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Tuesday, October 21, 1997 Monday, Iomega closed at $26 15/16, up $1/2 (+1.89%). TODAY'S RECAP: The Iomega message board benefitted from a unique "service" yesterday -- ~IAmErgoSum~ posted the entire transcript of IOM's 3Q conference call, including the Q&A (see the three posts below). Other posters debated the potential role of n.hand, the future of Iomega and SyQuest's advertising campaigns and Wall Street's coverage of Iomega's stock. Enjoy! INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) - or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++ IAmErgoSum provides a 3Q conference call transcript, part 1.
Recap written by TMF Weekly; posts
compiled by TMF Weekly. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool.
And now, the Best of the Board...Started 9:01pm ET 10/19/97. 1+++++++++++++++++++++++++++
Subject: Conf. Call Transcript- Part 1 Kim Edwards: Good afternoon. This is Kim Edwards. Welcome to our 3rd quarter ‘97 analyst phone conference. Today I’ll start off with a summary of the highlights of the 3rd quarter and then turn it over to Len, our CFO, who is going to provide a little more detail. [Usual disclaimer] OK. Let me hit the highlights and then provide you with a brief overview of what happened this quarter. Third Quarter sales were a record 432 million, up 39% from a year ago. Net income was up 135% to a record 30 million or 22 cents a share. Gross margin increased to 32% versus 26% a year ago. Cash flow was 33 million dollars positive; backlog was 379 million up from 183 million last quarter; Zip drive unit volume was about 26% over the 2nd quarter and this was about the same percentage increase we experienced in the 2nd quarter over the 1st. Jaz drive unit volume was flat compared to the 2nd quarter, but disk sales were very strong, coming off the disk recall in the 2nd quarter. OEM Zip drives were up more than 60% (I said six zero percent) over the 2nd quarter and represented just over 35% of total Zip drives shipped. And this was quite an encore performance for our OEM team following Q 2 when OEM units were up about 60% over Q 1. Today we announce that we shipped 9 million Zip drives in just over 2 1/2 years since our first shipment in March of ‘95. So with that let me provide some commentary. As we stated from the introduction of Zip, we are committed to achiving a retail price of $99 for the external Zip drive to expand the size of the available market and in fact starting at the end of September, some retailers began running the external Zip drive on special for 99 bucks. In fact, CompUSA and Best Buy offered it [at] $99 after $50 and $30 store rebate, respectively. This occurred a couple of weekends ago, and both accounts reported excellent sell through. We are now shipping ZipPlus and expect to ship the 15mm notebook Zip drive in November. These key product extensions represent two more steps in our progress toward becoming the next standard in removeable storage. And in addition, if you attend Comdex, you have a chance to see the working prototypes of the 12.7 or the half inch notebook drives in our booth. As part of our PC OEM effort, tune in to our TV ad for the “Zip Built In” starting November 17th and running through Thanksgiving and then for another 2 week [?] in December. It will appear in the top 7 markets by PC use on some of the top rated shows including NYPD Blue, Mad About You, Seinfeld and Frazier. In Q 3 we introduced Jaz 2GB, the two gigabyte version of Jaz which can read and write 1 gigabyte disks from our Jaz 1 gigabyte product. This means that the Jaz 2GB is compatible with the installed base of over 1 million Jaz 1 gigabyte drives. And as was stated in the press release we expect to ship Jaz 2GB this quarter. Issues found in our compatibility testing have resulted in postponing Buz until 1998. You may recall in last quarter’s conference call, I mentioned I view this as a tactical product, but we did want to bring you up to speed on where we stand on it in this call. In tape we expect to start shipping the internal DittoMax, our next generation 7 gigabyte tape drive later this month, and we expect to ship DittoMax Pro, our 10 gigabyte solution in November. Both of those capacities are compressed capacities. We are continuing our R&D efforts on n-hand and as many of you know that we use an interactive development process that intimately involves the customers in our product development and design. And in the case of n-hand since first showing at Comdex 1996 we made significant changes to the drive based on