-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FDjvYigQTDf/3EDRE7Pm6GxQH0Oxr1QQ/nf1ZcG8Hn4ZNfcNftik5YGWJY2hRUTB ezwN+wFse+vgFI5DhgQzEg== 0001193125-07-224829.txt : 20071024 0001193125-07-224829.hdr.sgml : 20071024 20071024171554 ACCESSION NUMBER: 0001193125-07-224829 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20071024 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071024 DATE AS OF CHANGE: 20071024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSS WORLD MEDICAL INC CENTRAL INDEX KEY: 0000920527 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MEDICAL, DENTAL & HOSPITAL EQUIPMENT & SUPPLIES [5047] IRS NUMBER: 592280364 STATE OF INCORPORATION: FL FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23832 FILM NUMBER: 071188740 BUSINESS ADDRESS: STREET 1: 4345 SOUTHPOINT BLVD STREET 2: STE 250 CITY: JACKSONVILLE STATE: FL ZIP: 32216 BUSINESS PHONE: 9043323000 MAIL ADDRESS: STREET 1: 4345 SOUTHPOINT BLVD STREET 2: STE 250 CITY: JACKSONVILLE STATE: FL ZIP: 32216 FORMER COMPANY: FORMER CONFORMED NAME: PHYSICIAN SALES & SERVICE INC /FL/ DATE OF NAME CHANGE: 19940318 8-K 1 d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


FORM 8-K

 


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 24, 2007

 


PSS WORLD MEDICAL, INC.

(Exact name of Registrant as specified in its charter)

Commission File Number: 0-23832

 

Florida   59-2280364
(State or other jurisdiction   (IRS Employer
of incorporation or organization)   Identification Number)
4345 Southpoint Blvd.  
Jacksonville, Florida   32216
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number,

including area code

  (904) 332-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



Item 2.02 Disclosure of Results of Operations and Financial Condition.

On October 24, 2007, PSS World Medical, Inc. (the “Company”) issued a press release in which the Company announced its financial results for the three and six months ended September 28, 2007. This press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference. In connection with the press release, the Company has also made available certain supplemental financial information (“the Financial Supplement”) for the three and six months ended September 28, 2007, which may be found on the Company’s website at www.pssd.com. This Financial Supplement is included as Exhibit 99.2 to this report and is incorporated herein by reference.

In accordance with General Instruction B.6 of Form 8-K, the information included or incorporated in this report, including Exhibit 99.1 and Exhibit 99.2, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

The press release and Financial Supplement contain financial measures that are not in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company has provided reconciliations within the press release and Financial Supplement of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

The Company provides non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures are intended to supplement the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses, gains and losses that, when excluded from the GAAP results, may provide additional understanding of the Company’s core operating results or business performance. However, these non-GAAP financial measures are not intended to supercede or replace the Company’s GAAP results. A detailed reconciliation of the GAAP results to the non-GAAP results is provided within the financial supplement.

 


Item 9.01 Financial Statements and Exhibits.

 

Exhibit
Number
  

Description

99.1    Press Release dated October 24, 2007 with respect to the Registrant’s financial results for the three and six months ended September 28, 2007.
99.2    Financial Supplement for the three and six months ended September 28, 2007.

 


SIGNATURE

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.

Date: October 24, 2007

 

PSS WORLD MEDICAL, INC.
By:   /s/    David M. Bronson
 

Name: David M. Bronson

Title: Executive Vice President and Chief Financial Officer

 


EXHIBIT INDEX

 

99.1    Press Release dated October 24, 2007.
99.2    Financial Supplement for the three and six months ended September 28, 2007
EX-99.1 2 dex991.htm PRESS RELEASE Press Release

LOGO

N        E        W        S                                     R        E        L         E        A        S        E

Exhibit 99.1

Contacts:

 

For investors:

   Robert C. Weiner    For media:    Brian C. Kosoy   
   Vice President, Investor Relations       Public Relations   
   904-332-3287       904-332-4175   

PSS WORLD MEDICAL REPORTS RESULTS

FOR FISCAL 2008 SECOND QUARTER

Fiscal 2008 Second Quarter Highlights:

   

Consolidated net sales growth of 7.2% (11.2% excluding last fiscal year flu sales)

  o Physician Business net sales growth of 6.4% (12.2 % excluding last fiscal year flu sales)
  o Elder Care Business net sales growth of 9.1%
   

Consolidated earnings per diluted share of $0.22, including,

  o $0.01 per diluted share for temporary operational costs associated with new Florida pedigree law
  o $0.01 per diluted share to increase accrual for destruction of pedigree-related quarantined inventory
  o $0.01 per diluted share of integration costs for the Activus acquisition
  o $0.04 per diluted share reduction of accruals for management incentive programs
   

Physician Business operating margin of 6.5%

   

Elder Care Business operating margin of 5.1%

   

Consolidated cash flow from operations of $13.1 million

   

Repurchased 2.8 million shares for $49.4 million

   

Announced acquisition of an approx. 5% stake in athenahealth, Inc. (NASDAQ GM:ATHN)

Jacksonville, Florida (October 24, 2007) – PSS World Medical, Inc. (NASDAQ GS:PSSI) announced today its results for the fiscal 2008 second quarter and six months ended September 28, 2007.

David A. Smith, Chairman and Chief Executive Officer, commented, “We have traction and execution across the breadth of our strategic programs. Momentum has accelerated from strategy implementation to program execution and success in global sourcing, home care and pharmaceuticals. However, the fastest start to any strategy in our arsenal is healthcare information technology with athenahealth and Smartscan. These technology solutions will galvanize our customer relationships and value proposition, as investors continue to benefit from a combination of our innovation, service excellence and strategic investments.”

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 2

October 24, 2007

Net sales for the three months ended September 28, 2007, were $457.9 million, an increase of 7.2%, compared with net sales of $427.1 million for the three months ended September 29, 2006. Net sales for the three months ended September 28, 2007, for the Physician Business increased by 6.4%, while net sales for the Elder Care Business increased by 9.1%. Income from operations for the three months ended September 28, 2007, was $24.5 million compared with income from operations for the three months ended September 29, 2006, of $21.6 million. Net income for the three months ended September 28, 2007, was $14.5 million, or $0.22 per diluted share, compared with net income for the three months ended September 29, 2006, of $12.8 million, or $0.18 per diluted share.

