SAFEGUARD SCIENTIFICS INC, 10-Q filed on 10/28/2016
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2016
Oct. 26, 2016
Document Documentand Entity Information [Abstract]
 
 
Entity Registrant Name
SAFEGUARD SCIENTIFICS INC 
 
Entity Central Index Key
0000086115 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
20,238,359 
Trading Symbol
SFE 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Current Assets:
 
 
Cash and cash equivalents
$ 52,496 
$ 32,838 
Marketable securities
13,816 
31,020 
Prepaid expenses and other current assets
1,906 
5,810 
Total current assets
68,218 
69,668 
Property and equipment, net
1,955 
2,145 
Ownership interests in and advances to partner companies
172,941 
171,601 
Loan participations receivable
2,649 
Long-term marketable securities
10,328 
9,743 
Other assets
296 
1,037 
Total Assets
253,738 
256,843 
Current Liabilities:
 
 
Accounts payable
110 
290 
Accrued compensation and benefits
3,259 
3,338 
Accrued expenses and other current liabilities
3,136 
2,789 
Total current liabilities
6,505 
6,417 
Other long-term liabilities
3,947 
3,965 
Convertible senior debentures
52,145 
50,956 
Total Liabilities
62,597 
61,338 
Commitments and contingencies
   
   
Equity:
 
 
Preferred stock, $0.10 par value; 1,000 shares authorized
Common stock, $0.10 par value; 83,333 shares authorized; 21,573 shares issued at September 30, 2016 and December 31, 2015
2,157 
2,157 
Additional paid-in capital
817,887 
817,434 
Treasury stock, at cost; 1,335 and 993 shares at September 30, 2016 and December 31, 2015, respectively
(23,467)
(19,570)
Accumulated deficit
(605,203)
(604,270)
Accumulated Other Comprehensive Income (Loss), Net of Tax
(233)
(246)
Total Equity
191,141 
195,505 
Total Liabilities and Equity
$ 253,738 
$ 256,843 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Preferred stock, par value
$ 0.10 
$ 0.10 
Preferred stock, shares authorized
1,000 
1,000 
Common stock, par value
$ 0.10 
$ 0.10 
Common stock, shares authorized
83,333 
83,333 
Common stock, shares issued
21,573 
21,573 
Treasury stock
1,335 
993 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]
 
 
 
 
General and administrative expense
$ 4,687 
$ 3,962 
$ 14,764 
$ 13,596 
Operating loss
(4,687)
(3,962)
(14,764)
(13,596)
Other income (loss), net
(2,405)
704 
(1,746)
301 
Interest income
513 
398 
1,460 
1,487 
Interest expense
(1,161)
(1,133)
(3,465)
(3,383)
Equity income (loss)
(16,345)
(7,635)
17,954 
(30,062)
Net loss before income taxes
(24,085)
(11,628)
(561)
(45,253)
Income tax benefit (expense)
Net loss
$ (24,085)
$ (11,628)
$ (561)
$ (45,253)
Net loss per share:
 
 
 
 
Basic (in dollars per share)
$ (1.18)
$ (0.56)
$ (0.03)
$ (2.17)
Diluted (in dollars per share)
$ (1.18)
$ (0.56)
$ (0.03)
$ (2.17)
Weighted average shares used in computing loss per share:
 
 
 
 
Basic (in shares)
20,387 
20,919 
20,390 
20,892 
Diluted (in shares)
20,387 
20,919 
20,390 
20,892 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash Flows from Operating Activities:
 
 
Net cash used in operating activities
$ (14,114)
$ (14,086)
Cash Flows from Investing Activities:
 
 
Proceeds from sales of and distributions from companies
73,854 
25,029 
Acquisitions of ownership interests in companies
(34,841)
(52,181)
Advances and loans to companies
(17,741)
(10,935)
Repayment of advances and loans to companies
1,741 
1,290 
Increase in marketable securities
(18,733)
(23,875)
Decrease in marketable securities
35,386 
28,043 
Capital expenditures
(73)
(402)
Net cash provided by (used in) investing activities
39,593 
(33,031)
Cash Flows from Financing Activities:
 
 
Issuance of Company common stock, net
676 
Tax withholdings related to equity-based awards
(437)
Repurchase of Company common stock
(5,389)
(1,748)
Net cash used in financing activities
(5,821)
(1,072)
Net change in cash and cash equivalents
19,658 
(48,189)
Cash and cash equivalents at beginning of period
32,838 
111,897 
Cash and cash equivalents at end of period
$ 52,496 
$ 63,708 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $)
In Thousands, unless otherwise specified
Total
Accumulated Deficit [Member]
AOCI Attributable to Parent [Member]
Common Stock
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Balance at Dec. 31, 2015
$ 195,505 
$ (604,270)
$ (246)
$ 2,157 
$ 817,434 
$ (19,570)
Balance (in shares) at Dec. 31, 2015
 
 
 
 
 
993 
Balance (in shares) at Dec. 31, 2015
 
 
 
21,573 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net loss
(561)
(561)
 
 
 
 
Stock Issued During Period, Value, Stock Options Exercised
(318)
 
 
 
(1,117)
799 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
 
 
 
 
 
(46)
Repurchase of common stock
(5,389)
 
 
 
 
(5,389)
Repurchase of common stock (in shares)
 
 
 
 
 
424 
Issuance of restricted stock, net of tax withholdings
12 
 
 
 
(681)
693 
Issuance of restricted stock, net (in shares)
 
 
 
 
 
(36)
Stock-based compensation expense
1,879 
 
 
 
1,879 
 
Other comprehensive income
13 
 
13 
 
 
 
Balance at Sep. 30, 2016
$ 191,141 
$ (605,203)
$ (233)
$ 2,157 
$ 817,887 
$ (23,467)
Balance (in shares) at Sep. 30, 2016
 
 
 
 
 
1,335 
Balance (in shares) at Sep. 30, 2016
 
 
 
