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Safeguard Scientifics Announces Fourth Quarter And Full Year 2012 Financial Results

Stocks in this article: SFE

Safeguard Scientifics, Inc. (NYSE:SFE), a holding company that builds value in growth-stage healthcare and technology companies, today announced that its partner companies reported 2012 aggregate revenue of $197.3 million, up from $142.7 million in 2011. Partner companies remain positioned for continued growth and achievement of operating, financial and strategic milestones. As a result, guidance for 2013 partner company aggregate revenue is projected to be between $250 million and $270 million. Results for Safeguard’s partner companies are reported on a one-quarter lag basis.

“The stage has been set for 2013 and beyond with an increase in activity on all fronts,” said Stephen T. Zarrilli, President and CEO at Safeguard. “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.”

Consolidated net loss for the three months ended December 31, 2012 was $10.8 million, or $0.51 per share, compared to $24.5 million, or $1.18 per share, for the same period in 2011. For the year ended December 31, 2012, the consolidated net loss was $39.4 million, or $1.88 per share, versus net income of $110.6 million, or $5.33 per share, in 2011.

“Safeguard had deployed an aggregate of $213 million of capital into its 18 current partner companies as of December 31, 2012,” said Jeffrey B. McGroarty Senior Vice President – Finance. “Our net cash, cash equivalents and marketable securities at year-end 2012 totaled $157.1 million after subtracting the total carrying value of debt outstanding of $49.0 million. Cash used in operating activities was $3.9 million for the three months and $16.5 million for the year ended December 31, 2012, compared to $4.1 million and $17.7 million, respectively, for the comparable periods in 2011.”



Safeguard Partner Company by Revenue Stage

Development Stage

- Pre-revenue

- Proving out technology

- Developing prototype

- Beta stage customers


Initial Revenue Stage

- $0M to $5M in revenue

- Initial customers

- Early market penetration

- Management team forming

- Infrastructure being built


Expansion Stage

- $5M to $20M in revenue

- Commercial grade solution

- Growing market penetration

- Management team built out

- Infrastructure in place


High Traction Stage

- $20M+ in revenue

- Significant commercial traction



AdvantEdge Healthcare Solutions, Inc. (Warren, NJ — High Traction Stage)

AdvantEdge Healthcare Solutions (“AdvantEdge”) is a technology-enabled provider of healthcare financial management solutions and business intelligence tools that substantially improve decision making, maximize financial performance, streamline operations and eliminate compliance risks for healthcare providers. AdvantEdge continues to gain meaningful scale through organic growth and strategic acquisitions. Founded in 1999, AdvantEdge is recognized as one of the top 10 medical billing, coding and practice management companies in the U.S.; has more than 675 employees in eight regional offices in the U.S. and one office in Bangalore, India; and collects over $1 billion annually for its physician, hospital, ambulatory surgery and large office-based clients using its own proven technology. Safeguard has deployed $15.3 million into AdvantEdge since November 2006 and has a 40% primary ownership position.

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