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 March 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
---------------------------------
ALCO STANDARD CORPORATION
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(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
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(Address of principal executive offices)
(Zip Code)
(610) 296-8000
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(Registrant's telephone number, including area code)
NONE
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(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 April 30, 1996.
Common Stock, no par value 128,386,641 shares
INDEX
ALCO STANDARD CORPORATION
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--March 31, 1996
and September 30, 1995
Consolidated Statements of Income--Three months
ended March 31, 1996 and March 31, 1995 and
Six months ended March 31, 1996 and March 31, 1995
Consolidated Statements of Cash Flows--Six
months ended March 31, 1996 and March 31, 1995
Notes to Consolidated Financial Statements--
March 31, 1996
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition and Liquidity
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements (unaudited)
- ----------------------------------------
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31 September 30
ASSETS 1996 1995
- ------ ----------- ------------
Current Assets
Cash $ 83,280 $ 90,106
Accounts receivable, less allowance for doubtful accounts:
3/96 - $43,835; 9/95 - $48,628 1,172,295 1,175,699
Inventories 818,904 747,895
Prepaid expenses, deposits and deferred taxes 187,349 146,867
----------- ------------
Total current assets 2,261,828 2,160,567
----------- ------------
Investments and Long-Term Receivables 63,818 56,086
Property and Equipment, at cost 824,705 745,235
Less accumulated depreciation 389,572 375,285
----------- ------------
435,133 369,950
----------- ------------
Other Assets
Goodwill 1,283,919 1,058,214
Miscellaneous 170,334 109,436
----------- ------------
1,454,253 1,167,650
----------- ------------
Finance Subsidiaries Assets 1,277,060 983,322
----------- ------------
$ 5,492,092 $ 4,737,575
=========== ============
See notes to consolidated financial statements.
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31 September 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------ ------------ -------------
Current Liabilities
Current portion of long-term debt $ 23,130 $ 26,319
Notes payable 179,291 280,832
Trade accounts payable 470,139 501,316
Accrued salaries, wages and commissions 90,796 115,874
Deferred revenues 189,626 172,900
Restructuring costs 8,341 33,302
Other accrued expenses 327,710 259,534
------------ -------------
Total current liabilities 1,289,033 1,390,077
------------ -------------
Long-Term Debt 772,809 325,314
Other Liabilities
Deferred taxes 101,489 96,082
Restructuring costs 6,000 6,000
Other long term liabilities 176,755 178,782
------------ -------------
284,244 280,864
------------ -------------
Finance Subsidiaries Liabilities;
including debt of: 3/96 - $997,983; 9/95 - $817,585 1,081,334 872,783
Shareholders' Equity
Series AA convertible preferred stock, no par value:
Depositary shares issued and outstanding
9/95 - 4,025 shares 201,924
Series BB conversion preferred stock, no par value:
3,877 depositary shares issued and outstanding 290,170 290,152
Common stock, no par value:
Authorized 300,000 shares
Issued 3/96 -128,168 shares; 9/95 - 112,182 shares 1,115,572 637,414
Retained earnings 682,807 765,309
Foreign currency translation adjustment (23,852) (21,536)
Cost of common shares in treasury: 3/96 - 1 shares;
9/95 - 118 shares (25) (4,726)
------------ -------------
2,064,672 1,868,537
------------ -------------
$ 5,492,092 $ 4,737,575
============ =============
See notes to consolidated financial statements.
