H-C
17 years ago
September 10, 2007 - 11:27 AM EST
GTW 1.86 0.00
Gateway Servers to Offer New Quad-Core AMD Opteron(TM) Processors
Increased performance and improved energy consumption provide Gateway's customers with leading technology and offer cost saving benefits
IRVINE, Calif., Sept. 10 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE: GTW), the nation's third largest PC vendor, will offer the powerful new Quad-Core AMD Opteron(TM) processors in its entry-level tower server and complete line of rackmount servers.
The new AMD (NYSE: AMD) processors feature four cores on one piece of silicon in the same thermal envelopes as the previous generation of dual-core AMD Opteron processors, for an increase in performance without an increase in heat generation. AMD's revolutionary Direct Connect Architecture allows the processors to be connected directly to one another and an I/O and memory controller to be directly connected to each processor. The new processors' improved energy efficiency features help control operational costs of data centers by reducing processor power consumption, thereby reducing heat generation and decreasing the strain on cooling systems.
'Our customers have been extremely pleased with our previous AMD Opteron processor-based servers,' said Tim Diefenthaler, Gateway senior director, professional product management. 'Once again, AMD is bringing leading-edge technology with significant benefits to our servers and, ultimately, our customers.'
The new Quad-Core AMD Opteron processors will be offered on the Gateway E-9232T tower server, and the E-9722R, E-9522R and E-9422R rackmount servers.
The Gateway E-9232T features a low price point and compelling technologies, making it an affordable, yet powerful server that can help small- and medium-sized businesses run efficiently and securely.
Gateway's 1U, 2U and 3U rackmount servers, the E-9422R, E-9522R and E-9722R, include leading improved serviceability, integrated RAID, Gateway Lights Out (GLO) system management and optional low-cost remote control K/V/M (keyboard, video, mouse). They also support both SAS and SATA II hard drives in the same system. Their powerful technologies and scalability features make them ideal for large, demanding office environments, but they are also cost- effective solutions for small- and medium-sized businesses. In March, the Gateway E-9722R server won the prestigious Best of FOSE Award in the enterprise hardware category.
'We're pleased to work with Gateway to help bring advanced technology with increased performance and cost savings to their business customers,' said Patrick Patla, Director of Product Management, Server/Workstation Division, AMD. 'Our new Quad-Core AMD Opteron processors operate within the same socket and thermal envelopes as our current generation of dual-core processors. Customers not only get increased performance, but also increased energy efficiencies, which help reduce power consumption. This advantage can be quite significant in today's demanding server environments.'
Professional Services
In addition, Gateway Professional Services deliver enterprise-level expertise to help professionals maximize the value of their technology resources. Offerings include:
-- Network planning and implementation
-- Backup and disaster recovery
-- Data and application migration
-- Server virtualization
-- Citrix(R) implementation
-- Hitachi SAN implementation
-- Server consolidation and clustering
North America Based Telephone Technical Support
While many PC vendors go off-shore to save service costs, Gateway's telephone technical support for U.S. customers is 100-percent based in North America. Customers are assured their calls are handled by knowledgeable, experienced, well-trained and dedicated support agents close to home(1).
Pricing and Availability
For more information on Gateway products, customers can visit http://www.gateway.com or call 1-800-GATEWAY. Solution providers and value added resellers (VARs) interested in partnering with Gateway through the ProNet Partner Program can find more information at http://www.gateway.com/pronet.
About Gateway
Since its founding in 1985, Irvine, Calif.-based Gateway (NYSE: GTW) has been a technology pioneer, offering award-winning PCs, servers and related products to consumers, businesses, government agencies and schools. Gateway is the fourth 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.
(1) Service methods subject to change without notice or obligation.
(C)2007 Gateway, Inc. Gateway terms and conditions of sale apply. Trademarks used herein are trademarks or registered trademarks of Gateway, Inc. in the United States and other countries. AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other product or service names mentioned herein are the trademarks of their respective owners.
SOURCE Gateway, Inc.
Source: PR Newswire (September 10, 2007 - 11:27 AM EST)
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H-C
17 years ago
MPC Corporation to Acquire Gateway Inc.'s Professional Business
Gateway's Professional Segment Revenue was Approximately $900 Million in 2006
NAMPA, Idaho, Sept. 5 /PRNewswire-FirstCall/ -- MPC Corporation (Amex: MPZ) today announced that it has signed a definitive agreement with Gateway, Inc. (NYSE: GTW) to acquire Gateway's Professional business. The transaction is subject to various terms and conditions to closing, including regulatory approval. The acquisition is expected to close in early Q4.
Under the terms of the definitive agreement, the consideration paid by MPC includes assumption of certain warranty and other obligations, the issuance to Gateway of MPC Common Stock and MPC Series B Preferred Stock, and a promissory note payable to Gateway in an amount subject to adjustments described in the definitive agreement. Based on MPC's current assumptions and estimates, the transaction is valued at about $90 million.
