<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-31729
PROSPECTUS
193,884 SHARES
PHYSICIAN SALES & SERVICE, INC.
COMMON STOCK
This prospectus relates to 193,884 shares (the "Shares") of common
stock, $.01 par value per share (the "Common Stock"), of Physician Sales &
Service, Inc., a Florida corporation ("PSS" or the "Company"). All of these
Shares are being offered for sale by the holders of the Common Stock named
herein under the heading "Selling Shareholders" (the "Selling Shareholders").
The Selling Shareholders received the Shares in connection with the Company's
acquisitions of Diagnostic Imaging, Inc. and Rad-Tech X-Ray, Inc. on November
25, 1996 and March 20, 1997, respectively.
The shares of Common Stock of the Company are listed on the Nasdaq
National Market System ("Nasdaq") under the symbol PSSI. On July 18, 1997 the
last sales price for the shares of Common Stock as reported by Nasdaq was $19.00
per share.
All or a portion of the Shares may be offered by the Selling
Shareholders from time to time (i) in transactions (which may include block
transactions) on the Nasdaq National Market or such other national securities
exchange or automated interdealer quotation system on which shares of the
Company's Common Stock are then traded, (ii) in negotiated transactions, or
(iii) by a combination of such methods of sale, at fixed prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, or at negotiated prices. The Selling Shareholders
may effect such transactions by selling the Shares directly to purchasers or
through underwriters, agents or broker-dealers, and any such underwriters,
agents or broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such underwriters, agents or broker-dealers may act as
agents or to whom they may sell as principals, or both (which compensation as to
a particular underwriter, agent or broker-dealer might be in excess of customary
compensation). To the extent required, the specific Common Stock to be sold, the
respective purchase prices and public offering prices, names of such agent,
dealer or underwriter, and any applicable commissions or discounts with respect
to a particular offer will be set forth in any accompanying Prospectus
Supplement or, if appropriate, a post-effective amendment to the Registration
Statement of which this Prospectus is a part. See "Selling Shareholders" and
"Plan of Distribution." None of the proceeds from the sale of the Shares by the
Selling Shareholders will be received by the Company. By agreement, the Company
will pay one-half of the expenses of this registration and the Selling
Shareholders will pay the remaining one-half of such expenses pro rata based on
the number of shares of Common Stock being offered hereby. The Selling
Shareholders will bear all underwriting discounts and commissions and transfer
taxes, if any. The Company has agreed to indemnify the Selling Shareholders
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
The Selling Shareholders and any broker-dealer, agents or underwriters
that participate with the Selling Shareholders in the distribution of the Common
Stock may be deemed to be "underwriters" within the meaning of Section 2(11) the
Securities Act, and any commissions received by them and any profit on the
resale of the Common Stock purchased by them may be deemed underwriting
commissions or discounts under the Securities Act. See "Selling Shareholders"
and "Plan of Distribution."
------------------------
SEE "RISK FACTORS BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
------------------------
<PAGE> 2
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JULY 25, 1997
<PAGE> 3
AVAILABLE INFORMATION
Additional information regarding the Company and the shares offered
hereby is contained in the Registration Statement on Form S-3 (of which this
Prospectus forms a part) and the exhibits relating thereto filed by the Company
with the Securities and Exchange Commission (the "Commission") under the
Securities Act. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy and information statements and other
information with the Commission. Such reports, proxy and information statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials can also
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports, proxy
and information statements and other information filed electronically by the
Company are available at the Commission's worldwide web site at
http://www.sec.gov. The Common Stock of the Company is traded on the Nasdaq
National Market under the symbol "PSSI," and such reports, proxy and information
statements and other information concerning the Company are available for
inspection at the office of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File
No. 0-23832) are hereby incorporated by reference into this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
March 28, 1997 (including those portions of the Company's Definitive
Proxy Statement for the fiscal year 1997 Annual Meeting of Shareholders
incorporated by reference therein); and
(2) The description of Common Stock set forth in the Company's registration
statement filed pursuant to Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating any such
description.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering registered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in any subsequently filed document that also is or is deemed to be
incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. All information
appearing in this Prospectus is qualified in its entirety by information and
financial statements (including notes thereto) appearing in the documents
incorporated by reference herein, except to the extent set forth in the
immediately preceding statement.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon written or
oral request of such person, a copy of any or all
-2-
<PAGE> 4
of the documents incorporated by reference herein (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
the information that the Prospectus incorporates). Requests should be directed
to David A. Smith, Chief Financial Officer, Physician Sales & Service, Inc.,
4345 Southpoint Boulevard, Jacksonville, Florida 32216, telephone number (904)
332-3000.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO RESULTS OF OPERATIONS AND
BUSINESSES OF THE COMPANY. SUCH FORWARD-LOOKING STATEMENTS MAY INVOLVE
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS AND
PERFORMANCE OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS OR
PERFORMANCE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. CAUTIONARY STATEMENTS
REGARDING THE RISKS ASSOCIATED WITH SUCH FORWARD-LOOKING STATEMENTS, INCLUDE,
WITHOUT LIMITATION, THOSE STATEMENTS INCLUDED UNDER "RISK FACTORS." INVESTORS
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO
PUBLICLY RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT
EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF
UNANTICIPATED EVENTS.
ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE
COMPANY ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE FOREGOING CAUTIONARY
STATEMENT.
-3-
<PAGE> 5
THE COMPANY
Physician Sales & Service, Inc. ("PSS" or the "Company) is a leading
distributor of medical supplies, equipment and pharmaceuticals to primary care
and other office-based physicians. PSS currently operates 61 physician office
medical supply distribution ("core business") service centers distributing to
approximately 103,000 physician office sites in all 50 states. The Company's
primary market is the approximately 399,000 physicians who practice medicine in
approximately 198,000 office sites throughout the United States. According to
industry estimates, the medical supply and equipment segment of the health care
industry represents a $30.2 billion market, of which $6.6 billion represents the
primary care and other office-based physicians. The medical supply and equipment
industry is estimated to be growing at an annual rate of 6% to 8%. PSS has
historically grown faster than the overall market. The Company estimates that
approximately 300 companies supply medical products to the office-based
physician sector.
The Company, through its newly formed subsidiary, Diagnostic Imaging,
Inc. ("DI" or "imaging division"), distributes medical diagnostic imaging
supplies, chemicals, equipment and service to the acute care and alternate care
market. DI currently operates 16 imaging service centers in nine southeastern
states. The Company is in the process of developing a separate information
system for DI which will include the current ICON(SM) and CustomerLink systems.
A primary company objective is to pursue acquisition opportunities within the
radiology and imaging distribution market in order to gain market share and
expand the product offerings to the physician office market currently serviced
by PSS and the acute care market currently serviced by DI.
The Company also distributes medical supplies and equipment in Belgium,
France, Germany, and the Netherlands through its WorldMed International, Inc.
subsidiary. The Company currently has three service centers ("European
operations") in Europe distributing to the acute and alternate care markets.
The Company's primary objectives are to be capable of servicing the
medical equipment and supply needs of every office-based physician in the United
States, to create a national diagnostic imaging distribution company, and to
expand its presence in the European medical equipment and supply market. To
achieve these objectives and increase profitability, the Company intends to (i)
continue to acquire core business medical supply and equipment distributors in
the United States and Europe, especially in existing markets where it can
leverage its distribution infrastructure and gain market share, (ii) acquire
diagnostic imaging distributors to expand its geographic coverage and leverage
its existing infrastructure, (iii) increase sales of existing service centers by
adding additional sales representatives and providing superior service,
competitive pricing and a broad product line, including sophisticated diagnostic
equipment, (iv) expand operating margins, (v) open new service centers in
selected markets where acquisition opportunities are not available, and (vi)
invest in sophisticated information systems that bring efficiency to the Company
and its subsidiaries.
On August 21, 1995, the Company completed the acquisition of Taylor
Medical, Inc. ("Taylor"), its largest acquisition to date in a stock-for-stock
pooling. Taylor distributed medical supplies and equipment mainly to
office-based physicians and managed care facilities. Taylor operated five
distribution centers, primarily in the Southwest and Northeast, with 20
redistribution and sales offices with approximately 175 sales representatives.
Taylor had physician-related net sales of approximately $122 million for the
fiscal year ended March 30, 1995. The acquisition of Taylor increased the
Company's market presence in the Southwest and Northeast and provides an
opportunity to enhance profitability through the integration and consolidation
of Taylor's operations.
