SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____.
Commission file number 000-23249
-------------------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION AND AFFILIATES
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
PRIORITY HEALTHCARE CORPORATION
250 TECHNOLOGY PARK, SUITE 124
LAKE MARY, FLORIDA 32746
<PAGE>
REQUIRED INFORMATION
Item 4. The Plan is subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") and the Plan's financial
statements and schedules have been prepared in accordance
with the financial reporting requirements of ERISA. Such
financial statements and schedules are included in this
Report in lieu of the information required by Items 1-3 of
Form 11-K.
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS:
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION, AT DECEMBER 31, 1999
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS, WITH FUND INFORMATION,
FOR THE YEAR ENDED DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
SCHEDULES *:
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
DECEMBER 31, 1999 (SCHEDULE I)
SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR
ENDED DECEMBER 31, 1999 (SCHEDULE V)
*NOTE - OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY
ARE NOT APPLICABLE.
(b) Exhibits
23 - Consent of Ent & Imler CPA Group, PC
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administrator and
Administrative Committee of
The Profit Sharing Plan of Priority Healthcare Corporation
and Affiliates:
We have audited the accompanying statement of net assets
available for plan benefits, with fund information, of The Profit
Sharing Plan of Priority Healthcare Corporation and Affiliates (the
"Plan") as of December 31, 1999, and the related statement of
changes in net assets available for plan benefits, with fund
information, for the year then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is
to express an opinion on the financial statements based on our
audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets available
for plan benefits, with fund information, as of December 31, 1999,
and the changes in net assets available for plan benefits, with fund
information, for the year ended December 31, 1999 in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes and
reportable transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial
statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected
to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
ENT & IMLER CPA GROUP, PC
Indianapolis, Indiana
June 20, 2000
<PAGE>
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION
AND AFFILIATES
STATEMENT OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS, WITH
FUND INFORMATION
DECEMBER 31, 1999
<TABLE>
<CAPTION> Fund Information
----------------------------------------------------------------
BWI PHC
Common Common Mutual Loan
Stock Stock Funds Fund Total
--------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value: $ 129,406 $ 450,726 $1,496,692 $ 89,749 $ 2,166,573
Receivables:
Employer contributions - 94,921 372,511 - 467,432
Employee contributions - 7,364 18,466 - 25,830
Accrued investment income 27 70 - - 97
--------- --------- ----------- -------- ----------
Total assets 129,433 553,081 1,887,669 89,749 2,659,932
Liabilities
Other liabilities - - - - -
--------- --------- ----------- -------- -----------
Net assets available for
plan benefits $ 129,433 $ 553,081 $1,887,669 $ 89,749 $ 2,659,932
========= ========= =========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION
AND AFFILIATES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION> Fund Information
----------------------------------------------------------------
BWI PHC
Common Common Mutual Loan
Stock Stock Funds Fund Total
--------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
Contributions:
Employer $ - $ 94,921 $ 372,511 $ - $ 467,432
Employee - 95,524 268,829 - 364,353
Contribution from
Bindley Western, Inc. 190,834 64,215 1,128,642 - 1,383,691
Rollover - - - - -
--------- --------- ---------- ------- ----------
Total contributions 190,834 254,660 1,769,982 - 2,215,476
--------- --------- ---------- ------- ----------
Investment Income:
Interest and dividends 729 849 108,750 1,662 111,990
Realized gains and losses 57,561 853 29,710 - 88,124
Net appreciation (depreciation)
in fair value of investments 55,301 107,377 109,310 - 271,988
--------- --------- ---------- -------- ----------
Total investment income 113,591 109,079 247,770 1,662 472,102
--------- --------- ---------- -------- ----------
Total additions 304,425 363,739 2,017,752 1,662 2,687,578
Distributions to participants (6,516) (10,496) (9,331) - (26,343)
Administrative expenses (426) (763) - (114) (1,303)
Net transfers (to) from
other funds (168,050) 200,601 (120,752) 88,201 -
--------- --------- ---------- -------- ----------
Net increase in net assets
available for plan benefits 129,433 553,081 1,887,669 89,749 2,659,932
Beginning of year - - - - -
--------- --------- ---------- -------- ----------
End of year $ 129,433 $ 553,081 $1,887,669 $ 89,749 $2,659,932
========= ========= ========== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION
AND AFFILIATES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE PLAN
The following brief description of the Profit Sharing Plan
of Priority Healthcare Corporation and Affiliates is provided for
general information purposes only. Participants should refer to the
plan agreement for more complete information.
