-----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, B+/vcRQu9yaYtRQreSDdDi8IZVggLmkkbm1BPvqccRAIwIn98KZe5bhyTNgBosO4 SX34a13vyWogvQGsNoC4AQ== 0000950159-00-000025.txt : 20000207 0000950159-00-000025.hdr.sgml : 20000207 ACCESSION NUMBER: 0000950159-00-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000113 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IOS CAPITAL INC CENTRAL INDEX KEY: 0000922255 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 232493042 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20405 FILM NUMBER: 523649 BUSINESS ADDRESS: STREET 1: 1738 BASS RD CITY: MACON STATE: GA ZIP: 31210 BUSINESS PHONE: 9124712300 MAIL ADDRESS: STREET 1: 1738 BASS RD CITY: MACON STATE: GA ZIP: 31210 FORMER COMPANY: FORMER CONFORMED NAME: IKON CAPITAL INC DATE OF NAME CHANGE: 19980113 FORMER COMPANY: FORMER CONFORMED NAME: ALCO CAPITAL RESOURCE INC DATE OF NAME CHANGE: 19940425 8-K 1 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) January 13, 2000 IOS CAPITAL, Inc. (Exact name of registrant as specified in its charter) ------------------------------------------------------ DELAWARE File No. 0-20405 23-2493042 ----------------------- ------------------------- ------------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification incorporation) Number) 1738 Bass Road, Macon, Georgia 31210 ------------------------------ ----- Registrant's telephone number, including area code: (912) 471-2300 -------------- Not Applicable (Former name or former address, if changed since last report) Item 5. Other Events. ------------ On January 13, 2000, the Registrant's parent, IKON Office Solutions, Inc. ("IKON"), announced that Kurt M. Landgraf had been elected to IKON's Board of Directors. IKON's press release dated January 13, 2000 containing further detail is attached. On January 26, 2000, IKON also announced results for the first quarter of its fiscal year 2000. The Registrant's press release dated January 26, 2000 containing further detail is attached. This Report includes or incorporates by reference information about the Registrant and/or IKON which may constitute forward-looking statements within the meaning of the federal securities laws, including, but not limited to: statements concerning IKON's expected revenue growth, cost savings and increased productivity and margins resulting from IKON's growth and productivity initiatives; statements concerning IKON's restructuring charge, and the expected savings and operational benefits relating to IKON's restructuring programs, including but not limited to, certain planned asset dispositions and consolidations; statements relating to product availability; and statements concerning IKON's anticipated earnings and revenue improvements during the second quarter of fiscal 2000. Although the Registrant believes the expectations contained in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove correct. Such forward-looking statements are based upon the Registrant's and/or IKON's current plans or expectations and are subject to a number of risks and uncertainties applicable to both the Registrant and IKON, 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 the Registrant's 1999 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission. As a consequence of these and other risks and uncertainties, the Registrant's current plans, anticipated actions and future financial condition and results may differ materially from those expressed in any forward-looking statements. 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 January 13, 2000 (99.1) IKON's Press Release dated January 26, 2000 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: February 4, 2000 EX-99 2 Exhibit 99 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 Pinckney Investor Relations Investor Relations Media Relations 610-408-7292 610-408-7196 610-408-7297 sgaffney@ikon.com vrosa@ikon.com wpinckney@ikon.com - ----------------- ------------------ ------------------ IKON OFFICE SOLUTIONS APPOINTS NEW BOARD MEMBER Kurt M. Landgraf Elected to Board of Directors Valley Forge, Pennsylvania - January 13, 2000 - IKON Office Solutions (NYSE: IKN) today announced that Kurt Landgraf has been elected a member of the Company's Board of Directors. This appointment fills the vacancy created by the resignation of board member Thomas Gerrity, who resigned in December due to other commitments. "We are pleased to elect Kurt Landgraf to our Board of Directors," said James J. Forese, President and Chief Executive Officer of IKON Office Solutions. "Mr. Landgraf's many years of business experience and respected leadership will be a significant contribution to the board." Kurt M. Landgraf, 53, is currently Executive Vice President and Chief Operating Officer for E.I. DuPont de Nemours & Company and Chairman of DuPont Europe and the DuPont Pharmaceutical Company. Landgraf is also Chairman of the DuPont Pharmaceutical Advisory Board, and is responsible for leading and implementing DuPont's pharmaceutical