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STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021

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Stagwell Inc. (NASDAQ: STGW) reported substantial revenue growth with a 95.5% increase in 4Q and 65.5% for the full year. The fourth quarter revenue stood at $611.9 million, while full-year revenue was $1,469.4 million. However, the net income for 4Q dropped to $0.8 million from $22.2 million in the prior year. Pro Forma revenue showed a 4.6% decrease in 4Q. For 2022, the company anticipates Pro Forma Net Revenue growth of 18%-22% and adjusted EBITDA of $450 million - $480 million.

Positive
  • Fourth quarter revenue increased by 95.5% year-over-year.
  • Full-year revenue grew by 65.5% compared to last year.
  • Pro Forma organic net revenue rose 14.5% for the year and 11.3% in 4Q.
  • Net New Business wins reached $75 million in the fourth quarter.
  • Pro Forma Free Cash Flow is expected to grow by approximately 30% in 2022.
Negative
  • 4Q net income attributable to shareholders dropped to $0.8 million from $22.2 million year-over-year.
  • Pro Forma revenue in 4Q declined by 4.6% compared to the prior year.
  • GAAP Revenue growth of 95.5% in 4Q and 65.5% for the Full-Year
  • Pro Forma Organic Net Revenue growth of 11.3% in 4Q and 14.5% for the Full-Year
  • Ex-Advocacy Pro Forma Organic Net Revenue growth of 21.2% in 4Q and 18.0% for the Full-Year
  • Net Income attributable to Stagwell of $0.8M in 4Q and Net Income of $21.0M for the Full-Year
  • Pro Forma Adjusted EBITDA of $103.6M in 4Q and $378.0M for the Full-Year
  • Issues 2022 Pro Forma Net Revenue growth guidance of 18%-22% and 13%-17% ex-Advocacy
  • Issues 2022 Adjusted EBITDA guidance of $450M - $480M and Pro Forma Free Cash Flow growth of ~30%

NEW YORK, March 8, 2022 /PRNewswire/ -- (NASDAQ: STGW) – Stagwell Inc. ("Stagwell") today announced financial results for the three and twelve months ended December 31, 2021.

REPORTED FOURTH QUARTER & YTD HIGHLIGHTS:

  • Fourth quarter revenue of $611.9 million, an increase of 95.5% versus the prior year period; full-year revenue of $1,469.4 million, an increase of 65.5% versus a year ago.
  • Fourth quarter net revenue of $519.7 million, an increase of 160.9% versus the prior period; full-year net revenue of $1,268.9 million, an increase of 100.4% versus a year ago.
  • Fourth quarter net income attributable to Stagwell Inc. common shareholders of $0.8 million versus net income of $22.2 million in the prior year period; full-year net income of $21.0 million versus $56.4 million in the prior year period.
  • Fourth quarter adjusted EBITDA of $103.6 million, an increase of 61.3% versus the prior year period; full-year adjusted EBITDA of $253.7 million an increase of 77.2% versus a year ago.

PRO FORMA FOURTH QUARTER & YTD STAGWELL INC. HIGHLIGHTS:

  • Fourth quarter Pro Forma revenue of $611.9 million, a decline of 4.6% versus the prior year period and an increase of 18.0% ex-Advocacy; full-year Pro Forma revenue of $2,224.3 million, an increase of 6.6% and an increase of 18.2% ex-Advocacy versus the prior year period.
  • Fourth quarter Pro Forma net revenue of $519.7 million, an increase of 10.4% and 20.2% ex-Advocacy vs. a year ago; full-year Pro Forma net revenue of $1,926.8 million, an increase of 16.4% and 20.0% ex-Advocacy versus the prior year period.
  • Fourth quarter Pro Forma organic net revenue increased 11.3% and 21.2% ex-Advocacy versus a year ago; full-year Pro Forma organic net revenue increased 14.5% and 18.0% ex-Advocacy versus a year ago.
  • Fourth quarter Pro Forma adjusted EBITDA was $103.6 million, a decrease of 5.1% versus the prior year period and an increase of 31.2% ex-Advocacy; full-year Pro Forma adjusted EBITDA was $378.0 million, an increase of 19.6% versus the prior year period and an increase of 41.4% ex-Advocacy.
  • Fourth quarter Pro Forma adjusted EBITDA margin was 19.9% of net revenue and full-year adjusted EBITDA margin was 19.6% of net revenue.
  • Net New Business wins totaled $75 million in the fourth quarter.

