Iomega - Q2 2005 resultaten
Iomega Reports Second Quarter 2005 Financial ResultsThursday July 28, 4:06 pm ET
SAN DIEGO, July 28 /PRNewswire-FirstCall/ -- Iomega Corporation (NYSE: IOM - News) today reported revenue of $65.7 million and a net loss of $6.4 million, or ($0.12) per share, for the quarter ended July 3, 2005. In comparison, second quarter 2004 revenue was $77.6 million with a net loss of $19.8 million, or ($0.38) per share. The lower revenue was primarily due to the decrease in Zip® product line revenue and was partially offset by revenue increases in the REV(TM) product line which began shipping in the second quarter of 2004.
The second quarter 2005 gross margin percentage was 20.6% compared to 19.0% for second quarter 2004. The increase was primarily due to lower overhead costs. Second quarter 2005 operating expenses were $19.8 million compared to $30.9 million in the second quarter of 2004, a reduction of 36%. The second quarter 2005 operating loss was $6.3 million, compared to $16.1 million for second quarter 2004. The improvement in operating loss was a result of the lower internal cost structure implemented in the second half of 2004.
The Company's total cash, cash equivalents, and temporary investments increased by $5.7 million during the second quarter to $109.9 million. The increase was primarily a result of improved working capital management, including lower inventories, reduced receivables and extended payment terms with major vendors.
"While the second quarter operating loss was consistent with our expectations, we are pleased to report significant improvements in working capital management that resulted in positive cash flow for the second quarter," said Werner Heid, president and CEO, Iomega Corporation. "We announced a restructuring plan on July 26th to align expenses with expected revenues. The actions are expected to result in a lean, more competitive cost structure, a rationalized product line, and a streamlined organization to enable faster decision making and improved new product time to market. Going forward, we will focus on HDD based storage solutions (REV, NAS and external HDDs) and we will continue to manage the Zip business to maximize cash flow. We anticipate annual cost savings of approximately $38 million to $42 million after we have fully implemented the restructuring, 85% of which are expected to be in operating expenses. The anticipated cost reductions include a 30% workforce reduction, consolidation of facilities, consolidation of internal business systems, bringing in-house work that is currently outsourced and a more focused approach to marketing spending. It is our goal, based on lower operating expenses and with our current gross margin structure, to achieve operating profitability in the fourth quarter. Longer term, the streamlined organization and faster time to market should provide the capability to achieve sales growth and higher margin goals."
Second quarter 2005 Zip product sales of $16.8 million decreased $15.5 million, or 48.1%, from second quarter 2004. Second quarter 2005 Zip product gross margin percentage of 51% improved 13 percentage points from 38% in the prior year. The increase in Zip gross margin percentage was primarily due to a combination of lower material spending and fewer pricing, rebate, and marketing programs. Second quarter 2005 Zip product profit margin (PPM) was $7.7 million, compared to $10.7 million in second quarter 2004.
Second quarter 2005 sales of Consumer Storage Solutions products, consisting of optical, hard disk (HDD), Mini USB flash, and floppy drives, were $33.1 million, relatively flat with second quarter 2004. The Consumer Storage Solutions product loss in second quarter 2005 was $2.2 million, compared to a product loss of $1.2 million in second quarter 2004. The second quarter 2005 product loss was primarily driven by lower margins due to price competition and increased inventory reserves for slow moving products.
Second quarter 2005 REV product sales were $11.1 million with a product loss of $1.6 million. The product loss was due to development costs for next generation REV products, continued marketing expenses to improve the market awareness of REV technology, and under-absorbed fixed overhead expenses at current volumes. Compared to second quarter 2004, when the product was initially launched, REV revenue increased from $7.5 million and the product loss decreased from $6.7 million.
Second quarter 2005 NSS revenue of $4.2 million increased $0.2 million, or 5%, compared to second quarter 2004. The NSS product line had a nominal PPM in second quarter 2005 compared to a PPM of $0.3 million in second quarter 2004.
General corporate expenses which were not allocated to the total second quarter 2005 PPM totaled $10.9 million, a decrease of $5.7 million, or 35%, compared to second quarter 2004.
Revenue by region during second quarter 2005 was $32.8 million in the Americas, $28.0 million in Europe, and $4.9 million in Asia, or 50%, 43%, and 7%, respectively. This compares to revenue by region during second quarter 2004 of $41.9 million in the Americas, $29.6 million in Europe, and $6.1 million in Asia, or 54%, 38%, and 8%, 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 second quarter 2005 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, August 11, 2005.
