EX-99.1 2 v168678_ex99-1.htm
Exhibit 99.1

Beginning with fourth quarter 2009 results, the Company will report two segments, Strategic Marketing Services Group and Performance Marketing Services Group:

1.  Strategic Marketing Services Group — This segment will include all integrated advertising agencies and strategic consulting services firms, including:

Allard Johnson
Attention
Bruce Mau Design
Colle + McVoy
Crispin Porter + Bogusky
Fletcher Martin
Hello Design
Henderson Bas
HL Group
Kirshenbaum Bond Senecal + Partners
Mono
Redscout
Skinny
Veritas
VitroRobertson
Yamamoto Moss MacKenzie
Zig

2.  Performance Marketing Services Group — This segment will predominantly include firms that use data analytics, provide consumer insights, or one-to-one consumer engagements to satisfy the growing need for targetable, measurable solutions and cost effective means of driving increasing return on marketing investment for clients, including:

Accent
Bryan Mills
Computer Composition Corp
Northstar Research Partners
Onbrand
6 Degrees
Source Marketing
Targetcom
 
Below are reclassified financials for each of the first three quarters in 2009 and 2008 and for the nine month-periods ended September 30, 2009 and 2008.
 
1


Summary financial information concerning the Company’s reclassified reportable segments are shown in the following tables:
 
Three Months Ended March 31, 2009
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
84,463
   
$
42,275
   
$
   
$
126,738
 
                                 
Cost of services sold
   
52,680
     
33,199
     
     
85,879
 
                                 
Office and general expenses
   
19,612
     
7,628
     
3,912
     
31,152
 
                                 
Depreciation and amortization
   
5,372
     
2,127
     
94
     
7,593
 
                                 
Operating Profit/(Loss)
   
6,799
     
(679
   
(4,006
   
2,114
 
                                 
Other Income (Expense):
                               
Other income, net
                           
2,629
 
Interest expense, net
                           
(3,558
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
1,185
 
Income tax expense
                           
615
 
                                 
Income from continuing operations before equity in affiliates
                           
570
 
Equity in earnings of non-consolidated affiliates
                           
93
 
                                 
Income from continuing operations
                           
663
 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(252)
 
                                 
Net Income
                           
411
 
Net income attributable to the noncontrolling interests
   
(676
 )
   
294
     
     
(382
 Net income attributable to MDC Partners Inc.
                         
$
29
 
                                 
Non cash stock based compensation
 
$
433
   
$
190
   
$
1,274
   
$
1,897
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
772
   
$
39
   
$
19
   
$
830
 
                                 
Goodwill and intangibles
 
$
223,022
   
$
57,505
   
$
   
$
280,527
 
                                 
Total assets
 
$
377,113
   
$
120,526
   
$
38,446
   
$
536,085
 
 
2

 
Three Months Ended March 31, 2008
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services Group
   
Corporate
   
Total
 
                         
Revenue
 
$
86,146
   
$
54,756
   
$
   
$
140,902
 
                                 
Cost of services sold
   
55,146
     
40,373
     
     
95,519
 
                                 
Office and general expenses
   
21,153
     
8,919
     
4,383
     
34,455
 
                                 
Depreciation and amortization
   
7,464
     
2,244
     
68
     
9,776
 
                                 
Operating Profit/(Loss)
   
2,383
     
3,220
     
(4,451
   
1,152
 
                                 
Other Income (Expense):
                               
Other income, net
                           
3,627
 
Interest expense, net
                           
(3,444
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
1,335
 
Income tax recovery
                           
292
 
                                 
Income from continuing operations before equity in affiliates
                           
1,627
 
Equity in earnings of non-consolidated affiliates
                           
140
 
                                 
Income from continuing operations
                           
1,767
 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(3,036
                                 
Net Loss
                           
(1,269
Net income attributable to the noncontrolling interests
   
(1,163
 )
   
(962
   
     
(2,125
 Net loss attributable to MDC Partners Inc.
                         
