The San Diego-based company, which employs two-thirds of its 310-strong work force at its plant in Roy, also saw its sales for the year fall from $328.7 million in 2004, when the memory-storage device maker lost $36.7 million and 71 cents per share, to $264.5 million in receipts last year.

For the quarter ending Dec. 31, Iomega recorded $70 million in sales, with a net income of $1.9 million (4 cents per share), compared with $89.6 million in revenues and $3.8 million in earnings (7 cents) the same time a year ago.

President and CEO Werner Heid told shareholders that the company - having completed a 30 percent work force reduction in the latter half of 2005 - had "met our goal to achieve positive operating income, excluding restructuring charges."

Ciphering out the fourth quarter's $800,000 in charges, Iomega's operating income was about $200,000.

As for the fourth quarter, the company endured a 22 percent revenue dip as sales of its Zip, mini-USB and floppy drive products tumbled. Sales for the decade-old Zip line plunged 51 percent in year-over compari- sons, to just $12.3 million, while the other product sales fell 11 percent, to $41.7 million, compared with 2004's fourth quarter.

Iomega got some respite from sales of its hard disk-based products, which rose 57 percent, to $33.8 million.

In an after-market shareholders teleconference on Thursday, Heid sounded an optimistic note for 2006, especially the second half of the fiscal year.

With restructuring behind it and new products coming into the market, the company forecast steady growth in sales and income.

"Our strategic imperatives are the continued improvement of [hard drive and removable memory storage sales] and the continued reduction in operating overhead and expenses," Heid said.

The flagship of Iomega's hopes is its new portable REV Drive line, which the company has showcased at this week's Sundance Film Festival in Park City.

The REV technology and its 35-gigabyte disks are being incorporated by Grass Valley, a Paris-based media company, for portable storage of digital video in the new Infinity Series multiformat camcorder and digital media recorder and player.

The Grass Valley products are the first to use Iomega REV removable disks as recording and playback media in professional filmmaking, Iomega said.* Microsoft Corp. reported a 5 percent increase in profit, with net income of $3.65 billion, or 34 cents per share, up from $3.46 billion, or 32 cents per share. The results included a one-time tax benefit of $108 million, or 1 cent per share. Without the one-time benefit, Microsoft met the expectations of 33 cents per share on revenue of $11.96 billion. Revenue rose 9 percent to $11.84 billion, up from $10.82 billion.