Analyst/Investors, please contact:
Barry Zwarenstein, Iomega Corporation, (858) 795-7188

Media please contact:
Chris Romoser, Iomega Corporation, (858) 795-7148 romoser@iomega.com

For Immediate Release

IOMEGA REPORTS FIRST QUARTER 2003 RESULTS

SAN DIEGO, April 17, 2003 - Iomega Corporation (NYSE: IOM) today reported net income of $5.3 million, or $0.10 per diluted share, for the quarter ended March 30, 2003. Net income for the quarter was favorably impacted by $3.7 million of after-tax legal settlements. In comparison, first quarter 2002 net income was $31.2 million, or $0.61 per diluted share, which included $15.8 million attributable to a decrease in the Company's valuation allowance for net deferred tax assets.

First quarter 2003 sales of $106.2 million decreased $72.7 million, or 40.6%, compared to first quarter 2002, primarily due to decreased Zip® product sales. The first quarter 2003 gross margin percentage was 34.9%, compared with 40.5% for the first quarter of the prior year. The decrease in the gross margin percentage was primarily due to a lower proportion of sales of higher margin Zip products and to price promotions on Zip drives. Operating expenses of $29.9 million decreased $16.2 million compared to $46.1 million during the same period in 2002, due in part to $6.0 million of pre-tax net legal settlements recorded during the current quarter. First quarter 2003 operating income, including the $6.0 million of pre-tax net legal settlements, was $7.2 million compared to $26.4 million in the prior year.

During first quarter 2003, the Company’s total cash, cash equivalents, and temporary investments increased by $6.8 million to $460.7 million. Cash flow during the first quarter was adversely impacted by a $22.8 million decrease in accounts payable. As was outlined in the Company’s fourth quarter 2002 earnings press release, this reduction was largely due to payments to Venture Corporation Limited for initial purchases of inventory following the November 1, 2002 sale of the Company’s Penang, Malaysia manufacturing subsidiary that were not due at December 31, 2002. First quarter 2003 cash flow was favorably impacted by $7.5 million in proceeds from a legal settlement.

“We are disappointed at the accelerated rate of decline in our core Zip product line, even allowing for a very difficult economic environment worldwide,” said Werner Heid, president and CEO, Iomega Corporation. “Zip revenues are expected to continue to decline and it will not be possible to offset this revenue decline in 2003 with the initiatives we have underway in our Mobile and Desktop Storage Systems and Network Storage Systems businesses. As we have previously stated, given the sales decline and the continuing investment in developing our new technologies, profitability in 2003 will continue to be below prior year levels. Despite this, our goal remains to achieve an operating profit in each quarter of 2003. This is an extremely challenging goal, but one on which we remain focused.”

“Strategically, we are focused on three key initiatives: building Iomega as the single destination for Mobile and Desktop Storage Systems; expanding our Network Storage Systems business by continuing to bring relevant enterprise class features to the small- and medium-sized business market via a channel assisted model; and moving forward in developing two innovative, small form factor, removable magnetic storage technologies with the goal of building new annuity streams in a variety of applications for 2004 and beyond,” continued Heid. “With the strong Iomega brand, our global channel presence and strong balance sheet, we are in an excellent position to pursue these strategies.”

First quarter 2003 Zip product sales of $73.3 million decreased $69.8 million, or 48.8%, from first quarter 2002. Iomega’s first quarter 2003 Zip drive shipments were 0.6 million units, a decrease of 0.5 million units when compared to first quarter 2002. First quarter 2003 Zip disk shipments were 4.7 million units, a decrease of 4.4 million units when compared to first quarter 2002. First quarter 2003 Zip drive unit shipments to OEM customers of 0.3 million units decreased 0.3 million units from first quarter 2002 and represented 48% of total unit shipments in first quarter 2003 compared with 51% in first quarter 2002. The first quarter 2003 Zip gross margin percentage of 46.5% decreased from 48.6% in the same period a year ago due to increased promotional and rebate activity and to lower volumes. Lower sales and gross margins more than offset the impact of reductions in and redeployment of operating expenses, resulting in a first quarter 2003 Zip product profit margin (PPM) of $29.4 million compared with $57.3 million in first quarter 2002.

First quarter 2003 CD-RW product sales of $15.3 million decreased $7.3 million from first quarter 2002. The first quarter 2003 CD-RW PPM was $0.2 million, compared to $0.1 million in the prior year.

