Feeds

Iomega cash pile looks tempting takeover target

Spend it, quick?

  • alert
  • submit to reddit

Top three mobile application threats

ComputerWire: IT Industry Intelligence

Iomega Corp now looks a sitting duck for a takeover as it sits on a $453.9m cash pile while its stock market value is a pitiful $483.4m. After hacking back costs, the San Diego, California-based company is milking increasing sums from its Zip drives but acknowledges that revenue will continue to slide in the coming year.

With $285m of its cash stashed in banks outside the US, Iomega would find the US government grabbing a 39% share if it was to be brought home, so an overseas buyer would find it a particularly attractive asset. Iomega has run out of ideas. It says that it has no plans to use its cash pile, and at a time when it desperately needs to expand its product line, cut its R&D budget last year by 26.8% to $36.2m.

In the fourth quarter to December 31, net income was $17.8m, up from income of $3.9m on revenue 18.4% lower at $153.8m. For the year, revenue was $34.7m, up from a loss of $93.3m on revenue that fell 26% to $614.4m.

Iomega, which had revenue of $1.5bn in 1999, has been on the slide for some time, and CEO Werner Heid said it must expect continued revenue decline in the Zip product line, which last year provided 77.9% of total revenue.

Iomega's failure extends further. Revenue from CD-RW dropped 23.2% to $79.5m, Jaz sales crashed 78.3% to $14m while PocketZip managed revenue of just $996,000, compared with $6.9m the previous year.

The one growth area has been in traditional storage products where revenue rose 82.9% to $41.3m. It has high hopes for its SAN products for the SME sector though it may be some time before these turn a profit.

Where Iomega has been remarkably successful is cutting back its cost base to generate more profit on shrinking revenue. However, this is inevitably a short-term strategy and unless Iomega uses its resources to buy a company that can offer revenue growth, its lack of ambition will see it bought by a management with greater ambitions.

© ComputerWire

3 Big data security analytics techniques

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.