<PAGE>
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 [NO FEE REQUIRED] for the fiscal year ended December 31, 1997 .
---------------------
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] for the transition period from _________________.
Commission File No. 0-23832
A. Full title and address of the plan, if different from that of the
issuer named below:
PSS/TAYLOR MEDICAL PROFIT SHARING 401(K) PLAN
4345 SOUTHPOINT BOULEVARD
JACKSONVILLE, FLORIDA 32216
(904) 332-3000
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PSS WORLD MEDICAL, INC.
4345 SOUTHPOINT BOULEVARD
JACKSONVILLE, FLORIDA 32216
(904) 332-3000
<PAGE>
REQUIRED INFORMATION
The following financial statements and schedules have been prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended:
1. Statements of Net Assets Available for Benefits -- December 31, 1997 and
December 31, 1996.
2. Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year Ended December 31, 1997.
2
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH
AUDITORS' REPORT
3
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND 1996
TABLE OF CONTENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits--December 31, 1997 and 1996
Statement of Changes in Net Assets Available for Benefits, With Fund
Information, for the Year Ended December 31, 1997
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes--
December 31, 1997
Schedule II: Item 27d--Schedule of Reportable Transactions for the Year
Ended December 31, 1997
4
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of the
PSS/Taylor Medical
Profit Sharing 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of PSS/TAYLOR MEDICAL PROFIT SHARING 401(k) PLAN as of December 31, 1997 and
1996 and the related statement of changes in net assets available for benefits,
with fund information, for the year ended December 31, 1997. These financial
statements and the schedules referred to below are the responsibility of the
Plan's administrator. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits 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 audits provide 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 benefits of the Plan as of
December 31, 1997 and 1996 and the changes in its net assets available for
benefits for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.
Our audits were made 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
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the changes in net assets
available for plan benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
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.
As discussed in Note 1, the schedules of assets held for investment purposes and
reportable transactions do not disclose the historical cost of certain plan
assets held by the plan custodians. Disclosure of this information is required
by the Department of Labor Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974.
/s/ Arthur Andersen LLP
- -----------------------
Jacksonville, Florida
May 15, 1998
5
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
INVESTMENTS, PARTICIPANT-DIRECTED:
Guaranteed Account $ 0 $ 327,765
Medium Capitalization Equity Account 0 155,367
Core Equity Account 0 97,391
Balanced Account 0 34,451
Government/Corporate Bond Account 0 739
American Balanced Fund 1,644,851 1,350,689
Growth Fund of America 648,597 434,472
AIM Constellation Fund 549,755 387,922
The Kaufmann Fund 363,408 270,888
PSS World Medical, Inc. common stock 198,069 93,058
Alex. Brown Cash Reserve Fund 91,637 89,103
Bond Fund of America 75,437 37,177
RECEIVABLES:
Accrued interest receivable 11,784 0
Receivable from plan sponsor (Note 2) 6,031 0
PARTICIPANT LOANS 3,997 5,826
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $3,593,566 $3,284,848
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND
INFORMATION,
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant-Directed
----------------------------------------------------------------
Medium Government/
Capitalization Core Corporate
Guaranteed Equity Equity Balanced Bond
Account Account Account Account Account
--------- -------------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net appreciation (depreciation) in fair value
of investments $ 730 $ 2,689 $ 2,603 $ 384 $ (6)
Investment income/dividends 0 0 0 0 0
Loan repayments 0 0 0 0 0
Accrued interest receivable 0 0 0 0 0
Receivable from plan sponsor (Note 2) 0 0 0 0 0
--------- --------- -------- -------- -----
Total additions 730 2,689 2,603 384 (6)
--------- --------- -------- -------- -----
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 0 0 0 0 0
Administrative expenses (6,031) 0 0 0 0
--------- --------- -------- -------- -----
Total deductions (6,031) 0 0 0 0
--------- --------- -------- -------- -----
INTERFUND TRANSFERS (322,464) (158,056) (99,994) (34,835) (733)
--------- --------- -------- -------- -----
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 327,765 155,367 97,391 34,451 739
--------- --------- -------- -------- -----
End of year $ 0 $ 0 $ 0 $ 0 $ 0
