SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 4, 1998
IKON Office Solutions, Inc.
(Exact name of registrant as specified in its charter)
OHIO File No. 1-5964 23-0334400
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
P.O. Box 834, Valley Forge, Pennsylvania 19482
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Registrant's telephone number, including area code: (610) 296-8000
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Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
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On November 4, 1998, IKON Office Solutions, Inc. ("IKON"or "the Registrant")
announced its financial results for the quarter and fiscal year ended September
30, 1998. IKON reported a net loss of $46.2 million, or $.38 per share in the
fourth quarter before transformation costs. This loss includes pretax charges
of $40.4 million for expenses related to the closing of under-performing
branches, executive severance packages, and the settlement of lawsuits. After
transformation costs, the Registrant had a net loss of $61.7 million, or $.49
per share.
For the fourth quarter of fiscal 1997, IKON had net earnings of $51.4 million,
or $.35 per share, before transformation costs, and net earnings of $33.0
million, or $.21 per share, including transformation costs.
The Registrant's new management team initiated a program in the fourth quarter
of 1998 to increase productivity and reduce costs. Although IKON is beginning
to see a positive impact from this program and revenues continue to grow,
results for the quarter were still affected by declining gross margins and
certain under-performing operations. The Registrant is expanding and
accelerating its aggressive program to cut costs and increase productivity. As
a result, IKON expects its financial performance will begin to show improvement
in fiscal 1999 and that it can achieve earnings per share in the range of $.65
to $.75 for the year.
For the 1998 fiscal year's fourth quarter, revenues increased to $1.43 billion
from $1.39 billion a year ago, a 2.5% gain.
For fiscal 1998, IKON had a net loss of $32.3 million or $.38 per share, before
transformation costs. This loss includes pretax charges of $150 million.
After transformation costs, the loss was $83.1 million, or $.76 per share.
Revenues for fiscal 1998 increased to $5.6 billion from $5.1 billion in fiscal
1997, a 10% gain.
For further information, the Registrant has filed its press release dated
November 4, 1998 as an exhibit to this Report.
This Report includes or incorporates by reference information which may
constitute forward-looking statements within the meaning of the federal
securities laws. Although the Registrant believes the expectations contained in
such forward-looking statements are reasonable, no assurances can be given that
such expectations will prove correct. Such forward-looking information is based
upon management's current plans or expectations and is subject to a number of
uncertainties and risks that could significantly affect current plans,
anticipated actions and the Registrant's future financial condition and results.
These uncertainties and risks include, but are not limited to, those relating to
successfully managing the integration of acquired companies, including companies
with technical services and products that are relatively new to the
Registrant, and also including companies outside the United States, which
present additional risks relating to international operations; risks and
uncertainties relating to conducting operations in a competitive environment;
delays, difficulties, technological changes, management transitions and
employment issues associated with consolidation of business operations; risks
and uncertainties associated with the implementation of a preferred vendor
program; risks and uncertainties relating to potential year 2000 deficiencies
associated with the operation of IKON's internal systems and distributed
products; debt service requirements (including sensitivity to fluctuation in
interest rates); and general economic conditions. As a consequence, current
plans, anticipated actions and future financial condition and results may differ
materially from those expressed in any forward-looking statements made by or on
behalf of the Registrant.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(99) Press Release dated November 4, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IKON OFFICE SOLUTIONS, INC.
By: /s/MICHAEL J. DILLON
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Michael J. Dillon
Vice President and Controller
Dated: November 4, 1998