UNITED
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COMMISSION
Washington
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D.C.
20549
SCHEDULE
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INFORMATION
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Filed
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Corporation
Pursuant
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14a-12
Under
the Securities Exchange Act of
1934
Subject
Company: Iomega
Corporation
Commission
File
No. 001-12333
This
filing relates to the proposed
acquisition of ExcelStor Great Wall Technology Limited, a Cayman Islands
company
(“EGWTL”), and Shenzhen ExcelStor Technology Limited, a PRC company (“SETL”) by
Iomega Corporation (“Iomega” or the “Company”) from Great Wall Technology
Company Limited, a People’s Republic of China company (“GWT”), ExcelStor Group
Limited, a Cayman Islands company (“EGL”), ExcelStor Holdings Limited, a British
Virgin Islands company (“EHL” and, together with GWT and EGL, the “Selling
Shareholders”), pursuant to the terms of a Share Purchase Agreement, dated as of
December 12, 2007 among Iomega, the Selling Shareholders, EGWTL, and SETL
(the “Proposed
Acquisition”). The following
is a
transcript of a conference call conducted by the Company on February
5, 2008
relating in part to the proposed acquisition:
Important
Additional
Information for Investors and Stockholders
In
connection with the transaction, the Company intends to file a proxy
statement
with the SEC. INVESTORS AND STOCKHOLDERS ARE STRONGLY ADVISED TO READ
THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Investors and stockholders may obtain a free copy of the
proxy
statement (when it becomes available) and other documents filed by
the Company
at the SEC’s website at http://www.sec.gov. A free copy of the proxy statement
when it becomes available may also be obtained from the Company, by
calling
Investor Relations at (801) 332-3585 or by writing to Iomega Corporation,
Attn:
Investor Relations, 10955 Vista Sorrento Parkway, San Diego, CA
91230.
The
Company, EGWTL, SETL, the Selling Shareholders and each of their respective
executive officers and directors may be deemed to be participants in
the
solicitation of proxies from the stockholders of the Company in favor
of the
transaction. Information about the executive officers and directors
of the
Company and their ownership of the Company’s common stock is set forth in the
proxy statement for the Company’s 2007 Annual Meeting of Stockholders filed with
the SEC on April 13, 2007 and the Company’s Current Reports on Form 8-K
filed with the SEC on September 27, 2007 November 8,
2007, December 12, 2007, December 20, 2007, and
January 23, 2008. Certain directors and executive officers of the Company
may have direct or indirect interests in the transaction due to securities
holdings, pre-existing or future indemnification arrangements, vesting
of
options or rights to severance payments if their employment is terminated
following the transaction. Additional information regarding the Company,
EGWTL,
SETL, the Selling Shareholders and the interests of each of their respective
executive officers and directors in the transaction will be contained
in the
proxy statement regarding the transaction that will be filed by the
Company with
the SEC.
Final
Transcript
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Conference
Call Transcript
IOM
- Q4 2007 Iomega Corporation Earnings Conference Call
Event
Date/Time: Feb. 05. 2008 / 1:30PM PT
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2008
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Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
CORPORATE
PARTICIPANTS
Jonathan
Huberman
Iomega
Corporation -
CEO
Preston
Romm
Iomega
Corporation -
CFO
Thomas
Kampfer
Iomega
Corporation -
President, COO
CONFERENCE
CALL
PARTICIPANTS
Sal
Kamalodine
B.
Riley & Co. -
Analyst
Boris
Markovich
Cantor
Fitzgerald -
Analyst
PRESENTATION
Ladies
and gentlemen, welcome to the Iomega quarterly earnings conference call.
(Operator Instructions). At this time, I would like to introduce today's
speaker, Jonathan Huberman.
Jonathan
Huberman
- Iomega Corporation
- CEO
Thank
you and good afternoon. Welcome to Iomega's fourth-quarter 2007 conference
call.
With me today are Tom Kampfer, President and COO, and Preston Romm, our
CFO.
