UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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IOMEGA CORPORATION
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Filed by Iomega Corporation
Pursuant to Rule 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 PowerPoint slides will be used by Iomega’s management for investor presentations regarding the Proposed Acquisition beginning on January 8, 2008:
 IOMEGA
Corporation IOMEGA Corporation January 7, 2008 |
 2 Statements in this presentation regarding goals for rapid growth and enhanced profitability in 2008, the highlights of the ExcelStor Acquisition (“Transaction”), accretion; potential incremental sales; access to and launch of new products; cross-selling opportunities;
potential new markets and market sizes; access to China markets; partnering with CEC;
Transaction synergies; all pro forma financial and performance estimates after closing
the Transaction including 2008, 2009 and 2010 incremental revenue, income and synergy
estimates; cost savings; operating leverage; tax benefits and rates; and all other
statements that are not purely historical are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. All such
forward-looking statements are based upon information available to Iomega as of
the date hereof, and Iomega disclaims any intention or obligation to update any such
forward looking statements. Actual results could differ materially from the current expectations. Factors that could cause or contribute to such differences include the failure to close the
Transaction; post closing integration challenges; difficulties in realizing cost savings and
synergies; difficulties in accessing and launching new product lines; downturn or loss
of any major customer; a downturn or sale of any ExcelStor OEM customer; a lack of
success of new products due to market and competitive pressures; restructuring or
other charges necessary as part of the integration; legal, compliance, accounting or
Sarbanes Oxley issues arising from a complex global operation; unforeseen technical or
manufacturing challenges; reactions or changes to
business relationships resulting from the Transaction; unexpected cost or burden increases resulting from the Transaction; ability to maintain stringent quality assurance standards;
availability of critical product components; the failure or delay of any sole source supplier; products and technology obsolescence; manufacturing and inventory issues; management turnover; cultural or communication issues adversely impacting the integration;
intellectual property rights; competition; litigation; difficulties realizing the tax
strategy, Government inquiries or directives; general economic and/or
industry-specific conditions; and the other risks and uncertainties identified in
the reports filed from time to time by Iomega with the SEC, including Iomega's most
recent Forms 10-Q and 10-K. Cautionary Note About Forward- Cautionary Note About Forward- Looking Statements Looking Statements |
 3 1995 – 2005: The ZIP Years • In 1995, Iomega (which was founded in 1980 and went public on the NYSE in 1983) launched the ZIP drive • The ZIP drive was the right product at the right time – Huge need to save and transport large data files – Proprietary technology – High margins – Few competitors • The ZIP drive took off and generated tremendous sales and profitability for Iomega • Iomega leveraged the ZIP drive to build solid worldwide sales channels and a very strong brand • After years of strong profits, Iomega became unprofitable in 2003 – Sales of ZIP exceeded $1 billion per year from 1997 through 1999 – As Zip entered the final stages of its product life cycle, Iomega became unprofitable and struggled |
 4 Q1 2006: A New Management Team Came in and Overhauled the Operation • Some of the changes made: – Replaced all but one of the senior executives – Reduced headcount 30% – Changed the organizational design – Flattened the decision making process – Improved time to market dramatically – Revamped our supply chain and replaced many of our partners • The results have been: – By Q3’06 returned to profitability (for the first time in 3.5 years) • Have been profitable every quarter since – By Q4’06 we achieved YoY revenue growth (for the first time in over 8 years) • Have had YoY revenue growth every quarter since – In 2008 we expect to continue to grow at a rapid pace while enhancing profitability |
 5 Iomega’s Key Assets Iomega’s Key Assets • Globally Recognized Brand Name – External HDD, network storage drives and managed services offerings – Large, loyal installed base with over 60 million drives sold • Strong Channel Presence in Europe and Americas – Broad channel coverage focused on Consumer / SOHO / SMB markets – Strong platform for potential future products – Europe – 70% – U.S. – 28% – Asia-Pacific – 2% • Highly Scalable Global Infrastructure – Able to handle significantly more revenue than we currently generate – Headquartered in San Diego, CA with 253 employees – Sales offices worldwide • Strong Financial Performance – Profitable revenue growth – $69.4 million in cash, no debt as of 9/30/07 • Broad Patent Portfolio |
