<PAGE> 1
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): December 14, 1997
Gulf South Medical Supply, Inc.
---------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-21512 06-1251310
- ----------------------------- --------------- ---------------------
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File number) Identification No.)
One Woodgreen Place, Madison, MS 39110
---------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601) 856-5900
<PAGE> 2
Item 5. Other Events
On December 14, 1997, Gulf South Medical Supply, Inc. ("GSMS") entered
into an Agreement and Plan of Merger dated as of December 14, 1997 by and among
Physician Sales & Service, Inc. ("PSS"), PSS Merger Corp. ("Merger Corp.") and
GSMS, providing for the merger of Merger Corp. with and into GSMS with GSMS
surviving as a wholly owned subsidiary of PSS.
This Form 8-K is being filed to disclose and make publicly available
certain pro forma financial information giving effect to the merger.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired. None.
(b) Pro Forma Financial Information. None.
(c) Exhibits.
Exhibit No. Description
99.1 Unaudited Pro Forma Condensed Combined
Financial Statements.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto authorized.
GULF SOUTH MEDICAL SUPPLY, INC.
Date: December 23, 1997
By: /s/ Stanton Keith Pritchard
----------------------------------
Stanton Keith Pritchard
Senior Vice President, Business
Development and Administration,
General Counsel and Secretary
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No. in
Sequentially
Numbered
Exhibit No. Description Copy
- ----------- ----------- ----
<S> <C>
99.1 Unaudited Pro Forma Condensed Combined Financial Statements. 1
</TABLE>
<PAGE> 1
EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On December 14, 1997, Physician Sales & Service, Inc. ("PSS") signed a
definitive agreement to acquire Gulf South Medical Supply, Inc. ("GSMS") in a
merger (the "Merger") to be accounted for as a pooling of interests. The
unaudited pro forma condensed combined balance sheet as of September 30, 1997
has been prepared as if the Merger took place on that date. The unaudited pro
forma condensed combined income statements for the three years ended March 28,
1997 and for the six months ended September 30, 1997 and 1996 have been
prepared as if the Merger had occurred on April 1, 1994. The unaudited pro
forma condensed combined financial statements are based on the separate
historical condensed financial statements of PSS and GSMS giving effect to the
transaction under the assumptions and adjustments outlined in the accompanying
Notes to Unaudited Pro Forma Condensed Combined Financial Statements. The
unaudited pro forma condensed combined financial statements are provided for
comparative purposes only and are not necessarily indicative of the actual
results that would have been obtained had the Merger occurred on the dates
indicated or that may be achieved in the future.
The unaudited pro forma condensed combined financial statements should be
read in conjunction with the separate audited consolidated financial
statements of PSS and GSMS filed on Form 10-K for the fiscal years ended March
28, 1997 and December 31, 1996, respectively, the separate quarterly unaudited
consolidated financial statements of PSS and GSMS filed on Form 10-Q for the
quarters ended September 30, 1997, and PSS's Current Report on Form 8-K filed
on December 23, 1997 which reflects the pooling with S&W X-Ray, Inc.
