RADNOR, Pa., July 28, 2016 /PRNewswire/ -- Safeguard Scientifics, Inc. (NYSE: SFE) today announced financial results for the three- and six-months ended June 30, 2016, as well as continued achievement of developmental milestones by Safeguard’s 27 current partner companies.
For the quarter ended June 30, 2016, Safeguard’s net income was $39.0 million, or $1.92 per share, compared with a net loss of $19.0 million, or $0.91 per share, for the same quarter of 2015. For the six months ended June 30, 2016, Safeguard’s net income was $23.5 million, or $1.15 per share, compared with a net loss of $33.6 million, or $1.61 per share, for the same period of 2015.
“As we enter the second half of 2016, we remain sharply focused on our core, value-creating strategies to deploy capital and provide operational support services to early- and growth-stage companies in targeted vertical markets, and to realize aggregate cash-on-cash returns of at least 2x on the $301.2 million deployed in our 27 current partner companies,” said Stephen T. Zarrilli, President and CEO at Safeguard. “We are not deterred by the ongoing political and economic uncertainties that have roiled global capital markets year-to-date. Instead, we believe that the year’s turbulence may generate opportunities for Safeguard as we work to expand our roster of partner companies, improve the pace of exit transactions, and evaluate potential new segments of the technology markets to deploy growth capital.”
SECOND QUARTER 2016 Financial Highlights
- Generated cash proceeds of $58.2 million from the $200 million sale of Putney to Dechra Holdings US Inc., a subsidiary of Dechra Pharmaceuticals Plc. This represents a 3.9x cash-on-cash return and 42% IRR for Safeguard. Safeguard had deployed $14.9 million in Putney since September 2011 and prior to the acquisition had a 28% primary ownership position. Safeguard recognized a $55 million book gain on the sale.
- Realized $5.0 million in cash proceeds from the sale of Safeguard’s ownership stake in partner company Bridgevine. Safeguard had deployed $10.0 million in Bridgevine since 2007.
- Recognized an impairment charge of $1.7 million related to partner company AppFirst, in which Safeguard had deployed $12.8 million since December 2012 and had a 34% primary ownership position. During the second quarter, AppFirst ceased operations and sold its technology, returning $0.9 million of cash to Safeguard.
- Deployed $5.5 million of new capital into San Francisco-based Aktana, a pioneer in data-driven decision support for global life science sales teams, as part of a $17.5 million financing. Safeguard has a 23% primary ownership position.
- Deployed $8.8 million in follow-on funding to support the growth of six existing partner companies.
AGGREGATE PARTNER COMPANY REVENUE
Aggregate partner company revenue for 2016 has been revised to reflect the sale of partner companies Putney and Bridgevine and AppFirst’s cessation of operations, and is now expected to be between $380 million and $400 million, which includes revenue for all partner companies in which Safeguard had an interest at January 1, 2016, except Putney, Bridgevine and AppFirst. Aggregate revenue reflects revenue on a net basis. Revenue data for certain partner companies pertains to periods prior to Safeguard’s involvement with those companies and is based solely on information provided to Safeguard by those companies.
SELECT PARTNER COMPANY HIGHLIGHTS
Significant accomplishments by Safeguard’s partner companies during the second quarter 2016 include:
~ Product Launches / Regulatory Approvals ~
CloudMine released an iOS software development kit to provide HIPAA compliant, encrypted and secure storage for data generated by Apple’s CareKit framework.
Good Start Genetics announced the national rollout of an advanced version of EmbryVu, the next-generation embryo screening test, based on its proprietary sequencing platform and technology licensed from Johns Hopkins University, and will be presenting three poster presentations and three abstracts at the upcoming ASRM and ASHG conferences, respectively, in October.
Hoopla Software announced several new major features including integrations with Slack, Google Sheets and Zapier, and support for the Amazon Fire TV stick. With these new releases, Hoopla has extended the Hoopla TV platform in order to motivate, engage, and align employees for customers around the world.
MediaMath and TruSignal have partnered to enhance ShopStyle, a digital shopping platform that converts potential customers into buyers at lower costs per order. MediaMath used TruSignal’s predictive data scores to drive a 200% increase in conversions at 60% lower cost per order over a 30-day period. In addition, PushSpring and MediaMath teamed up to integrate PushSpring’s proprietary mobile app data in the user interface for MediaMath’s clients. Lastly, MediaMath is participating in an anti-fraud certification program, “Certified Against Fraud” with the Trustworthy Accountability Group (TAG).