Net sales for the six months ended September 28, 2007, were $896.8 million, an increase of 6.7%, compared with net sales of $840.2 million for the six months ended September 29, 2006. Net sales for the six months ended September 28, 2007, for the Physician Business increased by 7.0%, while net sales for the Elder Care Business increased by 6.1%. Income from operations for the six months ended September 28, 2007, was $39.0 million compared with income from operations for the six months ended September 29, 2006, of $40.3 million. Net income for the six months ended September 28, 2007, was $23.2 million, or $0.34 per diluted share, compared with net income for the six months ended September 29, 2006, of $23.7 million, or $0.34 per diluted share.

David M. Bronson, Executive Vice President and Chief Financial Officer, commented, “Profitable revenue growth associated with momentum in our key business strategies through the first half of fiscal year 2008 has been offset to some degree with costs of compliance with drug pedigree legislation. Acquisition integration and the investment in the launch of our healthcare information technology offerings have also been a drag on earnings in the first two quarters, but should turn positive in the second half of fiscal year 2008.

“We are reiterating our full year goals for fiscal year 2008 of $0.81 – $0.85 earnings per diluted share and $63 – $67 million of cash flow from operations. Our repurchase of 2.8 million shares during the second quarter represents an accretive use of cash and underlines our confidence in achieving continued growth in the business, while providing a nice return to investors.”

The Company has today filed with the SEC a Form 8-K that includes a copy of this press release and its related Fiscal 2008 Second Quarter Financial Workbook, which contains GAAP and non-GAAP financial measures, and is available on the Company’s website, www.pssworldmedical.com.

A listen-only simulcast as well as a 90-day online replay of PSS World Medical’s fiscal 2008 second quarter conference call can be found in the Investor Relations/Financial Information sections of the Company’s websites, www.pssworldmedical.com or www.pssd.com, respectively, under the heading “Events and Presentations,” or at www.opencompany.info, on October 25, 2007, beginning at 8:30 a.m. Eastern time.

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 3

October 24, 2007

PSS World Medical, Inc. is a national distributor of medical products to physicians and elder care providers through its two business units. Since its inception in 1983, PSS has become a leader in the two market segments that it serves with a focused market approach to customer services, a consultative sales force, strategic acquisitions, strong arrangements with product manufacturers and a unique culture of performance.

Additional financial information pertaining to PSS World Medical financial results may be found by visiting the Investor Relations/Financial Information sections of the Company’s websites, www.pssworldmedical.com or www.pssd.com, respectively, under the heading “Events and Presentations.” If you should need assistance accessing the information, please call Investor Relations at 904-332-3000.

All statements in this release that are not historical facts, including, but not limited to, statements regarding anticipated growth in revenue, gross and operating margins, and earnings, statements regarding the Company’s current business strategy, the Company’s ability to complete and integrate acquired businesses and generate acceptable rates of return, the Company’s projected sources and uses of cash, and the Company’s plans for future development and operations, are based upon current expectations. Specifically, forward-looking statements in this Press Release include, without limitation, the Company’s expected results in GAAP EPS for the consolidated company; the expected operational cash flow in fiscal year 2008;the expected impact on earnings during the remainder of fiscal 2008 from the Company’s strategy to invest and participate in the marketing and sales of healthcare information technology products and services (HCIT); the expected impact on earnings during the remainder of 2008 related to the integration of acquired assets; as well as other expectations of growth and financial and operational performance. These statements are forward-looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Among the factors that could cause results to differ materially are the following: pricing and customer credit quality pressures; the loss of any of our distributorship agreements and our reliance on relationships with our suppliers and vendors; our reliance on a limited number of chain business elder care customers; the availability of sufficient capital to finance the Company’s business plans on terms satisfactory to the Company; lower revenue and earnings that may result from competition; the ability of the Company to adequately defend or reach a settlement on outstanding litigation matters and investigations involving the Company or its management; changes in labor, equipment and capital costs; changes in legislation and regulations affecting the Company’s business, such as the Medicare cliffs, changes in malpractice insurance rates and tort reform; future acquisitions or strategic partnerships; general business, competitive and economic factors and conditions; and other factors described from time to time in the Company’s reports filed with the Securities and Exchange Commission. Many of these factors are outside the control of the Company. The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company also wishes to caution readers that it undertakes no duty or is under no obligation to update or revise any forward-looking statements.

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 4

October 24, 2007

PSS WORLD MEDICAL, INC.

Unaudited Condensed Consolidated Statements of Operations

(In millions, except per share and share data)

 

      Three Months Ended     Six Months Ended  
      Sept. 28,
2007
    Sept. 29,
2006
    Sept. 28,
2007
    Sept. 29,
2006
 

Net sales

   $ 457.9     $ 427.1     $ 896.8     $ 840.2  

Cost of goods sold

     325.4       303.2       636.6       596.4  
                                

Gross profit

     132.5       123.9       260.2       243.8  

General and administrative expenses

     77.3       73.4       160.9       147.1  

Selling expenses

     30.7       28.9       60.3       56.4  
                                

Income from operations

     24.5       21.6       39.0       40.3  
                                
Other (expense) income:         

Interest expense

     (1.5 )     (1.3 )     (2.9 )     (2.8 )

Interest and investment income

     0.1       0.3       0.6       0.4  

Other income

     0.5       0.4       1.1       0.9  
                                
     (0.9 )     (0.6 )     (1.2 )     (1.5 )
                                

Income before provision for income taxes

     23.6       21.0       37.8       38.8  

Provision for income taxes

     9.1       8.2       14.6       15.1  
                                

Net income

   $ 14.5     $ 12.8     $ 23.2     $ 23.7  
                                

Earnings per share – basic

   $ 0.22     $ 0.19     $ 0.35     $ 0.35  
                                

Earnings per share – diluted

   $ 0.22     $ 0.18     $ 0.34     $ 0.34  
                                

Weighted average shares (in thousands):

        

Basic

     65,806       67,453       66,300       67,381  

Diluted

     67,067       69,478       67,916       69,213  

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 5

October 24, 2007

PSS WORLD MEDICAL, INC.

