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

To: sheila rothstein who wrote (53377)	4/22/1998 7:53:00 AM
From: Philip J. Davis	Read Replies (3) \| Respond to of 58324

Just woke up this morning after an exhausting day at the shareholder's meeting. I noticed that Michael has already informed the thread about the most important elements of the meeting. I'll merely add some more detail and comment on what I saw. Of course, I took notes as best I could, so please forgive me if I missed some element of the meeting or if I mis-characterize management's answers. My thoughts: 1) The OEM Clik! drive on display was incredibly small. Just like Michael said. I brought a camera with me and took pictures of the display. As soon as they are developed, I'll scan them and post them for all to see. They wouldn't let me, however, take pictures of the OEM drive. 2) I had tried to create a diversion with my picture taking so Michael could swipe an OEM drive, or at least a Clik! disk. No such luck. <G> 3) Each of the heads of the three divisions spoke at length about their area of responsibility. I was, of course, most interested when Fred Forsyth, head of the Mobile Products Division (Clik!) spoke. I heard him mention the NEC/Clik! license deal, almost in passing. Unless you were really listening, you would have missed it. 4) David Dunn told the audience that he and another board member traveled to NY and interviewed several head hunter firms in order to find a new CEO. I believe that he said they had already chosen a firm, but I can't remember for sure. 5) A little old lady asked what I thought was one of the best questions. She asked if the stock split was a mistake. David Dunn admitted that while they never expected the stock price to go into the single digits, that yes, the stock split was a mistake. 6) One gentleman asked why Iomega hadn't taken a mere $7 million from reserves and added them to earnings, since if they had, IOM would have made the numbers on Jan 22. David Dunn replied that had someone suggested that, they would have been fired on the spot. Len Purkis chimed in as well, saying that doing that would have been unethical. 7) A room next to the meeting room contained several displays of Iomega products. There were displays for Clik!, Buz (with Jaz 1GB and Jaz 2GB), Recordit (with Zip and Zip Plus), Ditto Max and Ditto Max Pro. All the displays were very impressive. I was most impressed with the Clik! display, of course. 8) One gentleman <g> asked whether the Zip PP and Zip SCSI drives would be phased out in favor of ZipPlus, so that Iomega could concentrate instead on just one Zip product line in order to reduce production costs. Ed Briscoe, head of the Personal Products Division (Zip) responded that they were already considering this. The Autodetect technology contained in the ZipPlus adds to customer value, since the drive is easier to install, more flexible, more portable, and faster. This decision would be made, of course, at the appropriate time. Regards, Philip

To: sheila rothstein who wrote (53377)	4/22/1998 9:54:00 AM
From: Jock Hutchinson	Respond to of 58324

Given IOM's current yearly growth rate of 13 percent in revenues, it will take IOM exactly fifteen years to become that 10 billion dollar company with their current product mix. With negative cash flow, they have very little money to spend on R&D to improve their product mix, except for shipping some prototypes. And the one product they do have a corner on is seeing significant price erosion and further competition for market share. Under current circumstances, IOM could skyrocket all the way to ten. But by the time when IOM supposedly can return to profitability, the SONY bear will have arrived, and other products will have appeared on the horizon. That Sony bear operates on net margins that are about one-third the size of IOM's, and SONY operates more efficiently. Thus IOM can continue to have its unit sales continue to grow while its revenues decline--a very likely outcome. But enough about the near-term future. The key to a company's long-term future will be its balance sheet and ability to develop new products in the movable storage field. IOM just does not have the muscle to compete with giants such as Sony. An installed base of 12 million drives can easily become an installed base of 12 million obsolescent drives as we move into various types of CD storage that puny R&D budgets of 3 percent can't hack. This is a sad one-time wonder of a company whose CEO still can't predict next quarter's revenues, and now it seems can't do any better than come within than a 33% range of guessing gross margins. Does IOM really expect the street to believe that a projected wait of a year for a new CEO is a positive factor?. I have heard close to a thousand CC's over the years, and quite frankly I never as many "You knows" coming from any company's CEO as I heard from Mr. Sierk. Verbigeration is not the sort of quality I am looking for in a turn around leader.