SPDE Speedus Corp (CE)

Speedus Announces Second Quarter 2004 Results; Zargis FDA Clearance and Opening of F&B Flagship Store Highlight the Quarter NEW YORK, Aug. 16 /PRNewswire-FirstCall/ -- Speedus Corp. (NASDAQ:SPDE) today announced earnings of $9.0 million, or $0.54 per share on a fully diluted basis, for the six months ended June 30, 2004 compared to a net loss of $7.3 million, or $0.44 per hare on a fully diluted basis, for the six months ended June 30, 2003. Earnings before depreciation and amortization for the six months ended June 30, 2004 were $9.6 million compared to a loss of $6.9 million for the six months ended June 30, 2003. "The Zargis Medical lab, located in Princeton, N.J., has increased development activity on the Zargis Acoustic Cardioscan this quarter. Our recent FDA clearance, combined with our three fundamental patents in the acoustical diagnostics arena, gives Zargis a first mover advantage in this emerging new segment of computer aided medical devices," said John Kallassy, Managing Director of Zargis Medical Corp. "We opened our F&B Flagship store in late June and are excited about the early response from our customers and potential franchisees. The 52nd Street location in midtown Manhattan is an ideal location for representing the fast casual F&B dining experience," said F&B Gudtfood co-founder Nicholas Type. For the quarter ended June 30, 2004, the Company reported a net loss of $1.4 million, or $0.09 per share on a fully diluted basis, compared to a net loss of $5.9 million, or $0.36 per share on a fully diluted basis, for the quarter ended June 30, 2003. The loss before depreciation and amortization for the quarter ended June 30, 2004 was $1.1 million compared to a loss of $5.7 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004, the operating loss before depreciation and amortization of Zargis Medical and F&B Gudtfood was $0.9 million and $0.4 million, respectively, compared to an operating loss before depreciation and amortization of $0.5 million and $0.2 million, respectively, for the six months ended June 30, 2003. The results for the six months ended June 30, 2004 were primarily driven by a gain from technology settlement. During the six months ended June 30, 2004, the Company recognized a gain from technology settlement in the amount of $15 million. In connection with this settlement, the Company incurred $2.9 million in technology settlement expenses. For the six months ended June 30, 2004 and 2003, total operating expenses, before depreciation and amortization and technology settlement expenses, amounted to approximately $3.0 million in each period. However, net of increases aggregating $0.3 million as a result of the inclusion of Zargis Medical operations since the date of acquisition in February 2003 and $0.1 million as a result of the opening of a second F&B Gudtfood store in the second quarter of 2004, total operating expenses, before depreciation and amortization and technology settlement expenses, decreased $0.4 million primarily as a result of the continuation of personnel reductions. About Speedus Corp. Speedus Corp. is a holding company with controlling interests in Zargis Medical Corp. and F&B Gudtfood Holdings, Inc. Speedus Corp also owns broadband intellectual property and controls licensed wireless frequencies. Additional information on Speedus Corp. and its services is available at http://www.speedus.com/ or by calling 718.567.4358. 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 2003 audited consolidated financial statements and notes thereto on Form 10-K and quarterly reports on Form 10-Q. Operating results for the three and six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. SPEEDUS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended Six months ended June 30, June 30, 2004 2003 2004 2003 Revenues $200,228 $204,267 $351,243 $374,074 Expenses: Selling, general and administrative 1,169,568 1,148,804 2,162,282 2,075,387 Technology settlement expenses 0 0 2,928,583 0 Research and development 368,249 422,723 738,994 757,667 Depreciation and amortization 306,770 260,245 592,246 475,613 Cost of sales 83,567 79,481 128,511 127,781 Total operating expenses 1,928,154 1,911,253 6,550,616 3,436,448 Operating loss (1,727,926) (1,706,986) (6,199,373) (3,062,374) Gain from technology settlement 0 0 15,000,000 0 Investment income/(loss) 154,941 (4,450,651) (103,181) (4,498,181) Minority interest 190,841 224,680 332,212 305,931 Equity in loss of associated company 0 0 0 (92,996) Net earnings/(loss) $(1,382,144) $(5,932,957) $9,029,658 $(7,347,620) Per share: Basic earnings/(loss) per common share $(0.09) $(0.36) $0.55 $(0.44) Weighted average common shares outstanding - basic 16,255,244 16,623,149 16,271,615 16,752,374 Diluted earnings/(loss) per common share $(0.09) $(0.36) $0.54 $(0.44) Weighted average common shares outstanding - diluted 16,255,244 16,623,149 16,832,814 16,752,374 SPEEDUS CORP. CONSOLIDATED BALANCE SHEETS June 30, December 31, 2004 2003 (unaudited) ASSETS Current assets: Cash and cash equivalents $27,203,635 $19,419,197 Marketable securities 71,740 2,086,638 Due from broker 793,236 3,713,146 Prepaid expenses and other 156,300 83,222 Accounts and other receivables 63,678 42,500 Total current assets 28,288,589 25,344,703 Property and equipment, net of accumulated depreciation of $2,221,418 and $2,003,862 669,820 419,868 Other intangible assets, net of accumulated amortization of $1,426,183 and $1,051,493 1,667,361 2,042,051 Goodwill 620,875 620,875 Other investment 600,000 --- Other assets 83,854 82,563 Total assets $31,930,499 $28,510,060 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $203,046 $151,258 Accrued liabilities 1,057,188 1,432,426 Securities sold and not purchased 605,500 5,406,135 Total current liabilities 1,865,734 6,989,819 Minority interest 198,843 531,055 Commitments and Contingencies Stockholders' equity: Common stock ($.01 par value; 50,000,000 shares authorized; 21,587,674 and 21,516,088 shares issued) 215,877 215,161 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 90,534,759 90,442,120 Treasury stock (at cost; 5,367,349 and 5,257,649 shares) (5,496,829) (5,250,552) Accumulated deficit (55,387,885) (64,417,543) Stockholders' equity 29,865,922 20,989,186 Total liabilities and stockholders' equity $31,930,499 $28,510,060 DATASOURCE: Speedus Corp. CONTACT: John Kallassy of Speedus Corp., +1-718-567-4358, Web site: http://www.speedus.com/

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