21,573 
 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net loss
$ (24,085)
$ (11,628)
$ (561)
$ (45,253)
Share of other comprehensive income of equity method investments
13 
Total comprehensive loss
$ (24,082)
$ (11,628)
$ (548)
$ (45,253)
General
General
General
The accompanying unaudited interim Consolidated Financial Statements of Safeguard Scientifics, Inc. (“Safeguard” or the “Company”) were prepared in accordance with accounting principles generally accepted in the United States of America and the interim financial statement rules and regulations of the SEC. In the opinion of management, these statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Consolidated Financial Statements. The interim operating results are not necessarily indicative of the results for a full year or for any interim period. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The Consolidated Financial Statements included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-Q and with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s 2015 Annual Report on Form 10-K.
Adoption of Accounting Standards Update 2016-09
In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). While the effective date of ASU 2016-09 is for fiscal years beginning after December 15, 2016, earlier adoption is permitted and the Company adopted the amendments in ASU 2016-09 during the second quarter of 2016. This standard simplifies or clarifies several aspects of the accounting for equity-based payment awards, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the Consolidated Statements of Cash Flows. Certain of these changes are required to be applied retrospectively, while other changes are required to be applied prospectively. The impact of early adoption resulted in the following:
The Company will recognize share-based payment forfeitures as they occur. Prior to adoption, forfeitures were estimated in order to arrive at current period expense. There was a cumulative effect adjustment of $0.4 million to Accumulated deficit on the Consolidated Balance Sheet as of January 1, 2016 as a result of the adoption of this amendment on a modified retrospective basis.
The Company, upon election by an employee, will withhold award shares with a fair value up to the amount of tax owed upon vesting or exercise using the maximum statutory tax rate in the employee's applicable jurisdiction while still qualifying for equity classification. Prior to adoption, the Company was only able to withhold award shares with a fair value up to the minimum statutory tax rate. There was no cumulative effect adjustment as a result of the adoption of this amendment on a modified retrospective basis.
The Company will present employee taxes paid by the Company through the withholding of award shares as a financing activity in the Consolidated Statements of Cash Flows. The effect of this retrospective change on the Company's Consolidated Statements of Cash Flows was not significant.
There were no other material impacts to the Company's results of operations or liquidity as a result of adopting ASU 2016-09.
Retrospective Adoption of Accounting Guidance
In the first quarter of 2016, the Company adopted accounting guidance that required retrospective adjustment to previously issued financial statements.  All prior period data presented in the Company's Consolidated Financial Statements reflect the retrospective adoption of this guidance.
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. As a result of the adoption of ASU 2015-03, the Company reclassified its capitalized debt issuance costs previously recorded within Other assets to a contra-liability reducing Convertible senior debentures on the Consolidated Balance Sheets.  The reclassification was $0.8 million as of December 31, 2015.  ASU 2015-03 had no effect on the Company's results of operations or liquidity.
Ownership Interests in and Advances to Partner Companies and Funds
Ownership Interests in and Advances to Partner Companies
Ownership Interests in and Advances to Partner Companies
The following summarizes the carrying value of the Company’s ownership interests in and advances to partner companies.   
   
September 30, 2016
 
December 31, 2015
   
(Unaudited - In thousands)
Equity Method:
   
 
 
Partner companies
$
151,437

 
$
150,898

Private equity funds
448

 
942

   
151,885

 
151,840

Cost Method:
   
 
 
Partner companies
1,200

 
5,024

Private equity funds
1,661

 
1,966

   
2,861

 
6,990

Advances to partner companies
18,195

 
12,771

   
$
172,941

 
$
171,601


In April 2016, Putney, Inc. was acquired by Dechra Pharmaceuticals Plc. The Company received $58.2 million in initial cash proceeds in connection with the transaction, excluding $0.4 million which was released from escrow in July 2016 and $0.6 million which will be held in escrow until April 2017. The Company recognized a gain of $55.2 million on the transaction, which was included in Equity income (loss) in the Consolidated Statements of Operations in the quarter ended June 30, 2016. The Company recognized a gain of $0.4 million on the escrow release in July 2016 which is included in Equity income (loss) in the Consolidated Statements of Operations in the quarter ended September 30, 2016.
In July 2015, Quantia, Inc. was acquired by Physicians Interactive. The Company received $7.8 million in initial cash proceeds in connection with the transaction. In July 2016, the Company received an additional $0.6 million which was released from escrow resulting in a gain of $0.6 million which is included in Equity income (loss) in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016.
In the quarter ended September 30, 2016, the Company recognized an impairment charge of $2.4 million related to its Penn Mezzanine debt and equity participations which is reflected in Other income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016. The amount of the impairment was determined based on the difference between the carrying value of the Company's debt and equity participations and their estimated fair values. The Company has no remaining Penn Mezzanine debt participations and the adjusted carrying value of the Company's remaining Penn Mezzanine equity participation was $0.2 million at September 30, 2016.
In the quarter ended September 30, 2016, the Company recognized an impairment charge of $1.0 million related to Aventura, Inc. which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the three and nine months ended September 30, 2016. The impairment was due to a lack of revenue growth and a strategic repositioning of the product in the market. The adjusted carrying value of the Company's interest in Aventura was $2.7 million at September 30, 2016.
In the quarter ended June 30, 2016, the Company recognized an impairment charge of $1.7 million related to AppFirst, Inc. which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2016. The impairment was due to the shutdown of AppFirst's operations and the sale of its assets. The amount of the impairment was determined based on the difference between the carrying value of the Company's holdings in AppFirst and the proceeds received on the sale of AppFirst's assets in June 2016. The adjusted carrying value of the Company's interest in AppFirst was $0 at September 30, 2016.
In June 2016, the Company sold its ownership interests in Bridgevine, Inc. The Company received cash proceeds of $5.0 million and recognized a gain of $0.4 million on the transaction which is included in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2016.
In April 2015, DriveFactor, Inc. was acquired by CCC Information Services, Inc. The Company received $9.1 million in initial cash proceeds in connection with the transaction. The Company recognized a gain of $6.1 million on the transaction, which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015. In April 2016, the Company received an additional $1.1 million which was released from escrow resulting in a gain of $1.1 million which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2016.
In April 2016, the Company received $3.3 million associated with the achievement of the final performance milestone related to the December 2013 sale of ThingWorx, Inc. to PTC, Inc., resulting in a gain of $3.3 million which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2016. In January 2016, the Company received $4.1 million in connection with the expiration of the escrow period related to the transaction, which was included in Prepaid expenses and other current assets in the Consolidated Balance Sheets as of December 31, 2015 as the Company had earned such amount as of December 31, 2015.
The Company discloses aggregate summarized statements of operations for any partner companies accounted for under the equity method that are deemed significant. The following table provides significant partner company operations information for the nine months ended September 30, 2016 and 2015. The partner company results of operations have been compiled from respective partner company financial statements, reflect certain historical adjustments, and are reported on a one quarter lag basis.
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
 
(In thousands)
Results of Operations:
 
 
 
Revenue
$
299,768

 
$
291,860

Gross profit
$
190,168

 
$
182,809

Net loss
$
(135,045
)
 
