RECAP: Safeguard Scientifics Third Quarter 2012 Financial Results

Posted by | October 25, 2012

This morning, Safeguard Scientifics announced its third quarter 2012 results and highlighted the progress our partner companies have made over the past three months. They continue to grow, mature, and achieve financial and strategic milestones. Combined with Safeguard’s value-add support at the holding company level, our partner companies are well-positioned, and we remain encouraged by our prospects to realize aggregate results in our target range consistent with our recent results.

As a result of continued momentum, 2012 aggregate partner company revenue guidance was increased to a range of $185 million to $190 million. This represents an increase of 33 percent to 37 percent as compared to $139.2 million in 2011, and an approximate increase of 15 percent as compared to initial 2012 revenue guidance of $160 million to $165 million. Results for Safeguard partner companies are reported on a one-quarter lag basis.

For the three months ended September 30, 2012, Safeguard’s consolidated net loss was $8.8 million, or $0.42 per share, compared with net income of $22.3 million, or $1.07 per share, for the same period in 2011. For the nine months ended September 30, 2012, the consolidated net loss was $28.6 million, or $1.36 per share, versus net income of $135.1 million, or $6.52 per share, for the same period in 2011.

Our net cash, cash equivalents, and marketable securities at September 30, 2012 totaled $183.1 million after subtracting the total carrying value of debt outstanding of $46.2 million. Cash used in operating activities was $3.0 million for the three months ended September 30, 2012, compared to $3.2 million for the comparable period in 2011.

We project aggregate annual 2012 use of cash to be between $65 million and $85 million, which is below our original projected range of $100 million to $150 million. Cash used in operating activities for 2012 is projected to be within a range of $17.0 million to $17.5 million.

Safeguard’s deal pipeline is full of exciting opportunities in our targeted markets, both the life sciences and technology sectors. We know it is more important than ever to remain vigilant and disciplined in pursuing new deployments at Safeguard. Our bar is set high, deliberately. We remain firm in the valuations that we pay for stakes in new partner companies, and in our expectations for growth and value creation.

If you missed this morning’s call, you can access our webcast through November 26, 2012 at 9:00 a.m. EST, or listen to the telephone replay at 877-344-7529 or (international) +412-317-0088. The replay access code is 1001974. You can also review our Twitter feed, @Safeguard, to see our live tweets from this morning’s call.

In addition, here is a copy of the presentation that was highlighted during our third quarter results conference call and webcast.


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