Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - SAFEGUARD SCIENTIFICS INC | tv497995_ex99-1.htm |
| EX-10.1 - EXHIBIT 10.1 - SAFEGUARD SCIENTIFICS INC | tv497995_ex10-1.htm |
| 8-K - FORM 8-K - SAFEGUARD SCIENTIFICS INC | tv497995_8k.htm |
Exhibit 99.2
Pro Forma Financial Information
On July 2, 2018, Safeguard Delaware, Inc., a subsidiary of Safeguard Scientifics, Inc. (“the Company”), entered into a stock repurchase agreement with MediaMath Holdings, Inc. (“MediaMath”), pursuant to which the Company agreed to sell to MediaMath, and MediaMath agreed to repurchase from the Company, 39.13% of the Company’s ownership position in MediaMath for a purchase price of $45.0 million. The Company also granted MediaMath an option to repurchase an additional 10.87% of the Company’s ownership position in MediaMath for $12.5 million within 180 days after the close of the initial transaction.
The following unaudited pro forma consolidated statements of operations of the Company give effect to the transaction as if it had been consummated on January 1, 2017. The unaudited pro forma consolidated balance sheet of the Company gives effect to the transaction as if it had been consummated on March 31, 2018. The unaudited pro forma consolidated financial statements of the Company do not reflect the exercise of MediaMath’s option to repurchase an additional 10.87% of the Company’s ownership position for $12.5 million within 180 days after the close of the initial transaction since such exercise is at MediaMath’s discretion.
The Company historically accounted for its ownership interest in MediaMath using the equity method of accounting. The Company’s historical consolidated statements of operations included equity income (loss) related to its ownership position in MediaMath. The unaudited pro forma consolidated statements of operations of the Company eliminate the equity income (loss) related to MediaMath from January 1, 2017 through March 31, 2108.
The unaudited pro forma financial information of the Company described above should be read in conjunction with the historical consolidated financial statements of the Company and the related notes thereto. The unaudited pro forma financial statements of the Company are not necessarily indicative of the financial position or results of operations of the Company that may have actually occurred had the transaction taken place on the dates noted, or the future financial position or operating results of the Company.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
March 31, 2018
(In thousands, except per value)
| As Reported | Adjustments for Partial Disposition of MediaMath (1) | Pro Forma | ||||||||||
| Assets | ||||||||||||
| Cash, cash equivalents and marketable securities | $ | 34,338 | $ | 45,000 | (1) | $ | 79,338 | |||||
| Other current assets | 2,856 | - | 2,856 | |||||||||
| Total current assets | 37,194 | 45,000 | 82,194 | |||||||||
| Ownership interest in and advances to partner companies | 132,277 | (1,381 | )(2) | 130,896 | ||||||||
| Other assets | 1,751 | - | 1,751 | |||||||||
| Total Assets | $ | 171,222 | $ | 43,619 | $ | 214,841 | ||||||
| Liabilities and Equity | ||||||||||||
| Liabilities: | ||||||||||||
| Other current liabilities | $ | 5,481 | $ | - | $ | 5,481 | ||||||
| Convertible senior debentures -current | 40,829 | - | 40,829 | |||||||||
| Total current liabilities | 46,310 | - | 46,310 | |||||||||
| Other long-term liabilities | 3,341 | - | 3,341 | |||||||||
| Credit facility | 45,736 | - | 45,736 | |||||||||
| Total liabilities | 95,387 | - | 95,387 | |||||||||
| Equity: | ||||||||||||
| Preferred stck, $0.10 par value; 1,000 shares authorized | - | - | - | |||||||||
| Common stock, $0.10 par value; 83,333 shares authorized; 21,573 shares issued at March 31, 2018 | 2,157 | 2,157 | ||||||||||
| Additional paid-in capital | 812,796 | 812,796 | ||||||||||
| Treasury stock, at cost, 1,012 shares at March 31, 2018 | (17,441 | ) | (17,441 | ) | ||||||||
| Accumulated deficit | (721,646 | ) | 43,600 | (3) | (678,046 | ) | ||||||
| Accumulated other comprehensive loss | (31 | ) | 19 | (12 | ) | |||||||
| Total equity | 75,835 | 43,619 | 119,454 | |||||||||
| Total Liabilities and Equity | $ | 171,222 | $ | 43,619 | $ | 214,841 | ||||||
(1) The unaudited pro forma consolidated balance sheet gives effect to the transaction assuming the partial disposition of MediaMath occurred on March 31, 2018.
