8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   January 19, 2005

PSS WORLD MEDICAL, INC.

(Exact name of Registrant as specified in its charter)

Commission File Number:   0-23832

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.    Entry into a Material Definitive Agreement.

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of a press release of PSS World Medical, Inc., dated January 25, 2005, announcing that PSS World Medical, Inc., and its wholly owned subsidiary, World Med Shared Services, Inc. (collectively the “Company”), entered into a Sourcing Services Agreement, dated as of January 19, 2005 (the “Agreement”), with Tiger Specialty Sourcing Limited and Tiger Shanghai Specialty Sourcing Co. Ltd. (collectively “Tiger Medical”) and Mark Engel, Elaine Fong, and Dr. Gao Zhan, principals of Tiger Medical. Subject to the terms and conditions of the Agreement, the Company has agreed to purchase certain medical and other products from Chinese suppliers and manufacturers using the exclusive sourcing services of Tiger Medical.

Pursuant to the terms of the Agreement, the Company made an initial equity investment of $1.0 million on January 25, 2005. In return for its initial equity investment, the Company appointed two individuals to serve on the five-member board of directors of both Tiger Specialty Sourcing Limited and Tiger Shanghai Specialty Sourcing Co. Ltd. The Company ultimately has the right to increase its ownership interest in Tiger Medical to 100% during fiscal years 2006 through 2009 if certain performance targets are achieved. The total purchase price to be paid by the Company for 100% ownership of Tiger Medical ranges between $1.0 million and $32.5 million, depending on certain performance targets. Any investments made by the Company during fiscal years 2005-2008 will be credited against the final purchase price to be paid by the Company. If at any time during the term of the Agreement, the Company achieves the agreed-upon cost of goods savings target in any twelve month period prior to achieving the agreed-upon sales target, then either party has the right to trigger an early final buy-out of Tiger Medical by the Company.

The Agreement may be terminated by either party upon the occurrence of certain events of default.

The Agreement provides the Company certain indemnification rights which terminate at varying times.

The foregoing summary description of the Agreement and the transactions contemplated thereby are not, nor are they intended to be, a complete description of all of the terms and conditions of the Agreement.

Exhibits

Exhibit Number	Description
99.1	Press Release dated January 25, 2005.

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 hereunto duly authorized.

Date: January 25, 2005

PSS WORLD MEDICAL, INC.

By: /s/ David M. Bronson
      Name:   David M. Bronson
      Title:    Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

99.1      Press Release dated January 25, 2005.

EX-99

N   E   W   S        R   E   L   E   A   S   E

Contact:   Robert C. Weiner
                 Vice President, Investor Relations
                  904-332-3287

PSS WORLD MEDICAL ANNOUNCES PARTNERSHIP AND PRODUCT SOURCING
AGREEMENT WITH CHINA-BASED COMPANY TO ASSIST IN EXECUTION OF
THE COMPANY’S GLOBAL PRODUCT SOURCING STRATEGY

Jacksonville, Florida (January 25, 2005) – PSS World Medical, Inc. (NASDAQ/NM:PSSI) announced today that it has established a partnership with Tiger Medical (“Tiger”), a China-based company with expertise in sourcing medical products manufactured in China. Tiger will exclusively assist PSS World Medical (“PSS”) in its execution of its global product sourcing strategy designed to provide quality medical products to its customers located in the United States of America.

        The partnership and exclusive sourcing agreement focuses on two primary objectives – the delivery of consistent high quality medical products and improving supply chain efficiencies for healthcare customers in the U.S. The partnership includes an initial equity investment in Tiger and rights to purchase additional equity in Tiger based on performance targets and mutual success of the PSS World Medical, Inc sourcing initiative. The agreement gives PSS two seats on the Board of Directors of Tiger in return for the equity investment. Other terms of the agreement were not disclosed.

        David A. Smith, President and Chief Executive Officer, commented, “Our organization has planned extensively and analyzed a variety of opportunities before initiating the first phase of our global product sourcing strategy. We have partnered with Tiger Medical, whose principals have established three successful healthcare businesses in mainland China, Excel PharmaStudies, Pioneer Pharmaceuticals and Haoyisheng (Good Doctor). Mark Engel, the operating principal of Tiger, is an American who has very successfully executed on several business models to provide value to U.S.-based healthcare services and pharmaceutical companies.

        “Tiger has been operating and sourcing products for U.S. manufacturers for several years and has a well-established organization to ensure local market knowledge, expertise, quality assurance, factory relations and logistics efficiency. We believe this partnership will deliver strong value to our customers and stockholders.”

        PSS World Medical, Inc. is a specialty marketer and distributor of medical products to physicians and elder care providers through its two business units. Since its inception in 1983, PSS has become a leader in the two market segments that it serves with a focused market approach to customer services, a consultative sales force, strategic acquisitions, strong arrangements with product manufacturers and a unique culture of performance.

        All statements in this release that are not historical facts, including, but not limited to, statements regarding anticipated growth in revenue, gross and operating margins, and earnings, statements regarding the Company’s current business strategy, the Company’s ability t o successful implement its global product sourcing strategy and realize value for its business operations and customers, the Company’s ability to increase supply chain efficiency in the United States from the execution of its global product sourcing strategy, the Company’s ability to complete and integrate acquired businesses and generate acceptable rates of return, the Company’s projected sources and uses of cash, and the Company’s plans for future development and operations, are based upon current expectations. Specifically, forward-looking statements in this Press Release include, without limitation, the Company’s expected results in GAAP EPS, revenue, operating incomes and operating margins for continuing operations and discontinued operations for both the consolidated company and for each of its businesses in fiscal years 2005 and 2006; the expected operational cash flow in fiscal year 2005; the ability to sustain revenue growth and expected growth rates of the marketing programs in its Physician and Elder Care Businesses; timing of and results of expected flu vaccine sales during fiscal years 2005 and 2006; and expected sales growth from durable medical equipment, housekeeping, revenues derived from home care and assisted living customers, our expectations for revenue, operating income, operating margin, cash flow from operations and earnings per share for fiscal years 2005 and 2006, as well as other expectations of growth and financial and operational performance. These statements are forward looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Among the factors that could cause results to differ materially are the following: pricing and customer credit quality pressures; the loss of any of our distributorship agreements and our reliance on relationships with our vendors; our reliance on a limited number of elder care customers; the availability of sufficient

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capital to finance the Company’s business plans on terms satisfactory to the Company; competitive factors; the ability of the Company to adequately defend or reach a settlement of outstanding litigations and investigations involving the Company or its management; changes in labor, equipment and capital costs; changes in regulations affecting the Company’s business, such as the Medicare cliffs, changes in malpractice insurance rates and tort reform; the success of the Company’s efforts to integrate acquired companies and realize expected revenue and cost synergies; future acquisitions or strategic partnerships; general business and economic conditions; and other factors described from time to time in the Company’s reports filed with the Securities and Exchange Commission. Many of these factors are outside the control of the Company. The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company also wishes to caution readers that it undertakes no duty or is under no obligation to update or revise any forward-looking statements.

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