SFE- should return to 2.75 the next few days
2. 54 x 59 now
Safeguard Announces Second Quarter Results; Continues Progress in its Operating Company Evolution
WEDNESDAY, JULY 30, 2003 4:46 PM
- BusinessWire
WAYNE, Pa., Jul 30, 2003 (BUSINESS WIRE) -- Safeguard Scientifics, Inc. (SFE) , a leader in building and operating technology companies, today announced its operating results for the second quarter ended June 30, 2003.
"We continued to make progress implementing our strategy of evolving to an operating company during the second quarter," said Anthony L. Craig, Safeguard's President and Chief Executive Officer. "We are encouraged with our pace of monetization activities as we continue to nurture our strategic initiatives."
Financial Highlights
Safeguard's consolidated revenue for the second quarter of 2003 was $419 million, compared with $453 million for the second quarter of 2002. The decline is due to a decrease in revenue at CompuCom, partially offset by the inclusion of Alliance Consulting's revenue subsequent to the acquisition in 2002.
For the quarter ended June 30, 2003, Safeguard reported a net loss of ($3.2) million, or a diluted loss per share of ($0.03), compared with a net loss of ($33.9) million, or a ($0.29) diluted loss per share in the second quarter of 2002. For the six months ended June 30, 2003, Safeguard reported a net loss of ($18.7) million or a diluted loss per share of ($0.17), compared with a net loss of ($74.6) million, or a diluted loss per share of ($0.65) in the same period of 2002 (excluding the cumulative effect of change in accounting principle). Including the cumulative change in accounting principle, the loss in 2002 was ($96.0) million, or a diluted loss per share of ($0.83). Included in the results for the three and six months ended June 30, 2003 is $12.6 million of gains related to the sales of three legacy companies, including sales of our shares of Pac-West and DocuCorp and the sale of a portion of our shares in Internet Capital Group.
As of June 30, 2003, Safeguard's parent company cash balance was $119 million and the market value of its ownership of public company marketable securities was $220 million. Safeguard's parent company cash balance was $133 million and the market value of its public company marketable securities was $232 million as of July 29, 2003.
"We strengthened our balance sheet, demonstrated our ability to realize value from our legacy companies and progressed in our transition to our operating company model," noted Chris Davis, Managing Director and CFO. "It was a solid quarter with measurable progress."
Web Cast
Safeguard will host a Web cast on July 31, 2003 at 9:00 a.m. ET to discuss second quarter 2003 results. You can access the Web cast, which will be accompanied by slides, at the Safeguard Web site at www.safeguard.com. The conference call is also available via a toll-free number. For listen only access, please call the toll-free number 877-818-2521 by 8:55 a.m.
About Safeguard (www.safeguard.com)
Safeguard Scientifics, Inc. (SFE) is an operating company creating long-term value by taking controlling interest in and developing its companies through superior operations and management. Safeguard operates businesses that provide business decision and life science software-based product and service solutions.
Forward-Looking Statements
The statements contained in this press release and attachments that are not historical facts are forward-looking statements that involve certain risks and uncertainties, including risks associated with the uncertainty of future performance of our companies, acquisitions of additional companies and dispositions of companies, additional financing requirements, the effect of economic conditions in the business sectors in which our companies operate, our ability to execute our business strategy and other uncertainties described in the Company's filings with the Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements or other information contained in this press release.
NOTE TO EDITORS: Safeguard is a service mark of Safeguard Scientifics, Inc.
