<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)*
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1994 or [ ] Transition
--------------
report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from _________ to ________
Commission file number 1-5964
-----------------------------------------------------
ALCO STANDARD CORPORATION
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 23-0334400
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Box 834, Valley Forge, Pennsylvania 19482
- -----------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(215) 296-8000
- -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
- -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
* Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
--- ---
* Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1994.
Common Stock, no par value 53,624,372 shares
<PAGE>
INDEX
ALCO STANDARD CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--March 31, 1994
and September 30, 1993
Consolidated Statements of Income--Three months
ended March 31, 1994 and March 31, 1993;
Six months ended March 31, 1994 and
March 31, 1993
Consolidated Statements of Cash Flows--Six
months ended March 31, 1994 and March 31, 1993
Notes to Consolidated Financial Statements--
March 31, 1994
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition and Liquidity
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
( in thousands )
<TABLE>
<CAPTION>
March 31 September 30
ASSETS 1994 1993
- ------ ---------- ------------
<S> <C> <C>
Current Assets
Cash $ 33,135 $ 36,495
Accounts receivable less allowance for doubtful accounts:
3/94 - $30,668; 9/93 - $27,528 852,441 855,666
Inventories 628,257 591,964
Prepaid expenses, deposits and deferred taxes 113,479 92,600
---------- ----------
Total current assets 1,627,312 1,576,725
---------- ----------
Investment in Unconsolidated Affiliate 116,256 118,060
Other Investments and Long-Term Receivables 47,551 46,813
Property and Equipment, at cost 632,282 596,901
Less accumulated depreciation 286,620 260,551
---------- ----------
345,662 336,350
---------- ----------
Other Assets
Excess of cost of acquired companies
over equity 704,536 694,757
Miscellaneous 66,148 69,662
Deferred taxes 20,746 22,454
---------- ----------
791,430 786,873
---------- ----------
Finance Subsidiaries Assets 558,214 484,069
---------- ----------
$3,486,425 $3,348,890
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31 September 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993
------------ ----------------
<S> <C> <C>
Current Liabilities
Current portion of long-term debt $ 38,342 $ 39,915
Notes payable 156,947 164,249
Trade accounts payable 396,659 426,971
Accrued salaries, wages and commissions 70,210 80,097
Deferred revenues 117,697 116,631
Restructuring costs 69,940 27,480
Other accrued expenses 146,473 164,831
------------ ------------
Total current liabilities 996,268 1,020,174
------------ ------------
Long-Term Debt 392,674 590,154
Other Liabilities
Restructuring costs 90,000 142,459
Workers' compensation and other 135,814 113,069
------------ ------------
225,814 255,528
------------ ------------
Finance Subsidiaries Liabilities;
including debt of: 3/94 - $454,927; 9/93 - $413,092 482,228 437,418
Redeemable Preferred Stock of Subsidiary 25,000 25,000
Shareholders' Equity
Series AA convertible preferred stock, no par value,
4,025 depositary shares issued and outstanding 198,906 197,900
Common stock, no par value: authorized 75,000 shares;
Issued 3/94 - 54,522 shares; 9/93 - 48,772 shares 551,051 259,031
Retained earnings 686,747 651,373
Foreign currency translation adjustment (31,574) (23,640)
Cost of common shares in treasury: 3/94 -
979 shares; 9/93 - 1,808 shares (40,689) (64,048)
------------ ------------
1,364,441 1,020,616
------------ ------------
$ 3,486,425 $ 3,348,890
============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
------------------------ ------------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues
Net sales $1,952,627 $1,477,536 $3,858,616 $2,909,441
Dividends, interest and other income 899 745 1,849 1,739
Finance subsidiaries 15,898 12,312 30,739 23,869
---------- ---------- ---------- ----------
1,969,424 1,490,593 3,891,204 2,935,049
---------- ---------- ---------- ----------
Costs and Expenses