1
<PAGE> 2
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
---------------------- ----------------------
PSS GSMS ADJUSTMENTS COMBINED
--------- -------- ----------- --------
(IN THOUSANDS)
ASSETS
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents............. $ 22,273 $ 49,154 $ 71,427
Marketable securities................. 842 -- 842
Accounts receivable, net.............. 150,995 54,055 205,050
Inventories........................... 79,129 31,734 110,863
Prepaid expenses and other............ 32,437 2,982 35,419
-------- -------- --------
Total current assets................. 285,676 137,925 423,601
Property and equipment, net............ 22,599 4,525 27,124
Intangibles, net....................... 47,692 34,575 82,267
Other assets........................... 6,958 3,132 10,090
-------- -------- --------
Total assets.......................... $362,925 $180,157 $543,082
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...................... $ 83,530 $ 19,289 $102,819
Accrued expenses...................... 23,937 3,856 27,793
Other................................. 15,557 -- 15,557
-------- -------- --------
Total current liabilities.............. 123,024 23,145 146,169
Long-term debt and capital lease
obligations, net of current
maturities............................ 1,749 -- 1,749
Other liabilities...................... 4,151 -- 4,151
-------- -------- --------
Total liabilities..................... 128,924 23,145 152,069
-------- -------- --------
Shareholders' equity:
Common stock.......................... 401 163 $ 122 (1) 686
Additional paid-in capital............ 221,075 115,727 (122)(1) 336,680
Retained earnings..................... 12,245 41,122 53,367
Cumulative foreign currency
translation adjustment............... 280 -- 280
-------- --------- ---- --------
Total shareholders' equity............ 234,001 157,012 (0) 391,013
-------- --------- ---- --------
Total liabilities and shareholders'
equity.............................. $362,925 $180,157 $ 0 $543,082
======== ======== ===== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
2
<PAGE> 3
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------ ---------------------
PSS GSMS ADJUSTMENTS COMBINED
-------- -------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales.............................. $476,638 $140,430 $617,068
Cost of goods sold..................... 347,354 108,234 455,588
-------- -------- --------
Gross profit....................... 129,284 32,196 161,480
Selling, general and administrative
expenses.............................. 112,194 18,795 130,989
Merger costs and expenses.............. 1,838 -- 1,838
Non-recurring ESOP cost of acquired
company............................... 2,457 -- 2,457
-------- -------- --------
Income from operations............. 12,795 13,401 26,196
-------- -------- --------
Other income (expense):
Net interest (expense) income......... (99) 973 874
Other income.......................... 2,021 -- 2,021
-------- -------- --------
1,922 973 2,895
-------- -------- --------
Income before income taxes......... 14,717 14,374 29,091
Provision for income taxes............. 6,169 5,520 11,689
-------- -------- --------
Net income............................. $ 8,548 $ 8,854 $ 17,402
======== ======== ========
Net income per common and common
equivalent share...................... $ 0.21 $ 0.53 $ 0.25
======== ======== ========
Weighted average shares................ 39,832 16,595 12,446(1) 68,873
======== ======== ====== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
3
<PAGE> 4
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
---------------- ---------------------
PSS GSMS ADJUSTMENTS COMBINED
-------- ------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales................................ $359,573 $90,745 $450,318
Cost of goods sold....................... 262,935 69,570 332,505
-------- ------- --------
Gross profit......................... 96,638 21,175 117,813
Selling, general and administrative
expenses................................ 86,104 11,831 97,935
Merger costs and expenses................ 6,934 -- 6,934
Non-recurring ESOP cost of acquired
company................................. 700 -- 700
-------- ------- --------
Income from operations............... 2,900 9,344 12,244
-------- ------- --------
Other income:
Net interest income..................... 1,051 795 1,846
Other income............................ 674 -- 674
-------- ------- --------
1,725 795 2,520
-------- ------- --------
Income before income taxes........... 4,625 10,139 14,764
Provision for income taxes............... 1,862 3,796 5,658
-------- ------- --------
Net income............................... $ 2,763 $ 6,343 $ 9,106
======== ======= ========
Net income per common and common
equivalent share........................ $ 0.07 $ 0.41 $ 0.14
======== ======= ========
Weighted average shares.................. 38,006 15,604 11,703(1) 65,313
======== ======= ====== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
4
<PAGE> 5
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE YEAR ENDED MARCH 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------ ---------------------
PSS GSMS ADJUSTMENTS COMBINED
-------- -------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales............................ $763,054 $202,084 $965,138
Cost of goods sold................... 558,164 155,616 713,780
-------- -------- --------
Gross profit..................... 204,890 46,468 251,358
Selling, general and administrative
expenses............................ 187,441 27,359 214,800
Merger costs and expenses............ 12,128 1,866 13,994
Non-recurring ESOP cost of acquired
company............................. 1,446 -- 1,446