========= ========= ======== ======== =====
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Participant-Directed
-----------------------------------------------
American Growth AIM The
Balanced Fund of Constellation Kaufmann
Fund America Fund Fund
---------- -------- ------------- --------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net appreciation (depreciation) in fair value of
investments $ 101,199 $ 78,012 $ 18,599 $ 38,993
Investment income/dividends 187,387 70,082 45,070 1,521
Loan repayments 1,829 0 0 0
Accrued interest receivable 0 0 0 0
Receivable from plan sponsor (Note 2) 0 0 0 0
---------- -------- -------- --------
Total additions 290,415 148,094 63,669 40,514
---------- -------- -------- --------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (191,904) (67,052) (28,166) (12,660)
Administrative expenses 0 0 0 0
---------- -------- -------- --------
Total deductions (191,904) (67,052) (28,166) (12,660)
---------- -------- -------- --------
INTERFUND TRANSFERS 195,651 133,083 126,330 64,666
---------- -------- -------- --------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,350,689 434,472 387,922 270,888
---------- -------- -------- --------
End of year $1,644,851 $648,597 $549,755 $363,408
========== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Participant-Directed
------------------------------------
Alex. Brown
PSS World Cash Bond
Medical, Inc. Reserve Fund of
Common Stock Fund America
------------- ------------ --------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net appreciation (depreciation) in fair value of
investments $ 55,450 $ 0 $ 914
Investment income/dividends 2,545 5,569 3,258
Loan repayments 0 0 0
Accrued interest receivable 0 0 0
Receivable from plan sponsor (Note 2) 0 0 0
-------- ------- -------
Total additions 57,995 5,569 4,172
-------- ------- -------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (16,665) (1,618) 0
Administrative expenses 0 0 0
-------- ------- -------
Total deductions (16,665) (1,618) 0
-------- ------- -------
INTERFUND TRANSFERS 63,681 (1,417) 34,088
-------- ------- -------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 93,058 89,103 37,177
-------- ------- -------
End of year $198,069 $91,637 $75,437
======== ======= =======
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
--------------------------------------
PARTICIPANT
LOANS OTHER TOTAL
----------- ------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net appreciation (depreciation) in fair value of investments $ 0 $ 0 $ 299,567
Investment income/dividends 0 0 315,432
Loan repayments (1,829) 0 0
Accrued interest receivable 0 11,784 11,784
Receivable from plan sponsor (Note 2) 0 6,031 6,031
------- ------- ----------
Total additions (1,829) 17,815 632,814
------- ------- ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 0 0 (318,065)
Administrative expenses 0 0 (6,031)
------- ------- ----------
Total deductions 0 0 (324,096)
------- ------- ----------
INTERFUND TRANSFERS 0 0 0
------- ------- ----------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,826 0 3,284,848
------- ------- ----------
End of year $ 3,997 $17,815 $3,593,566
======= ======= ==========
</TABLE>
The accompanying notes are an integral part of this statement.
9
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND 1996
1. DESCRIPTION OF PLAN
DESCRIPTION OF THE PLAN
The following description of the PSS/Taylor Medical Profit Sharing 401(k)
Plan (the "Plan") provides only general information. Participants should
refer to the plan document for a more complete description of the Plan's
provisions.
GENERAL
The Plan was adopted effective June 1, 1990 by Taylor Medical, Inc. to
establish a savings and investment plan for the exclusive benefit of its
employees and their beneficiaries. The Plan is a defined contribution plan
and is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended.
In August 1995, Taylor Medical, Inc. merged with Physician Sales & Service,
Inc. Subsequent to year-end, Physician Sales & Service, Inc. changed its
name to PSS World Medical, Inc. ("PSS" or the "Company"). Contributions to
the Plan were suspended for payroll periods commencing after August 20, 1995.
Effective August 20, 1995, the Plan was amended to provide for fully vested
account balances and the termination of the loan program. In addition,
effective for the plan year commencing on June 1, 1996, the Plan's year-end
changed from May 31 to December 31.
On October 1, 1996, the Plan was amended and renamed the PSS/Taylor Medical
Profit Sharing 401(k) Plan and the plan administrator was changed to PSS.
AMENDMENT AND RESTATEMENT OF THE PSS/TAYLOR MEDICAL PROFIT SHARING 401(K)
TRUST
Effective March 14, 1997, the PSS/Taylor Medical Profit Sharing 401(k) Trust
(the "Trust") was amended and restated. The Trust was amended to accept the
resignations of David Smith and Patrick Kelly as trustees to the Plan and to
appoint Northwestern Trust and Investors Advisory Company ("Northwestern") as
the new trustee.