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31 March 31
--------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Revenues
Net sales $ 2,771,353 $ 2,425,354 $ 5,304,968 $ 4,586,145
Dividends, interest and other income 1,100 692 2,114 1,562
Finance subsidiaries 35,636 19,788 67,431 39,728
---------- ---------- ---------- ----------
2,808,089 2,445,834 5,374,513 4,627,435
---------- ---------- ---------- ----------
Costs and Expenses
Cost of goods sold 1,984,646 1,819,279 3,834,080 3,425,488
Selling and administrative 672,086 522,656 1,258,581 1,001,930
Interest 18,365 15,047 32,692 26,997
Finance subsidiaries interest 15,930 6,978 30,739 16,597
---------- ---------- ---------- ----------
2,691,027 2,363,960 5,156,092 4,471,012
---------- ---------- ---------- ----------
Income Before Taxes 117,062 81,874 218,421 156,423
Taxes on Income 45,925 32,749 85,869 61,829
---------- ---------- ---------- ----------
Net Income 71,137 49,125 132,552 94,594
Preferred Dividends 4,885 2,893 12,549 5,786
---------- ---------- ---------- ----------
Net Income Available to Common Shareholders $ 66,252 $ 46,232 $ 120,003 $ 88,808
========== ========== ========== ==========
Earnings Per Share (1) $0.52 $0.42 $0.97 $0.80
========== ========== ========== ==========
Cash dividends per share of common stock $0.14 $0.13 $0.28 $0.26
========== ========== ========== ==========
(1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements.
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
March 31,
---------------------------
1996 1995
--------- -----------
Operating activities
Net income $ 132,552 $ 94,594
Additions (deductions) to reconcile net income to net
cash provided (used) by operating activities:
Depreciation 46,985 36,368
Amortization 19,190 15,800
Payment of restructuring costs (23,391) (16,356)
Provision for losses on accounts receivable 14,506 12,217
Changes in operating assets and liabilities, net
of effects from acquisitions and divestitures:
Decrease (increase) in accounts receivable 65,704 (95,084)
Increase in inventories (1,137) (92,009)
Increase in prepaid expenses (44,833) (5,620)
(Decrease) increase in accounts payable, deferred
revenues and accrued expenses (53,219) 21,156
Miscellaneous (2,000) (3,047)
--------- -----------
Net cash provided (used) 154,357 (31,981)
Investing activities
Proceeds from sale of property and equipment 19,232 13,624
Cost of companies acquired, net of cash acquired (178,552) (81,971)
Expenditures for property and equipment (75,975) (47,058)
Purchase of miscellaneous assets (44,932) (29,817)
Finance subsidiaries receivables - additions (431,671) (310,643)
Finance subsidiaries receivables - collections 173,381 108,052
--------- -----------
Net cash used (538,517) (347,813)
Financing activities
Proceeds (repayments) from short-term borrowings, net (89,072) 135,000
Proceeds from issuance of long-term debt 439,595 121,826
Proceeds from option exercises and sale of treasury shares 34,690 40,600
Proceeds from sale of finance subsidiaries lease receivables 26,454 33,586
Proceeds (repayments) from accounts receivable sold (4,279)
Debt issue costs (5,965)
Long-term debt repayments (105,646) (24,177)
Finance subsidiaries debt - additions 254,800 204,246
Finance subsidiaries debt - repayments (74,402) (52,573)
Dividends paid (45,700) (33,160)
Purchase of treasury shares (53,141) (55,074)
--------- -----------
Net cash provided 377,334 370,274
--------- -----------
Net decrease in cash (6,826) (9,520)
Cash at beginning of year 90,106 53,369
--------- -----------
Cash at end of period $ 83,280 $ 43,849
========= ===========
See notes to consolidated financial statements.
ALCO STANDARD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 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, 1995. Certain prior year amounts have been
reclassified to conform with the current year presentation.
Note 2: Debt
----
On December 11, 1995, the Company issued $300 million of 30 year bonds
at a stated interest rate of 6.75% to the public at a discount price of 98.48%.
The effective yield on the bonds is 6.87%. The bonds will be redeemable as a
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of their principal amount or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon discounted to maturity on a semiannual basis (assuming a 360-
day year consisting of twelve 30-day months) at the Treasury Yield (as defined)
plus 15 basis points, plus in each case accrued interest to the date of
redemption. Interest on the bonds is paid semi-annually. The bonds are not
subject to sinking fund provisions.
