760)



     Foreign exchange gain (loss)                                                                                                           (14,757)                                   5,442



     Other, net                                                                                                                               16,334                                  (3,383)


                                                                                                                                             (14,035)                                (14,701)



     Income before income taxes and equity in earnings of non-consolidated affiliates                                                         15,294                                      981



     Income tax expense                                                                                                                       13,500                                      748



     Income before equity in earnings of non-consolidated affiliates                                                                           1,794                                      233



     Equity in earnings of non-consolidated affiliates                                                                                             -                                      83




     Net income                                                                                                                                1,794                                      316



     Net income attributable to the noncontrolling interest                                                                                    (791)                                   (429)



     Net income (loss) attributable to MDC Partners Inc.                                                                                       1,003                                    (113)



     Accretion on and net income allocated to convertible preference shares                                                                  (3,440)                                 (2,383)




     Net loss attributable to MDC Partners Inc. common shareholders                                                                                  $
         (2,437)                           $
      (2,496)




     Loss Per Common Share:



     Basic



     Net loss attributable to MDC Partners Inc. common shareholders                                                                                   $
         (0.03)                            $
      (0.04)




     Diluted



     Net loss attributable to MDC Partners Inc. common shareholders                                                                                   $
         (0.03)                            $
      (0.04)




     Weighted Average Number of Common Shares Outstanding:



     Basic                                                                                                                                72,397,661                               60,258,102



     Diluted                                                                                                                              72,397,661                               60,258,102


                                                       
              
                SCHEDULE 2
                                                         
                MDC PARTNERS INC.
                                                 
                UNAUDITED REVENUE RECONCILIATION
                                                 
                (US$ in 000s, except percentages)




                                                                                            Three Months Ended


                                                                      Revenue $                                                % Change

                                                                                                                                    ---

                            March 31, 2019                                        $
              328,791


               Organic revenue (1)                                        6,434                                                            2.0

                                                                                                                                            %


               Non-GAAP
                acquisitions
                (dispositions),                                                                                                             %
                net                                                     (5,683)                                                         (1.7)


               Foreign exchange                                         (1,800)                                                         (0.5)
                impact
                                                                                                                                            %


               Total change                                             (1,049)                                                         (0.3)

                                                                                                                                            %

                                                                                                                                               ---

                            March 31, 2020                                        $
              327,742





                            (1) "Organic revenue refers to the positive results of subtracting both the foreign exchange and
                             acquisition (disposition) components from total revenue growth. The acquisition (disposition)
                             component is calculated by aggregating prior period revenue for any acquired businesses, less the
                             prior period revenue of any businesses that were disposed of during the current period. The
                             organic revenue component reflects the constant currency impact of (a) the change in revenue of
                             the partner firms which the Company has held throughout each of the comparable periods presented,
                             and (b) "non-GAAP acquisitions (dispositions), net". Non-GAAP acquisitions (dispositions), net
                             consists of (i) for acquisitions during the current year, the revenue effect from such
                             acquisition as if the acquisition had been owned during the equivalent period in the prior year
                             and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as
                             if they had been owned during that entire year (or same period as the current reportable period),
    Note: Actuals may not foot due to rounding


                                                                                                                                                                              
              
                SCHEDULE 3
                                                                                                                                                                                
                MDC PARTNERS INC.
                                                                                                                                                        
                UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
                                                                                                                                                                        
                (US$ in 000s, except percentages)



              
                
                
                  
                    
                      
                        For the Three Months Ended March 31, 2020


                                                                                                                                                              Integrated                                          Media &                All Other   Corporate         Total
                                                                                                                                                   Agencies                                             Data
                                                                                                                                                    Network                                           Network



              Revenue                                                                                                                                          $208,328                                           $41,058                   $78,356                   $327,742

                                                                                                                                                                                                                                                                         ===




              Net loss attributable to MDC Partners Inc. common                                                                                                                                                                                                   (2,437)
    shareholders



