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Non-Tech : Iomega Thread without Iomega -- Ignore unavailable to you. Want to Upgrade?

To: robert read who wrote (304)	7/1/1998 10:33:00 AM
From: s. bateh	Read Replies (3) \| Respond to of 10072

Update: The iom/ingram rebates to dealers has had the desired effects: they have moved "tons" yes "tons" of product....and it has not slowed down. The 10pks, jaz1 externals, starter kits, buz, etc. etc. are flying off the shelves. The cpq/zips are really moving with orders of 1000's on order.....and the big dealers do not even buy cpq from ingram, they go direct!!!!!

To: robert read who wrote (304)	7/1/1998 10:53:00 AM
From: Kevin Linder	Respond to of 10072

Iomega, Nomai, Legal fees and Income statements About a month back I discussed with Tyler Thatcher the cost of the legal battles with Nomai, SYQT and others. He stated that in the first quarter 98 the legal fees were approximately $10 million. One can only suspect that Nomai spent a fair amount also. In my estimation Iomega is getting Nomai for about the cost of four quarters of litigation or a combined(Iomeg a + Nomai) total of 2 quarters litigation costs. Fairly typical in litigation settlements to settle cases for somewhat less than the litigation costs - especially in nuisance suits. In the short run Iomega will end up losing money in the third quarter. These will be because of special merger costs and analysts discount these types of costs. (The reasoning is that these are nonrecurring costs and tax depreciation write-offs.) From the bright side this removes one of the most common reasons critics have said Iomega is a no future company. Management will have to prove that they have a future because of the tremendous foul up this year and the past year. Most of the current layoffs will be coming from the Utah area. At 1,000 people and guessing an average of $20,000 per year salary (my figures) the annual cost savings is $20,000,000. savings on legal fees would be around $30,000,000 a year (assuming Nomai was 2/3 to 3/4 of the legal expenditures.) This would still leave some money left for the Class Action Lawsuit defense and any litigation with SYQT. This means that management has probably cut about $50,000,000 or so out of future costs. Nomai litigation expenses were probably a little less. Less transatlantic flights on their part. The end result will be probably savings in the neighborhood of $60-75 million dollars for the new combined Iomega. These costs were incurred in the past and will not be recurring in the future. Most interesting is the fact that Nomai produces SYQT cartridges. I don't see a merger occurring with SYQT. There is simply to much dilution in the warrants that SYQT has issued to make a merger very attractive.