"2021 was a breakthrough year for Stagwell. Our full-year results and 2022 outlook are a clear affirmation of the combination and Stagwell's unique position as the challenger that will transform marketing," said Mark Penn, Chairman and Chief Executive Officer. "We delivered pro forma organic net revenue growth of 14.5% for the year and an even more impressive 18% organic growth when excluding our Advocacy businesses, which lapped the 2020 election cycle."

"Our record year was driven by tailwinds across our high concentration of leading digital capabilities, including digital transformation, influencer and global performance marketing; as well as a rapid acceleration in large contract wins," Penn continued. "Our robust 2022 outlook reflects our expectation for continued digital strength; continued acceleration in scaled, integrated contract wins; and significant growth in the second-half in our Advocacy businesses driven by an anticipated record year of spend during the 2022 U.S. mid-term elections."

Frank Lanuto, Chief Financial Officer, commented: "The Company reported strong fourth quarter net revenue of $520 million, representing pro forma net revenue growth of 10.4% year-over-year with 11.3% organic growth.  Strong operating performance led to pro forma adjusted EBITDA margins of 19.9% for the quarter. Effective cash flow management permitted our continued acquisitions of both minority interests in our fastest growing subsidiaries as well as the acquisition of Goodstuff in the UK while lowering our net leverage ratio from the prior quarter."

Financial Outlook

2022 financial guidance is as follows:

  • Pro Forma Net Revenue growth of 18%22%
  • Pro Forma Net Revenue growth ex-Advocacy of 13%17%
  • Adjusted EBITDA of $450 million - $480 million
  • Pro Forma Free Cash Flow growth of approximately 30%
  • Guidance assumes no impact from foreign exchange or acquisitions or dispositions.

* The Company has excluded a quantitative reconciliation with respect to the Company's 2022 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.

Webcast

Management will host a video webcast on Tuesday, March 8, 2022, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and twelve months ended December 31, 2021. The video webcast will be accessible at https://stagwellq4andfullyear2021earnings.open-exchange.net. An investor presentation has been posted on our website at www.stagwellglobal.com/investors and may be referred to during the conference call.

A recording of the conference call will be accessible one hour after the call and available for ninety days at www.stagwellglobal.com.

About Stagwell Inc.

Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 10,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Basis of Presentation

The acquisition of MDC Partners (MDC) by Stagwell Marketing Group (SMG) was completed on August 2, 2021. The results of MDC are included within the Statement of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entire period presented.

Non-GAAP Financial Measures

In addition to its reported results, Stagwell Inc has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) 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. Such non-GAAP financial measures include the following:

Pro Forma Results: The Pro Forma amounts presented for each period were prepared by combining the historical standalone statements of operations for each of legacy MDC and SMG. The unaudited pro forma results are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or consolidated financial condition would have been had the combination actually occurred on the date indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The Company has excluded a quantitative reconciliation of adjusted Pro Forma EBITDA to net income under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K.

(1) Organic Revenue: "Organic revenue growth" and "organic revenue decline" refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) "non-GAAP acquisitions (dispositions), net". Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) Free Cash Flow:  defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments.

(5) Financial Guidance:  The Company provides guidance on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company's beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as "estimates", "expects", "contemplates", "will", "anticipates", "projects", "plans", "intends", "believes", "forecasts", "may", "should", and variations of such words or similar expressions are intended to identify 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.

Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:

  • risks associated with international, national and regional unfavorable economic conditions that could affect the Company or its clients, including as a result of the novel coronavirus pandemic ("COVID-19");
  • the effects of the outbreak of COVID-19, including the measures to reduce its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
  • an inability to realize expected benefits of the combination of the Company's business with the business of MDC (the "Business Combination" and, together with the related transactions, the "Transactions");
  • adverse tax consequences in connection with the Transactions for the Company, its operations and its shareholders, that may differ from the expectations of the Company, including that future changes  in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company's determination of value and computations of its attributes may result in increased tax costs;
  • the occurrence of material Canadian federal income tax (including material "emigration tax") as a result of the Transactions;
  • direct or indirect costs associated with the Transactions, which could be greater than expected;
  • risks associated with severe effects of international, national and regional economic conditions;
  • the Company's ability to attract new clients and retain existing clients;
  • reduction in client spending and changes in client advertising, marketing and corporate communications requirements;
  • financial failure of the Company's clients;
  • the Company's ability to retain and attract key employees;
  • the Company's ability to achieve the full amount of its stated cost saving initiatives;
  • the Company's implementation of strategic initiatives;
  • 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 redeemable noncontrolling interests and deferred acquisition consideration;
  • the successful completion and integration of acquisitions which complement and expand the Company's business capabilities; and
  • foreign currency fluctuations.

Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in Exhibit 99.2 to our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "SEC") on August 10, 2021, and accessible on the SEC's website at www.sec.gov., under the caption "Risk Factors," and in the Company's other SEC filings.

CONTACTS:















For Investors:



For Media



Michaela Pewarski



Beth Sidhu



(646) 429-1812



(202) 423-4414



IR@StagwellGlobal.com 



beth.sidhu@stagwellglobal.com











SCHEDULE 1

STAGWELL INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(US$ in 000s, Except per Share Amounts)



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2021


2020


2021


2020

Revenue

$     611,927


$     313,062


$    1,469,363


$     888,032

Operating Expenses








Cost of services

348,000


198,524


906,856


571,588

Office and general expenses

197,318


64,498


424,038


191,679

Depreciation and amortization

31,381


11,187


77,503


41,025

Impairment and other losses

1,314



16,240



578,013


274,209


1,424,637


804,292

Operating income

33,914


38,853


44,726


83,740

Other Income (expenses):








Interest expense, net

(16,697)


(1,558)


(31,894)


(6,223)

Foreign exchange, net

(1,377)


(1,515)


(3,332)


(721)

Gain on sale of business and other, net

3,252


(404)


50,058


544


(14,822)


(3,477)


14,832


(6,400)

Income before income taxes and equity in earnings of non-consolidated affiliates

19,092


35,376


59,558


77,340

Income tax expense

14,193


2,726


23,398


5,937

Income before equity in earnings of non-consolidated affiliates

4,899


32,650


36,160


71,403

Equity in (income) losses of non-consolidated affiliates

(165)


51


(240)


58

Net income

4,734


32,701


35,920


71,461

Net income attributable to noncontrolling and redeemable noncontrolling interests

(3,897)


(10,469)


(14,884)


(15,105)

Net income attributable to Stagwell Inc. common shareholders

$            837


$       22,232


$         21,036


$       56,356

Income (Loss) Per Common Share:








Basic








Net income (loss) attributable to Stagwell Inc. common shareholders

$           0.01


N/A


$           (0.03)


N/A

Diluted








Net income (loss) attributable to Stagwell Inc. common shareholders

$           0.01


N/A


$           (0.03)


N/A

Weighted Average Number of Common Shares Outstanding:








Basic

99,615,252


N/A


90,426,215


N/A

Diluted

104,065,980


N/A


90,426,215


N/A




SCHEDULE 2

STAGWELL INC.

