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Edited Transcript of SFE earnings conference call or presentation 28-Feb-19 2:00pm GMT

Q4 2018 Safeguard Scientifics Inc Earnings Call

Wayne Apr 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Safeguard Scientifics Inc earnings conference call or presentation Thursday, February 28, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brian J. Sisko

Safeguard Scientifics, Inc. - President & CEO

* John E. Shave

Safeguard Scientifics, Inc. - SVP of IR and Corporate Communications

* Mark A. Herndon

Safeguard Scientifics, Inc. - Senior VP & CFO

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Conference Call Participants

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* James Robert MacDonald

First Analysis Securities Corporation, Research Division - MD

* Joseph Hersey Pratt

Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst

* Lee Zimmerman

* Peter Kirk Lukas

CJS Securities, Inc. - Analyst

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Presentation

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Operator [1]

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Good morning, and welcome to Safeguard Scientifics' Fourth Quarter and Full Year 2018 Financial Results Conference Call. Please note this event is being recorded.

I would now like to turn the conference over to John Shave, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

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John E. Shave, Safeguard Scientifics, Inc. - SVP of IR and Corporate Communications [2]

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Good morning, and thank you, for joining us for this update on Safeguard Scientifics' fourth quarter and full year 2018 financial results.

Joining me on today's call and webcast are Brian Sisko, Safeguard's President and CEO; and Mark Herndon, Safeguard's Senior Vice President and CFO.

During today's call, Brian will provide a corporate and strategic update and review recent highlights, including developments at Safeguard and our partner companies, and Mark will discuss our results. Afterwards, we will open it up to your questions.

As always, today's presentation includes forward-looking statements, and those statements are subject to risks and uncertainties. The risks and uncertainties that could cause actual results to differ materially include, among others, our ability to make good decisions about the monetization of our partner companies for maximum value or at all and distributions to our shareholders, the ongoing support of our existing partner companies, the fact that our partner companies may vary from period-to-period, challenges to achieving liquidity from our partner company holdings, fluctuations in the market prices of any publically traded partner company holdings, competition, our ability to attract and retain qualified employees, market valuations in sectors in which our partner companies operate, our inability to control our partner companies, our need to manage our assets to avoid registration under the Investment Company Act of 1940, and risks associated with our partner companies, including the fact that most of our partner companies have a limited history and a history of operating losses, face intense competition and may never be profitable, the effective economic conditions in the business sectors in which Safeguard's partner companies operate and other uncertainties described in our filings with the SEC.

Many of these factors are beyond the company's ability to predict or control. As a result of these and other factors, the company's past financial performance should not be relied on as an indication of future performance.

During the course of today's call, words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. Management cannot provide any assurance that future results will be as described in our forward-looking statements. We encourage you to read Safeguard's filings with the SEC, including our Form 10-K, which describe in detail the risks and uncertainties associated with managing our business. The company does not assume any obligation to update any forward-looking statements made today.

With that, here is Brian.

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [3]

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Thanks, John. Good morning and thank you for joining us. As you know, Safeguard began 2018 by opening a new chapter in the company's 65-year history. After an extensive review of strategic options, the Safeguard board authorized a shift in our business strategy and operations, designed to increase shareholder value. Under this new strategy, Safeguard ceased deploying capital into new partner companies while remaining focused on managing and financially supporting our existing partner companies with the goal of pursuing monetization opportunities and maximizing the value returned to our shareholders.

With the support of our financial advisor, Evercore, we are actively evaluating and exploring potential opportunities and alternatives regarding the monetization of our partner company interests, as well as the return of capital to shareholders. The company will be considering initiatives, including among others, the sale of individual partner companies, the sale of certain partner company interests in secondary market transactions or a combination thereof, as well as the sale of the entire company. This process is consistent with the company's previously announced strategy of maximizing and monetizing the overall value of our partner company holdings and returning value to shareholders as soon as it is practicable.