feedback from both OEMs and our endusers; and our new drive will be centerstage at Comdex. We are continuing our focus in building our world class management team as evidenced by our addition of Frank Forsythe as President of our Professional Products Division. There Frank is responsible, of course, for our Jaz business. He joins us from Apple where he was Senior Vice President and General Manager of the Power Macintosh group and previously was responsible for worldwide operations. We are also pleased to have added two new members to our Board of Directors: Dr. David A. Duke, former Vice Chairman of Corning and Jim Sierk Senior Vice President of Quality and Productivity for Allied Signal, bring very relevant experience. As examples, David has experienced rapid growth in the technology business when he was responsible for Corning’s optical fiber business. And Jim spent most of his career in Operations at Xerox, a company very well know for quality, training and innovation, and is now responsible for Allied Signal’s quality initiative, supply chain management and technical and customer excellence. Now we need to touch on a very distasteful subject: its called "disk piracy." We have continued to aggresively pursue the protection of our intellectual property and as part of this, we have had an independent laboratory test our disks and Nomai’s knockoffs in a controlled blind fashion. Ours worked as expected. However, the findings were that Nomai disks were not 100% compatible as claimed; the knockoff disks performed poorly in our drop test and failed to adequately protect the recording media from contamination. Moreover, the independent lab concluded that the knockoffs had the potential to cause permanent damage to the recording heads. Our own tests show that the media used in the knockoff disks does not meet own quality specifications. In addition to the protection of our intellectual property rights, we are very concerned about our customers using these disks and losing data or permanently damaging their drive. Our patent infringment case against Syquest is progressing with a trial date of January, 1999 already set by the judge. Let me take a few more minutes now to provide some of the financial comments relative to our 3rd quarter performance. First, let me provide you with some insight into the backlog situation. Our backlog grew to 379 million at the end of Q 3, which is substantially higher than the record 183 million reported at the end of Q 2. As we mentioned in July, we have been constrained by a chip shortage and have given priority to the OEMs over retail. Accordingly, since much of the 26% increase in Zip drive shipments were lower priced OEM drives, our revenue did not go up proportionately and our retail backlog grew even larger. Additionally, sell through has remained very strong for Zip and Jaz. So once again, we started and ended the quarter with lower than desired retail inventories even though we shipped 26% more Zip drives. As we mentioned last quarter, we believe that some of the 379 million in backlog is due to customers placing orders that are higher than their actual needs. We were very pleased with the 3rd quarter net income results; however, our backlog is evidence of continuing constraints on revenue. In Q 3 we experienced constraints caused by parts availability due to the chip constraint that I mentioned in last conference call, and supplier quality problems. Additionally, transitioning OEMs from the IDE Zip drive to the ATAPI drive placed a significant strain on resources, balancing components and our production. Let me comment on these three issues that is, chip availability, parts quality and the ATAPI transition. First I’ll address the chip availability and the ATAPI transition issues since they are interrelated. During the third quarter we transitioned several of the major Zip PC OEMs to the higher yield, lower cost Zip OEM ATAPI drive and we are now shipping it in high volume. The drive contains a new higher level of integration and therefore does not rely on the chip that contributed to our Q 2 constraints. Since the new chip is more readily available the transition has eased most of the chip availability issue and has improved our yields. We are also beyond the startup stage of production on the ATAPI drive. However, we will continue to ship the internal IDE drive to some OEMs into the first quarter of 1998 simply due to their qualifications cycles. To sum it up, transitioning some of our major PC OEMs to the ATAPI drive has freed up the IDE design chips, plus we have been successful in