# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

# FORM 10-Q

[X]              QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF
1934

| | For
the quarterly period ended       June 30, 2003
| | --------------------------------------------------

[
]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES    EXCHANGE ACT OF 1934

| | For
the transition period from ___________ to ____________
| | ----------------------------------------------------------

Commission File Number
0-23832

PSS WORLD MEDICAL, INC.(Exact name of
Registrant as specified in its charter)

|Florida                                                                                                           | 59-2280364                           
|----------------------------------------------------------------------------------------------------------------- | -------------------------------------
|(State or other jurisdiction   
of incorporation or organization)                                                 | (IRS Employer
 Identification Number)
|4345 Southpoint Blvd.
          Jacksonville, Florida                  
 (Address of principal executive offices) | 32216
 (Zip code)                    
|Registrant's telephone number                                                                                     | (904) 332-3000                       

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 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.

[X] Yes [ ] No

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

[X] Yes [ ] No

The number of shares of common stock,
par value $.01 per share, of the registrant outstanding as of August 12, 2003 was
66,952,065 shares.

# PSS WORLD MEDICAL,
INC. AND SUBSIDIARIES

# June 30, 2003

# TABLE OF CONTENTS

|Item |                                                                                       | Page
|---- | ------------------------------------------------------------------------------------- | ----
|     |                                                                                       |     
|     | Information Regarding Forward-Looking Statements                                      | 3   
|    
|     | Part I--Financial Information                                                        
|    
|1.   | Financial Statements:                                                                
|    
|     | Consolidated Balance Sheets--June 30, 2003 and March 28, 2003                         | 4   
|    
|     | Consolidated Statements of Operations for the Three Months Ended June 30, 2003 and   
|     | June 28, 2002                                                                         | 5   
|    
|     | Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2003 and   
|     | June 28, 2002                                                                         | 6   
|    
|     | Notes to Consolidated Financial Statements--June 30, 2003 and June 28, 2002           | 7   
|    
|     | Independent Accountants' Review Report                                                | 16  
|    
|2.   | Management's Discussion and Analysis of Financial Condition and Results of Operations | 17  
|    
|3.   | Quantitative and Qualitative Disclosures About Market Risk                            | 27  
|    
|4.   | Controls and Procedures                                                               | 27  
|    
|     | Part II--Other Information                                                           
|    
|1.   | Legal Proceedings                                                                     | 27  
|    
|2.   | Changes in Securities and Use of Proceeds                                             | 27  
|    
|3.   | Defaults Upon Senior Securities                                                       | 27  
|    
|4.   | Submission of Matters to a Vote of Security Holders                                   | 27  
|    
|5.   | Other Information                                                                     | 27  
|    
|6.   | Exhibits and Reports on Form 8-K                                                      | 28  
|    
|     | Signature                                                                             | 29  
|    

# CAUTIONARY STATEMENTS

# Forward-Looking
Statements

This Form 10-Q includes
forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act). All statements regarding
the Companys, and its subsidiaries (including subsidiaries that are limited
liability companies and limited partnerships), expected future financial position, results
of operations, cash flows, funds from operations, financing plans, business strategy,
budgets, projected costs, capital expenditures, competitive positions, growth
opportunities, plans and objectives of management for future operations, and statements
that include words such as anticipate, believe, plan,
estimate, expect, intend, may,
could, and other similar expressions are forward-looking statements. Such
forward-looking statements are inherently uncertain, and stockholders must recognize that
actual results may differ from the Companys expectations.

Actual future results and trends for
the Company may differ materially depending on a variety of factors discussed in the
Companys Annual Report on Form 10-K for the year ended March 28, 2003,
this Form 10-Q, and elsewhere in the Companys filings with the Securities and
Exchange Commission (the Commission). Factors that may affect the plans,
financial condition, or results of operations of the Company include, without limitation,
those listed in the Companys Annual Report on Form 10-K for the year ended
March 28, 2003 under the heading Factors That May Affect Future Results,
(refer to Item 7, Managements Discussion and Analysis of Financial Condition
and Results of Operations) and (i) the ability of the Company to successfully
implement its strategic business plan; (ii) the availability of sufficient capital
with satisfactory terms to finance the Companys business plans;
(iii) competitive factors; (iv) the ability of the Company to adequately defend
or reach a settlement of threatened or outstanding litigation; (v) changes in labor,
equipment, and capital costs; (vi) changes in regulations affecting the
Companys business; (vii) changes in Medicare supplemental reimbursements for
services provided by long-term care providers and physicians; (viii) future
acquisitions or strategic partnerships; and (ix) general business and economic
conditions. Many of these factors are outside the control of the Company and its
management. The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which are made pursuant to the Private Securities Litigation
Reform Act of 1995 and, as such, speak only as of the date made. The Company undertakes no
duty to update such forward-looking statements.

# PART I FINANCIAL
INFORMATION

# ITEM 1.  FINANCIAL
STATEMENTS

# PSS WORLD MEDICAL,
INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS JUNE 30, 2003 AND MARCH 28, 2003  
(Dollars in Thousands, Except Share Data)

# ASSETS

|                            | June 30,
2003 | March 28,
2003
|--------------------------- | ------------- | --------------
|
|Current Assets:             |               |               
|Cash and cash equivalents   |               |               
|Accounts receivable, net    |               |               
|Inventories                 |               |               
|Employee advances           |               |               
|Deferred tax assets         |               |               
|Prepaid expenses and other  |               |               
|                            |               |               
|Total current assets        |               |               
|                            |               |               
|Property and equipment, net |               |               
|Other Assets:               |               |               
|Goodwill                    |               |               
|Intangibles, net            |               |               
|Employee advances           |               |               
|Deferred tax assets         |               |               
|Other                       |               |               
|                            |               |               
|Total assets                |               |               
|                            |               |               

# LIABILITIES AND
SHAREHOLDERS EQUITY

|                                                                                                    |  | 
|--------------------------------------------------------------------------------------------------- |  | 
|Current Liabilities:                                                                                |  | 
|Accounts payable                                                                                    |  | 
|Revolving line of credit                                                                            |  | 
|Accrued expenses                                                                                    |  | 
|Other                                                                                               |  | 
|                                                                                                    |  | 
|Total current liabilities                                                                           |  | 
|Other noncurrent liabilities                                                                        |  | 
|                                                                                                    |  | 
|Total liabilities                                                                                   |  | 
|                                                                                                    |  | 
|Shareholders' Equity:                                                                               |  | 
|Preferred stock, $.01 par value; 1,000,000 shares authorized, no shares issued and      outstanding |  | 
|Common stock, $.01 par value; 150,000,000 shares authorized, 66,951,958 and 67,870,561              |  | 
|shares issued and outstanding at June 30, 2003 and March 28, 2003, respectively                     |  | 
|Additional paid-in capital                                                                          |  | 
|Accumulated deficit                                                                                 |  | 
|Accumulated other comprehensive loss                                                                |  | 
|Unearned compensation                                                                               |  | 
|                                                                                                    |  | 
|Total shareholders' equity                                                                          |  | 
|                                                                                                    |  | 
|Total liabilities and shareholders' equity                                                          |  | 
|                                                                                                    |  | 

The accompanying notes
are an integral part of these consolidated statements.

# PSS WORLD MEDICAL,
INC. AND SUBSIDIARIES  CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2003 AND JUNE 28, 2002  (UNAUDITED)

# (Dollars in Thousands,
Except Per Share Data)

|                                                                            | Three Months Ended
|--------------------------------------------------------------------------- | ------------------
|
|Net sales                                                                   |                   
|Cost of goods sold                                                          |                   
|                                                                            |                   
|Gross profit                                                                |                   
|General and administrative expenses                                         |                   
|Selling expenses                                                            |                   
|                                                                            |                   
|Income from operations                                                      |                   
|                                                                            |                   
|Other (expense) income:                                                     |                   
|Interest expense                                                            |                   
|Interest and investment income                                              |                   
|Other income                                                                |                   
|                                                                            |                   
|Other income (expense)                                                      |                   
|                                                                            |                   
|Income from continuing operations before provision for income taxes         |                   
|Provision for income taxes                                                  |                   
|                                                                            |                   
|Income from continuing operations                                           |                   
|Discontinued operations:                                                    |                   
|Loss from discontinued operations (net of benefit for income taxes of $463) |                   
|                                                                            |                   
|Net income                                                                  |                   
|                                                                            |                   
|Earnings (loss) per share - Basic:                                          |                   
|Income from continuing operations                                           |                   
|Loss from discontinued operations                                           |                   
|                                                                            |                   
|Net income                                                                  |                   
|                                                                            |                   
|Earnings (loss) per share - Diluted:                                        |                   
|Income from continuing operations                                           |                   
|Loss from discontinued operations                                           |                   
|                                                                            |                   
|Net income                                                                  |                   
|                                                                            |                   

The accompanying notes
are an integral part of these consolidated statements.

