<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 1998
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
PSS WORLD MEDICAL, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-3500595
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4345 SOUTHPOINT BOULEVARD, JACKSONVILLE, FLORIDA 32216
(904) 332-3000
(Address, including zip code, and telephone number,
including area code, of registrant's executive offices)
PATRICK C. KELLY
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
PSS WORLD MEDICAL, INC.
4345 SOUTHPOINT BOULEVARD
JACKSONVILLE, FLORIDA 32216
(904) 332-3000
(Name, address, including zip code, and telephone number
including area code, of agent for service)
The Commission is requested to send copies of all communications to:
J. VAUGHAN CURTIS, ESQ.
KIMBERLY A. KNIGHT, ESQ.
ALSTON & BIRD LLP
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
(404) 881-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ______
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED MAXIMUM PROPOSED
TITLE OF SHARES AMOUNT TO BE AGGREGATE OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share 787,500 shares $16.625 $13,092,188 $3,862.20
=======================================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee. This
amount, calculated pursuant to Rule 457(c), was based on the average of the
high and low prices of the Registrant's Common Stock on September 17, 1998,
as reported on the Nasdaq National Market System.
________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
787,500 SHARES
PSS WORLD MEDICAL, INC.
COMMON STOCK
This prospectus relates to the resale of up to 787,500 shares (the
"Shares") of common stock, $.01 par value per share (the "Common Stock"), of PSS
World Medical, Inc., a Florida corporation ("PSS" or the "Company") by a certain
holder of warrants (the "Warrantholder") to purchase Common Stock of the company
(the "Warrants"). This Prospectus does not relate to the issuance of the Shares
upon exercise of the Warrants but relates to the resale of such Shares by the
holders of the Shares (the "Selling Shareholder"). None of the proceeds from
the sale of the Shares by the Selling Shareholder will be received by the
Company.
On December 2, 1997, the Warrantholder acquired warrants to purchase shares
of common stock of Gulf South Medical Supply, Inc. ("Gulf South"). The warrants
had been issued in connection with the acquisition by Gulf South of all of the
outstanding capital stock and capital of Gateway Healthcare Corporation. On
March 26, 1998, the Company and Gulf South consummated a merger pursuant to the
Agreement and Plan of Merger dated December 14, 1997, by and among the Company,
PSS Merger Corp., and Gulf South. Under the terms of the merger, the warrants
to purchase Gulf South common stock became warrants to purchase shares of the
Company's common stock, par value $.01 per share and the Company assumed each
warrant in accordance with the terms of the warrant agreement by which it is
evidenced. The number of shares of PSS Common Stock subject to each warrant
became equal to the number of shares of Gulf South Common Stock that were
subject to such warrant, multiplied by 1.75. The Warrants are immediately
exercisable and remain exercisable until January 2, 2001. As of the date of
this Prospectus, none of the Warrants has been exercised.
The shares of Common Stock of the Company are listed on the Nasdaq National
Market System ("Nasdaq") under the symbol PSSI. On September 23, 1998 the last
sales price for the shares of Common Stock as reported by Nasdaq was $20.50 per
share.
The Selling Shareholder named herein or any transferees or other successors
in interest, directly or through dealers or underwriters to be designated, may
sell the Common Stock from time to time in a single block to a broker-dealer
acting as principal, in one or more transactions on the Nasdaq National Market
or in the over-the-counter market and in negotiated transactions, on terms to be
determined at the time of sale. 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
"Plan of Distribution." By agreement, the Company will pay all of the expenses
of this registration, which are estimated at $34,000. The Company has agreed to
indemnify the Selling Shareholder against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
The Selling Shareholder and any broker-dealer, agents or underwriters that
participate with the Selling Shareholder in the distribution of the Common Stock
may be deemed to be "underwriters" within the meaning of 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 Shareholder" and "Plan of Distribution"
below.
_________________________________
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 September 23, 1998
<PAGE>
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
of 1933 (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 statements and other information with the
Commission. Such reports, proxy 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 at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants such as the Company, that file electronically with the Commission.
Such reports, proxy and information statements and other information may be
found at the Commission's site address: 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 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:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended April 3,
1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1998; and
(c) 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.
2
<PAGE>
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 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 the Assistant
Secretary of PSS World Medical, 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 Section 27A of the Securities Act and
Section 21E of the Exchange Act with respect to the Company. All statements
other than statements of historical facts included in or incorporated by
reference into this Prospectus, including those regarding market trends, the
Company's financial position, business strategy, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
In general, such statement are identified by the use of forward-looking words or
phrases including, but not limited to, "intended," "will," "should," "may,"
"expects," "expected," and "anticipates" or the negative thereof or variations
thereon or similar terminology. These forward-looking statements are based on
the Company's current expectations. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there
can be no assurance that such expectations will prove to be correct. Because
forward-looking statements involve risks and uncertainties, the Company's actual
results could differ materially. Important factors that could cause actual
results to differ materially from the Company's expectations ("Cautionary
Statements") are disclosed under "Risk Factors," and elsewhere, including,
without limitation, in conjunction with the forward-looking statements included
in or incorporated by reference to this Prospectus, and from time to time in the
Company's Commission report and other filings. These forward-looking statements
represent the judgment of the Company as of the date of this Prospectus. All
subsequent written and oral forward-looking statements attributable to the
Company are expressly qualified in their entirety by the Cautionary Statements.
The Company disclaims, however, any intent or obligation to update its forward-
looking statements.
3
<PAGE>
THE COMPANY
Unless otherwise indicated, all references herein to "PSS" or "the Company"
mean PSS and its consolidated subsidiaries.
PSS is a specialty marketer and distributor of medical products to
physicians, alternate-site imaging centers, long-term care providers, and
hospitals through 101 service centers to customers in all 50 states and 5
European countries. Since its inception in 1983, the Company has become a leader
in all four market segments it serves with a focused, market specific approach
to customer services, a consultative sales force, strategic acquisitions, strong
arrangements with product manufacturers, and a unique culture of performance.
