Back to GetFilings.com
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number:
MARCH 31, 1997 0-20828
DANKA BUSINESS SYSTEMS PLC
(Exact name of registrant as specified in its charter)
ENGLAND 98-0052869
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11201 DANKA CIRCLE NORTH
ST. PETERSBURG, FLORIDA 33716
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (813) 576-6003
Securities registered pursuant to Section 12(g) of the Act:
ORDINARY SHARES
1.25 p each
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or an amendment to this
Form 10-K. [ ]
As of March 31, 1997, the Registrant had 226,827,049 Ordinary Shares
outstanding, including 171,566,107 represented by American Depositary Shares
("ADS"). Each ADS represents four Ordinary Shares. The ADSs are evidenced by
American Depositary Receipts. The aggregate market value of voting shares held
by non-affiliates of the Registrant as of March 31, 1997 was $1,718,205,396
based on the average bid and asked prices of ADSs as quoted on the NASDAQ
National Market.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year ended
March 31, 1997, are incorporated by reference in Part I and Part II of this
Form 10-K.
The information called for by Part III is incorporated by reference to the
definitive Proxy Statement for the Annual Meeting of Shareholders to be held
July 25, 1997, which has been filed with the Securities and Exchange
Commission.
2
DANKA BUSINESS SYSTEMS PLC
ANNUAL REPORT ON FORM 10-K
MARCH 31, 1997
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business 3
Item 2. Properties 11
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market Price for the Registrant's Common Equity and Related Shareholder
Matters 12
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 13
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and Management 14
Item 13. Certain Relationships and Related Transactions 14
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 15
2
3
PART I
ITEM 1. BUSINESS
INTRODUCTION
Danka Business Systems PLC and its subsidiaries (the "Company") is one
of the world's largest independent suppliers of photocopiers, facsimiles and
other related automated office equipment. The Company primarily markets these
products and related services, parts and supplies on a direct basis to retail
customers. The Company also markets photocopiers, facsimiles, and related
parts and supplies on a wholesale basis to dealers. The Company principally
distributes the products of Canon, Kodak, Konica, Minolta, Ricoh, Sharp and
Toshiba. The Company became the exclusive distributor of Kodak branded
photocopiers and printers in December 1996 after completing the acquisition of
Eastman Kodak Company's Office Imaging division and facilities management
business. See -- "Acquisition of Eastman Kodak's Office Imaging Division".
The Company provides a wide range of customer-related support
services, maintenance and supply contracts, training and technical support, and
leasing arrangements. The Company's focus on customer service and the
contractual nature of its service business, combined with its service contract
renewals, provide a significant source of recurring revenue. In addition, the
Company provides outsourcing services including traditional facilities
management and strategic consulting services, advising customers on the
management of document systems and how to add efficiencies. The acquisition of
Eastman Kodak's facilities management business in December 1996 significantly
increased the scope of the Company's outsourcing operations. See --
"Acquisition of Eastman Kodak's Office Imaging Division".
The Company's principal business strategy is to increase its presence
as one of the leading independent suppliers of automated office equipment and
related services, parts and supplies in existing and new strategic geographic
markets worldwide. The Company's internal expansion has resulted from
increased product offerings, aggressive marketing to new customers and an
emphasis on providing service and supplies. The Company has expanded
externally as a result of the acquisition of selected suppliers of automated
office equipment, and throughout its history, has completed over 140
acquisitions in the industry. See -- "Acquisition Strategy". The Company
seeks to improve the profitability of the businesses it acquires by integrating
them into the Company's sales and service network and standardizing their
operations with the Company's. The Company's operating philosophy is to
support its sales and service network through training in technical, marketing
and administrative support procedures, advertising and promotion campaigns, and
volume purchasing and uniform operating procedures.
Danka Business Systems PLC is a corporation organized under the laws
of England and Wales. The Company's principal operating subsidiaries are
located in North America, Europe, Australasia and Latin America. The
registered and principal executive office of the Company is located at 33
Cavendish Square, London W1M 0DE England, and its telephone number is
011-44171-399-3000. The Company's North American headquarters are located at
11201 Danka Circle North, St. Petersburg, Florida 33716, and its telephone
number is 813-576-6003.
3
4
ACQUISITION STRATEGY
The Company expands its business through internal growth by increasing
its penetration in existing markets, and by entering new geographic areas
primarily through the acquisition of existing businesses. The Company's
acquisition strategy is focused on acquiring businesses in current territories
to increase penetration in those markets and on acquiring businesses in new
territories. The Company seeks to acquire companies that generally have (i) an
established customer base, (ii) a product line that compliments or is
comparable with the Company's current and anticipated products and services;
(iii) necessary manufacturer authorizations, and (iv) the potential to benefit
from the Company's centralized purchasing power as well as from other potential
synergies including increasing productivity and streamlining operations.
Acquired companies are integrated into the Company through the
implementation of the Company's operating procedures, which (i) establishes
financial controls, common information systems and reporting requirements, (ii)
introduces the Company's service, marketing and sales programs and compensation
plans, (iii) evaluates, transfers and retrains personnel as necessary, and (iv)
in many cases, expands the acquiree's product mix to incorporate new products
and services which are sold by the Company. This integration generally results
in a replication of the Company's service, sales, marketing and other business
programs in the short-term. In most business acquisitions, the acquired
businesses' owners and management are contractually bound by executive
non-compete and trade secret protection agreements.
As a result of the Company's acquisitions, it has grown to a network
in excess of 700 locations in over 30 countries. Technological developments
increasing the complexity of new products, combined with the higher costs of
product support, has driven the consolidation within the North American and
European markets. This trend has caused smaller independent distributors to
consider selling their dealerships to larger marketing and service
organizations such as the Company. Through such acquisitions, the Company
entered the United Kingdom in 1993, the Canadian market in 1994, Continental
Europe in 1995 and Australasia in 1996. The acquisition of certain assets of
Eastman Kodak's Office Imaging division in December 1996, which added over $1.5
billion in annualized revenue and 19 new countries of operations, is the
largest by the Company to date.
