Media please contact:
Chris Romoser, Iomega Corporation, (858) 314-7148 romoser@iomega.com

Analyst/Investors, please contact:
Thomas Liguori, Iomega Corporation, (858) 314-7188

For Immediate Release

IOMEGA REPORTS SECOND QUARTER 2005 FINANCIAL RESULTS

SAN DIEGO, July 28, 2005 - Iomega Corporation (NYSE: IOM) today reported revenue of $65.7 million and a net loss of $6.4 million, or ($0.12) per share, for the quarter ended July 3, 2005. In comparison, second quarter 2004 revenue was $77.6 million with a net loss of $19.8 million, or ($0.38) per share. The lower revenue was primarily due to the decrease in Zip® product line revenue and was partially offset by revenue increases in the REV™ product line which began shipping in the second quarter of 2004.

The second quarter 2005 gross margin percentage was 20.6% compared to 19.0% for second quarter 2004. The increase was primarily due to lower overhead costs. Second quarter 2005 operating expenses were $19.8 million compared to $30.9 million in the second quarter of 2004, a reduction of 36%. The second quarter 2005 operating loss was $6.3 million, compared to $16.1 million for second quarter 2004. The improvement in operating loss was a result of the lower internal cost structure implemented in the second half of 2004.

The Company's total cash, cash equivalents, and temporary investments increased by $5.7 million during the second quarter to $109.9 million. The increase was primarily a result of improved working capital management, including lower inventories, reduced receivables and extended payment terms with major vendors.

"While the second quarter operating loss was consistent with our expectations, we are pleased to report significant improvements in working capital management that resulted in positive cash flow for the second quarter" said Werner Heid, president and CEO, Iomega Corporation. "We announced a restructuring plan on July 26th to align expenses with expected revenues. The actions are expected to result in a lean, more competitive cost structure, a rationalized product line, and a streamlined organization to enable faster decision making and improved new product time to market. Going forward, we will focus on HDD based storage solutions (REV, NAS and external HDDs) and we will continue to manage the Zip business to maximize cash flow. We anticipate annual cost savings of approximately $38 million to $42 million after we have fully implemented the restructuring, 85% of which are expected to be in operating expenses. The anticipated cost reductions include a 30% workforce reduction, consolidation of facilities, consolidation of internal business systems, bringing in-house work that is currently outsourced and a more focused approach to marketing spending. It is our goal, based on lower operating expenses and with our current gross margin structure, to achieve operating profitability in the fourth quarter. Longer term, the streamlined organization and faster time to market should provide the capability to achieve sales growth and higher margin goals."

Second quarter 2005 Zip product sales of $16.8 million decreased $15.5 million, or 48.1%, from second quarter 2004. Second quarter 2005 Zip product gross margin percentage of 51% improved 13 percentage points from 38% in the prior year. The increase in Zip gross margin percentage was primarily due to a combination of lower material spending and fewer pricing, rebate, and marketing programs. Second quarter 2005 Zip product profit margin (PPM) was $7.7 million, compared to $10.7 million in second quarter 2004.

Second quarter 2005 sales of Consumer Storage Solutions products, consisting of optical, hard disk (HDD), Mini USB flash, and floppy drives, were $33.1 million, relatively flat with second quarter 2004. The Consumer Storage Solutions product loss in second quarter 2005 was $2.2 million, compared to a product loss of $1.2 million in second quarter 2004. The second quarter 2005 product loss was primarily driven by lower margins due to price competition and increased inventory reserves for slow moving products.

Second quarter 2005 REV product sales were $11.1 million with a product loss of $1.6 million. The product loss was due to development costs for next generation REV products, continued marketing expenses to improve the market awareness of REV technology, and under-absorbed fixed overhead expenses at current volumes. Compared to second quarter 2004, when the product was initially launched, REV revenue increased from $7.5 million and the product loss decreased from $6.7 million.

Second quarter 2005 NSS revenue of $4.2 million increased $0.2 million, or 5%, compared to second quarter 2004. The NSS product line had a nominal PPM in second quarter 2005 compared to a PPM of $0.3 million in second quarter 2004.

General corporate expenses which were not allocated to the total second quarter 2005 PPM totaled $10.9 million, a decrease of $5.7 million, or 35%, compared to second quarter 2004.

Revenue by region during second quarter 2005 was $32.8 million in the Americas, $28.0 million in Europe, and $4.9 million in Asia, or 50%, 43%, and 7%, respectively. This compares to revenue by region during second quarter 2004 of $41.9 million in the Americas, $29.6 million in Europe, and $6.1 million in Asia, or 54%, 38%, and 8%, respectively.

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 second quarter 2005 financial results. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on Thursday, August 11, 2005.

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 new Iomega REV™ Drive, popular Zip® 100MB, 250MB and 750MB Drives; high-performance Iomega® External Hard Drives in desktop and portable configurations; Iomega Mini USB Drives, Micro Mini™ USB Drives,and the Iomega Mixx™ MP3 player; Iomega external CD-RW Drives; Iomega Super DVD Drives and the QuikTouch™ Video Burner; and Iomega Floppy USB-Powered Drives. 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 StorCenter Pro NAS servers offer capacities of 160GB to 1.6TB. 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
Any statements contained in this release regarding our announced restructuring plan to align expenses with expected revenues, anticipated benefits resulting from the restructuring including improvements to our cost structure and other anticipated savings, a more focused product line, time to market improvements for new products, the ability to achieve sales growth and higher margin goals in the longer term, the goal to operate profitably in the fourth quarter, and any 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 statements are based upon information available to us as of the date hereof, and we disclaim any intention or obligation to update any such statements. Actual results could differ materially from current expectations. Factors that could cause or contribute to such differences include lower than anticipated sales of our products; unexpected technical, manufacturing, or supply issues with our products; our inability to achieve a competitive cost structure; competition; our inability to maintain stringent quality assurance standards and customer satisfaction; manufacturing and inventory issues; management and key employee turnover; intellectual property disputes; adverse final judgments in 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 Quarterly and Annual Reports on Forms 10-Q and 10-K. For a copy of Iomega's Q2 2005 Financial Statements click here.

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Copyright© 2005 Iomega Corporation. All rights reserved. Iomega, Zip, REV, Active Disk, iStorage, Micro Mini, Mixx, StorCenter, QuikTouch and HotBurn 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.