<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, 1996 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
---------------------------
IKON OFFICE SOLUTIONS, INC.
(formerly 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)
ALCO STANDARD CORPORATION
- --------------------------------------------------------------------------------
(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, 1997.
Common Stock, no par value 134,656,622 shares
<PAGE>
INDEX
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--December 31, 1996
and September 30, 1996
Consolidated Statements of Income--Three months
ended December 31, 1996 and December 31, 1995
Consolidated Statements of Cash Flows--Three
months ended December 31, 1996 and December 31, 1995
Notes to Consolidated Financial Statements--
December 31, 1996
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)
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31 September 30
ASSETS 1996 1996
- ------ ------------- --------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 61,423 $ 46,056
Accounts receivable, net 587,096 513,378
Finance receivables, net 507,439 435,434
Inventories 433,533 350,774
Prepaid expenses 124,984 80,352
Deferred taxes 90,955 83,161
------------ -------------
Total current assets 1,805,430 1,509,155
------------ -------------
Investments and Long-Term Receivables 16,244 48,165
Long-Term Finance Receivables, net 959,014 878,324
Equipment on Operating Leases, net 95,826 95,043
Property and Equipment, at cost 375,737 358,234
Less accumulated depreciation 177,360 169,416
------------ -------------
198,377 188,818
------------ -------------
Other Assets
Goodwill 1,169,257 1,087,210
Miscellaneous 133,150 88,679
------------ -------------
1,302,407 1,175,889
------------ -------------
Net Assets of Discontinued Operations 1,489,201
------------ -------------
$ 4,377,298 $ 5,384,595
============ =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31 September 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1996
- ------------------------------------ ----------- -----------
<S> <C> <C>
Current Liabilities
Current portion of long-term debt $ 48,038 $ 62,697
Current portion of long-term debt, finance subsidiaries 373,000 314,000
Notes payable 11,400 186,462
Trade accounts payable 188,213 123,571
Accrued salaries, wages and commissions 67,682 101,632
Deferred revenues 203,389 200,225
Other accrued expenses 252,935 269,400
----------- -----------
Total current liabilities 1,144,657 1,257,987
----------- -----------
Long-Term Debt 536,525 721,923
Long-Term Debt, Finance Subsidiaries 928,034 813,026
Deferred Taxes 222,773 191,272
Other Long-Term Liabilities 140,852 144,883
Shareholders' Equity
Series BB conversion preferred stock, no par value:
3,877 depositary shares issued and outstanding 290,170 290,170
Common stock, no par value:
Authorized 300,000 shares
Issued 12/96 - 133,800 shares; 9/96 - 131,930 shares 597,118 1,305,413
Retained earnings 530,076 701,771
Foreign currency translation adjustment (3,380) (25,187)
Cost of common shares in treasury: 12/96 - 216 shares;
9/96 - 374 shares (9,527) (16,663)
----------- -----------
1,404,457 2,255,504
----------- -----------
$ 4,377,298 $ 5,384,595
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended
December 31
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues
Net Sales $ 638,828 $ 515,012
Service and rental revenue 453,860 353,772
Financial subsidiaries 47,746 31,795
----------- -----------
1,140,434 900,579
----------- -----------
Costs and Expenses
Cost of goods sold 404,934 333,226
Service and rental costs 216,107 169,335
Finance subsidiaries interest 20,011 14,809
Selling and administrative 417,970 314,534
----------- -----------
1,059,022 831,904
----------- -----------
Operating Income 81,412 68,675
Interest expense 8,201 7,340
----------- -----------
Income from continuing operations before taxes
and extraordinary loss 73,211 61,335
Taxes on Income 28,552 24,398
----------- -----------
Income from continuing operations before
extraordinary loss 44,659 36,937
Discontinued operations 20,151 26,229
----------- -----------
Income before extraordinary loss 64,810 63,166
Extraordinary loss from extinguishment of debt,
net of tax benefit (12,156)
----------- -----------
Net Income 52,654 63,166
Less: Preferred Dividends 4,885 7,664
----------- -----------
Net Income Available to Common Shareholders $ 47,769 $ 55,502
=========== ===========
Earnings (Loss) Per Share (1)
Continuing Operations $0.30 $0.25
Discontinued Operations $0.15 $0.22
Extraordinary loss ($0.09)
----------- -----------
$0.36 $0.47
=========== ===========
</TABLE>
(1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements.
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
-----------------------------
1996 1995
-----------------------------
<S> <C> <C>
Operating Activities
Income from continuing operations before extraordinary loss $ 44,659 $ 36,937
Additions (deductions) to reconcile income from continuing
operations before extraordinary loss to net cash (used in)
provided by operating activities of continuing operations
Depreciation 28,616 16,329
Amortization 11,211 7,319
Provisions for losses on accounts receivables 7,430 3,625
Provisions for deferred taxes 18,800
Changes in operating assets and liabilities, net
of effects from acquisitions and divestitures:
Increase in accounts receivables (63,384) (25,425)
Increase in inventories (79,134) (47,256)
Increase in prepaid expenses (54,245) (39,194)
Increase in accounts payable, deferred
revenues and accrued expenses 17,446 64,150
Miscellaneous 4,129 (11,923)
------------ ------------
Net cash (used in) provided by operating activities of continuing operations (64,472) 4,562
Net cash provided by (used in) operating activities of
discontinued operations 24,176 (63,764)
------------ ------------
Net cash used in operating activities (40,296) (59,202)
Investing activities
Proceeds from the sale of property and equipment 10,679 8,407
Payments received on long term receivables 3,057 962
Cost of companies acquired, net of cash acquired (41,224) (25,662)
Expenditures for property and equipment (38,912) (26,692)
Purchase of miscellaneous assets (9,249) (9,474)
Finance subsidiaries receivables - additions (317,869) (191,094)
Finance subsidiaries receivables - collections 142,615 73,443
------------ ------------
Net cash used in investing activities of continuing operations (250,903) (170,110)
Net cash used in investing activities of discontinued operations (38,058) (74,544)
------------ ------------
Net cash used in investing activities (288,961) (244,654)
Financing activities
Payments of short-term borrowings, net (180,351) (93,733)
Proceeds from issuance of long-term debt 14,591 369,194
Proceeds from option exercises and sale of treasury shares 27,874 13,281
Proceeds from sale of finance subsidiaries lease receivables 25,433 15,808
Proceeds from (payments to) Unisource 553,479 (146,387)
Long-term debt repayments (258,969) (14,655)
Finance subsidiaries debt - additions 200,008 134,985
Finance subsidiaries debt - repayments (26,000) (44,402)
Dividends paid (23,537) (22,917)
Purchase of treasury shares (1,786) (52,676)
------------ ------------
Net cash provided by financing activities of continuing operations 330,742 158,498
Net cash provided by financing activities of discontinued operations 13,882 138,308
------------ ------------
Net cash provided by financing activities 344,624 296,806
------------ ------------
Net increase (decrease) in cash and cash equivalents 15,367 (7,050)
Cash and cash equivalents at beginning of year 46,056 66,519
------------ ------------
Cash and cash equivalents at end of period $ 61,423 $ 59,469
============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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, 1996. Certain prior year amounts have been
reclassified to conform with the current year presentation. As a result of the
spin-off of Unisource as discussed in Note 3 and the second quarter fiscal 1996
merger of two companies that were accounted for as poolings-of-interests, prior
period amounts have been restated.
