Gateway seeks to delay annual report
The company asks the SEC for a 15-day extension to review its accounting, citing an SEC probe and changes to the way it reports software-bundling fees it received from AOL.
John G. Spooner
April 1, 2003 12:11 PM PST
Gateway is seeking a delay in filing its annual report.
The company on Tuesday said it will ask the Securities and Exchange Commission for a 15-day extension, as allowed by the commission's rules, for filing its 2002 annual report. Gateway said that it needed more time to review its accounting because of an SEC investigation of its 2000 financials and because of changes it made in the way it reports software-bundling fees received from America Online.
The Poway, Calif., PC maker also plans to restate its 2000 and 2001 earnings because of the AOL dispute and the probe by investigators.
Gateway and AOL have been disputing fees that the Internet company paid Gateway for bundling its AOL service on Gateway PCs. The PC maker took a id="982656">3 cent charge against its fourth-quarter 2002 earnings to cover fees it said were withheld by AOL. But the accounting changes pertain to earlier financial statements.
Gateway will state in the annual report, or 10-K, that it chose to revise its net sales and cost of goods sold for all of 2000 and for the first quarter of 2001. The changes account for bundled AOL service fees, which had previously been reported on a gross basis, the company said in a statement.
The PC company expects to report that for 2000, its net sales and its cost of goods sold were reduced by about $340 million, to $9.26 billion and $7.2 billion, respectively. Net sales and cost of goods sold in 2001 were reduced by about $130 million, to $5.95 billion and $5.11 billion, respectively.
Gateway's management sees it as "more appropriate to present such amounts on a net basis," the company said in a statement.
The revisions do not affect previously reported gross profit, operating income or loss, or net income or loss per share. Gateway's 2002 earnings will not be affected by any of the restatements, the company said.
Gateway now expects to file the 10-K report, which will include additional details, on or before April 15.
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