EXHIBIT 99
[IKON Office Solutions Letterhead]
News Release
Contacts:
Susan G. Gaffney Shawn T. Southard
Investor Relations Investor Relations
610-408-7292 610-408-7294
sgaffney@ikon.com ssouthard@ikon.com
IKON OFFICE SOLUTIONS REPORTS
THIRD QUARTER RESULTS
After Extensive Review of Operations, Company Takes Charges Against Earnings
New CEO Outlines Actions To Address Operating and Financial Issues
Valley Forge, Pennsylvania - August 14, 1998 - IKON Office Solutions
(NYSE: IKN) today reported financial results for the third quarter and nine
months ended June 30, 1998.
IKON said that it has completed its previously announced in-depth
review of operations under newly appointed Chief Executive Officer, James J.
Forese, and as a result has decided that it is necessary and appropriate to take
charges to earnings totaling $110 million on a pre-tax basis. $94 million of
those charges is being applied against third quarter earnings and $16 million
against second quarter earnings, which were reported earlier and are now being
restated.
With the effect of the $94 million in charges for the third quarter,
IKON had a net loss for the quarter of $77.9 million, or $0.61 per share,
excluding the Company's transformation costs. For the same period of fiscal
1997, IKON had net income of $45 million, or $0.30 per share, before
transformation costs. After transformation costs, the net loss for the third
quarter of 1998 was $88.6 million, or $0.69 per share. In the third quarter a
year ago, net income, after transformation costs, was $30.1 million, or $0.19
per share. Revenues for the third quarter this year rose to $1.4 billion, a 6%
gain compared to the third quarter of 1997.
Restating second quarter results to reflect the impact of the $16
million of charges, the Company is reducing earnings for that quarter by 23%,
resulting in revised net income of $42.1 million, or $0.27 per share, before
transformation costs. After transformation costs, the effect of the restatement
reduces second quarter earnings to $30.3 million, or $0.19 per share.
Previously,
-2-
the Company reported earnings for the quarter, after transformation costs, of
$39.3 million, or $0.25 per share.
For the first nine months of fiscal 1998, the Company earned $13.9
million, excluding transformation costs, but after deducting $14.7 million of
dividend payments for preferred shares, the Company lost $0.8 million, or $0.01
per share. After transformation costs, the loss was $21.4 million, or $0.27 per
share. Revenues for the first nine months increased to $4.2 billion, a 12.5%
growth rate compared to the first nine months of fiscal 1997.
"Obviously, the bottom-line results we are reporting today are
unacceptable," said Mr. Forese. "Having conducted an in-depth review of our
business, however, we believe we have clearly identified the issues that have
impeded IKON's progress. We are moving quickly and decisively to address the
problems and, as part of this effort, have concluded that it is necessary to
take substantial charges to our earnings. These charges address a number of
operating and financial issues and enable us to focus on building IKON's
business as we move forward.
"IKON's business has strong fundamentals, including a large and growing
customer base, state-of-the-art product and service offerings and talented
people throughout the organization. Drawing on those strengths, we must address
the changing dynamics of this industry more aggressively than we have in the
past. While our revenues and our customer base continue to grow, our environment
is increasingly cost-competitive, and the market is moving more rapidly than
ever toward digitization, color and other high-end products, as well as
outsourcing services. We will concentrate our resources on these challenges -
and the opportunities that come with them.
"Despite IKON's earnings reports in recent quarters," Mr. Forese added,
" the outstanding performance of some of our key regional operations has
demonstrated that, with proper execution, our basic business strategy is the
correct one for the Company. But, in IKON as a whole, execution has been
inconsistent, and we are determined to end that problem as quickly as possible."
Categories of Charges to Earnings
Mr. Forese said the charges to earnings for the third quarter fall into
four categories:
* Increases to accounting estimates for lease default and accounts
receivable reserves, altogether totaling $48 million: $28 million
for lease defaults and $20 million for accounts receivable;
-3-
* Breakdown in the execution of internal controls at four operating
units, resulting in $19 million of adjustments in the third
quarter and the $16 million charge to second quarter earnings;
* Adjustments at other operating units that led to a charge of
approximately $7 million; and
* A $20 million loss from an asset impairment in a Technology
Services company which is engaged in the development of high-end
custom software applications.
