MDC Partners reported third-quarter earnings Monday morning, saying it has continued to cut costs as the holding company seeks a new chief executive and continues a strategic review.
The company reported that third quarter revenue was flat year over year at $375.8 million. It also saw organic revenue growth of 1.5 percent. MDC's organic growth factors offset the effects of currency movements and acquisitions.
MDC announced in September that its chief executive and chairman, Scott Kauffman, would be stepping down from these positions, and would resign on Dec. 31 or when his successor starts, whichever comes first. The company said he would also remain on the board until June 2019. But Kauffman did not lead today's earnings call — it instead was led by MDC chief financial officer David Doft, who fielded a relatively brief call that ran shy of 25 minutes.
Also in September, MDC announced that it intends to consider "potential strategic alternatives" that could include the sale of the agency holding company. On Monday's call, Doft said the company could not further comment or answer questions on the CEO search or the strategic review process.
MDC's stock rebounded about 10 percent to $2.57 in late morning trading. But that came after shares on Friday slumped to an intraday low of $2.28, the lowest price since the Great Recession in 2009. MDC stock had traded above $4 before the company's announcements in September.
"I want you to know that we are working diligently to improve our company's performance, particularly in cost reductions and renewed investment in new business acquisitions," Doft said on the call.
Doft said the company has taken "targeted actions throughout the year to lower the cost structure of our agencies that will deliver annualized savings in excess of $50 million." He said the company expects an incremental $29 million in savings in 2019 from "already-actioned" headcount reductions and real estate consolidation.
Doft said the holding company has invested in senior business development and creative talent at several agencies, which is paying off in new business prospects. New business gross wins totaled $49 million, with $36 million in losses, he said. Those wins included 72andSunny landing Trojan Brand Condoms and Match.com; and Mono winning Leinenkugel's.
Contributing: Bradley Johnson