getting the IDE design chips earlier than previously committed by our chip supplier so the overall situation has improved considerably. The second issue. During the third quarter we temporarily shut down Zip and Jaz production as a result of component quality problems, primarily related to plastic and metal parts. We addressed the issues inside the quarter and believe that we have fixed the known problems. In fact, we shipped a record number of Zip and Jaz drives in September and continue at the higher level of production as we entered into the 4th quarter. As an added measure we have our own employees at several vendors to ensure that the suppliers make and we receive good quality parts. As you can tell from our results and the size of our backlog, demand remains very strong. We have taken multiple actions on multiple fronts to meet it. We will continue to give priority to our OEM customers. And although it is not an indicator of the quarter’s performance, we have started the 4th quarter with continued strong sell-through and production at about the level of our internal plan. Looking back at the third quarter, I am very pleased with our financial results. The team managed to sell a record 432 million, earn a record 30 million or 22 cents a share, be cash flow positive by 33 million and take another big step toward our goal of becoming the removeable storage standard by increasing OEM Zip shipments by more than 60% over the last quarter. With that let me turn to Len to provide you with financial details and then we will give you a chance to ask your questions. 2+++++++++++++++++++++++++++
Subject: Conf. Call Transcript-Part 2 Len Purkis: OK. Revenues are up 39% over third quarter ’96 to 432 million dollars. All three geographic areas experienced year over year growth with Americas up 25% to 287 million, Europe up 114% to 108 million and Pacific up 25% to 37 million. Our global growth continues with international sales representing 34% of 3rd quarter ‘97 revenue, up from 26% in 3rd quarter ‘96. In fact the last 4 quarters international revenue now exceed half a billion dollars. The revenue growth over 2nd quarter ‘97 was 8% with Europe basically flat in its seasonal low period and the Pacific down 19% with growth over 2nd quarter ‘97 coming from the Americas which was up sixteen percent. By product group, Zip and Jaz are up 51% to 406 million dollars and Ditto is down 20% at 26 million dollars versus 3rd quarter ‘96. Ditto continues to be weak across all regions but the nine months of ‘97 is slightly ahead of 1996 same period. Our gross margin of 140 million dollars is up 72% over 3rd quarter ‘96 and represents 32.5 % of revenue versus 26.3% in 3rd quarter ‘96. The 2nd quarter ‘97 margin percent was 29.4%. Gross margin dollars are up 19% on revenue growth of 8% versus 2nd quarter ‘97. Comparing 3rd quarter ‘97 with 2nd quarter of ‘97 we saw Zip gross margin percent as relatively flat. Within the quarter we executed per our operating model. Zip gross margins were positively impacted due to higher disk volumes and lower drive costs which enabled pricing actions to be implemented and further penetration of our OEM unit sales to over 35% of total Zip drive sales, up from about 30% last quarter. Jaz gross margins were higher with [?] pricing offset by lower drive costs and higher Jaz disk sales. The higher tie rate in Jaz is partially a catch-up from the impact of the 2nd quarter ‘97 Jaz disk recall. Therefore the catch-up on the Jaz disks in the 3rd quarter and the Jaz drive cost reductions were the primary drivers behind the increase in overall gross margins from 2nd quarter ‘97 to 3rd quarter ‘97. Advancement in operating expenses continues. SG&A increased slightly from 16.2% last year to 16.8% and is up 12 million dollars over last quarter. This 12 million dollar increase was driven by increased marketing spending and by headcount additions predominately in the sales and marketing functions worldwide. R&D at 23 million dollars is up more than twice 3rd quarter ‘96 and represents 5.2% of revenue, up from 3.4% in 3rd quarter ‘96. Spending increased 6 million dollars from 2nd quarter ‘97 when it represented 4.3% of revenue. Overall operating expenses were 22.1% of revenue in 3rd quarter ‘97 versus 19.6% in 3rd quarter ‘96 with the increase driven by our R&D [transmission unclear] Operating income of 45 million dollars or 2 1/2% of revenue is more than double 3rd quarter ‘96 of 21 million dollars and represented 6.7% of revenues. Quarter 3 year over year net income is up by 135% on revenue growth of 39%. This quarter’s