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 People’s Republic of China (“PRC”) company (“SETL”) by Iomega Corporation (“Iomega”) from Great Wall Technology Company Limited, a PRC 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 following PowerPoint slides were presented by Iomega’s management to investors beginning on December 12, 2007:
 IOMEGA Enters
Definitive IOMEGA Enters Definitive Agreement to Acquire Agreement to Acquire ExcelStor Group ExcelStor Group December 12, 2007 |
 2 Statements in this presentation regarding 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 • 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 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 in approximately 6 months from announcement Value • Transaction value of $310 mm, based on Iomega’s Market Cap of $207 mm • Implied ExcelStor multiples of 0.32x ‘08 Rev; 6.6x ‘08 EBITDA; 13.6x ‘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 |
 4 Highlights of Transaction Highlights of Transaction • • Creates a global Consumer Storage and Creates a global Consumer Storage and Electronics Company Electronics Company • • Combine Iomega’s global brand and Combine Iomega’s global brand and channels with ExcelStor’s China presence channels with ExcelStor’s China presence and manufacturing capabilities and manufacturing capabilities • • Drive significant incremental sales in Drive significant incremental sales in adjacent Consumer Electronics markets in adjacent Consumer Electronics markets in partnership with CEC sister companies partnership with CEC sister companies • • Combine best talents from both Combine best talents from both companies to create an experienced companies to create an experienced global management team global management team • • Cash EPS accretive Cash EPS accretive |
 5 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 • 2007 Revenue forecasted at $818.2 mm and net income of $18.3 mm • Manufactures and sells other HDD & storage products, including Iomega’s REV products • ExcelStor branded products represent 12% of revenue • World-class manufacturing expertise • Design services |
 6 • Primary product line is single-platter hard drives • Other products include: – External HDD – Autoloaders • Partners include: – Hitachi – Bell Microproducts – Freecom – Tandberg • Experienced management team with over 20 years of disk drive manufacturing experience in the U.S., China, Singapore and Malaysia • Facilities include a clean room, testing and production facility in Shenzhen ExcelStor Overview ExcelStor Overview – Digital recordable jukebox – Xander International – Hasee Technology – Fujitsu Korea – Iomega |
 7 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” Other 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% |
 8 Overview of CEC Organization Overview of 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 ~$16 bn in revenues – Approximately 50% ODM / OEM – Approximately 50% branded products • CEC controls over 1,000 companies and 10,000 products • CEC will indirectly control 43% of Iomega • Very limited distribution in the Americas and EMEA • Portfolio company sectors include – PCs – Notebooks – Servers – HDD – Cell Phones – PDAs |
 9 CEC Sister Companies CEC Sister Companies • Great Wall Technology Co., Ltd. • China National Electronic Corp. • Shanghai Hua Hong (Group) Co., Ltd. • Amoi Electronics Co., Ltd. • CEC Holding Co., Ltd. • SED Electronics Industry Corp. • China National Software & Service Co., Ltd. • CEC Corecast Co., Ltd • Wuhan Zhongyuan Electronics Co., Ltd • China Electronics Financial Co., Ltd • China Integrated Circuit Design Co., Ltd • Panda Electronics Co., Ltd • Shanghai Pudong Software Park Co., Ltd. |
 10 ($ 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 12/10/07 Stock Price $3.70 % of 52-Week High 64.3% Equity Value $310.3 $206.9 Debt 56.8 0.0 Cash 55.7 69.4 Enterprise Value $311.4 $137.5 Pro Forma Ownership (100% Stock) 60.0% 40.0% EV / Revenue (1) Metric (2) CY 2007E $818.2 0.38x 0.45x $308.4 CY 2008E 981.8 0.32x 0.36x 383.6 EV / EBITDA CY 2007E $38.5 8.1x 13.7x $10.1 CY 2008E 47.1 6.6x 9.7x 14.2 Equity Value / Net Income CY 2007E $18.3 16.9x 29.1x $7.1 CY 2008E 22.8 13.6x 20.5x 10.1 Multiples ExcelStor Iomega Value Metric |
      11 Review of Iomega’s Review of Iomega’s Stand Alone Business Stand Alone Business • 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 $69.4 mm in cash • Ability to scale revenues without adding significant infrastructure • Broad portfolio of hundreds of patents |