Key Issues and Actions
The review of operations conducted by IKON identified several
priorities that the Company's management is moving to address in order to
improve the execution of its business strategy. These priorities include:
enhancement of IKON's cost-competitiveness; further centralization of management
controls; more consistency in credit and financial policies; and the creation of
a key-management incentive compensation structure that emphasizes long-term
operating performance and the success of the Company as a whole.
To address these priorities, Mr. Forese outlined a program
that includes, among other measures:
* Restructuring all Business Services districts nation-wide using
IKON's most effective and efficient district, the Northeast, as
the model;
* Appointing the former district president of the Northeast as
senior vice president of the Business Services group and also
charging him to work with IKON's senior management to implement
the Northeast model throughout Business Services;
* Forming an integrated marketing committee for the first time, to
carry out a Company-wide marketing program designed not only to
build the customer base but also to control marketing costs;
* Implementing methods for delivering lower-margin products in the
most cost-effective manner possible in all product areas;
* Capturing more-profitable, value-added opportunities in high-end
and color products;
* Continuing to seek vendor support for more competitive pricing;
-more-
* Suspending the Company's acquisition program in North America for
six to nine months;
* Increasing field inspections of finance and operations by
headquarters personnel;
* Centralizing credit approval authority at the Company's finance
subsidiary, IOS Capital, rather than at the business-unit level;
* Changing the reporting structure so that finance personnel in
each business unit report directly to the corporate chief
financial officer with a dotted line to the unit's operations
leader;
-more-
* Centralizing all information technology resources under the
corporate chief information officer;
* Enhancing training to improve the retention and quality of
management and sales people;
* Analyzing and revising the incentive compensation system to put
into place a more balanced system with a focus on sustained,
high-quality results not only for individual business units but
also for the Company as a whole; and
* Establishing strict accountability and consistency of performance
as the number-one priority for management and employees.
"We recognize that only improved performance over time will overcome
the disappointments of past quarters and demonstrate that we can deliver
shareholder value. We anticipate seeing a modest improvement in operating
performance beginning in the fourth quarter and an increasingly positive impact
from a more effective and disciplined execution of our strategy in 1999 and
beyond. However, at this time we are unable to provide specific projections
about future growth, and our expectation is that a strong performance will speak
for itself. We are confident in the future of IKON and believe that we are on
the right path to realize the Company's potential," Mr. Forese concluded.
IKON Office Solutions (www.ikon.com) is one of the world's leading
office technology companies, providing customers with total office solutions
from copier and printing systems, computer networking to copy center management,
technology training and electronic file conversion. With fiscal 1997 revenues of
more than $5 billion, IKON has more than 1,100 locations in the U.S., Canada,
Mexico, the United Kingdom, France, Germany and Denmark.
This news release includes information that may constitute forward-looking
statements made pursuant to the safe harbor provisions of the federal
securities laws. Although IKON believes the expectations contained in such
forward-looking statements are reasonable, it can give no assurance that
such expectations will prove correct. This information is subject to risk
and uncertainties such as those relating to conducting activities in a
competitive environment; delays, difficulties, management transitions and
employment issues associated with consolidation of business operations;
managing a program to acquire and integrate new companies; risks and
uncertainties associated with implementation of a preferred vendor program
and general economic conditions. Therefore, actual results may differ
materially from the forward-looking statements.
# # # #
-5-
IKON Office Solutions, Inc.
