Zip drive maker Iomega reported a large loss for its second quarter, but said it expected its restructuring programme to start paying off next year.
Iomega reported a loss for the second quarter ending 27 June 1999 of $47.1 million or 17 cents per share, including tax and a restructuring charge of $41.9 million. For the same period last year, Iomega reported a loss of $39.9 million or 15 cents a share.
Turnover for the second quarter was $349 million, down from $394 million in the second quarter of 1998 revenue.
In June, Iomega announced a dramatic restructuring plan, axing 10 per cent of its workforce, closing two Californian factories and consolidating its operations in France and Scotland.see Newswire 19 June 1999
At the same time, Iomega warned the financial markets that its financial performance would be below par. see Newswire 18 June 1999
Iomega chief executive Jodie Glore said in a statement: "We have taken decisive actions to position Iomega for sustainable profitability. We have implemented an organisational structure that will make us more focussed and responsive."
He added: "We anticipate that the steps we have taken, when fully implemented over the remainder of the year, will result in annual cost savings of approximately $40 million in the year 2000."
Iomega has been challenged by recordable and writeable CD-roms (CD-RW) technology, which has hit sales of its Jaz storage drives and disks.
In addition to weak sales, the company said delays in the shipment of its Clik! Product, component shortages resulting in lower than expected sales of Zi100 and Zip 250 drives, as well as asset and inventory write offs, contributed to the second quarter losses.
The company's stock price was down 6 cents at close Thursday in New York to $4.68.
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