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

FOR IMMEDIATE RELEASE

Iomega Reports Fourth Quarter 2001 Profit

SAN DIEGO, January 17, 2002- Iomega Corporation (NYSE: IOM) today reported net income of $3.9 million, or $0.07 per diluted share, for the quarter ended December 31, 2001. This net income included a pre-tax restructuring charge of $4.6 million. This compares to fourth quarter 2000 net income of $22.0 million, or $0.41 per diluted share, which included $13.9 million attributable to a decrease in the Company's valuation allowance for net deferred tax assets. Excluding restructuring charges, operating income for the fourth quarter of 2001 was $9.4 million, which compares to $10.4 million in the same period a year ago.

Fourth quarter 2001 revenue of $189.9 million decreased $141.2 million compared to the fourth quarter of 2000, primarily due to decreased Zip®, Jaz® and CD-RW revenues. The fourth quarter 2001 gross margin percentage of 33.4% was essentially flat with the prior year, while fourth quarter operating expenses were cut by 46%, from $100.6 million in fourth quarter 2000 to $54.1 million this year, excluding restructuring charges.

"We have made significant progress in our restructuring initiatives and reorganization, but we still have a lot of challenges and work ahead of us," said Werner Heid, president and CEO, Iomega Corporation. "Our operating results in the fourth quarter indicate that our restructuring efforts are beginning to bear fruit. While we continue to focus on improving our operational efficiencies, the challenge ahead of us will be to generate sustained profitable growth. We are focused on building upon our profitable core Zip product line and expanding our position in external CD-RW solutions in order to reverse the revenue decline. We are also putting in place initiatives to broaden Iomega's product line to expand on our position as a leading global provider of solutions for the storage, sharing and protection of digital valuables. I appreciate the dedication and commitment we are receiving from our employees, customers and suppliers as we remain focused on our goal of generating long-term shareholder value."

The $4.6 million in restructuring charges included $2.1 million in severance resulting from reductions in workforce in the US and Europe and $2.5 million primarily associated with lease cancellations and asset write-downs as a result of the Company's decision to outsource distribution and logistics in Europe.

Fourth quarter 2001 Zip revenue of $145.0 million decreased $76.6 million from fourth quarter 2000 revenues of $221.6 million. Iomega's fourth quarter Zip drive shipments were 1.2 million units, a decrease of 0.6 million units when compared to the fourth quarter 2000. Fourth quarter Zip disk shipments were 7.4 million units, a decrease of 3.0 million units when compared to the fourth quarter 2000. Zip drive unit sales to OEM customers represented 52% of total unit shipments in the fourth quarter, which compares to 42% in the fourth quarter 2000. Fourth quarter 2001 Zip gross margin percentage of 43% compares to 41% in the same period a year ago, reflecting an improved media mix and lower costs. Improved margins and significantly lower expenses helped to mitigate the impact of the drop in sales, resulting in a fourth quarter 2001 Zip product profit margin (PPM) of $41.6 million compared with $54.9 million in the fourth quarter 2000.

Fourth quarter 2001 Jaz revenue of $11.5 million decreased $25.7 million from the fourth quarter 2000 revenue of $37.2 million. Jaz PPM of $2.7 million decreased $7.3 million when compared to fourth quarter 2000 PPM of $10.0 million. The year-over-year decrease in Jaz revenues and PPM is a result of the Company's decision to discontinue the Jaz product line.

Fourth quarter 2001 CD-RW revenue of $24.0 million decreased $30.0 million from fourth quarter 2000 revenue of $54.0 million. The lower revenue in the fourth quarter primarily represents the Company's decision to exit the internal CD-RW drive business. Fourth quarter 2001 CD-RW product loss of $7.7 million compares to a product loss of $4.3 million in the fourth quarter 2000. The increased product loss in the quarter was primarily due to costs associated with price reductions on models that are being phased out.

