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PSS World Medical, Inc. (PSSI)

F09Q03 (Qtr End 01/02/09) Earnings Call

January 29, 2009 8:30 a.m. ET


Rob Weiner - Vice President Investor Relations

David Smith - Chairman, CEO, President

Gary Corless - COO, Executive Vice President

David Bronson - CFO and Principal Accounting Officer


John Kreger - William Blair & Company, LLC

Lisa Gill - J.P. Morgan

Robert Willoughby - BAS-ML

Lawrence Marsh - Barclays Capital

Glen Santangelo - Credit Suisse

Randall Stanicky - Goldman Sachs

(Andrea Bece) - Stroders



Ladies and gentlemen, thank you for standing by. Welcome to the PSS World Medical fiscal 2009 third quarter conference call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question and answer session.

(Operator instructions). As a reminder this conference is being recorded Thursday January 29, 2009. I would like now to turn the conference over to Rob Weiner, Vice President Investor Relations, please go ahead, sir.

Rob Weiner

Good morning, thank you Shawn. Good morning everyone, thank you for joining our fiscal year 2009 third quarter conference call. Today on the call our speakers are David Smith, Chairman and CEO, Gary Corless, Chief Operating Officer, and David Bronson, Executive Vice President and CFO.

We issued our release last night for the quarter and the release and our financial workbook for fiscal year 2009 third quarter are available on our web site at The financial workbook contains GAAP and non-GAAP measures that provide greater detail into each business.

I'll read the forward looking statement. During this call we may make a number of forward looking statements regarding revenue, gross margin, operating expenses, operating margins, earnings per share, and other matters that are not historical facts.

These statements involve a number of risks and uncertainties that could cause actual results to differ materially from what is expressed or forecasted. For a list and descriptions of certain of these risks and uncertainties we refer you to the forward looking statement disclosure in today's press release—last night's press release and to the other information provided in our most recent form 10-K and other SEC filings, copies of which are available from the SEC, from the investor relations section on our Website, or from us here in investor relations.

The company wishes to caution listeners of this call and its replay to not place undue reliance on any such forward looking statements which statements pursuant to the Private Securities Litigation Reform Act of 1995 and as such speak only as of this date.

The company also wishes to caution listeners that it undertakes no duty or is under no obligation to update or revise any forward looking statements. Let me also remind you that we may reference certain non-GAAP financial measures in an effort to provide additional information to investors.

All non-GAAP measures have been reconciled to their related GAAP measures in accordance with SEC rules. You'll find reconciliation charts at the end of our financial workbook and our form 8-K submitted to the SEC. For our call today we will follow our formal remarks by a Q&A session as prompted by the operator.

We will limit the call to no more than one hour in duration and be mindful about our reporting companies and a busy week. I am now pleased to turn the call over to David Smith, our Chairman of the Board and Chief Executive Officer, David.

David Smith

Good morning. Thank you for joining us. We will deliver a quick and informative call this morning. Last quarter I described how the Chinese believed it is a blessing and a curse to live in interesting times. I can think of many other words this week like fascinating, sad, unpredictable, and challenging.

We are a company blessed by fate, fate to serve the alternate site healthcare system and customer. We are blessed previous strategic decisions to fanatically focus on customer innovations and solutions and have investments in operational efficiencies.

In this environment of pain and unprecedented disruption it's difficult to feel and harder to say but I like our position. I feel great about our strategic direction in investments. We simply can't feel guilty about doing what we're paid to do, maximize shareholder returns and take care of our customers and people.

We simply are making customers healthier, our people are winning on the streets, and our programs and solutions are effective. We are changing and adapting, relentlessly focusing on customers and people. And we believe we will emerge a stronger company.

We have proven time and time again that we are quicker and more nimble than our competition and have clearly grown revenues faster. We are removing costs from our business while we are investing in gross strategies and solutions.

Our guidance for this fiscal year is consistent at $0.94 to $0.96 EPS. We've accelerated investments and infrastructure and operational efficiency with capital and P&L spending. We've dealt with hurricanes, deflating dollar, rising commodities, and gas prices now to see commodity prices reverse.

And we are even beginning to see overseas containers shipping costs decline. We've seen consumer savings impact office visits and discretionary procedures matched by our customer's need and willingness to listen to solutions that impact cash flow.

Our solutions and programs were built on the belief that our customers would face more economic stress than ever before. These initiatives have not just been timely they have been critical to the health of our customer and allowed us to drive a bigger stake into the heart of our competition.

During the call Gary Corless, our Chief Operating Officer, will review these programs for both businesses and then David Bronson will review the balance sheet and financial results. My last three topics are physician revenue, strategic planning for fiscal 2010, and a Washington update.

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