Condensed Consolidated Balance Sheets

(In millions, except per share and share data)

 

      Sept. 28,
2007
   March 30,
2007
     (Unaudited)     
ASSETS

Current Assets:

     

Cash and cash equivalents

   $ 17.0    $ 46.7

Accounts receivable, net

     232.3      222.8

Inventories

     188.1      174.1

Deferred tax assets, net

     9.3      8.8

Prepaid expenses and other

     27.9      34.4
             

Total current assets

     474.6      486.8

Property and equipment, net

     89.3      88.6
Other Assets:      

Goodwill and intangibles, net

     139.7      137.1

Investment in available for sale securities

     46.1      —  

Other

     70.0      62.5
             

Total assets

   $ 819.7    $ 775.0
             
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:      

Accounts payable

   $ 149.8    $ 131.3

Accrued expenses

     33.3      37.2

Revolving line of credit and current portion of long-term debt

     32.1      2.2

Other current liabilities

     15.0      11.5
             

Total current liabilities

     230.2      182.2

Long-term debt, excluding current portion

     150.4      150.7

Other noncurrent liabilities

     66.9      61.2
             

Total liabilities

     447.5      394.1
             
Shareholders’ Equity:      

Preferred stock, $0.01 par value; 1,000,000 shares authorized, no shares issued and outstanding

     —        —  

Common stock, $0.01 par value; 150,000,000 shares authorized, 64,688,716 and 67,179,475 shares issued and outstanding at September 28, 2007, and March 30, 2007, respectively

     0.6      0.7

Additional paid-in capital

     254.8      300.0

Retained earnings

     103.1      80.2

Accumulated other comprehensive income

     13.7      —  
             

Total shareholders’ equity

     372.2      380.9
             

Total liabilities and shareholders’ equity

   $ 819.7    $ 775.0
             

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 6

October 24, 2007

PSS WORLD MEDICAL, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In millions)

 

      Three Months Ended     Six Months Ended  
      Sept. 28,
2007
    Sept. 29,
2006
    Sept. 28,
2007
    Sept. 29,
2006
 

Cash Flows from Operating Activities:

        

Net income

   $ 14.5     $ 12.8     $ 23.2     $ 23.7  
Adjustments to reconcile net income to net cash provided by operating activities:         

Depreciation

     4.8       4.1       9.3       8.2  

(Benefit) provision for deferred income taxes

     (2.5 )     3.4       (2.3 )     7.8  

Amortization of intangible assets

     1.4       1.5       2.8       3.0  

Provision for doubtful accounts

     0.8       0.9       1.8       1.0  

Non-cash compensation expense

     1.2       0.5       1.9       0.8  

Amortization of debt issuance costs

     0.4       0.3       0.7       0.7  

Provision for deferred compensation

     0.3       0.4       1.7       0.9  

Other

     —         0.1       —         —    
Changes in operating assets and liabilities, net of effects from business combination:         

Accounts receivable, net

     (10.2 )     (20.1 )     (8.2 )     (17.4 )

Inventories

     (0.5 )     (1.5 )     (11.8 )     1.3  

Prepaid expenses and other current assets

     4.8       (3.8 )     5.6       (8.4 )

Other assets

     (1.9 )     0.5       (8.9 )     0.3  

Accounts payable

     5.3       23.3       13.9       6.5  

Accrued expenses and other liabilities

     (5.3 )     7.5       2.7       5.5  
                                

Net cash provided by operating activities

     13.1       29.9       32.4       33.9  
                                

Cash Flows from Investing Activities:

        

Payments for business combinations, net of cash acquired

     (0.3 )     —         (15.1 )     (0.1 )

Payments for investment in available for sale securities

     (1.5 )     —         (24.1 )     —    

Capital expenditures

     (4.6 )     (3.1 )     (9.5 )     (7.7 )

Proceeds from note receivable

     2.7       —         2.7       —    

Payments for non-solicitation agreements

     (0.1 )     (0.3 )     (0.1 )     (0.8 )

Payments for signing bonuses

     —         (0.1 )     —         (0.1 )

Other

     —         —         —         —    
                                

Net cash used in investing activities

     (3.8 )     (3.5 )     (46.1 )     (8.7 )
                                

Cash Flows from Financing Activities:

        

Net proceeds from revolving line of credit

     31.4       —         31.4       —    

Proceeds from exercise of stock options

     1.3       2.5       1.6       5.0  

Excess tax benefits from share-based compensation arrangements

     0.6       1.3       0.8       2.6  

Proceeds from borrowings

     —         1.0       —         1.0  

Purchase of treasury shares

     (49.4 )     (12.2 )     (49.4 )     (12.2 )

Payments under capital lease obligations

     (0.2 )     (0.1 )     (0.4 )     (0.3 )

Other

     —         (1.0 )     —         0.5  
                                

Net cash used in financing activities

     (16.3 )     (8.5 )     (16.0 )     (3.4 )
                                

Net increase (decrease) in cash and cash equivalents

     (7.0 )     17.9       (29.7 )     21.8  

Cash and cash equivalents, beginning of period

     24.0       27.8       46.7       23.9  
                                

Cash and cash equivalents, end of period

   $ 17.0     $ 45.7     $ 17.0     $ 45.7  
                                

 

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PSSI Reports Results For Fiscal 2008 Second Quarter

Page 7

October 24, 2007

PSS WORLD MEDICAL, INC.

Net Sales Adjustment for Influenza Vaccine Sales

(In millions)

 

      For the Three Months Ended     For the Six Months Ended  
     Sept. 28,
2007
   Sept. 29,
2006
   Growth     Sept. 28,
2007
   Sept. 29,2006    Growth  

Consolidated:

                

Net sales

   $ 457.9    $ 427.1    7.2 %   $ 896.8    $ 840.2    6.7 %

Influenza vaccine sales

     —        15.4        —        15.4   
                                

Net sales adjusted for influenza vaccine sales

   $ 457.9    $ 411.7    11.2 %   $ 896.8    $ 824.8    8.7 %
                                

Physician Business:

                

Net sales

   $ 320.2    $ 300.8    6.4 %   $ 626.4    $ 585.3    7.0 %

Influenza vaccine sales

     —        15.4        —        15.4   
                                

Net sales adjusted for influenza vaccine sales

   $ 320.2    $ 285.4    12.2 %   $ 626.4    $ 569.9    9.9 %
                                

END

EX-99.2 3 dex992.htm FINANCIAL SUPPLEMENT FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 28, 2007 Financial Supplement for the three and six months ended September 28, 2007

Exhibit 99.2

LOGO

Financial Data Workbook

For the Second Quarter of Fiscal Year 2008 ending September 28, 2007


PSS World Medical, Inc.

