UNITED STATES
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 March 31, 2002
or
( ) Transition report pursuant to Section 15(d) of the Securities exchange Act
of 1934 [NO FEE REQUIRED].
For the transition period from ____ to ____.
Commission File No. 0-23832
-----------------------
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
(Full title of the Plan)
PSS WORLD MEDICAL, INC.
4345 Southpoint Boulevard
Jacksonville, Florida 32216
(Principal Executive Office)
Table of Contents
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
March 31, 2002 and 2001
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Schedule H, line 4i-Schedule of Assets Held at End of Year 11
Signature 12
Exhibit Index 13
Independent Auditors' Report
To the Plan Administrator of the
PSS World Medical, Inc. Employee Stock
Ownership and Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of PSS World Medical, Inc. Employee Stock Ownership and Savings Plan as of March
31, 2002, and the related statement of changes in net assets available for
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of PSS World Medical, Inc. Employee Stock Ownership and Savings Plan
as of March 31, 2001 and the year then ended were audited by other auditors
whose report dated August 16, 2001 expressed an unqualified opinion, with an
explanatory paragraph which indicated that certain historical cost information
had been omitted for nonparticipant-directed plan assets held by the Plan
custodian in a supplemental schedule.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides 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 PSS World
Medical, Inc. Employee Stock Ownership and Savings Plan as of March 31, 2002,
and the changes in net assets available for benefits for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, line
4i-Schedule of Assets Held at End of Year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
Jacksonville, Florida
August 1, 2002
1
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
Statements of Net Assets Available for Benefits
March 31, 2002 and 2001
2002 2001
--------------------- ---------------------
Assets:
Cash $ 7,562 $ 5,772
--------------------- ---------------------
Investments, at fair value 61,651,246 43,283,446
Investments, at cost:
Money market fund 2,801,622 953,093
Participant loans 10,134 22,238
--------------------- ---------------------
Total investments 64,463,002 44,258,777
--------------------- ---------------------
Receivables:
Participant contributions 536,318 407,105
Employer contributions 216,015 24,114
Pending transfer 57,224 --
--------------------- ---------------------
Total receivables 809,557 431,219
--------------------- ---------------------
Total assets 65,280,121 44,695,768
--------------------- ---------------------
Liabilities:
Other -- 130,540
--------------------- ---------------------
Net assets available for benefits $ 65,280,121 $ 44,565,228
===================== =====================
See accompanying notes to financial statements.
2
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
Statement of Changes in Net Assets Available for
Benefits For the year ended March 31, 2002
Additions to net assets available for benefits:
Investment income:
Dividends and interest income $ 469,900
Net appreciation in fair value of investments (Note 4) 16,334,612
---------------------
Total investment income 16,804,512
---------------------
Contributions:
Participant 7,188,836
Employer 1,095,745
Rollovers from qualified plans 1,039,560
---------------------
Total contributions 9,324,141
---------------------
Other:
Merger of National Medical Supply Company
401(k) Savings Plan (Note 1) 68,675
---------------------
Total additions 26,197,328
Deduction from net assets available for benefits:
Benefits paid to participants 5,482,435
---------------------
Net increase 20,714,893
Net assets available for benefits:
Beginning of year 44,565,228
---------------------
End of year $ 65,280,121
=====================
See accompanying notes to financial statements.
3
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
Notes to Financial Statements
March 31, 2002 and 2001
(1) Description of Plan
The following description of the PSS World Medical, Inc. Employee Stock
Ownership and Savings Plan (the Plan) provides only general information.
Participants should refer to the summary plan document for a more
complete description of the Plan's provisions.
(a) General
The Plan is a defined contribution retirement plan covering
substantially all employees of PSS World Medical, Inc. and its
subsidiaries (the Company or employer). The Plan was created under
the provisions of Section 401(a) of the Internal Revenue Code (the
IRC) and includes a qualified deferred arrangement, as described
in Section 401(k) of the IRC, for the benefit of eligible
employees of the Company. The Plan also has the features of an
employee stock ownership plan (ESOP), whereby employee and
employer contributions can be invested in PSS World Medical, Inc.
common stock (the Company's stock). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA), as amended.
Effective August 1, 2001, or as soon as practicable thereafter,
the Plan was amended to provide for the merger of the National
Medical Supply Company 401(k) Savings Plan ($68,675 of net assets
available for benefits). The assets were transferred into the Plan
in September 2001.