Note 2: Debt
----
On December 16, 1996, the Company entered into a credit agreement with
several banks under which it may borrow up to $400 million. This multicurrency
facility replaces a $500 million credit facility which was due to expire
December 1, 1999 and a $100 million credit facility which was canceled on
December 2, 1996. The reduced credit commitment reflects the spin-off of the
Unisource business which was effective December 31, 1996 (see note 3). The new
agreement, which expires December 15, 2001, includes a facility fee of 8 basis
points per annum on the commitment, based upon the Company's current long-term
debt rating. The agreement provides that loans may be made under either
domestic or Eurocurrency notes at rates computed under a selection of rate
formulas including prime or Eurocurrency rates. The agreement was filed as
Exhibit 4.1 to the Company's Form 10-K for the year ended September 30, 1996.
Note 3: Discontinued Operations and Spin-off
------------------------------------
On June 19, 1996, the Company announced that it would separate
Unisource Worldwide, Inc. ("Unisource"), its printing and imaging and supply
systems distribution business from IKON Office Solutions, Inc. ("IKON"), its
office solutions business, with each business operating as a stand-alone,
publicly traded company. In order to effect the separation of these businesses,
Alco declared a dividend payable to holders of record of Alco common stock at
the close of business on December 13, 1996 of one share of common stock, $.001
par value, of Unisource for every two shares of Alco stock owned on December 13,
1996. The distribution resulted in 100% of the outstanding shares of Unisource
common stock being distributed to Alco shareholders by December 31, 1996. The
Company has accounted for Unisource as a discontinued operation for all periods
presented in these financial statements. Prior year amounts have also been
restated to reflect the allocation of corporate interest and other corporate
expenses to the discontinued operations of the Company.
The results of discontinued operations are as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
December 31
----------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues $1,728,533 $1,716,165
========== ==========
Income before taxes $ 34,743 $ 43,282
Tax expense 14,592 17,053
---------- ----------
Net income $ 20,151 $ 26,229
========== ==========
</TABLE>
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
DECEMBER 31, 1996
Note 3: Discontinued Operations and Spin-off (Continued)
------------------------------------
The net carrying value at September 30, 1996 of the assets to be
distributed to shareholders consisted of (in thousands):
<TABLE>
<S> <C>
Working capital $ 750,792
Net property and equipment 224,168
Other assets 637,062
Long-term debt and other liabilities (122,821)
----------
Unisource equity and intercompany debt $1,489,201
==========
</TABLE>
In December 1996, Unisource repaid $553.5 million of intercompany debt
outstanding with the Company. The December 31, 1996 Balance Sheet reflects the
distribution of the Unisource stock to Alco shareholders. Equity of the Company
was reduced by $952.3 million, which was the equity of Unisource at December 31,
1996.
Note 4: Extraordinary Loss on Early Extinguishment of Debt
--------------------------------------------------
On December 2, 1996, Unisource borrowed under its new credit facility
to repay $553.5 million of intercompany debt with the Company. The Company
prepaid debt in the amount of $514 million from these funds. Early repayment of
this debt resulted in certain prepayment penalties. Total prepayment penalties
of $18.7 million and related tax benefits of $6.5 million are reflected as an
extraordinary loss on early extinguishment of debt on the December 31, 1996
financial statements.
Note 5: Name Change
-----------
At their annual meeting on January 23, 1997, the shareholders voted to
change the name of the Company from Alco Standard Corporation to IKON Office
Solutions, Inc., the name previously used by Alco's remaining operating unit.
The name change was effective immediately and the Company's ticker symbol was
changed from ASN to IKN effective January 27, 1997.
<PAGE>
Item 2: Management's Discussion and Analysis of Results of Operations and
- --------------------------------------------------------------------------
Financial Condition and Liquidity
- ---------------------------------
On June 19, 1996, the Company announced that it would split its two
operating units into independent companies by spinning off Unisource, its paper
and supply systems distribution group, as a separate publicly owned company.
The Company accomplished the transaction through a U.S. tax-free distribution of
Unisource stock to Company shareholders on December 31, 1996. As a result of
the spin off of Unisource, the Company has accounted for Unisource as a
discontinued operation. Continuing operations of the Company consist of IKON,
which sells, rents and leases photocopiers, digital printers and other automated
office equipment for use in both traditional and integrated office environments.