$
(105,042
)
Acquisitions of Ownership Interests in Partner Companies and Funds
Acquisitions of Ownership Interests in Partner Companies
Acquisitions of Ownership Interests in Partner Companies
In September 2016, the Company acquired a 32.6% interest in Moxe Health Corporation for $4.5 million. Moxe Health connects payers to their provider networks, facilitating real-time data exchange through its electronic integration platform. The Company accounts for its interest in Moxe Health under the equity method.
In September, June and January 2016, the Company deployed an aggregate of $5.0 million into InfoBionic, Inc. The Company had previously deployed an aggregate of $9.5 million in InfoBionic. InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias. The Company accounts for its interest in InfoBionic under the equity method.
In September and June 2016, the Company funded an aggregate of $0.5 million of convertible loans to Lumesis, Inc. The Company had previously deployed an aggregate of $5.6 million in Lumesis. Lumesis is a financial technology company focused on providing business efficiency, regulatory and data solutions to the municipal bond marketplace. The Company accounts for its interest in Lumesis under the equity method.
In July and April 2016, the Company funded an aggregate of $3.7 million of convertible bridge loans to Good Start Genetics, Inc. The Company had previously deployed an aggregate of $12.0 million in Good Start Genetics. Good Start Genetics is an information solutions company delivering genetics offerings to growing families, including advanced clinical sequencing and individualized actionable information to promote successful pregnancies. The Company accounts for its interest in Good Start Genetics under the equity method.
In July and January 2016, the Company deployed an aggregate of $4.0 million into Clutch Holdings, Inc. The Company had previously deployed an aggregate of $12.3 million in Clutch. Clutch provides customer intelligence and personalized engagements that empower consumer-focused businesses to identify, understand and motivate each segment of their customer base. The Company accounts for its interest in Clutch under the equity method.
In July and January 2016, the Company funded an aggregate of $4.0 million of convertible loans to Spongecell, Inc. The Company had previously deployed an aggregate of $14.0 million in Spongecell. Spongecell helps advertisers enhance the power of digital brand creative by leveraging customer data and brand content to personalize ads for maximum relevance. The Company accounts for its interest in Spongecell under the equity method.
In June 2016, the Company acquired a 23.4% interest in Aktana, Inc. for $5.5 million. Aktana leverages big data and machine learning to enable pharmaceutical brands to dynamically optimize their strategy and enhance sales execution. The Company accounts for its interest in Aktana under the equity method.
In June and January 2016, the Company funded an aggregate of $1.2 million of convertible bridge loans to AppFirst, Inc. The Company had previously deployed an aggregate of $11.6 million in AppFirst. The Company impaired its ownership interest in AppFirst in June 2016 due to the shutdown of AppFirst's operations and sale of its assets in June 2016, which generated cash proceeds to the Company of $0.9 million. The adjusted carrying value of the Company's interest in AppFirst is $0 as of September 30, 2016. The Company accounted for its interest in AppFirst under the equity method.
In April and March 2016, the Company funded an aggregate of $1.0 million of convertible loans to NovaSom, Inc. The Company had previously deployed an aggregate of $21.0 million in NovaSom. NovaSom is a medical device company focused on obstructive sleep apnea, specifically home testing with its FDA-cleared wireless device called AccuSom® Home Sleep Test. The Company accounts for its interest in NovaSom under the equity method.
In April 2016, the Company deployed an additional $5.0 million into Transactis, Inc. The Company had previously deployed $9.5 million in Transactis. Transactis provides electronic billing and payment solutions. The Company accounts for its interest in Transactis under the equity method.
In March 2016, the Company funded $1.0 million of a convertible bridge loan to Hoopla Software, Inc. The Company had previously deployed an aggregate of $3.8 million in Hoopla. Hoopla provides cloud-based software that helps sales organizations inspire and motivate sales team performance. The Company accounts for its interest in Hoopla under the equity method.
In March and January 2016, the Company deployed an aggregate of $4.0 million into Full Measure Education, Inc. The Company had previously deployed $4.0 million in Full Measure. Full Measure designs next-generation, mobile-first technologies for community colleges throughout the United States. The Company accounts for its interest in Full Measure under the equity method.
In January 2016, the Company deployed an additional $4.4 million into WebLinc, Inc. The Company had previously deployed an aggregate of $6.6 million in WebLinc. WebLinc is a commerce platform provider for fast growing online retailers. The Company accounts for its interest in WebLinc under the equity method.
In January 2016, the Company deployed an additional $7.5 million into Syapse, Inc. The Company had previously deployed $5.8 million in Syapse. Syapse drives healthcare transformation through precision medicine, enabling provider systems to improve clinical outcomes, streamline operations, and shift to new payment models. The Company accounts for its interest in Syapse under the equity method.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial instruments recorded at fair value on the Company’s Consolidated Balance Sheets are categorized as follows:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Include other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:
   
Carrying
Value
 
Fair Value Measurement at September 30, 2016
   
Level 1
 
Level 2
 
Level 3
 
(Unaudited - In thousands)
Cash and cash equivalents
$
52,496

 
$
52,496

 
$

 
$

Marketable securities—held-to-maturity:
   
 
   
 
   
 
   
Government agency bonds
$
612

 
$
612

 
$

 
$

Certificates of deposit
23,532

 
23,532

 

 

 Total marketable securities
$
24,144

 
$
24,144

 
$

 
$

 
Carrying
Value
 
Fair Value Measurement at December 31, 2015
   
Level 1
 
Level 2
 
Level 3
 
(Unaudited - In thousands)
Cash and cash equivalents
$
32,838

 
$
32,838

 
$

 
$

Marketable securities—held-to-maturity:
   
 
 
 
 
 
 
Government agency bonds
$
1,329

 
$
1,329

 
$

 
$

Certificates of deposit
39,434

 
39,434

 

 

 Total marketable securities
$
40,763

 
$
40,763

 
$

 
$


As of September 30, 2016, $13.8 million of marketable securities had contractual maturities which were less than one year and $10.3 million of marketable securities had contractual maturities greater than one year. Held-to-maturity securities are carried at amortized cost, which, due to the short-term maturity of these instruments, approximates fair value using quoted prices in active markets for identical assets or liabilities defined as Level 1 inputs under the fair value hierarchy.
Convertible Debentures and Credit Arrangements
Convertible Debentures and Credit Arrangements
Convertible Debentures and Credit Arrangements
Convertible Senior Debentures
In November 2012, the Company issued $55.0 million principal amount of its 5.25% convertible senior debentures due 2018 (the "2018 Debentures"). The 2018 Debentures may be settled in cash or partially in cash upon conversion. Accordingly, the Company separately accounts for the liability and equity components of the 2018 Debentures. The carrying amount of the liability component was determined at the transaction date by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component represented by the embedded conversion option was determined by deducting the fair value of the liability component from the initial proceeds of the 2018 Debentures as a whole. At September 30, 2016, the fair value of the $55.0 million outstanding 2018 Debentures was approximately $56.7 million, based on the midpoint of the bid and ask prices as of such date. At September 30, 2016, the carrying amount of the equity component was $6.4 million, the principal amount of the liability component was $55.0 million, the unamortized discount was $2.3 million, unamortized debt issuance costs were $0.6 million and the net carrying value of the liability component was $52.1 million. The Company is amortizing the excess of the face value of the 2018 Debentures over their carrying value over their term as additional interest expense using the effective interest method and recorded $0.4 million of such expense for the three months ended September 30, 2016 and 2015 and $1.2 million and $1.1 million for the nine months ended September 30, 2016 and 2015, respectively. The effective interest rate on the 2018 Debentures is 8.7%.
Credit Arrangements
The Company is party to a loan agreement with a commercial bank which provides it with a revolving credit facility in the maximum aggregate amount of $25.0 million in the form of borrowings, guarantees and issuances of letters of credit, subject to a $20.0 million sublimit. Actual availability under the credit facility is based on the amount of cash maintained at the bank as well as the value of the Company’s public and private partner company interests. This credit facility bears interest at the prime rate for outstanding borrowings, subject to an increase in certain circumstances. Other than for limited exceptions, the Company is required to maintain all of its depository and operating accounts at the bank. The credit facility, as amended December 29, 2015, matures on December 19, 2016. Under the credit facility, the Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters which was required in connection with the sale of CompuCom Systems in 2004. Availability under the Company’s revolving credit facility at September 30, 2016 was $18.7 million.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows:   
   
Three months ended September 30,
 
Nine months ended September 30,
   
2016
 
2015
 
2016
 
2015
 
(Unaudited - In thousands)
General and administrative expense
$
604

 
$
148

 
$
1,879

 
$
1,140

   
$
604

 
$
148

 
$
1,879

 
$
1,140


The fair value of the Company’s option awards to employees was estimated at the date of grant using the Black-Scholes option-pricing model. The risk-free rate was based on the U.S. Treasury yield curve in effect at the end of the quarter in which the grant occurred. The expected term of stock options granted was estimated using the historical exercise behavior of employees. Expected volatility was based on historical volatility measured using weekly price observations of the Company’s common stock for a period equal to the stock option’s expected term.
At September 30, 2016, the Company had outstanding options that vest based on two different types of vesting schedules:
1)
performance-based;
2)
service-based.