As of September 28, 2007

Current Fiscal Year

(in thousands, except per share data)

 

     Fiscal 2008  
     Q1     Q2  

Net Sales

   $ 438,910     $ 457,930  

Cost of Goods Sold

     311,227       325,390  
                

Gross Profit

     127,683       132,540  

General & Administrative Expenses

     83,600       77,315  

Selling Expenses

     29,551       30,763  
                

Income from operations

     14,532       24,462  

Interest Expense

     (1,358 )     (1,533 )

Interest & Investment Income

     528       114  

Other Income

     544       546  
                

Income from Operations before Income Taxes

     14,246       23,589  

Provision for Income Taxes

     5,559       9,106  
                

Net Income

   $ 8,687     $ 14,483  
                

Earnings per share - Basic:

    

Net Income

   $ 0.13     $ 0.22  
                

Earnings per share - Diluted:

    

Net Income

   $ 0.13     $ 0.22  
                

WASO - Basic

     66,793       65,806  

WASO - Diluted

     68,765       67,067  

Net Sales by Segment:

    

Physician Business

   $ 306,245     $ 320,171  

Elder Care Business

     132,665       137,759  
                
   $ 438,910     $ 457,930  
                

Billing Days:

     64       63  

Net Sales Per Billing Day:

    

Physician Business

   $ 4,785     $ 5,082  

Elder Care Business

     2,073       2,187  
                
   $ 6,858     $ 7,269  
                

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

As of September 28, 2007

(in thousands, except per share data)

 

     Fiscal 2005      Fiscal 2006      Fiscal 2007  
     Q1     Q2     Q3     Q4     Total      Q1      Q2      Q3      Q4      Total      Q1      Q2      Q3      Q4      Total  

Net Sales (1)

   $ 330,361     $ 364,267     $ 377,842     $ 401,299     $ 1,473,769      $ 387,129      $ 385,819      $ 423,781      $ 422,688      $ 1,619,417      $ 413,135      $ 427,059      $ 458,421      $ 443,024      $ 1,741,639  

Cost of Goods Sold

     234,585       258,945       268,675       288,209       1,050,414        276,654        273,512        303,707        298,219        1,152,092        293,233        303,203        335,186        310,007        1,241,629  
                                                                                                                                  

Gross Profit

     95,776       105,322       109,167       113,090       423,355        110,475        112,307        120,074        124,469        467,325        119,902        123,856        123,235        133,017        500,010  

General & Administrative Expenses (2)

     60,948       64,300       68,827       68,130       262,205        70,337        69,279        72,053        75,639        287,308        73,664        73,391        75,222        78,423        300,700  

Selling Expenses

     23,453       24,625       25,082       26,431       99,591        25,774        26,217        27,469        28,148        107,608        27,498        28,878        30,140        30,307        116,823  
                                                                                                                                  

Income from operations

     11,375       16,397       15,258       18,529       61,559        14,364        16,811        20,552        20,682        72,409        18,740        21,587        17,873        24,287        82,487  

Interest Expense

     (1,942 )     (1,817 )     (1,737 )     (1,360 )     (6,856 )      (1,509 )      (1,358 )      (1,561 )      (1,456 )      (5,884 )      (1,406 )      (1,336 )      (1,320 )      (1,284 )      (5,346 )

Interest & Investment Income

     111       89       12       5       217        99        111        75        138        423        101        282        426        385        1,194  

Other Income

     343       252       378       261       1,234        457        1,750        435        504        3,146        469        429        517        591        2,006  
                                                                                                                                  

Income from Continuing Operations before Income Taxes

     9,887       14,921       13,911       17,435       56,154        13,411        17,314        19,501        19,868        70,094        17,904        20,962        17,496        23,979        80,341  

Provision for Income Taxes

     3,962       6,149       (525 )     7,184       16,770        5,271        6,529        7,080        6,957        25,837        6,949        8,187        6,376        8,348        29,860  
                                                                                                                                  

Income from Continuing Operations

     5,925       8,772       14,436       10,251       39,384        8,140        10,785        12,421        12,911        44,257        10,955        12,775        11,120        15,631        50,481  

Total loss from discontinued operations

     (1,708 )     —         1,295       —         (412 )      —          —          —          —          —          —          —          —          —          —    
                                                                                                                                  

Net (Loss) Income

   $ 4,217     $ 8,772     $ 15,731     $ 10,251     $ 38,972      $ 8,140      $ 10,785      $ 12,421      $ 12,911      $ 44,257      $ 10,955      $ 12,775      $ 11,120      $ 15,631      $ 50,481  
                                                                                                                                  

Earnings (loss) per share - Basic:

                                        

Income from Continuing Operations

   $ 0.09     $ 0.14     $ 0.22     $ 0.16     $ 0.61      $ 0.13      $ 0.16      $ 0.19      $ 0.19      $ 0.67      $ 0.16      $ 0.19      $ 0.17      $ 0.23      $ 0.75  

Total loss from discontinued operations

     (0.03 )     —         0.02       —         (0.01 )      —          —          —          —          —          —          —          —          —          —    
                                                                                                                                  

Net (Loss) Income

   $ 0.06     $ 0.14     $ 0.24     $ 0.16     $ 0.60      $ 0.13      $ 0.16      $ 0.19      $ 0.19      $ 0.67      $ 0.16      $ 0.19      $ 0.17      $ 0.23      $ 0.75  
                                                                                                                                  

Earnings (loss) per share - Diluted:

                                        