IKON also provides outsourcing and imaging services and offers consulting,
design, computer networking and technology training for the networked office
environment. On January 23, 1997, shareholders of the Company voted to change
the name of the Company from Alco Standard Corporation to IKON Office Solutions,
Inc.
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,
as well as the discontinued operations of Unisource.
Three Months Ended December 31, 1996
Compared with the Three Months Ended December 31, 1995
------------------------------------------------------
Continuing Operations
Revenues and income before taxes for the first quarter of fiscal 1997
compared to the first quarter of fiscal 1996 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
---------------------
December 31 %
------------
1996 1995 Change
---- ---- ------
<S> <C> <C> <C>
(in millions)
REVENUES $1,140 $901 26.5%
------ ----
INCOME BEFORE TAXES:
Operating income $81.4 $68.6 18.7%
Interest expense (8.2) (7.3)
---- ----
$73.2 $61.3 19.4%
----- -----
</TABLE>
The Company's first quarter revenues increased $239 million, or 26.5% over
the first quarter of fiscal 1996, of which $107 million relates to current and
prior year acquisitions and $132 million to base companies' internal growth. The
Company's internal revenue growth was 15% in the first quarter of fiscal 1997.
The results reflect a very strong performance from the Company's traditional
copier business with substantial growth in both equipment placements and copy
volume. Revenues from the Company's operations outside the U.S. were $147
million for the first quarter of fiscal 1997 compared to $124 million for the
same period of the prior fiscal year. The Company's European operations
accounted for $2 million of the increase, while Canadian revenues increased $18
million as a result of acquisitions and internal growth in base companies. A
fiscal 1996 Mexican acquisition added $3 million of revenue to the first quarter
of fiscal 1997.
The Company's operating income increased by $12.8 million, or 18.7% over
the prior year's quarter. Current and prior year acquisitions accounted for
$5.8 million, while $7.0 million was the result of base companies' internal
growth net of increased transformation related costs. IKON Capital, Inc.
contributed 17.7% of the Company's operating income in the first quarter of
fiscal 1997 compared to 12.4% in the first quarter of fiscal 1996. The
Company's operating margins were 7.1% in the first
<PAGE>
quarter of fiscal 1997, compared to 7.6% in fiscal 1996. The reduction was
primarily the result of the short-term dilutive impact of the Company's rapid
acquisition of technology services companies and transformation expenses in
Europe.
The Company recognized a $6.5 million pretax gain in the first quarter of
fiscal 1997 on the sale of its corporate headquarters building. The Company
plans to move into a new headquarters facility later in fiscal 1997. The Company
also recognized several first time costs in the first quarter of fiscal 1997,
including costs associated with a national advertising program, enhanced
training programs throughout the Company and enhanced sales incentive programs.
Operating income from foreign operations was $10.0 million for the three
months ended December 31, 1996, down $1.6 million from the prior year's
quarter, of which $2.7 million is attributable to European operations and
relates to the European transformation initiative in the first quarter of fiscal
1997, net of $1.0 million increase in Canadian operations and $.1 million of
additional operating income related to the Mexican acquisition. There was no
material effect of foreign currency exchange rate fluctuations on the results of
operations in the first quarter of fiscal 1997 compared to the first quarter of
fiscal 1996.
The Company continues to proceed as planned with the transformation program
announced in 1995 to change its organization into a more cohesive and efficient
network by building a uniform information technology system and implementing
best practices for critically important management functions throughout the
Company.
Acquisitions
In the first quarter of fiscal 1997, the Company completed 23 acquisitions
with annualized revenues of nearly $170 million. Of the 23 companies acquired,
10 were systems integration companies, seven were outsourcing and imaging
companies and six were traditional copier companies. The increasing number of
systems integration and outsourcing companies in the acquisition mix reflects
the Company's intention to strengthen its ability to offer customers complete
office technology solutions, from traditional copier systems to computer
networking and outsourced imaging and duplicating services.
Other
Interest expense, net of corporate interest expense allocated to
discontinued operations, increased $.9 million in the first quarter of fiscal
1997, primarily the result of slightly higher borrowing levels and increased
interest rates during the first quarter of fiscal 1997 compared to fiscal 1996.
Income before taxes increased by $11.9 million, or 19.4% for the first
quarter, primarily reflecting the combined result of internal growth from base
companies, along with earnings contributed by acquisitions, net of increased
interest costs. The effective income tax rate for the quarter is 39.0% compared
with 39.8% for the comparative period in fiscal 1996.
The Company recorded an extraordinary charge of $12.2 million after tax
in the first quarter of fiscal 1997 relating to its early extinguishment of
certain corporate debt. The Company used the proceeds of a December 2, 1996
$553.5 million intercompany debt repayment from its discontinued operation,
Unisource, to prepay $514 million of corporate debt. The pretax charge of $18.7
million primarily included prepayment penalties and has a related tax benefit of
$6.5 million.
Earnings per share from continuing operations, excluding the extraordinary
charge, increased 20% from $.25 per share for the first quarter of fiscal 1996
to $.30 per share for the first quarter of fiscal 1997. Including the loss per
share of $.09 on the extraordinary charge and the earnings per share of $.15 on
discontinued operations, earnings per share of the Company were $.36 for the
first quarter ended December 31, 1996 compared to $.47 (which includes $.22 for
discontinued operations) for the first quarter ended December 31, 1995.
Weighted average shares of 134.3 million for the quarter ended December 31, 1996
were 15.8 million shares greater than the 118.5 million for the quarter ended
December 31, 1995, primarily the result of acquisitions for stock (6.8 million
weighted shares) and the conversion of the Company's Series AA Preferred Stock
effective February 9, 1996 (8.7 million weighted shares).