             6 Today We Focus on the Storage and Today We Focus on the Storage and Services Markets Services Markets Product Product Description Description • Portable storage products with 2.5” to 3.5” drives • Targets the Consumer and SOHO markets • NAS and NHDD storage for backup and disaster recovery • Targets the Consumer, SOHO and SMB markets • Enterprise quality managed services for SMBs • Key relationships with leading security vendors • Backup storage products, removability and transport • Targets the SMB market |
 7 Iomega Has World-Class Iomega Has World-Class Distribution Channels Distribution Channels Retail / E-tail • Sold at over 11,500 stores in the Americas, Europe and Asia • Integrated into Iomega’s online strategy Direct Marketers Distributors Iomega.com • A cost effective channel to reach small businesses, medium / large enterprises, government and education • Indirect sales channel for NHDD, NAS and REV • Iomega reaches over 65,000 VARs worldwide through its distributor network • Comprehensive channel program with 15,000 registered resellers in the U.S. and Europe • Approximately 1 million unique visitors, and 75,000 software and driver downloads per month • Quarterly sales through the website are approximately $2 - $2.5 million |
   8 Iomega Today: Iomega Today: Doing Well But Under-Leveraged Doing Well But Under-Leveraged • Leverage brand and channels with new products • Scale to leverage existing infrastructure • Extend business beyond external HDD business • Penetrate Asian market where currently under-represented Key Initiatives Key Initiatives Strengths Strengths • Global brand recognition • Strong worldwide distribution channel • Recent growth and momentum • Profitable with $69.4 mm in cash (as of 9/30/07) • Ability to scale revenues without adding significant infrastructure • Broad patent portfolio |
 9 • Will remain a public company (NYSE: IOM) headquartered in San Diego, CA • 9 Board Members: 5 from GWT / CEC and 4 from Iomega • Management • Acquisition of ExcelStor Technology, a subsidiary of Great Wall Technology (GWT) and China Electronics Corporation (CEC), by Iomega Transaction Summary Transaction Summary -On Dec 12, 2007, Iomega announced a definitive -On Dec 12, 2007, Iomega announced a definitive agreement to acquire ExcelStor- agreement to acquire ExcelStor- Transaction Consideration • All stock consideration • ~140 mm post-transaction fully diluted shares outstanding • Post-transaction ownership: Pro Forma Company Closing • Approval by Great Wall and Iomega shareholders • HSR and PRC regulatory approvals • Anticipated to close mid-year 2008 Value • Transaction value of $275 mm, based on Iomega’s Market Cap of $183 mm • Implied ExcelStor multiples of 0.24x ‘08 Rev; 4.9x ‘08 EBITDA; 12.1x ‘08 PE
Financial Impact • Accretive w/o synergies (excl. one-time transaction-related costs) • Substantially more accretive assuming synergies – GWT / CEC (43%) – Iomega (40%) – Other ExcelStor Investors (17%) – Dr. Z.X. Chen (Pres. of CEC) – Lu Ming (VP of CEC and Pres. of GWT) – Stephen David (Current Chair of Iomega) – Jon Huberman (Current CEO of Iomega) – Eddie Lui (Current CEO of ExcelStor) – CEO: Jonathan Huberman – Pres. / COO: Thomas Kampfer – Exec Chairman: Eddie Lui – CFO: Preston Romm |
 10 Key Transaction Benefits Key Transaction Benefits • • Creates a global Consumer Storage and Creates a global Consumer Storage and Electronics Company Electronics Company • • Combines Iomega’s global brand and channels Combines Iomega’s global brand and channels with ExcelStor’s China presence and with ExcelStor’s China presence and manufacturing capabilities manufacturing capabilities • • Drives significant incremental sales in adjacent Drives significant incremental sales in adjacent Consumer Electronics markets in partnership Consumer Electronics markets in partnership with CEC sister companies with CEC sister companies • • Combines best talents from both companies to Combines best talents from both companies to create an experienced global management create an experienced global management team team • • Cash EPS accretive Cash EPS accretive |
 11 ExcelStor at a Glance ExcelStor at a Glance • Privately held; founded in 2001 by former Seagate and Connor Peripheral Executives • Headquartered in Shenzhen, China, with 2,700 total employees • Manufacturer of internal / external hard drives and storage systems with a strong OEM relationship with major HDD company – This strategic OEM relationship represents approximately 84% of revenue – ExcelStor produces over 20 million single-platter drives per year – Manufactures and sells other HDD & storage products, including Iomega’s REV products • 2007 Revenue forecasted at $818.2 mm and net income of $18.3 mm • ExcelStor branded products represent 12% of revenue • World-class manufacturing expertise • Design services |