              Adjustments to reconcile to operating income (loss):



              Accretion on convertible preference shares                                                                                                                                                                                                            3,440



              Net income attributable to the noncontrolling                                                                                                                                                                                                           791
    interests



              Income tax expense                                                                                                                                                                                                                                   13,500



              Interest expense and finance charges, net                                                                                                                                                                                                            15,612



              Foreign exchange loss                                                                                                                                                                                                                                14,757



              Other, net                                                                                                                                                                                                                                         (16,334)




              Operating income (loss)                                                                                                                           $29,193                                              $617                    $7,857     $(8,338)       $29,329



              
                margin                                                                                                                                  14.0                                                             1.5                    10.0                  8.9


                                                                                                                                                                       %                                                              %                      %                   %





              Additional adjustments to reconcile to Adjusted
    EBITDA:



              Depreciation and amortization                                                                                                                       6,267                                               808                     1,899          232          9,206



              Other asset impairment                                                                                                                                161                                                                                                  161



              Stock-based compensation                                                                                                                            2,861                                              (13)                       80          142          3,070



              Deferred acquisition consideration adjustments                                                                                                    (5,044)                                              375                        69                    (4,600)



              Distributions from non-consolidated affiliates (2)                                                                                                      -                                                                                  (14)          (14)



              Other items, net (3)                                                                                                                                    -                                                                                 2,416          2,416

                                                                                                                                                                                                                                                                         ---


              Adjusted EBITDA (1)                                                                                                                               $33,438                                            $1,787                    $9,905     $(5,562)       $39,568



              
                Adjusted EBITDA margin                                                                                                                  16.1                                                             4.4                    12.6                 12.1


                                                                                                                                                                       %                                                              %                      %                   %









              
                (1) Adjusted EBITDA is a non-GAAP measure, and as shown above it represents operating income (loss) plus depreciation and amortization, stock-based
    compensation, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, impairment and other items. See "Non-GAAP
    Measures" herein.


              
                (2) Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from
    the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).


              
                (3) Other items, net includes items such as severance expense and other restructuring expenses. See Schedule 8 for a reconciliation of amounts.


              Note: Effective in the first quarter of 2020, the Company reorganized its management structure resulting in the aggregation of certain Partner Firms into
    integrated groups ("Networks"). In connection with the reorganization, we reassessed our reportable segments to align our external reporting with how we
    operate the Networks under our new organizational structure. Prior periods presented have been recast to reflect the change in reportable segments.


              Note: Actuals may not foot due to rounding.


                                                                                                                                                      
              
                SCHEDULE 4
                                                                                                                                                        
                MDC PARTNERS INC.
                                                                                                                                 
                UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
                                                                                                                                                
                (US$ in 000s, except percentages)




              
                For the Three Months Ended March 31, 2019


                                                                                                                                                             Integrated                                        Media &             All Other          Corporate                            Total
                                                                                                                                                  Agencies                                        Data
                                                                                                                                                   Network                                      Network

                                                                                                                                                                                                                                                                      ---


              Revenue                                                                                                                                         $206,910                              $43,232           $78,649                                                $328,791

                                                                                                                                                                                                                                                                                ===




              Net loss attributable to MDC Partners Inc. common                                                                                                                                                                                                (2,496)
    shareholders



              Adjustments to reconcile to operating income (loss):



              Accretion on convertible preference shares                                                                                                                                                                                                         2,383



              Net income attributable to the noncontrolling                                                                                                                                                                                                        429
    interests



              Equity in earnings of non-consolidated affiliates                                                                                                                                                                                                   (83)



              Income tax expense                                                                                                                                                                                                                                   748



              Interest expense and finance charges, net                                                                                                                                                                                                         16,760



              Foreign exchange income                                                                                                                                                                                                                          (5,442)



              Other, net                                                                                                                                                                                                                                         3,383




              Operating income (loss)                                                                                                                          $15,512                              $(1,649)           $6,641               $(4,822)                $15,682



