Safeguard Scientifics, Inc.
Q4 2014 Earnings Call Transcript

Published: 5 Mar 2015

[Operator:]

Good morning and welcome to Safeguard Scientifics' Fourth Quarter 2014 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would not like to turn the conference over to John Shave, Senior Vice President, Investor Relations and Corporate Communications. Sir, please go ahead.

[John Shave:]

Good morning, and thank you for joining us for Safeguard Scientifics' fourth quarter and full year 2014 conference call and webcast. Joining me on today's call are Steve Zarrilli, Safeguard's President and CEO; and Jeff McGroarty, Safeguard's Senior Vice President and CFO. During today's call, Steve will review highlights from the fourth quarter and full year 2014, as well as other developments at Safeguard and our partner companies. Jeff will then discuss Safeguard's financial results and strategies. After that, we'll open the lines to take your questions. As always, I must remind you that today's presentation includes forward-looking statements. Reliance on forward-looking statements involve certain risks and uncertainties, including, but not limited to the uncertainty of future performance of our partner companies, the risks associated with our acquisition or disposition of interest in partner companies, risks associated with our decisions about the deployment of capital, and the effect of regulatory and economic conditions generally, as well as the development of the healthcare and technology markets and other uncertainties that are described in our filings. 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. Now, here is Safeguard's President and CEO, Steve Zarrilli.

[Steve Zarrilli:]

