<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549

                                      FORM 10-K

 [X]               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                     For the fiscal year ended November 30, 1996
                                          OR
 [ ]             TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                 For the transition period from ________ to ________

Commission File Number:  0-12665
--------------------------------

                                MICRO BIO-MEDICS, INC.              
                  --------------------------------------------------
                (Exact name of Registrant as specified in its charter)

          New York                                           13-2692560         
-----------------------------                       ----------------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization                               (Identification No.)

846 Pelham Parkway
Pelham Manor, New York                                                    10803 
----------------------------------------                                --------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number,
including area code:                                              (914) 738-8400
                                                                  --------------

Securities registered pursuant to Section 12(b) of the Act:

                                         None
--------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:

                             Common Stock, $.03 par value
--------------------------------------------------------------------------------
                                   (Title of Class)

    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes  X .   No ___.

    Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in part III
of this Form 10-K or any amendment to this Form 10-K [ X].

    As of February 21, 1997 at 4:00 P.M., the aggregate market value of the
voting stock held by non-affiliates, approximately 4,700,000 shares of Common
Stock, $.03 par value, was approximately $76,375,000 based on the last sale
price of $16.25 for one share of Common Stock on such date. The number of shares
issued and outstanding of the Registrant's Common Stock, as of February 21, 1997
was 5,070,248.  


<PAGE>

ITEM 1.  BUSINESS

OVERVIEW

    Micro Bio-Medics, Inc. (the "Company" or "MBM") is a New York company which
was incorporated in 1971.  The Company distributes medical supplies to
physicians and hospitals in the New York metropolitan area, as well as to health
care professionals in the sports medicine, emergency medicine, school health,
industrial safety, government and laboratory markets nationwide.  The Company
depends upon the continued supply of the products it distributes, however, it
does not depend upon any single source.  The Company has neither encountered nor
does it anticipate any difficulty in obtaining the necessary products.  No one
customer has accounted for more than 10% of the Company's revenues during the
fiscal years ended  November 30, 1996, November 30, 1995 and November 30, 1994.

RECENT DEVELOPMENTS

    On March 7, 1997, MBM entered into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which HSI Acquisition Corp. ("HSI"), a
wholly-owned subsidiary of Henry Schein, Inc. ("Schein"), will merge into MBM
and MBM will be the surviving corporation as a subsidiary of Schein.  As a
result of the transaction, which has been approved by each of the companies'
Board of Directors, outstanding shares of MBM's Common Stock will be exchanged
at a fixed rate of 0.62 of a share of Schein's Common Stock for each outstanding
1.0 share of MBM.  The members of MBM's Board of Directors have granted to
Schein a proxy to vote their shares of MBM Common Stock in favor of the Merger
and an option, exercisable under certain circumstances, to acquire their shares
for the consideration that they would have received in the Merger in respect of
those shares.  

    Schein is a Delaware corporation with its principal executive offices at 
135 Duryea Road, Melville, NY 11747 and its telephone number is (516) 
843-5500. Schein is a large direct marketer of healthcare products and 
services to office-based healthcare practitioners including dental practices 
and laboratories, physician practices and veterinary clinics in the combined 
North American and European markets. 

    The completion of the transaction is subject to the following: 
Hart-Scott-Rodino waiting periods, including no action being instituted by 
the Department of Justice or the Federal Trade Commission challenging or 
seeking to adjoin the consummation of the transaction, which action shall 
have not been withdrawn or terminated; the transaction being treated as a 
"pooling of interest"; MBM shareholder approval (with dissenters' rights 
being exercised with respect to no more than 9% of the outstanding Shares of 
MBM Common Stock); and other customary closing conditions. The transaction is
expected to be completed by mid-1997 although no assurances can be given in 
this regard.  For a more complete description of the terms of the Merger 
Agreement and other related agreements entered into in connection with the 
Merger Agreement, reference is made to the texts of such agreements, which 
are filed as Exhibits to this Form 10-K, and the foregoing summary of certain
principal terms of such agreements are qualified in their entirety thereby. In
addition, Schein intends to file a Registration Statement on Form S-4 with 
the Securities and Exchange Commission (the "Commission") with respect to the
securities to be issued to 

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<PAGE>

MBM shareholders in the Merger.  After the Registration Statement has been filed
and subsequently declared effective by the Commission, MBM stockholders of
record of a date to be determined by its Board of Directors will receive copies
of a Proxy Statement/Prospectus which will contain a complete description of the
material terms of Merger Agreement and other related agreements and will be
entitled to vote in person or by proxy at an upcoming stockholder meeting at a
date to be determined by MBM's Board of Directors.  See "Item 13." 

CALIGOR DIVISION

    The Company's Caligor Division is a physician and hospital supplier in the
New York metropolitan area, serving over 12,000 physicians and laboratories.  It
also serves nursing homes and industrial medical departments.

    Caligor provides its physicians and hospitals with a comprehensive
selection of supplies and related logistical and software services.  The
division's estimated 50,000 supplies range from bandages and pharmaceuticals to
sophisticated diagnostic equipment, while the services range from equipment
repair to the complete design and installation of new offices, waiting rooms,
exam rooms and laboratories.

    The Caligor division's logistical and software services include "stockless"
inventory services for hospitals which allow the customer to reduce on-hand
inventory by up to ninety percent and significantly reduce operating expenses. 
Software services include purchase order management systems and materials
management systems to be used on the customer's premises to control parts of
their business operations  

    The Caligor division through Caligor Physicians & Hospital Supply Corp., a
wholly owned subsidiary of the Company, also operates a  pharmacy in Manhattan
to serve local physicians and their patients.  In addition, the Caligor Division
supplies independent clinical labs, hospital labs, and physician in-office labs
with diagnostic equipment, test kits, reagents and disposables.

    Over the past few years, the Caligor Division has been able to acquire a
number of smaller distributors, resulting in significant economies of scale and
improved operating efficiencies.  Caligor has increased its market share in
these new territories with the same combination of sales force support, direct
mail, catalogs and telemarketing sales that it uses in existing territories.

    Caligor is the Company's largest division in terms of annual sales.
Revenues during fiscal 1996 were approximately $129,300,000 or 86% of the
Company's total revenues for the same period as compared to approximately
$98,300,000 or 82% of total revenues for the comparable period of fiscal 1995,
as compared to approximately $101,000,000 or 83% of the total revenues for the
comparable period of fiscal 1994.  The Company's revenues since 1995 have
increased as a result of the Company's acquisition of the business and assets
from Stone Medical Supply Corporation, the opening of the Hospital Division's 


                                          3

<PAGE>

stockless distribution operation and sales and marketing efforts aimed at the
acquired and existing customer base.  

MBM DIVISION

    The MBM Division distributes sports medicine supplies, school nurse
supplies, medical equipment and rehabilitation equipment to over 10,000 schools,
colleges, municipalities, emergency medical units and professional sports teams
around the country, including many of the major and minor league baseball,
basketball, football and hockey teams.  Revenues derived from municipalities and
school districts are derived from competitive bidding.

    Like the Caligor Division, MBM Division serves its customers with a
comprehensive line of supplies and services, ranging from the delivery of
athletic tape to an NFL team on the road to the complete design, furnishing and
stocking of a training room, sports medicine clinic, or school nurse office.  

    MBM Division markets its product line primarily via three catalogs which it
distributes to customers and prospective customers each year.  These catalogs
are supported by direct mail, telemarketing, professional journal advertising,
national and local trade show exhibitions, and an inside sales and customer
service staff.

    The seasonal buying habits of the Company's school and athletic customers
is concentrated between the months of June and September of each year.  Although
the Company's marketing expenses relating to such customers are incurred
throughout the year, the Company has experienced no problem in meeting its cash
requirements as a result of its working capital and extension of credit under
its Revolving Credit Agreement.

    Revenues derived from the MBM Division during fiscal 1996 were
approximately $18,100,000 or 12% of the Company's total revenues for the same
period as compared with approximately $18,800,000 or 16% of total revenues for
fiscal 1995 and approximately $18,100,000 or 15% total revenues for fiscal 1994.
Revenues have remained relatively constant for this Division.

HEALER PRODUCTS DIVISION

    The Company's Healer Products Division is an assembler and wholesaler of
first aid kits and private label medical products. These products, in turn, are
marketed by the Company's other divisions, and sold to numerous outside markets
through a network of commissioned sales agents.  The first aid and medical kits
are produced in a variety of forms and sizes, but are generally designed for use
in government, industry, schools, emergency medical organizations, hospitals,
homes and recreational facilities.  

    The Healer Products Division also produces specialized kits for volunteer
ambulance corps, emergency squads, corporate offices, construction operations,
restaurants, retail stores, boats, athletic activities, motor vehicles, and
sales promotion 


                                          4

<PAGE>

purposes  as well as for specific medical problems such as burns, poisoning,
insect stings, traumatic accidents, obstetrical emergencies and eye injuries.

    Many of the products contained in the kits are generic and are marketed
under the Company's private label.  The use of private-label generic products
permits attractive pricing for the Company and its customers and creates a
consistent, positive brand image among customers.  

    Revenues derived from the Healer Products Division during fiscal year 1996
were approximately $2,700,000 representing 2% of the Company's total revenues as
compared with approximately $2,700,000 representing 2% of total revenues for
fiscal 1995 and as compared to approximately $2,500,000 representing 2% of total
revenues for fiscal 1994.  Revenues have remained relatively constant for this
Division.

ACQUISITION OF STONE MEDICAL SUPPLY CORPORATION

    Pursuant to an Agreement for Merger and Reorganization dated November 2,
1995 among MBM, Diagnostic Leasing Corp. ("DLC"), Stone Medical Supply
Corporation ("Stone"), a distributor of physician and podiatry supplies and
equipment, and Andrew D. Stone, Stone was merged into DLC with DLC as the
surviving corporation on January 18, 1996.  The Company issued approximately
280,696 shares of its Common Stock in exchange for the outstanding shares of
Stone.  Subsequent to the merger, DLC changed its name to Stone Medical Supply
Corporation and then merged into MBM.

ACQUISITION OF MID COUNTY MEDICAL SUPPLY CO., INC.

    On March 27, 1995, MBM acquired certain assets and customer accounts of Mid
County Medical Supply Co., Inc., a distributor of physician and hospital
supplies, for approximately $500,000.  The purchase price was allocated based
upon the fair market value of the assets at the date of acquisition.  The
operations of Mid County Medical Supply Co., Inc., have been combined into the
Caligor Division.

ACQUISITION OF JOSEPH WEINTRAUB, INC.

    On June 1, 1994, MBM acquired certain assets and customer accounts of
Joseph Weintraub, Inc., a distributor of physician and hospital supplies for
approximately $1,100,000.  The purchase price was allocated based upon the fair
market value of the assets at the date of acquisition.  The operations of Joseph
Weintraub Inc. have been combined into the Caligor Division. 

ACQUISITION OF CLARK SURGICAL CORP.

    On November 19, 1993, MBM Hospital Supply Corp., a wholly owned subsidiary
of MBM entered into an agreement with Clark Surgical Corp. ("Clark") to acquire
from Clark substantially all of the assets and customer accounts subject to
certain specific liabilities and obligations arising out of the contracts and
personal property leases acquired (the 


                                          5

<PAGE>

"Agreement").  This transaction closed on December 1, 1993 and was accounted for
as a purchase.    

    The purchase price for all the assets was approximately $16,500,000.  The
purchase price was based upon the book value of the inventory, accounts
receivable and fixed assets purchased by MBM Hospital plus $1 million for
Clark's goodwill as described in the Agreement.  MBM also issued to certain
persons warrants to purchase an aggregate of 40,000 shares of MBM's Common Stock
at a purchase price of $8.00 per share, subject to MBM's right to terminate the
unvested portion of the Warrants upon certain conditions at the sole discretion
of the Board of Directors. The Warrants vested 20% at closing and the balance
was scheduled to vest in four equal annual amounts on the anniversary date of
the Closing Date.  However, the unvested portion of the Warrants to purchase
32,000 shares have been terminated.

    The Agreement also provided for the execution of agreements not to compete
with Alfred S. Bretan and Burt Wexler, the sole shareholders of Clark
(hereinafter referred to as the "Shareholders").  The agreements not to compete
provide for the payment of $2.725 million in cash over a seven year period.

    The operations of MBM Hospital Supply Corp. have been combined into the
various divisions of MBM.

REVOLVING CREDIT AGREEMENT  

    MBM has entered into a Credit Agreement with Chase Manhattan Bank N.A.
("Chase") to act as agent of and as a participant in a $25 million secured
revolving credit facility for MBM.  Fleet Bank of New York ("Fleet") also acted
as a participant in the Credit Agreement.  Chase's and Fleet's commitment under
the Credit Agreement is limited to $15 million and $10 million, respectively. 
All references to MBM include MBM and its subsidiaries.

    The Credit Agreement, as amended, which expires on February 15, 1999,
provides for a three year secured revolving credit in an amount which shall not
exceed the lesser of (a) $25,000,000 or (b) the borrowing base as defined in the
Credit Agreement.  

    The Credit Agreement provides for MBM to pay interest on loans made under
the facility at the rate of 1/4 of 1% over the Banks periodic base rate unless
MBM elects to pay based upon an alternative formula at the time of each
borrowing.  MBM has been borrowing primarily by utilizing Eurodollar loans based
on LIBOR.  Currently, based on certain financial ratios, the Company's
prevailing borrowing rate on the Eurodollar loans is LIBOR plus 1.25%.  The
prevailing rate varies based upon the term of the LIBOR.  Upon request by MBM,
the Banks may, at their option, create banker acceptances under the facility. 
On June 7, 1995, MBM entered into a three year interest rate swap agreement with
Chase for $10,000,000.  It is Management's intent to match the agreement's terms
as to principal amounts and repricing maturities in order to reduce MBM's
interest rate risk on its revolving loans.  Effectively, the agreement serves to
limit the net interest rate 


                                          6

<PAGE>

charged on MBM's first $10,000,000 of revolving loans to 8.25%.  However, MBM
would receive no further interest rate benefit once the applicable interest rate
falls below 6.55%.

    The Credit Agreement is subject to several conditions and financial
covenants such as the following:  

    -    WORKING CAPITAL:  MBM shall maintain a Consolidated Working Capital of
         no less than $10,500,000 as of the end of each fiscal quarter.

    -    INTEREST COVERAGE RATIO:  MBM shall maintain a ratio of Consolidated
         EBITA (earnings before interest, taxes and amortization) to
         Consolidated Interest Expense, measured at the end of each fiscal
         quarter for a period comprised of such fiscal quarter and the three
         immediately preceding fiscal quarters, of not less than 2.50 to 1.00. 

    -    CURRENT RATIO:  MBM shall maintain a ratio of Consolidated Current
         Assets to Consolidated Current Liabilities of not less than 1.20 to
         1.0, calculated at each fiscal quarter end.

    -    LEVERAGE RATIO:  MBM shall maintain a ratio of (a)(i) total
         liabilities of MBM and its Consolidated Subsidiaries less (ii)
         Approved Subordinated Debt divided by (b)(i) net worth of MBM and its
         Consolidated Subsidiaries plus (ii) Approved Subordinated Debt less
         (iii) intangible assets of MBM and its Consolidated Subsidiaries, as
         of the end of each fiscal quarter of MBM of not more than 2.75 to
         1.00.

    -    TANGIBLE NET WORTH:  MBM shall maintain a Consolidated Tangible Net
         Worth, calculated at the end of each fiscal year, of no less than
         $400,000 more than the Consolidated Tangible Net Worth for the
         respective immediately preceding fiscal year.