net income of 30 million dollars and EPS of 22 cents compared to 12.8 million dollars and 9 cents same quarter last year. We were cash flow positive in the 3rd quarter of ‘97 by 33 million dollars. For the year to date ‘97 we were 105 million dollars cash flow positive and this is the 4th quarter in a row that we are cash flow positive. Strong collections performance....inventory receipts and liabilities...., positively impacted our cash performance. We ended the quarter with 166 million dollars in cash and a 200 million dollar revolver that is completely unutilized. Nine month results reflect continued operating leverage. Revenues for the 9 months of 1.2 billion are up 46% and close to total year 1996. Margin dollars are up 68% and net income of 79 million dollars or 58 cents EPS is up 114% over same period 1996 and is greater than total year net income for 1996. In fact the 9 month 1997 net income of 79 million is greater than the total of the last three fiscal years together. Our balance sheet continues to be closely controlled. DSOs of 55 days improved from 57 days in 3rd quarter ‘96, inventory turns of 6.2 turns improved from 5.1 turns in 3rd quarter ‘96. Debt to equity of 13% improved from 34% in 3rd quarter ‘96 and finally, we have cash resources totally more than 360 million dollars to fund future growth. 3+++++++++++++++++++++++++++
Subject: Zip standard...1.44 missing History in the making? Checkout the computer system described on the following link. Not only is the Zip drive standard but the floppy is gone! Link: Systems http://www.cayugacomputers.com/cayuga.htm From the product description: << Speaking of the Zip, you'll notice that this machine does not come with a legacy 1.44MB 3.5" floppy drive standard. It is our understanding that this is the first commercially available computer model that does not come with a legacy floppy drive standard. .........the legacy 1.44MB floppy is an obsolete beast that needs to be replaced by the Zip drive. The legacy 1.44MB floppy, at this point in time, is an unnecessary expense for many people that do not need to transfer data via floppy, or that have a floppy on their network (or their sneakernet). >> Clay Hagan 4+++++++++++++++++++++++++++
Subject: Q & A - Part 1 Kim Edwards: With that operator let’s open it up for questions. Q&A: Todd Bakar (H & Q): Thank you. Congratulations Kim. A few questions. First of all, the backlog level up significantly. Can you give us some flavor on how much of the backlog is OEM versus retail? Kim Edwards: OK Todd. I don’t want to break it out on absolute terms, but as I mentioned, a large piece of this is....there is OEM content in there, however a large piece of it is retail and not only that the sell through is strong but we shipped OEM drives in Q 3 at the expense of retail, even increasing it higher. Todd Bakar: On the operating expenses were up a little more than I expected. Can you maybe give us some sort of flavor on what the trends are looking forward in terms of [?] which I think were something like 22% combined. Kim Edwards: Yeah, I think the biggest impact was really the sales and marketing and it's really in preparation for the advertising during late September and into Q 4. I mentioned earlier on the call that we’ve got a TV ad running in November. A lot of that expense by the way... excuse me, I shouldn’t say a “lot of it”... Some of that gets caught in the prior quarter, in other words 3rd quarter, even though the ad runs in 4th because of when we expense some of the items. So there is a mixture of 4th quarter advertising even back into 3rd quarter. Another issue is that with Comdex coming up we also incur some of the November Comdex expenses in Q 3. Todd Bakar: Is it safe to assume that the Q 4 levels might remain up near Q 3 levels and then come back down early next year? Kim Edwards: Its definitely safe to assume that they will remain up in Q 4. We’ve not finalized our ‘98 plans for advertising particularly as you see us put more and more effort on the Built In Zip ad campaign. Todd Bakar: The shutdown that you alluded to, both for Zip and Jaz, can you tell us how long the shutdown was in place? Kim Edwards: Let me first clarify. There were two separate shutdowns for two different parts: one relative to Jaz, one relative to Zip. Normally, I suspect that a lot of companies wouldn’t even bring it up, but I think in the context of our backlog continuing to build, I thought it was relevant. The period of time in the case of Jaz was close to three weeks; in the case of Zip...I want to say in total it was probably a week...a