IRVINE, Calif., Dec. 15 /PRNewswire-FirstCall/ -- Gateway, Inc.
(NYSE: GTW) today announced that it has updated its fourth quarter revenue
range to $1.0 billion to $1.025 billion, and raised its GAAP earnings per
share estimate from a range of breakeven to a 1 cent profit, to a range of
22 to 24 cents. The improved GAAP earnings primarily reflect the 24 cent gain
associated with the previously announced retirement of Series A and C
preferred stock, a negative 3 to 4 cent impact due to acceleration of
transformation, integration and restructuring activities, and a 2 cent gain on
the retirement of liability associated with a recent outsourcing of extended
service plans. As a result of the extended service plan liability retirement
mentioned above, the company is raising its estimated fourth quarter non-GAAP
earnings per share before restructuring, transformation and integration costs
from a range of 1 to 2 cents to a range of 3 to 4 cents. The company also
indicated that it expects to end the year with approximately $550 million to
$575 million in cash.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO)
The company provided full-year 2005 guidance including a revenue range of
approximately $4 billion to $4.25 billion and GAAP earnings per share of 15 to
17 cents. Non-GAAP earnings per share before restructuring, transformation
and integration costs are expected to be 17 to 19 cents. While Gateway has
not yet provided guidance for the first quarter of 2005, the Company has
historically experienced a seasonal quarterly decline in revenues in the first
quarter as compared to the fourth quarter, in the range of 10 to 15 percent.
Given the increase in the Company's sales through retail channels, which are
seasonally higher in the fourth quarter, it would expect revenues in the first
quarter to reflect a seasonal decline of 15 percent or greater. Consistent
with traditional guidance timing, Gateway expects to provide guidance for the
first quarter in late January when it reports results for the fourth quarter
and full year 2004.
Table A: Reconciliation of Prior to Updated Earnings Per Share (EPS)
Guidance for fourth quarter, 2004.
GAAP EPS Operating EPS
Prior Guidance $0.00 -- $0.01 $0.01 -- $0.02
Gain on Series A and C $0.24 --
Restructuring, Transformation
and Integration ($0.03) -- ($0.04) --
Extinguishment of Liability $0.02 $0.02
Updated Guidance $0.22 -- $0.24 $0.03 -- $0.04
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 sales force. See http://www.gateway.com for more
information.
Certain non-GAAP financial information
This press release contains certain non-GAAP financial information,
including disclosure of the portion of the company's SG&A, gross margins and
net income relating to, or affected by, certain restructuring charges,
transformation expenses and integration expenses. This non-GAAP financial
information is provided as supplementary information and is not an alternative
to GAAP. This non-GAAP financial information is used by management and
management believes it is useful to investors to analyze the company's
baseline performance before charges and expenses that are considered by
management to be outside of Gateway's core operating results, notwithstanding
the fact that such restructuring, transformation and integration expenses may
be recurring. This non-GAAP information is among the primary indicators
management uses as a basis for evaluating Gateway's financial performance as
well as for forecasting of future periods. The presentation of this
additional information is not meant to be considered in isolation or as a
substitute for reported results determined in accordance with GAAP.
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
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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