Thank you, John, and thank you all for joining us today for an update on Safeguard and our partner companies. As we reflect back on 2014, and embark on 2015, we find ourselves gaining tremendous momentum from greater consistency in the amount of capital deployed and capital realized. In addition, we continue to further align our interest with the interest of our shareholders, and our incentive to create and maximize shareholder value. We expect that our strategic focus and steady execution will continue to propel Safeguard forward in 2015. We remain focused on deploying capital into healthcare and technology companies, serving the fine vertical markets, building value in those companies by providing strategic guidance and operational support, and then realizing gains through well timed exit transactions. In 2014, Safeguard deployed $43.3 million in six new partner companies, InfoBionic, Propeller Health, Syapse, Transactis, Trice Medical and WebLinc. We also deployed $26.6 million of follow-on capital to support the growth of ten partner companies in which we already had an interest at the beginning of the year. When appropriate, as part of our core capital deployment strategy, we will tranche certain financings based on the partner company’s achievement of various milestones in their business evolution. In 2014, Safeguard also realized aggregate initial cash proceeds of $81.3 million from the sale of our interests in four partner companies, Alverix, Crescendo, NuPathe and Sotera Wireless. In addition, Safeguard undertook a share repurchase at an aggregate cost of 25 million. We will continue to assess our cash position and consider opportunities to repurchase additional shares or debt when excess cash is available based on previously established parameters. Our pipeline of early and growth stage healthcare and technology companies remain strong with a high potential capital deployment opportunities. In 2014 we evaluated more than 850 new opportunities, signed 17 term sheets, and closed six new partner companies. These companies support our ongoing target to close six to eight new partner companies annually. The Safeguard team continues to run hard evaluating partner company prospects. We screened for opportunities where we can add value and drive growth with the goal of achieving at a minimum aggregate cash-on-cash returns of two times cost over a three to five year period. Actual aggregate partner company revenue for 2014 was $349 million up from $284 million in 2013, and $201 million in 2012 for the same partner companies. These figures do not include new partner companies in which Safeguard initially deployed capital in 2014. For 2015, aggregate partner company revenue was projected to be between $440 million and $460 million which includes revenue for all partner companies in which Safeguard had an interest at January 1, 2015. Aggregate revenue for the same partner companies for prior years was $368 million for 2014 and $299 million for 2013. Aggregate revenue for all years reflects revenue on a net basis, revenue data for certain partner companies pertain to periods prior to Safeguard's involvement with 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 one-quarter lag basis. As we previously stated, a Safeguard partner company could be involved in a strategic or financial exit transaction at any time in its development. We categorize Safeguard’s partner companies in four stages based upon revenue generation and operational, financial and organizational maturity. Here is a quick review. Development stage includes pre-revenue businesses that are proving their technology through prototype development or beta product versions. At year-end, we had two development stage companies, InfoBionic and Trice Medical. Initial revenue stage is made up of businesses that are building corporate infrastructure and management teams. They are beginning to penetrate target markets and have revenues of $5 million or less. Currently there are 10 partner companies in this category. Our expansion stage is comprised of companies that have characteristics of commercial grade solutions, growing market penetration, complete infrastructure and management teams, and are generating revenue in the range of $5 million to $20 million. Currently there are six partner companies in this category. And finally, high-traction stage companies are characterized by rapid growth, significant commercial success, revenue in excess of $20 million a year. Currently, there are six partner companies in this category. In 2015, we expect a number of our earlier stage partner companies to graduate to the next stage of revenue generation. We believe that the asset composition within these revenue stages, as defined, represent a balanced approach to asset diversification. Beyond diversification in revenue stage, we are well balanced with respect to the blend of healthcare and technology companies. At year end 2014, we had 13 technology partner companies, which represented $121 million of capital deployed and 11 healthcare partner companies, which represented $117 million of capital deployed. Now let's spend a few minutes highlighting two of our newest partner companies from 2014. In August of 2014, Safeguard led a $14.5 million Series B financing round for Propeller Health, deploying $9 million for 25% primary ownership position. Propeller Health provides digital solutions to measurably improve respiratory health. One of the first mobile platforms with FDA clearance, Propeller Health combines sensors, mobile apps and predictive analytics to monitor and engage patients, increase adherence and encourage effective self-management. Propeller Health partners with integrated delivery systems and health plans seeking new solutions to improve quality, strengthen care teams and reduce the cost of care for asthma and chronic obstructive pulmonary disease, the fifth and sixth most expensive diseases in the U.S., respectively. Already Propeller Health is garnering tremendous interest from strategic partners including a pilot program with Boehringer Ingelheim, to develop a sensor that attaches to the back of BI's Respimat inhaler in order to drive improved patient adherence with dosing instructions. Propeller Health is an initial revenue stage company. Next is Transactis. In August of 2014, Safeguard led an $11 million series B financing for Transactis deploying $9.5 million for 25% primary ownership position. Transactis is a leading provider of electronic billing and payment solutions. Transactis' cloud-based electronic bill presentment and payment platform, BillerIQ, is a white-labeled solution that's offered as-a-service, enabling businesses to rapidly and securely deliver electronic bills, invoices and documents, as well as accept payments online, by phone, and via mobile devices. BillerIQ is an extremely flexible and scalable platform for businesses ranging from 50 bills per month to Fortune 50 companies with hundreds of thousands of bills per month, across a variety of industries including property management, healthcare, insurance, public sector, utilities and financial services. Transactis is an expansion stage company. Now let's focus on two of our high tracking companies. Putney is a rapidly growing pet pharmaceutical company focused on developing high-quality, generic prescription medicines for pets. Putney's mission is to provide veterinary practices with FDA-approved generic medicines that meet pet medical needs and offer cost-effective alternatives for pet owners. The pet pharmaceutical market is growing at a compound annual rate of 5% according to industry data. In the U.S. alone, Pet Medications are an $8 billion annual market. The global market is estimated to be approximately $23 billion. Generic competition is limited in this space. 91% of all FDA approved Pet Medications have no generic equivalent. Data supports that pet owners and veterinary ends will adopt generics when they are available. Generic Carprofen tablets, which are indicative for the relief of pain and inflammation associated with osteoarthritis pain in dogs, now account for over 70% of the Carprofen tablets dispensed by Vets. Founder, President and CEO Jean Hockman, and her team are firing on all cylinders developing and introducing FDA approved generic pet medicines. In 2014, Putney received FDA approval for four generic prescription medicines for pets. It's important to note that during 2014, the FDA approved just six generic pet meds and four of them were Putney products. As a result, Putney is the only company selling FDA approved generics for all three dosage forms of Carprofen products. These among other remarkable milestones that we've highlighted in the press release speak to the quality and expertise of the R&D, commercial and regulatory teams at Putney. Going forward, we expect Putney to continue to grow at a higher rate to the combination of new drug approvals and successful commercial launches. Safeguard has deployed $14.9 million in Putney since September of 2011 and has a 28% primary ownership position. Safeguard's largest High Traction Stage partner company is MediaMath, a global technology company that is leading the movement to revolutionize traditional market and drive transformative results through its TerminalOne Marketing Operating System. Safeguard holds a 21% primary ownership stake in MediaMath, which grew revenue by 46% in 2014. MediaMath now operates offices in 15 cities across five continents. During the fourth quarter, MediaMath acquired Rare Crowds and open source software platform that enhances it's technology to target advertising audiences across display, mobile, video, and social media. MediaMath also acquired U.K. based Upcast, which is a Facebook preferred marketing developer and Twitter marketing platform partner with presences in Singapore, Berlin, Dublin and Warsaw. In addition, Apple's iAd platform is now integrated into MediaMath T1 platform, which enables marketers to run ad campaigns with more than 250,000 apps on Apple devices in more than 100 countries. MediaMath platform enables advertisers to effectively target marketing campaigns across every customer touch point. These are just a few of the many milestones that MediaMath has realized in 2014, momentum at the company remains strong for 2015. As we embark on 2015, we remain focused and disciplined. At year end, our partner company roster was 24. By the end of 2015 our goal is to increase our partner company total to approximately 30. In addition we plan to deploy $35 million to $50 million in new partner companies and $30 million to $50 million in follow on funding for current partner companies. With capital deployments comes a parallel of goal to realize a minimum of two profitable exits in 2015. Our core business model is sound and Safeguard has a very solid balance sheet. What's more Safeguard is active and experience deal team has the investment skills as well as the functional expertise to add value to any transaction. So with that, here Safeguard's CFO Jeff McGroarty, for an update on our financial performance in 2014.