Today's
call will begin with Preston providing an overview of our fourth-quarter
financial results and then I will provide a brief update on our business.
Following our remarks, we will take your questions. Preston?
Preston
Romm
- Iomega Corporation
- CFO
I
will start with our customary Safe Harbor notification. Please note that
various
remarks we may make about the Company's future expectations, plans, and
prospects constitute forward-looking statements for the purposes of the Safe
Harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these
forward-looking statements due to various factors, including those discussed
in
our most recently-filed Form 10-K and Form 10-Q.
In
addition, any forward-looking statements represent estimates as of today.
We
specifically disclaim any obligation to update forward-looking statements,
even
if our estimates change. So, the numbers.
Today,
we reported net revenue of $120.6 million for the fourth quarter 2007 with
a
gross margin percentage of 17.3% and net income of $6.5 million or $0.12
per
diluted share. This compares to fourth-quarter 2006 net revenue of $76.2
million, a gross margin percentage of 20.2% and net income of $4.9 million
or
$0.09 per diluted share. This also compares to third-quarter 2007 net revenue
of
$80.7 million, a gross margin percentage of 16.1%, and net income of $1.3
million or $0.02 per diluted share.
We
are pleased to state that these numbers exceeded our previous guidance shared
on
December 12, 2007 when we announced the ExcelStor acquisition. The
fourth-quarter performance represents a revenue increase of $44.4 million
or 58%
from the same period last year, driven by strong sales of consumer storage
solution products and network storage systems of 86% and 76% respectively.
©
2008
Thomson Financial.
Republished with permission. No part of this publication may be reproduced
or
transmitted in any form or by any means without the prior written consent
of
Thomson Financial.
Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
The
increase in gross margin dollars and decrease in gross margin percentage
from
the same period last year were a result of growth in consumer storage solution
products and an expected Zip revenue decrease of 48%, which carries a higher
gross margin percentage than consumer storage products. Further, our gross
margin percentage increased 120 basis points from the third quarter 2007
as a
result of material cost reductions and improved market pricing conditions
in the
external HDD market.
Total
year 2007 net revenue was $336.6 million with a 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 a loss of $0.17 per share. This represents
a net
revenue increase of $107.1 million or 47%, due primarily to strong growth
in the
consumer storage solutions and network storage systems 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 total $64.6 million, a decrease of $4.8
million
from the end of the third quarter 2007. This decrease was the result of timing
of working capital needs during the fourth quarter and building inventory
required to meet the expected strong demand in the first quarter 2008. Inventory
increased $11.7 million from the end of the third quarter to a December 31,
2007
balance of $79.9 million to meet this expected demand.
And,
we had a healthy order book of approximately $38.9 million as of January
1.
Inventory turns did improve from 4.0 during the third quarter to 5.0 at the
end
of the fourth quarter.
A
couple of items to note at this time which are included in the footnotes
of the
attached condensed statements. The fourth-quarter results include a pretax
cash
benefit of $3.5 million related to a prior license of intellectual property.
The
fourth-quarter and total year 2007 included pretax expenses of $1.2 million
and
$2.3 million respectively for external professional fees associated with
the
recently announced acquisition of ExcelStor Group. We obviously haven't
discussed these prior to today but they have been included in our earlier
quarterly financials.
And
finally, operating expenses for the fourth quarter were higher than normal
as
they included accruals for total year employee and management bonuses and
potential bad debt given the financial problems of one of our US retail
customers, CompUSA.
Turning
our attention to 2008, 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 the fourth quarter
2007,
we now expect full year 2008 revenue approximately $400 million and non-GAAP
net
income of $11 million or $0.20 per diluted share. These non-GAAP net income
figures exclude any external expenses associated with the acquisition of
ExcelStor Group.
This
concludes the finance portion of the call. Now, I would like to turn it over
to
John.