    The Credit Agreement provides, among other things that, (1) MBM shall not
declare or pay any dividends or make any distribution of assets to stockholders,
except that MBM may declare dividends and make distributions solely in the
Common Stock of MBM, (2) MBM shall not purchase any of its capital stock now or
hereafter outstanding which purchase shall, when aggregated with all other such
purchases, exceed $250,000 (excluding certain purchases as set forth in the
Credit Agreement relating to MBM's shares that were issued in connection with
MBM's purchase of Harrisburg Health Care, Inc.), (3) MBM shall not lease,
assign, transfer or dispose of assets other than in the ordinary course of
business, (4) MBM shall not change its fiscal year, (5) MBM shall not incur any
debt other than the following:  debt owed to the Banks under the facility;
existing debt disclosed to and approved by the Banks; approved subordinated
debt; debt between MBM and a subsidiary; accounts payable to trade creditors
incurred in the ordinary course of business; commercial letters of credit issued
for the account of MBM by other than the Banks in amount not to exceed in the
aggregate at any time the principal sum of $500,000; and such other debt as
provided for in the Credit Agreement.  


                                          7

<PAGE>

REGULATORY REQUIREMENTS

    The manufacturers of many products sold by MBM are required to obtain U.S.
Food and Drug Administration ("FDA") approval for such products, failing such
approval, sales of such products cannot lawfully be made.  MBM's assembly,
warehousing and distribution procedures are subject to the Good Manufacturing
Practices regulation of the FDA.  MBM has registered itself with the FDA and has
renewed said registration annually.  Such registration permits MBM to distribute
supplies and medical devices.

    The Caligor Division, among its various activities, operates as a
wholesaler and retailer of prescription drugs and medical devices in the State
of New York.  The practice of pharmacy at the wholesale and retail level is
regulated by federal, state and local statutes, rules and regulations.  MBM is
duly licensed to permit its Caligor Division to operate as wholesalers and
retailers in prescription drugs and medical devices in the State of New York. 
In the future, should MBM expand such activities, it will have to comply with
all applicable federal, state and local rules.  

COMPETITION

    MBM, in all phases of its activities, experiences competition from other
manufacturers and distributors of products in the same categories as those of
MBM, as well as from wholesale and retail pharmacies, selling to the same
general markets as those of MBM.  Additionally, the Caligor Division's services
are subject to competition from similar service organizations.  Many of MBM's
competitors have far greater resources than MBM and, in addition, many larger
and better financed firms not presently in MBM's lines of business may
conceivably enter these lines of business in the future. However, most of MBM's
markets are serviced by hospital and surgical supply dealers, athletic
retailers, pharmacies and equipment repair firms.  MBM believes that its
purchasing power, quick service including next day delivery where possible,
competitive pricing and marketing expertise enable it to compete favorably with
such firms although it continues to experience significant competition from
other firms which are better established and have substantially greater
financial resources than MBM.

EMPLOYEES

    At January 31, 1997, MBM employed 299 full-time employees, including 121
sales and customer service persons, 93 warehouse and shipping workers, 53
clerical workers, 10 delivery persons, 6 computer programmers, 2 pharmacists, 7
purchasing agents and 7 senior management officers.  MBM usually employs
seasonal summer employees during peak sales volume periods.  MBM's employees are
not covered under any collective bargaining agreements and there have been no
work stoppages.  Management believes MBM has satisfactory employee relations at
all levels.    


                                          8

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY.

    MBM leases one central location consisting of approximately 88,000 square
feet of assembly and storage space and 20,000 square feet of office space in a
31 year old industrial building at 846 Pelham Parkway, Pelham Manor, New York. 
This location's facilities are leased from a non-affiliated entity and are in
good condition and sprinklered.  MBM leased these premises pursuant to a lease
which expires on July 31, 2007.  MBM pays an annual rent of approximately
$540,000, with certain additional sums based upon property tax costs.  

    The Pelham Manor, New York facilities are equipped to house the assembly
processing, customer service, warehousing and shipping requirements of all MBM's
divisions to the extent located at these facilities.  It contains an order
picking conveyor system, fork lifts, large numbers of pallet racks and shelving,
manually operated material handling equipment, packaging equipment, assembly
equipment (tables, benches and conveyers), engraving machinery (for medical
equipment), and conventional office equipment, including an electronic data
processing system used to facilitate all areas of MBM's business.  

    MBM leases for its Caligor Division approximately 5,000 square feet of
space at 1226 Lexington Avenue, New York, New York, under a lease which expires
on April 30, 2000, for which it presently pays an annual rental of approximately
$49,000 per annum, together with additional sums for heat, utilities and
property tax costs.  This location contains a store front facility fully 
equipped to operate as a wholesale and retail pharmacy, and a basement storage
facility.

    MBM leases for its MBM division approximately 4,290 square feet of space at
211 Harbor Way, South San Francisco, California under a lease which expires on
January 31, 2000 for which it pays an annual rental of approximately $30,000. 
This location's facilities are in good condition with approximately 1,000 square
feet being devoted to office space and the balance to warehouse space.

    MBM also leases approximately 3,100 square feet of space in Jacksonville,
Florida, under a lease which expires June 30, 1997.  The annual rental under the
lease is approximately $17,500.

    MBM leases for its Caligor Division approximately 120,000 square feet of
warehouse space including offices and warehouse dock at 300 Michael Drive,
Syosset, New York.  The building is fully sprinklered and alarmed.  MBM leases
these facilities pursuant to a lease which expires April 29, 2001.  MBM pays an
annual rent of $240,000 with certain additional sums based upon property tax
costs, insurance and utilities. 

    In February 1996, MBM leased for its Caligor Division approximately 82,000
square feet of space in the Bronx, New York, under a lease which expires in
January, 2001.  The annual rent is approximately $308,000.  The space is used by
Caligor's Hospital Division 


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<PAGE>

for its stockless distribution operations.  The premises are in good condition,
sprinklered and alarmed.

    All of MBM's facilities are adequate for MBM's present needs.  In the event
that additional facilities are needed, Management believes that such facilities
can be obtained at a reasonable cost.

    Stone's executive and sales offices and its  storage facilities were
located at 2487 North Jerusalem  Road, East Meadow, New York 11550, containing
approximately  13,800 square feet. Stone purchased the aforesaid premises on
July  13, 1984, for the sum of $200,000.  A first mortgage was obtained from
Citibank, N.A., in the principal amount of $175,000,  payable over twenty years
at the monthly rate of $730, plus  interest on the unpaid balance.  On March 15,
1985, the Job  Development Authority of the State of New York (the "JDA") made 
an additional loan on the premises for alterations in the sum of  $149,000,
replacing temporary financing.  All of Stone's operations were assimilated into
the Caligor Division's operations.  MBM is actively attempting to sell the
property.

    None of MBM's leases are with related parties.  Additionally, MBM now owns
1 automobile and 1 truck and leases 1 station wagon, 8 trucks and 12
automobiles, all of which are utilized for business purposes.

Item 3.  LEGAL PROCEEDINGS

    There are no material legal proceedings pending against the Company.  

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    Not applicable.


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<PAGE>

                                       PART II

ITEM 5.  MARKET INFORMATION

    The Company's Common Stock is quoted on the National Association of
Securities Dealers' Automated Quotation System National Market System
("NASDAQ/NMS") under the symbol "MBMI."  As of February 21, 1997 at 4:00 P.M.
Eastern Standard Time, the last sale price of the Common Stock in the
over-the-counter market was $16.25.  

    The following table reflects the high and low sales prices for the
Company's Common Stock for the periods indicated as reported by the National
Association of Securities Dealers, Inc. ("NASD") from its NASDAQ system: 

                                     Common Stock
                                     ------------

                                Quarter Ended                     
         ---------------------------------------------------------

               February 28         May 31          August 31       November 30 
              High      Low    High      Low     High      Low     High    Low 
-------------------------------------------------------------------------------
Fiscal 
Year Ended 
November 
30, 1996      14-3/4 12-1/4    17     13-7/8     21     14-3/8    18-1/4 16-1/8
Fiscal 
Year Ended 
November 
30, 1995      10   9-7/16      12-5/8  9-5/16    13-7/8 11-1/4    14       12  

     The over-the-counter market quotations reported above reflects inter-dealer
prices, without retail markup, markdown or commission.
  
     Management has been advised by its transfer agent (American Stock Transfer
& Trust Company) that the approximate number of record holders of the Company's
Common Stock, as of February 21,  1997, the record date, was approximately 690. 
No cash dividends have been paid by the Company on its Common Stock and no such
payment is anticipated in the foreseeable future.


                                          11

<PAGE>

 
ITEM 6.   SELECTED FINANCIAL DATA

                          MICRO BIO-MEDICS, INC. AND SUBSIDIARIES


<TABLE><CAPTION>
                                                     AS AT AND FOR THE YEARS ENDED NOVEMBER 30,
                                     -------------------------------------------------------------------------
                                          1996           1995            1994           1993           1992
                                     -------------  -------------  -------------  -------------  -------------
<S>                                  <C>            <C>            <C>            <C>             <C>
NET SALES                            $ 150,142,529  $ 119,873,764  $ 121,604,461   $ 73,951,410   $ 61,629,435

COST OF GOODS SOLD                     119,205,502     94,307,143     94,923,689     56,347,353     47,287,409
                                     -------------  -------------  -------------  -------------  -------------

GROSS PROFIT                            30,937,027     25,566,621     26,680,772     17,604,057     14,342,026
                                     -------------  -------------  -------------  -------------  -------------

EXPENSES:
     Selling, shipping and warehouse    17,357,225     14,511,793     14,421,280      8,521,021      6,852,670
     General and administrative          9,795,069      7,901,052      8,581,615      6,525,488      5,015,128
     Interest and financing costs
       - net                               719,198      1,238,887      1,044,257        502,329        289,355
                                     -------------  -------------  -------------  -------------  -------------
          Total expenses                27,871,492     23,651,732     24,047,152     15,548,838     12,157,153
                                     -------------  -------------  -------------  -------------  -------------

INCOME BEFORE PROVISION FOR 
     INCOME TAXES                        3,065,535      1,914,889      2,633,620      2,055,219      2,184,873

PROVISION FOR INCOME TAXES               1,320,700        806,000        952,000        853,000        962,000
                                     -------------  -------------  -------------  -------------  -------------

INCOME BEFORE CUMULATIVE EFFECT OF 
     ACCOUNTING CHANGE                   1,744,835      1,108,889      1,681,620      1,202,219      1,222,873

CUMULATIVE EFFECT OF ACCOUNTING 
     CHANGE FOR INCOME TAXES 
     PRIOR TO 1994                            -              -           (60,000)          -              -   
                                     -------------  -------------  -------------  -------------  -------------

NET INCOME                             $ 1,744,835    $ 1,108,889    $ 1,621,620    $ 1,202,219    $ 1,222,873
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

EARNINGS PER COMMON AND COMMON 
     EQUIVALENT SHARE BEFORE 
     CUMULATIVE EFFECT OF 
     ACCOUNTING CHANGE                       $ .31          $ .25          $ .37          $ .30          $ .41

CUMULATIVE EFFECT OF ACCOUNTING 
     CHANGE FOR INCOME TAXES 
     PRIOR TO 1994                             -              -             (.01)            -              - 
                                     -------------  -------------  -------------  -------------  -------------

EARNINGS PER COMMON AND COMMON 
     EQUIVALENT SHARE                        $ .31          $ .25          $ .36          $ .30          $ .41
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

AVERAGE NUMBER OF SHARES USED TO 
     COMPUTE EARNINGS PER COMMON 
     AND COMMON EQUIVALENT SHARE      5,816,469(*)   5,121,634(*)   4,896,518(*)   4,734,746(*)   3,481,415(*)
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

DIVIDENDS PAID                                None           None           None           None           None
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

WORKING CAPITAL                       $ 28,112,222   $ 29,965,266   $ 30,141,450   $ 20,965,370   $ 15,819,417
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

LONG-TERM DEBT (net of 
     current maturities)               $ 8,714,567   $ 17,270,062   $ 19,381,239    $ 9,584,684    $ 9,410,079
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

TOTAL ASSETS                          $ 60,443,816   $ 51,135,712   $ 54,461,087   $ 32,784,324   $ 27,934,060
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

STOCKHOLDERS' EQUITY                  $ 31,391,765   $ 21,064,152   $ 18,067,056   $ 16,193,524   $ 10,461,736
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

STOCKHOLDERS' EQUITY PER SHARE           $ 5.40(*)      $ 4.11(*)      $ 3.69(*)      $ 3.42(*)      $ 3.01(*)
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

TANGIBLE BOOK VALUE PER SHARE            $ 3.98(*)      $ 3.14(*)      $ 2.92(*)      $ 3.13(*)      $ 2.72(*)
                                     -------------  -------------  -------------  -------------  -------------
                                     -------------  -------------  -------------  -------------  -------------

</TABLE>

(*)  Includes additional shares assuming conversion of stock options and 
     warrants utilizing the modified treasury stock method.

                                                          12

<PAGE>

ITEM 7.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
     
RESULTS OF OPERATIONS

     For fiscal 1996, net sales increased 25.3%.  The increase in net sales
resulted from the Company's increased volume to hospitals, the acquisition of
Stone Medical Supply Corporation ("Stone") and our continuing effort to gain
market penetration and sales volume to its existing customer base and the
addition of new customers.

     For fiscal 1995, net sales decreased 1.4%.  The decrease in net sales for
the fiscal 1995 resulted in MBM's downsizing of unprofitable divisions acquired
from Clark Surgical Corp. ("Clark") during the prior year.  For fiscal 1994 net
sales increased 64.4% as compared with the prior year.  This increase in sales
resulted from MBM's acquisition of Clark and its continuing effort to increase
market penetration and sales volume on the existing customer base and the
addition of new customers. During 1996, 1995 and 1994, the introduction of new
products, changing prices and inflation had no material impact on MBM's
operations.

     Net income for fiscal 1996 was 1.2% of net sales versus .9% of net sales in
fiscal 1995.  The increase for fiscal 1996 versus fiscal 1995 was due to
increased sales volume to hospitals, the Company's acquisition of Stone, lower
interest expense as a result of using the proceeds from the conversion of
outstanding warrants to decrease long-term debt and decreases in the interest
rates charged by financial institutions.
     
     Net income for fiscal 1995 was .9% of net sales versus 1.3% of net sales in
fiscal 1994.  Net income before the cumulative effect of accounting change in
1994 was 1.4% of net sales. The decrease for fiscal 1995 versus fiscal 1994 was
due to increased interest rates charged by financial institutions, the
downsizing of unprofitable divisions acquired from Clark Surgical Corp. during
the prior year, a decrease in the overall consolidated gross profit percentage
and an increase in the effective income tax rate for 1995. 
 
GROSS PROFIT/OPERATING EXPENSES

     Gross profit for fiscal 1996 was 20.6% of net sales versus 21.3% of net
sales in fiscal 1995.  The decrease in gross profit was a result of increased
sales to hospitals and changes in MBM's product mix.  Gross profit for fiscal
1995 was 21.3% of net sales versus 21.9% of net sales in fiscal 1994.  The
decrease in gross profit was a result of changes in MBM's product mix. 

     Selling, shipping and warehouse and general and administrative expenses
expressed as a percent of net sales decreased .6% for fiscal 1996 as compared to
fiscal 1995. Selling, shipping and warehouse and general and administrative
expenses expressed as a percent of net sales decreased .2% for fiscal 1995 as
compared to fiscal 1994. 


                                          13

<PAGE>

INTEREST AND FINANCING COSTS (NET OF INTEREST INCOME)

     Interest expense net of interest income expressed as a percent of net sales
decreased .6% for fiscal 1996 when compared to the prior year as a result of
using the proceeds from the conversion of outstanding warrants to decrease
long-term debt and decreases in the interest rates charged by financial
institutions.  Interest expense net of interest income expressed as a percent of
net sales increased .1% for fiscal 1995 when compared to the prior year as a
result of increases in the interest rates charged by financial institutions.

