IRVINE, Calif., Dec. 15 /PRNewswire-FirstCall/ -- Gateway, Inc.
(NYSE: GTW) today announced that it is selling two series of convertible
senior notes for an aggregate principal amount of $250 million. One series
will mature in 2009 and the other in 2011. The notes will bear interest and
will be convertible into shares of Gateway's common stock at a rate and price
to be determined on Dec. 16, 2004. Gateway expects to grant the initial
purchasers of the notes an option to purchase up to an additional $25 million
aggregate principal amount of the notes. Upon the occurrence of certain
designated events, holders will have the right to require Gateway to
repurchase the notes at a price equal to 100 percent of their principal
amount. Should certain transactions that constitute a fundamental change in
Gateway occur, under certain circumstances the conversion rate for the notes
will be increased.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO )
Gateway intends to use the net proceeds from the offering, together with
cash and credit facility borrowings, to repurchase all of Gateway's Series C
redeemable, convertible preferred stock and the majority of Gateway's Series A
convertible preferred stock. The convertible senior note offering is expected
to close on Dec. 21, 2004.
The notes will be offered only to qualified institutional buyers and other
eligible purchasers in a Rule 144A private placement offering. The notes will
not be registered under the Securities Act of 1933 and may not be offered or
sold in the United States absent registration or an applicable exemption from
registration requirements.
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
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
Company News On-Call:
http://www.prnewswire.com/comp/144245.html
CONTACT:
Media, Lisa Emard, +1-949-471-7705,
lisa.emard@gateway.com, or Investors, Marlys Johnson,
+1-605-232-2709, marlys.johnson@gateway.com, both of Gateway,
Inc.
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