              
                margin                                                                                                                                  7.5                                  (3.8)                8.4                                                     4.8


                                                                                                                                                                      %                                     %                  %                                                      %





              Additional adjustments to reconcile to Adjusted
    EBITDA:



              Depreciation and amortization                                                                                                                      5,715                                  993             1,913                    217                   8,838



              Other asset impairment                                                                                                                                 -



              Stock-based compensation                                                                                                                           4,459                                                    86                (1,573)                  2,972



              Deferred acquisition consideration adjustments                                                                                                   (6,491)                                 687            (1,839)                                      (7,643)



              Distributions from non-consolidated affiliates (2)                                                                                                     -



              Other items, net (3)                                                                                                                                   -                                                                      1,626                   1,626

                                                                                                                                                                                                                                                                      ---


              Adjusted EBITDA (1)                                                                                                                              $19,195                                  $31            $6,801               $(4,552)                $21,475



              
                Adjusted EBITDA margin                                                                                                                  9.3                                    0.1                 8.6                                                     6.5


                                                                                                                                                                      %                                     %                  %                                                      %





              
                (1) Adjusted EBITDA is a non-GAAP measure, and as shown above it represents operating income (loss) plus depreciation and amortization, stock-based
    compensation, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, impairment and other items. See "Non-GAAP
    Measures" herein.
    (2) Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from
    the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).
    (3) Other items, net includes items such as restructuring expenses. See Schedule 8 for a reconciliation of amounts.
    Note: Effective in the first quarter of 2020, the Company reorganized its management structure resulting in the aggregation of certain Partner Firms into
    integrated groups ("Networks"). In connection with the reorganization, we reassessed our reportable segments to align our external reporting with how we
    operate the Networks under our new organizational structure. Prior periods presented have been recast to reflect the change in reportable segments.
    Note: Actuals may not foot due to rounding.


                                                                                                                                                                                                                                        
              
                SCHEDULE 5
                                                                                                                                                                                                                                          
                MDC PARTNERS INC.
                                                                                                                                                                                                                            
       UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO COVENANT EBITDA
                                                                                                                                                                                                                                            
                (US$ in 000s)






                                                                                                                                                                                                                                   2019                                                               2020                                      Covenant EBITDA
                                                                                                                                                                                                                                                                                                                                      (LTM) (1)



                                                                                                                                                    Q1                                        Q2          Q3                     Q4                                                      Q1                              Q4-2019 -               Q1-2020 -L
                                                                                                                                                                                                                                                                                                                     LTM           TM

                                                                                                                                                                                                                                                                                                                                                        ---


              Net income (loss) attributable to MDC Partners                                                                                                        $
              (2,497)                          $
       776                                                                         $
          (5,058)                                                 $
       (10,488)                   $
       (2,437)                     $
       (17,267)        $
       (17,207)
    Inc. common shareholders



              Adjustments to reconcile to operating income:



              Accretion on and net income allocated to                                                                                          2,383                                              3,515                       3,306                                                                          3,373                                      3,440                          12,577                           13,634
    convertible preference shares



              Net income attributable to the noncontrolling                                                                                       429                                              3,043                       7,265                                                                          5,419                                        791                          16,156                           16,518
    interests



              Equity in losses of non-consolidated affiliates                                                                                    (83)                                             (206)                       (63)                                                                                                                                                  (352)                           (269)



              Income tax expense                                                                                                                  746                                              2,088                       3,457                                                                          4,241                                     13,500                          10,532                           23,286



              Interest expense and finance charges, net                                                                                        16,761                                             16,413                      16,110                                                                         15,658                                     15,612                          64,942                           63,793



              Foreign exchange loss (gain)                                                                                                    (5,442)                                           (2,932)                      3,973                                                                        (4,349)                                    14,757                         (8,750)                          11,449



              Other, net                                                                                                                        3,384                                                745                         431                                                                        (2,158)                                  (16,334)                          2,402                         (17,316)




