Iomega Announces Fourth-Quarter Profit of $21.3 Million; Zip Margin Improvements Lead to Profitability.Business Editors ROY, Utah--(BUSINESS WIRE)--Jan. 20, 2000 Iomega Corporation (company, storage) Iomega Corporation - A storage device manufacturer whose major products are the Zip and Jaz removable disk drives and Ditto tape drives. They became popular with an early product called the Bernoulli Box. (NYSE NYSE See: New York Stock Exchange : IOM IOM See: Index and Option Market ) today reported net income of $21.3 million, or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the fourth quarter ended December December: see month. 31, 1999. This compares to earnings of $19.0 million, or $0.07 per diluted share, for the fourth quarter of 1998. Fourth quarter 1999 revenue of $433.5 million was down 13.5 percent from $501.3 million in the fourth quarter of 1998, primarily due to decreased Jaz See Jaz disk. 1. (language) JAZ - An early system on the LGP-30. [CACM 2(5):16, May 1959]. 2. Jaz - Jaz Drive (R) revenue and the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of Ditto(TM) tape products. &uot;I am pleased with our return to profitability during the fourth quarter, and especially pleased that our Zip business achieved near record profitability,&uot; said David Dunn David John Ian Dunn (born December 27, 1979 in Great Harwood, England) is an English footballer who currently plays for Blackburn Rovers as a midfielder. Playing career Blackburn Rovers , chairman of the board, Iomega Corporation. &uot;Significant profit contributions from Zip and continued profitability from Jaz in the fourth quarter exceeded the losses associated with our Clik! platform. During the fourth quarter we made important progress toward achieving our goal of sustained profitability.&uot; &uot;In addition to the success enjoyed by our Zip and Jaz platforms during the fourth quarter of 1999, we expanded our presence in the optical arena with our ZipCD The name of an earlier CD-RW drive from Iomega that was introduced in 1999. See Iomega and Zip disk. platform,&uot; stated Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Albertson, president and COO (Cell Of Origin) See mobile positioning. . &uot;Although our Clik! platform has not achieved the results we were hoping for, we are aggressively redirecting our marketing and pricing value proposition for the Clik! platform by expanding efforts on enterprise opportunities for the Clik! PC Card drive. Additionally, we are focused on the delivery of several OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and products that target applications for a myriad Myriad is a classical Greek name for the number 104 = 10 000. In modern English the word refers to an unspecified large quantity. The term myriad is a progression in the commonly used system of describing numbers using tens and hundreds. of handheld handheld: see personal digital assistant. electronic devices such as MP3 players A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. , digital cameras and personal digital assistants. Overall, we believe our utility-driven hardware and software solutions position Iomega (Iomega Corporation, San Diego, CA, www.iomega.com) A mass storage company founded in 1980 that offers a variety of optical, hard disk and proprietary disk storage devices. In the early 1980s, Iomega introduced the Bernoulli Box, which was the first high-capacity, removable disk for well for the new millennium millennium [Lat.,=1,000 years], the period of 1,000 years in which, according to some schools of Christian eschatology, Christ will reign again gloriously on earth. Belief in the millennium, based on Rev. 20, has recurred in Christianity since the earliest times. .&uot; Fourth quarter 1999 Zip(R) product profit margin (PPM) of $107.0 million represented an increase of $52.7 million year-over-year due primarily to an increased sales mix sales mix See product mix. of Zip 250 MB drives, Zip manufacturing cost reductions and decreased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Iomega's fourth quarter 1999 Zip drive See Zip disk. (hardware, storage) Zip Drive - A disk drive from Iomega Corporation which takes removable 100 megabyte hard disks. Both internal and external drives are manufactured, making the drive suitable for backup, mass storage or for moving files between computers. shipments were 2.7 million units (excluding licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. shipments), a decrease of 11 percent over the fourth quarter of 1998 due to decreased shipments to OEM customers. Fourth quarter 1999 Zip disk A 3.5" removable disk drive from Iomega. Zip disks come in 100MB, 250MB and 750MB varieties, with the latter introduced in 2002 using USB and FireWire interfaces. The 250MB drives, introduced in 1998, also read and write 100MB disks. shipments decreased 9 percent year-over-year. Global shipments to date of Zip drives (including licensee shipments) and disks now exceed 32 million and 193 million, respectively. Fourth quarter 1999 Jaz(R) PPM of $19.5 million represented a decrease of $6.2 million from