<PAGE>
Discontinued Operations
Revenues of Unisource, the Company's discontinued operation, increased
$13 million, or 0.7%, to $1.73 billion in the first quarter of fiscal 1997
compared to the first quarter of the prior year. This change is due to increases
associated with current and prior year acquisitions of $152 million, which were
offset by revenue declines of $139 million in base operations. The decline in
base operations is principally due to an estimated decrease in average paper
prices of 17% compared to the same period last year. The price deflation was
partially offset by volume gains in the base operations. Income before income
taxes decreased $8.5 million to $34.7 million for the first quarter of fiscal
1997 compared to $43.3 million in the first quarter of fiscal 1996. This
decrease is primarily related to price decreases, net of volume increases in
base operations and operating income contributed by acquisitions, plus
additional interest expense of $3.5 million in the first quarter of fiscal 1997
compared to the first quarter of fiscal 1996.
Financial Condition and Liquidity
---------------------------------
Net cash used in operating activities of continuing operations for the
first quarter of fiscal 1997 was $64 million and primarily related to increases
in working capital. During the same period, the Company also used $251 million
in cash for investing activities, which included finance subsidiary activity of
$175 million, acquisition activity at a cash cost of $41 million and capital
expenditures of $39 million. Operating and investing activities were funded
through cash flow from financing activities. Cash provided by financing
activities included $553 million of intercompany debt repaid by Unisource which
was used primarily to prepay corporate debt of the Company. Debt, excluding
finance subsidiaries, was $596 million at December 31, 1996, a decrease of $375
million from the continuing operations debt balance at September 30, 1996 of
$971 million. The debt to capital ratio was 29.8% at December 31, 1996 compared
to 31.4% at September 30, 1996.
On December 16, 1996, the Company entered into a credit agreement with
several banks under which it may borrow up to $400 million. This credit facility
replaces a $500 million credit facility which was due to expire December 1999
and a $100 million credit facility which was canceled on December 2, 1996. The
reduced credit commitment reflects the spin-off of the Unisource business which
was effective December 31, 1996. As of December 31, 1996, there were no
borrowings under this agreement. The Company also has $450 million available for
either stock or debt offerings under its shelf registration statement filed
November 1995.
Finance subsidiaries debt grew by $174 million from September 30, 1996, a
result of increased leasing activity. During the three months ended December 31,
1996, IKON Capital issued an additional $177 million under its $1.5 billion
medium term notes program which began in July 1994. At December 31, 1996, $1.1
billion of medium term notes were outstanding with a weighted interest rate of
6.7%, leaving $323 million available under this program. Under its $275 million
asset securitization program, IKON Capital sold $25.4 million in direct
financing leases during the first quarter of fiscal 1997, replacing those leases
liquidated and leaving the amount of contracts sold unchanged. Of the total $275
million asset securitization program, $125 million expires in March 1997, but is
expected to be renewed.
The Company filed shelf registrations for 10 million shares of common
stock in January 1996 and 5 million shares of common stock in March 1996. Shares
issued under these registration statements are being used for acquisitions.
Approximately 11 million shares have been issued under these shelf registrations
through December 31, 1996.
The Company believes that its operating cash flow together with unused bank
credit facilities and other financing arrangements will be sufficient to finance
current operating requirements including capital expenditures, acquisitions,
dividends and transformation costs.
<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. (3.1) Amendment dated January 23, 1997 to Amended and
Restated Articles of Incorporation
Exhibit No. (3.2) Code of Regulations of IKON Office Solutions, Inc.
Exhibit No. (11) Computation of Earnings per Share
Exhibit No. (27) Financial Data Schedule.
(b) Reports on Form 8-K
On November 13, 1996, the registrant filed a Current Report on Form 8-K
to file, under Item 5 of the form, the Amended and Restated 1996
Support Agreement with its leasing subsidiary, IKON Capital, Inc. as
Exhibit 10 under Item 7 of the Form 8-K and to announce that on
November 8, 1996, the Board of Directors declared a special dividend of
100% of the common stock of Unisource Worldwide, Inc., the registrant's
wholly-owned subsidiary, payable December 31, 1996 to shareholders of
record of Alco common stock on December 13, 1996.
On January 30, 1997, the registrant filed a Current Report on Form 8-K
to file, under Item 5 of the form, the earnings for the fiscal quarter
ended December 31, 1996 and the announcement of the name change from
Alco Standard Corporation to IKON Office Solutions, Inc. which was
approved by shareholder vote at the annual shareholders meeting held
January 23, 1997.
<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.
IKON OFFICE SOLUTIONS, INC.
Date February 14, 1997 /s/ Michael J. Dillon
------------------- ------------------------------
Michael J. Dillon
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Number
- --------------
(3.1) Amendment dated January 23, 1997 to amended and
restated Article of Incorporation
(3.2) Code of Regulations of IKON Office Solutions, Inc.
(11) Computation of Earnings per Share
(27) Financial Data Schedule.
<PAGE>
[SEAL OF THE SECRETARY Prescribed by
OF STATE OF OHIO BOB TAFT, Secretary of State
APPEARS HERE] 30 East Broad Street, 14th Floor
Columbus, Ohio 43266-0418
Form SH-AMD (January 1991)
Exhibit 3.1
CERTIFICATE OF AMENDMENT
by Shareholders to the Articles of Incorporation of
Alco Standard Corporation
- --------------------------------------------------------------------------------
(Name of Corporation)
O. Gordon Brewer , who is:
- ------------------------------
[_] Chairman of the Board [_] President [X] Vice President (check one)
and
Karin M. Kinney , who is [X] Secretary [_] Assistant Secretary
- ------------------------------
(Check one) of the above named Ohio corporation for profit do hereby certify
that: (check the appropriate box and complete the appropriate statements)
[X] a meeting of the shareholders was duly called for the purpose of adopting
this amendment and held on January 23, 1997 at which meeting a quorum of
the shareholders was present in person or by proxy, and by the affirmative
vote of the holders of shares entitling them to exercise 69% of the voting
power of the corporation.
[_] in a writing signed by all of the shareholders who would be entitled to
notice of a meeting held for that purpose, the following resolution to
amend the articles was adopted:
See attached Exhibit A
IN WITNESS WHEREOF, the above named officers, acting for and on the behalf of
the corporation, have hereto subscribed their names this 23rd day of January,
1997.
