-----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, S8/dQmQHjCRJ1Qk1nmVTdcBLomLcpBFfV7D9uiNXUkqbpOl0CEfllyd6XSgIwJrA MtttOFtry4x9w12hDyY5Ag== 0000950159-01-500186.txt : 20010806 0000950159-01-500186.hdr.sgml : 20010806 ACCESSION NUMBER: 0000950159-01-500186 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010726 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20010803 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: 1934 Act SEC FILE NUMBER: 000-20405 FILM NUMBER: 1696707 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: ALCO CAPITAL RESOURCE INC DATE OF NAME CHANGE: 19940425 FORMER COMPANY: FORMER CONFORMED NAME: IKON CAPITAL INC DATE OF NAME CHANGE: 19980113 8-K 1 ios-8k.txt IOS 8K 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) July 26, 2001 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 July 26, 2001, the Registrant's parent, IKON Office Solutions, Inc. ("IKON" or the "Company"), announced results for the third quarter of fiscal year 2001. IKON's press release dated July 26, 2001 containing further detail is attached. This news release includes information about the Registrant and/or IKON which may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements relating to the Company's outlook for the fourth quarter and the full fiscal year and the Company's long-term investments and growth. 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. 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. Certain additional risks and uncertainties are set forth in IKON's 2000 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------ c. The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K: (99) Press Release dated July 26, 2001 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: August 3, 2001 EX-99 3 ex-99.txt EX-99 Exhibit 99 IKON OFFICE SOLUTIONS ANNOUNCES THIRD QUARTER RESULTS Earnings Exceed Expectations; Company Continues Focus on Cash Flow and Profitability Valley Forge, Pennsylvania - July 26, 2001 - IKON Office Solutions (NYSE:IKN) today announced net income of $26 million, or earnings per share of $.18, for the third fiscal quarter ended June 30, 2001, exceeding the Company's expectations for the quarter. For the same period in 2000, earnings were $.19 per share, excluding one-time gains from early extinguishment of debt and the sale of investments totaling $.02 per share. Revenues for the quarter were $1.31 billion, compared to $1.40 billion for the same period in 2000. Free cash flow for the third quarter was approximately $80 million compared to approximately $40 million for the same period in 2000. Based on the Company's latest analysis, free cash flow for the full year should exceed the previously communicated expectation of $170-$185 million. "Due to continued improvements in gross margin and our ability to control Selling and Administrative expenses without foregoing our strategic investments, we were able to deliver strong earnings for the quarter," said James J. Forese, Chairman and Chief Executive Officer of IKON Office Solutions. "Revenues declined 6% from the prior year, or 5% excluding the impact of foreign currency translation, largely due to growing economic concerns and continued competitive pressure. Understanding these challenges in the quarter, we were increasingly focused on sales discipline - specifically, improved equipment contribution, the continued penetration of growth markets such as the production and outsourcing sectors, and the delivery of higher value-added solutions to our customers. Equipment aftermarket, namely supply sales and equipment service, also delivered strong productivity. As a result, we were able to enhance profitability for the quarter despite lower revenues. "During the quarter, we continued to execute in areas critical to our long-term strategy. Specifically, we generated strong growth in the production arena through sales of our higher-end, segments 5 and 6 copier/printer equipment, and facilities management generated double-digit growth for the sixth consecutive quarter," continued Mr. Forese. Net Sales, which include the sale of copier/printer equipment, supplies, and technology hardware, declined 11% from the prior year largely due to the decline in technology hardware and copier/printer equipment sales. Technology hardware, such as computers, routers and servers sold by the various technology divisions, declined as the Company continued to shift emphasis away from these low margin products. Sales of copier/printer equipment declined in response to ongoing economic and competitive pressures as well as the Company's strategic focus on moving from low-end, lower margin products to high-end, higher margin products. The Company continued to post year-over-year growth in sales of higher-end products, specifically segments 5 and 6 black & white production equipment and production color. Gross profit margin on Net Sales increased substantially over the same period in 2000 as the Company focused on cost controls and as it realized the benefits of earlier productivity programs. Adding to the gross margin expansion was the ongoing benefit of less low margin technology hardware revenues in the current Net Sales revenue mix. Service & Rentals, which include revenues from the servicing of copier/printer equipment, outsourcing, technology services, and rentals, declined 2% from the prior year. While outsourcing continued to record year over year growth, revenues from the servicing of copier/printer equipment as well as technology services declined from the prior year. Service & Rentals gross profit margin increased from the prior year due to improvements in productivity associated with the servicing of copier/printer equipment. Finance Income grew 5.1% from the prior year. Gross profit margin on Finance Income improved from the prior year primarily due to increased average corporate borrowings on behalf of the finance subsidiaries. Interest on corporate borrowings is reflected as Interest Expense while interest on finance subsidiaries' borrowings is reflected as Finance Interest Expense. Operating Margins of 4.9% were comparable to the prior year largely due to stronger gross margins and controlled