NEW YORK: MDC Partners' Strategic Marketing Services unit, which contains its PR agencies, reported revenue of $264.6 million the third quarter of 2015, representing 10.8% organic growth over Q3 2014.
For the first nine months of the year, the group achieved 10.3% organic growth on revenue of $775.1 million.
The holding company, which owns majority stakes in Hunter Public Relations, HL Group, Allison+Partners, Kwittken, and Sloane & Company, among others, reported overall organic revenue growth of 5.7% to $328.4 million in the third quarter. For the first nine months of the year, revenue was up 7.1% organically to $967.2 million.
The company’s net loss was $8.6 million in Q3 2015. Net new business wins totaled $34.1 million in the quarter. It also saw an operating profit of $23.6 million, compared with $21.3 million in the same period of last year.
For the first nine months of the year, the holding company’s net loss was $11.1 million and net new business wins totaled $89.4 million. MDC reported an operating profit of $73.3 million for the first nine months, compared with $62 million in the same period of last year.
David Doft, CFO of MDC, said in a statement that MDC expects to "finish the year out of the revolver and with a healthy positive cash position."
"We are reiterating guidance despite proactively taking a number of operational efficiency actions that will negatively impact this year, but will position us for accelerated performance in 2016 and beyond," he added in the earnings statement.
In July, 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.
MDC’s Q3 earnings report listed risks linked to company’s forward-looking statements, one of which included "the SEC's ongoing investigation and the related class action litigation claims."
Other risks included effects of international, national, and regional economic downturn and the company’s ability to attract and retain clients.
When MDC announced Nadal’s departure this summer, 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.