    12 Single-Platter 3.5” Single-Platter 3.5” HDD Market Share HDD Market Share • Single-platter drives account for ~65% of 3.5” market • ExcelStor produces over 20 mm units per year of single-platter 3.5” HDDs Worldwide HDD Sales (units) of 3.5” Multi-Platter 35% Single- Platter 65% Market Size: 285 mm 185 mm 185 mm 100 mm 100 mm 20 mm 20 mm 165 mm 165 mm Single-Platter 3.5” HDD Vendor Shares (units) Source: Industry estimates. ExcelStor: 11% |
 13 Overview of The CEC Organization Overview of The CEC Organization CEC Over 60 holding companies CGC 10 companies similar to Great Wall and some are publicly traded Great Wall Technology (0074.HK) 12 other similar companies and some are publicly traded ExcelStor 100% 62% 62% – Monitors – LCD TVs – Software – Semiconductor – MP3 Players – Consumer Electronics • China Electronics Corporation • CEC is a PRC Government-owned conglomerate and CEC’s affiliates generate over $16 Billion in revenues – Approximately 50% ODM / OEM – Approximately 50% branded products • CEC controls over 1,000 companies and 10,000 products • CEC will indirectly control 43% of Iomega • Very limited distribution in the Americas and EMEA • Portfolio company sectors include – PCs – Notebooks – Servers – HDD – Cell Phones – PDAs |
 14 CEC Sister Companies Include: CEC Sister Companies Include: • Great Wall Technology Co., Ltd. • China National Electronic Corp. • Shanghai Hua Hong (Group) Co., Ltd. • Amoi Electronics Co., Ltd. • CEC Holding Co., Ltd. • SED Electronics Industry Corp. • China National Software & Service Co., Ltd. • CEC Corecast Co., Ltd • Wuhan Zhongyuan Electronics Co., Ltd • China Electronics Financial Co., Ltd • China Integrated Circuit Design Co., Ltd • Panda Electronics Co., Ltd • Shanghai Pudong Software Park Co., Ltd. |
 15 ($ in millions, except per share data) Comparative Valuation Summary Comparative Valuation Summary (1) 2007 ExcelStor net income excludes pre-tax transaction related expenses of $4.0 mm ($3.7 mm
net income). (2) 2007 Iomega net income excludes: i. Non-cash pre-tax goodwill impairment charge of $3.0 mm ($1.8 mm net income) incurred in Q1
and Q2; ii. Pre-tax transaction related expenses of $2.0 mm ($2.0 mm net income) incurred in Q2, Q3 and Q4; and iii. Pre-tax restructuring benefit of $0.2 mm ($0.1 mm net income) incurred Q1, Q2 and Q3.
Iomega Offer Price At Market for ExcelStor As of 1/3/08 Stock Price $3.28 % of 52-Week High 57.0% Equity Value $275.1 $183.4 Debt 8.0 0.0 Cash 51.1 69.4 Enterprise Value $232.0 $114.0 Pro Forma Ownership (100% Stock) 60.0% 40.0% EV / Revenue ExcelStor Metric (1) Iomega Metric (2) CY 2007E $818.2 0.28x 0.37x $308.4 CY 2008E 981.8 0.24x 0.30x 383.6 EV / EBITDA CY 2007E $38.5 6.0x 11.3x $10.1 CY 2008E 47.1 4.9x 8.0x 14.2 Equity Value / Net Income CY 2007E $18.3 15.0x 25.8x $7.1 CY 2008E 22.8 12.1x 18.2x 10.1 Multiples Value |
 16 Market Expansion Opportunities Market Expansion Opportunities • Significant opportunity to sell CEC products globally • New Iomega will gain immediate access to large markets such as PCs and LCD panels post closing Note: Estimates from IDC and Industry Research. HDD forecast includes internal and
external drives. (1) Computer peripherals market includes (i) mice and keyboards, (ii) video web cameras and (iii)
audio and gaming peripherals. Source: IDC, Morgan Keegan research report dated
2/28/07 and Logitech. Market Size ($ billions) Market Size ($ billions) Units Produced (millions) Units Produced (millions) $6 $30 $36 $144 $71 $10 $28 $193 $120 $37 Mobile PC LCD TV LCD Monitor HDD Computer Peripherals 2011 2007 +7.5% CAGR +14.0% CAGR (6.0%) CAGR +5.6% CAGR 482 147 113 71 177 194 163 676 Mobile PC LCD TV LCD Monitor HDD +14.5% CAGR +23.2% CAGR +4.7% CAGR +8.8% CAGR 2011 2007 +12.5% CAGR (1) |
 17 Significant Synergies Significant Synergies Revenue Gross Margin • Sell additional CEC products through Iomega’s global channel • Revenue potential: – LCD Monitors – LCD & HD TVs – PCs / Laptops / Servers – Other peripherals – Consumer Electronics • Sell additional Iomega products in China • Sell ExcelStor products in North America and Europe • Cost savings on Iomega products due to ExcelStor manufacturing efficiencies Tax • Significant reduction in pro forma tax rate achieved through step-up of ExcelStor assets – Effective tax rate going-forward ~ 12% Operating Leverage • Scale revenue with small incremental op ex investment |
 18 Pro Forma Operations Pro Forma Operations 2008 is a Year of Transition 2008 is a Year of Transition Revenue Revenue Net Income Net Income $308 $230 $384 $982 $818 $720 $70 2006A 2007E 2008E Iomega ExcelStor Synergies $950 $1,127 $1,435 $10 $3 $7 $18 $18 $23 $8 2006A 2007E 2008E $20 $25 $41 (1) 2007 Iomega net income excludes: i. Non-cash pre-tax goodwill impairment charge of $3.0 mm ($1.8 mm net income) incurred in Q1
and Q2; ii. Pre-tax transaction related expenses of $2.0 mm ($2.0 mm net income) incurred in Q2, Q3 and Q4; and iii. Pre-tax restructuring benefit of $0.2 mm ($0.1 mm net income) incurred Q1, Q2 and Q3.