LIQUIDITY AND CAPITAL RESOURCES

     During the past three fiscal years, MBM continued to meet its cash needs
via cash flow from operations and borrowings.  During fiscal 1996, 1995 and
1994, MBM had an average of approximately $14,800,000, $10,500,000 and
$11,000,000 respectively, of unused credit lines available each month over its
normal operating requirements.

     Management believes that its working capital of approximately $28,100,000
at November 30, 1996 provides sufficient liquidity for its short and long-term
requirements and that MBM's long-term liquidity is not materially effected by
any restrictive covenants contained in MBM's Revolving Credit Agreement. 
Further, Management believes that MBM should not experience a problem in
connection with the maintenance of such covenants and that its $25,000,000 line
of credit provides MBM with the resources it reasonably expects to require to
meet its cash commitments through fiscal 1997.  

     For fiscal 1996, MBM generated cash from operating activities.  An increase
in accounts payable, accrued expenses and prepaid expenses over and above an
increase in accounts receivable and inventory contributed to MBM's generation of
cash.  During fiscal 1996, MBM's financing activities used cash as a result of
repayments of the bank loan under its long-term credit agreement exceeding
proceeds from the exercise of warrants.  For fiscal 1996, MBM used cash in
investing activities to make capital expenditures and payments for intangible
assets.

     For fiscal 1995, MBM generated cash flow from operating activities.  
Decreases in accounts receivable and inventory over and above a decrease in 
accounts payable and an increase in prepaid expenses contributed to MBM's 
generation of cash.  During fiscal 1995, MBM's financing activities used cash 
as a result of repayments of the bank loan under its long-term credit 
agreement.  For fiscal 1995, MBM used cash in investing activities to make 
capital expenditures and payments for intangible assets.

     For fiscal 1994, MBM generated cash flow from operating activities.  An
increase in accounts payable over and above increases in inventory, accounts
receivable and prepaid expenses contributed to MBM's generation of cash.  During
fiscal 1994, MBM's financing activities used cash as a result of repayments of
the bank loan under its long-term credit agreement.  For fiscal 1994, MBM used
cash in investing activities to make capital expenditures and payments for
intangible assets.  During fiscal 1994, MBM 


                                          14

<PAGE>

acquired the business and certain assets of Clark through an increase in MBM's
line-of-credit and the use of same.

     Reference is made to "Recent Developments" for a complete description of
the terms of the Merger Agreement pursuant to which MBM expects to be acquired
by Schein by way of a merger of Schein's wholly-owned subsidiary into MBM in a
stock-for-stock transaction.  
          
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The information required by Item 8, and an index thereto commences on page
F-1, which pages follow this page.  

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE.

     Not applicable.  


                                          15


<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                                        INDEX

                                 FINANCIAL STATEMENTS




                                                                  PAGE

Independent Auditors' Report                                      F-2

Consolidated Balance Sheets
  November 30, 1996 and 1995                                   F-3 - F-4

Consolidated Statements of Income
  Years Ended November 30, 1996, 1995 and 1994                    F-5

Consolidated Statements of Cash Flows
  Years Ended November 30, 1996, 1995 and 1994                 F-6 - F-7

Consolidated Statements of Changes in
  Stockholders' Equity
  Years Ended November 30, 1996, 1995 and 1994                    F-8

Notes to Consolidated Financial Statements                     F-9 - F-21


FINANCIAL STATEMENT SCHEDULES:

  Schedule II - Valuation and Qualifying Accounts                 F-22

  Exhibit 11 - Earnings Per Share Calculation                     F-23

  Schedules other than those referred to above have been
    omitted as the conditions requiring their filing are not
    presented or the information has been presented
    elsewhere in the financial statements

  Separate financial statements and schedules of 
    Micro Bio-Medics, Inc. (Parent) have been omitted
    since the conditions for omission have been met 
                                         
                                         F-1

<PAGE>

                             INDEPENDENT AUDITORS' REPORT


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
MICRO BIO-MEDICS, INC.
PELHAM MANOR, NEW YORK


We have audited the accompanying consolidated balance sheets of Micro
Bio-Medics, Inc. and Subsidiaries as of November 30, 1996 and 1995, and the
related consolidated statements of income, cash flows, and changes in
stockholders' equity for each of the three years in the period ended 
November 30, 1996.  These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to 
express an opinion on these consolidated financial statements based on 
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Micro Bio-Medics,
Inc. and Subsidiaries as of November 30, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
November 30, 1996, in conformity with generally accepted accounting principles.

We have also audited Schedule II and Exhibit 11 for the years ended November 30,
1996, 1995 and 1994 included in the 1996 annual report of Micro Bio-Medics, Inc.
and Subsidiaries on Form 10-K.  In our opinion, such schedules present fairly
the information required to be set forth therein.




                                                 MILLER, ELLIN & COMPANY
                                                 CERTIFIED PUBLIC ACCOUNTANTS
New York, New York
February 12, 1997, except for
  Notes 8 and 12 which are
  dated March 7, 1997
 

                                         F-2

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                             CONSOLIDATED BALANCE SHEETS



                                        ASSETS


                                                       NOVEMBER 30,
                                               ---------------------------
                                                 1996             1995
                                               ----------       ----------
CURRENT ASSETS:
    Cash                                       $1,513,750       $2,817,285
    Accounts receivable, less allowance 
         for doubtful accounts of 
         $686,179 in 1996 and 
         $674,210 in 1995 (Note 5)             31,280,932       25,657,607
    Inventory (Note 5)                         13,488,244       12,318,756
    Prepaid expenses and other current assets     875,451          657,768
    Prepaid income taxes                          329,918          471,710
    Deferred income taxes (Note 6)                781,500          485,500
                                              -----------      -----------

                   Total current assets        48,269,795       42,408,626


PROPERTY, PLANT AND EQUIPMENT - at cost,
    net of accumulated depreciation and 
    amortization of $3,433,070 in 1996 and 
    $3,616,134 in 1995 (Notes 2, 3 and 5)       3,758,348        3,477,807


INTANGIBLE ASSETS, net of accumulated 
    amortization of $1,155,260 in 1996 and 
    $1,061,323 in 1995 (Notes 2 and 4)          8,254,087        4,990,073


OTHER ASSETS                                      161,586          259,206
                                              -----------      -----------
                                              $60,443,816      $51,135,712
                                              ===========      ===========







        The notes to consolidated financial statements are made a part hereof. 

                                         F-3

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                             CONSOLIDATED BALANCE SHEETS


                         LIABILITIES AND STOCKHOLDERS' EQUITY


                                                      NOVEMBER 30,
                                              ----------------------------

                                                  1996             1995      
                                              -----------      -----------

CURRENT LIABILITIES:
    Current maturities of long-term 
         debt (Note 5)                        $   432,755      $   479,195
    Accounts payable                           17,182,644       10,297,403
    Accrued expenses and sundry 
         liabilities (Note 7)                   2,542,174        1,666,762
                                              -----------      -----------
           Total current liabilities           20,157,573       12,443,360

LONG-TERM DEBT, net of current 
    maturities (Note 5)                         8,714,567       17,270,062

DEFERRED INCOME TAXES (Note 6)                    179,911          358,138
                                              -----------      -----------
           Total liabilities                   29,052,051       30,071,560
                                              -----------      -----------
COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY (Notes 5 and 9):
    Preferred stock $1 par value:
      Authorized - 1,000,000 shares,
      no shares issued                               -                -   
    Common stock $.03 par value:
      Authorized - 20,000,000 shares
      Issued     - 5,062,115 shares in 
                   1996 and 3,878,804 
                   shares in 1995                 151,863          116,364
    Additional paid-in capital                 20,954,536       12,407,257
    Retained earnings                          10,286,530        8,541,695
    Less:  Cost of 1,167 shares of common
           stock in treasury                       (1,164)          (1,164)
                                             ------------     ------------
           Total stockholders' equity          31,391,765       21,064,152
                                             ------------     ------------
                                             $ 60,443,816     $ 51,135,712
                                             ============     ============



      The notes to consolidated financial statements are made a part hereof. 

                                         F-4

<PAGE>
                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                          CONSOLIDATED STATEMENTS OF INCOME

                                         YEARS ENDED NOVEMBER 30,     
                               --------------------------------------------
                                    1996           1995            1994
                               -------------  -------------   -------------
NET SALES                      $ 150,142,529  $ 119,873,764   $ 121,604,461

COST OF GOODS SOLD               119,205,502     94,307,143      94,923,689
                               -------------  -------------   -------------

GROSS PROFIT                      30,937,027     25,566,621      26,680,772
                               -------------  -------------   -------------
OPERATING EXPENSES:
  Selling, shipping and 
     warehouse                    17,357,225     14,511,793      14,421,280
  General and administrative       9,795,069      7,901,052       8,581,615
  Interest and financing 
     costs (net of interest
     income of approximately 
     $206,400 in 1996,
     $172,600 in 1995 and 
     $173,000 in 1994)               719,198      1,238,887       1,044,257
                               -------------  -------------   -------------

       Total operating expenses   27,871,492     23,651,732      24,047,152
                               -------------  -------------   -------------
INCOME BEFORE PROVISION
    FOR INCOME TAXES               3,065,535      1,914,889       2,633,620

PROVISION FOR INCOME 
  TAXES (Note 6)                   1,320,700        806,000         952,000
                               -------------  -------------   -------------

INCOME BEFORE CUMULATIVE 
  EFFECT OF ACCOUNTING CHANGE      1,744,835      1,108,889       1,681,620


CUMULATIVE EFFECT OF ACCOUNTING
    CHANGE FOR INCOME TAXES 
    PRIOR TO 1994                       -              -            (60,000)
                               -------------  -------------   -------------

NET INCOME                       $ 1,744,835    $ 1,108,889     $ 1,621,620
                               -------------  -------------   -------------
                               -------------  -------------   -------------

EARNINGS PER COMMON AND COMMON
    EQUIVALENT SHARE BEFORE 
    CUMULATIVE EFFECT OF 
    ACCOUNTING CHANGE (Note 10)        $ .31          $ .25           $ .37

CUMULATIVE EFFECT OF ACCOUNTING
    CHANGE FOR INCOME TAXES
    PRIOR TO 1994                        -              -              (.01)
                               -------------  -------------   -------------

EARNINGS PER COMMON AND COMMON
    EQUIVALENT SHARE                   $ .31          $ .25           $ .36
                               -------------  -------------   -------------
                               -------------  -------------   -------------

NUMBER OF SHARES USED IN COMPUTING
    EARNINGS PER COMMON AND COMMON
    EQUIVALENT SHARE (Note 10)     5,816,469      5,121,634       4,896,518
                               -------------  -------------   -------------
                               -------------  -------------   -------------

DIVIDENDS PER COMMON SHARE              NONE           NONE            NONE
                               -------------  -------------   -------------
                               -------------  -------------   -------------

     The notes to consolidated financial statements are made a part hereof. 

                                         F-5

<PAGE>
                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                 YEARS ENDED NOVEMBER 30,
                                        ---------------------------------------
                                        1996           1995            1994
                                     -----------    -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                         $ 1,744,835    $ 1,108,889     $ 1,621,620
                                     -----------    -----------     -----------
  Adjustments to reconcile net 
    income to net cash
    provided by operating activities:
       Cumulative effect of 
         accounting change                  -              -             60,000
       Depreciation and 
         amortization                  1,371,283      1,056,365         952,109
       Provision for losses on 
         accounts receivable              44,000         24,210         268,551
       Deferred income taxes            (155,300)        89,000         (96,000)
       Changes in assets and 
         liabilities, net of
         effect of asset 
         acquisitions (Note 2):
       Accounts receivable            (4,381,287)     1,098,227      (1,055,450)
       Inventory                      (1,198,068)     3,130,709      (2,506,516)
       Prepaid expenses and other     
         current assets                 (159,254)       113,258        (265,042)
       Prepaid income taxes              205,691       (471,710)           -   
       Other assets                       97,618         (7,622)        (15,604)
       Accounts payable                5,785,344     (3,462,612)      8,441,961
       Accrued expenses and          
         sundry liabilities              710,872         85,421         255,913
                                     -----------    -----------     -----------
                                       2,320,899      1,655,246       6,039,922
                                     -----------    -----------     -----------
                                     
NET CASH PROVIDED BY                 
  OPERATING ACTIVITIES                 4,065,734      2,764,135       7,661,542
                                     -----------    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from exercise 
    of warrants                        3,586,059        300,601         126,409
  Net repayments under revolving 
    loan agreements                   (7,000,000)      (150,000)     (3,224,695)
  Net repayments of long-term debt      (603,532)      (419,952)       (380,085)
  Exercise of employee stock options     371,122        197,606         125,503
                                     -----------    -----------     -----------

NET CASH USED IN  FINANCING 
  ACTIVITIES                          (3,646,351)       (71,745)     (3,352,868)
                                     -----------    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payments for certain net 
    assets of businesses acquired           -          (931,466)     (2,718,009)
  Capital expenditures                  (664,433)      (788,330)       (713,484)
  Payments for intangible assets      (1,058,485)    (1,488,654)     (1,027,851)
  Note receivable                           -              -          1,000,000
                                     -----------    -----------     -----------

NET CASH USED IN INVESTING 
  ACTIVITIES                          (1,722,918)    (3,208,450)     (3,459,344)
                                     -----------    -----------     -----------

NET INCREASE (DECREASE) IN CASH       (1,303,535)      (516,060)        849,330
                                     
CASH - beginning of year               2,817,285      3,333,345       2,484,015
                                     -----------    -----------     -----------

CASH - end of year                   $ 1,513,750    $ 2,817,285     $ 3,333,345
                                     -----------    -----------     -----------
                                     -----------    -----------     -----------

        The notes to consolidated financial statements are made a part hereof. 

                                         F-6

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (CONTINUED)



                                                 YEARS ENDED NOVEMBER 30,
                                            -----------------------------------
                                              1996        1995          1994
                                           ---------   -----------   -----------


SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
    Cash paid during the year for:
      Interest                           $   986,000   $ 1,424,000   $ 1,217,000
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------
       Income taxes                      $ 1,150,000   $   948,000   $ 1,214,000
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------

ASSETS ACQUIRED FOR DEBT - capital leases,
  which are not reflected in 
  the above statements                   $       -     $       -     $   202,658
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------

NET ASSETS OF A BUSINESS ACQUIRED
  FOR ISSUANCE OF COMMON STOCK
  which is not reflected in the 
  above statements                       $ 3,228,004   $       -     $       -  
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------

BUSINESS ACQUIRED FOR ISSUANCE OF
  LONG-TERM DEBT which is not
  reflected in the 
  above statements                       $       -     $       -     $ 4,217,981
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------
DEBENTURES CONVERTED INTO COMMON
  STOCK                                  $ 1,400,000   $ 1,390,000   $       -  
                                         -----------   -----------   -----------
                                         -----------   -----------   -----------



        The notes to consolidated financial statements are made a part hereof. 

