SPDE Speedus Corp (CE)

Speedus Announces Third Quarter 2003 Results NEW YORK, Nov. 14 /PRNewswire-FirstCall/ -- Speedus Corp. today announced a loss before depreciation and amortization of $8.6 million for the nine months ended September 30, 2003 compared to a loss before depreciation and amortization of $1.1 million for the nine months ended September 30, 2002. The net loss for the nine months ended September 30, 2003 was $9.3 million, or $0.56 per share on a fully diluted basis, compared to a loss of $6.2 million, or $0.34 per share on a fully diluted basis, for the nine months ended September 30, 2002. For the quarter ended September 30, 2003, the Company reported a loss before depreciation and amortization of $1.7 million compared to a gain of $0.4 million before depreciation and amortization for the quarter ended September 30, 2002. The net loss for the quarter ended September 30, 2003 was $2.0 million, or $0.12 per share on a fully diluted basis, compared to a gain of $0.3 million, or $0.01 per share on a fully diluted basis, for the quarter ended September 30, 2002. The results for these periods were primarily driven by decreases in investment income, net of a decrease in depreciation and amortization for the nine month periods. For the nine months ended September 30, 2003, investment income amounted to a loss of $4.9 million compared to a gain of $2.9 million for the nine months ended September 30, 2002. The nine month 2002 period included a non-cash charge of $3.6 million for property and equipment taken out of service. For the three months ended September 30, 2003, investment income amounted to a loss of $0.4 million compared to a gain of $1.9 million for the three months ended September 30, 2002. For the nine months ended September 30, 2003, total operating expenses, before depreciation and amortization, amounted to $4.6 million compared to $4.4 million for the nine months ended September 30, 2002. However, net of increases aggregating $1.3 million as a result of the inclusion of F&B Gudtfood and Zargis Medical operations since the dates of acquisition in May 2002 and February 2003, respectively, total operating expenses, before depreciation and amortization, decreased $1.1 million primarily as a result of the continuation of cost cutting measures and a decrease in legal expenses. During 2003 to date, the Company continued to invest in Zargis Medical. The Company made additional investments of $1.25 million and $2 million in February and July 2003, respectively, achieving a controlling interest in Zargis Medical in February. In May 2003, Zargis Medical submitted a PreMarket Notification, 510(k), application to the Food and Drug Administration, for clearance to market its Zargis Acoustic CardioScan (ZAC) System in the United States. Zargis was awarded a core patent by the United States Patent and Trademark Office in June 2003 for the technology utilized by the ZAC System. Zargis has applied for 6 additional U.S. patents. Zargis hopes to receive FDA clearance of the ZACS System by the end of 2003. If Zargis obtains required FDA approval by December 1, 2003 to begin marketing its medical device, the Company has agreed to invest an additional $2 million in Zargis. Additional information on Speedus Corp. and its services is available at http://www.speedus.com/ or by calling 718.567.4300. For additional information on Zargis Medical, please visit their website at http://www.zargis.com/. For additional information on F&B Gudtfood, please visit their website at http://www.gudtfood.com/. Statements contained herein that are not historical facts, including but not limited to statements about the Company's product, corporate identity and focus, may be forward-looking statements that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward- looking statements made by the Company, including, but not limited to, the continuing development of the Company's sales, marketing and support efforts. These financial statements do not include all information and notes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the Company's 2002 audited consolidated financial statements and notes thereto on Form 10-K and quarterly reports on Form 10-Q. Operating results for the quarter and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. SPEEDUS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Revenues $174,033 $149,176 $548,107 $709,350 Expenses: Selling, general and administrative 1,130,195 1,183,623 3,205,582 3,226,867 Research and development 479,207 225,744 1,236,874 708,928 Depreciation and amortization 273,196 180,363 748,809 5,104,892 Cost of sales 36,038 49,080 163,819 467,441 Total operating expenses 1,918,636 1,638,810 5,355,084 9,508,128 Operating loss (1,744,603) (1,489,634) (4,806,977) (8,798,778) Investment income/(loss) (432,452) 1,857,127 (4,930,633) 2,876,999 Equity in loss of associated company 0 (151,970) (92,996) (369,819) Minority interest 186,323 38,808 492,254 61,592 Net earnings/(loss) $(1,990,732) $254,331 $(9,338,352) $(6,230,006) Per share: Basic earnings/(loss) per common share $(0.12) $0.01 $(0.56) $(0.34) Weighted average common shares outstanding 16,280,506 17,752,106 16,593,356 18,242,130 Diluted earnings/(loss) per common share $(0.12) $0.01 $(0.56) $(0.34) Weighted average common shares outstanding 16,280,506 17,850,506 16,593,356 18,242,130 SPEEDUS CORP. CONSOLIDATED BALANCE SHEETS September 30, December 31, 2003 2002 (unaudited) ASSETS Current assets: Cash and cash equivalents $23,097,199 $33,052,815 Marketable securities 7,940 879,194 Due from broker 8,113,073 11,728,880 Accounts and other receivables 42,500 40,099 Prepaid expenses and other 54,318 17,488 Total current assets 31,315,030 45,718,476 Property and equipment, net of accumulated depreciation of $1,983,818 and $2,015,662 565,204 819,714 Other intangible assets, net of accumulated amortization of $852,171 and $418,929 2,241,373 1,651,071 Goodwill 890,356 1,760,106 Other assets 221,584 235,208 Total assets $35,233,547 $50,184,575 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $130,088 $228,144 Accrued liabilities 1,544,434 1,734,252 Securities sold and not purchased 10,180,451 14,212,566 Total current liabilities 11,854,973 16,174,962 Minority interest 1,087,232 1,591,557 Commitments and Contingencies --- --- Stockholders' equity: Common stock ($.01 par value; 50,000,000 shares authorized; 21,472,338 and 21,384,838 shares issued) 214,723 213,848 Preferred stock ($.01 par value; 20,000,000 shares authorized): Series A Junior Participating ($.01 par value; 4,000 shares authorized; no shares issued and outstanding) --- --- Additional paid-in-capital 90,376,057 90,289,432 Treasury stock (at cost; 5,255,449 and 4,418,577 shares) (5,247,640) (4,371,778) Accumulated deficit (63,051,798) (53,713,446) Stockholders' equity 22,291,342 32,418,056 Total liabilities and stockholders' equity $35,233,547 $50,184,575 DATASOURCE: Speedus Corp. CONTACT: Thomas M. Finn of Speedus Corp., +1-718-567-4398, Web site: http://www.speedus.com/

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