The Company believes that select acquisition opportunities continue to
exist in the fragmented automated office equipment industry in certain
geographic areas. The Company's acquisition activity will be limited over the
next twelve to eighteen months as the Company concentrates on integrating the
acquired operations of Eastman Kodak's Office Imaging and facilities management
businesses. The Company's goal is to generate cost savings and margin
improvements with respect to the combined organization through increasing sales
and service productivity, streamlining operations and capitalizing on the new
purchasing power.
The Company's continued success in future acquisitions will be
dependent on a variety of factors, including the timing and size of an
acquisition; the success or failure to integrate any significant acquisition
and minimize integration costs related thereto; the Company's ability to
successfully grow its infrastructure to sustain, manage, operate and continue
significant expansion; and the Company's ability to maintain, manage and
operate its core business. Although the Company is currently engaged in
preliminary discussions and consideration of various possible acquisition
candidates, it does not have any agreement, arrangement or understanding with
respect to any acquisition candidate that are, individually or in the
aggregate, material to the Company.
ACQUISITION OF EASTMAN KODAK'S OFFICE IMAGING DIVISION
Effective December 31, 1996, the Company acquired from Eastman Kodak
Company ("Kodak") (i) the net assets relating to the sales, marketing,
distribution and services business of Kodak's Office Imaging and Customer
Equipment Services business units and (ii) all of the issued and outstanding
stock of certain subsidiaries of Kodak which constitute the facilities
management services business known as Kodak Imaging Services (collectively, the
"Kodak Sales and Services Business"). The Company paid net cash of $688.0
million
4
5
for the Kodak Sales and Services Business, subject to post-closing adjustments.
The purchase price was funded exclusively by a new six-year multicurrency $1.275
billion credit agreement. As of December 31, 1995, the net assets of the Kodak
Sales and Services Business were approximately $800.0 million, and for such
year, generated revenue of $1.8 billion and net earnings before income taxes of
$25.0 million. For the nine months ended September 30, 1996, the Kodak Sales
and Services Business generated revenue of $1.3 billion and net earnings before
income taxes of $72.0 million. Based on the December 31, 1996 audited balance
sheet provided by Kodak, the Company will receive a refund under the price
adjustment provision of the asset purchase agreement totaling approximately
$86.0 million.
The Kodak Sales and Services Business is engaged worldwide in the
direct sale and marketing of Kodak manufactured and branded black and white and
accent color high-volume photocopiers, duplicators and printers, as well as
Kodak branded mid-volume black and white and color photocopiers manufactured by
Canon, Inc., and in some cases, remanufactured by Kodak. The Kodak Sales and
Services Business also provides on-site repair and technical and field
engineering support for equipment sold, leased and rented to others by the
Kodak Sales and Services Business and by other photocopier distributors. In
addition, the Kodak Sales and Services Business provides customers with
facilities management services, including the management of central
reprographics departments, the placement and maintenance of convenience
copiers, fleet management of customer equipment, the operation of mail centers,
the processing of statements, print-on-demand operations and document archiving
and retrieval services. The acquisition of the Kodak Sales and Services
Business greatly enhances the Company's product line and significantly
increases the scope of its outsourcing business.
In connection with the acquisition of the Kodak Sales and Services
Business, the Company and Kodak entered into a number of agreements effective
December 31, 1996 relating to the purchase, sale and service of
electrophotographic equipment and related software, supplies, accessories and
spare parts manufactured or remanufactured by Kodak (the "Supply Agreements").
Pursuant to the Supply Agreements, the Company is required to purchase from
Kodak various levels of Kodak manufactured or remanufactured
electrophotographic equipment and accessories, spare parts, supplies and toner.
The Company's pricing for purchases of Kodak branded products is based on the
Company purchasing certain agreed upon levels. To the extent the Company
exceeds or fails to purchase these amounts, the Company may either receive a
refund or be required to make additional payments. Currently, the Company
believes that it will meet its required purchasing levels. Subject to certain
limitations, the Company has the worldwide exclusive right to distribute
Kodak's currently existing line of electrophotographic equipment for office
imaging and reprographics manufactured or remanufactured by Kodak, and the
related software, supplies, accessories and spare parts and a right of first
refusal to exclusively distribute worldwide certain future electrophotographic
products manufactured by Kodak for office imaging and reprographics. The
Company has also agreed to contribute a total of $175.0 million (plus an
additional $30.0 million if certain research milestones are met) to Kodak's
ongoing research and development for new electrophotographic products to be
funded over the period April 1, 1997 through December 31, 2002. The Company
and Kodak have appointed three representatives to serve as members of an
advisory committee which meet on a regular basis to discuss overall research
and development progress.
Currently, 63% of the Kodak Sales and Services Business is conducted
in North America and 34% is conducted in Europe. Approximately 90% of the
Kodak Sales and Services Business is operated in countries in which the Company
was already conducting its business prior to the acquisition. Kodak has agreed
to fund the Company $30.0 million per year over three years, to promote the
sale of Kodak branded products in Europe, Asia and Latin America. (Reference
is made to Note 6 of the "Notes to the Consolidated Financial Statements"
entitled "Foreign Operations" contained in the Company's Annual Report to
Shareholders for the year ended March 31, 1997 which is incorporated by
reference.) In accordance with the "Acquisition Strategy" discussed above, the
Company's goal is to increase the net margins of the Kodak Sales and Services
Business through certain cost efficiencies and synergies it expects to achieve
by operating the businesses. A number of factors will be important in the
Company's goal of successfully integrating the acquired business into the
Company including increasing sales and service productivity, streamlining
operations and capitalizing on the new purchasing power. There can be no
assurances regarding the ultimate impact of the Kodak Sales and Services
Business on the Company and its future business and operations.
5
6
PRODUCTS
The Company's primary products are photocopiers, facsimile equipment,
other automated office equipment, and related parts and supplies. The
photocopier industry is informally divided into six segments. Segments one and
two contain the least sophisticated photocopiers; segments three and four
contain faster and more sophisticated mid-range photocopiers; and segments five
and six contain the most sophisticated and fastest photocopiers in the industry.