By /s/ O. Gordon Brewer
------------------------------------
O. Gordon Brewer
Vice President
By /s/ Karin M. Kinney
------------------------------------
Karin M. Kinney
Secretary
NOTE: Ohio law does not permit one officer to sign in two capacities, Two
separate signatures are required, even if this necessitates the election of a
second officer before the filing can be made.
(OHIO - 613 - 3/4/91)
<PAGE>
Exhibit A
RESOLVED, that the Amended and Restated Articles of Incorporation of Alco
Standard Corporation be amended by changing FIRST thereof so that, as amended,
FIRST shall be and read as follows:
"FIRST: The name of the Corporation shall be IKON Office Solutions, Inc."
FURTHER RESOLVED, that all other provisions of the Amended and Restated Articles
of Incorporation not specifically modified by these resolutions, shall remain in
full force and effect unchanged.
FURTHER RESOLVED, that the officers of the corporation are hereby authorized to
take all necessary or appropriate action to carry out the purpose of the
foregoing resolutions.
<PAGE>
Exhibit 3.2
IKON OFFICE SOLUTIONS, INC.
(Formerly Known as Alco Standard Corporation)
CERTIFICATION OF
CODE OF REGULATIONS
The undersigned hereby certifies that she is the duly elected, acting and
qualified Secretary of IKON Office Solutions, Inc., an Ohio corporation ("the
Corporation"), and that the attached "IKON Office Solutions, Inc. Code of
Regulations" is a true and complete copy of the Code of Regulations of the
Corporation as in effect as of the date hereof.
In witness whereof the undersigned has hereunto set her hand and affixed
the seal of the Corporation this day of
___________________________________
Secretary
<PAGE>
IKON OFFICE SOLUTIONS, INC.
(Formerly Known as Alco Standard Corporation)
CODE OF REGULATIONS
Adopted: January 19, 1970
Amended: February 9, 1982
Amended: January 25, 1996
Name Change: January 23, 1997
ARTICLE I
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of shareholders of the
corporation for the election of directors, the consideration of reports to be
laid before such meeting, and the transaction of such other business as may
properly be brought before such meeting shall be held on such day in January,
February or March in each year at such time and place, either within or without
the State of Ohio, as may be fixed by the board of directors and specified in
the notice of the meeting. If, prior to December 31 of the year next preceding
the annual meeting, the board of directors does not so fix the time, place and
date of the meeting, the annual meeting of the shareholders shall be held on the
last Tuesday in February, if not a legal holiday (and if a legal holiday, then
on the next succeeding business day) at such time and place, either within or
without the State of Ohio, as may be fixed by the chairman of the board or by
the president and specified in the notice of such meeting.
SECTION 2. Special Meetings. Special meetings of the shareholders of the
corporation may be held on any business day, when called by the chairman of the
board, or by the president, or by the vice president, or by the board of
directors acting at a meeting, or by a majority of the directors acting without
a meeting, or by the person who hold twenty-five per cent of all the shares
outstanding and entitled to vote thereat. Upon request in writing delivered
either in person or by registered mail to the president or the secretary by any
persons entitled to call a meeting of shareholders, such officer shall forthwith
cause to be given to the shareholders entitled thereto notice of a meeting to be
held on a date not less than ten or more than sixty days after the receipt of
such request, as such officer may fix. If such notice is not given within
thirty days after the delivery or mailing of such request, the persons calling
the meeting may fix the time of the meeting and give notice thereof in the
manner provided by law or as provided in these regulations, or cause such notice
to be given by any designated representative. Each special meeting shall be
called to convene between nine o'clock a.m., and four o'clock p.m., and shall be
held at the principal office of the corporation, unless the same is called by
the directors, acting with or without a meeting, in which case such meeting may
be held at any place either within or without the State of Ohio designated by
the board of directors and specified in the notice of such meeting.
SECTION 3. Notice of Meetings. Not less than ten or more than sixty days
before the date fixed for a meeting of shareholders, written notice stating the
time, place, and purposes of
1
<PAGE>
such meeting shall be given by or at the direction of the secretary, or
assistant secretary, or any other person or persons required or permitted by
these regulations to give such notice. The notice shall be given by personal
delivery or by mail to each shareholder entitled to notice of the meeting who is
of record as the day next preceding the day on which notice is given or, if a
record date therefor is duly fixed, of record as of said date; if mailed, the
notice shall be addressed to the shareholders at their respective addresses as
they appear on the records of the corporation. Notice of the time, place, and
purposes of any meeting of shareholders may be waived in writing, either before
or after the holding of such meeting, by any shareholders, which writing shall
be filed with or entered upon the record of the meeting. The attendance of any
shareholder at any such meeting without protesting, prior to or at the
commencement of the meeting, the lack of proper notice shall be deemed to be a
waiver by him of notice of such meeting.
SECTION 4. Quorum; Adjournment. Except as may be otherwise provided by
law or by the Articles of Incorporation, at any meeting of the shareholders the
holders of shares entitling them to exercise a majority of the voting power of
the corporation present in person or by proxy shall constitute a quorum for such
meeting; provided, however, that no action required by law, by the Articles, or
by these regulations to be authorized or taken by a designated proportion of the
share of any particular class or of each class of the corporation may be
authorized or taken by a lesser proportion; and provided, further, that the
holders of a majority of the voting shares represented thereat, whether or not a
quorum is present, may adjourn such meeting from time to time; if any meeting is
adjourned, notice of such adjournment need not be given if the time and place to
which such meeting is adjourned are fixed and announced at such meeting.
SECTION 5. Proxies. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy. The person appointed
as proxy need not be a shareholder. Unless the writing appointing a proxy
otherwise provides, the presence at a meeting of the person having appointed a
proxy shall not operate to revoke the appointment. Notice to the corporation,
in writing or in open meeting, of the revocation of the appointment of a proxy
shall not affect any vote or act previously taken or authorized.
