MDC PARTNERS INC. REPORTS STRONG RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010

Oct 27, 2010, 17:08 ET from MDC Partners Inc.

Increases Quarterly Dividend 18.2% to $0.13 per Share from $0.11 per Share

THIRD QUARTER HIGHLIGHTS:

    -   Revenue increased to $178.6 million versus $134.4 million in Q3 2009,
        an increase of 32.9%
    -   Organic revenue increased 7.5% for Q3 2010, an over 200 basis point
        acceleration from Q2 2010
    -   EBITDA increased to $20.4 million versus $20.2 million in Q3 2009
    -   Total Free Cash Flow of $38.9 million, an increase of 12.0% from
        $34.7 million in Q3 2009
    -   Net new business wins of $14.7 million for Q3 2010 brings the year to
        date total to $47.5 million
    -   Technology and digital services revenue increased to 45% from 43% in
        Q2 2010
    -   2010 guidance maintained with revenues expected to increase 17.2% to
        20.0% to $640-655 million from $545.9 million in 2009
    -   EBITDA expected to increase 22.6% to 25.4% for 2010 to $86-88 million
        from $70.2 million in 2009
    -   Total Free Cash Flow guidance increased to $71-73 million for 2010,
        representing an expected increase of 28.6% to 32.2% from $55.2
        million in 2009
    -   Increasing quarterly dividend 18.2% to $0.13 per share from $0.11 per
        share in prior quarter

NEW YORK, Oct. 27 /PRNewswire-FirstCall/ - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three and nine months ended September 30, 2010.

"Our industry leading financial results are driven by our investment in technology and digital innovation, the extraordinary quality of our talent pool, our entrepreneurial culture, and our rigorous focus on driving meaningful Returns on Marketing Investment for our clients," said Miles S. Nadal, Chairman and Chief Executive Officer of MDC Partners. "Our durable competitive advantage utilizes technological expertise, creative and marketing services, data analytics, strategic consulting, and actionable ideas that make brands famous and drive consumer action that optimizes shareholder value for our clients. We seamlessly provide all of these required services, which has led to a strong pace of new business wins, accelerating revenue growth, another quarterly dividend increase, and total free cash flow generation of $170-180 million over the last three years including 2010. As importantly, we are very well positioned for even stronger growth in 2011."

Guidance for 2010 is updated as follows:

                            -------------------------------------------------
                                            Implied                 Implied
                                              Year                    Year
                                Adjusted      over     Pro Forma      over
                                  2010        Year        2010        Year
                                Guidance     Change     Estimate     Change
    -------------------------------------------------------------------------
    Revenue                  $640 - $655   +17.2% to $675 - $690   +23.6% to
                                 million      +20.0%     million      +26.4%
    EBITDA                     $86 - $88   +22.6% to   $96 - $98   +36.8% to
                                 million      +25.4%     million      +39.7%
    Free Cash Flow             $41 - $43    +0.2% to   $48 - $50   +17.3% to
                                 million       +5.1%     million      +22.2%
      + Change in Working        +$30                    +$30
        Capital and Other        million                 million
                            -------------           -------------
    Total Free Cash Flow       $71 - $73   +28.6% to   $78 - $80   +41.3% to
                                 million      +32.2%     million      +44.9%
    -------------------------------------------------------------------------

Note: The "Pro Forma 2010 Estimate" section of the above table accounts for recent acquisitions as if financial contributions to MDC occur for the entirety of 2010.

Consolidated revenue for the third quarter of 2010 was $178.6 million, an increase of 32.9% compared to $134.4 million in the third quarter of 2009. EBITDA (as defined) for the third quarter of 2010 was $20.4 million compared to $20.2 million in the third quarter of 2009, which was negatively impacted by revenue that was expected to be recognized in the third quarter but is now expected to be recognized in the fourth quarter, as well as higher costs associated with an increasing number of new business pitches. Net income (loss) attributable to MDC Partners Inc. in the third quarter was a loss of ($10.9) million compared to nominal income in the third quarter of 2009. Diluted earnings (loss) per share from continuing operations attributable to MDC Partners Inc. common shareholders for the third quarter of 2010 was a loss of ($0.36) compared with $0.00 per share in the same period of 2009. Free cash flow from operations (as defined) was $8.5 million in the third quarter of 2010, compared with $14.0 million in the third quarter of 2009. Total free cash flow (equal to free cash flow, as defined, plus changes in working capital and other changes in cash) increased 12.0% to $38.9 million in the third quarter of 2010 from $34.7 million in the same quarter last year.