The Company, through its Physician Sales & Service division, is the leading
distributor of medical supplies, equipment and pharmaceuticals to office-based
physicians in the United States. Physician Sales & Service currently operates
58 medical supply distribution service centers ("Physician Supply Business")
serving over 100,000 physician offices (representing approximately 50% of all
physician offices) in all 50 states. The Physician Supply Business' primary
market is the approximately 400,000 physicians who practice medicine in
approximately 200,000 office sites throughout the United States.
The Company, through its wholly owned subsidiary Diagnostic Imaging, Inc.
("DI"), is the leading distributor of medical diagnostic imaging supplies,
chemicals, equipment, and service to the acute care and alternate-care markets
in the United States. DI currently operates 26 imaging distribution service
centers ("Imaging Business") serving over 13,000 customer sites in 32 states.
The Imaging Business' primary market is the approximately 5,000 hospitals and
other alternate-site imaging companies operating approximately 50,000 office
sites throughout the United States.
Through its wholly owned subsidiary Gulf South Medical Supply, Inc.
("GulfSouth"), the Company has become a leading national distributor of medical
supplies and related products to the long-term care industry in the United
States. GulfSouth currently operates 14 distribution service centers ("Long-
Term Care Business") serving over 10,000 long-term care facilities in all 50
states. The Long-Term Care Business' primary market is comprised of a large
number of independent operators, small to mid-sized local and regional chains,
and several national chains representing over 10,000 long-term care facilities.
In addition to its operations in the United States, the Company, through
its wholly owned subsidiary WorldMed International, Inc., operates three
European service centers, distributing medical products to the physician office
and hospital markets in Belgium, France, Germany, Luxembourg, and the
Netherlands.
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.
4
<PAGE>
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 PSS Common Stock offered by this Prospectus. See "CAUTIONARY NOTICE
REGARDING FORWARDING-LOOKING STATEMENTS."
ACQUISITION STRATEGY
PSS has grown through, and anticipates that it will continue to grow
through, the acquisition of medical-products distributors. PSS has historically
grown through acquisitions and plans to enter new lines of business and new
geographic areas through acquisitions. Acquisitions may expose PSS to particular
risks, including, without limitation, diversion of management's attention, the
inability to integrate acquired companies' operations into PSS' operations, the
inability to integrate acquired companies' information systems into PSS'
information systems, assumption of liabilities and amortization of goodwill and
other acquired intangible assets, entry into markets in which PSS has little or
no direct prior experience, and the potential loss of key employees of the
acquired company, some or all of which could have a material adverse effect on
the financial condition or results of operations of PSS. There can be no
assurance that the Company's systems, procedures, controls and existing space
will be adequate to support extension of the Company's operations. The Company's
future operating results will also substantially depend on the ability of its
officers and key employees to manage changing business conditions and to
implement and improve its technical, administrative, financial control and
reporting systems. If the Company is unable to respond to and manage changing
business conditions, then the quality of the Company's services, its ability to
retain key personnel and its results of operations could be materially adversely
affected.
Depending on the value and nature of the consideration paid by PSS for
acquisitions, such acquisitions may adversely affect PSS' liquidity. In making
acquisitions in the future, PSS anticipates that it may compete for acquisitions
with other companies, many of which are larger and have greater financial
resources than PSS. There can be no assurance that PSS will be successful in
consummating acquisitions and integrating them into PSS' operations. PSS has
financed acquisitions, and anticipates that it will finance future acquisitions,
through cash on hand, the issuance of common stock and borrowings. Such
financing may result in potentially dilutive issuances of equity securities and
the incurrence of additional debt, either of which could have a material adverse
effect on PSS' financial condition and results of operations. Such acquisitions
could also be dilutive to the earnings per share of PSS before giving effect to
certain expected potential costs savings and synergies. PSS has taken, and in
the future may take, charges in connection with acquisitions. There can be no
assurance that the costs and expenses incurred will not exceed the estimates
upon which such charges are based. The indenture governing PSS' senior
subordinated notes (the "Indenture") and PSS' credit facility limits
acquisitions and contain financial covenants which may further limit PSS'
ability to make acquisitions.
5
<PAGE>
RISKS RELATING TO GULF SOUTH MERGER
Integration of Operations
On March 26, 1998, the Company closed its merger with Gulf South pursuant to
which Gulf South became a wholly owned subsidiary of the Company (the "Gulf
South Merger"). The success of the Gulf South Merger will be determined by
various factors, including the performance of the combined company's operations
after the Gulf South Merger and management's ability to effectively integrate
the operations of PSS and Gulf South. Among other matters, the successful
combination of PSS and Gulf South will require integration of the two companies'
sales, marketing and distribution resources, purchasing activities, management
information systems, and management and other key personnel. The integration of
the operations of PSS and Gulf South may be negatively affected if, among other
things: (i) customers, particularly large chains upon which Gulf South's
business depends to a significant degree (See "/__/Dependence on Customer
Relationships"), are not retained or do not react positively to the Gulf South
Merger or to some of the changes to integrate the businesses; (ii) unanticipated
integration costs are incurred (See "--Adjustment of Earnings of Gulf South");
(iii) costs or difficulties related to the integration of the businesses of PSS
and Gulf South are greater than expected; or (iv) key employees, managers and
sales personnel are not retained and effectively assimilated. The difficulties
of such integration may be increased by the necessity of coordinating
geographically separated organizations. In addition, the integration of
operations requires the dedication of management and other personnel, which may
distract their attention from the day-to-day business of the combined company.
There can be no assurance that the anticipated benefits of the proposed Gulf
South Merger will be realized or that the Gulf South Merger will not adversely
affect the future business, financial condition and results of operations of
PSS.
