<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 December 31, 1995 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)
(610) 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 January 31, 1996.
Common Stock, no par value 118,978,227 shares
<PAGE>
INDEX
ALCO STANDARD CORPORATION
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--December 31, 1995
and September 30, 1995
Consolidated Statements of Income--Three months
ended December 31, 1995 and December 31, 1994
Consolidated Statements of Cash Flows--Three
months ended December 31, 1995 and December 31, 1994
Notes to Consolidated Financial Statements--
December 31, 1995
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 (UNAUDITED)
- ----------------------------------------
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
ASSETS 1995 1995
- ------ ------------- --------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 67,231 $ 90,106
Accounts receivable, less allowance for doubtful accounts:
12/95 - $38,269; 9/95 - $48,628 1,131,930 1,175,699
Inventories 886,298 747,895
Prepaid expenses and deferred taxes 182,867 146,867
---------- ----------
Total current assets 2,268,326 2,160,567
---------- ----------
INVESTMENTS AND LONG-TERM RECEIVABLES 58,091 56,086
PROPERTY AND EQUIPMENT, AT COST 738,068 745,235
Less accumulated depreciation 347,511 375,285
---------- ----------
390,557 369,950
---------- ----------
OTHER ASSETS
Goodwill 1,173,749 1,058,214
Miscellaneous 152,980 109,436
---------- ----------
1,326,729 1,167,650
---------- ----------
FINANCE SUBSIDIARIES ASSETS 1,098,156 983,322
---------- ----------
$ 5,141,859 $ 4,737,575
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1995
- ------------------------------------- -------------- --------------
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $ 47,299 $ 26,319
Notes payable 95,039 280,832
Trade accounts payable 489,115 501,316
Accrued salaries, wages and commissions 71,437 115,874
Deferred revenues 171,526 172,900
Restructuring costs 19,068 33,302
Other accrued expenses 310,440 259,534
----------- -----------
Total current liabilities 1,203,924 1,390,077
----------- -----------
LONG-TERM DEBT 783,039 325,314
OTHER LIABILITIES
Deferred taxes 95,664 96,082
Restructuring costs 6,000 6,000
Other long term liabilities 174,265 178,782
----------- -----------
275,929 280,864
----------- -----------
FINANCE SUBSIDIARIES LIABILITIES;
including debt of: 12/95 - $908,168; 9/95 - $817,585 961,850 872,783
SHAREHOLDERS' EQUITY
Series AA convertible preferred stock, no par value:
Depositary shares issued and outstanding
12/95 - 3,832 shares; 9/95 - 4,025 shares 192,779 201,924
Series BB conversion preferred stock, no par value:
3,877 depositary shares issued and outstanding 290,175 290,152
Common stock, no par value:
Authorized 150,000 shares
Issued 12/95 - 113,368 shares; 9/95 - 112,182 shares 688,430 637,414
Retained earnings 789,666 765,309
Foreign currency translation adjustment (23,095) (21,536)
Cost of common shares in treasury: 12/95 - 508
shares; 9/95 - 118 shares (20,838) (4,726)
----------- -----------
1,917,117 1,868,537
----------- -----------
$ 5,141,859 $ 4,737,575
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31
--------------------------------
1995 1994
------------- -------------
<S> <C> <C>
REVENUES
Net sales $ 2,533,617 $ 2,160,791
Dividends, interest and other income 1,014 870
Finance subsidiaries 31,795 19,940
------------- -------------
2,566,426 2,181,601
------------- -------------
COSTS AND EXPENSES
Cost of goods sold 1,849,436 1,606,209
Selling and administrative 586,495 479,274
Interest 14,327 11,950
Finance subsidiaries interest 14,809 9,619
------------- -------------
2,465,067 2,107,052
------------- -------------
INCOME BEFORE TAXES 101,359 74,549
TAXES ON INCOME 39,944 29,080
------------- -------------
NET INCOME 61,415 45,469
PREFERRED DIVIDENDS 7,664 2,893
------------- -------------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ 53,751 $ 42,576
============= =============
EARNINGS PER SHARE (1) $0.47 $0.38
============= =============
Cash dividends per share of common stock $0.14 $0.13
============= =============
</TABLE>
(1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
---------------------------------
1995 1994
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 61,415 $ 45,469
Additions (deductions) to reconcile net income to net
cash used in operating activities:
Depreciation 21,090 18,116
Amortization 9,851 7,591
Payment of restructuring costs (13,644) (7,503)
Provision for losses on accounts receivable 6,708 5,526
Changes in operating assets and liabilities, net
of effects from acquisitions:
Decrease (increase) in accounts receivable 62,219 (58,129)