[Jeff McGroarty:]

Thanks Steve. Here's an overview of key financial metrics as of December 31, 2014 and for the quarter and year ended. At December 31, 2014 Safeguard's cash, cash equivalents, and marketable securities totaled $156.5 million. The carrying value of outstanding debt was $50.6 million resulting in net cash, cash equivalents and marketable securities of approximately $106 million. During the fourth quarter, primary uses of cash were $4 million in the second tranche of Series B financing for partner company InfoBionic, $1.3 million in follow on deployments for two partner companies, cash use and operations of $3.3 million and interest payments of $1.4 million. For the full year 2014, primary uses of cash were $43.3 million of capital deployed into six new partner companies, $26.6 million in follow on deployments in 10 partner companies, cash used in operations of $17.3 million and interest payments of $2.9 million. Safeguard's corporate expenses excluding interest and stock-based compensation expense were approximately $17 million for 2014, and are forecasted to be in the range of $17 million to $18 million in 2015. Our roster of partner companies totaled 24, at December 31. The cost of our interest in those companies was $238.1 million. The carrying value of those partner companies was $149.8 million as of the same day. Safeguard's financial strength, flexibility and liquidity are evident on this slide showing the company's balance sheet at December 31 2014. In 2014, Safeguard undertook a $25 million share repurchase program over several months we bought that $1.2 million shares of common stock at prices range from $19.54 to $22.18. Share repurchases are based on several factors. The capital needs of the business and the market price of Safeguard's common stock as well as general market conditions. As Steve mentioned earlier, we continually access our cash position and consider opportunities to repurchase shares or debt when we have excess cash based on parameters established by our board. We don’t expect to have significant excess cash until after future exit transaction. Now here is Steve to lead us through the Q&A segment of the call.

[Steve Zarrilli:]

Thanks Jeff. Operator, if you might open the lines for any questions.

[Operator:]

[Operator Instructions] Your first question comes from the line of Jim Macdonald from First Analysis. Your line is open.

[Jim Macdonald:]

Good morning guys. On your guidance, it looks like you've slightly reduced the amount you're thinking about putting in new partner companies and slightly increased the amount of - just taking in follow ons, any thoughts on that?