Note 3: Series AA Preferred Stock Redemption
------------------------------------
On February 9, 1996, the Company redeemed all of its Series AA
Preferred Stock for common stock at a conversion rate of 2.2402 shares of common
stock for each depositary share redeemed. Common shares totaling 8,585,000 were
issued in connection with this redemption.
Item 2: Management's Discussion and Analysis of Results of Operations and
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Financial Condition and Liquidity
- ---------------------------------
Results of Operations
---------------------
The discussion of the results of operations reviews the operations of the
Company as contained in the Consolidated Statements of Income.
Three and Six Months Ended March 31, 1996
Compared with the Three and Six Months Ended March 31, 1995
-----------------------------------------------------------
Revenues and income before taxes for the second quarter and year-to-date of
fiscal 1996 compared to the second quarter and year-to-date of fiscal 1995 were
as follows:
Three Months Ended Six Months Ended
------------------------ -----------------------
March 31 % March 31 %
----------- -----------
REVENUES: 1996 1995 Change 1996 1995 Change
---- ---- ------ ---- ---- ------
(in millions)
IKON Office Solutions $ 1,063 $ 698 52.3% $ 1,916 $1,334 43.4%
Unisource
United States 1,553 1,551 .1 3,074 2,918 5.3
Canada 194 199 (2.5) 389 379 2.6
--- --- --- ---
Total Unisource 1,747 1,750 (.2) 3,463 3,297 5.0
----- ----- ----- -----
Operating 2,810 2,448 14.8 5,379 4,631 16.2
Corporate and eliminations (2) (2) (4) (4)
----- ----- ----- -----
$2,808 $2,446 14.8% $5,375 $4,627 16.2%
====== ====== ====== ======
Three Months Ended Six Months Ended
----------------------- ----------------------
March 31 % March 31 %
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INCOME BEFORE TAXES: 1996 1995 Change 1996 1995 Change
---- ---- ------ ---- ---- ------
(in millions)
IKON Office Solutions $ 90.9 $ 59.0 54.1% $167.0 $114.2 46.2%
Unisource
United States 52.9 42.4 24.8 100.6 78.5 28.2
Canada 7.2 10.6 (32.1) 15.5 17.1 (9.4)
--- ---- ---- ----
Total Unisource 60.1 53.0 13.4 116.1 95.6 21.4
---- ---- ----- ----
Operating 151.0 112.0 34.8 283.1 209.8 34.9
Interest (18.4) (15.0) (32.7) (27.0)
Non-allocated (15.5) (15.1) (32.0) (26.4)
------ ------ ------ ------
$117.1 $ 81.9 43.0% $218.4 $156.4 39.6%
====== ====== ====== ======
QUARTER:
The Company's revenues for the second quarter of fiscal year 1996 were $2.8
billion, a 14.8% increase over the comparable period in the prior year.
Operating income increased 34.8% to $151.0 million from $112.0 million reported
in the second quarter of fiscal year 1995. Earnings per share of $.52 for the
second quarter of fiscal 1996 were 23.8% higher than the $.42 reported in the
second quarter of the prior year.
SIX MONTHS:
For the six months ended March 31, 1996, revenues were $5.4 billion, a
16.2% increase over the prior year's $4.6 billion. Operating income increased
34.9% for the first six months of fiscal 1996 compared to the prior year, to
$283.1 million. Earnings per share for the six months ended March 31, 1996
increased 21.3% to $.97 from $.80 in the first six months of fiscal 1995.
IKON Office Solutions
QUARTER:
IKON Office Solutions (IKON), formerly Alco Office Products, generated $365
million in increased revenues in the second quarter of fiscal 1996, a 52.3%
increase over the prior year, of which $263 million relates to current and prior
year acquisitions and $102 million to IKON's base companies. IKON improved its
internal revenue growth to 14.6% in the second quarter.