                                         F-7

<PAGE>
 

                        MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                      YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994



<TABLE>
<CAPTION>
                                          COMMON STOCK                                            
                                         $.03 PAR VALUE       ADDITIONAL                          
                                      -----------------        PAID-IN       RETAINED        TREASURY
                                      SHARES     AMOUNT        CAPITAL       EARNINGS         STOCK
                                      ------     ------      ------------   -----------     ---------
<S>                              <C>            <C>          <C>            <C>             <C>      
BALANCES AT                                                                
  NOVEMBER 30, 1993                3,535,452    $ 106,063    $ 10,277,439   $ 5,811,186     $ 1,164
                                                                           
Shares issued for exercise                                                 
  of warrants                         29,057          872         125,537          -           -   
Shares issued for stock options       30,900          927         124,576          -           -   
Net income                              -            -               -        1,621,620        -   
                                  ----------    ---------    ------------   -----------    --------
BALANCES AT                                                                
  NOVEMBER 30, 1994                3,595,409      107,862      10,527,552     7,432,806       1,164
                                                                           
Shares issued for conversion                                               
  of debentures (Note 5)             187,500        5,625       1,384,375          -           -   
Shares issued for stock options       45,133        1,354         196,252          -           -   
Shares issued for exercise                                                 
    of warrants                       50,762        1,523         299,078          -           -   
Net income                              -            -              -         1,108,889
                                  ----------    ---------    ------------   -----------    --------
                                                                           
BALANCES AT                                                                
  NOVEMBER 30, 1995                3,878,804      116,364      12,407,257     8,541,695       1,164 
                                                                           
Shares issued for conversion                                               
  of debentures (Note 5)             187,500        5,625       1,391,968          -            -  
Shares issued for stock options       56,049        1,681         369,441          -            - 
Shares issued for exercise                                                 
  of warrants                        659,066       19,772       3,566,287          -            -  
Shares issued in connection                                                
  with acquisition (Note 2)          280,696        8,421       3,219,583          -            -  
Net income                              -            -               -        1,744,835         -  
                                  ----------    ---------    ------------   -----------    --------
BALANCES AT                                                                
  NOVEMBER 30, 1996                5,062,115    $ 151,863    $ 20,954,536  $ 10,286,530     $ 1,164
                                  ----------    ---------    ------------   -----------    --------
                                  ----------    ---------    ------------   -----------    --------
                                                                           
</TABLE>


       The notes to consolidated financial statements are made a part hereof. 

                                                                     F-8


<PAGE>
                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994


     


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF OPERATIONS

     Micro Bio-Medics, Inc. (the "Company") and its subsidiaries are a United
     States based distributor.  The Company's principal line of business is the
     distribution, at wholesale, of medical supplies and related products.  The
     principal markets are the New York metropolitan area for physicians and
     hospitals, and throughout the United States for health care professionals
     in sports medicine, schools, emergency services, industrial safety and
     government and laboratory markets.  Included in their operations are the
     assembly and distribution of first aid medical kits and school and athletic
     medical supplies.  The foregoing operations are all considered as one
     business segment.

     CONCENTRATIONS OF CREDIT RISK

          CASH

          The Company maintains various bank accounts and at times, balances may
          be in excess of the FDIC insurance limit.  At November 30, 1996 and
          1995, the amounts in excess of FDIC insurance limits were
          approximately $1,200,000 and $2,200,000, respectively.

          ACCOUNTS RECEIVABLE

          Historically, the Company has not experienced significant losses
          related to receivables from any individual customers or group of
          customers in any industry or geographic area.

     PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of the Company
     and its subsidiaries, which are all wholly-owned.  All significant
     intercompany accounts and transactions have been eliminated in
     consolidation. 

                                         F-9

<PAGE>


                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

     Property, plant and equipment are being depreciated primarily on the
     straight-line basis over the estimated useful lives of the individual
     classes of assets.

     INTANGIBLES

     Certain computer programming costs are being amortized over five years
     using the straight-line method.

     The excess of the purchase price paid over the net assets of businesses
     acquired is being amortized over five to forty years using the
     straight-line method.

     The Company evaluates the recoverability of goodwill and other intangible
     assets and if there is a decline in related profitability it will recognize
     an impairment of value if appropriate.

     DEFERRED INCOME TAXES

     The Company adopted Statement of Financial Accounting Standards No. 109
     (SFAS No. 109), "Accounting for Income Taxes," which requires the use of
     the liability method of accounting for income taxes.  The liability method
     measures deferred income taxes by applying enacted statutory rates in
     effect at the balance sheet date to the differences between the tax bases
     of assets and liabilities and their reported amounts in the financial
     statements.

     REVENUE RECOGNITION

     The Company recognizes revenues when its products are shipped.

     USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period.  Actual results could differ from these
     estimates. 

                                         F-10

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     NEW ACCOUNTING STANDARDS

     In March 1995, the Financial Accounting Standards Board issued Statement
     No. 121, "Accounting for the Impairment of Long-Lived Assets and for
     Long-Lived Assets to be Disposed Of," which will require the determination
     by the Company of whether the carrying amount of an asset is recoverable
     and if an impairment loss should be recognized.  SFAS No. 121 is effective
     for fiscal years beginning after December 15, 1995 and management believes
     that such adoption will not significantly affect the Company's consolidated
     financial statements since the Company was generally in conformance with
     this standard.

     In October 1995, the Financial Accounting Standards Board issued SFAS
     No. 123, "Accounting for Stock Based Compensation", which is effective for
     fiscal years beginning after December 15, 1995 and is effective for the
     Company's fiscal year ended November 30, 1997.  Under SFAS No. 123,
     companies can elect but are not required to recognize compensation expense
     for all stock based awards, using a fair value methodology.  The Company
     expects to implement in 1997 the disclosure only provisions, as permitted
     by SFAS No. 123.

     For the year ended November 30, 1996, the Company adopted Statement of
     Financial Accounting Standards No. 106, "Employers' Accounting for
     Post-retirement Benefits Other than Pensions."  Such adoption did not
     significantly affect the Company's consolidated financial statements.


NOTE 2 - ACQUISITIONS

     Prior to fiscal year ended November 30, 1993, the Company made several
     acquisitions.

     On December 1, 1993, a subsidiary of the Company purchased certain net
     assets and customer accounts of Clark Surgical Corp. ("Clark") subject to
     certain specific liabilities and obligations under existing contracts and
     leases.  Clark was a major distributor of physician, hospital and
     veterinary supplies in the New York Metropolitan area and Southern
     Florida.  The purchase price as adjusted was approximately $16,500,000
     consisting of inventory of approximately $5,000,000, accounts receivable
     of approximately $10,200,000, property and equipment of approximately
     $300,000 and goodwill of $1,000,000.  The Company borrowed approximately
     $14,200,000 under its existing bank line of credit to finance this
     acquisition and made payments during the year ended November 30, 1994 of
     approximately $1,000,000.  The remaining balance of approximately
     $1,000,000 was paid in November 1995.

     In addition, the Company agreed to pay the two former stockholders of Clark
     an aggregate of $2,725,000 in cash, payable over a seven year period ending
     December 31, 2000 for their agreement not to compete for a period of twenty
     years.  As part of the acquisition of Clark's assets, which is included
     above, the Company issued 40,000 warrants at an exercise price of $8.00 to
     these two stockholders with 20% exercisable immediately and the remainder
     contingent upon certain conditions being met.  Effective November 29, 1994,
     these warrants were canceled. 

                                         F-11

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 2 - ACQUISITIONS (CONTINUED)

     Effective June 1, 1994, the Company acquired certain assets and customer
     accounts of Joseph Weintraub, Inc., a distributor of physician and hospital
     supplies for approximately $1,100,000.  The purchase price was allocated
     based upon the fair market value of the assets at the date of acquisition.

     Effective January 18, 1996, the Company acquired 100% of Stone Medical
     Supply Corporation's ("Stone's") $.01 par value common stock outstanding of
     approximately 3,432,000 shares in exchange for the issuance of 280,696
     shares of the Company's $.03 par value common stock (valued at $11.50 per
     share).  This tax-free merger was accounted for as a purchase.  The
     purchase price was approximately $3,200,000, and the excess of cost over
     the fair values of assets acquired was approximately $2,300,000 which is
     being amortized over a life of thirty years.  In addition, the Company
     entered into two fifteen year non-competition agreements with two former
     executives of Stone in the anticipated amount of $1,750,000, of which
     $916,666 was paid during 1996 with the remainder payable over five years
     subject to a final determination.


NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consists of the following:

                                          COST  
                               ---------------------------
                                       NOVEMBER 30,          
                               ---------------------------    ESTIMATED
                                    1996          1995       USEFUL LIFE
                               ------------   ------------   -----------
                                                               (Years)  
  Land                         $    93,552    $      -   
  Building and improvements        343,448           -           40
  Furniture, fixtures and       
     equipment (*)               5,457,771      5,716,810       5 - 8
  Transportation equipment         140,825         93,419         5
  Leasehold improvements         1,155,822      1,283,712   Life of lease
                               -----------     ----------
                                 7,191,418      7,093,941
  Less: Accumulated depreciation
           and amortization      3,433,070      3,616,134
                               -----------     ----------
                               $ 3,758,348    $ 3,477,807
                               -----------     ----------
                               -----------     ----------

  (*)   Equipment held under capital leases amounted to approximately
        $2,400,000 and $2,249,000 as of November 30, 1996 and 1995,
        respectively.

  Depreciation expense totalled approximately $976,000, $764,000 and $717,000
    for the years ended November 30, 1996, 1995 and 1994, respectively. 

                                         F-12

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 4 - INTANGIBLE ASSETS

  Intangible assets consist of the following:

                                                          NOVEMBER 30,  
                                                 --------------------------
                                                      1996          1995
                                                 -----------    -----------
  Excess cost of acquisitions over net          
     tangible assets acquired                    $ 6,668,876    $ 3,997,570
  Agreements not to compete (Note 2)               2,455,680      1,607,183
  Computer programming costs                         284,791        446,643
                                                 -----------    -----------
                                                   9,409,347      6,051,396
  Less: Accumulated amortization                   1,155,260      1,061,323
                                                 -----------    -----------
                                                
                                                 $ 8,254,087    $ 4,990,073
                                                 -----------    -----------
                                                 -----------    -----------

  Amortization expense amounted to approximately $395,000, $292,000 and
  $235,000 for the years ended November 30, 1996, 1995 and 1994, respectively.


NOTE 5 - LONG-TERM DEBT

  Long-term debt consists of the following:

                                                          NOVEMBER 30,  
                                                 --------------------------
                                                      1996          1995
                                                 -----------    -----------

  Capitalized leases (collateralized by equipment
     with an aggregate cost of approximately
     $2,400,000 and $2,249,000) payable in various
     installments through fiscal 2001; interest
     at 6.5% to 9.06% or varies with changes in 
     prime rate                                  $ 1,194,240    $ 1,426,384
  Bank loans (i)                                   7,500,000     14,500,000
  7% convertible subordinated              
     debentures, due                       
     October 30, 2003 (ii)                              -         1,500,000
  Obligations related to acquisitions                453,082        322,873
                                                 -----------    -----------
                                                   9,147,322     17,749,257
     Less:  Current maturities                       432,755        479,195
                                                 -----------    -----------
                                                 $ 8,714,567   $ 17,270,062 
                                                 -----------    -----------
                                                 -----------    -----------

                                         F-13

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 5 - LONG-TERM DEBT (CONTINUED)

  The approximate non-current portion of long-term debt at November 30, 1996 is
  payable as follows:

           YEAR ENDING NOVEMBER 30,
           ------------------------
                    1998                                $   435,000
                    1999                                  7,865,000
                    2000                                    278,000
                    2001                                     71,000
                    2002                                     17,000
                    Subsequent                               49,000
                                                        -----------
                                                        $ 8,715,000
                                                        -----------
                                                        -----------

(i)  The Company has a $25 million secured revolving loan agreement with Chase
     Manhattan Bank NA and Fleet Bank of New York.  Chase's and Fleet's
     commitment under the loan agreement is limited to $15,000,000 and
     $10,000,000, respectively.  The loan agreement expires on February 15,
     1999.  The loan bears interest at the bank's prime rate plus 1/4%, except
     for Eurodollar loans.  As of November 30, 1996, $4,000,000 of the
     $7,500,000 revolving loan outstanding was utilized for Eurodollar loans at
     an average interest rate of 6.625%.  The debt is collateralized by
     accounts receivable and inventory.  In connection with the loan agreement,
     the Company has agreed to certain restrictions relating to its
     indebtedness and liens, and has agreed to maintain specified financial
     ratios and covenants.  The loan agreement prohibits the Company from
     paying any dividends and restricts capital distributions or redemptions
     and purchases or retirements of any of the Company's capital stock.  There
     are also restrictions as to investments, acquisitions, capital
     expenditures and payments to related parties.  A commitment fee equal to
     1/8% per annum will be charged on the unused portion of the loan.  The
     loan may be repaid at any time.

     On June 7, 1995, the Company entered into a zero cost, three year interest
     rate swap agreement with Chase for $10,000,000.  It is management's intent
     to match the agreement's terms as to principal amounts and repricing
     maturities in order to reduce the Company's interest rate risk on its
     revolving loans.  As of November 30, 1996, the agreement serves to limit
     the net interest rate charged on the Company's first $10,000,000 of
     revolving loans to 8.25%.  However, the Company would receive no further
     interest rate benefit once the applicable interest rate falls below 6.55%.

(ii) In November 1993, the Company completed the private sale and issuance of
     its 7% convertible subordinated Debentures ("Debentures") due October 30,
     2003.  Net proceeds from the issuance of the Debentures with a face value
     of $3,000,000 were approximately $2,700,000.  The Debentures were
     immediately convertible into shares of common stock at the rate of $8.00
     per share until October 28, 2003.

     On September 28, 1995, $1,500,000 of the Debentures were converted into
     187,500 shares of the Company's common stock.  As of May 10, 1996, the
     remaining outstanding Debentures were converted into shares of the
     Company's common stock. 

                                         F-14

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 6 - INCOME TAXES

     The Company and its subsidiaries file consolidated income tax returns.

     Provision for income taxes consists of the following:

                                                YEARS ENDED NOVEMBER 30,     
                                       --------------------------------------
                                            1996         1995         1994
                                       ------------  -----------   -----------
Currently payable:
  Federal                              $ 1,055,000    $ 508,000    $ 745,000
  State and local                          421,000      209,000      303,000
                                       -----------    ---------    ---------
                                         1,476,000      717,000    1,048,000
                                       -----------    ---------    ---------
  Deferred:
     Federal                              (124,300)      72,000      (77,000)
     State and local                       (31,000)      17,000      (19,000)
                                       -----------    ---------    ---------
                                          (155,300)      89,000      (96,000)
                                       -----------    ---------    ---------
                                       $ 1,320,700    $ 806,000    $ 952,000
                                       -----------    ---------    ---------
                                       -----------    ---------    ---------

  The difference between the statutory United States federal income tax rate
  and the effective income tax rate is as follows:

                                                YEARS ENDED NOVEMBER 30,     
                                       -------------------------------------
                                           1996        1995          1994
                                       -----------    ---------    ---------

  Statutory federal income tax rate       34.0          34.0         34.0
  Current year state and local taxes
     (net of federal tax effect)           6.8           7.9          7.0
  Other                                    2.3            .2         (4.9)
                                         -----        ------       ------
                                          43.1%         42.1%        36.1%
                                         -----        ------       ------
                                         -----        ------       ------

  The net current and non-current components of deferred income taxes
  recognized in the balance sheets at November 30, are as follows:


                                                         1996         1995
                                                      ---------    ---------

     Net current assets                               $ 781,500    $ 485,500
     Net non-current liabilities                        179,911      358,138
                                                      ---------    ---------

     Net asset                                        $ 601,589    $ 127,362 
                                                      ---------    ---------
                                                      ---------    ---------

                                         F-15

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 6 - INCOME TAXES (CONTINUED)

  The components of the net deferred tax asset as of November 30, are as
  follows:

                                                         1996         1995
                                                      ---------    ---------

     Deferred tax assets:
     Accounts receivable allowances                   $ 248,274    $ 283,080
     Inventory - uniform capitalization and
       allowances                                       533,226      189,420
     Net operating loss                                 262,360          -  
     Other                                               44,100       13,000
                                                      ---------    ---------
                                                      1,087,960      485,500
  Deferred tax liability:
     Depreciation and amortization                      486,371      358,138
                                                      ---------    ---------

  Net deferred tax asset                              $ 601,589    $ 127,362
                                                      ---------    ---------
                                                      ---------    ---------

  In connection with its acquisition of Stone (Note 2), the Company has
  recorded a deferred tax asset of $336,927 reflecting the benefit of
  approximately $800,000 in loss carryforwards which expire in the year 2011. 
  Realization is dependent on generating sufficient taxable income prior to
  expiration of the loss carryforwards.  Although realization is not assured,
  management believes it is more likely than not that all of the deferred tax
  asset will be realized.  The amount of the deferred tax asset considered
  realizable, however, could be reduced in the near term if estimates of future
  taxable income during the carryforward period are reduced.  However, no
  valuation allowance has been provided.  During the year ended November 30,
  1996, $74,567 of this deferred tax asset was realized by the utilization of
  net operating loss carryforwards.


