Iomega Corp. (NYSE: IOM) rose 7 percent Monday after its board of directors authorized the repurchase of up to $150 million in stock.
Shares in the data management company which makes Zip drives, were up 0.25 to 4.63 Monday morning, still below their 52-week high of 6.37. Iomega managed to top Street estimates in its first quarter, but total sales fell 11 percent from the year-ago quarter.
"We believe that repurchases of stock at prices which have prevailed in recent months is an attractive use of corporate funds,'' said president and CEO Bruce Albertson in a company release.
The timing and amount of any shares repurchased will be determined by the company, based on its evaluation of market conditions and other factors. Iomega said it intends to use any repurchased shares in connection with its stock plans and for other corporate purposes.
Iomega also said its board has approved the call for redemption of all of the company's outstanding 6 3/4 percent convertible subordinated notes due March 15, 2001. About $45.5 million in notes are currently outstanding. The redemption price of the notes is $1,013.50 per $1,000 principal amount of notes. The notes are convertible into common stock at a conversion price of $4.9375 per share.
The stock repurchase program and note redemption will be funded using available working capital. As of June 25, Iomega had cash, cash equivalents and temporary investments of about $354 million and about $270.6 million shares outstanding.