As we execute against our strategy and initiatives, we remain committed to supporting the needs of existing partner companies. We will continue to leverage our capital and relevant experience to help our partner companies achieve additional market penetration, revenue growth, cash flow improvement and growth in their long term value. We accomplished a lot in 2018 under our new strategy, including streamlining our internal operations to reduce costs, repaying our maturing convertible debt and moving forward with strategic transactions with our partner companies that return significant capital back to Safeguard and which has also allowed us to make further debt repayments. We're pleased with what we accomplished in 2018, and our momentum continues as we move into 2019. As we previously announced in January 2019, Propeller was acquired by ResMed. Safeguard realized $41.5 million in cash proceeds, representing an approximate 3x cash on cash return and a 34% IRR.

That transaction is a good example of the potential value within the remainder of our portfolio. We've now generated over $120 million in cash proceeds since last January. Safeguard is well positioned for 2019 and we are looking forward to returning value to shareholders. We believe that 2019 will be an active year for potential monetizations of our partner company interests as our partner companies continued to mature and attracts strategic and financial buyer attention.

I'd like to turn the call over to Mark for review of the quarter's financial results.

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [4]

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Thanks Brian. Our fourth quarter resulted in a net loss of $16.6 million or $0.81 per share, as compared with a net loss of $18.7 million or $0.91 per share for the same quarter of 2017. For the 12 months ended December 31, 2018, Safeguard's net loss was $15.6 million or $0.76 per share compared with a net loss of $88.6 million or $4.34 per share in the same period of 2017.

A few of the larger elements, in fact, in the financial results for the fourth quarter, include $9 million of losses we record based on ownership percentage in our partner companies, interest expense of $6.6 million and non-cash dilution gains of $2.5 million. We'll speak to those later in the call. But first, let me comment on our strong balance sheet.

Safeguard's cash, cash equivalents, restricted cash and securities at December 31, 2018, totaled $46.2 million, compared to $35.3 million at 2017's year-end. Further, as we've mentioned, the Propeller transaction in early 2019 has provided an additional $41.5 million of liquidity since year-end. Safeguard's borrowings at December 31, 2018, under our senior credit facility totaled $68.6 million as a result of this $16.4 million repayment we made in October 2018.

And as a reminder, the terms of our debt facility require that qualified cash over $50 million we used to repay principal, along with the associated make-whole interest. Accordingly, we project that in April, we will make an additional principal repayment of approximately $22 million, which is presented as current on our balance sheet. This will result in a debt balance of about $45 million. And to reiterate, that current portion of long term debt is an estimate that could vary based on our first quarter operating costs and any further deployments we may make to our existing partner companies.

The extent that Safeguard has additional exit events that exceed our cash uses for the remainder of the year, we could have additional early repayment requirements and the resources to evaluate further capital allocation decisions in the future.

As a reminder, under the terms of the credit facility, the company is restricted from repurchasing shares of its common stock and/or issuing dividends until such time as the credit facility is repaid in full. And consistent with prior quarters, the company is in compliance with all of its debt covenants.

Now I'll move back to our results of operations for the 2018 year, which include the previously disclosed successes, such as the $45 million gain from the exit of a portion of our interest in MediaMath, $5.5 million dollar gain from the exit from AHS, and $9.5 million gain from related to Nexxt repayment of the note, and a $4.2 million gain from the sale of our interest in Cask and a $3.8 million gain from the merger of Spongecell and the Flashtalking.

2018 also included a variety of losses, including the impairments of Apprenda for $6.6 million, CloudMine for $4.8 million and Brickwork of $1.2 million. Our total for losses we report based on our ownership percentage in our partner companies was $46.7 million and unrealized dilution gains that result from our partners' companies' new financings was $9.2 million.

As I mentioned earlier, Safeguard's interest expense was $6.6 million for the fourth quarter as compared to $2.7 million for the same period last year. Interest expense was $16.1 million for the 2018 year as compared to $8.6 million for last year. These increases were primarily related to the accelerated interest resulting from the make-whole provision in our credit facility as well as accelerated recognition of debt issuance costs, both due to their early prepayment of a portion of the credit facility in October.