Cost of goods sold 1,451,184 1,102,613 2,881,318 2,177,173
Selling and administrative 437,343 324,619 856,440 636,586
Interest 10,138 9,713 22,281 21,507
Finance subsidiaries interest 6,535 5,846 12,827 11,581
---------- ---------- ---------- ----------
1,905,200 1,442,791 3,772,866 2,846,847
---------- ---------- ---------- ----------
Income (Loss) from Unconsolidated
Affiliate (1,157) 654 (1,893) 1,173
---------- ---------- ---------- ----------
Income from Continuing Operations,
Before Taxes 63,067 48,456 116,445 89,375
Taxes on Income 25,046 18,916 46,570 35,076
---------- ---------- ---------- ----------
Income from Continuing Operations 38,021 29,540 69,875 54,299
Income from Discontinued Operations,
net of income taxes 2,030 3,218
---------- ---------- ---------- ----------
Income before cumulative effect of
changes in accounting principles 38,021 31,570 69,875 57,517
Cumulative effect of
Postretirement benefits other than
pensions, net of income taxes (1,421)
Income taxes 1,421
---------- ---------- ---------- ----------
Net Income 38,021 31,570 69,875 57,517
Preferred Dividends 2,893 2,929 5,786 3,214
---------- ---------- ---------- ----------
Net Income Available to Common
Shareholders $ 35,128 $ 28,641 $ 64,089 $ 54,303
========== ========== ========== ==========
Earnings Per Share (1)
Continuing operations $0.64 $0.57 $1.24 $1.09
Discontinued operations 0.04 0.07
---------- ---------- ---------- ----------
Before cumulative effect of changes
in accounting principles 0.64 0.61 1.24 1.16
Cumulative effect of
Postretirement benefits other than
pensions, net of income taxes (0.03)
Income taxes 0.03
---------- ---------- ---------- ----------
$0.64 $0.61 $1.24 $1.16
========== ========== ========== ==========
Cash dividends per share of common stock $0.25 $0.24 $0.50 $0.48
===== ===== ===== =====
</TABLE>
(1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
----------------------
1994 1993
-------- --------
<S> <C> <C>
Operating activities
Net income $ 69,875 $ 57,517
Additions (deductions) to reconcile net income to net
cash provided (used) by operating activities:
Depreciation 34,352 27,631
Amortization 12,073 10,613
Provision for losses on accounts receivable 10,473 7,952
Benefit for deferred income taxes (287) (318)
Change in deferred liabilities 128 (1,640)
Changes in operating assets and liabilities, net
of effects from acquisitions and divestitures:
(Increase) decrease in accounts receivable 9 (15,213)
Increase in inventories (30,936) (31,053)
Increase in prepaid expenses (30,974) (8,699)
Decrease in accounts payable, deferred
revenues and accrued expenses (50,320) (50,558)
Miscellaneous (4,429) (8,751)
--------- ---------
Net cash provided (used) 9,964 (12,519)
Investing activities
Proceeds from sale of property and equipment 9,417 5,046
Payments received on long-term receivables 6,970 4,124
Cost of companies acquired, net of cash acquired (18,357) (156,970)
Expenditures for property and equipment (51,432) (38,788)
Purchase of miscellaneous assets (3,579) (5,134)
Finance subsidiaries receivables - additions (162,304) (129,938)
Finance subsidiaries receivables - collections 98,339 77,399
--------- ---------
Net cash used (120,946) (244,261)
Financing activities
Proceeds from issuance of long-term debt 107,995 117,960
Proceeds from option exercises and sale of treasury shares 37,165 30,559
Proceeds from issuance of common stock, net 293,511
Proceeds from issuance of preferred stock, net 196,383
Proceeds (repayments) from short-term borrowings, net (3,278) 75,948
Long-term debt repayments (318,340) (181,569)
Finance subsidiaries debt - issuance 57,143 84,012
Finance subsidiaries debt - repayments (15,308) (34,000)
Dividends paid (27,611) (22,296)
Purchase of treasury shares (23,655) (10,411)
--------- ---------
Net cash provided 107,622 256,586
--------- ---------
Net decrease in cash (3,360) (194)
Cash at beginning of year 36,495 24,386
Cash at end of period --------- ---------
$ 33,135 $ 24,192
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Alco Standard Corporation
Notes To Consolidated Financial Statements
March 31, 1994
Note 1: Accounting Changes
------------------
Effective October 1, 1993, the Company adopted SFAS No. 106, "Employer's
Accounting for Post Retirement Benefits Other Than Pensions", and SFAS No.
