Releases

posted on 06 February 2008 09:44

Iomega reported net revenue of $120.6 million and net income of $6.5 million, or $0.12 per diluted share, for the quarter ended December 31, 2007.

In comparison, fourth quarter 2006 net revenue was $76.2 million with net income of $4.9 million, or $0.09 per diluted share. Fourth quarter 2007 net revenue increased $44.4 million, or 58%, from the same quarter last year, primarily due to strong growth in Consumer Storage Solutions and Network Storage Systems products of 86% and 76%, respectively. Gross margin for fourth quarter 2007 was $20.9 million, or 17.3%, as compared to fourth quarter 2006 gross margin of $15.4 million, or 20.2%. The increase in gross margin dollars and decrease in gross margin percentage from the same period last year was a result of growth in Consumer Storage Solutions products, and an expected Zip revenue decline of 48% which carries a higher gross margin percentage than Consumer Storage Solutions products.

Fourth quarter 2007 net income included a pre-tax, cash benefit of $3.5 million related to a prior license of intellectual property and pre-tax expenses of $1.2 million for external professional fees associated with the recently announced acquisition of ExcelStor Group. Taken together, this pre-tax net benefit of $2.3 million represents an impact to fourth quarter 2007 net income of approximately $0.03 per diluted share.

Total year 2007 net revenue was $336.6 million with net income of $10.1 million, or $0.18 per diluted share. In comparison, 2006 net revenue was $229.5 million with a net loss of $8.8 million, or ($0.17) per share. This represents a revenue increase of $107.1 million, or 47%, due primarily to strong growth in Consumer Storage Solutions and Network Storage Systems products of 86% and 35%, respectively, partially offset by an expected Zip revenue decline of 49%.

Cash, cash equivalents and temporary investments, inclusive of long-term cash investments, at December 31, 2007 totaled $64.6 million, a decrease of $4.8 million from the end of third quarter 2007. This decrease was a result of timing of working capital needs during the fourth quarter and building inventory required to meet the expected robust demand in first quarter 2008.

I am pleased with our financial and operational execution for the fourth quarter and the strong revenue performance in our Consumer Storage and Network Storage product lines, both of which achieved substantial year-over-year growth despite the HDD supply constraints the entire industry experienced this quarter," said Jonathan Huberman, Chief Executive Officer, Iomega Corporation. "I am proud of the collective efforts of the Iomega team who delivered an impressive 47% revenue growth in 2007."

2008 Financial Guidance

In December, we issued preliminary revenue guidance for 2008 of $383.6 million and non-GAAP net income of $10.1 million, or $0.18 per diluted share. Given the strong performance we saw in fourth quarter 2007, we now expect full year 2008 revenue of approximately $400 million and non-GAAP net income of $11.0 million, or $0.20 per diluted share. These non-GAAP net income figures exclude any external expenses associated with the acquisition of ExcelStor Group, and any effects of the acquisition itself.

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 2007 financial results and management's goals and business outlook. The webcast may be accessed at http://www.iomega.com and will be available for replay through the close of business on February 19, 2008.