SAN DIEGO – Ardesta CEO Rick Snyder, who helped take Gateway Computer public 15 years ago, was named on Thursday as interim CEO of Gateway after former chief executive Wayne Inouye resigned.
Inouye, who became CEO after Gateway’s acquisition of eMachines in 2004, left “to pursue other interests,” he said in a statement. Gateway declined to elaborate.
Wall Street reacted to the news by driving down Gateway’s stock price by a nickle a share to close at $2.46. In after hours trading the stock fell another 3 cents.
Inouye, a former Best Buy Co. executive who revived eMachines, took over a Gateway with a work force of 7,400 and slashed it to 1,800. He retreated from an ill-fated push into consumer electronics, closed Gateway’s stores and began selling the company’s gear at Best Buy and other electronics stores. He also led the company to its first profit after 13 straight quarterly losses.
Snyder praised Inouye for his work on the retail side but said Gateway struggled to sell PCs to businesses and through direct channels such as the phone and the Internet.
“It’s clear that there are a lot of positives that have gone on with the company and there are challenges,” Snyder said in a conference call with financial analysts and reporters.
Last week, Gateway reported a fourth-quarter profit of $22.4 million from a loss of $6.6 million in the same period of 2004. Revenue grew 9 percent to $1.12 billion from $1.03 billion.
Inouye’s resignation, which took effect Wednesday, followed several days of “constructive dialogue” with the board of directors, Snyder said. “Basically, (Inouye) made the call,” he said.
Inouye’s severance package includes a cash payment of $720,000, or one year base salary, and health insurance for three years, according to a filing with the Securities and Exchange Commission. Gateway said Inouye will serve in an advisory role to ensure a smooth transition.
Snyder, 47, was Gateway’s president and chief operating officer in 1996 and 1997, before the company became an also-ran against Dell Inc. and Hewlett-Packard Co. He deflected questions about whether he would consider taking the CEO job permanently, which likely would require him to move from Ann Arbor, where he is chairman of SPARK.
Snyder said there were no other senior-level resignations and denied there would be a bigger role for Ted Waitt, who founded Gateway in 1985, guided it to its glory days as one of the largest PC makers in the United States. Waitt is still a major shareholder.
In the fourth quarter, Gateway was the third largest PC vendor in the United States with a market share of 6.8 percent, up from 6.4 percent a year earlier but still well behind Dell and HP, according to IDC, a research firm in Framingham, Mass.
Gateway under Inouye has risked depending too much on retail sales, which are concentrated during the back-to-school season and winter holidays, said analyst David Daoud of IDC. The retail emphasis leaves Gateway vulnerable during the first six months of the year.
Now the company’s biggest challenge is finding a new leader, Daoud said.
Snyder denied that Gateway was for sale, even after one caller urged him to consider the idea.
“I appreciate your thoughts,” Snyder said. “Everybody has an obligation to look through the options … As a practical matter, we’ll continue to operate in a normal fashion.”
