REPEAT/Iomega Announces Second Quarter Restructuring Charge; Expected to Produce Annual Cost Savings of Approximately $40 Million; Company Expects Second Quarter Loss.

ROY, Utah--(BUSINESS WIRE)--June 18, 1999--

Iomega Corporation (NYSE:IOM) today announced that it plans to take a second quarter restructuring charge of approximately $45 million, or $(0.11) per fully diluted share after tax. This charge is part of a plan to improve the Company's operating results and includes:

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--   Previously announced facility closures in San Jose and San Diego,
     California
--   Headcount reductions of approximately 450 regular and temporary
     employees
--   Write-off of assets related to the discontinuance of certain
     development projects
--   Consolidation of Iomega's Nomai operations in France and Scotland

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Approximately $27 million of the charge is non-cash and the remaining $18 million applies to severance-related expenses, lease buyouts and other cash expenses. On April 30, 1999, Iomega announced that it was consolidating its engineering expertise in Roy, Utah, and Longmont, Colorado, and closing its product development, marketing and research and development facilities in San Jose and San Diego, California.

Based on preliminary results-to-date, the Company also announced today that it expects a net loss for the quarter ending June 27, 1999, excluding the restructuring charge, in the range of $(0.05) to $(0.10) per share on sequentially lower revenues. This compares to a reported loss of $(0.13) per share, excluding special charges, in the second quarter of 1998. The expected decline in revenue and earnings is attributable principally to continued weakness in Iomega's Jaz drive and disk sales, the initial delay in shipment of Iomega's recently announced Clik! PC Card drive (which is now shipping), component shortages resulting in lower-than-expected sales of Zip 100 and Zip 250 drives, as well as inventory and asset write-offs expected to be recorded as a result of the lower-than-expected Jaz volumes.

"The restructuring charge that we announced today is expected to position Iomega for improved operating results going forward," said Jodie K. Glore, president and chief executive officer, Iomega Corporation. "The actions we have taken are designed to eliminate the redundancies in our product development, marketing and operations infrastructure and allow us to focus on our core products, such as Zip, and exciting new technologies like Clik!."

A portion of the restructuring charge is expected to result in annual cost savings of approximately $40 million. The Company anticipates a total headcount reduction of approximately 450 regular and temporary employees in California and other U.S. locations.

Iomega cautioned that its actual second quarter results could be higher or lower than the announced range because revenue and operating results can be significantly impacted by sales through distribution and retail channels. Iomega's revenue recognition policy defers recognition of revenue on estimated excess inventory in the distribution and retail channels. The policy identifies excess inventory as the amount of inventory that exceeds these channels' 30-day requirements as estimated by management.

Iomega Corporation (NYSE:IOM) manufactures and markets the award-winning Zip(R), Jaz(R) and Clik!(R) drives and disks 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 related to Iomega taking a second quarter restructuring charge of approximately $45 million, which is anticipated to result in an annual cost savings of approximately $40 million and to position the Company for improved operating results going forward, the Company's anticipated second quarter loss in the range of $(0.05) to $(0.10) per share, and the Company's plans to consolidate facilities, reduce headcount and discontinue certain development projects are forward-looking statements. 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 storage solutions, the success of the Company in reducing costs, the impact of competition from other suppliers of data storage products, the success of the Company in timely developing and ramping production and marketing of new products, the impact of the Company's change to a functional organization and associated management changes, the Company's success in realizing the benefits intended by such organizational change, the timing and impact of headcount reductions and facility consolidations, the Company's ability to maintain stringent quality assurance standards and enhanced customer services, 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, the Company's success in containing or eliminating operating losses from its subsidiary Nomai S.A., intellectual property rights, general economic and/or industry specific conditions and the other factors described in Iomega's Annual Report to Stockholders for 1998 on Form 10-K, filed March 26, 1999 and its most recent quarterly reports filed with the SEC.

Note to Editors: Iomega, Zip, Jaz, and the stylized "i" logo are registered trademarks of, and Clik! is a trademark of, Iomega Corporation. All other products and brand names are the property of their respective owners. For maximum reliability, use only genuine Zip disks featuring the genuine Zip symbol in your Zip drive.