You may have forgotten about



, but that doesn't mean the PC hard-drive maker has gone away. In fact, now might be a good time to zip through the numbers and see why this stock looks like a solid value.

Of course, reduced expectations have a hand in this story. In the mid '90s the sudden rise of the Zip drive had some analysts claiming Iomega would eventually rival


(IBM) - Get Report

. They were wrong, but with the company cutting costs and investors content to leave the past behind them, there could be an Iomega revival ahead.

Just take a look at what the company has done in the face of waning disk/drive sales. Iomega has cut its staff by 40% in three years, driving costs down some 24% over that period. It has also managed to increase its gross margin by 15 points over last year to 37.8% of sales. Iomega has done this by negotiating better terms with vendors, outsourcing more of its manufacturing and introducing higher-margin products -- the most notable being a line of portable hard disk drives compatible with essentially all Microsoft and Macintosh operating systems and a new line of high-speed CD-RW drives and CD-burning software aimed at the retail customer.

Another standout is its balance sheet. As of June 30, Iomega had more than $372 million, or $7.24 per diluted share, in cash and only a little over $2 million in debt. Cash flow has shown a dramatic improvement as well: Iomega generated almost $54 million in operational cash flow in the second quarter, compared to a $3.4 million loss in the same period last year. That's a big improvement.

So how confident is management in this turnaround story? Very, it seems. The company has a standing stock-buyback program, and officers and directors owned 9.8% of the stock as of March 27. That's pretty hefty. Insider ownership is no guarantee of success, but a stock buyback plan and solid insider ownership certainly can't hurt.

As things stand now, Iomega is on pace to earn from 80 to 90 cents a share this year. But I think earnings could easily climb north of $1 a share in 2003, given the company's strong gains in recent months. With the stock trading at $12, there could be room to the upside.

In keeping with TSC's editorial policy, Glenn Curtis doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Curtis welcomes your