IKON's operating income increased by $31.9 million, or 54.1% over the prior
year. Current and prior year acquisitions contributed $19.9 million. The
remaining $12.0 million represents internal growth from its base companies.
IKON Capital, Inc. (formerly Alco Capital Resource, Inc.) contributed 8.9% of
IKON's operating income in the second quarter of fiscal 1996 compared to 9.3% in
the second quarter of fiscal 1995. Operating margins were 8.6% in the second
quarter of fiscal 1996, compared to 8.5% in fiscal 1995.
SIX MONTHS:
For the six months ended March 31, 1996, IKON generated $582 million in
increased revenues, a 43.4% increase over the prior year, of which $417 million
relates to current and prior year acquisitions and $165 million to IKON's base
companies. Internal revenue growth in IKON's base companies continues to be
across all revenue segments, but primarily in equipment sales, supplies, service
and outsourcing businesses.
Operating income at IKON increased 46.2%, or $52.8 million, over the prior
year. Current and prior year acquisitions contributed $33.0 million. The
remaining $19.8 million represents internal growth from its base companies. This
growth primarily represents higher operating contributions from the equipment,
service and outsourcing areas of IKON's businesses. IKON Capital contributed
9.6% of IKON's operating income in the first six months of fiscal 1996 compared
to 9.3% in the first six months of fiscal 1995. Operating margins were 8.7% in
the first half of fiscal 1996, compared to 8.6% in fiscal 1995.
IKON Strategic Vision
The Company has developed a long range strategy to transform IKON. The
strategy includes broadening the business into three market segments - analog,
networking and outsourcing. The transformation will include consolidating
administrative functions, rationalizing the supply chain, establishing new
vendor alliances, developing a new information technology system, adopting a
single name, developing a major/national accounts program and moving to a
market-place focus to strengthen local service. IKON is in the early stages of
this transformation, which is expected to take up to four years.
Unisource
QUARTER:
Revenues from Unisource's U.S. operations were essentially flat for the
quarter compared to the prior year. Current and prior year acquisitions
contributed $120 million to revenue, while paper prices and shipments each
declined approximately 3% which decreased revenues of base companies. Supply
systems volume, excluding acquisitions, grew approximately 2% compared to the
second quarter of fiscal 1995, while pricing was down approximately 3%.
Unisource's Canadian operations' revenues decreased by $5 million, also the
result of paper price and volume decreases.
Operating income from Unisource's U.S. operations increased $10.5 million,
of which $6.8 million was from current and prior year acquisitions and $3.7
million was from its base companies. The increase in operating income from base
companies was primarily due to improvement in gross trading margin percentages,
restructuring benefits and operating efficiencies, net of the effects of price
and volume decreases. The decrease of $3.4 million in the Canadian operation
reflects both price and volume decreases. Operating margins were 3.4% in the
second quarter of fiscal 1996, compared to 3.0% in fiscal 1995.
SIX MONTHS:
The $156 million increase in revenues from Unisource's U.S. operations
includes current and prior year acquisitions of $196 million, offset by revenue
declines in base companies. Unisource's Canadian operations increased their
revenues by $10 million, including $7 million contributed by a 1995 acquisition.
Operating income from Unisource's U.S. operations increased $22.1 million,
of which $10.7 million is from current and prior year acquisitions and $11.4
million is from its base companies. The increase in operating income from base
companies was primarily due to improvement in gross trading margin percentages,
restructuring benefits and operating efficiencies, net of the effects of price
and volume decreases. The decrease of $1.6 million in the Canadian paper
operation reflects the price and volume decreases. Operating margins were 3.4%
in the first half of fiscal 1996, compared to 2.9% in fiscal 1995.
Unisource Restructuring
During the quarter, Unisource successfully completed beta testing its new
information technology system. Unisource is now upgrading the software to its
latest release before beginning implementation and expects the system to be
substantially implemented by the end of 1997. Unisource still expects to
deliver $50 million of restructuring benefits in fiscal 1996. At
March 31, 1996, the remaining restructuring reserve is $14.3 million.