The assumed warranty and other obligations are estimated at approximately $60 million. The market value of the Common and the Series B Preferred Stock to be issued to Gateway (assuming conversion of the Series B Preferred Stock into Common Stock) is approximately $20 million as of September 4, 2007 and constitutes an approximate 19.9% equity interest in the company on a fully diluted basis. Based on MPC's current assumptions, the principal amount of the promissory note would be approximately $10 million as of September 4, 2007, but such amount could vary significantly based on several factors including the amount of inventory delivered by Gateway at close. The promissory note would be payable to Gateway within six months after the closing date.
As a condition to close, MPC is required to raise an additional $9 million through the exercise of a portion of its outstanding warrants priced at $1.10. The exercise of such warrants and the conversion of certain outstanding convertible debentures would reduce the overhang in MPC's capitalization structure as these debentures and warrants are converted into common stock. The investment bank Maxim Group LLC acted as an advisor to MPC in connection with these conversions.
Combining the Businesses
Similar to MPC's business, Gateway's Professional business targets customers in education, medium-sized business, and government with customized solutions including PCs, peripherals and services. This acquisition would provide MPC with the customers, products and employees to compete at a larger scale in the PC industry. The combined revenue of MPC and Gateway's Professional business in 2006 would have been $1.2 billion.
With this acquisition, MPC expects to gain a more balanced portfolio of customer segments, with strong positions in federal government, state/local government, K-12 education, higher education, small business and mid-sized businesses. The combined company would offer a complete line of PCs and related products and services, with particular emphasis in mobile products, all-in-one desktops, servers and storage solutions.
MPC would own the entire catalog of products and services from Gateway's Professional business, and would make them available to both MPC and Gateway Pro customers. As part of the terms of the arrangement, MPC will migrate these products from the Gateway brand to the MPC brand within one year. Likewise, Gateway Professional customers would be able to purchase the entire catalog of MPC products and services.
Under the terms of the definitive agreement, upon closing MPC would acquire Gateway's leased final assembly facility located in Nashville, TN, including the assembly of the Gateway Professional products that are produced there. In addition, MPC would acquire the portion of Gateway's Consumer Direct business that targets businesses with less than 100 employees. MPC would also immediately assume responsibility for all operations and warranty support associated with Gateway's Professional business.
'We believe that the customers of MPC and Gateway's Professional business will benefit greatly from this combination,' said John P. Yeros, Chairman and CEO of MPC Corporation. 'The new company will be totally focused on the markets of government, education, and small-and-medium business, and will develop products and services to meet the specific needs of these customers. It will have the scale to enable it to compete better against larger rivals in the PC industry. In addition, our customers will gain access to a wider range of PC products and services and continue to enjoy high-quality, US-based service and support.'
'I believe that the combination of Gateway Professional and MPC will result in a highly-focused organization that can better compete and thrive in this competitive segment,' said Gateway CEO Ed Coleman.
'The combination of MPC and Gateway's Pro business makes good sense,' said Roger Kay, president of Endpoint Technologies Associates, Inc. 'The new company's focus on the professional segment should help solidify its position in the U.S. PC industry.'
The combined company will be headquartered in Nampa, ID with operations in Nampa, ID, North Sioux City, SD, Nashville, TN and Denver, CO.
MPC has set up a special information center on its website with more details. The website address is http://www.mpccorp.com
More details concerning the transaction will be available in a form 8-K to be filed by MPC with the Securities and Exchange Commission.
About MPC Corporation:
MPC Corporation (Amex: MPZ), through its subsidiary MPC Computers, provides enterprise IT hardware solutions to mid-sized businesses, government agencies and education organizations. MPC offers standards-based server and storage products, along with PC products and computer peripherals, all of which are backed by an industry-leading level of service and support. For more information, visit MPC online at http://www.mpccorp.com.
