-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GMnHRPtzdxOUhCiyIIRFyodbl1QCOw1keBkJNSO1g0E9pDsAkr5rtW5Z6KhdWCce 0bLsxzjhVpkVuB6Csb3dQQ== 0000950109-95-000367.txt : 19950215 0000950109-95-000367.hdr.sgml : 19950215 ACCESSION NUMBER: 0000950109-95-000367 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950214 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALCO STANDARD CORP CENTRAL INDEX KEY: 0000003370 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 230334400 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05964 FILM NUMBER: 95510672 BUSINESS ADDRESS: STREET 1: P O BOX 834 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 2152968000 MAIL ADDRESS: STREET 1: BOX 834 CITY: VALLEY FORGE STATE: PA ZIP: 19482 FORMER COMPANY: FORMER CONFORMED NAME: ALCO CHEMICAL CORP DATE OF NAME CHANGE: 19680218 10-Q 1 FORM 10-Q 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, 1994 or [ ] Transition ----------------- report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to __________ Commission file number 1-5964 ------------------------------------------ ALCO STANDARD CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 23-0334400 - ------------------------------- ------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Box 834, Valley Forge, Pennsylvania 19482 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (610) 296-8000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NONE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- * Applicable only to issuers involved in bankruptcy proceedings during the preceding five years: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ___ No ___ * Applicable only to corporate issuers: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of January 31, 1995. Common Stock, no par value 54,501,186 shares INDEX ALCO STANDARD CORPORATION PART I. FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets--December 31, 1994 and September 30, 1994 Consolidated Statements of Income--Three months ended December 31, 1994 and December 31, 1993 Consolidated Statements of Cash Flows--Three months ended December 31, 1994 and December 31, 1993 Notes to Consolidated Financial Statements-- December 31, 1994 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 - ---------- PART I. FINANCIAL INFORMATION ------------------------------ Item 1: Financial Statements - ---------------------------- ALCO STANDARD CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands)
December 31 September 30 1994 1994 ------------- ------------- Assets Current Assets Cash $ 33,127 $ 53,369 Accounts receivable less allowance for doubtful accounts: 12/94 - $32,138; 9/94 - $29,428 969,702 915,495 Inventories 745,460 609,974 Prepaid expenses and deferred taxes 131,997 131,638 ------------ ------------ Total current assets 1,880,286 1,710,476 ------------ ------------ Investments and Long-Term Receivables 48,484 68,472 Property and Equipment, at cost 662,735 653,722 Less accumulated depreciation 313,584 299,775 ------------ ------------ 349,151 353,947 ------------ ------------ Other Assets Excess of cost of acquired companies over equity 762,725 747,629 Miscellaneous 77,675 59,331 ------------ ------------ 840,400 806,960 ------------ ------------ Finance Subsidiaries Assets 659,006 562,403 ------------ ------------ $ 3,777,327 $ 3,502,258 ============ ============
See notes to consolidated financial statements. ALCO STANDARD CORPORATION CONSOLIDATED BALANCE SHEETS ( in thousands )
December 31 September 30 LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1994 - ------------------------------------ -------------- -------------- Current Liabilities Current portion of long-term debt $ 12,649 $ 12,299 Notes payable 266,426 91,999 Trade accounts payable 450,104 500,166 Accrued salaries, wages and commissions 65,303 96,987 Deferred revenues 137,202 134,485 Restructuring costs 58,552 56,971 Other accrued expenses 181,924 164,023 ------------ ------------ Total current liabilities 1,172,160 1,056,930 ------------ ------------ Long-Term Debt 437,286 340,771 Other Liabilities Deferred taxes 33,560 32,192 Restructuring costs 39,000 50,000 Workers' compensation and other 159,009 156,511 ------------ ------------ 231,569 238,703 ------------ ------------ Finance Subsidiaries Liabilities; including debt of: 12/94 - $525,539; 9/94 - $464,882 561,234 498,710 Shareholders' Equity Series AA convertible preferred stock, no par value, 4,025 depositary shares issued and outstanding 200,415 199,912 Common stock, no par value: authorized 75,000 shares; Issued 12/94 - 54,595 shares; 9/94 - 54,522 shares 555,446 551,215 Retained earnings 669,953 642,634 Foreign currency translation adjustment (31,688) (22,550) Cost of common shares in treasury: 12/94 - 333 shares; 9/94 - 74 shares (19,048) (4,067) ------------ ------------ 1,375,078 1,367,144 ------------ ------------ $ 3,777,327 $ 3,502,258 ============ ============