Performance-based awards entitle participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified partner companies. Vesting may occur, if at all, once per year. The requisite service periods for the performance-based awards are based on the Company’s estimate of when the performance conditions will be met. Compensation expense is recognized for performance-based awards for which the performance condition is considered probable of achievement. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if capital return targets are achieved earlier than estimated. During the nine months ended September 30, 2016 and 2015, the Company did not issue any performance-based options to employees. During the nine months ended September 30, 2016 and 2015, respectively, 4 thousand and 0 thousand performance-based options vested. During the nine months ended September 30, 2016 and 2015, 35 thousand and 9 thousand performance-based options, respectively, were canceled or forfeited. The Company recorded compensation expense related to performance-based options of $0.0 million for both the three months ended September 30, 2016 and 2015, and $0.2 million and $0.0 million for the nine months ended September 30, 2016 and 2015, respectively. The maximum number of unvested options at September 30, 2016 attainable under these grants was 415 thousand shares.
Service-based awards generally vest over four years after the date of grant and expire eight years after the date of grant. Compensation expense is recognized over the requisite service period using the straight-line method. The requisite service period for service-based awards is the period over which the award vests. During the nine months ended September 30, 2016 and 2015, the Company issued 12 thousand and 21 thousand service-based options, respectively, to employees. During the nine months ended September 30, 2016 and 2015, 12 thousand and 8 thousand service-based options, respectively, were canceled or forfeited. The Company recorded compensation expense related to service-based options of $0.1 million for both the three months ended September 30, 2016 and 2015, and $0.1 million and $0.2 million for the nine months ended September 30, 2016 and 2015, respectively.
Performance-based stock units vest based on achievement by the Company of target capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified partner companies, as described above related to performance-based awards. Performance-based stock units represent the right to receive shares of the Company’s common stock, on a one-for-one basis. During the nine months ended September 30, 2016 and 2015, the Company did not issue any performance-based stock units to employees. During the nine months ended September 30, 2016 and 2015, respectively, 1 thousand and 0 thousand performance-based stock units vested. Under the 2015 and 2014 performance-based award plans, once performance-based stock units are fully vested, participants are entitled to receive cash payments based on their initial performance grant values as target capital returns described above are exceeded. At September 30, 2016, the liability associated with such potential cash payments was $0.0 million.
During the nine months ended September 30, 2016 and 2015, the Company issued 43 thousand and 41 thousand deferred stock units, respectively, to non-employee directors for annual service grants or fees earned during the preceding quarter. Deferred stock units issued to directors in lieu of directors fees are 100% vested at the grant date; matching deferred stock units equal to 25% of directors’ fees deferred vest one year following the grant date or, if earlier, upon reaching age 65. Deferred stock units are payable in stock on a one-for-one basis. Payments related to the deferred stock units are generally distributable following termination of employment or service, death or permanent disability.
During the nine months ended September 30, 2016 and 2015, the Company did not issue any restricted stock awards.
Total compensation expense for performance-based stock units, deferred stock units, and restricted stock was $0.5 million and $0.1 million for the three months ended September 30, 2016 and 2015, respectively, and $1.5 million and $1.0 million for the nine months ended September 30, 2016 and 2015, respectively.
Income Taxes
Income Taxes
Income Taxes
The Company’s consolidated income tax benefit (expense) was $0.0 million for the three and nine months ended September 30, 2016 and 2015. The Company has recorded a valuation allowance to reduce its net deferred tax asset to an amount that is more likely than not to be realized in future years. Accordingly, the benefit of the net operating loss that would have been recognized in the three and nine months ended September 30, 2016 and 2015 was offset by changes in the valuation allowance. During the nine months ended September 30, 2016, the Company had no material changes in uncertain tax positions.
Net Income (Loss) Per Share
Net Income (Loss) Per Share
Net Loss Per Share
The calculations of net loss per share were as follows:
   
Three months ended September 30,
 
Nine months ended September 30,
   
2016
 
2015
 
2016
 
2015
 
(Unaudited - In thousands, except per share data)
Basic:
   
 
   
 
   
 
   
Net loss
$
(24,085
)
 
$
(11,628
)
 
$
(561
)
 
$
(45,253
)
Weighted average common shares outstanding
20,387

 
20,919

 
20,390

 
20,892

Net loss per share
$
(1.18
)
 
$
(0.56
)
 
$
(0.03
)
 
$
(2.17
)
 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Net loss
$
(24,085
)
 
$
(11,628
)
 
$
(561
)
 
$
(45,253
)
Weighted average common shares outstanding
20,387

 
20,919

 
20,390

 
20,892

Net loss per share
$
(1.18
)
 
$
(0.56
)
 
$
(0.03
)
 
$
(2.17
)

Basic and diluted average common shares outstanding for purposes of computing net income (loss) per share includes outstanding common shares and vested deferred stock units (DSUs).
If a consolidated or equity method partner company has dilutive stock options, unvested restricted stock, DSUs or warrants, diluted net income (loss) per share is computed by first deducting the income attributable to the potential exercise of the dilutive securities of the partner company from net income (loss). Any impact is shown as an adjustment to net income (loss) for purposes of calculating diluted net income (loss) per share.
Diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 do not reflect the following potential shares of common stock that would have an anti-dilutive effect or have unsatisfied performance or market conditions:
At September 30, 2016 and 2015, options to purchase 0.7 million and 1.1 million shares of common stock, respectively, at prices ranging from $9.83 to $19.95 and $7.14 to $19.95, respectively, were excluded from the calculations.
At September 30, 2016 and 2015, unvested restricted stock, performance-based stock units and DSUs convertible into 0.6 million and 0.4 million shares of stock, respectively, were excluded from the calculations.
At September 30, 2016 and 2015, 3.0 million shares of common stock, representing the effect of the assumed conversion of the 2018 Debentures, were excluded from the calculations.
Operating Segments
Operating Segments
Previously, the Company presented its operating results in two reportable segments - Healthcare and Technology. Recently, the Company shifted its focus to providing capital to technology companies within the fields of healthcare, financial services and digital media. Beginning in the third quarter of 2016, the Company has determined it operates as one operating segment based upon the similar nature of its technology-driven partner companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.
As of September 30, 2016, the Company held interests in 28 non-consolidated partner companies. The Company’s active partner companies were as follows as of September 30, 2016:
Partner Company
Safeguard Primary Ownership as of September 30, 2016
 
