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

FOR IMMEDIATE RELEASE

ROY, Utah--(BUSINESS WIRE)--July 13, 2000--Iomega Corporation (NYSE: IOM) today reported net income of $40.4 million, or $0.15 per diluted share, for the second quarter ended June 25, 2000, which included $15.3 million, or $0.05 per diluted share, attributable to a decrease in the Company's valuation allowance for net deferred tax assets, and also included $2.5 million, or $0.01 per diluted share, attributable to a reversal of restructuring charges previously recorded. This compares to a second quarter 1999 loss of $47.1 million, or ($0.17) per diluted share, which included a pre-tax restructuring charge of $41.9 million, or ($0.10) per diluted share after tax. Second quarter 2000 revenue of $303.6 million compares to second quarter 1999 revenue of $348.8 million "I am very pleased with our third consecutive quarter of profitability, said Bruce Albertson, Iomega president and chief executive officer. "We recently announced several exciting new products that move Iomega beyond the computer room and we intend to leverage the Iomega name in establishing new products, partnerships and alliances with key industry players. We saw continued growth in optical sales of ZipCD during the second quarter and I am delighted to see greater OEM acceptance of the Clik! platform in the digital audio market. During the second quarter, we also expanded our retail focus and experienced a series of significant wins in this channel." "The new Iomega is an energized team dedicated to growing our business profitably," continued Albertson. "You can feel this energy in everything we do from dealer structure, packaging and store displays to new products. Iomega is moving towards a convergence as our new products, multi-channel focus, people, processes, advertising and marketing are beginning to work together, building on our profitability and significant cash position, to fuel the next stage - profitable growth for long-term shareholder value." Second quarter 2000 Zip(R) product profit margin (PPM) of $69.6 million increased $36.7 million over second quarter 1999, while Zip revenue decreased $37.1 million. The Zip PPM increase reflected increased unit sales of Zip 250MB drives and decreased manufacturing and operating expenses. Revenue declined in the second quarter 2000 from the same period last year due to lower Zip drive and disk unit -sales. Iomega's second quarter 2000 Zip drive shipments were 1.6 million units (excluding licensee shipments), a decrease of .6 million units from the second quarter 1999. Zip disk units shipped in the second quarter of 2000 were 14.3 million, a decrease of 2.9 million units from the second quarter 1999. Iomega's OEM unit sales were 50 percent during the second quarter of 2000, essentially flat with second quarter 1999. Cumulative worldwide shipments (including licensee shipments) now exceed 37 million Zip drives and 223 million Zip disks. Second quarter 2000 Jaz(R) PPM of $11.8 million increased $14.0 million over second quarter 1999, while Jaz revenue decreased $27.1 million. The Jaz PPM increase reflected lower Jaz manufacturing and operating expenses. Jaz drive shipments in the second quarter of 2000 were 68 thousand units, a decrease of 54 thousand units from second quarter 1999. Jaz disk shipments in the second quarter of 2000 were 294 thousand units, a decrease of 195 thousand units from second quarter 1999. Second quarter 2000 Clik!(TM)product loss of $3.3 million represented an improvement of $13.5 million over second quarter 1999. Clik! revenue increased $2.6 million year-over-year. Clik! drive shipments during the second quarter 2000 were 26 thousand units, an increase of 22 thousand units over the second quarter 1999. Clik! disk shipments in the second quarter of 2000 were 72 thousand units, an increase of 50 thousand units from second quarter 1999. Second quarter 2000 ZipCD(TM) PPM was $0.7 million on revenue of $24.6 million, an increase of $13.8 million over first quarter 2000. ZipCD drive shipments in the second quarter of 2000 were 120 thousand units, an increase of 68 thousand units from first quarter 2000. During the second quarter of 2000, Iomega decreased its valuation allowance for net deferred tax assets by $15.3 million as a result of the pre-tax income recognized during the quarter. The decrease in the valuation allowance substantially offset the income tax provision that otherwise would have been reported at statutory rates. At June 25, 2000, the valuation allowance for net deferred tax