Forward-looking Statements
Any statements in this press release, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on current management expectations and assumptions. However, there is no assurance that such expectations will occur or that the assumptions will prove accurate. Our actual future performance could differ materially from the forward-looking statements. Forward-looking statements in this press release include statements with respect to the possible acquisition of Gateway's 'Professional' business unit. The potential acquisition is subject to a number of conditions to closing that may never be satisfied or waived, including applicable regulatory approvals and the requirement that MPC shall have raised at least $9,000,000 additional cash or cash equivalents through the conversion of outstanding convertible securities, the exercise of warrants or the sale of additional securities. The actual value of the transaction could vary from the current estimate of $90 million, depending on a number of factors, including the actual value of the warranties assumed, fluctuations in the value of the MPC stock, and the calculation of the value of the promissory note to be issued to Gateway. Statements in this press release with respect to possible future performance or potential benefits of a combined company are also forward-looking statements. The combined company could fail to achieve projected revenue, margin and other financial performance measures. A combined company would face significant risks and uncertainties, including the ability to retain customers and employees, retention of vendor support in funding the combined operation, the ability to transition product lines, the ability to effectively combine management teams, and the ability to obtain required intellectual property licenses on terms acceptable to the combined company or at all. Neither MPC nor the Gateway Professional businesses have been profitable in recent periods, and there is no assurance that the combined company will be profitable. The interests of current shareholders would be diluted in connection with the proposed transaction. MPC faces significant liquidity challenges, and the combined company would continue to face such challenges. Investors are encouraged to carefully review MPC's risk factors set forth in its most recent Form 10-KSB and Form 10-Q filed with the Securities and Exchange Commission. In addition, we intend to file a Current Report on Form 8-K on September 5, 2007 that will include risk factors related to the acquisition of the Gateway Profession Business that you should carefully review. We will file a Form 8-K/A within 71 days that will provide additional information regarding the acquisition of the Gateway Professional Business including historical and pro forma financial information. Except as required by law, we are not obligated to provide or release publicly any revisions to these forward-looking statements that might reflect events or circumstances occurring after the date of this press release or those that might reflect the occurrence of unanticipated events.
SOURCE MPC Corporation
Source: PR Newswire (September 5, 2007 - 12:01 AM EST)
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H-C
17 years ago
Gateway Reports Second Quarter 2007 Results
- Net income of $1.9 million, or $0.01 per diluted share, versus a net loss of $7.7 million a year ago
- Operating income of $5.9 million versus a loss of $6.9 million a year ago
- Revenue of $841 million versus $919 million a year ago
- Retail revenue of $614 million versus $592 million a year ago
- Gross margins of 7.6 percent versus 5.5 percent a year ago
- Retail gross margins of 5.6 percent versus 3.7 percent a year ago
IRVINE, Calif., Aug. 2 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE: GTW) today reported results for its second quarter ended June 30, 2007. Revenue amounted to $841 million, down from $919 million a year earlier. Retail revenue grew to $614 million from $592 million a year earlier, but was offset by continuing revenue declines in Professional and Direct.
Gross margin for the second quarter was 7.6 percent, compared with 4.9 percent in the prior quarter and 5.5 percent in the second quarter of 2006. Retail gross margin for the second quarter was 5.6 percent, compared with 3.1 percent in the prior quarter and 3.7 percent a year ago. Operating income was $5.9 million, compared to a loss of $6.7 million in the first quarter and a loss of $6.9 million a year earlier.
Net income equaled $1.9 million, or 1 cent per diluted share. This compares with a net loss of $8.6 million, or 2 cents per diluted share in the prior quarter, and a net loss of $7.7 million, or 2 cents per diluted share a year earlier.
'In the quarter in which Gateway sold its 50 millionth PC, we improved our year-over-year operating results for the third consecutive quarter,' said Ed Coleman, Gateway's chief executive officer. 'We showed revenue growth and significant margin improvement in our Retail business. While revenue declined in our Professional and Direct segments, we significantly increased Professional segment contribution by increasing gross margin and reducing expenses. These improvements, coupled with a continuing focus on managing our costs, resulted in this quarter's profitable performance.'
SG&A expense in the second quarter was $66.6 million, or 7.9 percent of revenue, up from $65.1 million in the prior quarter, and up from $66.1 million in the second quarter of 2006. The year-over-year increase is primarily due to an $8.4 million release of a prior disclosed sales tax reserve in 2006, which was not repeated in 2007, and an increase in depreciation expense related to the implementation of a new ERP system, partially offset by reductions in marketing and headcount-related expenses, settlement expenses and legal fees.
As part of Gateway's 2005 Marketing, Development and Settlement Agreement with Microsoft, second quarter results included the continuing quarterly benefit of $8.6 million.
The company sold 1,088,400 PC units in the second quarter, down 13 percent sequentially and down 7 percent year-over-year.
Segment Results
The Retail segment, which includes international sales, delivered second quarter revenue of $614 million, down 20 percent sequentially and up 4 percent year-over-year. Retail PC unit sales equaled 938,700, down 14 percent sequentially and down 1 percent year-over-year. The sequential decrease in units and revenue reflects seasonal factors. The year-over-year decrease in units and increase in revenue reflects a shift to higher opening price points.
Retail gross margin in the second quarter was $34.6 million or 5.6 percent of revenue, up from $23.6 million or 3.1 percent of revenue in the prior quarter, and up from $21.9 million or 3.7 percent of revenue in the second quarter of 2006. Retail segment contribution was $26.0 million (after Retail SG&A expenses of $8.6 million), up from $19.0 million in the prior quarter (after expenses of $4.6 million) and up from $17.2 million a year ago (after expenses of $4.6 million). The sequential and year-over year improvement in gross margin and segment contribution is primarily due to component cost and freight savings, as well as product and brand mix changes within the segment, partially offset by increased SG&A expense.
