Company Also Heading To New York Stock Exchange
North Sioux City, S.D., May 15, 1997 - Gateway 2000 (Nasdaq: GATE) today announced a two-for-one stock split of its common shares, a share repurchase program and an impending move to the New York Stock Exchange.
At the Company's annual shareholders' meeting in Sioux City, Ted Waitt, Chairman and Chief Executive Officer, told shareholders that the Board of Directors has authorized a two-for-one stock split to shareholders of record on June 2, 1997. The distribution is expected to occur on or about June 16, 1997. Since its initial public offering in December of 1993, Gateway's shares have appreciated more than 300%.
"The stock split," according to Waitt, "will improve the liquidity and should help improve the stability of our trading patterns for all our shareholders, particularly the larger institutional holders." As of May 7, 1997, Gateway has approximately 77 million shares outstanding. Upon completion of the split, the number will increase to approximately 154 million shares. The Gateway 2000 Board of Directors has also authorized a stock repurchase program under which the company may purchase up to 10 million shares (adjusted for stock split) of common stock in open market or negotiated transactions. Shares repurchased will be available for issuance to employees under the company's stock-based employee benefit plans. According to Waitt, "Recently, we have seen occasions when the stock seemed undervalued in the market. We have a great deal of confidence in the company and, if the right opportunities present themselves, repurchasing some of the outstanding shares is one of the best investments we could make at this time."
Gateway also announced that its common stock has been accepted for listing on the New York Stock Exchange (NYSE) and expects to begin trading on the Big Board under the new symbol GTW on Thursday, May 22, 1997.
Waitt said, "We believe the company and its shareholders will benefit from this move to the NYSE. This change should provide lower transaction costs and result in a more efficient market for the stock. While Gateway's stock on the Nasdaq has performed well over the last three years by dealer market standards, we have reached the point where listing on the NYSE will deliver substantial benefits to our company and shareholders."
NYSE President and Chief Operating Officer William R. Johnston, addressing shareholders at the Sioux City meeting, called the addition of Gateway 2000 to the Big Board a tremendous move for both the company and the Exchange. "Gateway 2000 is one of America's best business stories," said Johnston. "Their move to the New York Stock Exchange underscores the leadership positions both organizations enjoy in their respective fields."
In other news, shareholders reelected Ted Waitt, Chase Carey and Jim McCann to the Board of Directors.
Waitt told the 250 shareholders gathered for the meeting that the company intended to pursue an aggressive global growth strategy in 1997. Specifically, the company considers the major account and portables business to be significant opportunities over the course of the year. Waitt referred to new data from one of the industry's leading research firms that named Gateway 2000 as the leader in brand loyalty, repurchase intentions and the education sector as indicative of the momentum the company has generated over the first quarter of the year.
About Gateway 2000
Gateway 2000, Inc., a Fortune 500 company founded in 1985, is a global leader in the direct marketing of PCs. The company, headquartered in North Sioux City, South Dakota, has manufacturing facilities in the United States, Ireland and Malaysia, and employs over 10,000 people worldwide. Gateway 2000 products and services consistently win top awards from leading industry publications. In 1996, the company shipped 1.9 million systems and reported revenues of $5 billion and net income of $250 million.