Possible Dilutive Effects of Gulf South Merger on Earnings. Financial
analyses prepared in contemplation of the Gulf South Merger indicated that the
Gulf South Merger could be dilutive to the earnings per share of PSS in calendar
years 1998 and 1999 before giving effect to certain expected cost savings and
synergies. Although PSS and Gulf South entered into the Gulf South Merger with
the expectation that the Gulf South Merger will achieve such cost savings and
synergies, the actual operating or financial results achieved by the combined
company may vary from expected results. Such variations may result from, among
other factors, business and operational difficulties involved in integrating
sales, marketing and distribution resources and purchasing activities, the
timing and amount of synergies actually realized, the costs associated with
achieving such synergies and other factors. There can be no assurance that the
anticipated benefits of the proposed Gulf South Merger will be realized or that
the Gulf South Merger will not adversely affect the business, financial
condition and results of the operations of PSS.
Substantial Expenses Resulting from the Gulf South Merger. PSS has incurred
direct transaction costs relating primarily to regulatory filing costs, and the
fees of financial advisors, attorneys, accountants, financial printers and proxy
solicitors associated with the Gulf South Merger, which were charged to
operations upon consummation of the Gulf South Merger. PSS also incurred
approximately $21.0 million of charges to operations to reflect anticipated
costs associated with integrating the two companies. There can be no assurance
that actual costs will not substantially exceed such estimates, that
unanticipated expenses associated with the integration of the two companies will
not arise, or that PSS will not incur additional material charges in subsequent
quarters to reflect additional costs associated with the integration of the two
companies.
RISKS OF BUSINESS GROWTH AND MARGIN PRESSURES DUE TO CHANGING MARKET CONDITIONS
A key element of PSS' growth strategy is to increase sales to existing and new
customers, including large chains and independent operators and provider groups,
by adding one or more new strategic distribution centers or expanding existing
distribution centers and by hiring additional direct sales or other personnel
and through national account sales efforts. Such efforts will result in
increased operating expenses. There can be no assurance that the establishment
of new distribution centers, the expansion of existing distribution centers, the
addition of new sales or other personnel or national account sales efforts will
6
<PAGE>
result in additional revenues or operating income. The expansion of Gulf
South's business with large chains and PSS' business with consolidating provider
groups has in the past resulted in competitive pricing pressures and lower
operating margins and such pressure on margins may continue in the future. As a
result of changes occurring in the long-term care market, physician and
alternate site markets, the nature of PSS' customer base as well as the products
and services required by its customers are changing. The failure by management
to effectively respond to and manage changing business conditions, including
changes in customer requirements and changes to PSS' overall product mix, could
have an adverse effect on PSS' business and results of operations and on
operating margins.
PSS has grown through, and PSS anticipates that it will continue to grow
through, the opening of start-up service centers. PSS anticipates that each
start-up service center opened will generally incur operating losses for a
period of time which has historically been approximately 18 months. Accordingly,
PSS' 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 that substantial indebtedness may be incurred in
connection with, and significant losses could result from, unsuccessful start-
ups.
EXPANSION INTO NEW LINES OF BUSINESS
PSS recently has expanded into new product areas, including distributing
imaging equipment, chemicals and supplies and providing technical service to
physicians, other alternate-site providers and hospitals, and the long-term care
market. The integration and operation of these new business may place
significant demands on PSS' management and other resources. There can be no
assurance that there will be any operating efficiencies between these businesses
or that these businesses can be operated profitably. PSS has pursued, and
anticipates that it will continue to aggressively pursue, expansion
opportunities in these and other medical equipment and supplies distribution
markets; however, there can be no assurance that PSS will be successful in
acquiring, integrating or operating additional businesses. In addition,
although PSS is restricted by the terms of the Indenture from engaging in any
business other than those previously engaged in and certain reasonably related
businesses, PSS may in the future, enter into other lines of business, which may
have the same or additional risks as its existing businesses. There can be no
assurance that if PSS were to enter into any additional lines of business that
it would be able to operate such businesses successfully.
DEPENDENCE ON VENDOR RELATIONSHIPS
PSS distributes over 45,000 medical products manufactured by approximately
5,000 vendors and is dependent on these vendors for the manufacture and supply
of products. During the 12-month period ended April 3, 1998, no vendor
relationship accounted for more than 10% of the Company's inventory purchases.
PSS has entered into a contract with Abbott which may be terminated by Abbott if
PSS does not meet certain sales levels (the "Abbott Agreement"). PSS and Abbott
have in the past renegotiated such sales levels. In addition, PSS has entered
into other separate exclusive distribution agreements, including agreements for
certain products manufactured by F. Hoffman-La Roche, Ltd., Siemens AG, Hologic,
Inc., C. R. Bard, Inc., Tanita Corporation of America, Inc. and HumaScan Inc.
PSS' ability to maintain good relations with these vendors will affect the
profitability of its business. Currently, PSS 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 PSS will maintain good relations with
its vendors.
7
<PAGE>
DEPENDENCE ON CUSTOMER RELATIONSHIPS
Gulf South's business depends on a limited number of large customers for a
significant portion of its net sales. Consolidation among long-term care
providers including several national hospital and drug wholesale distributors
and health care manufacturers, and the expansion of Gulf South's business with
large chains could increase such dependence, result in the loss of customers as
a result of acquisitions and result in competitive pricing pressures and lower
operating margins. As is customary in its industry, Gulf South does not have
any long-term contracts with its customers and sells on a purchase order basis
only. The loss of, or significant declines in the level of purchases by, one or
more of these customers would have a material adverse effect on Gulf South's and
the Company's business and results of operations. Although Gulf South has not
to date experienced any failure to collect accounts receivable from its largest
customers, an adverse change in the financial condition of any of these
customers, including as a result of a change in governmental or private
reimbursement programs, could have a material adverse effect upon Gulf South's
or the Company's results of operations or financial condition.
