MDC Partners Inc (MDCA) saw its loss widen to $33.53 million, or $0.64 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $8.60 million, or $0.17 a share.
Revenue during the quarter grew 6.35 percent to $349.25 million from $328.42 million in the previous year period. Operating margin for the quarter stood at negative 3.08 percent as compared to a positive 7.19 percent for the previous year period.
Operating loss for the quarter was $10.75 million, compared with an operating income of $23.62 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $46.26 million compared with $53.47 million in the prior year period. At the same time, adjusted EBITDA margin contracted 304 basis points in the quarter to 13.25 percent from 16.28 percent in the last year period.
Scott Kauffman, chairman and chief executive officer of MDC Partners, said, “The third quarter was impacted by the many actions we are taking to position our business for long-term profitable growth and balance sheet strength. We are reducing expenses, optimizing our partner portfolio, and re-prioritizing how we allocate capital, all while investing in our partners to ensure that they have the right resources to continue to drive outstanding performance for our clients. While some of these efforts carry near-term costs, which is contributing to our lower full year financial projections, we expect to reap the benefits in 2017. In addition, the suspension of our dividend will free up over $11 million in cash per quarter, which we plan to allocate toward enhanced liquidity, accelerated de-leveraging and investment in growth initiatives. We are confident that the moves we are making, alongside our active pipeline of new business opportunities, will lead to a reacceleration of the business beginning in 2017.”
Mdc Partners projects revenue to be in the range of $1,365 million to $1,375 million for financial year 2016.
Operating cash flow remains negative
MDC Partners Inc has spent $58.92 million cash to meet operating activities during the nine month period as against cash outgo of $10.49 million in the last year period.
The company has spent $14.66 million cash to meet investing activities during the nine month period as against cash outgo of $25.62 million in the last year period.
Cash flow from financing activities was $32.66 million for the nine month period as against cash outgo of $63.67 million in the last year period.
Cash and cash equivalents stood at $21.74 million as on Sep. 30, 2016, up 37.93 percent or $5.98 million from $15.76 million on Sep. 30, 2015.
Working capital remains negative
Working capital of MDC Partners Inc was negative $319.15 million on Sep. 30, 2016 compared with negative $326.54 million on Sep. 30, 2015. Current ratio was at 0.63 as on Sep. 30, 2016, up from 0.62 on Sep. 30, 2015.
Days sales outstanding went down to 110 days for the quarter compared with 117 days for the same period last year.
Debt moves up
MDC Partners Inc has witnessed an increase in total debt over the last one year. It stood at $951.45 million as on Sep. 30, 2016, up 15.02 percent or $124.26 million from $827.19 million on Sep. 30, 2015. Total debt was 57.93 percent of total assets as on Sep. 30, 2016, compared with 51.15 percent on Sep. 30, 2015.
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