UNJ61

ITED STATES STATES DISTRICT MIDDLE DISTRICT OF FLORIDA 33I

JACKSONVILLE DIVISION ( r -- - - - - - - - - - - - X

JACK HIRSCH, : Civil Action No.

Plaintiff, :

V.

PSS WORLD MEDICAL, INC., PATRICK C. KELLY, FREDERICK EUGENE DELL, THOMAS A. HIXON and DAVID A. SMITH,

Defendants.

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CLASS ACTION COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS

JURY TRIAL DEMANDED

Plaintiff Jack Hirsch, by his undersigned attorneys, for

his class action complaint, alleges the claims set forth herein.

Plaintiff's claims as to himself and his own actions, as set forth

herein, are based upon personal knowledge. All other allegations

are based upon the investigations of counsel, which investigations

included reviews of the public filings with the Securities and

Exchange Commission (the "SEC") made by PSS World Medical, Inc.

("PSSI" or the "Company"), securities analysts reports and

advisories about the Company, press releases issued by the Company,

media reports about the Company and discussions with consultants,

and other witnesses. Based upon such investigations, plaintiff

believes that substantial evidentiary support exists for the

allegations set forth herein. Each paragraph sets forth with

particularity the basis for the allegations contained therein.

NATURE OF THE ACTION

1. This is a securities class action brought on behalf

of all persons, other than defendants and affiliated persons as

described below (the flClassT!), who purchased or otherwise acquired

the securities of PSSI between December 27, 1997 and May 8, 1998,

inclusive, when PSSI announced that its earnings would be below

estimates as a result of the fact that Gulf South Medical Supply

Inc. ("GSMS") , which PSSI recently acquired in a merger, was not as

profitable as originally represented to the public.

2. On December 15, 1997, PSSI and GSMS announced a

definitive agreement to merge the two companies in a transaction

valued at approximately $600 million.

3. Both companies immediately began touting the

positive effects that the merger would have -- proclaiming that the

merger would result in a !!strong growth engine!!, !!ensuring [PSSI! s ]

leadership!! in home health care.

4. On December 22, 1997, the companies filed a Current

Report on Form 8-K which contained pro forma combined financial

statements of PSSI and GSMS which were materially false and

misleading.

5. On May 11, 1998, PSSI announced its earnings would

be below estimates in fiscal 1998 and 1999, after discovering that

GSMS was not as profitable as had been represented on its financial

statements. As a result of the release of the news, the price of

the common stock of PSSI fell 25%, or $4-15/16, to $14-7/16 on

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trading volume of 13.8 million, more than 30 times its average

daily volume.

JURISDICTION AND VENUE

6. Plaintiff brings this action pursuant to Sections

10(b) and 20(a) of the Securities Exchange Act of 1934 (the

"Exchange Act"), 15 U.S.C. 78j and 78t, Rule 10b-5, and 17 C.F.R.

§240.10b-5, promulgated thereunder by the SEC.

7. This Court has jurisdiction in this action pursuant

to Section 27 of the Exchange Act, 15 U.S.C. § 78aa; and 28 U.S.C.

§ 1367.

8. Venue is proper in this District pursuant to Section

27 of the Exchange Act, and 28 U.S.C. § § 1391(b) and (c) . Many of

the acts and transactions giving rise to the violations of law

complained of herein occurred in this District. In addition, PSSI

maintains its corporate headquarters and executive offices within

this District.

9. In connection with the acts and conduct alleged in

this Complaint, defendants, directly and indirectly, used the means

and instrumentalities of interstate commerce, including the mails

and telephone communication systems, and the facilities of a

national securities market.

THE PARTIES

10. Plaintiff Jack Hirsch purchased 129 shares of PSSI

common stock on January 14, 1998 at $19.71 per share and has been

damaged as a result of defendants' conduct as described herein.

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11. Defendant PSSI is a Florida corporation, formerly

known as Physician Sales and Services, Inc., with its principal

offices located at 4345 South Point Boulevard, Jacksonville,

Florida. PSSI common stock trades on the NASDAQ under the symbol

"PSSI". The Company files annual, quarterly and other reports with

the SEC in accordance with the Securities Exchange Act of 1934.

12. Defendant Patrick C. Kelly ("Kelly") at all relevant

times herein was Chairman and Chief Executive Officer of the

Company.

13. Defendant Frederick Eugene Dell ("Dell"), at all

relevant times herein was an officer of the Company.

14. Defendant Thomas A. Hixon ("Hixon"), at all relevant

times herein was an officer of the Company. Defendant Hixon was

the President of GSMS and joined PSSI on March 26, 1998 as

President and Chief Operating Officer.

15. Defendant David A. Smith ("Smith") , at all relevant

times herein has been Executive Vice President and Chief Financial

Officer of the Company.

