1 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 [FEE REQUIRED] for the fiscal year ended May 31, 1996. 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 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 7800 BELFORT PARKWAY, SUITE 250 JACKSONVILLE, FLORIDA 32256 (904) 281-0011 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: PHYSICIAN SALES & SERVICE, INC. 7800 BELFORT PARKWAY, SUITE 250 JACKSONVILLE, FLORIDA 32256 (904) 281-0011 2 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, With Fund Information - -- May 31, 1996 and 1995. 2. Statement of Changes in Net Assets Available for Benefits, With Fund Information for the Year Ended May 31, 1996. 3 TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST FINANCIAL STATEMENTS AND SCHEDULES MAY 31, 1996 AND 1995 TABLE OF CONTENTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits, With Fund Information--May 31, 1996 and 1995 Statement of Changes in Net Assets Available for Benefits, With Fund Information, for the Year Ended May 31, 1996 NOTES TO FINANCIAL STATEMENTS AND SCHEDULES SCHEDULES SUPPORTING FINANCIAL STATEMENTS Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes --May 31, 1996 Schedule II: Item 27b--Schedule of Loans or Fixed Income Obligations-- May 31, 1996 Schedule III: Item 27d--Schedule of Reportable Transactions for the Year Ended May 31, 1996 4 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrative Committee of the Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust In our opinion, the accompanying statement of net assets available for benefits presents fairly, in all material respects, the net assets available for benefits of the Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust at May 31, 1995 in conformity with generally accepted accounting principles. This financial statement is the responsibility of the Plan's management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with generally accepted auditing standard which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Houston, Texas October 3, 1995 5 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Plan Administrator of the Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust: We have audited the accompanying statement of net assets available for benefits, with fund information, of TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST as of May 31, 1996 and the related statement of changes in net assets available for benefits, with fund information, for the year then ended. 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 audit. The statement of net assets of Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust as of May 31, 1995 was audited by other auditors whose report dated October 3, 1995 expressed an unqualified opinion on that statement. We conducted our audit 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 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 Plan as of May 31, 1996 and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes, loans or fixed income obligations, 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 6 -2- Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The schedules of assets held for investment purposes and reportable transactions do not disclose the historical cost of certain plan assets held by the plan custodians. Disclosure of this information is required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ Arthur Andersen LLP Jacksonville, Florida October 22, 1996 7 TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION MAY 31, 1996 PARTICIPANT-DIRECTED ----------------------------------------------------------------------------- AMERICAN FUNDS GROUP ----------------------------------------------------------------------------- WASHINGTON CASH BOND GROWTH MUTUAL INCOME MANAGEMENT SMALLCAP FUND FUND OF INVESTORS FUND OF TRUST OF WORLD OF AMERICA FUND AMERICA AMERICA FUND AMERICA ----------- ------------ ----------- ------------ ---------- ------- INVESTMENTS, AT FAIR VALUE $857,240 $1,169,737 $477,997 $52,045 $173,370 $24,245 EMPLOYEE CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 EXCESS