Effective November 13, 1995 the Company completed a secondary offering
of 11.5 million shares of common stock at $17 per share, 8.8 million of which
were offered by the Company. The Company used approximately $58.2 million of the
total net proceeds of $142.9 million to repay debt in fiscal 1996. Management
used approximately $50 million in connection with acquisitions of the imaging
division,
-4-
<PAGE> 6
core business, European operations, and general corporate purposes, including
capital expenditures during fiscal 1997. Management intends to use the remaining
net proceeds of the secondary offering for general corporate purposes, including
future acquisitions. The consummation of this transaction, along with the
Company's financing arrangements, has provided the Company with resources to
continue its strategy of being capable of servicing the medical equipment and
supply needs of every office-based physician in the United States, to create a
national imaging distribution company, and to expand its presence in the
European medical equipment and supply market.
On December 29, 1996, the Company acquired X-ray Corporation of Georgia
("X-ray GA") in a merger pursuant to which the Company issued 593,672 shares of
common stock to the former shareholders of X-ray GA, in exchange for all of the
outstanding shares of capital stock of X-ray GA valued at $11.0 million at the
time of the merger. This merger has been accounted for as a material
pooling-of-interests and, accordingly, the Company's consolidated financial
statements have been restated to include the accounts and operations of Taylor
and X-ray GA for all periods prior to the mergers.
In addition to Taylor and X-ray GA, for which the consolidated
financial statements have been restated for all periods prior to merger during
fiscal 1996 and 1997, respectively, the Company merged with seven companies
accounted for as poolings-of-interest (four core business and three imaging
division companies) and 12 companies accounted for as purchases (nine core
business and three European operation companies).
PSS Common Stock is publicly traded over the counter by the Nasdaq
National Market System under the ticker symbol "PSSI".
The Company is incorporated under the laws of the State of Florida. The
address and telephone number of its principal executive offices are 4345
Southpoint Boulevard, Jacksonville, Florida, 32216, telephone number (904)
332-3000.
-5-
<PAGE> 7
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus.
ANTICIPATED EXPANSION AND MANAGEMENT OF EXPANDED OPERATIONS
The Company intends to acquire additional distributors in markets it
already services and expects to open additional service centers. The Company's
ability to expand its operations is dependent upon a number of factors,
including (i) the availability of suitable acquisition candidates on acceptable
terms, (ii) the Company's ability to continue to consolidate and integrate its
acquisitions with its existing operations, and (iii) the Company's ability to
attract, train, and retain skilled sales representatives and management.
Management anticipates that each start-up service center opened will generally
incur operating losses for 18 months. Accordingly, the Company's planned
expansion creates numerous risks, including the risk that the expansion may have
an adverse effect on working capital and earnings during the expansion period
and acquisition transition period, that substantial indebtedness may be incurred
in connection with the expansion and that significant losses could result in the
event of unsuccessful acquisitions or start-ups.
The Company recently has expanded into new product areas, including
radiology and imaging equipment, chemicals and supplies to the acute and
alternate site markets. The integration and operation of this new division may
place significant demands on the Company's management and other resources. There
can be no assurance that there will be any operating efficiencies between the
Company's businesses or that its diagnostic imaging division can be operated
profitably, which could have a material adverse effect on the Company's business
and future prospects. The Company plans to aggressively pursue additional
expansion opportunities in this market, however, there can be no assurance that
the Company will be successful in acquiring, operating or integrating additional
operations. In addition, the radiology and imaging equipment market is heavily
reliant on the hiring and retention of skilled service technicians to maintain
such equipment. There is a current shortage of these skilled technicians, which
may result in intense competition and increasing salaries. Any inability of the
Company to hire or retain such skilled technicians could limit the Company's
ability to expand and adversely affect its results of operations.
MANAGEMENT OF INTERNATIONAL OPERATIONS
Through its WorldMed International subsidiary, the Company has recently
acquired medical supply distributors serving physicians in Belgium, France,
Germany and the Netherlands and plans to increase its presence in European
markets. As the Company expands internationally, it will need to hire, train and
retain qualified personnel in countries where language, cultural or regulatory
impediments may exist. The Company has encountered and expects to encounter
significant expense and delay in expanding its international operations because
of language and cultural differences, and staffing, communications and related
issues. There can be no assurance that the Company's services and business
practices will be accepted by vendors, physicians or other involved parties in
foreign markets.