[Steve Zarrilli:]

Actually it's a great question Jim and it actually highlights some of the changes that we have made in our deployment strategy. You may have noticed in 2014 that the average new partner capital deployment number was less than $10 million, it was actually closer to $7 million. And what we've found is that we were able to get into certain opportunities with an initial amount of capital that's been a little bit less than what we had to use in the past. And then what you are seeing is that we are following up with some follow on capital in one or more tranches as the companies are meeting their milestones. So you're going to continue to see that play-out in our strategy. We actually have a pretty significant target number for new partner companies in 2015 when you are factoring the fact that we have suggested that our ending balance will be somewhere around 30 and we also anticipate to have some monetizations in 2015 as well. So the net number to get us to 30 is still pretty sizeable. So this is a trend that you are going to see us continue to use. We are going a bit earlier in certain situations because we are finding better valuations. We are finding greater opportunity. We are able to tranche our capital. We are able to sustain our level of ownership over an extended period of time as we even invite other capital providers to participate with us. So, when you look at the dollar amounts for 2015 embedded within that is the thought that we are probably going to have a greater number of new partner company deployments in 2015 and we also are going to support some of those companies that we put capital into previously including those in 2014, as they continue to meet their milestones and achievements that we deem to be important.

[Jim Macdonald:]

Great. And then thinking about the two companies you have invested in this year Aventura and CloudMine. Number one, I assume you’re not going to be including those in 2015 partner revenue calculations and then also could you specifically talk how much you invested? I think the press releases has the round sizes but how much you invested in those companies?

[Steve Zarrilli:]

Sure. Let me let Jeff answer both those question.

[Jeff McGroarty:]

Jim, as you’ve probably seen in the past we like to try to put the revenue guidance together as of the beginning of the year because the partner companies are always changing. So we try to draw a line in the sand. So we have something comparable that we can report against throughout the year and next year when we issue the final revenue results in aggregate for our partner companies. So, the new companies will not be included there for this year's guidance. And the amounts we are taking about, Aventura was nearly 6 million, it was about 5.95 million and CloudMine was 2.9 million.

[Steve Zarrilli:]

And Jim there was also a third company Full Measure that we also deployed capital in Q1.

[Operator:]

Your next question comes from the line of Bob Labick from CJS Securities. Your line is open.

[Bob Labick:]

Good morning. So, you mentioned in your opening remarks medium assets largest investment and I think obviously - with this rapid growth, bigger, bigger portion of your overall intrinsic value though probably not fully reflected in your stock price yet. But about a year ago, they raised capital I guess on the private side and you discussed a couple of acquisitions they made. Can you give us an update, I don’t know if you are able to but on where they stay in terms of their capital needs if they expect to raise more capital either privately or publicly I guess in 2015.

[Steve Zarrilli:]

Good morning, Bob. So MediaMath continues to evaluate its capital needs based upon the opportunities that it’s seen in the marketplace. Concurrent with that, they are continuing to prepare themselves for what they believe will be an eventual IPO at least that's the current thought process although, as we all know that as companies prepared for these public offerings other things could occur that would ultimately provide a different alternative for them. But as they prepare for that potential transaction, they are also considering what capital might they need as they move closer to that target date. And that target date quite honestly today has not been firmly established. So there is still some play in when that might occur; could it be a 2015 transaction or a 2016 transaction. But they are working very diligently and recognize that they need to be mindful of the changing dynamics in the marketplace in order to ultimately make the decision as to when to go or not to go. And I know the team is looking at their capital needs in relationship to that equation. As of this moment in time, they have sufficient capital to operate their business that would not require any substantial infusion of capital that would dilute the current shareholder base. They also look at times for other non-dilutive funding opportunities. They've also been able to very specifically develop some relationships with commercial lenders that have provided lending opportunities for them in the case that they want to augment their capital with debt. So, MediaMath continues to demonstrate its ability to grow, point number one, and growth is clearly on the agenda for 2015 with some big ambitions. They have demonstrated their ability to do these tuck-in acquisitions that enhances the platform. If you recall some of the comments in the past that the CEO of MediaMath has made, he is very deliberately trying to ensure that the platform of capability is as full as possible so that he can be clearly in the lead from a competitive perspective in the marketplace. And I think what Joe has done over the last 24 months, has methodically gone through and began to put together those pieces so that he knows that he has got a very solid foundation of core services that meet or exceed the expectations of his customers and probably exceed the capabilities of his competitors. So that's the focal point of MediaMath as we begin 2015, and their capital is going to be used to continue to augment and develop their platform for market purposes.

