-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FjuvKKVkse2MDqFrJj7qfOvz2FpalXUSkZsQnGXj0SX9VBLVI1tlM4kfC1A9Oyai 72/bRbcwCyVhP1CwLct5yA== 0000950109-97-001236.txt : 19970222 0000950109-97-001236.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950109-97-001236 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 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: 97532640 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, 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 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 - ---------- PART I. FINANCIAL INFORMATION Item 1: Financial Statements (unaudited) IKON OFFICE SOLUTIONS, INC. (formerly Alco Standard Corporation) CONSOLIDATED BALANCE SHEETS (in thousands)
December 31 September 30 ASSETS 1996 1996 - ------ ------------- -------------- 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 ============ =============
See notes to consolidated financial statements. IKON OFFICE SOLUTIONS, INC. (formerly Alco Standard Corporation) CONSOLIDATED BALANCE SHEETS (in thousands)
December 31 September 30 LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1996 - ------------------------------------ ----------- ----------- 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 =========== ===========
See notes to consolidated financial statements. IKON OFFICE SOLUTIONS, INC. (formerly Alco Standard Corporation) CONSOLIDATED STATEMENTS OF INCOME (in thousands, except earnings per share)
Three Months Ended December 31 ------------------------- 1996 1995 ----------- ----------- 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 =========== ===========
(1) See Exhibit 11 for computation of earnings per share. See notes to consolidated financial statements. IKON OFFICE SOLUTIONS, INC. (formerly Alco Standard Corporation) CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three Months Ended December 31, ----------------------------- 1996 1995 ----------------------------- 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 ============ ============
See notes to consolidated financial statements. 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):
Three Months Ended December 31 ---------------------- 1996 1995 ---------- ---------- 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 ========== ==========
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): 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 ==========
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. 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:
Three Months Ended --------------------- December 31 % ------------ 1996 1995 Change ---- ---- ------ (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% ----- -----
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 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). 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. 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. 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) 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. EX-3.1 2 ARTICLES OF INCORPORATION [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) 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. EX-3.2 3 CODE OF REGULATIONS 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 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 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 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 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 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 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 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 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 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 EX-11 4 COMPUTATIONS OF EARNINGS PER SHARE EXHIBIT 11 - ---------- IKON OFFICE SOLUTIONS, INC. (formerly Alco Standard Corporation) COMPUTATION OF EARNINGS PER SHARE (in thousands, except earnings (loss) per share)
1996 1995 -------------------------- -------------------------- Fully Fully Primary Diluted(1) Primary Diluted(1) ----------- ----------- ----------- ----------- 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 =========== =========== =========== ===========
(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 5 FINANCIAL DATA SCHEDULE
5 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. 3-MOS SEP-30-1997 DEC-31-1996 61,423,000 0 628,139,000 41,043,000 433,533,000 1,805,430,000 638,090,000 343,887,000 4,377,298,000 1,144,657,000 1,464,559,000 0 290,170,000 597,118,000 517,169,000 4,377,298,000 638,828,000 1,140,434,000 404,934,000 641,052,000 417,970,000 7,430,000 8,201,000 73,211,000 28,552,000 44,659,000 20,151,000 (12,156,000) 0 52,654,000 0.36 0.36 INCLUDES EQUIPMENT ON OPERATING LEASES, AT COST, OF $262,353,000 INCLUDES ACCUMULATED DEPRECIATION FOR EQUIPMENT ON OPERATING LEASES OF $166,527,000 INCLUDES FINANCE SUBSIDIARIES INTEREST OF $20,011,000 REPRESENTS SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. CONTINUING OPERATIONS ONLY.
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