Analyst/Investors, please contact:
Jim Recob, Iomega Corporation, (801) 332-4430 recob@iomega.com

FOR IMMEDIATE RELEASE

ROY, Utah--(BUSINESS WIRE)--April 13, 2000--Iomega Corporation (NYSE: IOM) today reported net income of $51.8 million, or $0.19 per diluted share, for the first quarter ended March 26, 2000, which includes $20.1 million, or $.07 per diluted share, attributable to a decrease in the valuation allowance for net deferred tax assets. The net income compares to first quarter 1999 earnings of $0.6 million. First quarter 2000 revenue of $344.9 million decreased $41.3 million from $386.2 million in the first quarter 1999. "While I am pleased with our bottom-line results and resolve to maintain our profit focus, I am disappointed with our revenue decline," said Bruce Albertson, Iomega president and chief executive officer. "I think that while there are still challenges ahead, there are significant opportunities for growth. These include leveraging our installed base of 35 million Zip drives and our strong brand recognition within and beyond the PC markets, exploiting the great international market possibilities, and exploring new areas that complement our core competencies. This record quarter will be tough to beat, but we are focused on remaining profitable each and every quarter. At the same time, we plan to invest in people, R&D, and marketing and sales to stop the decline in revenue. In fact, we have already begun with a new TV and print media campaign, a change in our sales strategy and increased sales staff." At December 31, 1999, Iomega had a valuation allowance for net deferred tax assets of $88.0 million. Most of this valuation allowance was established in the third quarter of 1999, due to the significant uncertainty at that time, in light of cumulative losses incurred during 1998 and through the third quarter of 1999, that these net deferred tax assets would be realized. The valuation allowance has been decreased in the quarter by $20.1 million as a result of the pre-tax income recognized in the first quarter of 2000. The decrease in the valuation allowance substantially offsets the income tax provision that otherwise would have been reported at statutory rates. At March 26, 2000, the valuation allowance for net deferred tax assets was approximately $66 million. First quarter 2000 Zip(R) product profit margin (PPM) of $87.9 million increased $36.7 million over the first quarter 1999, while Zip revenue decreased $23.3 million. The Zip PPM increase reflects a favorable product mix with increased sales of Zip 250MB drives and 100MB disks, a favorable mix change with increased aftermarket sales, and decreased Zip manufacturing and operating expenses. Iomega's first quarter 2000 Zip drive shipments were 1.9 million units (excluding licensee shipments), a decrease of 0.5 million units from the first quarter 1999 due to decreased shipments primarily to OEM customers. Zip disk units shipped in the first quarter were 15.3 million, a decrease of 0.8 million units from the first quarter 1999. First quarter 2000 Jaz(R) PPM of $12.5 million increased $15.5 million over the first quarter 1999, while Jaz revenue decreased $11.5 million. The Jaz PPM increase reflects increased disk shipments and lower Jaz manufacturing and operating expenses. Jaz drive shipments in the first quarter 2000 were 75 thousand units, a decrease of 43 thousand units from the first quarter 1999. Jaz disk shipments in the first quarter 2000 were 443 thousand units, an increase of 21 thousand units from the first quarter 1999. First quarter 2000 Clik!(TM) product loss of $16.3 million increased $3.2 million over the first quarter 1999 product loss, while Clik! revenue decreased $3.0 million year-over-year. The first quarter 2000 Clik! product loss included $7.4 million in charges to reflect estimates of the net realizable value of inventory and equipment. After these charges, net assets and commitments related to the Clik! platform were approximately $10 million at March 26, 2000. First quarter 2000 ZipCD(TM) PPM was nearly break-even on revenue of $10.8 million and shipments of 52 thousand units. The fourth quarter 1999 ZipCD product loss was $2.7 million on revenue of $15.0 million and shipment of 95 thousand units. The quarter-to-quarter decrease in ZipCD shipments reflects fourth quarter 1999 seasonality and delays from component suppliers. Iomega's balance sheet and liquidity continued to strengthen during the first quarter of 2000. Cash, cash equivalents, and temporary investments were $273.4 million at March 26, 2000, an increase of $62.5 million from December 31, 1999. Iomega has not borrowed any funds during the past five quarters under its $75 million credit facility and had no outstanding borrowings under this facility at March 26, 2000. About Iomega Iomega Corporation (NYSE: IOM) manufactures and markets the award-winning Zip(R), Jaz(R), and Clik!(TM) drives and disks and markets the ZipCD(TM) CD-RW 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 the Company's opportunities for growth, achievement of profitability in future periods, and planned actions intended to stop revenue declines 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 Zip(R), Jaz(R), Clik!