Accounting Method
AdvantEdge Healthcare Solutions, Inc.
40.1%
 
Equity
Aktana, Inc.
23.4%
 
Equity
Apprenda, Inc.
29.5%
 
Equity
Aventura, Inc.
19.9%
 
Equity
Beyond.com, Inc.
38.2%
 
Equity
Cask Data, Inc.
31.3%
 
Equity
CloudMine, Inc.
30.1%
 
Equity
Clutch Holdings, Inc.
45.0%
 
Equity
Full Measure Education, Inc.
36.0%
 
Equity
Good Start Genetics, Inc.
29.6%
 
Equity
Hoopla Software, Inc.
25.5%
 
Equity
InfoBionic, Inc.
40.5%
 
Equity
Lumesis, Inc.
44.1%
 
Equity
MediaMath, Inc.
20.5%
 
Equity
Medivo, Inc.
35.3%
 
Equity
meQuilibrium
31.5%
 
Equity
Moxe Health Corporation
32.6%
 
Equity
NovaSom, Inc.
31.7%
 
Equity
Pneuron Corporation
35.4%
 
Equity
Propeller Health, Inc.
24.4%
 
Equity
QuanticMind, Inc.
23.5%
 
Equity
Sonobi, Inc.
21.6%
 
Equity
Spongecell, Inc.
23.0%
 
Equity
Syapse, Inc.
25.8%
 
Equity
Transactis, Inc.
24.2%
 
Equity
Trice Medical, Inc.
27.7%
 
Equity
WebLinc, Inc.
38.0%
 
Equity
Zipnosis, Inc.
26.2%
 
Equity
 As of September 30, 2016 and December 31, 2015, all of the Company’s assets were located in the United States.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
The Company and its partner companies are involved in various claims and legal actions arising in the ordinary course of business. In the current opinion of the Company, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations, however, no assurance can be given as to the outcome of these actions, and one or more adverse rulings could have a material adverse effect on the Company’s consolidated financial position and results of operations or that of its partner companies. The Company records costs associated with legal fees as such services are rendered.
The Company had outstanding guarantees of $3.8 million at September 30, 2016 which related to one of the Company's private equity holdings.
Under certain circumstances, the Company may be required to return a portion or all the distributions it received as a general partner of a private equity fund (“clawback”). The maximum clawback the Company could be required to return due to its general partner interest is approximately $1.3 million, of which $1.0 million was reflected in Accrued expenses and other current liabilities and $0.3 million was reflected in Other long-term liabilities on the Consolidated Balance Sheets at September 30, 2016. The Company’s ownership in the fund is 19%. The clawback liability is joint and several; therefore the Company may be required to fund the clawback for other general partners should they default. The Company believes its potential liability due to the possibility of default by other general partners is remote.
 
In October 2001, the Company entered into an agreement with a former Chairman and Chief Executive Officer of the Company, to provide for annual payments of $0.65 million per year and certain health care and other benefits for life. The related current liability of $0.8 million was included in Accrued expenses and other current liabilities and the long-term portion of $2.1 million was included in Other long-term liabilities on the Consolidated Balance Sheet at September 30, 2016.
The Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters as required in connection with the sale of CompuCom Systems in 2004.
The Company has agreements with certain employees that provide for severance payments to the employee in the event the employee is terminated without cause or an employee terminates his employment for “good reason.” The maximum aggregate exposure under the agreements was approximately $3.0 million at September 30, 2016.
In June 2011, the Company's former partner company, Advanced BioHealing, Inc. (“ABH”) was acquired by Shire plc. Prior to the expiration of the escrow period in March 2012, Shire plc filed a claim against all amounts held in escrow related to the sale based principally upon a United States Department of Justice (“DOJ”) false claims act investigation relating to ABH. No further proceeds will be distributed to the Company or other former owners until the validity of such claims is determined. The Company presently views it as unlikely that it will receive any portion of such amount in the short- or long-term. In connection with the above-referenced investigation, in July 2015 the Company received a Civil Investigation Demand-Documentary Material from the DOJ regarding ABH and Safeguard’s relationship with ABH. Safeguard intends to cooperate with the investigation.
Equity
Equity
Equity
In July 2015, the Company's Board of Directors authorized the Company, from time to time and depending on market conditions, to repurchase up to $25.0 million of the Company's outstanding common stock. The Company repurchased 0.4 million shares at an aggregate cost of $5.4 million during the nine months ended September 30, 2016.
Ownership Interests in and Advances to Partner Companies and Funds (Tables)
The following summarizes the carrying value of the Company’s ownership interests in and advances to partner companies.   
   
September 30, 2016
 
December 31, 2015
   
(Unaudited - In thousands)
Equity Method:
   
 
 
Partner companies
$
151,437

 
$
150,898

Private equity funds
448

 
942

   
151,885

 
151,840

Cost Method:
   
 
 
Partner companies
1,200

 
5,024

Private equity funds
1,661

 
1,966

   
2,861

 
6,990

Advances to partner companies
18,195

 
12,771

   
$
172,941

 
$
171,601

The Company discloses aggregate summarized statements of operations for any partner companies accounted for under the equity method that are deemed significant. The following table provides significant partner company operations information for the nine months ended September 30, 2016 and 2015. The partner company results of operations have been compiled from respective partner company financial statements, reflect certain historical adjustments, and are reported on a one quarter lag basis.
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
 
(In thousands)
Results of Operations:
 
 
 
Revenue
$
299,768

 
$
291,860

Gross profit
$
190,168

 
$
182,809

Net loss
$
(135,045
)
 
$
(105,042
)
Fair Value Measurements (Tables)
Carrying Value and Fair Value of Certain Financial Assets and Liabilities Measured at Fair Value on Recurring Basis
The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:
   
Carrying
Value
 
Fair Value Measurement at September 30, 2016
   
Level 1
 
Level 2
 
Level 3
 
(Unaudited - In thousands)
Cash and cash equivalents
$
52,496

 
$
52,496

 
$

 
$

Marketable securities—held-to-maturity:
   
 
   
 
   
 
   
Government agency bonds
$
612

 
$
612

 
$

 
$

Certificates of deposit
23,532

 
23,532

 

 

 Total marketable securities
$
24,144

 
$
24,144

 
$

 
$

 
Carrying
Value
 
Fair Value Measurement at December 31, 2015
   
Level 1
 
Level 2
 
Level 3
 
(Unaudited - In thousands)
Cash and cash equivalents
$
32,838

 
$
32,838

 
$

 
$

Marketable securities—held-to-maturity:
   
 
 
 
 
 
 
Government agency bonds
$
1,329

 
$
1,329

 
$

 
$

Certificates of deposit
39,434

 
39,434

 

 

 Total marketable securities
$
40,763

 
$
40,763

 
$

 
$

Stock-Based Compensation (Tables)
Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows:   
   
Three months ended September 30,
 
Nine months ended September 30,
   
2016
 
2015
 
2016
 
2015
 
(Unaudited - In thousands)
General and administrative expense
$
604

 
$
148

 
$
1,879

 
$
1,140

   
$
604

 
$
148

 
$
1,879

 
$
1,140

At September 30, 2016, the Company had outstanding options that vest based on two different types of vesting schedules:
1)
performance-based;
2)
service-based.
Net Income (Loss) Per Share (Tables)
Calculations of Net Loss Per Share
The calculations of net loss per share were as follows:
   