Other mobile and desktop storage product sales in first quarter 2003 were $13.3 million, an 83.2% increase compared to $7.2 million in first quarter 2002. Sales from external hard disk drive products totaled $10.1 million, compared with $6.1 million in first quarter 2002. Sales from Iomega® Mini USB drives reached $2.7 million in the first full quarter of shipments. Product profit loss for other mobile and desktop storage products for the first quarter was $0.1 million compared to a product profit loss of $4.2 million in first quarter 2002.

First quarter 2003 product sales from the discontinued Jaz® product line were $1.9 million, a decrease of $4.0 million from first quarter 2002. Jaz PPM in first quarter 2003 was $1.3 million compared to $1.9 million in first quarter 2002.

First quarter 2003 NAS product sales of $2.3 million compared to $0.1 million in first quarter 2002 when the product line was launched. The NAS product loss in first quarter 2003 was $4.0 million due to research and development and sales and marketing spending designed to broaden and refresh our product offering beginning in second quarter 2003 and under-absorbed operational overhead due to lower volumes. This compared to a product loss of $0.7 million in first quarter 2002.

During first quarter 2003, the expenses incurred in connection with the new technologies under development, called Digital Capture Technology (“DCT”) and Small Form Factor Removable Hard Disk System (“SFF-RHDS”), were $4.9 million. A further $0.9 million, primarily supplier tooling and manufacturing equipment, was capitalized.

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

Conference Call Information
As previously announced, Iomega will host a conference call with simultaneous audio webcast beginning at 4:30 p.m. Eastern Time today to discuss Iomega’s first quarter results. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on Thursday, May 1, 2003.

About Iomega
Iomega Corporation provides easy-to-use, high value storage solutions to help people protect, secure, capture and share their valuable digital information. Iomega’s award-winning storage products include the popular Zip® 100MB, 250MB and 750MB drives, high-performance Iomega® HDD Portable Hard Drives that feature capacities from 20GB to 60GB, Iomega® HDD Desktop Hard Drives that offer capacities from 40GB to 120GB, the new Iomega® Mini USB Drives in 64MB, 128MG and 256MB capacity sizes, Iomega® external CD-RW drives and the Iomega® Floppy USB-Powered Drive. Iomega simplifies data protection and sharing at home and in the workplace with Iomega® Automatic Backup software, Iomega® Sync software, HotBurn® CD-recording software, and Active Disk™ technology. For networks, Iomega® NAS servers offer capacities of 120GB to 1.4TB. For unlimited capacity and anytime, anywhere access, Iomega offers iStorage™ secure online storage. Iomega also offers businesses and consumers a comprehensive data recovery services solution for recovering lost data due to hardware failure, file corruption or media damage. The Company can be reached at 1-888-4-IOMEGA (888-446-6342), or on the Web at www.iomega.com.

Special Note Regarding Forward-Looking Statements: The statements contained in this release regarding expected Zip product revenue declines, the goal to leverage Iomega’s brand, channel presence and balance sheet to pursue key initiatives, the goal to build Iomega as the single destination for storage products, the plan to continue to expand NAS product offerings, the plan to develop new removable magnetic storage solutions with the goal to build new annuity streams in 2004 and beyond, the goal to achieve an operating profit in each quarter of 2003, the Company’s belief that it is in an excellent position to pursue its strategies, 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 the level of retail and OEM market acceptance of and demand for the Company's products, any rejection by customers of Iomega’s “destination storage” concept or failure in implementation thereof, declining consumer confidence levels and general market demand for PCs and consumer electronics products, the Company's success in the timely producing and marketing of its products, increased acceleration of the revenue decline on the Zip product line, the Company’s inability to achieve profitability on its NAS, HDD, and CD-RW product lines, technical difficulties, delays and cost challenges on new products, competitive pricing pressures or a lack of market acceptance with respect to any of the Company’s new products, the failure to achieve OEM adoption on new products, any 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, adverse final judgments in litigation, the business failure of any significant customer, worldwide economic uncertainty caused by the war with Iraq, reductions in consumer spending in Asia due to SARS virus fears, 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 Annual Report on Form 10-K.

Copyright© 2003 Iomega Corporation. All rights reserved. Iomega, Zip, Jaz, HotBurn, Active Disk, iStorage, and ioLink 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.