The Professional segment delivered revenue of $173 million in the second quarter, up 11 percent sequentially and down 31 percent year-over-year. Professional PC unit sales equaled 119,400, up 7 percent sequentially and down 36 percent year-over-year. The sequential increases in revenue and unit sales were predominantly due to seasonal factors and higher average unit prices due to product mix. The year-over-year decreases in revenue and unit sales were due to greater selectivity in contract bidding and desktop production constraints related to the ramp-up of production at our Nashville facility, partially offset by higher average unit prices due to product mix. Production constraints at Nashville resulted in a significantly higher backlog than normal for Professional at the end of the quarter.
Professional gross margin was $21.1 million or 12.2 percent of revenue, up from $10.8 million or 6.9 percent of revenue in the prior quarter and up from $11.1 million or 4.4 percent of revenue in the second quarter of 2006. Professional segment contribution was $8.4 million (after Professional SG&A expenses of $12.7 million), up from a loss of $3.0 million in the prior quarter (after expenses of $13.8 million) and up from a loss of $8.3 million a year ago (after expenses of $19.3 million). The sequential and year-over-year improvements in gross margin and segment contribution were due to management's decision to pursue opportunities on a more selective basis, resulting in better margin management, as well as reduced headcount-related expenses and other expense controls. Additionally, margins in the second quarter of 2006 were negatively impacted by $10 million in one-time warranty and royalty adjustments.
The Direct segment delivered revenue of $54 million, down 38 percent sequentially and down 30 percent year-over-year. Direct PC unit sales equaled 30,300, down 35 percent sequentially and down 15 percent year-over-year. The sequential and year-over-year declines in units and revenue reflect declining marketing spend and desktop production constraints at our Nashville facility, as well as declining deferred extended warranty revenue and Internet access subscription revenue share.
Direct gross margin was $8.2 million or 15.1 percent of revenue, down from $15.3 million or 17.7 percent of revenue in the prior quarter and down from $17.6 million or 22.9 percent of revenue in the second quarter of 2006. Direct segment contribution was $4.1 million (after Direct SG&A expenses of $4.0 million), down from $8.7 million in the prior quarter (after expenses of $6.6 million) and down from $9.3 million a year ago (after expenses of $8.4 million). The sequential and year-over-year decline in gross margin and segment contribution reflects declining deferred extended warranty revenue and Internet access subscription revenue share, partially offset by reduced headcount-related and marketing expenses.
Working Capital
Working capital at the end of the quarter was $314 million, which was unchanged from the end of the first quarter.
Accounts payable and supplier receivables both dropped to more normal levels from the distorted levels caused by component receiving and invoicing delays in the first quarter. Accounts payable were $610 million (71 days) down from $861 million (81 days) as we shortened our payables in support of our ODM relationships. Supplier receivables decreased to $275 million (32 days) from $479 million (45 days) due to timely invoicing of components sales to our ODMs. Accounts payable, net of supplier receivables, decreased to $335 million from $382 million at the end of the first quarter.
Net accounts receivable were $314 million (34 days) up from $303 million (27 days) at the end of the first quarter. Net inventory closed at $160 million (19 days) up from $131 million (12 days) at the end of the first quarter due to increased finished goods inventory. Other current assets dropped to $111 million from $203 million at the end of the first quarter in part due to improved collection of vendor credit programs.
The net result is that cash and marketable securities decreased to $255 million from $317 million at the end of the first quarter, as more working capital was utilized in assets supporting the business.
Cash flow, defined as earnings before interest and taxes, plus depreciation and amortization, minus capital expenditures, rose to $7.7 million, an increase of $17 million from ($9.3) million in the first quarter, and an increase of $23 million from ($15.3) million in the second quarter of 2006. This reflects improvement in operating income, greater depreciation and amortization and a lower capital expenditure budget.
At the end of the second quarter, Gateway had approximately $84 million in income tax reserves attributable to past periods. Gateway is in the process of concluding audits of these past periods and believes that a significant portion of these reserves will be released over the next few quarters, which would benefit its reported net income.
Conference Call Information
Gateway will host a conference call for analysts on Thursday, Aug. 2 at 10:00 am EDT/7:00 am PDT, which will be accessible via live audio web cast at http://www.gateway.com.
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. Gateway is 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.
