ANNUAL REPORT ON FORM 11-K
ITEM 9(a)
LIST OF FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992, and 1991
SAFEGUARD SCIENTIFICS, INC.
STOCK SAVINGS PLAN
<PAGE>
FORM 11-K -ITEM 9(a)
SAFEGUARD SCIENTIFICS, INC.
STOCK SAVINGS PLAN
LIST OF FINANCIAL STATEMENTS
The following financial statements of Safeguard Scientifics, Inc. Stock
Savings Plan are submitted herewith:
Statements of Net Assets Available For Plan Benefits
As of December 31, 1993 and 1992
Statements of Changes in Net Assets Available for
Plan Benefits
For the years ended December 31, 1993, 1992 and 1991
Notes to Financial Statements
Schedule I Assets Held for Investment Purposes
Schedule II Reportable Transactions
<PAGE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
MUTUAL COMMON
FUNDS STOCK LOANS TOTAL
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments
Money Market Fund $ 147,818 $ 451 $ 148,269
(cost equals current value)
Safeguard Scientifics, Inc. common stock
92,817 shares (cost $1,166,707) 2,227,608 2,227,608
Novell, Inc. common stock
15,921 shares (cost $4,794) 330,361 330,361
Cambridge Technology Partners common stock
38,259 shares (cost $191,295) 602,579 602,579
Bond Fund
5,474 shares (cost $76,779) 78,660 78,660
Balanced Fund
25,067 shares (cost $340,686) 360,718 360,718
Equity Growth Fund
56,435 shares (cost $978,472) 1,056,462 1,056,462
Net loans receivable $ 160,068 160,068
Contributions receivable - employer 9,834 9,834
- participants 38,558 8,520 47,078
---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 1,682,216 $ 3,179,353 $ 160,068 $ 5,021,637
========== ========== ========== ==========
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
MUTUAL COMMON
FUNDS STOCK LOANS TOTAL
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments
Money Market Fund $ 200,488 $ 148 $ 200,636
(cost equals current value)
Safeguard Scientifics, Inc. common stock
91,138 shares (cost $1,075,284) 1,663,269 1,663,269
Novell, Inc. common stock
21,278 shares (cost $6,406) 606,423 606,423
Bond Fund
5,039 shares (cost $69,701) 70,496 70,496
Balanced Fund
18,477 shares (cost $244,232) 252,772 252,772
Equity Growth Fund
50,081 shares (cost $853,311) 895,950 895,950
Net loans receivable $ 127,286 127,286
Contributions receivable - employer 15,009 15,009
- participants 34,377 5,203 39,580
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 1,454,083 $ 2,290,052 $ 127,286 $ 3,871,421
=========== =========== =========== ===========
See notes to financial statements
</TABLE>
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<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
1993 1992
----------------------------------------------- -----------------------------------------------
MUTUAL COMMON MUTUAL COMMON
FUNDS STOCK LOANS TOTAL FUNDS STOCK LOANS TOTAL
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
CONTRIBUTIONS:
PARTICIPANTS $338,140 $60,950 $399,090 $327,612 $45,597 $373,209
EMPLOYERS 0 213,305 213,305 0 194,444 194,444
INTEREST INCOME 0 0 0
DIVIDEND INCOME 52,866 257 53,123 46,128 139 46,267
NET UNREALIZED/REALIZED GAIN
IN AGGREGATE
CURRENT VALUE OF INVESTMENTS 106,491 808,974 915,465 47,433 297,871 345,304
LOAN REPAYMENTS 33,442 17,023 (50,465) 0 16,361 6,274 (22,635) 0
INTEREST ON LOAN REPAYMENTS 10,939 10,939 0 6,285 6,285
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
530,939 1,100,509 (39,526) 1,591,922 437,534 544,325 (16,350) 965,509
DEDUCTIONS:
BENEFIT PAYMENTS TO
WITHDRAWING PARTICIPANTS 96,172 334,832 10,702 441,706 27,497 36,718 7,801 72,016
LOANS TO PARTICIPANTS 53,652 29,358 (83,010) 0 73,707 77,730 (151,437) 0
TRANSFERS 152,982 (152,982) 0 1,128 3,320 4,448