# PSS WORLD MEDICAL,
INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 28, 2002
 (UNAUDITED) (Dollars in Thousands,
Except Per Share Data)

|                                                                                  | Three Months Ended
|--------------------------------------------------------------------------------- | ------------------
|
|Cash Flows From Operating Activities:                                             |                   
|Net income                                                                        |                   
|Adjustments to reconcile net income to net cash provided by operating activities: |                   
|Loss from discontinued operations                                                 |                   
|Depreciation                                                                      |                   
|Amortization of intangible assets                                                 |                   
|Amortization of debt issuance costs                                               |                   
|Provision for doubtful accounts                                                   |                   
|Provision (benefit) for deferred income taxes                                     |                   
|Provision for deferred compensation                                               |                   
|Noncash compensation expense                                                      |                   
|Loss on sales of property and equipment                                           |                   
|Changes in operating assets and liabilities:                                      |                   
|Accounts receivable                                                               |                   
|Inventories                                                                       |                   
|Prepaid expenses and other current assets                                         |                   
|Other assets                                                                      |                   
|Accounts payable                                                                  |                   
|Accrued expenses and other liabilities                                            |                   
|Net cash provided by discontinued operations                                      |                   
|                                                                                  |                   
|Net cash provided by operating activities                                         |                   
|                                                                                  |                   
|Cash Flows From Investing Activities:                                             |                   
|Capital expenditures                                                              |                   
|Payment of transaction costs for sale of Imaging Business                         |                   
|Payments on noncompete agreements                                                 |                   
|Proceeds from sales of property and equipment                                     |                   
|Net cash used in discontinued operations                                          |                   
|                                                                                  |                   
|Net cash used in investing activities                                             |                   
|                                                                                  |                   
|Cash Flows From Financing Activities:                                             |                   
|Purchase of treasury stock                                                        |                   
|Net payments under the revolving line of credit                                   |                   
|Proceeds from issuance of common stock                                            |                   
|                                                                                  |                   
|Net cash (used in) provided by financing activities                               |                   
|                                                                                  |                   
|Net (decrease) increase in cash and cash equivalents                              |                   
|Cash and cash equivalents, beginning of period                                    |                   
|                                                                                  |                   
|Cash and cash equivalents, end of period                                          |                   
|                                                                                  |                   

The accompanying notes
are an integral part of these consolidated statements.

# PSS WORLD MEDICAL,
INC. AND SUBSIDIARIES

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# JUNE 30, 2003 AND JUNE 28, 2002

# (UNAUDITED)

# (Dollars in Thousands,
Except Share and Per Share Data, Unless Otherwise Noted)

1.    
          BACKGROUND AND BASIS OF PRESENTATION

# Nature of Operations

PSS World Medical, Inc. (the Company or
PSSI), a Florida corporation, is a specialty marketer and distributor of
medical products to alternate-site healthcare providers including physician offices,
long-term care facilities, and home care providers through 45 full-service distribution
centers, which serve all 50 states throughout the United States of America. The Company
currently conducts business through two operating segments, the Physician Business and
the Elder Care Business. These strategic segments serve a diverse customer base. A third
reporting segment, titled Corporate Shared Services, includes unallocated costs of
corporate departments that provide services to the operating segments and overhead
associated with the Imaging Business, which was sold on November 18, 2002.

The Physician Business, or the
Physician Sales & Service division, is the leading distributor of medical
supplies, equipment, and pharmaceuticals to primary care office-based physicians in the
United States of America. The Physician Business currently operates 33 full-service
distribution centers, 19 break-freight locations, and 3 strategic distribution facilities
serving physician offices in all 50 states.

The Elder Care Business, or the Gulf
South Medical Supply, Inc. subsidiary, is a leading national distributor of medical
supplies and related products to the long-term and elder care industry in the United
States of America. The Elder Care Business currently operates 12 full-service
distribution centers and 1 break-freight location serving independent, regional, and
national skilled nursing facilities, assisted living centers, and home care providers in
all 50 states.

Historically, the Company conducted
business under a fourth operating segment, the Imaging Business. On November 18,
2002, the Company completed the sale of the Imaging Business, or the Diagnostic Imaging,
Inc. subsidiary (DI), a distributor of medical diagnostic imaging supplies,
chemicals, equipment, and services to the acute and alternate-care markets in the United
States of America. As a result, DIs results of operations for the three months
ended June 28, 2002 have been classified as discontinued operations. Refer to Note 9,
Discontinued Operations, for a further discussion.

# Basis of Presentation

The accompanying unaudited
consolidated financial statements have been prepared in accordance with the rules and
regulations of the United States Securities and Exchange Commission (the SEC).
Accordingly, certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted pursuant to the SEC rules and regulations. The
consolidated financial statements reflect, in the opinion of management, all adjustments
necessary to present fairly the financial position and results of operations for the
periods indicated.

The accompanying consolidated
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP) and include the
consolidated accounts of PSS World Medical, Inc. and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in consolidation.
Certain amounts reported in prior years have been reclassified to conform to the fiscal
year 2004 presentation.

The consolidated balance sheet as of
March 28, 2003 has been derived from the Companys audited consolidated
financial








statements for the year ended March 28, 2003. The financial statements and
related notes included in this report should be read in conjunction with the Companys
Annual Report on Form 10-K for the year ended March 28, 2003.

The Company reports its year-end
financial position, results of operations, and cash flows on the Friday closest to March 31.
Fiscal year 2004 consists of 53 weeks or 258 selling days where as fiscal year
2003 consisted of 52 weeks or 253 selling days. As a result of the increase in
selling days during fiscal year 2004, the Company changed the reporting of its
quarter-end financial results to distribute the 5 additional selling days among all
four quarters. During fiscal year 2004, the Company will report its quarter-end financial
position, results of operations, and cash flows on the calendar month-end for those
quarters in which physical inventories are not taken and on the Friday closest to
month-end for those quarters in which physical inventories are taken. During fiscal year
2003, the Company reported its quarter-end financial position, results of operations, and
cash flows on the Friday closest to June 30, September 30, and December 31.
The three months ended June 30, 2003 and June 28, 2002 consist of 65 and 64
selling days, respectively.

The results of operations for the
interim periods covered by this report may not be indicative of operating results for the
full fiscal year.

# Recent Accounting
Pronouncement

Financial Accounting Standards Board
Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities
(FIN 46), clarified the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity investors do not
have the characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional subordinated
financial support from other parties. FIN 46 is applicable immediately for variable
interest entities created after January 31, 2003. For variable interest entities
created prior to January 31, 2003, the provisions of FIN 46 are applicable no
later than July 1, 2003. This Interpretation will not have an effect on the Companys
consolidated financial statements.

In April 2003, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities (SFAS 149). SFAS 149 amends and
clarifies accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS 133. In
particular, this Statement clarifies under what circumstances a contract with an initial
net investment meets the characteristic of a derivative and when a derivative contains a
financing component that warrants special reporting in the statement of cash flows. This
Statement is generally effective for contracts entered into or modified after June 30,
2003 and is not expected to have a material impact on the Companys financial
statements.

The FASB recently issued SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity(SFAS 150). This Statement requires issuers to classify as
liabilities (or assets in some circumstances) three classes of freestanding financial
instruments that embody obligations for the issuer. Previously, many such instruments had
been classified as equity. A freestanding financial instrument is an instrument that is
entered into separately and apart from any of the entitys other financial
instruments or equity transactions, or that is entered into in conjunction with some
other transaction and is legally detachable and separately exercisable, such as certain
put and call options. These provisions are effective for financial instruments entered
into or modified after May 31, 2003, and otherwise is effective at the beginning of
the second quarter. The Company does not currently have any financial instruments that
are affected by this statement.

# 2.      EARNINGS
PER SHARE

In accordance with SFAS No. 128,
Earnings Per Share, the calculation of basic earnings per common share and diluted
earnings per common share is presented below (share amounts in thousands, except per
share data):

|                                      | Three Months Ended
|------------------------------------- | ------------------
|
|Income from continuing operations     |                   
|Loss from discontinued operations     |                   
|                                      |                   
|Net income                            |                   
|                                      |                   
|Earnings (loss) per share - Basic:    |                   
|Income from continuing operations     |                   
|Loss from discontinued operations     |                   
|                                      |                   
|Net income                            |                   
|                                      |                   
|Earnings (loss) per share - Dilutive: |                   
|Income from continuing operations     |                   
|Loss from discontinued operations     |                   
|                                      |                   
|Net income                            |                   
|                                      |                   
|Weighted average shares outstanding:  |                   
|Common shares                         |                   
|Assumed exercise of stock options     |                   
|Assumed vesting of restricted stock   |                   
|                                      |                   
|Diluted shares outstanding            |                   
|                                      |                   

The treasury stock method was
used in calculating the assumed exercise of stock options. Options to purchase
approximately 5,589 and 3,055 shares of common stock that were outstanding during the
three months ended June 30, 2003 and June 28, 2002, respectively, were not
included in the computation of diluted earnings per share for each of the respective
periods because the options exercise prices exceeded the fair market value of the
Companys common stock.