Income from Continuing Operations

   $ 0.09     $ 0.13     $ 0.22     $ 0.16     $ 0.60      $ 0.12      $ 0.16      $ 0.19      $ 0.19      $ 0.66      $ 0.16      $ 0.18      $ 0.16      $ 0.23      $ 0.73  

Total loss from discontinued operations

     (0.03 )     —         0.02       —         (0.01 )      —          —          —          —          —          —          —          —          —          —    
                                                                                                                                  

Net (Loss) Income

   $ 0.06     $ 0.13     $ 0.24     $ 0.16     $ 0.59      $ 0.12      $ 0.16      $ 0.19      $ 0.19      $ 0.66      $ 0.16      $ 0.18      $ 0.16      $ 0.23      $ 0.73  
                                                                                                                                  

WASO—Basic

     64,890       64,358       64,305       64,656       64,547        64,877        65,392        65,779        66,546        65,643        67,310        67,453        67,054        67,059        67,219  

WASO—Diluted

     66,056       65,267       65,366       65,786       65,607        65,860        66,487        66,931        68,062        66,887        68,947        69,478        69,458        69,419        69,325  

Net Sales by Segment:

                                        

Physician Business

   $ 216,705     $ 237,370     $ 243,439     $ 261,502     $ 959,016      $ 250,544      $ 255,422      $ 290,010      $ 290,844      $ 1,086,820      $ 284,438      $ 300,813      $ 329,160      $ 313,109      $ 1,227,520  

Elder Care Business

     113,656       126,897       134,403       139,797       514,753        136,585        130,397        133,771        131,844        532,597        128,697        126,246        129,261        129,915        514,119  
                                                                                                                                  
   $ 330,361     $ 364,267     $ 377,842     $ 401,299     $ 1,473,769      $ 387,129      $ 385,819      $ 423,781      $ 422,688      $ 1,619,417      $ 413,135      $ 427,059      $ 458,421      $ 443,024      $ 1,741,639  
                                                                                                                                  

Billing Days:

     62       65       61       65       253        64        63        62        64        253        64        63        62        64        253  

Net Sales Per Billing Day:

                                        

Physician Business

   $ 3,495     $ 3,652     $ 3,991     $ 4,023     $ 3,791      $ 3,915      $ 4,054      $ 4,678      $ 4,544      $ 4,296      $ 4,444      $ 4,775      $ 5,309      $ 4,892      $ 4,852  

Elder Care Business

     1,833       1,952       2,203       2,151       2,035        2,134        2,070        2,158        2,060        2,105        2,011        2,004        2,085        2,030        2,032  
                                                                                                                                  
   $ 5,328     $ 5,604     $ 6,194     $ 6,174     $ 5,826      $ 6,049      $ 6,124      $ 6,836      $ 6,604      $ 6,401      $ 6,455      $ 6,779      $ 7,394      $ 6,922      $ 6,884  
                                                                                                                                  

(1) Quarterly net sales for fiscal year 2007 were adjusted in the fourth quarter of 2007 from previously reported amounts. During the fourth quarter of fiscal year 2007, the Company properly reclassified certain transactions from cost of sales to net sales. Such adjustments were deemed immaterial on quarterly net sales.


PSS World Medical, Inc.

As of September 28, 2007

SelectTM Net Sales

(in thousands)

 

     Fiscal 2003    Fiscal 2004    Fiscal 2005    Fiscal 2006    Fiscal 2007

Consolidated Select Sales

   $ 101,883    $ 121,211    $ 137,540    $ 157,296    $ 185,844


PSS WORLD MEDICAL, INC.

SEGMENT INFORMATION

September 28, 2007

(in thousands)

 

     Three Months Ended     Six Months Ended  
     9/28/2007     9/29/2006     9/28/2007     9/29/2006  

NET SALES:

        

Physician Business

   320,171     300,813     626,416     585,252  

Elder Care Business

   137,759     126,246     270,424     254,942  
                        

Total Net Sales

   457,930     427,059     896,840     840,194  
                        

BILLING DAYS:

   63     63     127     127  

NET SALES PER BILLING DAY:

        

Physician Business

   5,082     4,775     4,932     4,608  

Elder Care Business

   2,187     2,004     2,129     2,007  
                        

Total Net Sales Per Billing Day

   7,269     6,779     7,062     6,616  
                        

INCOME FROM OPERATIONS:

        

Physician Business

   20,910     21,139     39,427     39,748  

Elder Care Business

   6,963     4,904     11,549     9,787  

Corporate Shared Services

   (3,411 )   (4,457 )   (11,982 )   (9,208 )
                        

Total Income from operations

   24,462     21,587     38,994     40,327  
                        

DEPRECIATION:

        

Physician Business

   2,188     1,952     4,266     3,878  

Elder Care Business

   1,141     1,017     2,286     2,049  

Corporate Shared Services

   1,428     1,176     2,805     2,313  
                        

Total Depreciation

   4,758     4,145     9,357     8,239  
                        

AMORTIZATION OF INTANGIBLE AND OTHER ASSETS:

        

Physician Business

   767     750     1,549     1,522  

Elder Care Business

   638     698     1,285     1,396  

Corporate Shared Services

   1     29     30     59  
                        

Total amortization of intangible and other assets

   1,406     1,477     2,864     2,977  
                        

PROVISION FOR DOUBTFUL ACCOUNTS:

        

Physician Business

   781     433     1,385     369  

Elder Care Business

   68     490     415     646  

Corporate Shared Services

   —       —       —       —    
                        

Total provision for doubtful accounts

   849     923     1,799     1,015  
                        

INTEREST EXPENSE:

        

Physician Business

   1,236     1,028     2,309     2,045  

Elder Care Business

   1,958     1,959     3,917     3,917  

Corporate Shared Services

   (1,661 )   (1,651 )   (3,334 )   (3,223 )
                        

Total interest expense

   1,533     1,336     2,891     2,739  
                        

INTEREST AND INVESTMENT INCOME:

        

Physician Business

   —       —       —       —    

Elder Care Business

   3     7     6     13  

Corporate Shared Services

   111     275     636     368  
                        

Total interest and investment income

   114     282     642     380  
                        

PROVISION (BENEFIT) FOR INCOME TAXES:

        

