content: SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549
                                      Form 10-Q
  
  (Mark One)*
  [X] Quarterly report pursuant to section 13 or 15(d) of the Securities  Exchange
  Act of 1934 for the  quarterly  period  ended March 31,  1997 or [ ]  Transition
  report  pursuant to section 13 or 15(d) of the  Securities  Exchange Act of 1934
  for the transition period from _________ to __________
  
  Commission file number     1-5964
  
                             IKON OFFICE SOLUTIONS, INC.
  
               (Exact name of registrant as specified in its charter)
  
  
             OHIO                                        23-0334400
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification No.)
  
                      Box 834, Valley Forge, Pennsylvania 19482
                      (Address of principal executive offices)
                                     (Zip Code)
  
                                   (610) 296-8000
                (Registrant's telephone number, including area code)
  
                                        NONE
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
  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
  
  *  Applicable  only to issuers  involved in  bankruptcy  proceedings  during the
  preceding five years:
  
  Indicate  by check mark  whether  the  registrant  has filed all  documents  and
  reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
  Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
  confirmed by a court.
  
  Yes         No
  
  * Applicable only to corporate issuers:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of April 30, 1997.
  
  Common Stock, no par value                         132,519,051 shares
  
  
  <PAGE>
  
                                        INDEX
  
                             IKON OFFICE SOLUTIONS, INC.
  
  
  PART I. FINANCIAL INFORMATION
  
  
       Item 1.             Financial Statements (Unaudited)
  
                           Consolidated Balance Sheets--March 31, 1997
                           and September 30, 1996
  
                           Consolidated  Statements of Income--Three  months ended
                           March 31, 1997 and March 31, 1996 and Six months  ended
                           March 31, 1997 and March 31, 1996
  
                           Consolidated Statements of Cash Flows--Six months ended
                           March 31, 1997 and March 31, 1996
  
                           Notes to Consolidated Financial Statements--
                           March 31, 1997
  
  
       Item 2.             Management's Discussion and Analysis of Results
                           of Operations and Financial Condition and Liquidity
  
  
  
  PART II.  OTHER INFORMATION
  
  Item 6.    Exhibits and Reports on Form 8-K
  
  
  
  SIGNATURES
  
  
  <PAGE>
                            PART I. FINANCIAL INFORMATION
  
  Item 1: Financial Statements (unaudited)
  
                             IKON OFFICE SOLUTIONS, INC.
                             CONSOLIDATED BALANCE SHEETS
                                  ( in thousands )
  
                                              March 31     September 30
  ASSETS                                        1997           1996
  
  Current Assets
       Cash                                    $25,427        $46,056
       Accounts receivable, net                627,106        513,378
       Finance receivables, net                585,646        435,434
       Inventories                             442,110        350,774
       Prepaid expenses                        115,683         80,352
       Deferred taxes                           96,008         83,161
                                            ----------     ----------
       Total current assets                  1,891,980      1,509,155
                                            ----------     ----------
  
  
  Investments and Long-Term Receivables         21,041         48,165
  
  Long-Term Finance Receivables, net         1,107,672        878,324
  
  Equipment on Operating Leases, net            95,820         95,043
  
  Property and Equipment, at cost              394,840        358,234
       Less accumulated depreciation           205,367        169,416
                                            ----------     ----------
                                               189,473        188,818
                                            ----------     ----------
  
  Other Assets
       Goodwill                              1,274,155      1,087,210
       Miscellaneous                           142,085         88,679
                                            ----------     ----------
                                             1,416,240      1,175,889
                                            ----------     ----------
  
  Net Assets of Discontinued Operations                     1,489,201
                                            ----------     ----------
  
                                            $4,722,226     $5,384,595
                                            ==========     ==========
  
  
  See notes to consolidated financial statements.
  
  <PAGE>
                             IKON OFFICE SOLUTIONS, INC.
                             CONSOLIDATED BALANCE SHEETS
                                  ( in thousands )
  
  <TABLE>
  <CAPTION>
  
                                                                     March 31       September 30
  LIABILITIES AND SHAREHOLDERS' EQUITY                                 1997             1996
  <S>                                                                 <C>              <C>    
  Current Liabilities
      Current portion of long-term debt                               $58,637          $62,697
      Current portion of long-term debt, finance subsidiaries         393,000          314,000
      Notes payable                                                    56,934          186,462
      Trade accounts payable                                          202,415          123,571
      Accrued salaries, wages and commissions                          86,752          101,632
      Deferred revenues                                               204,624          200,225
      Other accrued expenses                                          286,529          269,400
                                                                  -----------      -----------
      Total current liabilities                                     1,288,891        1,257,987
                                                                  -----------      -----------
  
  Long-Term Debt                                                      500,460          721,923
  
  Long-Term Debt, Finance Subsidiaries                              1,085,714          813,026
  
  Deferred Taxes                                                      231,308          191,272
  
  Other long term liabilities                                         127,784          144,883
  
  
  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 3/97 -135,684 shares; 9/96 - 131,930 shares          670,687        1,305,413
      Retained earnings                                               534,329          701,771
      Foreign currency translation adjustment                          (2,090)         (25,187)
      Cost of common shares in treasury: 3/97 - 114 shares;
          9/96 - 374 shares                                            (5,027)         (16,663)
                                                                  -----------      -----------
                                                                    1,488,069        2,255,504
                                                                  -----------      -----------
  
                                                                   $4,722,226       $5,384,595
                                                                  ===========      ===========
  </TABLE>
  
  See notes to consolidated financial statements.
  
  <PAGE>
                             IKON OFFICE SOLUTIONS, INC.
                          CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except earnings per share)
  
  <TABLE>
  <CAPTION>
                                                           Three Months Ended                Six Months Ended
                                                                 March 31                        March 31
                                                          1997             1996            1997            1996
  <S>                                                   <C>              <C>           <C>             <C>       
  Revenues
  Net sales                                             $744,552         $585,006      $1,383,380      $1,100,018
  Service and rentals                                    480,293          394,719         934,153         748,491
  Finance income                                          53,015           35,636         100,761          67,431
                                                     -----------      -----------     -----------     -----------
                                                       1,277,860        1,015,361       2,418,294       1,915,940
                                                     -----------      -----------     -----------     -----------
  
  Costs and Expenses
  Cost of goods sold                                     469,792          393,906         874,726         727,132
  Service and rental costs                               239,343          188,402         455,450         357,737
  Finance interest expense                                23,370           15,930          43,381          30,739
  Selling and administrative                             442,451          336,101         846,078         649,945
  Transformation costs                                    61,190            5,613          75,533           6,303
                                                     -----------      -----------     -----------     -----------
                                                       1,236,146          939,952       2,295,168       1,771,856
                                                     -----------      -----------     -----------     -----------
  
  Operating income                                        41,714           75,409         123,126         144,084
  Interest expense                                        11,605            9,167          19,806          16,507
                                                     -----------      -----------     -----------     -----------
  Income from continuing operations before taxes
      and extraordinary loss                              30,109           66,242         103,320         127,577
  Taxes on income                                         15,494           25,756          44,046          50,154
                                                     -----------      -----------     -----------     -----------
  Income from continuing operations before
       extraordinary loss                                 14,615           40,486          59,274          77,423
  
  Discontinued operations                                                  28,631          20,151          54,860
                                                     -----------      -----------     -----------     -----------
  Income before extraordinary loss                        14,615           69,117          79,425         132,283
  Extraordinary loss from early extinguishment
       of debt, net of tax benefit                                                        (12,156)
                                                     -----------      -----------     -----------     -----------
  Net Income                                              14,615           69,117          67,269         132,283
  Less:  Preferred Dividends                               4,885            4,885           9,770          12,549
                                                     -----------      -----------     -----------     -----------
  Available to Common Shareholders                        $9,730          $64,232         $57,499        $119,734
                                                     ===========      ===========     ===========     ===========
  
  Earnings (Loss) Per Share (1)
  Continuing Operations                                    $0.07            $0.28           $0.37           $0.53
  Discontinued Operations                                                   $0.22           $0.15           $0.44
  Extraordinary loss                                                                       $(0.09)
                                                     -----------      -----------     -----------     -----------
                                                           $0.07            $0.50           $0.43           $0.97
                                                     ===========      ===========     ===========     ===========
  </TABLE>
  (1)  See Exhibit 11 for computation of earnings per share.
  
  See notes to consolidated financial statements.
  