(TM) and ZipCD(TM) storage solutions, the Company's success in redirecting its Clik! product platform for enterprise opportunities and handheld electronic devices, the effect of recently announced price reductions for the Clik! PC Card Drive, the future level of OEM demand for the Company's products, the success of the Company's product cost-reduction activities, the impact of competition from other suppliers of data storage products, the success of the Company in timely production, and marketing of new products, the impact of 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 new marketing initiatives, manufacturing and inventory issues, intellectual property rights, litigation, general economic and/or industry-specific conditions and the other factors described in Iomega's Annual Report on Form 10-K for the year ended December 31, 1999, as 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 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/00q1supp.pdf. In addition, the information provided below is also available at the following location: www.iomega.com/about/investor/00q1pres.pdf. Investors and others without Internet access may contact the company at 1-801-332-3585 or by e-mail to investorrelations@iomega.com. IOMEGA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - QTD (In thousands, except per share data) For the Three Months Ended -------------------------------- Mar. 26, Mar. 28, Dec. 31, 2000 1999 1999 (Unaudited) (Unaudited) --------- --------- --------- SALES $344,897 $386,212 $433,511 COST OF SALES 216,990 292,476 320,084 --------- --------- --------- Gross margin 127,907 93,736 113,427 --------- --------- --------- OPERATING EXPENSES: Selling, general and administrative 65,246 69,941 67,519 Research and development 11,130 20,713 14,870 Restructuring charge 0 0 3,407 --------- --------- --------- Total operating expenses 76,376 90,654 85,796 --------- --------- --------- OPERATING INCOME 51,531 3,082 27,631 Interest and other income and expense, net 1,233 (2,205) (1,381) --------- --------- --------- INCOME BEFORE INCOME TAXES 52,764 877 26,250 PROVISION FOR INCOME TAXES (21,044) (308) (7,364) DECREASE IN TAX VALUATION ALLOWANCE 20,106 0 2,455 --------- --------- --------- NET INCOME $51,826 $569 $21,341 ========= ========= ========= NET INCOME PER COMMON SHARE BASIC $0.19 $0.00 $0.08 ========= ========= ========= DILUTED $0.19 $0.00 $0.08 ========= ========= ========= COMMON SHARES OUTSTANDING 270,448 268,390 269,954 ========= ========= ========= COMMON SHARES ASSUMING DILUTION 281,235 273,087 280,664 ========= ========= ========= PRODUCT REVENUES & PROFIT MARGINS - QTD (In thousands) (Unaudited) For the Three Months Ended -------------------------------- Mar. 26, Mar. 28, Dec. 31, 2000 1999 1999 --------- --------- --------- Revenues Zip $278,517 $301,846 $352,352 Jaz 51,847 63,338 64,911 Clik! 2,054 5,102 1,458 ZipCD 10,778 0 15,046 Ditto 1,223 10,066 742 Other 478 5,860 (998) --------- --------- --------- Total Revenues 344,897 386,212 433,511 Product Profit Margin (Losses) Zip $ 87,941 $ 51,224 $107,021 Jaz 12,463 (2,995) 19,465 Clik! (16,269) (13,029) (59,035) ZipCD (104) (776) (2,676) Ditto (1,727) (1,312) (2,326) Other (636) (5,297) (3,896) --------- --------- --------- Total Product Profit Margin 81,668 27,815 58,553 Common General corporate expenses 30,137 24,733 27,515 Restructuring charge 0 0 3,407 Interest and other income and expense, net (1,233) 2,205 1,381 --------- --------- --------- Income Before Income Taxes $52,764 $ 877 $26,250 ========= ========= ========= IOMEGA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) Mar. 26, Mar. 28, Dec. 31, 2000 1999 1999 -------- -------- -------- (unaudited)(unaudited) ASSETS: Cash and cash equivalents $190,927 $93,964 $172,706 Temporary investments 82,502 0 38,209 Trade receivables (net) 160,340 227,560 188,482 Inventories 84,588 158,018 94,626 Other current assets 45,974 88,608 41,495 -------- -------- -------- Total current assets 564,331 568,150 535,518 Fixed assets (net) 120,665 195,241 137,700 Intangible and other assets 32,468 40,257 34,591 -------- -------- -------- $717,464 $803,648 $707,809 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY: Notes payable $ 1,884 $ 40,101 $ 1,569 Current lease obligations 2,900 3,477 3,973 Accounts payable 111,020 144,201 135,615 Other current liabilities 180,498 140,680 198,993 -------- -------- -------- Total current liabilities 296,302 328,459 340,150 Long-term liabilities 1,058 8,830 1,366 Convertible notes 45,505 45,505 45,505 Stockholders' equity 374,599 420,854 320,788 -------- -------- -------- $717,464 $803,648 $707,809 ======== ======== ======== CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - YTD (In thousands) (unaudited) For the Three Months Ended ----------------------- Mar. 26, Mar. 28, 2000 1999 ----------- ---------- Cash Flows from Operating Activities: Net Income $ 51,826 $ 569 Non-Cash Revenue and Expense Adjustments 24,137 28,793 --------- --------- 75,963 29,362 Changes in Assets and Liabilities: Trade receivables 29,620 6,102 Inventories 10,038 7,114 Other current assets 4,812 (383) Accounts payable (24,595) (16,776) Accrued liabilities (27,786) (10,013) --------- --------- Net cash provided by operating activities 68,052 15,406 --------- --------- Cash Flows from Investing Activities: Purchase of property, plant and equipment (5,867) (8,881) Sale of temporary investments 30,559 0 Purchase of temporary investments (74,852) 0 Net decrease (increase) in other assets 251 (3,647) --------- --------- Net cash used in investing activities (49,909) (12,528) --------- --------- Cash Flows from Financing Activities: Proceeds from sale of Common Stock 1,144 2,681 Payments on notes payable and capitalized lease obligations (1,066) (1,868) Purchase of Common Stock 0 0 --------- --------- Net cash provided by financing activities 78 813 --------- --------- Net Increase in Cash and Cash Equivalents 18,221 3,691 Cash and Cash Equivalents at Beginning of Period 172,706 90,273 --------- --------- Cash and Cash Equivalents at End of Period $ 190,927 $ 93,964 ========= ========= CONTACT: Iomega Corporation, Roy Jim Recob, 801/332-4430 (Analysts/Investors) recob@iomega.com Chris Romoser, 801/332-3678 (Media) romoser@iomega.com