NOTE 7 - ACCRUED EXPENSES

  Accrued expenses and sundry liabilities consist of:

                                                            NOVEMBER 30,
                                                    ------------------------
                                                        1996         1995
                                                    -----------  -----------

  Compensation                                      $ 1,273,444  $   660,638
  Freight-out                                           194,222      356,795
  Commissions                                           273,747      166,871
  Other                                                 800,761      482,458
                                                    -----------  -----------
                                                    $ 2,542,174  $ 1,666,762
                                                    -----------  -----------
                                                    -----------  -----------

                                         F-16

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 8 - COMMITMENTS AND CONTINGENCIES

     RETIREMENT PLAN

     The Company's 401(k) deferred retirement plan is available to all eligible
     employees and provides for matching contributions by the Company equal to
     20% of the amount of the participants' contributions that are not in excess
     of 5% of compensation.  For the years ended November 30, 1996, 1995 and
     1994, the Company's matching contributions were approximately $78,000,
     $62,000 and $30,000, respectively.

     DIRECTORS' RETIREMENT PLAN

     The 1996 Directors' Retirement Plan to provide certain retirement benefits
     for the directors of the Company was approved by the stockholders in
     June 1996.  Under the plan, a director must render continuous service to
     the Company for a period of seven years after the commencement of the plan
     and shall receive a retirement benefit on the earlier of retirement date,
     disability or death.  The retirement benefit is an annual benefit equal to
     the aggregate director's fees paid during the twelve month period preceding
     the payment of benefits.  The Plan also provides that in the event of a
     "change in control" as defined, a director may elect to receive either an
     actuarial equivalent lump sum of the product of the director's compensation
     and the director's life expectancy or a lump sum equal to the product of
     the director's compensation and the number of completed years of service. 
     The total of such payments in a "change in control" would amount to
     approximately $1,400,000 (See Note 12).

     For the year ended November 30, 1996, the adoption of SFAS No. 106, 
     "Employers' Accounting for Post-retirement Benefits Other than Pensions,"
     resulted in a retirement expense which was immaterial to the Company's
     consolidated financial statements and for which no provision has been made.

     EMPLOYMENT/CONSULTING CONTRACTS

     The Company has an employment agreement with its Chief Executive Officer
     and a consulting agreement with a Director, terminating on March 31, 2000
     and December 31, 1996, respectively.  The current aggregate annual base
     compensation under these contracts is approximately $340,000.  The Chief
     Executive Officer's contract provides for annual increments plus a bonus
     based on income before taxes.  If the contract is terminated prior to
     expiration, payments are to be made equal to the greater of $2,000,000 or
     the sum of five years' salary, based upon the rate of compensation then in
     effect, plus five times the last annual bonus received (See Note 12).

     For the years ended November 30, 1996, 1995 and 1994, bonuses of
     approximately $299,000, $144,000 and $199,000, respectively, were paid
     under the employment contract. 

                                         F-17
<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994





NOTE 8 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     SELF-INSURANCE

     The Company acts as a self-insurer for its employees' health insurance up
     to a maximum of $50,000 per covered individual.  The Company is liable up
     to a maximum of $460,000 for the year.  Claims, including estimates for
     charges incurred but not reported, are charged to operations during the
     year in which they occur.  As of November 30, 1996, 1995 and 1994, the
     liability for claims incurred but not submitted amounted to $50,000,
     $75,000 and $75,000, respectively.

     LEASES

     The approximate aggregate minimum annual rental commitments under long-term
     operating leases in effect at November 30, 1996 are as follows:

     YEAR ENDING       OFFICE, WAREHOUSE        TRANSPORTATION
     NOVEMBER 30,        AND SALES                EQUIPMENT         TOTAL
     ------------     ------------------       ---------------  -----------
         1997           $ 1,234,000              $ 149,000     $ 1,383,000
         1998             1,266,000                126,000       1,392,000
         1999             1,320,000                103,000       1,423,000
         2000             1,287,000                 75,000       1,362,000
         2001               927,000                 35,000         962,000
       Thereafter         4,647,000                  3,000       4,650,000
                        -----------              ---------     -----------
                        $10,681,000              $ 491,000     $11,172,000
                        -----------              ---------     -----------
                        -----------              ---------     -----------

     Certain leases contain escalation clauses which increase the rents for
     various operating expenses and fluctuations in property taxes.

     Rent expense consists of the following:

                                        YEARS ENDED NOVEMBER 30, 
                         -----------------------------------------
                             1996           1995           1994
                         -----------    -----------    -----------
Office, warehouse and 
  sales                  $ 1,552,500    $ 1,141,700    $ 1,392,046
Transportation 
  equipment                  111,216        117,417         85,555
                         -----------    -----------    -----------
                         $ 1,663,716    $ 1,259,117    $ 1,477,601
                         -----------    -----------    -----------
                         -----------    -----------    -----------

                                         F-18

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994





NOTE 8 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     The Company leases certain equipment under capital leases.  The following
     is a schedule by years of approximate future minimum lease payments under
     the capitalized leases together with the present value of the net minimum
     lease payments at November 30, 1996:

               YEAR ENDING NOVEMBER 30,
               ------------------------

                         1997                    $  516,000
                         1998                       274,000
                         1999                       263,000
                         2000                       255,000
                         2001                        53,000
                                                -----------
     Total minimum lease payments                 1,361,000
     Less:  Amount representing 
            interest at 6.5% to 9%                  167,000
                                                -----------
                                                $ 1,194,000
                                                -----------
                                                -----------




NOTE 9 - STOCK OPTIONS AND WARRANTS

     OPTIONS

     Under various plans, the Company may grant stock options to directors,
     officers and employees.  The options must be granted at exercise prices of
     not less than fair market value and expire within ten years from the date
     of grant.  Transactions under the various stock option and incentive plans
     for the periods indicated were as follows:

                                     YEARS ENDED NOVEMBER 30, 
                          ------------------------------------------
                             1996           1995            1994    
                          ---------      ----------      -----------
Outstanding at 
  beginning of year       1,491,568      1,372,368         1,244,767
Add (deduct):
     Granted                215,000        207,000           180,500
     Terminated             (15,100)       (42,667)          (22,000)
     Exercised              (56,049)       (45,133)          (30,899)
                          ---------      ----------      -----------

Outstanding at 
  end of year             1,635,419      1,491,568         1,372,368
                          ---------      ----------      -----------
                          ---------      ----------      -----------

Remaining shares 
  reserved for issuance     687,732        387,632            51,965
                          ---------      ----------      -----------
                          ---------      ----------      -----------

     Options outstanding at November 30, 1996, 1995 and 1994 ranged in price
     from $2.25 to $16.50.  Options exercised ranged in price from $2.25 to
     $10.25 in 1996, 1995 and 1994. 

                                         F-19
<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994




NOTE 9 - STOCK OPTIONS AND WARRANTS (CONTINUED)

     WARRANTS

     The Company's Series 1 warrants expired in June 1996 and almost all were
     exercised at $6.00 per 1.047 shares.  The total net proceeds from the
     exercise of all warrants from 1992 (inception) through June 1996 were
     approximately $7,900,000 with approximately 1,400,000 shares of common
     stock being issued.


NOTE 10 - EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

     Earnings per common and common equivalent share are based on the weighted
     average number of common shares and common equivalent shares outstanding
     during the period.  The modified treasury stock method was utilized to
     calculate the dilutive effect of the options and warrants upon the earnings
     per share data.  Fully diluted earnings per common and common equivalent
     share were the same as for the primary calculation.


NOTE 11 - FINANCIAL INSTRUMENTS

     The amounts at which cash, accounts receivable, accounts payable and other
     current liabilities are presented in the balance sheets approximate their
     fair value due to their short maturities.  The carrying amount of long-term
     debt approximates its fair value determined based on discounted cash flow
     using a market rate of interest at the balance sheet dates as applicable to
     comparable debt. 

NOTE 12 - SUBSEQUENT EVENT

    On March 7, 1997, the Company entered into an agreement and plan of  merger
    whereby HSI Acquisition Corp., a wholly-owned subsidiary of Henry Schein,
    Inc. ("Schein"), will merge into the Company. The Company will  be the
    surviving corporation as a subsidiary of Schein. Schein is a marketer of
    healthcare products and services to  office-based healthcare practitioners
    including dental practices and laboratories, physician practices and
    veterinary clinics in the North American and European markets. As a result
    of the transaction, outstanding shares of the Company's common stock will
    be exchanged at a rate of .62 shares of Schein's common stock for each
    outstanding share  of the Company. Existing options and warrants will be
    exchanged for Schein's options and warrants at the same rate. It is
    intended that the merger shall qualify as a tax  free reorganization for
    income tax purposes and accounted for as a  pooling of interests for
    financial reporting purposes.


                                         F-20

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994

NOTE 12 - SUBSEQUENT EVENT (CONTINUED)

     The completion of the transaction is subject to approval by the Company's
     shareholders and to termination of any waiting period under the
     Hart-Scott-Rodino Act, and further, all dissenting shares shall not
     constitute more than 9% of the  Company's outstanding common stock
     immediately prior to the effective date of the merger.

     The agreement may be terminated based upon certain conditions as defined
     in the Plan of Merger including if the merger is not consummated before
     September 30, 1997. In the event that the merger is not completed due to
     cause by either party, liquidated damages of $3,000,000 will be payable by 
     such party to the other party. If (i) the Company terminates the Plan of 
     Merger in order to effect an Acquisition Transaction (as defined) with 
     another person, (ii) Schein terminates the Plan of Merger due to the 
     Company's Board of Directors withdrawing or adversely modifying its 
     recommendation that the Company's shareholders approve the Plan of Merger, 
     or (iii) the Plan of Merger terminates under certain other circumstances 
     and the Company effects an Acquisition Transaction or enters into a 
     definitive agreement with respect thereto within six months of such 
     termination, the Company will pay Schein a termination fee of $5,000,000.

     In connection with the Merger Agreement, the Chief Executive Officer of 
     the Company entered into an employment agreement, which becomes effective
     when the merger is completed, to be employed as Executive Vice-President 
     of Schein and President of Schein's medical products group. The existing
     employment agreement (see Note 8) will be terminated and Schein will cause 
     the Company to pay him $3,000,000 in five equal installments pursuant
     thereto. The first payment is due on the effective date of the merger and
     the remaining installments are payable on each January 1st thereafter.

     If the merger becomes effective, the Board of Directors of the Company 
     will terminate the 1996 Directors' Retirement Plan (see Note 8) and the 
     directors will not seek to obtain the benefits payable under such plan.


                                    F-21

<PAGE>


                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994






                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                                     SCHEDULE II

                          VALUATION AND QUALIFYING ACCOUNTS




       COLUMN A                  COLUMN B    COLUMN C      COLUMN D   COLUMN E
       ---------                -----------  ----------   ----------- ----------
                                 BALANCE     ADDITIONS                 BALANCE
                                BEGINNING    CHARGED TO                 END OF 
                                 OF YEAR     OPERATIONS   DEDUCTIONS*    YEAR 
                                -----------  ----------   -----------  ---------
  DESCRIPTION
  -----------

Allowance for Doubtful Accounts

  Year ended November 30, 1994   $ 600,000    $ 268,551    $ 218,551  $ 650,000
                                
  Year ended November 30, 1995     650,000       96,000       71,790    674,210
                                
  Year ended November 30, 1996     674,210       44,000       32,031    686,179





* Deductions represent accounts written off, net of recoveries of accounts
  written off in prior years. 

                                         F-22

<PAGE>

                       MICRO BIO-MEDICS, INC. AND SUBSIDIARIES

                              EXHIBIT 11 - STATEMENT RE:
            COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE


                                                YEARS ENDED NOVEMBER 30,
                                        ------------------------------------
                                             1996       1995         1994
                                        -----------  -----------  ----------
PRIMARY EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE

EARNINGS

Income before cumulative effect of 
  accounting change                     $ 1,744,835  $1,108,889    $1,681,620

MODIFIED TREASURY STOCK METHOD

Incremental income after the application 
  of assumed proceeds toward repurchase 
  of 20% of the outstanding common shares 
  at the average market price, the reduction 
  of debt and the balance of funds invested 
  in U.S. government securities, net of 
  applicable income taxes                    59,709     191,461       146,222
                                        -----------  ----------   -----------

Adjusted earnings                       $ 1,804,544  $1,300,350    $1,827,842
                                        -----------  ----------   -----------
                                        -----------  ----------   -----------


SHARES

Weighted average number of common shares
  outstanding                             4,554,046   3,690,092     3,551,732

Additional shares assuming conversion of:
  Stock options and warrants utilizing the
     modified treasury stock method       1,262,423   1,431,542     1,344,786
                                        -----------  ----------   -----------

Number of common and common 
  equivalent shares                       5,816,469   5,121,634     4,896,518
                                        -----------  ----------   -----------
                                        -----------  ----------   -----------

Earnings per common and common equivalent 
  share before cumulative effect of 
  accounting change                            $.31        $.25          $.37
                                        -----------  ----------   -----------
                                        -----------  ----------   -----------

Fully diluted earnings per common and common equivalent share were the same. 

                                       F-23


<PAGE>

                                       PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

(a)  IDENTIFICATION OF DIRECTORS

     The names, ages and principal occupations of the Company's present
directors, and the date on which their term of office commenced and expires, are
as follows:
     
                                        First
                         Term of        Became           Principal
Name                Age  Office         Director         Occupation  
----                ---  --------       --------       --------------

Bruce J. Haber       44    (1)          1981           President of the
                                                       Company

Marvin S. Caligor    66    (1)          1982           Consultant

Renee Steinberg      74    (1)          1971           Secretary of
                                                       the Company

K. Deane Reade, Jr.  55    (1)          1987           President of
                                                       Bangert, Dawes, 
                                                       Reade,
                                                       Davis & Thom
                                                       Incorporated
___________________________
(1)  Directors are elected at the annual meeting of stockholders and hold office
     until the following annual meeting.  

(b)  IDENTIFICATION OF EXECUTIVE OFFICERS.

     Bruce J. Haber is President of the Company and its subsidiaries.  Louis
Buther, Ernest W. Nelson and Michael Levy are each a Vice-President of the
Company.  Donald Sabia is Vice President of Operations of the Company.  Stuart
F. Fleischer is Vice President of Finance and the Principal Financial and
Accounting Officer and Gary Butler is Treasurer of the Company. Renee Steinberg
is Secretary of the Company.  

     The terms of all officers expire at the annual meeting of directors
following the annual stockholders meeting.  Subject to their contract rights to
compensation, if any, officers may be removed, either with or without cause, by
the Board of Directors, and a successor elected by a majority vote of the Board
of Directors, at any time.  


                                          16

<PAGE>

(c)  BUSINESS EXPERIENCE

     Bruce J. Haber is serving as President and a Director of MBM.  Mr. Haber
was elected to the position of President in December, 1983; has served as a
Director of MBM since September, 1981; and, from that date, until his election
as President of MBM, served as Executive Vice-President of MBM.  Prior to his
affiliation with MBM, Mr. Haber served from 1977 to August, 1981 as a
Vice-President of Commercial Credit Business Services, Inc., New York. 
Mr. Haber holds a Bachelor of Science degree from the City College of New York
and a Master of Business Administration from Baruch College in New York.  Mr.
Haber is a full-time employee of MBM.  