CONTRIBUTIONS PAYABLE 0 0 0 0 0 0 -------- ---------- -------- ------- -------- ------- NET ASSETS AVAILABLE FOR BENEFITS $857,240 $1,169,737 $477,997 $52,045 $173,370 $24,245 ======== ========== ======== ======= ======== ======= PARTICIPANT-DIRECTED ------------------------------------------------------------------------------------- LINCOLN NATIONAL LIFE INSURANCE COMPANY ---------------------------------------------------------- GOVERNMENT AND MEDIUM CORE CORPORATE CAPITALIZATION PARTICIPANT GUARANTEED EQUITY BONDS EQUITY BALANCED LOANS TOTAL ------------- -------- ------------ ---------------- -------- ------------- --------- (Note 1 and Schedule II) INVESTMENTS, AT FAIR VALUE $320,321 $93,649 $694 $163,103 $33,546 $63,523 $3,429,470 EMPLOYEE CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 0 EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 0 EXCESS CONTRIBUTIONS PAYABLE 0 0 0 0 0 0 0 -------- ------- ---- -------- ------- ------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $320,321 $93,649 $694 $163,103 $33,546 $63,523 $3,429,470 ======== ======= ==== ======== ======= ======= ========== The accompanying notes are an integral part of this statement. 8 TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION MAY 31, 1995 PARTICIPANT-DIRECTED -------------------------------------------------------------- AMERICAN FUNDS GROUP -------------------------------------------------------------- WASHINGTON CASH BOND GROWTH MUTUAL INCOME MANAGEMENT SMALLCAP FUND FUND OF INVESTORS FUND OF TRUST OF WORLD OF AMERICA FUND AMERICA AMERICA FUND AMERICA --------- ---------- ---------- ---------- --------- -------- INVESTMENTS, AT FAIR VALUE $730,882 $1,086,924 $449,925 $54,381 $118,663 $19,157 EMPLOYEE CONTRIBUTIONS RECEIVABLE 14,748 17,504 8,921 1,320 5,457 1,217 EMPLOYER CONTRIBUTIONS RECEIVABLE 4,019 8,917 2,378 1,814 2,345 712 EXCESS CONTRIBUTIONS PAYABLE (204) 0 0 0 (205) 0 -------- ---------- -------- ------- -------- ------- NET ASSETS AVAILABLE FOR BENEFITS $749,445 $1,113,345 $461,224 $57,515 $126,260 $21,086 ======== ========== ======== ======= ======== ======= PARTICIPANT-DIRECTED ------------------------------------------------------------------------------------- LINCOLN NATIONAL LIFE INSURANCE COMPANY ----------------------------------------------------------- GOVERNMENT AND MEDIUM CORE CORPORATE CAPITALIZATION PARTICIPANT GUARANTEED EQUITY BONDS EQUITY BALANCED LOANS TOTAL ------------- ------- ---------- -------------- --------- ------------ --------- (Note 1 and Schedule II) INVESTMENTS, AT FAIR VALUE $333,717 $72,507 $677 $116,547 $28,774 $68,418 $3,080,572 EMPLOYEE CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 49,167 EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 0 0 0 20,185 EXCESS CONTRIBUTIONS PAYABLE 0 0 0 0 0 0 (409) -------- ------- ---- -------- ------- ------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $333,717 $72,507 $677 $116,547 $28,774 $68,418 $3,149,515 ======== ======= ==== ======== ======= ======= ========== The accompanying notes are an integral part of this statement. 9 TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION, FOR THE YEAR ENDED MAY 31, 1996 PARTICIPANT-DIRECTED ------------------------------------------------------------------ AMERICAN FUNDS GROUP ------------------------------------------------------------------ WASHINGTON CASH BOND GROWTH MUTUAL INCOME MANAGEMENT SMALLCAP FUND FUND OF INVESTORS FUND OF TRUST OF WORLD OF AMERICA FUND AMERICA AMERICA FUND AMERICA ------ ---------- ------- --------- -------- -------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Net appreciation (depreciation) in fair value of investments $151,515 $ 265,712 $ 57,958 $ 0 $ 43,683 $ (205) Investment income 7,485 35,270 26,440 2,322 1,387 1,716 Contributions: Participant (including rollover) 31,592 37,301 19,936 3,167 10,679 2,213 -------- ---------- -------- ------- -------- ------- Total additions 190,592 338,283 104,334 5,489 55,749 3,724 -------- ---------- -------- ------- -------- ------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefits paid to participants 