Hosts Annual Analyst Conference
Company Gains Traction in the Marketplace Through Value Leadership
POWAY, Calif., Feb. 27 /PRNewswire-FirstCall/ -- At today's annual meeting
for financial analysts, Gateway, Inc. (NYSE: GTW) provided details on the
significant progress the company made in 2001, a strategic overview of
Gateway's strengths, updates on business trends resulting from its value-based
strategy and updated financial guidance for the current quarter and full year.
Key topics included:
Significant progress in 2001. The company reported significant progress
made in 2001 in terms of the following:
-- Cost reduction
-- Balance sheet and liquidity improvement
-- Product quality
-- Customer satisfaction
Gateway confirmed that it has completed the majority of its restructuring
actions announced on January 24 and is now completely focused on growth in
both its core PC and solutions businesses through a combination of aggressive
pricing, stepped-up marketing communications and ongoing market development.
Current trend of business since value strategy introduction. The company
provided analysts detailed background information on the newly instituted,
aggressive pricing and marketing strategy including a description of the
success to date.
"We've regained value leadership in our core products since we went to our
new pricing strategy and are bucking seasonal sales trends," said Gateway
Chairman and CEO Ted Waitt. "We don't intend to let up. This year, our
objective is growth -- we'll continue to drive growth rates that are better
than the industry average and as a result, Gateway will return to long-term,
sustainable profitability and gain share in our target markets."
Strategic overview of Gateway's strengths. Topics included the following:
-- Gateway brand
-- Direct model
-- Multi-channel strategy
-- Technology solutions business
The company demonstrated evidence of its powerful brand, including the
fact that Gateway has the highest brand loyalty among Wintel-based
competitors. In addition, Gateway reiterated the strength of its direct
distribution model and unique multi-channel strategy, including its nationwide
network of retail stores. In addition to driving growth in its core PC
business, Gateway is advancing its digital solutions capabilities through a
number of planned retail pilot tests and trials designed to establish Gateway
as the leading destination for digital solutions for consumers and small
businesses.
Updated financial guidance. The company today provided more detailed
financial guidance, saying that it expects to generate approximately
$1 billion in revenue in the current quarter. As a result of the company's
aggressive pricing strategy and increased marketing communications, Gateway
expects for the first quarter to generate gross margins of approximately
14-15% and a pre-tax loss, excluding special charges, of between
$100-$120 million. The company also confirmed the special charge in the first
quarter of approximately $75-$100 million associated with the restructuring
actions it announced in January.
For the full year of 2002, Gateway said it expects revenue in the range of
$4.5-$5 billion and will record a pre-tax loss, excluding special charges,
between $200-$250 million as the company continues to invest in growth, with
an expected return to profitability, excluding special charges, in fiscal year
2003.
The company also said it expects to maintain its strong liquidity position
for the balance of the year and beyond, and expects to exit 2002 with more
than $1 billion in cash and marketable securities.
"We're confident we're executing the right strategy to grow our core PC
business, continue the expansion of our solutions business, and do what's
right for our customers, employees and shareholders," Waitt said. "We're
already seeing traction in the marketplace, which is key to our long-term goal
of better leveraging our fixed costs through growth and I believe that by this
time next year, we'll be in a much stronger position in the marketplace, with
long-term profitability clearly in sight."
About Gateway
Gateway (NYSE: GTW), a personal technology company, improves people's
lives through a combination of the latest and best hardware, communication
tools, applications, training and service, all wrapped in a custom financing
package. The company takes a localized approach, utilizing its Web site, call
centers and nationwide network of Gateway retail stores to build direct
relationships with consumers, small and medium businesses and government and
education institutions. A Fortune 500(R) company founded in 1985, Gateway is
ranked as the most admired American company in the Computers and Office
Equipment industry in a Fortune magazine survey(1) and is the top brand in
customer loyalty and for first-time home computer purchases of Wintel-based
PCs(2).
For more information, including access to the complete text of the
company's February 27, 2002, annual analyst presentation, which includes
forward-looking guidance, visit Gateway's Web site at http://www.gateway.com .
Special Note
This press release contains forward-looking statements that involve risks
and uncertainties, as well as assumptions that, if they do not materialize or
prove incorrect, could cause Gateway's results to differ materially from those
expressed or implied by such forward-looking statements. All statements,
other than statements of historical fact, are statements that could be deemed
forward-looking statements, including any projections or preliminary estimates
of earnings, revenues, or other financial items; any statements of plans,
strategies and objectives of management for future operations; any statements
regarding proposed new products, services or developments; any statements
regarding future economic conditions or performance; statements of belief and
any statement of assumptions underlying any of the foregoing. The risks that
contribute to the uncertain nature of these statements include, among others,
competitive factors and pricing pressures, including the impact of aggressive
pricing cuts by larger competitors; general conditions in the personal
computing industry, including changes in overall demand and average selling
prices, shifts from desktops to mobile computing products and information
appliances and the impact of new microprocessors and operating software; the
ability to transform the company to a technology solutions provider and
restructure its operations and cost structure; component supply shortages;
short product cycles; the ability to access new technology; infrastructure
requirements; risks of international business; foreign currency fluctuations;
ability to grow in e-commerce; risks of minority equity investments; risks
relating to new or acquired businesses, joint ventures and strategic
alliances; risks related to financing customer orders; changes in accounting
rules; the impact of litigation and government regulation generally; inventory
risks due to shifts in market demand; changes in product, customer or
geographic sales mix; the impact of employee reductions and management changes
and additions; and general economic conditions, and other risks described from
time to time in Gateway's Securities and Exchange Commission periodic reports
and filings. Gateway assumes no obligation to update these forward-looking
statements to reflect events that occur or circumstances that exist after the
date on which they were made.
(1) Fortune Magazine, "America's Most Admired Companies,"
February 19, 2001.
(2) From the Harris Interactive Consumer TechPoll(SM) study of
140,000 PC owners who use the Internet, released March 5, 2001.
SOURCE Gateway, Inc.
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Related links:
http://www.gateway.com
CONTACT:
media, Brad Williams, +1-858-848-2511,
brad.williams@gateway.com, or Ashley Wood, +1-858-848-3874,
ashley.wood@gateway.com, or investors, Marlys Johnson,
+1-605-232-2709, marlys.johnson@gateway.com, all of Gateway, Inc.
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