Physician Business

   7,690     7,971     14,657     14,927  

Elder Care Business

   1,928     1,167     2,957     2,322  

Corporate Shared Services

   (512 )   (951 )   (2,949 )   (2,113 )
                        

Total provision for income taxes

   9,106     8,187     14,664     15,136  
                        

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

Current Fiscal Year Balance Sheet

(in thousands)

Consolidated

 

     As of
     6/29/07    9/28/07
ASSETS      

Cash

   23,954    17,041

Accounts Receivable, net

   222,699    232,282

Inventory, net

   187,499    188,087

Deferred Tax Assets

   8,987    9,319

Other Current Assets

   34,257    27,894
         

Total Current Assets

   477,396    474,623
         

Property and Equipment, net

   89,347    89,339

Intangibles, net

   30,280    28,991

Goodwill

   110,993    110,727

Investment in available for sale securities

   —      46,147

Other Long-Term Assets

   98,380    69,856
         

Total Long-Term Assets

   329,000    345,060
         

Total Assets

   806,396    819,683
         
LIABILITIES & EQUITY      

Accounts Payable

   144,572    149,827

Accrued Expenses

   33,099    33,275

Current Maturities of Long-Term Debt

   2,132    32,129

Other Current Liabilities

   15,267    15,000
         

Total Current Liabilities

   195,070    230,230
         

Long-Term Debt

   150,527    150,449

Other Long-Term Liabilities

   70,414    66,788
         

Total Long-Term Liabilities

   220,941    217,237
         

Total Liabilities

   416,011    447,467
         

Total Equity

   390,385    372,216
         

Total Liabilities & Equity

   806,396    819,683
         

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

Balance Sheet Trend

(in thousands)

Consolidated

 

    Fiscal 2005   Fiscal 2006   Fiscal 2007
ASSETS   Jun-04   Sep-04   Dec-04   Mar-05   Jun-05   Sep-05   Dec-05   Mar-06   Jun-06   Sep-06   Dec-06   Mar-07

Cash

  63,112   45,591   13,657   17,888   23,836   17,466   26,651   23,867   27,784   45,678   54,904   46,658

Accounts Receivable, net

  182,639   197,423   209,342   217,350   208,642   213,585   207,659   208,964   206,405   225,536   219,822   222,776

Inventory, net

  112,653   113,384   147,470   134,110   132,684   136,450   167,407   173,458   170,612   172,127   186,193   174,130

Deferred Tax Assets

  38,594   33,301   32,206   29,014   29,113   20,183   14,298   12,959   11,181   9,042   7,379   8,776

Other Current Assets

  13,596   10,016   18,567   19,451   22,182   25,822   27,937   33,827   32,876   39,288   37,329   34,434
                                               

Total Current Assets

  410,594   399,715   421,242   417,813   416,457   413,506   443,952   453,075   448,858   491,671   505,627   486,774
                                               

Property and Equipment, net

  70,792   73,362   76,453   81,105   84,173   86,840   86,475   87,663   88,214   87,291   85,885   88,627

Intangibles, net

  10,737   12,824   22,419   21,858   21,217   34,427   35,395   34,345   33,350   32,343   31,186   29,758

Goodwill

  71,631   71,646   79,542   85,617   86,273   103,420   105,452   105,521   106,519   106,819   106,971   107,366

Other Long-Term Assets

  39,555   40,794   41,691   39,965   47,315   50,862   53,665   56,371   —     —     —     2
                                               

Total Long-Term Assets

  192,715   198,626   220,105   228,545   238,978   275,549   280,987   283,900   283,066   281,388   282,105   288,201
                                               

Total Assets

  603,309   598,341   641,347   646,358   655,435   689,055   724,939   736,975   731,924   773,059   787,732   774,975
                                               
    Fiscal 2005   Fiscal 2006   Fiscal 2007
LIABILITIES & EQUITY   Jun-04   Sep-04   Dec-04   Mar-05   Jun-05   Sep-05   Dec-05   Mar-06   Jun-06   Sep-06   Dec-06   Mar-07

Accounts Payable

  105,057   105,608   127,465   109,649   115,455   118,953   141,622   139,227   122,449   145,767   162,338   131,330

Accrued Expenses

  29,667   33,610   36,085   44,880   26,660   33,196   30,413   34,499   27,748   34,827   31,670   37,224

Current Maturities of Long-Term Debt

  35,052   25,000   25,000   25,000   25,679   27,786   25,788   509   517   1,655   152,154   2,238

Liabilities of Discontinued Operations

  4,809   405   —     —     —     —     —     —     —     —     —     —  

Other Current Liabilities

  12,982   13,360   9,296   9,701   12,661   11,883   11,837   13,639   12,490   13,917   10,730   11,440
                                               

Total Current Liabilities

  187,567   177,983   197,846   189,230   180,455   191,818   209,660   187,874   163,204   196,166   356,892   182,232
                                               

Long-Term Debt

  150,000   150,000   150,000   150,000   151,192   151,113   150,981   150,855   150,725   150,616   460   150,675

Other Long-Term Liabilities

  23,629   25,225   29,359   30,310   35,870   41,179   43,509   49,433   54,274   57,781   62,302   61,207
                                               

Total Long-Term Liabilities

  173,629   175,225   179,359   180,310   187,062   192,292   194,490   200,288   204,999   208,397   62,762   211,882

Total Liabilities

  361,196   353,208   377,205   369,540   367,517   384,110   404,150   388,162   368,203   404,563   419,654   394,114
                                               

Total Equity

  242,113   245,133   264,142   276,818   287,918   304,945   320,789   348,813   363,721   368,496   368,078   380,861
                                               

Total Liabilities & Equity

  603,309   598,341   641,347   646,358   655,435   689,055   724,939   736,975   731,924   773,059   787,732   774,975
                                               


PSS World Medical, Inc.

