MDC during its second-quarter earnings call Thursday took the opportunity to tell investors that it hasn't lost any business from the SEC investigation.
The company's new chief, Scott Kauffman, who previously served as presiding director on the company's board of directors but took the helm last month, said, "I can say that we have not lost any business and our pipeline is as robust as I have ever seen it."
The second-quarter results come less than three weeks after the company announced its CEO and Chairman of the Board of Directors Miles Nadal was stepping down, a change that came amid the SEC investigation that began in October 2014 and looked into MDC's accounting practices, trading information and Mr. Nadal's expenses. This spring, the company said Mr. Nadal would pay back his employer $8.6 million, and that the investigation would be ongoing.
Last month, the company said that Mr. Nadal agreed to pay MDC $1.88 million, and $10.58 million over the next couple years (or sooner if the company sells), in addition to the $8.6 million the company said he agreed to pay earlier.
The executives did not provide much detail related to the investigation and where it stood at the moment. "All of us at MDC continue to cooperate fully with the SEC and are eager for the time when we address all of your questions directly and fully," said Mr. Kauffman. "Until then, I'd like to thank you for your continued understanding and compassion when we indicate that we're unable to address the particular issue because of the ongoing SEC inquiry."
Outside of the issues with Mr. Nadal and the SEC, the company, which owns 72andSunny, CP&B and Anomaly, among others, said that it will continue to "scale" its media business to take advantage of emerging opportunities in that space.
MDC Partners' Revenue climbed to $336.6 million from $299.4 million, an increase of 12.4% in the second quarter, the company said Thursday afternoon. Net income attributable to MDC Partners for the quarter was $29.6 million, up from $16.5 million in the same period in 2014. Net new-business wins totaled $27.3 million, including Paypal, Novartis and PayPal.
In the first six months of the year, revenue increased to $638.8 million from $574.2 million, an 11.3% increase. Net new business wins totaled $55.3 million for the first 6 months, the company said.