     Louis Buther has been a Vice-President of MBM since December, 1983.  He has
served as Vice-President of MBM's wholly-owned subsidiary Caligor Physicians and
Hospital Supply Corp. since May, 1983 and from March 1, 1982 to April, 1983,
served as its Sales Manager.  Mr. Buther also served as Sales Manager for the
Caligor business from 1980 until its acquisition and prior thereto served it in
the capacity of a licensed pharmacist and pharmacist intern.  Mr. Buther holds
an Associate Arts Science degree in Chemistry from Bronx Community College and a
Bachelor of Science degree in Pharmacy from Long Island University.  Mr. Buther
is a full-time employee of MBM.  

     Ernest W. Nelson has been a Vice-President of MBM since December, 1983.
From January, 1982 until his election as a Vice-President, he was employed by
MBM as a Sales Representative and then promoted to the position of National
Sales Manager for MBM's MBM division.  Prior thereto, Mr. Nelson was employed
from June, 1981, to December, 1981, as a Sales Representative for United States
Lines and, from July, 1976, to June, 1981, as an Athletic Trainer and Associate
Professor at Columbia University, New York City.  Mr. Nelson holds a Bachelor of
Science degree from Central Connecticut State University and a Master of Arts
degree from Columbia University.  Mr. Nelson is a full-time employee of MBM.

     Donald R. Sabia has been Vice-President of Operations since August of 1996.
Prior to his appointment as Vice-President, Donald Sabia has served as Customer
Service Manager of the Caligor Division from September 1991 to April of 1995 and
Purchasing Director of the Company from April 1995 to his appointment of
Vice-President.  Mr. Sabia joined MBM in 1990 through the acquisition of his
company, Eastern Medical Supply Co., Stamford, CT, in which he was a major
shareholder and held the position of  Vice-President for 15 years.  Mr. Sabia is
a full time employee of MBM.

     Michael Levy joined MBM in 1990 as Vice President of the Healer Products
Division.  Prior to joining MBM, Mr. Levy served as a Management Consultant in
the women's apparel industry from 1987 to 1990.  He was Senior Vice President of
Rudco Industries, Inc., a financial forms manufacturer from 1975 to 1987 and
held two management positions in the hardware industry from 1960 to 1975.  Mr.
Levy holds a Bachelor of Science degree from New York University.  Mr. Levy is a
full-time employee of MBM.  


                                          17

<PAGE>

     Stuart F. Fleischer has been Vice President of Finance, Principal Financial
and Accounting Officer since April 1995.  Stuart Fleischer joined the Company in
March 1995.  From February 1986 through March 1995, Mr. Fleischer served as a
Senior Vice President and Chief Financial Officer of Communications Diversified,
a promotional marketing entity.  From June 1974 through January 1986, he worked
on the audit staff at Price Waterhouse.  Mr. Fleischer is a Certified Public
Accountant and holds a Bachelor of Science degree from Lehigh University.  Mr.
Fleischer is a full-time employee of MBM.

     Gary L. Butler has been Treasurer of MBM and has served at various times as
an executive officer in other capacities since December, 1983.  From March 1,
1982 until December, 1983, Mr. Butler served as the Controller of MBM's
wholly-owned subsidiary, Caligor Physicians and Hospital Supply Corp., and,
prior thereto, served in such capacity with the Caligor business from May, 1975
until its acquisition by MBM.  From December, 1984 to the present, Mr. Butler
has served as Treasurer of Caligor Physicians & Hospital Supply Corp. 
Mr. Butler holds a Bachelor of Science degree from New York University.  Mr.
Butler is a full-time employee of MBM.  

     Marvin S. Caligor, a Director of MBM since March 1, 1982, when Caligor
Physicians and Hospital Supply division of Health-Chem Corporation was acquired
by MBM.  Mr. Caligor also served as Senior Vice-President of MBM from March,
1982 until December, 1987.  Since December, 1987, Mr. Caligor has been employed
by MBM as a consultant on a part-time basis.  From 1969 until its acquisition by
MBM, Mr. Caligor was President of the division and an officer and director of
Health-Chem Corporation.  Mr. Caligor is a licensed pharmacist and holds a
Bachelor of Science in Pharmacy from Columbia University.  

     Renee Steinberg has served as Secretary and a Director of MBM for more than
the past 5 years and has not been associated with any firm other than MBM and
its subsidiaries during such period.  Mrs. Steinberg received a Bachelor of
Science degree from Cornell University and is a founder of MBM.  

     K. Deane Reade, Jr. has been a Director of MBM since July, 1987. Mr. Reade
is a General Partner of Gramercy Hills Partners, L.P.  Mr. Reade is a founder
and, since 1975, has served as President and a director of Bangert, Dawes,
Reade, Davis & Thom, Incorporated, a private investment banking firm with
offices in New York and San Francisco.  Between 1989 and 1996, Mr. Reade served
as Managing Director of John Hancock Capital Growth Management, Inc.  Mr. Reade
is a graduate of Rutgers University.  He is a director of American/Elgen, Inc.
(Irvington, New Jersey); Myers Industries, Inc. (Lincoln, Illinois); U. S.
Souvenir, Inc. (Honolulu, Hawaii) and Trail Blazers Camps, Inc. (New York, N.Y.)
a 100 year old social service organization with a year round educational program
for disadvantaged children from the Metropolitan New York - New Jersey area.  

     Directors are elected at the annual meeting of stockholders and hold office
until the following annual meeting.  The terms of all officers expire at the
annual meeting of directors following the annual stockholders meeting.  Subject
to their contract rights to compensation, if any, officers may be removed,
either with or without cause, by the Board 


                                          18

<PAGE>

of Directors, and a successor elected by a majority vote of the Board of
Directors, at any time.  

     In October 1987, MBM established an Executive Compensation Committee with
Renee Steinberg as Chairman and Bruce Haber and K. Deane Reade as members and an
Audit Committee with K. Deane Reade as Chairman and Bruce Haber and Marvin
Caligor as members.

     The Compensation Committee has the power to review compensation of MBM's
executive officers, including salaries, the granting of stock options and other
forms of compensation for executive officers whose salaries are within the
purview of the Board of Directors. In some cases, the Compensation Committee may
make recommendations to the entire Board of Directors for its approval or,
itself exercise the powers and authority of the Board of Directors to designate
compensation.

     The Audit Committee has the power to:(i)select the independent certified
public accountant; (ii) satisfy itself on behalf of the Board that the external
and internal auditing procedures assure reliable and informative accounting and
financial reporting;(iii) have meetings with management, or with the auditors,
or with both management and auditors, to review the scope of the auditor's
examination, audit reports and the Corporation's internal auditing procedures
and reviews;(iv) monitor policies established to prohibit unethical,
questionable, or illegal activities by those associated with the Corporation;
and (v) review the compensation paid to the auditors through annual audit and
non-audit fees and the effect on the independence of the auditors in relation
thereto, and it may exercise the powers and authority of the Board of Directors
to implement changes in connection with the foregoing or, at its option, may
make recommendations to the entire Board of Directors for its approval.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission").  Officers, directors and greater than ten percent
stockholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.  To Management's knowledge, no
officer, director or person owning more than 10% of the Company's Common Stock
filed any reports late during its fiscal year ended November 30, 1996. 

Item 11.  EXECUTIVE COMPENSATION
     
     The following table provides a summary compensation table with respect to
the compensation of MBM's Chief Executive Officer (CEO) and the executive
officers other than the CEO who are serving as executive officers at the end of
fiscal 1996 whose total annual salary and bonus, if any, exceeded $100,000.  


                                          19

<PAGE>

<TABLE>
<CAPTION>

                                                         SUMMARY COMPENSATION TABLE

                                                                           Long Term Compensation
--------------------------------------------------------------------------------------------------------------------------------
                                   Annual Compensation                       Awards              Payouts
--------------------------------------------------------------------------------------------------------------------------------
(a)                   (b)           (c)           (d)            (e)          (f)            (g)           (h)            (i)
                                                                Other                                                     All
  Name                                                         Annual      Restricted                                    Other
   and                                                         Compen-       Stock                        LTIP          Compen-
Principal                                                      sation       Award(s)       Number of     Payouts        sation  
Position              Year       Salary ($)     Bonus ($)        ($)       ($)    (1)       Options        ($)         ($)   (2) 
--------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>         <C>            <C>             <C>         <C>             <C>           <C>           <C>
                      1996        237,509        298,742         -0-          -0-            70,000        -0-           40,500
Bruce J. Haber        1995        222,577        144,131         -0-          -0-            70,000        -0-           40,431
CEO,                  1994        209,385        199,097         -0-          -0-            70,000        -0-           40,848
--------------------------------------------------------------------------------------------------------------------------------
                      1996        116,720        170,517         -0-          -0-            15,000        -0-            1,150
Louis Buther          1995        115,885         50,874         -0-          -0-            17,500        -0-            1,150
Vice President        1994        114,058         89,365         -0-          -0-            17,500        -0-            1,766
--------------------------------------------------------------------------------------------------------------------------------
                      1996         93,211         40,437         -0-          -0-            10,000        -0-            1,326
Ernest Nelson         1995         85,654         40,890         -0-          -0-            15,000        -0-            1,217
Vice President        1994         85,346         46,445         -0-          -0-            10,000        -0-            1,228
--------------------------------------------------------------------------------------------------------------------------------
                      1996         79,731         32,483         -0-          -0-             7,000        -0-            1,112
Donald Sabia          1995         74,487         10,551         -0-          -0-             2,000        -0-              840
Vice President        1994         72,114         13,353         -0-          -0-             2,500        -0-              845
Operations          
--------------------------------------------------------------------------------------------------------------------------------
Stuart Fleischer      1996        114,654         33,825         -0-          -0-            10,000        -0-              575
Vice President-       1995         71,621         11,446         -0-          -0-            10,000        -0-             -0-
Finance and           1994           -0-            -0-          -0-          -0-             -0-          -0-             -0-
Principal Financial
and Accounting
Officer
--------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                                                     20

<PAGE>

(1) The restricted stock awards are based upon the dollar value of restricted 
    stock, calculated by multiplying the closing market price of the 
    Registrant's unrestricted stock on the date of grant by the number of shares
    awarded on that date.

(2) Includes contributions to MBM's 401(K) Plan and in the case of Bruce 
    Haber, all other compensation includes insurance premiums paid for a whole 
    life policy which Mr. Haber is allowed to designate the beneficiary and 
    directors fees.  

                                          21

<PAGE>

 

    During the past three fiscal years, MBM has not granted stock appreciation
rights.  In addition, MBM does not have a defined benefit or actuarial plan. 
See Section 401(k) or deferred retirement plan regarding the cash or deferred
retirement plan pursuant to Section 401(k) of the Code.  Directors currently
receive $16,000 annual compensation for their services as directors, $4,000 for
services on each Audit and Compensation Committee and are eligible to receive
stock options.   


                                          22

<PAGE>

                                 OPTION GRANTS TABLE

    The information provided in the table below provides information with
respect to individual grants of stock options during fiscal 1996 of each of the
executive officers named in the summary compensation table above.  MBM did not
grant any stock appreciation rights during 1996.

                          Option Grants in Last Fiscal Year

-------------------------------------------------------------------------------
                                                              Potential       
                                                         Realizable Value at  
                                                            Assumed Annual    
Individual Grants                                        Rates of Stock Price 
                                                             Appreciation     
                                                         for Option Term (2)  
-------------------------------------------------------------------------------
(a)                 (b)       (c)       (d)        (e)       (f)        (g)
                             % of
                             Total
                            Options/
                           Granted to
                  Options  Employees   Exercise   Expira-                 
                  Granted  in Fiscal    Price      tion                    
Name                (#)     Year (1)   ($/Sh)      Date    5% ($)     10% ($)
-------------------------------------------------------------------------------
Bruce Haber        70,000    32.6%     12.25     2/13/06   539,000   1,366,400
Louis Buther       15,000     7.0%     12.25     2/13/06   115,500     292,800
Ernest Nelson      10,000     4.7%     12.25     2/13/06    77,000     195,200
Stuart Fleischer   10,000     4.7%     12.25     2/13/06    77,000     195,200
Donald Sabia        2,000     0.9%     12.25     2/13/06    15,400      39,040
Donald Sabia        5,000     2.3%     16.50     10/2/06    51,900     131,500
-------------------------------------------------------------------------------

N/A - Not Applicable.

(1)  The percentage of total options granted to employees in fiscal year is
     based upon options granted to officers, directors and employees.

(2)  The potential realizable value of each grant of options assumes that the
     market price of MBM's Common Stock appreciates in value from the date of
     grant to the end of the option term at annualized rates of 5% and 10%,
     respectively, and after subtracting the exercise price from the potential
     realizable value. 


                                          23

<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

     The information provided in the table below provides information with
respect to each exercise of stock option during fiscal 1996 by each of the
executive officers named in the summary compensation table and the fiscal year
end value of unexercised options.

-------------------------------------------------------------------------------
(a)                   (b)      (c)             (d)                (e)
                                                                Value of    
                                            Number of         Unexercised   
                    Shares                 Unexercised        In-the-Money  
                   Acquired                 Options at          Options     
                      on      Value         FY-End (#)        at Fy-End($)  
                   Exercise  Realized      Exercisable/       Exercisable/  
Name                 (#)      ($)(1)      Unexercisable     Unexercisable(1)
-------------------------------------------------------------------------------
Bruce Haber         8,333     113,662     796,667/0        9,700,005/0
Louis Buther        5,333      72,742     160,000/15,800    1,702,743/168,420
Ernest Nelson       5,333      72,742     108,333/15,800    1,084,170/167,700
Stuart Fleischer     -0-        -0-       20,000/8,000     74,500/68,000
Donald Sabia         -0-        -0-       20,500/12,700    89,750/77,875
-------------------------------------------------------------------------------

_______________________
(1)  The aggregate dollar values in column (c) and (e) are calculated by   
     determining the difference between the fair market value of the Common
     Stock underlying the options and the exercise price of the options at
     exercise or fiscal year end, respectively.  In calculating the dollar value
     realized upon exercise, the value of any payment of the exercise price is
     not included.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The Compensation Committee of the Board of Directors (the "Committee") is
composed of three board members, namely, Bruce J. Haber, the Company's the Chief
Executive Officer ("CEO"), Renee Steinberg, the Company's Secretary, and K.
Deane Reade, Jr.  This Committee is responsible for reviewing, determining and
recommending to the Board the annual salary, bonuses, stock option grants, stock
awards and other compensation of the executive officers of the Company.

     The report describes the policies and rationales of the Committee in
establishing the principal components of executive compensation in 1996.  The
Committee's review and determination of executive compensation includes
consideration of the following factors:  (a) compensation surveys of similar
size companies, (b) past and future performance contributions of each executive
officer, (c) the performance of the Company, both separately and relative to
similar size companies, (d) historical compensation levels and (e)
recommendations of independent board members with respect to compensation
competitiveness.  


                                          24

<PAGE>

     Under the direction of the Committee, the Company has developed a
compensation strategy designed to compensate its executives on a competitive
basis relative to performance and comparable to other companies of similar size.
The program is intended to (a) reward executives for long-term strategic
management and the enhancement of shareholder value, (b) facilitate the
Company's short- and long-term planning process and (c) attract and retain key
executives critical to the long-term success of the Company.

     Compensation for each of the Named Executives consists of a fixed base
salary and variable components, including both short- and long-term incentive
compensation in the form of bonuses, stock option grants and stock awards.  An
annual salary and performance incentive plan for each of the Company's executive
officers, other than the CEO, based on the above-described considerations and
the Company's compensation strategy, has been developed and prepared under the
direction of the CEO and approved by the Committee.  Subject to the CEO's
contractual rights in his employment contract, the Committee reviews and fixes
the CEO's compensation based on similar data as well as an assessment of his
past and future contributions in leading the Company toward its objectives.