week and a half net impact. Todd Bakar: Do you feel comfortable that both issues have been overcome now? Kim Edwards: Yeah. We believe we’ve got them behind us. As I mentioned we think we solved them inside the quarter which is what allowed us to have such a good production month, a shipping month, in September. So we had a strong September and we’ve entered the 4th quarter at similar rates to the strong September. Todd Bakar: Just two more questions. Jaz flat, can you tell us why, quarter to quarter... Anything going on there that we should know about? Kim Edwards: Well, I’d say the biggest thing was shutting the line down for 3 weeks. That’s a heck a lot of the quarter right there. Todd Bakar: Last question. On the OEM front..can you give us.. I think last quarter you talked who the top five OEMs were. Have those changed at all? And do you see.... As you make the OEM push particularily now with this advertising campaign as well...are you seeing the OEMs broadening their penetration of their own systems with the Zip drive? Kim Edwards: No question about it, Todd. The other thing we’re seeing is it going beyond even the big names into to these almost tertiary users at this point. You know there’s a lot of Ma and Pa outfits out there building 10,000 PCs a year that are now incorporating Zip into it. Now I don’t mean that’s significant relative to the volume. I think its significant in terms of the acceptance of the product in broad terms. Let me get back to the first part of your question or comment. Apple, Dell, Gateway, Micron and Compaq remain the top 5 PC OEMs in 3rd quarter. Todd Bakar: OK, I won’t take up any more. Thank you. Kim Edwards: Thanks for your comments, Todd. Tom Cowen [?] (Soundview Financial): Hi guys, nice quarter. I was wondering if you would discuss your strategy or what you allege in your patent infringment lawsuit against Nomai, and could you take us to where the status of the courts are. I know the French court put something out in June and has that court spoken since then? Have you heard back from the German court on their reasons for lifting the injunction.? And what should we expect there going forward? And if you could take a worse case scenario and if Nomai is successful in defending itself what type of impact would you think they would have on your... I imagine most of it would be... on your gross margin line. Kim Edwards: OK. First of all, thank you for your congratulations but let me get to your questions in sort of in reverse order. I don’t see it important speculating on any scenario with Nomai because we fully intend to vigorously defend our intellectual property rights. Believe me we are not intending to give up here. On the subject of the strategy I think that many of you might imagine on the call here...you know... we’re embroiled with litigation against with what we consider a major competitor and it would be very inappropriate for me to comment on our specific plans, 'cause we have no intention of tiping our hand to them. Now let me give you some specifics in terms of the status on this litigation and let me first start in France and then comment in Germany. On September 26th we were granted permission by the District Court in Paris to file what is called an “early fixed date hearing summons”. In our summons which was filed and announced in our press release on September 30th, we are seeking permanent injunctive relief and damages based on Nomai XHD disk introduced by Nomai in France during September. Our claims will be heard on an expedited basis on November 28th in Paris. In a separate complaint, also filed on September 30th, we claim Nomai has infringed our pending European patents and that proceeding will be relatively inactive until our patents issue in Europe. That’s where we are with Nomai in France and we will continue to vigorously enforce our intellectual properties on that front. But now let me comment on Germany... Give me a second please... Tom Cowen: Could you comment on when the court decides... I know the court did something in June....did the court do anything since June? Kim Edwards: Let me comment on the German thing here. The Hanover court ruled that Nomai’s copying of the Iomega Zip cartridge did not amount to unfair competition under Germany’s unfair competition statutue with respect to Nomai’s alleged exploitation of Iomega confidential information. The court ruled that since Nomai offered an oral undertaking in Court to not distribute any disk based on an exploitation of a confidentiality breach, Iomega could simply enforce that undertaking. The court said that any violation of the undertaking by Nomai would be subject to fine. We believe that these rulings and a number of other findings by the court were in error and should be reversed by an appellate court and we have filed our notice of appeal, in fact, on October 15th. So that’s sort of the sum and substance of the French situation and the German court situation. Tom Cowen: OK, thank you. Kim Edwards: You’re welcome. 5+++++++++++++++++++++++++++
