Iomega Corp has announced that president and chief executive Kim Edwards has resigned after four years at the helm of the Roy, Utah storage products company. Edward’s departure comes little more than a week after Iomega warned that its first-quarter revenue would be essentially flat with the year-ago quarter and that it would post a loss in the range of $10m to $25m (CI No 3,369). Moreover, the company expects to be cash-flow negative for the quarter. Iomega insists that the resignation was a mutual decision between Edwards and the board and that it has no connection to the profit warning or a recently-filed shareholder lawsuit. The first-quarter shortfall in sales was compounded by $20m in added marketing costs that came as part of the company’s $100m promotional campaign. Last month, the company was slapped with a class action lawsuit stemming from a delay in shipments of the company’s 2-gigabyte Jaz drive. The delay is estimated to have impacted the fourth-quarter top line by $70m and shareholders didn’t take too kindly to the simultaneous announcement that $100m was going to be spent on advertising – with a negative impact on future earnings unless sales volume increased significantly. Iomega says it won’t know until late April or early May whether the marketing efforts are having their desired effects. Under Edward’s guidance, the company’s annual sales grew from $141m to $1.7bn last year. But things have been less rosy lately, as the company’s share price has dropped from its 52-week high of $16.75 a share in December to about $7 now. Iomega board member James Sierk will take over the chief executive job until a replacement is found. Sierk has already declared that he is not a candidate for the permanent position. Iomega shares fell $0.375 on Wednesday to close at $7 even.