For the nine months ended September 30, 2010 consolidated revenue was $484.4 million, an increase of 22.5% compared to $395.6 million in the same period of 2009. EBITDA (as defined) for the first nine months of 2010 was $47.9 million, a decrease of 5.7% compared to $50.8 million in the first nine months of 2009. Net income (loss) attributable to MDC Partners Inc. for the first nine months of 2010 was a loss of ($26.9) million compared to income of $0.1 million in the first nine months of 2009. Diluted earnings (loss) per share from continuing operations attributable to MDC Partners Inc. common shareholders for the nine months ended September 30, 2010 was a loss of ($0.91) compared with income of $0.03 per share in the same period of 2009.

"Our unique business model has enabled us to deliver superior financial performance in a disciplined manner with a conservative approach to our balance sheet," said David Doft, Chief Financial Officer. "Organic growth is accelerating and we fully expect that this trend will continue for the remainder of 2010 and for 2011 as well. Importantly, our recent acquisitions, all of which are accretive and fully integrated into our network, are performing on or ahead of plan, which are expected to drive material incremental returns going forward. Finally, we expect to deliver even better financial results in 2011 in terms of organic growth, margin expansion and free cash flow generation, especially as we get the full benefit of the recent acquisitions."

MDC Partners Announces $0.13 per Share Cash Dividend

MDC Partners today also announced that its Board of Directors has declared a cash dividend of $0.13 per share on all of its outstanding Class A shares and Class B shares. The dividend will be payable on or about November 26, 2010 to shareholders of record at the close of business on November 12, 2010.

"We are dedicated to rewarding all of our shareholders for their loyalty and commitment," said Mr. Nadal. "The payment of cash dividends remains an important part of our ongoing strategy to maximize shareholder value. The new dividend of $0.13 per share represents an 18.2% increase above MDC Partners' last dividend payment and is representative of the significant increase in free cash flow that MDC has achieved to date. As total free cash flow continues to increase over time, we expect dividend payments to continue to increase as well while still having ample capital available to finance our growth initiatives."

Conference Call

Management will host a conference call on Thursday, October 28, 2010 at 8:00 a.m. (EST) to discuss results. The conference call will be accessible by dialing 1-647-427-7450 or toll free 1-888-231-8191. An investor presentation has been posted on our website www.mdc-partners.com and will be referred to during the conference call.

A recording of the conference call will be available until Thursday, November 11, 2010 by dialing 1-416-849-0833 or toll free 1-800-642-1687 (passcode 16264289) or by visiting our website at www.mdc-partners.com.

About MDC Partners Inc.

MDC is a Business Transformation Organization that utilizes technology, marketing communications, data analytics and strategic consulting solutions to drive meaningful returns on Marketing and Communications

Investments for multinational clients in the United States, Canada, Europe, and the Caribbean.

MDC's durable competitive advantage is to Empower the Most Talented Entrepreneurial Thought Leaders to Drive Business Success to new levels of Achievement, for both our Clients and our Shareholders, reinforcing MDC's reputation as "The Place Where Great Talent Lives."

MDC Partners' Class A shares are publicly traded on NASDAQ under the symbol "MDCA" and on the Toronto Stock Exchange under the symbol "MDZ.A".

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 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. These non-GAAP financial measures relate to: (1) presenting EBITDA and EBITDA margin (as defined) for the three and nine months ended September 30, 2010 and 2009; and (2) presenting Total Free Cash Flow, Free Cash Flow and Free Cash Flow per Share (as defined) for the three and nine months ended September 30, 2010 and 2009. Included in this earnings release are tables reconciling MDC's reported results to arrive at these non-GAAP financial measures.

This press release contains forward-looking statements. The Company's representatives may also make forward-looking statements orally from time to time. Statements in this press release that are not historical facts, including statements about the Company's beliefs and expectations, recent business and economic trends, potential acquisitions, estimates of amounts for deferred acquisition consideration and "put" option rights, constitute 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 severe effects of national and regional
        economic downturn;

    -   the Company's ability to attract new clients and retain existing
        clients;

    -   the financial success of the Company's clients;

    -   the Company's ability to retain and attract key employees;

    -   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 "put" option right and deferred acquisition
        consideration;

    -   the successful completion and integration of acquisitions which
        complement and expand the Company's business capabilities; and

    -   foreign currency fluctuations.