On December 17, 2002, the
Companys Board of Directors approved a stock repurchase program authorizing the
Company, depending upon market conditions and other factors, to repurchase up to a
maximum of 5% of its common stock, or approximately 3.4 million common shares, in
the open market, in privately negotiated transactions, or otherwise. During the three
months ended June 30, 2003, the Company repurchased approximately 1.0 million
shares of common stock under this program at an average price of $5.92 per common share.

# 3.     COMPREHENSIVE INCOME

Comprehensive income is defined as
net income plus direct adjustments to shareholders equity. The following details
the components of comprehensive income for the periods presented.

|                                      | Three Months Ended
|------------------------------------- | ------------------
|
|Net income                            |                   
|Other comprehensive loss, net of tax: |                   
|Unrealized loss on interest rate swap |                   
|                                      |                   
|Comprehensive income                  |                   
|                                      |                   

# 4.      STOCK-BASED COMPENSATION

The Company applies the
intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations including FIN No. 44, Accounting for Certain Transactions Involving
Stock Compensation, an Interpretation of APB Opinion No. 25, to account for its
fixed-plan stock options. Under this method, compensation expense is recorded on the date
of grant only if the current market price of the underlying stock exceeds the exercise
price. SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123),
established accounting and disclosure requirements using a fair-value-based method of
accounting for stock-based employee compensation plans. As allowed by SFAS 123, the
Company has elected to continue to apply the intrinsic-value-based method of accounting
described above, and has adopted only the disclosure requirements of SFAS 123. The
following table illustrates the effect on net income and earnings per share if the
fair-value-based method had been applied to all outstanding and unvested awards in each
period.

|                                                 | Three Months Ended
|------------------------------------------------ | ------------------
|
|Net income, as reported                          |                   
|Total stock-based employee compensation expense  |                   
|determined under fair value based method for all |                   
|awards, net of related tax effects               |                   
|                                                 |                   
|Pro forma net income                             |                   
|                                                 |                   
|Earnings per share - Basic:                      |                   
|As reported                                      |                   
|Pro forma                                        |                   
|Earnings per share - Diluted:                    |                   
|As reported                                      |                   
|Pro forma                                        |                   

# 5.     INTANGIBLES

The following table summarizes the
gross carrying amount and accumulated amortization for existing intangible assets subject
to amortization by business segment and major asset class.

|                           | As of June 30, 2003 | As of March 28, 2003
|-------------------------- | ------------------- | --------------------
|
|Noncompetition Agreements: |                     |                     
|Physician Business         |                     |                     
|Elder Care Business        |                     |                     
|Corporate Shared Services  |                     |                     
|                           |                     |                     
|                           |                     |                     
|                           |                     |                     
|Signing Bonuses:           |                     |                     
|Physician Business         |                     |                     
|Elder Care Business        |                     |                     
|                           |                     |                     
|                           |                     |                     
|                           |                     |                     
|Other Intangibles:         |                     |                     
|Physician Business         |                     |                     
|Elder Care Business        |                     |                     
|                           |                     |                     
|                           |                     |                     
|                           |                     |                     
|Total                      |                     |                     
|                           |                     |                     

Total amortization expense for
intangible assets for the three months ended June 30, 2003 and June 28, 2002
was $502, and $618, respectively. The estimated amortization expense for the next five
fiscal years is as follows:

|                          | 
|------------------------- | 
|Fiscal Year:              | 
|2004 (remaining 9 months) | 
|2005                      | 
|2006                      | 
|2007                      | 
|2008                      | 
|Thereafter                | 
|                          | 
|Total                     | 
|                          | 

The
remaining weighted-average amortization period, in total and by major asset class, is as
follows:

|(in years)                    | June 30,
2003 | March 28,
2003
|----------------------------- | ------------- | --------------
|                              |               |               
|Noncompetition Agreements     |               | 7.0           
|Signing Bonuses               |               | 4.1           
|Other Intangibles             |               | 10.8          
|                              |               |               
|Total weighted-average period |               | 7.8           
|                              |               |               

Future
minimum payments required under noncompetition agreements at June 28, 2003 are as
follows:

|                          | 
|------------------------- | 
|Fiscal Year:              | 
|2004 (remaining 9 months) | 
|2005                      | 
|2006                      | 
|2007                      | 
|2008                      | 
|Thereafter                | 
|                          | 
|Total                     | 
|                          | 

# 6.      DEBT

# Revolving Credit
Agreement

On May 20, 2003, the Company
entered into an amended and restated Credit Agreement (the Credit Agreement),
by and among the Company, as borrower thereunder (the Borrower), the
subsidiaries of the Borrower party thereto, the lenders from time to time party thereto
(the Lenders), and Bank of America, N.A., as Agent for the Lenders. The
Credit Agreement provides for a three-year credit facility consisting of an aggregate $150 million
revolving line of credit and letters of credit (the Credit Facility).
Availability of borrowings under the Credit Facility depends upon the amount of a
borrowing base consisting of accounts receivable and, upon satisfaction of certain
requirements, inventory. The Credit Facility bears interest at the Banks prime rate
plus a margin of between 0.00% and 1.00% based on the Companys ratio of funded debt
to earnings before interest, taxes, depreciation, and amortization (EBITDA),
as defined in the Credit Agreement, or at LIBOR plus a margin of between 1.75% and 3.00%
based on the Companys ratio of funded debt to EBITDA. Under the Credit Agreement,
the Company and its subsidiaries are subject to certain covenants, including but not
limited to, limitations on (i) paying dividends and repurchasing stock, (ii) selling
or transferring assets, (iii) making certain investments (including acquisitions),
(iv) incurring additional indebtedness and liens, and (v) annual capital
expenditures. Initial proceeds from the Credit Facility were used to refinance existing
indebtedness outstanding under the original credit facility and future proceeds will be
used to issue letters of credit and finance the ongoing working capital requirements of
the Company. The Credit Facility matures on March 28, 2006. At June 28, 2003
and March 28, 2003, there was $82,595 and $83,000, respectively, outstanding under
the revolving line of credit.

During the three months ended June 28,
2003, the Company entered into an interest rate swap agreement to hedge the variable
interest rate debt of its revolving line of credit. Under the terms of the interest rate
swap agreement, the Company makes payments based on the fixed rate and will receive
interest payments based on the 1-month LIBOR. The changes in market value of this
financial instrument are highly correlated with changes in market values of the hedged
item both at inception and over the life of the agreement. Amounts received or paid under
the interest rate swap agreement are recorded as reductions or additions to interest
expense. In accordance with SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, and SFAS No. 138, Accounting for Certain Derivative Instruments
and Certain Hedging Activities, an amendment of FASB Statement No. 133, the Companys
interest rate swap agreement has been designated as a cash flow hedge with changes in
fair value recognized in accumulated other comprehensive loss in the accompanying
consolidated balance sheets.

The swap carries a notional
principal amount of $35.0 million and effectively fixes the interest rate on a
portion of the revolving line of credit to 2.195%, prior to applying the funded debt to
EBITDA margin discussed above. The swap agreement expires on March 28, 2006 and
settles monthly until expiration. At June 30, 2003, the Company recorded an
unrealized loss, net of taxes, of $232 for the estimated fair value of the swap agreement
in accumulated other comprehensive loss in the accompanying balance sheet.

# 7.     SEGMENT INFORMATION

The Companys reportable
segments are strategic businesses that offer different products to different segments of
the healthcare industry, and are the basis which management regularly evaluates the
Company. These segments are managed separately because of different customers and
products. See Note 1, Background and Basis of Presentation for descriptive
information about the Companys operating segments. The Company primarily evaluates
the operating performance of its segments based on net sales and income from operations.
The following table presents financial information about the Companys business
segments:

|                                        | Three Months Ended
|--------------------------------------- | ------------------
|
|NET SALES:                              |                   
|Physician Business                      |                   
|Elder Care Business                     |                   
|                                        |                   
|Total net sales                         |                   
|                                        |                   
|INCOME FROM OPERATIONS:                 |                   
|Physician Business                      |                   
|Elder Care Business                     |                   
|Corporate Shared Services               |                   
|                                        |                   
|Total income from operations            |                   
|                                        |                   
|DEPRECIATION:                           |                   
|Physician Business                      |                   
|Elder Care Business                     |                   
|Corporate Shared Services               |                   
|                                        |                   
|Total depreciation                      |                   
|                                        |                   
|AMORTIZATION OF INTANGIBLE ASSETS:      |                   
|Physician Business                      |                   
|Elder Care Business                     |                   
|Corporate Shared Services               |                   
|                                        |                   
|Total amortization of intangible assets |                   
|                                        |                   
|PROVISION FOR DOUBTFUL ACCOUNTS:        |                   
|Physician Business                      |                   
|Elder Care Business                     |                   
|Corporate Shared Services               |                   
|                                        |                   
|Total provision for doubtful accounts   |                   
|                                        |                   

|                                 | Three Months Ended
|-------------------------------- | ------------------
|
|INTEREST EXPENSE:                |                   
|Physician Business               |                   
|Elder Care Business              |                   
|Corporate Shared Services        |                   
|                                 |                   
|Total interest expense           |                   
|                                 |                   
|PROVISION FOR INCOME TAXES:      |                   
|Physician Business               |                   
|Elder Care Business              |                   
|Corporate Shared Services        |                   
|                                 |                   
|Total provision for income taxes |                   
|                                 |                   
|CAPITAL EXPENDITURES:            |                   
|Physician Business               |                   
|Elder Care Business              |                   
|Corporate Shared Services        |                   
|                                 |                   
|Total capital expenditures       |                   
|                                 |                   

|                          | As of
|------------------------- | -----
|
|ASSETS:                   |      
|Physician Business        |      
|Elder Care Business       |      
|Corporate Shared Services |      
|                          |      
|Total assets              |      
|                          |      