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
302,806 211,208 (72,308) 441,706 102,332 117,768 (143,636) 76,464
NET INCREASE (DECREASE) 228,133 889,301 32,782 1,150,216 335,202 426,557 127,286 889,045
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
BEGINNING OF THE YEAR 1,454,083 2,290,052 127,286 3,871,421 1,118,881 1,863,495 0 2,982,376
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
END OF YEAR $1,682,216 $3,179,353 $160,068 $5,021,637 $1,454,083 $2,290,052 $127,286 $3,871,421
=========== =========== =========== =========== =========== =========== =========== ===========
See notes to financial statements
<PAGE>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(CONTINUED)
YEARS ENDED DECEMBER 31,
-----------------------------------------------
1991
-----------------------------------------------
FIXED
MUTUAL INCOME COMMON
FUNDS FUND STOCK TOTAL
----------- ----------- ----------- -----------
ADDITIONS:
CONTRIBUTIONS:
PARTICIPANTS $79,302 $84,399 $81,039 $244,740
EMPLOYERS 134,455 134,455
INTEREST INCOME 43,868 572 44,440
DIVIDEND INCOME 13,466 419 13,885
NET UNREALIZED/REALIZED GAIN
IN AGGREGATE
CURRENT VALUE OF INVESTMENTS 38,076 835,678 873,754
LOAN REPAYMENTS
INTEREST ON LOAN REPAYMENTS
----------- ----------- ----------- -----------
130,844 128,267 1,052,163 1,311,274
DEDUCTIONS:
BENEFIT PAYMENTS TO
WITHDRAWING PARTICIPANTS 633 51,095 23,110 74,838
LOANS TO PARTICIPANTS
TRANSFERS (988,670) 998,957 (10,736) (449)
----------- ----------- ----------- -----------
(988,037) 1,050,052 12,374 74,389
NET INCREASE (DECREASE) 1,118,881 (921,785) 1,039,789 1,236,885
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
BEGINNING OF THE YEAR 921,785 823,706 1,745,491
----------- ----------- ----------- -----------
END OF YEAR $1,118,881 $ 0 $1,863,495 $2,982,376
=========== =========== =========== ===========
See notes to financial statements
</TABLE>
<PAGE>
[TEXT]
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
1. Summary of Significant Accounting Policies:
Basis of Presentation - The accompanying financial statements have
been prepared on an accrual basis of accounting.
Investments - Investments are stated at current value.(dagger) At the
option of the employee, investments may be made in their choice of four
Mutual Funds or Safeguard Scientifics, Inc. (SSI or the "Company") common
stock. In addition, participants holding SSI common stock held in trust
under the Plan may participate in distributions made by SSI to its
shareholders. In May 1993, SSI and Cambridge Technology Partners (CTP)
completed a rights offering. Each plan participant was offered a one-time
investment election to purchase CTP common stock, based upon the number of
Company shares held as of the rights offering date. Prior to October 1,
1991, the participants were offered the election to invest in either a
Fixed Income Fund or SSI Common Stock. After the above effective date, the
investment options were expanded to include the Money Market Fund (Vanguard
Money Market Prime Portfolio) and three Mutual Funds from the American
Funds Group - the Bond Fund (U.S. Government Securities), the Balanced Fund
(Income Fund of America), and the Equity Growth Fund (Investment Company of
America).
SSI common stock, which is traded on the New York Stock Exchange, and
Novell, Inc., (Novell) and CTP common stock, which are traded on the over-
the-counter market, are valued at the last reported sales price on the last
business day of the year.
Realized Gain (Loss) on Sale of Investments - The realized gain (loss)
on sale of investments is the difference between the proceeds received and
the average cost of investments sold.
