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

FOR IMMEDIATE RELEASE

ROY, Utah, October 12, 2000 ( Iomega Corporation (NYSE: IOM) today reported net income of $55.4 million, or $0.20 per diluted share, for the third quarter ended September 24, 2000, which included $22.8 million, or $0.08 per diluted share, primarily attributable to a decrease in the Company's valuation allowance for net deferred tax assets, and $2.3 million, or $0.01 per diluted share, attributable to a pretax reversal of restructuring charges previously recorded. This compares to a third quarter 1999 loss of $78.3 million, or ($0.29) per diluted share, which included a pre-tax restructuring charge of $20.5 million, $12.7 million in other charges related to inventory and equipment write-downs, and an increase of $51.3 million in the Company's valuation reserve for net deferred tax assets.

Third quarter 2000 revenue of $320.5 million decreased $36.1 million from the third quarter of 1999. Revenue declined $20.2 million in Europe as sales of the Company's U.S. dollar-priced products became adversely affected due to the weaker euro. The Americas revenue declined $10.4 million, mainly due to a decline in Zip( drive sales to OEM customers and a decline in Jaz( revenue. Revenue in Asia declined $5.5 million primarily due to decreases in sales in Japan and Taiwan. While third quarter 2000 revenue declined, the gross margin of $130.8 million was up $44.1 million, or over 50 percent, from third quarter 1999 gross margin of $86.6 million (excluding restructuring charges).

"We are excited to be reporting our fourth consecutive quarter of profitability", said Bruce Albertson, Iomega president and chief executive officer. "Profitability in each of the first three quarters of 2000 has been driven by significantly improved gross margins and reduced costs compared with the same periods last year. While there are clearly significant revenue challenges in Europe and Asia, there are signs of revenue strength in the Americas relating to the aftermarket business. We expect to benefit from new products, new distribution, merchandising and advertising in the fourth quarter. Sustainable, profitable growth is our number one priority and our newest products, HipZip and Fotoshow, show our commitment to develop new growth opportunities in new markets."

Third quarter 2000 Zip( product profit margin (PPM) of $87.1 million increased $39.0 million over third quarter 1999, while Zip revenue decreased $26.8 million. The Zip PPM increase reflected a favorable product mix with continued increased unit sales of Zip 250MB drives and decreased manufacturing and operating expenses. Revenue declined in the third quarter 2000 from the same period last year primarily due to lower Zip drive unit sales to OEM customers partially offset by increased after-market sales. Iomega's third quarter 2000 Zip drive shipments were 1.7 million units (excluding licensee shipments), a decrease of .7 million units, from the third quarter 1999 primarily due to lower OEM sales. Zip disk units shipped in the third quarter 2000 were 14.8 million, an increase of .8 million units from the third quarter 1999. Iomega's Zip drive unit sales to OEM customers were 46 percent of total Zip drive shipments during the third quarter 2000, which was down from 56 percent in the third quarter 1999. Cumulative worldwide shipments (including licensee shipments) now exceed 38 million Zip drives and 240 million Zip disks.

Third quarter 2000 Jaz( PPM of $9.8 million decreased $1.5 million over third quarter 1999, as Jaz revenue decreased $31.7 million. The decrease in Jaz revenue, which corresponds to over 85 percent of the total third quarter decline, was expected due to increased availability of replacement products and changing customer requirements. The Jaz PPM decrease reflected decreased unit sales partially offset by lower Jaz manufacturing and operating expenses. Jaz drive shipments in the third quarter of 2000 were 67 thousand units, a decrease of 43 thousand units from third quarter 1999. Jaz disk shipments in the third quarter of 2000 were 272 thousand units, a decrease of 270 thousand units from third quarter 1999.

Third quarter 2000 Iomega CD-RW PPM of $2.1 million increased $4.8 million over third quarter 1999 as revenue increased $25.6 million. Iomega CD-RW drive shipments in the third quarter of 2000 were 193 thousand units, an increase of 140 thousand units from the third quarter of 1999 when the first Iomega CD-RW product was introduced. Iomega has since introduced additional internal and external CD-RW drives to its product line.