Jonathan
Huberman
- Iomega Corporation
- CEO
The
fourth quarter was a great finish to an eventful year for Iomega. With our
outstanding fourth-quarter results, we achieved our sixth consecutive quarter
of
profitability and our fifth consecutive quarter of delivering year-over-year
revenue growth. We made solid progress towards our previously stated goals
for
2007 and set the stage for continued success in 2008.
Some
of the highlights from our fourth-quarter results include quarterly revenue
of
$120.6 million, a 58% increase over fourth quarter 2006; 2007 annual revenue
of
$336.6 million, a 47% increase over 2006 total revenue; record levels of
external HDD revenue in gross margin dollars, marking another quarter in
which
our HDD business was the biggest contributor to overall revenue and gross
margin. Outstanding NAS revenue growth of 76% over the same period last year
was
a record as well, resulting from new products positioned to take advantage
of
the strong market growth in network storage in the home, home office, and
small-business segments. And finally, the announcement of our planned
acquisition of ExcelStor create synergistic opportunities that we believe
will
allow for substantial growth in the future.
The
excellent results achieved in the fourth quarter and all of 2007 are a testament
to the dedication of the Iomega team, a competitive targeted product mix
and the
resurgent value of the Iomega brand. We achieved a lot in 2007. And looking
ahead, I'm very optimistic about the opportunities before us in 2008. Before
we
discuss the outlook for 2008, let's spend a few moments reviewing our product
line performance in the fourth quarter of 2007.
Much
of our success in the fourth quarter was due to our ability to take full
advantage of the seasonality of the quarter with high-volume external HDD
products, a competitive cost and pricing structure, a very efficient operation
and supply chain, strong brand equity, and robust sales.
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Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
Turning
to our product line, I will start with the HDD business. The external HDD
business had another quarter of increased year-over-year revenue, posting
exceptional revenue growth of 94%. As the need for incremental data storage
continues to explode for consumers and small businesses, our HDD business
continues to grow and generate incremental profits. As in previous quarters,
we
faced tough pricing challenges in a very competitive marketplace. But we
again
delivered the right products at the right prices to the market.
A
prime example is our stylish and colorful eGo Portable Hard Drive, which
continued to sell out in the US and Europe. The small form factor eGo Portable
Hard Drive is Iomega at its best, bringing a point of differentiation to
an HDD
product that sets it apart from competitors. The eGo has won numerous accolades
around the world for its unique blend of design and style including widespread
approval from the technology press in the US and Europe. The eGo drive has
also
garnered kudos from the general media as well, including a coveted spot in
TIME
Magazine's 10 Ten Gadgets of 2007.
The
eGo Drive is now available in two capacities, 160 GB and 250 GB, as well
as the
initial USB-powered version and the new dual interface model with FireWire
400
that was announced two weeks ago at Apple's Annual Macworld Trade Show. As
demand grows, the palette of colors for the eGo Drive continues to expand
with
models that match Dell's new colorful Inspiron laptops. And a great channel
win
by our sales team, the eGo Drive is now a featured product in Apple retail
stores and at the online Apple Store.
Speaking
of Apple, the fourth quarter also saw initial sales of our strongest lineup
of
Apple-oriented products ever. In addition to the dual interface eGo Portable
Hard Drive, we have single and double drive desktop HDDs that strike the
right
balance of ease-of-use and functionality with attractive Apple-inspired designs
that look great on the desktop.
Today's
Apple user needs an external hard drive to take advantage of Time Machine,
the
innovative data backup feature in the new Leopard Operating System. These
Iomega
external hard drives designed specifically for use with Mac Computers are
ideal
storage solutions for this purpose. I expect all of these products as well
as
our high-volume, value-oriented external hard drives will continue to do
well as
the market for external storage expands in 2008.
Turning
to our NAS product line, the fourth quarter saw great progress with this
business growing 76% year-over-year. With simple to use network hard drives
and
NAS devices, Iomega competed aggressively for the rapidly expanding market
for
network storage in the home. Independent analysis shows that there are at
least
75 million homes worldwide with two or more personal computers in a home
network. Just as the wireless router has become commonplace in the home,
we
believe shared network storage will as well. This market is a great continuing
growth opportunity for Iomega.