Three months ended September 30,
 
Nine months ended September 30,
   
2016
 
2015
 
2016
 
2015
 
(Unaudited - In thousands, except per share data)
Basic:
   
 
   
 
   
 
   
Net loss
$
(24,085
)
 
$
(11,628
)
 
$
(561
)
 
$
(45,253
)
Weighted average common shares outstanding
20,387

 
20,919

 
20,390

 
20,892

Net loss per share
$
(1.18
)
 
$
(0.56
)
 
$
(0.03
)
 
$
(2.17
)
 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Net loss
$
(24,085
)
 
$
(11,628
)
 
$
(561
)
 
$
(45,253
)
Weighted average common shares outstanding
20,387

 
20,919

 
20,390

 
20,892

Net loss per share
$
(1.18
)
 
$
(0.56
)
 
$
(0.03
)
 
$
(2.17
)
Operating Segments (Tables)
Active Partner Companies by Segment
The Company’s active partner companies were as follows as of September 30, 2016:
Partner Company
Safeguard Primary Ownership as of September 30, 2016
 
Accounting Method
AdvantEdge Healthcare Solutions, Inc.
40.1%
 
Equity
Aktana, Inc.
23.4%
 
Equity
Apprenda, Inc.
29.5%
 
Equity
Aventura, Inc.
19.9%
 
Equity
Beyond.com, Inc.
38.2%
 
Equity
Cask Data, Inc.
31.3%
 
Equity
CloudMine, Inc.
30.1%
 
Equity
Clutch Holdings, Inc.
45.0%
 
Equity
Full Measure Education, Inc.
36.0%
 
Equity
Good Start Genetics, Inc.
29.6%
 
Equity
Hoopla Software, Inc.
25.5%
 
Equity
InfoBionic, Inc.
40.5%
 
Equity
Lumesis, Inc.
44.1%
 
Equity
MediaMath, Inc.
20.5%
 
Equity
Medivo, Inc.
35.3%
 
Equity
meQuilibrium
31.5%
 
Equity
Moxe Health Corporation
32.6%
 
Equity
NovaSom, Inc.
31.7%
 
Equity
Pneuron Corporation
35.4%
 
Equity
Propeller Health, Inc.
24.4%
 
Equity
QuanticMind, Inc.
23.5%
 
Equity
Sonobi, Inc.
21.6%
 
Equity
Spongecell, Inc.
23.0%
 
Equity
Syapse, Inc.
25.8%
 
Equity
Transactis, Inc.
24.2%
 
Equity
Trice Medical, Inc.
27.7%
 
Equity
WebLinc, Inc.
38.0%
 
Equity
Zipnosis, Inc.
26.2%
 
Equity
 
General (Details) (USD $)
Jan. 1, 2016
Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
Cumulative effect adjustment
 
$ 0 1
Deferred finance costs, noncurrent, net
 
800,000 
Accumulated Deficit [Member]
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
Cumulative effect adjustment
$ 400,000 
$ 372,000 1
Ownership Interests in and Advances to Partner Companies and Funds - Carrying Value (Detail) (USD $)
Sep. 30, 2016
Dec. 31, 2015
Investments In And Advances To Affiliates [Line Items]
 
 
Equity method investments
$ 151,885,000 
$ 151,840,000 
Cost method investments
2,861,000 
6,990,000 
Advances to partner companies
18,195,000 
12,771,000 
Investments in and advance to affiliates, subsidiaries, associates, and joint ventures
172,941,000 
171,601,000 
Partner companies
 
 
Investments In And Advances To Affiliates [Line Items]
 
 
Equity method investments
151,437,000 
150,898,000 
Cost method investments
1,200,000 
5,024,000 
Private equity funds
 
 
Investments In And Advances To Affiliates [Line Items]
 
 
Equity method investments
448,000 
942,000 
Cost method investments
$ 1,661,000 
$ 1,966,000 
Ownership Interests in and Advances to Partner Companies and Funds - Narrative (Detail) (USD $)
9 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Jun. 30, 2016
AppFirst, Inc.
Jun. 30, 2016
AppFirst, Inc.
Sep. 30, 2016
AppFirst, Inc.
Jun. 30, 2016
Bridgevine Inc
Sep. 30, 2016
Bridgevine Inc
Jul. 31, 2016
Putney, Inc.
Apr. 30, 2016
Putney, Inc.
Sep. 30, 2016
Putney, Inc.
Jun. 30, 2016
Putney, Inc.
Jul. 31, 2016
Quantia Inc.
Jul. 31, 2015
Quantia Inc.
Sep. 30, 2016
Quantia Inc.
Sep. 30, 2016
Quantia Inc.
Sep. 30, 2016
Penn Mezzanine Assets
Sep. 30, 2016
Penn Mezzanine Assets
Sep. 30, 2016
Aventura
Sep. 30, 2016
Aventura
Apr. 30, 2016
Drive Factor
Apr. 30, 2015
Drive Factor
Sep. 30, 2016
Drive Factor
Sep. 30, 2015
Drive Factor
Apr. 30, 2016
Thing Worx Inc
Jan. 31, 2016
Thing Worx Inc
Sep. 30, 2016
Thing Worx Inc
Apr. 30, 2017
Scenario, Forecast
Putney, Inc.
Investment [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of business
$ 73,854,000 
$ 25,029,000 
 
$ 900,000 
 
 
$ 5,000,000 
 
$ 400,000 
$ 58,200,000 
 
 
$ 600,000 
$ 7,800,000 
 
 
 
 
 
 
$ 1,100,000 
$ 9,100,000 
 
 
$ 3,300,000 
$ 4,100,000 
 
 
Amount held in escrow
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000 
Gain on sale of business
 
 
 
 
 
 
 
400,000 
 
 
400,000 
55,200,000 
 
 
600,000 
600,000 
 
 
 
 
 
 
1,100,000 
6,100,000 
 
 
3,300,000 
 
Asset Impairment Charges
 
 
 
 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
2,400,000 
2,400,000 
1,000,000 
1,000,000 
 
 
 
 
 
 
 
 
Other Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000 
200,000 
 
 
 
 
 
 
 
 
 
 
Equity method investments
151,885,000 
 
151,840,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,700,000 
2,700,000 
 
 
 
 
 
 
 