(2) 2006 Iomega net income reconciliation – see previously filed 10K and 10Qs. (3) 2007 ExcelStor net income excludes pre-tax transaction related expenses of $4.0 mm ($3.7 mm net income). (1) (2) (3) ($ in millions) |
 19 Significant Revenue and Significant Revenue and Cost Synergies Expected Cost Synergies Expected $243 $70 $500 2008E 2009E 2010E $19.4 $8.5 $34.3 2008E 2009E 2010E ($ in millions) Incremental Revenue Incremental Revenue Pre-Tax Synergies Pre-Tax Synergies -Tax
Synergies Tax Synergies |
    20 Pro Forma Tax Benefits Pro Forma Tax Benefits Geographic Tax Rates • U.S. ~ 0% • Cayman Islands ~ 0% • Europe ~ 18% • China btwn 7.5% – 25.0% over next 7 years Blended Tax Rate ~ 12% |
 21 Pro Forma 2008E Cash Pro Forma 2008E Cash Earnings Per Share Earnings Per Share • Iomega Stand Alone 2008E Earnings $10.1 $10.1 • Plus: ExcelStor Stand Alone Earnings $22.8 $22.8 • Plus: Net Income Impact $1.0 $8.4 • Pro Forma 2008E Cash Net Income $33.9 $41.3 Per Share Basis • Iomega Stand Alone 2008E EPS $0.18 $0.18 • 2008E Cash EPS Accretion $0.06 $0.12 • Pro Forma 2008E Cash EPS $0.24 $0.30 ($ in millions, except per share data) (1) Assumes adjustments from interest income lost due to cash transaction expenses and an adjusted tax
rate of 12% for the combined company. (2) Pro forma cash net income and EPS is non-GAAP and excludes transaction-related
restructuring costs and amortization of intangibles. Without Without Synergies Synergies With With Synergies Synergies (2) (1) (2) (2) |
       22 Pro Forma Balance Sheet Pro Forma Balance Sheet ($ in millions) Cash, Equivalents and Short-Term Investments Total Assets Total Debt Total Liabilities Shareholders’ Equity Iomega Iomega $ 69.4 205.5 0.0 111.0 94.4 ExcelStor ExcelStor Pro Forma Pro Forma $ 51.1 240.4 8.0 178.5 61.9 $ 120.5 445.9 8.0 289.5 156.3 (1) (1) Iomega and ExcelStor balance sheets as of Q307 (2) Pro forma balance sheet excludes transaction expenses. (1) (2) |
 23 Pro Forma Ownership Pro Forma Ownership 4.7% ExcelStor / Iomega Management 6.1% ExcelStor Foxteq Holdings 6.1% ExcelStor H&Q Asia Pacific 18.8% Iomega Top 10 Institutions 21.2% Iomega Other Institutional & Retail Investors 100.0% 43.1% Ownership Ownership ExcelStor Affiliation Affiliation Pro Forma Total CEC Subsidiaries Investors Investors Source: Iomega Management and FactSet. |
 24 Conditions to Closing Conditions to Closing • Approvals by both shareholders • Approvals of relevant antitrust and regulatory agencies • All government approvals – Applicable Hong Kong and PRC Government requirements – HSR and other principals • No material adverse effect of Iomega / ExcelStor stand alone business • Anticipated to close mid-year 2008 |
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, and December 20, 2007. 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.