<PAGE>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
2. Description of the Plan:
The Plan was established in 1981 for the benefit of SSI employees.
(dagger) The employees may contribute 2%, 3% or 4% of their basic
compensation, as defined, (excluding overtime, bonuses and certain other
SSI paid benefits). Effective January 1, 1992 SSI made contributions equal
to 75% of an employee's pretax contributions at all Company locations.
Prior to January 1, 1992, SSI contributed 75% of an employee's pretax
contribution at its Minneapolis, MN and Green Bay, WI locations and 50% for
all other employees. Employees may contribute up to an additional 11%
without further contribution by the Company.(dagger) The total of employee
and SSI contributions are subject to a determinable maximum.(dagger)
Employee contributions are invested as directed by the employee into any of
the following investment options: Money Market Fund, Bond Fund, Balanced
Fund, Equity Growth Fund, and Safeguard Scientifics' common stock. They may
divide their contribution between all the funds in increments of 5%.
SSI's contribution is invested in SSI Common Stock for the account of the
employees.(dagger) Employees with less than one year of service may become
participants for the purpose of making salary deferral contributions on the
first day of the first payroll period of any month.(dagger) However, new
employees will not be eligible to receive Company matching contributions until
the completion of one year of service. Company contributions become fully
vested after the earlier of three years of employment, or two years of
participation in the Plan, or upon death, disability or retirement. Effective
as of any quarterly valuation date, each vested participant may direct a
change in investment of amounts held in their matching contribution
subaccount, other than amounts attributable to matching contributions made
during the current or previous Plan year.
Effective January 1, 1992, eligible employees are entitled to take out
loans from the Plan. Generally, an employee may borrow up to 50% of the
amount in their account up to $50,000. The minimum loan amount is $1,000.
The interest rate is prime plus 2% as of the loan approval date. The
interest paid will be credited to the employee's account. All loans must
be repaid within five years, except in the case where a loan is used to
purchase a principal residence, and then the repayment period is 15 years.
SSI has the right under the Plan to amend, modify, suspend or
terminate the Plan at any time. In the event of termination of the Plan,
each participant will immediately become fully vested and be entitled to
full distribution of his share of the Plan. Administrative costs of the
Plan are paid by SSI.
<PAGE>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
2. Description of the Plan (continued)
The full value of an individual's account including all deposits, all
Company contributions, and any gains or losses will be paid upon:
1) Retirement
2) Termination of Employment (With less than two years of
participation, the value of Company contributions to an individual's
account is forfeited.)
3) Disability (as defined under the Plan)
4) Death
Payments are made:
1) in cash as a lump-sum payment;
2) in Company stock for the value of an individual's
investment in that fund;
3) in the form of installments over a fixed period; or
4) under other methods of payment that may be adopted and
applied uniformly among all Plan participants by the Stock Savings Plan
Committee.
Distribution of a participant's account will be made as soon as
possible following the event (i.e., termination, retirement, disability or
death) that calls for distribution. Under no circumstances will
distribution be made later than 60 days after the end of the year in which
the event occurs that triggers the distribution. The above description
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
3. Income Tax Status:
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401(a) of the Internal Revenue Code and is, therefore, not subject
to Federal income tax under present income tax laws.
Plan participant contributions are made from compensation before
income tax deductions in accordance with Section 401(k) of the Internal
Revenue Code.(dagger) The participants are not subject to income tax on SSI's
contributions to the Plan, appreciation in Plan assets or income earned
thereon until their withdrawal from the Plan.(dagger) A letter of favorable
determination has been received from the Internal Revenue Service that the
Plan meets the requirements of Section 401(k) of the Internal Revenue Code.
