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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 1, 1996
Iomega Corporation
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(Exact name of registrant as specified in its charter)
Delaware
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State or other jurisdiction of incorporation
0-11963 86-0385884
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(Commission File Number) (IRS Employer Identification No.)
1821 West Iomega Way, Roy, Utah 84067
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Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 778-1000
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This is Page 1 of 9 pages
Exhibit Index is on Page 4
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Item 5. Other Events
On February 1, 1996, Iomega Corporation (the "Corporation") issued a
press release entitled "Iomega Announces Public Offering on Hold", a copy of
which is attached hereto as an exhibit and incorporated herein by reference.
On February 5, 1996, the Corporation mailed to stockholders of the
Corporation a letter, a copy of which is attached hereto as an exhibit and
incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IOMEGA CORPORATION
Dated: By: /s/ Leonard C. Purkis
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EXHIBIT INDEX
Exhibit No. Description Page No.
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99.1 Press Release issued February 1, 1996
99.2 Letter to Stockholders,
dated February 5, 1996
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Exhibit 99.1
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NEWS RELEASE
IOMEGA FOR MORE INFORMATION CONTACT:
Iomega Corporation Investor Relations (801) 778-3585
Kalt, Rosen & Associates, Inc. (415) 397-2686
FOR IMMEDIATE RELEASE
IOMEGA ANNOUNCES PUBLIC OFFERING ON HOLD
ROY, UTAH, FEBRUARY 1, 1996 -- Iomega Corporation (NASDAQ:IOMG),
with the concurrence of their investment bankers, today announced
that due to confusion in the market place and volatility of the
stock price, its planned public offering has been placed on hold.
The Company reiterated that it will require financing to fund its
growth and is reviewing alternatives available to it, including
proceeding with a public offering at a later point in time.
Company president Kim B. Edwards stated that "although component
issues continue to limit our ability to ramp production, demand for
our products remains strong. We believe that the decision to defer
the offering is in the best interests of our shareholders."
Iomega Corporation provides personal computer storage solutions
that help people manage their computer stuff -- anywhere. These
solutions include: Zip drives and disks; Jaz one-gigabyte drives and
disks; Ditto tape backup drives and tape cartridges; and the
Bernouli line of removable drives and disks. Used in homes, business,
government and education, and by creative professionals, Iomega
storage solutions are available through computer retail stores,
resellers and major distributors. The Company can be reached at
800-MY-STUFF (800-697-8833) or 801-778-1000.
# # #
Iomega and Bernoulli are registered trademarks of, and Zip, Ditto,
Jaz and the Iomega logo are trademarks of, Iomega Corporation. All
other company and product names are marks of their respective
companies.
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Iomega Corporation 1821 West Iomega Way Roy, Utah 84067
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Exhibit 99.2
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IOMEGA February 5, 1996
LETTER FROM THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Fellow Shareholders:
On February 1, we announced that we were placing our planned stock
offering on hold. This was a decision made after extensive
discussions with our investment bankers. As a result of this abrupt
change in plans, I feel that we need to keep you informed of the
basis for our decision and our future course of action. With that in
mind, we have attached a copy of our press release regarding placing
the offering on hold and the following list of questions and answers
to address the confusion and misinformation in the market place
regarding the offering:
WAS THE OFFERING PLACED ON HOLD BECAUSE OF ACCOUNTING IRREGULARITIES
AT THE COMPANY?
No. The Company's audited financial statements for the year ended
December 31, 1995 have been filed with the SEC and are publicly
available. The Company's 1995 financial statements do not reflect
any changes in accounting policy from the prior year.
WHY DID YOU PLACE THE OFFERING ON HOLD?
As mentioned in the news release, there was too much confusion in
the marketplace, including significant misinformation. Several
misleading articles and confusing and conflicting rumors were making
it difficult for us to effectively communicate with potential
investors. In addition, there continue to be uncertainties affecting
the Company's ability to satisfy demand, including, for example, the
ongoing component shortages confronting the Company. After
discussions with our investment bankers, we concluded that it was not
in the best interest of our shareholders to proceed with the offering
at this time. The road show is intended to be an opportunity for us
to present and sell the Company to potential investors. Our
investment bankers believed that instead of focusing on the business
of the Company, we would find ourselves responding to rumors and
misinformation.
WILL YOU PROCEED WITH THE OFFERING, AND, IF SO, WHEN?
Since we are reviewing all options available to us, we cannot be
that specific at this time. However, we are continuing to review all
forms of financing to allow us to continue our growth. While the
withdrawal of the offering was a setback, we are working on obtaining
financing to meet our short- and long-term capital needs. Our
investment and commercial bankers are actively involved in helping
us formulate our short- and long-term financing strategy.
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IOMEGA CORPORATION 1821 West Iomega Way Roy, Utah 84067 TEL 801-778-1000
FAX 801-778-3190
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WHAT DO YOU MEAN BY CONFUSION AND MISINFORMATION?
There have been many rumors and incorrect stories about the Company
published in the newspapers and on-line services. For example,
several recently published articles contained incorrect information
about alleged changes in the Company's policy of reserving against
receivables. Our 1995 results have been audited by Arthur Andersen
and have received an unqualified opinion. Had we changed accounting
methods, we would have been obligated to disclose this. The assertion
that our bad debt reserve had been reduced from $3.5 million at the
end of the third quarter to $1.9 million at the end of the fourth
quarter was untrue, starting with the fact that our third quarter
bad debt reserve was only $1.5 million, not the rumored $3.5. Our
methodology for calculating bad debt reserve was the same in the
fourth quarter as it was in the third.
There have been additional rumors regarding our inventory reserve and
level of inventory. We believe that our obsolescence reserve is
properly stated. In fact, we increased our reserves against
inventories by a significant amount in the fourth quarter.
Inventories are high because, as we rapidly grow sales, we frequently
find ourselves with having an imbalance in our inventories. An
imbalance means that we may have all but one (or a few) of the
components to build a drive. But, because of the missing
components(s), we cannot build the drive. Since the manufacturing
cycle time is very short, it does not pay to start the build. This
imbalance obviously results in a high level of component inventory.
The reason for the low level of finished goods inventory is that
the sell through of our products has been very good which results
in low finished goods. In fact, we still are unable to build enough
Zip drives to satisfy current demand.
IS THE COMPANY RUNNING OUT OF MONEY?
The Company will require additional financing during the first half
of 1996 in order to fund its growth plans. We are continuing to
review all financing alternatives to allow us to continue our growth.
This includes the possibility of proceeding with the public offering
at some point in the future. Our investment bankers continue to be
involved in formulating our financing strategy.
Sincerely,
Kim B. Edwards
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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