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GATEWAY COMMUNICATIONS ANNOUNCES 1991 RESULTS

 GATEWAY COMMUNICATIONS ANNOUNCES 1991 RESULTS
 IRVINE, Calif., Feb. 20 /PRNewswire/ -- Gateway Communications


Inc. (NASDAQ/NMS: GWAY) announced today the results of operations for the year and fourth quarter ended Dec. 31, 1991. For the 12 months ended Dec. 31, 1991, the company reported net income of $57,000 or $0.01 per share on total revenues of $23.5 million. This compares to net income of $470,000 or $0.10 per share on total revenues of $25.1 million for the prior year ended Dec. 31, 1990.
 The company's 1991 results were impacted by a one-time, pre-tax restructuring charge of $859,000 taken during the fourth quarter. This charge, which was announced through a press release on Jan. 16, 1992, primarily consists of costs associated with the strategic redirection of the company, and includes discontinued products, certain capitalized software and severance expenses related to staff reductions. Exclusive of the restructuring charge of $859,000, the company's 1991 pre-tax operating income was $926,000, compared to $1,029,000 for the comparable period of 1990, exclusive of a charge in 1990 for the disposition of the company's Australian subsidiary.
 For the three months ended Dec. 31, 1991, the company reported a net loss of ($693,000) or ($0.14) per share on total revenues of $5.7 million. In the comparable period of 1990, net income was $302,000 or $0.07 per share on total revenues of $6.4 million. Exclusive of the restructuring charge of $859,000 during the fourth quarter of 1991, the company incurred a pre-tax operating loss of ($251,000) compared to pre-tax operating income of $506,000 in the comparable quarter of 1990. The operating loss in the fourth quarter of 1991 as compared to operating income in the fourth quarter of 1990 was largely because of a decrease in revenues and profit margins coupled with an increase in advertising and promotional expenses that are expected to benefit future periods.
 "We expect 1992 to be a highly competitive year in the markets served by Gateway Communications," said Donald F. Brosnan, president and chief executive officer. "In anticipation of this outlook, we have reduced our operating expenses, and intensified our product cost reduction and marketing efforts. In addition, the company has strengthened its worldwide distribution network to enable Gateway Communications to increase its market penetration.
 Founded in 1981, Gateway Communications Inc. develops, manufactures, market and supports a complete line of PC-based local area networking and remote access connectivity products for IBM and compatible PCs. Global headquarters are located at 2941 Alton Ave., Irvine, CA 92714; telephone, 714-553-1555.
 The following table compares results of operations for the year and quarter ended Dec. 31, 1991 and 1990:
 GATEWAY COMMUNICATIONS INC.
 (Results of Operations)
 (For the Year and Quarter Ended Dec. 31, 1991 and 1990)
 1991 1990
 12 months ended Dec. 31:
 Total revenues $23,536,000 $25,055,000
 Operating costs and
 expenses $22,610,000 $24,026,000
 Restructuring charge $859,000 ---
 Disposition of subsidiary --- $152,000
 Income before taxes $67,000 $877,000
 Net income $57,000 $470,000
 Net income per share $0.01 $0.10
 Weighted average number of
 shares and share equivalents
 used in computing per share
 amounts 4,880,000 4,576,000
 Three months ended Dec. 31:
 Total revenues $5,723,000 $6,401,000
 Operating costs and
 expenses $5,974,000 $5,895,000
 Restructuring charge $859,000 ---
 Income (loss) before taxes ($1,110,000) $506,000
 Net income (loss) ($693,000) $302,000
 Net income (loss) per share ($0.14) $0.07
 Weighted average number of
 shares and share equivalents
 used in computing per share
 amounts 4,845,000 4,587,000
 -0- 2/20/92
 /CONTACT: Kari Jo Bloomer of Gateway Communications, 714-553-1555/
 (GWAY) CO: Gateway Communications ST: California IN: CPR SU: ERN


JL-EH -- LA038 -- 1201 02/20/92 19:21 EST
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Date:Feb 20, 1992
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