Foreign Operations
QUARTER:
Revenues from the Company's paper and office products operations outside
the U.S. were $327 million for the second quarter of fiscal 1996 compared to
$271 million for the same period of the prior fiscal year, an increase of 20.7%.
IKON's European operations accounted for $45 million of the increase, primarily
the result of the acquisitions of A:Copy (UK) PLC and Copymore PLC in the third
and fourth quarters of fiscal 1995. IKON's Canadian revenues increased $16
million, while Unisource's Canadian revenues decreased $5 million.
Operating income from foreign operations was $21.5 million for the three
months ended March 31, 1996, up $5.5 million from the prior year, of which $7.2
million is attributable to IKON's European operations. IKON's Canadian
operations added $1.7 million of operating income to the second quarter of
fiscal 1996, while Unisource's Canadian operations were $3.4 million less than
the prior year.
SIX MONTHS:
For the first six months of fiscal 1996, revenues from the Company's paper
and office products operations outside the U.S. increased 24.9% to $647
million, compared to $518 million for the same period of the prior fiscal year.
IKON's European operations accounted for $89 million of the increase, primarily
the result of the acquisitions of A:Copy (UK) PLC and Copymore PLC in the third
and fourth quarters of fiscal 1995. The increase also includes $40 million from
Unisource and IKON Canadian operations.
Foreign operations operating income was $41.4 million for the six months
ended March 31, 1996, up $15.4 million from the prior year, of which $14.2
million is attributable to IKON's European operations. IKON's Canadian
operations added $2.8 million of operating income to the first six months of
fiscal 1996, while Unisource's Canadian operations were $1.6 million less than
the prior year.
There was no material effect of foreign currency exchange rate fluctuations
on the results of operations during the first six months of fiscal 1996 compared
to the first six months of fiscal 1995.
Acquisitions
In the second quarter of fiscal 1996, IKON completed 30 acquisitions with
annualized revenues of $379 million, including five acquisitions in the U.K.
This brings total year to date acquisitions to 54, with annualized revenues of
$516 million. Several of these acquisitions will expand IKON's capacity and
expertise in networking and outsourcing, two of the group's focus areas in its
strategic vision.
Unisource completed 10 acquisitions in the second quarter of fiscal 1996
with annualized revenues of $239 million. For the six months ended
March 31, 1996, Unisource completed 21 acquisitions with annualized revenues of
$514 million. Almost all of the U.S.-based acquisitions in the second quarter
are supply systems companies, reflecting Unisource's goal of a balanced revenue
contribution between its paper and supply systems segments by the year 2000. Two
of the second quarter acquisitions are located in Mexico, for a total of four
year-to-date, further expanding the group's presence in that market.
Other
Interest expense year-to-date increased by approximately $5.7 million,
primarily the result of increased borrowing levels during the first half of
fiscal 1996 compared to the fiscal 1995.
Income before taxes increased by $35.2 million, or 43.0% for the second
quarter and $62.0 million, or 39.6% year-to-date over the prior year, primarily
reflecting the combined result of improved operations from base companies, along
with earnings contributed by acquisitions, net of increased interest costs and
corporate expenses. The effective income tax rate year-to-date is 39.3%
compared with 39.5% for the comparative period in fiscal 1995.
Weighted average shares of 128.4 million for the quarter ended
March 31, 1996 were 17.1 million shares greater than the 111.3 million at
March 31, 1995, primarily the result of acquisitions for stock and conversion of
Series AA Preferred Stock effective February 9, 1996.
The Company now plans to adopt Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of" in the first quarter of fiscal 1997. It is not
expected to have a material effect on the Company's financial statements.
On April 17, 1996, the Company announced that its Board of Directors has
approved the structuring of its businesses, IKON and Unisource, under separate
ownership in order to maximize the future growth potential of both businesses.