  <PAGE>
                             IKON OFFICE SOLUTIONS, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (in thousands)
  <TABLE>
  <CAPTION>
                                                                               Six Months Ended
                                                                                   March 31
                                                                               1997          1996
  Operating Activities
  <S>                                                                        <C>            <C>    
      Income from continuing operations before extraordinary loss            $59,274        $77,423
      Additions (deductions) to reconcile income from continuing
          operations before extraordinary loss to net cash
          provided by operating activities of continuing operations
             Depreciation                                                     50,418         34,146
             Amortization                                                     22,730         15,672
             Provisions for losses on accounts receivable                     11,339          8,102
             Provision for deferred taxes                                     30,000
             Writeoff of assets related to transformation                     23,311
             Changes in  operating  assets and  liabilities, net
                of effects from acquisitions and divestitures:
                   Increase in accounts receivable                           (82,394)       (53,141)
                   Increase in inventories                                   (81,428)       (39,020)
                   Increase in prepaid expenses                              (34,154)       (47,958)
                   Increase in accounts payable, deferred
                       revenues and accrued expenses                          47,907         84,805
             Miscellaneous                                                     1,374         (1,434)
                                                                           ---------      ---------
  Net cash provided by operating activities of continuing operations          48,377         78,595
  Net cash provided by operating activities of
      discontinued operations                                                 24,174         63,399
                                                                           ---------      ---------
  Net cash provided by operating activities                                   72,551        141,994
  
  Investing activities
      Proceeds from the sale of property and equipment                        19,106         16,477
      Payments received on long term receivables                               4,999          3,748
      Payments made on deferred liabilities                                  (13,442)
      Cost of companies acquired, net of cash acquired                       (99,856)       (62,814)
      Expenditures for property and equipment                                (77,376)       (54,805)
      Purchase of miscellaneous assets                                        (9,509)       (11,289)
      Finance subsidiaries receivables - additions                          (741,735)      (431,671)
      Finance subsidiaries receivables - collections                         303,913        173,381
                                                                           ---------      ---------
  Net cash used in investing activities of continuing operations            (613,900)      (366,973)
  Net cash used in investing activities of discontinued operations           (38,058)      (165,931)
                                                                           ---------      ---------
  Net cash used in investing activities                                     (651,958)      (532,904)
  
  Financing activities
      Payments of short-term borrowings, net                                (131,380)       (72,977)
      Proceeds from issuance of long-term debt                                39,878        433,630
      Proceeds from option exercises and sale of treasury shares              33,134         34,690
      Proceeds from sale of finance subsidiaries lease receivables            51,407         26,454
      Proceeds from (payments to) discontinued operations                    553,183       (142,952)
      Long-term debt repayments                                             (316,784)       (81,321)
      Finance subsidiaries debt - additions                                  427,688        254,800
      Finance subsidiaries debt - repayments                                 (76,000)       (74,402)
      Dividends paid                                                         (33,815)       (45,700)
      Purchase of treasury shares                                             (2,415)       (53,141)
                                                                           ---------      ---------
  Net cash provided by financing activities of continuing operations         544,896        279,081
  Net cash provided by financing activities of discontinued operations        13,882        102,532
                                                                           ---------      ---------
  Net cash provided by financing activities                                  558,778        381,613
                                                                           ---------      ---------
  
  Net decrease in cash                                                       (20,629)        (9,297)
  Cash at beginning of year                                                   46,056         66,413
                                                                           ---------      ---------
  Cash at end of period                                                      $25,427        $57,116
                                                                           =========      =========
  </TABLE>
  
  See notes to consolidated financial statements 
  
  <PAGE>
  
                             IKON OFFICE SOLUTIONS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   MARCH 31, 1997
  
  Note 1:  Basis of Presentation
  
           The accompanying  unaudited condensed consolidated financial statements
  have been prepared in accordance with generally accepted  accounting  principles
  for interim  financial  information  and the  instructions to Form 10-Q and Rule
  10-01  of  Regulation  S-X.  In  the  opinion  of  management,  all  adjustments
  (consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
  presentation  have  been  included.  For  further  information,   refer  to  the
  consolidated   financial  statements  and  footnotes  thereto  included  in  the
  Company's  annual  report on Form 10-K for the year ended  September  30,  1996.
  Certain  prior year amounts have been  reclassified  to conform with the current
  year presentation. As a result of the spin-off of Unisource as discussed in Note
  3, prior period amounts have been restated.
  
  
  Note 2:  Debt
  
           On December 16, 1996, the Company entered into a credit  agreement with
  several banks under which it may borrow up to $400 million.  This  multicurrency
  facility  replaces  a $500  million  credit  facility  which  was due to  expire
  December  1, 1999 and a $100  million  credit  facility  which was  canceled  on
  December 2, 1996.  The reduced  credit  commitment  reflects the spin-off of the
  Unisource  business which was effective  December 31, 1996 (see note 3). The new
  agreement,  which expires December 15, 2001,  includes a facility fee of 8 basis
  points per annum on the commitment,  based upon the Company's  current long-term
  debt rating. The agreement provides that loans may be made under either domestic
  or  Eurocurrency  notes at rates  computed  under a selection  of rate  formulas
  including prime or Eurocurrency rates. The agreement was filed as Exhibit 4.1 to
  the Company's Form 10-K for the year ended September 30, 1996.
  
  
  Note 3: Discontinued Operations and Spin-off
  
           On  June  19,  1996,  the  Company  announced  that it  would  separate
  Unisource  Worldwide,  Inc.  ("Unisource"),  its printing and imaging and supply
  systems  distribution  business from IKON Office Solutions,  Inc. ("IKON"),  its
  office  solutions  business,  with each  business  operating  as a  stand-alone,
  publicly traded company.  In order to effect the separation of these businesses,
  Alco  declared a dividend  payable to holders of record of Alco common  stock at
  the close of business on December 13, 1996 of one share of common  stock,  $.001
  par value, of Unisource for every two shares of Alco stock owned on December 13,
  1996. The distribution  resulted in 100% of the outstanding  shares of Unisource
  common stock being  distributed to Alco  shareholders  by December 31, 1996. The
  Company has accounted for Unisource as a discontinued  operation for all periods
  presented  in these  financial  statements.  Prior year  amounts  have also been
  restated to reflect the  allocation  of corporate  interest and other  corporate
  expenses to the discontinued operations of the Company.
  
           The  results of  discontinued  operations,  included  in the  Company's
  results of operations through December 31, 1996, are as follows (in thousands):
  
                               Three Months Ended       Six Months Ended
                                      March 31              March 31
                                       1996           1997            1996
            Revenues                $1,746,821     $1,728,533     $3,462,986
                                    ==========     ==========     ==========
  
            Income before taxes        $47,113        $34,743        $90,395
            Tax expense                 18,482         14,592         35,535
                                    ----------     ----------     ----------
            Net income                 $28,631        $20,151        $54,860
                                    ==========     ==========     ==========
  
  
  <PAGE>
  
                             IKON OFFICE SOLUTIONS, INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
                                   MARCH 31, 1997
  
  
  Note 3: Discontinued Operations and Spin-off (Continued)
  
           The net  carrying  value at  September  30,  1996 of the  assets  to be
  distributed to shareholders consisted of (in thousands):
  
  
            Working capital                               $750,792
            Net property and equipment                     224,168
            Other assets                                   637,062
            Long-term debt and other liabilities          (122,821)
                                                       -----------
            Unisource equity and intercompany debt      $1,489,201
                                                       ===========
  
           In December 1996,  Unisource repaid $553.5 million of intercompany debt
  outstanding  with the Company and the Unisource  stock was  distributed  to Alco
  shareholders. Equity of the Company was reduced by $952.3 million, which was the
  equity of Unisource at December 31, 1996.
  
  
  Note 4:  Extraordinary Loss on Early Extinguishment of Debt
  
           On December 2, 1996,  Unisource  borrowed under its new credit facility
  to repay  $553.5  million of  intercompany  debt with the  Company.  The Company
  prepaid debt in the amount of $514 million from these funds.  Early repayment of
  this debt resulted in certain prepayment  penalties.  Total prepayment penalties
  of $18.7  million and related tax benefits of $6.5  million are  reflected as an
  extraordinary  loss on early  extinguishment  of debt on the Statement of Income
  for the six months ended March 31, 1997.
  
  
  Note 5:  Name Change
  
           At their annual meeting on January 23, 1997, the shareholders  voted to
  change the name of the Company  from Alco  Standard  Corporation  to IKON Office
  Solutions,  Inc., the name previously used by Alco's  remaining  operating unit.
  The name change was effective  immediately  and the Company's  ticker symbol was
  changed from ASN to IKN effective January 27, 1997.
  
  
  Note 6:  Transformation Costs
  
           At the end of fiscal 1995,  the Company  announced  its  transformation
  program to change its organization into a more cohesive and efficient network by
  building a uniform information technology system and implementing best practices
  for critically important management functions throughout the IKON companies.  In
  March 1997, the Company  announced that it was accelerating  the  transformation
  program.  As a result, the Company began to separately disclose these costs as a
  component of operating  expenses on the Statement of Income. The Company expects
  to  complete  the  transformation  program  by  the  end  of  fiscal  1998.  The
  transformation  involves a variety of activities which the company believes will
  significantly lower administrative  costs and improve margins.  These activities
  include  consolidating  purchasing,   inventory  control,  logistics  and  other
  activities into thirteen  customer  service centers in the U.S.,  establishing a
  single financial  processing center,  building a common  information  technology
  system, adopting a common name and creating marketplace-focused field operations
  with  greater  attention  to  customer  sales and  services.  Costs  charged  to
  transformation  expense relate principally to the write off of the abandoned SAP
  computer platform,  severance and other employee related costs, costs related to
  consultants  assisting with the transformation,  facility  consolidation  costs,
  including  lease  buyouts and  write-offs of leasehold  improvements,  and costs
  incurred in connection with the adoption of the IKON name worldwide.
  
  
  <PAGE>
  
  
  Item 2:  Management's  Discussion  and  Analysis  of Results of  Operations  and
  Financial Condition and Liquidity
  
           On June 19,  1996,  the Company  announced  that it would split its two
  operating units into independent companies by spinning off Unisource,  its paper
  and supply systems distribution group, as a separate publicly owned company. The
  Company  accomplished the transaction  through a U.S.  tax-free  distribution of
  Unisource stock to Company shareholders on December 31, 1996. As a result of the
  spin off of Unisource, the Company has accounted for Unisource as a discontinued
  operation.  Continuing  operations of the Company consist of IKON,  which sells,
  rents and leases  photocopiers,  digital  printers  and other  automated  office
  equipment for use in both traditional and integrated office  environments.  IKON
  also provides  outsourcing and imaging services and offers  consulting,  design,
  computer   networking   and  technology   training  for  the  networked   office
  environment.  On January 23, 1997,  shareholders  of the Company voted to change
  the name of the Company from Alco Standard Corporation to IKON Office Solutions,
  Inc.
  