     Based on the Company's profitable operations over the past ten years, the
Committee believes that the Company's executive management is dedicated to its
corporate objectives of achieving significant improvements in long-term
financial and operating performance.  The executive compensation program
outlined below is designed to implement this strategy by rewarding management
for achieving these objectives.  

     BASE SALARY.  The Company's base salary is designed to recognize the
sustained and cumulative effect on long-term results that its executives have
demonstrated.  The base salary is a remuneration for services provided and is
fixed at levels which are competitive with amounts paid to executives at
comparable companies.  

     SHORT-TERM INCENTIVES.  Short-term incentives in the form of annual bonuses
are paid to each of the Executives named in the summary compensation table to
recognize performance that is related to the achievement of key financial and
operating objectives that have been established for a fiscal year.  Since short-
term incentives should generally reflect one year contributions, the size of the
payments may vary considerably from year to year, depending on performance.  At
the beginning of each year, performance goals for the purposes of determining
annual incentive compensation are established in each of the Company's divisions
as well as in certain staff departments.  These goals are objective, measurable
and controllable by the responsible executive.  

     LONG-TERM INCENTIVES.  The Committee recognizes that long-term incentive
compensation is a substantial component of the total pay package linking
executive pay and corporate performance.  At the Company, long-term incentive
compensation in the form of equity based compensation is intended to link the
interests of its executives with the interests of the Company's shareholders. 
The payment of stock option grants and stock grant awards are designed to be
issued to executives when the Company has 


                                          25

<PAGE>

provided the shareholders with an acceptable return on their investment over a
prolonged period of time.

     CHIEF EXECUTIVE OFFICER'S 1996 COMPENSATION.  As more specifically set
forth in the Summary of Compensation table, Mr. Haber earned during fiscal 1996,
an annual salary of $237,509 (computed at the rate of $240,750 per annum) and an
annual bonus of $298,742 equal to 7% of the Company's income before deducting
taxes and the amount of his bonus in accordance with his employment contract. 
In addition, Mr. Haber received options to purchase 70,000 shares of the
Company's Common Stock at the then current fair market value at the time of
grant.  

     In determining Mr. Haber's 1996 compensation, the Committee considered the
factors applied to the compensation of all executive officers as discussed
above.  The Committee decided that, based on these criteria, the Company's
performance was successful.  The Committee decided that Mr. Haber's total 1996
compensation package reflects the Company's overall performance based on the
creation of shareholder value, cash flow, and net income and that his annual
bonus which was based upon the terms of his employment contract, compares to
that paid to CEO's of similar sized companies.
    
     The foregoing report has been approved by all members of the Committee.

                 Renee Steinberg, Chairperson
                 K. Deane Reade, Jr.
                 Bruce J. Haber

COMPARATIVE PERFORMANCE BY THE COMPANY

     The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total shareholder return on its Common Stock with
the cumulative shareholder return of (1) a broad equity market index, and (2) a
published industry index or peer group for the past five years.  Such chart
compares the performance of the Company's Common Stock with (1) the NASDAQ Stock
Market Index and (2) a group of public companies each of whom are listed in the
peer group machinery, equipment and supplies and assumes an investment of $100
on December 1, 1991 in each of the Company's Common Stock, the stock comprising
the NASDAQ Stock Market index and the stocks of the machinery, equipment and
supplies.     


                                          26

<PAGE>

                   Comparison of Five Year-Cumulative Total Returns
                                Performance Graph for
                                MICRO BIO-MEDICS, INC.


     PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
     Produced on 01/27/97 including data to 11/29/96




                               LEFT BLANK INTENTIONALLY

                 [INSERT GRAPH OF "5-YEAR CUMULATIVE TOTAL RETURNS"]






 

                                                                   LEGEND

<TABLE>
<CAPTION>

Symbol    CRSP Total Returns Index for:                11/29/91  11/30/92  11/30/93  11/30/94  11/30/95  11/29/96
------    ----------------------------                 --------  --------  --------  --------  --------  --------

<S>       <C>                                          <C>       <C>       <C>       <C>       <C>       <C>
______ -  MICRO BIO-MEDICS, INC.                          100.0     179.7     339.0     257.6     352.5     488.1

 ...__. -  Nasdaq Stock Market (US Companies)              100.0     126.0     145.8     146.1     208.3     255.2

------ -  NASDAQ Stocks (SIC 5080-5089 US Companies)      100.0     113.1     163.8     133.9     138.7     158.4
          Machinery, Equipment, and Supplies

</TABLE>

Notes:
     A. The lines represent monthly index levels derived from compounded daily 
        returns that include all dividends.

     B. The indexes are reweighted daily, using the market capitalization on the
        previous trading day.

     C. If the monthly interval, based on the fiscal year-end, is not a trading 
        day, the preceding trading day is used.

     D. The index level for all series was set to $100.0 on 11/29/91.


                                                                     27
 

<PAGE>

EMPLOYMENT AND CONSULTING AGREEMENTS

     MBM has a five year Employment Agreement with Bruce J. Haber subject to an
automatic one year extension on April 1st  of each year commencing April 1,
1996, unless either party elects not to extend the contract after giving the
other party at least 180 days prior written notice.  Pursuant to this agreement,
Mr. Haber has agreed to devote his full time and efforts to the business of MBM
and to serve as MBM's President and Chief Executive Officer.  Mr. Haber is
currently receiving a base salary of $260,000 per annum which compensation is
increased annually by at least $5,000 per annum until the termination of the
agreement, subject to additional increases at the discretion of the Board of
Directors.  Mr. Haber is also entitled to be paid each year an annual bonus for
the most recently completed fiscal year equal to no less than 7% of MBM's income
before income taxes and Mr. Haber's bonus.  Mr. Haber received a whole-life
policy covering his life, presently in the sum of $2,000,000 and the use of a
Company motor vehicle.   In the event Mr. Haber's employment agreement is
terminated for any reason other than his willful misconduct, then Mr. Haber
shall be entitled, as liquidated damages, to an amount of money equal to the
greater of $2,000,000 or the sum of five years compensation. In the event there
is a dispute as to the amount of liquidated damages payable to Mr. Haber, then
on the termination date MBM shall be required to pay into an interest bearing
escrow account, the sum of $4,000,000 less the amount of liquidated damages paid
to Mr. Haber which is not in dispute.  Mr. Haber will continue to receive his
full compensation during the continuation of any dispute.

     If there is a substantial change in the management of MBM, wherein any
Board of Directors that may be elected becomes opposed to, or acts contrary to,
the policy of the Board of Directors now in control of MBM and, as a result
thereof, Mr. Haber, in his sole discretion, finds it difficult for him to work
harmoniously and effectively with any such Board of Directors of MBM, or the
Board of Directors of MBM shall determine that Mr. Haber shall not be the
President and Chief Executive Officer of MBM, or Mr. Haber shall not be elected
as a member of the Board of Directors of MBM, then, in any of such events, Mr.
Haber shall have the absolute right and option to resign upon giving MBM 60 days
written notice of his intention to do so.  Upon such resignation, Mr. Haber
shall be entitled to the liquidated damages and expenses as set forth above in
consideration of Mr. Haber's agreement not to compete with MBM for a period of
one year following his resignation.  Pursuant to Mr. Haber's employment
agreement, MBM is obligated to provide to Mr. Haber indemnification for any
claim or lawsuit which may be asserted against him when acting in his capacity
as an officer and director of MBM provided said indemnification is not in
violation of any federal or state law, rule or regulations.  

     On January 1, 1988, Mr. Caligor commenced serving MBM as a part-time
consultant at an annual cash compensation of $100,000.  Mr. Caligor's consulting
contract which originally provided for a termination date of December 31, 1990
was extended by MBM's Board of Directors and currently terminates on
December 31, 1997.


                                          28

<PAGE>

STOCK OPTION PLANS

     An Incentive Stock Option Plan (the "1982 Incentive Plan") was adopted by
the Board of Directors and stockholders on February 24, 1982 and terminated on
February 24, 1992 as to the granting of new options.  The 1982 Plan provided
that an aggregate of 166,666 shares of MBM's Common Stock were issuable, subject
to adjustment in the event of changes in the capital structure of MBM. 
Employees of MBM were eligible for selection as participants.  During fiscal
1996, 1995 and 1994, 26,966 shares, 11,300 shares and 12,666 shares,
respectively, of MBM's Common Stock were issued at exercise prices ranging from
$2.25 per share to $4.00 per share.  As of February 28, 1997, MBM has 62,400
options outstanding under the 1982 Plan at exercise prices ranging from $2.25
per share to $4.00 per share.

     On April 14, 1989, the Board of Directors adopted and the shareholders
later approved a 1989 Non-qualified Stock Option Plan, (the "1989 Plan"), in
order to attract and retain qualified employees, officers and directors.  Under
the 1989 Plan, options to purchase a maximum of 416,666 shares of Common Stock
may be granted to employees, officers and directors of MBM.  If any options
granted under the 1989 Plan expire or terminate for any reason without having
been exercised in full, the unpurchased shares shall become available for
further options pursuant to the 1989 Plan.  The 1989 Plan also provides that no
options may be granted after April 13, 1999.  The 1989 Plan is administered by
the Board of Directors of MBM or by a Stock Option Committee appointed by the
Board which consists of not less than three directors.  The maximum term of any
option under the Plan is ten years.  The Board of Directors or Committee
appointed by the Board determines which employee, officer or director shall have
options under the 1989 Plan, the number of shares of Common Stock that may be
purchased under each option, the option price and all other provisions of the
respective option agreements (which need not be identical), including but not
limited to provisions concerning the time or times when, and the extent to
which, the options may be exercised and any limitations upon the transferability
of such shares.  Each option granted under the 1989 Plan is non-transferable,
may be exercised only if the participant has been continuously a director,
consultant or employee of MBM.  However, in the case of death, the lawful heirs
and/or beneficiaries of a deceased optionee may exercise such options for a
period of six months after the optionee's death.  As of November 30, 1996, MBM
had outstanding options under the 1989 Plan to purchase an aggregate of 398,567
shares of MBM's Common Stock at exercise prices from $2.25 per share to $4.00
per share to various officers and members of the Board of Directors.  As of
November 30, 1996, substantially all of these options are exercisable.  During
fiscal 1996, 1995 and 1994, 2,000 shares, 4,333 shares and 4,000 shares,
respectively, of MBM's Common Stock were issued at exercise prices ranging from
$2.25 to $4.00 per share.  

     On January 28, 1992, the Board of Directors of MBM adopted a Stock Option
Plan (the "1992 Plan") which was approved by stockholders.  The 1992 Plan, as
amended, covers 1,850,000 shares of Common Stock.  The 1992 Plan authorizes the
issuance of the options covered thereby as either "Incentive Stock Options"
within the meaning of the Internal Revenue Code of 1986, as amended, or as "Non-
Statutory Stock Options."  


                                          29

<PAGE>

Persons eligible to receive options under the 1992 Plan includes employees,
directors, officers, consultants or advisors, provided that bona fide services
shall be rendered by consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital raising
transaction; however, only employees are eligible to receive an Incentive
Option.  The 1992 Plan also provides that no options may be granted after
January 27, 2002.

     The 1992 Plan is administered by MBM's Board of Directors or a stock option
committee consisting of three members of the Board which has the authority to
determine the persons to whom options shall be granted, whether any particular
option shall be an Incentive Option or a Non-Statutory Option, the number of
shares to be covered by each option, the time or times at which options will be
granted or may be exercised and the other terms and provisions of the Options. 
An Optionee of a Stock Option who terminates his employment with MBM, other than
by reason of his death or disability, may not exercise his Option.  The lawful
heirs or beneficiaries of a deceased Optionee may exercise Stock Options for a
maximum period of six months after the Optionee's death, so long as the Option
has otherwise not expired.  All Stock Options are non-transferable except by
will or the laws of descent and distribution.  

     The 1992 Plan also provides that:  (i) the exercise price of options
granted thereunder is not less than 100% (or in the case of an Incentive Option,
110% if the optionee owns 10% or more of the outstanding voting securities of
MBM) of the fair market value of such shares on the date of grant, as determined
by the Board or Stock Option Committee, and (ii) no option by its terms may be
exercised more than ten years (five years in the case of an Incentive Option,
where the optionee owns 10% or more of the outstanding voting securities of MBM)
after the date of grant.  Any options which are canceled or not exercised within
the option period become available for future grants.  

     The 1992 Plan will (a) upon the occurrence of an Acquisition Event (as
defined in the 1992 Plan), at the election of an optionee, permit each optionee
to exercise all or any portion of such optionee's exercisable Options by
borrowing from MBM, and MBM shall be obligated to loan such optionee an amount
equal to the aggregate exercise price of such Options intended to be exercised
by such optionee.  Such optionee shall use the proceeds of such loan to exercise
such Options.  Such optionee shall issue to MBM a promissory note made by such
optionee in a principal amount equal to the amount of such loan.  The optionee
will pledge to MBM to secure the repayment of such loan all shares of Common
Stock issued to the optionee upon exercise of Options pursuant to this
paragraph.  At the time of such loan, such loan shall have a rate of interest
and such loan and pledge shall have such additional terms and conditions all as
determined by the Board of a Committee thereof; (b) upon the occurrence of a
Change of Control, as defined in the 1992 Plan, which Change of Control is not
approved by a vote of at least eighty percent (80%) of the directors that
constitute the Board immediately prior to the occurrence of such Change of
Control, terminate all Options as of the time immediately prior to the
occurrence of such Change of Control and the respective optionees shall
surrender all of their unexercised Options for cancellation by MBM and, upon
such surrender, the optionee shall receive  (1) the cash, securities or other
consideration he would have received had he been entitled 


                                          30

<PAGE>

to exercise, and had he exercised, such Option or Options immediately prior to
such Change of Control and had he disposed of his shares issuable upon such
exercise in connection with such Change of Control (subject to required
deductions and withholdings), minus (2) an amount of cash or fair market value
of securities or other such consideration equal to the exercise price of such
Option or Options surrendered.  (i) The foregoing shall not apply to all
incentive stock options granted prior to the June 23, 1995, the date of
stockholder approval of such provisions, (ii) any non-statutory stock option
granted prior to June 23, 1995 where a written consent is required to be
obtained from the optionee whose rights have been adversely affected and such
consent is not obtained from the optionee, or (iii) any Option whatsoever where
an event of default would be created under MBM's then-existing institutional
loan(s) and such event of default is not waived prior to such occurrence or
cured pursuant to the terms of said loan agreements.  As of February 28, 1997,
MBM has under the 1992 Plan Incentive and Non-Statutory Stock Options
outstanding to purchase 1,335,700 shares of MBM's Common Stock at exercise
prices ranging from $4.00 per share to $16.25 per share.  During fiscal 1996,
22,750 shares of MBM's Common Stock were issued at exercise prices ranging from
$4.00 to $10.25 per share.

SECTION 401(K) OR DEFERRED RETIREMENT PLAN

     Effective December 1, 1985, MBM initiated a cash or deferred retirement
plan pursuant to Section 401(k) of the Code (the "Plan").  All employees are
eligible to enroll and to receive benefits under the Plan, beginning February 1,
1986, the commencement date of the plan.  Employees can elect to contribute up
to 20% of their compensation to the Plan and MBM will make matching
contributions in an amount equal to 20% of the amount of the Participant's
contribution that is not in excess of 5% of compensation.  A Participant shall
at all times have a one hundred (100%) percent vested interest in his
contribution Account.  Any distributions to be made under the Plan to a
Participant will begin not later than the 60th day after the latest of the close
of the Plan year in which (a) the Participant attains his normal retirement age
(i.e. 59-1/2), or (b) the date the Participant terminates his employment with
MBM, or (c) such later date pursuant to his written election.  Prior to
retirement, Plan savings may be payable upon an employee's death (payable to his
or her designated beneficiary), disability (as defined in the Plan) or
termination by MBM.  Plan savings are payable, at the Plan Administrator's
option, in either one lump sum or in installments. The Participant may be
consulted prior to making such determination. For the fiscal years ended
November 30, 1996, 1995 and 1994, MBM's matching contributions amounted to
$78,000, $62,200 and $29,985,  respectively.