82,877 244,181 128,963 10,748 9,132 947 Administrative expenses 1,708 2,394 1,052 120 277 42 Interfund transfers (1,788) 35,316 (42,454) 91 (770) (424) -------- ---------- -------- ------- -------- ------- Total deductions 82,797 281,891 87,561 10,959 8,639 565 -------- ---------- -------- ------- -------- ------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 749,445 1,113,345 461,224 57,515 126,260 21,086 -------- ---------- -------- ------- -------- ------- End of year $857,240 $1,169,737 $477,997 $52,045 $173,370 $24,245 ======== ========== ======== ======= ======== ======= PARTICIPANT DIRECTED ----------------------------------------------------------------------------- LINCOLN NATIONAL LIFE INSURANCE COMPANY --------------------------------------------------------- GOVERNMENT AND MEDIUM CORE CORPORATE CAPITALIZATION PARTICIPANT GUARANTEEED EQUITY BONDS EQUITY BALANCED LOANS TOTAL ----------- ------ --------- -------------- -------- ----------- ----- (Note 1 and) Schedule II ADDITIONS TO NET ASSETS ATTRIBUTED TO: Net appreciation (depreciation) in fair value of investments $ 0 $22,149 $ 25 $ 48,207 $ 5,136 $ 0 $ 594,180 Investment income 21,366 0 0 0 0 1,734 97,720 Contributions: Participant (including rollover) 0 0 0 0 0 0 104,888 -------- ------- ---- -------- ------- ------- ---------- Total additions 21,366 22,149 25 48,207 5,136 1,734 796,788 -------- ------- ---- -------- ------- ------- ---------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Benefits paid to participants 27,832 0 0 0 0 0 504,680 Administrative expenses 3,530 1,007 8 1,651 364 0 12,153 Interfund transfers 3,400 0 0 0 0 6,629 0 -------- ------- ---- -------- ------- ------- ---------- Total deductions 34,762 1,007 8 1,651 364 6,629 516,833 -------- ------- ---- -------- ------- ------- ---------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 333,717 72,507 677 116,547 28,774 68,418 3,149,515 -------- ------- ---- -------- ------- ------- ---------- End of year $320,321 $93,649 $694 $163,103 $33,546 $63,523 $3,429,470 ======== ======= ==== ======== ======= ======= ========== 10 TAYLOR MEDICAL, INC. PROFIT SHARING 401(k) PLAN AND TRUST NOTES TO FINANCIAL STATEMENTS AND SCHEDULES MAY 31, 1996 AND 1995 1. DESCRIPTION OF PLAN The following description of the Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust (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. (the "Company") to establish a savings and investment plan for the exclusive benefit of the Company's 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. The Plan is administered by the Company, and the American Funds Group and Lincoln National Life Insurance Company serve as the Plan's custodians. Disclosure of historical cost information with regard to the Plan's investments is required to be presented in the schedules of assets held for investment purposes and reportable transactions (Schedules I and II) in accordance with the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Due to the record-keeping system maintained by the custodians, this information cannot be provided. On July 1, 1993, Taylor Medical, Inc. acquired Attention Medical Company. The assets of the Attention Medical Company 401(k) Plan (the "Attention Plan"), which approximated $719,000 at the acquisition date, were combined with the assets of the Plan. The Attention Plan assets are invested in six funds under contract with Lincoln National Life Insurance Co. It is the Company's intention to leave the Attention Plan's assets invested in the Lincoln National Life Insurance Co. funds unless individual participants elect to transfer their investments to the American Funds Group. All contributions made subsequent to the acquisition date were invested in funds in the American Funds Group. In August 1995, the Company merged with Physician Sales & Services, Inc. ("PSS"). Contributions to the Plan were suspended effective for payroll periods commencing after August 20, 1995. The Plan was also amended to provide for fully vested account balances effective August 20, 1995 and to provide for the termination of the loan program. In addition, effective for the plan year commencing on June 1, 1996, the Plan's year-end will change from May 31 to December 31. 