                                Results of Operations
  
           The  discussion  of the results of  operations  reviews the  continuing
  operations of the Company as contained in the Consolidated Statements of Income.
  
                      Three and Six Months Ended March 31, 1997
             Compared with the Three and Six Months Ended March 31, 1996
  
           Revenues  and  income   before   taxes  for  the  second   quarter  and
  year-to-date  of fiscal 1997 compared to the second quarter and  year-to-date of
  fiscal 1996 were as follows:
  <TABLE>
  <CAPTION>
                                               Three Months Ended                         Six Months Ended
                                                    March 31               %                March  31          %
                                                 1997        1996        Change         1997       1996         Change
  (in millions)
  <S>                                          <C>         <C>           <C>          <C>        <C>          <C>  
  REVENUES                                     $1,278      $1,015        25.9%        $2,418     $1,916       26.2%
                                               ======      ======                     ======     ======
  
  INCOME BEFORE TAXES:
  Operating income, excluding
     transformation costs                      $102.9       $81.0        27.0%        $198.6     $150.4       32.0%
  Transformation costs                          (61.2)       (5.6)                     (75.5)      (6.3)
                                                ------      -----                     ------     ------
        Operating income                         41.7        75.4                      123.1      144.1
  Interest expense                              (11.6)       (9.2)                     (19.8)     (16.5)
                                                ------      -----                     ------     ------
                                                $30.1       $66.2       (54.5%)       $103.3     $127.6      (19.0%)
                                                =====       =====                     ======     ======
  </TABLE>
  
  
  SECOND QUARTER:
           The Company's second quarter revenues increased $263 million,  or 25.9%
  over the second quarter of fiscal 1996, of which $147 million relates to current
  and prior year acquisitions and $116 million to base companies' internal growth.
  The Company's  internal revenue growth was 11.5% in the second quarter of fiscal
  1997.  The  results  reflect  a  very  strong  performance  from  the  Company's
  traditional  copier business in North America,  despite a temporary  shortage in
  high-end and color copiers and printers from suppliers,  net of revenue declines
  in the U.K.  Revenues from the Company's  operations  outside the U.S. were $167
  million for the second  quarter of fiscal 1997  compared to $134 million for the
  same  period  of the  prior  fiscal  year.  The  Company's  European  operations
  accounted for $1 million of the increase, which consisted of revenue declines in
  IKON  U.K.  of $17  million  offset  by  revenue  increases  in  other  European
  operations,  while  Canadian  revenues  increased  $29  million  as a result  of
  acquisitions  and  internal  growth in base  companies.  A fiscal  1996  Mexican
  acquisition  added $3 million of revenue to the second  quarter of fiscal  1997.
  U.K.   operations  are  continuing  to  recover  from  an  abrupt  and  untested
  consolidation  which began in October 1996. Since then,  management changes were
  made, the  organization  is being rebuilt,  and the Company  expects the U.K. to
  return to previous run rates within the next 12 months.
  
  <PAGE>
  
  
           The Company's  operating  income decreased by $33.7 million compared to
  the prior year's quarter.  However,  excluding  transformation costs,  operating
  income  increased  27.0% to $102.9 million from $81.0 million in the prior year.
  Finance subsidiaries  contributed 13.5% of the Company's operating income before
  transformation  costs in the second  quarter of fiscal 1997 compared to 11.1% in
  the second quarter of fiscal 1996. The Company's  operating margins were 3.3% in
  the second  quarter of fiscal 1997,  compared to 7.4% in fiscal 1996.  Excluding
  transformation  costs, the Company's  operating  margins were 8.1% in the second
  quarter of fiscal 1997, compared to 8.0% in the second quarter of fiscal 1996.
  
           Costs associated with the Company's  transformation program,  announced
  the end of fiscal 1995, increased  significantly in the second quarter of fiscal
  1997. Due to the significance of these costs in the second quarter, and the fact
  that these costs will be incurred  through fiscal 1998, when the  transformation
  program  is  expected  to be  completed,  the  Company  began  this  quarter  to
  separately  disclose  these costs as a component  of  operating  expenses on the
  Statement  of Income.  The  increase of $55.6  million in the second  quarter of
  fiscal 1997  compared to the second  quarter of fiscal 1996,  was  primarily the
  result of the write-off of costs associated with the SAP computer  platform that
  was abandoned during the quarter ($25 million),  employee  severance  agreements
  ($6 million),  outside  consultants ($1 million),  temporary labor ($3 million),
  facility  consolidations  ($6 million) and costs incurred in connection with the
  adoption of the IKON name worldwide ($9 million).
  
           Operating  income from  foreign  operations  was $12.1  million for the
  three  months  ended March 31,  1997,  down $2.2  million  from the prior year's
  quarter.  European  operations posted a $4.3 million decline in operating income
  in the second quarter,  relating  primarily to revenue declines in the U.K. as a
  result  of its  consolidation  which  began  in  October  1996,  while  Canadian
  operating income increased $2.2 million and the Mexican operation reported a $.1
  million  operating  loss for the  second  quarter of fiscal  1997.  There was no
  material effect of foreign currency exchange rate fluctuations on the results of
  operations in the second  quarter of fiscal 1997 compared to the second  quarter
  of fiscal 1996.
  
  
  SIX MONTHS:
           The Company's six month revenues increased $502 million,  or 26.2% over
  the first six months of fiscal 1996,  of which $254  million  relates to current
  and prior year acquisitions and $248 million to base companies' internal growth.
  The Company's  internal revenue growth was 13% in the first half of fiscal 1997.
  The results  reflect a very strong  performance  from the Company's  traditional
  copier  business in North  America  with  substantial  growth in both  equipment
  placements and copy volume,  net of revenue  declines in the U.K.  Revenues from
  the  Company's  operations  outside the U.S. were $314 million for the first six
  months of fiscal 1997  compared to $258 million for the same period of the prior
  fiscal year. The Company's European  operations  accounted for $3 million of the
  increase, which consisted of revenue declines in IKON U.K. of $29 million offset
  by revenue  increases in other  European  operations,  while  Canadian  revenues
  increased $47 million as a result of  acquisitions  and internal  growth in base
  companies and the fiscal 1996 Mexican acquisition added $6 million of revenue to
  the second quarter of fiscal 1997.
  
           Transformation  costs  increased $69.2 million for the six months ended
  March 31, 1997 compared to the prior year and was primarily due to the write-off
  of costs associated with the SAP computer platform that was abandoned during the
  second  quarter ($28  million),  employee  severance  agreements  ($7  million),
  outside  consultants  ($2  million),  temporary  labor  ($6  million),  facility
  consolidations  ($7 million) and costs incurred in connection  with the adoption
  of the IKON name worldwide ($10 million).
  
           The Company's  operating  income decreased by $21.0 million compared to
  the prior year's first half. Excluding  transformation  costs,  operating income
  increased  32% in the first half of fiscal  1997 to $198.6  million  from $150.4
  million in the first half of fiscal 1996. Finance subsidiaries contributed 14.3%
  of the Company's  operating  income in the first half of fiscal 1997 compared to
  11.6% in the first half of fiscal 1996.  The  Company's  operating  margins were
  5.1% in the first six months of fiscal  1997,  compared to 7.5% in fiscal  1996.
  Excluding  transformation  costs,  operating margins were 8.2% for the first six
  months of fiscal 1997 compared to 7.8% in the first six months of fiscal 1996.
  
  
  <PAGE>
  
  
           Operating income from foreign  operations was $22.1 million for the six
  months ended March 31, 1997, down $3.8 million from the prior year's first half.
  European  operations  posted a $7.0 million  decline in operating  income in the
  first six months of fiscal 1997,  relating  primarily to revenue declines in the
  U.K.  as a result  of its  consolidation  which  began in  October  1996,  while
  Canadian  operating income increased $3.2 million.  There was no material effect
  of foreign currency  exchange rate  fluctuations on the results of operations in
  the first six months of fiscal  1997  compared to the first six months of fiscal
  1996.
  
  
  Acquisitions
           In the  second  quarter  of  fiscal  1997,  the  Company  completed  24
  acquisitions,  bringing  total  year-to-date  acquisitions  to  47.  Of  the  24
  companies  acquired,   nine  were  systems  integration   companies,   six  were
  outsourcing and imaging  companies and nine were traditional  copier  companies.
  This year, as part of its total  solutions  strategy,  IKON has  emphasized  the
  acquisition  of  systems  integration  and  outsourcing  companies  to build its
  capabilities in these areas.
  
  Other
           Interest expense increased $2.4 million in the second quarter of fiscal
  1997, and $3.3 million year-to-date. The increased expense is due to higher debt
  levels  in  fiscal  1997  when  adjusted  for the  Unisource  intercompany  debt
  repayment made in December 1996.
  
           Income before taxes  decreased by $36.1  million in the second  quarter
  and $24.3 million  year-to-date  over the prior year,  primarily  reflecting the
  combined  result of internal  growth from base  companies,  along with  earnings
  contributed by acquisitions, net of increased transformation and interest costs.
  The effective income tax rate  year-to-date is 42.6% compared with 39.3% for the
  comparative period in fiscal 1996.
  
           The Company recorded an extraordinary charge of $12.2 million after tax
  in the first  quarter of fiscal  1997  relating to its early  extinguishment  of
  certain  corporate  debt.  The Company  used the  proceeds of a December 2, 1996
  $553.5 million  intercompany  debt repayment  from its  discontinued  operation,
  Unisource,  to prepay $514 million of corporate debt. The pretax charge of $18.7
  million is primarily for  prepayment  penalties and has a related tax benefit of
  $6.5 million.
  