Subject: Adweek Article. . . Adweek article on Syquest and Iomega http://www.marketingcomputers.com/news/9710/16_04.html 6+++++++++++++++++++++++++++
Subject: Re: Adweek Article. . . good link and a decently written article, except for the reporter pitting SyJet against Zip at the top when it's actually SyJet vs. Jaz. I think that was confusion not intention. My amateur-schmamateur thoughts on this: I think Iomega has to be genuinely concerned with SyQuest's eggs-in-one-basket approach with the SyJet. They're smart to blow off the EZFlyer, which is all but dead (guess those ex-Iomegans working for SyQuest delivered the cold hard truth) and the Jaz-level market seems to me to be wide open. On the other hand....the Zip campaign isn't going to be as costly to the positive cash-flow, rising-earnings Iomega as the SyJet campaign appears it will be to the cash-starved, negative-earnings Syquest. It's a big step for SyQuest and if it doesn't work there doesn't seem to be a lot of help warming up in the bullpen. Advantage 1 for Iomega: Zip ads can focus solely on the Zip while the SyQuest campaign must promote the Jet and simultaneously dig away at Iomega's ``Your Stuff'' campaign, which I think is most closely identified with the Zip: ergo, SyJet is taking on the Zip on TV but in the stores SyJet is pitted against the Jaz, which could create some confusion for consumers. Advantage 2 for Iomega: Zip sales and Iomega brand name awareness are going to inevitably spur more Jaz sales and the ad campaign will help that along. I think it's safe to say Jaz sales were driven by the Zip's success and greater Zip success will boost Jaz sales again. SyQuest's success with the SyJet looks to me to depend a great deal on the new marketing/advertising push. And obviously there's no help coming from the Flyer. Advantage 1 for SyQuest: As opposed to the crude opening shots at Iomega in its last campaign, this one smartens up the SyQuest focus: ``It's not your stuff, it's your life'' is a damn-solid turn of phrase and connects at a pragmatic, good-for-business level and a sentimental level. It's unclear from the article whether that's going to be the actual slogan __they'd probably have infrigement trouble with it -- or if it's just Ed Harper's summary statement, but the thinking behind it is laudable. The ``It's your stuff'' tag is still cool, attractive, semi-hip, puts a consumer at ease, etc.-- but it's thinking is glib by comparison. A good transitional ad tag for Iomega one day would be ``Because it's Your Stuff...and It's Your Life'' Focusing on ``genius, creative and ideas'' might help SyQuest flatter customers as it engages them. Advantage 2 for SyQuest: I'm not sure there is one, aside from the chance to emphasize size advantage--which, again, is undercut by the campaign's de facto stance as a Zip beater, when it's actually a Jaz challenger. Paul Loop 7+++++++++++++++++++++++++++
Subject: HRPlbg's n.Hand Concerns HRPlbg raises some very thoughtful points and offers some interesting ideas about n.Hand. I will attempt to respond and add to them. HRPlbg wrote: << ... N-Hand disks can be reused so I immediately became concerned about tie ratios. ... >> HRPlbg legitimately worries that after the initial purchase of 5 or 6 n.Hand disks with each camera, the consumer may stop buying more n.Hand disks and will just reuse old ones. Actually, that may not be too bad for a tie ratio of 5 or 6 if such is the case. A tie ratio is supposed to be a life time thing anyway. However, if this is going to be n.Hand's case, it may not be as powerful as the Zip business model in which the tie ratio may actually increase as Zip drive install base grows and old owners may keep on buying more Zip disks. That is exactly why it will be to Iomega's interest to find ways to entice n.Hand camera users to leave their images on the n.Hand disks: 1. The Caddy to allow future versions of Zip drives to read n.Hand disks: We know this may not happen during n.Hand's introduction stage or shortly thereafter. But I believe Iomega may still be working feverishly trying to make it happen later if possible. With the caddy idea, n.Hand disks can be read anytime by a computer equipped with a future Zip drive. So, transferring images from n.Hand disks to your computer may not be necessary. Just leave your favorite images on the n.Hand disk like a photo album. 