Stronger IKON

1
Stronger IKON

• On July 17, Franklin Business Practices
  Incorporated (FBPI) sent a letter to Matthew Espe
  (CEO of IKON) requesting Ten Changes that would
  make IKON a stronger company and add value for
  its shareholders
• Ten Changes to make IKON stronger
• Adopt business plan seeking 20 growth in diluted
  EPS and 20 ROIC
• Better allocate cash through sale of non-core
  assets, strategic capex and acquisitions
• Think globally
• Re-focus on selling office solutions including
  SaaS
• Structure leadership team in a matrix by product
  by customer
• Reduce SGA by 120 million
• Reconsider cost/benefits of Oracle One Platform
• Return to an optimal capital structure
• Give shareholders a say on executive pay
• Reduce the size of the Board to six members,
  retaining four while adding two new members

2
Stronger IKON

• Executive Summary
• Largest independent distributor of copiers and
  related products
• 400 locations (N.A. Europe) 500,000
  mid-market customers 250 large accounts major
  partners Canon, Ricoh, Konica Minolta, Kyocera,
  HP and EMC
• Value added services equipment software
  customer service supplies managed and
  professional services
• Core strategies sprint-to-color (34 of sales)
  broad customer coverage geographic expansion
• 0.7B market cap Forward P/E 7.25
• 1.6B enterprise value EV/EBITDA 5.75
• In three years after expanding in Asia and S.A.
  and entering new markets, significantly better
  investment with higher takeout multiple on higher
  earnings base

3
Stronger IKON

• Poor Operating and Stock Price Performance
• 2007 Revenues 4.16B
• 2007 EBITDA 271.9M (6.5 OF Revenues)
• 2007 Trade Working Capital 534.4M
• 12/31/07 Cash Balance 142.4M
• 12/31/07 Net PPE 218.6M
• Diluted EPS growth 3.7
• ROIC 4.9
• IKON stock price 12.67 (7/17/06) vs. 12.23
  (7/16/08)
• Nasdaq index 2,037.72 (7/17/06) vs. 2,284.85
  (7/16/08)

4
Stronger IKON

• SWOT Analysis
• Strengths 1 in office copiers, top-tier
  purchasing power, broad-based customer
  relationships, solid financials (free cash
  flows/recurring revenue streams)
• Weaknesses management and board leadership,
  compensation practices, organizational structure,
  internal controls, lackluster growth, low
  operating margins
• Opportunities organic growth (new customers/new
  products), new markets (SaaS), global expansion,
  strategic acquisitions
• Threats poor performance/angry shareholders

5
Stronger IKON

• Risk Factors
• Market Risks
• New competitors
• Failure to innovate
• Operational Risks
• Quality service
• Internal controls
• Employee morale
• Financial Risks
• Weak U.S. economy
• Higher interest rates
• Declining U.S. dollar
• Legal/Regulatory Risks
• Discontinued operations