UNAUDITED PRO FORMA COMPONENTS OF NET REVENUE CHANGE

(US$ in 000s, except percentages)





Net Revenue - Components of Change






Change


Three Months
Ended
December 31,
2020


Foreign
Currency


Net
Acquisitions
(Divestitures)


Organic


Total Change


Three Months
Ended
December 31,
2021


Organic


Total







Integrated Agencies Network

$        283,330


$                  (8)


$               382


$         42,614


$         42,988


$         326,318


15.0 %


15.2 %

Media Network

94,860


454



34,313


34,767


129,627


36.2 %


36.7 %

Communications Network

86,780


3



(26,005)


(26,002)


60,778


(30.0) %


(30.0) %

All Other

5,645


88


(5,022)


2,258


(2,676)


2,969


40.0 %


(47.4) %


$        470,615


$               537


$          (4,640)


$         53,180


$         49,077


$         519,692


11.3 %


10.4 %






















Net Revenue - Components of Change






Change


Twelve
Months Ended
December 31,
2020


Foreign
Currency


Net
Acquisitions
(Divestitures)


Organic


Total Change


Twelve Months
Ended
December 31,
2021


Organic


Total







Integrated Agencies Network

$     1,038,842


$           9,265


$         20,986


$       189,337


$       219,588


$      1,258,430


18.2 %


21.1 %

Media Network

359,857


5,058



62,667


67,725


427,582


17.4 %


18.8 %

Communications Network

236,045


594



(21,810)


(21,216)


214,829


(9.2) %


(9.0) %

All Other

21,242


561


(5,827)


9,997


4,731


25,973


47.1 %


22.3 %


$     1,655,986


$         15,478


$         15,159


$       240,191


$       270,828


$      1,926,814


14.5 %


16.4 %


Note: Actuals may not foot due to rounding.




SCHEDULE 3

STAGWELL INC.

UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS

(US$ in 000s, except percentages)


For the Three Months Ended December 31, 2021



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$       326,318


$       129,627


$                60,778


$           2,969


$                —


$       519,692

Billable Costs

52,211


9,764


30,260




92,235

Revenue

378,529


139,391


91,038


2,969



611,927













Billable Costs

52,211


9,764


30,260




92,235

Staff costs

210,918


71,742


36,877


1,634


9,466


330,637

Administrative costs

33,332


16,363


6,583


563


3,503


60,344

Unbillable and other costs, net

16,262


8,541


93


260


(19)


25,137

Adjusted EBITDA (1)

65,806


32,981


17,225


512


(12,950)


103,574













Stock-based compensation

15,141


2,250


543


24


3,610


21,568

Depreciation and amortization

20,271


6,549


2,465


486


1,610


31,381

Deferred acquisition consideration

9,001


184


80




9,265

Impairment and other losses

1,314






1,314

Other items, net (1)

1,368


2,638


152



1,974


6,132

Operating income (loss)

$         18,711


$         21,360


$                13,985


$                  2


$        (20,144)


$         33,914

























(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Actuals may not foot due to rounding.




SCHEDULE 4

STAGWELL INC.

UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS

(US$ in 000s, except percentages)


For the Twelve Months Ended December 31, 2021



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$   1,258,430


$      427,582


$              214,829


$        25,973


$               —


$   1,926,814

Billable Costs

173,178


34,480


89,871




297,529

Revenue

1,431,608


462,062


304,700


25,973



2,224,343













Billable Costs

173,178


34,480


89,871




297,529

Staff costs

786,766


260,245


138,200


17,023


35,487


1,237,721

Administrative costs

124,843


59,266


22,474


9,783


5,511


221,877

Unbillable and other costs, net

57,468


30,677


241


793


5


89,184

Adjusted EBITDA (1)

289,353


77,394


53,914


(1,626)


(41,003)


378,032













Stock-based compensation

51,315


4,962


16,231


39


7,978


80,525

Depreciation and amortization

54,403


24,644


8,052


2,499


6,537


96,135

Deferred acquisition consideration

35,840


286


28




36,154

Impairment and other losses

2,269


14,846





17,115

Other items, net (1)

7,114


6,543


230



31,985


45,872

Operating income (loss)

$      138,412


$        26,113


$                29,373


$         (4,164)


$       (87,503)


$      102,231













(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Actuals may not foot due to rounding.