-------- -------- --------
Income from operations........... 3,875 17,243 21,118
-------- -------- --------
Other income (expense):
Interest expense..................... (1,188) (189) (1,377)
Interest and investment income....... 2,419 2,248 4,667
Other income......................... 1,537 -- 1,537
-------- -------- --------
2,768 2,059 4,827
-------- -------- --------
Income before income taxes....... 6,643 19,302 25,945
Provision for income taxes........... 2,216 7,119 9,335
-------- -------- --------
Net income........................... $ 4,427 $ 12,183 $ 16,610
======== ======== ========
Net income per common and common
equivalent share.................... $ 0.12 $ 0.76 $ 0.25
======== ======== ========
Weighted average shares.............. 38,015 16,042 12,032(1) 66,089
======== ======== ====== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
5
<PAGE> 6
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE YEAR ENDED MARCH 29, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------ ---------------------
PSS GSMS ADJUSTMENTS COMBINED
-------- -------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales............................ $589,120 $140,807 $729,927
Cost of goods sold................... 426,530 106,477 533,007
-------- -------- --------
Gross profit....................... 162,590 34,330 196,920
Selling, general and administrative
expenses............................ 141,160 19,371 160,531
Merger costs and expenses............ 15,732 512 16,244
Non-recurring ESOP cost of acquired
company............................. 850 -- 850
-------- -------- --------
Income from operations............. 4,848 14,447 19,295
-------- -------- --------
Other income (expense):
Interest expense..................... (3,568) (220) (3,788)
Interest and investment income....... 1,188 104 1,292
Other income......................... 1,586 -- 1,586
-------- -------- --------
(794) (116) (910)
-------- -------- --------
Income before income taxes......... 4,054 14,331 18,385
Provision for income taxes........... 1,925 5,750 7,675
-------- -------- --------
Net income........................... $ 2,129 $ 8,581 $ 10,710
======== ======== ========
Net income per common and common
equivalent share.................... $ 0.06 $ 0.61 $ 0.19
======== ======== ========
Weighted average shares.............. 32,870 14,019 10,514(1) 57,403
======== ======== ====== ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
6
<PAGE> 7
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE YEAR ENDED MARCH 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------ ---------------------
PSS GSMS ADJUSTMENTS COMBINED
-------- -------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales........................... $471,985 $101,107 $573,092
Cost of goods sold.................. 339,670 75,070 414,740
-------- -------- --------
Gross profit....................... 132,315 26,037 158,352
Selling, general and administrative
expenses........................... 121,407 14,902 136,309
Restructuring charges............... 4,389 -- 4,389
Non-recurring ESOP cost of acquired
company............................ 832 -- 832
-------- -------- --------
Income from operations............. 5,687 11,135 16,822
-------- -------- --------
Other income (expense):
Interest expense.................... (4,506) (116) (4,622)
Interest and investment income...... 5 245 250
Other income........................ 1,912 -- 1,912
-------- -------- --------
(2,589) 129 (2,460)
-------- -------- --------
Income before income taxes........ 3,098 11,264 14,362
Provision for income taxes.......... 3,038 4,510 7,548
-------- -------- --------
Net income.......................... $ 60 $ 6,754 $ 6,814
======== ======== ========
Net income per common and common
equivalent share................... $ 0.00 $ 0.49 $ 0.14
======== ======== ========
Weighted average shares............. 25,101 13,851 10,388(1) 49,340
======== ======== ======= ========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements.
7
<PAGE> 8
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined financial statements have been
prepared by combining the historical balances of PSS and the historical
balances of GSMS as recast to a conforming March year end. The following notes
describe the pro forma adjustments and other items relevant to such
statements.
MERGER COSTS AND EXPENSES AND ANTICIPATED COST SAVINGS
Certain expenses are expected to be incurred in connection with the
consolidation and restructuring of PSS and GSMS. Such activities will include
consolidation costs from the closing of duplicate facilites, realigning
regional and corporate functions, consolidating information systems and
reducing personnel. The expenses associated with these activities cannot be
currently estimated with a reasonable degree of accuracy, but preliminary
estimates indicate that these expenses may range between $35 million and $45
million. Income tax benefits at the statutory rate resulting from these
charges range between $14 million and $18 million. The estimated costs
associated with the restructuring activities will be expensed in the period in
which the companies complete the restructuring plan.
Efficiencies and net cost savings are expected to result from the
consolidation and restructuring. The unaudited pro forma condensed combined
financial statements do not reflect such savings.
PRO FORMA ADJUSTMENTS
(1) SHAREHOLDERS' EQUITY AND EARNINGS PER SHARE
Shareholders' equity and weighted average common share amounts represent the
aggregate weighted average shares of PSS after the pooling, adjusted to
reflect the exchange ratio of 1.75 shares of PSS common stock for each share
of GSMS common stock.
8