Gateway, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Net sales $840,625 $919,312 $1,849,329 $1,997,134
Cost of goods sold 776,756 868,736 1,735,741 1,867,830
Gross profit 63,869 50,576 113,588 129,304
Selling, general, and
administrative expenses 66,603 66,149 131,685 169,246
Microsoft benefit 8,625 8,625 17,250 17,250
Operating income (loss) 5,891 (6,948) (847) (22,692)
Other income (loss), net (988) (1,317) (281) 920
Minority interest (79) -- (108) --
Income (loss) before
income taxes 4,824 (8,265) (1,236) (21,772)
Benefit (Provision) for income
taxes (2,911) 585 (5,430) 1,755
Net income (loss) $1,913 $(7,680) $(6,666) $(20,017)
Net income (loss) per share:
Basic $0.01 $(0.02) $(0.02) $(0.05)
Diluted $0.01 $(0.02) $(0.02) $(0.05)
Weighted average shares
outstanding:
Basic 371,857 372,089 371,666 372,531
Diluted 371,928 372,089 371,666 372,531
Gateway, Inc.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
June 30, March 31, December 31,
2007 2007 2006
ASSETS:
Current assets:
Cash and cash equivalents $225,621 $287,184 $345,677
Marketable securities 29,611 30,289 70,658
Accounts receivable, net 314,163 303,020 274,782
Inventory, net 160,431 130,616 97,187
Other 444,749 735,257 462,789
Total current assets 1,174,575 1,486,366 1,251,093
Property, plant, and equipment, net 110,158 108,249 110,931
Intangibles, net 68,909 71,970 75,058
Goodwill and non-amortizable
intangible assets 205,219 205,219 205,219
Other assets, net 10,666 10,231 13,934
$1,569,527 $1,882,035 $1,656,235
LIABILITIES AND EQUITY:
Current liabilities:
Accounts payable $609,900 $860,471 $612,639
Accrued liabilities 159,265 191,314 230,115
Accrued royalties 58,916 85,142 54,521
Other current liabilities 32,406 35,178 121,659
Total current liabilities 860,487 1,172,105 1,018,934
Long-term debt 300,000 300,000 300,000
Other long-term liabilities 145,382 149,387 65,875
Total liabilities 1,305,869 1,621,492 1,384,809
Minority interest 2,526 2,447 2,418
Stockholders' equity 261,132 258,096 269,008
$1,569,527 $1,882,035 $1,656,235
Gateway, Inc.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
2007 2006
Cash flows from operating activities:
Net loss $(6,666) $(20,017)
Adjustments to reconcile net cash to
net cash provided by operating
activities:
Write-down of long-lived assets -- 1,176
Depreciation and amortization 19,339 13,471
Provision for doubtful accounts
receivable 8,457 2,083
Stock-based compensation 2,216 2,149
Loss on investments 55 66
Loss on disposal of property, plant
and equipment 1 --
Changes in operating assets and
liabilities
Accounts receivable (49,614) 23,343
Inventory (63,244) 71,536
Other assets 23,085 55,312
Accounts payable (3,571) (162,640)
Accrued liabilities (63,173) (723)
Accrued royalties 4,395 (1,327)
Other liabilities (12,467) (25,533)
Net cash used in operating activities (141,187) (41,104)
Cash flows from investing activities:
Proceeds from sales of available-
for-sale securities, net 57,894 113,121
Purchases of available-for-sale
securities (16,753) (48,879)
Purchases of property, plant and
equipment (20,093) (24,093)
Proceeds from sale of property,
plant and equipment -- 3,731
Net cash provided by investing
activities 21,048 43,880
Cash flows from financing activities
Repurchase of treasury stock -- (280)
Proceeds from common stock
exercises 83 5
Net cash provided by (used in)
financing activities 83 (275)
Net (decrease) increase in cash and
cash equivalents (120,056) 2,501
Cash and cash equivalents, beginning
of period 345,677 422,488
Cash and cash equivalents, end of
period $225,621 $424,989
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Minority interest in earnings $(108) $--
Value of restricted shares withheld
for taxes $312 $2,690
SUPPLEMENTAL CASH FLOW INFORMATION
Cash received for income taxes, net $103 $153
Cash paid for interest $3,437 $3,215
SOURCE Gateway, Inc.
Source: PR Newswire (August 2, 2007 - 8:00 AM EST)
H-C
17 years ago
News :
March 15, 2007 - 5:00 AM EDT
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Gateway Enhances Server Line With an Entry-Level Tower Powered by AMD, Redefining Value and Performance
IRVINE, Calif., March 15 /PRNewswire-FirstCall/ -- Redefining the feature set of a value server, the Gateway(R) E-9232T gives customers a choice of powerful AMD processors and several advanced technologies not typically available in an entry-level server.
Powered by either a dual-core AMD Opteron(TM) 1000 Series processor or a single-core AMD Athlon(TM) 64 processor 3500+, the E-9232T also includes Gateway Lights Out (GLO) system management, optional remote keyboard/video/mouse (K/V/M) technology, integrated RAID support and optional hot-swappable redundant power supplies.
Its low price point and compelling technologies make it an affordable, yet powerful server that can help small- and medium-sized businesses run efficiently and securely.
Recent IDC research (LANs and Servers in US SMBs(1)) noted that many small and medium-sized organizations are still using traditional desktops, despite the growing popularity of local networks. 'Even with the appeal of the latest network technology, the lack of full-time IT staff can make it hard for smaller companies to step up to the investment,' said Ray Boggs, vice president for SMB research IDC. 'The availability and affordability of new servers like the E-9232T can provide a powerful alternative to desktop approaches, letting smaller firms gain access to network capabilities for the first time.'
