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

To: Michael Coley who wrote (8677)	3/31/1999 10:07:00 AM
From: Michael Coley	Read Replies (1) \| Respond to of 10072

I just increased my position 50%. That brings my average cost per share down to about $6.50. Looking back a year or two from now, I think I'll be very glad that I made this additional purchase. - Michael Coley - bible-reading.com

To: Michael Coley who wrote (8677)	3/31/1999 1:47:00 PM
From: Herb Fuller	Read Replies (1) \| Respond to of 10072

Mike , >>> Re: Before I post my revenue and earnings analysis and estimates <<< Please factor in the reported $40 million that Iomega used to pay off their short term debt today . Iomega could not have had a bad 1st quarter if they were able to spare the cash to pay off this debt unless they reduced their inventories and I doubt that . Herb

To: Michael Coley who wrote (8677)	3/31/1999 8:25:00 PM
From: Michael Coley	Read Replies (4) \| Respond to of 10072

RE: Detailed Q1 Revenue and Earnings Estimates Okay, here are my estimates and the detail and assumptions behind them. First, the top and bottom line: Revenues: $402 million Gross Margin: 25% Earnings: $1 million EPS: 0.00 The numbers behind the revenues: I'm estimating Zip retail unit sales of about 1 million units. This is about 10% less than Q3 98 levels, and reflects slow computer related sales in Q1, inability to get Zip250 to market in quantity, and little effect from the price drops late in the quarter. I'm anticipating the revenue per retail drive to Iomega dropped from about $90 to about $80. That's $80 million in retail Zip sales. I'm predicting that OEM sales will be about 1.75 million units. This assumes that worldwide Q1 PC sales drop almost 20% to slightly below Q3 levels and that Iomega increases their OEM penetration from 7.1% in Q4 to 7.8% in Q1. I'm estimating that revenue per OEM drive is about $49. That's $86 million in OEM Zip drive sales, or $166 million in total Zip drive sales. For Zip disks, I'm anticipating a drop in the tie rate and total Zip disk revenues of about $99 million. I'm anticipating a drop because of the supply constraints with Zip250 disks. I'm estimating Jaz unit sales at 180,000, roughly halfway between Q3 and Q4 levels. I'm estimating that average revenue per Jaz drive dropped slightly to about $275 per drive. That's about $50 million in Jaz drive sales. For Jaz disks, I'm anticipating tie rates to remain fairly constant and revenues to be about $63 million. I'm estimating Ditto at $15 million in sales and Clik, Buz, and all other items at about $10 million in sales. Add it all up, and that's where I came up with $402 million in revenues. The numbers behind the gross margin: I'm anticipating that gross margins for OEM Zip, Zip disks, Jaz drives, Jaz disk, and other products all remain roughly equal to their Q4 levels. Retail zip drives are the only products I anticipate a reduction in margins. I expect total gross margin to be about $100 million, or 25% of sales. The numbers behind the earnings: I'm estimating SG&A to be roughly $75 million, between Q3 and Q4 levels. I'm estimating R&D to be $24 million, just like Q3 and Q4. Given the estimated gross margin of $100 million above and $99 million in operating expenses, that leaves about $1 million for earnings. Roughly a break-even quarter. FWIW, my current estimates for Q2-Q4 are revenues of $469, $519, and $629 million; gross margins of 27%, 29%, and 28%; earnings of $17, $29, and $38 million; and EPS of 0.06, 0.10, and 0.14. Full year, that's revenues of $2 billion, gross margin of 27.5%, earnings of $86 million, and EPS of 0.31. (Note that there could be rounding errors--my spreadsheet has higher precision than indicated here. Also, I should point out that these are just my estimates based on my assumptions--changing any of the assumptions can drastically impact the results.) - Michael Coley - bible-reading.com