Selling and Administrative costs as the Company continues to balance investments necessary for market differentiation and leadership against cost savings achieved through ongoing productivity programs. Since the beginning of its fiscal year, the Company has reduced headcount by approximately 1,500 as part of these productivity initiatives. Outlook: Earnings per share for the full year, excluding special items, are expected to be $.55, as previously communicated. The Company expects that economic and competitive pressures will continue to impact the last quarter of fiscal 2001, along with normal seasonal influences typical within the industry. Free cash flow for fiscal 2001 is expected to exceed $200 million. "IKON has made strong progress in becoming an integrated provider of business communication solutions. We have realigned our sales and service organizations to focus on new technologies and market opportunities, and we continue to improve our operational infrastructure to ensure we have a profitable and customer-focused business model," concluded Mr. Forese. "We will continue to execute on this strategy while responding to the additional challenges of an uncertain economic environment by remaining focused on our cost structures, cash flow, and profitability." ================================================================================ Additional information regarding the third quarter results and the Company's outlook for next quarter and the full fiscal year will be discussed on a conference call hosted by IKON at 10:00 a.m. EST on Thursday, July 26, 2001. Please call (719) 457-2645 to participate. A complete replay of the conference call will be available over the Internet on IKON's Investor Relations home page approximately two hours after the call ends. To listen, please go to www.ikon.com and click on Invest in IKON. Beginning at 1:00PM EST on July 26, 2001 and ending at midnight on July 30, 2001, a complete replay of the conference call can also be accessed via telephone by calling (719) 457-0820 and using the access code 766184. ================================================================================ 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, e-business development, telecommunications services and technology training. With fiscal 2000 revenues of $5.4 billion, IKON has approximately 800 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. These forward-looking statements include, but are not limited to, statements relating to the Company's outlook for the fourth quarter and the full fiscal year and the Company's long-term investments and growth. 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. 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. Certain additional risks and uncertainties are set forth in IKON's 2000 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission. # # #
IKON Office Solutions, Inc. Exhibit 99 - --------------------------- FINANCIAL SUMMARY (in thousands, except earnings per share) Third Quarter Fiscal --------------------------------------------- 2001 2000 % Change --------------------- ------------------ ---------- Revenues Net sales $ 641,858 $ 720,066 (10.9)% Service and rentals 571,662 583,524 (2.0) Finance income 97,637 92,922 5.1 - ------------------------------------------------------------------------------------------------------------------ 1,311,157 1,396,512 (6.1) - ------------------------------------------------------------------------------------------------------------------ Costs and Expenses Cost of goods sold 409,861 482,916 Service and rental costs 337,855 349,438 Finance interest expense 41,783 43,889 Selling and administrative 456,880 451,797 - ------------------------------------------------------------------------------------------------------------------ 1,246,379 1,328,040 - ------------------------------------------------------------------------------------------------------------------ Operating income 64,778 68,472 Gain on sale of investment 3,288 Interest expense 18,345 18,314 - ------------------------------------------------------------------------------------------------------------------ Income before income taxes and extraordinary gain 46,433 53,446 Income taxes 20,431 23,525 - ------------------------------------------------------------------------------------------------------------------ Income before extraordinary gain 26,002 29,921 Extraordinary gain from early extinguishment of debt, net of income taxes of $1,342 1,707 - ------------------------------------------------------------------------------------------------------------------ Net income $ 26,002 $ 31,628 - ------------------------------------------------------------------------------------------------------------------ Basic and Diluted Earnings Per Common Share $0.18 $0.21 ===================== ================== Weighted Average Common Shares Outstanding, Basic 141,546 148,922 ===================== ================== Weighted Average Common Shares Outstanding, Diluted 145,431 148,941 ===================== ================== Operations Analysis: Gross profit %, net sales 36.1% 32.9% Gross profit %, service and rentals 40.9% 40.1% Gross profit %, finance subsidiaries 57.2% 52.8% Total gross profit % 39.8% 37.3% Selling and administrative as a % of revenue 34.8% 32.4% Operating income as a % of revenue 4.9% 4.9%
IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share) Excluding Special Items