fourth quarter 1998. Although revenues decrease 46 percent year-over-year, the reduction in PPM decreased only 24 percent, due primarily to cost reductions associated with the second quarter 1999 restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). actions. Fourth quarter 1999 Jaz drive See Jaz disk. (hardware, storage) Jaz Drive - Iomega Corporation's drive which takes removable one or two gigabyte disk cartridges which contain conventional hard disks. shipments of 107 thousand units were down 46 percent compared to the fourth quarter of 1998. Fourth quarter 1999 Jaz disk A removable hard disk drive from Iomega. Introduced in late 1995, Iomega startled the industry with its breakthrough price of $99 for a 1GB removable disk cartridge. Jaz was fairly popular in its niche, and 2GB drives were introduced in 1997. shipments of 516 thousand units were down 51 percent on a year-over-year basis. While fourth quarter 1999 Jaz revenues and drive shipments were essentially unchanged from the third quarter of 1999, the PPM improved significantly. Fourth quarter 1999 Clik!(TM) PPM was negative $59.0 million. This exceeded the fourth quarter 1998 PPM of negative $10.5 million, due primarily to charges of $47.3 million taken in the fourth quarter 1999 to reflect estimates of the net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of inventory and equipment, and accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for related purchase commitments. After these charges, net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and commitments related to the Clik! platform were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19 million on December 31, 1999. Fourth quarter 1999 ZipCD(TM) PPM was negative $2.7 million. Fourth quarter 1999 ZipCD drive shipments were 95 thousand units, representing an increase of 42 thousand units from the third quarter of 1999 when the product was introduced. David Gantt, vice president and general manager of optical products for Iomega stated, &uot;The internal 4x4x24 ZipCD-RW drive sold through the channel very well during the quarter - a solid initial test of the optical business. We began shipping the external ZipCD USB drive A flash memory card that plugs into the computer's USB port. Small enough to hook onto a keychain, it emulates a small disk drive and allows data to be easily transferred from one machine to another. in limited quantities in the fourth quarter and expect to ship the external drive in volume beginning in the first quarter of 2000. Looking forward, we also intend to broaden our optical offerings throughout the year.&uot; Fourth quarter 1999 net income included a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $3.4 million primarily for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs, which was approximately $4.1 million less than previously expected. Fourth quarter 1999 income taxes of $4.9 million, or 18.7 percent of pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. , were lower than amounts that would have been provided at the statutory tax rate as a result of permanent deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). items and a decrease in the deferred tax asset valuation allowance. For all of 1999, revenue totaled $1.5 billion, a decrease from $1.7 billion in 1998, due primarily to lower Jaz(R) and Ditto(TM) revenue partially offset by increased Zip(R) and ZipCD(TM) revenue. 1999 Zip drive and disk shipments increased by 8 percent and 9 percent, respectively, from 1998. Iomega's net loss for the year ended December 31, 1999 was $103.5 million, or ($0.38) per diluted share. This compares with a net loss of $54.2 million, or ($0.20) per diluted share in 1998. Iomega's balance sheet and liquidity continued to strengthen during the fourth quarter of 1999. Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1999 cash and temporary investments were $210.9 million, an increase of $78.1 million and $120.6 million from September September: see month. 26, 1999 and December 31, 1998, respectively. The Company did not borrow Borrow To obtain or receive money on loan with the promise or understanding that it will be repaid. any funds during 1999 under its $75 million credit facility. &uot;Now that we have begun to control our bottom line, our next most important goal is to stop the top-line decline experienced over the past two years and then begin to grow revenues,&uot; said Mr. Albertson. &uot;I think that while there are significant challenges ahead, there are also significant opportunities for growth, including increased Zip penetration within and beyond the PC market, further development of international markets and leveraging our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Mr. Dunn Dunn may refer to: Places