2. Fast Miniaturized Interface: Even if the n.Hand-Zip caddy system never comes true, there are other ways. Since the n.Hand camera will actually have a n.Hand drive inside, lots can be done. For one, I think the n.Hand camera may deploy a faster interface than the serial port currently being used on most of the digital cameras in order to make use of the built in n.Hand drive effectively. I am not going to speculate here which interface may be used. That may belong to another post. Suffice to speculate here that it may be a faster interface miniaturized at the camera end. And this is entirely my own guessing. 3. Stand alone n.Hand drive: Iomega may market a stand alone n.Hand drive for people who don't like to use their n.Hand camera doubling as a n.Hand drive all the time. A stand alone n.Hand drive may have more features or power source options. 4. "Instant" Viewing or Printing of Images with a Fast Enough Interface: Since the n.Hand camera may be able to double as a drive, and if indeed it can be attached to a compter with a fast enough interface, viewing and printing of images through a computer is of course easy. It can be done "straight from the n.Hand drive in the camera" without "uploading to the computer hard drive or a Zip drive" first. This way, most n.Hand camera users may not even bother to uploading the images. Just leave them on the n.Hand disks and buy new disks for more picture taking. Of course, n.Hand cameras may have a feature for users to edit out bad and unwanted images and reuse only those "frames". 5. Viewing on TV through an additional box: Like HRPlbg has suggested. But in addition to putting the n.Hand disks in another device that contains a drive, the n.Hand camera with a n.disk inside may be able to attach to a simple and small added-on video box. The whole thing can then be connected to your TV very much like your camcorder can if the n.Hand camera has a fast enough interface. All in all, Iomega may find ways to make it "convenient" for consumers and let them just leave the images on the n.Hand disks. After all, n.Hand disks will be very reasonably priced for that purpose. Just a lay person's humble opinions and speculations. As "usaul', I may be very wrong. 8+++++++++++++++++++++++++++
Subject: nhand uses You folks aren't even scratching the surface of uses for nhand.... Quit thinking like nhand is just a smaller Zip.....because of it's size the Zip is pretty much limited to bigger things like CPU's and laptops....nhand will allow computer chips to go where they never have before.... I have a digital camera...the casio QV....it isn't only a camera....they call it a 'personal presentation device'. Meaning that I can not only take photos and download them from the camera to my computer, I can UPLOAD photos from the computer to the camera as well... I currently have to do this with a cable, but nhand would make the task much easier..... My tiny Casio even allows me to do simple slide-show presentations in a client's office. I simply UPLOAD up to 96-shots on my camera (photos or any PICT/tiff graphics), connect the camera to an office AV monitor and voila! I have a ready-made slide show & projector that fits in my pocket!! Last month I visited my uncle in Virginia....I wanted to show him some ancient family photos....Rather than schlep precious old pix across country I scanned them in and UPLOADED them to the Casio, with the camera's video back serving as the viewer. If I'd had an nhand camera I would've just carried out the disks in my camera bag....at $12 per disk I wouldn't even think about emptying and re-using the disk....just buy another one for less than the price of a regular roll of film and developing....and yes, people DO shoot MANY more pix with digital cameras since the shots are essentially free.....if you don't like it delete before you take the next shot.... Sure I could d/l all pix to my desktop CPU and re-use the nhand, but then the pix wouldn't be cool and portable any more. I keep my best fotos permanently on my Casio.....Kowloon from the air, Victoria Falls in Zambia, Oriental Mindoro in the Phillipines, etc.....they make for great conversation on flights and at parties and stuff....nhand will allow shutter bugs to keep their fave photos with them at ALL times in their camera bag, in the little 'nhand' storage compartment that camera bag makers will have to start building in... :-D Nhand will also be used in umpteen different kinds of hand-held devices, ranging from PDA's (personal digital assistants) and GPS (global positioning systems) to gizmos whose purpose hasn't even been dreamed up yet. Think of just about any occupation....for instance, I just got a parking ticket this morning (&%&$*#@!!!!)