$
(3,394
                                 
Non cash stock based compensation
 
$
446
   
$
284
   
$
1,268
   
$
1,998
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
2,815
   
$
1,334
   
$
28
   
$
4,177
 
                                 
Goodwill and intangibles
 
$
212,196
   
$
63,054
   
$
   
$
275,250
 
                                 
Total assets
 
$
379,445
   
$
146,604
   
$
13,641
   
$
539,690
 

 
3

 

Three Months Ended June 30, 2009
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
88,248
   
$
46,634
   
$
   
$
134,882
 
                                 
Cost of services sold
   
52,760
     
35,478
     
     
88,238
 
                                 
Office and general expense
   
18,517
     
7,517
     
4,139
     
30,173
 
                                 
Depreciation and amortization
   
5,480
     
2,043
     
81
     
7,604
 
                                 
Operating Profit/(Loss)
   
11,491
     
1,596
     
(4,220
)
   
8,867
 
                                 
Other Income (Expense):
                               
Other expense, net
                           
(2,541
)
Interest expense, net
                           
(3,653
)
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
2,673
 
Income tax expense
                           
1,608
 
                                 
Income from continuing operations before equity in affiliates
                           
1,065
 
Equity in earnings of non-consolidated affiliates
                           
105
 
                                 
Income from continuing operations
                           
1,170
 
                                 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(108
)
                                 
Net Income
                           
1,062
 
Net income attributable to the noncontrolling interests
   
(978
)
   
(5
)
   
     
(983
)
Net income attributable to MDC Partners Inc.
                         
$
79
 
                                 
Non cash stock based compensation
 
$
371
   
$
184
   
$
1,490
   
$
2,045
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
676
   
$
540
   
$
41
   
$
1,257
 
                                 
Goodwill and intangibles
 
$
221,468
   
$
57,954
   
$
   
$
279,422
 
                                 
Total assets
 
$
357,067
   
$
120,464
   
$
66,749
   
$
544,280
 

 
4

 

Three Months Ended June 30, 2008
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
96,405
   
$
60,544
   
$
   
$
156,949
 
                                 
Cost of services sold
   
59,178
     
43,155
     
     
102,333
 
                                 
Office and general expense
   
22,005
     
9,585
     
4,845
     
36,435
 
                                 
Depreciation and amortization
   
6,118
     
2,398
     
69
     
8,585
 
                                 
Operating Profit/(Loss)
   
9,104
     
5,406
     
(4,914
)
   
9,596
 
                                 
Other Income (Expense):
                               
Other expense, net
                           
(501
)
Interest expense, net
                           
(3,228
)
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
5,867
 
Income tax expense
                           
4,485
 
                                 
Income from continuing operations before equity in affiliates
                           
1,382
 
Equity in earnings of non-consolidated affiliates
                           
81
 
                                 
Income from continuing operations
                           
1,483
 
                                 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(2,891
)
                                 
Net loss
                           
(1,428
)
Net loss attributable to the noncontrolling interests
   
(1,955
)
   
(1,089
)
   
     
(3,044
)
Net loss attributable to MDC Partners Inc.
                         
$
(4,472
)
                                 
Non cash stock based compensation
 
$
571
   
$
257
   
$
1,035
   
$
1,863
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
2,934
   
$
1,475
   
$
8
   
$
4,417
 
                                 
Goodwill and intangibles
 
$
212,679
   
$
62,659
   
$
   
$
275,338
 
                                 
Total assets
 
$
390,686
   
$
143,775
   
$
18,210
   
$
552,671
 

 
5

 

Three Months Ended September 30, 2009
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
92,680
   
$
41,945
   
$
   
$
134,625
 
                                 
Cost of services sold
   
54,023
     
31,503
     
     
85,526
 
                                 
Office and general expenses
   
19,105
     
7,578
     
4,718
     
31,401
 
                                 
Depreciation and amortization
   
5,386
     
2,013
     
115
     
7,514
 
                                 
Operating Profit/(Loss)
   
14,166
     
851
     
(4,833
   
10,184
 
                                 
Other Income (Expense):
                               
Other expense, net
                           
(3,080
Interest expense, net
                           
(3,775
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
3,329
 
Income tax expense
                           
1,149
 
                                 
Income from continuing operations before equity in affiliates
                           
2,180
 
Equity in earnings of non-consolidated affiliates
                           
60
 
                                 
Income from continuing operations
                           
2,240
 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
 
                                 
Net Income
                           
2,240
 
Net income attributable to the noncontrolling interests
   
(2,073
)
   
(131
   
     
(2,204
 Net income attributable to MDC Partners Inc.
                         