(b) Plan Administration
Effective March 9, 2001, the Company amended and restated the
Plan to establish one trust for the purpose of maintaining,
managing, investing, and reinvesting the Plan's assets. Prior to
March 9, 2001, there were two separate trusts: the Primary Trust
and the Company Stock Fund Trust. J.P. Morgan Chase & Co. (the
Trustee) is the trustee for all Plan assets and Metropolitan Life
Insurance Company is the record keeper.
(c) Eligibility
Effective April 1, 2001, any employee of the Company is eligible
to participate in the Plan upon attaining age tewnty-one and
completing six months of service. Plan entry dates are the first
day of each month within the Plan year.
(d) Contributions
The Plan is funded through voluntary employee salary deferrals and
employer contributions. Participants can elect to defer up to 15%
but not less than 1% of compensation, as defined by the Plan and
as limited by requirements of the IRC. Participant elective
contributions are invested by the Trustee in the investment
options (mainly mutual funds and employer securities) as directed
by the participant. Effective April 1, 2001, the Plan was amended
to eliminate the participant's right to make elective
contributions from bonuses.
4
The Company may make the following types of contributions: (i)
supplemental ESOP matching contributions, (ii) ESOP matching
contributions, (iii) non-ESOP matching contributions, (iv) ESOP
employer contributions, and (v) qualified nonelective
contributions.
Supplemental ESOP Matching Contributions: If participants
direct their investment of their elective contributions to the
Unencumbered Company Stock Fund (participant-directed), the
Plan may use the elective contributions to make payments on
any loans outstanding if the Plan has purchased Company stock
with borrowed funds. When loan repayments are made, shares of
the Company's stock are released from a special account within
the Plan. The number of shares released is determined under
federal laws governing the administration of ESOPs. The number
of shares released is not directly related to the current fair
market value of the Company's stock. For that reason, the
Company may purchase additional shares of the Company's stock
that are at least equal to the number of shares that would be
purchased with the participant's elective contributions if the
shares were acquired at fair market value on the open market
(Supplemental ESOP Matching Contribution). Any additional
shares purchased as a result of the Supplemental ESOP Matching
Contribution are allocated only to those participants who have
directed their investment of their elective contributions to
the Unencumbered Company Stock Fund. For the plan year ended
March 31, 2002, the Company made no Supplemental ESOP Matching
Contributions.
ESOP Matching Contributions and Non-ESOP Matching
Contributions: The Company's Board of Directors may elect
annually to make a discretionary contribution in the form of
an ESOP matching contribution (contributions to remain
invested in the Company's stock) or in the form of a non-ESOP
matching contribution (contributions to be invested at the
direction of the participant). Such contributions are
allocated to participants based on the formula established by
the Board of Directors. The Board of Directors also determines
the percentage of each participant's elective contributions to
be matched as well as the maximum amount to be contributed. A
participant must have provided 1,000 hours of service and be
employed on the last day of the plan year to be eligible for
such contributions. In the event that the elective
contributions and ESOP employer contributions used to repay
any outstanding ESOP loan are less than that required to meet
the minimum loan payment, the Company shall make an ESOP
matching contribution sufficient to meet the loan repayment
requirement. The ESOP Matching Contributions for the plan year
ended March 31, 2002 were approximately $98,000.
Effective April 1, 2001, the Company began making a quarterly
Non-ESOP Matching Contribution for each eligible participant
equal to the lesser of (i) 25% of a participant's elective
deferral amount up to 4% of a participant's compensation for
the Plan year or (ii) $1,500. This Non-ESOP Matching
Contribution is subject to a seven-year vesting schedule, as
described in Note 1(e), Vesting. The Non-ESOP Matching
Contributions for the plan year ended March 31, 2002
approximated $952,000, which was net of approximately $65,000
of forfeitures.
ESOP Employer Contributions: The Company's Board of Directors
may also elect annually to make a discretionary ESOP Employer
Contribution. If the Plan has purchased common stock of the
Company with borrowed funds, the Plan may use these
contributions to make payments due on any outstanding loans.
Such contributions are allocated based on the ratio of each
eligible participant's considered compensation to the total
considered compensation of all eligible participants during
the plan year and will be allocated to participants who have
provided 1,000 hours of service and are employed on the last
day of the plan year. There were no ESOP employer
contributions for the plan year ended March 31, 2002.