The principal manufacturers in segments one through four are Canon, Konica,
Minolta, Ricoh, Sharp and Toshiba. The Company offers products from each of
these manufacturers. Advances in technology and changing market demands have
also led to the emergence of color, digital and multifunctional equipment as
well as high speed printers, all of which the Company currently distributes. As
a result of the acquisition of the Kodak Sales and Services Business, the
Company is now the exclusive distributor of Kodak branded photocopiers and
printers worldwide. The sales, marketing, distribution and services operations
of the acquired Kodak Sales and Services Business is now known as Danka Office
Imaging. The Company sells photocopiers in segments one through six through its
retail operations. In addition, the Company principally sells segment one
equipment through its wholesale operations. The Company will continue to expand
its product offerings to encompass new equipment as it is made available by its
vendors.
The Company distributes a range of facsimile equipment, with a
concentration in the more sophisticated plain paper and multifunctional models.
The plain paper and multifunctional models use toner and other supplies and
require maintenance similar to photocopiers. A majority of these facsimile
machines are private label products of the Company.
TECHNOLOGY
The Company believes that the black and white photocopier and
facsimile equipment markets will continue to change with the increasing
acceptance of digital technology. Digital photocopiers have the ability to
communicate with other automated office equipment. This innovation is
resulting in a blurring of the distinction between traditional photocopiers,
facsimile equipment and printers, with the emergence of a range of
multifunctional office equipment that prints, copies, scans and faxes all from
one machine.
Many of the Company's existing vendors have expended considerable
resources in the research, development, and creation of digital products and
have introduced several digital black and white and color photocopiers and
printers. The Company has developed and acquired certain of the expertise
necessary to support the transition to digital technology and provides training
and support to its sales professionals and service technicians for new vendor
digital product offerings. In acquiring the Kodak Sales and Services Business,
the Company gained additional digital expertise and products including Kodak's
LionHeart products that enable digital devices to be connected to a computer.
Currently, color photocopiers represent a growing segment of the
photocopier market and are an increasing component of the Company's retail
copier sales. The Company continues to expand its color markets through its
relationship with Ricoh and Canon. With a color server, color photocopiers can
be converted into networkable color printers that will accept digital output
from a computer as well as hard copy inputs which can be reproduced or scanned
into the computer, thus increasing the functionality of the unit.
SERVICES
In fiscal 1997, retail service, supplies and rentals represented 55%
of the Company's total revenue. This revenue is primarily derived from its
equipment, maintenance and supply contracts ("EMS Contracts") and other
maintenance contracts. Generally, EMS Contracts are for a one-year term and
are automatically renewable. Although the Company has various payment
arrangements, most maintenance contracts are based upon a per copy charge.
These arrangements provide the customer with scheduled payments that can be
conveniently budgeted and provide the Company with a steady source of revenue.
As a percentage of total revenue, retail service, supplies and rentals
increased in fiscal 1997 due to the acquisition of the Kodak Sales
6
7
and Services Business, where a significantly higher portion of the revenue
generated from the Kodak Sales and Services Business was from retail service,
supplies and rentals as compared to the Company's core operations.
The Company has a stated mission of repairing a machine on the first
service call, and has full time service trainers who teach classes to the
Company's technicians. The Company also maintains an emergency toll-free number
to assist its own service technicians and service technicians of independent
dealers who are customers of its wholesale operations. The Company maintains a
database of common service problems and related solutions to assist technicians
in the field.
The Company's outsourcing operations are also included in retail
service, supplies and rentals. The acquisition of the Kodak Sales and Services
Business significantly increased the scope of the Company's outsourcing
business. The Company's outsourcing business combined with the facilities
management business acquired from Kodak is now known as Danka Imaging Services,
and provides services including the management of central reprographics
departments, placement of convenience copiers, fleet management of customer
equipment, print-on-demand operations, and document archiving and retrieval
services. Danka Imaging Services also provides strategic consulting services,
advising customers on the management of their document systems and how to add
efficiencies -- including the shift from a stand alone analog copier to a
networked digital printer/copier system, the storage of data, and the flow of
information throughout the business.
MARKETING AND CUSTOMERS
The Company believes that, in addition to price and product
performance and capabilities, its retail customers primarily base their
purchasing decisions on the quality of post-sales service and support, speed of
service, and the availability of financing and rental programs. The Company
believes that its wholesale customers primarily base their purchasing decisions
on price, speed of delivery, dealer support, product performance and
capabilities, and availability of financing.
The Company's retail operations target a broad range of customer
groups which include small businesses to large multinational companies,
professional firms, and governmental and educational institutions. Customers
of the Company's wholesale operations consist generally of independent dealers
who are not authorized dealers for major manufacturers. Additionally, the
Company markets Infotec private label copiers and facsimiles as well as its dex
private label facsimile equipment and related supplies on a wholesale basis to
a network of authorized independent dealers. No customer represents more than
one percent of the Company's total revenue, and the loss of any one customer
would not materially affect the Company.
As of March 31, 1997, there were approximately 4,400 Company employees
devoted to sales which represents a substantial increase from March 31, 1996,
primarily due the acquisition of the Kodak Sales and Services Business. Sales
personnel turnover is common in the industry and the Company makes a
considerable effort to retain qualified sales personnel. The Company's sales
teams are highly specialized, with each office dedicated to marketing the
products of one or two particular manufacturers. Individual team members will
concentrate on particular product groups, focusing on lower segment machines
during their first year and graduating to more complex equipment as their
knowledge and experience increases. With its sales force, the Company
emphasizes product knowledge, commitment and professionalism. Each sales
person negotiates a method of payment - lease, outright sale or rental - to
suit the individual customer. Their compensation is comprised of a base salary
and a selling commission, based on achievement of unit placements and gross
profit dollars. The Company has instituted a standard compensation plan for
the sales personnel that joined the Company through the acquisition of the
Kodak Sales and Services Business, which is more in line with that of the
Company's existing sales force.
The Company utilizes a wide range of advertising and promotional
activities, including television, radio, and billboard advertising campaigns,
sponsorship of major sporting events and teams, distribution of descriptive
brochures and direct mail pieces, and informational seminars and presentations.