LITIGATION AND LIABILITY EXPOSURE
The Company and certain of its current officers and directors are named as
defendants in a purported securities class action lawsuit entitled Jack Hirsch
v. PSS World Medical, Inc., et al., Civil Action No. 98-502-cv-5-20A. The
action, which was filed on May 28, 1998, is pending in the United States
District Court for the Middle District of Florida. The plaintiff alleges, for
himself and for a purported class of similarly situated stockholders that
allegedly purchased the Company's stock between December 27, 1997 and May 8,
1998, that the defendants engaged in violations of certain provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5
promulgated thereunder. The plaintiff seeks damages, including costs and
expenses. The Company believes that the allegations contained in the complaint
are without merit and intends to defend vigorously against the claims. However,
the lawsuit is in the earliest stages, and there can be no assurance that this
litigation will be ultimately resolved on terms that are favorable to the
Company.
Gulf South, a wholly owned subsidiary of the Company, and certain of its
current and former officers and directors, among others, are named as defendants
in two purported securities class action lawsuits entitled Ernest Klein v. Gulf
South Medical Supply, Inc., et al., Civil Action No. 3:97cv526WS, and Ann
Krupnick v. Gulf South Medical Supply, Inc., et al., Civil Action No.
3:97cv525BN. Both actions, which were filed on July 21, 1997, are pending in
the United States District Court for the Southern District of Mississippi. The
plaintiff in the Klein action alleges, for himself and for a purported class of
similarly situated stockholders that allegedly purchased stock in Gulf South's
June 1996 public offering of three million shares of its common stock (the "June
1996 Offering"), that the defendants engaged in violations of certain provisions
of the Securities Act of 1933, as amended, and Mississippi state law. The
plaintiff in the Krupnick action alleges for herself and for a purported class
of similarly situated stockholders who purchased Gulf South Common Stock between
May 2, 1996 and July 22, 1996, that the defendants engaged in certain violations
of the Exchange Act, Rule 10b-5 promulgated thereunder and Mississippi state
law. Both lawsuits relate to disclosures made in the prospectus issued by Gulf
South in connection with its June 1996 Offering. Plaintiffs seek damages,
including costs and expenses. The Company believes that the allegations
contained in these complaints are also without merit and intends to defend
vigorously against the claims. However, these lawsuits are in their earliest
stages, and there can be no assurance that this litigation will ultimately be
resolved on terms that are favorable to the Company.
The Company is named as defendant in a purported patent infringement claim
filed by Bayer Corp. ("Bayer") in the United States District Court for the
Middle District of Florida 98-235 Civ. J-21A. In this lawsuit, Bayer alleges
that the urinalysis test strips sold by the company under the Penny Saver(TM)
label infringe four Bayer patents. The Company is contesting the claim of
infringement. In addition, the Company has obtained a written agreement from
the manufacturer of the product, YeongDong Pharmaceuticals of Seoul, Korea
indemnifying the Company for the costs of defense of the suit and for the
underlying liability. To date, YeongDong has fulfilled its obligation to
8
<PAGE>
reimburse the Company for the fees and costs incurred in defending this case.
The Company further has indemnity rights against the U.S. distributor of the
YeongDong product, BioSys Laboratories ("BioSys"), pursuant to its vendor
agreement with BioSys. The company believes that the allegations contained in
the complaint are without merit and intends to defend vigorously against the
claims. However, this lawsuit is in its earliest stages and there can be no
assurance that this litigation will ultimately be resolved on terms that are
favorable to the Company. Although PSS is not a manufacturer, the distribution
of medical supplies and equipment entails inherent risks of product liability.
Despite the fact that PSS has not experienced any significant product liability
claim to date 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. PSS operates approximately 620 vans to
deliver medical products on a same-day delivery basis. PSS has experienced
various claims regarding motor vehicle accidents, all of which have been covered
by insurance, subject to applicable retentions and deductibles. PSS 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 PSS.
RISKS OF LEVERAGE
In connection with the issuance in October 1997 of 8 1/2% Senior Subordinated
Notes due 2007, PSS incurred $125.0 million in indebtedness. As a result of
this increased leverage, PSS' principal and interest obligations have increased
substantially. The level of its indebtedness could adversely affect PSS'
ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or other purposes and could limit its
flexibility in reacting to changes in the industry and economic conditions
generally. PSS' increased leverage could also adversely affect its liquidity,
as a substantial portion of cash flow from operations must be dedicated to debt
service and will not be available for other purposes. PSS believes, based on
current circumstances, that its cash flow, together with available borrowings
under its credit facility, will be sufficient to permit it to meet its operating
expenses and to service its debt requirements as they become due for the
foreseeable future. This belief assumes, among other things, that PSS will
succeed in implementing its business strategy and that there will be no material
adverse developments in its business, liquidity or capital requirements.
However, if PSS is unable to generate sufficient cash flow from operations to
service its indebtedness, it will be forced to adopt an alternative strategy
that may include options such as reducing or delaying acquisitions and capital
expenditures, selling assets, restructuring or refinancing its indebtedness or
seeking additional equity capital. There can be no assurance that any of these
strategies could be effected on satisfactory terms, if at all.
DEPENDENCE ON KEY MANAGEMENT
The success of PSS is dependent upon the efforts and abilities of its senior
management. The loss of one or more of such individuals may adversely affect
PSS' business. Because of PSS' decentralized operating structure, PSS is also
dependent upon its operations and sales managers for each of its service areas.
There can be no assurance that PSS will be able to retain such key personnel or
attract qualified personnel in the future.
DEPENDENCE ON SALES REPRESENTATIVES AND SERVICE SPECIALISTS
PSS believes that to be successful it must continue to hire, train and retain
highly qualified sales representatives and service specialists. PSS' sales
growth has resulted largely from hiring and developing new sales representatives
and adding, through acquisitions, established sales representatives whose
existing customers generally have become customers of PSS. Due to the
relationships developed between PSS' sales representatives and its customers,
upon the departure of a sales representative PSS faces the risk of losing the
representative's customers, especially if the representative were to act as a
representative of PSS' competitors. PSS generally requires its sales
representatives and service specialists to execute a non-competition agreement
as a condition of their employment, however PSS has not obtained non-competition
agreements from certain of the sales representatives and service specialists
hired through acquisitions. Although courts have generally upheld the terms of
PSS' non-competition agreements in the past, there can be no assurance that such
9
<PAGE>
agreements will be upheld in the future. In addition, the radiology and imaging
equipment market served by the Imaging Business is reliant on the hiring and
retention of skilled service specialists to maintain such equipment. There is a
current shortage of these skilled specialists, which may result in intense
competition and increasing salaries. Any inability of PSS to hire or retain such
skilled specialists could limit its ability to expand its Imaging Business and
adversely affect its business, financial condition and results of operations.
