POWAY, Calif., April 14 /PRNewswire-FirstCall/ --
Gateway, Inc. (NYSE: GTW) today announced that it has filed with the
Securities and Exchange Commission an amended Form 10-K for fiscal year 2001,
primarily to reflect previously announced revisions to net sales and cost of
goods sold relating to the company's accounting for bundled AOL Internet
services. (See release dated April 1, 2003). This revision reduces the
recognized bounty income by the costs incurred for AOL bundled Internet
service by $8 million, $337 million and $131 million for 1999, 2000 and the
first quarter of 2001, respectively.
(Photo: http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO )
The company's filing also included revisions to 1999, 2000 and 2001 net
sales and cost of goods sold relating to transactions with a third-party
provider of extended warranties to Gateway's customers. This change reduced
the company's net sales and cost of goods sold by $0.5 million, $6 million and
$10 million in 1999, 2000 and 2001, respectively.
Both of these changes reflect the company's determination that it is more
appropriate to present these amounts on a net basis rather than the previous
reporting on a gross basis. Neither of these revisions had an impact on
previously reported gross profit, operating income (loss) or net income (loss)
per share.
The restatement of the 2000 and 2001 financial statements also reflects
the deferral of a gain on the sale of a financing portfolio and recognition of
the gain as an adjustment to the yield on a loan that was made to an affiliate
of the portfolio's purchaser. The impact of this change is that net income in
2000 has been reduced by approximately $2.9 million, or one cent per share,
and that the net loss in 2001 has been correspondingly reduced by
approximately $2.9 million, or an increase to EPS of one cent per share.
The company has kept the SEC's staff fully apprised of its accounting
determinations in connection with the restatement. In the opinion of
management, all material adjustments necessary to correct the previously
issued historical financial statements have been made, and the company does
not currently expect any further restatement.
Finally, the company reiterated that it intends to file its fiscal year
2002 Form 10-K on April 15 with no changes from results previously announced
in January 2003.
About Gateway
Gateway, Inc. (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 offered with 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. In 2003, Gateway was named the second
most admired American company in the computer industry by Fortune magazine(1).
In 2002, Gateway's products and services received more than 90 awards and
accolades and the company's retail stores outperformed its competitors in a
"mystery shopper" comparison(2). For more information, visit Gateway's Web
site at http://www.gateway.com .
(1) Source: Fortune magazine, March 3, 2003 issue.
(2) Source: Computer Shopper magazine, February 2003 issue.
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. The risks that contribute to the uncertain nature
of these statements include, among others, changes in and the complexity of
accounting rules; the impact of litigation and government regulation
generally, including risks relating to the ongoing SEC investigation of the
periods subject to restatement, 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.
SOURCE Gateway, Inc.
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Related links:
http://www.gateway.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
CONTACT:
Media, Robert Sherbin, +1-858-848-3886,
robert.sherbin@gateway.com , or Investor Relations, Marlys
Johnson, +1-605-232-2709, marlys.johnson@gateway.com , both of
Gateway, Inc.
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