16. Defendants Kelly, Dell, Hixon and Smith sometimes

are collectively referred to herein as the "Individual Defendants."

Because of the Individual Defendants' positions with the Company,

they had access to the material adverse non-public information

about GSMS's internal control structure, as well as GSMS's and the

Company's finances, and had access to internal corporate documents

(including GSMS's and the Company's operating plans, budgets and

forecasts and reports of actual operations compared thereto) . Each

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of the Individual Defendants owed to the purchasers of the

Company's stock, including plaintiff and members of the Class, the

duty to make a reasonable and diligent investigation of the

statements contained in GSMS's and the Company's financial

statements and press releases. This duty included ensuring that

the statements contained therein were true, and that there were no

omissions of material facts required to be stated in order to make

the statements contained in such not misleading. As hereinafter

alleged, each Individual Defendant violated those specific duties

and obligations.

CLASS ACTION ALLEGATIONS

17. Plaintiff brings this case as a class action

pursuant to Rule 23(a) and Rule 23(b) (3) of the Federal Rules of

Civil Procedure on behalf of a class consisting of all persons and

entities who purchased PSSI securities during the Class Period (the

"Class"), that is, during the period December 27, 1997, the date on

which PSSI announced its proposed merger with GSMS, and May 8,

1998, the date on which it was first publicly announced that PSSI

would not achieve forecasted earnings due to the fact that GSMS was

not as profitable as had been originally represented. Excluded

from the Class are the defendants herein, any subsidiaries or

affiliates of PSSI, the officers and directors of PSSI and GSMS

during the Class Period, members of the Individual Defendants'

immediate families, any person, firm, trust, corporation, officer,

director or any individual or entity in which any defendant has a

controlling interest or which is related to, or affiliated with,

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any of the defendants, and the legal representatives, agents,

affiliates, heirs, successors-in-interest, or assigns of any such

excluded party.

18. During the Class Period, thousands of shares of

common stock of PSSI were traded on the NASDAQ National Market

System, an efficient and developed securities market. Thousands of

brokers nationwide have immediate access to trading information

about PSSI. Within minutes of any transaction taking place, this

system displays the most recent trades and prices.

19. The members of the Class are so numerous that

joinder of all members is impracticable. PSSI has more than 100

million shares of common stock outstanding. During the Class

Period, millions of shares of PSSI stock were purchased by hundreds

or thousands of persons located throughout the United States. The

exact number of Class members may be determined through appropriate

discovery.

20. Plaintiff's claims are typical of the claims of the

members of the Class. Plaintiff and all members of the Class

sustained damages as a result of defendants' wrongful conduct

complained of herein.

21. Plaintiff will fairly and adequately protect the

interests of the members of the Class and has retained counsel

competent and experienced in class actions and securities

litigation. Plaintiff has no interests that are adverse or

antagonistic to, or in conflict with, the interests of the other

members of the Class.

22. A class action is superior to other available

methods for the fair and efficient adjudication of this controversy

because, among other things, it would be impracticable and

undesirable for all members of the Class to bring separate actions

in various parts of the country. In addition, because the damages

suffered by many individual Class members may be relatively small,

the expense and burden of individual litigation make it virtually

impossible for the Class members to seek redress individually for

the wrongful conduct alleged herein.

23. The prosecution of separate actions by individual

Class members also would create the risk of inconsistent and

varying adjudications concerning the subject of this action, which

adjudications could establish incompatible standards of conduct for

defendants under the laws cited herein. Further, common questions

of law and fact exist as to all members of the Class and

predominate over any questions affecting solely individual members

of the Class in that, at least by use of publicly filed reports,

defendants have acted on grounds generally applicable to the entire

Class. Among the questions of law and fact common to the Class

are:

(a) whether the federal securities laws were

violated by defendants' acts as alleged herein;

(b) whether statements disseminated to the

investing public and securities markets by the defendants omitted

or misrepresented material facts concerning the Company's true

financial results;

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(c) whether defendants, to the extent required by

the federal securities laws, acted with the requisite state of mind

in omitting and/or misrepresenting material facts respecting the

failure to disclose the known financial impact that the massive

production difficulties the Company was facing would have on the

Company's financial results;

(d) whether the market price of PSSI's common stock

during the Class Period was artificially inflated due to the

misrepresentations and/or non-disclosures regarding the production

problems on the Company's financial results; and

(e) whether the members of the Class have sustained

damages, and, if so, the appropriate measure thereof.

24. Plaintiff knows of no difficulty that will be

encountered in the management of this litigation that would

preclude its maintenance as a class action. The names and

addresses of the record owners of PSSI securities purchased during

the Class Period are available from the Company or its transfer

agent(s). Notice may be provided to such record owners via first

class mail using techniques and a form of notice similar to those

customarily used in class actions.

