Iomega Reports Q1

SAN DIEGO -- Iomega Corporation (NYSE: IOM) today reported net revenue of $76.0 million and a net profit of $1.1 million, or $0.02 per diluted share, for the quarter ended April 1, 2007. In comparison, first quarter 2006 net revenue was $59.1 million with a net loss of $4.2 million, or $(0.08) per share. First quarter net revenue increased $16.9 million, or 29%, from the same quarter last year primarily due to a $21.0 million increase in Consumer Storage Solutions revenue, partially offset by a $6.1 million expected decrease in Zip(R) revenue.

Gross margin for first quarter 2007 was $14.3 million, or 18.8%, as compared to first quarter 2006 gross margin of $11.8 million, or 20.0%. The decrease in the gross margin percentage from first quarter 2006 was primarily due to the expected decline in Zip revenue, partially offset by new lower cost external HDD products, supply chain improvements and other cost reductions.

Pre-tax profit from continuing operations for first quarter 2007 was $1.4 million, as compared to a first quarter 2006 pre-tax loss from continuing operations of $5.6 million.

Non-GAAP, pre-tax profit from continuing operations was $3.0 million for first quarter 2007, excluding a non-cash goodwill impairment charge of $1.7 million and a restructuring benefit of less than $0.1 million. This compares to a first quarter 2006 non-GAAP, pre-tax loss from continuing operations of $1.2 million, when excluding a $3.1 million non-cash goodwill impairment charge, $0.3 million of restructuring charges, and a $1.0 million severance charge relating to the departure of the prior chief executive officer.

Cash, cash equivalents and temporary investments at April 1, 2007 amounted to $76.8 million, an increase of $8.7 million from year end. This increase was a result of our profitability and collections from the seasonally strong fourth quarter, offset by a previously accrued, one-time $1.3 million cash payout to exit a lease on an unused facility in Utah.