Stagwell Inc. (STGW) Q4 2017 Earnings Report, Transcript and Summary

Good day, everyone, and welcome to the MDC Partners Fourth Quarter and Year-End Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, today’s event is being recorded. At this time, I’d like to turn the conference call over to Mr. Matt Chesler, Vice President of investor Relations and Finance. Sir, please go ahead.

Good afternoon, everyone. I’d like to thank you for taking the time to listen to the MDC Partners conference call for the fourth quarter of 2017. Joining me today from MDC are Scott Kauffman, Chairman and CEO; and David Doft, Chief Financial Officer. Before we begin our prepared remarks, I’d like to remind you all that the following discussion contains forward-looking statements and non-GAAP financial data. As we all know, forward-looking statements about the company are subject to uncertainties referenced in the cautionary statement included in our earnings release and slide presentation and are further detailed in the Company’s Form 10-K and subsequent SEC filings. For your reference, we posted an investor presentation to our website. We also refer you to this afternoon’s press release and slide presentation for definitions, explanations and reconciliations of non-GAAP financial data. And now to start the call, I’d like to turn it over to our Chairman and CEO, Scott Kauffman.

Thanks, Matt, and good afternoon, everyone. 2017 was a year of significant progress for MDC Partners. We executed on what we said we were going to do, firmly reestablished our place as the industry’s disruptive growth story, invested in our future and strengthened our financial position. All of these factors helped us achieve our financial guidance, and in many cases, with industry-leading metrics. Reported GAAP revenue increased over 9% to $1.51 billion, our best year ever. We delivered best-in-class organic revenue growth of 7.0%, spot on with our approximately 7% guidance and 6 times the industry average for the big legacy agency holding companies. Organic revenue increased nearly 7% in the United States and 15% outside of North America. Canada declined 1%. We saw double-digit gains in client verticals, led by communications, financials and consumer packaged goods and double-digit growth in our media businesses. We generated adjusted EBITDA of $203.5 million, an increase of over 15%, with margins expanding by 60 basis points, also spot on with our guidance. Our improved profitability was driven by the growth of our business; payoffs from investments in growth areas, such as international and data analytics; and the leveraging of our cost structure. This year, we also significantly strengthened our financial position. We began the year with a $95 million equity investment from Goldman Sachs Merchant Banking and finished in a strong cash position and out of the revolver, as expected. We passed a significant milestone in terms of reducing our deferred acquisition consideration and non-controlling interests. After funding $129 million of acquisition-related payments in 2017, we’ve now reduced these items to a new 6.5-year low. At the same time, we brought our reported net-to-debt EBITDA ratio down to 4.2 times, a full turn lower than year-end 2016 and consistent with our commitment to deleverage. The key ingredient to our ongoing success continues to be our ability to gain market share, and 2017 was no exception. Net new business was approximately $87 million, nearly in line with 2016. We gained particular traction with consumer packaged goods companies, becoming a key beneficiary of clients seeking agencies who are able to disrupt traditional segments. This year, we expanded relationships with Hershey’s, Diageo, General Mills, MillerCoors, Coca-Cola and Bacardi, and with additional recent wins from Del Monte and Dean Foods. Just as importantly, we’re increasingly the go-to partner for many of the major tech players and cutting-edge disruptors and innovators of their respective industries. And as an example, this year, we grew revenue by 30% with the FANG group of companies, which collectively now accounts for over 5% of MDC revenue. And in the fourth quarter, 72andSunny won the global creative account for one of the most disruptive brands, Uber. We continue to gain share outside of North America where we expanded our capabilities in recent years and where we’re increasingly playing at the highest levels of strategy, creativity and innovation. In addition to Uber, this year, we added international or global assignments for Huawei, Electrolux, IKEA and eBay, helping to lift our international revenue to 14% of MDC total revenue from 11% a year ago. And the industry is increasingly honoring our agency partners for their ability to deliver all of this and more. We’re especially proud that just this week, Advertising Age named of one of our own partners, Assembly, as Media Agency of the Year. Additionally, Anomaly and 72andSunny earned two of the 10 spots in the publication’s annual A-list, and Crispin Porter + Bogusky was recognized as an agency standout. Also this week, Forsman & Bodenfors was named by Fast Company as among the most innovative companies in the advertising and marketing sector. That our partners are gaining market share and consistently punching far above their weight in terms of industry recognition is a great validation of the competitiveness and differentiation of the MDC portfolio. Our success in 2017 and beyond comes down to core pillars around which we formed the company: Talent, culture and creativity. These pillars form the foundation that enables MDC agencies to consistently produce impactful work, driving business results for clients, growth for MDC and value for our stakeholders. Empowering entrepreneurial management teams, we represent a progressive alternative to traditional holding companies. With a focused effort on recruiting, growing and promoting a diverse workforce, we believe that diversity of thought and opinion puts our teams in the best position to understand consumer behavior and technology and yields more impactful results for our clients. We are The Place Where Great Talent Lives. Our strategic bet