                                          31



<PAGE>

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock by all persons known by the
Company to be beneficial owners of more than 5% of its Common Stock and all
executive officers and directors, both individually and  as a group.  For
purposes of calculating the amount of beneficial ownership and the respective
percentages, the number of shares of Common Stock which may be acquired by a
person are considered outstanding notwithstanding the vesting schedule, but
shall not be deemed to be outstanding for the purpose of computing the
percentage of Common Stock owned by any other person.

                                  Amount
                                and Nature        Approximate
Name and Address of            of Beneficial        Percent
Beneficial Owner (1)           Ownership (1)      of Class (2)
--------------------           -------------      ------------

Renee Steinberg (3)(12) 
20080 Boca West Drive 
Apt. 458 
Boca Raton, FL 33434              145,667              2.9

Bruce J. Haber (4)                973,834             16.4 

Louis Buther (5)                  191,667              3.7

Marvin S. Caligor (11)            111,083              2.2

Ernest W. Nelson (6)              131,834              2.5

Gary Butler (7)                    22,000              *

K. Deane Reade, Jr.(8)(10)
605 Third Avenue
New York, NY 10158                229,519              4.4

Michael Levy (12)                   8,500              * 

Stuart F. Fleischer (13)           30,000              *  

Donald R. Sabia (14)               25,500              *

All executive officers  
and directors as a group
(ten persons) (9)               1,869,604             28.4


                                          32

<PAGE>

____________ 
*      Represents less than one percent of the outstanding Common Stock.

 (1)   Unless otherwise indicated, all shares are directly owned and investing
       power is held by the persons named.  All addresses, except as otherwise
       noted, are c/o of Micro Bio-Medics, Inc., 846 Pelham Parkway, Pelham
       Manor, NY  10803.  

 (2)   Based upon 5,070,248 shares of Common Stock outstanding on February 28,
       1997.  The foregoing does not include the possible issuance of shares in
       connection with the exercise of outstanding options.

 (3)   May be deemed to be a "founder" or "parent" of MBM for purposes of the
       Securities Act of 1933, as amended.  Includes options to purchase 22,000
       shares granted to Renee Steinberg.

 (4)   Includes options to purchase 866,667 shares granted to Mr. Haber.  A non-
       executive officer of MBM has agreed for a period of ten years from 
       January 18, 1996, unless such shares are transferred to an unrelated 
       third party, to vote such shares in accordance with the directions of 
       Bruce J. Haber, or if Mr. Haber dies, becomes disabled or is unable to 
       give such directions, then in accordance with the directions of the board
       of directors of MBM.  The amount of shares included in Mr.Haber's 
       beneficial ownership does not include such non-executive officer's 
       shares.  If such non-executive officer's shares are deemed beneficially 
       owned by Mr. Haber, then Mr. Haber may be deemed to beneficially own 
       1,104,560 shares (16.8%).    

 (5)   Includes options to purchase 175,000 shares granted to Mr. Buther.

 (6)   Includes options to purchase 118,666 shares granted to Mr. Nelson.

 (7)   Includes options to purchase 15,666 shares granted to Mr. Butler.

 (8)   Includes shares owned under certain retirement trusts and profit sharing
       plans.  

 (9)   Includes options to purchase 1,504,666 shares granted to officers and
       directors.  The amount of shares owned by all executive officers and
       directors as a group does not include 130,726 shares of Common Stock
       which may be deemed beneficially owned by Bruce Haber as discussed in
       footnote 4.  In the event that such 130,726 shares were deemed
       beneficially owned by Mr. Haber, then the amount of shares beneficially
       owned by all executive officers and directors as a group would be
       2,000,330 representing 30.4% of MBM's outstanding shares.  

(10)   Includes options to purchase 163,333 shares granted to Mr. Reade. 

(11)   Includes options to purchase 79,667 shares granted to Mr. Caligor.

(12)   Includes options to purchase 8,500 shares granted to Mr. Levy.

(13)   Includes options to purchase 30,000 shares granted to Mr. Fleischer.

(14)   Includes options to purchase 25,500 shares granted to Mr. Sabia.  


                                          33

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
     
     On January 18, 1996, MBM issued 280,696 shares in connection with its
acquisition of Stone Medical Supply Corporation, 161,452 shares of which are
owned by Andrew Stone.  During 1996, Mr. Stone sold 30,000 of these shares.  Mr.
Stone has agreed for a period of ten years from January 18, 1996 to vote his MBM
shares in accordance with directions of Bruce J. Haber or if Mr. Haber dies,
becomes disabled or unable to give directions, then in accordance with
directions of the MBM Board of Directors, until such time as such shares are
transferred to an unrelated third party.

     Reference is made to "Item 1" under "Recent Developments" for a 
description of the Merger Agreement pursuant to which MBM would become a 
wholly owned subsidiary of Schein and the stockholders of MBM would exchange 
their MBM outstanding shares for shares of Schein Common Stock.  The terms of 
the Merger Agreement were determined following lengthy negotiations between 
the respective managements of Schein and MBM.  The respective managements and 
Board of Directors of each company are not affiliated or related to one 
another.  The terms of the Merger Agreement are the result of arms' length 
negotiations. Various agreements have been entered into between Schein and 
the Company's directors.  All of the Company's directors, namely, Bruce J. 
Haber, K. Deane Reade, Jr., Marvin S. Caligor and Renee Steinberg have 
entered into an Option and Proxy Agreement dated March 7, 1997  pursuant to 
which they have agreed to grant Schein their individual proxies to vote all 
common stock beneficially owned by them (excluding certain shares 
beneficially owned by Mr. Reade in pension plans and in margin accounts) or 
which they have the right to vote in favor of the Merger Agreement at an 
upcoming stockholder meeting to be called for the purpose of adopting and 
approving the Merger Agreement.  Further, the Option and Proxy Agreements 
provide that in the event of termination of the Merger Agreement, under 
certain circumstances, Schein has the option to compel all directors to 
exercise their options to purchase MBM Common Stock and to compel them to 
exchange all MBM Common Stock beneficially owned by them (excluding certain 
shares beneficially owned by Mr. Reade in pension plans and in margin 
accounts) for Schein Common Stock at the conversion ratio of 0.62 of a share 
of Schein Common Stock for each 1.0 share of MBM Common Stock.  Further, Mr. 
Haber has entered into an employment agreement with Schein and an agreement 
with Schein to terminate his existing contract with MBM for a termination fee 
of $3,000,000 to be paid over three and one-half years which becomes effective 
upon the consummation of the Merger.  For complete details of these 
agreements and other related agreements which will be entered into between Mr 
Haber and Schein upon the consummation of the Merger, reference is made to 
the texts of such agreements, which are filed as Exhibits to this Form 10-K, 
and the foregoing summary of certain principal terms of such agreements are 
qualified in their entirety. 

     The Company has entered into an agreement with Bangert, Dawes, Reade, 
Davis & Thom Incorporated ("BDRDT") pursuant to which it engaged them to 
perform financial advisory services to MBM  in connection with the Merger 
Agreement with Schein and its subsidiary, HSI.  Upon the consummation of the 
Merger, BDRDT will receive a fee currently estimated to be approximately 
$1,230,000 and if the Merger is not consummated, BDRDT will receive a fee of 
$150,000.  

                                          34

<PAGE>

ITEM 14.      EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 
8-K.

(a)(1)(2)     FINANCIAL STATEMENTS/SCHEDULES.
              A list of the Financial Statements and Financial Statement
Schedules filed as a part of this Report is set forth in Item 8, and appears at
Page F-1 of this Report; which list is incorporated herein by reference and
follows Item 9.  

(a)(3) EXHIBITS  
    3         Articles of Incorporation, as amended (incorporated by reference
              to the Registrant's Form S-2 Registration Statement File No. 
              33-46319, Exhibit 3)

    3(A)      By-Laws (incorporated by reference to the Registrant's Form S-2
              Registration Statement File No. 33-46319, Exhibit 3(A))

    10        Employment Agreement of Bruce Haber dated February 11, 1992
              (incorporated by reference to Exhibit 10(C) included in the
              Company's Form 10-K for the fiscal year ended November 30, 1991)

    10(A)     Contract with Marvin Caligor (incorporated by reference to Exhibit
              10.2 included in the Company's Form S-18 Registration Statement,
              File No. 2-89795-NY)

    10(B)     Amendments to Caligor's Agreement (incorporated by reference to
              Exhibit 10(D) included in the Company's Form 10-K for the fiscal
              year ended November 30, 1991)

    10(C)     New lease for Pelham Manor, New York (incorporated by reference to
              Exhibit 10(B) included in the Company's Form 10-K for the fiscal
              year ended November 30, 1991)

    10(D)     Credit Agreement dated November 18, 1993 among Micro  Bio-Medics,
              Inc., the Bank's signatory thereto, and the Chase Manhattan, N.A.
              as agent (incorporated by reference to Exhibit 10.1 included in
              the Company's Form 8-K dated November 19, 1993)

    10(E)     First Amendment to Credit Agreement dated August 1, 1994
              (incorporated by reference to Exhibit 10(a)(1) included in the
              Company's Form 10-K for the fiscal year ended November 30, 1994)
     
    10(F)     Second Amendment to Credit Agreement dated December 1, 1994
              (incorporated by reference to Exhibit 10(a)(2) included in the
              Company's Form 10-K for the fiscal year ended November 30, 1994)

   10(F.1)    Form of Third Amendment to Credit Agreement dated as of
              December 1, 1995 (incorporated by reference to Exhibit  10(F.1)
              included in the Company's Form 10-K for its fiscal year ended
              November 30, 1995.   


                                          35

<PAGE>

    10(G)     Asset Purchase Agreement dated November 19, 1993 by and between
              MBM Hospital supply Corp. and Clark Surgical Corp. (incorporated
              by reference to Exhibit 10.2 included in the Company's Form 8-K
              dated November 19, 1993)

    10(H)     Amendments 1-4 to Asset Purchase Agreement dated November 19, 1993
              by and between MBM Hospital Supply Corp. and Clark Surgical Corp.
              (incorporated by reference to Exhibit 10(b)(1) included in the
              Company's Form 10-K for the fiscal year ended November 30, 1993)

    10(I)     Lease for the Company's facilities located in Syosset, New York by
              and between the Company and Lin Pac, Inc. dated December 8, 1994
              (incorporated by reference to Exhibit 10(c)(2) included in the
              Company's Form 10-K for the fiscal year ended November 30, 1994)

    10(J)     Amendment dated December 23, 1993 to Bruce Haber's  Employment
              Contract (incorporated by reference to Exhibit 10(e) included in
              the Company's Form 10-K for the fiscal year ended November 30,
              1993)

    10(K)     1982 Incentive Stock Option Plan of Registrant (incorporated by
              reference to Exhibit 10.4 included in the Company's Form S-18
              Registration Statement, File No. 2-89795-NY)

    10(L)     1989 Non-Qualified Stock Option Plan (incorporated by reference to
              Exhibit 28 included in the Company's Form 10-K for the fiscal year
              ended November 30, 1989)

    10(M)     1992 Incentive and Non-Statutory Stock Option Plan (incorporated
              by reference to Exhibit 28(A) included in the Company's Form 10-K
              for the fiscal year ended November 30, 1991)

    10(N)     Subscription Agent Agreement (incorporated by reference to Exhibit
              10(m) included in the Registrant's Form S-2 Registration Statement
              File No. 33-463191, Exhibit M)

    10(O)     Agreement for Merger and Reorganization dated as of November 2,
              1995*

    10(P)     Noncompetition, Indemnification and Release Agreement of Andrew D.
              Stone dated as of November 2, 1995 *

    10(Q)     Noncompetition Agreement of Lyudmila Stone dated as of November 2,
              1995* 

    10(R)     Form of Escrow Agreement *


                                          36

<PAGE>

    10(S)     Employment Agreement of Andrew D. Stone dated as of November 2,
              1995*

    10(T)     Form of Put and Call Agreement *

    10(U)     Management Agreement dated as of November 2, 1995 *

    10(V)     Amendment to Bruce Haber Employment Agreement dated as of December
              23, 1993 *

    10(W)     Amendment to Bruce Haber Employment Agreement dated as of April 1,
              1995 *

    10(X)     Amendment to Bruce J. Haber's Employment Agreement dated as of
              March 12, 1996 **    

    10(Y)     Amendments to 1992 Incentive and Non-Statutory Stock Option Plan *

    10(Z)     Consent of Chase Manhattan Bank dated as of November 2, 1995 *

    10(a)(a)  Further Amendment to 1992 Incentive and Non-Statutory Stock Option
              Plan **

    10(b)(b)  Agreement and Plan of Merger dated March 7, 1997 by and among
              Henry Schein, Inc., HSI Acquisition Corp. and the Registrant
              together with exhibits which include Form of Affiliate Agreement,
              Form of Option and Proxy Agreement and Form of counsel opinions.**

    10(c)(c)  Employment Agreement dated March 7, 1997 between Bruce J. Haber
              and Henry Schein, Inc.**

    10(d)(d)  Form of Agreement between Bruce J. Haber and Henry Schein, Inc.
              relating to a change in control of Schein.**

    10(e)(e)  Termination of MBM Employment Agreement between Bruce J. Haber and
              Henry Schein, Inc.**

    10(f)(f)  Form of Restricted Stock Agreement between Bruce J. Haber and
              Henry Schein, Inc.**

    10(g)(g)  Agreement between the Registrant and Bangert, Dawes, Reade, Davis
              & Thom Incorporated**

    11        Statements re: computation of per share earnings (included in
              Notes to Consolidated Financial Statements and Schedules thereto)


                                          37

<PAGE>

    21        Subsidiaries of Registrant (Caligor Physicians & Hospital Supply
              Corp., a wholly-owned New York corporation does business under the
              name "Caligor Pharmacy")

    23        Consent of Accountants **

    27        Financial Data Schedule **
       ________________
       *      Incorporated by reference to Exhibits 10(N) through 10(X) and
              Exhibit 21 filed as Exhibits to the Registrant's Form S-4
              Registration Statement, File No. 33-64399.

       **     Filed herewith  

                    (b)  REPORTS ON FORM 8-K

     During the three months ended November 30, 1996, a Form 8-K was not filed
or required to be filed.



                                          38

<PAGE>

                                      SIGNATURES

     Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.  

                                   MICRO BIO-MEDICS, INC.



                                   By: /s/ Bruce J. Haber
                                      ----------------------------------------
                                       Bruce J. Haber, President


Dated:    Pelham Manor, N.Y.
          March 14, 1997


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

     Signatures               Titles                          Date
     ----------               ------                          ----

/s/ Bruce J. Haber 
-----------------------
Bruce J. Haber                President, Principal
                              Executive Officer
                              and Director                    March 14, 1997

/s/ Marvin S. Caligor
-----------------------
Marvin S. Caligor             Director                        March 14, 1997


/s/ Stuart F. Fleischer
-----------------------
Stuart F. Fleischer           Vice President of Finance,
                              Principal Accounting
                              and Financial Officer           March 14, 1997

/s/ Renee Steinberg
-----------------------
Renee Steinberg               Secretary and Director          March 14, 1997


/s/ K. Deane Reade, Jr.
-----------------------
K. Deane Reade, Jr.           Director                        March 14, 1997


                                          39