PSS World Medical Inc. (PSSI, Financial) filed Quarterly Report for the period ended 2009-01-02.
PSS World Medical Inc. is a specialty marketer and distributor of medical products to physicians alternate-site imaging centers long-term care providers home care providers and hospitals. They have become a leader in three of the market segments it serves with a focused market specific approach to customer service a consultative sales force strategic acquisitions strong arrangements with product manufacturers innovative systems and a unique culture of performance. PSS World Medical Inc. has a market cap of $960.88 million; its shares were traded at around $15.97 with a P/E ratio of 15.5 and P/S ratio of 0.52. PSS World Medical Inc. had an annual average earning growth of 18.3% over the past 5 years.
During the nine months ended January 2, 2009, the Company issued $230.0 million principal amount of 3.125% convertible senior notes. The Company used a portion of the net proceeds of the offering to repurchase approximately $35.0 million of its common stock in privately negotiated transactions with institutional investors concurrent with this offering. The Company also entered into convertible note hedge transactions with the initial purchaser and/or its affiliates and, separately, sold warrants to the initial purchaser and/or its affiliates. The Company used a portion of the net proceeds of the offering, and of the warrants it sold, to pay the costs of its hedge transactions. The Company anticipates using up to $150.0 million of the net proceeds on or before March 15, 2024, when holders of the notes have the option to require the Company to redeem all or part of the outstanding 2.25% notes. Remaining proceeds will be used for general corporate purposes. See Footnote 3, Debt, for additional information.
Gross profit for the Physician and Elder Care Businesses increased $13.2 million and $6.7 million, respectively, from the same quarter in the prior year and $30.0 million and $15.7 million on a year to date basis. These increases were primarily due to the growth in net sales discussed above, as well as the Companys continued focus on its sourcing strategies and margin enhancement initiatives. The Companys sourcing strategies are designed to improve the Physician and Elder Care Business cost competitiveness and increase its gross margins on certain products.
General and administrative expenses increased during the nine months ended January 2, 2009, when compared to the same period in the prior year. This increase was primarily attributable to (i) an increase of $3.8 million in bonus expense for the year related to a combination of new incentive compensation plans introduced during fiscal year 2009 and operating performance; (ii) an increase of $3.3 million in payroll related charges; (iii) an increase of $1.3 million due to additional National Meeting expenses; and (iv) an increase of $1.0 million for relocation expenses due to the Companys realignment of its organizational structure from four regions to six regions. Partially offsetting these increases are $1.3 million of costs incurred during the nine months ended December 28, 2007 related to the Companys national launch of its Select and healthcare information technology marketing programs.
General and administrative expenses for the three months ended January 2, 2009 increased $2.9 million when compared to the same period in the prior year. This increase is primarily attributable to an increase of $1.3 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009 and a $0.8 million increase in payroll related costs due to an increase in full-time employees and merit increases.
General and administrative expenses for the nine months ended January 2, 2009 increased $10.8 million when compared to the same period in the prior year. This increase is primarily attributable to (i) an increase of $7.0 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009, an increase in payout estimates based on managements quarterly review of performance achievement and the reversal of $3.2 million in the first nine months of the prior year; (ii) a $3.0 million increase in payroll related costs due to an increase in full-time employees and merit increases; (iii) a $1.9 million increase in stock compensation expense related to new long-term incentive plans introduced during fiscal year 2008; and (iv) $1.8 million related to increases in medical insurance costs. Partially offsetting these increases is a $4.3 million decrease in settlement and legal costs related to the Florida Department of Healths inspection of the Companys operations for compliance with State Pedigree laws in fiscal year 2008.
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PSS World Medical Inc. is a specialty marketer and distributor of medical products to physicians alternate-site imaging centers long-term care providers home care providers and hospitals. They have become a leader in three of the market segments it serves with a focused market specific approach to customer service a consultative sales force strategic acquisitions strong arrangements with product manufacturers innovative systems and a unique culture of performance. PSS World Medical Inc. has a market cap of $960.88 million; its shares were traded at around $15.97 with a P/E ratio of 15.5 and P/S ratio of 0.52. PSS World Medical Inc. had an annual average earning growth of 18.3% over the past 5 years.
Highlight of Business Operations:
Income from operations of $31.8 million during the third quarter of fiscal year 2009 increased 31.7% or $7.7 million compared with the same period in prior year and increased 17.8% or $11.2 million to $74.3 million for the nine months ended January 2, 2009 compared to the prior year period. This was primarily the result of the net sales growth discussed above offset by increases in general and administrative expenses.During the nine months ended January 2, 2009, the Company issued $230.0 million principal amount of 3.125% convertible senior notes. The Company used a portion of the net proceeds of the offering to repurchase approximately $35.0 million of its common stock in privately negotiated transactions with institutional investors concurrent with this offering. The Company also entered into convertible note hedge transactions with the initial purchaser and/or its affiliates and, separately, sold warrants to the initial purchaser and/or its affiliates. The Company used a portion of the net proceeds of the offering, and of the warrants it sold, to pay the costs of its hedge transactions. The Company anticipates using up to $150.0 million of the net proceeds on or before March 15, 2024, when holders of the notes have the option to require the Company to redeem all or part of the outstanding 2.25% notes. Remaining proceeds will be used for general corporate purposes. See Footnote 3, Debt, for additional information.
Gross profit for the Physician and Elder Care Businesses increased $13.2 million and $6.7 million, respectively, from the same quarter in the prior year and $30.0 million and $15.7 million on a year to date basis. These increases were primarily due to the growth in net sales discussed above, as well as the Companys continued focus on its sourcing strategies and margin enhancement initiatives. The Companys sourcing strategies are designed to improve the Physician and Elder Care Business cost competitiveness and increase its gross margins on certain products.
General and administrative expenses increased during the nine months ended January 2, 2009, when compared to the same period in the prior year. This increase was primarily attributable to (i) an increase of $3.8 million in bonus expense for the year related to a combination of new incentive compensation plans introduced during fiscal year 2009 and operating performance; (ii) an increase of $3.3 million in payroll related charges; (iii) an increase of $1.3 million due to additional National Meeting expenses; and (iv) an increase of $1.0 million for relocation expenses due to the Companys realignment of its organizational structure from four regions to six regions. Partially offsetting these increases are $1.3 million of costs incurred during the nine months ended December 28, 2007 related to the Companys national launch of its Select and healthcare information technology marketing programs.
General and administrative expenses for the three months ended January 2, 2009 increased $2.9 million when compared to the same period in the prior year. This increase is primarily attributable to an increase of $1.3 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009 and a $0.8 million increase in payroll related costs due to an increase in full-time employees and merit increases.
General and administrative expenses for the nine months ended January 2, 2009 increased $10.8 million when compared to the same period in the prior year. This increase is primarily attributable to (i) an increase of $7.0 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009, an increase in payout estimates based on managements quarterly review of performance achievement and the reversal of $3.2 million in the first nine months of the prior year; (ii) a $3.0 million increase in payroll related costs due to an increase in full-time employees and merit increases; (iii) a $1.9 million increase in stock compensation expense related to new long-term incentive plans introduced during fiscal year 2008; and (iv) $1.8 million related to increases in medical insurance costs. Partially offsetting these increases is a $4.3 million decrease in settlement and legal costs related to the Florida Department of Healths inspection of the Companys operations for compliance with State Pedigree laws in fiscal year 2008.
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