strategy. Since 1980, Landgraf has held numerous high level executive positions at DuPont including Executive Vice President for DuPont U.S. and President and Chief Executive Officer of the DuPont Merck Pharmaceutical Company, as well as several director positions within DuPont international and domestic business and marketing divisions. Prior to joining DuPont, Landgraf was Manager of Marketing Analysis and Planning for The Upjohn Company's Worldwide Business Development Division. In addition to his current role at DuPont, Landgraf is currently the Board Chairman of Christiana Care Health Services, Inc. and Director of the University of Delaware Research Foundation and the Delaware Biotechnology Institute. He also serves on numerous pharmaceutical industry, research and business boards as well as many Delaware-based community and education boards. Landgraf received his bachelor's degree in economics/business administration from Wagner College. He has also earned three master's degrees: in economics from Pennsylvania State University, in administration from Rutgers University, and in sociology from Western Michigan University. He graduated from the Harvard Business School Advanced Management Program in 1992 and holds two honorary doctoral degrees. IKON Office Solutions (www.ikon.com) is one of the world's leading providers of products and services that help businesses communicate. IKON provides customers with total business solutions for every office, production and outsourcing need, including copiers and printers, color solutions, distributed printing, facilities management, imaging and legal outsourcing solutions, as well as network design and consulting, application development and technology training. With fiscal 1999 revenues of $5.5 billion, IKON has nearly 1,000 locations worldwide including the United States, Canada, Mexico, the United Kingdom, France, Germany, Ireland, and Denmark. ### EX-99.1 3 Exhibit 99.1 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 Steve Eck Investor Relations Investor Relations Media Relations 610-408-7292 610-408-7196 610-408-7295 sgaffney@ikon.com vrosa@ikon.com seck@ikon.com - ----------------- ----------------- --------------- IKON OFFICE SOLUTIONS announceS First QUARTER results Operating Margin Improvement Marks Quarter Company Takes Restructuring Charge To Consolidate Facilities and Implement Further Productivity-Building Initiatives Valley Forge, Pennsylvania - January 26, 2000 - IKON Office Solutions (NYSE: IKN) today reported results for the first quarter of fiscal 2000. IKON generated net income of $22.8 million, or $.15 per share, excluding a pre-tax restructuring charge of $105 million, or an after-tax charge of $.52 per share. Including the charge, the Company reported a net loss of $55.6 million, or $.37 per share. For the first quarter of fiscal 1999, the Company had reported net income of $28.7 million, or $.19 per share, including a gain from asset securitization of $.06 per share. "Our operating margin improvement this quarter signifies that our ongoing competitiveness and productivity initiatives are taking hold and delivering results," said James J. Forese, President and Chief Executive Officer. "I am optimistic that we are on the right course and making progress. We are seeing efficiency gains in lower administrative costs as a result of our centralization of key support areas that will allow us to continue to make investments for growth - our top priority this fiscal year." Revenues for the quarter were $1.33 billion, a 2.6% decrease from the fourth quarter of fiscal 1999 and a 3.6% decrease from the same period a year ago, excluding the securitization gain. The revenue decline can be attributed to customers' Y2K delays industry-wide that mostly affected the Company's Technology Services business, a continued backlog of Canon digital products that is expected to ease in the second quarter, and the cumulative impact of the reduced sales force from last fiscal year. "We have made steady progress in recruiting sales representatives in the areas of strongest growth - such as color, high-volume, outsourcing and major accounts. Through this effort and reduced attrition, the net addition to our sales force was approximately 175 representatives in the first quarter. However, we have not yet seen additional revenue because of the time it takes new representatives to ramp up and become fully productive," Mr. Forese said. Revenues in key areas of opportunity, such as digital and higher volume equipment and outsourcing, did show signs of growth during the first quarter. Digital sales of color and black-and-white equipment continue to increase as a percent of total equipment revenues - up to 79% compared to 69% last quarter. Revenues from outsourcing contracts were up 15% from the first quarter of fiscal 1999 and up 10% sequentially, and IKON's higher volume equipment base grew 4% sequentially. "Also of particular note is our European business which is on a fully-integrated