International revenues are subject to inherent risks, including
political and economic instability, difficulties in staffing and managing
foreign operations and in accounts receivable collection, fluctuating currency
exchange rates, costs associated with localizing service offerings in foreign
countries, unexpected changes in regulatory requirements, difficulties in the
repatriation of earnings and burdens of complying with a wide variety of foreign
laws and labor practices.
-6-
<PAGE> 8
DEPENDENCE ON MANUFACTURERS
The Company distributes over 35,000 products manufactured by
approximately 3,000 vendors and is dependent on these vendors for the
manufacture and supply of product. Additionally, the Company has entered into a
significant contract with Abbott, which may be terminated by Abbott if the
Company does not meet certain sales levels. The Company's ability to maintain
good relations with these vendors will affect the profitability of its business.
Currently, the Company relies on vendors to provide (i) field sales
representatives' technical and selling support, (ii) agreeable purchasing and
delivery terms, (iii) sales performance incentives, (iv) financial support of
sales and marketing programs, and (v) promotional materials. There can be no
assurance that the Company will maintain its good relations with its vendors.
REGULATION OF AND CHANGE IN PRACTICE OF MEDICINE
The health care industry, including the practice of medicine by
physicians, is subject to extensive government regulation, licensure and
operating procedures. The Company cannot predict the impact that present or
future regulations may have on operations of the Company or on its plan to
expand its business activities. In addition, as consolidation among physician
provider groups continues and provider networks are created, purchasing
decisions may shift to individuals with whom the Company has not had prior
selling relationships. The Company is increasingly focusing on national accounts
where the purchasing decision may not be made by the Company's traditional
physician customers. There can be no assurance that the Company will be able to
maintain its customer relationships in such circumstances.
DEPENDENCE ON THIRD-PARTY REIMBURSEMENT
The cost of a significant portion of medical care in the United States
is funded by government and private insurance programs, such as Medicare,
Medicaid and corporate health insurance plans. In recent years,
government-imposed limits on reimbursement of hospitals and other health care
providers have significantly impacted spending budgets in certain markets within
the medical supply and equipment industry. Private third-party reimbursement
plans are also developing increasingly sophisticated methods of controlling
health care costs through redesign of benefits and exploration of more
cost-effective methods of delivering health care. Accordingly, there can be no
assurance that reimbursement for purchase and use of medical equipment and
supplies by physicians' offices will not be limited or reduced and thereby
adversely affect future sales by the Company.
TWO-TIER PRICING
As a result of the Non-Profit Act of 1944, the medical supplies and
equipment industry is subject to a two-tier pricing structure. Under this
structure, certain institutions, originally limited to non-profit hospitals, can
obtain more favorable prices for medical supplies and equipment than the
Company. The two-tiered pricing structure continues to expand as many large
integrated health care providers and others with significant purchasing power
demand more favorable pricing terms. Although the Company is seeking to obtain
similar terms from its manufacturers, there can be no assurance that such terms
can be obtained. Such a pricing structure, should it persist, may put the
Company at a competitive disadvantage.
SALES REPRESENTATIVES
The Company's sales growth has resulted to a significant degree from
hiring and developing new sales representatives and adding, through
acquisitions, established sales representatives whose existing customers
generally have become customers of the Company. The Company's continued growth
will depend in part on its ability to continue to hire, train and retain sales
representatives who agree to the Company's compensation plans and to maintain
good relations with its existing sales representatives.
-7-
<PAGE> 9
KEY MANAGEMENT
The success of the Company is dependent upon the efforts and abilities
of its senior management, including the Company's Chairman and Chief Executive
Officer, Patrick C. Kelly, its President, John F. Sasen, Sr. and its Executive
Vice President and Chief Financial Officer, David A. Smith. The loss of any such
senior management may adversely affect the Company's business. The Company
maintains key man life insurance on Mr. Kelly.
COMPETITION
The marketing of medical supplies and equipment to physicians' offices
is highly competitive. Some of the Company's competitors are larger and have
greater financial resources than the Company. Also, the Company could encounter
additional competition because many of the products it sells are readily
obtainable by others from various sources of supply and such competitors could
consolidate into regional or national networks. In addition, a competitor of the
Company could obtain exclusive rights to market a certain product to the
exclusion of the Company. There can be no assurance that the Company will not
face increased competition in the future.