Third Quarter Fiscal -------------------------------------------- 2001 2000 * % Change -------------------- ------------------ --------------------- Revenues Net sales $ 641,858 $ 720,066 (10.9)% Service and rentals 571,662 583,524 (2.0) Finance income 97,637 92,922 5.1 - ------------------------------------------------------------------------------------------------- 1,311,157 1,396,512 (6.1) - ------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 409,861 482,916 Service and rental costs 337,855 349,438 Finance interest expense 41,783 43,889 Selling and administrative 456,880 451,797 - ------------------------------------------------------------------------------------------------- 1,246,379 1,328,040 - ------------------------------------------------------------------------------------------------- Operating income 64,778 68,472 Interest expense 18,345 18,314 - ------------------------------------------------------------------------------------------------- Income before income taxes 46,433 50,158 Income taxes 20,431 22,078 - ------------------------------------------------------------------------------------------------- Net income $ 26,002 $ 28,080 ==================== ================== Basic and Diluted Earnings Per Common Share $0.18 $0.19 ==================== ================== Weighted Average Common Shares Outstanding, Basic 141,546 148,922 ==================== ================== Weighted Average Common Shares Outstanding, Diluted 145,431 148,941 ==================== ================== Operations Analysis: Gross profit %, net sales 36.1% 32.9% Gross profit %, service and rentals 40.9% 40.1% Gross profit %, finance subsidiaries 57.2% 52.8% Total gross profit % 39.8% 37.3% Selling and administrative as a % of revenue 34.8% 32.4% Operating income as a % of revenue 4.9% 4.9%
* Third quarter fiscal 2000 excludes $3,288 gain on sale of investment and $3,049 extraordinary gain on early extinguishment of debt ($1,707 after-tax). IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share)
Year to Date Fiscal ---------------------------------------------- 2001 2000 % Change ---------------------- ------------------ --------- Revenues Net sales $ 2,001,648 $ 2,080,636 (3.8)% Service and rentals 1,703,795 1,737,774 (2.0) Finance income 284,991 255,089 11.7 - ------------------------------------------------------------------------------------------------------------- 3,990,434 4,073,499 (2.0) - ------------------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 1,305,473 1,382,241 Service and rental costs 1,028,800 1,048,707 Finance interest expense 132,350 122,849 Selling and administrative 1,364,391 1,314,579 Restructuring and asset impairment charge 105,340 - ------------------------------------------------------------------------------------------------------------- 3,831,014 3,973,716 - ------------------------------------------------------------------------------------------------------------- Operating income 159,420 99,783 Gain on sale of investment 3,288 Interest expense 54,222 51,934 - ------------------------------------------------------------------------------------------------------------- Income from continuing operations before income taxes and extraordinary gain 105,198 51,137 Income taxes 46,287 41,999 - ------------------------------------------------------------------------------------------------------------- Income from continuing operations before extraordinary gain 58,911 9,138 Discontinued operations, net of income taxes of $942 1,200 Extraordinary gain from early extinguishment of debt, net of income taxes of $1,342 1,707 - ------------------------------------------------------------------------------------------------------------- Net income $ 60,111 $ 10,845 ====================== ================== Basic and Diluted Earnings Per Common Share Continuing operations $0.41 $0.06 Discontinued operations 0.01 Extraordinary gain 0.01 ---------------------- ------------------ Net income $0.42 $0.07 ====================== ================== Weighted Average Common Shares Outstanding, Basic 142,121 149,158 ====================== ================== Weighted Average Common Shares Outstanding, Diluted 143,982 149,317 ====================== ================== Operations Analysis: Gross profit %, net sales 34.8% 33.6% Gross profit %, service and rentals 39.6% 39.7% Gross profit %, finance subsidiaries 53.6% 51.8% Total gross profit % 38.2% 37.3% Selling and administrative as a % of revenue 34.2% 32.3% Operating income as a % of revenue 4.0% 2.4%
IKON Office Solutions, Inc. FINANCIAL SUMMARY (in thousands, except earnings per share) Excluding Special Items
Year to Date Fiscal 2001 * 2000 ** % Change -------------------- ----------------- -------------------- Revenues Net sales $ 2,001,648 $ 2,080,636 (3.8)% Service and rentals 1,703,795 1,737,774 (2.0) Finance income 284,991 255,089 11.7 - ---------------------------------------------------------------------------------------------------- 3,990,434 4,073,499 (2.0) - ---------------------------------------------------------------------------------------------------- Costs and Expenses Cost of goods sold 1,305,473 1,382,241 Service and rental costs 1,028,800 1,048,707 Finance interest expense 132,350 122,849 Selling and administrative 1,364,391 1,331,579 - ---------------------------------------------------------------------------------------------------- 3,831,014 3,885,376 - ---------------------------------------------------------------------------------------------------- Operating income 159,420 188,123 Interest expense 54,222 51,934 - ---------------------------------------------------------------------------------------------------- Income before income taxes 105,198 136,189 Income taxes 46,287 59,923 - ---------------------------------------------------------------------------------------------------- Net income $ 58,911 $ 76,266 ==================== ================= Basic and Diluted Earnings Per Common Share $0.41 $0.51 ==================== ================= Weighted Average Common Shares Outstanding, Basic 142,121 149,158 ==================== ================= Weighted Average Common Shares Outstanding, Diluted 143,982 149,317 ==================== ================= Operations Analysis: Gross profit %, net sales 34.8% 33.6% Gross profit %, service and rentals 39.6% 39.7% Gross profit %, finance subsidiaries 53.6% 51.8% Total gross profit % 38.2% 37.3% Selling and administrative as a % of revenue 34.2% 32.7% Operating income as a % of revenue 4.0% 4.6%
* Fiscal 2001 excludes a gain from discontinued operations of $2,142 ($1,200 after-tax). ** Fiscal 2000 excludes $17,000 of insurance proceeds related to the shareholder litigation settlement, $105,340 restructuring and asset impairment charge, $3,288 gain on sale of investment, and $3,049 extraordinary gain on early extinguishment of debt ($1,707 after-tax). -----END PRIVACY-ENHANCED MESSAGE-----