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

To: tom lenaerts who wrote (44661)	1/22/1998 10:25:00 PM
From: steve patler	Respond to of 58324

Just finished conf. call. BTW I have owned IOM stock for almost 3years now. My impressions- Unit demand for zip is still there and growing. Mix of units is moving faster to oem. This fact has 2 main effects -lower margins & small tie ratios. Margins this quarter are great mainly because no material price reductions while at the same time costs have declined. The company believes that in order to accelerate revenue growth (increase tie ratios) the public needs to know about the uses of zip drives and disks, that means increased marketing and advertising. Unit capacity of zip is at 20m per year rate now. Inventory at 8-9 week level in channel . However they reserve anything in excess of 4 week, so not income in currrent quarter. Costs probably won't go down rapidly until drives become more integrated and probably won't happen until 2nd half of 1998. Jaz 2 has backlog but high pricing will probably limit demand in near term . KE said we will make money on all of our drives (high cost =high price) (implying syquest etc. doesn't make money on drives) internal notebook zips will not be standard equip or oem'd until the smaller version comes out 2nd half of this year. I believe that internal notebook zip has potential for substantial revenue end of this year and next because tie ratios should be outstanding on these. Asia accounts for less than 10% . but apparently KE anticipated large growth from this area prior to current economic conditions there. but limited asia downside as less than 10%of revenue. Overall- a pretty good quarter nice unit growth quarter to quarter and year over year. Per unit Tie ratios are declining and this is impacting revenue growth. Apparently for the first time in recent memory the company can produce more product than it is selling. To increase demand and the likelihood of becoming a standard Iomega is launching marketing blitz. This company is the leader in a fast growing area -removable storage. Unit growth should continue as will top line growth. Although 50-100 % growth may not be acheivable in 1998, when the market is pricing the stock at 20PE on historical and 15PE on current year earnings the stock is a bargain. If the company were to be meeting the most optimistic expectations of the analysts who follow the company, it would be selling at a 50-60PE. This company is a takeover target at $9.