FINANCIAL SUMMARY (in thousands, except earnings per share)
Three Months Ended June 30
1998 1997 % Change
Revenues
Net sales $721,044 $714,461 0.9%
Service and rentals 594,806 542,395 9.7
Finance income 78,878 59,450 32.7
- ----------------------------------------------------------------------------------------------------------------
1,394,728 1,316,306 6.0
- ----------------------------------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 520,442 455,358 14.3
Service and rental costs 307,632 273,219 12.6
Finance interest expense 33,171 26,350 25.9
Selling and administrative 587,772 473,699 24.1
Loss from asset impairment 20,000
Transformation costs 16,539 22,961
- ----------------------------------------------------------------------------------------------------------------
1,485,556 1,251,587 18.7
- ----------------------------------------------------------------------------------------------------------------
Operating income (loss) (90,828) 64,719 (240.3)
Interest expense 17,684 12,089 46.3
- ----------------------------------------------------------------------------------------------------------------
Income (loss) before taxes (108,512) 52,630 (306.2)
Taxes on income (19,867) 22,502 (188.3)
- ----------------------------------------------------------------------------------------------------------------
Net income (loss) (88,645) 30,128 (394.2)
- ----------------------------------------------------------------------------------------------------------------
Less preferred dividends 4,885 4,885
- ----------------------------------------------------------------------------------------------------------------
Available to common shareholders $(93,530) $25,243
======== =======
Earnings (Loss) Per Common Share ($0.69) $0.19
======== =======
Weighted Average Shares Outstanding 135,581 132,781 2.1%
======== =======
Earnings (Loss) Per Common Share, assuming dilution ($0.69) $0.19
======== =======
Weighted Average Shares Outstanding, assuming dilution 135,581 133,839 1.3%
======== =======
Continuing Operations Analysis:
Gross profit %, net sales 27.8% 36.3%
Gross profit %, service and rentals 48.3% 49.6%
Gross profit %, finance subsidiaries 57.9% 55.7%
Total gross profit % 38.2% 42.7%
SG&A as a % of revenue 42.1% 36.0%
Operating income % of revenue -6.5% 4.9%
Oper inc % of rev, excl trans costs and write off -3.9% 6.7%
-6-
IKON Office Solutions, Inc.
FINANCIAL SUMMARY (in thousands, except earnings per share)
Nine Months Ended June 30
1998 1997 % Change
Revenues
Net sales $2,236,092 $2,066,085 8.2%
Service and rentals 1,740,694 1,508,304 15.4
Finance income 223,788 160,211 39.7
- -----------------------------------------------------------------------------------------
4,200,574 3,734,600 12.5
- -----------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 1,490,189 1,319,100 13.0
Service and rental costs 892,274 740,422 20.5
Finance interest expense 96,876 69,731 38.9
Selling and administrative 1,586,547 1,319,008 20.3
Loss from asset impairment 20,000
Transformation costs 54,250 98,494
- -----------------------------------------------------------------------------------------
4,140,136 3,546,755 16.7
- -----------------------------------------------------------------------------------------
Operating income 60,438 187,845 (67.8)
Interest expense 50,956 31,895
- -----------------------------------------------------------------------------------------
Income from continuing operations before taxes
and extraordinary loss 9,482 155,950 (93.9)
Taxes on income 30,852 66,548 (53.6)
- -----------------------------------------------------------------------------------------
Income (loss) from continuing operations before
extraordinary loss (21,370) 89,402 (123.9)
Discontinued operations 20,151
- -----------------------------------------------------------------------------------------
Income (loss) before extraordinary loss (21,370) 109,553
Extraordinary loss from early extinguishment
of debt, net of tax benefit (12,156)
- -----------------------------------------------------------------------------------------
Net income (loss) (21,370) 97,397
- -----------------------------------------------------------------------------------------
Less preferred dividends 14,655 14,655
- -----------------------------------------------------------------------------------------
Available to common shareholders $(36,025) $82,742
========== ==========
Earnings (Loss) Per Common Share
Continuing operations ($0.27) $0.56
Discontinued operations $0.15
Extraordinary loss ($0.09)
- -----------------------------------------------------------------------------------------
($0.27) $0.62
========== ==========
Weighted Average Shares Outstanding 134,799 133,410 1.0%
========== ==========
Earnings (Loss) Per Common Share, assuming dilution
Continuing operations ($0.27) $0.56
Discontinued operations $0.15
Extraordinary loss ($0.09)
- -----------------------------------------------------------------------------------------
($0.27) $0.62
========== ==========
Weighted Average Shares Outstanding, assuming dilution 134,799 134,937 (0.1%)
========== ==========
Continuing Operations Analysis:
Gross profit %, net sales 33.4% 36.2%
Gross profit %, service and rentals 48.7% 50.9%
Gross profit %, finance subsidiaries 56.7% 56.5%
Total gross profit % 41.0% 43.0%
SG&A as a % of revenue 37.8% 35.3%
Operating income % of revenue 1.4% 5.0%
Oper inc % of rev, excl trans costs and write off 3.2% 7.7%
-7-
IKON Office Solutions, Inc.
