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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: Xpiderman who wrote (44553)	1/22/1998 6:49:00 PM
From: Rocky Reid	Read Replies (2) \| Respond to of 58324

Pay careful attention to some of the figures in the Earnings Report: "Sales of Zip and Jaz, the company's two key high capacity removable data storage products, grew 48 percent during fourth quarter 1997 versus the year-ago quarter, the company said. " 48% growth shows alarming signs of slowing down year to year of these core revenue generators. 48% Zip growth will not make it a "Standard" when it's inclusion rate is only about 5%. "Ditto tape product business declined in the fourth quarter by 28 percent year-over-year to $28 million from $39 million." Ditto continues its revenue decline, evidently being hurt by other tape competitors, and large capacity drives like Jaz, SparQ, and Syjet. "Sales in Iomega's Americas region rose 23 percent to $301 million" 23% Growth in its most important market is a drastic reduction from last year. Expect this year to be even worse. "Iomega said it had record revenue of $547 million, a 38 percent rise over fourth quarter 1996 revenues. " The EPS would have been even worse had Iomega not been able to improve their Gross Margin to 33% (Good Call, Gary). However, year to year revenue growth of 38%, while impressive to most companies, cannot be justified with a PE of 36. Not while the growth rate has a very clear pattern of slowing markedly. "Selling, general and administrative expenses as a percentage of sales increased to 19.0 percent, or $104 million, for the fourth quarter of 1997 as compared to fourth quarter 1996 SG&A expenses of $68 million, or 17.2 percent of sales. << Have they applied the costly Super Bowl ads expenses to this past Q, or have they reserved those expenses for this 1st Q? Just thoughts from an Iomega skeptic.