CURRENT YEAR CHANGES
On January 14, 1997, all investments held by Lincoln National Life Insurance
Company were transferred to Alex. Brown and invested in funds with similar
investment objectives. On April 1, 1997, all investments held by Alex. Brown
were placed in the custody of Northwestern. In addition, on August 11, 1997,
custody of investments in the Kaufmann Fund was assumed by Northwestern.
10
<PAGE>
On November 1, 1997, the record keeper of the plan changed from Coopers &
Lybrand LLP to Howard Johnson & Company.
RECORD KEEPER INFORMATION
Disclosure of historical cost information with regard to the Plan's
investments is required to be presented in the schedules of assets held for
investment purposes and reportable transactions (Schedules I and II) in
accordance with the Department of Labor Rules and Regulations for Reporting
and Disclosure under ERISA. Due to the record-keeping systems maintained by
the custodians, this information cannot be provided.
CONTRIBUTIONS
As of August 20, 1995, the Plan was frozen and participants became fully
vested in all employer contributions. All contributions were disallowed for
the time period thereafter.
PARTICIPANT ACCOUNTS
Individual accounts are maintained for each of the Plan's participants to
reflect each participant's share of the Plan's income and each participant's
contribution. Allocations are based on participant account balances, as
defined in the plan document.
INVESTMENTS
Investments are participant-directed. A description of each investment
option available at December 31, 1997 is provided below:
AMERICAN BALANCED FUND
This fund may consist of a portfolio invested in securities, including
common stocks, preferred stocks, corporate bonds, and U.S. government
securities designed to provide the conservation of capital, current
income, and long-term growth of capital and income.
GROWTH FUND OF AMERICA
Funds are invested in a diversified portfolio consisting primarily of
common stocks. Assets may also be held in securities convertible into
common stock, cash or cash equivalents, straight debt securities, or
nonconvertible preferred stocks. The objective of this fund is capital
growth.
AIM CONSTELLATION FUND
This fund may consist of a portfolio invested in common stocks, with an
emphasis on medium-sized and smaller emerging growth companies, and is
designed to provide capital appreciation.
THE KAUFMANN FUND
This fund may consist of a portfolio invested in common stocks and
convertible preferred stocks and convertible bonds and is designed to
provide capital appreciation.
11
<PAGE>
PSS WORLD MEDICAL, INC. COMMON STOCK
This is an account in which contributions are invested in the stock of
the Company.
ALEX. BROWN CASH RESERVE FUND
This fund may consist of a portfolio invested in commercial paper, U.S.
government or federal agency obligations, short-term corporate
obligations, bank certificates of deposit, savings accounts, and
comparable investments designed to provide maximum protection of capital
with a conservative rate of return.
BOND FUND OF AMERICA
Funds are invested in marketable corporate debt securities, U.S.
government securities, mortgage-related securities, other asset-backed
securities, and cash or money market instruments. The object of this
fund is to provide a level of current income that is consistent with the
preservation of capital.
Investment objectives are not an indication of actual performance.
PAYMENT OF BENEFITS
Upon retirement, death, disability, or termination of service, a participant
or beneficiary may elect to receive a lump-sum distribution in an amount
equal to the value of that participant's account on the date of distribution.
In addition, hardship distributions are permitted if certain criteria are
met.
PARTICIPANT LOANS
Subsequent to August 31, 1995, participants were not permitted to direct the
investment of their accounts in a participant loan at any time. All loans
are secured by the vested interest remaining in the participant's account.
Interest rates are based on prevailing market conditions at the time of
origination. Interest payments on loans are allocated to respective
individual participant account balances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual method of
accounting. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the accompanying financial statements
and disclosures. Actual results could differ from those estimates.
ADMINISTRATIVE EXPENSES
Administrative expenses paid by the Company were approximately $11,250 for
the year ended December 31, 1997. Administrative expenses paid by the Plan
totaled $6,031. These expenses were withdrawal penalties for early
termination of the guaranteed investment contract, which resulted from the
change in custodian during the year. These fees will be repaid by the
Company.
12
<PAGE>
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments, other than investments in guaranteed investment
contracts and participant loans, are stated at fair value, as determined by
quoted market prices. The Plan's investment contract with Lincoln National
Life Insurance Company is fully benefit-responsive and is stated at contract
value. Loans to participants are valued at cost, which approximates fair
value. Investment income is recorded when earned. The net appreciation
(depreciation) in fair value of investments includes the gain or loss on
investments bought or sold during the year as well as the change in fair
value.