LIABILITY EXPOSURE
Although the Company is not a manufacturer, the distribution of medical
supplies and equipment entails risks of product liability. Despite the fact that
the Company has not to date experienced any significant product liability claims
and currently maintains liability insurance coverage, such insurance is
expensive, difficult to obtain and may be unobtainable in the future on
acceptable terms, if at all. The Company operates approximately 700 trucks to
deliver medical supplies and equipment on a same-day delivery basis. The Company
has experienced various claims regarding motor vehicle accidents, all of which
have been covered by insurance. The Company believes that it maintains adequate
insurance coverage for such claims. Nevertheless, the amount and scope of any
coverage may be inadequate in the event that a product liability or motor
vehicle accident claim is successfully asserted against the Company.
RELIANCE ON DATA PROCESSING
The Company's business is dependent upon its ongoing ability to obtain,
process, analyze and manage data, and to maintain and upgrade its data
processing capabilities. Interruption of data processing capabilities for any
extended length of time, the failure to upgrade data services, difficulties in
converting data and information systems after acquisitions, loss of stored data,
programming errors or other computer problems could have a material adverse
effect on the Company's business.
ANTI-TAKEOVER PROVISIONS; POSSIBLE ISSUANCE OF PREFERRED STOCK
The Company's Amended and Restated Articles of Incorporation and Bylaws
contain various provisions that may make it more difficult for a third party to
acquire, or may discourage acquisition bids for, the Company and could limit the
price that certain investors might be willing to pay in the future for shares of
the Common Stock. In addition, the rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of any holders of
Preferred Stock that may be issued in the future and that may be senior to the
rights of the holders of Common Stock. Furthermore, the Company has not opted
out of certain provisions of the Florida Business Corporation Act, including the
provisions relating to control-share acquisitions, which could have the effect
of delaying, deferring or preventing a change in control of the Company without
further action by its shareholders.
-8-
<PAGE> 10
MERGERS AND ACQUISITIONS
On November 25, 1996, the Company acquired Diagnostic Imaging, Inc.
("DI"), a company organized under the laws of the State of Florida, pursuant to
a merger by which the shareholders of DI received shares of Common Stock in
exchange for their shares of stock in DI (the "DI Merger"). In connection with
the DI Merger, the Company granted the former shareholders of DI the right to
register for resale the shares of Common Stock held by such shareholders. The
former shareholders of DI who are offering shares of Common Stock pursuant to
the Registration Statement of which this Prospectus is a part are referred to
herein as the "DI Selling Shareholders."
On March 20, 1997, the Company acquired Rad-Tech X-Ray, Inc. ("Rad"), a
company organized under the laws of the State of Georgia, pursuant to a merger
by which the shareholders of Rad received shares of Common Stock in exchange for
their shares of stock in Rad (the "Rad Merger"). In connection with the Rad
Merger, the Company granted the former shareholders of Rad the right to register
for resale the shares of Common Stock held by such shareholders. The former
shareholder of Rad who is offering shares of Common Stock pursuant to the
Registration Statement of which this Prospectus is a part is referred to herein
as the "Rad Selling Shareholder."
The DI Selling Shareholders and the Rad Selling Shareholder are
collectively referred to herein as the "Selling Shareholders." The Selling
Shareholders have acquired the 193,884 shares of Common Stock offered hereby
pursuant to the above-referenced mergers.
Pursuant to certain demand registration rights granted in connection
with such merger, the Company agreed to register the shares of Common Stock
offered by the Selling Shareholders hereunder, and to use its best efforts to
maintain such registration statement in effect until the Shares are sold
hereunder or up to sixty (60) days following the date of this Prospectus. This
Prospectus may not be used by the Selling Shareholders following the earlier of
(i) the date the all shares of Common Stock offered hereby have been sold, or
(ii) unless otherwise agreed to by the Company, sixty (60) days following the
date of this Prospectus.
-9-
<PAGE> 11
SELLING SHAREHOLDERS
The following table sets forth (i) the name of each of the Selling
Shareholders, (ii) the number of shares of Common Stock beneficially owned by
each Selling Shareholder prior to the offering and being offered hereby, and
(iii) the number of shares of Common Stock beneficially owned by each Selling
Shareholder after completion of the offering.
