<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, 1998.
-----------------
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, 1998 and
December 31, 1997.
2. Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year Ended December 31, 1998.
<PAGE>
PSS/Taylor Medical
Profit Sharing 401(k) Plan
Financial Statements and Schedules
As of December 31, 1998 and 1997
Together With
Auditors' Report
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(k) PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits--December 31, 1998 and 1997
Statement of Changes in Net Assets Available for Benefits, With Fund
Information, for the Year Ended December 31, 1998
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes--
December 31, 1998
Schedule II: Item 27d--Schedule of Reportable Transactions for the Year
Ended December 31, 1998
<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, 1998 and
1997 and the related statement of changes in net assets available for benefits,
with fund information, for the year ended December 31, 1998. 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, 1998 and 1997 and the changes in its net assets available for
benefits for the year ended December 31, 1998 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor 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
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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 trustee. 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
April 30, 1999
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
INVESTMENTS, participant-directed:
Mutual funds:
American Balanced Fund $2,229,603 $1,644,851
The Kaufmann Fund 298,365 363,408
Washington Mutual Investors Fund 272,224 0
Enterprise Group of Funds 215,550 549,755
Bond Fund of America 76,351 75,437
Growth Fund of America 0 648,597
Money market:
Prime Cash Obligations Fund 97,904 91,637
Common stock:
PSS World Medical, Inc. common stock 276,660 198,069
PARTICIPANT LOANS 0 3,997
CASH 3,997 0
RECEIVABLES:
Accrued interest receivable 11,337 11,784
Receivable from plan sponsor 0 6,031
========== ==========
NET ASSETS AVAILABLE FOR BENEFITS $3,481,991 $3,593,566
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<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, 1998
<TABLE>
<CAPTION>
Participant-Directed
------------------------------------------------------------------------------------
Washington
American The PSS World Mutual Enterprise Prime Cash Bond
Balanced Kaufmann Medical, Inc. Investors Group of Obligations Fund of
Fund Fund Common Stock Fund Funds Fund America
--------- ---------- ------------ ------------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net (depreciation) appreciation in fair
value of mutual funds $ (24,452) $(37,945) $ 16,480 $ 6,576 $ 24,505 $ 0 $(1,433)
Interest income/dividends 54,181 11,675 46 22,653 50,494 5,560 3,913
---------- -------- -------- -------- --------- ------- -------
Total additions 29,729 (26,270) 16,526 29,229 74,999 5,560 2,480
---------- -------- -------- -------- --------- ------- -------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (184,086) (10,440) (3,696) 0 (52,240) (263) (266)
---------- -------- -------- -------- --------- ------- -------
INTERFUND TRANSFERS 739,109 (28,333) 65,761 242,995 (356,964) 970 (1,300)
---------- -------- -------- -------- --------- ------- -------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,644,851 363,408 198,069 0 549,755 91,637 75,437
---------- -------- -------- -------- --------- ------- -------
End of year $2,229,603 $298,365 $276,660 $272,224 $ 215,550 $97,904 $76,351
========== ======== ======== ======== ========= ======= =======
<CAPTION>
Growth
Fund of Participant
America Loans Other Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net (depreciation) appreciation in fair value of mutual funds $ 0 $ 0 $ 0 $ (16,269)
Interest income/dividends 54,624 0 11,337 214,483
---------- ----------- ---------- ----------
Total additions 54,624 0 11,337 198,214
---------- ----------- ---------- ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (58,798) 0 0 (309,789)
---------- ----------- ---------- ----------
INTERFUND TRANSFERS (644,423) (3,997) (13,818) 0
---------- ----------- ---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 648,597 3,997 17,815 3,593,566
---------- ----------- ---------- ----------
End of year $ 0 $ 0 $ 15,334 $3,481,991
========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(k) Plan
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
1. PLAN DESCRIPTION
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 PSS World Medical, Inc. (the
"Company"), formerly Physician Sales & Service, Inc. 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.
Effective March 14, 1997, the PSS/Taylor Medical Profit Sharing 401(k) Trust
was amended and restated to appoint Northwestern Trust and Investors Advisory
Company as the Plan's trustee. Howard Johnson & Company serves as the record
keeper.
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Record-Keeper Information
Disclosure of historical cost information with regard to the Plan's
investments is required to be presented in the schedule 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 trustee, 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 of income are based on relative participant
account balances, as defined in the plan document.
Investments
Investments are participant-directed. A description of each investment
option available at December 31, 1998 is provided below:
American Balanced Fund
This mutual fund consists of a portfolio invested in securities,
including common stocks, preferred stocks, corporate bonds, and U.S.
government securities. The objective of this fund is to provide for
the conservation of capital while providing current income and long
term growth.
The Kaufmann Fund
This mutual fund consists of a portfolio invested in common stocks,
and convertible preferred stocks and bonds. The objective of this fund
is to provide capital appreciation.
Washington Mutual Investors Fund
This mutual fund consists of a portfolio invested in common stocks,
and convertible preferred stocks and bonds. The objective of this fund
is to provide capital appreciation.
Enterprise Group of Funds (Formerly Known as AIM Constellation Fund)
This mutual fund consists of a portfolio invested in common stocks,
with an emphasis on medium-sized and smaller emerging-growth
companies. The objective of this fund is to provide capital
appreciation.
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Bond Fund of America
Assets of this mutual fund 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 objective of this fund is to provide a level of current income
that is consistent with the preservation of capital.
Growth Fund of America
This mutual fund invests in a diversified portfolio consisting
primarily of common stocks. Assets may also be held in securities
convertible into common stocks, cash or cash equivalents, straight
debt securities, or nonconvertible preferred stocks. The objective of
this fund is capital growth.