Increase in inventories (115,782) (130,349)
Increase in prepaid expenses (41,846) (9,886)
Decrease in accounts payable, deferred
revenues and accrued expenses (41,649) (63,852)
Miscellaneous (8,892) 1,688
-------------- --------------
Net cash used (60,530) (191,329)
INVESTING ACTIVITIES
Proceeds from sale of property and equipment 9,326 7,776
Payments received on long-term receivables 962 913
Cost of companies acquired, net of cash acquired (86,425) (22,460)
Expenditures for property and equipment (33,831) (20,564)
Purchase of miscellaneous assets (29,914) (23,057)
Finance subsidiaries receivables - additions (191,094) (133,398)
Finance subsidiaries receivables - collections 76,097 54,580
-------------- --------------
Net cash used (254,879) (136,210)
FINANCING ACTIVITIES
Proceeds (repayments) from short-term borrowings, net (156,977) 156,000
Proceeds from issuance of long-term debt 431,675 108,814
Proceeds from option exercises and sale of treasury shares 13,281 20,735
Proceeds from sale of finance subsidiaries lease receivables 13,154 16,909
Debt issue costs (5,875)
Long-term debt repayments (17,714) (2,456)
Finance subsidiaries debt - additions 134,985 99,246
Finance subsidiaries debt - repayments (44,402) (38,589)
Dividends paid (22,917) (16,555)
Purchase of treasury shares (52,676) (36,807)
-------------- --------------
Net cash provided 292,534 307,297
-------------- --------------
NET DECREASE IN CASH (22,875) (20,242)
CASH AT BEGINNING OF PERIOD 90,106 53,369
-------------- --------------
CASH AT END OF PERIOD $ 67,231 $ 33,127
============== ==============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
Note 1: 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 the instructions to Form 10-Q 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, 1995. Certain prior year amounts have
been reclassified to conform with the current year presentation.
Note 2: Debt
----
On December 11, 1995, the Company issued $300 million of 30 year bonds at a
stated interest rate of 6.75% to the public at a discount price of 98.48%. The
effective yield on the bonds is 6.87%. The bonds will be redeemable as a whole
or in part, at the option of the Company at any time, at a redemption price
equal to the greater of (i) 100% of their principal amount or (ii) the sum of
the present values of the remaining scheduled payments of principal and interest
thereon discounted to maturity on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Yield (as defined) plus 15
basis points, plus in each case accrued interest to the date of redemption.
Interest on the bonds is paid semi-annually. The bonds are not subject to
sinking fund provisions.
Note 3: Series AA Preferred Stock Redemption
------------------------------------
On January 10, 1996, the Company announced its intention to redeem all of
its Series AA Preferred Stock effective February 9, 1996. Holders of record of
the depositary shares of Series AA Preferred Stock on the redemption date will
be entitled to receive approximately 2.2402 shares of common stock for each
depositary share redeemed. As of December 31, 1995, 3,832,100 depositary shares
of Series AA Preferred Stock were outstanding.
<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 operations of the
Company as contained in the Consolidated Statements of Income.
THREE MONTHS ENDED DECEMBER 31, 1995
COMPARED WITH THREE MONTHS ENDED DECEMBER 31, 1994
--------------------------------------------------
Revenues and income before taxes for the first quarter of fiscal 1996
compared to the first quarter of fiscal 1995 were as follows:
<TABLE>
<CAPTION>
Revenues Income Before Taxes
------------------------ --------------------------
December 31 % December 31 %
--------------- --------------
1995 1994 Change 1995 1994 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
(in millions)
Alco Office Products $ 852 $ 636 34.0% $76.1 $ 55.1 38.1%
Unisource
United States 1,520 1,367 11.2 47.7 36.1 32.1
Canada 196 180 8.9 8.3 6.5 27.7
--- --- --- ---
Total Unisource 1,716 1,547 10.9 56.0 42.6 31.5
----- ----- ---- ----
Operating 2,568 2,183 17.6 132.1 97.7 35.2
Interest (14.3) (11.9)
Eliminations and non-allocated (2) (1) (16.4) (11.2)
-- -- ----- -----
$2,566 $2,182 17.6% $101.4 $74.6 35.9%
====== ====== ====== =====
</TABLE>
The Company's revenues for the first quarter of fiscal year 1996 were $2.6
billion, a 17.6% increase over the comparable period in the prior year.
Operating income increased 35.2% to $132.1 million from $97.7 million reported
in the first quarter of fiscal year 1995. Earnings per share of $.47 were 23.7%
higher than the $.38 reported in the first quarter of the prior year.