11 -2- CONTRIBUTIONS Prior to the suspension of contributions, participants could elect to make pretax contributions ranging from 1% to 15% of their annual compensation, excluding certain commissions, with a minimum monthly contribution of $25. PARTICIPANT ACCOUNTS Individual accounts are maintained for each of the Plan's participants to reflect the participant's share of the Plan's income and the participant's contribution. Allocations are based on participant account balances, as defined. VESTING Participants are fully vested at all times with respect to their pretax contributions plus earnings thereon. Effective August 20, 1995, participants became fully vested in all employer contributions. INVESTMENT OPTIONS Contributions made to the Plan are invested in funds with the American Funds Group only. Participants may no longer invest funds with Lincoln Life Insurance Company but may transfer their accounts to the American Funds Group. A description of each investment option available through the American Funds Group is provided below: GROWTH FUND OF AMERICA Funds are invested in a diversified portfolio consisting primarily of common stocks. Assets may also be held in securities convertible into common stocks, cash or cash equivalents, straight debt securities, or nonconvertible preferred stock. The objective of this fund is growth of capital. WASHINGTON MUTUAL INVESTORS FUND Funds are invested in high-quality common stocks and securities converted into common stocks. The objective of this fund is to produce income and to provide an opportunity for growth of principal consistent with sound common stock investing. INCOME FUND OF AMERICA Funds may be invested in common and preferred stocks, straight debt securities, debt securities with equity conversion or purchase rights, and cash and cash equivalents. The fund may also invest in various mortgage-related securities. The objective of this fund is to emphasize current income while secondarily striving to attain capital growth. 12 -3- CASH MANAGEMENT TRUST OF AMERICA Funds are invested in a high-quality portfolio of money market instruments, which may include commercial paper, commercial bank obligations, savings association obligations, corporate bonds and notes, and securities of the U.S. government, its agencies, or instrumentalities. The objective of this fund is to provide investors with a way to earn income on their cash reserves, while preserving capital and maintaining liquidity. SMALLCAP WORLD FUND Funds are invested primarily in equity securities of companies with relatively small market capitalizations. The objective of this fund is to provide long-term growth of capital. BOND FUND OF AMERICA Funds are invested in marketable corporate debt securities, U.S. government securities, mortgage-related securities, other asset-backed securities, and cash or money market instruments. The objective of this fund is to provide as high a level of current income as is consistent with the preservation of capital. Investment objectives may not be 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. LOANS TO PARTICIPANTS Prior to August 20, 1995, a participant was permitted to borrow the lesser of $50,000 or 50% of the vested interest in the participant's account on the valuation date coinciding with or immediately preceding such loan. All loans are secured by the vested interest remaining in the participant's account. Interest rates are based on prevailing market conditions at the time of origination. Interest payments on loans are allocated to individual participant account balances. Subsequent to August 31, 1995, during the transition in connection with the acquisition of Taylor by PSS, certain participant loan payments were erroneously not collected through automatic payroll deduction and, as a result, the loans were delinquent at May 31, 1996. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECLASSIFICATIONS Certain 1995 amounts have been reclassified to conform to the 1996 presentation. 