[Bob Labick:]

Okay. Great. Thank you. And then, you mentioned in your opening remarks, you’re looking for potential two profitable exits, I assume you obviously have more irons in the fire to have that. Can you give us just the level of confidence in that and talk a little bit about the environment rate now for exits?

[Steve Zarrilli:]

I think the environment for exits is strong. I think that there are a number of partner companies that present some really interesting opportunities in the market and we are very deliberate in how we are looking at some of the partner companies and how they maybe able to take advantage of the market. So, we feel comfortable in noting that there are some exit opportunities in 2015. We will continue to update you if that number looks to be greater than not with regard to the initial targets that we've set. But we believe that we can have a couple of meaningful – at least a couple of meaningful exits in 2015, that will provide not only profit on the deployment but also cash back to Safeguard.

[Operator:]

Your next question comes from the line of Ryan Lynch from KBW. Your line is open.

[Ryan Lynch:]

Good morning. Thank you for taking my questions. I would just like to first start off with the new portfolio companies you guys made in 2015 Aventura, CloudMine and Full Measure. Can you just give a little background on each company and may be how the deal was sourced and what you liked about the partner company?

[Steve Zarrilli:]

Good morning, Ryan. So let's start with Aventura. Aventura is a leading provider of awareness computing for the healthcare industry. And really what that means is that, within a delivery care environment or care delivery environment, there is a lot of information that healthcare professionals are trying to access and Aventura will be able to provide some streamlining and unique work flow opportunities as it relates to how that data is used and shared within the care delivery environment. We sourced this - the Managing Director from Safeguard he is involved with this deployment, Al Wiegman you may recall Al is a professional who joined us about 18 months ago, formally a partner at HLM Venture up in Boston. Al has a very strong healthcare IT background and this opportunity was sourced through his network. I'm going to speak on CloudMine and then I'll let Jeff speak to Full Measure. CloudMine is a local Philadelphia based company and early stages but a company that has been able to get some significant traction in the market pretty quickly. CloudMine is a - what they refer to themselves as an enterprise mobility company that provides HIPAA compliance mobility solutions to accelerate development, eliminate maintenance, and standardize cross organizational mobile IT. And what that means is that they have the ability to basically allow for more rapid development of mobile apps. With regard to CloudMine, there is a competitive landscape that they have to be mindful of. They are competing within a landscape of what is referred to as Mobile Enabled Applications Platforms or MEAPs. But these MEAPs today offer significantly less flexibility around development as to some of those backend service providers that currently exist in the market. The enterprise mobility market is projected to be as big as $160 billion and they believe CloudMine's addressable market is $4 billion to $5 billion by 2017 according to IDC. We like this for a number of reasons. We liked it for purposes of the fact that we had a previous history with the CEO. As I mentioned it had some angel investors and some local investors that we thought had real substance in how they evaluated the opportunity and we wanted to make sure that we could be a part of that future. So CloudMine Philadelphia based company with a lot of opportunity. And with that, I'll let Jeff speak to Full Measure.

