NEW YORK MDC Partners said it has hired Michael Sabatino as svp and chief accounting officer.
He joins MDC tomorrow, two days after the company said it would delay the release of its fourth-quarter and full-year results [Adweek Online, March 30].
MDC becomes the second holding company to take such action in recent weeks, following Interpublic Group's inability to set a date for reporting its 2004 results.
Toronto-based MDC—parent to ad agencies such as Cliff Freeman and Partners, Crispin Porter + Bogusky, Kirshenbaum Bond + Partners—said it expects to release its earnings and file its Form 10-K with the Securities and Exchange Commission no later than April 15.
MDC in a statement attributed the delay "to the additional time required for the company to provide its independent auditors with incremental documentation necessary to complete the 2004 audit of the consolidated financial statements of the company and its subsidiaries."
No further explanation was provided, and MDC officials could not immediately be reached.
Sabatino will have responsibility and oversight for management accounting, external financial reporting, SEC compliance, financial planning and analysis and taxation. He joins from the accounting firm Eisner LLP, where he has been a partner for the past year. Walter Campbell, MDC's current CFO, will become CFO of MDC Partners' Secure Products International Group. He has served in various financial functions over the past 10 years.
MDC, which asked for an extension in mid-March, told the SEC it needed more filing time since this is the company's first 10-K filing and first audit as a U.S. registrant, sources said. (In 2004 MDC, which is listed on the Toronto stock exchange and the Nasdaq, went from foreign issuer status to being classified as a U.S. registrant.
As part of its new American orientation, Toronto-based MDC appointed KPMG as its accounting company in the first quarter.
New York-based IPG, in addition to being unable to announce a date for reporting its annual results, has said it might be delayed in releasing its 1Q numbers, and possibly even those for the second quarter [Adweek, March 21]. The annual meeting, typically in May, may be postponed.
IPG's latest accounting woes, due to "material weaknesses in its internal controls," according to the company, appear to be an overstatement of revenue related primarily to acquisitions from 1996 to 2001. The problem stems from IPG claiming full-year revenue on hundreds of agencies it purchased mid-year during that period, sources said. IPG said it had identified about $145 million in revenue and $25 million in net income that "may have been improperly recognized" in that period.