Gateway has received a fifteen-day grace extension for filing its 10K form for 2002, after asking for the extension form the Securities and Exchange Commission in order to finish an internal review and restate its 2000 and 2001 revenues.
Gateway said in an April 1 statement it would likely refile its 10K on or before April 15. The company is trying to re-account for bundled America Online Internet services in 2000 and the first quarter of 2001, while revising its net sales and costs by equivalent amounts for those periods.
" The revision is related to how the company accounted for bundled AOL Internet services, which it previously had reported on a gross basis," Gateway continued. "Current management has determined that it is more appropriate to present such amounts on a net basis. These revisions do not affect previously reported gross profit, operating income (loss) or net income (loss) per share. The company modified its contract with AOL in the first quarter of 2001, after which it no longer reported such net sales and COGS on a gross basis."
Full-year net sales for 2000 will likely be reported as down to about $9.26 billion, with cost of goods sold figures down to about $7.20 billion - a $340 million total difference from original reporting, the company said. For 2001, the adjustment lowered the total full-year net and cost of goods sold about $130 million, to $5.95 billion (net) and $5.11 billion (cost of goods sold), respectively.
Analysts suggest Gateway - the first personal computer maker to sell its wares on the Internet itself (beginning in 1995) - is not just trying to come up from under an almost impossible complex corporate structure. These analysts believe Gateway is trying to put some distance between itself and both AOL's own problems with investigation of revenue reporting (which may have prodded eBay to cancel an ad deal with AOL) and the SEC's probe into Gateway's reporting methods.