Pneuron introduced its Pneuron 2.0 platform for decentralizing and accelerating enterprise data management and analysis. Version 2.0 features a redesigned user interface, larger library of design components, and enhanced enterprise security configurations.
Propeller Health and AMC Health, a provider of remote patient monitoring and engagement services, formally launched a previously announced nationwide initiative to help patients with Chronic Obstructive Pulmonary Disease and asthma improve disease management and reduce symptoms and hospital visits. The multiyear partnership brings Propeller Health’s commercial programs in U.S. healthcare systems and other organizations to more than 40. Physicians at Dignity Health published results of a randomized controlled trial using Propeller Health in the Journal of Allergy and Clinical Immunology: In Practice, demonstrating that the use of the Propeller digital health technology could improve asthma control.
~ Major Customer Wins / Strategic Partnerships ~
Beyond added Johns Hopkins Health System, Time Warner Cable, Charles Schwab, ConAgra Foods and Sysco Corporation to its customer roster.
Clutch Holdings and Rocky Brands are now teaming up on four separate loyalty programs for Rocky’s diverse brand lineup of work and western boots, and luxury sneakers. Additionally, Clutch has finalized a new strategic partnership with NetSuite, resulting in agreements with retailers Toad & Co. and MZ Wallace.
MediaMath launched its training arm, the New Marketing Institute, in Asia Pacific to help aspiring marketers and professionals to understand programmatic techniques and technologies. MediaMath integrated with a new partner, C1X, to enable access to highly privileged supply on both Open RTB and through private marketplace deals. MediaMath also announced that Zayo Group Holdings, Inc. will provide colocation and wavelength connectivity that MediaMath clients require for processing large volumes of data and real-time bidding with low latency.
meQuilibrium established partnerships with two of the large national healthcare plans. In addition, meQuilibrium added two Fortune 50 companies as clients, as well as expanded relationships with existing clients.
Propeller Health has new partnerships with 246,000-member Molina Healthcare of New Mexico for asthma control, and with Vectura Group plc in the United Kingdom to develop digitally connected inhalers using Vectura’s dry powder technology.
Sonobi announced that its JetStream platform has been incorporated in the new Publisher Addressable Marketplaces premium programmatic advertising solution launched by Merkle, a global data-driven, technology enabled performance marketing agency and the largest independent agency in the U.S. for CRM, digital and search. The PAM solution enables people-based targeting and measurement across premium publisher audiences and inventory.
Syapse has launched the Oncology Precision Network (OPeN) in collaboration with its customers Intermountain Healthcare, Providence Health & Services, and Stanford Cancer Institute. OPeN will share cancer genomics data from these health systems through the Syapse software platform, rapidly bringing the most promising treatment insights to cancer patients and physicians. Syapse and OPeN continue to garner attention for their work to advance cancer care through data sharing and increased access to clinical trials. U.S. Vice President Joe Biden highlighted Syapse and OPeN in his remarks at the Cancer Moonshot Summit in Washington, D.C. His remarks were broadcast by C-SPAN and widely reported in national media. OPeN comprises physicians and patients across 11 states, 70 hospitals and 800 clinics, and is projected to help 50,000 new patients per year when fully implemented. In addition to the launch of OPeN, Syapse launched precision oncology programs with two new customers, Henry Ford Health System, a leader in addressing the needs of underserved patients in the great lakes region, and Catholic Health Initiatives, the nation’s second-largest nonprofit health system.
WebLinc created a commerce platform for women’s online clothing retailer Rachel Roy. In addition, WebLinc relaunched an ecommerce website for existing client Sanrio and launched new ecommerce sites for new clients Costume SuperCenter and Skye’s the Limit for Alfred Dunner.
Zipnosis added two health systems to its roster of clients. First is Lakewood Health System, located in Minnesota, which is an independent rural healthcare system that operates a hospital and primary clinics in five Minnesota communities. Zipnosis developed Lakewood’s Click Care platform. Second is St. Vincent’s Medical Center, located in Connecticut, which is a member of Ascension, the largest non-profit health system in the U.S. and the world’s largest Catholic health system. Zipnosis developed St. Vincent’s MYvirtualcare.com for online diagnosis and treatment.
~ Industry Awards ~
Aktana was recognized as a Cool Vendor in Gartner’s 2016 report “Cool Vendors in Life Science.”
Cask Data was named a 2016 Cool Vendor in a Gartner report on Pervasive Integration for its open source Cask Data Application Platform (CDAP) and Cask Hydrator. Vendors selected for the “Cool Vendor” report are innovative, impactful and intriguing. Cask has also been certified as a great workplace by the independent analysts at Great Place to Work®; the esteemed certification recognizes Cask for excellence in employee ratings.