The Company's
7
8
marketing efforts are enhanced by manufacturers' national advertising campaigns
and co-op arrangements where appropriate and applicable.
MARKET BASED APPROACH
To further the Company's goal of providing better support for its
sales and service force as well as its customers, the Company began moving away
from its traditional branch management concept to a more centralized, market
oriented, support concept of administration in North America during fiscal 1997
(the "Market Based Approach"). Under the Market Based Approach, most of the
administrative and management functions which were performed at the branch level
are centralized on a regional basis. Such functions include managerial support,
service dispatch, billing and collections, supply sales and equipment setup and
delivery. The Company's goal is for the transition to be fully implemented,
excluding the Kodak Sales and Services Business, by the first half of fiscal
1998 and once complete, the Company's North American operations will consist of
approximately 22 regions with numerous markets within each region. The Company
believes that this Market Based Approach will provide for a higher quality of
customer support, increased productivity and reduced administrative costs. The
Company is also in the process of rolling out a new computer system for the
North American operations which is expected to be complete by the third quarter
of fiscal 1998. The completion of these two initiatives are intended to help
facilitate additional future efficiencies in the Company's North American
operations.
LEASING
Leasing plays a significant role in the Company's sale of equipment.
The Company believes that the ability of its sales force to offer customers the
option to lease equipment leads to additional sales. In substantially all of
its lease transactions, the Company initiates the lease, then one of a number
of available third-party leasing companies approves the customer's credit and
the Company immediately finances the lease in return for a single payment. The
Company has significantly reduced the credit risks normally associated with
leasing arrangements, while improving its cash flow and profit margins. The
Company has also established relationships with certain leasing companies
through which the Company participates in a portion of the leasing company's
profits in exchange for the Company targeting certain leasing volumes.
The Company believes customers are less resistant to a small increase
in monthly lease payments as opposed to an increase in the outright cash sales
price of such equipment. As a result, in most of these leasing arrangements,
the Company is able to achieve a higher sale price, and a higher profit margin
than that which would have been obtained by a cash sale of such equipment.
Finally, these leasing arrangements permit the Company to utilize its capital
for other business activities. The Company has similar arrangements for leases
which are offered to customers outside the U.S.
Through various acquisitions, the Company has acquired certain lease
arrangements and installment receivables that have not been sold to third-party
leasing companies. Over time, the Company will seek to convert these
acquisition leasing programs to arrangements similar to those described above.
TRAINING
A key element of the Company's operating philosophy is the training of
its sales, service and administrative employees in order to assist in uniform
application of the Company's established operating procedures throughout the
sales network. Upon employment, Company salespersons begin a sales program
developed and conducted by the Company. Training continues throughout their
careers in sales and sales management with certifications awarded upon
completion of various courses. The training sessions, coupled with weekly
sales meetings, assist the Company's staff in enhancing and maintaining their
marketing and sales management skills.
8
9
Service technicians new to the Company are immediately trained and
certified in accordance with the Company's methods, procedures, and standards.
The Company's technical personnel are continuously updated and retrained as new
technology is developed. The Company's service training centers are certified
as manufacturers' authorized service facilities. The Company monitors service
technicians' continued educational experience and fulfillment of requirements
in order to evaluate the competence of its service technicians. All the
Company's service technicians receive service bulletins, service technician
tips and continued training seminars throughout their careers with the Company.
Similar to the Company, the Kodak Sales and Services Business places great
emphasis on training sales and service personnel and has a strong reputation for
high customer satisfaction.
VENDORS
The Company's business is dependent upon close relationships with its
vendors and its ability to purchase products from these vendors on competitive
terms. During fiscal 1997, the Company's sales of Canon, Konica, Minolta,
Ricoh, Sharp and Toshiba photocopiers and facsimile equipment represented
approximately 73% of its total equipment revenue, excluding its dex and Omnifax
private label facsimiles and the acquired Kodak Sales and Services Business.
The Company's dex and Omnifax private labels are imported from various Japanese
and Korean manufacturers. The majority of the Company's Kodak branded
equipment sales were generated from the acquired Kodak Sales and Services
Business. In addition, the Company relies on its photocopier and facsimile
vendors for parts and supplies.
The Company conducts its business in reliance upon its continuing
ability to purchase equipment, supplies, and parts from its current
manufacturers pursuant to authorized retail dealer and wholesale agreements
("Authorized Manufacturer Agreements"). The Company's retail operations'
primary Authorized Manufacturer Agreements are with Canon, Konica, Minolta,
Ricoh, Sharp and Toshiba. Such agreements are generally for one-year terms,
cover only specific products, have specific territorial boundaries, and may be
terminated with cause, and in some instances, without cause. Although
Authorized Manufacturer Agreements are non-exclusive, they are generally
limited to one or two authorized dealers within specific territorial
boundaries. The Company also has exclusive Supply Agreements with Kodak, the
terms of which vary from the Company's traditional Authorized Manufacturing
Agreements. See -- "Acquisition of Eastman Kodak's Office Imaging Division"
above. The Company's wholesale operations' primary Authorized Manufacturer
Agreements are with Copystar, Konica, Minolta, Ricoh, Sharp and Toshiba, and
contain terms which are substantially similar to those of the Company's retail
operations. Private label facsimile products are provided under purchase
agreements with various manufacturers, and the terms of these agreements are
similar to the agreements with certain of the Company's photocopier vendors.