The Company is actively considering a variety of alternatives for separating the
two businesses. The Company plans to reach a decision as to the method of
separation by the end of June, with an estimated completion date of not later
than December 31, 1996.
Financial Condition and Liquidity
---------------------------------
The Company's operations for the first six months of fiscal 1996 generated
$154 million in cash. This cash, along with increased debt levels, funded the
Company's major cash usages for the first half of fiscal 1996, primarily
acquisitions, capital expenditures and dividends.
Debt, excluding finance subsidiaries, was $975 million at March 31, 1996,
an increase of $343 million from the Company's debt balance at
September 30, 1995 of $632 million, but only a $50 million increase for the
second quarter. In November 1995, the Company filed a shelf registration with
the SEC under which it could issue up to $750 million of debt or equity
securities. On December 11, 1995, the Company issued $300 million of 30 year
bonds with a stated interest rate of 6.75% to the public at a discount of 98.48%
under this shelf. The proceeds were used to repay short term borrowings. The
Company had a total of $600 million in bank credit commitments as of
March 31, 1996. Short term borrowings supported by these facilities totaled $163
million leaving $437 million unused and available. At March 31, 1996, debt as a
percentage of capitalization was 32.1% and the current ratio was 1.8 to 1.
The Company filed a shelf registration for 10 million shares of common
stock in January 1996. Shares issued under this registration statement are
being used primarily for acquisitions. Approximately 5.8 million shares have
been issued under this shelf registration through March 31, 1996. A shelf
registration statement for 5 million shares of common stock, which will also be
used for acquisitions, was filed in March 1996.
The Company estimated that total cash expenditures in connection with the
Unisource restructuring plan will amount to $143 million. In addition to the
$112 million spent through fiscal 1995, $23 million was expended in the first
six months of fiscal 1996, totaling $135 million spent to date. Unisource
anticipates spending an additional $8 million during the remainder of fiscal
1996. The remaining commitment under Unisource's $300 million 10 year
information technology outsourcing agreement, which was effective
January 1, 1994, is $195 million at March 31, 1996. The foregoing commitments
are anticipated to be funded from Unisource's operating cash flow.
Finance subsidiaries debt grew by $180 million from September 30, 1995, a
result of increased leasing activity. During the six months ended
March 31, 1996, IKON Capital issued an additional $169.5 million under its
medium term notes program which began in July 1994. At March 31, 1996, $741.5
million of medium term notes remain outstanding with a weighted interest rate of
6.7%, leaving $728.5 million available under this program. Under its $125
million asset securitization agreement commenced in September 1994, IKON Capital
sold $26.5 million in direct financing leases during the first half of fiscal
1996, replacing those leases liquidated and leaving the amount of contracts sold
unchanged.
The Company believes that its operating cash flow together with unused
lines of credit and other financing arrangements will be sufficient to finance
current operating requirements including capital expenditures, acquisitions and
restructuring and transformation programs.
PART II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
On January 25, 1996, the Company held its annual meeting of shareholders,
at which eleven directors were elected to hold office until election of their
successors. The shareholders also voted on the following proposals: 1) a
proposal to amend the Amended Articles of Incorporation of the Company to
increase the number of shares of common stock which the Company shall have
authority to issue from 150 million to 300 million shares; and 2) a proposal to
amend the Code of Regulations of the Company to fix the minimum number of
directors at seven and the maximum number of directors at sixteen and to permit
the Board of Directors to change the number of directors fixed by the
shareholders within the minimum and maximum numbers established by the Code of
Regulations.
