Safeguard Scientifics Announces Third Quarter 2019 Financial Results and Declares Cash Dividend of $1.00 Per Share

RADNOR, Pa., Nov. 7, 2019

On November 7, 2019, the Safeguard Board of Directors declared a special cash dividend of $1.00 per share, payable on December 30, 2019 to shareholders of record as of the close of business on December 23, 2019 (the "Record Date").  The ex-dividend date will be the trading day immediately prior to the Record Date.

"This dividend demonstrates our commitment to return value to our shareholders.  And, we remain committed to continuing to reward our shareholders by maximizing the overall value of our partner company holdings and by returning that value to our shareholders as quickly and tax efficiently as possible," said Brian J. Sisko, Safeguard's President and CEO.  "Since we announced our strategy, we have realized over $184 million in cash proceeds related to monetizations of our partner company interests.  To date we have used those proceeds to continue to support our partner companies; to operate the business; and to retire all of our debt.  We are now able to start returning value to our shareholders.  At this time, our Board of Directors has determined that the most appropriate first step in this stage of the execution of our strategy is to issue a dividend.  We anticipate the dividend to be characterized as a return of capital for Federal tax purposes.  Whenever we have cash and cash equivalents on our balance sheet that exceeds what we believe is prudent to keep on hand to operate the business and continue to support our partner companies, our Board of Directors will authorize share repurchases and/or additional dividends.  Currently, we believe $25 million is the appropriate amount to retain on our balance sheet."

The Company also announced corporate governance changes.  Effective immediately, Board of Director compensation will be paid solely with Safeguard equity.  Also, the size of the Board will be reduced to four from six at the Company's upcoming Annual Meeting.

Highlights

• Safeguard continues the pursuit of exits from our various partner company positions and, in collaboration with Evercore, is pursuing strategies regarding the return of value to our shareholders.
• At September 30, 2019, the Company's balance of cash, cash equivalents, and restricted cash totaled $45.6 million.
• During the quarter, the Company fully repaid its outstanding debt.
• Safeguard continues to prudently manage follow-on deployments to its partner companies.  Follow-on fundings totaled $3.8 million for the quarter and $14.5 million year to date.
• General and administrative expenses continued to decrease, totaling $2.3 million for the quarter ended September 30, 2019 as compared to $3.5 million for the comparable prior year quarter, reflecting the Company's reduced cost structure.  Corporate expenses totaled $1.9 million for the quarter ended September 30, 2019.
• Financings undertaken during the third quarter resulted in $4.3 million of observable price gains recorded in Other income and $1.0 million of unrealized dilution gains recorded in Equity income.
• Equity income also included the receipt of $1.8 million of cash proceeds related to amounts previously withheld for contingencies from the proceeds of prior exit transactions.    

OUTLOOK