ALCO OFFICE PRODUCTS
Alco Office Products (AOP) generated $216 million in increased revenues in
the first quarter of fiscal 1996, a 34.0% increase over the prior year, of which
$62 million related to AOP's base companies and $154 million to current and
prior year acquisitions. Internal revenue growth (approximately 10%) in AOP's
base companies continues across all revenue segments, but primarily in equipment
sales, supplies and outsourcing businesses. AOP expects its internal revenue
growth to increase in the last three quarters of the fiscal year to yield at
least a 15% internal growth rate for fiscal 1996. Internal revenue growth in
the first quarter was adversely affected due to an emphasis on operating income
and margin improvement and not on machine placements.
AOP's operating income increased by $21.0 million, or 38.1% over the prior
year. Current and prior year acquisitions contributed $13.2 million. The
remaining $7.8 million represents internal growth from its base companies, net
of transformation costs. This growth primarily represents higher operating
contributions from the equipment, supplies and outsourcing areas of AOP's
businesses, as well as increased operating income related to its leasing
activities through Alco Capital Resource, Inc. (Alco Capital). Alco Capital
contributed 11.2% of AOP's operating income in the first quarter of fiscal 1996
compared to 10.2% in the first quarter of fiscal 1995. Operating margins were
8.9% in the first quarter of fiscal 1996, compared to 8.7% in fiscal 1995.
<PAGE>
AOP TRANSFORMATION
The Company has developed a long range strategy to transform AOP. The
strategy includes broadening the business into three market segments - analog,
networking and outsourcing. The transformation will include consolidating
administrative functions, rationalizing the supply chain, establishing new
vendor alliances, developing a new information technology system, adopting a
single name, developing a major/national accounts program and moving to a
market-place focus to strengthen local service. AOP is in the early stages of
this transformation, which is expected to take up to four years.
UNISOURCE
Revenues from Unisource's U.S. operations increased by $153 million, or
11.2% over the prior year. Current and prior year acquisitions accounted for $76
million of this increase. On a quarter to quarter comparison, paper prices were
up an average of 18%, while shipments were down approximately 6% due to
inventory buildups throughout the industry in the latter part of fiscal 1995.
Paper prices have dropped significantly since September, but demand and prices
are expected to recover as inventories are reduced. Supply systems volume,
excluding acquisitions, was essentially flat compared to first quarter of fiscal
1995. Unisource's Canadian operations increased revenues by $16 million,
including $4 million contributed by a 1995 acquisition. The remaining increase
represents the net effect of higher pricing in fiscal 1996, offset by a
reduction in shipments.
Operating income from Unisource's U.S. operations increased $11.6 million,
of which $7.7 million is from its base companies and $3.9 million is from
current and prior year acquisitions. The increase in operating income from base
companies was primarily due to paper price increases. The increase of $1.8
million in the Canadian paper operation also reflects the positive effects of
price increases. Operating margins were 3.3% in the first quarter of fiscal
1996, compared to 2.8% in the first quarter of fiscal 1995.
UNISOURCE RESTRUCTURING
During the quarter, Unisource began testing its new information technology
system. Due to some required software modifications, Unisource does not expect
the system to be fully implemented until the end of 1997. Unisource still
expects to deliver $50 million of incremental restructuring benefits in fiscal
1996, with most of these benefits to be captured in the second half of this
year. At December 31, 1995, the remaining restructuring reserve is $25.1
million.
FOREIGN OPERATIONS
Revenues from the Company's paper and office products operations outside
the U.S. were $320 million for the first quarter of fiscal 1996 compared to $247
million for the same period of the prior fiscal year, an increase of 29.6%.
AOP's European operations accounted for $43 million of the increase, primarily
the result of the acquisitions of A:Copy (UK) PLC and Copymore PLC in the third
and fourth quarter of fiscal 1995. The increase also includes $30 million from
Unisource and AOP Canadian operations.
Operating income from foreign operations was $19.9 million for the three
months ended December 31, 1995, up $9.9 million from the prior year, of which
$7.0 million is attributable to AOP's European operations. Unisource and AOP's
Canadian operations added $2.9 million of operating income to the first quarter
of fiscal 1996.
There was no material effect of foreign currency exchange rate fluctuations
on the results of operations during the first quarter of fiscal 1996 compared to
the first quarter of fiscal 1995.
<PAGE>
ACQUISITIONS
In the first quarter of fiscal 1996, AOP completed 24 acquisitions with
annualized revenues of $137 million. In addition, AOP announced two strategic
acquisitions with combined annualized revenues of $225 million - Legal Copies
International (LCI) and CDP Imaging Systems (CDP). The LCI transaction was
completed on January 12, 1996 and CDP is expected to close in mid-February.