$
36
 
                                 
Non cash stock based compensation
 
$
705
   
$
292
   
$
1,234
   
$
2,231
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
853
   
$
315
   
$
33
   
$
1,201
 
                                 
Goodwill and intangibles
 
$
232,580
   
$
58,366
   
$
   
$
290,946
 
                                 
Total assets
 
$
393,818
   
$
117,603
   
$
68,817
   
$
580,238
 

 
6

 

Three Months Ended September 30, 2008
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
88,246
   
$
53,843
   
$
   
$
142,089
 
                                 
Cost of services sold
   
54,157
     
40,402
     
     
94,559
 
                                 
Office and general expenses
   
19,967
     
8,998
     
2,899
     
31,864
 
                                 
Depreciation and amortization
   
5,055
     
2,303
     
69
     
7,427
 
                                 
Operating Profit/(Loss)
   
9,067
     
2,140
     
(2,968
   
8,239
 
                                 
Other Income (Expense):
                               
Other income, net
                           
2,418
 
Interest expense, net
                           
(3,117
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
7,540
 
Income tax expense
                           
2,222
 
                                 
Income from continuing operations before equity in affiliates
                           
5,318
 
Equity in earnings of non-consolidated affiliates
                           
69
 
                                 
Income from continuing operations
                           
5,387
 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(771
                                 
Net Income
                           
4,616
 
Net income attributable to the noncontrolling interests
   
(1,103
 )
   
(263
   
     
(1,366
 Net income attributable to MDC Partners Inc.
                         
$
3,250
 
                                 
Non cash stock based compensation
 
$
475
   
$
205
   
$
1,149
   
$
1,829
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
1,380
   
$
439
   
$
23
   
$
1,842
 
                                 
Goodwill and intangibles
 
$
209,908
   
$
61,733
   
$
   
$
271,641
 
                                 
Total assets
 
$
376,009
   
$
142,907
   
$
9,799
   
$
528,715
 

 
7

 

Nine Months Ended September 30, 2009
(thousands of United States dollars)  
 
   
Strategic
Marketing
Services
   
Performance
Marketing
Services
   
Corporate
   
Total
 
                         
Revenue
 
$
265,392
   
$
130,854
   
$
   
$
396,246
 
                                 
Cost of services sold
   
159,464
     
100,180
     
     
259,644
 
                                 
Office and general expenses
   
57,234
     
22,723
     
12,769
     
92,726
 
                                 
Depreciation and amortization
   
16,239
     
6,184
     
288
     
22,711
 
                                 
Operating Profit/(Loss)
   
32,455
     
1,767
     
(13,057
   
21,165
 
                                 
Other Income (Expense):
                               
Other expense, net
                           
(2,991
Interest expense, net
                           
(10,987
                                 
Income from continuing operations before income taxes, equity in affiliates
                           
7,187
 
Income tax expense
                           
3,373
 
                                 
Income from continuing operations before equity in affiliates
                           
3,814
 
Equity in earnings of non-consolidated affiliates
                           
258
 
                                 
Income from continuing operations
                           
4,072
 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
                           
(361
                                 
Net Income
                           
3,711
 
Net income attributable to the noncontrolling interests
   
(3,727
 )
   
158
     
     
(3,569
 Net income attributable to MDC Partners Inc.
                         
$
142
 
                                 
Non cash stock based compensation
 
$
1,509
   
$
666
   
$
3,998
   
$
6,173
 
                                 
Supplemental Segment Information:
                               
                                 
Capital expenditures
 
$
2,302
   
$
894
   
$
92
   
$
3,288
 
                                 
Goodwill and intangibles
 
$
232,580
   
$
58,366
   
$
   
$
290,946
 
                                 
Total assets
 
$