Additionally, small- and medium-sized businesses running Microsoft Small Business Server (SBS) will find it an ideal platform to run all their office tasks. It has the power and features necessary to easily handle Internet, networking and productivity applications such as email, file and print sharing and financial or database programs.
'Server technology is not just for large companies with big budgets and dedicated IT staff,' said Steven VanRoekel, director of the Windows Server Solutions group at Microsoft. 'With Windows Small Business Server 2003 R2 on the new Gateway E-9232T, customers will be able to cost-effectively boost their productivity and better ensure system security.'
Failing technology can be disastrous for small businesses which operate in a retail environment. NetSolace, an independent software vendor specializing in point-of-sale solutions for a vast majority of the nation's franchises, exclusively uses Gateway tower servers for their customers' installations. NetSolace uses Gateway business class servers instead of high-end desktops due to their high-reliability and affordability. Combined with Gateway's four-hour on-site support(2), NetSolace is assured their customers' operations are running at peak efficiency, cost-effectively, and that their data is well protected.
Powerful Technologies Redefine Value and Raise the Bar for Others
Powered by either an AMD Opteron dual-core or Athlon single-core processor, the Gateway E-9232T brings true server performance and advanced capabilities to the value category.
'Our relationship with AMD has allowed us to develop another compelling server with leading technologies,' said Marc Tanguay, Gateway senior group manager, servers and storage. 'With excellent performance and advanced system management, the E-9232T offers benefits typically not found in an entry-level system.'
Bringing a high level of efficiency to IT departments, Gateway Lights Out (GLO) system management allows customers to remotely shut down and re-start their server regardless of power condition. An optional low-cost remote control K/V/M with media redirect features enables IT managers to take full remote control of a server.
Customers will also find leading serviceability features such as color-coded components and a tool-less chassis and motherboard, making the product easy to support and deploy.
Nicely equipped but with room to grow, the server features dual integrated 10/100/1000 GbE NICs and video; five PCI slots; and DDR2 unbuffered ECC memory with four sockets, providing memory capacity of up to 8GB. Highly expansive with room for four 3.5-inch hard disk drives, it has a storage capacity of up to 3.0TB with SATA II drives(3). Integrated SATA RAID 1, 5 and 10 offers greater redundancy and integrity.
'Providing the widest variety of computing options to infrastructure providers and end customers, Gateway has leveraged the performance and value benefits of the AMD Opteron and AMD Athlon 64 processors to help small and medium sized businesses run applications more efficiently while helping provide enterprise developers with low-cost, dedicated systems,' said Pat Patla, director, Server/Workstation Division, AMD. 'By making the choice to expand its AMD offerings to include rack-mount and now tower servers, we believe Gateway has enhanced its server line in the right direction.'
Pricing and Availability
Shipping and available immediately, the new servers are being built at Gateway's U.S.-based configure-to-order facility in Nashville. Prices start at just $699 for the AMD Athlon 64 processor-based system and $999 for the server powered by AMD Opteron processors. For more information, customers can visit http://www.gateway.com or call 1-800-GATEWAY. Solution providers and value-added resellers (VARs) interested in partnering with Gateway through the ProNet Partner Program can find more information at http://www.gateway.com/pronet.
Professional Services
In addition, Gateway Professional Services deliver enterprise-level expertise to help professionals maximize the value of their technology resources. Offerings include:
-- Network planning and implementation
-- Backup and disaster recovery
-- Data and application migration
-- Server virtualization
-- Citrix(R) implementation
-- Hitachi SAN implementation
-- Server consolidation and clustering
North America Based Telephone Technical Support
While many PC vendors go off-shore to save service costs, Gateway's telephone technical support for U.S. customers is 100-percent based in North America. Customers are assured their calls are handled by knowledgeable, experienced, well-trained and dedicated support agents close to home(4).
Gateway Professional
From ultra-reliable desktops, notebooks and servers to comprehensive services, Gateway has served organizations for twenty years. Gateway makes technology purchase, use and support simple through the programs developed for education, government and business customers. The ProNet(SM) Partner Program's channel-friendly benefits help solution providers strengthen and grow their businesses. Gateway customers include many of the world's leading organizations, such as the U.S. Defense Logistics Agency, the University of Arizona, State of California, State of New York and others. For more information on Gateway Professional solutions, visit http://www.gateway.com/business.
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. See http://www.gateway.com for more information.
Limited-time offers subject to change without notice or obligation and may not be available through all sales channels
(1) IDC Report #203250 LANs and Servers in US SMBs: Changing Hardware,
Environments, and Applications.
(2) Limited warranties and service agreements apply; visit gateway.com or
call 1-800-846-2000 for a free copy. Service agreements are issued and
performed by third parties. May not be available in all locations.