5
Qualified Nonelective Contributions: The Company's board of
directors may also elect annually to make qualified
nonelective contributions. Such contributions may be allocated
to a limited number of non-highly compensated employees and
are only made to eliminate potential discrimination with
respect to participant elective contributions or employer
matching contributions that would otherwise favor highly
compensated employees. The qualified nonelective contributions
for the plan year ended March 31, 2002 approximated $46,000.
(e) Vesting
Participants are immediately vested in their elective
contributions, all post-August 1, 1999 employer contributions
except ESOP employer contributions, and the earnings thereon.
Participants are vested in the Company's discretionary ESOP
employer contributions, pre-August 1, 1999 ESOP employer
contributions, and earnings thereon based on years of continuous
service, as defined in the Plan, according to the following
schedule:
Less than three years of service 0%
Three years but less than four years 20%
Four years but less than five years 40%
Five years but less than six years 60%
Six years but less than seven years 80%
Seven years or more 100%
In the event of total and permanent disability or death, a
participant shall become 100% vested in his/her account balance.
Nonvested portions of the Company's discretionary contributions
are forfeited as of an employee's termination date and are used to
reduce future company matching contributions. At March 31, 2002,
forfeited, nonvested accounts approximated $4,200.
(f) Benefits Paid to Participants
Upon retirement, death, disability, or other severance of
employment, a participant or his/her beneficiary may elect to
receive an amount equal to the value of the participant's vested
interest in his/her account. Effective August 1, 2001, balances in
participant accounts are paid in a single lump sum.
Balances in a participant's accounts are distributed in shares of
the Company's stock (with fractional shares paid in cash) or cash
as elected by the participant with payment to the participant at
their direction. Benefits are recorded when paid.
(g) Participants' Loans
The participant loans outstanding as of March 31, 2002 and 2001
are loans that were transferred into the Plan when a separate
plan of an entity acquired by the Company through acquisition was
merged with the Plan. Participant loans are not permitted and
have not been made under the Plan.
(h) Participants' Accounts
Each participant's account is credited with his/her contributions,
his/her share of the Company's discretionary and/or required
contribution, and an allocation of plan earnings. Allocations of
earnings are based on the proportion that each participant's
account balance bears to the total of all participant account
balances as well as the participant's investment elections. The
benefit to which a participant is entitled is the vested portion
of the benefit that can be provided from the participant's
account.
6
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The accompanying financial statements have been prepared on the
accrual basis of accounting.
(b) Use of Estimates
The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of
America requires the Plan's management to use estimates and
assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from these estimates.
(c) Income Recognition
Interest income is recorded as earned on the accrual basis of
accounting. Dividend income is recorded on the ex-dividend date.
Purchases and sales of the Company's stock are recorded on a trade
date basis. Investment earnings on the Company's stock are
allocated on a daily basis to participant accounts.
(d) Investment Valuation
Investments in mutual funds are stated at fair value, which is
based on published market quotations on national exchanges.
Investment in the guaranteed interest contract is valued at
contract value, which approximates fair market value. Purchases
and sales of investments are recorded on the trade date. Money
market funds and loans are valued at cost, which approximates
fair value. The Company's common stock as of March 31, 2002 and
2001 is valued at its quoted market price as listed on the NASDAQ
national market under the ticker symbol PSSI.
Investment securities, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility
risks. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values
of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the
statements of net assets available for benefits.
(e) Net Appreciation in Fair Value of Investments
Net realized gains (losses) from the sales of investments and the
changes in the unrealized appreciation (depreciation) on
investments held are recorded in the accompanying statement of
changes in net assets available for benefits as net appreciation
in fair value of investments.
(f) Administrative Expenses
The Company paid administrative expenses of the Plan for the year
ended March 31, 2002.
(3) Escrow Shares
When the Company purchased TriStar Imaging Systems, Inc. ("TriStar"),
approximately 29,600 shares of the Company's stock were held by a
leveraged employee stock ownership plan (ESOP) sponsored by TriStar.
These shares were restricted pursuant to a security agreement established
in connection with the ESOP loan. Approximately 17,300 shares were
released pursuant to the terms of the security agreement and deposited
into the trust during the year ended March 31,2001. During the year ended
March 31, 2002, the remaining 12,300 shares were released and deposited
into the trust.