FINANCIAL SUMMARY (in thousands, except earnings per share)
Nine Months Ended June 30, 1998
Restated
1st Qtr. 2nd Qtr. 3rd Qtr. Total
Revenues
Net sales $728,105 $786,943 $721,044 $2,236,092
Service and rentals 575,822 570,066 594,806 1,740,694
Finance income 70,330 74,580 78,878 223,788
- -----------------------------------------------------------------------------------------------------------------------------
1,374,257 1,431,589 1,394,728 4,200,574
- -----------------------------------------------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 468,200 501,547 520,442 1,490,189
Service and rental costs 285,283 299,359 307,632 892,274
Finance interest expense 30,746 32,959 33,171 96,876
Selling and administrative 488,091 510,684 587,772 1,586,547
Loss from asset impairment 20,000 20,000
Transformation costs 19,519 18,192 16,539 54,250
- -----------------------------------------------------------------------------------------------------------------------------
1,291,839 1,362,741 1,485,556 4,140,136
- -----------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 82,418 68,848 (90,828) 60,438
Interest expense 17,029 16,243 17,684 50,956
- -----------------------------------------------------------------------------------------------------------------------------
Income before taxes 65,389 52,605 (108,512) 9,482
Taxes on income 28,405 22,314 (19,867) 30,852
- -----------------------------------------------------------------------------------------------------------------------------
Net income 36,984 30,291 (88,645) (21,370)
- -----------------------------------------------------------------------------------------------------------------------------
Less preferred dividends 4,885 4,885 4,885 14,655
- -----------------------------------------------------------------------------------------------------------------------------
Net income available to common shareholders $32,099 $25,406 $(93,530) $(36,025)
Basic EPS $0.24 $0.19 ($0.69) ($0.27)
========= ========= ========= =========
Shares 133,729 134,974 135,581 134,799
========= ========= ========= =========
Diluted EPS $0.24 $0.19 ($0.69) ($0.27)
========= ========= ========= =========
Shares 134,767 136,302 135,581 134,799
========= ========= ========= =========
Operational Analysis:
Gross profit %, net sales 35.7% 36.3% 27.8% 33.4%
Gross profit %, service and rentals 50.5% 47.5% 48.3% 48.7%
Gross profit %, financing 56.3% 55.8% 57.9% 56.7%
Total gross profit 42.9% 41.8% 38.2% 41.0%
SG&A as a % of revenue 35.5% 35.7% 42.1% 37.8%
Operating income % of revenue 6.0% 4.8% -6.5% 1.4%
Oper. inc. % of rev., excl. trans costs & write off 7.4% 6.1% -3.9% 3.2%
-8-
IKON OFFICE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
( in thousands )
June 30 September 30
ASSETS 1998 1997
Current Assets
Cash $4,633 $21,341
Accounts receivable, net 760,872 765,660
Finance receivables, net 800,919 670,784
Inventories 475,827 442,207
Prepaid expenses 108,133 101,294
Deferred taxes 122,028 124,520
----------- -----------
Total current assets 2,272,412 2,125,806
----------- -----------
Investments and Long-Term Receivables 16,482 17,508
Long-term Finance Receivables, net 1,535,008 1,331,372
Equipment on Operating Leases, net 112,870 101,900
Property and Equipment, at cost 498,725 462,360
Less accumulated depreciation 237,809 222,815
----------- -----------
260,916 239,545
----------- -----------
Other Assets
Goodwill 1,354,736 1,348,133
Miscellaneous 155,817 159,622
----------- -----------
1,510,553 1,507,755
----------- -----------
$5,708,241 $5,323,886
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $125,073 $60,794
Current portion of long-term debt, finance subsidiaries 645,911 251,711
Notes payable 90,677 266,979
Trade accounts payable 224,838 206,547
Accrued salaries, wages and commissions 100,711 110,628
Deferred revenues 205,050 208,612
Other accrued expenses 250,795 268,511
----------- -----------
Total current liabilities 1,643,055 1,373,782
----------- -----------
Long-Term Debt 664,567 490,235
Long-Term Debt, Finance Subsidiaries 1,433,635 1,494,043
Deferred Taxes 340,321 330,996
Other Long-Term Liabilities 138,616 153,182
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 135,705 shares 677,681 677,681
Retained earnings 526,932 574,646
Foreign currency translation adjustment (1,198) (728)
Cost of common shares in treasury: 6/98 - 179 shares;
9/97 - 2,401 shares (5,538) (60,121)
----------- -----------
1,488,047 1,481,648
----------- -----------
$5,708,241 $5,323,886
=========== ===========
-9-
August 14, 1998
Attached are supplemental financial summaries of IKON Office Solutions for the
third quarter of 1998, excluding the effect of transformation costs on operating
income.