COMPETITION
The Company's business is highly competitive with a number of
competitors in most geographic markets. The Company's retail operations are in
direct competition with local and regional equipment suppliers and dealers,
manufacturers, mass merchandisers, and wholesale clubs. Depending upon the
customer, principal areas of competition may include: quality and speed of
post-sales service support; availability of competitive products, parts and
supplies; speed of delivery; product capability and performance; financing
terms; and the availability of financing, leasing, or rental programs. The
Company's wholesale operations are in direct competition with local, regional,
and national distributors and manufacturers. Principal areas of competition
for wholesale operations are availability of competitive products, price, speed
of delivery, dealer support, centralized volume buying, product performance,
and the availability of financing programs. The continued ability of the
Company to offer competitive photocopiers in all segment areas is important in
both retail and wholesale operations. See -- "Products". As a result of
acquiring the Kodak Sales and Services Business, the Company substantially
increased its presence in the high-volume photocopier market currently
dominated by Xerox Corporation. In addition, the Kodak Sales and Services
Business significantly increased the scope of the Company's outsourcing
business. Competition in the outsourcing industry is based primarily on the
technical solutions devised, the breadth of services offered and pricing. The
Company also competes
9
10
with other large competitors for acquisitions, particularly its principal
competitor Ikon Office Solutions, Inc., and in some instances such competition
can raise the price of an acquisition.
EMPLOYEES
As of March 31, 1997, the Company employed approximately 21,800
persons, of which approximately 11,600 employees were devoted to service, and
approximately 4,400 persons in the Company were devoted to sales. The
remaining employees were devoted to training, management, and various
administrative and support positions at the regional and corporate locations.
Support positions include receiving customer service calls and dispatching
service technicians, contacting customers to obtain meter readings, renewing
customer maintenance agreements, collecting accounts receivable, controlling
inventory, and performing certain billing functions. The Company's total
employees doubled in size from March 31, 1996 primarily due to the acquisition
of the Kodak Sales and Services Business. The ratio of service employees
increased more so due to the higher percentage of service personnel at the Kodak
Sales and Services Business.
Some of the Company's non-U.S. employees are subject to labor
agreements that establish rates of pay, working hours, procedures for orderly
settlement of disputes and other terms and conditions of employment. The
Company considers its employee relations to be good, and believes that it
provides working conditions and wages which compare favorably to those of its
competitors.
The Company relies heavily on its senior management, and the loss of
certain Executive Officers could have an adverse effect on the Company.
Additionally, the Company's ability to successfully grow and maintain its
management and employee base, as well as to successfully integrate acquired
company employees during periods of expansion, are extremely important to the
Company's continued success.
TRADEMARKS AND SERVICE MARKS
The Company believes that its trademarks and service marks have gained
significant recognition in the automated office equipment market and are
important to its marketing efforts. The Company has registered various
trademarks and service marks in certain markets. The trademarks "Danka",
"dex", "Omnifax" and "Infotec" are among those registered marks which are
viewed as important to the Company's ongoing business. The Company's policy is
to continue to pursue registration of its marks whenever possible and to oppose
vigorously any infringement of its proprietary rights. Depending on the
jurisdiction, trademarks and service marks are valid as long as they are in use
and/or their registrations are properly maintained, and they have not been
found to have become generic. Registrations of trademarks and service marks in
the United States can generally be renewed indefinitely as long as the
trademarks and service marks are in use.
BACKLOG
The backlog of orders at March 31, 1997 and March 31, 1996 were not
material.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained throughout this Form 10-K such as
statements concerning the anticipated effect of the acquisition of the Kodak
Sales and Services Business (the "Acquisition") on the Company's expenses,
productivity, and earnings, the expected synergies and efficiencies resulting
from the integration of the Acquisition, future intentions for reducing costs
and prospects for improving margins and maximizing profitability from the
Acquisition, and from the anticipated growth of digital and color equipment and
other statements contained herein regarding matters that are not historical
facts are "forward looking statements" (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and because such statements involve
risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward looking statements. Factors that might
cause such differences include, among others, the following: (i) the Company's
ability to manage and operate the Kodak Sales and Services Business, (ii) the
demands that the Acquisition and integration of the Kodak Sales and Services
Business will place, and the
10
11
effect that such demands will have, on the Company's resources, infrastructure
and current operations, (iii) the Company's ability to successfully operate in
new international markets, (iv) the ability of the Company to retain current
management and other employees of the Kodak Sales and Services Business
accustomed to different corporate culture, compensation arrangements and
benefits, (v) the Company's ability to successfully manage and reduce the
increased debt resulting from the Acquisition, (vi) the Company's ability to
achieve the minimum equipment purchase commitments under the Supply Agreements,
(vii) the Company's ability to obtain an alternative and acceptable source of
high-volume equipment and related parts and supplies in the event the Supply
Agreements are not renegotiated or Kodak equipment is not competitive in the
marketplace, (viii) increased competition resulting from other high-volume
copier distributors and the discounting of such copiers by competitors, (ix)
fluctuations in foreign currency, (x) domestic and foreign political
developments and governmental regulations and policies, (xi) increased costs
resulting from technological developments, (xii) general economic and business
conditions, (xiii) future performance of the Kodak Sales and Services Business
and the Company's current business, (xiv) the ability of the Company to
successfully implement its growth and business strategy, (xv) the ability of the
Company to continue to receive acceptable financing as required in the future,
(xvi) the Company's inability to achieve substantial operating cost reductions
and efficiencies in productivity, (xvii) the potential for unanticipated
increases in expenditures for labor, equipment, inventory, materials and
supplies required to manage the increased size of the Company as a result of the
Acquisition, (xviii) the ability of the Company to continue to gain access to
and successfully distribute new and current products brought to the marketplace
at competitive costs and prices, and (xix) there can be no assurances that the
implementation of the Company's Market Based Approach and new computer system
will result in additional efficiencies. Readers are cautioned not to place
undue reliance on the forward looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
update the forward looking statements to reflect events or circumstances that
arise after the date hereof.
ITEM 2. PROPERTIES
The Company's general policy is to lease, rather than own, its
business locations. The Company leases numerous properties for administration,
sales and service, and distribution functions. The terms vary under the
respective leases and some contain a right of first refusal or an option to
purchase the underlying real property and improvements. In general, the
Company's lease agreements require it to pay its proportionate share of taxes,
common area expenses, insurance, and related costs of such rental properties.
In addition, the Company leases in excess of 700 properties for its retail and
wholesale operations.
The Company owns several smaller business locations, none of which are
necessary to the success of the particular location's business. Generally,
these properties were included among the assets obtained in certain
acquisitions. In the future, the Company may dispose of such properties and
enter into leases of properties which the Company believes may be more
desirable or more centrally located.
