March 2012
Investor Presentation
22
Forward Looking Statements
Statements contained in this presentation that are not historical facts are forward looking statements which involve certain risks and uncertainties including, but not limited to, risks associated with the uncertainty of managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, our ability to execute our strategy, the uncertainty of the future performance of our partner companies, acquisitions and dispositions of additional partner companies, the inability to manage growth, government regulation and legal liabilities and the effect of economic conditions in the business sectors in which our partner companies operate, negative media coverage and other uncertainties as described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.
Safeguard does not assume any obligation to update any forward looking statements or other information contained in this presentation.
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The Safeguard Difference (NYSE: SFE)
SIGNIFICANTLY UNDERVALUED
44
Why Own Safeguard?
Full Value Yet to be Realized
Ownership Stakes in Exciting Partner Companies
Top Performance of Proven Team
Financial Strength, Flexibility and Liquidity
Strong Alignment of Interests
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Experienced Team
Peter J. Boni
President and CEO
Jim Datin
EVP and Managing Director
Brian Sisko
SVP and General Counsel
John E. Shave III
VP, Corporate Communications and Business Development
Steve Zarrilli
SVP and CFO
Prime Response
Online Software
International
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The Company We Keep
Alliances & Syndication Partnerships
Technology & Life Sciences Advisory Boards
SFE Board of Directors
JA3 Partners
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Safeguard Today
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Safeguard Positioning
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Go To Market Strategy
Growth Financing Typically Deploy Up to $25M Generally Primary Shareholder Realize Value
GROWTH DRIVERS
• Maturity
• Migration
• Convergence
• Compliance
• Cost Containment
CRITERIA
• Management
• Market
• Model
• Momentum
• Moat
1010
Attractive Sectors
* Represents % of Capital Deployed in Current Partner Companies.
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Acquired By Proceeds*Cash-on-Cash
Return
$36M 4x
$146M 14x
$36M 3x
$208M** 3x
* Includes Amounts Held in Escrow, if any, but not Earnout, where Applicable.** Proceeds include $61M from Sale of CLRT Shares during Q3’09.
*** Based on achievement of difficult earnout provisions.
Return Potential Could Approach 8x***
Market Cap Increased 5x
Recent Success Stories
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Revenue Stages
1313
Case Study: SFE Stake 25%
• Medical Technology Company
• Developed and is Commercializing emPower!
• emPower! Most Significant Change in Eyeglasses Since Bifocal in 1784
• 100M Bifocals and Progressive Lenses Sold Per Year
• Every 1% Penetration = $400M in Revenue
• 1000+ Eye Care Professionals Signed On
• SFE Deployed Capital in April 2011
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Case Study: SFE Stake 40%
• Top 10 Provider of Medical Billing and Practice Management Services
• U.S. Market Opportunity Exceeds $4B Annually
• <20% Physician Practices Outsource Billing and Practice Management
• Gaining Meaningful Scale via Organic Growth and Strategic Acquisitions
• Completed Five Acquisitions since mid-2009
• 2011 Revenue Increased 40% YoY to ~$40M
• Inc.5000 Three Consecutive Years; Ranked #10 Fastest Growing Co. in NJ
• Safeguard Deployed $15.3M since November 2006
Market for AHS' Services Approx. $4B - $8B1
1 Billing and Practice Management Service Market (Falcon Capital): $8.0B; Total RCM Market (Wallingford Capital/HBMA, 2007): $4.75 B; Top 10 Billing cos.: $1.0B
1515
Case Study: SFE Stake 22%
• Provides Enterprise-Class Technology and Services to Advertisers/Agencies
• ‘Bloomberg’ Terminal: Media Buying Platform
• Recognized Industry Leader
• 2011 U.S. Online Advertising Forecast to Grow 20% to $31B
• Strong Growth Continues
• Expanding Domestic, International Operations
• Strong Client Roster – All Agency Groups, Dozens of Fortune 500
• SFE Deployed $16.9M since July 2009
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Safeguard Partner Companies
* Aggregate revenue guidance for 2012 and prior years, presented above, reflects revenue on a net basis. Revenue figures utilized for certain companies pertain to periods prior to Safeguard’s involvement with said companies and based solely on information provided to Safeguard by such companies. Safeguard reports the revenue of its equity method and cost method partner companies on a one-quarter lag basis.
17 Partner Companies Today
27 Board Seats Across 17 Companies
16 Companies Generating Revenue
4 Companies EBITDA Positive
1 Company Filed NDA
Deployed $181M in Current Partner Companies
Realized $632M Since January 2006 (2.4x CoC)
Strong Partner Company Satisfaction
Aggregate Revenue*
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Financial Highlights
• Net Cash, Cash Equivalents and Marketable Securities
– $258M at 12/31/11 vs. $226M at 12/31/10
• 2011 Primary Uses of Cash = $145M
• 2012 Projected Uses of Cash = $100M to $150M
– Corporate Expenses
– Capital Deployment into New Partner Companies
– Follow-on Funding for Current Partner Companies and Penn Mezzanine Participations
– Platform Expansion
* As of 12/31/11
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Strategy for Growth
Build Value in Current Holdings
Realize Some Valuable Exits
Replenish The Holdings with Winners
Expand the Platform
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Why Own Safeguard?
Full Value Yet to be Realized
Ownership Stakes in Exciting Partner Companies
Top Performance of Proven Team
Financial Strength, Flexibility and Liquidity
Strong Alignment of Interests
2020
The Safeguard Difference (NYSE: SFE)
SIGNIFICANTLY UNDERVALUED
Investor PresentationMarch 2012
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