Safeguard Scientifics (NYSE: SFE) Investor Relations Presentation - November 2012

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Why Own Safeguard? …

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

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.

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  • 1. Investor Presentation November 2012
  • 2. Forward Looking StatementsStatements contained in this presentation that are not historical facts areforward looking statements which involve certain risks and uncertaintiesincluding, but not limited to, risks associated with the uncertainty ofmanaging rapidly changing technologies, limited access to capital,competition, the ability to attract and retain qualified employees, our abilityto execute our strategy, the uncertainty of the future performance of ourpartner companies, acquisitions and dispositions of additional partnercompanies, the inability to manage growth, government regulation and legalliabilities and the effect of economic conditions in the business sectors inwhich our partner companies operate, negative media coverage and otheruncertainties as described in our filings with the Securities and ExchangeCommission, including our Annual Report on Form 10-K.Safeguard does not assume any obligation to update any forward lookingstatements or other information contained in this presentation. 2
  • 3. The Safeguard Difference (NYSE:SFE) SIGNIFICANTLY UNDERVALUED 3
  • 4. 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 4
  • 5. Experienced Team 5
  • 6. The Company We Keep 6
  • 7. Safeguard Today 7
  • 8. Safeguard Positioning 8
  • 9. Go To Market Strategy> Growth Financing> Typically Deploy Up to $25M> Generally Primary Shareholder> Realize ValueGROWTH DRIVERS CRITERIA• Maturity • Management• Migration • Market• Convergence • Model• Compliance • Momentum• Cost Containment • Moat 9
  • 10. Attractive Sectors 10
  • 11. Recent Success Stories Cash-on-Cash Acquired By Proceeds* Return $38M 4x $138M 13x $41M 3x Return Potential Could Approach 8x*** $208M** 3x Market Cap Increased 5x * Does not include unearned milestones / earnouts, or amounts remaining in escrow, where applicable. ** Proceeds include $61M from sale of CLRT shares during Q3’09. *** Based on achievement of difficult earnout provisions. 11
  • 12. Revenue Stages 12
  • 13. Case Study: SFE Stake 25%• Medical Technology Company• Developed and is Commercializing emPower!• emPower! Most Significant Change in Eyeglasses Since Bifocal in 1784• 100M Bifocals and Progressive Lenses Sold Per Year• Every 1% Penetration = $400M in Revenue• 1000+ Eye Care Professionals Signed On• SFE Deployed $31.7M since April 2011 13
  • 14. Case Study: SFE Stake 40% • Top 10 Provider of Medical Billing and Practice Management Services • U.S. Market Opportunity Exceeds $4B Annually • <20% Physician Practices Outsource Billing and Practice Management • Gaining Meaningful Scale via Organic Growth and Strategic Acquisitions • Completed Seven Acquisitions since 2007 • 2011 Revenue Increased 40% YoY to ~$40M • Inc. 5000 Four Consecutive Years; Ranked #10 Fastest Growing Co. in NJ • SFE Deployed $15.3M since November 2006 Market for AHS Services Approx. $4B - $8B11 Billing and Practice Management Service Market (Falcon Capital): $8.0B; Total RCM Market (Wallingford Capital/HBMA, 2007): $4.75 B; Top 10 Billing cos.: $1.0B 14
  • 15. Case Study: SFE Stake 22%• Provides Enterprise-Class Technology and Services to Advertisers/Agencies• ‘Bloomberg’ Terminal: Media Buying Platform• Named #1 Demand-Side Platform Vendor by Forrester Research• Strong Growth Continues; Ranked on Inc. 500 in 2012• Expanding Domestic, International Operations• Strong Client Roster – All Agency Groups, Dozens of Fortune 500• SFE Deployed $18.5M since July 2009 15
  • 16. 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
  • 17. 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 17
  • 18. Strategy for Growth• Build Value in Current Holdings• Realize Some Valuable Exits• Replenish The Holdings with Winners• Expand the Platform 18
  • 19. 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 19
  • 20. The Safeguard Difference (NYSE:SFE) SIGNIFICANTLY UNDERVALUED 20
  • 21. John E. Shave IIIVICE PRESIDENT,BUSINESS DEVELOPMENT &CORPORATE COMMUNICATIONSjshave@safeguard.comP 610.975.4952E IR@safeguard.com 21