Gateway Delays Release of Second Quarter Earnings Pending Outcome of Voluntary Request for Accounting Guidance From SEC on April
July 27 2005 - 9:31PM
PR Newswire (US)
Gateway Delays Release of Second Quarter Earnings Pending Outcome
of Voluntary Request for Accounting Guidance From SEC on April 2005
Gateway-Microsoft Agreement IRVINE, Calif., July 27
/PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE:GTW), the nation's
third-largest PC company, today announced it plans to delay release
of its second quarter earnings until August 4, pending the outcome
of the company's voluntary request for final guidance from the U.S.
Securities and Exchange Commission's Office of the Chief Accountant
on the proper accounting for elements of the April 2005 agreement
with Microsoft. The guidance requested includes income statement
classification of the marketing and development related program
spending benefits of the Microsoft agreement. The resolution 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. "We believe it would be
inappropriate to issue results in advance of receiving that
guidance." 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. DATASOURCE: Gateway, Inc. CONTACT: media,
David Hallisey, +1-949-471-7703, , or John W. Spelich,
+1-949-471-7710, , or investors, Marlys Johnson, +1-605-232-2709, ,
all of Gateway, Inc. Web site: http://www.gateway.com/
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