 
Revenue
299,768,000 
291,860,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
190,168,000 
182,809,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
$ (135,045,000)
$ (105,042,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions of Ownership Interests in Partner Companies and Funds (Detail) (USD $)
9 Months Ended 1 Months Ended 9 Months Ended 21 Months Ended 1 Months Ended 6 Months Ended 37 Months Ended 4 Months Ended 47 Months Ended 2 Months Ended 54 Months Ended 1 Months Ended 17 Months Ended 4 Months Ended 64 Months Ended 1 Months Ended 48 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 17 Months Ended 7 Months Ended 47 Months Ended 1 Months Ended 18 Months Ended 7 Months Ended 34 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Sep. 30, 2016
Moxe Health
Jun. 30, 2016
Aktana, Inc.
Sep. 30, 2016
InfoBionic
Dec. 31, 2015
InfoBionic
Jun. 30, 2016
AppFirst, Inc.
Jun. 30, 2016
AppFirst, Inc.
Dec. 31, 2015
AppFirst, Inc.
Sep. 30, 2016
AppFirst, Inc.
Sep. 30, 2016
Lumesis, Inc.
Dec. 31, 2015
Lumesis, Inc.
Apr. 30, 2016
Novasom, Inc.
Dec. 31, 2015
Novasom, Inc.
Apr. 30, 2016
Transactis
Dec. 31, 2015
Transactis
Sep. 30, 2016
Transactis
Jul. 31, 2016
Good Start Genetics, Inc.
Dec. 31, 2015
Good Start Genetics, Inc.
Mar. 31, 2016
Hoopla Software, Inc.
Dec. 31, 2015
Hoopla Software, Inc.
Sep. 30, 2016
Hoopla Software, Inc.
Mar. 31, 2016
Full Measure
Dec. 31, 2015
Full Measure
Sep. 30, 2016
Full Measure
Jan. 31, 2016
WebLinc
Dec. 31, 2015
WebLinc
Sep. 30, 2016
WebLinc
Jul. 31, 2016
Spongecell
Dec. 31, 2015
Spongecell
Sep. 30, 2016
Spongecell
Jan. 31, 2016
Syapse, Inc.
Dec. 31, 2015
Syapse, Inc.
Jul. 31, 2016
Clutch Holdings, LLC
Dec. 31, 2015
Clutch Holdings, LLC
Sep. 30, 2016
Clutch Holdings, LLC
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest under equity method, percentage
 
 
 
32.60% 
23.40% 
 
 
 
 
 
 
44.10% 
 
 
 
 
 
24.20% 
 
 
 
 
25.50% 
 
 
36.00% 
 
 
38.00% 
 
 
23.00% 
 
 
 
 
45.00% 
Payments to acquire equity method investments
$ 34,841,000 
$ 52,181,000 
 
$ 4,500,000 
$ 5,500,000 
$ 5,000,000 
$ 9,500,000 
 
 
$ 11,600,000 
 
 
$ 5,600,000 
 
$ 21,000,000 
$ 5,000,000 
$ 9,500,000 
 
 
$ 12,000,000 
 
$ 3,800,000 
 
$ 4,000,000 
$ 4,000,000 
 
$ 4,400,000 
$ 6,600,000 
 
 
$ 14,000,000 
 
$ 7,500,000 
$ 5,800,000 
$ 4,000,000 
$ 12,300,000 
 
Proceeds from sales of and distributions from companies
73,854,000 
25,029,000 
 
 
 
 
 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investments
151,885,000 
 
151,840,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible bridge loan
 
 
 
 
 
 
 
 
$ 1,200,000 
 
 
$ 500,000 
 
$ 1,000,000 
 
 
 
 
$ 3,700,000 
 
$ 1,000,000 
 
 
 
 
 
 
 
 
$ 4,000,000 
 
 
 
 
 
 
 
Fair Value Measurements - Carrying Value and Fair Value of Certain Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
$ 52,496 
$ 32,838 
Total marketable securities
24,144 
40,763 
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
Total marketable securities
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
Total marketable securities
Carrying (Reported) Amount, Fair Value Disclosure
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
52,496 
32,838 
Total marketable securities
24,144 
40,763 
Government agency bonds |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
612 
1,329 
Government agency bonds |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
Government agency bonds |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
Government agency bonds |
Carrying (Reported) Amount, Fair Value Disclosure
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
612 
1,329 
Certificates of deposit |
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
23,532 
39,434 
Certificates of deposit |
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
Certificates of deposit |
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
Certificates of deposit |
Carrying (Reported) Amount, Fair Value Disclosure
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total marketable securities
$ 23,532 
$ 39,434 
Fair Value Measurements - Narrative (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Fair Value Disclosures [Abstract]
 
 
Marketable securities, current
$ 13,816 
$ 31,020 
Marketable securities, non current
$ 10,328 
$ 9,743 
Convertible Debentures and Credit Arrangements - Convertible Senior Debentures Narrative (Detail) (USD $)
3 Months Ended 9 Months Ended
Dec. 31, 2015
Sep. 30, 2016
Convertible Senior Debentures due 2018
Sep. 30, 2015
Convertible Senior Debentures due 2018
Sep. 30, 2016
Convertible Senior Debentures due 2018
Sep. 30, 2015
Convertible Senior Debentures due 2018
Nov. 30, 2012
Convertible Senior Debentures due 2018
Debt Instrument [Line Items]
 
 
 
 
 
 
Aggregate face value of convertible senior debentures
 
$ 55,000,000 
 
$ 55,000,000 
 
$ 55,000,000.0 
Interest rate on debentures
 
 
 
 
 
5.25% 
Fair value of debentures outstanding
 
56,700,000 
 
56,700,000 
 
 
Gross carrying amount of equity component
 
6,400,000 
 
6,400,000 
 
 
Unamortized discount
 
2,300,000 
 
2,300,000 
 
 
Deferred finance costs, noncurrent, net
800,000 
600,000 
 
600,000 
 
 
Carrying value of liability component
 
52,100,000 
 
52,100,000 
 
 
Amortization of debt discount (premium)
 
$ 400,000 
$ 400,000 
$ 1,200,000 
$ 1,100,000 
 
Debt instrument, interest rate, effective percentage
 
8.70% 
 
8.70% 
 
 
Convertible Debentures and Credit Arrangements - Credit Arrangements Narrative (Detail) (Credit Arrangements, USD $)
9 Months Ended
Sep. 30, 2016
Debt Instrument [Line Items]
 
Maximum aggregate amount of revolving credit facility in the form of borrowings, guarantees and issuances of letters of credit (subject to a $20 million sublimit)
$ 25,000,000.0 
Sublimit facility attached on revolving credit facility
20,000,000 
Amount available for borrowing under revolving credit facility
18,700,000 
After Amendment
 
Debt Instrument [Line Items]
 
Credit facility maturity date
Dec. 19, 2016 
Landlord Of Compu Com Systems Incs Dallas Headquarters
 
Debt Instrument [Line Items]
 
Letter of credit under the credit facility
$ 6,300,000 
Letter of credit expiration date
Mar. 19, 2019 
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation expense
$ 604 
$ 148 
$ 1,879 
$ 1,140 
General And Administrative Expenses
 
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation expense
$ 604 
$ 148 
$ 1,879 
$ 1,140 
Stock-Based Compensation - Narrative (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Number of award vesting types
 
 
Cash liability for performance-based units
$ 0 
 
$ 0 
 
Performance Shares
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Options, vested (in shares)
 
 
4,000 
Options, forfeitures in period (in shares)
 
 
35,000 
9,000 
Stock-based compensation expense
0.2 
Stock-based compensation, maximum number of unvested shares (in shares)
 
 
415,000 
 
Equity instruments other than options, vested in period (in shares)
 
 
1,000 
Service Based Award
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Options, forfeitures in period (in shares)
 