13 -4- 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 estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments, other than investments in guaranteed investment contracts and participant loans, are stated at fair value, as determined by quoted market prices. The Plan's investment contract is fully benefit-responsive and is stated at contract value, which approximates fair value. Loans to participants are valued at cost, which approximates fair value. Investment income is recorded when earned. The net appreciation/depreciation in fair value of investments includes the gain or loss on investments bought and sold during the year as well as the change in fair value. On September 23, 1994, the American Institute of Certified Public Accountants issued Statement of Position ("SOP") 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans," which requires certain disclosures for investment contracts that are fully benefit-responsive. This SOP is effective for financial statements for plan years beginning after December 15, 1995 if investment contracts were entered into before December 31, 1993. Thus, since the Plan's investment contract was entered into prior to December 31, 1993, the Plan will adopt SOP 94-4 for the year ending December 31, 1996. The plan administrator does not expect the adoption of this SOP to have a material impact on the Plan's financial statements. 3. INVESTMENTS The Plan's investments are held by the American Funds Group and Lincoln National Life Insurance Company. The fair values of individual assets that represent 5% or more of the Plan's net assets as of May 31, 1996 and 1995 are as follows: 1996 1995 ---------- ---------- American Funds Group: Washington Mutual Investors Fund $1,169,737 $1,113,345 Growth Fund of America 857,240 749,445 Income Fund of America 477,997 461,224 SMALLCAP World Fund 173,370 126,260 Lincoln National Life Insurance Company: Guaranteed Account 320,321 333,717 14 -5- 4. TAX STATUS Although the Plan has received a favorable determination letter from the Internal Revenue Service dated April 10, 1996, it has not been updated for the latest plan amendments. However, the plan administrator believes that the Plan, as amended, is designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, the plan administrator believes that the Plan is qualified and the related trust continues to be tax-exempt. 5. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. 6. SUBSEQUENT EVENTS ON OCTOBER 1, 1996, THE PLAN WAS AMENDED AND RENAMED AS THE PSS/TAYLOR MEDICAL PROFIT SHARING 401(K) PLAN, AND THE PLAN ADMINISTRATOR WAS CHANGED TO PHYSICIAN SALES & SERVICE, INC. 15 SCHEDULE I TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES MAY 31, 1996 CURRENT IDENTITY OF PARTY INVOLVED DESCRIPTION OF INVESTMENT COST VALUE --------------------------------------- -------------------------------------------- ---- --------- * AMERICAN FUNDS GROUP Growth Fund of America (a) $ 857,240 * AMERICAN FUNDS GROUP Washington Mutual Investors Fund (a) 1,169,737 * AMERICAN FUNDS GROUP Income Fund of America (a) 477,997 * AMERICAN FUNDS GROUP Cash Management Trust of America (a) 52,045 * AMERICAN FUNDS GROUP SMALLCAP World Fund (a) 173,370 * AMERICAN FUNDS GROUP Bond Fund of America (a) 24,245 * LINCOLN NATIONAL LIFE INSURANCE COMPANY Guaranteed Fixed Account (a) 320,321 * LINCOLN NATIONAL LIFE INSURANCE COMPANY Core Equity Account (a) 93,649 * LINCOLN NATIONAL LIFE INSURANCE COMPANY Government and corporate bonds (a) 694 * LINCOLN NATIONAL LIFE INSURANCE COMPANY Medium Capitalization Equity Account (a) 163,103 * LINCOLN NATIONAL LIFE INSURANCE COMPANY Balanced Account (a) 33,546 * VARIOUS PLAN PARTICIPANTS Loans, interest rates ranging from 6% to 12% $63,523 63,523 *Represents a party in interest. (a) Historical cost information has been requested from the custodians; however, due to their record-keeping systems, cost information cannot be made available. The accompanying notes are an integral part of this schedule. 