MDC PARTNERS INC. REPORTS RECORD RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2011

Maintains Quarterly Dividend of $0.14 per Share

FIRST QUARTER HIGHLIGHTS:

• Revenue increased to $217.5 million versus $135.9 million in Q1 2010, an increase of 60.0%
• Organic revenue increased 26.5% for Q1 2011, an over 1,200 basis point acceleration from Q4 2010
• EBITDA increased to $14.8 million versus $9.3 million in Q1 2010, an increase of 59.1%
• Free Cash Flow before working capital improved to $0.8 million versus an outflow of ($1.4) million in Q1 2010
• Total Free Cash Flow including working capital was an outflow of ($30.2) million, consistent with the seasonality of our business, versus an outflow of ($13.5) million in Q1 2010
• Technology and digital services revenue made up 51% of total revenues in Q1 2011
• Net new business wins of $8.2 million for Q1 2011

NEW YORK, April 28 /PRNewswire-FirstCall/ - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three months ended March 31, 2011.

"What a terrific way to begin the year," said Miles S. Nadal, Chairman and Chief Executive Officer of MDC Partners. "The transformational work that our partners continue to produce for our clients, and our unique understanding of how consumers consume influence in a digital economy is resulting in market leading organic revenue growth of 26.5 percent and our strongest EBITDA results for Q1.  We are building a business that is at the forefront of where this industry is going, and are creating platforms that have longevity, rather than short-term campaigns, leading to long lasting relationships with clients driven by increasing return on marketing investment and resulting in a strong pace of new business. While it's still early in the year, with our differentiated model and a smart approach to investment and cost management, we are reiterating our 2011 fiscal year guidance."

Guidance for 2011 is maintained as follows:

Consolidated revenue for the first quarter of 2011 was $217.5 million, an increase of 60.0% compared to $135.9 million in the first quarter of 2010.  EBITDA (as defined) for the first quarter of 2011 was $14.8 million compared to $9.3 million in the first quarter of 2010.  Net income attributable to MDC Partners in the first quarter was a loss of $8.7 million compared to a loss of $10.2 million in the first quarter of 2010.  Diluted earnings per share from continuing operations attributable to MDC Partners common shareholders for the first quarter of 2011 was a loss of ($0.31) compared with a loss of ($0.35) per share in the same period of 2010.  Free cash flow from operations (as defined) was $0.8 million in the first quarter of 2011, compared with an outflow of ($1.4) million in the first quarter of 2010.

"Our strong results this quarter sets us up nicely to deliver the organic growth, margin expansion and free cash flow generation that we forecasted for 2011," said David Doft, Chief Financial Officer.  "We are confident that we can approach a $1 billion run rate in revenue in the next nine months and the capital raise that we recently successfully completed underscores how strongly the market believes in our model and prospects for future shareholder value creation. While our balance sheet provides us with the flexibility to build on the momentum we have right now, we will continue to take a conservative and disciplined approach to growth, with particular emphasis on organic growth."

Add-On Senior Notes Offering Completed On April 19, 2011

On April 19, 2011, MDC Partners completed a private offering of US$55 million aggregate principal amount of 11% senior unsecured notes due 2016 (the "Notes").  The Notes were priced at a premium to par at an issue price of 111%, resulting in a yield-to-maturity of approximately 8%.  Gross proceeds received from this offering were approximately $61.1 million. MDC Partners used the net proceeds of this offering to repay borrowings under its senior secured revolving credit facility.  The new Notes are a follow-on issue to the Company's outstanding senior unsecured notes.

"We are thrilled to have been able to opportunistically take advantage of favorable credit market conditions to raise incremental capital.  The successful bond offering provides added flexibility with which to fund our growth strategy," added Mr. Nadal. "The continued reduction in our cost of capital and added liquidity is a testament to the strong results we have delivered since initially issuing our bonds in the public markets in October 2009. We expect this additional capital will be a key driver of our ability to deliver growing incremental shareholder value in the future."

MDC Partners Announces $0.14 per Share Cash Dividend

MDC Partners today also announced that its Board of Directors has declared a cash dividend of $0.14 per share on all of its outstanding Class A shares and Class B shares.  The dividend will be payable on or about May 31, 2011 to shareholders of record at the close of business on May 16, 2011.

Conference Call

Management will host a conference call on Friday, April 29, 2011 at 8:00 a.m. (ET) 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 Friday, May 13, by dialing 1-416-849-0833 or toll free 1-800-642-1687 (passcode 62983172) 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 insights 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 months ended March 31, 2011 and 2010; and (2) presenting Total Free Cash Flow, Free Cash Flow and Free Cash Flow per Share (as defined) for the three months ended March 31, 2011 and 2010.  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.

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, from borrowings under its credit facility and through incurrence of bridge or other debt financing, any 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.

(1) Capital Expenditures, net represents capital expenditures net of landlord reimbursements.  

(2) 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. Total Free Cash Flow represents Free Cash Flow plus changes in working capital plus other changes in cash.

SOURCE MDC Partners Inc.

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