has been that in a rapidly changing market services landscape, the winners will be the most talented, innovative and creative agencies. New technologies will continue to emerge and data will move front and center, but leveraging these capabilities to win will always be fueled by strong creativity at the core. And we believe very strongly in the expanding definition of creativity, so we’ve worked diligently to ensure that our portfolio continues to meet the evolving needs of Chief Marketing Officers. Our approach is to look at big growth areas in our space where there is a client need and where we think we have the opportunity to take a leading position. We’ve done this successfully many times by scaling integrated advertising agencies and increasingly by combining data-driven consumer insights, strategy and digital products into our offering. As examples, we organically launched Gale, a world-class data-driven marketing firm which brings together the expertise of a top management consultancy with the ability to extract strategic insights from customer data in order to solve complex business problems. Gale has scaled to over 200 people in just over three years. We’ve incubated Zero & One, a data-at-the-center platform and consultancy that we launched this past year. This captive agency, available only to the MDC portfolio, empowers our partners to better harness customer data, understand customer journey and activate business and communication strategies on behalf of their clients. Zero & One is live and in the market with a number of projects underway. And we’ve invested in mobile and interaction strategy and development and launched practices that leverage AI-driven insights. Looking ahead, MDC’s modern marketing model uniquely positions us to gain incremental market share in an environment of great change. Many of the challenges that ail the big legacy agency holding companies represent opportunity for us. Our firms were born in a world where Internet already existed. This has shaped our cultures and the talent it attracts. Digital hasn’t changed us, it defines us. While we’re constantly refining our model, we don’t need an organizational overhaul, tearing down walls and breaking fiefdoms to be positioned to compete. The disruption that many industries are undergoing means more brands under pressure looking for change agents with fresh, progressive solutions. That favors MDC’s specialist agencies at the expense of incumbent firms previously entrenched in long-term relationships. The active pitch environment only means more at-bat opportunities for us, and we welcome the reviews. The complexity of omni-channel communications also increasingly requires diverse teams delivering integrated solutions. MDC is born out of like-minded entrepreneurs who are accustomed to partnering with other specialists. It’s in our DNA. So we already collaborate well with one another in our current form. There’s no need for a buzzword to be client-centric, that’s why our top 10 largest clients are currently served by an average of four or more separate MDC agencies, even better than the three-plus agencies where we stood a year ago. New competitors may be angling for their own share of the expanding budget under the purview of the Chief Marketing Officer, but our excellence in creativity means our services are difficult to automate or disintermediate. This is even more the case as we increasingly power our creativity with data-driven consumer insights and great strategy. The drive for efficiency means more clients are reevaluating their marketing programs to ensure that their dollars are driving measurable returns. We’ve always focused on performance, never invested in many of the legacy marketing capabilities that have been disrupted and don’t sit on expensive global infrastructure that just isn’t needed anymore. We’re looking at how we grow agencies from 5 offices to 10 offices, not how they reduce from 200 offices to 100. This allows us to be thoughtful and strategic about building, not emotional and reactive about breaking things down. The swell of client demand for transparency and accountability plays right to the strength of Assembly and MDC Media Partners, which was launched just four years ago in the digital age powered by data and with a fully transparent model. We’ve made no secret that we don’t think that our competitors have gone far enough. For all these reasons, we’re highly confident that our world-class agencies are ideally positioned to continue to thrive in an industry defined by constant change. And so we absolutely expect to continue our long-term track record of market share gains. To fortify our place as a leader in the industry, in 2018, we’re fueling a number of strategic initiatives to capture key growth opportunities to complement our existing strength in creatively led agencies. We’re continuing to scale our data-at-the-center platform, Zero & One, as a resource to our partners as they address the CMO’s most toughest business challenges which increasingly revolve around better understanding and communicating with their customers. We’re adding to our digital product and design expertise to capture greater share of client wallet as CMO budgets are increasingly allocated towards connected experiences across digital channels. We’re scaling and expanding the geographic footprint of our production capabilities to meet the client needs of more cost-efficient content and the rising importance of earned media. And we’re continuing to support a number of our firms through office expansion as they seek to expand into new geographies, with recent openings in Berlin, Singapore and Sydney. We’re making additional investments to scale our health care marketing capabilities to better capture share in this area of significant disruption. And before I turn the call over to David, I’d like to take just a moment to thank the 6,000-plus dedicated members of the MDC family for making MDC Partners the group with the most exciting prospects in the industry. I believe in our business, the people and the work we do, and I’m excited for the year ahead. And with that, I’d like to turn the call over to David.

