Safeguard board renews prior authorization of share repurchase program

Safeguard Scientifics, Inc. (NYSE: SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced that its Board of Directors has renewed its prior authorization of a share repurchase program.

Safeguard's Board of Directors has reauthorized the Company, from time to time and depending on market conditions, to repurchase shares of its outstanding common stock, with up to an aggregate value of $10 million. These repurchases will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission and other applicable legal requirements. The manner, timing and amount of any purchases will be determined by Safeguard based upon an evaluation of market conditions, stock price and other factors. The Board's authorization does not obligate Safeguard to acquire any particular amount of common stock; may be modified or suspended at any time at Safeguard's discretion; and replaces any prior repurchase authorization.

Stephen T. Zarrilli, Senior Vice President and Chief Financial Officer of Safeguard said, "In May 2008, our board approved a share repurchase of up to $10 million, pursuant to which Safeguard repurchased an aggregate of 163,000 shares for the aggregate amount of $1.3 million. Since those share repurchases were undertaken we also have repurchased approximately $81.6 million in face value of convertible debt. Safeguard's debt to equity ratio has moved from 1:1 at March 31, 2008 to 1:8. The reauthorization of this share repurchase program provides management with the flexibility to consider share repurchases in the future. However, management still believes that multiple opportunities exist to deploy capital in new and existing partner companies capable of producing meaningful future returns."

Zarrilli continued, "As we stated during our third quarter 2011 results conference call, at September 30, Safeguard's interests in its 13 partner companies represented an aggregate of $167 million in capital deployed, and our net cash, cash equivalents and marketable securities totaled $235 million. This amount of cash provides a meaningful base of capital, but not an amount we consider excessive in relation to opportunities for capital deployment being presented to us. Although we can't predict or guarantee that we will produce any particular level of return, if any, since January 1, 2006 Safeguard's aggregate cash-on-cash returns have averaged 2.4x for exit transactions and write-offs relating to partner company relationships created by our current management since January 2006. Applying this aggregate track record to existing and future capital deployed provides a potential assessment of future value."