SFE Third Quarter 2012 Financial Results
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 operate, 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. 2
Safeguard Q3’12 Highlights • Continue to Build Value • Partner Company Aggregate Revenue Guidance Increased • Customer Wins, Strategic Partnerships, Regulatory Progress • Penn Mezzanine Generating Interest and Fee Income • Deal Pipeline Full of Exciting Capital Deployment Opportunities 3
Safeguard Strategy • Exploit Five Strategic Themes • Maturity, Migration, Convergence, Compliance and Cost Containment • Typically Deploy up to $25M in Growth Capital per Partner Company • 16 Partner Companies Today • Exits Timed to Maximize Risk ‐ Adjusted Returns on Capital • Targeted Aggregate 2x to 5x, at a Minimum, Given Evolving Diversified Deployment Strategy • Realized Gross, Aggregate Cash ‐ on ‐ Cash Return of 2.0x on Non ‐ Legacy Capital Deployments Since 2006 4
Investor Day 2012 Recap 5
Partner Company Q3’12 Update: • Innovative Molecular Diagnostic Company • Developed More Accurate/Comprehensive Pre ‐ Pregnancy Genetic Tests • GoodStart Select™ is CLIA ‐ and CAP ‐ Approved • Offers Tests for All Disorders Recommended by Pertinent Medical Societies • Next ‐ Generation DNA Sequencing Results in Higher Detection Rates • Targeting $1B Genetic Testing Segment • SFE Deployed $10.5M Since September 2010 for 29% Primary Ownership 6
Partner Company Q3’12 Update: • Specialty Pharmaceutical Company • Focused on Branded Therapeutics for Diseases of Central Nervous System • Appointed new CEO • Completed $28M Private Placement • FDA Assigned Zecuity™ PDUFA Date of January 17, 2013 • Zecuity would be First and Only Transdermal Patch for Treatment of Migraine • SFE Deployed $23.3M Since September 2006 for 18% Primary Ownership 7
Financial Highlights • Net Cash, Cash Equivalents and Marketable Securities • $183.1M at 9/30/12 vs. $211.9M at 12/31/11 • Q3 Primary Use of Cash = $16.4M • 2012 Projected Use of Cash between $65M to $85M • Capital Deployment into New Partner Companies • Follow ‐ on Funding for Current Partner Companies • Follow ‐ on Funding for Penn Mezzanine Participations • Corporate Expenses • Platform Expansion 8
Q3’12 Update: • First Fund Raised $64.2M • Safeguard is GP and Co ‐ Investor • 8 Investments Outstanding 9/30/12 • All Maturities ≤ 5 Years from Funding 9
Safeguard Partner Companies • 16 Partner Companies Today • 26 Board Seats Across 16 Companies • 15 Companies Generating Revenue • Deployed $188.3M in Current Partner Companies as of September 30, 2012 • Realized $646M Since January 2006 * Aggregate revenue guidance for 2012 and prior years, presented above, reflects revenue on a net basis. Revenue figures utilized for certain companies pertain to periods prior to Safeguard’s involvement with said companies and based solely on information provided to Safeguard by such companies. Safeguard reports the revenue of its equity method and cost method partner companies on a one-quarter lag basis. NYSE:SFE
Questions & Answers
Why Own Safeguard? • Full Value Yet to be Realized • Ownership Stakes in Exciting Partner Companies • Top Performance of Proven Team • Financial Strength, Flexibility and Liquidity • Strong Alignment of Interests
SFE Third Quarter 2012 Financial Results Replay Information 877 ‐ 344 ‐ 7529 (International) +412 ‐ 317 ‐ 0088 Access Code: 1001974 Replay available through November 26, 2012 at 9:00am EST 13
John E. Shave III VICE PRESIDENT, BUSINESS DEVELOPMENT & CORPORATE COMMUNICATIONS jshave@safeguard.com P 610.975.4952 E IR@safeguard.com 14
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