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Shares Being Shares Beneficially
Selling Shareholder Offering(1) Offered Owned After Offering
------------------- ----------- ------- --------------------
<S> <C> <C> <C>
DI SELLING SHAREHOLDERS:
William F. Bronson (2).................. 129,221 40,000 89,221
Harvey A. Shores (2).................... 82,659 50,000 32,659
William Shores (2)...................... 4,570 3,884 686
RAD SELLING SHAREHOLDER:
Shelli T. Jenkins (3) 407,317 100,000 307,317
------- ------- -------
TOTAL..................................... 623,767 193,884 429,883
======= ======= =======
</TABLE>
- ---------------------
(1) Assumes that all of the Shares held by the Selling Shareholders and
being offered hereby are sold, and that the Selling Shareholders
acquire no additional shares of Common Stock prior to completion of
this offering. Each Selling Shareholder beneficially owns less than 1%
of the total number of shares of Common Stock outstanding.
(2) Messrs. Bronson and Harvey Shores served as members of the Board of
Directors of DI prior to the DI Merger. Includes 19,383, 12,399 and 686
shares for Messrs. Bronson, Harvey Shores and William Shores,
respectively, being held in escrow pursuant to an Escrow Agreement
dated November 25, 1996, which may be used to indemnify the Company
against certain claims in connection with the DI Merger.
(3) Ms. Jenkins served as the President, Treasurer and sole director of Rad
prior to the Rad Merger. Includes 31,339 shares being held in escrow
pursuant to an Escrow Agreement dated March 20, 1997, which may be used
to indemnify the Company against certain claims in connection with the
Rad Merger.
-10-
<PAGE> 12
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders,
or by pledgees, donees, transferees or other successors in interest. Such sales
may be made from time to time (i) in transactions (which may include block
sales) on the Nasdaq National Market or such other national securities exchange
or automated interdealer quotation system on which shares of Common Stock are
then listed, (ii) in negotiated transactions or (iii) through a combination of
such methods of sale, at fixed prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The Shares may be sold directly to purchasers
or through underwriters, agents or broker-dealers by one or more of the
following: (a) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
a block trade in which the broker or dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (d) an exchange distribution in accordance with
the rules of the exchange or automated interdealer quotation system on which the
Common Stock is then listed; and (e) through the writing of options on the
Shares. Any such underwriters, agents or broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the Selling
Shareholders and/or the purchasers of the Shares for which such underwriters,
agents or broker-dealers may act as agents or to whom they sell as principals,
or both (which compensation as to an underwriter, agent or particular
broker-dealer will be negotiated prior to the sale and may be in excess of
customary compensation). If required by applicable law at the time a particular
offer of Shares is made, the terms and conditions of such transaction will be
set forth in a Prospectus Supplement to this Prospectus. In addition, any Shares
covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than pursuant to this
Prospectus.
The Selling Shareholders and any underwriters, agents or broker-dealers
who act in connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any compensation received by them might be deemed to be underwriting discounts
and commissions under the Securities Act.
The Selling Shareholders will pay all applicable stock transfer taxes,
transfer fees and brokerage commissions or discounts. The Company has agreed to
bear one-half of all expenses in connection with the registration of the shares
being offered by the Selling Shareholders and the Selling Shareholders shall
bear the remaining one-half of all expenses on a pro rata basis. The Company has
agreed to indemnify the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act.
-11-
<PAGE> 13
LEGAL MATTERS
A legal opinion to the effect that the Shares offered hereby by the
Selling Shareholders are validly issued, fully paid and non-assessable has been
rendered by Fred Elefant, P.A., Jacksonville, Florida, general counsel to the
Company.
EXPERTS
The consolidated financial statements of the Company appearing in its
Annual Report on Form 10-K for the fiscal year ended March 28, 1997 have been
audited by Arthur Andersen LLP, independent auditors, as set forth in their
report therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in auditing and accounting.
-12-
<PAGE> 14
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER TO SELL OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION..................... 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE.................. 2
CAUTIONARY NOTICE REGARDING
FORWARD-LOOKING STATEMENTS.............. 3
THE COMPANY............................... 4
RISK FACTORS.............................. 6
MERGERS AND ACQUISITIONS.................. 9
SELLING SHAREHOLDERS...................... 10
PLAN OF DISTRIBUTION...................... 11
LEGAL MATTERS............................. 12
EXPERTS................................... 12
</TABLE>
================================================================================
================================================================================
193,884 SHARES
PHYSICIAN SALES & SERVICE, INC.
COMMON STOCK
P R O S P E C T U S
JULY 25, 1997
================================================================================
-1-