              Operating income                                                                                                                 15,681                                             23,442                      29,421                                                                         11,696                                     29,329                          80,240                           93,888





              Adjustments to reconcile to Adjusted EBITDA:



              Depreciation and amortization                                                                                                     8,838                                             10,663                       9,368                                                                          9,460                                      9,206                          38,329                           38,697



              Goodwill and other asset impairment                                                                                                   -                                                                        1,944                                                                          5,875                                        161                           7,819                            7,980



              Stock-based compensation                                                                                                          2,972                                              3,634                       6,026                                                                         18,408                                      3,070                          31,040                           31,138



              Deferred acquisition consideration adjustments                                                                                  (7,643)                                             2,073                       1,943                                                                          9,030                                    (4,600)                          5,403                            8,446



              Distributions from non-consolidated affiliates                                                                                        -                                                31                       (202)                                                                         2,219                                       (14)                          2,048                            2,034



              Other items, net (2)                                                                                                              1,626                                              6,594                         705                                                                            349                                      2,416                           9,274                           10,064




              Adjusted EBITDA                                                                                                                  21,474                                             46,437                      49,205                                                                         57,037                                     39,568                         174,153                          192,247





              Adjustments to reconcile to Covenant EBITDA:



              Proforma dispositions (3)                                                                                                       (2,701)                                             (729)                      (996)                                                                       (1,294)                                     (124)                        (5,720)                         (3,143)



              Severance due to eliminated positions                                                                                             1,534                                              2,346                       1,956                                                                          3,221                                      2,133                           9,057                            9,656



              Other adjustments, net (4)                                                                                                        1,412                                                989                         228                                                                            368                                        357                           2,997                            1,942



              
                Covenant adjusted EBITDA                                                                                                     $
              
                21,719                     $
     
        49,043                                                                     $
      
            50,393                                             $
        
         59,332              $
        
         41,934               $
        
          180,487 $
        
           200,702








              
                (1) Covenant EBITDA is a measure that includes pro forma adjustments for acquisitions, one-time charges, permitted dispositions and other adjustments, as defined
    in the Company's Credit Agreement. Covenant EBITDA is calculated as the aggregate of operating results for the rolling last twelve months (LTM). Each quarter is
    presented to provide the information utilized to calculate Covenant EBITDA. Historical Covenant EBITDA may be re-casted in the current period for any proforma
    adjustments related to acquisitions and/or dispositions in the current period. See "Non-GAAP Measures" herein.
    (2) Other items, net includes items such as severance expense, other restructuring expenses and costs associated with the Company's strategic review process.
    (3) Represents Kingsdale and Sloane EBITDA for the respective period.
    (4) Other adjustments, net primarily includes one-time professional fees and costs associated with real estate consolidation.
    Note: Actuals may not foot due to rounding.


                                                            
             
                
                  SCHEDULE 6
                                                                   
                  MDC PARTNERS INC.
                                                          
                 UNAUDITED CONSOLIDATED BALANCE SHEETS
                                                                     
                  (US$ in 000s)






                                                                                 March 31,                                    December 31,
                                                                                      2020                             2019

                                                                                                                       ---




              
                ASSETS



              Current Assets:


               Cash and cash equivalents                                                       $
              221,102                           $
       106,933


               Accounts receivable, less allowance
                for doubtful accounts of $2,118
                and $3,304                                                         407,311                            450,403


               Expenditures billable to clients                                     22,763                             30,133



              Other current assets                                                 44,689                             35,613




              Total Current Assets                                                695,865                            623,082


               Fixed assets, at cost, less
                accumulated depreciation of
                $132,174 and $129,579                                               75,767                             81,054


               Right-of-use assets - operating
                leases                                                             216,194                            223,622



              Goodwill                                                            725,390                            740,674


               Other intangible assets, net                                         50,640                             54,893



              Deferred tax assets                                                  77,378                             85,988



              Other assets                                                         29,622                             30,179




