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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 17, 1996
ALCO STANDARD CORPORATION
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(Exact name of registrant as specified in its charter)
OHIO File No. 1-5964 23-0334400
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
P.O. Box 834, Valley Forge, Pennsylvania 19482
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Registrant's telephone number, including area code: (610) 296-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On April 17, 1996, the Registrant announced its second quarter results
and reported its intention to structure the businesses of IKON Business
Solutions and Unisource under separate ownership.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
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Press Release dated April 17, 1996
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SIGNATURE
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.
ALCO STANDARD CORPORATION
By: /s/ Michael J. Dillon
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Michael J. Dillon
Vice President and Controller
Dated: April 17, 1996
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Index to Exhibit
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(28) Press Release Dated April 17, 1996
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NEWS RELEASE
[LETTER HEAD APPEARS HERE]
ALCO STANDARD REPORTS SECOND QUARTER RESULTS;
ANNOUNCES INTENT TO SEPARATE BUSINESSES
VALLEY FORGE, PENNSYLVANIA--APRIL 17, 1996--Alco Standard Corporation
(NYSE:ASN) announced today net income of $71 million for the second quarter of
fiscal year 1996, which ended March 31, 1996. This represents an increase of 45%
over net income of $49 million in the second quarter last year. Earnings per
share rose to $.52, an increase of 24% over the $.42 earned in the second
quarter of fiscal 1995, despite a 15% increase in shares outstanding. Figures
reflect the two-for-one stock split announced October 17, 1995.
The company also announced that its Board of Directors has approved the
structuring of its businesses, IKON Office Solutions and Unisource, under
separate ownership in order to maximize the future growth potential of both
businesses. IKON is the largest independent marketer of office technology
solutions in North America and the United Kingdom, while Unisource is the
largest marketer and distributor of paper products and supply systems in North
America.
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John E. Stuart, Alco's chairman and chief executive officer, said, "The
decision to split the company reflects our desire to eliminate the growing
strategic conflict between our two businesses. As the market moves from ink on
paper to imaging on paper, and as the trend toward outsourcing grows, IKON's
future opportunities increasingly bring it in direct competition with
Unisource's customers. Additionally, Unisource is expanding its distribution of
imaging supplies to the corporate office market, IKON's traditional customer
base. Although these conflicts have only become of strategic concern in recent
months, we believe they will accelerate rapidly in the future. Under separate
ownership, IKON and Unisource will be free to pursue their own growth
strategies, unencumbered by the activities of the other in the marketplace."
The company is actively considering a variety of alternatives for
separating the two businesses, including a spin-off of Unisource to Alco
shareholders as a tax-free dividend. The company plans to reach a decision as to
the method of separation by the end of June, with an estimated completion date
of not later than December 31, 1996.
Stuart commented, "Whatever form the separation takes, we intend to protect
the interests of all of Alco's constituents including customers, suppliers,
employees, shareholders, bondholders and other creditors."
For its second quarter, Alco revenues rose to $2.8 billion, up 15% over the
$2.4 billion reported in the same period last year. Operating income increased
35% to $151 million, compared with $112 million for the period one year ago.
IKON Office Solutions (formerly Alco Office Products) posted a 52% increase
in revenues for the quarter, to $1.1 billion, while operating income advanced
54% to $91 million. Operating margins were 8.6%, compared with 8.5% in the
second quarter of last year. Internal growth, which excludes acquisitions, was
14.6% in revenues and 20.4% in operating income.
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IKON completed 30 acquisitions in the second quarter, with annualized
revenues of approximately $380 million; five of the acquisitions were market
extensions to Erskine House in the United Kingdom. Through March 30,
acquisitions for IKON exceed $500 million in annualized revenues.
In addition, since the end of the quarter, IKON has acquired New York City-
based Concordance Technologies, Inc. (CTI), its first acquisition completely
dedicated to digital networking, and Axion, an office solutions network with 5
primary locations throughout Southern France.
Unisource delivered a 13% increase in operating income, generating $60
million for the quarter. Revenues for the period were $1.7 billion, unchanged
from revenues in the same period last year despite a severe decline in printing
paper prices in recent months. Operating margins were 3.4%, on track with
Unisource's goal of 4% operating margins by the fourth quarter of 1996.
Unisource sustained its aggressive acquisition pace in the second quarter,
completing 10 acquisitions with total annualized revenues of nearly $240
million. Unisource has already exceeded its 1996 acquisition goal of $500
million in annualized revenues and expects to approach $1 billion by year end.
The large majority of the acquisitions have been supply systems companies, in
accordance with the group's goal of achieving a 50% revenue contribution from
supply systems longer-term.
For the first six months of the fiscal year, revenues for Alco totaled $5.4
billion, 16% higher than for the first half of 1995. Operating income year-to-
date in 1996 was $283 million, a 35% increase over operating income generated in
1995's first six months. Earnings per share for the first six months totaled
$.97, up 21% over the first half of 1995. Average shares outstanding increased
11% over the same period last year.
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"Our performance this quarter was strong, and we're particularly pleased we
can deliver these results even in the face of tough conditions in the paper
industry," Stuart stated. "Paper prices have declined significantly since the
beginning of the year, preventing revenue growth this quarter at Unisource. In
response, we have successfully reduced our working capital and operating costs
in order to meet our commitment to improve Unisource's operating margins."
Stuart continued, "IKON is exceeding its targets for growth in revenues and
operating income and its internal growth is in line with long-standing
performance levels. We have already achieved our annual goals for acquisitions
for both groups, and we plan to continue to acquire attractive companies that
will enhance the performance of both groups."
Alco Standard Corporation is headquartered in Valley Forge, Pennsylvania.
Alco operates the largest independent marketer of office solutions in North
America and the United Kingdom through IKON Office Solutions and the largest
marketer and distributor of paper and supply systems in North America through
Unisource. Revenues for fiscal year 1995 were nearly $10 billion.
