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
IOS CAPITAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE File No. 0-20405 23-2493042
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification
Number)
1738 Bass Road, Macon, Georgia 31210
(Address of principal executive offices) (Zip Code)
(912) 471-2300
Registrant's telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On November 24, 1999, the Registrant's parent, IKON Office Solutions,
Inc. ("IKON"), announced that it had reached an agreement to settle, subject to
court approval, the securities class action and derivative lawsuits brought by
IKON's shareholders. The litigation had contended that IKON failed to make
appropriate financial disclosures. The settlement does not reflect any admission
of liability by IKON 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, IKON 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. IKON has adequate sources of
financing to fund the settlement and to continue to invest in its fiscal 2000
business plan.
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 IKON's business plan and future growth; and IKON'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 information is based upon management's current plans or
expectations and is subject to a number of risks and uncertainties that could
significantly affect current plans, anticipated actions and the Registrant's
and/or IKON's future financial condition and results. These risks and
uncertainties, which apply to both the Registrant and IKON, 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 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) IKON's 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.
IOS CAPITAL, INC.
By: /s/Harry Kozee
Harry Kozee
Vice President - Finance
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 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.
<PAGE>
"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 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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