My spin Gateway is indeed a struggling company. However, it’s trying hard and I think will succeed in reducing the losses. It’ll be a smaller company but many times small guys can do things that larger guys can’t do.
News Clip: POWAY, Calif., March 5 /PRNewswire-FirstCall/ — Speaking at an investor conference today, Gateway, Inc. CFO and Executive Vice President Rod Sherwood outlined the company’s business and cost-savings plans, with the objective of
achieving its previously announced goal of returning to profitability by the fourth quarter of 2003.
He said Gateway will reduce its quarterly selling, general and administrative (SG&A) spending to below $200 million by the fourth quarter, down from $250 million a year earlier. In addition, it will reduce its cost of goods sold (COGS) by approximately $200 million annually.
The company expects by the end of the year to be cash-flow positive and to have more than $1 billion in cash and marketable securities on its balance sheet, he said.
As part of this effort, Mr. Sherwood said Gateway may take a restructuring charge this quarter that is “conservatively north of $80 million,” related to cost-reduction plans which the company will detail by quarter’s end. The cash component expected to be incurred this quarter may be approximately one-third of the charge, which could grow to approximately two-thirds in subsequent
Mr. Sherwood’s previously announced remarks were made at the Morgan Stanley Semiconductor & Systems Conference in Dana Point, California. His presentation was simultaneously carried on a webcast.
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