7
(4) Investments
The following presents investments that represent 5% or more of the
Plan's net assets as of March 31, 2002 and 2001
Description of Asset (Shares, respectively) 2002 2001
------------------------------------------- ---------------- ----------------
PSS World Medical, Inc. common stock:
Participant-directed (2,894,255 and 2,213,697 shares) $28,365,709 $ 9,892,568
Nonparticipant-directed (zero and 808,291 shares) -- 3,612,091
Janus Balanced Fund (631,031 and 669,813 shares) 12,443,797 13,315,890
Managers Special Equity Fund (87,004 and 85,509 shares) 6,201,593 5,680,363
Janus Fund (184,542 and 155,510 shares) 4,535,975 4,243,877
American Century Ultra Fund (153,063 and 133,878 shares) 4,186,019 3,575,903
There are no reserves for credit risk recorded against the guaranteed
interest contract (valued at $1,038 at March 31, 2002). The average
yield on this contract was 2.72% for the year ended March 31, 2002.
Interest on this contract is credited on a quarterly basis and has an
evergreen maturity.
During the year ended March 31, 2002, the Plan's investments
(including gains and losses on investments bought and sold as well as
held during the year) appreciated (depreciated) in value as follows:
Total
------------
PSS World Medical, Inc. common stock
Participant-directed $12,401,987
Nonparticipant-directed 4,075,435
Corporate common stock (2,782)
Mutual funds (140,028)
------------
Net appreciation in fair value of investments $16,334,612
============
(5) Nonparticipant-Directed Investments
Information pertaining to the significant components of the change in net
assets relating to the nonparticipant-directed investments included in
the allocated portion of the Plan's financial statements is as follows as
of March 31, 2002:
PSS World Non-
Medical, Inc. Interest
Common Bearing
Stock Cash
---------------- -------------
Net appreciation in fair value of investments $ 4,075,435 --
Distributions (605,491) --
Adjustments -- (1,790)
Interfund transfers (7,082,035) --
---------------- -------------
Decrease in net assets available for benefits $(3,612,091) (1,790)
================ =============
8
Prior to April 1, 2002, a portion of a participant's account balance
could have been invested in a nonparticipant-directed company stock fund
at the direction of the Trustee. Effective April 1, 2002, participants
are entitled to direct investment of all of their account balances under
the Plan. Therefore, on March 31, 2002, the nonparticipant-directed
company stock fund was transferred to the participant-directed company
stock fund and all of the Plan's investment options became participant
directed.
(6) Tax Status
On April 9, 2001, the Plan, as amended, received a favorable
determination letter from the Internal Revenue Service. Although the Plan
has been amended and restated since receiving this letter, the plan
administrator believes that the Plan, as amended and restated, is
designed and being operated in compliance with the applicable
requirements of the IRC. Therefore, the plan administrator believes that
the Plan is qualified and the related trust continues to be tax-exempt.
(7) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become fully vested in their account
balances.
(8) Related Party Transactions
The Plan owns 2,894,255 shares of the Company's common stock at March 31,
2002, which represents approximately 4.1% of the outstanding common stock
of the Company at that date.
Receivables at March 31, 2002 include a pending inter-fund transfer of
$57,224 due from the Trustee.
Other liabilities at March 31, 2001 consist of $20,281, which is payable
to another defined contribution plan sponsored by the Company. The
remaining $110,259 represents a payable due to the Trustee for a pending
trade at March 31, 2001.
(9) Reconciliation to Form 5500
As of March 31, 2002, there were no pending distributions to participants
who elected distributions from the Plan.
As of March 31, 2001, the Plan had $15,014 of pending distributions to
participants who elected distributions from the Plan. These amounts were
recorded as a liability in the Plan's Form 5500; however, these amounts
were not recorded as a liability in the accompanying statements of net
assets available for benefits in accordance with accounting principles
generally accepted in the United States of America.
9
The following table reconciles benefits paid to partipants between the
financial statements and Form 5500 as filed by the Company for the
year ended March 31, 2002:
Benefits
Paid
-------------
Per financial statements $5,482,435
2002 amounts pending distribution
to participants (15,014)
-------------
Per Form 5500 $5,467,421
=============
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 March 31, 2001:
Benefits Net Assets
Payable to Benefits Available
Participant Paid for Benefits
----------- ----------- ------------
Per financial statements $ -- $2,709,308 $44,565,228
2001 amounts pending distribution
to participants 15,014 15,014 (15,014)
----------- ----------- ------------
Per Form 5500 $ 15,014 2,724,322 44,550,214
=========== =========== ============
(10) Subsequent Events
Effective April 1, 2002, the vested interest in the Company's
contributions and non-ESOP matching contributions shall be calculated on
a six year vesting schedule.