SUBSTANTIVE ALLEGATIONS

25. PSS1 is a specialty marketer and distributor of

medical products to physicians, other alternate site providers and

hospitals. PSSI has grown rapidly through acquisitions, internal

growth and new center developments. From fiscal year 1994 (ended

December 31, 1994) to fiscal year 1997, PSSI's revenues have grown

from $357.2 million to $938 million.

26. According to recently issued financial reports filed

with the Securities and Exchange Commission ("the SEC"), PSSI views

the acquisition of medical products distributors as an integral

part of its growth strategy.

27. Since 1994, PSSI has accelerated its acquisition of

medical products distributors in number and size of the operation

acquired.

28. On December 14, 1997, PSSI signed a definitive

agreement to acquire GSMS in a merger. Under the agreement,

holders would receive 1.75 shares of PSSI for each share of GSMS.

The total shares to be issued in the merger would be 28,738,297

shares, representing 41.2 of PSSI shares after the merger.

29. At the time of the announcement of the merger,

defendant Kelly was quoted as follows:

Patrick C. Kelly, Chairman and Chief Executive Officer of PSS World Medical, Inc., said "Strategically, this transaction gives us entry into the entire alternate-site market and is one of the most compelling transactions we have ever completed. All of the sales expertise, information technology and marketing momentum that are hallmarks of PSS World Medical will have immediate application for Gulf South. We believe there are extraordinary synergistic and value-added opportunities inherent in this transaction which should generate increased profitability for our company."

Mr. Kelly continued, "This transaction not only allows PSS World Medical to employ its customer-focused distribution capabilities in all of the alternate-site market, but it also partners us with the preeminent distributor of

medical products to the extended-care market segment. The combination of PSS World Medical and Gulf South creates the nation's leading alternate-site distributor. This transaction adds 17 full-service regional distribution centers to the Company's existing 86 service centers.

30. In connection with the proposed merger, which was

required to be approved by P551 stockholders, PSSI issued a Current

Report on Form 8-K dated December 22, 1997 (the "December 8-K 11 ) in

which there appeared unaudited pro forma considered combined

financial statements for the three years ended March 28, 1997. The

December 8-K reported the filing pro forma revenue and net income

for the combined PSSI and GSMS companies, for the six months ended

September 30, 1997:

Net Sales $617,068.00* Cost of Goods Sold $455,588.00* Gross Profit $161,480.00* Net Income $ 17,407.00* Net income per share $ .25* * thousands

31. After signing of the merger agreement and issuance

of the December 8-K, the price of PSSI stock began to climb through

the end of 1997, from $19-9/16 on December 22, 1997 to a high of

$22-1/8 on December 31, 1997. One analyst estimated that the

merger would add $.03 per share in net income to PSSI in 1998 and

$.04 per share in 1999.

32. Based on information provided by defendants, Moodys

confirmed its rating of PSSI debt at Bi and said the following:

The merger will not only allow PSS to enter the long term care market and be a dominant player in that market, but will improve the company's operating margins and return on assets [emphasis supplied]

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33. On May 8, 1998, PSSI issued an announcement which

stunned the market and caused a 25% decline in the price of its

stock:

PSS World Medical, Inc. today announced that it expects to adjust earnings relating to the Gulf South Medical Supply merger which was recently completed on March 26, 1998, in a pooling-of-interests transaction. The Company anticipates making the adjustment as a result of its decision to accelerate and increase integration and infrastructure spending and to conform Gulf South Medical Supply's accounting practices to those of PSS World Medical.

The Company also believes that this adjustment will affect earnings in fiscal 1999, which, although anticipated to increase approximately 30% over the Company's 1998 fiscal year, are expected to be approximately 141 below analyst expectations. This reduction is primarily due to (i) the conforming of accounting practices noted above and the implications of those accounting changes on future growth forecasts and (ii) the Company's decision to accelerate and increase expenditures on Gulf South Medical Supply infrastructure to support integration and future growth.

34. On May 11, 1998, the first day of trading after the

disclosure, the price of PSSI stock declined by approximately $4-

15/16 to $14-7/16 on trading of 13 million shares, more than 30

times the recent daily average.

35. After the disclosure of the negative news at least

one analyst downgraded PSSI. In a report for May 6-12, 1998, BT

Alex. Brown stated:

We believe management credibility and the Company's acquisition strategy have been damaged by this announcement. . .