Thank you, Scott, and good afternoon. As Scott indicated, we ended the year exactly how we had hoped and guided to, both in terms of revenue, adjusted EBITDA and margin. Organic revenue grew 7.0%, with Q4 at plus 3.3%. This was consistent with our approximately 7% full year guidance and included 150 basis points benefit from higher billable pass-through costs. Adjusted EBITDA was $203.5 million, up 15.2% year-over-year, with Q4 at $66.7 million or up 19.5% year-over-year. The 60 basis points of margin expansion for the full year was also consistent with guidance. Importantly, when we updated guidance in the middle of the year, given the higher pass-through trend, we mentioned that margins would still be up 100 basis points on a net basis. And in fact, they came in better, at plus 120 basis points. We delivered strong full year results despite the sale of our local lead gen business, LBN, in August, which cost us about 1% of revenue and $1.6 million of adjusted EBITDA over the past four months. We were also able to successfully overcome $2 million of incremental unbudgeted costs for professional fees incurred mostly in the back half of the year. These costs primarily relate to compliance efforts for new revenue recognition rules. Finally, as a reminder, beginning with 2017, we voluntarily stopped adding back acquisition deal cost as part of our effort to simplify our non-GAAP reporting. This would have added another $1 million, approximately, to our adjusted EBITDA this year. With all of this considered, we’re very pleased with our revenue growth for the year and even more pleased with our ability to convert a higher percentage of it to the bottom line. I’d also like to highlight a number of items related to our balance sheet and cash flow. We finished the year with $46 million of cash on the balance sheet and 0 drawn on our revolving credit facility, as expected. We generated $45 million of cash from working capital in the fourth quarter. For the full year, we used $12 million due to the timing of certain collections and payments. In terms of our deferred acquisition consideration liability, there remains $122 million accrued on the balance sheet as of December 31. Consistent with our goal of reducing our DAC liability on an absolute and relative basis, this is down from $230 million as of the year ago. While cash taxes came in higher, largely driven by higher overseas profit, capital expenditures, net of landlord reimbursement dollars, was lower. Two final items to call out. First, net income attributable to the non-controlling interest in the P&L increased to a little over $15 million in 2017, driven by the recovery of profitability at firms where we own less than 100% as well as certain firms that obtained the rights to distribution of earnings in the current period. Second, the quarter and full year included a combined $206 million of non-cash tax-related benefits. We recorded a benefit of $105.5 million related to the enactment of the Tax Cuts and Jobs Act of 2017. Of that amount, $34.1 million was related to the revaluation of our deferred tax assets and valuation allowance due to the reduction in federal corporate tax rate from 35% to 21%. We also reduced a portion of our valuation allowance and record a benefit of $66.4 million due to changes under the act that will allow us to realize more of our deferred tax assets going forward. We also recorded a benefit of $105.5 million, reflecting the reversal of the remainder of our U.S. valuation allowance that was not reversed as part of tax reform. The release was based primarily on our significant cumulative pretax income over the last 12 quarters as well as our expectation of future taxable income going forward that will allow us to realize the benefit of our deferred tax assets. Before jumping into our 2018 outlook, I’d like to discuss the new revenue recognition rules, ASC 606, which we adopted on January 1, 2018. While there are many nuances to the new standard, the main impact it will have is that, going forward, the pattern of revenue recognition will look more similar to the proportional performance method than straight-line. This is likely to lead to shifts in when we are able to recognize revenue relative to historical GAAP, and therefore, there may be a timing impact on adjusted EBITDA as it relates to the quarterly seasonality moving through the year. While there may be some immaterial changes in gross versus net revenue accounting, nothing changes in our