Our
Iomega Home Network Hard Drive introduced in the third quarter enables network
storage in the home for a little more than the cost of a standard desktop
hard
drive. Hitting the right note on easy network storage at a great price resulted
in strong sales of the home network hard drive in the fourth quarter. Our
more
advanced, higher capacity Iomega StorCenter Network Hard Drive targeted to
home
offices and small businesses also experienced sales momentum in the developing
mass market for home and SMB network storage.
In
January, we established an alliance with EMC to use its Linux-based operating
system called LifeLine for a next-generation, Iomega-branded NAS appliances.
Targeting consumer, SOHO, and small businesses, we expect that the EMC LifeLine
software will serve to broaden our current NAS offerings beginning in the
second
quarter of this year. EMC's LifeLine software alliance is just the start
of a
cooperative worldwide marketing effort between Iomega and EMC on SOHO and
SMB
NAS products. There will be more news on this front as 2008 unfolds.
Today,
Iomega's NAS products already represent the industry's broadest lineup of
network storage devices for consumer, SOHO, and small-business customers.
From
250 GB to 3 terabytes, from the smallest home office to a small business
with
more than 100 employees, Iomega has the right storage devices to address
the
full spectrum of data storage needs.
Now,
to our REV Backup Drive product line. The first two generations of Iomega
REV
Drive technology addressed the backup and archive needs of small and midsize
businesses. The 35 GB and 70 GB removable hard drives and the innovative
REV
Loader gave companies a superior backup and archive solution to slow, unreliable
and obsolete tape technologies.
To
date, we have sold approximately 350,000 REV Drives and nearly 2 million
REV
Disks. As everyone knows, technology doesn't stand still. And as hard drive
capacity increases, the storage needs of our customers are changing too.
That's
why we will announce a third-generation REV device very soon. The upcoming
addition to the REV product family will feature another increase in capacity
and
performance to meet the needs of businesses across the US, Europe, and around
the world. Digital data is the lifeblood of growing businesses. And, no other
removable archivable technology reliably protects that data at a better cost
per
gigabyte than our REV products.
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of
Thomson Financial.
Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
Let's
switch gears to our OfficeScreen managed services business. Our services
business had a solid quarter with revenue of 2.8 million, driven by strong
growth in the systems integration segment. In the fourth quarter, we continued
to build sales momentum of our Postini powered e-mail and spam defense service.
Postini chose Iomega as its primary SMB partner to broaden the reach of its
solution beyond both the enterprise segment and the US market. This product
is
being well received by SMB customers that now have access to the best in
enterprise e-mail security at a price they can afford.
However,
with Google's purchase of Postini late last year, it is unclear what the
future
holds for Iomega sales of Postini's e-mail spam and end spam defense service.
Our combined strategy to marry Postini's world-class offerings with our strong
worldwide brand, infrastructure and channel relationships remains a strong
approach to increasing sales in this business. Nevertheless, we will have
to see
what Google's ultimate plan is for this acquisition of Postini. I suspect
we
will know more shortly.
Beyond
our strong financial results, the biggest news of the fourth quarter was
our
planned acquisition of ExcelStor Technology, a subsidiary of Great Wall
Technology and China Electronics Corporation. The goal of this acquisition
is to
create a global consumer electronics company. Both Iomega and ExcelStor bring
complementary elements to a new combined company. We have the powerful equity
of
the Iomega brand combined with strong channel penetration in the US and Europe.
ExcelStor is a world-class manufacturer with sister companies that produce
a
wide spectrum of computer peripheral and consumer electronics products that
today have little or no access to Western markets.
This
planned acquisition combines the best talents from both companies with
practically no current product line overlap at all. Headquartered in Shenzhen,
China and founded in 2001, ExcelStor has a very impressive growth history.