This information is provided for additional analysis and is not intended to be a
presentation in accordance with generally accepted accounting principles.
-10-
This schedule presents the financial results of IKON Office Solutions, Inc.
excluding the transformation costs amounting to ($.08) per share in the third
quarter of fiscal 1998 and ($.11) in the third quarter of fiscal 1997. (Diluted
EPS calculation)
IKON Office Solutions, Inc.
FINANCIAL SUMMARY (in thousands, except earnings per share)
Three Months Ended June 30
1998 1997 % Change
Revenues
Net sales $721,044 $714,461 0.9%
Service and rentals 594,806 542,395 9.7
Finance income 78,878 59,450 32.7
- ---------------------------------------------------------------------------------------
1,394,728 1,316,306 6.0
- ---------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 520,442 455,358 14.3
Service and rental costs 307,632 273,219 12.6
Finance interest expense 33,171 26,350 25.9
Selling and administrative 587,772 473,699 24.1
Loss from asset impairment 20,000
- ---------------------------------------------------------------------------------------
1,469,017 1,228,626 19.6
- ---------------------------------------------------------------------------------------
Operating income (loss) (74,289) 87,680 (184.7)
Interest expense 17,684 12,089 46.3
- ---------------------------------------------------------------------------------------
Income (loss) before taxes (91,973) 75,591 (221.7)
Taxes on income (14,079) 30,538 (146.1)
- ---------------------------------------------------------------------------------------
Net income (loss) (77,894) 45,053 (272.9)
- ---------------------------------------------------------------------------------------
Less preferred dividends 4,885 4,885
- ---------------------------------------------------------------------------------------
Available to common shareholders $(82,779) $40,168
========= =========
Earnings (Loss) Per Common Share ($0.61) $0.30
========= =========
Weighted Average Shares Outstanding 135,581 132,781 2.1%
========= =========
Earnings (Loss) Per Common Share, assuming dilution ($0.61) $0.30
========= =========
Weighted Average Shares Outstanding, assuming dilution 135,581 133,839 1.3%
========= =========
Continuing Operations Analysis:
Gross profit %, net sales 27.8% 36.3%
Gross profit %, service and rentals 48.3% 49.6%
Gross profit %, finance subsidiaries 57.9% 55.7%
Total gross profit % 38.2% 42.7%
SG&A as a % of revenue 42.1% 36.0%
Operating income % of revenue, excl. write off -3.9% 6.7%
This information is provided for additional analysis and is not intended to be a
presentation in accordance with generally accepted accounting principles.
-11-
This schedule presents the financial results of IKON Office Solutions, Inc.
excluding the transformation costs amounting to ($.26) per share in the first
nine months of fiscal 1998 and ($.47) in the first nine months of fiscal 1997.
(Diluted EPS calculation)
IKON Office Solutions, Inc.
FINANCIAL SUMMARY (in thousands, except earnings per share)
Nine Months Ended June 30
1998 1997 % Change
Revenues
Net sales $ 2,236,092 $ 2,066,085 8.2%
Service and rentals 1,740,694 1,508,304 15.4
Finance income 223,788 160,211 39.7
- ---------------------------------------------------------------------------------------------------
4,200,574 3,734,600 12.5
- ---------------------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 1,490,189 1,319,100 13.0
Service and rental costs 892,274 740,422 20.5
Finance interest expense 96,876 69,731 38.9
Selling and administrative 1,586,547 1,319,008 20.3
Loss from asset impairment 20,000
- ---------------------------------------------------------------------------------------------------
4,085,886 3,448,261 18.5
- ---------------------------------------------------------------------------------------------------
Operating income 114,688 286,339 (59.9)
Interest expense 50,956 31,895
- ---------------------------------------------------------------------------------------------------
Income from continuing operations before taxes
and extraordinary loss 63,732 254,444 (75.0)
Taxes on income 49,840 101,021 (50.7)
- ---------------------------------------------------------------------------------------------------
Income from continuing operations before
extraordinary loss 13,892 153,423 (90.9)
Discontinued operations 20,151
- ---------------------------------------------------------------------------------------------------
Income before extraordinary loss 13,892 173,574
Extraordinary loss from early extinguishment
