Mark Penn only became CEO of MDC Partners in March, yet there were already signs of progress in the company’s Q2 financial results released Wednesday.
The company enjoyed new business growth of $43 million in the quarter, compared to a loss of $11.7 million in the corresponding period one year ago. However, the results also suggested that Penn has a long way to go to put the struggling holding company back in the black. Revenue for the quarter was $362.1 million, a 4.6% decline from $379.7 million a year ago. Organic revenue in the quarter was also down 2.4%.
Adjusted EBITDA was $46.4 million, compared to $43.0 million for the same period last year. “The improvement was primarily driven by reduced staff costs at partner agencies and lower staff costs and professional fees at corporate,” said the company in a release.
“We began aggressively executing against a comprehensive two-year plan that will create a more nimble organization and return this business to consistent revenue growth,” said Penn in the release. “The plan is built around agency cooperation and network collaboration, with digital-first thinking and media and creative integration across agencies.”
Penn became CEO after his company, Stagwell Group, acquired a minority stake in MDC for $100 million. The deal ended months of uncertainty at MDC, including the departure of previous CEO Scott Kauffman last September and an activist shareholder revolt at the start of the year over poor performance compared to other advertising holding companies.
Canadian operations for the Toronto-born, New York-based advertising holding company include Anomaly, Union, Forsman & Bodenfors and Kenna.
When Penn took over, he said that he planned to find cost savings of $35 million though back office efficiencies, while generating new business, and reorganizing MDC’s various agencies to better work together. “Tasks of scale and even tasks of chaos are something I’m really familiar with,” he told The Wall Street Journal at the time.
“You’ve got to provide offerings for today’s CMOs who increasingly want more for less and who want to make sure you can deliver across all mediums,” he said. “The biggest challenge for MDC is getting all the agencies firing on strong cylinders. Some agencies are doing quite well. Some have run into real headwinds.”
In July, MDC merged its MDC Media Partners with Gale—bringing together its entire suite of media services, from strategy, planning and buying to programmatic, data and analytics—under one CEO.
“Our recent move to align MDC Media Partners with Gale is just one example of one of many initiatives we are pursuing to create a more cohesive network,” said Penn on Wednesday. “We believe this plan will create a more efficient organization that delivers consistent financial returns and allows partner agencies to thrive in a rapidly changing and increasingly competitive marketplace.”