In addition to improving organic growth for its existing operations, the Company's business strategy includes ongoing efforts to engage in material acquisitions of ownership interests in entities in the marketing communications services industry. The Company intends to finance these acquisitions by using available cash from operations and through incurrence of bridge or other debt financing, either of which may increase the Company's leverage ratios, or by issuing equity, which may have a dilutive impact on existing shareholders proportionate ownership. At any given time the Company may be engaged in a number of discussions that may result in one or more material acquisitions. These opportunities require confidentiality and may involve negotiations that require quick responses by the Company. Although there is uncertainty that any of these discussions will result in definitive agreements or the completion of any transactions, the announcement of any such transaction may lead to increased volatility in the trading price of the Company's securities.

Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Annual Report on Form 10-K under the caption "Risk Factors" and in the Company's other SEC filings.

                                 SCHEDULE 1

                              MDC PARTNERS INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              (US$ in 000s, except share and per share amounts)

                                Three Months Ended      Nine Months Ended
                                   September 30,           September 30,
                              ----------------------- -----------------------
                                 2010        2009        2010        2009
    -------------------------------------------------------------------------

    Revenue                     $178,597    $134,421    $484,401    $395,607

    Operating Expenses:
      Cost of services sold      122,891      85,230     336,056     258,633
      Office and general
       expenses                   45,094      31,323     118,690      92,524
      Depreciation and
       amortization                9,353       7,502      23,196      22,663
                              ----------------------- -----------------------
                                 177,338     124,055     477,942     373,820
                              ----------------------- -----------------------

    Operating profit               1,259      10,366       6,459      21,787

    Other Income (Expenses):
      Other income (expense)         453      (3,072)       (423)     (2,979)
      Interest expense and
       finance charges            (8,887)     (3,792)    (24,340)    (11,276)
      Interest income                 55          20         155         292
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations
     before income taxes
     and equity in affiliates     (7,120)      3,522     (18,149)      7,824

    Income tax expense               300       1,215       1,208       3,589
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations
     before equity in
     affiliates                   (7,420)      2,307     (19,357)      4,235
    Equity in earnings (loss)
     of non-consolidated
     affiliates                   (1,496)         60      (1,639)        258
                              ----------------------- -----------------------

    Income (loss) from
     continuing operations        (8,916)      2,367     (20,996)      4,493
    Loss from discontinued
     operations, net of taxes       (556)        (79)     (1,410)       (625)
                              ----------------------- -----------------------
    Net income (loss)             (9,472)      2,288     (22,406)      3,868
    Net income attributable
     to the noncontrolling
     interests                    (1,446)     (2,252)     (4,503)     (3,726)
                              ----------------------- -----------------------
    Net income (loss)
     attributable to MDC
     Partners Inc.              ($10,918)        $36    ($26,909)       $142
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (Loss) Per Common
     Share:
      Basic:
        Income (loss) from
         continuing operations
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.36)      $0.00      ($0.91)      $0.03
        Discontinued operations   ($0.02)      $0.00      ($0.05)     ($0.02)
                              ----------------------- -----------------------
        Net income (loss)
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.38)      $0.00      ($0.96)      $0.01
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Income (Loss) Per Common
     Share:
      Diluted:
        Income (loss) from
         continuing operations
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.36)      $0.00      ($0.91)      $0.03
        Discontinued operations   ($0.02)      $0.00      ($0.05)     ($0.02)
                              ----------------------- -----------------------
        Net income (loss)
         attributable to MDC
         Partners Inc. common
         shareholders             ($0.38)      $0.00      ($0.96)      $0.01
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Weighted Average Number of
     Common Shares:
      Basic                   28,500,287  27,471,041  27,980,895  27,343,575
      Diluted                 28,500,287  29,009,655  27,980,895  27,838,740

    -------------------------------------------------------------------------



                                 SCHEDULE 2

                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Three Months Ended September 30, 2010

                               Strategic Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------

    Revenue                     $110,582     $68,015           -    $178,597
                                ---------------------------------------------
                                ---------------------------------------------
    Operating income (loss) as
     reported                     $7,758      $1,107     ($7,606)     $1,259
    margin                          7.0%        1.6%                    0.7%

    Add:
      Depreciation and
       amortization                4,277      4,990           86       9,353
      Stock-based compensation     2,376        483        4,089       6,948
      Acquisition deal costs         699        176           64         939
      Deferred acquisition
       consideration adjustments
       to P&L                        626      1,164         (126)      1,664
      Profit distributions
       from affiliates                 -          -          242         242
                                ---------------------------------------------

    EBITDA*                     15,736      7,920       (3,251)     20,405
    margin                         14.2%      11.6%                    11.4%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,
        stock-based compensation, acquisition deal costs, deferred
        acquisition consideration adjustments and profit distributions from
        affiliates.