Also related to interest costs, I'll remind you that prior to a full repayment of our credit facility, we will on a quarterly basis, for accounting purposes, estimate the fair value of our derivative liability under the credit facility based on our expected future, qualified cash balances considering follow on investments, exits and ongoing corporate expenses.

The fair value of that derivative was $5.1 million at December 31, 2018, which is $0.5 million less than the end of the third quarter, but $4.5 million higher than when it was established in May of 2018. Changes in that fair value of this item are component of the other lost net line item on our statement of operations.

Staff reductions during the year resulted in an aggregate severance charge of $3.9 million, of which $1.1 million was recognized in the first quarter, $1.7 million was recognized in the second quarter, $1 million was recognized in the third quarter and $0.1 million was recognized in the fourth quarter. Through December 31, 2008, we have paid $2.8 million towards its obligations. We expect to incur an additional $0.1 million in 2019 and to pay the remainder our year-end liability during 2019.

For the fourth quarter, corporate expenses, excluding interest, depreciation, severance and stock-based compensation were $1.9 million compared with $3.3 million in the fourth quarter of 2017. For the 12 months ended December 31, 2018, these same expenses were $10 million as compared with $15.1 million in 2017. We are pleased to have realized these savings for our shareholders. But we do not expect further dramatic reductions to our cost levels over the next couple years. We will expect to continue to look for ways to extract further efficiencies from our operations as we continue to support our partner companies.

And with respect to those partner company holdings, at December 31, 2018, we had 21 partner companies representing an aggregate cost of $263.8 million and having a carrying value of $90.4 million. However, those amounts include Propeller and Brickwork, which were exited in January 2019.

During the fourth quarter, we limited deployments to $0.7 million of capital to 4 existing partner companies, bringing 2018 follow-on funding to $15.9 million. We expect that we will make additional deployments in 2019 so that we can continue to support our partner companies. But in the aggregate, we expect those deployments to be less than 2018.

Aggregate partner company revenue ended up being below our updated projected range of $400 million to $415 million for the 22 partner companies active in 2018, reflecting the continued slower growth in the Digital Media sector, which has impacted several of our partner companies. However, we remain optimistic about our entire portfolio.

Our projection for 2019 for the smaller group of 19 partner companies is between $420 million and $450 million. That would represent a growth rate of between 11% and 19% for the same partner companies in 2018. Revenue data for certain partner companies pertain to periods prior to Safeguard's involvement in those companies and are based solely on information provided to Safeguard by those companies. Safeguard reports the revenue of its equity and cost method partner companies on a 1 quarter lag basis.

Now, here's Brian to share some final thoughts and lead us through the Q&A segment of the call.

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [5]

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Operator, please open the lines for any questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Bob Labick with CJS Securities.

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Peter Kirk Lukas, CJS Securities, Inc. - Analyst [2]

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It's Pete Lukas for Bob. 2 quick questions here. As far as portfolio of companies, anything you can talk about as far as anyone being at or close to a sale process? And if you could also touch on the investment in those companies. You mentioned it's going to be less than last year, any more specifics there?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [3]

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So on the first question, I'm going to answer consistently with my past responses that at any given time there is a significant -- there are significant number of our portfolio companies, partner companies in some level of conversation concerning a potential exit or an M&A activity. Trying to delineate which ones you would consider in a formal process is probably not particularly helpful. Like, for instance, Propeller, as I've mentioned a number of shareholders and individual conversations was not in a process. And we've -- based upon our prior experiences, transactions occur as a results of those sort of situations playing their way out as often if, not more often, than when formal processes are involved. That being said, there are a couple of our companies that are actively engaged with investment bankers, talking to potential suitors. But to decide a number would, I think, be more misleading than helpful, Pete. And Mark on the second question?