In
seven years' time, ExcelStor has become a profitable $800 million entity
that
produces over 20 million single platter hard drive products per year. At
upon
completion of this acquisition, the profitability of ExcelStor's revenue
stream
will be immediately accretive to the new Iomega creating a $1 billion plus
company.
ExcelStor
is well known to us, having manufactured our REV products for the last four
years. The opportunity to identify new product categories with the sister
companies and to increase and diversify the kinds of products we bring to
market
has all of us at Iomega excited about this acquisition and what it means
for our
Company and creating shareholder wealth.
Assuming
we finalize this deal in the middle of the year, you should expect to see
new
Iomega-branded consumer electronics products before the end of 2008. We've
already started the process of investigating new product launches and I was
in
China last week discussing opportunities with Great Wall and CEC sister
companies.
Turning
our attention to ExcelStor's financials, as a reminder, we gave guidance
when we
announced the deal on December 12, 2007 with 2007 revenues forecasted at
$818
million and net income of $18.3 million. ExcelStor's Q4 revenues appear to
be
roughly in line with those projections, while their income appears to be
coming
in a bit higher than expected. Once we publish ExcelStor's final US GAAP
audited
2007 numbers, we expect to update our 2008 combined projections.
In
summary, fourth quarter 2007 was an outstanding quarter for Iomega. We posted
our highest level of profitability in many years and continue to develop
momentum in our overall business as we move through the first quarter of
2008
and beyond. Our goal is for 2008 to build upon our goals we pursued in 2007.
Here they are -- to continue to grow and deliver sustained profitability;
to
further increase the size of our HDD business and excel in the high-growth
NAS
market; to launch and ramp the next generation of REV products and lastly
to
finalize the ExcelStor acquisition and begin to create a global consumer
electronics company.
We
are enthusiastic about the opportunities in the first quarter to continue
to
grow our business, generate profit and improve shareholder value. Our core
businesses, in particular HDD and NAS, are well-positioned for growth throughout
the year.
Thank
you for your time today. We will be pleased to take your questions.
Operator?
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2008
Thomson Financial.
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Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings Conference
Call
|
QUESTION
AND ANSWER
(Operator
Instructions). Sal.
Sal
Kamalodine
- B. Riley & Co. - Analyst
Nice
quarter and guidance. Do you feel like the HDD business in
Q4 reflected all of the opportunities related with the eGo Drive being
distributed through Dell and having the Apple Stores as a new distribution
channel?
Jonathan
Huberman
- Iomega Corporation -
CEO
Well,
we certainly did do very well with Dell in Q4 with the
eGo. The Apple Stores we're just starting to get in. And frankly, the dual
wasn't introduced until this month. So we had a little bit in the Apple Stores
on the eGo. It was more on other products. The 2.5 inch Silver Drive was the
primary product we had distributed in Apple during Q4. And we had some UltraMax
as well in certain stores but not all stores.
So,
I think there's certainly -- we got a bit of a bump from that.
But I think your question, did we see a full expected bump? The answer is
no.
Sal
Kamalodine
- B. Riley & Co. - Analyst
And
so then, with Apple just beginning to ramp and the fact
that March is typically a seasonally weaker quarter for the consumer products,
what would you expect that business to look like sequentially in the March
quarter, given that?
Preston
Romm
- Iomega Corporation -
CFO
This
is Preston. We really don't give guidance one quarter out.
You are right in that traditionally, seasonally down. We had a very strong
backlog going into the quarter. It really depends what we ship and what other
new orders come in. But I think we will see a bump from the Apple business
being
full-blown and the dual coming out but usually it's a seasonally down quarter
for us.
Sal
Kamalodine
- B. Riley & Co. - Analyst
In
the REV product line, does rolling out a higher capacity
drive open up new opportunities or do you look at that as being more of a
replacement business for the 70 GB drive?
Jonathan
Huberman
- Iomega Corporation -
CEO
I
think it may open up a few new opportunities. I think it will
continue the life of REV significantly and it will add to the longevity of
REV.
