Safeguard Announces 10% Increase in First Quarter 2005 Revenues; Consolidated Companies Achieve Important Milestones

Business Wire, May 4, 2005

WAYNE, Pa. -- Safeguard Scientifics, Inc. (NYSE:SFE), a strategic growth partner for information technology and life sciences companies in the Time-to-Volume stage of development, today announced its operating results for the first quarter of 2005.

"We are pleased with the progress of our companies in the first quarter," said Anthony L. Craig, President and Chief Executive Officer. "They leveraged their technologies in growing markets, won new customers, and created and launched new products and services to meet their customers' needs. These are important milestones that clearly demonstrate their growing values."

For the three months ended March 31, 2005, Safeguard's consolidated revenues from continuing operations were $42.8 million, up 10% from $39.0 million in the first quarter of 2004. Net loss from continuing operations in the first quarter of 2005 was $16.1 million, or $0.13 per share, compared with a net loss from continuing operations of $5.7 million, or $0.05 per share in the first quarter of 2004. The 2004 results included $10.5 million of other income primarily associated with sales of companies.

"Clarient, Laureate Pharma, Mantas, and Pacific Title all recorded strong increases in revenues from the year-ago quarter," said Christopher Davis, Executive Vice President and Chief Administrative and Financial Officer of Safeguard Scientifics.

Clarient (NASDAQ:CLRT), a technology and service resource for pathologists, oncologists and the pharmaceutical industry, achieved first quarter revenues which were more than double from the prior year because of robust sales from its new lab services business and increased systems sales in the first quarter.

Laureate Pharma, which provides bioprocessing and drug delivery services to support the development and commercialization of pharmaceutical and biopharmaceutical products, contributed $2.6 million of revenues in its first full quarter as a Safeguard company. Safeguard acquired Laureate Pharma in December 2004.

At Mantas, a leading provider of sophisticated analytic applications that address risk management, fraud detection, anti-money laundering and trading compliance, revenues grew 26% over the prior year as a result of increased market penetration. In addition, Mantas' backlog continued to grow, reaching $37 million at March 31, 2005 compared to $31 million at March 31, 2004.

Pacific Title, which provides high technology digital and other specialized post-production services to the Hollywood motion picture and television industry, achieved a 10% increase in revenues compared to last year's first quarter, reflecting expanded service offerings including a new digital intermediate suite and state-of-the-art 3D main title design.

During the first quarter of 2005, Alliance Consulting, which provides custom software solutions and IT consulting services to Fortune 2000 clients, had a decline in revenues compared to the 2004 first quarter, when the company was engaged in a significant post-merger integration project for its largest customer. Alliance continues to deploy its new, higher-margin Global Delivery and Master Data Management services both to existing and to new clients.

"At the Parent Company level, Safeguard's balance sheet is strong," said Mr. Davis, "and we ended the quarter with $155 million in cash available to support the funding of our companies and for making acquisitions."

"Safeguard's strategy is to create long-term value for our shareholders by acquiring companies and helping them to develop through superior operations and management," said Mr. Craig. "We work closely with our companies to help them achieve their growth strategies, and we anticipate continued progress. We also recognize that young companies must invest to build growth. While these investments affect their profitability as well as Safeguard's consolidated results, we believe that the investments will enhance the long-term values of our companies. As their enhanced values become apparent in growing revenues and profitability, we expect to have opportunities to realize the increased values through liquidity events."

Web Cast

Safeguard will host a conference call and Web cast on May 5, 2005 at 9:00 a.m. (ET) to discuss first quarter 2005 results. Interested parties may access the live Web cast through the Safeguard Web site at www.safeguard.com. Web participants are encouraged to go to the site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. A replay of the Web cast will be archived and available at the Web site shortly after the call.

About Safeguard

Safeguard Scientifics, Inc. (NYSE:SFE) is a strategic growth partner for companies in the Time-to-Volume stage of development. Time-to-Volume companies are those that are generating revenues from a commercially viable product or service, and are facing new challenges as they scale their businesses to meet market opportunities. Focused primarily on the information technology and life sciences sectors, Safeguard generally acquires majority ownership interests in companies at this stage of growth. In addition to expansion capital, Safeguard provides its companies a wide range of operating and managerial expertise to drive their successful growth to become market leaders. For more information about Safeguard and its strategy, visit www.safeguard.com.