# 8.              COMMITMENTS
AND CONTINGENCIES

# Litigation

The Company, through its Elder Care
Business, its Physician Supply Business, and/or predecessor companies, has been named as
one of many defendants in latex glove product liability claims in various Federal and
state courts. The defendants are primarily distributors of certain brands of latex
gloves. Currently, state litigation exists in New Hampshire and California, while Federal
litigation is present in Washington, New Hampshire, and Ohio. Defense costs are currently
allocated by agreement between a consortium of insurers on a pro rata basis for each case
depending upon policy years and alleged years of exposure. All of the insurance carriers
are defending subject to a reservation of rights. The Company intends to vigorously
defend the proceedings; however, there can be no assurance that this litigation will be
ultimately resolved on terms that are favorable to the Company.

The Company and certain of its
current and former officers and directors are named as defendants in a purported
securities class action lawsuit entitled Jack Hirsch v. PSS World Medical, Inc., et
al., Civil Action No. 3:98-CV 502-J-32TEM. The action, which was filed on or about
May 28, 1998, is pending in the United States District Court for the Middle District
of Florida, Jacksonville Division. The plaintiff seeks indeterminate damages, including
costs and expenses. The plaintiff initially alleged, for himself and for a purported
class of similarly situated stockholders who purchased the Companys stock between
December 23, 1997 and May 8, 1998 that the defendants engaged in violations of
certain provisions of the Exchange Act, and Rule 10b-5 promulgated there under. The
allegations were based upon a decline in the Companys stock price following an
announcement by the Company in May 1998 regarding the Gulf South Medical Supply, Inc.
merger, which resulted in earnings below analysts expectations. By order dated
December 18, 2002, the Court granted the Companys motion to dismiss the plaintiffs
second amended complaint with prejudice with respect to the Section 10(b) claims. The
plaintiffs filed their third amended complaint on January 17, 2003 alleging claims under
Sections 14(a) and 20(a) of the Exchange Act on behalf of a putative class of all persons
who were shareholders of the Company as of March 26, 1998. The Company moved to dismiss
the third amended complaint on February 14, 2003.
By order dated May 21, 2003,

the Court denied the defendants motion to dismiss. The
Company filed an answer on June 17, 2003. The Company intends to vigorously defend the
proceedings; however, there can be no assurance that this litigation will be ultimately
resolved on terms that are favorable to the Company.

The Company has been named as a
defendant in ten related class action complaints, the first of which was filed on July 13,
2001, in the United States District Court for the Middle District of Florida. Those ten
actions were consolidated into a single action under the caption In Re PSS World
Medical Inc. Securities Litigation. Following that consolidation, on March 22,
2002, lead plaintiffs served their amended class action complaint for violation of
securities laws. After denial of their motion to dismiss the amended complaint, the
Company and the other defendants served their answer to the amended complaint on August 12,
2002, and the parties are now engaged in discovery. The amended complaint named the
Company along with certain present and former directors and officers. The amended
complaint was filed as a purported class action on behalf of persons who purchased or
acquired PSS World Medical, Inc. common stock at various times during the period between
October 26, 1999 and October 3, 2000. The amended complaint alleges, among
other things, violations of Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated there under, and seeks indeterminate damages. The
plaintiffs allege that the Company issued false and misleading statements and failed to
disclose material facts concerning, among other things, the Companys financial
condition. The plaintiffs further allege that because of the issuance of false and
misleading statements and/or failure to disclose material facts, the price of PSS World
Medical, Inc. common stock was artificially inflated during the class period. The Court
granted plaintiffs motion for class certification on November 14, 2002. On
December 10, 2002, the Court entered an order approving plaintiffs method of
notifying class members that a class has been certified and further set a schedule of
dates for such notice. On December 10, 2002, the court also entered an order setting
forth a schedule of dates for pre-trial procedures and trial. Pursuant to that order, a
jury trial in the case is scheduled for the trial term commencing October 18, 2004. The
Company believes that the allegations contained in the amended complaint are without
merit and intends to defend vigorously against the claims. There can be no assurance that
this litigation will be ultimately resolved on terms that are favorable to the Company.

The Company has been named as a
defendant in a suit brought by three former and present employees of the Company, entitled Angione,
et al. v. PSS World Medical, Inc., which was filed on or about June 4, 2002 in the
U.S. District Court for the Central District of California, Santa Ana Division. The court
approved the transfer of venue, and the case is now pending in the United States Court
for the Middle District of Florida, Jacksonville Division, Case Number 02-CV-854. The
plaintiffs allege that the Company wrongfully classifies its purchasers, operations
leader trainees, and accounts receivable representatives as exempt from the overtime
requirements imposed by the Fair Labor Standards Act and the California Wage Orders. The
plaintiffs seek to recover back pay, interest, costs of suit, declaratory and injunctive
relief, and applicable statutory penalties. On February 21, 2003, the court
conditionally allowed the case to proceed as a collective action under the Fair Labor
Standards Act. A total of 63 plaintiffs are now parties to the action. Two of the three
original named plaintiffs also brought, but subsequently have settled, individual claims
for gender discrimination and retaliation under Title VII of the Civil Rights Act of
1964 and the Equal Pay Act of 1963. The Company is vigorously defending against the
claims. Limited discovery is underway following a mediation on May 20, 2003, in
preparation for a second mediation scheduled for mid-August 2003. However, there can be
no assurance that this litigation will be ultimately resolved on terms that are favorable
to the Company.

The Company is also a party to
various other legal and administrative proceedings and claims arising in the normal
course of business. While any litigation contains an element of uncertainty, the Company,
after consultation with outside legal counsel, believes that the outcome of such other
proceedings or claims which are pending or known to be threatened will not have a
material adverse effect on the Companys consolidated financial position, liquidity,
or results of operations.

The Company has various insurance
policies, including product liability insurance, covering risks and in amounts it
considers adequate. In many cases in which the Company has been sued in connection with
products manufactured by others, the Company is provided indemnification by the
manufacturer. There can be no assurance that the insurance coverage maintained by the
Company is sufficient or will be available in adequate amounts or at a reasonable cost,
or that indemnification agreements will provide adequate protection for the Company.

# 9.     DISCONTINUED OPERATIONS

On September 26, 2002, the
Companys Board of Directors adopted a plan to dispose of the Imaging Business,
reflecting a strategic decision by management to focus the Companys efforts on its
Physician and Elder Care Businesses, which offer attractive opportunities for growth and
profitability.

On November 18, 2002, the
Company completed the sale of DI to Imaging Acquisition Corporation (the Buyer),
a wholly owned subsidiary of Platinum Equity, LLC, a private equity firm (Platinum).
The sale was completed pursuant to a Stock Purchase Agreement, dated as of October 28,
2002, among the Company, the Buyer, and Platinum, as amended on November 18, 2002
(the Stock Purchase Agreement). Under the Stock Purchase Agreement, the
purchase price was $45,000 less (i) an adjustment for any change in net asset value
from the initial net asset value target date and (ii) an adjustment for any change
in the net cash from the initial net cash target date (the Purchase Price).
The cash proceeds received during fiscal year 2003 were reduced by approximately $4,343
for transaction costs. In connection with the closing of the transaction, the Company and
the Buyer entered into a transitional services agreement, pursuant to which the Company
will provide certain reimbursable services to the Buyer for a period not to exceed one
year. The costs incurred related to providing services under the transition services
agreement are included in general and administrative expenses and the reimbursement for
these expenses are included in other income in the accompanying statements of operations.
During the three months ended June 30, 2003, the Company recognized approximately
$1,854 of other income related to the transition services agreement.

The results of operations of the
Imaging Business and the estimated loss on disposal have been classified as discontinued
operations in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The estimated loss on disposal is subject to change based
on the final Purchase Price adjustments that will be recorded in the period in which they
become known. The accompanying financial statements have been restated to conform to
discontinued operations treatment for all historical periods presented.