109, "Accounting for Income Taxes". In adopting SFAS No. 106, the Company has
elected to immediately recognize the transition obligation, which resulted in
a cumulative effect charge of $1,421,000, net of taxes, or $.03 per share. The
new standard for income taxes permitted the Company to recognize the benefit
of certain deferred tax assets that was prohibited under the previous
standard, SFAS No. 96, which the Company adopted for the fiscal year ended
September 30, 1988. The cumulative effect of establishing the net deferred tax
asset as of October 1, 1993 was to increase net income by $1,421,000, or $.03
per share.
Note 2: Common Stock
------------
In December, 1993, the Company issued 5,750,000 shares of common stock in a
public offering. The net proceeds from the offering of approximately $294
million were used for repayment of debt. Net income from continuing operations
and earnings per share from continuing operations for the fiscal year ended
September 30, 1993 would have been $13,288,000 and $.07, respectively, if the
offering had occurred on October 1, 1992. Net income and earnings per share for
six months ended March 31, 1994 would have been $71,144,000 and $1.20,
respectively, if the offering had occurred on October 1, 1993.
Note 3: Debt
----
On December 13, 1993, the Company amended its $200,000,000 credit agreement
dated December 18, 1991 to extend the term of the 364 day portion of the
facility to December 14, 1994 and the three year portion to December 18, 1996.
On January 14, 1994, the Company amended its DM 180,000,000 credit
agreement dated October 15, 1992 to extend the expiration date of the commitment
to January 11, 1995.
On April 20, 1994, the Company amended its $200,000,000 credit agreement
dated April 21, 1993 to extend the term of the 364 day portion of the facility
to April 19, 1995. The facility fee on the 364 day portion of the agreement was
reduced from 1/8% per annum to 1/10%, while the facility fee on the remaining
portion of the agreement was reduced from 3/16% per annum to 3/20%.
<PAGE>
ALCO STANDARD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1994
Note 4: Supplemental Information to Statements of Cash Flows
----------------------------------------------------
The Company has presented statements of cash flows for the periods ended
March 31, 1994 and 1993 in accordance with SFAS No. 95.
Interest paid for the six months ended March 31, 1994 was $34,584,000.
Interest paid for the six months ended March 31, 1993 approximates the amount
disclosed in the accompanying Statement of Income.
Income tax payments of $40,504,000 and $38,250,000 were made during the six
months ended March 31, 1994 and 1993, respectively.
The total assets for acquisitions amounted to $42,969,000 during the six
months ended March 31, 1994 and $171,761,000 during the six months ended March
31, 1993. The excess of cost over acquired equity included in these assets was
$21,425,000 and $21,671,000, respectively.
<PAGE>
Item 2: Management's Discussion and Analysis of Results of Operations
- -----------------------------------------------------------------------
and Financial Condition and Liquidity
-------------------------------------
Results of Operations
---------------------
The discussion of the results of operations reviews the continuing
operations of the Company as contained in the Consolidated Statements of Income.