Certain plan amendments were effective on August 1, 2002. The following
items summarize those amendments:
o The record keeping and trustee responsibilities were transferred from
Metropolitan Life Insurance Company and J.P. Morgan Chase & Co. to
ABN-AMRO Trust Services Company,
o Any employee of the Company, upon completion of ninety days of
service, is eligible to participate in the Plan. Plan entry dates are
the first day of each month within the Plan year, and
o Participants are permitted to make elective contributions from
bonuses.
10
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets Held at End of Year
March 31, 2002
Identity of Party Involved Description of Investment Current
value
-------------------------------------------- ------------------------------------------------------ ---------------
* PSS World Medical, Inc. PSS World Medical, Inc. common stock, 2,894,255 $28,365,709
shares
Janus Capital Corporation Janus Balanced Fund, 631,031 units 12,443,797
Janus Fund, 184,542 units 4,535,975
Janus Worldwide Fund, 36,150 units 1,570,686
The Managers Fund Managers Special Equity Fund, 87,004 units 6,201,593
American Century Investment Management American Century Ultra Fund, 153,063 units 4,186,019
Reich & Tang Group Reich & Tang Fund, 2,801,622 units 2,801,622
Pacific Investment Management Company PIMCO Total Return Fund, 193,403 units 2,013,268
Harris Associates Oakmark Fund, 48,978 units 1,793,282
* Metropolitan Life Insurance Company Metlife Stock Market Index Guaranteed Fund, 2,328 539,879
units
* Metropolitan Life Insurance Company Guaranteed Interest Contract, 1.52% interest rate,
evergreen maturity 1,038
Participant Loans Loans to participants with interest rates ranging
from 8.25% to 8.5% 10,134
---------------
$64,463,002
===============
* Party in Interest
11
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, PSS
World Medical, Inc. (the Plan administrator for the PSS World Medical, Inc.
Employee Stock Ownership and Savings Plan) has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Jacksonville, State of Florida, on September 9, 2002.
PSS WORLD MEDICAL, INC
By: /s/ David M. Bronson
-----------------------------------
David M. Bronson,
Senior Vice President and Chief
Financial Officer (Duly Authorized
Officer and Principal Financial and
Accounting Officer)
12
PSS WORLD MEDICAL, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
EXHIBIT INDEX
Exhibit Number
23 Independent Auditors' Consent
99 Report of Independent Certified Public Accountants for the Plan
year ended March 31, 2001
13
Exhibit 23
Independent Auditors' Consent
To the Plan Administrator of the
PSS World Medical, Inc. Employee Stock
Ownership and Savings Plan:
We consent to incorporation by reference in the registration statement (No.
33-80657) on Form S-8 of PSS World Medical, Inc. of our report dated August 1,
2002 relating to the financial statements and supplemental schedule of PSS World
Medical, Inc. Employee Stock Ownership and Savings Plan as of March 31, 2002 and
for the year then ended, which report appears in the March 31, 2002 annual
report on Form 11-K of PSS World Medical, Inc. Employee Stock Ownership and
Savings Plan.
/s/ KPMG LLP
Jacksonville, Florida
September 9, 2002
Exhibit 99
In July 2002, the Plan dismissed Arthur Andersen LLP and engaged KPMG LLP to
audit the Plan's financial statements for the year ended March 31, 2002. The
Plan has not been able to obtain Arthur Andersen LLP's consent to incorporate by
reference the audited financial statements for the year ended March 31, 2001
into the Plan's existing registration statement. Because the Plan has not been
able to obtain such consent, recovery of damages by investors in the Plan's
common stock sold pursuant to the registration statement may be limited.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of the
PSS World Medical, Inc. Employee Stock
Ownership and Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the PSS WORLD MEDICAL, INC. EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN as of
March 31, 2001 and 2000 and the related statement of changes in net assets
available for benefits for the year ended March 31, 2001. These financial
statements and the schedule referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 PSS World
Medical, Inc. Employee Stock Ownership and Savings Plan as of March 31, 2001 and
2000 and the changes in its net assets available for benefits for the year ended
March 31, 2001 in conformity with accounting principles generally accepted in
the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of assets (held at end of
year) as of March 31, 2001 is presented for purposes of additional analysis and
is not a required part of the basic financial statements but is 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 schedule has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
As explained in the notes thereto, information provided by the Trustee and
presented in the schedule of assets (held at end of year) does not disclose the
historical cost of certain investments. 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
August 16, 2001