Prime Cash Obligations Fund (Formerly Known as Alex. Brown Cash
Reserve Fund)
This money market fund consists 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. The objective of this fund is to provide
maximum protection of capital with a conservative rate of return.
PSS World Medical, Inc. Common Stock
This is an account in which contributions are invested in the stock of
the Company.
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.
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.
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Administrative Expenses
Administrative expenses paid by the Company were approximately $14,000 for
the year ended December 31, 1998. Administrative expenses paid by the Plan
during the year ended December 31, 1997 were approximately $6,000. During
1998, the Company repaid this amount to the Plan.
Investment Valuation and Income Recognition
The Plan's investments, other than participant loans, are stated at fair
value, as determined by quoted market prices. 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. The Plan has been amended since
receiving the determination letter. However, the plan administrator
believes that the Plan is currently designed and is being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, the plan administrator believes that the Plan was qualified and
the related trust was tax-exempt as of the financial statement dates.
4. PLAN TERMINATION
The Company reserves the right to terminate the Plan at any time, subject
to plan provisions and applicable provisions of ERISA. If the Plan were to
terminate, each participant's interest in the trust would be distributed to
such participant or his/her beneficiary at the time prescribed by the Plan
and the Internal Revenue Code. Upon termination of the Plan, the trustee
shall pay all liabilities and expenses of the trust fund and will sell
shares of encumbered stock held in the loan suspense account, if any, to
the extent such sale is necessary in order to repay any outstanding loans.
<PAGE>
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5. RECONCILIATION TO FORM 5500
As of December 31, 1998 and 1997, the Plan had $3,056 and $14,626,
respectively, 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.
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, 1998:
<TABLE>
<CAPTION>
Net Assets
Benefits Available
Payable to Benefits for Benefits
------------------------
Participants Paid 1998 1997
------------ -------- ------------------------
<S> <C> <C> <C> <C>
Per financial statements $ 0 $309,789 $3,481,991 $3,593,566
1998 amounts pending distribution
to participants 3,056 3,056 (3,056) 0
1997 amounts pending distribution
to participants 0 (14,626) 0 (14,626)
-------- --------- ----------- -----------
Per Form 5500 $3,056 $298,219 $3,478,935 $3,578,940
======== ========= =========== ===========
</TABLE>
6. SUBSEQUENT EVENT
Subsequent to year-end, the Plan was amended and restated to appoint
Metropolitan Life Insurance Company as the Plan's record keeper.
<PAGE>
SCHEDULE 1
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(k) PLAN
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Current
Identity of Party Involved Description of Investment Cost Value
- ------------------------------ ----------------------------------------------------------- --------- -----------
<S> <C> <C> <C>
* AMERICAN FUNDS GROUP American Balanced Fund, mutual fund, 145,365 shares (a) $ 2,229,603
ENTERPRISE GROUP Enterprise Group of Funds, growth fund, 10,230 shares (a) 215,550
* THE KAUFMANN FUND The Kaufmann Fund, equity fund, 54,505 shares (a) 298,365
* PSS WORLD MEDICAL, INC. PSS World Medical, Inc. common stock, 8,254 shares (a) 276,660
* FEDERATED INVESTORS Prime Cash Obligations Fund, money market, 119,351 shares (a) 97,904
* AMERICAN FUNDS GROUP Bond Fund of America, mutual fund, 3,821 shares (a) 76,351
Washington Mutual Investors Fund, equity fund, 8,272 shares (a) 272,224
-----------
$ 3,466,657
===========
</TABLE>
*Represents a party in interest.
(a) Historical cost information has been requested from
the trustee; however, due to its record-keeping
systems, cost information cannot be made available.
The accompanying notes are an integral part of this schedule.
<PAGE>
SCHEDULE II
PSS/TAYLOR MEDICAL
PROFIT SHARING 401(k) PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Purchases Sales
------------------------- -------------------------
Number Number
of Purchase of Selling
Identity of Party Involved Description of Investment Transactions Price Transactions Price
--------------------------- --------------------------------------- ------------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
* AMERICAN FUNDS GROUP Growth Fund of America, mutual fund 0 $ 0 2 $ 710,002
* AMERICAN FUNDS GROUP American Balanced Fund, mutual fund 9 1,044,106 4 390,157
ENTERPRISE GROUP Enterprise Group of Funds, mutual fund 3 190,798 0 0
AIM GROUP AIM Constellation Fund, mutual fund 0 0 2 599,768
* AMERICAN FUNDS GROUP Washington Mutual Investors Fund, mutual 8 265,515 0 0
Fund
<CAPTION>
Cost
of Net
Identity of Party Involved Description of Investment Assets Gain
--------------------------- --------------------------------------- ------------ ---------
<S> <C> <C> <C>
* AMERICAN FUNDS GROUP Growth Fund of America, mutual fund (b) (b)
* AMERICAN FUNDS GROUP American Balanced Fund, mutual fund (b) (b)
ENTERPRISE GROUP Enterprise Group of Funds, mutual fund (b) (b)
AIM GROUP AIM Constellation Fund, mutual fund (b) (b)
* AMERICAN FUNDS GROUP Washington Mutual Investors Fund, mutual (b) (b)
Fund
</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, 1998.
(b) Historical cost information has been requested from the
trustee; however, due to its record-keeping systems, cost
information cannot be made available.
The accompanying notes are an integral part of this schedule.
<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 24, 1999.
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
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report dated April 30, 1999, 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 22, 1999