services model. Revenues were up 2.5% from the first quarter of the prior year, despite a year-over-year decline in the technology service business due to Y2K deferrals in Europe. This growth is further evidence that we are winning business and growing through the delivery of integrated solutions to our customers," Mr. Forese stated. During the quarter the Company continued to make investments and progress on its growth strategy by: o Developing a branding campaign that is scheduled to launch in February. The campaign focuses on how IKON's broad array of products and services helps businesses communicate, and will use the positioning, "IKON: The Way Business Gets CommunicatedSM" to represent IKON's ability to understand its customers' business communications needs and deliver customized solutions uniquely matched to those needs. o Expanding its products and services portfolio with the launch of the Canon imageRUNNER 110 high-volume digital production copier/printer and additional digital devices from Ricoh. In the second quarter the Company will continue to develop relationships with vendors for cluster printing, document management workflow and network print volume assessments. Rounding out its full range of offerings for the legal industry, IKON also recently announced the launch of the Virtual File Room(TM), an Internet-based litigation management solution that provides attorneys with rapid access to electronic case documents. o Adopting a national Technology Services platform to promote growth and productivity, focused on education, e-business development, network assessment and consulting, project management and security. o Focusing its Business Document Services locations on a digital, print-on-demand strategy to aid in the integration of these production facilities with the Company's growing facilities management business and to leverage the strength of its Digital Express(R) network to provide Internet data repository and printing services. o Developing programs to increase sales productivity through national sales training and a Web-based sales automation tool, as well as enhanced customer service and billing capabilities that will free up sales representatives to spend more time on customer consulting and sales. The Company also announced a restructuring plan to address underperformance in certain Technology Services, Business Document Services and Business Information Services locations, to consolidate real estate and to implement certain productivity initiatives, which resulted in a pre-tax restructuring charge of $105 million for the quarter. "We believe the approximate savings from these programs will be $15 million during fiscal 2000 and $45 million on an annualized basis. This restructuring will significantly aid our efforts to convert fully to an operating company and will position us for sustained productivity improvements as we focus on revenue growth," Mr. Forese stated. The restructuring charge includes actions relating to: o Consolidation, disposition or right-sizing of certain underperforming and specific non-strategic Technology Services, Business Document Services and Business Information Services locations. Approximately 65 locations will be affected, two-thirds of which will be consolidated to leverage back-office operations and co-location with other IKON units. The restructuring will further aid our implementation of consistent, national service offerings in these business units. o A real estate strategy to close or consolidate more than 140 facilities to achieve cost savings as well as increased administrative and marketing synergies by co-locating its businesses. o Severance related to various productivity initiatives that will be implemented within the next 12 months in the areas of inventory management, purchasing, finance/accounting and other administrative functions. "We have made steady progress in increasing our efficiency and productivity, and I am confident that we have the right strategy in place to take advantage of the growing opportunities in our industry. As I have stated before, we will not see the results of these initiatives overnight - they will take time and a lot of hard work - but we are clearly on the right course. In the upcoming quarter we anticipate earnings improvement of 12% to 15% sequentially and revenue growth for the same period of close to 3%." Mr. Forese concluded. A complete replay of IKON's conference call with investors will be available over the Internet on IKON's investor relations home page. To listen, go to ikon.com/corporate info and click on Investor Relations. IKON Office Solutions (www.ikon.com) is one of the world's leading providers of products and services that help businesses communicate. IKON provides customers with total business solutions for every office, production and outsourcing need, including copiers and printers, color solutions, distributed printing, facilities management, imaging and legal outsourcing solutions, as well as network design and consulting, application development and technology training. With fiscal 1999 revenues of $5.5 billion, IKON has nearly 950 locations worldwide including the United States, Canada, Mexico, the United Kingdom, France, Germany, Ireland, 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 expected revenue growth, cost savings and increased productivity and margins resulting from IKON's growth and productivity initiatives; and statements concerning the restructuring charge, expected savings and operational benefits relating to certain planned asset dispositions and consolidations. 