General
Effective January 1, 1999, Priority Healthcare Corporation
adopted the Profit Sharing Plan of Priority Healthcare Corporation
and Affiliates (the "Plan") which is a combined profit sharing and
401(K) pre-tax savings plan, using the Prism Prototype Retirement
Plan and Trust (the "Prism Plan"). The purpose of the Plan is to
provide retirement income and other benefits to eligible employees
of Priority Healthcare Corporation and its Affiliates (the
"Company").
Participation
Employees are eligible to participate in the Company's
profit sharing program of the Plan on January 1, April 1, July 1 or
October 1, whichever comes first, after completing one year of
service and attaining age twenty-one. An employee is considered to
have completed one year of service at the end of the first twelve-
month period during which the employee has completed not fewer than
1,000 hours of service.
Employees are eligible to make 401(K) pre-tax contributions
to the Plan beginning on January 1, April 1, July 1 or October 1,
whichever comes first, after 90 days of employment and attaining age
twenty-one.
Administration
The Plan is administered by a committee (the "Committee")
appointed by the Compensation and Stock Option Committee of the
Company's Board of Directors. The Plan has a trust agreement with
Key Trust (the "Trustee") whereby the Trustee receives
contributions, invests Plan assets and distributes amounts for
benefit payments as directed by the Committee. All trustee's fees
and other administrative expenses, exclusive of those incurred in
relation to the Committee, are paid by the Plan.
Contributions and Allocations to Participants
The Company's annual profit sharing contribution to the Plan
is a discretionary amount determined by the Board of Directors. The
1999 profit sharing contribution amounted to $471,050 before
forfeitures.
Participants may authorize that a pre-tax amount between 1%
and 13% of their annual compensation be contributed on their behalf
to the Plan. However, the annual contribution per employee cannot
exceed $10,000 for 1999. Participants may also make qualified
rollover contributions to the Plan.
Profit sharing contributions are allocated to participants
on the basis of the ratio that each participant's compensation bears
to the total compensation paid to all Plan participants for the
applicable Plan year. The maximum compensation allowed is $160,000
in 1999.
Forfeitures (the non-vested portion of those participant's
accounts who have terminated service with the Company) are used to
offset future employer profit sharing contributions. At December
31, 1999, forfeited non-vested accounts totaled $3,618.
Income (net of expenses) is allocated on a daily basis based
on the ratio of each participant's adjusted beginning balance to the
total of all participants' adjusted beginning balances for the
applicable investment fund.
Vesting and Distributions
A participant's interest in his pre-tax employee
contributions and the earnings thereon are 100% vested at all times.
A participant's interest in his profit sharing account is
vested as follows:
Number of Years Percentage
of Service Vested
---------------- -----------
1 20%
2 40%
3 60%
4 80%
5 100%
In the event of a participant's retirement on or after his
65th birthday, total disability or death, his profit sharing account
becomes fully vested.
Distributions consist of benefit payments to eligible
participants, payments of vested amounts to terminated participants
and payments to participants who can demonstrate financial hardship.
Participants are also able to obtain loans from the Plan. Loans
issued under the Prism Plan bear a rate of interest of prime plus
1%. The loan fund is utilized as the disbursement fund for loans
granted by the Plan.
All distributions and loans to participants must be approved
by the Committee.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accounts of the Plan are maintained on the accrual basis
of accounting.
Investments and Investment Income
Investments are stated at fair value which equals quoted
market value or unit values based upon quoted market values.
Participant loans are valued at cost, which approximates fair value.
