Ladies and gentlemen, good day and thank you all for joining this MDC Partners Second Quarter 2020 Results Conference Call. All lines are in a listen-only mode. But after today's prepared remarks, instructions on how to share a question will be given to our questions. To get us started with opening remarks and introductions, I am pleased to turn the floor to Mr. David Kirby. Welcome, David.

Thank you, operator, and good morning, everyone. Welcome to the MDC Partners conference call for the second quarter of 2020. Joining me today are Mark Penn, Chairman and Chief Executive Officer, and Frank Lanuto, Chief Financial Officer. Before we begin our prepared remarks, I'd like to remind you that the following discussion contains forward-looking statements and non-GAAP financial data. Forward-looking statements about the company, including those relating to earnings guidance, are subject to uncertainties referenced in the cautionary statements 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've posted an investor presentation to our website. We also refer you to this morning'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 Chief Executive Officer, Mark Penn.

Thank you and good morning. The second quarter brought the full economic, social and political force of COVID-19 upon our clients, the economy and the marketing service industry. The results affirmed the basic strength and resilience of MDC Partners in the face of a more than 30% contraction in GDP. While we had to take significant cost reduction measures, we continue to implement the key elements of the New World marketing plan that I announced a year ago to position us for a strong rebound as the economy recovers and to continue to operate in a positive net cash position, even as the virus extends economic shutdown. The underlying economics of the business have been preserved and extended, adjusted EBITDA margins have expanded and we have ample liquidity. As we anticipated, revenue declined 15% in the first 6 months of the year. Organic revenue was down 12.9%, fueled by a strong first quarter, which was followed by a softer Q2 performance as organic revenue declined 26%. Excluding direct pass-through costs our net revenue was down 10% in the first half and down 22% in the second quarter, significantly stronger than the recent GDP decline of 32%. After 3 months of clients paring budgets, delaying projects and extending contracts, as expected, we are seeing clients again look to restore funding and new pitches are restarting. Our client relations remain strong, since the revenue loss was driven heavily by client postponement, not client losses. In anticipation of the softer top line, we were extremely diligent in protecting the bottom line through our cost management efforts. In the first 6 months we reduced costs by 16%, or $82 million, as compared to the prior year. 75% of those cost actions, or over $60 million, were taken in the second quarter. Notably, we were…

Thanks, Mark. Good morning, everyone. Our business performed in line with expectations in the second quarter and first half of the year. The COVID-19 pandemic has presented many challenges to our business, clients and team members globally. I believe we have executed well during the crisis, responding quickly in positioning the business to weather this storm and ultimately emerging from this period as a stronger and nimbler organization. Looking at our financial results, in the first half of 2020 we delivered revenue of $587 million, down 12.9% on an organic basis. In the second quarter organic revenue declined 26.4% to $260 million. Excluding the disproportionate impact on direct billable costs during the pandemic, our net revenue declined 10.5% organically in the first half and 21.8% in the second quarter. Looking at our agencies by discipline, our digital business continues to grow rapidly, despite current conditions, followed by our specialist communications business, which remains in strong demand. Our experiential businesses, though small, have been particularly impacted right now and are working on alternate strategies with our clients to offset the decline. Much of our media and advertising business experienced COVID-driven softness in the second quarter, as many clients reduced or delayed a portion of their spending programs. With respect to operating expenses, we acted swiftly at the beginning of the pandemic to further reduce costs beyond the reductions we made previously in 2019. In the first half, we reduced controllable costs by $82 million, or 16%, from the prior year. Over 75% of the savings were in staff costs and just under 10% were from reduced T&E expense. For the second quarter, controllable costs were lower by $62 million, or 24%, compared to prior year, with over 80% of the savings in staff costs. In terms of restructuring actions, we have…

Mr. Lanuto, thank you and thank you to the rest of the leadership team for their remarks today. [Operator Instructions]. We'll hear first from Sean Mickle with Northwest [ph].

My question revolves around your the proposal with Stagwell, about the potential takeover. Can you speak to that? What are some of the challenges you're facing in reaching a decision? A just shed some light on that, please. Hello?

Think we have a connection problem.

Are you -- can you hear us?

Sorry. I can't, I got it. Sorry. I can't give you any information beyond what's publicly available, other than that there's a special committee that's been formed by the board. That special committee has retained Bob Mullis [ph] and DLA Piper. Stagwell has on its side JPMorgan and Freshfields. And the process is continuing along and they will make announcements from the special committee as appropriate and as developments occur.

Do you have a sense of the timeframe associated with that decision?

I can't really comment anything specifically. Irwin Simon is head of the special committee. I know that each side is working as quickly as possible. There's no hesitation or delay. I think that this is being organized and evaluated on all sides in a relatively speedy and diligent manner. Yes.

[Operator Instructions] Mr. Penn, Mr. Lanuto, we have no signals from the audience. I'll turn it back to you for any additional or closing remarks that you have. Or actually, gentlemen, I apologize. I spoke too soon. We do have a signal coming from Mr. Brian Hirschfeld at Bain Capital.

Can you please give us a little bit more clarity around the 2 different groups of integrated networks that you break out on Pages 11 and 12 of the presentation?

Frank?

Certainly, quickly in order to preserve the basic economics of the business, to put us in a position for renewed growth when the economy comes back and we get past the pandemic that troubles both us all emotionally, personally and this economy.

Thank you very much. Be safe. Be well.