Gateway Communications : IRVINE

Nature of Business: Makes and markets networking and communications products Total employees: 83 In Orange County: 78 Stock listing in The Times: On NASDAQ as “GtwyCm” Ticker Symbol: “GWAY” Friday’s Stock Close: $1.38 Change: Down $0.19 Analyst Review: “Networking generally has been a fast-growing market, despite the recession, as people try to connect independent PCs to a network or mainframe. Gateway makes the ethernet local area network cards that connect those systems, and the cards that connect IBM systems to McIntosh. But the trend is that ethernet cards are becoming generic. Consequently, the market has become very competitive and the margins are low. You have to work very hard. Gateway does that. It not only makes the generic cards, but it produces special cards with higher memory that work faster. It has a very good reputation for quality, and has built a good distribution network. There is no reason why Gateway can’t do well.” --Jeffrey Kilpatrick, president Newport Securities, Costa Mesa Sales and Profits Dollar amounts in millions

3 Qtrs. 3 Qtrs. 1989 1990 1991 1991 1992 Sales 25.3 25.0 23.5 17.8 16.4 Profits 1.0 .500 .100 .750 .515

Corporate Outlook: “Gateway’s mission is to expand its leadership position in the local area network remote access market by combining and leveraging its core competencies. In addition to maintaining its established focus to deliver products and services for the departmental work group and small business end-user, it will focus its attention to provide local area network connectivity solutions for users of mobile laptop and pen-based computer users, personal digital assistance and multimedia PCs.” --Patrick F. Cadigan, chairman/CEO RETURN ON INVESTMENT: 3-YEAR SUMMARY AND YEAR-TO-DATE

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 3 Qtrs. 1989 1990 1991 1991 52-Week High $2.88 $2.25 $2.69 $2.69 52-Week Low $1.63 $0.63 $0.88 $0.88 Book Value Per Share $1.54 $1.64 $1.64 $1.69 Price Per Share $2.13 $1.00 $1.38 $1.75 Net Earnings (Loss) Per Share $0.22 $0.10 $0.01 $0.15 Price-to-Earnings Ratio 9:1 10:1 138:1 9:1 Average Return on Investor Equity 14% 7% 1% 12%

Fiscal year ending 3 Qtrs. 1992 52-Week High $2.25 52-Week Low $0.69 Book Value Per Share $1.69 Price Per Share $1.56 Net Earnings (Loss) Per Share $0.10 Price-to-Earnings Ratio 11:1 Average Return on Investor Equity 8%

For more information call or write, Gateway Communications Inc.: 2941 Alton Ave., Irvine, Calif. 92714. (714) 553-1555 Source: Gateway Communications Inc. Researched by DALLAS M. JACKSON/Los Angeles Times