See notes to consolidated financial statements. ALCO STANDARD CORPORATION CONSOLIDATED STATEMENTS OF INCOME (in thousands, except earnings per share)
Three Months Ended December 31 --------------------------- 1994 1993 ------------ ------------ Revenues Net sales $ 2,160,791 $ 1,905,989 Dividends, interest and other income 870 950 Finance subsidiaries 19,940 14,841 ------------ ------------ 2,181,601 1,921,780 ------------ ------------ Costs and Expenses Cost of goods sold 1,606,209 1,430,134 Selling and administrative 479,274 419,097 Interest 11,950 12,143 Finance subsidiaries interest 9,619 6,292 ------------ ------------ 2,107,052 1,867,666 ------------ ------------ Loss from Unconsolidated Affiliate (736) ------------ ------------ Income Before Taxes 74,549 53,378 Taxes on Income 29,080 21,524 ------------ ------------ Net Income 45,469 31,854 Preferred Dividends 2,893 2,893 ------------ ------------ Net Income Available to Common Shareholders $ 42,576 $ 28,961 ============ ============ Earnings Per Share (1) $0.77 $0.60 ============ ============ Cash dividends per share of common stock $0.26 $0.25 ============ ============ (1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements. ALCO STANDARD CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three Months Ended December 31, ------------------------------ 1994 1993 ----------- ------------ Operating activities Net income $ 45,469 $ 31,854 Additions (deductions) to reconcile net income to net cash used by operating activities: Depreciation 18,116 16,269 Amortization 7,591 6,353 Restructuring costs (7,503) Provision for losses on accounts receivable 5,526 5,606 Provision (benefit) for deferred income taxes 119 (303) Change in deferred credits 1,805 6,911 Changes in operating assets and liabilities, net of effects from acquisitions and divestitures: Decrease (increase) in accounts receivable (58,129) 32,466 Increase in inventories (130,349) (66,507) Increase in prepaid expenses (9,886) (13,640) Decrease in accounts payable, deferred revenues and accrued expenses (63,852) (64,308) Miscellaneous (236) (4,073) ----------- ------------ Net cash used (191,329) (49,372) Investing activities Proceeds from sale of property and equipment 7,776 5,058 Payments received on long-term receivables 913 1,626 Cost of companies acquired, net of cash acquired (22,460) (9,160) Expenditures for property and equipment (20,564) (22,499) Purchase of miscellaneous assets (23,057) (2,847) Finance subsidiaries receivables - additions (133,398) (82,247) Finance subsidiaries receivables - collections 71,489 46,839 ----------- ----------- Net cash used (119,301) (63,230) Financing activities Proceeds from short-term borrowings, net 156,000 84,179 Proceeds from issuance of long-term debt 108,814 6,818 Proceeds from option exercises and sale of treasury shares 20,735 18,975 Proceeds from issuance of common stock, net 293,755 Long-term debt repayments (2,456) (310,742) Finance subsidiaries debt - additions 99,246 36,723 Finance subsidiaries debt - repayments (38,589) (3,308) Dividends paid (16,555) (14,193) Purchase of treasury shares (36,807) (4,816) ----------- ----------- Net cash provided 290,388 107,391 ----------- ----------- Net decrease in cash (20,242) (5,211) Cash at beginning of year 53,369 36,495 ----------- ----------- Cash at end of period $ 33,127 $ 31,284 =========== ===========
