PSS World Medical, Inc. Reports First Quarter Results.
First Quarter Highlights:
-- Pro forma net income per share increased 31% -- Accelerated integration of Gulf South on schedule -- Gulf South accounting periods and methods conformed to those of
PSS -- New exclusive agreement for PSS
PSS World Medical, Inc. (Nasdaq/NM:PSSI) today announced results for the first quarter ended June 30, 1998.
For the three months ended June 30, 1998, net sales increased 19% to $342.5 million compared with $288.2 million for the same period last year. Pro forma net income, excluding merger and other nonrecurring costs and expenses, for the quarter increased 33% to $11.7 million, or $0.17 per diluted share, on 70.7 million weighted average shares outstanding versus $8.8 million, or $0.13 per diluted share, on 68.1 million weighted average shares outstanding for the prior year period. Net income for the three months ended June 30, 1998, was $11.3 million, or $0.16 per diluted share.
Patrick C. Kelly, chairman and chief executive officer of PSS World Medical, Inc., said, "We are pleased with our results for the first quarter of 1998, which are on target or ahead of analysts expectations. Our integration of Gulf South is moving rapidly and on schedule. We are very pleased with the progress of our management team and their actions to position Gulf South as the market leader. In addition, the accounting periods and methods of Gulf South have been conformed to those of PSS World Medical."
Mr. Kelly also stated that both the Physician and Imaging operations are performing well despite distractions from the merger with Gulf South. The Physician division just entered into another new exclusive agreement with Critikon, a Johnson & Johnson company, the United States market leader of multiparameter heart monitors. This new exclusive is for Critikons DINAMAP(R) heart monitors and DURA-CUF(R) blood pressure cuffs. Also, Diagnostic Imaging continues to gain momentum and perform ahead of our expectations with its continued focus on unique customer services and sophisticated product sales.
During our first quarter of operations following the merger, Gulf South purchased the assets of Chattanooga, Tennessee-based National Medical, LLC, a privately held distributor to the home health care marketplace, with annualized revenues of approximately $7 million.
In addition, the Company's other subsidiaries completed a number of strategic acquisitions during the first quarter. Diagnostic Imaging also expanded through the purchase of the assets of Danville, Pennsylvania-based North Central X-Ray, Inc., serving Central Pennsylvania, and the stock-for-stock acquisition of Little Rock, Arkansas-based Medical Imaging Services, Inc., with combined annualized revenues of approximately $30 million. Physician Sales & Service purchased the assets of three physician medical supply companies, with total combined annualized revenues of approximately $5 million.
PSS World Medical is the largest distributor of medical supplies, equipment and pharmaceuticals to office-based physicians in the United States through its Physician Sales & Service Division. Through its Gulf South Medical Supply subsidiary, the Company is a leading national distributor of medical supplies and related products to the long-term care industry. In addition, the Company is the leading distributor of medical diagnostic imaging supplies, chemicals, equipment, and service to the acute care and alternate-care markets through its subsidiary, Diagnostic Imaging, Inc.
This news release contains forward-looking statements and information that are subject to certain risks, trends and uncertainties detailed in the company's reports filed with the Securities and Exchange Commission, including business and economic conditions, as well as conditions affecting the health care industry, competitive forces and the ability to integrate acquired operations successfully, that could cause results to differ materially from those projected. -0-
PSS WORLD MEDICAL, INC Unaudited Consolidated Operating Highlights Including Pro Forma Net Income and Net Income Per Share (In millions, except per share data) Three Months Ended June 30, Percent of Percent of Percent 1998 Net Sales 1997 Net Sales Change Net sales $ 342.5 100.0% $ 288.2 100.0% 19% Gross profit 94.9 27.7% 76.8 26.6% 24% Selling, general and administrative expenses 75.0 21.9% 63.0 21.9% 19% Merger and other nonrecurring costs and expenses .3 .1% 1.4 .5% (79)% Operating income 19.6 5.7% 12.4 4.3% 58% Net income $ 11.3 3.3% $ 7.9 2.7% 43% Basic earnings per share $ 0.16 $ 0.12 Diluted earnings per share $ 0.16 $ 0.12 Pro forma operating income $ 19.9 5.8% $ 13.8 4.8% 44% Pro forma net income excluding merger and other nonrecurring costs and expenses $ 11.7 3.4% $ 8.8 3.1% 33% Pro forma diluted earnings per share excluding merger and nonrecurring costs and expenses $ 0.17 $ 0.13 31% Weighted average shares: Basic 69,858 67,285 Diluted 70,727 68,059
CONTACT: PSS World Medical Inc., Jacksonville
David A. Smith, 904/332-3000
Thomas A. Crowley, Jr., 973/783-1510