SCHEDULE 5

STAGWELL INC.

UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS

(US$ in 000s, except percentages)


For the Three Months Ended December 31, 2020



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$      283,330


$        94,860


$                86,780


$          5,645


$               —


$      470,615

Billable Costs

50,419


10,623


109,573




170,615

Revenue

333,749


105,483


196,353


5,645



641,230













Billable Costs

50,419


10,623


109,573




170,615

Staff costs

173,381


54,785


36,551


4,819


10,486


280,022

Administrative costs

34,554


17,339


7,103


4,379


761


64,136

Unbillable and other costs, net

13,140


6,074


215


(2,180)


12


17,261

Adjusted EBITDA (1)

62,255


16,662


42,911


(1,373)


(11,259)


109,196













Stock-based compensation

2,188





1,143


3,331

Depreciation and amortization

9,405


7,075


1,978


985


1,212


20,655

Deferred acquisition consideration

42,356



2,543




44,899

Impairment and other losses

70,802


6,438





77,240

Other items, net (1)

997


905


303



25,863


28,068

Operating income (loss)

$      (63,493)


$          2,244


$                38,087


$         (2,358)


$       (39,477)


$       (64,997)













(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Actuals may not foot due to rounding.




SCHEDULE 6

STAGWELL INC.

UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS

(US$ in 000s, except percentages)


For the Twelve Months Ended December 31, 2020



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$   1,038,842


$      359,857


$              236,045


$        21,242


$               —


$   1,655,986

Billable Costs

155,979


38,952


236,108




431,039

Revenue

1,194,821


398,809


472,153


21,242



2,087,025













Billable Costs

155,979


38,952


236,108




431,039

Staff costs

644,896


222,872


121,184


21,094


27,929


1,037,975

Administrative costs

129,686


62,042


20,570


13,096


5,041


230,435

Unbillable and other costs, net

44,209


35,310


2,414


(10,410)


26


71,549

Adjusted EBITDA (1)

220,051


39,633


91,877


(2,538)


(32,996)


316,027













Stock-based compensation

8,135



72



2,982


11,189

Depreciation and amortization

39,656


24,170


7,078


3,681


3,345


77,930

Deferred acquisition consideration

43,658


375


2,651




46,684

Impairment and other losses

88,797


6,473




1,129


96,399

Other items, net (1)

1,476


2,651


293


1


38,506


42,927

Operating income (loss)

$        38,329


$          5,964


$                81,783


$         (6,220)


$       (78,958)


$        40,898













(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Actuals may not foot due to rounding.




SCHEDULE 7

STAGWELL INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(US$ in 000s)



December 31,
2021


December 31,
2020

ASSETS




Current Assets




Cash and cash equivalents

$          184,009


$            92,457

Accounts receivable, net

696,937


225,733

Expenditures billable to clients

63,065


11,063

Other current assets

64,106


36,433

Total Current Assets

1,008,117


365,686

Fixed assets, net

118,603


35,614

Right-of-use assets - operating leases

297,919


57,752

Goodwill

1,682,397


351,725

Other intangible assets, net

937,695


186,035

Other assets

33,019


17,043

Total Assets

$       4,077,750


$       1,013,855

LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY




Current Liabilities




Accounts payable

$          271,769


$          147,826

Accruals and other liabilities

504,780


90,557

Advance billings

361,885


66,418

Current portion of lease liabilities - operating leases

72,922


19,579

Current portion of deferred acquisition consideration

77,946


12,579

Total Current Liabilities

1,289,302


336,959

Long-term debt

1,195,112


198,024

Long-term portion of deferred acquisition consideration

148,464


5,268

Long-term lease liabilities - operating leases

328,328


52,606

Deferred tax liabilities, net

110,628


16,050

Other liabilities

62,621


5,801

Total Liabilities

3,134,455


614,708

Redeemable Noncontrolling Interests

43,364


604

Commitments, Contingencies and Guarantees




Shareholders' Equity:




Convertible preference shares, 0 and 0 authorized, issued and outstanding at December 31, 2021 and 2020, respectively


Members' capital


358,756

Common shares - Class A & B

118


Common shares - Class C

2


Paid-in capital

401,200


Accumulated deficit

(6,983)


Accumulated other comprehensive loss

(12,720)


Stagwell Inc. Shareholders' Equity

381,617


358,756

Noncontrolling interests

518,314


39,787

Total Shareholders' Equity

899,931


398,543

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Deficit

$       4,077,750


$       1,013,855




SCHEDULE 8

STAGWELL INC.