(3) Accessible capacity varies; MB = 1 million bytes; GB = 1 billion
bytes; TB = 1 trillion bytes.
(4) Service methods subject to change without notice or obligation.
(C)2007 Gateway, Inc. Gateway terms and conditions of sale apply. Trademarks used herein are trademarks or registered trademarks of Gateway, Inc. in the United States and other countries. AMD, the AMD Arrow logo and combinations thereof, AMD Opteron and AMD Athlon, are trademarks of Advanced Micro Devices, Inc. Other product or service names mentioned herein are the trademarks of their respective owners.
SOURCE Gateway, Inc.
Source: PR Newswire (March 15, 2007 - 5:00 AM EDT)
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GTW 1.94 -0.21
Today 5d 1m 3m 1y 5y 10y
Gateway Reports Preliminary Fourth Quarter and Full-Year 2006 Results
* Q4 revenue of $1.021 billion
* Q4 net income of $8.8 million, or $0.02 per diluted share
* FY 2006 revenue of $3.981 billion
* FY 2006 net income of $6.9 million, or $0.02 per diluted share
IRVINE, Calif., Feb. 8 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE: GTW) today reported preliminary results for its fourth quarter ended December 31, 2006. Revenue amounted to $1.021 billion, up from $963 million in the third quarter of 2006 and compared to $1.124 billion a year earlier.
The company recorded fourth quarter net income of $8.8 million, or 2 cents per diluted share, after a net tax benefit of $11.8 million. This compares with net income of $18.2 million, or 5 cents per diluted share in the prior quarter, and a net loss of $20.9 million, or 5 cents per diluted share a year earlier.
'Gateway's results for the quarter were mixed, as we continued to realign our Professional and Consumer Direct businesses while preparing our Retail business for the recent, successful Microsoft Vista launch. Certain supply constraints and the resulting impact on our supply chain contributed to lower than expected gross margins,' said Ed Coleman, Gateway's chief executive officer. 'While we continue to face a number of challenges, I believe cost structure and process improvement initiatives launched in the fourth quarter, combined with continued product innovation, strong customer relationships and an increased focus on the consumer market will enable Gateway to deliver improved financial performance in 2007.'
Overall Performance
The company sold 1,288,400 PC units in the fourth quarter, up 10 percent sequentially and down 5 percent year-over-year. Based on preliminary IDC data, Gateway was the third largest PC company in the U.S. with an estimated 6.6 percent market share in the fourth quarter, unchanged from a year ago.
Gross margin for the fourth quarter was 5.2 percent, compared with 7.6 percent in the prior quarter and 6.2 percent in the fourth quarter of 2005. The sequential decrease is due to margin declines in the Retail and Professional segments, partially offset by improvement in the Direct segment. The year-over-year decline in gross margin is due to lower margins in Retail and a continued mix shift towards the Retail segment, which historically has lower margins.
SG&A expense in the fourth quarter was $65.4 million, or 6.4 percent of revenue, down from $74.1 million in the prior quarter, and down from $113.0 million (including $2.8 million of restructuring expenses) in the fourth quarter of 2005. The sequential decrease in SG&A was due to headcount-related savings and reduced legal fees, partially offset by increased brand marketing expenses. In addition to the reduction in restructuring expenses, the year- over-year decrease was due to reduced headcount-related expenses and legal fees, offset by a $25 million increase in the sales tax reserve in the fourth quarter of 2005.
As part of Gateway's 2005 Marketing, Development and Settlement Agreement with Microsoft, fourth quarter results included the continuing quarterly benefit of $8.6 million.
Operating income equaled a loss of $4.1 million, down from income of $7.9 million in the third quarter and compared to a loss of $29.3 million a year earlier.
Segment Results
The Retail segment, which includes International, delivered fourth quarter revenue of $755 million, up 21 percent sequentially and down 5 percent year- over-year. Retail PC unit sales equaled 1,113,000, up 18 percent sequentially and down 2 percent year-over-year. The sequential increase in units and revenue reflect seasonal trends, partially offset by the effects of component shortages and softer than normal fourth quarter retail demand in the U.S. and Japan due to Microsoft's launch of its new Vista operating system in January 2007. The year-over-year decreases reflect component shortages and decreased demand due to Vista. Microsoft's launch of Vista in January 2007 caused some retailers to delay their PC purchases. Our channel inventories closed the quarter at unusually low levels as retailers managed down their inventories of Microsoft XP products in anticipation of the January 2007 launch of Microsoft Vista.
Retail gross margin in the fourth quarter was $22.1 million or 2.9 percent of revenue, down from $26.5 million or 4.2 percent of revenue in the prior quarter, and down from $48.3 million or 6.1 percent of revenue in the fourth quarter of 2005. Retail segment contribution was $17.1 million (after Retail SG&A expenses of $5.0 million), down from $20.9 million in the prior quarter (after SG&A expenses of $5.6 million) and down from $40.6 million a year ago (after SG&A expenses of $7.7 million). The sequential and year-over-year decline in gross margin and segment contribution is primarily due to higher costs driven by component shortages, competitive pricing pressures, and operational inefficiencies.