Three Months Ended March 31, 1994
Compared with Three Months Ended March 31, 1993
-----------------------------------------------
Revenues and income before taxes for the second quarter of fiscal 1994
versus the second quarter of fiscal 1993 were as follows:
<TABLE>
<CAPTION>
Revenues Income Before Taxes
----------------------- ----------------------
March 31 % March 31 %
------------ -------------
1994 1993 Change 1994 1993 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
(in millions)
Alco Office Products $ 544 $ 371 46.6% $ 47.8 $33.5 42.7%
Unisource
United States 1,268 952 33.2 34.3 28.9 18.7
Canada 159 170 (6.5) 2.9 4.3 (32.6)
------ ------ ------ -----
Total Unisource 1,427 1,122 27.2 37.2 33.2 12.0
------ ------ ------ -----
Operating 1,971 1,493 32.0 85.0 66.7 27.4
Unconsolidated affiliate (1.2) .7
Interest (10.1) (9.7)
Eliminations and
non-Allocated (2) (2) (10.6) (9.2)
------ ------ ------ -----
$1,969 $1,491 32.1% $ 63.1 $48.5 30.1%
====== ====== ====== =====
</TABLE>
Alco Office Products (AOP) contributed $173 million of additional revenues,
of which $116 million related to current and prior year acquisitions. The
remaining $57 million increase reflects continued internal growth in all
revenue areas of AOP's base companies, inclusive of service and facilities
management businesses. The $316 million increase in revenues from Unisource's
U.S. operations includes $260 million from prior year acquisitions and $56
million of internal growth from its base companies. The $11 million revenue
decrease in the Unisource Canadian paper businesses reflects a 6% decrease in
the average foreign exchange rate.
AOP's increase in operating income of $14.3 million includes $7 million
from current and prior year acquisitions. The remaining $7.3 million of
internal growth from its base companies is primarily the result of higher
operating contributions from the service and facilities management areas of
AOP's businesses, along with increased operating income related to its leasing
activities through Alco Capital Resource, Inc.
<PAGE>
Operating income from Unisource's U.S. paper operations increased
$5.4 million including $4.3 million from prior year acquisitions and $1.1
million from its base companies. The decrease in operating income in the
Canadian paper distribution business of $1.4 million is attributable to the
gross margin erosion within the Canadian paper industry along with the negative
impact of foreign exchange rates.
Revenues from the Company's paper and office products operations outside
the U.S. was $208 million for the second quarter of fiscal 1994 compared to $191
million for the second quarter of fiscal 1993. The $17 million increase reflects
internal growth along with contributions from prior year AOP acquisitions which
collectively overcome the $11 million decrease in revenues from the Canadian
paper distribution business.
Operating income from foreign operations was $7 million for the three
months ended March 31, 1994, a decline of $700,000 from the prior year which is
attributed to the decrease in the operating income of the Canadian paper
distribution business along with the negative impact of foreign exchange rates.
The Company incurred a $1.2 million loss in the second quarter of fiscal
1994, from its investment in an unconsolidated affiliate, IMM Office Systems
Gmbh (IMM). For the comparative period in fiscal 1993 the Company recorded a
$700,000 equity pickup. While results have undoubtedly been hampered by the
German economy, the Company believes that the present joint venture does not
offer a positive basis on which to grow the business, absent a
recapitalization or restructuring of its ownership. This could result in a
devaluation of the Company's investment in IMM.
Interest expense increased by $400,000, a result of higher average
borrowing levels to fund acquisitions and working capital requirements. The
increase in income before taxes of 30.1% or $14.6 million is a combined result
of improved operations from base companies along with the earnings contributed
by acquisitions made in the prior year. The effective income tax rate for the
second quarter was 39.7% compared with 39% in fiscal 1993.