v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to my previous position as non-executive non-executive adj non-executive director → direttore m senza potere esecutivo chairman of the board.&uot; About Iomega Iomega Corporation (NYSE: IOM) manufactures and markets the award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" Zip(R), Jaz(R) and Clik!(TM) drives and disks and markets the ZipCD(TM) CD-RW (CD-ReWritable) The only rewritable CD technology. CD-RW disks look like other CD media, but with close inspection, they have a more polished surface with a very dark blue-gray cast. drives and discs that help people to organize, manage, create, exchange and share their important information. Used in homes, businesses, government, education and by creative professionals everywhere, Iomega storage solutions are the enabling technologies preferred by millions. The Company can be reached at 1-800-MY-STUFF (800-697-8833), or on the Web at http://www.iomega.com. Special Note: The statements in this release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc achievement by the Company of profitability in future periods, efforts to redirect re·di·rect tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re the Company's Clik! product platform, plans to expand the Company's optical product offerings, including volume shipments of the external ZipCD USB drive, and opportunities for growth are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . There are a number of important factors that could cause actual results to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, market acceptance of and demand for the Company's Zip(R), Jaz(R), Clik!(TM) and ZipCD(TM) storage solutions, the Company's success in redirecting its Clik! platform for enterprise opportunities and handheld electronic devices, the success of the Company's recent restructuring efforts, the impact of competition from other suppliers of data storage products, the success of the Company in timely producing and marketing new products, the impact of the Company's change to a functional organization and recent management changes, the Company's ability to maintain stringent quality assurance standards and enhanced customer service, the availability of product components that meet the Company's requirements, the success of the Company's marketing and product cost-reduction activities, manufacturing and inventory issues, production costs, intellectual property rights, general economic and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. industry specific conditions and the other factors described in Iomega's Annual Report to Stockholders for 1998 on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed March 26, 1999 and subsequent quarterly reports filed with the SEC. Copyright (c) 2000 Iomega Corporation. Iomega, Zip, Zip 100, Zip 250, Jaz, Clik! and ZipCD are either registered trademarks or trademarks of Iomega Corporation in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and/or other countries. Certain other product names, brand names and company names may be trademarks or designations of their respective owners. Supplemental financial information regarding product revenue and units, revenue by region, cash conversion days and inventory turns is available at our web site; www.iomega.com/about/investor/supp.pdf. In addition, the information provided below is also available at the following location: www.iomega.com/about/investor/q499pre1.pdf. Investors and others without Internet access See how to access the Internet. may contact the company at 1-801-332-3585 or by e-mail to investorrelations@iomega.com.
IOMEGA CORPORATION
CONDENSED STATEMENTS OF OPERATIONS - QTD
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended
--------------------------------
Dec. 31, Dec. 31, Sep. 26,
1999 1998 1999
--------- --------- ---------
SALES $433,511 $501,288 $356,625
COST OF SALES 320,084 362,361 269,976
--------- --------- ---------
Gross margin 113,427 138,927 86,649
--------- --------- ---------
OPERATING EXPENSES:
Selling, general and
administrative 67,519 81,376 71,773
Research and development 14,870 24,319 17,813
Restructuring charge 3,407 0 20,457
--------- --------- ---------
Total operating expenses 85,796 105,695 110,043
--------- --------- ---------
OPERATING INCOME (LOSS) 27,631 33,232 (23,394)
Interest and other income
and expense, net (1,381) (4,101) (2,601)
--------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES 26,250 29,131 (25,995)
PROVISION FOR INCOME TAXES (4,909) (10,090) (52,351)
--------- --------- ---------
NET INCOME (LOSS) $21,341 $19,041 ($78,346)
========= ========= =========
EARNINGS (LOSS) PER SHARE
BASIC $0.08 $0.07 ($0.29)
DILUTED $0.08 $0.07 ($0.29)
========= ========= =========
COMMON SHARES OUTSTANDING
BASIC 269,954 267,234 269,715
DILUTED 280,664 281,227 269,715
========= ========= =========
====================== =================== ================
PRODUCT REVENUES &PROFIT MARGINS - QTD
(In thousands)
(Unaudited)
For the Three Months Ended
--------------------------------
Dec. 31, Dec. 31, Sep. 26,
1999 1998 1999
--------- --------- ---------
Revenues
Zip $352,352 353,355 274,140
Jaz 64,911 119,543 66,538
Clik! 1,458 445 5,937
ZipCD 15,046 0 8,807
Ditto 742 16,239 2,000
Other (998) 11,706 (797)
--------- --------- ---------
Total Revenue 433,511 501,288 356,625
Product Profit Margin (Losses)
Zip 107,021 54,356 48,059
Jaz 19,465 25,623 11,307
