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Safeguard Scientifics Inc. (SFE) filed Quarterly Report for the period ended 2011-09-30.
Safeguard Scientifics Inc. has a market cap of $372.3 million; its shares were traded at around $18 with a P/E ratio of 2.8 and P/S ratio of 10.7.
This is the annual revenues and earnings per share of SFE over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SFE.
Highlight of Business Operations:
The Company recognized an impairment charge of $0.4 million in the third quarter of 2011 which is reflected in Other income (loss), net, in the Consolidated Statements of Operations, representing the unrealized loss on the mark-to-market of its ownership interest in Tengion, which was previously recorded as a separate component of equity. The Company had previously recognized impairment charges of $0.3 million and $0.8 million in the first and second quarters of 2011, respectively. Following the impairment charge, the Company’s adjusted cost basis in Tengion was $0.3 million. The Company determined that the decline in the value of its public holdings in Tengion was other than temporary. The Company also recognized impairment charges on its holdings in Tengion of $2.1 million and $1.1 million in the first and third quarters of 2010 respectively.The Company accounts for its holdings in Tengion as available-for-sale securities. The Company recognized impairment charges of $0.4 million, $0.3 million and $0.8 million in the third, second and first quarters of 2011, respectively, representing the unrealized losses on the mark-to-market of its ownership interest in Tengion which were previously recorded as a separate component of equity. As of September 30, 2011, the Company’s adjusted cost basis in available-for-sale securities of Tengion was $0.3 million. The value of the Company’s holdings in Tengion was measured by reference to quoted prices for Tengion’s common stock as traded on the NASDAQ Capital Market, which is considered a Level 1 input under the valuation hierarchy.
The Company accounts for its holdings in NuPathe and Tengion as available-for-sale securities. The Company recorded unrealized net losses of $14.2 million and $18.3 million associated with available-for-sale securities as a separate component of equity in the three and nine months ended September 30, 2011, respectively. The Company reclassified $0.4 million and $1.5 million in unrealized losses associated with Tengion in the three and nine months ended September 30, 2011, respectively, as a result of management’s determination that the security was impaired on an other than temporary basis.
Performance-based awards entitle participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified partner companies. Vesting may occur, if at all, once per year. The requisite service periods for the performance-based awards are based on the Company’s estimate of when the performance conditions will be met. During the nine months ended September 30, 2011 and 2010, respectively, the Company issued 193 thousand and zero performance-based options to employees. During the nine months ended September 30, 2011 and 2010 respectively, 56 thousand and zero performance-based options vested. Compensation expense is recognized for performance-based awards for which the performance condition is considered probable of achievement. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if capital return targets are achieved earlier than estimated. The Company recorded compensation expense related to performance-based options of $0.1 million and $0.0 million for the three months ended September 30, 2011 and 2010, respectively and $0.3 million and $0.1 million for the nine months ended September 30, 2011 and 2010, respectively. The maximum number of unvested shares at September 30, 2011 attainable under these option grants was 756 thousand shares.
Total compensation expense for deferred stock units, performance-based stock units and restricted stock was approximately $0.2 million and $0.1 million for the three months ended September 30, 2011 and 2010, respectively, and $0.6 million and $0.5 million for the nine months ended September 30, 2011 and 2010, respectively.
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