           Earnings per share from continuing  operations  decreased from $.28 per
  share for the  second  quarter  of fiscal  1996 to $.07 per share for the second
  quarter of fiscal 1997. Excluding  transformation costs, earnings per share from
  continuing  operations  would have  increased  19.4% from $.31 per share for the
  second  quarter of fiscal 1996 to $.37 per share in the second quarter of fiscal
  1997. Including discontinued operations,  earnings per share of the Company were
  $.50 for the second  quarter  ended March 31, 1996.  Year-to-date,  earnings per
  share from continuing operations,  excluding the extraordinary charge, decreased
  from $.53 per share  for the first six  months of fiscal  1996 to $.37 per share
  for the  first  six  months  of fiscal  1997.  Excluding  transformation  costs,
  earnings per share from  continuing  operations  would have increased 30.4% from
  $.56 per share for the first six months of fiscal 1996 to $.73 per share for the
  first six  months of fiscal  1997.  Including  the loss per share of $.09 on the
  extraordinary  charge  and the  earnings  per  share  of  $.15  on  discontinued
  operations, earnings per share of the Company were $.43 for the six months ended
  March  31,  1997  compared  to  $.97  (which  includes  $.44  for   discontinued
  operations) for the six months ended March 31, 1996.
  
           Weighted  average  shares of 136.3  million for the quarter ended March
  31, 1997 were 7.8 million  shares greater than the 128.5 million for the quarter
  ended  March 31,  1996,  primarily  the  result of  acquisitions  for stock (6.0
  million weighted average shares).
  
  <PAGE>
  
                          Financial Condition and Liquidity
  
           Net cash provided by operating activities of continuing  operations for
  the first six months of fiscal 1997 was $48 million. During the same period, the
  Company  used $614  million in cash for  investing  activities,  which  included
  finance subsidiary activity of $438 million, acquisition activity at a cash cost
  of $100 million and capital  expenditures of $77 million.  Investing  activities
  were funded  through cash flow from  operations and financing  activities.  Cash
  provided by financing  activities  included  $553 million of  intercompany  debt
  repaid by Unisource  which was used  primarily to prepay  corporate  debt of the
  Company and $352 million of additional funding for finance  subsidiaries.  Debt,
  excluding finance  subsidiaries,  was $616 million at March 31, 1997, a decrease
  of $355 million from the  continuing  operations  debt balance at September  30,
  1996 of $971  million.  The debt to  capital  ratio was 29.3% at March 31,  1997
  compared to 31.4% at September 30, 1996 and 29.8% at December 31, 1996.
  
           On December 16, 1996, the Company entered into a credit  agreement with
  several banks under which it may borrow up to $400 million. This credit facility
  replaces a $500 million credit  facility  which was due to expire  December 1999
  and a $100 million  credit  facility which was canceled on December 2, 1996. The
  reduced credit commitment  reflects the spin-off of the Unisource business which
  was  effective  December 31, 1996. As of March 31, 1997,  borrowings  under this
  agreement totaled $47.3 million,  leaving $352.7 million available.  The Company
  also has $450 million  available  for either stock or debt  offerings  under its
  shelf registration statement filed November 1995.
  
           Finance subsidiaries debt grew by $352 million from September 30, 1996,
  a result of increased  leasing  activity.  During the six months ended March 31,
  1997,  IKON Capital  issued an additional  $385.5 million under its $1.5 billion
  medium term notes  program  which began in July 1994.  At March 31,  1997,  $1.3
  billion of medium term notes were outstanding  with a weighted  interest rate of
  6.7%, leaving $115 million available under this program. IKON Capital intends to
  file a new shelf  registration  in May 1997 for $2 billion of medium term notes.
  The new registration  statement will have essentially the same provisions as the
  existing  program.  Under its $275 million asset  securitization  program,  IKON
  Capital sold $51.4 million in direct  financing  leases during the first half of
  fiscal  1997,  replacing  those  leases  liquidated  and  leaving  the amount of
  contracts sold unchanged.
  
           The Company filed shelf  registrations  for 10 million shares of common
  stock in January 1996 and 5 million shares of common stock in March 1996. Shares
  issued  under these  registration  statements  are being used for  acquisitions.
  Approximately 11 million shares have been issued under these shelf registrations
  through March 31, 1997. A new shelf registration was filed on April 10, 1997 for
  an additional 10 million shares to be used for acquisitions.
  
           On April 17, 1997, the Company  announced  that it may repurchase  from
  time to time as much as five  percent of the  outstanding  IKON common  stock in
  open market transactions.
  
           The Company  believes that its operating cash flow together with unused
  bank credit  facilities and other financing  arrangements  will be sufficient to
  finance  current  operating   requirements   including   capital   expenditures,
  acquisitions,  dividends,  stock  repurchases  and  costs  associated  with  the
  Company's  transformation  program.  The Company  estimates the total  remaining
  costs of its  transformation  program to be from $105  million to $140  million,
  excluding capital costs of $90 million to $100 million.
  
  <PAGE>
  
                             Forward-looking Information
  
           This document contains, and other materials filed or to be filed by the
  Company with the Commission which are incorporated by reference  herein, as well
  as information  included in oral statements or other written  statements made or
  to be made by the Company, contain or will contain or include, disclosures which
  are  forward-looking  statements  within  the  meaning  of  Section  27A  of the
  Securities  Act of 1933,  as amended,  and Section 21E of the 1934 Exchange Act.
  Such  forward-looking   statements  address,   among  other  things,   strategic
  initiatives  (including  plans for enhancing the Company's  business through new
  acquisitions,  information technology systems,  sales strategies,  market growth
  plans,  margin  enhancement  initiatives,  capital  expenditures  and  financing
  sources).  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 Company's
  future financial  condition and results.  These uncertainties and risks include,
  but are not limited to, those  relating to  successfully  managing an aggressive
  program to  acquire  and  integrate  new  companies,  including  companies  with
  technical services and products that are relatively new to the Company, and also
  including companies outside the U.S., 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  a
  large-scale   transformation   project;  debt  service  requirements  (including
  sensitivity to fluctuations in interest rates); and general economic conditions.
  As a  consequence,  current  plans,  anticipated  actions  and future  financial
  condition  and results may differ from those  expressed  in any  forward-looking
  statements made by or on behalf of the Company.
  
  
  <PAGE>
  
                             PART II. OTHER INFORMATION
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
       On January 23, 1997, the Company held its annual  meeting of  shareholders,
  at which seven  directors  were elected to hold office  until  election of their
  successors.  The  shareholders  also  voted on a proposal  to amend the  Amended
  Articles of  Incorporation of the Company to change the name of the Company from
  Alco Standard Corporation to IKON Office Solutions, Inc.
  
       The following  sets forth the tabulation of votes with respect to the above
  proposals:
  
  Proposals to Elect Directors            For             Withheld
  James R Birle                       112,874,379         305,737
  Kurt E. Dunkelacker                 112,846,880         333,237
  William F. Drake, Jr                112,874,775         305,341
  Frederick S. Hammer                 112,861,193         318,923
  Barbara B. Hauptfuhrer              112,853,540         326,576
  Richard A. Jalkut                   111,957,192       1,222,925
  John E. Stuart                      112,810,011         370,105
  
                                          For            Against        Abstain
  Proposal to Amend Articles
  of Incorporation to Change Name:     111,377,627       680,696       1,121,793
  
     All proposals were routine; therefore, no broker non-votes were recorded.
  
  
  Item 6.  Exhibits and Reports on Form 8-K
  
           (a)   The following Exhibits are furnished pursuant to Item 601 of
                 Regulation S-K:
  
  
                 Exhibit No. (11) Computation of Earnings per Share
  
                 Exhibit No. (27) Financial Data Schedule.
  
           (b)   Reports on Form 8-K
  
                 On January 30, 1997,  the  registrant  filed a Current  Report on
                 Form 8-K to file,  under Item 5 of the form, the earnings for the
                 fiscal  quarter ended December 31, 1996 and the  announcement  of
                 the name change  from Alco  Standard  Corporation  to IKON Office
                 Solutions,  Inc.  which was approved by  shareholder  vote at the
                 annual shareholders meeting held January 23, 1997.
  
                 On April 18, 1997, the registrant  filed a Current Report on Form
                 8-K to file,  under  Item 5 of the  form,  the  earnings  for the
                 fiscal  quarter  ended  March 31,  1997 and the  announcement  of
                 certain  management  changes,  and the  announcement  that it may
                 repurchase  from  time  to  time  as  much  as 5  percent  of its
                 outstanding shares in open market transactions.
  
                 On April 23, 1997, the registrant  filed a Current Report on Form
                 8-K to file,  under Item 5 of the form, a Press  Release  stating
                 that it was unaware of any reason its stock,  which  recently had
                 traded down sharply,  should be under pressure. The Press Release
                 also stated  that IKON's  business is strong and that the Company
                 knows of no  material  developments  concerning  its  business or
                 financial statements which have not been publicly disclosed.
  
  <PAGE>
  
                                     SIGNATURES
  
  
  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. This report has also been signed by the
  undersigned in his capacity as the chief accounting officer of the Registrant.
  
  
                                          IKON OFFICE SOLUTIONS, INC.
  
