IRVINE, Calif., Aug. 3 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE: GTW)
plans to release second quarter earnings in conjunction with the filing of its
10-Q report on or before August 15, pending finalization of accounting for
elements of the April 2005 agreement with Microsoft, which includes income
statement classification of the marketing and development related program
spending benefits of the agreement.
The finalization of the Microsoft accounting treatment will only result in
additional benefits or income to Gateway.
"Because of the complex accounting interpretation issues related to our
agreement with Microsoft, we voluntarily made a pre-filing submission seeking
the SEC's guidance to ensure we apply proper accounting treatment," said Rod
Sherwood, Gateway senior vice president and CFO. "The SEC has given guidance
on the framework for the Gateway-Microsoft accounting treatment and we are now
working with our advisors on apportionment of values for the elements of the
agreement that represent future marketing and development spending versus the
legal settlement."
On April 11, Gateway and Microsoft announced a $150 million agreement to
work together on the marketing and development of Gateway personal computing
products and to resolve legal issues between the two companies. As part of
the agreement, Microsoft agreed to provide funds that Gateway is required to
use for marketing and promotional initiatives, including advertising and
promotions, sales training and consulting, as well as the research,
development and testing of new Gateway products that can run current Microsoft
products and Microsoft's next-generation operating system and productivity
software.
About Gateway
Since its founding in 1985, Irvine, Calif.-based Gateway (NYSE: GTW) has
been a technology pioneer, offering award-winning PCs and related products to
consumers, businesses, government agencies and schools. After acquiring
eMachines in early 2004, Gateway is now the third largest PC company in the
U.S. and among the top ten worldwide. The company's value-based eMachines
brand is sold exclusively by leading retailers worldwide, while the premium
Gateway line is available at major retailers, over the web and phone, and
through its direct and indirect sales force. See http://www.gateway.com for
more information.
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
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; the extent of
seasonal changes in demand; 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, risks related to shifting
our distribution model to third-party retail; 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 simplify the company's
business, change its distribution model 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; 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; 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 any 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
CONTACT:
Media, David Hallisey, +1-949-471-7703,
david.hallisey@gateway.com, or John W. Spelich, +1-949-471-7710,
john.spelich@gateway.com, or Investors, Marlys Johnson,
+1-605-232-2709, marlys.johnson@gateway.com, all of Gateway, Inc.
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