<PAGE>
<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
4. Allocation of Plan Income and Changes in Plan Equity to Investment Programs
Year Ended December 31, 1993
MONEY EQUITY TOTAL
MARKET BOND BALANCED GROWTH MUTUAL
FUND FUND FUND FUND FUNDS
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
CONTRIBUTIONS:
PARTICIPANTS $ 37,144 $ 28,970 $ 78,458 $ 193,568 $ 338,140
DIVIDEND INCOME 4,868 5,464 18,275 24,259 52,866
NET UNREALIZED/REALIZED GAIN
IN AGGREGATE CURRENT VALUE
OF INVESTMENTS 406 1,748 22,220 82,117 106,491
LOAN REPAYMENTS 4,160 6,530 8,120 14,632 33,442
46,578 42,712 127,073 314,576 530,939
DEDUCTIONS:
BENEFIT PAYMENTS TO
WITHDRAWING PARTICIPANTS 16,659 15,443 15,493 48,577 96,172
LOANS TO PARTICIPANTS 8,882 4,081 14,428 26,261 53,652
TRANSFERS 74,572 15,250 (12,578) 75,738 152,982
----------- ----------- ----------- ----------- -----------
100,113 34,774 17,343 150,576 302,806
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) (53,535) 7,938 109,730 164,000 228,133
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
BEGINNING OF THE YEAR 205,838 74,063 260,775 913,407 1,454,083
----------- ----------- ----------- ----------- -----------
END OF YEAR $ 152,303 $ 82,001 $ 370,505 $ 1,077,407 $ 1,682,216
=========== =========== =========== =========== ===========
Year Ended December 31, 1992
MONEY EQUITY TOTAL
MARKET BOND BALANCED GROWTH MUTUAL
FUND FUND FUND FUND FUNDS
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
CONTRIBUTIONS:
PARTICIPANTS $ 49,332 $ 31,298 $ 77,697 $ 169,285 $ 327,612
DIVIDEND INCOME 6,782 4,877 13,082 21,387 46,128
NET UNREALIZED/REALIZED GAIN
IN AGGREGATE CURRENT VALUE
OF INVESTMENTS (673) 10,550 37,556 47,433
LOAN REPAYMENTS 2,709 3,560 3,820 6,272 16,361
----------- ----------- ----------- ----------- -----------
58,823 39,062 105,149 234,500 437,534
DEDUCTIONS:
BENEFIT PAYMENTS TO
WITHDRAWING PARTICIPANTS 5,204 3,789 8,025 10,479 27,497
LOANS TO PARTICIPANTS 9,398 9,012 14,063 41,234 73,707
TRANSFERS 9,545 9,507 (194) (17,730) 1,128
----------- ----------- ----------- ----------- -----------
24,147 22,308 21,894 33,983 102,332
----------- ----------- ----------- ----------- -----------
NET INCREASE 34,676 16,754 83,255 200,517 335,202
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
BEGINNING OF THE YEAR 171,162 57,309 177,520 712,890 1,118,881
----------- ----------- ----------- ----------- -----------
END OF YEAR $ 205,838 $ 74,063 $ 260,775 $ 913,407 $ 1,454,083
=========== =========== =========== =========== ===========
<PAGE>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
4. Allocation of Plan Income and Changes in Plan Equity to Investment Programs (continued)
Year Ended December 31, 1991
MONEY EQUITY TOTAL
MARKET BOND BALANCED GROWTH MUTUAL
FUND FUND FUND FUND FUNDS
----------- ----------- ----------- ----------- -----------
ADDITIONS:
CONTRIBUTIONS:
PARTICIPANTS $ 12,118 $ 7,757 $ 16,719 $ 42,708 $ 79,302
DIVIDEND INCOME 6,801 454 1,962 4,249 13,466
NET UNREALIZED/REALIZED GAIN
IN AGGREGATE CURRENT VALUE
OF INVESTMENTS 1,457 2,964 33,655 38,076
LOAN REPAYMENTS 0
----------- ----------- ----------- ----------- -----------
18,919 9,668 21,645 80,612 130,844
DEDUCTIONS:
BENEFIT PAYMENTS TO
WITHDRAWING PARTICIPANTS 0
LOANS TO PARTICIPANTS 633 633
TRANSFERS (152,876) (47,641) (155,875) (632,278) (988,670)
----------- ----------- ----------- ----------- -----------
(152,243) (47,641) (155,875) (632,278) (988,037)
----------- ----------- ----------- ----------- -----------
NET INCREASE 171,162 57,309 177,520 712,890 1,118,881
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
BEGINNING OF THE YEAR 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
END OF YEAR $ 171,162 $ 57,309 $ 177,520 $ 712,890 $ 1,118,881
=========== =========== =========== =========== ===========
</TABLE>
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<TABLE>
<CAPTION>
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
Schedule I- Assets Held for Investment Purposes
December 31, 1993
- - ---------------------------------------------------------------------
Current
Units Cost Value
<S> <C> <C> <C> <C>
Vanguard Money Market
Prime Portfolio 147,818 $ 147,818 $ 147,818
Legg Mason Money Market 451 451 451
Safeguard Scientifics, Inc.