Net
sales and total loss from discontinued operations of the Imaging Business are as follows:

|                                          | Three Months
Ended
June 28, 2002
|----------------------------------------- | --------------------------------
|Net sales                                 |                                 
|                                          |                                 
|Loss from operations before benefit       |                                 
|for income taxes                          |                                 
|Benefit for income taxes                  |                                 
|                                          |                                 
|Total loss from discontinued operations . |                                 
|                                          |                                 

In accordance with Emerging Issues
Task Force Issue No. 87-24, Allocation of Interest to Discontinued Operations (EITF 87-24),
a portion of the Companys interest expense that is not directly attributable to or
related to other operations of the Company has been allocated to discontinued operations
based upon the ratio of net assets to be sold to the sum of consolidated net assets plus
consolidated debt. In addition, in accordance with EITF 87-24, general corporate
overhead was not allocated to discontinued operations. Interest expense allocated to
discontinued operations was $830 during the three months ended June 28, 2002. Income
taxes related to continuing operations have been calculated for the period presented. The
difference between this amount and the total tax provision, as previously reported, has
been allocated to discontinued operations.

On March 14, 2003, the Company
received a letter from the Buyer claiming a purchase price adjustment of $32,257. The
claimed purchase price adjustment is based on an accounting of the net asset statement as
of the closing date, which was delivered to the Buyer in January 2003. If the
dispute is not resolved by discussion between the parties, it will be referred to an
independent accounting firm of national reputation for binding resolution. The parties
have been unable to resolve the dispute through negotiation. Pursuant to the terms of the
Stock Purchase Agreement, the parties are now in the process of selecting the independent
accountant who will serve as the arbitrator. The Company intends to defend vigorously
against these claims; however, there can be no assurance that this claim will be
ultimately resolved on terms that are favorable to the Company.

INDEPENDENT
ACCOUNTANTS REVIEW REPORT

The Board of Directors
and ShareholdersPSS World Medical, Inc.:

We have reviewed the consolidated
balance sheet of PSS World Medical, Inc. and subsidiaries as of June 30, 2003, the
related consolidated statements of operations and cash flows for the three-month periods
ended June 30, 2003 and June 28, 2002. These consolidated financial statements
are the responsibility of the Companys management.

We conducted our review in accordance
with standards established by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of applying analytical
procedures and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.

Based on our review, we are not aware
of any material modifications that should be made to the consolidated financial statements
referred to above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in
accordance with auditing standards generally accepted in the United States of America, the
consolidated balance sheet of PSS World Medical, Inc. and subsidiaries as of
March 28, 2003, and the related consolidated statements of operations,
shareholders equity, and cash flows for the year then ended (not presented herein);
and in our report dated May 22, 2003, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of March 28, 2003, is fairly stated, in
all material respects, in relation to the consolidated balance sheet from which it has
been derived.

KPMG LLP

Jacksonville, Florida August 13, 2003

# ITEM 2.    MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE COMPANY

PSS World Medical, Inc. (the
Company or PSSI), a Florida corporation, is a specialty marketer
and distributor of medical products to alternate-site healthcare providers including
physician offices, long-term care facilities, and home care providers through 45
full-service distribution centers, which serve all 50 states throughout the United States
of America. Since its inception in 1983, PSSI has become a leader in the two market
segments it serves as a result of value-added, solution-based marketing programs, a
customer differentiated distribution and service model, a consultative sales force with
extensive product knowledge, unique arrangements with product manufacturers, innovative
information systems, acquisitions, and a culture of performance. During fiscal years 2000
through 2003, the Company has focused on business operations, growing through innovative
solution-based marketing programs, maximizing its core distribution capability and
efficiency, and improving management business processes.

The Company currently conducts
business through two operating segments, the Physician Business and the Elder Care
Business. These strategic segments serve a diverse customer base. A third reporting
segment, titled Corporate Shared Services, includes unallocated costs of corporate
departments that provide services to the operating segments and overhead associated with
the Imaging Business, which was sold on November 18, 2002.

Historically, the Company conducted
business under a fourth operating segment, the Imaging Business. On November 18,
2002, the Company completed the sale of the Imaging Business, or the Diagnostic Imaging,
Inc. subsidiary (DI), a distributor of medical diagnostic imaging supplies,
chemicals, equipment, and services to the acute and alternate-care markets in the United
States of America. As a result, DIs results of operations have been classified as
discontinued operations for all periods presented. Refer to Note 9, Discontinued
Operations, in the accompanying financial statements for a further discussion.

THE INDUSTRY

According to industry estimates, the
medical supply and equipment segment of the healthcare industry in the United States of
America represents an approximate $34 billion market. This market is comprised of
medical products and equipment that are distributed to alternate-site healthcare
providers, including physician offices, long-term care and assisted living facilities,
home healthcare agencies, dental offices, and other alternate-site providers, such as
outpatient surgery centers, podiatrists, and veterinarians. The Companys primary
focus is the distribution of medical products to physician offices, long-term care and
assisted living facilities, and home healthcare providers, which represents an approximate
$10 billion market.

The medical products distribution
industry continues to experience growth due to the aging population, increased healthcare
awareness, the proliferation of medical technology and testing, new pharmacology
treatments, and expanded third-party insurance coverage. The elder care market continues
to benefit from the increasing growth rate of the population of elderly Americans. As of
December 31, 2002, the estimated growth rate for the physician and elder care markets
was approximately 3.8% and 2.3%, respectively. The January 2000 U.S. Bureau of the Census
estimates that the elderly population in America will more than double by the year 2040.
In 2000, four million Americans were age 85 years and older, the part of the population
most in need of long-term care and elder care services. By the year 2040, that number is
projected to more than triple to over 14 million. The population age 65 to 84 years is
projected to more than double in the same time period. In addition, the physician market
continues to benefit from the shift of procedures and diagnostic testing in hospitals to
the alternate site, particularly physician offices, despite significantly lower pricing of
hospital medical products. As the cosmetic surgery and elective procedure markets continue
to grow, physicians are increasingly performing more procedures in their offices. As a
result of these market dynamics, the annual expenditures for healthcare services continues
to increase in the United States of America. The Centers for Medicaid and Medicare
Services (CMS), Office of the Actuary, National Health Statistics Group, cited in its 2002
study, Trends and Indicators in the Changing Health Care Marketplace, that total national health care spending reached $1.3 trillion in 2000, or 13.2% of the nations gross domestic product. Health care
spending is projected to reach $2.6 trillion in 2010, an estimated 16.8% of the gross
domestic product, the benchmark measure for annual production of goods and services in the
United States of America.

The healthcare industry is subject to
extensive government regulation, licensure, and operating compliance procedures. National
healthcare reform has been the subject of a number of legislative initiatives by Congress.
Additionally, government and private insurance programs fund a large portion of the total
cost of medical care. During 1997, the Balanced Budget Act passed by Congress
significantly reduced reimbursement rates for nursing homes and home healthcare providers,
affecting spending levels and overall financial viability of these institutions. The
Company has responded by tightening credit policies and increasing its allowance for
doubtful accounts. While there have been recent announcements from Washington, DC of
increases in Medicaid funding and reimbursement rates for long-term care facilities, there
are no assurances that such relief will increase the level of spending of these
institutions, or improve their overall financial condition.

# OPERATING HIGHLIGHTS AND TRENDS

The following tables set forth
certain financial information by business segment and give retroactive effect to the
restatement of the Imaging Business as discontinued operations. All dollar amounts
presented below are in thousands unless otherwise indicated.

|                             | Three Months Ended
|---------------------------- | ------------------
|
|Net Sales:                   |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   
|Total Company                |                   
|                             |                   
|Income from Operations:      |                   
|Physician Business           |                   
|Elder Care Business          |                   
|Corporate Shared Services    |                   
|                             |                   
|Total Company                |                   
|                             |                   
|Days Sales Outstanding: (a)  |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   
|Days On Hand: (b)            |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   
|Days in Accounts Payable:(c) |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   
|Cash Conversion Days:(d)     |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   
|Inventory Turnover:(e)       |                   
|Physician Business           |                   
|Elder Care Business          |                   
|                             |                   

|                                                    | Three Months Ended
|--------------------------------------------------- | ------------------
|
|Cash Flow Information:                              |                   
|Net cash provided by operating activities           |                   
|Net cash used in investing activities               |                   
|Net cash (used in) provided by financing activities |                   

|                                | As of
|------------------------------- | -----
|
|Net Debt:                       |      
|Bank debt                       |      
|Cash and cash equivalents       |      
|                                |      
|Net bank debt                   |      
|                                |      
|Asset Management:               |      
|Operational working capital (f) |      
|Working capital (g)             |      

| | (a) | Days sales outstanding (DSO) is average accounts receivable divided
by average net sales. Average accounts receivable is the sum of accounts
receivable, net of allowance for doubtful accounts, at the beginning and ending
of the first quarter divided by two. Average net sales is the sum of net sales
for each of the three months in the first quarter divided by ninety.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Days on hand (DOH) is average inventory divided by average cost of
goods sold (COGS). Average inventory is the sum of inventory at the
beginning and ending of the first quarter divided by two. Average COGS is COGS
for each of the three months in the first quarter divided by ninety.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Days in accounts payable (DIP) is average accounts payable divided
by average COGS. Average accounts payable is the sum of accounts payable at the
beginning and ending of the first quarter divided by two.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Cash conversion days is the sum of DSO and DOH, less DIP.
| | --- | ---------------------------------------------------------

| | (e) | Inventory turnover is 360 divided by DOH.
| | --- | -----------------------------------------

| | (f) | Operational working capital is the sum of accounts receivable and inventory,
less accounts payable.
| | --- | ---------------------------------------------------------------------------------------------------

| | (g) | Working capital is current assets less current liabilities.
| | --- | -----------------------------------------------------------