There can be no assurance that PSS will be able to retain or attract qualified
personnel in the future.
COMPETITION
The Company operates in a highly competitive environment. The Company's
principal competitors are the few multimarket medical distributors that are
full-line, full-service medical supply companies, most of which are national in
scope. These national companies have sales representatives competing directly
with PSS, are substantially larger in size and have substantially greater
financial resources than the Company. There are also numerous local dealers
and mail order firms that distribute medical supplies and equipment within the
same market as the Company. Most local dealers are privately owned and operate
within limited product lines. There are several mail order firms that
distribute medical supplies on a national or regional basis. The Company also
competes with certain manufacturers that sell their products both to
distributors and directly to users, including office-based physicians.
In addition, consolidation within the health care industry has resulted in
increased competition by large national distributors and drug wholesalers. In
response to competitive pressures, PSS has in the past lowered, and may in the
future lower, selling prices in order to maintain or increase market share,
which has resulted, and may in the future result, in lower gross margins. PSS
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 PSS could obtain exclusive rights to market a certain product to the
exclusion of PSS. Although several national hospital and drug wholesale
distributors and health care manufacturers presently sell to the long-term care
market, to date the long-term care market has not been a primary focus for such
distributors and manufacturers. However, such distributors and manufacturers
may focus their efforts more directly on the long-term care market. Hospitals
that form alliances with long-term care facilities to create integrated health
care networks may look to hospital distributors and manufacturers to furnish
products to their long-term care affiliates. There can be no assurance that
PSS will not face increased competition and significant pricing pressure in the
future.
MANAGEMENT OF INTERNATIONAL BUSINESS
Through its WorldMed International, Inc. subsidiary, PSS has acquired medical
supply distributors serving physicians in Belgium, France, Germany, Luxembourg
and the Netherlands and plans to increase its presence in European markets. As
PSS expands internationally, it will need to hire, train and retain qualified
personnel in countries where language, cultural or regulatory impediments may
exist. PSS 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 PSS' services and business practices will be accepted by vendors,
physicians or other involved parties in foreign markets. The cost of medical
care in many European countries is funded by the government, which may
significantly impact spending budgets in certain 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.
10
<PAGE>
IMAGING BUSINESS TECHNOLOGY
The development of new technology may change the manner in which diagnostic
imaging services are provided. Recently, certain manufacturers have developed
digital radiology equipment that does not rely on film and film products, which
currently constitute a substantial percentage of the products distributed by the
Imaging Business. No assurance can be given that the introduction and
proliferation of digital radiology or other technological changes will not
result in a material adverse change in the Imaging Business. While PSS
anticipates that it will distribute new imaging technology, there can be no
assurance that PSS will obtain distribution agreements or develop vendor
relationships to distribute such new technology. In addition, there can be no
assurance that PSS would be able to distribute any such new technology
profitably.
RELIANCE ON THIRD-PARTY SHIPPERS
Because Gulf South believes that its success to date is dependent in part upon
its ability to provide prompt, accurate and complete service to its customers on
a price-competitive basis, any material increases in its costs of procuring and
delivering products could have an adverse effect on its results of operations.
Strikes or other service interruptions affecting United Parcel Service ("UPS")
or other common carriers used by Gulf South to ship its products, such as the
strike by UPS workers in 1997, could impair Gulf South's ability to deliver
products on a timely and cost-effective basis. In addition, because Gulf South
typically bears the cost of shipment to its customers, any increase in shipping
rates could have an adverse effect on Gulf South's operating results.
RISKS ASSOCIATED WITH INVENTORY MANAGEMENT
In order to provide prompt and complete service to its customers, Gulf South
maintains a significant investment in product inventory at its 23 warehouse
locations. Although Gulf South closely monitors its inventory exposure through
a variety of inventory control procedures and policies, there can be no
assurance that such procedures and policies will continue to be effective or
that unforeseen product development or price changes will not adversely affect
Gulf South's business or results of operations. In addition, Gulf South may
assume the inventory of distributors that it acquires which includes product
lines or operating assets not normally carried or used by Gulf South. These
product lines or assets may be difficult to sell, resulting in Gulf South
writing off any such unsold inventory or unused assets in future periods.
REGULATION OF AND CHANGES IN THE PRACTICE OF MEDICINE
The health care industry is subject to extensive government regulation,
licensure and operating procedures. PSS cannot predict the impact that present
or future regulations may have on operations of PSS or Gulf South or on their
plans to expand business activities. In addition, as consolidation among
physician provider groups, long-term care facilities and other alternate-site
providers continues and provider networks are created, purchasing decisions may
shift to individuals with whom PSS has not had prior selling relationships. PSS
is increasingly focusing on national accounts where the purchasing decision may
not be made by its traditional customers. There can be no assurance that PSS
will be able to maintain its customer relationships in such circumstances or
that such provider consolidation will not result in reduced operating margins.
In addition, national health care reform has been the subject of a number of
legislative initiatives by Congress. Due to uncertainties regarding the
ultimate features of health care reform initiatives and their enactment and
implementation, PSS cannot predict which, if any, of such reform proposals will
be adopted, when they may be adopted or what impact they may have on PSS or its
customers. The actual announcement of reform proposals and the investment
community's reaction to such proposals, announcements by competitors of their
strategies to respond to reform initiatives and general industry conditions
could produce volatility in the training and market price of PSS Common Stock.
11
<PAGE>
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-products
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 products will not be limited or
reduced and thereby adversely affect future sales by PSS.