UNAUDITED SUMMARY CASH FLOW DATA

(US$ in 000s)



Twelve Months Ended
December 31,


2021


2020

Cash flows from operating activities:




Net income

$            35,920


$            71,461

Adjustments to reconcile net income to cash provided by (used in) operating activities:




Stock-based compensation

75,032


Depreciation and amortization

77,503


41,025

Debt issuance cost amortization


811

Impairment and other losses

16,240


Provision for bad debt

2,031


6,222

Deferred income taxes

(20,139)


(5,463)

Changes in fair value of investments in unconsolidated affiliates


518

Adjustment to deferred acquisition consideration

18,706


4,520

Interest from preferred investments


(600)

Equity in losses of unconsolidated affiliates, net of dividends received


(58)

Transaction costs contributed by Stagwell Media LP


10,160

Foreign currency translation loss on foreign denominated debt


721

Other

5,396


Gain on sale of an asset

(43,440)


Changes in working capital:




Accounts receivable

(35,669)


(26,805)

Expenditures billable to clients

(35,371)


10,078

Other assets

930


(10,461)

Accounts payable

(46,351)


5,606

Accruals and other liabilities

56,196


22,922

Advance billings

76,021


7,423

Acquisition related payments

(12,431)


Net cash provided by operating activities

170,574


138,080

Cash flows from investing activities:




Capital expenditures

(22,626)


(12,099)

Proceeds from sale of assets

37,232


Acquisitions, net of cash acquired

153,739


(14,732)

Other

(26,535)


(2,190)

Net cash provided by (used in) investing activities

141,810


(29,021)

Cash flows from financing activities:




Repayment of borrowings under revolving credit facility

(716,339)


(126,994)

Proceeds from borrowings under revolving credit facility

518,537


167,000

Shares acquired and cancelled

(841)


Distributions to noncontrolling interests and other

(18,850)


(115,543)

Payment of deferred consideration and other


(1,000)

Contributions


1,554

Proceeds from issuance of the 5.625% Notes

1,100,000


Purchase of noncontrolling interest


(1,559)

Debt issuance costs

(15,365)


(3,099)

Payment of contingent consideration


(500)

Distributions

(204,929)


Repurchase of 7.50% Senior Notes

(884,398)


Net cash used in financing activities

(222,185)


(80,141)

Effect of exchange rate changes on cash and cash equivalents

1,353


(321)

Net increase in cash and cash equivalents

91,552


28,597

Cash and cash equivalents at beginning of period

92,457


63,860

Cash and cash equivalents at end of period

$          184,009


$            92,457

 

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SOURCE Stagwell Inc.

FAQ

What were Stagwell Inc.'s fourth quarter results in 2021?

Stagwell Inc. reported fourth quarter revenue of $611.9 million, a 95.5% increase year-over-year.

How much did Stagwell's net income decrease in 4Q 2021?

Net income for 4Q 2021 was $0.8 million, down from $22.2 million in the prior year.

What is the Pro Forma revenue growth guidance for Stagwell in 2022?

Stagwell expects Pro Forma Net Revenue growth of 18%-22% for 2022.

What were the full-year revenue figures for Stagwell Inc. in 2021?

For the full year 2021, Stagwell reported revenue of $1,469.4 million, a 65.5% increase year-over-year.

What is Stagwell Inc.'s adjusted EBITDA guidance for 2022?

Stagwell expects adjusted EBITDA for 2022 to be between $450 million and $480 million.

Stagwell Inc.

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