Safeguard Scientifics, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenue $419,212 $452,852 $789,911 $803,656
Total operating expenses 429,126 459,922 811,058 819,622
-------- -------- -------- --------
(9,914) (7,070) (21,147) (15,966)
Other income (loss), net 12,881 (3,397) 17,072 (8,928)
Impairment - related party - - (659) -
Interest Income 853 2,307 1,885 4,327
Interest and financing expense (3,477) (5,558) (6,921) (13,023)
-------- -------- -------- --------
Income (loss) before income
taxes, minority interest,
equity loss and cumulative
effect of change in
accounting principle 343 (13,718) (9,770) (33,590)
Income tax expense (1,465) (1,944) (2,857) (3,062)
Minority interest 107 (608) 97 (1,449)
Equity loss (2,135) (17,639) (6,159) (36,546)
-------- -------- -------- --------
Net loss before cumulative
effect of change in
accounting principle (3,150) (33,909) (18,689) (74,647)
Cumulative effect of change in
accounting principle (a) - - - (21,390)
-------- -------- -------- --------
Net loss $(3,150) $(33,909) $(18,689) $(96,037)
======== ======== ======== ========
Basic loss per share
Prior to cumulative effect of
change in accounting
principle $(0.03) $(0.29) $(0.16) $(0.64)
Cumulative effect of change
in accounting principle - - - (0.18)
-------- -------- -------- --------
$(0.03) $(0.29) $(0.16) $(0.82)
======== ======== ======== ========
Diluted loss per share
Prior to cumulative effect of
change in accounting
principle $(0.03) $(0.29) $(0.17) $(0.65)
Cumulative effect of change
in accounting principle - - - (0.18)
-------- -------- -------- --------
$(0.03) $(0.29) $(0.17) $(0.83)
======== ======== ======== ========
Weighted average shares
outstanding - basic and
diluted 118,348 117,572 118,256 117,548
======== ======== ======== ========
(a) We adopted the provisions of SFAS 142, "Goodwill and Other
Intangible Assets" which required that transitional impairment
losses for goodwill, and negative goodwill be included as a
cumulative change as of January 1, 2002.
Safeguard Scientifics, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2003 2002
---------- ----------
(unaudited)
Assets
Current Assets
Cash, restricted cash and short-term
investments - Parent $119,291 $126,334
Cash and cash equivalents - Subsidiaries 136,093 142,065
Accounts receivable 183,764 179,668
Inventories 29,312 30,181
Trading securities 1,642 832
Available-for-sale securities 11,813 -
Prepaid expenses and other current
assets 13,764 13,045
---------- ----------
Total current assets 495,679 492,125
Property and equipment, net 36,289 38,610
Ownership interests in and advances
to affiliates 66,069 74,859
Available-for-sale securities - 4,548
Intangible assets, net 14,554 18,580
Goodwill, net 213,672 206,815
Deferred taxes 496 1,210
Other 27,257 31,919
---------- ----------
Total Assets $854,016 $868,666
========== ==========
Liabilities and Shareholders' Equity
Total current liabilities $238,013 $249,979
Long-term debt 1,976 1,998
Minority interest 135,961 130,384
Other long-term liabilities 14,199 14,032
Convertible subordinated notes
(5%, due June 2006) 200,000 200,000
Total shareholders' equity 263,867 272,273
---------- ----------
Total Liabilities and Shareholders'
Equity $854,016 $868,666
========== ==========
Certain prior year amounts have been reclassified to conform to the
current year presentation.
Safeguard Scientifics, Inc.
Results of Segment Operations
(unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Summary
Strategic Initiative $(10,481) $(6,982) $(18,182) $(13,734)
Legacy 12,858 (20,953) 13,433 (45,701)
CompuCom 3,377 4,987 6,823 7,868
-------- -------- -------- --------
Total segments 5,754 (22,948) 2,074 (51,567)
Corporate operations (7,439) (9,017) (17,906) (20,018)
Income tax expense (1,465) (1,944) (2,857) (3,062)
-------- -------- -------- --------
(3,150) (33,909) (18,689) (74,647)
Cumulative effect of change
in accounting principle - - - (21,390)
-------- -------- -------- --------
$(3,150) $(33,909) $(18,689) $(96,037)
======== ======== ======== ========
Strategic Initiative
Revenue 26,720 11,999 58,415 20,710
Net Loss (10,481) (6,982) (18,182) (13,734)
Legacy
Revenue 14,678 14,719 23,297 29,819
Net income (loss) 12,858 (20,953) 13,433 (45,701)
Compucom
Revenue 377,728 426,142 708,025 753,090
Net income 3,377 4,987 6,823 7,868
SOURCE: Safeguard Scientifics, Inc.
Safeguard Scientifics, Inc., Wayne
Media Contact:
Ed Callahan, 610-293-0600
or
Investor Contact:
Kris Block, 610-293-0600
businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2003 Business Wire. All rights reserved. |