TWO-TIER PRICING
As a result of the Non-Profit Act of 1944, the medical-products 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 products than PSS. 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
PSS 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 place PSS at a competitive disadvantage.
QUARTERLY FLUCTUATIONS IN OPERATING RESULTS
Net sales and operating results may fluctuate quarterly as a result of demand
for PSS' products and services, the introduction of new products and services by
PSS and its competitors, acquisitions or investments, changes in manufacturers'
prices or pricing policies, changes in the level of operating expenses, product
supply shortages, inventory adjustments, changes in product mix and general
competitive and economic conditions. In addition, a substantial portion of PSS'
net sales in each quarter result from orders booked in such quarter.
Accordingly, PSS believes that period-to-period comparisons of its operating
results should not be relied upon as an indication of future performance. It is
possible that in certain future periods, PSS' operating results may be below the
expectations of analysts and investors, which could materially and adversely
affect the trading price of the Common Stock.
RELIANCE ON DATA PROCESSING
PSS' business is dependent upon its ongoing ability to obtain, process,
analyze and manage data, and to maintain and upgrade its data processing
capabilities. PSS typically receives rebates from manufacturers for the purchase
of certain products for its Imaging Business and needs sophisticated systems to
carefully track and apply for such rebates. Interruption or failure of data
processing capabilities for any extended length of time, the failure to upgrade
data services, the inability of PSS' data processing system to support the
expanded scope of PSS' or Gulf South's businesses or to adequately track PSS'
Imaging Business rebates, difficulties in converting data and information
systems after acquisitions, loss of stored data, programming errors or other
computer problems could adversely affect PSS' ability to receive and process
customer orders and ship products on a timely basis and otherwise have a
material adverse effect on PSS' business, financial condition and results of
operations.
YEAR 2000
The Company is currently replacing a majority of its internal information
systems hardware and software with new systems ("New Systems") that are year
2000 compliant. These New Systems will be used in several key areas of the
Company's business, including inventory management, purchasing, sales, shipping,
accounts payable, accounts receivable, and financial reporting. The Company
expects to incur internal payroll costs, consulting fees, and hardware and
software costs for preparation and implementation of these New Systems. The
total expected cost of implementation is estimated to be approximately $10.0
million. Although the Company believes it will complete all phases of
12
<PAGE>
implementation of these New Systems by December 1999, there can be no assurance
that full implementation will occur by the year 2000. Failure to complete
certain phases of the implementation would have a material adverse affect on the
Company's systems and results of operations.
Implementation of the New System entails contacting suppliers to ensure
compatibility with the Company's information systems and to discuss year 2000
compliance issues. There can be no assurance that the systems of other
companies which the Company's systems rely upon will be timely converted, or
that such failure to convert by another company would not have a material
adverse effect on the Company's systems and results of operations.
ENVIRONMENTAL LIABILITIES AND REGULATIONS
The past and present business operations of PSS and the past and present
ownership and leasing of real property by PSS are subject to extensive and
changing federal, state, local and foreign environmental laws and regulations,
including those relating to the use, handling, storage, discharge and disposal
of hazardous substances. Certain of the products distributed and serviced by
PSS' Imaging Business contain chemicals and byproducts which require proper
disposal under applicable environmental law. PSS cannot predict what
environmental legislation or regulations will be enacted in the future, how
existing or future laws or regulations will be administered or interpreted or
what environmental conditions may be found to exist on its properties.
Compliance with more stringent laws or regulations, as well as more vigorous
enforcement policies of applicable regulatory agencies or stricter
interpretations of existing laws, and discovery of new conditions, may require
additional expenditures by PSS, some of which may be material.
Anti-Takeover Provisions; Possible Issuance of Preferred Stock
PSS' Amended and Restated Articles of Incorporation, as amended, and Amended
and Restated Bylaws contain various provisions that may make it more difficult
for a third party to acquire, or may discourage acquisition bids for, PSS 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
PSS Common Stock will be subject to, and may be adversely affected by, the
rights of any holders of preferred stock of PSS that may be issued in the future
and that may be senior to the rights of the holders of PSS Common Stock.
Furthermore, PSS 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 PSS without further action by its stockholders.
13
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Shareholder. The company will, however, receive the proceeds
from the exercise of the Warrants. The exercise price for each warrant is
$14.80 per share (subject to adjustment upon the occurrence of certain events)
and is payable in cash. Cash proceeds received by the Company for the exercise
of any Warrants will be used for general corporate purposes.
SELLING SHAREHOLDER
The following table sets forth certain information with respect to the Shares
held by the Selling Shareholder. The Shares may be offered from time to time by
the Selling Shareholder. See "Plan of Distribution."
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING (1) SHARES OFFERED
------------------------- PURSUANT TO
NAME NUMBER PERCENT THIS PROSPECTUS
---- ------ ------- ---------------
<S> <C> <C> <C>
Deutsche Morgan Grenfell, 787,500 * 787,500
Inc.
- ------------
* Less than 1% of the outstanding Common Stock of the Company.
</TABLE>
PLAN OF DISTRIBUTION
The Company's Common stSck is quoted on the Nasdaq National Market under the
symbol "PSSI." The Common Stock offered hereby will be sold by the Selling
Shareholder for their own account and the Company will not receive any of the
proceeds from the sale by the Selling Shareholder of the Common Stock offered
hereby. Any or all of the shares of Common Stock may be sold from time to time
(i) to or through underwriters or dealers, (ii) directly to one or more other
purchasers, (iii) through agents on a best-efforts basis, or (iv) through a
combination of any such methods of sale.
The shares of Common Stock offered hereby may be sold from time to time by the
Selling Shareholder, or by transferees or other successors in interest. Such
sales may be made in the over-the-counter market, or otherwise at prices and at
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. Any or all of the shares of Common Stock may be
sold by one or more of the following: (i) 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; (ii)
purchases by a broker or dealer or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; (iii) an exchange
distribution in accordance with the rules of such exchange; and (iv) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
in affecting sales, brokers or dealers engaged by the Selling Shareholder may
arrange for other brokers or dealers to participate. Brokers and dealers will
receive commission or discounts from the Selling Shareholder in amounts to be
negotiated prior to the sale.