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 1999 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. # # # IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share)
First Quarter Fiscal ------------------------------------------------------------------- 2000 1999 % Change ----------------- ----------------- -------------------- Revenues Net sales $ 668,482 $ 707,719 (5.5)% Service and rentals 582,921 601,259 (3.0) Finance income 81,097 87,439 (7.3) - --------------------------------------------------------------------------------------------------------- 1,332,500 1,396,417 (4.6) - --------------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 451,092 471,746 (4.4) Service and rental costs 345,438 349,881 (1.3) Finance interest expense 39,452 32,680 20.7 Selling and administrative 438,223 468,963 (6.6) Restructuring charge 105,340 - --------------------------------------------------------------------------------------------------------- 1,379,545 1,323,270 4.3 - --------------------------------------------------------------------------------------------------------- Operating income (loss) (47,045) 73,147 Interest expense 15,994 19,547 (18.2) - --------------------------------------------------------------------------------------------------------- Income (loss) before income taxes (benefit) (63,039) 53,600 Income taxes (benefit) (7,403) 24,924 - --------------------------------------------------------------------------------------------------------- Net income (loss) $ (55,636) $ 28,676 ================= ================= Basic Earnings (Loss) Per Share ($0.37) $0.19 ================= ================= Diluted Earnings (Loss) Per Share ($0.37) $0.19 ================= ================= Weighted Average Common Shares Outstanding, Basic 149,279 148,349 0.6 % ================= ================= Weighted Average Common Shares Outstanding, Diluted 149,279 148,907 0.2 % ================= ================= Operations Analysis: Gross profit %, net sales 32.5% 33.3% Gross profit %, service and rentals 40.7% 41.8% Gross profit %, finance subsidiaries 51.4% 62.6% Total gross profit % 37.3% 38.8% SG&A as a % of revenue 32.9% 33.6% Operating income (loss) % of revenue (3.5%) 5.2% Oper inc % of rev, excl restructuring charge in fiscal 2000 and gain on asset securitization in fiscal 1999 4.4% 4.3%
IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share) EXCLUDING SPECIAL ITEMS
First Quarter Fiscal ------------------------------------------------------------------- 2000 1999 % Change ----------------- ----------------- -------------------- Revenues Net sales $ 668,482 $ 707,719 (5.5)% Service and rentals 582,921 601,259 (3.0) Finance income 81,097 73,106 * 10.9 - ------------------------------------------------------------------------------------------------- 1,332,500 1,382,084 (3.6) - ------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 451,092 471,746 (4.4) Service and rental costs 345,438 349,881 (1.3) Finance interest expense 39,452 32,680 20.7 Selling and administrative 438,223 468,963 (6.6) - ------------------------------------------------------------------------------------------------- 1,274,205 ** 1,323,270 (3.7) - ------------------------------------------------------------------------------------------------- Operating income 58,295 58,814 Interest expense 15,994 19,547 (18.2) - ------------------------------------------------------------------------------------------------- Income before taxes 42,301 39,267 Income taxes 19,458 19,191 - ------------------------------------------------------------------------------------------------- Net income $ 22,843 $ 20,076 ================= ================= Basic Earnings Per Share $0.15 $0.13 ================= ================= Diluted Earnings Per Share $0.15 $0.13 ================= ================= Weighted Average Common Shares Outstanding, Basic 149,279 148,349 0.6 % ================= ================= Weighted Average Common Shares Outstanding, Diluted 149,443 *** 148,907 0.4 % ================= ================= Operations Analysis: Gross profit %, net sales 32.5% 33.3% Gross profit %, service and rentals 40.7% 41.8% Gross profit %, finance subsidiaries 51.4% 55.3% Total gross profit % 37.3% 38.2% SG&A as a % of revenue 32.9% 33.9% Operating income % of revenue 4.4% 4.3% * Excludes $14.3 million gain from asset securitization ** Excludes $105.3 million restructuring charge *** As a result of exclusion items, shares that were previously excluded because of a net loss, are now included in the diluted earnings per share calculation