Third quarter 2000 PocketZip(tm) (formerly Clik!) product loss of $4.9 million represented an improvement of $14.8 million over third quarter 1999. Third quarter 2000 PocketZip revenue decreased $2.9 million from the third quarter 1999 primarily due to an increase in sales mix of OEM unit sales. PocketZip drive shipments during the third quarter 2000 were slightly higher than the third quarter 1999. The HipZip(tm) digital audio player was launched the last week of the third quarter; accordingly, only limited revenue is reflected in the quarterly results. HipZip plays music stored on Iomega's PocketZip 40MB disks, radically lowering the cost of creating portable personal music collections. HipZip is expected to have an effect on revenue in the fourth quarter.

During the third quarter of 2000, Iomega decreased its valuation allowance for net deferred tax assets by $22.8 million primarily as a result of the pre-tax income recognized during the quarter. At September 24, 2000, the valuation allowance for net deferred tax assets was $15.4 million for the U.S. operations and $14.0 million for foreign operations.

For the first nine months of 2000, Iomega's revenue totaled $969.0 million compared to $1,091.6 million for the first nine months of 1999. Iomega's net income for the first nine months of 2000 totaled $147.6 million or $0.53 per diluted share, which included $58.1 million, or $0.21 per diluted share, primarily attributable to a decrease in the Company's valuation allowance for net deferred tax assets, and $4.8 million, or $0.02 per diluted share, attributable to pre-tax reversals of restructuring charges previously recorded. This compared to a net loss of $124.8 million or ($0.46) per diluted share for the same period in 1999, which included pre-tax restructuring charges of $62.4 million, other charges of $19.7 million related to inventory and equipment write-downs, in addition to an increase in the net deferred tax valuation allowance of $51.3 million.

Iomega's balance sheet and liquidity continued to strengthen in the third quarter of 2000. Cash, cash equivalents, and temporary investments of $406.9 million at September 24, 2000 represented an increase of $53.0 million from June 25, 2000 and an increase of $274.1 million from the end of the third quarter of 1999. On September 8, 2000, Iomega announced that its Board of Directors authorized the repurchase of up to $150 million of the Company's Common Stock from time to time on the open market or in privately negotiated transactions. The Company purchased 400,000 shares of stock during the quarter. The Company has also called for redemption on October 23, 2000, of all $45.5 million of the Company's outstanding 6.75% convertible subordinated notes due March 15, 2001. The note redemption and any stock repurchases will be funded using the Company's existing cash, cash equivalents and temporary investments.

About Iomega
Iomega Corporation (NYSE:IOM) manufactures and markets the award-winning Zip(, Jaz( and PocketZip( drives and disks, the HipZip(tm) digital audio player, the Fotoshow(tm) digital image center and Quik Sync 2 software; Iomega also markets Iomega CD-RW drives and discs. Iomega's products help people to save, share, manage and create important information such as Internet downloads, audio files, personal photographs, spreadsheets, and slides, while protecting that content from viruses and hackers. Used in homes, businesses, government and educational facilities and by creative professionals everywhere, Iomega storage solutions are the enabling technologies preferred by millions. The Company can be reached at 1-888-4-IOMEGA (888-446-6342), or on the Web at http://www.iomega.com.

Special Note: The statements in this release relating to future growth and operating results and expected benefits from new products, new distribution, merchandising and advertising 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, including retail and OEM market acceptance of and demand for the Company's existing and new products, general market demand for PCs and consumer electronics products, the Company's success in timely producing and marketing its products and expanding its product offerings to include consumer electronics products targeted beyond the PC market, ability to maintain stringent quality assurance standards and enhanced customer service, availability of critical product components, success of the Company's new marketing initiatives, manufacturing and inventory issues, intellectual property rights, competition, 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, and its most recent quarterly reports filed with the SEC.

Copyright (c) 2000 Iomega Corporation. Iomega, Zip, Jaz, PocketZip, HipZip and Fotoshow 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.