  
  Date  May 15, 1997                      /s/ Michael J. Dillon
        ------------                      ---------------------
                                          Michael J. Dillon
                                          Vice President and Controller
                                         (Chief Accounting Officer)
  
  <PAGE>
  
                                  INDEX TO EXHIBITS
  
  Exhibit Number
  
  
           (11)       Computation of Earnings per Share
  
           (27)       Financial Data Schedule.
metadata_documents: [{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 51476}]
metadata_filer: {"company-data": {"conformed-name": "IKON OFFICE SOLUTIONS INC", "cik": "0000003370", "assigned-sic": "5045", "irs-number": "230334400", "state-of-incorporation": "OH", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-05964", "film-number": "97607730"}, "business-address": {"street1": "P O BOX 834", "city": "VALLEY FORGE", "state": "PA", "zip": "19482", "phone": "2152968000"}, "mail-address": {"street1": "BOX 834", "city": "VALLEY FORGE", "state": "PA", "zip": "19482"}, "former-company": [{"former-conformed-name": "ALCO STANDARD CORP", "date-changed": "19920703"}, {"former-conformed-name": "ALCO CHEMICAL CORP", "date-changed": "19680218"}]}
text: SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549
                                      Form 10-Q
  
  (Mark One)*
  [X] Quarterly report pursuant to section 13 or 15(d) of the Securities  Exchange
  Act of 1934 for the  quarterly  period  ended March 31,  1997 or [ ]  Transition
  report  pursuant to section 13 or 15(d) of the  Securities  Exchange Act of 1934
  for the transition period from _________ to __________
  
  Commission file number     1-5964
  
                             IKON OFFICE SOLUTIONS, INC.
  
               (Exact name of registrant as specified in its charter)
  
             OHIO                                        23-0334400
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification No.)
  
                      Box 834, Valley Forge, Pennsylvania 19482
                      (Address of principal executive offices)
                                     (Zip Code)
  
                                   (610) 296-8000
                (Registrant's telephone number, including area code)
  
                                        NONE
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
  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
  
  *  Applicable  only to issuers  involved in  bankruptcy  proceedings  during the
  preceding five years:
  
  Indicate  by check mark  whether  the  registrant  has filed all  documents  and
  reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
  Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
  confirmed by a court.
  
  Yes         No
  
  * Applicable only to corporate issuers:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of April 30, 1997.
  
  Common Stock, no par value                         132,519,051 shares
  INDEX
  
                             IKON OFFICE SOLUTIONS, INC.
  
  PART I. FINANCIAL INFORMATION
  
       Item 1.             Financial Statements (Unaudited)
  
                           Consolidated Balance Sheets--March 31, 1997
                           and September 30, 1996
  
                           Consolidated  Statements of Income--Three  months ended
                           March 31, 1997 and March 31, 1996 and Six months  ended
                           March 31, 1997 and March 31, 1996
  
                           Consolidated Statements of Cash Flows--Six months ended
                           March 31, 1997 and March 31, 1996
  
                           Notes to Consolidated Financial Statements--
                           March 31, 1997
  
       Item 2.             Management's Discussion and Analysis of Results
                           of Operations and Financial Condition and Liquidity
  
  PART II.  OTHER INFORMATION
  
  Item 6.    Exhibits and Reports on Form 8-K
  
  SIGNATURES
  PART I. FINANCIAL INFORMATION
  
  Item 1: Financial Statements (unaudited)
  
                             IKON OFFICE SOLUTIONS, INC.
                             CONSOLIDATED BALANCE SHEETS
                                  ( in thousands )
  
                                              March 31     September 30
  ASSETS                                        1997           1996
  
  Current Assets
       Cash                                    $25,427        $46,056
       Accounts receivable, net                627,106        513,378
       Finance receivables, net                585,646        435,434
       Inventories                             442,110        350,774
       Prepaid expenses                        115,683         80,352
       Deferred taxes                           96,008         83,161
                                            ----------     ----------
       Total current assets                  1,891,980      1,509,155
                                            ----------     ----------
  
  Investments and Long-Term Receivables         21,041         48,165
  
  Long-Term Finance Receivables, net         1,107,672        878,324
  
  Equipment on Operating Leases, net            95,820         95,043
  
  Property and Equipment, at cost              394,840        358,234
       Less accumulated depreciation           205,367        169,416
                                            ----------     ----------
                                               189,473        188,818
                                            ----------     ----------
  
  Other Assets
       Goodwill                              1,274,155      1,087,210
       Miscellaneous                           142,085         88,679
                                            ----------     ----------
                                             1,416,240      1,175,889
                                            ----------     ----------
  
  Net Assets of Discontinued Operations                     1,489,201
                                            ----------     ----------
  
                                            $4,722,226     $5,384,595
                                            ==========     ==========
  
  See notes to consolidated financial statements.
  IKON OFFICE SOLUTIONS, INC.
                             CONSOLIDATED BALANCE SHEETS
                                  ( in thousands )
  March 31       September 30
  LIABILITIES AND SHAREHOLDERS' EQUITY                                 1997             1996
  Current Liabilities
      Current portion of long-term debt                               $58,637          $62,697
      Current portion of long-term debt, finance subsidiaries         393,000          314,000
      Notes payable                                                    56,934          186,462
      Trade accounts payable                                          202,415          123,571
      Accrued salaries, wages and commissions                          86,752          101,632
      Deferred revenues                                               204,624          200,225
      Other accrued expenses                                          286,529          269,400
                                                                  -----------      -----------
      Total current liabilities                                     1,288,891        1,257,987
                                                                  -----------      -----------
  
  Long-Term Debt                                                      500,460          721,923
  
  Long-Term Debt, Finance Subsidiaries                              1,085,714          813,026
  
  Deferred Taxes                                                      231,308          191,272
  
  Other long term liabilities                                         127,784          144,883
  
  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 3/97 -135,684 shares; 9/96 - 131,930 shares          670,687        1,305,413
      Retained earnings                                               534,329          701,771
      Foreign currency translation adjustment                          (2,090)         (25,187)
      Cost of common shares in treasury: 3/97 - 114 shares;
          9/96 - 374 shares                                            (5,027)         (16,663)
                                                                  -----------      -----------
                                                                    1,488,069        2,255,504
                                                                  -----------      -----------
  
                                                                   $4,722,226       $5,384,595
                                                                  ===========      ===========
  See notes to consolidated financial statements.
  IKON OFFICE SOLUTIONS, INC.
                          CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except earnings per share)
  Three Months Ended                Six Months Ended
                                                                 March 31                        March 31
                                                          1997             1996            1997            1996
  Revenues
  Net sales                                             $744,552         $585,006      $1,383,380      $1,100,018
  Service and rentals                                    480,293          394,719         934,153         748,491
  Finance income                                          53,015           35,636         100,761          67,431
                                                     -----------      -----------     -----------     -----------
                                                       1,277,860        1,015,361       2,418,294       1,915,940
                                                     -----------      -----------     -----------     -----------
  
  Costs and Expenses
  Cost of goods sold                                     469,792          393,906         874,726         727,132
  Service and rental costs                               239,343          188,402         455,450         357,737
  Finance interest expense                                23,370           15,930          43,381          30,739
  Selling and administrative                             442,451          336,101         846,078         649,945
  Transformation costs                                    61,190            5,613          75,533           6,303
                                                     -----------      -----------     -----------     -----------
                                                       1,236,146          939,952       2,295,168       1,771,856
                                                     -----------      -----------     -----------     -----------
  
  Operating income                                        41,714           75,409         123,126         144,084
  Interest expense                                        11,605            9,167          19,806          16,507
                                                     -----------      -----------     -----------     -----------
  Income from continuing operations before taxes
      and extraordinary loss                              30,109           66,242         103,320         127,577
  Taxes on income                                         15,494           25,756          44,046          50,154
                                                     -----------      -----------     -----------     -----------
  Income from continuing operations before
       extraordinary loss                                 14,615           40,486          59,274          77,423
  
  Discontinued operations                                                  28,631          20,151          54,860
                                                     -----------      -----------     -----------     -----------
  Income before extraordinary loss                        14,615           69,117          79,425         132,283
  Extraordinary loss from early extinguishment
       of debt, net of tax benefit                                                        (12,156)
                                                     -----------      -----------     -----------     -----------
  Net Income                                              14,615           69,117          67,269         132,283
  Less:  Preferred Dividends                               4,885            4,885           9,770          12,549
                                                     -----------      -----------     -----------     -----------
  Available to Common Shareholders                        $9,730          $64,232         $57,499        $119,734
                                                     ===========      ===========     ===========     ===========
  
  Earnings (Loss) Per Share (1)
  Continuing Operations                                    $0.07            $0.28           $0.37           $0.53
  Discontinued Operations                                                   $0.22           $0.15           $0.44
  Extraordinary loss                                                                       $(0.09)
                                                     -----------      -----------     -----------     -----------
                                                           $0.07            $0.50           $0.43           $0.97
                                                     ===========      ===========     ===========     ===========
  (1)  See Exhibit 11 for computation of earnings per share.
  