The Selling Shareholder and any such underwriters, dealers or agents that
participate in the distribution of the Common Stock may be deemed to be
underwriters within the meaning of the Securities Act, and any profit on the
sale of the Common Stock by them and any discounts, commissions or concessions
14
<PAGE>
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Common Stock may be sold from time to time in one
or more transactions at a fixed offering price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the Company and/or the Selling Shareholder and any
underwriters or dealers. Brokers or dealers acting in connection with the sale
of Common Stock contemplated by this Prospectus may receive fees or commissions
in connection therewith.
At the time a particular offer of Common Stock is made, to the extent required
a supplement to this prospectus will be distributed which will identify and set
forth the aggregate number of shares of Common Stock being offered and the terms
of the offering, including the name or names of any underwriters, dealers or
agents, the purchase price paid by any underwriter for Common Stock purchased
from the Selling Shareholder, any discounts, commissions and other items
constituting compensation from the Selling Shareholder and/or the Company and
any discounts, commissions or concessions allowed or reallowed or paid to
dealers, including the proposed selling price to the public. Such supplement to
this Prospectus and, if necessary, a post-effective amendment to the
Registration Statement of which this Prospectus is a part, will be filed with
the Commission to reflect the disclosure of additional information with respect
to the distribution of the Common Stock.
The Selling Shareholder will pay all applicable stock transfer taxes, transfer
fees and brokerage commissions or discounts. The Company has agreed to bear all
expenses in connection with the registration of the shares being offered by the
Selling Shareholder. The Company has agreed to indemnify the Selling
Shareholder against certain liabilities, including liabilities under the
Securities Act as underwriters or otherwise.
LEGAL MATTERS
A legal opinion to the effect that the Shares offered hereby by the Selling
Shareholder 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 PSS included in the Form 10-K for the
year ended April 3, 1998 incorporated by reference in this registration
statement have been audited by Arthur Andersen LLP, independent certified public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The consolidated financial statements of Gulf South as of December 31, 1997
and 1996, and for each of the three years in the period ended December 31, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included in PSS's Annual Report on Form 10-K for the fiscal
year ended April 3, 1998 and incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
15
<PAGE>
<TABLE>
<CAPTION>
================================================ ================================================
<S> <C>
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
Shareholder. 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 787,500 Shares
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. PSS WORLD MEDICAL, INC.
Common Stock
___________________
TABLE OF CONTENTS
Page
----
Available Information................ 2
Incorporation of Certain
Documents by Reference.............. 2
Cautionary Notice Regarding
Forward-Looking Statements.......... 3
The Company.......................... 4
Recent Developments.................. 5
Risk Factors......................... 6
Use of Proceeds...................... 14
Selling Shareholder.................. 14
Plan of Distribution................. 14
Legal Matters........................ 15
Experts.............................. 15 P R O S P E C T U S
September 23, 1998
================================================ ================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration fee to Securities and Exchange Commission.. $ 3,862
Accounting fees and expenses............................ 20,000
Legal fees and expenses................................. 5,000
Miscellaneous expenses.................................. 5,138
-------
Total.............................................. $34,000
The foregoing items, except for the registration fee to the Securities and
Exchange Commission, are estimated. The Company has agreed to bear all expenses
in connection with the registration of the shares being offered by the Selling
Shareholder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Amended and Restated Articles of Incorporation, as amended, and the
Amended and Restated Bylaws of the Registrant set forth the extent to which the
Registrant's directors and officers may be indemnified against liabilities they
may incur while serving in such capacities. Such indemnification will be
provided to the fullest extent allowed by the Florida Business Corporation Act,
as amended from time to time, and judicial or administrative decisions. Under
these indemnification provisions, the Registrant is required to indemnify any of
its directors and officers against any reasonable expenses (including attorneys'
fees) incurred by him in the defense of any action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which he was made a party,
or in defense of any claim, issue or matter therein, by reason of the fact that
he is or was a director or officer of the Registrant or who, while a director or
officer of the Registrant, is or was serving at the Registrant's request as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise to
the extent that such director or officer has been successful, on the merits or
otherwise, in such defense. The Registrant also may indemnify any of its
directors or officers against any liability incurred in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Registrant, in which event, additional determinations must be made
before indemnification is provided) by reason of the fact that he is or was a
director or officer of the Registrant who, while a director or officer of the
Registrant, is or was serving at the Registrant's request as a director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, if
such director or officer acted in good faith and in a manner he believed to be
in, or not opposed to, the best interests of the Registrant, and with respect to
any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. The Registrant may also provide advancement of expenses incurred by a
director or officer in defending any such action, suit or proceeding upon
receipt of a written affirmation of such officer or director that he has met
certain standards of conduct and an understanding by or on behalf of such
officer or director to repay such advances unless it is ultimately determined
that he is entitled to indemnification by the Registrant. Notwithstanding the
foregoing, the Amended and Restated Bylaws of the Registrant provide that the
Registrant shall not be required to indemnify any of its directors or officers
in connection with a proceeding initiated by such person unless such
authorization for such proceeding was not denied by the Board of Directors of
the Registrant prior to sixty (60) days after receipt of notice thereof from
such person stating his or her intent to initiate such proceeding and only upon
such terms and conditions as the Board of Directors may deem appropriate.