of debt, net of tax benefit (12,156)
- ---------------------------------------------------------------------------------------------------
Net income 13,892 161,418
- ---------------------------------------------------------------------------------------------------
Less preferred dividends 14,655 14,655
- ---------------------------------------------------------------------------------------------------
Available to common shareholders $ (763) $ 146,763
========= =========
Earnings (Loss) Per Common Share
Continuing operations ($0.01) $1.04
Discontinued operations $0.15
Extraordinary loss ($0.09)
- ---------------------------------------------------------------------------------------------------
($0.01) $1.10
========= =========
Weighted Average Shares Outstanding 134,799 133,410 1.0%
========= =========
Earnings (Loss) Per Common Share, assuming dilution
Continuing operations ($0.01) $1.03
Discontinued operations $0.15
Extraordinary loss ($0.09)
- ---------------------------------------------------------------------------------------------------
($0.01) $1.09
========= =========
Weighted Average Shares Outstanding, assuming dilution 134,799 134,937 (0.1%)
========= =========
Continuing Operations Analysis:
Gross profit %, net sales 33.4% 36.2%
Gross profit %, service and rentals 48.7% 50.9%
Gross profit %, finance subsidiaries 56.7% 56.5%
Total gross profit % 41.0% 43.0%
SG&A as a % of revenue 37.8% 35.3%
Operating income % of revenue, excl. write off 3.3% 7.7%
This information is provided for additional analysis and is not intended to be a
presentation in accordance with generally accepted accounting principles.
-12-
IKON Office Solutions, Inc. - excluding transformation costs
FINANCIAL SUMMARY (in thousands, except earnings per share)
Nine Months Ended June 30, 1998
Restated
1st Qtr. 2nd Qtr. 3rd Qtr. Total
Revenues
Net sales $728,105 $786,943 $721,044 $2,236,092
Service and rentals 575,822 570,066 594,806 1,740,694
Finance income 70,330 74,580 78,878 223,788
- -----------------------------------------------------------------------------------------------------------------------
1,374,257 1,431,589 1,394,728 4,200,574
- -----------------------------------------------------------------------------------------------------------------------
Costs and Expenses
Cost of goods sold 468,200 501,547 520,442 1,490,189
Service and rental costs 285,283 299,359 307,632 892,274
Finance interest expense 30,746 32,959 33,171 96,876
Selling and administrative 488,091 510,684 587,772 1,586,547
Loss from asset impairment 20,000 20,000
- -----------------------------------------------------------------------------------------------------------------------
1,272,320 1,344,549 1,469,017 4,085,886
- -----------------------------------------------------------------------------------------------------------------------
Operating income (loss) 101,937 87,040 (74,289) 114,688
Interest expense 17,029 16,243 17,684 50,956
- -----------------------------------------------------------------------------------------------------------------------
Income before taxes 84,908 70,797 (91,973) 63,732
Taxes on income 35,237 28,682 (14,079) 49,840
- -----------------------------------------------------------------------------------------------------------------------
Net income 49,671 42,115 (77,894) 13,892
- -----------------------------------------------------------------------------------------------------------------------
Less preferred dividends 4,885 4,885 4,885 14,655
- -----------------------------------------------------------------------------------------------------------------------
Net income available to common shareholders $44,786 $37,230 $(82,779) $(763)
========= ========= ========= =========
Basic EPS $0.33 $0.28 ($0.61) ($0.01)
========= ========= ========= =========
Shares 133,729 134,974 135,581 134,799
========= ========= ========= =========
Diluted EPS $0.33 $0.27 ($0.61) ($0.01)
========= ========= ========= =========
Shares 134,767 136,302 135,581 134,799
========= ========= ========= =========
Operational Analysis:
Gross profit %, net sales 35.7% 36.3% 27.8% 33.4%
Gross profit %, service and rentals 50.5% 47.5% 48.3% 48.7%
Gross profit %, financing 56.3% 55.8% 57.9% 56.7%
Total gross profit 42.9% 41.8% 38.2% 41.0%
SG&A as a % of revenue 35.5% 35.7% 42.1% 37.8%
Operating income % of revenue, excl write off 7.4% 6.1% -3.9% 3.2%
This information is provided for additional analysis and is not intended to be a
presentation in accordance with generally accepted accounting principles.