Unaudited Operating Highlights

Current Fiscal Year

(in millions)

 

      Three Months Ended     Six Months Ended  
    

September 28,

2007

   

September 29,

2006

   

September 28,

2007

   

September 29,

2006

 

Net Sales:

        

Physician Business

   $ 320.2     $ 300.8     $ 626.4     $ 585.3  

Elder Care Business

     137.8       126.2       270.4       254.9  
                                

Total Net Sales

   $ 457.9     $ 427.1     $ 896.8     $ 840.2  
                                

Income from Operations:

        

Physician Business

   $ 20.9     $ 21.1     $ 39.4     $ 39.7  

Elder Care Business

     7.0       4.9       11.5       9.8  

Corporate Shared Services

     (3.4 )     (4.5 )     (12.0 )     (9.2 )
                                

Total income from operations

   $ 24.5     $ 21.6     $ 39.0     $ 40.3  
                                

EBITDA (a)

   $ 31.2     $ 27.6     $ 52.3     $ 52.4  

Income from operations, as a percentage of net sales

     5.3 %     5.1 %     4.3 %     4.8 %

Consolidated Return on Committed Capital (“ROCC”) (b)

     27.2 %     27.5 %     22.9 %     26.4 %

Billing Days

     63       63       127       127  

Net Sales Per Billing Day (in thousands):

        

Physician Business

   $ 5,082     $ 4,775     $ 4,932     $ 4,608  

Elder Care Business

     2,187       2,004       2,129       2,007  
                                

Total Net Sales Per Billing Day

   $ 7,269     $ 6,779     $ 7,062     $ 6,616  
                                

Net Sales Per Billing Day Growth Rate:

        

Physician Business

     6.4 %       7.0 %  

Elder Care Business

     9.1 %       6.1 %  

Total Net Sales Per Billing Day Growth Rate

     7.2 %       6.7 %  
                  Annualized  
                 September 28,
2007
    September 29,
2006
 

DSO (c)

        

Physician Business

         42.6       40.9  

Elder Care Business

         50.7       55.3  

DOH (d)

        

Physician Business

         48.8       48.2  

Elder Care Business

         56.1       50.8  

DIP (e)

        

Physician Business

         44.9       43.5  

Elder Care Business

         27.9       29.1  

Cash Conversion Days (f)

        

Physician Business

         46.5       45.6  

Elder Care Business

         78.8       77.0  
                  As of  
                 September 28,
2007
    September 29,
2006
 

Operational working capital (g)

       $ 270.5     $ 251.9  

Net Debt:

        

Bank debt

       $ 31.4     $ 1.0  

Other debt

         1.2       1.3  

Convertible senior notes

         150.0       150.0  

Less: Cash and cash equivalents

         (17.0 )     (45.7 )
                    

Net Debt

       $ 165.6     $ 106.6  
                    

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

EBITDA Calculation

Current Fiscal Year

(in thousands)

 

     Fiscal 2008  
     Q1     Q2  

Net Income

   $ 8,687     $ 14,483  

Plus: Interest expense

     1,358       1,533  

Less: Interest and investment income

     (528 )     (114 )

Plus: Provision for income taxes

     5,559       9,106  

Plus: Depreciation

     4,595       4,758  

Plus: Amortization of intangible assets

     1,458       1,406  
                

EBITDA

   $ 21,128     $ 31,172  
                

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

EBITDA Calculation

(in thousands)

 

      Fiscal 2005     Fiscal 2006     Fiscal 2007  
     Q1     Q2     Q3     Q4     Total FY
2005
    Q1     Q2     Q3     Q4     Total FY
2006
    Q1     Q2     Q3     Q4     Total FY
2007
 

Income from Continuing Operations

   $ 5,925     $ 8,772     $ 14,436     $ 10,251     $ 39,384     $ 8,140     $ 10,785     $ 12,421     $ 12,911     $ 44,257     $ 10,955     $ 12,775     $ 11,120     $ 15,631     $ 50,481  

Plus: Interest expense

     1,942       1,817       1,737       1,360       6,856       1,509       1,358       1,561       1,456       5,884       1,406       1,336       1,320       1,284       5,346  

Less: Interest and investment income

     (111 )     (89 )     (12 )     (5 )     (217 )     (99 )     (111 )     (75 )     (138 )     (423 )     (101 )     (282 )     (426 )     (385 )     (1,194 )

Plus: Provision for income taxes

     3,962       6,149       (525 )     7,184       16,770       5,271       6,529       7,080       6,957       25,837       6,949       8,187       6,376       8,348       29,860  

Plus: Depreciation

     3,482       3,427       3,727       3,605       14,241       3,316       3,468       3,673       3,475       13,932       4,094       4,145       4,215       4,296       16,750  

Plus: Amortization of intangible assets

     836       935       1,278       1,488       4,537       1,361       1,389       1,677       1,871       6,298       1,505       1,472       1,468       1,463       5,908  
                                                                                                                        

EBITDA

   $ 16,036     $ 21,011     $ 20,641     $ 23,883     $ 81,571     $ 19,498     $ 23,418     $ 26,337     $ 26,532     $ 95,785     $ 24,808     $ 27,633     $ 24,073     $ 30,637     $ 107,151  
                                                                                                                        

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

Return on Committed Capital (ROCC)

Current Fiscal Year

(in thousands)

Consolidated

 

      Fiscal 2008  
     Q1     Q2  

Quarterly Average Committed Capital (1)

   363,905     387,926  

Return on Committed Capital - Quarterly (2)

   18.2 %   27.2 %

Return:

    

Net Income

   8,687     14,483  

Add:

    

Provision for Income Taxes

   5,559     9,106  

Interest Expense

   1,358     1,533  

Amortization

   1,458     1,406  

Interest and Investment Income

   (528 )   (114 )
            
   16,534     26,414  
            

Committed Capital:

    

Total Assets

   806,396     819,683  

Less assets excluded:

    

Cash

   (23,954 )   (17,041 )

Goodwill and Intangibles, net

   (141,273 )   (139,718 )

Total Liabilities

   (416,011 )   (447,467 )

Plus liabilities excluded:

    

Current debt

   2,132     32,129  

Long-term debt

   150,527     150,449  
            
   377,817     398,035  
            

(1) Quarterly Average Committed Capital equals the sum of the committed capital of the most recent two quarters, divided by two.
(2) Return on Committed Capital equals Return divided by Committed Capital. Quarterly calculations are annualized.

 

Numbers may not foot due to rounding differences.


PSS World Medical, Inc.