  See notes to consolidated financial statements.
  IKON OFFICE SOLUTIONS, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (in thousands)
  Six Months Ended
                                                                                   March 31
                                                                               1997          1996
  Operating Activities
  Income from continuing operations before extraordinary loss            $59,274        $77,423
      Additions (deductions) to reconcile income from continuing
          operations before extraordinary loss to net cash
          provided by operating activities of continuing operations
             Depreciation                                                     50,418         34,146
             Amortization                                                     22,730         15,672
             Provisions for losses on accounts receivable                     11,339          8,102
             Provision for deferred taxes                                     30,000
             Writeoff of assets related to transformation                     23,311
             Changes in  operating  assets and  liabilities, net
                of effects from acquisitions and divestitures:
                   Increase in accounts receivable                           (82,394)       (53,141)
                   Increase in inventories                                   (81,428)       (39,020)
                   Increase in prepaid expenses                              (34,154)       (47,958)
                   Increase in accounts payable, deferred
                       revenues and accrued expenses                          47,907         84,805
             Miscellaneous                                                     1,374         (1,434)
                                                                           ---------      ---------
  Net cash provided by operating activities of continuing operations          48,377         78,595
  Net cash provided by operating activities of
      discontinued operations                                                 24,174         63,399
                                                                           ---------      ---------
  Net cash provided by operating activities                                   72,551        141,994
  
  Investing activities
      Proceeds from the sale of property and equipment                        19,106         16,477
      Payments received on long term receivables                               4,999          3,748
      Payments made on deferred liabilities                                  (13,442)
      Cost of companies acquired, net of cash acquired                       (99,856)       (62,814)
      Expenditures for property and equipment                                (77,376)       (54,805)
      Purchase of miscellaneous assets                                        (9,509)       (11,289)
      Finance subsidiaries receivables - additions                          (741,735)      (431,671)
      Finance subsidiaries receivables - collections                         303,913        173,381
                                                                           ---------      ---------
  Net cash used in investing activities of continuing operations            (613,900)      (366,973)
  Net cash used in investing activities of discontinued operations           (38,058)      (165,931)
                                                                           ---------      ---------
  Net cash used in investing activities                                     (651,958)      (532,904)
  
  Financing activities
      Payments of short-term borrowings, net                                (131,380)       (72,977)
      Proceeds from issuance of long-term debt                                39,878        433,630
      Proceeds from option exercises and sale of treasury shares              33,134         34,690
      Proceeds from sale of finance subsidiaries lease receivables            51,407         26,454
      Proceeds from (payments to) discontinued operations                    553,183       (142,952)
      Long-term debt repayments                                             (316,784)       (81,321)
      Finance subsidiaries debt - additions                                  427,688        254,800
      Finance subsidiaries debt - repayments                                 (76,000)       (74,402)
      Dividends paid                                                         (33,815)       (45,700)
      Purchase of treasury shares                                             (2,415)       (53,141)
                                                                           ---------      ---------
  Net cash provided by financing activities of continuing operations         544,896        279,081
  Net cash provided by financing activities of discontinued operations        13,882        102,532
                                                                           ---------      ---------
  Net cash provided by financing activities                                  558,778        381,613
                                                                           ---------      ---------
  
  Net decrease in cash                                                       (20,629)        (9,297)
  Cash at beginning of year                                                   46,056         66,413
                                                                           ---------      ---------
  Cash at end of period                                                      $25,427        $57,116
                                                                           =========      =========
  See notes to consolidated financial statements
  IKON OFFICE SOLUTIONS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   MARCH 31, 1997
  
  Note 1:  Basis of Presentation
  
           The accompanying  unaudited condensed consolidated financial statements
  have been prepared in accordance with generally accepted  accounting  principles
  for interim  financial  information  and the  instructions to Form 10-Q and Rule
  10-01  of  Regulation  S-X.  In  the  opinion  of  management,  all  adjustments
  (consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
  presentation  have  been  included.  For  further  information,   refer  to  the
  consolidated   financial  statements  and  footnotes  thereto  included  in  the
  Company's  annual  report on Form 10-K for the year ended  September  30,  1996.
  Certain  prior year amounts have been  reclassified  to conform with the current
  year presentation. As a result of the spin-off of Unisource as discussed in Note
  3, prior period amounts have been restated.
  
  Note 2:  Debt
  
           On December 16, 1996, the Company entered into a credit  agreement with
  several banks under which it may borrow up to $400 million.  This  multicurrency
  facility  replaces  a $500  million  credit  facility  which  was due to  expire
  December  1, 1999 and a $100  million  credit  facility  which was  canceled  on
  December 2, 1996.  The reduced  credit  commitment  reflects the spin-off of the
  Unisource  business which was effective  December 31, 1996 (see note 3). The new
  agreement,  which expires December 15, 2001,  includes a facility fee of 8 basis
  points per annum on the commitment,  based upon the Company's  current long-term
  debt rating. The agreement provides that loans may be made under either domestic
  or  Eurocurrency  notes at rates  computed  under a selection  of rate  formulas
  including prime or Eurocurrency rates. The agreement was filed as Exhibit 4.1 to
  the Company's Form 10-K for the year ended September 30, 1996.
  
  Note 3: Discontinued Operations and Spin-off
  
           On  June  19,  1996,  the  Company  announced  that it  would  separate
  Unisource  Worldwide,  Inc.  ("Unisource"),  its printing and imaging and supply
  systems  distribution  business from IKON Office Solutions,  Inc. ("IKON"),  its
  office  solutions  business,  with each  business  operating  as a  stand-alone,
  publicly traded company.  In order to effect the separation of these businesses,
  Alco  declared a dividend  payable to holders of record of Alco common  stock at
  the close of business on December 13, 1996 of one share of common  stock,  $.001
  par value, of Unisource for every two shares of Alco stock owned on December 13,
  1996. The distribution  resulted in 100% of the outstanding  shares of Unisource
  common stock being  distributed to Alco  shareholders  by December 31, 1996. The
  Company has accounted for Unisource as a discontinued  operation for all periods
  presented  in these  financial  statements.  Prior year  amounts  have also been
  restated to reflect the  allocation  of corporate  interest and other  corporate
  expenses to the discontinued operations of the Company.
  
           The  results of  discontinued  operations,  included  in the  Company's
  results of operations through December 31, 1996, are as follows (in thousands):
  
                               Three Months Ended       Six Months Ended
                                      March 31              March 31
                                       1996           1997            1996
            Revenues                $1,746,821     $1,728,533     $3,462,986
                                    ==========     ==========     ==========
  
            Income before taxes        $47,113        $34,743        $90,395
            Tax expense                 18,482         14,592         35,535
                                    ----------     ----------     ----------
            Net income                 $28,631        $20,151        $54,860
                                    ==========     ==========     ==========
  IKON OFFICE SOLUTIONS, INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
                                   MARCH 31, 1997
  
  Note 3: Discontinued Operations and Spin-off (Continued)
  
           The net  carrying  value at  September  30,  1996 of the  assets  to be
  distributed to shareholders consisted of (in thousands):
  
            Working capital                               $750,792
            Net property and equipment                     224,168
            Other assets                                   637,062
            Long-term debt and other liabilities          (122,821)
                                                       -----------
            Unisource equity and intercompany debt      $1,489,201
                                                       ===========
  
           In December 1996,  Unisource repaid $553.5 million of intercompany debt
  outstanding  with the Company and the Unisource  stock was  distributed  to Alco
  shareholders. Equity of the Company was reduced by $952.3 million, which was the
  equity of Unisource at December 31, 1996.
  
  Note 4:  Extraordinary Loss on Early Extinguishment of Debt
  
           On December 2, 1996,  Unisource  borrowed under its new credit facility
  to repay  $553.5  million of  intercompany  debt with the  Company.  The Company
  prepaid debt in the amount of $514 million from these funds.  Early repayment of
  this debt resulted in certain prepayment  penalties.  Total prepayment penalties
  of $18.7  million and related tax benefits of $6.5  million are  reflected as an
  extraordinary  loss on early  extinguishment  of debt on the Statement of Income
  for the six months ended March 31, 1997.
  
  Note 5:  Name Change
  
           At their annual meeting on January 23, 1997, the shareholders  voted to
  change the name of the Company  from Alco  Standard  Corporation  to IKON Office
  Solutions,  Inc., the name previously used by Alco's  remaining  operating unit.
  The name change was effective  immediately  and the Company's  ticker symbol was
  changed from ASN to IKN effective January 27, 1997.
  
  Note 6:  Transformation Costs
  
           At the end of fiscal 1995,  the Company  announced  its  transformation
  program to change its organization into a more cohesive and efficient network by
  building a uniform information technology system and implementing best practices
  for critically important management functions throughout the IKON companies.  In
  March 1997, the Company  announced that it was accelerating  the  transformation
  program.  As a result, the Company began to separately disclose these costs as a
  component of operating  expenses on the Statement of Income. The Company expects
  to  complete  the  transformation  program  by  the  end  of  fiscal  1998.  The
  transformation  involves a variety of activities which the company believes will
  significantly lower administrative  costs and improve margins.  These activities
  include  consolidating  purchasing,   inventory  control,  logistics  and  other
  activities into thirteen  customer  service centers in the U.S.,  establishing a
  single financial  processing center,  building a common  information  technology
  system, adopting a common name and creating marketplace-focused field operations
  with  greater  attention  to  customer  sales and  services.  Costs  charged  to
  transformation  expense relate principally to the write off of the abandoned SAP
  computer platform,  severance and other employee related costs, costs related to
  consultants  assisting with the transformation,  facility  consolidation  costs,
  including  lease  buyouts and  write-offs of leasehold  improvements,  and costs
  incurred in connection with the adoption of the IKON name worldwide.
  Item 2:  Management's  Discussion  and  Analysis  of Results of  Operations  and
  Financial Condition and Liquidity
  
           On June 19,  1996,  the Company  announced  that it would split its two
  operating units into independent companies by spinning off Unisource,  its paper
  and supply systems distribution group, as a separate publicly owned company. The
  Company  accomplished the transaction  through a U.S.  tax-free  distribution of
  Unisource stock to Company shareholders on December 31, 1996. As a result of the
  spin off of Unisource, the Company has accounted for Unisource as a discontinued
  operation.  Continuing  operations of the Company consist of IKON,  which sells,
  rents and leases  photocopiers,  digital  printers  and other  automated  office
  equipment for use in both traditional and integrated office  environments.  IKON
  also provides  outsourcing and imaging services and offers  consulting,  design,
  computer   networking   and  technology   training  for  the  networked   office
  environment.  On January 23, 1997,  shareholders  of the Company voted to change
  the name of the Company from Alco Standard Corporation to IKON Office Solutions,
  Inc.
  