Interest and dividends are credited to the accounts when earned.
Payment of Benefits
Upon termination of service, a participant may elect to
receive a lump sum amount equal to the value of their account.
Benefits are recorded when paid.
Use of Estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of
assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
NOTE 3 - INVESTMENTS
The Plan's investments are held by a Trustee. The Plan
provides that the contributions will be invested in several
different investment programs as directed by each participant.
These investment programs range from money market, government
secured, fixed income, growth, aggressive funds, and the Company's
own stock. For the participants who fail to complete the proper
investment election forms, these participant accounts are
automatically invested in the low risk government secured
investment. The net appreciation/(depreciation) in fair value for
each significant class of investment is shown in the accompanying
financial statements as investment income.
Investment Options
Under the Prism Plan, participants are able to direct their
contributions among several investment options. The investment
funds available to participants are as follows:
1. Victory Investment Quality Bond Fund - invests primarily in
investment-grade bonds issued by corporations and the U.S.
Government and its agencies or instrumentalities.
2. Victory Balanced Fund - invests in a diversified portfolio
of common stocks and fixed income securities or other
collective funds holding these securities.
3. Victory Special Value Fund - invests primarily in common
stocks of small and medium-sized companies.
4. Bindley Western Industries Common Stock Fund - invests in
the common stock of Bindley Western Industries, Inc.
5. Victory U.S. Government Obligations Fund - invests only in
short-term securities issued or guaranteed by the U.S.
Treasury and repurchase agreements collateralized by U.S.
Treasury securities with maturities of thirteen months or
less.
6. American EuroPacific Growth Fund - invests in small and
large companies based in industrial nations as well as
smaller, developing nations.
7. American Washington Mutual Investors Fund - invests
primarily in companies that consistently pay dividends and
earn more than their dividend payout.
8. Janus Fund - invests primarily in a diversified portfolio of
common stocks of issuers of any size.
9. Victory Stock Index - composed of 500 domestically traded
common stocks weighted according to the market value of each
common stock in the Index.
10. Priority Healthcare Corporation Common Stock Fund - invests
in the common stock of Priority Healthcare Corporation.
Fund Transfers
Transfers between funds result from participants redirecting
their contributions between the funds listed above.
NOTE 4 - PARTY-IN-INTEREST
Participants in the Plan may invest their
contributions/account balances in a Priority Healthcare Corporation
Common Stock Fund, which primarily holds shares of Priority
Healthcare Corporation common stock. At December 31, 1999, this
fund held 15,057 shares with a historical cost of $351,661 and a
market value of $450,726.
NOTE 5 - INCOME TAX STATUS
The Internal Revenue Service issued a determination letter
stating that the Plan qualifies for tax exempt status under the
applicable provisions of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. However,
management believes the Plan is designed and is currently being
administered in accordance with the Internal Revenue Code and ERISA.
NOTE 6 - PLAN TERMINATION
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of plan termination, participants
will become 100 percent vested in their accounts.
NOTE 7 - DIFFERENCE FROM FORM 5500
At December 31, 1999, there are no differences between the
Annual Return/Report of Employee Benefit Plan (Form 5500) filed with
the Internal Revenue Service and the accompanying financial
statements.
NOTE 8 - BINDLEY WESTERN INDUSTRIES, INC. SPIN-OFF OF PRIORITY
HEALTHCARE CORPORATION
As of January 1, 1999 Bindley Western Industries, Inc.
distributed to its shareholders all of its common stock of Priority
Healthcare Corporation. In addition the Bindley Western Industries,
Inc. Profit Sharing Plan held shares of Bindley Western Industries,
Inc. stock (in its stock fund), this Bindley Western Industries,
Inc. Plan received shares of Priority Healthcare Corporation stock
in the spin-off. The account balances of Priority Healthcare
Corporation employees were transferred to The Profit Sharing Plan of
Priority Healthcare Corporation, after the spin-off distribution was
completed. The Priority Healthcare Corporation employees were
permitted to continue to hold their investment position in Bindley
Western Industries, Inc. however, they are not permitted to purchase
anymore Bindley Western Industries, Inc. stock.