These acquisitions will expand AOP's capacity and expertise in networking and
outsourcing, two of the group's strategic focus areas in its transformation to
become the premier provider of office solutions.
Unisource completed 11 acquisitions in the first quarter of fiscal 1996
with annualized revenues of $275 million. Nine of those acquisitions are U.S.-
based supply systems companies, reflecting Unisource's goal of a balanced
revenue contribution between its paper and supply systems segments by the year
2000. Two of the acquisitions are located in Mexico, significantly expanding
the group's presence in that market.
OTHER
Interest expense increased by approximately $2.4 million, primarily the
result of increased borrowing levels during the first quarter of fiscal 1996
compared to the first quarter of fiscal 1995.
Income before taxes increased by $26.8 million, or 35.9% over the prior
year, primarily reflecting the combined result of improved operations from base
companies, along with earnings contributed by acquisitions, net of increased
interest costs and corporate expenses. The effective income tax rate is
currently 39.4% compared with 39.0% for the comparative period in fiscal 1995.
Weighted average shares of 114.6 million at December 31, 1995 were 3.8
million shares greater than the 110.8 million at December 31, 1994, primarily
the result of acquisitions. On January 10, 1996, the Company announced its
intention to redeem all of its Series AA Preferred Stock effective February 9,
1996. As of December 31, 1995, there were approximately 3.8 million depositary
shares of Series AA Preferred Stock outstanding. Each depositary share is
convertible to 2.2402 shares of common stock. There will be no material effect
to earnings per share for fiscal 1996 as a result of the conversion.
The Company now anticipates adopting Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-
Lived Assets to Be Disposed Of" in the first quarter of fiscal 1997. It is not
expected to have a material effect on the financial statements.
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
The Company's cash usage from operating activities is the result of
increased working capital, primarily due to inventory buildups. Unisource's
inventory buildup is primarily a result of decreased sales volume during the
quarter. AOP's inventory increase is a result of restocking after strong fourth
quarter 1995 sales and continued growth in the Oce product line. Other major
cash usages for the quarter include acquisitions, capital expenditures and
dividends. These cash usages in the first quarter were funded by cash flow from
operations and increased debt.
Debt, excluding finance subsidiaries, was $925 million at December 31,
1995, an increase of $293 million from the Company's debt balance at September
30, 1995 of $632 million. In November 1995, the Company filed a shelf
registration with the SEC under which it may issue up to $750 million of debt or
equity securities. On December 11, 1995, the Company issued $300 million of 30
year bonds with a stated interest rate of 6.75% to the public at a discount
price of 98.48% under this shelf. The proceeds were used to repay short term
borrowings. The Company had a total of $600 million in bank credit commitments
as of December 31, 1995. Short term borrowings supported by these facilities
totaled $89 million leaving $511 million unused and available. At December 31,
1995, debt as a percentage of capitalization was 32.6% and the current ratio was
1.9 to 1.
The Company also filed a shelf registration for 10 million shares of common
stock in December 1995. Shares issued under this shelf will be used exclusively
for acquisitions.
The Company estimates that total cash expenditures in connection with the
Unisource restructuring plan will amount to $143 million. In addition to the
$112 million spent through fiscal 1995, $14 million was expended in the first
quarter of fiscal 1996, totaling $126 million spent to date. Unisource
anticipates spending an additional $17 million during the remainder of fiscal
1996. The remaining commitment under Unisource's $300 million 10 year
information technology outsourcing agreement, which was effective January 1,
1994, is $206 million at December 31, 1995. The foregoing commitments are
anticipated to be funded from Unisource's operating cash flow.
Finance subsidiaries debt grew by $91 million from September 30, 1995, as a
result of increased leasing activity. During the three months ended December
31, 1995, Alco Capital issued an additional $120 million under its medium term
notes program. At December 31, 1995, $722 million of medium term notes were
outstanding with a weighted interest rate of 6.8%, leaving $778 million
available under this program. Under its $125 million asset securitization
agreement commenced in September 1994, Alco Capital sold $13 million in direct
financing leases during the first quarter of fiscal 1996, replacing leases which
had been liquidated and leaving the amount of contracts sold unchanged.
The Company believes that its operating cash flow together with unused
lines of credit and other financing arrangements will be sufficient to finance
current operating requirements including capital expenditures, acquisitions and
restructuring and transformation programs.
