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GATEWAY COMMUNICATIONS ANNOUNCES THIRD QUARTER RESULTS

 IRVINE, Calif., Oct. 29 /PRNewswire/ -- Gateway Communications Inc. (NASDAQ-NMS: GWAY) announced today the results of operations for the third quarter ended Sept. 30, 1993. For the three months ended Sept. 30, 1993, the company reported a net loss of ($723,000), or ($0.14) per share, on total revenues of $2.46 million. Impacting the results for the third quarter and nine months of 1993 was a one-time, non-cash income tax charge of $213,000 representing a reassessment of the company's deferred tax assets and liabilities required by new accounting rules under FASB Statement No. 109. In the comparable quarter of 1992, net income was $59,000, or $0.01 per share, on total revenues of $4.42 million. For the nine months ended Sept. 30, 1993, the company reported a net loss of ($1,783,000), or ($0.35) per share, on total revenues of $8.30 million, compared to net income of $515,000, or $0.10 per share, on total revenues of $16.41 million in the comparable period of 1992.
 "The results for the third quarter of 1993 reflect unrelenting price competition and margin pressure in the LAN adapter market," stated Dr. Patrick F. Cadigan, chairman and chief executive officer. "Although we have recently made substantial staff and expense reductions, Gateway will continue to invest very selectively in research and development, including our LAN Expander(TM) family of remote access products, which allow remote PC users to dial into and access local area networks."
 Recent cost reductions have included a reduction in force of approximately 15 people representing over 20 percent of the company's workforce. The company's board of directors has retained an investment banker to assist in the process of examining various strategic alternatives including the possible sale of the company. The company has commenced preliminary discussions with several potential suitors.
 Gateway Communications Inc. develops, manufactures, and markets a full range of networking and communications products for IBM and compatible PCs. Gateway products are sold in more than 45 countries worldwide. Corporate headquarters are located at 2941 Alton Ave., Irvine, CA 92714; telephone 714-553-1555.
 GATEWAY COMMUNICATIONS INC.
 Summary of Unaudited Consolidated Financial Results
 (In thousands, except per share results)
 1993 1992
 Three Months Ended Sept. 30:
 Total revenues $2,457 $4,417
 Operating costs and expenses 3,053 4,344
 Other --- ---
 (Loss) income before taxes (596) 73
 Net (loss) income (723) 59
 Net (loss) income per share ($0.14) $0.01
 Weighted average number of
 shares and share equivalents
 used in computing per-share
 amounts 5,112 5,005
 Nine Months Ended Sept. 30:
 Total revenues $8,300 $16,411
 Operating costs and expenses 9,922 15,411
 Other 488 206
 (Loss) income before taxes (2,110) 794
 Net (loss) income (1,783) 515
 Net (loss) income per share ($0.35) $0.10
 Weighted average number of
 shares and share equivalents
 used in computing per-share
 amounts 5,059 4,984
 Sept. 30, 1993 Dec. 31, 1992
 Balance Sheet Highlights:
 Total assets $8,866 $10,848
 Working capital 6,274 7,948
 Shareholders' equity 7,012 8,672
 -0- 10/29/93
 /CONTACT: Kirk E. Andrews, CFO of Gateway Communications, 714-553-1555 or (fax) 714-553-1616/
 (GWAY)


CO: Gateway Communications Inc. ST: California IN: CPR SU: ERN

JB-LS -- LA049 -- 8774 10/29/93 18:40 EDT
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Date:Oct 29, 1993
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