Analyst/Investors, please contact:
Preston Romm, Iomega Corporation, (858) 314-7188

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

For Immediate Release

IOMEGA REPORTS SECOND QUARTER FINANCIAL RESULTS

SAN DIEGO, July 27, 2006 - Iomega Corporation (NYSE: IOM) today reported revenue of $40.7 million and a net loss of $10.4 million, or ($0.20) per share, for the quarter ended July 2, 2006. These results included a number of charges associated with previously announced corporate restructuring and product transitions, as follows:

1. Pre-tax, restructuring charges of $4.3 million associated with severance and benefits, lease cancellation costs for facilities previously vacated, miscellaneous contracts and excess assets.

2. An additional non-cash, pre-tax goodwill impairment charge of $2.3 million associated with the Zip® product line. Further, we recognized a $0.9 million tax benefit associated with the release of a tax liability for the goodwill timing difference.

3. Pre-tax, non-restructuring charges of $1.5 million, recorded as cost of goods sold, associated with supplier claims and inventory charges related to the impact of RoHS compliance (the European lead free initiative) and the external hard disk drive (HDD) product transition. This charge, negatively impacting overall gross margin by 370 basis points, was primarily directed to the REV® and HDD product lines.

4. A pre-tax charge of $0.6 million was recognized for previously committed NRE charges associated with the REV product line. This charge, negatively impacting overall gross margin by 150 basis points, was recorded as cost of goods sold.

5. A pre-tax accrual of $0.5 million for an uncollectible VAT receivable related to an old customer in Europe, recorded in other expenses.

6. A pre-tax gain of $1.1 million associated with selling certain patents, reflected as a reduction of operating expenses.

In comparison, second quarter 2005 revenue was $65.7 million with a net loss of $6.4 million, or ($0.12) per share, which included $1.6 million of pre-tax charges related to Zip end of life inventory reserves and other product line inventory charges and $0.4 million in pre-tax, license and patent fee income.

Second quarter 2006 revenue of $40.7 million decreased $25.1 million, or 38%, compared to second quarter 2005. The decrease was across all product lines with the largest decrease in the Consumer Storage Solutions and Zip product lines. The second quarter 2006 gross margin percentage was 16.7%, primarily reflective of the above mentioned non-restructuring charges of $1.5 million and NRE write-off of $0.6 million. On a non-GAAP basis, excluding the aforementioned non-restructuring charge of $1.5 million and NRE write-off of $0.6 million, the gross margin percentage would have been 21.9%.

Second quarter 2006 operating expenses were $18.4 million, which included the $4.3 million of restructuring charges associated with severance and benefits, lease cancellation costs for facilities previously vacated, miscellaneous contracts and excess assets, and $2.3 million for a non-cash goodwill impairment charge associated with the Zip product line, partially offset by the $1.1 million of fees associated with selling certain patents. By comparison, second quarter 2005 operating expenses were $19.6 million, which included $0.4 million in license and patent fee income.

The second quarter 2006 pre-tax loss was $11.2 million as compared to a second quarter 2005 pre-tax loss of $6.4 million. Excluding the above mentioned restructuring charges ($4.3 million), goodwill impairment charge ($2.3 million), uncollectible VAT ($0.5 million), non-restructuring supplier claims and inventory charges ($1.5 million) and NRE write-off ($0.6 million) from the second quarter 2006 pre-tax loss of $11.2 million, the non-GAAP, adjusted second quarter 2006 pre-tax loss was $2.0 million. This compares to a non-GAAP, adjusted pre-tax loss of $4.8 million for second quarter 2005 when excluding certain similar inventory charges ($1.6 million) from the pre-tax loss of $6.4 million.

Second quarter 2006 sales of $40.7 million included REV product sales of $8.9 million; Consumer Storage Solutions product sales (consisting of HDD, optical, Mini USB flash and floppy drives) of $20.2 million; Network Storage Solutions (NSS) sales of $3.4 million; and Zip product sales of $7.8 million.

During second quarter 2006, the Company's total cash, cash equivalents, and temporary investments decreased by $10.6 million to $77.6 million as of July 2, 2006. The decrease was primarily a result of working capital requirements for the implementation of the new lower cost HDD supply chain, payments associated with the restructuring actions and the current quarter's operating loss. This use of cash was partially offset by the $1.1 million benefit from the sale of certain patents.

"As we discussed in our first quarter earnings call and reflected in our results, the second quarter was one of transition as we reduced headcount, re-engineered product lines and our supply chain and dealt with the RoHS compliance deadline," said Jonathan Huberman, Chief Executive Officer of Iomega Corporation. "I am pleased with the progress and speed our new management team is making towards the strategic and tactical goals of the Company. Since February, we have completed a restructuring plan and fully expect to reach our goal of $20 to $25 million in annualized expense and overhead savings over the first quarter 2006 run rates. We re-engineered our external HDD product line and supply chain and will be launching these new products throughout the third quarter and expect product cost savings of 20 to 30 percent across the line by the fourth quarter. We announced the new 70GB REV Backup Drive, a major achievement by our engineering team. In July, we announced an acquisition of a managed services provider which will move Iomega into that fast growing market segment. The acquisition of CSCI, Inc., which should close in August, will leverage Iomega's core assets and provide us the basis of what we expect will become a high-margin growth engine.

"I am proud of all that the team has accomplished in this short time and am confident that we are progressing well towards our goal of sustained profitability entering the fourth quarter of this year," concluded Huberman.

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 financial results and management's goals and outlook. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on Friday, August 11, 2006.

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 Iomega® REV® platform: the new Iomega REV 70GB Backup Drive, available in USB 2.0 and ATAPI computer interface models for server implementations; Iomega REV™ 35GB Drive, available in multiple interfaces, as well as the REV 1000 Autoloader and new REV Loader 280; Zip® 100MB, 250MB and 750MB Drives; the new Iomega StorCenter™ Network Hard Drives, high-performance Iomega® External Hard Drives including the Iomega Micro Mini Hard Drive, the Iomega StorCenter™ Network Hard Drive, the Iomega 1TB Desktop Hard Drive XL Series, the Iomega MiniMax USB 2.0/FireWire Desktop Hard Drive and the Iomega ScreenPlay™ Multimedia Drive; 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. Resellers can visit Iomega at www.iomega.com/ipartner.

Special Note Regarding Forward-Looking Statements
Statements contained in this release regarding the Company's short-term goals and plans to improve profitability; the expected results of our restructuring plan, including annualized expense and overhead savings of $20 to $25 million over the first quarter 2006 run rates and expected product cost savings of 20 to 30% from our external HDD product line and to achieve sustained profitability entering the fourth quarter of this year; Iomega's focus in the future; statements about the growth of the managed services market; 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 July 27, 2006, 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 losses of key personnel including possibly as a result of restructuring actions; lower than anticipated sales of our products; any inability or failure to improve REV product sales or improve HDD product gross margins, 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; difficulties in identifying and completing strategic opportunities to grow our business; manufacturing and inventory issues; intellectual property disputes; adverse final judgments in litigation; general economic and/or industry-specific conditions including significant changes in the landscape of data storage demand, pricing, or competition; 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 and quarterly report on Form 10-Q. For a copy of Iomega's Q2/2006 Financial Statements, click here.

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Copyright© 2006 Iomega Corporation. All rights reserved. Iomega, Zip, REV, StorCenter, iStorage, Micro Mini, 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.