Six Months Ended March 31, 1994
Compared with Six Months Ended March 31, 1993
---------------------------------------------
Revenues and income before taxes for the first half of fiscal 1994 versus
the first half of fiscal 1993 were as follows:
<TABLE>
<CAPTION>
Revenues Income Before Taxes
----------------------- -----------------------
March 31 % March 31 %
--------------- -----------
1994 1993 Change 1994 1993 Change
----- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
(in millions)
Alco Office Products $1,042 $ 719 44.9% $ 90.3 $ 62.0 45.6%
Unisource
United States 2,534 1,877 35.0 63.2 57.0 10.9
Canada 319 342 (6.7) 5.1 8.7 (41.4)
------ ------ ------ ------
Total Unisource 2,853 2,219 28.6 68.3 65.7 4.0
------ ------ ------ ------
Operating 3,895 2,938 32.6 158.6 127.7 24.2
Unconsolidated affiliate (1.9) 1.2
Interest (22.3) (21.5)
Eliminations and
non-Allocated (4) (3) (18.0) (18.0)
------ ------ ------ -----
$3,891 $2,935 32.6% $116.4 $89.4 30.2%
====== ====== ====== ======
</TABLE>
<PAGE>
Alco Office Products generated $323 million in increased revenues of which
$193 million relates to fiscal 1993 acquisitions and $29 million to fiscal
1994 acquisitions. The remaining $101 million increase reflects continued
growth in all revenue areas of AOP's base companies, but particularly in its
equipment, service and facilities management businesses. The $657 million
increase in revenues from Unisource's U.S. operations includes $512 million
from prior year acquisitions and $145 million of internal growth from its base
companies. The $23 million revenue decrease in the Unisource Canadian paper
businesses is primarily attributable to a 5% decrease in the average foreign
exchange rate.
AOP's operating income increase of $28.3 million includes $10.5 million
from prior year acquisitions and $2.4 million from current acquisitions. The
remaining $15.4 million increase reflects internal growth from its base
companies which is primarily the result of higher operating contributions from
the service, facilities management and supply areas of AOP's businesses, along
with increased operating income related to its leasing activities through Alco
Capital Resource, Inc. Operating income from Unisource's U.S. paper operations
increased $6.2 million. This increase represents a contribution of $10.8
million from prior year acquisitions net of a decrease of $4.6 million from
its base companies which reflects the gross margin erosion that has been
experienced in the paper industry. The Canadian paper distribution business
decrease in operating income of $3.6 million is the result of the carryover of
certain incremental merger costs related to the Canadian merger plan
implemented in fiscal 1993, gross margin erosion within the Canadian paper
industry, and the effects of the declining foreign exchange rates.
Geographically, revenues from the Company's paper and office products
operations outside the U.S. was $413 million for the first half of fiscal 1994
compared to $384 million for the same period in the prior fiscal year. The
increase reflects $48 million from prior year AOP acquisitions along with
$4 million from internal growth offset by a decrease of $23 million from the
Canadian paper distribution business.
Operating income from foreign operations was $12.6 million for the six
months ended March 31, 1994, down $2.2 million from the prior year primarily
the result of the decrease in operating income of the Canadian paper
distribution business along with the negative impact of foreign exchange
rates.
For the first six months of fiscal 1994, the Company incurred a $1.9
million loss from its investment in an unconsolidated affiliate, IMM Office
Systems Gmbh., compared to a $1.2 million equity pickup for the comparative
period in the prior fiscal year. The German recession has played a part in
the $3.1 million decline but, as mentioned previously, the Company intends to
analyze IMM's ability to achieve its long-term goals.
Interest expense increased by $800,000 from the comparable period in fiscal
1993, a result of higher borrowing levels to fund acquisitions and working
capital requirements. The increase in income before taxes of 30.2% or $27
million is a combined result of improved operations from our base companies
along with the earnings contributed by acquisitions. The effective income tax
rate for the current period was 40% compared with 39.2% in fiscal 1993. At
March 31, 1994 weighted average shares were 4.7 million shares greater than the
47 million shares at March 31, 1993. This increase includes the impact of a
public offering of common stock in December, 1993.
<PAGE>
The Unisource restructuring plan announced in September, 1993 is proceeding
as planned, with fifty-five mergers expected to be completed by the end of the
third quarter. Since September 30, 1993, Unisource has reduced its employee
base by approximately 350. This excludes the data processing personnel that
transferred as part of the information technology system outsourcing agreement
with Integrated Systems Solutions Corporation, a subsidiary of IBM. This 10
year agreement for $300 million, which is effective January 1, 1994, will
provide the information technology system to be implemented as part of the
restructuring plan.