....the meter maids will probly be using nhand portable ticketing devices.... I just got back from the gym....personal trainers will be able to set up custom training regimens on nhand, with clients insert them into exercise equipment for the perfect workout. Imagine shopping carts with built-in nhand to track your grocery and $ totals, then going home and slipping the nhand disk into your fridge door. Next week you get reminded the milk on the second shelf is at its expiration date.... Imagine slipping an nhand into a payphone, calling AOL, and download all your email, or IOM posts (a scary thought indeed), for viewing via your in-dash unit. Sure, all of these sound far out, but not compared to the stuff that will actually be out there in a few years. I expect nhand to become much bigger than Zip, and to even cannibalize some of it's markets... You get the idea.... PS--'scuze the ramblings, but my brain is kinda loopy today....this morning I woke up and my girlfriend shows me this sparkly rock she claims I put on her left hand yesterday. I was hoping it was only a weird dream, but no such luck... ;-) 9+++++++++++++++++++++++++++
Subject: Wall Street Following Folks, it is true that the Wall Street following for Iomega is pathetic. True. Even Amazon.Com, a newly-minted public company, has 6 analysts reporting to First Call vs. 5 for Iomega. Excite has 7. Yahoo has 14. I picked some Internet stocks for a reason: They are sexy. Sexy to cover, sexy to talk about, sexy to be quoted about. Iomega is not sexy. It is scary to Wall Street. Few understand what happened last year. Few really want to understand. It is frightening and bizarre. Because they are out of the loop, they probably don't even know that the earnings and revenue growth are a fantastic story worthy of continued excitement and interest. All they know is a bunch of touts sent the stock to 55 and its now half that more than a year later. Yuck! The only coverage today is from a small group: 1) The captives, they underwrote the secondary. One, Todd Bakar of Hambrecht and Quist, apparently calls the earnings within a penny or three every quarter, despite Iomega's self-proclaimed "lack of guidance." Obviously, when Bakar talks to Iomega execs in private, the "guidance" he gets is good enough to figure it all out. The other captive, Dan Kunstler (is that his name?) at J.P. Morgan doesn't seem to care much about Iomega these days. He's not on the conference call. He may be the one First call reportee who hasn't put in a 1998 estimate. 2) The hypesters. One, Emerald, has very little credibility given that they appear to make all their money selling research. They aren't gonna make that money touting stocks that they don't think are going up big. The other, Brous, is no a true hypester. But Rosencrans appears to enjoy being quoted a great deal. H.D. Brous, regardless, is a teeny weeny bit player in the grand scheme of things, not impressing anyone on Wall St. 3) The unknowns. One, Needham, is a small Wall Street firm. One of the "other 550". It is not a top tier or second tier outfit. It's a third tier outfit, respected, but pretty insignificant. The other, Buckingham, I know zero about. I do know that if their 1998 forecast is right, we are all gonna lose a lot of money on Iomega next year because the P/E is gonna be slashed if earnings only grow 25% or so. In sum, we have hype, invisibility and captivity. None of the movers and shakers in the industry, the people who can really make it happen, are here. No Merrill. No Morgan Stanley. No Goldman. No DMG. No Alex.Brown. No Robertson. No Montgomery. No no no nobody to speak of. One won't do it. Iomega needs 5-10 more analysts, including 2-3 in the top 20 firms. Another "roadshow" might do it, but Kim hates the work. In the meantime, though, the lack of coverage continues. Does it hurt the stock? Well, earnings are gonna be up 100+% this year and the P/E is only 40. Proof? Not really. What are forward earnings? If the P/E trades at a discount to those, than coverage is necessary I think. _______________________________ End Report. Posts covered through 9:00pm ET 10/20/97. _______________________________
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