<PAGE>
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following Exhibits are furnished pursuant to Item 601 of
Regulation S-K:
Exhibit No. (11) Computation of Earnings Per Share
Exhibit No. (27) Financial Data Schedule
Exhibit No. (99) Additional Exhibits
Press Release dated February 6, 1996
(b) Reports on Form 8-K
On December 27, 1995, the registrant filed a Current Report
on Form 8-K to file, under Item 5 of the form, certain
exhibits relating to its offering of $300,000,000 6.75%
Bonds due December 1, 2025
<PAGE>
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 February 14, 1996 /s/ Michael J. Dillon
------------------- -------------------------------
Michael J. Dillon
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit Number
- --------------
<S> <C>
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(99) Additional Exhibits
</TABLE>
<PAGE>
EXHIBIT 11
- ----------
ALCO STANDARD CORPORATION
COMPUTATIONS OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
1995 1994
----------------------- ------------------------
FULLY Fully
PRIMARY DILUTED(1) Primary Diluted(1)
--------- ---------- --------- ----------
THREE MONTHS ENDED DECEMBER 31
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING
Common shares 112,361 112,361 108,762 108,762
Preferred stock
Senior Securities 8,694 9,016
Convertible loan notes 380
Options 2,229 2,300 2,078 2,282
--------- ---------- --------- ----------
Total shares 114,590 123,735 110,840 120,060
========= ========== ========= ==========
INCOME
Net Income $ 61,415 $ 61,415 $ 45,469 $ 45,469
Less: Preferred dividends 7,664 4,885 2,893
--------- ---------- --------- ----------
Net income available to common shareholders $ 53,751 $ 56,530 $ 42,576 $ 45,469
========= ========== ========= ==========
--------- ---------- --------- ----------
EARNINGS PER SHARE $0.47 $0.46 $0.38 $0.38
========= ========== ========= ==========
</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 Opinion No.
15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ALCO STANDARD CORPORATION AND SUBSIDIARIES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 67,231,000
<SECURITIES> 0
<RECEIVABLES> 1,170,199,000
<ALLOWANCES> 38,269,000
<INVENTORY> 886,298,000
<CURRENT-ASSETS> 2,268,326,000
<PP&E> 738,068,000
<DEPRECIATION> 347,511,000
<TOTAL-ASSETS> 5,141,859,000<F1>
<CURRENT-LIABILITIES> 1,203,924,000
<BONDS> 783,039,000
0
482,954,000
<COMMON> 688,430,000
<OTHER-SE> 745,733,000
<TOTAL-LIABILITY-AND-EQUITY> 5,141,859,000<F2>
<SALES> 2,533,617,000
<TOTAL-REVENUES> 2,566,426,000
<CGS> 1,849,436,000
<TOTAL-COSTS> 1,864,245,000<F3>
<OTHER-EXPENSES> 586,495,000<F4>
<LOSS-PROVISION> 6,708,000
<INTEREST-EXPENSE> 14,327,000
<INCOME-PRETAX> 101,359,000
<INCOME-TAX> 39,944,000
<INCOME-CONTINUING> 61,415,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,415,000
<EPS-PRIMARY> 0.47
<EPS-DILUTED> 0.46
<FN>
<F1>Includes Finance Subsidiaries assets (primarily lease receivables) of
$1,098,156,000
<F2>Includes Finance Subsidiaries liabilities (primarily debt) of $961,850,000
<F3>Includes Finance Subsidiaries interest of $14,809,000
<F4>Represents selling, general, and administrative expenses.
</FN>
</TABLE>
<PAGE>
Exhibit 99
[Letterhead of ALCO Standard Corporation]
ALCO STANDARD COMMENTS ON STRATEGIC OPTIONS
VALLEY FORGE, PENNSYLVANIA--FEBRUARY 6, 1996--In response to a security analyst
report issued today, Alco Standard Corporation confirmed that it continues to
consider the possibility of establishing Alco Office Products and Unisource as
separate public companies.
John Stuart, Alco's chairman and chief executive officer, said "Our goal remains
to take all appropriate steps to insure long-term growth for shareholders. We
believe that as separately capitalized and managed companies, AOP and Unisource
may have better long-term growth prospects than under common ownership. There
are many complex structural and operational issues which will need to be
evaluated before we will be in position to come to any judgment on what course
of action, if any, should be taken."
No timetable has been established for finalizing any decisions concerning such a
transaction.
Alco Standard Corporation is headquartered in Valley Forge, Pennsylvania. Alco
operates the largest independent marketer and distributor of office equipment in
North America and the United Kingdom through Alco Office Products and is the
largest marketer and distributor of paper and supply systems in North America
through Unisource Worldwide, Inc. Revenues for fiscal year 1995, which ended
September 30, were nearly $10 billion.
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