<PAGE>
<TABLE>
<CAPTION>
Schedule I
Item 27 (a) Form 5500
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION
AND AFFILIATES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
Current
Identity of Issue Description of Investment Cost Value
----------------------- ------------------------------------- --------- ----------
<S> <C> <C> <C>
Bindley Western Equity Securities of Bindley Western $ 74,105 $ 129,406
Industries Common Industries, Inc.
Stock Fund
Priority Healthcare Equity Securities of Priority Health-
Corp Common Stock Fund* care Corporation 351,661 450,726
American Europacific Registered Investment Companies 179,824 254,938
Growth Fund
Janus Fund Registered Investment Companies 100,343 107,687
Victory Special Value Registered Investment Companies 160,980 155,901
Fund
Victory Stock Index Fund Registered Investment Companies 6,948 7,634
Victory Balanced Fund Registered Investment Companies 218,768 231,241
American Washington Registered Investment Companies 481,192 482,081
Mutual Inv. Fund
Victory Investment Registered Investment Companies 51,845 49,105
Quality Bond
Victory U.S. Government Registered Investment Companies 187,482 208,105
Obligations Fund
Loans to participants (Interest rates of 8.25% to 9.25%)* 89,749 89,749
---------- ----------
$1,902,897 $2,166,573
========== ==========
</TABLE>
*Denotes party-in-interest.
See auditors' report and accompanying notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
Schedule V
Item 27 (d) Form 5500
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION
AND AFFILIATES
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Current Value
Number of of Asset on
Identity of Purchases/ Purchase Selling Transaction Transaction Net Gain
Party Involved Description of Asset Sales Price Price Expenses Cost Date or (loss)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Key Trust Company Victory U.S. Government 33 $ 85,655 $ 85,655 $ 85,655 $ -
of Indiana, NA Obligations Fund
Key Trust Company American Washington Mutual 37 270,176 270,176 270,176 -
of Indiana, NA Investors Fund
Key Trust Company Victory Balanced Fund 38 127,000 127,000 127,000 -
of Indiana, NA
Key Trust Company American Europacific 34 129,808 129,808 129,808 -
of Indiana, NA Growth Fund
Key Trust Company Janus Fund Mutual Fund 13 100,343 100,343 100,343 -
of Indiana, NA
Key Trust Company Victory Prime Obligation 12 135,560 135,560 135,560 -
of Indiana, NA Money Market Fund
Key Trust Company Priority Healthcare 16 277,464 277,464 277,464 -
of Indiana, NA Corporation Common
Stock Fund
Key Trust Company Victory Special Value Fund 32 101,773 101,773 101,773 -
of Indiana, NA
Key Trust Company Pooled Loans Fund 5 94,826 94,826 94,826 -
of Indiana, NA
Key Trust Company Victory Prime Obligation 10 114,317 114,317 114,317 -
of Indiana, NA Money Market Fund
Key Trust Company American Washington Mutual 25 107,931 92,411 107,931 15,520
of Indiana, NA Investors Fund
Key Trust Company Victory Balanced Fund 19 69,424 60,844 69,424 8,580
of Indiana, NA
Key Trust Company Bindley Western Industries 7 95,377 37,816 95,377 57,561
of Indiana, NA Common Stock Fund
Key Trust Company Victory Special Value Fund 14 71,399 71,885 71,399 (486)
of Indiana, NA
Key Trust Company Victory Quality Bond Fund 9 72,661 73,455 72,661 (794)
of Indiana, NA
</TABLE>
See auditors' report and accompanying notes to the financial statements.
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustees (or other persons who administer
the employee benefit plan) have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
PROFIT SHARING PLAN OF PRIORITY
HEALTHCARE CORPORATION AND
AFFILIATES
Date: June 26, 2000 By /s/ Barbara J. Luttrell
----------------------------------
Name: Barbara J. Luttrell
Title: Plan Administrator
