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 user 2003-10-29 at 10:25:00 am Views: 102
  • #8223

    Ikon Office Solutions Inc., which sells and leases copiers and office equipment, on Monday said its fiscal fourth-quarter profit fell on declining profit margins on its copiers and printers.

    The company also said it expects a decline in profit on flat revenue for the current quarter.

    The Valley Forge, Pennsylvania, company said net income was $32.4 million, or 21 cents a share in the fourth quarter, compared with $39.3 million, or 25 cents per share.

    Excluding a $7 million gain from early debt repayment, the company posted a profit of 18 cents a share.

    Revenue at Ikon, which offers office equipment made by manufacturers such as Canon Inc. and Ricoh Co. Ltd, fell to $1.20 billion from $1.21 billion a year ago.

    Analysts on average had forecast a profit of 16 cents a share and revenue of $1.11 billion, according to Reuters Research, a unit of Reuters Group Plc. The company’s gross profit margin fell to 29.2 percent from 32.5 percent a year ago.

    “That margin pressure essentially offset the improved profitability we should have delivered (from) stronger core revenues,” Ikon Chairman and Chief Executive Matthew Espe said on a conference call with analysts.

    Net sales of equipment, which represents half of the company’s total sales, fell nearly 1 percent, reflecting a technology hardware business. Services revenue fell 2.8 percent.

    For the full fiscal year ending in September, Ikon’s net income fell to $116 million from $150.3 million, while total revenue slipped to $4.7 million from $4.9 million.

    The company said it expects its first-quarter earnings, ending in December, to be in a range of 17 cents to 19 cents a share, compared with 21 cents a year ago. It projected flat revenue.

    It expects fiscal 2004 earnings, ending in September, to be in the range of 82 cents to 87 cents a share, compared with 75 cents a share in 2003. It projected a 1 percent increase in revenue.

    Analysts projected Ikon’s first quarter profit at 18 cents a share, and 88 cents a share for the full year.

    Last year, the company exited its telephony business, sold its technology education business and closed or sold several digital print centers and technology services locations.

    Shares of Ikon edged up 2 cents to $8.10 on the New York Stock Exchange. Ikon shares are up 20 percent from July, when the company warned of weakness in its fiscal fourth quarter.


    Ikon Office Solutions Inc.’s fiscal fourth-quarter net income declined 17.5% due to Ikon Office Solutions Inc.’s fiscal fourth-quarter net income declined 17.5% due to declines in its gross profit margin from a year ago. However, the distributor of copiers, printers and fax machines expects fiscal 2004 results to improve over fiscal 2003, as it carries over sales momentum from the latest quarter.   face=Arial Dow Jones Report with Figures

    In other news, Ikon reported yesterday,


    New Executive Appointment Affirms IKON’s Services Strategy IKON Office Solutions yesterday named David J. Rupert as Vice President of Management Services, reporting directly to Matthew J. Espe, IKON’s Chairman and Chief Executive Officer. The appointment reflects IKON’s strong commitment to enhancing document management efficiency through a comprehensive array of facilities management solutions, including on-site copy and mailroom services and fleet management. “Our customers look to IKON for solutions that turn document and printing strategies into measurable business advantages that streamline workflow and reduce long-term costs,” said Mr. Espe. “David Rupert is an industry veteran who knows how to achieve these results and we look forward to the leadership, energy and vision he will provide to our growing management services business.”

    Mr. Rupert, who has spent more than 25 years in corporate and consulting roles, will provide strategic direction for IKON’s management services sales and operations, managing the development of strategies and processes to drive growth and operational excellence. He will also lead the implementation and roll out of IKON’s recently announced IKON Service Excellence(SM) program – a proprietary outsourcing methodology to improve efficiency through streamlined document management workflow.

    Prior to joining IKON, Rupert was Chief Development Officer of Uniscribe Professional Services, an industry innovator in offering digital document management services, off-site facility management outsourcing and reprographics. Before that, Mr. Rupert was President/COO and then CEO of HQ Global Workplaces, the world’s largest provider of fully serviced office space and business support services. Prior to joining HQ Global Workplaces, Mr. Rupert spent 17 years at Pitney Bowes. He was President of Pitney Bowes Business Services, a division of Pitney Bowes providing a range of business services including mail, document and records management. He was instrumental in developing the initial business plan for the division, which he started in 1987 and helped grow to a $550 million unit by the late-1990s.

    Mr. Rupert graduated from Georgetown University with a BA in Political Science, and holds a Masters of Management from the Yale School of Management.