assets was $37.3 million for the U.S. operations and $12.9 million for foreign operations. For the first six months of 2000, Iomega's revenue totaled $648.5 million compared to $735.0 million for the first six months of 1999. Iomega's net income for the first six months of 2000 totaled $92.2 million or $0.33 per diluted share, which included $35.4 million, or $0.13 per diluted share, attributable to a decrease in the Company's valuation allowance for net deferred tax assets, and also included $2.5 million, or $0.01 per diluted share, attributable to a reversal of restructuring charges previously recorded. This compared to a net loss of $46.5 million or ($0.17) per diluted share for the same period in 1999, which included a pre-tax restructuring charge of $41.9 million, or ($0.10) per diluted share after tax. Iomega's balance sheet and liquidity continued to strengthen in the second quarter of 2000. Cash, cash equivalents, and temporary investments of $354 million at June 25, 2000 represented an increase of $80 million from March 26, 2000 and an increase of $265 million from one year ago. 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. Iomega's products help people to save, share, manage and create important information such as spreadsheets, slides, Internet downloads, audio files and personal photographs, 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 1-800-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 future plans for marketing, new products and alliances and future growth and operating results 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, the Company's success in timely producing and marketing its products, 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, 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/00q2supp.pdf. In addition, the information provided below is also available at the following location: www.iomega.com/about/investor/00q2pres.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 STATEMENTS OF OPERATIONS - QTD (In thousands, except per share data) (Unaudited) For the Three Months Ended -------------------------------- June 25, June 27, March 26, 2000 1999 2000 --------- --------- --------- SALES $303,639 $348,781 $344,897 COST OF SALES 183,628 273,020 216,990 --------- --------- --------- Gross margin 120,011 75,761 127,907 --------- --------- --------- OPERATING EXPENSES: Selling, general and administrative 69,254 82,828 65,246 Research and development 15,318 23,085 11,130 Restructuring charge (reversal) (2,497) 41,909 0 --------- --------- --------- Total operating expenses 82,075 147,822 76,376 --------- --------- --------- OPERATING INCOME (LOSS) 37,936 (72,061) 51,531 Interest and other income and expense, net 3,230 (328) 1,233 --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES 41,166 (72,389) 52,764 BENEFIT (PROVISION) FOR INCOME TAXES (16,064) 25,336 (21,044) DECREASE IN TAX VALUATION ALLOWANCE 15,268 0 20,106 --------- --------- --------- NET INCOME (LOSS) $40,370 ($47,053) $51,826 ========= ========= ========= NET INCOME (LOSS) PER COMMON SHARE BASIC $0.15 ($0.17) $0.19 ========= ========= ========= DILUTED $0.15 ($0.17) $0.19 ========= ========= ========= COMMON SHARES OUTSTANDING 270,638 269,115 270,448 ========= ========= ========= COMMON SHARES ASSUMING DILUTION 281,351 269,115 281,235 ========= ========= ========= ====================== =================== ================ PRODUCT REVENUES & PROFIT MARGINS - QTD (In thousands) (Unaudited) For the Three Months Ended -------------------------------- June 25, June 27, March 26, 2000 1999 2000 --------- --------- --------- Revenues: Zip $237,290 $274,383 $278,517 Jaz 37,883 65,003 51,847 Clik! 3,209 627 2,054 ZipCD 24,585 4 10,778 Other 672 8,764 1,701 --------- --------- --------- Total Revenues $303,639 $348,781 $344,897 ========== ========= ========= Product Profit Margin (Loss): Zip 69,615 32,872 87,941 Jaz 11,803 (2,193) 12,463 Clik! (3,257) (16,780) (16,269) ZipCD 656 (2,031) (104) Other (2,406) (9,378) (2,363) --------- --------- --------- Total Product Profit Margin 76,411 2,490 81,668 Common General corporate expenses 40,972 32,642 30,137 Restructuring charge (reversal) (2,497) 41,909 0 Interest and other income and expense, net (3,230) 328 (1,223) --------- --------- --------- Income (Loss) Before Income Taxes $41,166 ($72,389) $52,764 ========= ========= ========= ====================== ====================== =================== IOMEGA CORPORATION CONDENSED STATEMENTS OF OPERATIONS - YTD (In thousands, except per share data) (Unaudited) For the Six Months Ended -------------------------------- June 25, June 27, 2000 1999 --------- --------- SALES $648,536 $734,993 COST OF SALES 400,618 565,496 --------- --------- Gross margin 247,918 169,497 --------- --------- OPERATING EXPENSES: Selling, general and administrative 134,500 152,769 Research and development 26,448 43,798 Restructuring charges (reversal) (2,497) 41,909 --------- --------- Total operating expenses 158,451 238,476 --------- --------- OPERATING INCOME (LOSS) 89,467 (68,979) Interest and other income and expense, net 4,463 (2,533) --------- --------- INCOME (LOSS) BEFORE INCOME TAXES 93,930 (71,512) BENEFIT (PROVISION) FOR INCOME TAXES (37,108) 25,028 DECREASE IN TAX VALUATION ALLOWANCE 35,374 0 --------- --------- NET INCOME (LOSS) $92,196 ($46,484) ========= ========= NET INCOME (LOSS) PER COMMON SHARE: BASIC $0.34 ($0.17) ========= ========= DILUTED $0.33 ($0.17) ========= ========= COMMON SHARES OUTSTANDING 270,543 268,753 ========= ========= COMMON SHARES ASSUMING DILUTION 281,293 268,753 ========= ========= ====================== =================== ================ PRODUCT REVENUES & PROFIT MARGINS - YTD (In thousands) (Unaudited) For the Six Months Ended -------------------------------- June 25, June 27, 2000 1999 --------- --------- Revenues : Zip $515,806 $576,229 Jaz 89,731 128,341 Clik! 5,264 5,729 ZipCD 35,364 4 Other 2,371 24,690 --------- --------- Total Revenues 648,536 734,993 ========= ========= Product Profit Margin (Loss): Zip $157,557 $ 84,096 Jaz 24,266 (5,188) Clik! (19,526) (29,809) ZipCD 552 (2,807) Other (4,770) (15,987) --------- --------- Total Product Profit Margin 158,079 30,305 Common General corporate expenses 71,109 57,375 Restructuring charges (reversal) (2,497) 41,909 Interest and other income and expense, net (4,463) 2,533 --------- --------- Income (Loss) Before Income Taxes $93,930 ($71,512) ========= ========= ====================== ====================== =================== IOMEGA CORPORATION CONDENSED BALANCE SHEETS (In thousands) (Unaudited) June 25, June 27, March 26, 2000 1999 2000 -------- -------- -------- ASSETS: Cash and cash equivalents $278,583 $ 89,281 $190,927 Temporary investments 75,332 0 82,502 Trade receivables 168,716 197,785 160,340 Inventories 75,733 138,400 84,588 Other current assets 24,293 88,923 45,974 -------- -------- -------- Total current assets 622,657 514,389 564,331 Fixed assets (net) 108,882 173,559 120,665 Intangible and other assets 30,446 53,781 32,468 -------- -------- -------- $761,985 $741,729 $717,464 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY: Notes payable $ 0 $ 383 $ 0 Current lease obligations 4,444 4,014 4,784 Accounts payable 104,210 135,883 111,020 Convertible notes 45,505 0 45,505 Other current liabilities 191,977 175,656 180,498 -------- -------- -------- Total current liabilities 346,136 315,936 341,807 Long-term liabilities 781 5,089 1,058 Convertible notes 0 45,505 0 Stockholders' equity 415,068 375,199 374,599 -------- -------- -------- $761,985 $741,729 $717,464 ======== ======== ======== CONDENSED STATEMENTS OF CASH FLOWS - YTD (In thousands) (unaudited) For the Six Months Ended ------------------------ June 25, June 27, 2000 1999 ----------- ---------- Cash Flows from Operating Activities: Net Income (Loss) $ 92,196 ($ 46,484) Non-Cash Revenue and Expense Adjustments 40,116 80,808 --------- --------- 132,312 34,324 Changes in Assets and Liabilities: Trade receivables 22,993 43,902 Inventories 18,893 22,112 Other current assets 4,751 9,135 Accounts payable (31,405) (36,880) Other current liabilities 6,735 1,974 --------- --------- Net cash provided by operating activities 154,279 74,567 --------- --------- Cash Flows from Investing Activities: Purchase of property, plant and equipment (11,238) (25,688) Acquisition of business assets - Syquest 0 (12,093) Sale of temporary investments 66,578 0 Purchase of temporary investments (103,701) 0 Net (increase) decrease in other assets 401 (1,955) --------- --------- Net cash used in investing activities (47,960) (39,736) --------- --------- Cash Flows from Financing Activities: Proceeds from sale of Common Stock 1,241 3,706 Net payments on notes payable and capitalized lease obligations (1,683) (39,529) Purchase of Common Stock 0 0 --------- --------- Net cash used in financing activities (442) (35,823) --------- --------- Net Increase (Decrease) in Cash and Cash Equivalents 105,877 (992) Cash and Cash Equivalents at Beginning of Period 172,706 90,273 --------- --------- Cash and Cash Equivalents at End of Period $278,583 $ 89,281 ========= =========