SECTION 6. Approval and Ratification of Acts of Offices and Board of
Directors. Except as otherwise provided by the Articles of Incorporation or by
law, any contract, act, or transaction, prospective or past, of the corporation,
or of the board of directors, or of the officers may be approved or ratified by
the affirmative vote at a meeting of the shareholders, or by the written
consent, with or without a meeting, of the holders of record of shares entitling
them or exercise a majority of the voting power of the corporation, and such
approval or ratification shall be as valid and binding as though affirmatively
voted for or consented to by every shareholder of the corporation.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Number. The number of directors shall be such number as is
fixed by the shareholders, at any annual or special meeting called for the
purpose of electing directors at which a quorum is present, by the affirmative
vote of the holders of a majority of the shares which are represented at the
meeting and entitled to vote, but shall not be less than seven or more than
2
<PAGE>
sixteen. If the shareholders at any meeting for the election of directors shall
fail to fix the number of directors to be elected, the number elected shall be
deemed to be the number of directors so fixed. Notwithstanding the foregoing,
the board of directors may change the number of directors fixed by the
shareholders, from time to time by resolution adopted by a majority of the board
of directors, provided, however, that in no event shall the number of directors
be less than seven or more than sixteen.
SECTION 2. Election of Directors; Vacancies. The directors shall be
elected at each annual meeting of shareholders or at a special meeting called
for the purpose of electing directors. At a meeting of shareholders at which
directors are to be elected, only persons nominated as candidates shall be
eligible for election as directors and the candidates receiving the greatest
number of votes shall be elected. In the event of the occurrence of any vacancy
or vacancies in the board of directors, however caused, the remaining directors,
though less than a majority of the whole authorized number of directors, may, by
the vote of a majority of their number, fill any such vacancy for the unexpired
term.
SECTION 3. Term of Office; Resignations. Each director shall hold office
until the next annual meeting of the shareholders and until his successor is
elected, or until his earlier resignation, removal from office, or death. Any
director may resign at any time by oral statement to that effect made at a
meeting of the board of directors or in a writing to that effect delivered to
the secretary, such resignation to take effect immediately or at such other time
as the director may specify.
SECTION 4. Organization Meeting. Immediately after each annual meeting of
the shareholders, the newly elected directors shall hold an organization meeting
for the purpose of electing officers and transacting any other business. Notice
of such meeting need not be given.
SECTION 5. Regular Meetings. Regular meetings of the board of directors
may be held at such times and places within or without the State of Ohio as may
be provided for in bylaws or resolutions adopted by the board of directors and
upon such notice, if any, as shall be so provided.
SECTION 6. Special Meetings. Special meetings of the board of directors
may be held at any time within or without the State of Ohio upon call by the
chairman of the board or the president or a vice president or by not less than
one-third of the directors. Notice of the time and place of each such meeting
shall be served upon or telephoned to each director at least twenty-four hours,
or mailed or telegraphed to each director at his address as shown by the books
of the corporation at least forty-eight hours prior to the time of the meeting,
which notice need not specify the purposes of the meeting; provided, however,
that attendance of any director at any such meeting without protesting, prior to
or at the commencement of the meeting. the lack of proper notice shall be deemed
to be a waiver by him of notice of such meeting and such notice may be waived in
writing, either before or after hold of such meeting, by any director, which
writing shall be filed with or entered upon the records of the meeting. Unless
otherwise indicated in the notice thereof, any business may be transacted at any
organization, regular or special meeting.
SECTION 7. Quorum; Adjournment. A quorum of the board of directors shall
consist of a majority of the directors then in office (but in no event more than
five); provided, that a majority of the directors present at a meeting duly
held, whether or not a quorum is present, may
3
<PAGE>
adjourn such meeting from time to time; if any meeting is adjourned, notice of
such adjournment need not be given if the time and place to which such meeting
is adjourned are fixed and announced at such meeting. At each meeting of the
board of directors at which a quorum is present, all questions and business
shall be determined by a majority vote of those present except as in these
regulations otherwise expressly provided.
SECTION 8. Action Without a Meeting. Any action which may be authorized
or taken at a meeting of the board of directors may be authorized or taken
without a meeting with the affirmative vote or approval of, and in a writing or
writings signed by, all of the directors, which writing or writings shall be
filed with or entered upon the records of the corporation.
SECTION 9. Committees. The board of directors may at any time appoint
from its members an executive, finance, or other committee or committees,
consisting of such number of members, not less than three, as the board of
directors may deem advisable, together with such alternates as the board of
directors may deem advisable, to take the place of any absent member or members
at any meeting of such committee. Each such member and each such alternate
shall hold office during the pleasure of the board of directors. Any such
committee shall act only in the intervals between meetings of the board of
directors and shall have such authority of the board of directors as may, from
time to time, be delegated by the board of directors, except the authority to
fill vacancies in the board of directors or in any committee of the board of
directors. Subject to the aforesaid exceptions, any person dealing with the
corporation shall be entitled to rely upon any act or authorization of an act by
any such committee, to the same extent as an act or authorization of the board
of directors. Each committee shall keep full and complete records of all
meetings and actions, which shall be open to inspection by the directors.
Unless otherwise ordered by the board of directors, any such committee may
prescribe its own rules for calling and holding meetings, and for its own method
of procedure, and may act at a meeting by a majority of its members or without a
meeting by a writing or writings signed by all of its members.
ARTICLE III
OFFICERS
SECTION 1. Election and Designation of Officers. The board of directors
shall elect a president, a secretary, a treasurer, and, in its discretion, may
elect a chairman of the board, one or more administrative or managing directors,
one or more vice presidents, one or more assistant secretaries, one or more
assistant treasurers, and such other officers as the board of directors may deem
necessary. The chairman of the board and the president shall be directors, but
no one of the other officers need be a director. Any two or more of such
offices may be held by the same person, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity, if such
instrument is required to be executed, acknowledged, or verified by two or more
officers.