See notes to consolidated financial statements. ALCO STANDARD CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1994 Note 1: Debt ---- On December 1, 1994, the Company entered into a credit agreement with 14 banks to borrow up to $500 million. This multi-currency facility replaces three other lines of credit amounting to approximately $415 million. The new agreement has two parts: $350 million is subject to termination on December 1, 1999; the other $150 million is available for 364 days subject to annual renewal for successive 364-day periods. Facility fees of 10 basis points per annum on the five-year portion and 8 basis points per annum on the 364-day portion are charged for these commitments. 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. At the same time, the Company has reduced the commitment under another agreement from $200 million to $100 million. Note 2: Supplemental Information to Statements of Cash Flows ---------------------------------------------------- The Company has presented statements of cash flows for the periods ended December 31, 1994 and 1993 in accordance with SFAS No. 95. Interest paid for the quarter ended December 31, 1994 was $23.5 million. Interest paid for the quarter ended December 31, 1993 was $22.1 million. State and Foreign income tax payments of $2.8 million and $3.5 million were made during the three months ended December 31, 1994 and 1993, respectively. The total assets for acquisitions amounted to $41.3 million during the three months ended December 31, 1994 and $15.5 million during the three months ended December 31, 1993. The excess of cost over acquired equity included in these assets was $27.3 million and $8 million, respectively. Item 2: Management's Discussion and Analysis of Results of Operations - ------- ------------------------------------------------------------- and Financial Condition and Liquidity ------------------------------------- Results of Operations --------------------- The discussion of the results of operations reviews the operations of the Company as contained in the Consolidated Statements of Income. Three Months Ended December 31, 1994 Compared with Three Months Ended December 31, 1993 -------------------------------------------------- Revenues and income before taxes for the first quarter of fiscal 1995 compared to the first quarter of fiscal 1994 were as follows:
Revenues Income Before Taxes ----------------------- ----------------------- December 31 % December 31 % --------------- -------------- 1994 1993 Change 1994 1993 Change ------- ---- ------ ----- ---- ------ (in millions) Alco Office Products $ 636 $ 498 27.7% $55.1 $42.5 29.6% Unisource United States 1,367 1,266 8.0 36.1 28.9 24.9 Canada 180 160 12.5 6.5 2.2 ------ ----- ----- ----- Total Unisource 1,547 1,426 8.5 42.6 31.1 37.0 ------ ----- ----- ----- Operating 2,183 1,924 13.5 97.7 73.6 32.7 Unconsolidated affiliate (.7) Interest (11.9) (12.1) Eliminations and non-Allocated (1) (2) (11.2) (7.4) ------ ------ ----- ----- $2,182 $1,922 13.5% $74.6 $53.4 39.7% ====== ====== ===== =====
The Company's revenues for the first quarter of fiscal year 1995 were $2.2 billion, 13.5% ahead of the comparable period in the prior year. Income before taxes increased to $74.6 million from $53.4 million reported in the first quarter of fiscal year 1994. Earnings per share of $.77 were 28.3% higher than the $.60 reported in the prior year. Alco Office Products generated $138 million in increased revenues, of which $88 million related to AOP's base companies and $50 million to current and prior year acquisitions. Internal growth in AOP's base companies continues to be across all revenue segments but primarily in equipment sales, service and facilities management businesses. Revenues from Unisource's U.S. operations increased by $101 million. All but $4 million relating to current and prior year acquisitions was a result of the strong revenue gains within Unisource. Unisource's Canadian operations increased their revenues by $20 million despite a $6 million negative impact from foreign exchange rates. The improvement in Unisource's revenues reflects both price and volume increases in its fine paper and supply systems businesses. AOP's operating income increased by $12.6 million. Current and prior year acquisitions contributed $4.5 million. The remaining $8.1 million represents the internal growth from its base companies. This growth primarily represents higher operating contributions from the service, supply and facilities management areas of AOP's businesses, but also includes increased operating income related to its leasing activities through Alco Capital Resource, Inc. (Alco Capital). Operating income from Unisource's U.S. paper operations increased $7.2 million which includes $7.1 million from its base companies and $.1 million from prior year acquisition. The increase in operating income was due to cost reductions gained as a result of Unisource's