              Total Assets                                                                  $
              1,870,856                         $
       1,839,492



                            LIABILITIES, REDEEMABLE NONCONTROLLING
    INTERESTS, AND SHAREHOLDERS' DEFICIT



              Current Liabilities:



              Accounts payable                                                                $
              153,491                           $
       200,148


               Accruals and other liabilities                                      325,826                            353,575



              Advance billings                                                    146,803                            171,742


               Current portion of lease
                liabilities -operating leases                                       48,022                             48,659


               Current portion of deferred
                acquisition consideration                                           46,337                             45,521


               Total Current Liabilities                                           720,479                            819,645



              Long-term debt                                                    1,014,260                            887,630


               Long-term portion of deferred
                acquisition consideration                                           26,399                             29,699


               Long-term lease liabilities -
                operating leases                                                   211,254                            219,163



              Other liabilities                                                    35,523                             25,771



              Total Liabilities                                                 2,007,915                          1,981,908



               Redeemable Noncontrolling Interests                                  35,698                             36,973



              Commitments, Contingencies, and Guarantees



              Shareholders' Deficit:


               Convertible preference shares,
                145,000 authorized, issued                                         152,746                            152,746
    and outstanding at March 31, 2020 and December 31,
     2019


               Common stock and other paid-in
                capital                                                             99,587                            101,469



              Accumulated deficit                                               (468,508)                         (469,593)


               Accumulated other comprehensive
                (loss) income                                                        3,669                            (4,269)


               MDC Partners Inc. Shareholders'
                Deficit                                                          (212,506)                         (219,647)



              Noncontrolling interests                                             39,749                             40,258


               Total Shareholders' Deficit                                       (172,757)                         (179,389)


               Total Liabilities, Redeemable
                Noncontrolling Interests and                                                 $
              1,870,856                         $
       1,839,492
    Shareholders' Deficit


                                           
              
                SCHEDULE 7
                                             
                MDC PARTNERS INC.
                                      
                UNAUDITED SUMMARY CASH FLOW DATA
                                               
                (US$ in 000s)




                                                              Three Months Ended March 31,


                                            2020                                        2019

                                                                                        ---

               Net cash used
                in operating
                activities                         $
              (19,954)                        $
       (81,200)


               Net cash
                provided by
                investing
                activities                16,645                                        18,101


               Net cash
                provided by
                financing
                activities               119,642                                        60,753


               Effect of
                exchange rate
                changes on
                cash, cash
                equivalents,
                and                      (2,164)                                        (576)
    cash held in trusts



               Net increase
                (decrease) in
                cash, cash
                equivalents,
                and cash held                       $
              114,169                          $
       (2,922)
    in trusts including cash
     classified within assets
     held for sale


               Change in cash
                and cash
                equivalents
                held in trusts
                classified                     -                                      (3,307)
    within held for sale


               Change in cash
                and cash
                equivalents
                classified
                within assets
                held                           -                                        1,728
    for sale



               Net increase
                (decrease) in
                cash and cash
                equivalents                         $
              114,169                          $
       (4,501)




              Note: Actuals may not foot due to rounding.


                                                                                                                                                                                             
              
                SCHEDULE 8
                                                                                                                                                                                               
                MDC PARTNERS INC.
                                                                                                                                                                              
            UNAUDITED RECONCILIATION OF COMPONENTS OF NON-GAAP MEASURES
                                                                                                                                                                                                 
                (US$ in 000s)






                                                                                                                                                                                                                                                      2019                              2020


                                                                                                                                                    Q1                     Q2         Q3                           Q4                           YTD            Q1

                                                                                                                                                                                                                                                              ---


              
                NON-GAAP ACQUISITIONS (DISPOSITIONS), NET



              GAAP revenue from current year acquisitions                                                                                
              $                                                                              $
              698                     $
            1,347                     $
             1,396                     $
            3,441  
     $



              GAAP revenue from prior year acquisitions (1)                                                                                    15,685                              1,519                                                       1,109            291                            18,604



