Gateway 2000 reports record third quarter results.NORTH SIOUX CITY Sioux City, city (1990 pop. 80,505), seat of Woodbury co., NW Iowa, at the junction of the Big Sioux and Floyd rivers with the Missouri; inc. 1857. It is a shipping, wholesale trade, and industrial center for an extensive agricultural and livestock area (including , S.D.--(BUSINESS WIRE)--Oct. 19, 1995--Gateway 2000, Inc. (Nasdaq: GATE), the leading direct marketer of personal computers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , today reported third quarter results that underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the continued demand the company has experienced this year. Gateway 2000 Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Ted Waitt Theodore "Ted" Waitt (born January 18, 1963) is an American billionaire who was a co-founder of Gateway, Inc. Biography Waitt was born and raised in Sioux City, Iowa and attended the University of Iowa. characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. the quarter as a solid one for the company. "Sales remained in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with our expectations, backlogs continued to grow in response to the increased business activity and margins were steady," said Waitt. "We feel we are in a very good position to respond to the market between now and the end of the year. Our product line is as solid as ever and our staffing is at levels which will permit us to respond to the anticipated seasonal demand." Revenues for the quarter just ended totaled $888.7 million, a 38% increase over the $644.4 million reported in the same period in 1994. The company's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. contributed revenues of 98.5 million in the third quarter. Net shipments for the third quarter were approximately 325,000 units, a 32% increase over the 246,000 units shipped in the third quarter of last year. Gateway 2000 markets its products in a growing number of international locations, having added sales centers in both Japan and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. during the quarter just ended. Net income in the third quarter increased to $40.9 million, or $0.52 per share, compared to $27.6 million and $0.35 per share for the third quarter of 1994, an increase of 48%. Gross profit for the quarter improved slightly to 16.4% of sales. Although selling, general and administrative expenses declined as a percentage of sales compared to the second quarter, the level of spending increased from approximately $75 million to $85 million. The introduction of Windows 95 and planning for the traditionally strong fourth quarter were the principal reasons for the increase in SG&A costs, as employee levels grew to more than 7,700 employees worldwide. Gateway 2000's support of Windows 95 and its close business relationship with Microsoft allowed the company to become the first major system manufacturer to ship Windows 95. Net income for the quarter was adversely affected by a change in the estimated effective tax rate for the year as a whole. This change in estimate primarily resulted from the effect of start-up Start-up The earliest stage of a new business venture. operations in Japan and Australia as
emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations to consolidated results. The effective tax rate in the quarter, reflecting the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. adjustment for the change in estimate, was 36.5%. The current estimated tax Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. rate for the year is 34%. Sales for the nine months of the year were $2.4 billion compared to $1.9 billion for the nine months of last year, an increase of 29%. Net income increased over 200% from $56.7 million at the end of the third quarter last year to $114.4 million this year. During the quarter, Gateway 2000 embarked on strategic expansions in two markets in the Asia/Pacific region. In August, the company completed the acquisition of the assets of Osborne Computer Corporation (company) Osborne Computer Corporation - The unsucessful computer manufacturer founded by Adam Osborne that produced one of the first laptop computers, the Osborne 1. in Australia and, in September, Gateway 2000 opened a sales center and showroom in Japan. Waitt said both ventures, which are still in a start-up mode, represent good business opportunities for Gateway 2000. In September, the company announced plans to build its second United States manufacturing facility in Hampton, Virginia Hampton is an independent city in Virginia, and therefore not part of any Virginia county. One of the Seven Cities of Hampton Roads, it is on the southeast end of the Virginia Peninsula, bordering on Hampton Roads and Chesapeake Bay. As of the 2000 U.S. . Construction is underway and manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. are scheduled to begin in late summer of 1996. Initial staffing plans call for approximately 250 employees. At the end of the third quarter, Gateway 2000 successfully launched an innovative portable product with the introduction of the Solo - the first notebook optimized for Windows 95. Trade reviews have been positive and initial sales have been encouraging. The Pentium-based Solo features active matrix screens, modular internal CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). and floppy drives See floppy disk. floppy drive - disk drive , lithium ion A rechargeable battery technology introduced in 1991 that provides greater charge per pound than nickel metal hydride. In 1993, Toshiba introduced the first notebook in the U.S. with a Li-ion battery. batteries, a docking bar, a full-size Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. 95 keyboard and a host of other features. Gateway 2000 began shipping the Solo in late September. About Gateway 2000 Gateway 2000, a Fortune 500 company founded in 1985, sells more personal computer systems in the U.S. through the direct channel than any other PC manufacturer. Its desktop and portable lines consistently receive top ratings among trade publications and customer surveys. Gateway 2000, headquartered in North Sioux City, South Dakota North Sioux City is a city in Union County, South Dakota, United States. It is part of the Sioux City/Iowa/Nebraska/South Dakota Metropolitan Statistical Area. The population was 2,288 at the 2000 census. , employs more than 7,700 people worldwide. -0-
GATEWAY 2000, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except share and per share amounts)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1995 1994 1995 1994
--------- -------- ---------- ----------
Net sales $888,674 $644,421 $2,431,095 $1,876,877
Cost of goods sold 742,817 552,815 2,039,810 1,644,842
--------- -------- ---------- ----------
Gross profit 145,857 91,606 391,285 232,034
Selling, general and admini-
strative expenses 84,796 49,551 230,879 147,073
--------- -------- ----------- ---------
Operating income 61,061 42,055 160,406 84,961
Other, net 3,383 302 12,559 3,108
--------- -------- ----------- ---------
Income before income taxes 64,444 42,357 172,965 88,069
Provision for income taxes 23,518 14,751 58,808 31,351
--------- -------- ----------- ---------
Net income $40,926 $27,606 $114,157 $56,718
========= ======== =========== =========
Net income per share $0.52 $0.35 $1.45 $0.72
========= ======== =========== =========
Primary weighted average
shares outstanding 79,164,646 78,398,260 78,943,103 78,581,571
========== ========== ========== ==========
GATEWAY 2000, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)
September 30, December 31,
1995 1994
------------- -----------
ASSETS
Current assets:
Cash and cash equivalents $149,579 $214,021
Marketable securities 13,262 29,868
Accounts receivable, less allowance
for uncollectible accounts of
$11,300 and $13,900, respectively 295,211 252,910
Inventory 238,885 120,229
Deferred income taxes 21,304 17,376
Other 61,212 14,756
------------- ----------
Total current assets 779,453 649,160
Property, plant and equipment, net 130,794 89,310
Software costs, net 47,265 27,110
Other assets 25,248 5,000
------------- ----------
$982,760 $770,580
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current
maturities of long-term
obligations $ 16,607 $3,767
Accounts payable 224,162 183,299
Accrued liabilities 85,205 57,795
Accrued royalties 99,310 85,818
Customer prepayments 16,756 17,996
Income taxes payable 2,081 200
----------- ---------
Total current liabilities 444,121 348,875
Long-term obligations, net of current
maturities 13,238 27,131
Deferred income taxes 10,927 6,990
Other liabilities 24,277 11,549
----------- ---------
Total liabilities 492,563 394,545
----------- ---------
Stockholders' equity
Common stock and additional paid-in
capital 275,134 275,124
Retained earnings 215,209 101,052
Unrealized loss on marketable securities
available for sale, net of tax (146) (141)
---------- --------
Total stockholders' equity 490,197 376,035
---------- --------
$982,760 $770,580
========== ========
CONTACT: Gateway 2000, Inc. Investor Contact: Jim Wharton, Director of Investor Relations Investor relations The process by which the corporation communicates with its investors. , 605/232-2709 |
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