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PSS World Medical Inc. Reports Operating Results (10-Q)

February 08, 2012 | About:
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10qk

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PSS World Medical Inc. (PSSI) filed Quarterly Report for the period ended 2011-12-30.

Pss World Medical Inc. has a market cap of $1.32 billion; its shares were traded at around $24.85 with a P/E ratio of 18.2 and P/S ratio of 0.7. Pss World Medical Inc. had an annual average earning growth of 24.1% over the past 10 years.

Highlight of Business Operations:

Net sales during the three and nine months ended December 30, 2011 decreased $4.3 million and $16.4 million, respectively, when compared to the same period in the prior fiscal year. Net sales in the nursing home and assisted living facilities and the hospice and home health care customer categories were negatively impacted by the loss of several regional and national chain customers. Net sales in the nursing home and assisted living facilities customer category improved 1.1% during the three months ended December 30, 2011 due to recent acquisitions.

The net sales decline in the other sales category for the three months ended December 30, 2011 reflects a decline in net sales of $0.3 million attributable to the companys non-controlling interest in Pathway, a consulting service provider within the extended care market, which is consolidated by the Company as a variable interest entity. Net sales growth in the other sales category for the nine months ended December 30, 2011 was due to an increase in net sales of $1.9 million attributable to Pathway. See Footnote 3, Variable Interest Entity, for additional information.

Gross profit dollars for the Physician Business increased $13.7 million and gross margin increased 180 basis points during the three months ended December 30, 2011, when compared to the same period in the prior fiscal year. Gross profit dollars increased $39.1 million and gross margin increased 78 basis points during the nine months ended December 30, 2011, when compared to the same period in the prior fiscal year. The increase in gross profit dollars and gross margin was a result of growth in the Companys store brand products and acquisitions in the physician dispensing solutions product category, which generally have higher gross margins than the Companys other product categories.

General and administrative expenses increased $7.4 million during the three months ended December 30, 2011, when compared to the same period in the prior fiscal year. This increase was attributable to (i) an increase in payroll and payroll related expenses of $3.8 million, $2.7 million of which was the result of physician dispensing solutions acquisitions; (ii) an increase in cost to deliver of $1.3 million due to an increase in warehouse expense related to the growth in net sales during the period, and additional expenses from physician dispensing solutions acquisitions; and (iii) an increase in depreciation and amortization expense of $1.1 million due to the addition of property and equipment and intangible assets related to acquisitions.

General and administrative expenses increased $23.4 million during the nine months ended December 30, 2011, when compared to the same period in the prior fiscal year. This increase was attributable to (i) an increase in payroll and payroll related expenses of $11.0 million, $9.0 million of which was the result of physician dispensing solutions acquisitions; (ii) an increase in cost to deliver of $4.1 million due to an increase in warehouse expense related to the growth in net sales during the period, and additional expenses from physician dispensing solutions acquisitions; (iii) an increase in depreciation and amortization expense of $3.7 million due to the addition of property and equipment and intangible assets related to acquisitions; (iv) an increase in consulting fees of $1.5 million related to acquired companies; and (v) an increase in accrued incentive compensation expense of $0.7 million.

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