# THREE MONTHS ENDED JUNE 30, 2003
VERSUS THREE MONTHS ENDED JUNE 28, 2002

# NET SALES

|                    | For the Three Months Ended |  |  
|------------------- | -------------------------- |  | -
|
|Physician Business  |                            |  | $
|Elder Care Business |                            |  |  
|                    |                            |  |  
|Total Company       |                            |  | $
|                    |                            |  |  

The comparability of net sales
quarter over quarter is impacted by the number of selling days in each quarter. The three
months ended June 30, 2003 and June 28, 2002 consist of 65 and 64 selling days,
respectively. The consolidated average daily net sales for the three months ended
June 30, 2003 was $4.7 million compared to $4.5 million for the three
months ended June 28, 2002. The Physician Business average daily net sales for
the three months ended June 30, 2003 was $3.0 million compared to
$2.9 million for the three months ended June 28, 2002. The Elder Care
Business average daily net sales for the three months ended June 30, 2003 was
$1.7 million compared to $1.6 million for the three months ended June 28,
2002.

# Physician Business

The change in net sales is primarily
attributable to (i) an increase in medical disposables sales of approximately
$11.0 million, of which branded consumable and private label consumable sales
increased $9.0 million and $2.0 million, respectively, (ii) an increase in
pharmaceutical sales of approximately $3.6 million, (iii) an increase in
equipment sales of approximately $0.9 million, offset by (iv) a decrease in
immunoassay sales of approximately $2.0 million. Approximately $1.2 million of
the decrease in immunoassay sales was related to the United States Food and Drug
Administration recall of glycated hemoglobin in July 2002. Sales were positively
impacted by the launch of the following revenue growth programs focused on consumables,
equipment, and pharmaceuticals during the quarter ended June 30, 2003:

- The Rx Extreme program is the Physician Business comprehensive program offering
pharmaceutical, vaccine and general injectibles products to office-based physicians in
all 50 states. The term Extreme symbolizes the Physician Businesssignificant
commitment to its customers to become the leading provider of these products and related
services to the U.S. physician market. The Rx Extreme program was launched in June 2003.
- The Advantage Club is the Physician Business customer membership club that enables
customers to participate in exclusive promotions for a broad selection of commonly used
products. The Advantage Club program was launched in June 2003.
- The Can Do program is the Physician Business equipment marketing program
that enables customers to access a broad portfolio of industry-leading laboratory and
diagnostic equipment, as well as certain exclusive products available only through the
Physician Business. The Can Do program launched several new products during
the three months ended June 30, 2003.

# Elder Care Business

The change in net sales is
attributable to an increase in sales to nursing home facilities and homecare providers of
approximately $1.9 million and $3.3 million, respectively. In addition,
housekeeping product sales increased approximately $4.0 million. Approximately
$1.6 million of the $1.9 million growth in sales to nursing home facilities was
to regional nursing home facilities. The overall growth in net sales is attributable to
growth in the customer base, increased penetration into existing customer facilities, and
the introduction of new product lines partially offset by the loss of revenues
attributable to national chain customers divesting unprofitable nursing home facilities.
This sales growth was achieved through the continued implementation of several innovative
customer solutions including, ANSWERS, ANSWERS Housekeeping (ANSWERS HK), and
Partners in Efficiency (P.I.E.).

ANSWERS is a marketing program that
aligns improved business processes (best practices), typically in the ordering
process of nursing home operations and purchasing, with efficient distribution activities
of the Elder Care Business. The goal of the program is to produce savings for the
customer, vendor, and distributor. In addition to reducing distribution costs by
encouraging more efficient buying patterns, ANSWERS provides opportunities for
manufacturing partners to increase sales volume of category-leading, name-brand products
while providing customers the opportunity to purchase higher quality products at reduced
prices. The ANSWERS HK marketing program solely promotes housekeeping supplies. P.I.E. is
the Elder Care Business product program designed to reduce customers product
procurement costs and drive operating efficiencies in their businesses by committing to
certain purchasing levels and standardized ordering procedures.

# GROSS PROFIT

Gross profit for the three months
ended June 30, 2003 totaled $87.9 million, an increase of $7.0 million, or
8.7%, from gross profit of $80.9 million for the three months ended June 28,
2002. Gross profit as a percentage of net sales increased 20 basis points to 28.4%
during the three months ended June 30, 2003 from 28.2% during the three months ended
June 28, 2002. Gross profit was positively impacted by the overall growth in net
sales discussed above. In addition, during the three months ended June 28, 2002, the
Physician Business recorded a charge of approximately $1.1 million related to the
termination of the Candela Corporation distribution agreement, which included the
termination of manufacturer support, installation services, and warranty coverage.

# GENERAL AND
ADMINISTRATIVE EXPENSES

|                          | For the Three Months Ended | 
|------------------------- | -------------------------- | 
|
|
|Physician Business        |                            | 
|Elder Care Business       |                            | 
|Corporate Shared Services |                            | 
|                          |                            | 
|Total Company             |                            | 
|                          |                            | 

# Physician Business

The overall growth in net sales
discussed above increased general and administrative expenses. The following details the
significant increases or decreases in various components of general and administrative
expenses: (i) warehouse salary expenses increased approximately $0.6 million for
two positions that were created at each full-service distribution center as a result of
the centralization of the purchasing function and the consolidation of the distribution
centers into larger facilities (Rationalization Programs), offset by the
savings from closed centers, (ii) freight expenses increased approximately
$0.6 million as a result of fuel surcharges and rate increases by third party
providers and a temporary increase in the number of shipments between distribution centers
as a result of the Rationalization Programs, (iii) depreciation expense increased
approximately $0.3 million for completed phases of the ERP system, myPSS.com
electronic commerce platform, and supply chain initiatives, (iv) employee benefits
and insurance increased approximately $0.3 million as a result of increased medical
claims quarter over quarter, (v) meeting expenses increased approximately
$0.4 million as a result of the two regional sales meetings to launch the new sales
growth programs; (vi) other general and administrative expenses decreased
approximately $0.7 million which is discussed below under the caption Other General
and Administrative Expenses, and (vii) salary expenses decreased approximately
$0.6 million related to lower head count as a result of the Rationalization Programs.

# Elder Care Business

The overall growth in net sales
discussed above increased general and administrative expenses. The following details the
significant increases or decreases in various components of general and administrative
expenses: (i) warehouse expenses increased approximately $1.0 million due to
increased fuel surcharge and rate increases from third party providers and (ii) bad
debt expense increased approximately $0.5 million as a result of a customer filing
for bankruptcy during the three months ended June 30, 2003.

# Corporate Shared
Services

The increase in general and
administrative expenses is primarily attributable to (i) an increase in incentive
compensation of approximately $0.8 million which is primarily related to the adoption
of the Shareholder Value Plan during fiscal year 2003 and (ii) an increase in
business insurance expense of approximately $0.7 million due to rate increases on the
corporate umbrella and director and officer policies, offset by (i) a decrease in
other general and administrative expenses of $0.4 million which is discussed below
and (ii) a decrease in the cost of the private data network of approximately
$0.4 million as a result of reducing the number of service center locations and the
conversion to a virtual private network across the internet.

The comparability of general and
administrative expenses period over period is impacted by (i) the accounting for the
disposition of the Imaging Business and (ii) the costs incurred in connection with
providing certain services to the buyer under the transition services agreement. In
accordance with EITF No. 87-24, Allocation of Interest to Discontinued Operations
(EITF 87-24), the Company is permitted to allocate corporate overhead
expenses to discontinued operations that are directly attributable to the operations of
the Imaging Business. EITF 87-24 specifically states that indirect expenses are not
allocable to discontinued operations. During the three months ended June 28, 2002,
the Company incurred approximately $2.8 million of general and administrative
expenses, which included both direct and indirect overhead expenses that were attributable
to the Imaging Business. However, the Company only allocated approximately
$2.1 million of these expenses to discontinued operations, which represented direct
overhead expenses for the period from March 30, 2002 to June 28, 2002.
Subsequent to the sale of the Imaging Business, expenses continued to be incurred by the
Company for services provided to Imaging Acquisition Corporation, a wholly owned
subsidiary of Platinum Equity, LLC, under a transition services agreement and were no
longer allocated to discontinued operations. These expenses are recorded as a component of
general and administrative expenses and the reimbursement is recorded in other income in
the accompanying statements of operations.