Clik! (59,035) (10,497) (19,700)
ZipCD (2,676) 0 (2,722)
Ditto (2,326) (4,641) (7,329)
Other (3,896) (6,911) (5,342)
--------- --------- ---------
Total Product Profit
Margin 58,553 57,930 24,273
Common
General corporate expenses 27,515 24,698 27,210
Restructuring charge 3,407 0 20,457
Interest and other income
and expense, net 1,381 4,101 2,601
--------- --------- ---------
Income (Loss) Before Income Taxes $26,250 $29,131 ($25,995)
========= ========= =========
====================== =================== ================
IOMEGA CORPORATION
CONDENSED STATEMENTS OF OPERATIONS - YTD
(In thousands, except per share data)
For the Years Ended
--------------------------
Dec. 31, Dec. 31,
1999 1998
----------- -----------
SALES $1,525,129 $1,694,385
COST OF SALES 1,155,556 1,271,451
----------- -----------
Gross margin 369,573 422,934
----------- -----------
OPERATING EXPENSES:
Selling, general and
administrative 292,061 386,304
Research and development 76,481 101,496
Restructuring charges 65,773 0
Purchased in-process
technology 0 11,100
----------- -----------
Total operating expenses 434,315 498,900
----------- -----------
OPERATING LOSS (64,742) (75,966)
Interest and other income
and expense, net (6,515) (7,459)
----------- -----------
LOSS BEFORE INCOME TAXES (71,257) (83,425)
BENEFIT (PROVISION) FOR
INCOME TAXES (32,232) 29,203
=========== ===========
NET LOSS ($103,489) ($54,222)
=========== ===========
LOSS PER SHARE
BASIC ($0.38) ($0.20)
DILUTED ($0.38) ($0.20)
=========== ===========
COMMON SHARES OUTSTANDING
BASIC 269,294 265,286
DILUTED 269,294 265,286
=========== ===========
PRODUCT REVENUES &PROFIT MARGINS - YTD
(In thousands)
(unaudited)
For the Years Ended
-------------------------
Dec. 31, Dec. 31,
1999 1998
------------ ----------
Revenues
Zip $1,202,609 $1,183,020
Jaz 259,792 416,885
Clik! 13,126 2,125
ZipCD 23,857 0
Ditto 18,903 81,074
Other 6,842 11,281
--------- ---------
Total Revenue 1,525,129 1,694,385
Product Profit Margin (Losses)
Zip 238,994 150,702
Jaz 25,791 4,746
Clik! (108,572) (37,052)
ZipCD (8,416) 0
Ditto (13,905) (14,309)
Other (20,231) (9,015)
--------- ---------
Total Product Profit Margin 113,661 95,072
Common
General corporate expenses 112,630 159,938
Restructuring charges 65,773 0
Purchased in-process technology 0 11,100
Interest and other income and
expense, net 6,515 7,459
--------- ---------
Loss Before Income Taxes (71,257) (83,425)
========= =========
IOMEGA CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)
Dec. 31, Dec. 31, Sep. 26,
1999 1998 1999
-------- -------- --------
ASSETS: (unaudited)
Cash and temporary investments $210,915 $ 90,273 $132,801
Trade receivables 188,482 233,662 187,975
Inventories 94,626 165,132 132,136
Other current assets 41,495 95,047 45,226
-------- -------- --------
Total current assets 535,518 584,114 498,138
Fixed assets (net) 137,700 208,115 159,071
Intangible and other assets 34,591 37,930 40,629
-------- -------- --------
$707,809 $830,159 $697,838
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable $ 1,569 $ 40,101 $ 1,500
Current lease obligations 3,973 4,307 2,963
Accounts payable 135,615 160,977 162,351
Other current liabilities 198,993 152,843 183,950
-------- -------- --------
Total current liabilities 340,150 358,228 350,764
Long-term liabilities 1,366 9,510 3,735
Convertible notes 45,505 45,655 45,505
Stockholders' equity 320,788 416,766 297,834
-------- -------- --------
$707,809 $830,159 $697,838
======== ======== ========
CONDENSED STATEMENTS OF CASH FLOWS - YTD
(In thousands)
For the Years Ended
-----------------------
Dec.31, Dec. 31,
1999 1998
----------- ----------
Cash Flows from Operating Activities:
Net Loss ($103,489) ($ 54,222)
Non-Cash Revenue and Expense
Adjustments 182,555 88,325
--------- ---------
79,066 34,103
Changes in Assets and Liabilities:
Trade receivables 44,557 54,229
Inventories 62,313 84,335
Other current assets 3,254 (6,594)
Accounts payable (30,585) (108,324)
Accrued liabilities 57,925 (61,137)
--------- ---------
Net cash provided by (used)
in operating activities 216,530 (3,388)
--------- ---------
Cash Flows from Investing Activities:
Purchase of property, plant and
equipment (46,814) (94,775)
Purchase of Nomai S.A., net of
cash acquired 0 (41,902)
Acquisition of business assets -
Syquest (12,093) 0
Sale of temporary investments 0 36,319
Purchase of temporary investments (38,209) 0
Net increase in other assets (90) (2,943)
--------- ---------
Net cash used in investing
activities (97,206) (103,301)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from sale of Common Stock 5,216 5,283
Net proceeds from (payments on) notes
payable and capitalized lease
obligations (42,107) 32,222
Purchase of Common Stock 0 (465)
--------- ---------
Net cash (used in) provided by
financing activities (36,891) 37,040
--------- ---------
Net Increase (Decrease) in Cash
and Cash Equivalents 82,433 (69,649)
Cash and Cash Equivalents at
Beginning of Period 90,273 159,922
--------- ---------
Cash and Cash Equivalents at
End of Period $ 172,706 $ 90,273
========= =========
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