                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Three Months Ended September 30, 2009

                               Strategic Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------

    Revenue                      $92,476     $41,945           -    $134,421
                             ------------------------------------------------
                             ------------------------------------------------

    Operating income (loss)
     as reported                 $14,348        $851     ($4,833)    $10,366
    margin                         15.5%        2.0%                    7.7%

    Add:
      Depreciation and
       amortization                5,374       2,013         115       7,502
      Stock-based
       compensation                  705         292       1,234       2,231
      Acquisition deal costs           -           -           -           -
      Deferred acquisition
       consideration
       adjustments to P&L              -           -           -           -
      Profit distributions
       from affiliates                 -           -          80          80
                             ------------------------------------------------

    EBITDA*                     20,427       3,156      (3,404)     20,179
    margin                         22.1%        7.5%                   15.0%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,
        stock-based compensation, acquisition deal costs, deferred
        acquisition consideration adjustments and profit distributions from
        affiliates.



                                 SCHEDULE 3

                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Nine Months Ended September 30, 2010

                               Strategic Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------

    Revenue                     $308,722    $175,679           -    $484,401
                             ------------------------------------------------
                             ------------------------------------------------

    Operating income (loss)
     as reported                 $24,791       ($210)   ($18,122)     $6,459
    margin                          8.0%       -0.1%                    1.3%

    Add:
      Depreciation and
       amortization               11,788      11,137         271      23,196
      Stock-based
       compensation                5,207       1,248       6,849      13,304
      Acquisition deal costs         739         841          89       1,669
      Deferred acquisition
       consideration
       adjustments to P&L            935       2,040           -       2,975
      Profit distributions
       from affiliates                 -           -         249         249
                             ------------------------------------------------

    EBITDA*                     43,460      15,056     (10,664)     47,852
    margin                         14.1%        8.6%                    9.9%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,
        stock-based compensation, acquisition deal costs, deferred
        acquisition consideration adjustments and profit distributions from
        affiliates.



                              MDC PARTNERS INC.
             RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
                      (US$ in 000s, except percentages)

    For the Nine Months Ended September 30, 2009

                               Strategic Performance
                               Marketing   Marketing
                                Services    Services   Corporate       Total
    -------------------------------------------------------------------------

    Revenue                     $264,753    $130,854           -    $395,607
                             ------------------------------------------------
                             ------------------------------------------------

    Operating income (loss)
     as reported                 $33,077      $1,767    ($13,057)    $21,787
    margin                         12.5%        1.4%                    5.5%

    Add:
      Depreciation and
       amortization               16,191       6,184         288      22,663
      Stock-based
       compensation                1,509         666       3,998       6,173
      Acquisition deal costs           -           -           -           -
      Deferred acquisition
       consideration
       adjustments to P&L              -           -           -           -
      Profit distributions
       from affiliates                 -           -         139         139
                             ------------------------------------------------

    EBITDA*                     50,777       8,617      (8,632)     50,762
    margin                         19.2%        6.6%                   12.8%

    -------------------------------------------------------------------------
    * EBITDA is a non-GAAP measure, but as shown above it represents
        operating income (loss) plus depreciation and amortization,
        stock-based compensation, acquisition deal costs, deferred
        acquisition consideration adjustments and profit distributions from
        affiliates.



                                 SCHEDULE 4

                              MDC PARTNERS INC.
                               FREE CASH FLOW
              (US$ in 000s, except share and per share amounts)

                                Three Months Ended      Nine Months Ended
                                   September 30,           September 30,
                              ----------------------- -----------------------
                                 2010        2009        2010        2009
    -------------------------------------------------------------------------

    EBITDA                       $20,405     $20,179     $47,852     $50,762
    Net Income Attibutable to
     Noncontrolling Interests     (1,446)     (2,252)     (4,503)     (3,726)
    Capital Expenditures          (2,446)     (1,201)     (8,166)     (3,285)
    Cash Taxes                        28         (85)       (775)       (487)
    Cash Interest, net & Other    (8,025)     (2,620)    (21,985)     (8,204)
                              ----------------------- -----------------------
    Free Cash Flow*             $8,516     $14,021     $12,423     $35,060
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    Diluted Common Shares
     Outstanding              28,500,287  29,009,655  27,980,895  27,838,740

