Stagwell Inc. (NASDAQ:STGW) Q1 2023 Earnings Conference Call May 9, 2023 8:30 AM ET

Company Participants

Ben Allanson - Investor Relations

Mark Penn - Chairman and CEO

Frank Lanuto - Chief Financial Officer

Conference Call Participants

Laura Martin - Needham

Jeff Van Sinderen - B Riley

Steve Cahall - Wells Fargo

Mark Zgutowicz - Benchmark

Barton Crockett - Rosenblatt

Nick Zangler - Stephens

Ben Allanson

Good morning from Stagwell’s worldwide headquarters at One World Trade Center in New York City and welcome to Stagwell Inc.’s Earnings Webcast for the First Quarter of 2023. My name is Ben Allanson and I recently joined Stagwell to lead the Investor Relations function.

With me today are Mark Penn, Stagwell’s Chairman and Chief Executive Officer; and Frank Lanuto, Chief Financial Officer. Mark will provide a business update and Frank will share our financial review. After the prepared remarks, we will open the floor for Q&A. You are welcome to submit questions through the chat function.

Before we begin, I’d like to remind you that the following remarks include forward-looking statements and non-GAAP financial data. Forward-looking statements about the company, including those related to earnings guidance are subject to uncertainties and risk factors addressed in our earnings release, slide presentation and the company’s SEC filings.

Please refer to our website, stagwellglobal.com/investors, for an investor presentation and additional resources. This morning’s press release and slide deck provide definitions, explanations and reconciliations of non-GAAP financial data.

With that, I’d like to turn the call over to our Chairman and CEO, Mark Penn.

Mark Penn

Thank you, Ben, and thank you to everyone for joining us for our earnings call. Today is an important day for Stagwell, its future and for its investors. I can announce that Stagwell Inc. has entered into a definitive agreement, negotiated by a group of independent directors, advised by legal and advisory teams to repurchase over 23 million shares of Stagwell Inc. class A stock from AlpInvest.

This move will not affect the float, but will reduce the number of shares outstanding by 8% to about 267 million and should avoid the necessity of any further secondary issuances in relation to exiting AlpInvest.

In addition, as per a separate release from the Stagwell Group, the remaining investors in Stagwell Media have stepped up and are in advanced negotiations expected to go to final documentation soon to redeem any remaining Stagwell Media LP interest held by AlpInvest. I believe these actions will remove an overhang from the stock.