SPDE Speedus Corp (CE)

Speedus Announces Third Quarter 2004 Results and Recent Zargis Achievements NEW YORK, Nov. 15 /PRNewswire-FirstCall/ -- Speedus Corp. (NASDAQ:SPDE) today announced earnings of $7.9 million, or $0.47 per share on a fully diluted basis, for the nine months ended September 30, 2004 compared to a net loss of $9.3 million, or $0.56 per share on a fully diluted basis, for the nine months ended September 30, 2003. Earnings before depreciation and amortization for the nine months ended September 30, 2004 were $8.8 million compared to a loss of $8.6 million for the nine months ended September 30, 2003. Recent Zargis achievements include: (1) receipt of FDA clearance for a graphical display of the median energy level, timing, and duration of suspected heart murmurs,(2) the Texas Heart Institute Journal will publish results of a clinical study in Hypertrophic Cardiomyopathy (HCM),(3) signing of an exclusive agreement with Johns Hopkins University to expedite our product development pipeline and accelerate any potential clinical adoption through association with one of the world's leading medical research centers,(4) increase of our equity stake through further investment in Zargis, (5) hiring of a Vice President of Regulatory and Reimbursement to lead efforts in obtaining health insurance reimbursement coverage for the Cardioscan procedure and (6) successful product demonstration at the American Heart Association Scientific Sessions in New Orleans. For the quarter ended September 30, 2004, the Company reported a net loss of $1.1 million, or $0.07 per share on a fully diluted basis, compared to a net loss of $2.0 million, or $0.12 per share on a fully diluted basis, for the quarter ended September 30, 2003. The loss before depreciation and amortization for the quarter ended September 30, 2004 was $0.9 million compared to a loss of $1.7 million for the quarter ended September 30, 2003. For the nine months ended September 30, 2004, the operating loss before depreciation and amortization of Zargis Medical and F&B Gudtfood was $1.3 million and $0.5 million, respectively, compared to an operating loss before depreciation and amortization of $1.1 million and $0.3 million, respectively, for the nine months ended September 30, 2003. The results for the nine months ended September 30, 2004 were primarily driven by a gain from technology settlement. During the nine months ended September 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 nine months ended September 30, 2004 and 2003, total operating expenses, before depreciation and amortization and technology settlement expenses, amounted to approximately $4.5 million and $4.6 million, respectively. 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 $0.2 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 $0.6 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 nine months ended September 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 Nine months ended September 30, September 30, 2004 2003 2004 2003 Revenues $308,600 $174,033 $659,843 $548,107 Expenses: Selling, general and administrative 998,249 1,130,195 3,160,531 3,205,582 Technology settlement expenses 0 0 2,928,583 0 Research and development 378,143 479,207 1,117,137 1,236,874 Depreciation and amortization 278,833 273,196 871,079 748,809 Cost of sales 66,098 36,038 194,609 163,819 Total operating expenses 1,721,323 1,918,636 8,271,939 5,355,084 Operating loss (1,412,723) (1,744,603) (7,612,096) (4,806,977) Gain from technology settlement 0 0 15,000,000 0 Investment income/(loss) 135,518 (432,452) 32,337 (4,930,633) Minority interest 144,688 186,323 476,900 492,254 Equity in loss of associated company 0 0 0 (92,996) Net earnings/(loss) $(1,132,517) $(1,990,732) $7,897,141 $(9,338,352) Per share: Basic earnings/(loss) per common share $(0.07) $(0.12) $0.49 $(0.56) Weighted average common shares outstanding - basic 16,219,742 16,280,506 16,254,198 16,593,356 Diluted earnings/(loss) per common share $(0.07) $(0.12) $0.47 $(0.56) Weighted average common shares outstanding - diluted 16,219,742 16,280,506 16,816,636 16,593,356 SPEEDUS CORP. CONSOLIDATED BALANCE SHEETS September 30, December 31, 2004 2003 (unaudited) ASSETS Current assets: Cash and cash equivalents $25,678,616 $19,419,197 Marketable securities 78,400 2,086,638 Due from broker --- 3,131,835 Prepaid expenses and other 132,913 83,222 Accounts and other receivables 76,681 42,500 Total current assets 25,966,610 24,763,392 Property and equipment, net of accumulated depreciation of $147,748 and $2,003,862 606,560 419,868 Other intangible assets, net of accumulated amortization of $1,613,933 and $1,051,493 1,616,516 2,042,051 Goodwill 620,875 620,875 Other investment 1,236,920 --- Other assets 812,508 663,874 Total assets $30,859,989 $28,510,060 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $221,848 $151,258 Accrued liabilities 1,711,895 1,432,426 Securities sold and not purchased --- 5,406,135 Total current liabilities 1,933,743 6,989,819 Minority interest 190,655 531,055 Commitments and Contingencies Stockholders' equity: Common stock ($.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 90,539,800 90,442,120 Treasury stock (at cost; 5,368,949 and 5,257,649 shares) (5,499,684) (5,250,552) Accumulated deficit (56,520,402) (64,417,543) Stockholders' equity 28,735,591 20,989,186 Total liabilities and stockholders' equity $30,859,989 $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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