    Free Cash Flow per Share       $0.30       $0.48       $0.44       $1.26
                              ----------------------- -----------------------
                              ----------------------- -----------------------

    * Free Cash Flow and Total Free Cash Flow are non-GAAP measures. As
    shown above, Free Cash Flow represents EBITDA less net income
    attributable to noncontrolling interests, less capital expenditures, less
    net cash interest (including interest paid and to be paid on the 11%
    Senior Notes), less cash taxes plus realized cash foreign exchange gains
    and excludes capitalized costs related to the October 2009 refinancing.
    Total Free Cash Flow represents Free Cash Flow plus changes in working
    capital plus other changes in cash.



                                 SCHEDULE 5

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


                                                  September 30,  December 31,
                                                      2010           2009
    -------------------------------------------------------------------------
    Assets
      Current Assets:
        Cash and cash equivalents                     $40,995        $51,926
        Accounts receivable, net                      190,505        118,211
        Expenditures billable to clients               34,239         24,003
        Other current assets                           12,365          8,105
                                                   --------------------------
      Total Current Assets                           $278,104        202,245

      Fixed assets, net                                35,826         35,375
      Investment in affiliates                          1,014          1,547
      Goodwill                                        458,170        301,632
      Other intangible assets, net                     57,135         34,715
      Deferred tax assets                              12,584         12,542
      Other assets                                     19,337         16,463
                                                   --------------------------
    Total Assets                                     $862,170       $604,519
                                                   --------------------------
                                                   --------------------------

    Liabilities and Shareholders' Equity
      Current Liabilities:
        Accounts payable                              $97,478        $77,450
        Accrued and other liabilities                  77,779         66,967
        Advance billings                              143,052         65,879
        Current portion of long term debt               1,385          1,456
        Current portion of deferred acquisition
         consideration                                 28,823         30,645
                                                   --------------------------
      Total Current Liabilities                       348,517        242,397

      Revolving credit facility                             -              -
      Long-term debt                                  284,756        216,490
      Long-term portion of deferred acquisition
       consideration                                   53,494              -
      Other liabilities                                 7,835          8,707
      Deferred tax liabilities                          8,986          9,051
                                                   --------------------------
      Total Liabilities                               703,588        476,645
                                                   --------------------------
                                                   --------------------------

    Redeemable Noncontrolling Interests                36,275         33,728
                                                   --------------------------
                                                   --------------------------

      Shareholders' Equity:
        Common shares                                 226,233        218,533
        Additional paid in capital                          -          9,174
        Charges in excess of capital                   (3,701)
        Accumulated deficit                          (158,069)      (131,160)
        Stock subscription receivable                    (217)          (341)
        Accumulated other comprehensive loss           (5,263)        (5,880)
                                                   --------------------------
        MDC Partners Inc. Shareholders' Equity         58,983         90,326
        Noncontrolling Interests                       63,324          3,820
                                                   --------------------------
      Total Equity                                    122,307         94,146
                                                   --------------------------

    Total Liabilities, Redeemable Noncontrolling
     Interests and Equity                            $862,170       $604,519
                                                   --------------------------
                                                   --------------------------



                                 SCHEDULE 6

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

                                                       Nine Months Ended
                                                         September 30,
                                                      2010           2009
    -------------------------------------------------------------------------
    Cash flows provided by continuing operating
     activities                                       $26,370        $50,424
      Discontinued operations                          (1,097)          (250)
                                                   --------------------------
    Net cash provided by operating activities          25,273         50,174
                                                   --------------------------

    Net cash used in continuing investing
     activities                                       (86,381)       (11,156)
      Discontinued operations                            (710)            (3)
                                                   --------------------------
    Net cash used in investing activities             (87,091)       (11,159)

    Net cash provided by (used in) continuing
     financing activities                              50,865         (8,923)

    Effect of exchange rate changes on cash
     and cash equivalents                                  22           (486)
                                                   --------------------------

    Net increase (decrease) in cash and cash
     equivalents                                     ($10,931)       $29,606
                                                   --------------------------
                                                   --------------------------

SOURCE MDC Partners Inc.