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [4]

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Yes, with respect to the total number of deployments during the year. It's an ongoing evaluation that we look at with respect to each company and their own capital needs. But we're looking at it in the aggregate right now and looking to limit the number to the same or less than what was spent in 2018.

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [5]

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And Pete, what -- I guess, what I would add to that is, Mark used the term limit. It's not so much -- this portfolio of companies has reached the point where the needs for the ABC investors to continue to contribute, declined as these companies mature and grow. So while we're definitely being cognizant of how much capital we put in, given that we don't -- we're not trying to elongate timeframes et cetera. We're just managing conservatively. But we continue to believe that that number -- the dollar amount of deployments will naturally decrease over time and 2019 will reflect that.

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Peter Kirk Lukas, CJS Securities, Inc. - Analyst [6]

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And you touched on in the prepared remarks, but can you get a little more specific on Evercore's mandate and provide us with any kind of specifics or timeline that they have as well, as are they compensated on a transaction basis or any details you can give us there?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [7]

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So not a whole lot of in the way of additional detail, because as suggested or as stated in the press release, Evercore has been one of the bankers that's been in our -- in the background since we announced the strategy. As everyone on the phone knows, I'm sure that there's always bankers that you're getting assistance from and it's an anticipation of them potentially getting engaged at some point. So you're getting advice and counsel from a number of different sources and Evercore has been one of those bankers we decided to formally take the step and is a natural progression of where we are in our execution of the strategy. Evercore at the moment is deeply engaged in due diligence concerning us and our assets. And that is -- that's what is the main focus of effort at the moment. Their -- what we're have -- what we have Evercore -- what we have formally engaged Evercore to do is to inform the decision making at the board. That'll take a lot of different versions and we all know how bankers go about developing what they believe current valuations are, what they believe projected potential values are and we're going to take advantage and they're going to take advantage of every one of those tools in their tool box. So this isn't something that will be, that is just a snapshot in time kind of engagement. We have a portfolio of let's call just roughly 20 companies. We're going to make one decision, next week one decision and in 3 months, one decision and 6 months about what we do going forward as the portfolio changes. That will include when companies exit, does that change our thinking about the remaining portfolio? And Evercore will continue to do that on an ongoing basis. So the first level of inquiry is to help the board -- make sure the board is properly understanding what it should and shouldn't be doing at the present time to make sure that the overall goal of maximizing value is ultimately achieved. But they are a typical banker engagement. Almost every banker engagement that I've ever been involved with, while it may have some small engagement component to it, ultimately, bankers get paid when transactions get done. And that is largely how the engagement works with Evercore. And any large dollars that they make will be made if they are involved in a transaction with us concerning any of the various ways that we're going to go about monetizing this portfolio as we continue to plow through it.

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Peter Kirk Lukas, CJS Securities, Inc. - Analyst [8]

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And last one from me. On the last call, we talked about buybacks as a way to distribute to shareholders. Has it always been the case that buybacks are restricted until the entire credit facility is paid back? And if you could just kind of expand on that quickly?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [9]

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Yes. When we first entered into it, if I recall correctly, and I'm looking around the table just to make sure I'm not misstating something there. We had a small allowance originally on an annual basis. But when we renegotiated the facility in the context of the strategy change, there was a -- that was eliminated. Obviously, we could go back to HPS, if we were to want to undertake a buyback before we've paid them off. But, realistically, how that will play out is that they will be paid off and out of the way before any of that occurs.

