omega Anticipates First Quarter Loss
Business Wire - March 16, 1998 08:50
%IOMEGA IOM %UTAH %COMPUTERS %ELECTRONICS %COMED V%BW P%BW
ROY, Utah--(BUSINESS WIRE)--March 16, 1998--Iomega Corporation (NYSE:IOM)
announced today that it expects its first quarter 1998 revenue will be relatively flat with first
quarter 1997 revenue.
Additionally, based on preliminary results to date, Iomega expects to report a first quarter loss
in the range of $10 million to $25 million and expects to be cash flow negative. Iomega plans
to announce its first quarter financial results on Thursday, April 16, after the close of the
market.
Iomega cautioned that the estimated loss for the quarter could be higher or lower since
revenue and operating results will be significantly impacted by sales through the distribution
and retail channels in the remaining few weeks of the quarter. Iomega's revenue recognition
policy defers recognition of revenue on estimated excess inventory in the distribution and retail
channels. For this purpose, excess inventory is the estimated amount of inventory which
exceeds these channels' 30 day requirements.
"Our shipments this quarter in all regions are generally lower than we anticipated particularly in
our international aftermarket business," said Kim B. Edwards, Iomega's president and chief
executive officer. "The shortfall in sales combined with over $20 million in incremental
marketing expenses appear to be the main factors contributing to our expected loss. In
addition, we expect Iomega's inventory levels to be up over fourth quarter which will increase
our cash utilization this quarter."
Iomega Corporation manufactures personal read/write storage solutions that help people
manage their stuff -- anywhere. Iomega's products provide consumers with what they want,
when they want it, at a reasonable price. The Company's industry storage solutions, designed
for all types of computer users, include Zip(R) drives and genuine Zip 100 disks; Jaz(R) one-
and two-gigabyte drives and disks; and Ditto(TM) tape backup drives and tape cartridges.
Whether used in homes, business, government and education, or by creative professionals, all
Iomega storage solutions ensure high levels of quality and reliability when using authorized
Iomega media products. Iomega products are available through computer retail stores,
resellers, major distributors and OEMs.
Special Note: The statements in this release related to Iomega's anticipated first quarter sales
levels, anticipated first quarter loss, inventory levels and cash flow 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, the level of demand and acceptance for Iomega's drive and removable
disk products, estimated sell-through data and the estimated excess inventory in the
distribution and retail channels, market responses to advertising campaigns, inventory
management, manufacturing issues, including availability of certain key components that meet
Iomega specifications and quality requirements, product shipment delays, actual marketing
expenses, production costs, competitive factors and pricing considerations, general economic
conditions, including, without limitation, conditions in the Asia/Pacific region and conditions
affecting the computer industry generally, 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, Zip, Jaz, the Iomega logo and the stylized "i" are registered
trademarks of, and Ditto is a trademark of, Iomega Corporation. All other product and brand
names are the property of their respective companies.
CONTACT: Iomega Corporation
Susan T. Stillings, 801/778-4668
stilling@iomega.com
or
Tyler Thatcher, 801/778-4362
thatcher@iomega.com
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