Safeguard Scientifics (SFE) Reports Q2 Loss of $0.48

Safeguard Scientifics (NYSE: SFE) reported Q2 EPS of ($0.48), versus $1.75 reported last year.

Highlights

• Safeguard remains committed to its stated strategy to monetize ownership interests in a timely manner and maximize the value for Safeguard shareholders.
• Safeguard's companies continue to respond to COVID-19 by managing cost structures, securing capital and adjusting operations to take advantage of opportunities in post COVID-19 environment.
• Safeguard completed follow-on funding to three companies totaling $4.4 million in the second quarter, including $3.8 million to Syapse as part of an existing investor round that also expanded and restructured its debt facilities, bringing the year-to-date total deployed to $6.6 million.
• At June 30, 2020, the carrying value of the Company's ownership interests totaled $61.4 million, and cash, cash equivalents and restricted cash totaled $13.6 million.
• Reduced General and Administrative expenses 30% year over year to $2.0 million for the quarter ended June 30, 2020, including a reduction in Corporate expenses1 of $1.2 million, a 36% year over year decline.
• Safeguard's net loss for the three months ended June 30, 2020 was $9.9 million, or $0.48 per share, compared with net income of $36.1 million, or $1.75 per share, for the same period in 2019. Safeguard's results for the quarter included additional non-cash impairment charges of $5.7 million resulting from reduced expectations for certain ownership interests, while the prior period quarter included a gain from the sale of Transactis of $50 million.
• Safeguard's net loss for the six months ended June 30, 2020 was $25.9 million, or $1.25 per share, compared with net income of $57.8 million, or $2.80 per share, for the same period in 2019. Safeguard's results for the year-to-date period included non-cash impairment charges of $17.0 million, while the prior period included gains from the sales of Propeller and Transactis totaling $86 million.

"We are pleased by how the management teams of our companies have responded to the challenges posed by COVID-19," said Eric C. Salzman, Safeguard's Chief Restructuring Officer. "By and large, our companies are tracking ahead of their COVID-19 budgets, actively adapting to the current environment and in some cases finding new pockets of strength. Our team is fully engaged in the support of our companies and the actions they are taking. While the current environment may impact the time frame of expected exits for some of our companies, we are encouraged by an increase in demand in certain markets and cautiously optimistic that the activity we are seeing with strategic partners and capital providers will translate into continued recovery and increased opportunities going forward."

"We have taken action to reduce expenses while continuing to prudently evaluate deployments," said Mark A. Herndon, Safeguard's Senior Vice President and Chief Financial Officer. "Our expectation for follow-on funding requirements during the full year 2020 remains between $8 and $12 million. Corporate expenses for the year ended December 31, 2020 are expected to be at the low end, or below, our previously disclosed range of $5.6 to $6.0 million as compared to $7.1 million reported for the year ended December 31, 2019."

For earnings history and earnings-related data on Safeguard Scientifics (SFE) click here.

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