The Florida Business Corporation Act contains a provision which limits the
personal liability for monetary damages to the corporation or any other person
for any statement, vote, decision, or failure to act, regarding corporate
management or policy, by a director, unless the director breached or failed to
perform his duties as a director and such breach constitutes (i) a violation of
criminal law, unless the director has reasonable cause to believe his conduct
II-1
<PAGE>
was unlawful; (ii) a transaction from which the director received an improper
personal benefit; (iii) an unlawful distribution under Florida law, (iv) in a
proceeding by or in the right of a corporation to procure a judgment in its
favor or by or in the right of a shareholder, conscious disregard for the best
interest of the corporation, or willful misconduct; or (v) in a proceeding by or
in the right of someone other that the corporation or a shareholder,
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton or willful disregard of human
rights, safety or property. The Registrant maintains an insurance policy
insuring the Registrant and directors and officers of the Registrant against
certain liabilities, including liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
- ----------- -----------
4.1 Amended and Restated Articles of Incorporation, as amended, of the
Registrant (incorporated by reference from the Registrant's Current
Report on Form 8-K filed with the Commission on April 7, 1998).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by
reference from Registrant's Registration Statement on Form S-1,
Registration No. 33-76580).
4.3 Form of Specimen Certificate of PSS World Medical, Inc. Common
Stock (incorporated by reference from the Registrant's Current
Report on Form 8-K filed with the Commission on April 7, 1998).
5.1 Opinion of Fred Elefant, P.A. as to the legality of the securities
being offered by the Selling Shareholder.
23.1 Consent of Fred Elefant, P.A. (included in the opinion filed as
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent Ernst & Young LLP.
24.1 Power of Attorney (included as part of the signature page hereto).
ITEM 17. UNDERTAKINGS.
(a) The Undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
II-2
<PAGE>
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
-------- -------
Section do not apply if the Registration Statement is on Form S-3, Form S-8
or Form F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Jacksonville, State of Florida, on September 18,
1998.
PSS WORLD MEDICAL, INC.
By: /s/ PATRICK C. KELLY
-------------------------
Name: Patrick C. Kelly
Title: Chairman and Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Patrick
C. Kelly and David A. Smith, and each of them, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him or her and in his or her name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3 of PSS World Medical,
Inc. or a registration statement filed pursuant to Rule 462(b), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on September 18, 1998.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Patrick C. Kelly Chairman of the Board and Chief Executive Officer
- ------------------------------------------------------ (principal executive officer)
Patrick C. Kelly
/s/ David A. Smith Executive Vice President, Chief Financial Officer
- ------------------------------------------------------ and Director (principal financial and accounting
David A. Smith officer)
Director
- ------------------------------------------------------
Thomas G. Hixon
Director
- ------------------------------------------------------
Hugh M. Brown
/s/ T. O'Neal Douglas Director
- ------------------------------------------------------
T. O'Neal Douglas
/s/ Melvin L. Hecktman Director
- ------------------------------------------------------
Melvin L. Hecktman
Director
- ------------------------------------------------------
Delores Kesler
Director
- ------------------------------------------------------
Charles R. Scott
/s/ James L.L. Tullis Director
- ------------------------------------------------------
James L.L. Tullis
/s/ Donna C. E. Williamson Director
- ------------------------------------------------------
Donna C. E. Williamson
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- ----------------------------------------------------------------------------
<C> <S>
4.1 Amended and Restated Articles of Incorporation, as amended, of the
Registrant (incorporated by reference from the Registrant's Current Report
on Form 8-K filed with the Commission on April 8, 1998).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by reference
from Registrant's Registration Statement on Form S-1, Registration No.
33-76580).
4.3 Form of Specimen Certificate of PSS World Medical, Inc. Common Stock
(incorporated by reference from the Registrant's Current Report on Form 8-K
filed with the Commission on April 8, 1998).
5.1 Opinion of Fred Elefant, P.A. as to the legality of the Shares being
offered by the Selling Shareholder.
23.1 Consent of Fred Elefant, P.A. (including in the opinion filed as Exhibit
5.1).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included as part of the signature page hereto).
</TABLE>
<PAGE>
EXHIBIT 5.1
FRED ELEFANT, P.A.
1650 PRUDENTIAL DRIVE, SUITE 105
JACKSONVILLE, FLORIDA 32207
September 18, 1998
PSS World Medical, Inc.
4345 Southpoint Boulevard
Jacksonville, Florida 32216
Ladies and Gentlemen:
This opinion is given in connection with the filing by PSS World
Medical, Inc., a corporation organized and existing under the laws of the State
of Florida (the "Company"), of a Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission with
respect to the registration under the Securities Act of 1933, as amended, of up
to 787,500 shares of Common Stock (the "Offering Shares") that may be sold by
certain selling stockholders of the Company.
In the capacity described above, I have considered such matters of law
and of fact, including the examination of originals or copies, certified or
otherwise identified to my satisfaction, of such records and documents of the
Company, certificates of public officials and such other documents as I have
deemed appropriate as a basis for the opinions hereinafter set forth. In
conducting my examination, I have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such documents. The opinions set forth herein
are limited to the laws of the State of Florida.
Based upon the foregoing, it is my opinion that the Offering Shares
have been duly authorized and are validly issued, fully paid, and non-assessable
by the Company under the Business Corporation Act of the State of Florida as in
effect on the date hereof.
This opinion is provided to you for your benefit and for the benefit
of the Commission, in each case, solely with regard to the Registration
Statement, may be relied upon by you and the Commission only in connection with
the Registration Statement, and may not be relied upon by any other person or
for any other purpose without my prior written consent.
I consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference made to my firm under the caption "Legal Matters"
in the Prospectus constituting part of the Registration Statement.
FRED ELEFANT, P.A.
By:/s/ Fred Elefant
----------------
Fred Elefant
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
June 30, 1998 included in the Form 10-K of PSS World Medical, Inc. for the year
ended April 3, 1998 and to all references to our Firm included in this
registration statement.
Arthur Andersen LLP
Jacksonville, Florida
September 23, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-3 and related Prospectus of PSS World Medical,
Inc. for the registration of 787,500 shares of its common stock and to the
incorporation by reference therein of our report dated June 30, 1998, with
respect to the consolidated financial statements of Gulf South Medical Supply,
Inc. for the year ended December 31, 1997, included in PSS World Medical, Inc.'s
Annual Report on Form 10-K for the fiscal year ended April 3, 1998.
Ernst & Young LLP
Jackson, Mississippi
September 22, 1998