I'm not sure that there is substantial new opportunities that we can't target
with the REV 70 that we will be able to target with a higher capacity.
Sal
Kamalodine
- B. Riley & Co. - Analyst
Then
the margins, the gross margin on a blended basis was a lot
better than what would be suggested by the mix. Preston, you touched upon the
lower material costs and the better pricing environment in general in Q4. Can
you just expand a little bit on that because the margins were pretty good in
the
quarter?
Preston
Romm
- Iomega Corporation -
CFO
Yes,
the margins were quite good in the quarter, especially
compared to Q3. And if you remember our explanation about the Q3 margins being
lower was that we took some price protection in the beginning of the third
quarter really in relation to -- that probably [shaved it] longer in the second
quarter. So, if you normalize those two, we're slightly above where we were
in
the fourth quarter.
There
were some supply constraints as you know on the drive business
in the fourth quarter. I think our team did an excellent job finding drives
and
shipping product out the door and getting them in at good pricing and
maintaining our low-cost structure. But also as a result of that, there wasn't
a
lot of price protection we had to pass on to the customer. I think that really
benefited the gross margins in the external HDD business in the fourth
quarter.
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Thomson Financial.
Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
Sal
Kamalodine
- B. Riley & Co. - Analyst
How
do you see the supply situation unfolding so far in January
-- or February, excuse me?
Jonathan
Huberman
- Iomega Corporation -
CEO
It's
still a bit constrained, not nearly the same as it was in
Q4. And I expect the constraints will continue to ease as we move towards Q2.
And we don't expect to see any constraints in Q2 which is typically the
seasonally weakest quarter of the year.
Sal
Kamalodine
- B. Riley & Co. - Analyst
Then
finally, can you just expand a little more on the
ExcelStor acquisition and where you are in terms of when you would expect the
deal to close? And if you could just expand a little bit too on some of the
products you expect to roll out and how you see that playing out in the second
half of the year.
Jonathan
Huberman
- Iomega Corporation -
CEO
Sure,
we will do what we can. As far as closing, we expect it
to -- we continue to expect it to close around mid-year. No change there. We
are
hoping to get the initial proxy out shortly. We are certainly working diligently
to do that. At the same time, ExcelStor is working very diligently on their
side
to get Chinese approval to supply us the information we need for US-based
approvals. You may have seen that their parent company, Great Wall, issued
their
circular a few weeks back to the Hong Kong Stock Exchange regarding this
transaction.
In
terms of the products, as I had mentioned in the prepared remarks,
I was in China last week discussing with some of our new sister companies'
potential products that we could bring out. I don't want to go into a lot of
detail right now, but certainly they are quite enthusiastic about working with
us. And internally, we see a lot of opportunities. And we're working -- going
down a number of different paths. And as we're ready to talk about specifics,
I
will bring that to you. But at this point, we're not ready yet.
Just
wanted to make it clear to everyone, we're working diligently.
ExcelStor is working diligently but there's clearly no guarantees that we will
get approval from either side.
Boris
Markovich.
Boris
Markovich
- Cantor Fitzgerald -
Analyst
A
question for you on the REV product line. As you look out
into sort of 2008 and 2009, do you look at this as a growth business as in
would
you expect the revenues to actually turn around and start growing at some
point?
Thomas
Kampfer
- Iomega Corporation -
President, COO
This
is Tom Kampfer. If you look at where we are, we've been
flat. We're optimistic about the next generation product that we'll be launching
this year and that we're able to offer a much higher capacity for the same
or
lower cost. So, the value proposition is better than we currently offer on
REV
70. We hope that opens up the backup and archive market for us.
As
we've discussed on many calls here, we had an upside planned
around Thomson Grass Valley. That just hasn't come to fruition yet. They are
shipping as we reported on the last call. I don't have access to their exact
volumes but it's not materially uplifting our revenue at this point. It
certainly didn't in Q4.
So,
we're looking forward to that in 2008. We'll see where it goes.
