IOMEGA REPORTS FIRST QUARTER FINANCIAL RESULTS
San Diego, April 26, 2007 - Iomega Corporation (NYSE: IOM) today reported net revenue of $76.0 million and a net profit of $1.1 million, or $0.02 per diluted share, for the quarter ended April 1, 2007. In comparison, first quarter 2006 net revenue was $59.1 million with a net loss of $4.2 million, or $(0.08) per share. First quarter net revenue increased $16.9 million, or 29%, from the same quarter last year primarily due to a $21.0 million increase in Consumer Storage Solutions revenue, partially offset by a $6.1 million expected decrease in Zip® revenue.
Gross margin for first quarter 2007 was $14.3 million, or 18.8%, as compared to first quarter 2006 gross margin of $11.8 million, or 20.0%. The decrease in the gross margin percentage from first quarter 2006 was primarily due to the expected decline in Zip revenue, partially offset by new lower cost external HDD products, supply chain improvements and other cost reductions.
Pre-tax profit from continuing operations for first quarter 2007 was $1.4 million, as compared to a first quarter 2006 pre-tax loss from continuing operations of $5.6 million.
Non-GAAP, pre-tax profit from continuing operations was $3.0 million for first quarter 2007, excluding a non-cash goodwill impairment charge of $1.7 million and a restructuring benefit of less than $0.1 million. This compares to a first quarter 2006 non-GAAP, pre-tax loss from continuing operations of $1.2 million, when excluding a $3.1 million non-cash goodwill impairment charge, $0.3 million of restructuring charges, and a $1.0 million severance charge relating to the departure of the prior chief executive officer.
Cash, cash equivalents and temporary investments at April 1, 2007 amounted to $76.8 million, an increase of $8.7 million from year end. This increase was a result of our profitability and collections from the seasonally strong fourth quarter, offset by a previously accrued, one-time $1.3 million cash payout to exit a lease on an unused facility in Utah.
"I am pleased with our financial and operational results in the first quarter. We exceeded our revenue goal and continued the strong momentum in our HDD business" said Jonathan Huberman, Vice Chairman and CEO. "This is our third consecutive quarter of profitability and second consecutive quarter of year-over-year revenue growth. I'm particularly pleased with our positive cash flow of $8.7 million during the quarter as proof that our business model is working."
Mr. Huberman continued, "As we look to the remainder of 2007, our goals remain:
Conference Call Information
As previously announced, Iomega will host a conference call with simultaneous audio webcast beginning at 4:30 p.m. Eastern Time today to discuss Iomega's first quarter financial results and management's goals and outlook. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on May 10, 2007.
Iomega Corporation, headquartered in San Diego, is a worldwide leader in innovative storage and network security solutions for small and mid-sized businesses, consumers and others. The Company has sold more than 400 million digital storage drives and disks since its inception in 1980. Today, Iomega’s product portfolio includes industry leading network attached storage products, external hard drives, and our award-winning removable storage technology, the REV ® Backup Drive. OfficeScreen ®, Iomega’s managed security services, available in the U.S. and select markets in Europe, provides enterprise quality perimeter security and secure remote network access for SMBs, which help protect small enterprises from data theft and liability. To learn about all of Iomega’s digital storage products and managed services solutions, please go to the Web at www.iomega.com. Resellers can visit Iomega at www.iomega.com/ipartner.
Special Note Regarding Forward-Looking Statements
Statements contained in this release regarding the Company's business goals for 2007, and any other statements that are not purely historical are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such statements are based upon information available to us as of April 26, 2007; and we disclaim any intention or obligation to update any such statements. Actual results could differ materially from current expectations. Factors that could cause or contribute to such differences include losses of key personnel; lower than anticipated sales of our products; any inability or failure to improve REV product sales, or to stabilize or improve HDD product gross margins; unexpected technical, manufacturing, or supply issues with our products; any inability to achieve a competitive cost structure; competition; any inability to maintain stringent quality assurance standards and customer satisfaction; difficulties in identifying and completing strategic opportunities to grow our business; intellectual property disputes; adverse final judgments in litigation; general economic and/or industry-specific conditions including significant changes in the landscape of data storage demand, pricing, or competition; faster than expected declines in Zip product sales and gross margins; and the other risks and uncertainties identified in the reports filed from time to time by Iomega with the U.S. Securities and Exchange Commission, including Iomega's most recent Annual Report on Form 10-K. Obtain a copy of Iomega's Q1/2007 Financial Statements.
Copyright© 2007 Iomega Corporation. All rights reserved. Iomega, eGo, REV, StorCenter, OfficeScreen, MiniMax and UltraMax are either registered trademarks or trademarks of Iomega Corporation in the United States and/or other countries. All other trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.
Media please contact:
Chris Romoser, Iomega Corporation, +1 (858) 314-7148 email@example.com