I recently spoke with Tim Consalvi over at Gateway International. Tim just released a letter to shareholders and posted it on their new corporate website. I have reposted the release on my First Capital Investors site as well for your review.
Tim has assured me that they are moving forward in their efforts re-file a Form 10SB with the SEC. While I don't think that the company is going to put a specific date out there for investors to look ahead to, based on the general tone of our conversation, I am "hopeful" that we will see a filing sooner than later, perhaps even by this summer. Gateway operates on a June 30 year end, so perhaps that will have an influence, although I am unsure at this juncture.
A Form 10SB filing would be a welcomed relief and I believe that the guys over at Gateway are genuinely good guys and are trying to do what is right by the shareholders. Tim assured me that he is pressing forward. Having had many face to face meetings with Tim, I believe him.
According to the new Gateway website, http://www.gih-inc.com/, Steve Kasprisin, is apparently still a Director with Gateway, so perhaps there is more to that story than I am aware of. Either way, since he is still an advisor to the company, I am confident that he is assisting in the transition to the new accounting system in whatever way he can. In the event that I jumped the gun on his departure to a new job in my earlier blog and was not accurate in my assessment of that situation, I apologize.
The shareholder report was interesting as it discussed an acquisition that occurred of which I was unaware. Gateway acquired CNC Repos for thier vendor and client base, as well as the existing management. I knew that they had been looking at that firm, but until I saw it in the letter to shareholders, I did not know that the acquisition had actually occurred. I am not sure at this point if CNC Repos was rolled into Elite Machine Tool Company or not, as the acquisition does not show up as a subsidiary under the "Companies" portion of the new site under the Machine and Tools Group section. If I get clarification on that I'll update later.
I think this is a positive step for Gateway as it gets them back on the acquisition roll-up track, which gives Gateway the potential to accelerate its growth beyond typical operation expansions. They have been excellent at doing this over the past 6 years. Had it not been for the acquisitions of Bechler Cams, Inc. and Nelson Engineering, Inc. - two deals that unfortunately did not work out - I think that the other acquisitions would have worked out much better. As it is they have still acquired Eran Engineering, ESK (rolled into Eran), All-American CNC Sales and now, CNC Repos. In their new facility, they certainly have the ability to acquire several more manufacturing firms and roll them right into the new footprint. By the way, I have visited the new facility on 2 occassions. It is very nice, well laid out, and offers HUGE opportunity for growth. Given that this company has average about 50% top end growth each year for the past 5-6 years, I have no reason to believe that they will not continue to keep that record in tact.
I will be keeping in contact with Gateway in the upcoming months and plan to keep a "finger on the pulse" to make sure they continue to move towards their relisting. At this time I am cautiously optimistic and hope that we will have this little gem back to trading publicly over the next quarter or two. For those who have contacted me over the past month and told me of your frustrations, just know that I am staying patient and ask the same from you and let's see if we are rewarded.
Stay tuned!
DISCLOSURE: I worked with Gateway as a Capital Markets Advisor and Investor Relations Consultant from 2003 thru December 31, 2007. However, while they remain a private, non-trading company, I am not under any type of contract at this time. Also for the record, as part of my Private Equity holdings, I own stock in Gateway International Holdings and have clients that own stock in the company as well.
