SFE First Quarter 2011 Results Forward Looking Statements - - PDF document

SFE First Quarter 2011 Results

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Forward Looking Statements

Statements contained in this presentation that are not historical facts are forward looking statements which involve certain risks and uncertainties including, but not limited to, risks associated with the uncertainty of managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, our ability to execute our strategy, the uncertainty of the future performance of our partner companies, acquisitions and dispositions of additional partner companies, the inability to manage growth, government regulation and legal liabilities and the effect of economic conditions in the business sectors in which our partner companies

• perate, negative media coverage and other uncertainties as described in our

filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K. Safeguard does not assume any obligation to update any forward looking statements or other information contained in this presentation.

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2011 Highlights YTD

• Expand Platform with Mezzanine Lending Company
• Deploy $5M in ThingWorx and $25M in PixelOptics
• Reiterate Aggregate Partner Company Revenue Projections
• Work Towards Additional Value Creation in 2011, 2012

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Safeguard Overview

• Exploit Five Strategic Themes

– Maturity, Migration, Convergence, Compliance and Cost Containment

• Typically Deploy up to $25M in Growth Capital per Partner Co.
• 15 Partner Companies Today

– 7 Life Sciences, 8 Technology; 13 Private, 2 Public (As of 4/27/11)

• Exits Timed to Maximize Risk-Adjusted Returns on Capital

– Targeted 3 to 5x, at a Minimum

• Replenish SFE Holdings with Winners in 2011, 2012

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New Partner Company: Life Sciences

• Commercializing World’s First Electronically

Focusing Prescription Eyewear

• $13B Annual Market Opportunity, Projected to

Increase with Aging Population

• SFE Deployed $25M of $35M Series D Equity

Financing

• SFE Ownership = 25%

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Partner Company Highlights: Life Sciences

• Filed S-1 with SEC for IPO on February 25, 2011
• SFE ownership = 28%
• Zelrix NDA Accepted for Filing by FDA
• Q3 2011 Target for NDA Review Completion
• SFE ownership = 18%

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Partner Company Highlights: Technology

• Strong Growth Organically and Via Acquisitions
• 2010 Revenue Up ~115%
• SFE ownership = 40%
• Robust Growth over Past Five Years
• 39 Healthcare Customers Serving 42M+ Members
• SFE ownership = 45%
• Explosive Growth since 2007 Founding
• Key Strategic Hires, Acquisition in 2010
• 2010 Revenue Growth +150%
• First European Office Opened Q1’11
• SFE ownership = 22%

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Financial Highlights

• SFE is Stronger, Leaner, Better Positioned
• Unprecedented Activity has Achieved Strategic Goals
• Realized Big Gains from Q4’10 Exit Transactions
• Deployed Capital in Two New Partner Companies in 2011
• SFE to Commit $30M in Mezzanine Lending Company
• Reduced Corporate Debt through 2.625% Notes Repurchase
• Debt:Equity Ratio 1:5 at 3/31/11. Improved from 1:2 at 12/31/09

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Uses of Cash in Q1 2011

• MediaMath = $9M
• ThingWorx = $5M
• Corporate Operating Expenses = $7.7M
• Cash Operating Expenses Projected at $17-18M for 2011

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Uses of Cash in 2011

• Repayment of Senior Convertible Debentures
• Corporate Expenses
• Capital Deployment into New Partner Companies
• Follow-on Funding for Current Partner Companies
• Platform Expansion

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Mezzanine Fund Initiative

• Strategic Partnership
• Total Initial Capital = $60M+
• SFE to Commit $30M
• Financing to Capitalize Mid-Atlantic Enterprises
• SFE to Benefit from Management Fees and Carried Interest

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2011 Aggregate Revenue Guidance

• 2011 Forecast for the

Technology Group: $180M - $190M

• 2011 Forecast for the

Life Sciences Group: Deferred due to Partner Company ABH’s February 2011 Filing of a Registration Statement

• n Form S-1 with the

SEC for an IPO.

* Figures above include revenues for Clarient and Quinnova Pharmaceuticals. As a reminder, Safeguard reports the revenue of its equity method and cost method partner companies on a one-quarter lag basis.

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