 
12,000 
8,000 
Stock-based compensation expense
0.1 
0.1 
0.2 
Vesting period (in years)
 
 
4 years 
 
Expiration period (in years)
 
 
8 years 
 
Options issued (in shares)
 
 
12,000 
21,000 
Deferred Stock Units
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Percentage of shares vested in lieu of directors fees at the grant date
 
 
100.00% 
 
Portion of Director fees matched to deferred stock units
 
 
25.00% 
 
Vesting period of deferred stock (in years)
 
 
1 year 
 
Minimum age required for meeting directors fees deferred vest criteria
 
 
65 
 
Deferred Stock Units |
Director
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Shares issued to non-employee individual (in shares)
 
 
43,000 
41,000 
Deferred stock units, performance-based stock units and restricted stock
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 0.5 
$ 0.1 
$ 1.5 
$ 1.0 
Restricted Stock Unit And Performance Stock Unit And Deferred Stock Unit [Member]
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
 
 
Share of common stock excluded from diluted net loss per share calculation (in shares)
600,000 
400,000 
600,000 
400,000 
Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Tax Disclosure [Abstract]
 
 
 
 
Income tax benefit (expense)
$ 0 
$ 0 
$ 0 
$ 0 
Net Income (Loss) Per Share - Calculations of Net Income (Loss) Per Share (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Basic:
 
 
 
 
Net income (loss)
$ (24,085)
$ (11,628)
$ (561)
$ (45,253)
Weighted average common shares outstanding (in shares)
20,387 
20,919 
20,390 
20,892 
Net income (loss) per share (in dollars per share)
$ (1.18)
$ (0.56)
$ (0.03)
$ (2.17)
Diluted:
 
 
 
 
Weighted average common shares outstanding (in shares)
20,387 
20,919 
20,390 
20,892 
Net income (loss) per share (in dollars per share)
$ (1.18)
$ (0.56)
$ (0.03)
$ (2.17)
Net Income (Loss) Per Share - Narrative (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Stock Options
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Share of common stock excluded from diluted net loss per share calculation (in shares)
0.7 
1.1 
0.7 
1.1 
Shares of common stock at prices ranging, lower limit (in dollars per share)
$ 9.83 
$ 7.14 
$ 9.83 
$ 7.14 
Shares of common stock at prices ranging, upper limit (in dollars per share)
$ 19.95 
$ 19.95 
$ 19.95 
$ 19.95 
Deferred stock units, performance-based stock units and restricted stock
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Share of common stock excluded from diluted net loss per share calculation (in shares)
0.6 
0.4 
0.6 
0.4 
Convertible Senior Debentures due 2018
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Share of common stock excluded from diluted net loss per share calculation (in shares)
3.0 
3.0 
3.0 
3.0 
Operating Segments - Narrative (Detail)
Sep. 30, 2016
nonconsolidated_partner_company
Segment Reporting [Abstract]
 
Non-consolidated partner companies
28 
Operating Segments - Active Partner Companies by Segment (Detail)
Sep. 30, 2016
AdvantEdge Healthcare Solutions, Inc.
Jun. 30, 2016
Aktana, Inc.
Sep. 30, 2016
Apprenda
Sep. 30, 2016
Beyond.com, Inc
Sep. 30, 2016
Cask Data
Sep. 30, 2016
CloudMine
Sep. 30, 2016
Clutch Holdings, LLC
Sep. 30, 2016
Full Measure
Sep. 30, 2016
Hoopla Software, Inc.
Sep. 30, 2016
Lumesis, Inc.
Sep. 30, 2016
MediaMath, Inc.
Sep. 30, 2016
Moxe Health
Sep. 30, 2016
Pneuron
Sep. 30, 2016
QuanticMind, Inc.
Sep. 30, 2016
Sonobi
Sep. 30, 2016
Spongecell
Sep. 30, 2016
Transactis
Sep. 30, 2016
WebLinc
Sep. 30, 2016
Healthcare
Aktana, Inc.
Sep. 30, 2016
Healthcare
Aventura
Sep. 30, 2016
Healthcare
Good Start Genetics, Inc.
Sep. 30, 2016
Healthcare
InfoBionic
Sep. 30, 2016
Healthcare
Medivo, Inc.
Sep. 30, 2016
Healthcare
meQuilibrium
Sep. 30, 2016
Healthcare
Novasom, Inc.
Sep. 30, 2016
Healthcare
Propeller
Sep. 30, 2016
Healthcare
Syapse, Inc.
Sep. 30, 2016
Healthcare
Trice
Sep. 30, 2016
Healthcare
Zipnosis
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest under equity method, percentage
40.10% 
23.40% 
29.50% 
38.20% 
31.30% 
30.10% 
45.00% 
36.00% 
25.50% 
44.10% 
20.50% 
32.60% 
35.40% 
23.50% 
21.60% 
23.00% 
24.20% 
38.00% 
23.40% 
19.90% 
29.60% 
40.50% 
35.30% 
31.50% 
31.70% 
24.40% 
25.80% 
27.70% 
26.20% 
Commitments and Contingencies (Detail) (USD $)
1 Months Ended
Oct. 31, 2001
Sep. 30, 2016
Dec. 31, 2015
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Accrued expenses
 
$ 3,136,000 
$ 2,789,000 
Other long-term liabilities
 
3,947,000 
3,965,000 
Annual payments
650,000 
 
 
Employee Severance
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Maximum severance payments
 
3,000,000 
 
Letter of credit
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Letter of credit under the credit facility
 
6,300,000 
 
Accrued expenses and other current liabilities
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Liability to former chairman and chief executive officer, current
 
800,000 
 
Other long-term liabilities
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Liability to former chairman and chief executive officer, non-current
 
2,100,000 
 
Clawback Liability
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Accrued expenses and other current liabilities
 
1,300,000 
 
Accrued expenses
 
1,000,000 
 
Other long-term liabilities
 
300,000 
 
Company's ownership in the funds
 
19.00% 
 
Private equity funds
 
 
 
Commitment Contingencies And Guarantees [Line Items]
 
 
 
Company outstanding guarantees
 
$ 3,800,000 
 
Equity (Details) (USD $)
Share data in Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Jul. 31, 2015
Equity, Class of Treasury Stock [Line Items]
 
 
Stock repurchased during period, value
$ 5,389,000 
 
Common Stock
 
 
Equity, Class of Treasury Stock [Line Items]
 
 
Stock repurchase program, authorized amount
 
25,000,000 
Repurchase of common stock (in shares)
400 
 
Stock repurchased during period, value
$ 5,400,000 
 
Subsequent Events (Details) (USD $)
9 Months Ended 1 Months Ended 3 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Jul. 31, 2016
Putney, Inc.
Apr. 30, 2016
Putney, Inc.
Sep. 30, 2016
Putney, Inc.
Jun. 30, 2016
Putney, Inc.
Subsequent Event [Line Items]
 
 
 
 
 
 
Proceeds from sales of and distributions from companies
$ 73,854,000 
$ 25,029,000 
$ 400,000 
$ 58,200,000 
 
 
Gain on sale of business
 
 
 
 
$ 400,000 
$ 55,200,000