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Operator [10]

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Your next question comes from Jim MacDonald with First Analysis.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [11]

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Couple of follow-ups first and then I'll get into some other things. So on the repurchase question, you sort of say in your press release that you'd do repurchases first and then distributions later. Although it sounds like you could -- since you have to wait to repay the debt for either of those, you could have done both of those at the same time. So what's your thinking there?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [12]

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Without trying to be too prescriptive, because the lawyers warn me about talking too much about repurchases and potentially triggering SEC kind of issues. But just as a general matter. What that's -- what we're trying to reflect is that we believe that ultimately to provide the best return, a sequencing will -- that takes into account, how do you utilize repurchases will lead to us doing some repurchases before we're actually just distributing cash. That is very much wrapped around a concern on our part to try to make sure we're providing the most tax efficient return to shareholders. Obviously, there's very few levers that we can pull in that regard. But we're very cognizant of those. It's been expressed to us by any number of different shareholders and we take that into account. So if you quickly think through the situation, I believe that that's the conclusion that you'll get to, that's probably the best method. Obviously, they will be limited by the availability of people being willing to sell in the market. So that will also dictate how we execute the specifics of that approach.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [13]

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So you're assuming the shares undervalued basically?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [14]

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Well, obviously, we're not -- obviously, our ability to repurchase will be dependent upon where our share price moves to, absolutely. If that's not the case, then you have to take that into account as well.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [15]

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And back on Evercore, if I remember right, they've had a -- at least some time in their history, they've taken over management of portfolios. I seem to remember they may even have bought themselves portions of portfolios. I mean, if you're hiring them as your advisor, I mean is that a possibility or would they be sort of conflicted in that case or sort...

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [16]

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You're getting beyond how I thought about it, Jim. The Evercore has engaged as our advisor and therefore has -- that is the role, it's front and center. I'm not even -- I'm not aware of them -- their actions as a principal. And that's not at all wrapped around what we're utilizing their expertise for.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [17]

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You mentioned -- can you talk a little bit about the impact of the Brickwork disposition and what that impact will be in the first quarter?

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [18]

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Yes, I can talk about that. Not much impact at all. So we broke down in the fourth quarter, the carrying value for that particular interest. And as I mentioned, that was the $1 million impairment. We did not received cash in that transaction. So in terms of cash changing hands, there's no impact again in the first quarter and we do not expect to see a meaningful gain or loss in the first quarter goal to that transaction either.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [19]

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So it had a $2.4 million carrying value on December 31. That won't go to 0 or I mean, so it won't be a $2.4 million loss?

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [20]

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That's correct. That's correct. So that will be the starting carrying value again in the first quarter of '19 for our interest in the acquiring company.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [21]

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And on Trice, sort of, interested to see that they were doing an acquisition. You talked a little bit about that and whether there was -- if that's going to add to their revenue as well, but also the strategic reason for that acquisition?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [22]

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Well, I'll the strategic point, then Mark can touch upon the other part of your question. Yes, it absolutely is a strategic acquisition in the sense that it builds a broader solution set. I believe that the way it's been put is you're touching diagnostic and treatment, which previously the mi-eye was focused on diagnostic even though it has some capacity to be utilized further. But the platform itself is being strategically broadened through this acquisition.

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [23]

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And yes, I'll follow on that they've funded the acquisition themselves and they do expect -- it would be factored into their expectations of revenue for 2019, which is --

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [24]

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So was there historical revenue -- a significant historical revenue of the acquired company?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [25]

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We're not -- I don't think -- I'm going to punt on that because I -- there are certain things which we have agreed, obviously, to be -- to keep confidential. But the -- let's stand on what Mark responded that it certainly is intended to add to the revenue base of the company and you can read into that as you deem appropriate.

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James Robert MacDonald, First Analysis Securities Corporation, Research Division - MD [26]

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And then one more for me. So unless it was a typo, Sonobi seemed to go from high traction down to traction, so maybe talk a little bit about that. That's pretty unusual.

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [27]

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Yes. So I can talk about that. So they were one of those companies that was right on the threshold and they are impacted by this slowdown in that particular market. But we continue to expect great things out of Sonobi in the future and we would expect that -- at some point, we hope that they'll turn back around into that higher traction area. But they're just absolutely there.

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Operator [28]

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Your next question comes from Joe Pratt with Stifel.

