Exhibit 99.1
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| SAFEGUARD MEDIA CONTACT: | | INVESTOR CONTACT: |
| Ed Callahan | | Kris Block |
| (610) 293-0600 | | (610) 293-0600 |
SAFEGUARD ANNOUNCES FIRST QUARTER RESULTS
Wayne, PA, April 30, 2003 –Safeguard Scientifics, Inc. (NYSE: SFE), a leader in building and operating technology companies, today announced its operating results for the first quarter ended March 31, 2003.
“During the last few months, Safeguard completed the first stage of our strategy – the turnaround process and strategy formulation” said Anthony L. Craig, Safeguard’s President and Chief Executive Officer. “During the second stage, Safeguard will continue to refine our strategy while supporting operational excellence at our companies. The final stage will emerge when Safeguard’s operating companies have evolved sufficiently to be evaluated against traditional operating company measurements.”
Financial Highlights
Safeguard’s consolidated revenue for the first quarter of 2003 was $370.7 million, compared with $350.8 million for the first quarter of 2002 due primarily to the inclusion of Alliance Consulting revenues in Q1 2003.
For the quarter ended March 31, 2003, Safeguard reported a net loss of ($15.5) million, or a diluted loss per share of ($0.14), compared with a net loss of ($62.1) million, or a $(0.53) diluted loss per share in the first quarter of 2002. The 2002 loss included a cumulative effect of a change in accounting principle of $(21.4) million, or a diluted loss per
share of $(0.18). This loss compares with a loss of $(31.2) million, or a diluted loss per share of $(0.27) for the fourth quarter of 2002.
As of March 31, 2003, Safeguard’s parent company cash balance was $109 million and the market value of its ownership of public company marketable securities was $182 million. Safeguard’s parent company cash balance was $106 million and the market value of its public company marketable securities was $200 million as of April 29, 2003.
“It was a solid quarter for Safeguard” noted Chris Davis, Managing Director and CFO. “We continued to trim our quarterly operating losses, while continuing to build our strategic initiative subsidiaries.”
Web Cast
Safeguard will host a Web cast May 1, 2003 at 9:00 a.m. EDT to discuss first 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. (NYSE: 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.
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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)
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| | | | Three Months | | Three Months |
| | | | Ended March 31, | | Ended March 31, |
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| | | | 2003 | | 2002 |
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| Revenue | | $ | 370,699 | | | $ | 350,804 | |
| Total operating expenses | | | 381,932 | | | | 359,700 | |
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| | | | (11,233 | ) | | | (8,896 | ) |
| Other income (loss), net | | | 4,191 | | | | (5,531 | ) |
| Impairment — related party | | | (659 | ) | | | — | |
| Interest, net | | | (2,412 | ) | | | (5,445 | ) |
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| Loss before income taxes, minority interest, equity loss and cumulative effect of a change in accounting principle | | | (10,113 | ) | | | (19,872 | ) |
| Income tax expense | | | (1,392 | ) | | | (1,118 | ) |
| Minority interest | | | (10 | ) | | | (841 | ) |
| Equity loss | | | (4,024 | ) | | | (18,907 | ) |
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| Net loss before cumulative effect of a change in accounting principle | | | (15,539 | ) | | | (40,738 | ) |
| Cumulative effect of a change in accounting principle (a) | | | — | | | | (21,390 | ) |
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| Net loss | | $ | (15,539 | ) | | $ | (62,128 | ) |
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| Basic loss per share | | | | | | | | |
| | Prior to cumulative effect of change in accounting principle | | $ | (0.13 | ) | | $ | (0.35 | ) |
| | Cumulative effect of change in accounting principle | | | — | | | | (0.18 | ) |
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| | | $ | (0.13 | ) | | $ | (0.53 | ) |
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| Diluted loss per share | | | | | | | | |
| | Prior to cumulative effect of change in accounting principle | | $ | (0.14 | ) | | $ | (0.35 | ) |
| | Cumulative effect of change in accounting principle | | | — | | | | (0.18 | ) |
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| | | $ | (0.14 | ) | | $ | (0.53 | ) |
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| Weighted average shares outstanding — basic and diluted | | | 118,163 | | | | 117,523 | |
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| (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. The effect on net earnings was an increase in net loss of $21.8 million. |
Safeguard Scientifics, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
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| | | | March 31, | | December 31, |
| | | | 2003 | | 2002 |
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Assets | | | | | | | | |
| Current Assets | | | | | | | | |
| | Cash and cash equivalents, restricted cash and short-term investments — Parent | | $ | 108,512 | | | $ | 126,334 | |
| | — Subsidiaries | | | 152,053 | | | | 142,065 | |
| | Trading securities | | | 768 | | | | 832 | |
| | Accounts receivable | | | 125,526 | | | | 179,668 | |
| | Inventories | | | 26,327 | | | | 30,181 | |
| | Prepaid expenses and other current assets | | | 14,610 | | | | 13,045 | |
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| Total current assets | | | 427,796 | | | | 492,125 | |
| Property and equipment, net | | | 38,140 | | | | 38,610 | |
| Ownership interests in and advances to affiliates | | | 77,691 | | | | 74,859 | |
| Available-for-sale securities | | | 4,474 | | | | 4,548 | |
| Intangible assets, net | | | 17,209 | | | | 18,580 | |
| Goodwill, net | | | 206,513 | | | | 206,815 | |
| Deferred taxes | | | 847 | | | | 1,210 | |
| Other | | | 29,116 | | | | 31,919 | |
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Total Assets | | $ | 801,786 | | | $ | 868,666 | |
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Liabilities and Shareholders’ Equity | | | | | | | | |
| Total current liabilities | | $ | 197,013 | | | $ | 249,979 | |
| Long-term debt | | | 2,221 | | | | 1,998 | |
| Minority interest | | | 129,620 | | | | 130,384 | |
| Other long-term liabilities | | | 15,550 | | | | 14,032 | |
| Convertible subordinated notes (5%, due June 2006) | | | 200,000 | | | | 200,000 | |
| Total shareholders’ equity | | | 257,382 | | | | 272,273 | |
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Total Liabilities and Shareholders’ Equity | | $ | 801,786 | | | $ | 868,666 | |
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Certain prior year amounts have been reclassified to conform to the current year presentation.