Management believes that the properties which it occupies are, in
general, suitable and adequate for the purposes for which they are utilized.
Additional space may be occupied as necessary upon future expansion of
operations.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which the Company is a party to
which the Company believes will have a material adverse effect on its results
of operations or its financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
11
12
PART II
ITEM 5. MARKET PRICE FOR REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS
The following table sets forth the high and low sale price per American
Depositary Share ("ADS") as reported by the Nasdaq National Market and the high
and low middle market quotations (which represent an average of bid and offered
prices in pence) for the Ordinary Shares as reported on the London Stock
Exchange Official List. Each ADS represents four Ordinary Shares.
U.S. Dollars per Pence per
ADS Ordinary Share
High Low High Low
- ------------------------------------------------------------------------------------------
Fiscal Year 1997:
Quarter ended June 30, 1996 $51.88 $26.50 848p 468p
Quarter ended September 30, 1996 45.25 22.25 700 403
Quarter ended December 31, 1996 45.13 35.13 663 533
Quarter ended March 31, 1997 46.25 30.25 683 472
Fiscal Year 1996:
Quarter ended June 30, 1995 $27.75 $22.50 420p 356p
Quarter ended September 30, 1995 37.38 24.13 590 384
Quarter ended December 31, 1995 38.50 29.75 595 489
Quarter ended March 31, 1996 44.50 34.63 714 560
As of March 31, 1997, 42,891,527 ADSs were held of record by 3,692 registered
holders and 55,260,942 Ordinary Shares were held of record by 1,530 registered
holders. Since some of the ADSs and Ordinary Shares are held by nominees, the
number of holders may not be representative of the number of beneficial owners.
The Company currently expects to continue its policy of paying semi-annual cash
dividends, although there can be no assurance as to future dividends because
they are dependent upon future operating results, capital requirements and the
Company's financial condition.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated herein by
reference to the information under the heading "Selected Consolidated Financial
Data" in the Company's Annual Report to Shareholders for the Year Ended March
31, 1997. See Exhibit 13 to this Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is incorporated herein by
reference to the information under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report to Shareholders for the Year Ended March 31, 1997. See Exhibit
13 to this Report.
12
13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated herein by
reference to the information under the headings "Consolidated Statements of
Earnings", "Consolidated Balance Sheets", "Consolidated Statements of Cash
Flows", "Consolidated Statements of Shareholders' Equity" and "Notes to the
Consolidated Financial Statements" in the Company's Annual Report to
Shareholders for the Year Ended March 31, 1997. See Exhibit 13 to this Report.
As is the case with any company, prior financial condition and results of
operations are not necessarily indicative of future results.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
13
14
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item is incorporated herein by
reference to the information under the headings "MANAGEMENT - Directors and
Executive Officers" in the Company's definitive Proxy Statement to be used in
connection with the Company's 1997 Annual Meeting of Shareholders, which has
been filed with the Commission.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by
reference to the information under the headings "MANAGEMENT - Compensation of
Executive Officers and Directors" in the Company's definitive Proxy Statement
to be used in connection with the Company's 1997 Annual Meeting of
Shareholders, which has been filed with the Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item is incorporated herein by
reference to the information under the heading "MANAGEMENT - Security Ownership
of Management and Others" in the Company's definitive Proxy Statement to be
used in connection with the Company's 1997 Annual Meeting of Shareholders,
which has been filed with the Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by
reference to the information under the heading "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS" in the Company's definitive Proxy Statement to be used in
connection with the Company's 1997 Annual Meeting of Shareholders, which has
been filed with the Commission.
14
15
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. The following Financial Statements of the Registrant
included in Part II, Item 8, of this Report are
incorporated herein by reference as described in Item
8:
Consolidated Statements of Earnings - Years ended
March 31, 1997, 1996 and 1995
Consolidated Balance Sheets - March 31, 1997 and 1996
Consolidated Statements of Cash Flows - Years ended
March 31, 1997, 1996 and 1995
Consolidated Statements of Shareholders' Equity -
Years ended March 31, 1997, 1996 and 1995
Notes to the Consolidated Financial Statements -
Years ended March 31, 1997, 1996 and 1995
Independent Auditors' Report
2. The following Financial Statement Schedules of the
Registrant are included in Item 14(d):
Independent Auditors' Report
II - Valuation and Qualifying Accounts
All other schedules are omitted because the required
information is not present in amounts sufficient to
require submission of the schedule, the information
required is included in the financial statements and
notes thereto or the schedule is not required or
inapplicable under the related instructions.
3. Exhibit index:
Exhibit
Number Description of Document
------ -----------------------
2.1* Asset Purchase Agreement between Eastman Kodak Company and Danka Business Systems PLC
dated as of September 6, 1996, including Exhibit 5.19 (a) which is the form of Amended
and Restated Supply Agreement by and between Eastman Kodak Company and
_______________________ dated as of ____________________, 1996. (Exhibit 2.1 to the
Company's Form 8-K dated November 14, 1996.)
2.2* Amendment No. 1 to Asset Purchase Agreement between Eastman Kodak Company and Danka
Business Systems PLC dated December 20, 1996 (Excluding schedules and similar
attachments). (Exhibit 2.2 to the Company's Form 8-K dated January 15, 1997).
3.1* Memorandum of Association of the Company. (Exhibit 3.1 of Company's Registration
Statement on Form 20-F, No. 0-20828, filed on November 10, 1992 [the "1992 Registration
Statement"].)
3.2* Articles of Association of the Company. (Exhibit 3.2 to the 1992 Registration
Statement.)
15
16
4.1* Memorandum of Association of the Company, including paragraphs 5 and 6. (Exhibit 2.1
to the 1992 Registration Statement.)
4.2* Articles of Association of the Company, including sections relating to Shares,
Variation of Rights and Votes of Members. (Exhibit 2.2 to the 1992 Registration
Statement.)
4.3* Form of Ordinary share certificate. (Exhibit 4.3 of Company's Registration Statement
on Form S-1, No. 33-68278, filed on October 8, 1993 [the "1993 Registration
Statement"]).