Return on Committed Capital (ROCC)

(in thousands)

Consolidated

 

     Fiscal 2005     Fiscal 2006     Fiscal 2007  
    Q1     Q2     Q3     Q4     Total FY
2005
    Q1     Q2     Q3     Q4     Total FY
2006
    Q1     Q2     Q3     Q4     Total FY
2007
 

Quarterly Average Committed Capital (1)

  247,761     260,802     280,166     303,738       316,837     322,662     325,748     330,989       340,070     341,619     331,779     338,812    

Annual Average Committed Capital (2)

          274,084             321,764             341,411  

Return on Committed Capital - Quarterly (3)

  20.3 %   27.0 %   24.1 %   26.7 %     20.4 %   24.7 %   27.8 %   27.9 %     24.4 %   27.5 %   23.9 %   31.1 %  

Return on Committed Capital - Annual

          24.6 %           25.4 %           26.5 %

Return:

                             

Income from Continuing Operations before Extraordinary Loss

  5,925     8,772     14,436     10,251     39,384     8,140     10,785     12,421     12,911     44,257     10,955     12,775     11,120     15,631     50,481  

Add:

                             

Provision for Income Taxes

  3,962     6,149     (525 )   7,184     16,770     5,271     6,529     7,080     6,957     25,837     6,949     8,187     6,376     8,348     29,860  

Interest Expense

  1,942     1,817     1,737     1,360     6,856     1,509     1,358     1,550     1,467     5,884     1,406     1,336     1,320     1,284     5,346  

Amortization

  836     934     1,278     1,488     4,536     1,361     1,389     1,677     1,871     6,298     1,500     1,477     1,469     1,462     5,908  

Interest and Investment Income

  (111 )   (89 )   (12 )   (5 )   (217 )   (99 )   (111 )   (64 )   (149 )   (423 )   (101 )   (282 )   (426 )   (385 )   (1,194 )
                                                                                         
  12,554     17,583     16,914     20,278     67,329     16,182     19,950     22,664     23,057     81,853     20,709     23,493     19,859     26,340     90,401  
                                                                                         

Committed Capital:

                             

Total Assets

  603,309     598,341     641,347     646,358     646,358     655,435     689,055     724,939     736,975     736,975     731,924     773,059     787,732     774,975     774,975  

Less assets excluded:

                             

Cash

  (63,112 )   (45,591 )   (13,657 )   (17,888 )   (17,888 )   (23,836 )   (17,466 )   (26,651 )   (23,867 )   (23,867 )   (27,784 )   (45,678 )   (54,904 )   (46,658 )   (46,658 )

Goodwill and Intangibles, net

  (82,368 )   (84,470 )   (101,961 )   (107,475 )   (107,475 )   (107,490 )   (137,847 )   (140,847 )   (139,866 )   (139,866 )   (139,869 )   (139,162 )   (138,157 )   (137,124 )   (137,124 )

DTA from sale of Imaging Business

  (28,444 )   (26,923 )   (26,746 )   (15,758 )   (15,758 )   (10,487 )   (6,184 )   (912 )   (3,614 )   (3,614 )   —             —    

Total Liabilities

  (361,196 )   (353,208 )   (377,205 )   (369,540 )   (369,540 )   (367,517 )   (384,110 )   (404,150 )   (388,162 )   (388,162 )   (368,203 )   (404,563 )   (419,654 )   (394,114 )   (394,114 )

Plus liabilities excluded:

                             

Current debt

  35,052     25,000     25,000     25,000     25,000     25,679     27,786     25,788     509     509     517     1,655     152,154     2,238     2,238  

Long-term debt

  150,000     150,000     150,000     150,000     150,000     151,192     151,113     150,981     150,855     150,855     150,725     150,616     460     150,675     150,675  

Liabilities of Discontinued Operations

  4,809     405     —       —       —       —       —       —       —       —       —       —       —       —       —    
                                                                                         
  258,050     263,554     296,778     310,697     310,697     322,976     322,347     329,148     332,830     332,830     347,310     335,927     327,631     349,992     349,992  
                                                                                         

(1) Quarterly Average Committed Capital equals the sum of the committed capital of the most recent two quarters, divided by two.
(2) Annual Average Committed Capital equals the sum of the committed capital of the most recent two year ends, divided by two.
(3) Return on Committed Capital equals Return divided by Committed Capital. Quarterly calculations are annualized.

 

Numbers may not foot due to rounding differences.


PSS WORLD MEDICAL, INC.

Footnotes

(a) EBITDA represents net income plus provision for income taxes, interest expense, depreciation, and amortization of intangible assets, less interest and investment income. Management reviews EBITDA when evaluating and comparing the performance of each operating segment on a quarterly basis. Management believes EBITDA is an important measure of liquidity.

(b) ROCC equals return divided by average committed capital. Return is annualized for quarterly calculations. Management reviews ROCC when evaluating and comparing the performance of each operating segment on a quarterly basis. Management believes ROCC is an important measure of profitability and return.

(c) DSO is average accounts receivable divided by average daily net sales. Average accounts receivable is the sum of accounts receivable, net of the allowance for doubtful accounts, at the beginning and end of the most recent four quarters divided by five. Average daily net sales are net sales for the most recent four quarters divided by 360. Southern Anesthesia & Surgical, Inc. (“SAS”) accounts receivable balance of $1.4 million as of September 30, 2005, has been excluded from the Fiscal Year 2006 calculation.

(d) DOH is average inventory divided by average daily cost of goods sold (“COGS”). Average inventory is the sum of inventory at the beginning and end of the most recent four quarters divided by five. Average daily COGS is quarterly COGS for the most recent four quarters divided by 360. SAS inventory balance of $3.9 million as of September 30, 2005, has been excluded from the Fiscal Year 2006 calculation.

(e) DIP is average accounts payable divided by average daily COGS. Average accounts payable is the sum of accounts payable at the beginning and end of the most recent four quarters divided by five. SAS accounts payable balance of $3.8 million as of September 30, 2005, has been excluded from the Fiscal Year 2006 calculation.

(f) Cash Conversion Days is the sum of DSO and DOH less DIP.

(g) Operational working capital equals accounts receivable plus inventory minus accounts payable.

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