              Foreign exchange impact                                                                                                               -                                                                                          470          (246)                              224                                (248)



              Contribution to organic revenue (growth) decline (2)                                                                            (4,008)                             (440)                                                    (2,185)       (1,694)                          (8,327)                               (411)



              Prior year revenue from dispositions (3)                                                                                        (1,825)                           (5,995)                                                    (3,178)       (4,505)                         (15,503)                             (5,024)



              Non-GAAP acquisitions (dispositions), net                                                                                                          $
        9,852                                                    $
              (4,218)                  $
            (2,437)                  $
             (4,758)                   $
           (1,561)          $
           (5,683)





                                                                                                                                                                                                                                                      2019                              2020


                                                                                                                                                    Q1                     Q2         Q3                           Q4                           YTD            Q1

                                                                                                                                                                                                                                                              ---


              
                OTHER ITEMS, NET



              Severance and other restructuring expenses                                                                                            -                             6,703                                                         705                                           7,408                                1,334



              Strategic review process costs                                                                                                    1,626                              (109)                                                                      349                             1,866                                1,082



              Total other items, net                                                                                                                             $
        1,626                                                      $
              6,594                       $
            705                       $
             349                     $
            9,274          $
              2,416





                                                                                                                                                                                                                                                      2019                              2020


                                                                                                                                                    Q1                     Q2         Q3                           Q4                           YTD            Q1

                                                                                                                                                                                                                                                              ---


              
                CASH INTEREST, NET & OTHER



              Cash interest paid                                                                                                              (1,629)                          (30,014)                                                      (882)      (29,698)                         (62,223)                                 145



              Bond interest accrual adjustment                                                                                               (14,625)                            14,625                                                    (14,625)        14,625                                                              (14,625)




              Adjusted cash interest paid                                                                                                    (16,254)                          (15,389)                                                   (15,507)      (15,073)                         (62,223)                            (14,480)



              Interest income                                                                                                                     149                                138                                                         165            162                               614                                (114)



              Total cash interest, net & other                                                                                                                $
        (16,105)                                                  $
              (15,251)                 $
            (15,342)                 $
             (14,911)                  $
           (61,609)         $
           (14,594)





                                                                                                                                                                                                                                                      2019                              2020


                                                                                                                                                    Q1                     Q2         Q3                           Q4                           YTD            Q1

                                                                                                                                                                                                                                                              ---


              
                CAPITAL EXPENDITURES, NET



              Capital expenditures                                                                                                            (3,606)                           (4,317)                                                    (5,863)       (4,810)                         (18,596)                             (1,546)




                                                                                                                                                                                                                                                      2019                              2020


                                                                                                                                                    Q1                     Q2         Q3                           Q4                           YTD            Q1

                                                                                                                                                                                                                                                              ---


              
                MISCELLANEOUS OTHER DISCLOSURES



              Net income attributable to the noncontrolling interests                                                                             429                              3,043                                                       7,265          5,419                            16,156                                  791



              Cash taxes                                                                                                                                         $
        1,677                                                      $
              1,817                       $
            137                   $
             (1,335)                    $
            2,296            $
              849





              
                (1)  GAAP revenue from prior year acquisitions for 2020 and 2019 relates to acquisitions which occurred in 2019 and 2018, respectively.
    (2) Contribution to organic revenue represents the change in revenue, measured on a constant currency basis, relative to the comparable pre-acquisition
    period for acquired businesses that are included in the Company's organic revenue growth (decline) calculation.
    (3) Prior year revenue from dispositions reflects the incremental impact on revenue for the comparable period after the Company's disposition of such disposed
    business, plus revenue from each business disposed of by the Company in the previous year through the twelve month anniversary of the disposition.



              Note: Actuals may not foot due to rounding.

CONTACT:
Erica Bartsch
Sloane & Company
212-446-1875
IR@mdc-partners.com

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SOURCE MDC Partners Inc.