Iomega Corp. Announces Third Quarter Earnings Growth of 135 Percent on
Revenue Growth of 39 Percent
BusinessWire, Thursday, October 16, 1997 at 16:08
ROY, Utah--(BUSINESS WIRE)--Oct. 16, 1997--Iomega Corp.
(NYSE:IOM) Thursday reported record third quarter earnings of
$30 million, or $0.22 per share, a 135 percent increase over third
quarter 1996 earnings of $13 million, or $0.09 per share.
Record revenue of $432 million represented an increase of
39 percent over third quarter 1996 revenue of $310 million.
For the first nine months of 1997, revenue totaled $1.2 billion,
which is a 46 percent increase over revenue of $816 million for the
first nine months of 1996 and equals Iomega's total 1996 annual
revenue. Net income for the first nine months of 1997 grew
114 percent to $79 million, or $0.58 per share, over $37 million,
or $0.28 per share, for the same period in 1996.
"Demand for our products continued to accelerate in the third
quarter," said Kim Edwards, Iomega's president and chief executive
officer. "Worldwide Zip drive shipments increased 26 percent over
last quarter, driven by continued strong orders. Over 35 percent of
Zip drives shipped during the third quarter went into the OEM
channel, continuing our push to become the new standard in mass
market removable storage."
Gross margin for the third quarter of 1997 increased to
$140 million, or 32.5 percent of sales, from $82 million, or
26.3 percent of sales, for the third quarter of 1996. Selling,
general and administrative ("SG&A") expenses as a percentage of sales
increased to 16.8 percent, or $73 million, for the third quarter of
1997 as compared to third quarter 1996 SG&A expenses of $50 million,
or 16.2 percent.
The increase in SG&A expenses is primarily the result of
international expansion and additional headcount. Research and
development expenses were $23 million, or 5.2 percent of sales, for
the third quarter of 1997, as compared to $10 million, or 3.4 percent
of sales, for the third quarter of 1996.
The company achieved positive cash flow of $33 million in the
third quarter of 1997. Iomega's balance sheet as of Sept. 28,
1997, reflected cash and short term investments of $166 million,
which is an increase of $31 million from June 29, 1997. Total debt
decreased to $56 million from $58 million at June 29, 1997.
"Our combined Zip and Jaz businesses grew 51% over the third
quarter last year," Edwards continued. "Even though we continued to
face some supply constraint issues, we were able to ramp production
significantly in the second part of the third quarter. Zip drive
inventory levels in the channel were lower than the company desired
at both the beginning and end of the third quarter and we're
continuing to work hard to replenish that inventory."
By product category, Iomega's Zip and Jaz product sales were
$406 million in the third quarter of 1997. Iomega's Ditto tape
product business declined by twenty percent year-over-year from
$33 million to $26 million.
All of Iomega's geographic regions experienced year-over-year
sales growth. Sales in Iomega's Americas region increased 25 percent
to $287 million, Iomega's European sales grew 114 percent to
$108 million and Iomega's Asia/Pacific sales grew 25 percent
year-over-year to $37 million.
Iomega Corp. provides personal computer storage solutions that
help people manage their computer stuff -- anywhere. These solutions
include: Zip drives and disks; Jaz one-gigabyte drives and disks;
and Ditto tape backup drives and tape cartridges.
Used in homes, business, government and education, and by
creative professionals, Iomega storage solutions are available
through computer retail stores, resellers and major distributors.
The company can be reached at 800/MY-STUFF (800/697-8833),
iomega.com and additional Iomega press releases can be
accessed through the toll-free fax-back line: (888/88-IOMEGA).
Special Note: Statements in this release related to replenishing
Zip drive inventories and the Zip drive becoming the new standard in
mass market removable storage are forward-looking statements. There
are a number of important factors that could cause actual results to
differ materially from those suggested or indicated by such
forward-looking statements.
These include, among others, market acceptance of, and demand
for, the company's drive and removable disk products, manufacturing
issues, including availability of certain integrated circuit chips
and other key components of the Iomega Zip drive, component quality
issues, production costs, competition, intellectual property rights,
litigation, general economic conditions, and other factors identified
in Iomega's Annual Report as filed on Form 10-K, June 4, 1996
Prospectus and most recent quarterly reports filed with the SEC.
NOTE TO EDITORS: Iomega, Jaz and the Iomega Logo are registered
trademarks of, and Zip, Ditto and n-hand are trademarks of, Iomega
Corp. All other product and brand names are the property of their
respective companies.
*T
IOMEGA CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
For the Three Months Ended
Sept. 28, Sept. 29,
1997 1996
SALES $431,700 $310,085
COST OF SALES 291,373 228,424
Gross margin 140,327 81,661
OPERATING EXPENSES:
Selling, general and
administrative 72,631 50,323
Research and development 22,571 10,475
Total operating expenses 95,202 60,798
OPERATING INCOME 45,125 20,863
Interest and other income and
expense, net 1,055 71
INCOME BEFORE INCOME TAXES 46,180 20,934
PROVISION FOR INCOME TAXES (16,172) (8,168)
NET INCOME $30,008 $12,766
NET INCOME PER COMMON SHARE $0.22 $0.09
WEIGHTED AVERAGE SHARES
OUTSTANDING 137,035 137,027
IOMEGA CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
For the Nine Months Ended
Sept. 28, Sept. 29,
1997 1996
SALES $1,193,206 $815,711
COST OF SALES 828,141 597,955
Gross margin 365,065 217,756
OPERATING EXPENSES:
Selling, general and
administrative 187,807 122,605
Research and development 54,295 29,008
Total operating expenses 242,102 151,613
OPERATING INCOME 122,963 66,143
Interest and other income and
expense, net (1,219) (5,329)
INCOME BEFORE INCOME TAXES 121,744 60,814
PROVISION FOR INCOME TAXES (42,513) (23,845)
NET INCOME $79,231 $36,969
NET INCOME PER COMMON SHARE $0.58 $0.28
WEIGHTED AVERAGE SHARES
OUTSTANDING 136,379 132,089
IOMEGA CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
Sept. 28, June 29,
1997 1997
ASSETS:
Cash and temporary investments $166,024 $135,402
Trade receivables 264,184 244,110
Inventories 188,424 150,542
Other current assets 51,220 46,860
Total current assets 669,852 576,914
Fixed assets (net) 155,063 139,947
Other assets 3,259 3,448
Total Assets $828,174 $720,309
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable $0 $398
Current lease obligations 5,465 5,438
Accounts payable 206,257 154,355
Other current liabilities 149,050 123,193
Total current liabilities 360,772 283,384
Long-term liabilities 4,437 6,060
Convertible notes 45,683 45,684
Stockholders' equity 417,282 385,181
Total Liabilities and
Stockholders' Equity $828,174 $720,309
*T |