(2) Reflects the carrying value for the disposed portion of the Company’s ownership interest in MediaMath.
(3) Reflects the non-recurring net gain on sale, calculated as the excess of the estimated net proceeds of $45,000 over the carrying value for the disposed portion of the Company's ownership interest in MediaMath as of March 31, 2018.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2017
(In thousands, except per share data)
| As Reported | Adjustments for Partial Disposition of MediaMath (1) | Pro Forma | ||||||||||
| General and administrative expense | $ | 17,131 | $ | - | $ | 17,131 | ||||||
| Operating loss | (17,131 | ) | - | (17,131 | ) | |||||||
| Other income (loss), net | (339 | ) | - | (339 | ) | |||||||
| Interest income | 3,876 | - | 3,876 | |||||||||
| Interest expense | (8,620 | ) | - | (8,620 | ) | |||||||
| Equity income (loss) | (66,358 | ) | 2,539 | (2) | (63,819 | ) | ||||||
| Net loss before income taxes | (88,572 | ) | 2,539 | (86,033 | ) | |||||||
| Income tax benefit (expense) | - | - | - | |||||||||
| Net loss | $ | (88,572 | ) | $ | 2,539 | $ | (86,033 | ) | ||||
| Net loss per share: | ||||||||||||
| Basic | $ | (4.34 | ) | $ | (4.21 | ) | ||||||
| Diluted | $ | (4.34 | ) | $ | (4.21 | ) | ||||||
| Weighted average shares used in computing net loss per share: | ||||||||||||
| Basic | 20,430 | 20,430 | ||||||||||
| Diluted | 20,430 | 20,430 | ||||||||||
(1) The unaudited pro forma consolidated statements of operations give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1, 2017 and exclude the $43,600 non-recurring net gain on sale.
(2) Reflects the elimination of equity income (loss) related to the Company's ownership interest in MediaMath under the equity method of accounting.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2018
(In thousands, except per share data)
| As Reported | Adjustments for Partial Disposition of MediaMath (1) | Pro Forma | ||||||||||
| General and administrative expense | $ | 5,589 | $ | - | $ | 5,589 | ||||||
| Operating loss | (5,589 | ) | - | (5,589 | ) | |||||||
| Other income (loss), net | (1,435 | ) | - | (1,435 | ) | |||||||
| Interest income | 798 | - | 798 | |||||||||
| Interest expense | (2,690 | ) | - | (2,690 | ) | |||||||
| Equity income (loss) | 2,746 | (583 | )(2) | 2,163 | ||||||||
| Net loss before income taxes | (6,170 | ) | (583 | ) | (6,753 | ) | ||||||
| Income tax benefit (expense) | - | - | - | |||||||||
| Net loss | $ | (6,170 | ) | $ | (583 | ) | $ | (6,753 | ) | |||
| Net loss per share: | ||||||||||||
| Basic | $ | (0.30 | ) | $ | (0.33 | ) | ||||||
| Diluted | $ | (0.30 | ) | $ | (0.33 | ) | ||||||
| Weighted average shares used in computing net loss per share: | ||||||||||||
| Basic | 20,506 | 20,506 | ||||||||||
| Diluted | 20,506 | 20,506 | ||||||||||
(1) The unaudited pro forma consolidated statements of operations give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1, 2017.
(2) Reflects the elimination of equity income (loss) related to the Company's ownership interest in MediaMath under the equity method of accounting.