We are always looking for new applications and new markets for REV. But, again,
we haven't found that material upside yet. So, we'll keep pushing it with now
and new product with the upcoming new REV product.
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2008
Thomson Financial.
Republished with permission. No part of this publication may be reproduced
or
transmitted in any form or by any means without the prior written consent
of
Thomson Financial.
Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings
Conference
Call
|
Boris
Markovich
- Cantor Fitzgerald -
Analyst
Do
you expect any additional license and patent fee income like
that 3.5 million that you had this past quarter in 2008?
Preston
Romm
- Iomega Corporation -
CFO
Can
you repeat the question?
Boris
Markovich
- Cantor Fitzgerald -
Analyst
You
had 3.5 million in license and patent fee income in the
quarter.
Preston
Romm
- Iomega Corporation -
CFO
Yes,
we are always looking at ways to monetize our intellectual
property. As you know, we've got a large patent portfolio. We've done this
in
the past and I suspect we'll continue to do it in the future. 3.5 is a rather
large amount of money. And that's really the last payment of a license deal
we
did in 2004. So, that's kind of unique by itself. But we are always looking
for
ways to monetize and either sell or license off our intellectual property.
Jonathan
Huberman
- Iomega Corporation -
CEO
And
we definitely have IP that is valuable that we will be able
to monetize. How much of it is an open question. But we are certainly aggressive
about doing so.
Thomas
Kampfer
- Iomega Corporation -
President, COO
We've
had intuitive deals in the last two to three years and
are optimistic that there will be other transactions in 2008 but nothing to
report now.
Boris
Markovich
- Cantor Fitzgerald -
Analyst
My
final question is on the acquisition. Can you give us a
little bit of color on your discussions with Hitachi, given the importance
of
Hitachi as a customer and partner of ExcelStor, any concerns or feedback that
you've gotten from that particular customer?
Jonathan
Huberman
- Iomega Corporation -
CEO
Sure.
As we understand it today, the relationship between
Hitachi and ExcelStor is actually getting stronger rather than getting weaker.
There certainly has been a lot of concern in the market over Hitachi's future
and the widely-reported investment in them -- potential investment in them
by
Silver Lake.
As
I understand it, there's nothing definitive there to date. Hitachi
continues to be interested in a minority investment from what I hear by a
private equity firm. Certainly ExcelStor and Hitachi are working together on
many different fronts and I don't see any near-term problems for that
relationship. I think that we will have to wait and see what happens over the
next few months. But I'm optimistic that the relationship will get stronger
and
not weaker.
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Thomson Financial.
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or
transmitted in any form or by any means without the prior written consent
of
Thomson Financial.
Final
Transcript
Feb.
05. 2008 / 1:30PM PT, IOM - Q4 2007 Iomega Corporation Earnings Conference
Call
|
(Operator
Instructions). Sal.
Sal
Kamalodine
- B. Riley & Co. - Analyst
What
is this partnership with EMC and the LifeLine product mean
for you guys for the NAS product line this year? How significant is it?
Jonathan
Huberman
- Iomega Corporation -
CEO
It's
a very good question. From a business perspective, we're
very enthusiastic about the opportunity to work together with EMC and being
one
of their two lead partners, us and Intel's white box business being the other
one to help bring -- jointly bring this product to market. It's a very good
stack. And leveraging their stack, our hardware, and our two brands and two
teams, I think we can do substantially better in a NAS business than we are
today. What it means financially, we will have to wait and see. We don't have
the product in market yet. It's hard to predict the kind of take-up we're going
to get. But I'm optimistic that this is going to have a meaningful impact to
our
business.
Sal
Kamalodine
- B. Riley & Co. - Analyst
Right,
and you said the product rolls out in Q2?
Jonathan
Huberman
- Iomega Corporation -
CEO
We
expect to have something probably late Q2 in the
market.
At
this time, I'm showing no further questions.
Jonathan
Huberman
- Iomega Corporation -
CEO
Thank
you very much for your attention. I appreciate the
support and look forward to talking to you in three months.
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