ongoing restructuring, productivity realized and the impact from price and volume increases realized during the quarter. The increase of $4.3 million in the Canadian paper distribution business represents strong growth in the fine paper distribution business including the positive effects of price increases along with administrative cost reductions. Revenues from the Company's paper and office products operations outside the U.S. were $247 million for the first quarter of fiscal 1995 compared to $204 million for the same period of the prior fiscal year. The increase includes $20 million from the Canadian paper distribution business and $3 million of internal growth in the AOP Canadian operations. It also includes $20 million relating to the European operations of Erskine and the two companies acquired in September 1994. The Company incurred an equity loss of $.7 million from IMM Office Systems GmbH (IMMOS) in the first quarter of fiscal 1994. The investment in IMMOS was sold in September 1994. Income from foreign operations was $10 million for the three months ended December 31, 1994, up $4.4 million from the prior year, primarily attributable to the Canadian paper distribution business. Interest expense increased overall by approximately $.2 million, the net effect of increased borrowing levels and interest rates during fiscal 1995 offset by the effect of the debt reduction resulting from the Company's common stock offering in December 1993. Income before taxes increased by $21.2 million primarily reflecting the combined result of improved operations from base companies along with earnings contributed by acquisitions. The effective income tax rate is currently 39% compared with 40.3% for the comparative period in fiscal 1994. Weighted average shares of 55.4 million at December 31, 1994 were 6.8 million shares greater than the 48.6 million at December 31, 1993. This is primarily the result of a public offering of 5.8 million common shares in December 1993. The Unisource restructuring plan announced in September, 1993 basically is proceeding as planned. As of December 31, 1994, Unisource had substantially completed 72 facility consolidations and expects to complete an additional 3 consolidations by the end of the second quarter. Unisource reduced its employee base by approximately 725 excluding those data processing personnel transferred to Integrated Systems Solution Corporation (ISSC) as of December 31, 1994. At December 31, 1994, the remaining restructuring reserve is $97.6 million, which management continues to believe is adequate to complete the restructuring plan by the end of fiscal 1996. Financial Condition and Liquidity --------------------------------- Debt, excluding finance subsidiaries, was $716 million at December 31, 1994, an increase of $271 million from the Company's debt balance at September 30, 1994 of $445 million. This increase in borrowing levels was primarily to satisfy the Company's working capital requirements. On December 1, 1994, the Company entered into a new credit agreement to borrow up to $500 million. This multi-currency facility replaces three other lines of credit amounting to approximately $415 million. At the same time, the Company also reduced the commitment under another agreement from $200 million to $100 million. The Company had a total of $600 million in bank credit commitments as of December 31, 1994, of which $245 million were unused and available. At December 31, 1994, debt as a percentage of capitalization was 34.3% and the current ratio was 1.6 to 1. The Company's change in cash from operating activities during the first quarter primarily relates to working capital expenditures. Unisource reduced its accounts payable by $79 million and increased inventory by $97 million reflecting supplier price increases as well as higher inventory quantities to support expected increases in demand and uncertainty regarding availability of certain product grades. AOP expended $34 million for inventory which resulted from growth within the business, supplier price increases, restriction on product availability in the fourth quarter of fiscal 1994 which was filled in the first quarter of fiscal 1995, and the cost of equipment relating to higher segment machines. For the first quarter in fiscal 1994 changes in cash from operating activities included the following: $23 million for special purchases of inventory by some