Safeguard Scientifics Announces Fourth Quarter and Full Year 2012 Financial Results and Strategy for 2013 and Beyond

Posted by | March 7, 2013

The stage has been set for Safeguard in 2013 and beyond with an increase in activity on all fronts.

That’s how our President and CEO, Steve Zarrilli, summed up many of Safeguard’s achievements in 2012, which were highlighted in our fourth quarter and year-end conference call this morning.

“In 2013, we intend to be more proactive in driving growth of our existing partner companies. In addition, we’re targeting to increase our roster of partner companies to up to 25 and realizing two well-timed exits by year-end. Through our disciplined approach, we believe that successful execution of our core business can drive Safeguard’s deployed capital plus net cash to a range of $550 million to $700 million by year-end 2015, from approximately $370 million at the beginning of this year.”

For 2012, our partner companies reported aggregate revenue of $197.3 million, up 38% from $142.7 million in 2011. We believe in 2013, partner company aggregate revenue will increase 27% to 37% to between $250 million and $270 million. Results for Safeguard partner companies are reported on a one-quarter lag basis.

As of December 31, 2012, we had deployed an aggregate $213 million of capital into our 18 partner companies, and we had net cash, cash equivalents, and marketable securities of $157.1 million, after subtracting the total carrying value of debt outstanding of $49.0 million.

The Safeguard team will work to increase our stable of partner companies, and to deliver multiple exits in any given twelve month period. We anticipate that we will deploy an average of $50 million to $60 million in any given twelve-month period on new opportunities, targeting cash-on-cash returns of a minimum of 2x our cost.

We believe that successful execution of these initiatives will drive Safeguard’s deployed capital and net cash, or our implied capital under management, to a range of $550 million to $700 million by year-end 2015, from approximately $370 million at the beginning of this year.

If you missed this morning’s call, an audio replay and webcast will be available through 9:00 a.m. EDT on April 8, 2013 at 877-344-7529 // (International) +412-317-0088 // www.safeguard.com/results. The replay access code is 10025175. 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 year-end 2012 results conference call and webcast.

 

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