                                Results of Operations
  
           The  discussion  of the results of  operations  reviews the  continuing
  operations of the Company as contained in the Consolidated Statements of Income.
  
                      Three and Six Months Ended March 31, 1997
             Compared with the Three and Six Months Ended March 31, 1996
  
           Revenues  and  income   before   taxes  for  the  second   quarter  and
  year-to-date  of fiscal 1997 compared to the second quarter and  year-to-date of
  fiscal 1996 were as follows:
  Three Months Ended                         Six Months Ended
                                                    March 31               %                March  31          %
                                                 1997        1996        Change         1997       1996         Change
  (in millions)
  REVENUES                                     $1,278      $1,015        25.9%        $2,418     $1,916       26.2%
                                               ======      ======                     ======     ======
  
  INCOME BEFORE TAXES:
  Operating income, excluding
     transformation costs                      $102.9       $81.0        27.0%        $198.6     $150.4       32.0%
  Transformation costs                          (61.2)       (5.6)                     (75.5)      (6.3)
                                                ------      -----                     ------     ------
        Operating income                         41.7        75.4                      123.1      144.1
  Interest expense                              (11.6)       (9.2)                     (19.8)     (16.5)
                                                ------      -----                     ------     ------
                                                $30.1       $66.2       (54.5%)       $103.3     $127.6      (19.0%)
                                                =====       =====                     ======     ======
  SECOND QUARTER:
           The Company's second quarter revenues increased $263 million,  or 25.9%
  over the second quarter of fiscal 1996, of which $147 million relates to current
  and prior year acquisitions and $116 million to base companies' internal growth.
  The Company's  internal revenue growth was 11.5% in the second quarter of fiscal
  1997.  The  results  reflect  a  very  strong  performance  from  the  Company's
  traditional  copier business in North America,  despite a temporary  shortage in
  high-end and color copiers and printers from suppliers,  net of revenue declines
  in the U.K.  Revenues from the Company's  operations  outside the U.S. were $167
  million for the second  quarter of fiscal 1997  compared to $134 million for the
  same  period  of the  prior  fiscal  year.  The  Company's  European  operations
  accounted for $1 million of the increase, which consisted of revenue declines in
  IKON  U.K.  of $17  million  offset  by  revenue  increases  in  other  European
  operations,  while  Canadian  revenues  increased  $29  million  as a result  of
  acquisitions  and  internal  growth in base  companies.  A fiscal  1996  Mexican
  acquisition  added $3 million of revenue to the second  quarter of fiscal  1997.
  U.K.   operations  are  continuing  to  recover  from  an  abrupt  and  untested
  consolidation  which began in October 1996. Since then,  management changes were
  made, the  organization  is being rebuilt,  and the Company  expects the U.K. to
  return to previous run rates within the next 12 months.
  The Company's  operating  income decreased by $33.7 million compared to
  the prior year's quarter.  However,  excluding  transformation costs,  operating
  income  increased  27.0% to $102.9 million from $81.0 million in the prior year.
  Finance subsidiaries  contributed 13.5% of the Company's operating income before
  transformation  costs in the second  quarter of fiscal 1997 compared to 11.1% in
  the second quarter of fiscal 1996. The Company's  operating margins were 3.3% in
  the second  quarter of fiscal 1997,  compared to 7.4% in fiscal 1996.  Excluding
  transformation  costs, the Company's  operating  margins were 8.1% in the second
  quarter of fiscal 1997, compared to 8.0% in the second quarter of fiscal 1996.
  
           Costs associated with the Company's  transformation program,  announced
  the end of fiscal 1995, increased  significantly in the second quarter of fiscal
  1997. Due to the significance of these costs in the second quarter, and the fact
  that these costs will be incurred  through fiscal 1998, when the  transformation
  program  is  expected  to be  completed,  the  Company  began  this  quarter  to
  separately  disclose  these costs as a component  of  operating  expenses on the
  Statement  of Income.  The  increase of $55.6  million in the second  quarter of
  fiscal 1997  compared to the second  quarter of fiscal 1996,  was  primarily the
  result of the write-off of costs associated with the SAP computer  platform that
  was abandoned during the quarter ($25 million),  employee  severance  agreements
  ($6 million),  outside  consultants ($1 million),  temporary labor ($3 million),
  facility  consolidations  ($6 million) and costs incurred in connection with the
  adoption of the IKON name worldwide ($9 million).
  
           Operating  income from  foreign  operations  was $12.1  million for the
  three  months  ended March 31,  1997,  down $2.2  million  from the prior year's
  quarter.  European  operations posted a $4.3 million decline in operating income
  in the second quarter,  relating  primarily to revenue declines in the U.K. as a
  result  of its  consolidation  which  began  in  October  1996,  while  Canadian
  operating income increased $2.2 million and the Mexican operation reported a $.1
  million  operating  loss for the  second  quarter of fiscal  1997.  There was no
  material effect of foreign currency exchange rate fluctuations on the results of
  operations in the second  quarter of fiscal 1997 compared to the second  quarter
  of fiscal 1996.
  
  SIX MONTHS:
           The Company's six month revenues increased $502 million,  or 26.2% over
  the first six months of fiscal 1996,  of which $254  million  relates to current
  and prior year acquisitions and $248 million to base companies' internal growth.
  The Company's  internal revenue growth was 13% in the first half of fiscal 1997.
  The results  reflect a very strong  performance  from the Company's  traditional
  copier  business in North  America  with  substantial  growth in both  equipment
  placements and copy volume,  net of revenue  declines in the U.K.  Revenues from
  the  Company's  operations  outside the U.S. were $314 million for the first six
  months of fiscal 1997  compared to $258 million for the same period of the prior
  fiscal year. The Company's European  operations  accounted for $3 million of the
  increase, which consisted of revenue declines in IKON U.K. of $29 million offset
  by revenue  increases in other  European  operations,  while  Canadian  revenues
  increased $47 million as a result of  acquisitions  and internal  growth in base
  companies and the fiscal 1996 Mexican acquisition added $6 million of revenue to
  the second quarter of fiscal 1997.
  
           Transformation  costs  increased $69.2 million for the six months ended
  March 31, 1997 compared to the prior year and was primarily due to the write-off
  of costs associated with the SAP computer platform that was abandoned during the
  second  quarter ($28  million),  employee  severance  agreements  ($7  million),
  outside  consultants  ($2  million),  temporary  labor  ($6  million),  facility
  consolidations  ($7 million) and costs incurred in connection  with the adoption
  of the IKON name worldwide ($10 million).
  
           The Company's  operating  income decreased by $21.0 million compared to
  the prior year's first half. Excluding  transformation  costs,  operating income
  increased  32% in the first half of fiscal  1997 to $198.6  million  from $150.4
  million in the first half of fiscal 1996. Finance subsidiaries contributed 14.3%
  of the Company's  operating  income in the first half of fiscal 1997 compared to
  11.6% in the first half of fiscal 1996.  The  Company's  operating  margins were
  5.1% in the first six months of fiscal  1997,  compared to 7.5% in fiscal  1996.
  Excluding  transformation  costs,  operating margins were 8.2% for the first six
  months of fiscal 1997 compared to 7.8% in the first six months of fiscal 1996.
  Operating income from foreign  operations was $22.1 million for the six
  months ended March 31, 1997, down $3.8 million from the prior year's first half.
  European  operations  posted a $7.0 million  decline in operating  income in the
  first six months of fiscal 1997,  relating  primarily to revenue declines in the
  U.K.  as a result  of its  consolidation  which  began in  October  1996,  while
  Canadian  operating income increased $3.2 million.  There was no material effect
  of foreign currency  exchange rate  fluctuations on the results of operations in
  the first six months of fiscal  1997  compared to the first six months of fiscal
  1996.
  
  Acquisitions
           In the  second  quarter  of  fiscal  1997,  the  Company  completed  24
  acquisitions,  bringing  total  year-to-date  acquisitions  to  47.  Of  the  24
  companies  acquired,   nine  were  systems  integration   companies,   six  were
  outsourcing and imaging  companies and nine were traditional  copier  companies.
  This year, as part of its total  solutions  strategy,  IKON has  emphasized  the
  acquisition  of  systems  integration  and  outsourcing  companies  to build its
  capabilities in these areas.
  
  Other
           Interest expense increased $2.4 million in the second quarter of fiscal
  1997, and $3.3 million year-to-date. The increased expense is due to higher debt
  levels  in  fiscal  1997  when  adjusted  for the  Unisource  intercompany  debt
  repayment made in December 1996.
  
           Income before taxes  decreased by $36.1  million in the second  quarter
  and $24.3 million  year-to-date  over the prior year,  primarily  reflecting the
  combined  result of internal  growth from base  companies,  along with  earnings
  contributed by acquisitions, net of increased transformation and interest costs.
  The effective income tax rate  year-to-date is 42.6% compared with 39.3% for the
  comparative period in fiscal 1996.
  
           The Company recorded an extraordinary charge of $12.2 million after tax
  in the first  quarter of fiscal  1997  relating to its early  extinguishment  of
  certain  corporate  debt.  The Company  used the  proceeds of a December 2, 1996
  $553.5 million  intercompany  debt repayment  from its  discontinued  operation,
  Unisource,  to prepay $514 million of corporate debt. The pretax charge of $18.7
  million is primarily for  prepayment  penalties and has a related tax benefit of
  $6.5 million.
  