4.4* Form of American Depositary Receipt. (Exhibit 4.4 to the 1993 Registration Statement.)
4.5* Deposit Agreement dated June 25, 1992, Amendment No. 1 dated February 26, 1993 and
Amendment No. 2 dated July 2, 1993 (Exhibit 4.9 to the 1993 Registration Statement.)
and Amendment No. 3 dated August 16, 1994 between The Bank of New York, Company and
Owners and Holders of American Depositary Receipts.
4.6* Indenture dated March 13, 1995 between the Company and The Bank of New York, as
Trustee. (Exhibit 2 to the Company's Form 8-K dated March 21, 1995).
4.7* Deposit and Custody Agreement dated March 13, 1995, between The Bank of New York as
Depositary and the Company. (Exhibit 3 to the Company's Form 8-K dated March 21,
1995).
4.8* Registration Rights Agreement dated as of March 13, 1995 relating to $175,000,000 in
Aggregate Principal Amount of 6.75% Convertible Subordinated Notes Due 2002 by and
among the Company and Prudential Securities Incorporated and Smith Barney, Inc. and
Robert W. Baird & Co. and Raymond James & Associates, Inc. (Exhibit 4.12 to the
Company's 1995 Form 10-K).
4.9* Resolution No. 8 adopted by shareholders at the 1996 general meeting waiving pre-
emptive rights of shareholders under certain circumstances.
4.10* Credit Agreement dated March 19, 1996 among Danka Business Systems PLC, Danka Holding
Company, the several financial institutions from time to time a party to this
Agreement, Bank of America National Trust and Savings Association, Bank of America
International Limited, Nationsbank, N.A., and Southtrust National Bank of Alabama,
N.A., in an amount up to $400.0 million. (Exhibit 1 to the Company's Form 8-K dated
March 19, 1996).
4.11* Credit Agreement dated December 5, 1996, by and among Danka Business Systems PLC,
Dankalux Sarl & Co. SCA, Danka Holding Company, the several financial institutions from
time to time a party and NationsBank, N.A., as agent (Exhibit 4 to the Company's Form
8-K December 16, 1996).
No other instruments defining the rights of holders of long-term debt of the Company
and its subsidiary have been included as exhibits because the total amount of
obligation authorized under any such agreement does not exceed 10% of the total assets
of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees
to furnish supplementally a copy of any omitted long-term debt instrument to the
Commission upon request.
10.1* Office Building Lease dated February 4, 1986 between Daniel M. Doyle and Francis J.
McPeak, Jr., and Copies, Inc. (Exhibit 3.4 to the 1993 Form 20-F).
16
17
10.2* Office Building Lease dated May 1, 1992 between Daniel M. Doyle and Francis J. McPeak,
Jr., and Gulf Coast Business Machines. (Exhibit 3.5 to the 1993 Form 20-F).
10.3* Office Building Lease dated April 1, 1990 between Daniel M. Doyle and Francis J.
McPeak, Jr., and Danka. (Exhibit 3.6 to the 1993 Form 20-F).
10.4* Lease Agreement dated December 22, 1986, and Addendum Lease Agreement dated March 1,
1987, between Daniel M. Doyle and Francis J. McPeak and Danka. (Exhibit 3.7 to the
1993 Form 20-F).
10.5* U.K. Executive Share Option Scheme. (Exhibit 3.11 to the 1993 Form 20-F).
10.6* U.S. Executive Incentive Stock Option Plan. (Exhibit 3.12 to the 1993 Form 20-F).
10.7* Form of Stock Option Agreement. (Exhibit 3.13 to the 1993 Form 20-F).
10.8* Addendum to Lease Agreement dated September 1, 1992, between Mid-County Investments,
Inc. and Danka. (Exhibit 3.38 to the 1993 Form 20-F).
10.9* Lease Agreement dated November 12, 1992 and Lease Commencement Agreement dated April 7,
1993 between PARD, Inc. and Danka. (Exhibit 10.41 to the 1993 Form 20-F).
10.10* Deposit Agreement dated June 25, 1992, Amendment No. 1 dated February 26, 1993 and
Amendment No. 2 dated July 2, 1993, between The Bank of New York, Company and Owners
and Holders of American Depositary Receipts, filed as Exhibit 4.5 and incorporated as
reference.
10.11* Employment Agreement dated April 1, 1994 among the Company, Danka Industries, Inc. and
Daniel M. Doyle. (Exhibit 10.49 to the 1994 Form 10-K).
10.12* Employment Agreement dated April 1, 1994 among the Company, Danka Industries, Inc. and
David C. Snell. (Exhibit 10.50 to the 1994 Form 10-K).
10.13* Employment Agreement dated April 1, 1994 among the Company, Danka Industries, Inc. and
Mark A. Vaughan-Lee. (Exhibit 10.51 to the 1994 Form 10-K).
10.14* Danka Business Systems PLC 1994 Executive Performance Plan. (Exhibit 10.52 to the 1994
Form 10-K).
10.15* Indenture dated March 13, 1995 between the Company and The Bank of New York, as
Trustee. (Exhibit 2 to the Company's Form 8-K dated March 21, 1995).
10.16* Deposit and Custody Agreement dated March 13, 1995, between The Bank of New York as
Depositary and the Company. (Exhibit 3 to the Company's Form 8-K dated March 21,
1995).
10.17* Registration Rights Agreement dated as of March 13, 1995 relating to $175,000,000 in
Aggregate Principal Amount of 6.75% Convertible Subordinated Notes Due 2002 by and
among the Company and Prudential Securities Incorporated and Smith Barney, Inc. and
Robert W. Baird & Co. and Raymond James & Associates, Inc. (Exhibit 10.24 to the
Company's 1995 Form 10-K).
17
18
10.18* Purchase Agreement dated October 25, 1995 between ABN AMRO Bank N.V. and Credit
Lyonnais Bank Nederland N.V. and Danka Europe B.V. (Exhibit 2 to the Company's
Form 8-K dated November 3, 1995).
