Analyst/Investors, please contact:
Tom Kampfer, Iomega Corporation, (858) 314-7188

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

For Immediate Release

IOMEGA REPORTS 2004 FOURTH QUARTER AND FULL YEAR RESULTS

SAN DIEGO, January 27, 2005 ­ Iomega Corporation (NYSE: IOM) today reported revenue of $89.6 million and net income of $3.8 million, or $0.07 per diluted share, for the quarter ended December 31, 2004. Net income included $1.5 million in pre-tax restructuring charges and a pre-tax net benefit of $11.2 million from DCT-related license fees and gains on DCT asset sales. The net benefit of the DCT transaction was not recorded as revenue. Rather, substantially all of the transaction was recorded as a reduction to fourth quarter 2004 operating expenses. In comparison, fourth quarter 2003 revenue was $93.4 million with a net loss of $15.5 million, or $0.30 per share, which included $4.5 million of pre-tax restructuring charges and $2.3 million in pre-tax charges associated with the re-orientation of the Network Storage System (NSS) product line.

Full year 2004 revenue was $328.7 million, with a net loss of $36.7 million, or $0.71 per share, compared with full year 2003 revenue of $391.3 million and a net loss of $18.9 million, or $0.37 per share. The 2004 net loss included $4.5 million in pre-tax restructuring charges; a pre-tax net benefit of $6.6 million from DCT-related license fees and gains/impairments on DCT assets; a $1.8 million pre-tax benefit associated with the release of various accruals for a European subsidiary for which operations have ceased; $21.2 million in tax provisions from increased valuation allowances; and $3.8 million of tax benefits primarily from releases of tax accruals. Included in the 2003 net loss were pre-tax restructuring charges of $16.5 million, $6.0 million of net favorable pre-tax legal settlements, and $2.3 million in pre-tax charges associated with the re-orientation of the NSS product line and various tax benefits totaling approximately $1 million.

Fourth quarter 2004 revenue of $89.6 million decreased $3.8 million, or 4%, compared to fourth quarter 2003. The decrease was primarily due to lower Zip® and Optical drive product sales, partially offset by sales of new REV™ products and higher sales of non-Optical Sourced Branded products. The fourth quarter 2004 gross margin percentage was 24.2% compared to 22.1% for fourth quarter 2003, which included $1.9 million of charges associated with the re-orientation of the NSS product line. Fourth quarter 2004 operating expenses were $16.0 million, which included a benefit of $11.0 million relating to the DCT transaction, $0.7 million of non-recurring DCT employee expenses, and $1.5 million in restructuring charges. By comparison, fourth quarter 2003 operating expenses were $41.0 million, which included $4.5 million of restructuring charges and $0.4 million of NSS re-orientation charges. Fourth quarter 2004 operating income, including the DCT and restructuring items described above, was $5.7 million, compared to a fourth quarter 2003 operating loss of $20.4 million, which included $4.5 million of restructuring charges and $2.3 million of NSS re-orientation charges.

"During the fourth quarter, we made significant progress toward many of our corporate goals," said Werner Heid, president and CEO, Iomega Corporation. "We achieved our objective to license our DCT intellectual property, generated significant sales growth on our Sourced Branded products, continued the sequential growth in our new REV product line, and benefited from our 2004 restructuring and supply chain improvement activities. As a result, we achieved sequential improvements in overall gross margin, operating expenses, and operating results. For the first half of 2005, our primary focus is to continue to invest in REV product awareness and demand generation, to grow Sourced Branded product line revenue and gross margin, and to maintain the expense discipline achieved during the recent restructuring with the overall goal to return the Company to consistent profitability," concluded Heid.

Fourth quarter 2004 Zip product sales of $25.3 million decreased $22.1 million, or 47%, from fourth quarter 2003. The fourth quarter 2004 Zip product gross margin percentage of 52.3% improved from 44.8% in the prior year. The improvement in Zip gross margin was primarily due to a combination of lower material spending and fewer pricing rebate and marketing programs. Fourth quarter 2004 Zip product profit margin (PPM) was $11.8 million compared to $18.4 million in fourth quarter 2003.

Fourth quarter 2004 sales of Sourced Branded products, consisting of optical, hard disk (HDD), Mini USB flash, and floppy drives, were $46.9 million, an increase of $6.2 million, or 15%, compared to fourth quarter 2003. The fourth quarter 2004 PPM for the Sourced Branded business was $0.1 million, compared to a product loss of $1.2 million in fourth quarter 2003. The improved PPM was driven primarily by higher product sales and lower operating overhead.

Fourth quarter 2004 NSS revenue was $3.9 million, an increase of $0.2 million, compared to the fourth quarter 2003. The NSS product loss in fourth quarter 2004 was $0.3 million compared to a product loss in fourth quarter 2003 of $6.1 million. The fourth quarter 2003 product loss included $2.3 million in charges for inventory write-downs and other charges following the Company's decision to re-orient its NSS product strategy. The improvement in NSS product loss was driven by improved product gross margin and significantly reduced NSS operating expenses.

Fourth quarter 2004 REV product sales were $12.9 million with a product loss of $1.8 million. The product loss was primarily driven by continued market development and research and development expenses on next generation REV products. On a sequential basis, REV product revenue increased from $10.3 million and the product loss improved from $5.6 million.

General corporate expenses which were not allocated to the total fourth quarter 2004 PPM totaled $13.1 million, a decrease of $6.3 million, compared to fourth quarter 2003. This decrease primarily resulted from cost savings from the 2003 and 2004 restructuring actions.

During fourth quarter 2004, the Company's total cash, cash equivalents, and temporary investments increased by $1.5 million to $120.8 million as of December 31, 2004. Cash flow improved during the quarter due to $11.7 million in proceeds from the DCT transaction. This was primarily offset by inventory purchases to ramp REV and Sourced Branded products and the payment of restructuring related liabilities.

Revenue by region during fourth quarter 2004 was $44.4 million in the Americas, $40.8 million in Europe, and $4.4 million in Asia, or 49%, 46%, and 5%, respectively. This compares to revenue by region during fourth quarter 2003 of $50.0 million in the Americas, $37.3 million in Europe, and $6.1 million in Asia, or 53%, 40%, and 7%, 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 fourth quarter 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, February 3, 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™ 35GB drive, popular Zip® 100MB, 250MB and 750MB drives, high-performance Iomega HDD External Hard Drives in desktop and network configurations, Iomega Mini USB Drives and Micro Mini USB Drives, Iomega external CD-RW drives, Iomega Super DVD 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 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
The statements contained in this release regarding the Company's goals for the first half of 2005, 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 the sales ramp of REV products, unforeseen post-launch technical, manufacturing or supply issues regarding REV products or other new products, unforeseen difficulties in implementing the 2004 restructuring actions and any associated inability to achieve the expected savings, level of retail and OEM market acceptance of and demand for the Company's products including new REV 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, greater than expected revenue declines on the Zip product line, the Company's inability to achieve consistent profitability on its Sourced Branded business, technical difficulties, supplier constraints, 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 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, adverse final judgments in litigation, the business failure of any significant customer, 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 Form 10-Q and Annual Report on Form 10-K.

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Copyright© 2005 Iomega Corporation. All rights reserved. Iomega, Zip, REV, Active Disk, iStorage, Micro Mini, 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.