920527--5/26/2006--PSS_WORLD_MEDICAL

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The Company s business is dependent on sophisticated data processing systems that are critical to the business operations. The Elder Care Business implementation of the JD Edwards customer service module could temporarily disrupt its operations. Numerous factors, many of which cannot be controlled by the Company, may cause the Company s net sales and results of operations to fluctuate quarterly, which may adversely affect the market price of the Company s common stock. The Company s future results of operations could be adversely affected by operational disruptions due to natural disasters, particularly in regions susceptible to hurricanes. The Company may face increasing, competitive pricing pressures on its sales to large national and regional accounts and consolidated provider groups. Pricing and customer credit quality pressures, due to reduced spending budgets by healthcare providers, may affect the Company s net sales, ability to collect accounts receivable, and results of operations. The Elder Care Business has a limited number of large customers. The viability of the Company s customers may be threatened by increasing costs of malpractice claims and liability insurance. The Company may not be able to continue to compete successfully with other medical supply companies and direct manufacturers. Continued consolidation of medical supply distributors within the healthcare industry may lead to increased competition. Expansion of the multi-tiered costing structure may place the Company at a competitive disadvantage. The Company depends on the availability of multi-tiered priced products from other distributors at prices lower than the manufacturers list prices. If the government allows hospitals or GPOs to provide free hardware and software to physician offices, the Company s ability to distribute medical supplies may be threatened. The ability to maintain good relations with vendors may affect the Company s overall profitability. The Company depends heavily on significant distributorship agreements and the termination of any agreements may reduce the Company s net sales and results of operations. The Physician Business net sales and results of operations may be negatively impacted by the Company s inability to obtain influenza vaccines. The Company must hire and retain qualified sales representatives to continue its sales growth. The Company must retain the services of senior management. The Company s strategy for growth may not result in additional net sales or operating income and may have an adverse effect on working capital, operating cash flow, and results of operations. The Company s operations and prospects in Asia are subject to political, economic and legal uncertainties. The operating costs of the Company s delivery fleet could increase due to fuel price fluctuations and/or service interruptions by third parties. The Company s significant investment in inventory may be exposed to risk of product obsolescence or decline in market valuation. Business acquisitions may decrease existing shareholders percentage ownership in the Company and/or require the Company to incur additional debt. If difficulties are encountered while integrating the operations of acquired companies with the operations of the Company, profitability may be adversely affected. The Company s indebtedness may limit its ability to obtain additional financing in the future and may limit its flexibility to react to industry or economic conditions. The price of the Company s common stock and the trading value of the convertible senior notes may be volatile. Tax legislation initiatives could adversely affect the Company s net earnings and tax liabilities. The Company faces litigation and liability exposure for existing and potential claims. The Company faces litigation risk exposure to product liability and other claims. The Company faces risk that proprietary rights may infringe on the rights of third parties. If environmental claims arise, the Company could incur substantial liabilities and costs. If management fails to maintain an effective system of internal controls, the Company may not be able to accurately report its financial results. The Articles of Incorporation, Bylaws, Rights Agreement, and Florida law may inhibit a takeover of the Company or could deprive the Company s shareholders of the opportunity to obtain a takeover premium for their shares. The Company s business, marketing activities, and pricing are subject to review by federal or state agencies. The distribution of controlled pharmaceutical products by the Physician Business is subject to review by federal agencies. The Medicare Part B billing services provided by the Elder Care Business is subject to review by federal agencies. Increasing governmental efforts to regulate the pharmaceutical supply channel may increase the Physician Business operating costs and reduce profitability. Failure to comply with the United States Foreign Corrupt Practices Act and other laws could adversely impact the Company s competitive position and subject us to penalties and other adverse consequences.

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920527--5/26/2006--PSS_WORLD_MEDICAL_INC