client contracts or the billing arrangements with clients. Expense recognition is also unaffected. There will be more disclosures in our Form 10-K. Before turning to our outlook, I will say that this presents some challenges as it relates to modeling and only reinforces the notion that we have shared with you all on many occasions. That is, it is critically important to look at our business on an annual, not quarter-to-quarter basis. As 2017 has shown, we are focused on operating our business and executing in a way that meets our financial performance targets. Now looking at our 2018 outlook. We are not blind to the challenges many of our competitors are facing. Thankfully, our agencies are well positioned. We have good momentum and a very robust new business pipeline. This gives us comfort with our ability to deliver on a growth plan for the year. In terms of specific financial guidance for 2018, we are targeting approximately 4% organic revenue growth. We currently estimate that the impact of foreign exchange, assuming currency rates remain the same, will be positive 100 basis points for the full year. And last year’s divestiture of LBN should have a roughly 100 basis point negative impact on net acquisition revenue. In terms of profitability, we’re targeting an improvement in adjusted EBITDA margin of approximately 20 basis points above 2017’s level of 13.4%. This year, we’re doing a lot of things behind the scenes to set ourselves up for the future. This includes fueling growth initiatives, such as those discussed by Scott; as well as targeting efficiency initiatives, including additional real estate consolidation which will drive benefit beginning next year, but cost $3 million to $4 million in 2018. We’re also operating in an increasingly onerous regulatory environment due to the continuation of accounting standard and data regulation changes hitting at the same time. So unfortunately, the near-term professional fees and other costs of compliance are going up by over $2 million this year, not down. This should hopefully settle down in 2019. Despite all of this, on the back of cycling a 120 basis point improvement in margins on a net revenue basis in 2017, our targeted 20 basis points of improvement in 2018 will put the two-year improvement at 140 basis points, which is right in line with the 50 to 100 basis points of average annual improvement that we target in our medium-term financial framework. Keep in mind that because of ASC 606-related timing shifts and aforementioned initiatives, we expect Q1 adjusted EBITDA to be smaller as a percent of full year’s expectation than we have seen in the past. And in terms of year-over-year growth of adjusted EBITDA, our base this year begins $2.5 million lower, reflecting the eight months of contribution from LBN in 2017. A few other items to help you with modeling. In terms of our acquisition-related payment obligations, in 2018, we expect to make payments of $60 million to $65 million weighted to the first half. This is about $15 million to $20 million less than we have previously indicated and means our payments will be approximately half compared to 2017 levels. In terms of taxes, we expect to benefit from U.S. tax reform in the form of reduced cash taxes over time. As we continue to eat through our remaining NOLs over the coming years and as our profitability increases, we expect to have a lower rate on those higher profits. We’re only a few years away from this happening, depending on the results of the business, but it could be as early as next year. In the near term however, we will likely pay slightly more than we otherwise would absent tax reform due to certain provisions within the new law. We estimate the incremental cash taxes to be roughly $2 million in 2018. We have previously indicated, even without tax reform, that our cash taxes were likely to creep higher as a function of increasing profitability, particularly overseas. All in, we expect cash taxes to be in the range of $10 million to $12 million in 2018 versus $8.1 million in 2017. Importantly, tax reform does not change our ability to utilize our tax-deductible goodwill to reduce taxable income. We plan to mitigate some of the impact of incremental higher cash taxes this year by settling back down to more normalized CapEx as we expect lower levels of office-related expansion in 2018. We are currently budgeting $25 million for CapEx, net of landlord reimbursement dollars. We’d now like to take your questions.