SAN DIEGO, July 28 /PRNewswire-FirstCall/ -- Iomega Corporation (NYSE: IOM - News) today reported revenue of $65.7 million and a net loss of $6.4 million, or ($0.12) per share, for the quarter ended July 3, 2005. In comparison, second quarter 2004 revenue was $77.6 million with a net loss of $19.8 million, or ($0.38) per share. The lower revenue was primarily due to the decrease in Zip® product line revenue and was partially offset by revenue increases in the REV(TM) product line which began shipping in the second quarter of 2004.
The second quarter 2005 gross margin percentage was 20.6% compared to 19.0% for second quarter 2004. The increase was primarily due to lower overhead costs. Second quarter 2005 operating expenses were $19.8 million compared to $30.9 million in the second quarter of 2004, a reduction of 36%. The second quarter 2005 operating loss was $6.3 million, compared to $16.1 million for second quarter 2004. The improvement in operating loss was a result of the lower internal cost structure implemented in the second half of 2004.
The Company's total cash, cash equivalents, and temporary investments increased by $5.7 million during the second quarter to $109.9 million. The increase was primarily a result of improved working capital management, including lower inventories, reduced receivables and extended payment terms with major vendors.
"While the second quarter operating loss was consistent with our expectations, we are pleased to report significant improvements in working capital management that resulted in positive cash flow for the second quarter," said Werner Heid, president and CEO, Iomega Corporation. "We announced a restructuring plan on July 26th to align expenses with expected revenues. The actions are expected to result in a lean, more competitive cost structure, a rationalized product line, and a streamlined organization to enable faster decision making and improved new product time to market. Going forward, we will focus on HDD based storage solutions (REV, NAS and external HDDs) and we will continue to manage the Zip business to maximize cash flow. We anticipate annual cost savings of approximately $38 million to $42 million after we have fully implemented the restructuring, 85% of which are expected to be in operating expenses. The anticipated cost reductions include a 30% workforce reduction, consolidation of facilities, consolidation of internal business systems, bringing in-house work that is currently outsourced and a more focused approach to marketing spending. It is our goal, based on lower operating expenses and with our current gross margin structure, to achieve operating profitability in the fourth quarter. Longer term, the streamlined organization and faster time to market should provide the capability to achieve sales growth and higher margin goals."
Second quarter 2005 Zip product sales of $16.8 million decreased $15.5 million, or 48.1%, from second quarter 2004. Second quarter 2005 Zip product gross margin percentage of 51% improved 13 percentage points from 38% in the prior year. The increase in Zip gross margin percentage was primarily due to a combination of lower material spending and fewer pricing, rebate, and marketing programs. Second quarter 2005 Zip product profit margin (PPM) was $7.7 million, compared to $10.7 million in second quarter 2004.
Second quarter 2005 sales of Consumer Storage Solutions products, consisting of optical, hard disk (HDD), Mini USB flash, and floppy drives, were $33.1 million, relatively flat with second quarter 2004. The Consumer Storage Solutions product loss in second quarter 2005 was $2.2 million, compared to a product loss of $1.2 million in second quarter 2004. The second quarter 2005 product loss was primarily driven by lower margins due to price competition and increased inventory reserves for slow moving products.
Second quarter 2005 REV product sales were $11.1 million with a product loss of $1.6 million. The product loss was due to development costs for next generation REV products, continued marketing expenses to improve the market awareness of REV technology, and under-absorbed fixed overhead expenses at current volumes. Compared to second quarter 2004, when the product was initially launched, REV revenue increased from $7.5 million and the product loss decreased from $6.7 million.
Second quarter 2005 NSS revenue of $4.2 million increased $0.2 million, or 5%, compared to second quarter 2004. The NSS product line had a nominal PPM in second quarter 2005 compared to a PPM of $0.3 million in second quarter 2004.
General corporate expenses which were not allocated to the total second quarter 2005 PPM totaled $10.9 million, a decrease of $5.7 million, or 35%, compared to second quarter 2004.
Revenue by region during second quarter 2005 was $32.8 million in the Americas, $28.0 million in Europe, and $4.9 million in Asia, or 50%, 43%, and 7%, respectively. This compares to revenue by region during second quarter 2004 of $41.9 million in the Americas, $29.6 million in Europe, and $6.1 million in Asia, or 54%, 38%, and 8%, 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 second quarter 2005 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, August 11, 2005.
posted at 1:53 p.m.
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