SOURCE: Gateway International Holdings, Inc.

February 08, 2007 09:25 ET

Gateway International Reports Audited Financial Results

ANAHEIM, CA -- (MARKET WIRE) -- February 8, 2007 -- Gateway International Holdings, Inc. (PINKSHEETS: GWYI) announced today that it has filed its audited financial statements at for the period ending June 30, 2006. The complete filing can be found at and

In fiscal 2006, the Company changed its year end to June 30. As a result, the period ending June 30, 2006 being reported represents a shortened 9-month fiscal year. In prior years, the Company ended its fiscal year on September 30th.There are no pro-forma reports attached to the reported financials to equate for a 9-month versus a 12-month year.

For the nine months ended June 30, 2006, Gateway reported increased net revenues of $20,381,011, versus $18,902,590 for the 12 months ended September 30, 2005, representing a 7.8% increase in 9 months over the prior 12 month period. Gross profit came in at $4,638,771, a Gross Margin of 22.8% as compared to $5,562,515 and 29.4%. The gross margin for 2006 was adversely affected by increased raw material cost related to the Company's manufacturing companies which could not be passed on to customers. The Company has re-bid the products affected by these cost increases and has seen improved margins in fiscal 2007 to date.

Operating Expenses totaled $6,422,975 or 31.5% of net sales as compared to $6,191,244 or 32.8% in 2005. Operating expenses in 2006 were adversely affected by one time charges for professional fees and goodwill impairment of $921,566 and $1,100,000 respectively, as compared to $729,903 and $207,244 in 2005. After adjustment for these one time charges, operating expenses for the 9 months ended June 30, 2006 were $4,401,490 or 21.6% of net sales as compared to $5,254,137 or 27.8% for the year ended September 30, 2005.

Pre-tax loss totaled $2,014,134, as compared to a pre-tax loss of $857,362 for the 12 months ended September 30, 2005. The increase in the loss was primarily due to non-recurring costs referred to above. After adjusting for these one time charges, net income before taxes was $7,432 for the 9 months ended June 30, 2006 as compared to $79,795 for the year ended September 30, 2005.

Gateway International's CEO, Tim Consalvi, commented, "I am very pleased that we have been able to complete the audit of our year-end financial statements. The addition of Steve Kasprisin our CFO, and Dan Wright, our Controller to our management team was instrumental in completing this audit and we look forward to their assistance in issuing interim results for the 6 months ended December 30, 2006 as soon as possible."

Gateway's CFO, Steve Kasprisin, added, "As I discussed previously, my top priority has been to ensure that we have accurate financial statements and to install the necessary internal controls across subsidiaries that will allow us to close our books and file our regulatory reports in a timely manner. We now have the foundation to proceed with a review of our 6-month results and the changes we have made to reporting and control procedures. Once we complete this 6-month review, we will be able to evaluate our systems and determine what additional steps, if any, are necessary to proceed with registering the Company as soon as possible."

Investor information is available on Gateway International Holdings website at Additionally, a downloadable Investor Fact Sheet is available at


This press release may contain forward-looking statements. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition and other material risks.

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