[Jeff McGroarty:]

Thanks Steve. Full Measure is a company based on Washington DC, they offer colleges and universities a cost effective SaaS based student engagement platform to maximize student's success and engagement. With Full Measure schools can redesign their communication and student services to streamline the administrative processes, automate steps where possible and deliver more personalized support to each student. By doing that and providing a more relevant communication to students, students are inspired to achieve their academic goals and institutions can intervene when students exhibit at risk behavior or otherwise might show signs of dropping out due to the administrative burden. As far as the market opportunity, higher education institutions in the U.S. spend about $17.5 billion a year on student services. Initially Full Measure is targeting the community college and junior college market. The average revenue per community college is about $56 million. In the community and junior college market, these colleges spend about 4% of their budget on student services. So that's the opportunity the Full Measure is targeting. And when they target additional four year colleges, the number could be even higher in terms of their market. Safeguard in January led a $5.5 million Series B financing. And Erik Rasmussen from our technology team is the Managing Director who led that transaction.

[Ryan Lynch:]

Great. Thanks. That's helpful. Then I would just be really interested to hear your outlook on just the current investment pipeline and if you are viewing any industries or sub-sectors more attractive than others right now?

[Steve Zarrilli:]

So let me see if I can answer that multi-facade question in a couple of different ways. The pipeline is strong and I don’t want to say it’s been stronger than it ever has, because it may have been a bit stronger in the past than we've seen it today but it is extraordinarily strong and I can't remember the last time it was as strong as it is today. So, I'd be willing to say it's probably as strong as we have ever seen it. What's really been beneficial to us over the last 18 months is that, with some of the higher profile exits that we have at the end of 2013 and then going into 2014, we are really beginning to establish a broader footprint from a branding perspective. As you may recall, we were clearly focused on the mid-Atlantic region and have been for a significant part of our history. But we are starting to see real opportunity now present itself to us in other areas of the U.S. where we may have been late to the game in the past. And today we are finding ourselves early in, been able to begin these conversations and really position ourselves to be competitive in the process. So, we actually feel not only great about the fact that the pipeline is full and you probably have seen some statistics that we presented this morning with regard to how full that pipeline was in 2014. We are feeling even better about the fact that we are starting to see opportunities earlier in their life cycle which allows us to begin that dialogue with the entrepreneur or the other investors or the management team earlier than not which is always a good thing and that we don't have as many as those opportunities where we scratch our heads and say wow, why didn't we have a chance to look at that opportunity. The segments that we are focusing on really aren't changing. We feel really comfortable about that. I think you are going to see us have even a more concerted effort in trying to take advantage of opportunities in the FinTech arena. Phil Moyer and his team are trying to figure out ways to be even a bigger player in that arena, that you will probably see some personnel additions in 2015 that we will speak specifically to the opportunities we see there. You are going to see some other personnel additions both in technology and healthcare to ensure that we got even a deeper bench to make sure that we are pursuing the opportunities that we think has the most value for Safeguard and its shareholders. So, we are getting off to a fast start. I think if you look back on some past years, three partnered companies in the first 60 days of a year. That's pretty quick, pretty substantial. You're going to hear hopefully about some others as we get through the balance of Q1 and in the Q2. And as I mentioned earlier, and one of the other questions that was asked, the average capital amount being deployed is probably going to be on average less than $10 million for the initial tranche of capital but that does not suggest that the number of companies that we are going to be able to add to the roster or partner companies in 2015 will be less. It will probably actually be more than what we had in 2014.

[Operator:]

Your next question comes from the line of Paul Knight from Janney Montgomery. Your line is open.

[Paul Knight:]

Are you seeing more competition on the deal front with like private equity players moving upstream or is there any changes on that occurring?

[Steve Zarrilli:]

Well the PE guys are moving upstream and we are not necessarily in their way because we are - as you can see by what we have been doing over the last 12 to 24 months, we are principally playing in the Series E, Series B rounds of capital. We are seeing better deals, we are seeing better valuations. We got the balance sheet to support these companies. So, our tactics, maybe getting a little bit earlier and help them build value. If you recall, we don't always have to wait for substantial revenue to be developed in some of these opportunities as well both on the healthcare side as well as on the technology side because we’re finding that some compelling business models and underlying capabilities are being valued and appreciated by larger players. And even though we’re in early, we still are able to stick to our needing with regard to at least in aggregate 2x return hopefully higher over that three to five year period of time. So, I wouldn't suggest we're bumping into the PE guys. Had we stayed on the course that we were on a few years ago and started to write bigger checks, I think that that's where we probably would have been at risk of bumping into them in the marketplace. Today what we're dealing with from a competitive landscape and it is competitive, there's a lot of capital raised in 2014 as most of you know it was over $30 billion, about a third of what was raised at the height in 2000, but there's still a lot of capital both in new funds and from existing funds. So we do recognize we're competing, but we're generally competing with other initial or growth equity capital providers that are looking to put money in that Series A through series C around the funding.