SECTION 2. Term of Office; Vacancies. The officers of the corporation
shall hold office until the next organization meeting of the board of directors
and until their successors are elected, except in case of resignation, removal
from office, or death. The board of directors may remove any officer at any
time with or without cause by a majority vote of the directors then in office.
Any vacancy in any office may be filled by the board of directors.
4
<PAGE>
SECTION 3. Authority and Duties of Officers. The officers of the
corporation shall have such authority and shall perform such duties as are
customarily incident to their respective offices or as may be specified from
time to time by the board of directors, regardless of whether such authority and
duties are customarily incident to such office.
SECTION 4. Delegation of Authority and Duties. The board of directors is
authorized to delegate the authority and duties of any officer to any other
officer and generally to control the action of the officers and to require the
performance of duties to those mentioned herein.
ARTICLE IV
COMPENSATION
SECTION 1. Directors and Members of Committees. Members of the board of
directors and members of any committee of the board of directors shall, as such,
receive such compensation, which may be either a fixed sum for attendance at
each meeting of the board of directors, or at each meeting of the committee, or
stated compensation payable at intervals, or shall otherwise be compensated as
may be determined by or pursuant to authority conferred by the board of
directors or any committee of the board of directors, which compensation may be
in different amounts for various members of the board of directors or any
committee. No member of the board of directors and no member of any committee
of the board of directors shall be disqualified from being counted in the
determination of a quorum from acting at any meeting of the board of directors
or of a committee of the board of directors by reason of the fact that matters
affecting his own compensation as a director, member of a committee of the board
of directors, officer , or employee are to be determined.
SECTION 2. Officers and Employees. The compensation of officers and
employees of the corporation, or the method of fixing such compensation, shall
be determined by or pursuant to authority conferred by the board of directors or
any committee of the board of directors. Such compensation may include pension,
disability, an death benefits, and may be by way of fixed salary, or on the
basis of earnings of the corporation, or any combination thereof, or otherwise,
as my be determined or authorized from time to time by the board of directors or
any committee of the board of directors.
ARTICLE V
INDEMNIFICATION
SECTION 1. Third Party Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, including all appeals (other than an
action, suit, or proceeding by or in the right of the corporation) by reason of
the fact that he is or was a director, officer or employee of the corporation,
or is or was serving at the request of the corporation as a director, trustee,
officer, or employee of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys' fees), judgments,
decrees, fines, penalties, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit, or proceeding
if he acted in good faith and
5
<PAGE>
in a manner reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. Derivative Actions. The corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit, including all appeals, by or in the right
of the corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, or employee of the corporation, or is or
was serving at the requires of the corporation as a director, trustee, officer,
or employee of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been finally adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation unless and only
to the extent that the Court of Common Pleas or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
Court of Common Please or such other court shall deem proper.
SECTION 3. Rights after Successful Defense. To the extent that a
director, trustee, officer, or employee has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Section 1
or 2, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 4. Other Determinations of Rights. Except in a situation governed
by Section 3, any indemnification under Section 1 or 2 (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, trustee, officer, or
employee is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 1 or 2. Such determination shall be
made (a) by a majority vote of directors acting at a meeting at which a quorum
consisting of directors who were not parties to such action, suit, or proceeding
is present, or (b) if such a quorum is not obtainable (or even if obtainable),
and a majority of disinterested directors so directs, by independent legal
counsel (compensated by the corporation) in a written opinion, or (c) by the
affirmative vote in person or by proxy of the holders of a majority of the
shares entitled to vote in the election of directors, without regard to voting
power which may thereafter exist upon default, failure, or other contingency.
SECTION 5. Advances of Expenses. Expenses of each person indemnified
hereunder incurred in defending a civil, criminal, administrative, or
investigative action, suit, or proceeding (including all appeals), or threat
thereof, may be paid by the corporation in advance of the final disposition of
such action, suit, or proceeding as authorized by the board of directors,
whether a
6
<PAGE>
disinterested quorum exists or not, upon receipt of an undertaking by or on
behalf of the director, trustee, office, or employee, to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the corporation.
SECTION 6. Non-Exclusivity; Heirs. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled as a matter of law or under the Articles, these
regulations, any agreement, vote of shareholders, any insurance purchased by the
corporation, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, trustee, officer, or employee and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
SECTION 7. Purchase of Insurance. The corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
or employee of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, or employee of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article or of
the Ohio General Corporation Law.
ARTICLE VI
RECORD DATES
For any lawful purpose, including, without limitation, the determination of
the shareholders who are entitled to receive notice of or to vote at a meeting
of shareholders, the board of directors may fix a record date in accordance with
the provisions of the Ohio General Corporation Law. The record date for the
purpose of the determination of the shareholders who are entitled to receive
notice of or to vote at a meeting of shareholders shall continue to be the
record date for all adjournments of such meetings, unless the board of directors
or the persons who shall have fixed the original record date shall, subject to
the limitations set forth in the Ohio General Corporation Law, fix another date,
and, in case a new record date is so fixed, notice thereof and of the ate to
which the meeting shall have been adjourned shall be given to shareholders of
record as of such date in accordance with the same requirements as those
applying to a meeting newly called. The board of directors may close the share
transfer books against transfers of shares during the whole or any part of the
period provided for in this Article, including the date of the meeting of
shareholders and the period ending with the date, if any, to which adjourned.
If no record date is fixed therefor, the record date for determining the
shareholders who are entitled to receive notice of or to vote at a meeting of
shareholders shall be the date next preceding the day on which notice is given,
or the date next preceding the day on which the meeting is held, as the case may
be.