The Professional segment delivered revenue of $181 million in the fourth quarter, down 31 percent sequentially and down 16 percent year-over-year. Professional PC unit sales equaled 135,100, down 30 percent sequentially and down 19 percent year-over-year. The sequential and year-over-year decreases in revenue and unit sales were predominantly due to increased competition within the segment and greater selectivity in contract bidding.
Professional gross margin was $9.1 million or 5.1 percent of revenue, down from $34.3 million or 13.1 percent of revenue in the prior quarter and up from $3.1 million or 1.4 percent of revenue in the fourth quarter of 2005. Professional segment contribution was a loss of $4.2 million (after Professional SG&A expenses of $13.3 million), down from $18.2 million in the prior quarter (after SG&A expenses of $16.2 million) and up from a loss of $15.3 million a year ago (after SG&A expenses of $18.4 million). The sequential decline in gross margin and segment contribution was due to seasonal volume declines and the fulfillment and close-out of lower margin contracts from the first half of the year, partially offset by lower headcount-related expenses. The year-over-year improvement in gross margin and segment contribution was due to operational improvements and better margin management, as well as reduced headcount-related and marketing expenses.
The Direct segment delivered revenue of $85 million, up 14 percent sequentially and down 26 percent year-over-year. Direct PC unit sales equaled 40,300, up 16 percent sequentially and down 31 percent year-over-year. The sequential increase in units and revenue reflect seasonal trends as well as a positive response to recent product offerings. The year-over-year declines in units and revenue reflect the impact of the change in product and marketing strategy to focus on more fully-featured solutions and reduce Retail channel conflict.
Direct gross margin was $21.5 million or 25.3 percent of revenue, up from $12.5 million or 16.8 percent of revenue in the prior quarter and up from $18.6 million or 16.1 percent of revenue in the fourth quarter of 2005. Direct segment contribution was $16.2 million (after Direct SG&A expenses of $5.2 million), up from $0.4 million in the third quarter (after SG&A expenses of $12.2 million) and up from $5.7 million a year ago (after SG&A expenses of $12.9 million). The sequential and year-over-year increase in gross margin and segment contribution reflects better than expected alliance partner revenue sharing as well as reduced marketing and headcount-related expenses.
Cash and Marketable Securities
Cash and marketable securities decreased to $416 million from $429 million at the end of the third quarter and from $586 million at the end of 2005. The decrease during the fourth quarter includes a $25 million reduction in notes payable. The decrease during 2006 includes a reduction in days payable outstanding and a $50 million reduction in notes payable.
Preliminary Full Year 2006
Gateway reported preliminary full-year 2006 revenue of $3.981 billion and a net profit of $6.9 million, or 2 cents per diluted share. Total PC unit sales for the year were 5 million, a 12 percent increase over the prior year.
SG&A expenses for the year were $308.7 million (including $0.5 million in restructuring, transformation and integration expenses), compared with $363.6 million in 2005 (including $13.1 million in restructuring, transformation and integration expenses).
Gateway is still in the process of finalizing and reconciling its year-end balance sheet. During the course of the year-end close process, management identified certain inventory receipt discrepancies which may result in balance sheet adjustments to inventory and liability related accounts. Gateway is evaluating the effectiveness of its internal controls related to this matter. Final year-end results will be published with the 10K filing later this month.
Conference Call Information
Gateway will host a conference call for analysts on Thursday, February 8 at 5:30 pm EST/2:30 pm PST, which will be accessible via live audio web cast at http://www.gateway.com.
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. Gateway is 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.
Gateway, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three months ended, December 31 Year Ended December 31,
2006 2005 2006 2005
Net sales $1,020,507 $1,124,194 3,980,803 $3,854,061
Cost of goods sold 967,820 1,054,228 3,725,442 3,531,623
Gross profit 52,687 69,966 255,361 322,438
Selling, general,
and administrative
expenses 65,425 113,031 308,738 363,578
Microsoft benefit 8,625 13,802 34,500 40,500
Operating income (loss) (4,113) (29,263) (18,877) (640)
Other income, net 1,131 1,868 4,138 6,791
Minority interest (18) -- (18) --
Income (loss) before
income taxes (3,000) (27,395) (14,757) 6,151
Benefit (Provision) for
income taxes 11,796 6,493 21,707 (10)
Net income (loss) $8,796 $(20,902) $6,950 $6,161
Net income (loss) per
share:
Basic $0.02 $(0.06) $0.02 $0.02
Diluted $0.02 $(0.05) $0.02 $0.02
Weighted average shares
outstanding:
Basic 372,150 373,115 373,117 371,661
Diluted 372,888 409,250 374,139 372,167
SOURCE Gateway, Inc.
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