    12 Creating a Global Consumer Storage Creating a Global Consumer Storage & Electronics Provider & Electronics Provider • Sell Iomega products into Chinese Markets • Sell ExcelStor products outside China – increase size of current branded business • Utilize in-house manufacturing where appropriate to lower COGS • Plan to partner with CEC’s 1,000+ subsidiaries to sell globally through Iomega channel • Extendable brand • Strong channel relationships • Global presence • World-class manufacturing expertise • Size / profitability • Growing OEM and branded storage business New Iomega • Vast breadth of products • Manufacturing and design capabilities • Deep access into Chinese end markets |
                      13 Cross-Selling Opportunities Cross-Selling Opportunities Expansion of product lines creates a unique portfolio Expansion of product lines creates a unique portfolio |
 14 Immediate Market Expansion Immediate Market Expansion • Significant opportunity to sell CEC products globally • New Iomega will gain immediate access to large markets such as PCs and LCD panels Note: Estimates from IDC and Industry Research. HDD forecast includes internal and
external drives. (1) Computer peripherals market includes (i) mice and keyboards, (ii) video web cameras and (iii)
audio and gaming peripherals. Source: IDC, Morgan Keegan research report dated
2/28/07 and Logitech. Market Size ($ billions) Market Size ($ billions) Units Produced (millions) Units Produced (millions) 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) $6 $30 $36 $144 $71 $10 $28 $193 $120 $37 Mobile PC LCD TV LCD Monitor HDD Computer Peripherals |
 15 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 |
 16 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) |
 17 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 |
    18 Pro Forma Tax Benefits Pro Forma Tax Benefits • U.S. ~ 0% • Cayman Islands ~ 0% • Europe ~ 18% • China btwn 7.5% – 25.0% over next 7 years Blended Tax Rate ~ 12% Geographic Tax Rates |
 19 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) |
    20 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 $ 55.7 283.5 56.8 229.4 54.1 $ 125.1 489.0 56.8 340.4 148.5 (1) (1) Iomega and ExcelStor balance sheet as of Q307 and Q207, respectively. (2) Pro forma balance sheet excludes transaction expenses. (1) (2) |
 21 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. |
 22 Stand Alone Iomega Stand Alone Iomega • Globally Recognized Brand Name – External HDD, network storage drives and managed services offerings – Large, loyal installed base with 60 million drives sold • Worldwide Channel Presence – Broad channel coverage focused on Consumer / SOHO / SMB markets – Strong platform for potential future products • 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 • Broad Patent Portfolio of Hundreds of Patents • Currently Lacks Presence in China – Europe – 70% – U.S. – 28% – Asia-Pacific – 2% |
             23 Iomega Has a Strong Brand and Iomega Has a Strong Brand and Product Portfolio Product Portfolio 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 |
 24 Iomega Has A World-Class Iomega Has A World-Class Distribution Channel Distribution Channel • Sold at over 11,500 stores in the Americas, Europe and Asia • Integrated into Iomega’s online strategy • Direct marketers are a cost effective channel to reach small businesses, medium / large enterprises, government and education • Indirect selling channel for N- HDD, NAS and REV disks • 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 2.5 million unique visitors, and 250,000 software and driver downloads per month • 2006 sales through the website were approximately $10 million Distributors Iomega.com Retail / E-tail Direct Marketers |
 25 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 in approximately 6 months from announcement |
 26 Highlights of Transaction Highlights of Transaction • • Creates a global Consumer Storage and Creates a global Consumer Storage and Electronics Company Electronics Company • • Combine Iomega’s global brand and Combine Iomega’s global brand and channels with ExcelStor’s China presence channels with ExcelStor’s China presence and manufacturing capabilities and manufacturing capabilities • • Drive significant incremental sales in Drive significant incremental sales in adjacent Consumer Electronics markets in adjacent Consumer Electronics markets in partnership with CEC sister companies partnership with CEC sister companies • • Combine best talents from both Combine best talents from both companies to create an experienced companies to create an experienced global management team global management team • • Cash EPS accretive Cash EPS accretive |
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 and November 8, 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.