Ladies and gentlemen, at this time we’ll begin the question-and-answer session. [Operator Instructions] And our first question today comes from John Janedis from Jefferies. Please go ahead with your question.

Thank you. David, when you talked to prioritizing the strategic growth initiatives and divestments, I know you spoke a little bit about it, but can you be more specific in terms of dollars, with both your comments and Scott’s, about leveraging the cost structure? And I was hoping maybe there would be a little bit more margin growth this year. So is it the $5 million or so you just spoke to or something more? Because I think, if it’s $5 million, that’s more like a 50 basis point kind of growth in margin as opposed to the 20. So any help there will be helpful.

Sure. So there were three real items that are impacting the margin this year that are really not related to the underlying agency operations. So one is the growth initiatives, and it will likely end up being somewhere in that mid-single digit million sort of range. The second is the real estate opportunity that’s been identified which offers us substantial savings in the long run, but has an upfront cost to the tune of $3 million to $4 million. And the third is higher professional fees related to some of the new regulations that I mentioned that we need to get going on, but once it gets going, those professional fees will fade away. And that’s a little over $2 million. So when you add all of those up, you’re looking at a double-digit million dollar impact on the bottom line, based on those initiatives.

Okay, got it. Thanks. And then separately, I guess, understanding it’s a low double-digit piece of the business, can you give us an update on your expectations for international growth this year? As you know, it’s been a big driver, and I was wondering if that’s expected to continue or to moderate.

So our expectation is to continue to see solid growth overseas. We continue to be invited to more and more pitches on a global basis. Scott mentioned some of the wins in 2017, and those opportunities are picking up, not slowing down. So we’re very excited about that. And that’s what’s leading to some of the incremental office openings in new regions around the world.

And are there more reasons to open up [indiscernible] (26:39) or no?

I’m sorry, that didn’t quite come through. There was a beep of some sort.

Are there more to open in 2018 relative to what you just spoke to on the call? Or are we sort of done on the expansion there?

We’re always evaluating incremental opportunities. And ultimately, we’ve built into the budget the investment for those offices that opened in 2017 that need to scale. And so we’ll operate at a loss in 2018. And then we’ll continue to evaluate opportunities as they come.

Thanks a lot.

Our next question comes from Dan Salmon from BMO Capital Markets. Please go ahead with your question.

Hi, guys. This is Caroline on for Dan. I was wondering if you could speak a little bit about tax reform and how you think it’ll impact your business in 2018. One of your peers said that they expect consumers to start spending their extra cash towards the second half of the year. Are you as optimistic here?

We absolutely believe that tax reform will be beneficial to the consumer economy. And the consumer economy has been the key driver of advertising spend by brands historically. So net-net, we think it’s a good thing for our industry. We went into detail in the prepared remarks about how it impacts us specifically in our tax structure. So overall, it’s good for us, it’s good for consumers, it’s good for our industry. That’s our view.

Thanks.

Our next question comes from Rich Tullo from Midtown Partners. Please go ahead with your question.

Hi, guys. Congratulations on a good quarter. It seems like you’ve made a lot of progress. A couple of quick questions. It seems like Scott was very high on the data opportunity and the data growth. Is that complementary to your media buying business? And are you seeing competition from kind of the consultancy class in that business? And then I have a question on international.

Thanks, Rich. A lot of the initial or the early stage data initiative did come out of the media world, in part because media has always been – even back to the days of demographic and psychographic audience measurement, it was the place where data was entering the agency. But obviously, with the advent of the social grid and all the different ways consumers now leave trails of information about them and clients are becoming increasingly more sophisticated, even with their own first-party customer data, it really just – it transcends just media, which is why we’ve made a concerted effort to bring data-centric strategies to the center of all of our operations. So that includes, not just media, where it’s in wide supply and demand and is widely deployed, but also data as it informs both strategy and creative. David Ogilvy was famous for saying, "Give me the freedom of a tight strategy." The more information that our creative teams have about prospects in consumers, the more effective creative development can be. And of course, that gets into strategy about how to turn prospects into customers. So we think data is a key value creator. It’s central to everything that we’re doing here as technology and design and data and creativity all continue to merge, it completely changes the landscape. We feel we’re in a uniquely capable position with the agility required to make the kinds of changes that marketers are demanding today. And much of it is about helping them deal with their own onslaught of data in all the many forms that it takes. With regard to the consultancies, there’s so much noise and so much coverage, and yet you’ve heard it from across the industry, we see very few instances of it actually impeding our ability to continue to progress with Chief Marketing Officers. We also think that we already provide a very high level of strategic support in all of the relationships that we have with our clients. And I would just offer this up, and I think this is widely felt across the industry, we think it’s a whole lot easier to bring strategic insights to our clients than it can be for strategists to bring creativity to their clients. And this is where we think that duplication and disintermediation are very difficult when you have doubled down on creativity as we have.

Okay. And now my question on international. A number of the peers suggested they’re seeing a lot of weakness in Brazil, Venezuela, owing to the economic and social chaos. I guess China has got some internal issues it’s working out. How are your businesses, if you could provide any color, operating in these regions? And did they provide a headwind or a tailwind in the current quarter? And how do you look at them in 2018?