The following sets forth the tabulation of votes with respect to the above
proposals:
Proposal to Elect Directors For Withheld
- ---------------------------- --- --------
Paul J. Darling, II 91,449,481 665,128
William F. Drake 90,614,598 1,500,011
James J. Forese 91,462,419 652,191
Frederick S. Hammer 91,744,188 370,421
Barbara B. Hauptfuhrer 91,449,913 664,697
Dana G. Mead 86,148,267 5,966,343
Ray B. Mundt 91,726,217 388,393
Paul C. O'Neill 91,447,351 667,258
Rogelio G. Sada 91,417,963 696,647
James W. Stratton 91,463,861 650,748
John E. Stuart 91,735,500 379,110
For Against Abstain
--- ------- -------
Proposal to Amend Articles
of Incorporation: 82,886,029 8,666,370 562,210
Proposal to Amend Code of
Regulations: 75,188,332 14,348,317 2,577,960
All proposals were routine; therefore, no broker non-votes were recorded.
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) Amended and Restated Articles of Incorporation
of Alco Standard Corporation.
Exhibit No. (3.2) Amended and Restated Code of Regulations of
Alco Standard Corporation.
Exhibit No. (4.2) Amendment No. 2 dated as of December 1, 1994,
Amendment No. 3 dated as of March 17, 1995, and Amendment No. 4
dated as of March 26, 1996 to Revolving Credit and Acceptance
Agreement dated as of April 21, 1993, which was filed as Exhibit 4.2
to Alco's 1993 Form 10-K and 1994 Form 10-K.
Exhibit No. (10.20) First Amendment dated as of September 15, 1995
and Second Amendment dated as of March 15, 1996 to Receivables
Transfer Agreement dated as of September 23, 1994 among IKON Capital,
Inc., Twin Towers, Inc. and Deutsche Bank AG, New York Branch, which
was filed as Exhibit 10.20 to Alco's 1994 Form 10-K/A.
Exhibit No. (10.1) Alco Standard Corporation Amended and Restated
Long Term Incentive Plan.
Exhibit No. (10.4) Alco Standard Corporation Amended and Restated
Partners' Stock Purchase Plan.
Exhibit No. (10.5) Alco Standard Corporation Amended and Restated
1995 Stock Option Plan.
Exhibit No. (11) Computation of Earnings per Share
Exhibit No. (27) Financial Data Schedule.
(b) Reports on Form 8-K
On March 8, 1996, the registrant filed a Current Report on
Form 8-K to file, under Item 5 of the form, the announcement
made March 4, 1996 of the name change of the Company's
office products group from Alco Office Products to IKON
Office Solutions, Inc.
On April 22, 1996, the registrant filed a Current Report on
Form 8-K to file, under Item 5 of the form, the announcement
made April 17, 1996 of the decision to structure the Company's
two businesses, IKON Office Solutions, Inc. and Unisource
Worldwide, Inc., under separate ownership.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized. This report has also been signed by the
undersigned in his capacity as the chief accounting officer of the Registrant.
ALCO STANDARD CORPORATION
Date May 14, 1996 /s/ Michael J. Dillon
--------------- ---------------------
Michael J. Dillon
Vice President and Controller
(Chief Accounting Officer)
INDEX TO EXHIBITS
-----------------
Exhibit Number
- --------------
(3.1) Amended and Restated Articles of Incorporation
of Alco Standard Corporation.
(3.2) Amended and Restated Code of Regulations of
Alco Standard Corporation.
(4.2) Amendment No. 2 dated as of December 1, 1994,
Amendment No. 3 dated as of March 17, 1995, and Amendment No. 4
dated as of March 26, 1996 to Revolving Credit and Acceptance
Agreement dated as of April 21, 1993.
(10.20) First Amendment dated as of September 15, 1995
and Second Amendment dated as of March 15, 1996 to Receivables
Transfer Agreement dated as of September 23, 1994 among IKON
Capital, Inc., Twin Towers, Inc.
and Deutsche Bank AG, New York Branch.
(10.1) Alco Standard Corporation Amended and Restated
Long Term Incentive Plan.
(10.4) Alco Standard Corporation Amended and Restated
Partners' Stock Purchase Plan.
(10.5) Alco Standard Corporation Amended and Restated
1995 Stock Option Plan.
(11) Computation of Earnings per Share
(27) Financial Data Schedule.