AOP companies due to expected price increases; $12 million for Company bonus payments; and $71 million for the reduction of Accounts Payable for the Unisource businesses. The Company estimated that total cash expenditures in connection with the Unisource restructuring plan will amount to $148 million. In addition to the $52 million spent in fiscal 1994, $8 million was expended in the first quarter of fiscal 1995, totaling $60 million spent to date. Unisource anticipates spending an additional $45 million during the remainder of fiscal 1995. Finance subsidiaries debt grew by $61 million from September 30, 1994, a result of increased leasing activity. During the three months ended December 31, 1994, Alco Capital had issued an additional $98 million under its Medium Term Notes Program which began in July 1994. At December 31, 1994, $203 million of the $500 million available under this program was outstanding. Alco Capital under its $125 million asset securitization agreement commenced in September 1994, sold an additional $18.8 million in direct financing leases during the first quarter of fiscal 1995, replacing those leases liquidated leaving the amount of contracts sold unchanged. The Company believes that its operating cash flow together with unused lines of credit and other financing arrangements will be sufficient to finance current operating requirements including capital expenditure, acquisition and restructuring programs. PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- (a) The following Exhibits are furnished pursuant to Item 601 of Regulation S-K: Exhibit No. (11) Computation of Earnings Per Share Exhibit No. (27) Financial Data Schedule 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 with the instructions to Form 10Q 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, 1994. Date February 14, 1995 /s/Michael J. Dillon --------------------- ---------------------------------- Michael J. Dillon Vice President and Controller SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. This report has also been signed by the undersigned in his capacity as the chief accounting officer of the Registrant. ALCO STANDARD CORPORATION Date February 14, 1995 /s/Michael J. Dillon --------------------- ----------------------------------- Michael J. Dillon Vice President and Controller (Chief Accounting Officer) Index to Exhibits ----------------- Exhibit Number - -------------- (11) Computation of Earnings Per Share (27) Financial Data Schedule EX-11 2 COMPUTATION OF EARNINGS EXHIBIT 11 - ---------- ALCO STANDARD CORPORATION COMPUTATIONS OF EARNINGS PER SHARE (in thousands, except earnings per share)
Three Months Ended December 31 ---------------------------------------------------- 1994 1993 --------------------- ----------------------- Fully Fully Primary Diluted(1) Primary Diluted(1) --------- ---------- --------- ---------- Average Shares Outstanding Common shares 54,381 54,381 47,748 47,748 Preferred stock Considered common equivalents 12 12 Senior Securities 4,508 4,508 Options 1,039 1,141 881 1,033 --------- --------- --------- --------- Total shares 55,420 60,030 48,641 53,301 ========= ========= ========= ========= Income Net income $ 45,469 $ 45,469 $ 31,854 $ 31,854 Preferred dividends 2,893 2,893 --------- --------- --------- --------- Income available to common shareholders $ 42,576 $ 45,469 $ 28,961 $ 31,854 ========= ========= ========= ========= Earnings Per Share $0.77 $0.76 $0.60 $0.60 ========= ========= ========= =========
(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%. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated financial statements of Alco Standard Corporation and subsidiaries and is qualified in its entirety by reference to such financial statements. 3-MOS SEP-30-1994 DEC-31-1994 $33,127,000 0 1,001,840,000 32,138,000 745,460,000 1,880,286,000 662,735,000 313,584,000 3,777,327,000 1,172,160,000 437,286,000 555,446,000 0 200,415,000 619,217,000 3,777,327,000 2,160,791,000 2,181,601,000 1,606,209,000 1,615,828,000 0 5,526,000 11,950,000 74,549,000 29,080,000 45,469,000 0 0 0 45,469,000 0.77 0.76 Redeemable solely at the Company's option. Includes Finance Subsidiaries assets (primarily lease receivables) of $659,006,000. Includes Finance Subsidiaries liabilities (primarily debt) of $561,234,000 Includes Finance Subsidiaries interest of $9,619,000.
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