CloudMine earned three prestigious awards during the quarter. Its Connected Health Cloud won a 2016 SIIA CODiE Award as Best Information Service Delivered as a Mobile App. The CloudMine Connected Health Cloud enables healthcare organizations and pharmaceutical companies to connect vast amounts of patient data to promote patient engagement and improve treatment adherence and patient outcomes. The company was recognized as an IDC Innovator because its technology balances lower-cost mobile app development platform subscription fees with development of specialized APIs relevant to regulated industries. Gartner named CloudMine a Cool Vendor in mobile app development for its Connected Health Cloud.
MediaMath was ranked No. 2 on Business Insider’s list of the “37 hottest pre-IPO ad tech startups of 2016.” Business Insider says the market for privately held ad tech companies is “bustling,” and that “a number of public companies have eyed up MediaMath for a potential acquisition, but it sounds as though the company wants to remain independent for now.” In other news, CEO Joe Zawadzki was named 2016 Data Innovator of the Year for leadership in data-driven marketing by the Data Innovators Group and the Direct Marketing Club of New York. Fortune magazine listed MediaMath among the 100 Best Workplaces for Millennials, and one of the 50 Best Places to Work for new college graduates.
Propeller Health received the American Telemedicine Association 2016 President’s Award for Innovation in Remote Healthcare.
Spongecell‘s dynamic video campaign for the Tennessee Department of Tourism Development was awarded both a Silver Lion in Creative Data Enhancement and a Bronze Lion in Data Storytelling at Cannes Lions 2016, the preeminent international festival of creativity. The Tennessee Department of Tourism Development saw a 46% increase in Web traffic and 12,000 trip itineraries.
Trice Medical won MedCity News’ ‘Best of INVEST’ award in the medical device category.
WebLinc co-founder and CEO, Darren Hill, was a finalist for the Ernst & Young Entrepreneur Of The Year 2016 Award in the Greater Philadelphia Region. WebLinc was named a finalist for the 2016 SIIA CODiE Award for Best eCommerce Solution. Client Zobha’s redesigned interactive commerce platform was recognized as a Top Innovator by Apparel Magazine.
Zipnosis was one of four companies recognized as an IDC Innovator in U.S. virtual care for 2016 among companies with less than $50 million in revenue. CEO Jonathan Pearce was listed among the 100 leaders transforming healthcare through technology by Hot Topics, a prominent tech news publisher. Zipnosis was also listed among Minnesota’s 2016 ‘Best Places to Work’ by the Minneapolis/St. Paul Business Journal.
~ Financings and Other Milestones ~
Aktana was added to the roster of Safeguard partner companies through a Safeguard-led $17.5 million financing. Safeguard deployed an initial $5.5 million for a 23% primary ownership position. Proceeds will be used to continue product development and international expansion. Aktana has offices in San Francisco, New York City and Tokyo, and plans to expand in China and Europe.
Apprenda acquired Kismatic to accelerate the company’s delivery of cloud-native enterprise applications using Kubernetes technology. The Kismatic CEO will serve as Apprenda’s corporate CTO.
Aventura was issued a patent (No. 9,367,512) by the U.S. Patent and Trademark Office relating to dynamic updating of virtual resources and applications based on location change, which can solve the problem of roaming sessions on virtualized desktops and applications. In addition, technology innovator Patrick Flynn, former CTO of Phytel, which was acquired by IBM in 2015, was appointed COO.
Cask Data reported that Ericsson has made a strategic minority investment that is expected to accelerate delivery of Cask’s Apache Hadoop-based services for managing complex data analytics to a range of industries. Cask has spent years working with customers to give them the ability to drive efficiencies at every step in the big data lifecycle, to expand access to data through self-service, and to provide portability of services across different production environments.
Full Measure Education raised $6 million in equity capital in a Series B financing led by Safeguard. Year to date, Full Measure reported that its client base has more than doubled and that proceeds from the financing will be used to support continued growth. The company expanded its leadership team with the appointment of former Blackboard Inc. executive Tess Kelly-Frazier as executive vice president of strategy and operations.
meQuilibrium appointed veteran sales executive Scott Fillenworth to the position of senior vice president for sales and business development.
Transactis raised a $30 million Series E financing with equal participation from Safeguard and five of the largest U.S. commercial banksCapital One, Fifth Third, PNC, TD and Wells Fargo.
To read full press release, please click here.