Revenue for the full year 2001 of $834.3 million decreased $465.9 million when compared to revenue of $1.3 billion in 2000. Net loss for the full year 2001 of $93.3 million, or ($1.74) per diluted share, compares to net income of $169.6 million, or $3.07 per diluted share, in 2000. Excluding restructuring and non-restructuring charges, the pre-tax income for the full year 2001 was $9.9 million, which compares to $164.9 million in 2000. Restructuring and non-restructuring charges recorded in 2001 and 2000 were $116.0 million and $2.6 million, respectively.

The Company's cash, cash equivalents, and temporary investments balance at December 31, 2001 was $329 million with no long-term debt. During the fourth quarter of 2001, the Company repurchased 1.35 million shares of its common stock for approximately $9.3 million. Cumulative shares repurchased under the buyback program announced on September 8, 2000, are 2.92 million shares for $24.8 million through the end of the fourth quarter 2001.

Please refer to the attached supplemental information schedule for unit information by product line and revenue by region.

Conference Call Information

As previously announced, the company will hold a conference call begining at 4:30 P.M. EST today to discuss Iomega's fourth quarter results. A simultaneous webcast of the conference call and replays for two weeks will be available at http://www.iomega.com.

Reverse Stock Split

All share and per share information included in this release gives retroactive effect to the one-for-five reverse stock split effected as of the close of business on September 28, 2001.

About Iomega

Iomega Corporation is a global leader in reliable portable data storage. Iomega's award-winning storage products include the popular Zip® 100MB and 250MB drives, the high-performance Peerless™ drive system with 10GB and 20GB disks, and external CD-RW drives. Iomega QuikSync™ automatic backup software and HotBurn™ CD-recording software simplify data protection and sharing at home and in the workplace. For networks, Iomega markets DataSafe™ mid-range NAS servers. Iomega products help people capture, share, protect and secure their digital valuables. The Company can be reached at 1-888-4-IOMEGA (888-446-6342), or on the Web at http://www.iomega.com.

Special Note Regarding Forward-Looking Statements

The statements contained in this release regarding the progress of the Company's restructuring initiatives and reorganization, impact of these activities on the Company's fourth quarter and future results, a continued focus on improving operational efficiencies, the goal to achieve sustained profitable growth and generate long-term shareholder value, the focus and goal to build upon the Zip product line and reverse the revenue decline, plans to expand external CD-RW product solutions, broaden product lines, enter new markets, and expand the Company's position in its storage solutions market, and all other statements that are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are based upon information available to Iomega as of the date hereof, and Iomega disclaims any intention or obligation to update any such forward-looking statements. Actual results could differ materially from the current expectations. Factors that could cause or contribute to such differences include unforeseen difficulties in implementing restructuring activities, the level of retail and OEM market acceptance of and demand for the Company's products, declining consumer confidence levels and general market demand for PCs and consumer electronics products, the Company's success in timely producing and marketing its products, the Company's inability to reverse the revenue decline on the Zip product line, the Company's inability to achieve profitability on its CD-RW product line in 2002, financial or technical difficulties in expanding the Company's markets, broadening product lines, and entering new markets, the Company's inability to maintain stringent quality assurance standards and enhanced customer service, availability of critical product components, the failure or delay of any sole source supplier, products and technology obsolescence, manufacturing and inventory issues, management turnover, intellectual property rights, competition, litigation, general economic and/or industry-specific conditions and the other risks and uncertainties identified in the reports filed from time to time by Iomega with the U.S. Securities and Exchange Commission, including Iomega's most recent filings on Forms 10-K and 10-Q.

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Iomega, Zip, Jaz, PocketZip, Peerless, DataSafe, HipZip, FotoShow, QuikSync, and LifeWorks are either registered trademarks or trademarks of Iomega Corporation in the United States and/or other countries. Microdrive is a trademark of IBM Corporation and is used with permission. Certain other product names, brand names and company names may be trademarks or designations of their respective owners.