Common Stock 92,817 1,166,707 2,227,608
Novell Inc.
Common Stock 15,921 4,794 330,361
Cambridge Technology Partners
Common Stock 38,259 191,295 602,579
U.S. Government Securities Fund
Bond Fund 5,474 76,779 78,660
Income Fund of America
Balanced Fund 25,067 340,686 360,718
Investment Company of America
Equity Growth Fund 56,435 978,472 1,056,462
Net loans receivable 160,068 160,068
- - ---------------------------------------------------------------------
$ 3,067,070 $ 4,964,725
- - ---------------------------------------------------------------------
Schedule II - Reportable Transactions*
Year ended December 31, 1993
- - -------------------------------------------------------------------------------------
Purchased Distribution Gain on
Cost Amount Distribution
- - --------------------------------------------------------------------------------------
Safeguard Scientifics, Inc.
Common Stock (1) $ 274,255
Safeguard Scientifics, Inc.
Common Stock (1) $ 202,874 $ 30,531
Cambridge Technology Partners
Common Stock $ 225,885
- - ---------------------------------------------------------------------------------
* A reportable transaction is a transaction or a series of transactions of the same
security that involves an amount in excess of 5% of the current value of the net
assets at the beginning of the plan year.
(1) Represents the aggregate amount of a series of transactions, which individually
may or may not qualify as a reportable transaction.
</TABLE>
<PAGE>
[TEXT]
Independent Auditors' Report
The Board of Directors of
Safeguard Scientifics, Inc.:
We have audited the accompanying statements of net assets available for
plan benefits of Safeguard Scientifics, Inc. Stock Savings Plan as of
December 31, 1993 and 1992 and the related statements of changes in net
assets available for plan benefits for each of the years in the three-year
period ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of
Safeguard Scientifics, Inc. Stock Savings Plan at December 31, 1993 and
1992 and the changes in net assets available for plan benefits for each of
the years in the three-year period ended December 31, 1993, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
Assets Held for Investment Purposes and Reportable Transactions are
presented for the purpose of additional analysis and are not a required
part of the basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG Peat Marwick
Philadelphia, Pennsylvania
June 3, 1994
CONSENT2.EDG CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Safeguard Scientifics, Inc.:
We consent to incorporation by reference in the Post-Effective Amendment
No. 1 to the Registration Statement No. 2-72362 on Form S-8 and the
Registration Statement No. 33-48462 on Form S-8 of Safeguard Scientifics,
Inc. of our report dated June 3, 1994, relating to the statements of net
assets available for plan benefits of Safeguard Scientifics, Inc. Stock
Savings Plan as of December 31, 1993 and 1992 and the related statements of
changes in net assets available for plan benefits for each of the years in
the three-year period ended December 31, 1993 which report is included in
the annual report on Form 11-K of Safeguard Scientifics, Inc. Stock Savings
Plan for the year ended December 31, 1993.
KPMG Peat Marwick
Philadelphia, Pennsylvania
June 29, 1994
