Safeguard Scientifics Q4 and Full-Year Financial Results Recap

Posted by | February 29, 2012

This morning, we announced our fourth quarter and full-year 2011 financial results.

Consolidated net loss for the three months ended December 31, 2011 was $24.5 million, or $1.18 per share, compared with net income of $45.1 million, or $2.19 per share, for the same period in 2010. For the year, net income was $110.6 million, or $5.33 per share, versus net income of $26.6 million, or $1.30 per share, in 2010.

We executed two well-timed exits with Portico Systems and Advanced BioHealing, realizing net proceeds of $182 million, including escrowed amounts, and booking cash-on-cash returns of 4x and 14x, respectively. Our deal teams deployed $69.4 million in capital in seven new partner companies and made three follow-on deployments in existing partner companies totaling $14 million. We also deployed $13.6 million of capital into Penn Mezzanine and related participation interests through which we expect to generate management fee and interest income, as well as profit participation opportunities. Our repayment of $31 million in corporate debt bolstered Safeguard’s financial strength, improving the company’s ratio of total debt to equity at year-end 2011 to 1:8. Safeguard continues to enhance its brand as ‘the preferred catalyst to build great companies’ to ultimately drive shareholder value.

Today, we hold interests in 17 partner companies. We typically deploy up to $25 million in growth capital per company with the intention of achieving aggregate, targeted, risk-adjusted returns on our capital of 2x to 4x over three to five years.

For all deployments since January 2006 that have been realized or written off, Safeguard has realized aggregate cash-on-cash returns of 2.4x—that’s twice as much as the U.S. venture capital cash-on-cash returns for that same period, according to data provided by Cambridge Associates.

If you were unable to join us live this morning, check out our podcast or you can listen to a replay of the call at 855-859-2056 // (International) +404-537-3406. The replay will be available through March 30, 2012.

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