Iomega Corporation (NYSE: IOM) today reported net revenue of $59.3 million and a net profit of $1.1 million, or $0.02 per diluted share, for the quarter ended July 1, 2007. In comparison, second quarter 2006 net revenue was $40.7 million with a net loss of $10.4 million, or $(0.20) per share. Second quarter net revenue increased $18.7 million, or 46%, from the same quarter last year, primarily due to strong growth in Consumer Storage Solutions and Network Storage Systems. Gross margin for second quarter 2007 was $12.1 million, or 20.5%, as compared to second quarter 2006 gross margin of $6.8 million, or 16.7%.
Included in the second quarter 2007 net income was a net tax benefit of $1.2 million and a goodwill impairment charge of $1.3 million. With this goodwill impairment charge, Zip product line goodwill has been completely written off.
Cash, cash equivalents and temporary investments at July 1, 2007 amounted to $75.1 million, a decrease of $1.7 million from the end of the first quarter. This decrease was a result of timing of working capital needs during the quarter as compared to the prior quarter.
“I am pleased with our financial and operational results for the second quarter which is historically our seasonally weakest quarter,” said Jonathan Huberman, Chief Executive Officer. “We posted our fourth consecutive quarter of net income and third consecutive quarter of year-over-year revenue growth; and we continued to execute on our 2007 goals.”
Mr. Huberman continued, “As we look to the remainder of 2007, our goals remain:
1. To continue to grow and deliver sustained profitability,
2. To further increase the size of our external HDD business,
3. To continue to penetrate the high-growth NAS market with new products,
4. To ramp the REV 70GB Backup Drive and push for broad market adoption,
5. To grow our managed services business, and
6. To continue to seek opportunities to leverage Iomega’s assets.”
Special Note Regarding Forward-Looking Statements
Statements contained in this release regarding the Company’s business goals for 2007, 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 August 2, 2007; 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; lower than anticipated sales of our products; any inability or failure to improve REV product sales, or to stabilize or improve HDD product gross margins; unexpected technical, manufacturing, or supply issues with our products; any inability to achieve a competitive cost structure; competition; any inability to maintain stringent quality assurance standards and customer satisfaction; difficulties in identifying and completing strategic opportunities to grow our business; 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; faster than expected declines in Zip product sales and gross margins; 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.