This information is provided for additional analysis and is not intended to be a presentation in accordance with generally accepted accounting principles. IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share)
First Quarter Fourth Quarter Fiscal Fiscal 2000 1999 % Change ----------------- ----------------- -------------------- Revenues Net sales $ 668,482 $ 717,970 (6.9)% Service and rentals 582,921 577,780 0.9 Finance income 81,097 71,860 12.9 - ---------------------------------------------------------------------------------------------------------- 1,332,500 1,367,610 (2.6) - ---------------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 451,092 482,843 (6.6) Service and rental costs 345,438 341,886 1.0 Finance interest expense 39,452 34,137 15.6 Selling and administrative 438,223 452,447 (3.1) Shareholder litigation settlement 101,106 Restructuring charge 105,340 - ---------------------------------------------------------------------------------------------------------- 1,379,545 1,412,419 (2.3) - ---------------------------------------------------------------------------------------------------------- Operating loss (47,045) (44,809) Interest expense 15,994 15,652 2.2 - ---------------------------------------------------------------------------------------------------------- Loss before income tax benefit (63,039) (60,461) Income tax benefit (7,403) (15,476) - ---------------------------------------------------------------------------------------------------------- Net loss $ (55,636) $ (44,985) ================= ================= Basic Loss Per Share ($0.37) ($0.30) ================= ================= Diluted Loss Per Share ($0.37) ($0.30) ================= ================= Weighted Average Common Shares Outstanding, Basic 149,279 148,958 0.2 % ================= ================= Weighted Average Common Shares Outstanding, Diluted 149,279 148,958 0.2 % ================= ================= Operations Analysis: Gross profit %, net sales 32.5% 32.7% Gross profit %, service and rentals 40.7% 40.8% Gross profit %, finance subsidiaries 51.4% 52.5% Total gross profit % 37.3% 37.2% SG&A as a % of revenue 32.9% 33.1% Operating loss % of revenue (3.5%) (3.3%) Oper inc % of rev, excl restructuring charge in fiscal 2000 and shareholder litigation settlement in fiscal 1999 4.4% 4.1%
IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share) EXCLUDING SPECIAL ITEMS
First Quarter Fourth Quarter Fiscal Fiscal 2000 1999 % Change ----------------- ----------------- -------------------- Revenues Net sales $ 668,482 $ 717,970 (6.9)% Service and rentals 582,921 577,780 0.9 Finance income 81,097 71,860 12.9 - ------------------------------------------------------------------------------------------------------ 1,332,500 1,367,610 (2.6) - ------------------------------------------------------------------------------------------------------ Costs and Expenses Cost of goods sold 451,092 482,843 (6.6) Service and rental costs 345,438 341,886 1.0 Finance interest expense 39,452 34,137 15.6 Selling and administrative 438,223 452,447 (3.1) - ------------------------------------------------------------------------------------------------------ 1,274,205 * 1,311,313 ** (2.8) - ------------------------------------------------------------------------------------------------------ Operating income 58,295 56,297 Interest expense 15,994 15,652 2.2 - ------------------------------------------------------------------------------------------------------ Income before taxes 42,301 40,645 Income taxes 19,458 18,900 - ------------------------------------------------------------------------------------------------------ Net income $ 22,843 $ 21,745 ================= ================= Basic Earnings Per Share $0.15 $0.15 ================= ================= Diluted Earnings Per Share $0.15 $0.15 ================= ================= Weighted Average Common Shares Outstanding, Basic 149,279 148,958 0.2 % ================= ================= Weighted Average Common Shares Outstanding, Diluted 149,443 *** 149,119 *** 0.2 % ================= ================= Operations Analysis: Gross profit %, net sales 32.5% 32.7% Gross profit %, service and rentals 40.7% 40.8% Gross profit %, finance subsidiaries 51.4% 52.5% Total gross profit % 37.3% 37.2% SG&A as a % of revenue 32.9% 33.1% Operating income % of revenue 4.4% 4.1% * Excludes $105.3 million restructuring charge ** Excludes $101.1 million shareholder litigation settlement *** As a result of exclusion items, shares that were previously excluded because of a net loss, are now included in the diluted earnings per share calculation
This information is provided for additional analysis and is not intended to be a presentation in accordance with generally accepted accounting principles. -----END PRIVACY-ENHANCED MESSAGE-----