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IKON Announces Results for the Third Quarter of Fiscal Year 2006
MALVERN, Pa July , 2006–IKON Office Solutions
* EPS from Continuing Operations up 17%; Increases 27% Excluding Debt Extinguishment
* Equipment Revenue Grows for Third Consecutive Quarter; Color Equipment Revenue up 13%
IKON
Office Solutions , the world’s largest independent channel for document
management systems and services, today reported results for the quarter
ended June 30, 2006. Net income from continuing operations for the
third quarter was $27 million, or $0.20 per diluted share, including a
$0.02 charge for a loss on early extinguishment of debt. Excluding this
charge, earnings per diluted share were $0.22, exceeding the Company’s
previously communicated EPS range of $0.19 to $0.21, and representing a
27% increase over the same period last year.Total revenue for the third
quarter of fiscal year 2006 was $1.05 billion, compared to $1.10
billion for the third quarter of fiscal year 2005. The expected decline
resulted from the Company’s decision to sell or exit unprofitable and
non-core businesses. Targeted revenue, which represents 98% of total
revenue, declined 1% year over year.”During the third quarter, color
equipment revenue continued to perform well, as placements increased
40% and revenue increased 13% year over year. In addition, we
experienced strong placement growth in the office segment and strong
revenue growth in the production segment,” said Matthew J. Espe, IKON’s
Chairman and Chief Executive Officer. “In a challenging market, we have
grown equipment revenue for the last three quarters, with recent
strength coming from new product introductions from Canon and Ricoh, as
well as our co-branded initiatives with Konica Minolta.”Selling and
administrative (S&A) expenses of $311 million in the quarter
decreased 9%, or $29 million, compared to the third quarter of fiscal
year 2005. Operating income of $54 million increased 10% year over
year.”Our steady progress managing S&A expenses resulted in an
expense-to-revenue ratio of 29.7% this quarter, in line with our
full-year goal to achieve an expense-to-revenue ratio below 30%,” Espe
said. “Our commitment to cost containment and productivity improvements
contributed to a strong operating income margin of 5.2% for the quarter.”
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