SOURCE: Gateway International Holdings, Inc.

January 04, 2007 09:05 ET

Gateway International Reports Financial Results

ANAHEIM, CA -- (MARKET WIRE) -- January 4, 2007 -- Gateway International Holdings, Inc. (PINKSHEETS: GWYI) announced today that it has filed interim financial statements at for the period ended June 30, 2006. The complete filing can be found at and, and then proceed to the Financial Reports tab.

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 $5,874,753, a Gross Margin of 28.8%. Operating Expenses totaled $4,710,330. Pre-tax loss totaled $1,880,424, 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. Adjustments for one-time charges include: 1) $1,100,000 Impairment of goodwill related to past acquisitions and 2) $721,566 in non-recurring legal and professional fees related to the regulatory actions that were settled in June 2006.

Adjusted income from operations, reflecting the removal of one-time charges, totaled $171,072.

Gateway International's CEO, Tim Consalvi, commented on the results, "From an operational perspective, Gateway has experienced excellent internal growth over the past year. Our increase in total revenues reflects only 9 months of operations as compared to the prior year having a full 12 months. We are currently tracking well for the current year and look forward to another good year."

Gateway's CFO, Steve Kasprisin, added to the analysis, "Over the past 18 months, the Company experienced significantly higher expenses in regulatory filing costs than what I consider normal as a result of the preparation of multiple annual and quarterly filings with the SEC.

"One of the primary reasons that the Company had difficulties meeting reporting requirements was due to difficulties of our multiple subsidiaries to close their books in a timely fashion, thereby delaying the preparation of consolidated financial statements. Since joining Gateway in November, 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. Once we have these internal controls in place, we will file a Form 10 Registration with the Securities and Exchange Commission to become fully reporting."

He continued, "We wrote down a significant portion of goodwill during this year in accordance with the provisions of Financial Accounting Standard 142. This write down was principally the result of the impact of raw material prices on several large short term contracts in the Defense and Aerospace marketplace, which had fixed pricing in place. During the period, commodities experienced higher than normal price swings and although we were able to negotiate to a reasonable extent with our vendors, we were unable to make up all these increased costs. As a result, the valuation of goodwill related to our operating subsidiary was negatively affected. These contracts have now been completed and the current pricing structure for new contracts should allow for more normalized gross margins going forward. Although our net loss increased for the period as a result of these increased write downs and unexpected cost variations, we are currently tracking well for the current year."

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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