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
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report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from to
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Commission file number 1-5964
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IKON OFFICE SOLUTIONS, INC.
(formerly Alco Standard Corporation)
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(Exact name of registrant as specified in its charter)
OHIO 23-0334400
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(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)
ALCO STANDARD CORPORATION
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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
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* 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
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* 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
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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
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Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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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
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Total current assets 1,805,430 1,509,155
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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
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198,377 188,818
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Other Assets
Goodwill 1,169,257 1,087,210
Miscellaneous 133,150 88,679
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1,302,407 1,175,889
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Net Assets of Discontinued Operations 1,489,201
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$ 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
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Total current liabilities 1,144,657 1,257,987
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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)
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1,404,457 2,255,504
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$ 4,377,298 $ 5,384,595
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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
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1996 1995
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Revenues
Net Sales $ 638,828 $ 515,012
Service and rental revenue 453,860 353,772
Financial subsidiaries 47,746 31,795
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1,140,434 900,579
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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
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1,059,022 831,904
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Operating Income 81,412 68,675
Interest expense 8,201 7,340
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Income from continuing operations before taxes
and extraordinary loss 73,211 61,335
Taxes on Income 28,552 24,398
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Income from continuing operations before
extraordinary loss 44,659 36,937
Discontinued operations 20,151 26,229
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Income before extraordinary loss 64,810 63,166
Extraordinary loss from extinguishment of debt,
net of tax benefit (12,156)
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Net Income 52,654 63,166
Less: Preferred Dividends 4,885 7,664
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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)
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$0.36 $0.47
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(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)
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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)
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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
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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)
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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
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Net cash provided by financing activities 344,624 296,806
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Net increase (decrease) in cash and cash equivalents 15,367 (7,050)
Cash and cash equivalents at beginning of year 46,056 66,519
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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
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1996 1995
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Revenues $1,728,533 $1,716,165
========== ==========
Income before taxes $ 34,743 $ 43,282
Tax expense 14,592 17,053
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Net income $ 20,151 $ 26,229
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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)
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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
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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
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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%
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INCOME BEFORE TAXES:
Operating income $81.4 $68.6 18.7%
Interest expense (8.2) (7.3)
---- ----
$73.2 $61.3 19.4%
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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.