7
<PAGE>
ARTICLE VII
CERTIFICATES FOR SHARES
SECTION 1. Form of Certificates and Signatures. Each holder of shares
shall be entitled to one or more certificates, signed by the chairman of the
board or the president or a vice president and by the secretary, an assistant
secretary, the treasurer, or an assistant treasurer of the corporation, which
shall certify the number and class of shares held by him in the corporation, but
no certificate for shares shall be executed or delivered until such shares are
fully paid. When such a certificate is countersigned by an incorporated
transfer agent or registrar, the signature of any of said officers of the
corporation may be facsimile, engraved, stamped, or printed. Although any
officer of the corporation whose manual or facsimile signature is affixed to
such a certificate ceases to be such officer before the certificate is
delivered, such certificate nevertheless shall be effective in all respects when
delivered.
SECTION 2. Transfer of Shares. Shares of the corporation shall be
transferable upon the books of the corporation by the holders thereof, in
person, or by a duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares of the same class or series, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of the authenticity of the signatures to such assignment and
power of transfer as the corporation or its agents may reasonably require.
SECTION 3. Lost, Stolen, or Destroyed Certificates. The corporation may
issue a new certificate for shares in place of any certificate theretofore
issued by it and alleged to have been lost, stolen, or destroyed, and the board
of directors may, in its discretion, require the owner, or his legal
representatives, to give the corporation a bond containing such terms as the
board of directors or the president or a vice president and the secretary or the
treasurer may require to protect the corporation or any person injured by the
execution and delivery of a new certificate.
SECTION 4. Transfer Agent and Registrar. The board of directors may
appoint, or revoke the appointment of transfer agents and registrars and may
require all certificates for shares to bear the signatures of such transfer
agents and registrars, or any of them.
ARTICLE VIII
CORPORATE SEAL
The Ohio General Corporation Law provides in effect that the absence of a
corporate seal from any instrument executed on behalf of the corporation does
not affect the validity of the instrument; if in spite of that provision a seal
is imprinted on or attached, applied, or affixed to an instrument by embossment,
engraving, stamping, printing, typing, adhesion, or other means, the impression
of the seal on the instrument shall be circular in form and shall contain the
name of the corporation and the words "corporate seal".
8
<PAGE>
ARTICLE IX
AMENDMENTS
The regulations of the corporation may be amended, or new regulations may
be adopted, by the shareholders at a meeting held for such purpose, by the
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power on such proposal or without a meeting by the written consent
of the holders of shares entitling them to exercise two-thirds of the voting
power on such proposal. If the regulations are amended or new regulations are
adopted without a meeting of the shareholders, the secretary of the corporation
shall mail a copy of the amendment or the new regulations to each shareholder
who would have been entitled to vote thereon and did not participate in the
adoption thereof.
9
<PAGE>
EXHIBIT 11
- ----------
IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except earnings (loss) per share)
<TABLE>
<CAPTION>
1996 1995
-------------------------- --------------------------
Fully Fully
Primary Diluted(1) Primary Diluted(1)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Three Months Ended December 31
Average Shares Outstanding
Common shares 132,801 132,801 116,315 116,315
Preferred stock 8,694
Convertible loan notes 230 241
Dilutive effect of stock options 1,545 1,669 2,229 2,300
----------- ----------- ----------- -----------
Total shares 134,346 134,700 118,544 127,550
=========== =========== =========== ===========
Income
- ------
Continuing operations $ 44,659 $ 44,744 $ 36,937 $ 36,937
Discontinued operations 20,151 20,151 26,229 26,229
----------- ----------- ----------- -----------
Income before extraordinary item 64,810 64,895 63,166 63,166
Extraordinary loss on extinguishment of debt (12,156) (12,156)
----------- ----------- ----------- -----------
Net Income 52,654 52,739 63,166 63,166
Less: Preferred dividends 4,885 4,885 7,664 4,885
----------- ----------- ----------- -----------
Net income available to common shareholders $ 47,769 $ 47,854 $ 55,502 $ 58,281
=========== =========== =========== ===========
Earnings (Loss) Per Share
Continuing operations $0.30 $0.30 $0.25 $0.25
Discontinued operations 0.15 0.15 0.22 0.21
Extraordinary loss (0.09) (0.09)
----------- ----------- ----------- -----------
$0.36 $0.36 $0.47 $0.46
=========== =========== =========== ===========
</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 IKON OFFICE SOLUTIONS, INC.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 61,423,000
<SECURITIES> 0
<RECEIVABLES> 628,139,000
<ALLOWANCES> 41,043,000
<INVENTORY> 433,533,000
<CURRENT-ASSETS> 1,805,430,000
<PP&E> 638,090,000<F1>
<DEPRECIATION> 343,887,000<F2>
<TOTAL-ASSETS> 4,377,298,000
<CURRENT-LIABILITIES> 1,144,657,000
<BONDS> 1,464,559,000
0
290,170,000
<COMMON> 597,118,000
<OTHER-SE> 517,169,000
<TOTAL-LIABILITY-AND-EQUITY> 4,377,298,000
<SALES> 638,828,000
<TOTAL-REVENUES> 1,140,434,000
<CGS> 404,934,000
<TOTAL-COSTS> 641,052,000<F3>
<OTHER-EXPENSES> 417,970,000<F4>
<LOSS-PROVISION> 7,430,000<F5>
<INTEREST-EXPENSE> 8,201,000
<INCOME-PRETAX> 73,211,000
<INCOME-TAX> 28,552,000
<INCOME-CONTINUING> 44,659,000
<DISCONTINUED> 20,151,000
<EXTRAORDINARY> (12,156,000)
<CHANGES> 0
<NET-INCOME> 52,654,000
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
<FN>
<F1>INCLUDES EQUIPMENT ON OPERATING LEASES, AT COST, OF $262,353,000
<F2>INCLUDES ACCUMULATED DEPRECIATION FOR EQUIPMENT ON OPERATING LEASES OF
$166,527,000
<F3>INCLUDES FINANCE SUBSIDIARIES INTEREST OF $20,011,000
<F4>REPRESENTS SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
<F5>CONTINUING OPERATIONS ONLY.
</FN>
</TABLE>
