An overreaction by Iomega Corp.'s board of directors may have spurred Kim B. Edwards' resignation as its president and chief executive, an analyst said Wednesday.
Joseph Besecker, an analyst with Emerald Research in Lancaster, Pa., said he spoke with Edwards after the resignation was announced Wednesday. Although Edwards was not talkative about his reasons for resigning, Besecker said, the move leaves room for speculation."I certainly don't have all the facts, but knowing what I know, I think it's perhaps an overreaction by the board," he said. "It appears to me the board wants to go in a direction of building excellence in manufacturing and quality control and that kind of thing as opposed to marketing in an entrepreneurial nature. . . .
"There had to be some very strong philosophical differences for this parting of the ways."
Edwards joined Iomega in 1994 and took its sales from $141 million then to $1.7 billion last year.
Neither he nor other company board members were available for comment Wednesday.
But Willow Baum, corporate communications director for the Roy-based manufacturer of computer data storage products, said Edwards' departure was "amicable," and he will retain his seat on Iomega's board.
"They just arrived at a mutual decision," Baum said. "Kim Edwards and the board were constantly in dialogue. The approach to the business and leadership apparently had been under discussion for some time."
She would not give any other details on the reasons for the resignation or any severance package Edwards will receive. But Baum said board chairman David J. Dunn affirmed Wednesday that the company is not planning to make dramatic changes to the rest of its senior management team.
Peter Genereaux, president of the Utah Information Technologies Association, said he had no insight into the reasons behind Edwards' move.
"His resignation is not a function of Iomega being in difficulty financially or market-wise," Genereaux said Wednesday. "Iomega is on a roll. So whatever the reasons for his departure are not attributable to any decline in the fortunes of Iomega."
Besecker said Iomega has faced several problems in the past few quarters, including product delays, lawsuits, the controversial decision to spend $100 million on advertising and the announcement last week that it expects to lose between $10 million and $25 million in the first quarter of this year.
But it is hard to argue with the company's bottom-line success under Edwards' leadership, Besecker said.
"There's a lot of mixed signals here, and it's tough to make a lot of sense out of it," he said. "Quite honestly, I think there is potential this company could be a takeover (target) at these prices."
Iomega stock closed down about 5 percent, or 371/2 cents, at $7 per share Wednesday.
Baum said the company does not comment on takeover or other rumors.
She said Iomega has formed a committee to search for a new president, and Edwards will help with the transition. James E. Sierk, an Iomega board member, will take over as acting president and CEO.