IOMEGA REPORTS THIRD QUARTER FINANCIAL RESULTS
REVENUE INCREASED 51% YEAR OVER YEAR
SAN DIEGO , October 25, 2007 – Iomega Corporation (NYSE: IOM) today reported net revenue of $80.7 million and net income of $1.3 million, or $0.02 per diluted share, for the quarter ended September 30, 2007. In comparison, third quarter 2006 net revenue was $53.6 million with net income of $0.9 million, or $0.02 per diluted share. Third quarter net revenue increased $27.1 million, or 51%, from the same quarter last year, primarily due to strong growth in Consumer Storage Solutions and Network Storage Systems of 100% and 23%, respectively. Gross margin for third quarter 2007 was $13.0 million, or 16.1%, as compared to third quarter 2006 gross margin of $12.2 million, or 22.8%. The increase in gross margin dollars and decrease in gross margin percentage from the same period last year was a result of growth in Consumer Storage Solution products, which generally carry a lower gross margin percentage than other product lines, and an expected Zip revenue decline of 39% which carries a higher gross margin percentage.
Cash, cash equivalents and temporary investments at September 30, 2007 totaled $69.4 million, a decrease of $5.8 million from the end of second quarter 2007. This decrease was a result of timing of working capital needs during the third quarter and building inventory required to meet strong demand in the fourth quarter.
“I am pleased with our financial and operational performance for the third quarter and the continued market acceptance of both our Consumer Storage and Network Storage product lines, both of which achieved substantial year-over-year growth,” said Jonathan Huberman, Chief Executive Officer, Iomega Corporation. “We posted our fifth consecutive quarter of net income and fourth consecutive quarter of year-over-year revenue growth; and we continued to execute on our 2007 goals. The external HDD business continues to be a very competitive market, but we were able to deliver significant growth and gain market share. We remain optimistic about our business performance and prospects in the seasonally high fourth quarter.”
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 third quarter 2007 financial results and management’s goals and business outlook. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on November 8, 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 its own award-winning removable storage technology, the REV ® Backup Drive. OfficeScreen ®, Iomega’s managed security services, which are available in the U.S. and select markets in Europe, provide 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 our expectations concerning the fourth quarter, 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 October 25, 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; supply shortages impacting our suppliers; any inability to maintain 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 and Quarterly Reports on Form 10-Q. Obtain a copy of Iomega's Q3/2007 Financial Statements.
Copyright© 2007 Iomega Corporation. All rights reserved. Iomega, Zip, REV, and OfficeScreen are either registered trademarks or trademarks of Iomega Corporation in the United States and/or other countries. Certain other product names, brand names and company names may be trademarks or designations of their respective owners.
Media please contact:
Chris Romoser, Iomega Corporation, +1 (858) 314-7148 firstname.lastname@example.org