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) November 24, 1999
IKON Office Solutions, Inc.
(Exact name of Registrant as specified in its charter)
OHIO File No. 1-5964 23-0334400
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
P.O. Box 834, Valley Forge, Pennsylvania 19482
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 296-8000
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On November 24, 1999, the Registrant announced that it had reached an
agreement to settle, subject to court approval, the securities class action and
derivative lawsuits brought by its shareholders. The litigation had contended
that the Registrant failed to make appropriate financial disclosures. The
settlement does not reflect any admission of liability by the Registrant, and
there has been no finding of any violation of federal securities laws.
In the settlement, the Registrant agreed to pay $111 million (which
will result in a net amount of approximately $45 to $60 million, after tax). In
addition to available insurance coverage, the Registrant will take a special
one-time charge to reflect this payment and anticipates that the charge will be
treated as a subsequent event for its fiscal year 1999. The Registrant has
adequate sources of financing to fund the settlement and to continue to invest
in its fiscal 2000 business plan. The Registrant's press release dated November
24, 1999 containing further detail is attached.
This Report includes or incorporates by reference information which may
constitute forward-looking statements within the meaning of the federal
securities laws, including, but not limited to statements concerning the impact
of the settlement on Registrant's business plan and future growth; and
Registrant's growth opportunities and productivity initiatives. Although the
Registrant believes the expectations contained in such forward-looking
statements are reasonable, it can give no assurances that such expectations will
prove correct. Such forward-looking statements are based upon management's
current plans or expectations and are subject to a number of risks and
uncertainties that could significantly affect current plans, anticipated actions
and the Registrant's future financial condition and results. These risks and
uncertainties include, but are not limited to, risks and uncertainties relating
to conducting operations in a competitive environment and a changing industry;
delays, difficulties, management transitions and employment issues associated
with consolidation of, and/or changes in business operations; managing the
integration of existing and acquired companies; risks and uncertainties
associated with existing or future vendor relationships; and general economic
conditions. Certain additional risks and uncertainties are set forth in the
Registrant's 1998 Annual Report on Form 10-K/A filed with the Securities and
Exchange Commission. As a consequence of these and other risks and
uncertainties, current plans, anticipated actions and future financial condition
and results may differ materially from those expressed in any forward-looking
statements made by or on behalf of the Registrant.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
c. The following exhibits are furnished in accordance with the provisions of
Item 601 of Regulation S-K:
(99) Press Release dated November 24, 1999
<PAGE>
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.
IKON OFFICE SOLUTIONS, INC.
By: /s/WILLIAM S. URKIEL
William S. Urkiel
Senior Vice President and
Chief Financial Officer
Dated: November 29, 1999
[GRAPHIC OMITTED]
P.O. Box 834
Valley Forge, PA 19482-0834
70 Valley Stream Parkway
Malvern, PA 19355
News Release
---------------------------------------------------------------
Contacts:
Susan G. Gaffney Veronica L. Rosa Wendy L. Pinckney Steven K. Eck
Investor Relations Investor Relations Media Relations Media Relations
610-408-7292 610-408-7196 610-408-7297 610-408-7295
[email protected] [email protected] [email protected] [email protected]
IKON SETTLES SHAREHOLDER LITIGATION
Valley Forge, Pennsylvania - November 24, 1999 - IKON Office Solutions (NYSE:
IKN) announced that it has reached an agreement today to settle, subject to
court approval, the securities class-action and derivative lawsuits brought by
its shareholders. The litigation had contended that the Company had failed to
make appropriate financial disclosures. The settlement does not reflect any
admission of liability by the Company, and there has been no finding of any
violation of federal securities laws.
In the settlement, IKON agreed to pay $111 million (which will result in a net
amount of approximately $45 to $60 million, after tax). In addition to available
insurance coverage, the Company will take a special one-time charge to reflect
this payment and anticipates that the charge will be treated as a subsequent
event for its fiscal year 1999. The Company has adequate sources of financing to
fund the settlement and to continue to invest in its fiscal 2000 business plan.
In announcing the settlement, Richard Jalkut, non-executive Chairman of IKON's
Board of Directors, said, "This settlement is in the best interests of the
Company and all our shareholders. The Board reached that decision after weighing
several factors, including the uncertainty and
<PAGE>
inherent risks of a jury trial, increasing litigation expenses, and the constant
and significant diversion of the management team from its focus on sustaining
progress and continuing to move this company ahead.
"We must put the issue firmly behind us. We have a new management team in place
and have made substantial gains over the past year on important initiatives
aimed at growing our business, increasing organizational disciplines, making
IKON more profitable and building shareholder value."
James J. Forese, who became President and Chief Executive Officer in July of
1998 following the alleged wrongdoing, stated, "In the past year, we have made
progress toward our goal of being a superior single-source provider of solutions
for our customers' business needs. We have strengthened our senior management
team, improved controls within the Company, established an ongoing
cost-competitiveness and productivity program to reduce expense levels, and
implemented a new national sales model to move us toward more disciplined
management review and control - all of which are critical for a sales-oriented
service company. There are positive signs that these initiatives are beginning
to improve the quality of our business through increased sales productivity,
increased placements of such focus products as digital and color, strong cash
generation and continued demand for our service offerings. We have demonstrated
our ability to improve our financial performance and increase our investments in
IKON's long-term growth.
"In short, we have laid the foundation to generate revenue growth, and will
continue to move aggressively to capitalize on our strong network of sales and
service professionals and the breadth of office solutions they provide. It is
obvious that we have come a long way in a relatively short time by focusing on
discipline and execution, and we are totally committed to maintain this focus."
IKON Office Solutions (http://www.ikon.com) is one of the world's leading office
technology companies providing customers with total office solutions from copier
and printing systems, computer networking and digital document services to copy
center management, hardware and
<PAGE>
software product interfaces and electronic file conversion. With fiscal 1999
revenues of more than $5.5 billion, IKON Office Solutions has more than 1,000
locations in the U.S., Canada, Mexico, the United Kingdom, France, Germany and
Denmark.
This news release includes information which may constitute
forward-looking statements within the meaning of the federal securities laws,
including, but not limited to: statements concerning the impact of the
settlement on IKON's business plan and future growth; and IKON's growth
opportunities and productivity initiatives. Although IKON believes the
expectations contained in such forward-looking statements are reasonable, it can
give no assurances that such expectations will prove correct. Such
forward-looking statements are based upon management's current plans or
expectations and are subject to a number of risks and uncertainties, including,
but not limited to, risks and uncertainties relating to conducting operations in
a competitive environment and a changing industry; delays, difficulties,
management transitions and employment issues associated with consolidation of,
and/or changes in business operations; managing the integration of existing and
acquired companies; risks and uncertainties associated with existing or future
vendor relationships; and general economic conditions. Certain additional risks
and uncertainties are set forth in IKON's 1998 Annual Report on Form 10-K/A
filed with the Securities and Exchange Commission. As a consequence of these and
other risks and uncertainties, IKON's current plans, anticipated actions and
future financial condition and results may differ materially from those
expressed in any forward-looking statements.
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