           Earnings per share from continuing  operations  decreased from $.28 per
  share for the  second  quarter  of fiscal  1996 to $.07 per share for the second
  quarter of fiscal 1997. Excluding  transformation costs, earnings per share from
  continuing  operations  would have  increased  19.4% from $.31 per share for the
  second  quarter of fiscal 1996 to $.37 per share in the second quarter of fiscal
  1997. Including discontinued operations,  earnings per share of the Company were
  $.50 for the second  quarter  ended March 31, 1996.  Year-to-date,  earnings per
  share from continuing operations,  excluding the extraordinary charge, decreased
  from $.53 per share  for the first six  months of fiscal  1996 to $.37 per share
  for the  first  six  months  of fiscal  1997.  Excluding  transformation  costs,
  earnings per share from  continuing  operations  would have increased 30.4% from
  $.56 per share for the first six months of fiscal 1996 to $.73 per share for the
  first six  months of fiscal  1997.  Including  the loss per share of $.09 on the
  extraordinary  charge  and the  earnings  per  share  of  $.15  on  discontinued
  operations, earnings per share of the Company were $.43 for the six months ended
  March  31,  1997  compared  to  $.97  (which  includes  $.44  for   discontinued
  operations) for the six months ended March 31, 1996.
  
           Weighted  average  shares of 136.3  million for the quarter ended March
  31, 1997 were 7.8 million  shares greater than the 128.5 million for the quarter
  ended  March 31,  1996,  primarily  the  result of  acquisitions  for stock (6.0
  million weighted average shares).
  Financial Condition and Liquidity
  
           Net cash provided by operating activities of continuing  operations for
  the first six months of fiscal 1997 was $48 million. During the same period, the
  Company  used $614  million in cash for  investing  activities,  which  included
  finance subsidiary activity of $438 million, acquisition activity at a cash cost
  of $100 million and capital  expenditures of $77 million.  Investing  activities
  were funded  through cash flow from  operations and financing  activities.  Cash
  provided by financing  activities  included  $553 million of  intercompany  debt
  repaid by Unisource  which was used  primarily to prepay  corporate  debt of the
  Company and $352 million of additional funding for finance  subsidiaries.  Debt,
  excluding finance  subsidiaries,  was $616 million at March 31, 1997, a decrease
  of $355 million from the  continuing  operations  debt balance at September  30,
  1996 of $971  million.  The debt to  capital  ratio was 29.3% at March 31,  1997
  compared to 31.4% at September 30, 1996 and 29.8% at December 31, 1996.
  
           On December 16, 1996, the Company entered into a credit  agreement with
  several banks under which it may borrow up to $400 million. This credit facility
  replaces a $500 million credit  facility  which was due to expire  December 1999
  and a $100 million  credit  facility which was canceled on December 2, 1996. The
  reduced credit commitment  reflects the spin-off of the Unisource business which
  was  effective  December 31, 1996. As of March 31, 1997,  borrowings  under this
  agreement totaled $47.3 million,  leaving $352.7 million available.  The Company
  also has $450 million  available  for either stock or debt  offerings  under its
  shelf registration statement filed November 1995.
  
           Finance subsidiaries debt grew by $352 million from September 30, 1996,
  a result of increased  leasing  activity.  During the six months ended March 31,
  1997,  IKON Capital  issued an additional  $385.5 million under its $1.5 billion
  medium term notes  program  which began in July 1994.  At March 31,  1997,  $1.3
  billion of medium term notes were outstanding  with a weighted  interest rate of
  6.7%, leaving $115 million available under this program. IKON Capital intends to
  file a new shelf  registration  in May 1997 for $2 billion of medium term notes.
  The new registration  statement will have essentially the same provisions as the
  existing  program.  Under its $275 million asset  securitization  program,  IKON
  Capital sold $51.4 million in direct  financing  leases during the first half of
  fiscal  1997,  replacing  those  leases  liquidated  and  leaving  the amount of
  contracts sold unchanged.
  
           The Company filed shelf  registrations  for 10 million shares of common
  stock in January 1996 and 5 million shares of common stock in March 1996. Shares
  issued  under these  registration  statements  are being used for  acquisitions.
  Approximately 11 million shares have been issued under these shelf registrations
  through March 31, 1997. A new shelf registration was filed on April 10, 1997 for
  an additional 10 million shares to be used for acquisitions.
  
           On April 17, 1997, the Company  announced  that it may repurchase  from
  time to time as much as five  percent of the  outstanding  IKON common  stock in
  open market transactions.
  
           The Company  believes that its operating cash flow together with unused
  bank credit  facilities and other financing  arrangements  will be sufficient to
  finance  current  operating   requirements   including   capital   expenditures,
  acquisitions,  dividends,  stock  repurchases  and  costs  associated  with  the
  Company's  transformation  program.  The Company  estimates the total  remaining
  costs of its  transformation  program to be from $105  million to $140  million,
  excluding capital costs of $90 million to $100 million.
  Forward-looking Information
  
           This document contains, and other materials filed or to be filed by the
  Company with the Commission which are incorporated by reference  herein, as well
  as information  included in oral statements or other written  statements made or
  to be made by the Company, contain or will contain or include, disclosures which
  are  forward-looking  statements  within  the  meaning  of  Section  27A  of the
  Securities  Act of 1933,  as amended,  and Section 21E of the 1934 Exchange Act.
  Such  forward-looking   statements  address,   among  other  things,   strategic
  initiatives  (including  plans for enhancing the Company's  business through new
  acquisitions,  information technology systems,  sales strategies,  market growth
  plans,  margin  enhancement  initiatives,  capital  expenditures  and  financing
  sources).  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 Company's
  future financial  condition and results.  These uncertainties and risks include,
  but are not limited to, those  relating to  successfully  managing an aggressive
  program to  acquire  and  integrate  new  companies,  including  companies  with
  technical services and products that are relatively new to the Company, and also
  including companies outside the U.S., 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  a
  large-scale   transformation   project;  debt  service  requirements  (including
  sensitivity to fluctuations in interest rates); and general economic conditions.
  As a  consequence,  current  plans,  anticipated  actions  and future  financial
  condition  and results may differ from those  expressed  in any  forward-looking
  statements made by or on behalf of the Company.
  PART II. OTHER INFORMATION
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
       On January 23, 1997, the Company held its annual  meeting of  shareholders,
  at which seven  directors  were elected to hold office  until  election of their
  successors.  The  shareholders  also  voted on a proposal  to amend the  Amended
  Articles of  Incorporation of the Company to change the name of the Company from
  Alco Standard Corporation to IKON Office Solutions, Inc.
  
       The following  sets forth the tabulation of votes with respect to the above
  proposals:
  
  Proposals to Elect Directors            For             Withheld
  James R Birle                       112,874,379         305,737
  Kurt E. Dunkelacker                 112,846,880         333,237
  William F. Drake, Jr                112,874,775         305,341
  Frederick S. Hammer                 112,861,193         318,923
  Barbara B. Hauptfuhrer              112,853,540         326,576
  Richard A. Jalkut                   111,957,192       1,222,925
  John E. Stuart                      112,810,011         370,105
  
                                          For            Against        Abstain
  Proposal to Amend Articles
  of Incorporation to Change Name:     111,377,627       680,696       1,121,793
  
     All proposals were routine; therefore, no broker non-votes were recorded.
  
  Item 6.  Exhibits and Reports on Form 8-K
  
           (a)   The following Exhibits are furnished pursuant to Item 601 of
                 Regulation S-K:
  
                 Exhibit No. (11) Computation of Earnings per Share
  
                 Exhibit No. (27) Financial Data Schedule.
  
           (b)   Reports on Form 8-K
  
                 On January 30, 1997,  the  registrant  filed a Current  Report on
                 Form 8-K to file,  under Item 5 of the form, the earnings for the
                 fiscal  quarter ended December 31, 1996 and the  announcement  of
                 the name change  from Alco  Standard  Corporation  to IKON Office
                 Solutions,  Inc.  which was approved by  shareholder  vote at the
                 annual shareholders meeting held January 23, 1997.
  
                 On April 18, 1997, the registrant  filed a Current Report on Form
                 8-K to file,  under  Item 5 of the  form,  the  earnings  for the
                 fiscal  quarter  ended  March 31,  1997 and the  announcement  of
                 certain  management  changes,  and the  announcement  that it may
                 repurchase  from  time  to  time  as  much  as 5  percent  of its
                 outstanding shares in open market transactions.
  
                 On April 23, 1997, the registrant  filed a Current Report on Form
                 8-K to file,  under Item 5 of the form, a Press  Release  stating
                 that it was unaware of any reason its stock,  which  recently had
                 traded down sharply,  should be under pressure. The Press Release
                 also stated  that IKON's  business is strong and that the Company
                 knows of no  material  developments  concerning  its  business or
                 financial statements which have not been publicly disclosed.
  SIGNATURES
  
  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. This report has also been signed by the
  undersigned in his capacity as the chief accounting officer of the Registrant.
  
                                          IKON OFFICE SOLUTIONS, INC.
  
  Date  May 15, 1997                      /s/ Michael J. Dillon
        ------------                      ---------------------
                                          Michael J. Dillon
                                          Vice President and Controller
                                         (Chief Accounting Officer)
  INDEX TO EXHIBITS
  
  Exhibit Number
  
           (11)       Computation of Earnings per Share
  
           (27)       Financial Data Schedule.