3. TAX STATUS
The Internal Revenue Service issued a determination letter dated September
23, 1997 stating that the Plan was designed in accordance with applicable
sections of the Internal Revenue Code.
4. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions of
ERISA.
5. RECONCILIATION TO FORM 5500
As of December 31, 1997, the Plan had approximately $14,626 of pending
distributions to participants who elected distributions from the Plan. These
amounts are recorded as a liability in the Plan's Form 5500; however, these
amounts are not recorded as a liability in the accompanying statements of net
assets available for benefits in accordance with generally accepted
accounting principles. There were no pending distributions as of December
31, 1996.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the year
ended December 31, 1997:
<TABLE>
<CAPTION>
BENEFITS NET ASSETS
PAYABLE TO BENEFITS AVAILABLE
PARTICIPANTS PAID FOR BENEFITS
------------ -------- ------------
<S> <C> <C> <C>
Per financial statements $ 0 $318,065 $3,593,566
1997 amounts pending distribution to participants 14,626 14,626 (14,626)
------- -------- ----------
Per Form 5500 $14,626 $332,691 $3,578,940
======= ======== ==========
</TABLE>
13
<PAGE>
SCHEDULE I
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF PARTY INVOLVED DESCRIPTION OF INVESTMENT COST VALUE
-------------------------- ------------------------- ---- ----------
<S> <C> <C> <C>
AMERICAN FUNDS GROUP AMERICAN BALANCED FUND $1,644,851
AMERICAN FUNDS GROUP GROWTH FUND OF AMERICA (a) 648,597
AIM GROUP AIM CONSTELLATION FUND (a) 549,755
*THE KAUFMANN FUND THE KAUFMANN FUND (a) 363,408
*PSS WORLD MEDICAL, INC. PSS WORLD MEDICAL, INC. COMMON STOCK (a) 198,069
*ALEX. BROWN ALEX. BROWN CASH RESERVE FUND (a) 91,637
AMERICAN FUNDS GROUP BOND FUND OF AMERICA (a) 75,437
*VARIOUS PLAN PARTICIPANTS LOANS, INTEREST RATE OF 12% 3,997 3,997
----------
Total investments $3,575,751
==========
</TABLE>
*Represents a party in interest.
(a) Historical cost information has been requested from the
custodians; however, due to their record-keeping
systems, cost information cannot be made available.
The accompanying notes are an integral part of this schedule.
14
<PAGE>
SCHEDULE II
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(K) PLAN
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
COST NET
PURCHASE SELLING OF GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF INVESTMENT PRICE PRICE ASSETS (LOSS)
- -------------------------- ------------------------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
AMERICAN FUNDS GROUP Growth Fund of America $221,309 $ 67,052 (b) (b)
*ALEX. BROWN Alex. Brown Cash Reserve Fund 616,081 616,081 616,081 $0
AMERICAN FUNDS GROUP American Balanced Fund (single transaction) 220,040 N/A N/A N/A
AMERICAN FUNDS GROUP American Balanced Fund 202,096 191,904 (b) (b)
AIM GROUP AIM Constellation Fund 171,166 28,166 (b) (b)
*LINCOLN NATIONAL LIFE INS. CO. Guaranteed Account 196 327,961 (b) (b)
</TABLE>
*Represents a party in interest.
(a) Represents transactions or a series of transactions
in securities of the same issue in excess of 5% of
the Plan's market value as of January 1, 1997.
(b) Historical cost information has been requested from
the custodians; however, due to their record-keeping
systems, cost information cannot be made available.
The accompanying notes are an integral part of this schedule.
15
<PAGE>
SIGNATURES
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,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF SEATTLE, STATE OF WASHINGTON, ON
JUNE 26, 1998.
PSS/TAYLOR MEDICAL PROFIT SHARING
401(K) PLAN
BY: NORTHWESTERN TRUST AND INVESTORS
ADVISORY COMPANY, AS TRUSTEE
By: /s/ Gerry Kelley
-------------------------
Title: Vice President and Senior
Trust Officer
-------------------------
16
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report dated May 15, 1998, included in this Form 11-K, into
the Company's previously filed Registration Statement File No. 333-15107.
/s/ Arthur Andersen LLP
- ---------------------------
Jacksonville, Florida
June 26, 1998