[Paul Knight:]

And I know when you started as CEO you wanted to have this regular flow of liquidity events. Are you there now? Or do you want to - do you need to be at this 30 count in terms of portfolio companies. And then my follow on to that is, it looks like the window the liquidity is narrowing at least in healthcare. So between the faster time or maybe it’s a normalized venture capital environment now, maybe - are you there in terms of being at that stage of having your goal accomplished?

[Steve Zarrilli:]

The goal is still in the process, but we’re getting closer and there’s still a bit of lumpiness in that, I'm not bashful in acknowledging that we had four exits in 2014, but they all came in Q1 and now we’re in Q1 of 2015, and you all and our shareholders who may not be on this call are expecting to see some exits in 2015. And we're at the end of a 12-month period of time, what I would tell you is, I can't be so prescriptive right now that I’m going to have an exit every quarter. We do expect that we'll have exits in 2015. So right now what we're trying to do, is make sure that every year we have exits and every year we have meaningful exits with profits. We're still trying to figure out ways in which we can kind of smooth them out throughout the course of the year but as I said here today, knowing that we returned $80 million last year, four exits three of which happened to be healthcare. As I look at the landscape in 2015, I think our exits are going to be balanced between technology and healthcare to be honest, I just think that there's opportunity on both sides of that sense. And I think we're going to demonstrate to our shareholders this year that there is a similar level of inflow of capital, but it's - unfortunately I haven't been able to figure out how to smooth it evenly over four quarters. But we had an exit in 2013, we had four in 2014, I expect exits in 2015, that's the story that we’ve been working towards. And coupled with that is we want to make sure that we're always in the market not only building a bigger roster of partner companies, but making sure that we're putting capital to work in every year so that we don't have dry spells. So we have got a lot more efficient, a lot more capable, and effective in meeting those two objectives. But make no mistake, the management team of this business including the managing directors and the principals, have their - part of their corporate objectives for 2015, which drives annual bonuses is specifically tied to our ability to produce exit. So it's a very significant goal for us and one that we’re not taking lightly.

[Operator:]

Your next question comes from the line of Ed Woo from Ascendiant Capital. Your line is open.

[Ed Woo:]

I had a question in terms of, just your distribution of former company doing technology and healthcare. Do you see it stream fairly down going forward. And we also seen a rash of big pharma mergers recently, did it have any impact on your healthcare investments?

[Jeff McGroarty:]

Hi Ed, good morning. With respect to question number one, as we grow the organization I’d expect it to balance. We'll remain pretty consistent with what we had today, which is almost 50, 50 and it's just based upon the way we’re putting capital to work and seeing opportunities and how we structured our - how we believe we should focus on the market. And by the way I want to make sure that you all understand that when we say we're increasing resources, we’re doing it in a very methodical way, we're not going to get too far ahead of ourselves and load this business up with a lot of unnecessary costs. But we also want to balance that with the ability to bring in people maybe a little bit ahead of the curve as we see more capital coming into the business, because of monetizations that we’re anticipating, we want to make sure that we got the right bench strength to put and ever increasing amount of assets under management to work into the marketplaces that we can maintain the momentum. I'm sorry your second question?

[Ed Woo:]

In terms of - we've seen a big rash of big pharma, does that impact your investment profile in healthcare?