During the first quarter of fiscal 1994, the Company adopted Financial
Accounting Standard No. 106, "Employer's Accounting for Retirement Benefits
other than Pensions" and Financial Accounting Standard No. 109, "Accounting for
Income Taxes"; the combined effect on earnings of these accounting changes was
neutral.
Financial Condition and Liquidity
---------------------------------
In December 1993, the Company issued 5,750,000 shares of common stock in a
public offering, and the net proceeds of approximately $294 million were used to
reduce outstanding debt. The Company's total debt (excluding finance
subsidiaries) decreased to $588 million at March 31, 1994 from $794 million at
September 30, 1993.
At March 31, 1994 debt as a percentage of capitalization was 29.7%, and the
current ratio was 1.6 to 1. Finance subsidiaries debt grew by $42 million from
September 30, 1993, as a result of increased leasing activity. The Company had
a total of $608 million in bank credit commitments as of March 31, 1994, of
which $352 million were unused and available.
In connection with the Unisource restructuring accrual, the Company
estimates that total cash expenditures will amount to $148 million, of which
approximately $15 million has been spent to date. Related cash expenditures in
the third and fourth quarters are estimated to aggregate to $43 million.
The Company believes that its operating cash flow together with unused
lines of credit will be sufficient to finance current operating requirements
including capital expenditure, acquisition and restructuring programs.
<PAGE>
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) The following Exhibit is furnished pursuant to Item 601
of Regulation S-K:
Exhibit No. (11) Computation of Earnings Per Share
<PAGE>
BASIS OF PRESENTATION
---------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10Q and Rule 10-01 of
Regulation S-X. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended September 30, 1993.
Date May 12, 1994 /s/ Michael J. Dillon
--------------------- ----------------------------------
Michael J. Dillon
Controller
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized. This report has also been signed by the
undersigned in his capacity as the chief accounting officer of the Registrant.
ALCO STANDARD CORPORATION
Date May 12, 1994 /s/ Michael J. Dillon
--------------------- -----------------------------------
Michael J. Dillon
Controller
(Chief Accounting Officer)
<PAGE>
Index to Exhibits
-----------------
Exhibit Number
- --------------
(11) Computation of Earnings Per Share
<PAGE>
EXHIBIT 11
- ----------
ALCO STANDARD CORPORATION
COMPUTATIONS OF EARNINGS PER SHARE
(in thousands, except earnings per share)
<TABLE>
<CAPTION>
Six Months Ended March 31
-----------------------------------------
1994 1993
------------------- -------------------
Fully Fully
Primary Diluted(1) Primary Diluted(1)
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Average Shares Outstanding
- --------------------------
Common shares 50,774 50,774 46,355 46,355
Preferred stock
Considered common equivalents 9 9 69 69
Senior securities 4,508 2,452
Options 968 1,044 615 856
------- ------- ------- -------
Total shares 51,751 56,335 47,039 49,732
======= ======= ======= =======
Income
- ------
Continuing operations $69,875 $69,875 $54,299 $54,299
Discontinued operations 3,218 3,218
------- ------- ------- -------
Income before cumulative effect of
changes in accounting principles 69,875 69,875 57,517 57,517
Cumulative effect of
Postretirement benefits other than
pensions (net of income taxes) (1,421) (1,421)
Income taxes 1,421 1,421
------- ------- ------- -------
Net Income 69,875 69,875 57,517 57,517
Preferred dividends 5,786 3,214
------- ------- ------- -------
Net income available to common
shareholders $64,089 $69,875 $54,303 $57,517
======= ======= ======= =======
Earnings Per Share
- ------------------
Continuing operations $1.24 $1.24 $1.09 $1.09
Discontinued operations 0.07 0.07
------- ------- ------- -------
Before cumulative effect of changes
in accounting principles 1.24 1.24 1.16 1.16
Cumulative effect of
Postretirement benefits other than
pensions (net of income taxes) (0.03) (0.03)
Income taxes 0.03 0.03
------- ------- ------- -------
$1.24 $1.24 $1.16 $1.16
======= ======= ======= =======
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB No.
15 because it results in dilution of less than 3%.
