NEW YORK: MDC Partners' Strategic Marketing Services unit, which contains its PR agencies, reported revenue of $270.1 million the second quarter of 2015, representing 11.5% organic growth over Q2 2014.
For the first six months of the year, the group achieved 10.1% organic growth on revenue of $510.5 million.
Two weeks ago, MDC founder, chairman, and CEO Miles Nadal resigned from the company amid an investigation by the Securities and Exchange Commission into his travel, medical, and other expenses.
Scott Kauffman, presiding director on MDC’s board, took over Nadal’s role at the holding company, which owns majority stakes in Hunter Public Relations, HL Group, Allison+Partners, Kwittken, and Sloane & Company, among others.
MDC reported overall organic revenue growth of 8.3% to $336.6 million in the second quarter. For the first six months of the year, revenue was up 7.8%% organically to $638.8 million
The company’s net income climbed more than 79% to $29.6 million in Q2 2015. Net new business wins totaled $27.3 million in the quarter. It also saw an operating profit of $44.5 million, compared with $29.1 million in the same period of last year.
For the first six months of the year, the holding company’s net loss was $2.5 million and net new business wins totaled $55.3 million. Operating profit for the first half of the year was $49.7 million, compared with $40.7 million last year.
David Doft, CFO of MDC, said in a statement that the company’s performance for the quarter was "strong and consistent with our expectations."
"We remain firmly on track for a successful second half of the year and to achieving our 17% to 19% mid-term margin outlook," he added in the statement.
The earnings report also included information regarding potential "inherent risks and uncertainties" about MDC’s forward-looking statements.
The first factor listed points to "risks associated with the subpoena and ongoing SEC investigation and related securities litigation claims."
Some other risk factors include international, national, and regional downtown and the company’s ability to attract and retain clients.
When MDC announced Nadal’s departure at the end of July, the company said in a statement that he has "agreed to repay to MDC Partners all expenses that were requested to be repaid by the special committee of the board of directors, including an additional $1.88 million that was recently identified."
In terms of Nadal’s retirement, MDC also announced that the former CEO will be required to repay $10.6 million in retention amounts received between 2012 and 2015 in accordance with MDC’s agreements. Nadal will not be eligible for any compensation payments or severance upon retirement.
In addition to Nadal, MDC chief account officer Michael Sabatino stepped down from his role at the end of July, according to a statement. Sabatino has agreed to pay back $208,535 in cash bonus payments received between 2012 and 2014.