SEC Comment Letter for Stagwell Inc (STGW) (CIK 0000876883) (STGW) — Feb 28, 2011
Stagwell Inc (STGW) (CIK 0000876883)
Date: Feb. 28, 2011 · CIK: 0000876883 · Accession: 0000000000-11-012665
AI Filing Summary & Sentiment
Reasoning
Referenced dates: December 15, 2010, January 28, 2011
Letter
Mail Stop 3720 February 28, 2011 Mr. Miles S. Nadal Chief Executive Officer MDC Partners, Inc. 45 Hazelton Avenue Toronto, Ontario Canada M5R 2E3 Re: MDC Partners, Inc. Form 10-K for Fiscal Year Ended December 31, 2009 Filed March 10, 2010 Form 10-Q for Fiscal Quarter Ended September 30, 2010 Form 8-K/A filed February 10, 2011 File No. 1-13178
Dear Mr. Nadal:
We have reviewed your response letter da ted February 15, 2011 and have the following comments. Please provide us with the request ed information so we may better understand your disclosure.
Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response. After reviewing the information you provide in response to these comments, we may have additional comments. Form 10-K for Fiscal Year Ended December 31, 2009
Note 16. Segmented Information, page 79
1. We note your response to comment two from our letter dated January 28, 2011. It is still unclear to us why you have aggregated all of your operating segments into two reportable segments. Please further explain your pr esentation by addressing the following items:
Mr. Miles S. Nadal MDC Partners, Inc. February 28, 2011 Page 2
• Clarify which reportable segment previously contained the Accent operating segment, which was moved to the SCS segment in 2009. • Tell us how many operating segments remained in the SCS segment after moving the five operating segments mentioned in your re sponse to the SMS segments. How did you determine that these remaining segments coul d be aggregated with the previously named CRM segment? • In your response to comment nine from our letter dated December 15, 2010, you indicate that the long term financial gross margins of the SMS and PMS segments are expected to be similar “excluding non recurring items.” Tell us the nature of these items and why they were excluded from your analysis. • In the same response, you discuss certain ope rating segments within the PMS reportable segment that did not have similar economic ch aracteristics, but which were aggregated into this segment due to immateriality. Te ll us why you included these segments within the PMS segment instead of presenting them in an “other” column. • For both of your reportable segments, please provide us with your analysis and financial information for all periods presented in your filing, demonstrating your compliance with FASB ASC 280-10-50-11. Please provi de us with an analysis th at includes historical and projected revenues, gross margins, gross margin percentages, operating profit, and operating profit percentages, along with a ny other information you believe would be useful for each of your operating segments to help us understand how these operations are economically similar. Please also address any differences in the trends these financial indicators depict (e.g. if gross profit margin is decr easing for one operation and increasing for another). Form 8-K/A filed February 10, 2011
2. We note that you filed the financ ial statements of Capital C Communications LP for the year ended December 31, 2009 and the eleven months ended November 30, 2010. Based on the pro forma statement of operations for the ye ar ended December 31, 2009, it is unclear to us why you were not required to present three years of historical financial statements of Capital C Communications LP. Please revise or a dvise us by providing your calculations of significance.
Mr. Miles S. Nadal MDC Partners, Inc. February 28, 2011 Page 3
You may contact Melissa Hauber, Senior Staff Accountant, at (202) 551-3368 or Carlos Pacho, Senior Assistant Chief Accountant, at (202) 551-3835 if you have questions regarding comments on the financial statements and relate d matters. Please contact Ajay Koduri, Staff Attorney, at (202) 551-2210 or Robe rt F. Bartelmes, Senior Fina ncial Analyst, at (202) 551-3354 with any other questions. Sincerely, Larry Spirgel Assistant Director
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Mail Stop 3720
February 28, 2011
Mr. Miles S. Nadal Chief Executive Officer MDC Partners, Inc. 45 Hazelton Avenue Toronto, Ontario Canada M5R 2E3
Re: MDC Partners, Inc.
Form 10-K for Fiscal Year Ended December 31, 2009 Filed March 10, 2010
Form 10-Q for Fiscal Quarter Ended September 30, 2010
Form 8-K/A filed February 10, 2011 File No. 1-13178
Dear Mr. Nadal:
We have reviewed your response letter da ted February 15, 2011 and have the following
comments. Please provide us with the request ed information so we may better understand your
disclosure.
Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response.
After reviewing the information you provide in response to these comments, we may
have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2009
Note 16. Segmented Information, page 79
1. We note your response to comment two from our letter dated January 28, 2011. It is still
unclear to us why you have aggregated all of your operating segments into two reportable
segments. Please further explain your pr esentation by addressing the following items:
Mr. Miles S. Nadal
MDC Partners, Inc.
February 28, 2011 Page 2
• Clarify which reportable segment previously contained the Accent operating segment,
which was moved to the SCS segment in 2009.
• Tell us how many operating segments remained in the SCS segment after moving the five
operating segments mentioned in your re sponse to the SMS segments. How did you
determine that these remaining segments coul d be aggregated with the previously named
CRM segment?
• In your response to comment nine from our letter dated December 15, 2010, you indicate
that the long term financial gross margins of the SMS and PMS segments are expected to
be similar “excluding non recurring items.” Tell us the nature of these items and why
they were excluded from your analysis.
• In the same response, you discuss certain ope rating segments within the PMS reportable
segment that did not have similar economic ch aracteristics, but which were aggregated
into this segment due to immateriality. Te ll us why you included these segments within
the PMS segment instead of presenting them in an “other” column.
• For both of your reportable segments, please provide us with your analysis and financial
information for all periods presented in your filing, demonstrating your compliance with
FASB ASC 280-10-50-11. Please provi de us with an analysis th at includes historical and
projected revenues, gross margins, gross margin percentages, operating profit, and
operating profit percentages, along with a ny other information you believe would be
useful for each of your operating segments to help us understand how these operations are economically similar. Please also address any differences in the trends these financial
indicators depict (e.g. if gross profit margin is decr easing for one operation and
increasing for another).
Form 8-K/A filed February 10, 2011
2. We note that you filed the financ ial statements of Capital C Communications LP for the year
ended December 31, 2009 and the eleven months ended November 30, 2010. Based on the pro forma statement of operations for the ye ar ended December 31, 2009, it is unclear to us
why you were not required to present three years of historical financial statements of Capital
C Communications LP. Please revise or a dvise us by providing your calculations of
significance.
Mr. Miles S. Nadal
MDC Partners, Inc. February 28, 2011 Page 3
You may contact Melissa Hauber, Senior Staff Accountant, at (202) 551-3368 or Carlos
Pacho, Senior Assistant Chief Accountant, at (202) 551-3835 if you have questions regarding
comments on the financial statements and relate d matters. Please contact Ajay Koduri, Staff
Attorney, at (202) 551-2210 or Robe rt F. Bartelmes, Senior Fina ncial Analyst, at (202) 551-3354
with any other questions.
Sincerely, Larry Spirgel Assistant Director