# Other General and
Administrative Expenses

General and administrative expenses
include charges related to restructuring activity, merger activity, and other items. These
charges decreased approximately $1.1 million during fiscal year 2003 compared to the
prior fiscal year. The following tables summarize other general and administrative
expenses (in millions) by business segment:

|                                   | For the Three Months Ended June 30, 2003
|---------------------------------- | ----------------------------------------
|
|Restructuring costs and expenses   |                                         
|Accelerated depreciation           |                                         
|Reversal of operational tax charge |                                         
|Rationalization expenses           |                                         
|Other                              |                                         
|                                   |                                         
|Total                              |                                         
|                                   |                                         

|                                   | For the Three Months Ended June 28, 2002
|---------------------------------- | ----------------------------------------
|
|Restructuring costs and expenses   |                                         
|Merger costs and expenses          |                                         
|Accelerated depreciation           |                                         
|Reversal of operational tax charge |                                         
|Rationalization expenses           |                                         
|Other                              |                                         
|                                   |                                         
|Total                              |                                         
|                                   |                                         

Restructuring costs and expenses for
the three months ended June 30, 2003 and June 28, 2003 primarily relate to
charges recorded for the plans adopted by the Physician Business during the fourth quarter
of fiscal year 2003 and the fourth quarter of fiscal year 2002. Management does not expect
material charges related to these plans during the remainder of fiscal year 2004.

Merger costs and expenses for the
three months ended June 28, 2002 include costs related to employee retention bonuses
to retain certain officers and key employees that were fully paid during fiscal year 2003.

Rationalization expenses are costs
incurred as a result of the conversion to the new ERP system, the centralization of the
purchasing function, and the restructuring plan that was adopted during the fourth quarter
of fiscal year 2002. Such costs primarily include salary and travel expenses for personnel
responsible for converting the ERP system, centralizing the purchasing function, or
closing a distribution center location.

# SELLING EXPENSES

|                    | For the Three Months Ended | 
|------------------- | -------------------------- | 
|
|
|                    |                            | 
|Physician Business  |                            | 
|Elder Care Business |                            | 
|                    |                            | 
|Total Company       |                            | 
|                    |                            | 

# Physician Business and
Elder Care Business

The change in selling expenses is
primarily attributable to an increase in commission expense due to the increased sales
volume discussed above. Although net sales increased, selling expenses as a percentage of
net sales remained relatively constant period to period. Commissions are generally paid to
sales representatives based on gross profit dollars and gross profit as a percentage of
net sales.

# INCOME FROM OPERATIONS

|                          | For the Three Months Ended | 
|------------------------- | -------------------------- | 
|
|
|                          |                            | 
|Physician Business        |                            | 
|Elder Care Business       |                            | 
|Corporate Shared Services |                            | 
|                          |                            | 
|Total Company             |                            | 
|                          |                            | 

Income from operations for each
business segment changed due to the factors discussed above.

# INTEREST EXPENSE

Interest expense for the three months
ended June 30, 2003 totaled $1.1 million, a decrease of $1.2 million, or
51.5%, from interest expense of $2.3 million for the three months ended June 28,
2002. Interest expense allocated to discontinued operations was $0.8 million during
the three months ended June 28, 2002. Excluding the effects of the allocation of
interest expense to discontinued operations, interest expense decreased approximately
$2.0 million. The retirement of the 8 1⁄2% Senior Subordinated Notes (the
Notes) during fiscal year 2003 decreased interest expense during the three
months ended June 30, 2003 approximately $2.8 million. The overall decrease in
interest expense was partially offset by an increase in interest expense of approximately
$0.7 million due to an increase in the average daily balance outstanding under the
revolving line of credit of $82.7 million period over period.

# OTHER INCOME

Other income for the three months
ended June 30, 2003 totaled $2.1 million, an increase of $1.7 million from
other income of $0.4 million for the three months ended June 28, 2002. During
the three months ended June 30, 2003, approximately $1.9 million of other income
was recorded as a result of the transition services agreement associated with the sale of
the Imaging Business. The Company expects such transitional services to significantly
decrease during the three months ended October 3, 2003. The increase in other income
was offset by a decrease in the amount of customer finance charge income of approximately
$0.2 million on the Physician Business customer accounts.

# PROVISION FOR INCOME
TAXES

Provision for income taxes was
$3.1 million for the three months ended June 30, 2003, an increase of
$1.1 million from the provision for income taxes of $2.0 million for the three
months ended June 28, 2002. The effective income tax rate was approximately 39.9% and
37.8% for the three months ended June 30, 2003 and June 28, 2002, respectively.
The provision for income taxes increased approximately $0.9 million as a result of an
increase in income from continuing operations before provision for income taxes.

During fiscal year 2002, the Company
was notified by the Internal Revenue Service that the income tax returns for fiscal years
ended March 31, 2000 and March 30, 2001 would be examined. Fieldwork was
completed during the first quarter of fiscal year 2004, with anticipated final audit
results during fiscal year 2004. Management does not anticipate the results of the audit
to have a material impact on the financial condition or consolidated results of operations
of the Company.

# TOTAL LOSS FROM
DISCONTINUED OPERATIONS

Net sales for the Imaging Business
were $176.8 million for the three months ended June 28, 2002. The pretax loss
from operations was $1.3 million for the three months ended June 28, 2002. The
Imaging Business was sold on November 18, 2002.

# NET INCOME

Net income for the three months ended
June 30, 2003 totaled $4.7 million compared to net income of $2.6 million
for the three months ended June 28, 2002. Net income for the three months ended
June 28, 2002 included a charge of $0.8 million for the loss from discontinued
operations. Otherwise, variances are due to the factors discussed above.

# LIQUIDITY AND CAPITAL
RESOURCES

As the Companys business grows,
its cash and working capital requirements will also continue to increase as a result of
the anticipated growth of the Companys operations. The Company expects this growth
will be funded through a combination of cash flows from operating activities, revolving
credit borrowings, and other financing arrangements.

# Cash Flows From
Operating, Investing, and Financing Activities

Net cash provided by operating
activities was $6.7 million and $20.1 million for the three months ended
June 30, 2003 and June 28, 2002, respectively. During the three months ended
June 30, 2003 and June 28, 2002, cash flows from operating activities were
positively impacted by noncash items of $8.5 million and $4.6 million,
respectively, primarily related to depreciation, amortization of intangible assets,
amortization of debt issuance costs, provision for doubtful accounts, the net provision
for deferred income taxes, and provision for deferred compensation. Cash flows from
operating activities were negatively impacted by a net increase in operating assets and
liabilities of $6.4 million and $3.5 million, during the three months ended
June 30, 2003 and June 28, 2002, respectively, primarily due to investments to
support revenue growth. The growth in inventory during the three months ended June 30,
2003 primarily resulted from purchases to support the Physician Business new
marketing programs and to support the Elder Care Business investment in the
housekeeping product line. During fiscal year 2003, the Company sold its Imaging Business and the cash flows generated
from this business were

approximately $16.5 million during the three months ended
June 28, 2002. Furthermore, during the three months ended June 28, 2002, the
Company received a refund of approximately $4.2 million for payments made for federal
income taxes for the fiscal year ended 2002.

Net cash used in investing activities
was $3.7 million and $3.4 million for the three months ended June 30, 2003
and June 28, 2002, respectively. During the three months ended June 30, 2003 and
June 28, 2002, capital expenditures totaled $2.6 million and $2.9 million,
respectively, which include expenditures related to the continued development and
enhancement of the Companys ERP system, electronic commerce platforms, and supply
chain integration of approximately $1.5 million and $1.0 million during the
three months ended June 30, 2003 and June 28, 2002, respectively. Capital
expenditures related to the distribution center expansions as a result of the
Rationalization Programs were approximately $0.5 million and $1.1 million during
the three months ended June 30, 2003 and June 28, 2002, respectively.
Approximately $1.0 million of transaction costs related to the sale of the Imaging
Business were paid during the three months ended June 30, 2003.

Net cash used in financing activities
was $6.0 million, and $0.1 million during the three months ended June 30,
2003 and June 28, 2002, respectively. During the three months ended June 30,
2003, the Company paid $5.6 million to repurchase approximately 1.0 million
shares of the Companys common stock at an average price of $5.92 per common share.
On December 17, 2002, the Companys Board of Directors authorized the purchase
of up to 5% of its common stock, or approximately 3.4 million common shares, in the
open market, in privately negotiated transactions, or otherwise.