Well, before David jumps in, I can just tell you, we are underpenetrated in Venezuela, so we don’t think we’re as vulnerable as some of the others. David?

So ultimately, Rich, we’re so small in those markets, what those economies are doing, what those advertising markets are doing, are actually irrelevant to us. At 14% of our revenue, it’s a little over $200 million across all those regions for us. And if you break it down between each of them, it’s such a rounding error and the opportunity is so large that just our ability to provide solutions that clients need is driving very strong new business opportunity and growth.

Real quick, as a follow-up. I think Scott said – you said – how much was FANG as percentage of total revenue? And how much would you say direct-to-consumer is a percentage of total revenue?

As we said in the prepared remarks, FANG’s over 5% of revenue now. And our business is largely direct-to-consumer advertising. We have small components of business-to-business capabilities as well as specialist capabilities around health care that sometimes market to physicians, but the vast majority of our business is direct-to-consumer.

Very good. Thank you very much, appreciate it and good luck next year.

Thanks, Rich.

Our next question comes from Leo Kulp from RBC Capital Markets. Please go ahead with your questions.

Hi, guys. Thanks for taking the question. I just had two quick ones. First, just curious what you’re going to do with your excess free cash flow, given the lower DAC paydown. Do you think M&A is on the table? Or are you going to just let the cash build on the balance sheet? And then second, with regards to your organic growth guidance for next year, what level of incremental new business is baked in?

Thanks, Leo. I mean, as you can tell from the results, we’ve been pretty heads-down on focusing on the year and we remain committed to delevering the balance sheet. But historically, we have grown through both organic growth and through acquisition, and we continue to be a beacon for those brilliant entrepreneurial teams that are looking for a safe harbor and a potential home. So the doorbell rings frequently. And we’re in a position now where we’re continuing to evaluate possibilities and opportunities. And don’t be surprised if we do make a couple of acquisitions this year.

In terms of our growth profile for 2018, we never made the assumption that we’re just going to get price increases from clients. It hasn’t been that sort of environment for many, many years. We need to earn incremental assignments, scopes of work, geographies from them. So generally, we’re looking at growing our relationships with existing clients as well as winning new clients, but it’s not price increases because that’s just not the way the industry has operated for a long, long time. So ultimately, it’s all going to come from new business in one form or another.

Got it, thank you very much.

[Operator Instructions] Our next question comes from Barry Lucas from Gabelli & Company. Please go ahead with your question.

Thank you and good evening. It looks like 2018 could see a ripple effect of large media assignments turning over. And given the growth of Assembly and the awards that you’ve recently received, I wonder how – if you could provide, I was going to say color, but where do you think you are in the continuum in terms of scale to be able to potentially pick up some even larger pieces of media assignments?

Thanks, Barry. If we look back a couple of years and a couple of earnings calls, I was very frustrated when Mediapalooza I hit and we were pretty much on the sidelines. We haven’t effectively scaled our media operations. But Martin Cass and the team at Assembly have done a phenomenal job over the last few years. We’ve knocked down a couple of marquee, larger pieces of business. And as we know, because it happens somewhat frequently despite our size, when we get named Agency of the Year, we know that the phone rings. And so the pipeline continues to be robust and we expect that the awards and accolades really do matter in a case like this. There’s been reports about large domestic consumer packaged goods campaigns up for grabs now. With our market share, odds are those aren’t our accounts. So we’re not in a defensive mode, we’re not preoccupied with defending. These represent upside opportunities for us. We referenced in the prepared remarks the number of at-bats that we anticipate this year. And so we like the way the market is continuing to evolve and what the landscape for competitive opportunity looks like right now.

Thanks for that color, Scott.

And ladies and gentlemen, at this time, I’m showing no additional questions. I’d like to turn the conference call back over to Mr. Scott Kauffman for any closing remarks.

Thank you, Jamie. In closing, I just want to thank all of you for joining us today, and we certainly appreciate your questions. And as indicated, 2017 was a year of significant accomplishments for MDC Partners, and we’re proud of the talented teams at our agencies who have been fundamental to our strong performance. As we look ahead in 2018, we have the right strategy and the talent, culture and creativity in our agencies to build on our success. We have a robust calendar of investor conferences and meetings in the months ahead and look forward to seeing many of you in person. Good evening from New York City.

And ladies and gentlemen, that does conclude today’s conference call. We do thank you for attending today’s presentation. You may now disconnect your lines.