16 SCHEDULE II TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST ITEM 27B--SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS MAY 31, 1996 ORIGINAL AMOUNT RECEIVED UNPAID AMOUNT DURING YEAR BALANCE AMOUNT OVERDUE OF ----------------------- AT END TERM OF FIRST INTEREST --------------------- NAME LOAN PRINCIPAL INTEREST OF YEAR LOAN PAYMENT RATE PRINCIPAL INTEREST - ------------------------- ----------- ----------- ----------- ----------- ---------- --------- --------- ------------ --------- * CARMAN, DEANNA P. $ 2,000.00 $ 0.00 $ 0.00 $ 1,155.41 4 years 08/28/92 6.000% $ 1,155.41 $ 51.99 * CASH, VICKI S. 2,000.00 127.75 28.27 1,443.10 5 years 02/11/94 7.000 1,443.10 75.76 * DRIVER, STEPHEN D. 1,228.54 78.47 16.19 823.39 5 years 11/05/93 7.000 823.39 43.23 * DRIVER, VEMA M. 2,915.74 188.20 38.43 1,954.45 5 years 11/05/93 7.000 1,954.45 102.61 * EARLS, BETTY L. 4,099.34 242.55 29.75 1,444.24 5 years 06/05/92 7.500 1,444.24 81.24 * EARLS, RICHARD A. 10,000.00 601.08 73.72 3,579.12 6 years 06/15/92 7.500 3,579.12 201.33 * HAWKINS, DANA L 1,100.00 162.26 24.15 903.72 18 months 04/21/95 9.125 903.72 61.85 * MCCARTHY, KEVIN J. 20,000.00 1,132.14 203.48 10,309.21 5 years 03/01/92 7.500 10,309.21 579.89 * PETROSS, STANLEY M. 3,000.00 280.98 38.67 1,833.92 3 years 06/15/94 7.750 1,833.92 106.80 * PLACETTE, SHEILA R. 1,000.00 81.06 22.26 835.88 4 years 11/18/94 9.500 835.88 59.56 * ROBERTS, TAMMY R. 1,300.00 300.65 17.89 586.30 15 months 12/30/94 8.875 586.30 39.03 * SHROUT, DANIEL E. 4,000.00 237.60 53.65 2,942.94 5 years 03/15/94 7.000 2,942.94 154.50 * STANLEY, DAVID JON 21,550.00 1,137.54 210.53 9,983.44 5 years 02/01/93 8.000 9,983.44 599.01 * STANLEY, EVAN R. 14,000.00 840.54 142.40 7,186.15 5 years 02/01/93 7.500 7,186.15 404.22 * WALLACE, JESSE, JR. 1,000.00 146.93 14.96 560.25 2 years 10/07/94 8.750 560.25 36.77 * WILLIAMS, DANNY D. 3,400.00 0.00 0.00 3,400.00 5 years 10/15/95 9.750 3,400.00 248.63 ---------- --------- ------- ---------- ---------- -------- $92,593.62 $5,557.75 $914.35 $48,941.52 $48,941.52 2,846.42 ========== ========= ======= ========== ========== ======== *Represents a party in interest. The accompanying notes are an integral part of this schedule. 17 SCHEDULE III TAYLOR MEDICAL, INC. PROFIT SHARING 401(K) PLAN AND TRUST ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (A) FOR THE YEAR ENDED MAY 31, 1996 COST NET IDENTITY OF ISSUER, BORROWER, SELLING OF GAIN OR SIMILAR PARTY DESCRIPTION OF INVESTMENT PRICE ASSETS (LOSS) -------------------------------- --------------------------------- --------- ------- ------- * AMERICAN FUNDS GROUP Washington Mutual Investors Fund $246,575 (b) (b) *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 June 1, 1995. (b) Historical cost information has been requested from the custodians; however, due to their record-keeping systems, cost information cannot be made available. The accompanying notes are an integral part of this schedule. 18 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 Jacksonville, State of Florida, on October 29, 1996. PSS/TAYLOR MEDICAL PROFIT SHARING 401(K) PLAN By: /s/ Patrick C. Kelly ----------------------------- Patrick C. Kelly, Trustee By: /s/ David A. Smith ----------------------------- David A. Smith, Trustee 19 ARTHUR ANDERSEN LLP CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS As independent certified public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-8 pertaining to the PSS/Taylor Medical Profit Sharing 401(k) Plan (the "Plan") of our report dated October 22, 1996, with respect to the financial statements and schedule of the Plan, included in the Plan's Annual Report (Form 11-K) for the fiscal year ended May 31, 1996. ARTHUR ANDERSEN LLP Jacksonville, Florida October 28, 1996 20 CONSENT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of Taylor Medical, Inc. We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 of Physician Sales & Service, Inc. of our report dated October 3, 1995 on the net assets available for benefits of Taylor Medical, Inc. Profit Sharing 401(k) Plan and Trust appearing on page 2 in the Form 11-K. PRICE WATERHOUSE LLP Houston, Texas October 23, 1996