[Jeff McGroarty:]

No, probably not, and principally because we're not doing traditional pharma but we do have one specialty pharmaceutical play in Putney that I think will benefit from what I consider to be a pretty strong pharma environment out there today. And Putney has always been focused on not only growing it's revenue, but it’s pipeline, because that is ultimately what’s going to be most attractive to either a strategic acquirer or if they wanted to ultimately find some other pathway to creating value for their shareholders. But as we look at pharma - as it relates to healthcare information technology, while there isn't a direct correlation to the valuation of these businesses, we do recognize that partnering with certain types of pharma players in the marketplace for certain of our partner companies could be very advantageous in helping them further develop and mature their business models to create that value that you're looking for from a ultimate exit. So, it's more of an indirect implication I view it as form a valuation perspective, but it's an important one nonetheless.

[Operator:]

Your next question comes from the line of Jim Macdonald from First Analysis. Your line is open.

[Jim Macdonald:]

Just a couple of quick follow-ups. So just to complete my other thought, could you tell how much you invested in Full Measure?

[Steve Zarrilli:]

Jeff, why don't you take that question for me.

[Jeff McGroarty:]

If I didn't say, a Full Measure was $4 million deployment.

[Jim Macdonald:]

Okay. Out of the 5.5. And I noticed in your commentary that you now expect Bridgevine to have over 70 million revenue this year, I think it was formally 80 million, any comments on Bridgevine?

[Jeff McGroarty:]

We are being a little bit conservative with regard to Bridgevine. There is some things in the marketplace that we're trying to get better understanding of, the number that we currently have out there is a number that we feel extraordinarily comfortable with. You may ultimately see some changes to that as the year progresses, there are some customer opportunities that may provide some upside, but for right now that’s the number that we think based upon everything that we have is a very phased estimated of where we think Bridgevine will be this year.

[Jim Macdonald:]

Great. Thanks a lot.

[Operator:]

[Operator Instructions] Your next question comes from the line of Bryan Kipp from Janney Capital Markets. Your line is open.

[Bryan Kipp:]

Hi Steve, just a quick follow-up in light of your commentary on Putney. I'm sure as you know next to that priced earlier, a couple of months back earlier this year, have your conversations changed with Putney due to the next ad IPO and is there interest there - potentially exploring that opportunity in the near-term while the window is open?

[Steve Zarrilli:]

What I can say at this point is that there’s an ongoing conversation as to what are the opportunities for Putney. The good news is there is a variety of different opportunities for Putney. The Board and Management continued to try to explore, which ones they think are going to be ultimately the most valuable for the shareholders, and we as shareholders not only ourselves, but the other shareholders including the CEO who has the significant ownership stake in the company, we're wanting to make sure that we’re evaluating all aspects of the market in order to make the right decision about the future of Putney. Putney is one of those partner companies we love to be involved with because there are so many different opportunities as you look to the future and, while that sometimes can be viewed as a challenge because you are having to pick from a variety of alternatives. I tend to look at it as a very positive, because there’s so much opportunity and so much perceived - not perceive but anticipated value from Putney. Putney, the secret salts for Putney is its team, its ability to ultimately get these products through approval and they have continued to just demonstrate significant capability and expertise in doing so. So we continue to try to figure out how we can ensure that they have got the right resources to grow the business, and at the same time working with the CEO, Jean Hockman and making sure that we are evaluating what's been presented to us from the marketplace in order to make sure that we are doing what's right for the company, for it employees and for the shareholders.

[Bryan Kipp:]

I know you disclosed the growth rate of MediaMath, I don't know if I caught it. Did you give the year-over-year growth rate for Putney this year. I know they had a bunch of product launches so just thinking context of that?

[Steve Zarrilli:]

We won't be disclosing specifically what Putney is. Putney had a very strong year in 2014, revenue was - growth was well north of 40% and the pipeline was growing pretty substantially as well. We anticipate Putney will be able to maintain or even build upon that strength in 2015.

[Bryan Kipp:]

Perfect. Appreciated. Thanks.

[Operator:]

There are no further questions at this time. Presenters, I turn the call back to you.

[Steve Zarrilli:]

Thank you. Having no other questions, we appreciate you being on this call today. And we will continue to keep you updated on the progress for Safeguard as a whole and for the partnered companies that we currently have an interest in.

[Operator:]

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