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

To: RetiredNow who wrote (53039)	4/19/1998 1:18:00 AM
From: Andrew Shih	Read Replies (1) \| Respond to of 58324

>> They put the positive spin on it, saying that OEM sales as a percentage of total went up to 50%. What they neglected to mention was that the increase to 50% was due to retail sales having decreased dramatically. OEM sales actually have stayed the same as last quarter. << I think this is to be expected. I personally believe that all future gains will be at the OEM level. The annoucement that ATAPI drives are to be sold at retail does help. As for OEM sales slowing, it is simply not true. If they had the same number of OEM drive sales as last quarter, that is positive, since the number of computers sold in the 1Q is far lower than 4Q... -Andrew

To: RetiredNow who wrote (53039)	4/19/1998 1:18:00 AM
From: Rational	Read Replies (1) \| Respond to of 58324

Mindmeld: Thanks. Good analysis. I agree with you that only a partial compensation of decreased retail sales with increased OEM sales was the main beast. If this shift becomes a trend and helps make the ZIP a standard, then an increase in volume will perhaps make up for the reduced margin. However, I am concerned that the shift to OEM sales did not increase the revenue this quarter. The stock was beaten badly for this reason. If the trend you are talking about continues, then it will be worrisome. But, the luster of Clik! (even if it does not add to the bottom line soon) can build up the sentiment for IOM -- just think about the internet stocks for which no finance valuation model will work at this time. I like your depth of financial analysis. One should keep in mind, however, that the herd action in the market is often driven by euphoria for technological innovations. Good night! Sankar

To: RetiredNow who wrote (53039)	4/19/1998 1:27:00 AM
From: Rocky Reid	Read Replies (1) \| Respond to of 58324

>>What they neglected to mention was that the increase to 50% was due to retail sales having decreased dramatically.<< Which is exactly the point I've been trying to make. The retail Zip slowdown is now 2 Quarters old, and this should serve as an extreme warning to all Iomaniacs. The slowdown in retail Zips is by itself responsible for the plunge in profits. Since Iomega is probably losing money on every OEM Zip sold, retail Zips and their tie ratios are the key to the future of Iomega. In the CC, Iomega says they are shifting their marketing focus to in-store promotions. They know what is on the line. And Sony is about to address this issue directly with their HiFi drive. Iomega is hurting bad enough right now without Sony in the mix. Does anyone here really actually think that retail Zip sales, and the resulting Iomega profits, won't erode further when HiFi becomes available? Stop kidding yourselves.

To: RetiredNow who wrote (53039)	4/19/1998 5:12:00 AM
From: Dale Stempson	Read Replies (1) \| Respond to of 58324

A couple of comments mindmeld: >>> However, in the CC, they said that profit would have been better if they hadn't spent $20 MM on incremental advertising during the quarter. O.K. So that gets us back up to $1.4 MM (20-18.6) they should have earned. <<< In your scenario, you should have subtracted the ad expense from Before Tax Income: (29-20) = $9 MM loss before taxes or roughly a $5.5 MM Net Loss after adding the Tax Benefit. >>> OEM sales actually have stayed the same as last quarter. This is bad news. <<< If you take into account the significant seasonal factor, one could argue that OEM penetration actually improved even though unit sales stayed flat. Regards - Dale