PSS World Medical third quarter consolidated earnings per diluted share increase 16.6% to $0.35

Third Quarter Highlights:

• Consolidated net sales growth of 1.5%

• Physician Business net sales growth of 1.2%, with net sales growth of 7.4% excluding prior-year H1N1-related product sales
• Elder Care Business net sales growth of 1.9%

• Consolidated operating margin growth of 44 basis points to 6.8%

• Physician Business operating margin decline of 29 basis points to 9.8%
• Elder Care Business operating margin growth of 19 basis points to 6.8%

• Consolidated earnings per diluted share growth of 16.6% to $0.35
• Consolidated cash flow from operations of $35.9 million

PSS World Medical, Inc. (Nasdaq:PSSI) announced today its results for the fiscal 2011 third quarter ended December 31, 2010.

Gary A. Corless, President and Chief Executive Officer, commented, "Sales growth of 1.5% in the third quarter reflects stability in our markets and our team's success in continuing to solve caregivers' biggest problems. While we are seeing early signs of a return to growth in our markets, our plan does not anticipate an increase in demand to reach our raised earnings per share goal of $1.30 - $1.32 per diluted share for fiscal year 2011.

"Over the longer term, we are encouraged by the heightened focus on and investment in quality care initiatives and the expansion of physician and preventive care services in the U.S. health care system.  We remain confident in our team's ability to take advantage of these developments, as well as execute in the fourth quarter to successfully deliver value to our customers and shareholders."

David M. Bronson, Executive Vice President and Chief Financial Officer, commented, "We continue to achieve year-over-year operating margin expansion of 40-50 basis points, driven by successful execution of our business strategies and responsible expense management.  Operating cash flows of approximately $75 million through the first three quarters have put us on track to reach our full year goal and facilitated accretive share repurchases and our acquisition strategy. During this fiscal year, we have acquired $100 million of annualized revenue from a combination of strategic targets and fold-ins, more than doubling the goal we had established for this year.  After some modest transaction and integration costs, these acquisitions will add several percentage points of earnings growth next fiscal year."

Net sales for the three months ended December 31, 2010, were $510.1 million, an increase of 1.5%, compared with net sales of $502.8 million for the three months ended January 1, 2010. Net sales for the three months ended December 31, 2010, for the Physician Business increased by 1.2% (7.4% growth excluding H1N1-related product sales in last year's third quarter) and increased by 1.9% for the Elder Care Business. Income from operations for the three months ended December 31, 2010, was $34.7 million compared with income from operations for the three months ended January 1, 2010, of $32.0 million. Net income for the three months ended December 31, 2010, was $19.5 million, or $0.35 per diluted share, compared with net income for the three months ended January 1, 2010, of $17.9 million, or $0.30 per diluted share.  Each of the three-month periods during fiscal years 2011 and 2010 included 61 sales days.

Net sales for the nine months ended December 31, 2010, were $1,485.1 million, a decrease of 4.7%, compared with net sales of $1,558.3 million for the nine months ended January 1, 2010. Net sales for the nine months ended December 31, 2010, for the Physician Business decreased by 6.0% and decreased by 1.5% for the Elder Care Business. Income from operations for the nine months ended December 31, 2010, was $95.4 million compared with income from operations for the nine months ended January 1, 2010, of $92.3 million. Net income for the nine months ended December 31, 2010, was $52.9 million, or $0.94 earnings per diluted share, compared with net income for the nine months ended January 1, 2010, of $52.9 million, or $0.89 earnings per diluted share.  The Company noted that it had five fewer sales days (188 sales days) in the nine-month period of fiscal year 2011, ended December 31, 2010, compared with the number of sales days (193 sales days) in the nine-month period of fiscal year 2010, ended January 1, 2010.

A listen-only simulcast as well as a 90-day online replay of PSS World Medical's fiscal year 2011 third quarter conference call can be found in the Investor Relations/Financial Information sections of the Company's website, www.pssworldmedical.com, under the heading "Events and Presentations," on January 27, 2011, beginning at 8:30 a.m. Eastern time.

The Company has today filed with the SEC a Form 8-K that includes a copy of this press release and its related Fiscal Year 2011 Third Quarter Financial Workbook, which contains GAAP and non-GAAP financial measures, and is available on the Company's website, www.pssworldmedical.com. Additional financial information pertaining to PSS World Medical financial results may be found by visiting the Investor Relations section of the Company's website, www.pssworldmedical.com, under the heading "Events and Presentations." If you should need assistance accessing the information, please call Investor Relations at 904-332-3000.