10.19* Credit Agreement dated March 19, 1996 among Danka Business Systems PLC, Danka Holding
Company, the several financial institutions from time to time a party to this
Agreement, Bank of America National Trust and Savings Association, Bank of America
International Limited, Nationsbank, N.A., and Southtrust National Bank of Alabama,
N.A., in an amount up to $400.0 million. (Exhibit 1 to the Company's Form 8-K dated
March 19, 1996).
10.20* The Danka 1996 Share Option Plan filed as Appendix 1 of the 1996 Annual Proxy Statement
and approved by shareholders under Resolution 10.
10.21* The Danka 1996 Non-Employee Directors Share Option Plan filed as Appendix 2 of the 1996
Annual Proxy Statement and approved by shareholders under Resolution 11.
13 Annual Report to Shareholders of the Company for the year ended March 31, 1997.
Portions of such Annual Report to Shareholders are incorporated by reference into this
Report.
21 List of Current Subsidiaries of the Company.
23 Independent Auditors Consent.
27 Financial Data Schedule
* Document has heretofore been filed with the Commission and is
incorporated by reference and made a part hereof.
(b) Reports on Form 8-K
On June 26, 1996, the Company filed a report on Form 8-K announcing
expected results of operations for the first quarter of fiscal 1997 and the
effects to the Company resulting from its change to a market based management
approach, expansion of its sales division, and its increased commitment to the
sale of color and higher segment products.
On November 14, 1996, the Company filed a report on Form 8-K announcing
the Company's second quarter financial results, the agreement with Eastman
Kodak Company to acquire the sales, marketing and equipment service operations
of Kodak's Office Imaging Business, as well as Kodak's facilities management
business known as Kodak Imaging Services (collectively the "Kodak Sales and
Services Business"), and the promotion of David Snell to Chief Operating
Officer.
On December 16, 1996, the Company filed a report on Form 8-K announcing
the Company's New Credit Facility dated December 5, 1996 with NationsBank, N.A.
as agent and the approval by the Company's shareholders of the acquisition of
the Kodak Sales and Services Business.
On January 3, 1997, the Company filed a report on Form 8-K announcing
the Company's closing of the acquisition of the Kodak Sales and Services
Business and the Consent of Price Waterhouse LLP dated December 23, 1996.
18
19
On January 15, 1997, the Company filed a report on Form 8-K reporting
the acquisition of the Kodak Sales and Services Business.
On March 13, 1997, the Company filed a report on Form 8-K/A reporting
the audited historical financial statements of the Kodak Sales and Services
Business for the nine months ended September 30, 1996 and the unaudited pro
forma consolidated statement of earnings for the combined operations of the
Company and the Kodak Sales and Serivces Business for the year ended March 31,
1996 and the nine months ended December 31, 1996.
(c) Exhibits:
The exhibits listed in Item 14(a)(3) to this Report
are filed with this Report.
(d) Financial Statement Schedules
Report of Independent Auditors
II - Valuation and Qualifying Accounts
All other schedules are omitted since the required
information is not present or is not present in amounts sufficient to require
submission of the schedules.
19
20
INDEPENDENT AUDITORS' REPORT
To the Members of Danka Business Systems PLC:
Under date of May 12, 1997, we reported on the consolidated balance sheets of
Danka Business Systems PLC and subsidiaries as of March 31, 1997 and 1996 and
the related consolidated statements of earnings, shareholders' equity and cash
flows for each of the years in the three-year period ended March 31, 1997, as
contained in the 1997 annual report to shareholders. These consolidated
financial statements and our report thereon are incorporated by reference in
the annual report on Form 10-K for the year 1997. In connection with our
audits of the aforementioned financial statements, we also have audited the
related financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
KPMG Audit Plc
Chartered Accountants
Registered Auditors
May 12, 1997 London, England
20
21
DANKA BUSINESS SYSTEMS PLC
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
Column A Column B Column C Column D Column E
-------- ----------- ------------------------------ ------------- -----------
Balance at Charged to Charged to Balance
Beginning of Costs and Other at End
Description Period Expenses Accounts (1) Deductions (2) of Period
----------- ----------- --------- ------------ -------------- ----------
Allowance for doubtful accounts:
Year ended March 31, 1995 $5,290 $2,016 $1,213 $(2,485) $6,034
====== ======= ======= ======== =======
Year ended March 31, 1996 $6,034 $3,717 $8,009 $(8,956) $8,804
====== ======= ======= ======== =======
Year ended March 31, 1997 $8,804 $21,062 $12,382 $(14,395) $27,853
====== ======= ======= ======== =======
(1) Represents beginning balances of acquired companies.
(2) Represents accounts written off during the year, net of
recoveries.
Note: Certain prior year amounts have been reclassified to conform to the
current year presentation.
21
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: June 18, 1997 DANKA BUSINESS SYSTEMS PLC
(Registrant)
By: /s/ DANIEL M. DOYLE
-----------------------------
Daniel M. Doyle,
Chief Executive (The Chief
Executive Officer)
By: /s/ DAVID C. SNELL
-----------------------------
David C. Snell,
Finance Director (The Chief
Operating Officer and the
Principal Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons on behalf of the Company
and in the capacities indicated on June 18, 1997.
SIGNATURE TITLE
- --------- -----
/s/ MARK A. VAUGHAN-LEE Chairman and Director
- ----------------------------------
Mark A. Vaughan-Lee
/s/ DANIEL M. DOYLE Chief Executive and Director
- ----------------------------------
Daniel M. Doyle
/s/ DAVID C. SNELL Finance Director, Chief Operating
- ---------------------------------- Officer and Principal
David C. Snell Accounting Officer
/s/ DAVID S. HOOKER Director
- ----------------------------------
David S. Hooker
/s/ DAVID W. KENDALL Director
- ----------------------------------
David W. Kendall
/s/ JAMES F. WHITE, JR. Director
- ----------------------------------
James F. White, Jr.
/s/ PIERSON M. GRIEVE Director
- ----------------------------------
Pierson M. Grieve
/s/ KEITH J. MERRIFIELD Director
- ----------------------------------
Keith J. Merrifield
22