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Joseph Hersey Pratt, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [29]

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Just a quick question on, who are the major shareholders of Transactis?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [30]

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Well, we're the largest shareholder. And -- but if you'll recall from prior conversations, that company while that there are other large shareholders, well -- large pocketed shareholders in Transactis besides us. Some venture firms, some more strategic, but the most important mention I'd made, if you recall. The last round of capital financing that was done for Transactis, we let around, where 5 large banks participated to the tune of $5 million each to become both strategic partners as well as strategic investors in the company. So around the table, you have the normal sampling of financial type investors, venture firms et cetera like StarVest, et cetera. But you've got now PNC, TD Bank, Wells Fargo, Fifth Third, and Capital One. I think of the 5, if my memory serves me correctly. So that's the ownership. We are the largest owner --

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Joseph Hersey Pratt, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [31]

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And then we know everything that's put on Twitter is extremely reliable and accurate. And I think I recall that last October there was somebody who mentioned that a book was out on Transactis, any comment on that?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [32]

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I'm not going to comment anything on Twitter. I don't have a Twitter account and I know that your statement was tongue-in-cheek. But don't rely on anything that you read on the internet at all.

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Operator [33]

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Your next question comes from Lee Zimmerman with Baird.

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Lee Zimmerman, [34]

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Maybe you can give us a little color on MediaMath, that they're reaccelerating or how they're doing? And also I'd like to know -- one more question. Net cash on the balance sheet that you would feel comfortable with before you start buybacks or distributions?

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [35]

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So, I'll answer the MediaMath question and then Mark will handle your cash question. I just happened to a MediaMath board meeting yesterday, normal course meeting. And I am extremely excited about what they're doing and where they're going. They've started off the year very well and 2019 appears to be a significant growth here, and I'll leave it at that. I have my limitations as far as what I can say. But I'm looking forward to their performance in 2019.

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Mark A. Herndon, Safeguard Scientifics, Inc. - Senior VP & CFO [36]

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And in regards to your question about the cash on the balance sheet and what our limits and thresholds would be there. I guess, I'd point you to just like 2 or 3 factors that I would -- we would think about before we made that decision. One would be that amount of operating costs that we expect to incur at least 1 year, but probably 2 that what those cash costs would be, so we need that number. And secondly, you need to think about what level of deployments we're going to be making in companies for the next year or 2. And then thirdly, how much cash do you need to have on hand to do something meaningful for shareholders. And you can each kind of make your own estimates about those amounts. But I think, as we've talked about, our expectations for deployment in 2019 and our operating costs from a cash basis are pretty consistent. That's pointing in the direction of about how much you think you would need at any point in time before you started a capital distribution of any kind.

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Lee Zimmerman, [37]

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One last question which I know you probably won't or can't answer too closely. But if somebody came in for the whole company in relationship to previously thought, well, 1.8x your purchase cost is what you hope to get or more. What level would the board consider and what wouldn't they consider? Just give me any parameters you feel you can on that.

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [38]

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Well, I am going to stay away from answer the question more directly than the lawyers in the room would allow me to. But I think the right way to think about, Lee, is if someone were to come in and want to buy the entire company, it would have to reflect what our expectations for the potential outcome in our partner companies are. But it gets overly complicated in connection with the analysis of the value of our NOLs. So the short answer is, I'm not going to put a number on the table. But our board is a very rational group of individuals and for the right price we would consider that as an exit possibility, but it has to start with somebody reaching out and being willing to recognize the value in the portfolio so that we can provide that value back to you guys.

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Operator [39]

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There are no further questions at this time. I will now turn the call back over to Brian for closing remarks.

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Brian J. Sisko, Safeguard Scientifics, Inc. - President & CEO [40]

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So we know we have a lot of work ahead as we continue to execute the strategy. We'll continue to keep you -- keep everyone uprise as best we can in real-time. We thank you for your continued interest, your confidence and your support. And we look forward to achieving the goals that we've described to you.

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Operator [41]

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This concludes today's conference call. You may now disconnect.