# Revolving Credit
Agreement

On May 20, 2003, the Company
entered into an amended and restated Credit Agreement (the Credit Agreement),
by and among the Company, as borrower thereunder (the Borrower), the
subsidiaries of the Borrower party thereto, the lenders from time to time party thereto
(the Lenders), and Bank of America, N.A., as Agent for the Lenders. The Credit
Agreement provides for a three-year credit facility consisting of an aggregate
$150 million revolving line of credit and letters of credit (the Credit
Facility). Availability of borrowings under the Credit Facility depends upon the
amount of a borrowing base consisting of accounts receivable and, upon satisfaction of
certain requirements, inventory. The Credit Facility bears interest at the Banks
prime rate plus a margin of between 0.00% and 1.00% based on the Companys ratio of
funded debt to earnings before interest, taxes, depreciation, and amortization
(EBITDA), as defined in the Credit Agreement, or at LIBOR plus a margin of
between 1.75% and 3.00% based on the Companys ratio of funded debt to EBITDA. Under
the Credit Agreement, the Company and its subsidiaries are subject to certain covenants,
including but not limited to, limitations on (i) paying dividends and repurchasing
stock, (ii) selling or transferring assets, (iii) making certain investments
(including acquisitions), (iv) incurring additional indebtedness and liens, and
(v) annual capital expenditures. Initial proceeds from the Credit Facility were used
to refinance existing indebtedness outstanding under the original credit facility and
future proceeds will be used to issue letters of credit and finance the ongoing working
capital requirements of the Company. The Credit Facility matures on March 28, 2006.
At June 28, 2003 and March 28, 2003, there was $82.6 million and
$83.0 million, respectively, outstanding under the revolving line of credit.

During the three months ended
June 28, 2003, the Company entered into an interest rate swap agreement to hedge the
variable interest rate debt of its revolving line of credit. Under the terms of the
interest rate swap agreement, the Company makes payments based on the fixed rate and will
receive interest payments based on the 1-month LIBOR. The changes in market value of this
financial instrument are highly correlated with changes in market values of the hedged
item both at inception and over the life of the agreement. Amounts received or paid under
the interest rate swap agreement are recorded as reductions or additions to interest
expense. In accordance with Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities, and SFAS No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment
of FASB Statement No.133, the Companys interest rate swap agreement has been
designated as a cash flow hedge with changes in fair value recognized in accumulated other
comprehensive loss in the accompanying consolidated balance sheets.

The swap carries a notional principal
amount of $35.0 million and effectively fixes the interest rate on a portion of the
revolving line of credit to 2.195%, prior to applying the funded debt to EBITDA margin
discussed above. The swap agreement expires on March 28, 2006 and settles monthly
until expiration. At June 30, 2003, the Company recorded

an unrealized loss, net of
taxes, of $232 for the estimated fair value of the swap agreement in accumulated other
comprehensive loss in the accompanying balance sheet.

# Future Minimum
Obligations

In the normal course of business, the
Company enters into obligations and commitments that require future contractual payments.
The commitments primarily result from repayment obligations for borrowings under the
revolving line of credit, as well as contractual lease payments for facility, vehicle, and
equipment leases, and contractual payments under noncompetition agreements and employment
agreements. The following table presents, in aggregate, scheduled payments under
contractual obligations for the Physician Business, the Elder Care Business, and Corporate
Shared Services (in thousands):

|                            | Fiscal Years | 
|--------------------------- | ------------ | 
|
|                            |              | 
|Revolving line of credit(a) |              | 
|Operating leases:           |              | 
|Operating                   |              | 
|Restructuring               |              | 
|Noncompetition agreements   |              | 
|Employment agreements       |              | 
|                            |              | 
|Total                       |              | 
|                            |              | 

| | (a) | The revolving line of credit is classified as a current liability in accordance
with EITF No. 95-22, Balance Sheet Classification of Borrowings Outstanding
under Revolving Credit Agreements That Include both a Subjective Acceleration
Clause and a Lock-Box Arrangement; however, the New Credit Facility does not
expire until March 26, 2008. The Company is not obligated to repay the
amount outstanding under the revolving line of credit during fiscal year 2004.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Other

As of March 28, 2003, the
Company has not entered into any material working capital commitments that require
funding. The Company believes that the expected cash flows from operations, borrowing
availability under the credit facility, and capital markets are sufficient to meet the
Companys anticipated future requirements for working capital, capital expenditures,
and acquisitions for the foreseeable future.

The Company may, from time-to-time,
seek to retire its outstanding debt or equity through cash purchases and/or exchanges for
equity securities, in open market purchases, privately negotiated transactions or
otherwise. Such repurchases or exchanges, if any, will depend on prevailing market
conditions, the Companys liquidity requirements, contractual restrictions and other
factors. The amounts involved may be material.

# APPLICATION OF CRITICAL
ACCOUNTING POLICIES

There has been no material change in
the Companys Critical Accounting Policies, as disclosed in its Form 10-K for
the year ended March 28, 2003 filed on June 26, 2003.

# RECENT ACCOUNTING
PRONOUNCEMENTS

Refer to Note 1, Background and
Basis of Presentation, for a discussion of recent accounting pronouncements and their
impact on the Companys financial condition and results of operations.

# ITEM 3.     QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes there has been
no material change in its exposure to market risk from that discussed in Item 7A in
the Annual Report on Form 10-K for the fiscal year ended March 28, 2003.

# ITEM 4.    CONTROLS
AND PROCEDURES

Evaluation of disclosure controls and procedures.
The Companys Principal Executive Officer and Principal Financial Officer have
reviewed and evaluated the effectiveness of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 240.13a-14(c) and 15d-14(c)) as of the
end of the period covered by this report (the Evaluation Date). Based on that
evaluation, the Principal Executive Officer and the Principal Financial Officer have
concluded that the Companys current disclosure controls and procedures are
effective, providing them with material information relating to the Company, including its
consolidated subsidiaries, as required to be disclosed in the reports the Company files or
submits under the Exchange Act on a timely basis.

Changes in internal controls. There
has been no significant change in the Companys internal controls over financial
reporting identified in connection with the foregoing evaluation that occurred during the
last quarter and that has materially affected, or is reasonably likely to material affect,
the Companys internal controls over financial reporting.

# PART II  OTHER
INFORMATION

# ITEM 1.    LEGAL
PROCEEDINGS

See Note 8, Commitments and
Contingencies, of this Form 10-Q and Item 3 of the Companys Annual Report
on Form 10-K for the year ended on March 28, 2003.

# ITEM 2.      CHANGES IN
SECURITIES AND USE OF PROCEEDS

Not applicable.

# ITEM 3.      DEFAULTS UPON
SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.    OTHER
INFORMATION

Not applicable.

# ITEM 6.      EXHIBITS AND
REPORTS ON FORM 8-K

(a)    
          Exhibits required by Item 601 of Regulation S-K:

|Exhibit
Number | Description                                                                                
|-------------- | -------------------------------------------------------------------------------------------
|10.1*          | 1999 Broad-Based Employee Stock Plan.                                                      
|              
|10.2*          | Amended and Restated Directors Stock Plan.                                                 
|              
|10.3*          | Amended and Restated 1994 Long-Term Stock Plan.                                            
|              
|10.4*          | Shareholder Value Plan (Portions omitted pursuant to a request for confidential treatment -
|               | Separately filed with the SEC).                                                            
|              
|10.5*          | 1999 Long-Term Incentive Plan.                                                             
|              
|10.6*          | Third Amendment to the Amended and Restated Savings Plan.                                  
|              
|10.7           | Amendment No. 2 to Credit Agreement, dated as of May 20, 2003, by and among the Company,   
|               | each of the Company's subsidiaries therein named, the Lenders from time to time party      
|               | thereto, Bank of America, N.A., as Agent, and Banc of America Securities LLC, as Arranger. 
|              
|10.8*          | Employment Agreement, dated as of July 10, 2003, by and between the Company and            
|               | David A. Smith.                                                                            
|              
|15             | Awareness Letter from KPMG LLP                                                             
|              
|31.1           | Rule 13a-14(a) Certification of the Chief Executive Officer                                
|              
|31.2           | Rule 13a-14(a) Certification of the Chief Financial Officer                                
|              
|32.1           | Section 1350 Certification of the Chief Executive Officer                                  
|              
|32.2           | Section 1350 Certification of the Chief Financial Officer                                  
|              
|               | * Represents a management contract or compensatory plan or arrangement.                    

(b)    
          Reports on Form 8-K:

The
following current reports on Form 8-K were furnished during the quarter ended
June 30, 2003:

|               |                                                                                                                
|-------------- | ---------------------------------------------------------------------------------------------------------------
|Date of Report | Item Reported                                                                                                  
|May 22, 2003   | Furnished to announce the Company's financial
  results for the quarter and fiscal year ended
  March 28, 2003.

# SIGNATURE

Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Jacksonville,
State of Florida, on August 14, 2003.

| | PSS WORLD MEDICAL, INC                                                                                                                                                                                      
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                             
| | By:   /s/ David_M. Bronson
         David M. Bronson
         Executive Vice President and Chief Financial Officer
         (Duly Authorized Officer and Principal Financial and
         Accounting Officer