* * *

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Investors' concerns about the Gulf South merger were that PSSI overpaid and was diversifying away from the core physician business. These concerns have now become a reality, as Ernst & Young's (Gulf South's auditors) aggressive interpretation of an accounting rule now means that Gulf South's earnings were significantly overstated, according to PSSI's more conservative approach, which is consistent with that of their auditor's, Arthur Andersen. The restatement of previous results eliminates the near-term synergies PSSI had modeled for Gulf South, and lowers Gulf South's operating profit margin to 7 from 9

* * *

During a recent audit of 3 years' of financial data on Gulf South after the merger closed on March 26, 1998 (in a pooling of interests), PSSI's accountant, Arthur Andersen, discovered that Gulf South capitalized operating costs of distribution centers that were going to get shut down, as of the day it was planned that a center would eventually shut down. This contrasts with PSSI's more conservative approach of recording charges until the center is actually closed. This discrepancy between PSSI's accountants, Arthur Andersen, and Gulf South's accountants, Ernst & Young, in the interpretation of rule 95.3 EITF regarding merger accounting, will result in a $0.04 shortfall to $0.64 versus our estimate and the Street estimate of $0.68 in the FY 1998 results, which will be reported early/mid June.

But more important, we believe, will be the lost synergies from Gulf South -- when working the numbers for the Gulf South acquisition, PSSI had forecasted synergies from closing distribution centers at Gulf South, but these synergies will not materialize as they were already capitalized and not expensed in the P&L.

The result is a lower profit base off which to grow, and significantly less synergy opportunities from the Gulf South piece of business. Hence, our EPS forecasts for FY 1999 and FY 2000 are too high, and have been

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lowered to reflect this change, to $0.83 from $0.98 and to $1.08 from $1.30, respectively. Additionally, we have lowered our 3-5 year growth rate to 25%. At these levels, we believe the stock is fairly valued, so we have downgraded our investment rating to "market perform" (3) from " strong buy" (1)

Management credibility has been an issue in the past, when a similar event occurred regarding a merger integration issue with Taylor Medical, roughly one year ago, and we believe that it will take a while for investors to rebuild confidence in management and the EPS forecasts.

36. The pro forma financial statements of the Company

were false and misleading in that they failed to comply with SEC

regulations and GAAP accounting policies.

37. Generally Accepted Accounting Principles ("GAAP")

encompass the rules, conventions and practices recognized and

employed by the accounting profession for the preparation of

financial statements. Statements of Financial Accounting Standards

("FAS") are promulgated by the profession's Financial Accounting

Standards Board, and are considered the highest authority of GAAP.

Other authoritative pronouncements include Accounting Principles

Board Opinions ("APB") and Statements of Position of the American

Institute of Certified Public Accountants ("SOP") . Financial

statements filed in any documents with the Securities and Exchange

Commission are required by Regulation S-X (17 CFR 210.4-01(a) (1))

to conform to GAAP. PSSI's financial statements which were

included in the public filings were not prepared in accordance with

GAAP for, inter alia, the following reasons:

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(a) The principle that financial reporting should

provide information that is useful to present and potential

investors and creditors and other users in making rational

investment, credit and similar decisions (FASB Statement of

Concepts No. 1, ¶ 34)

(b) The principle that financial reporting should

provide information about the economic resources of an enterprise,

the claims to those resources, and the effects of transactions,

events, and circumstances that change resources and claims to those

resources (FASB Statement of Concepts No. 1, ¶ 40)

(c) The principle that financial reporting should

provide information about how management of an enterprise has

discharged its stewardship responsibility to owners (stockholders)

for the use of enterprise resources entrusted to it. To the extent

that management offers securities of the enterprise to the public,

it voluntarily accepts wider responsibilities for accountability to

prospective investors and to the public in general (FASB Statement

Concepts No. 1, ¶ 50)

(d) The principle that financial reporting should

provide information about an enterprise's financial performance

during a certain time period. Investors and creditors often use

information about the past to help in assessing the prospects of an

enterprise. Thus, although investment and credit decisions reflect

investors' expectations about future enterprise performance, those

expectations are commonly based at least partly on evaluations of

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past enterprise performance (FASB Statement of Concepts No. 1, ¶

42)

(e) The principle that financial reporting should

be reliable in that it represents what it purports to represent.

That information should be reliable as well as relevant is a notion

that is central to accounting (FASB Statement of Concepts No. ¶J

58-59)

(f) The principle of completeness, which means that

nothing is left out of the information that may be necessary to

insure that it validly represents underlying events and conditions

(FASB Statement of Concepts No. 2, ¶ 79);

(g) The principle that conservatism be used as a

prudent reaction to uncertainty to try to ensure that uncertainties

and risks inherent in business situations are adequately

considered. The best way to avoid injury to investors is to try to

ensure that what is reported represents what it purports to

represent (FASB Statement of Concepts No. 2, 11 95, 97); and

(h) The principle that revenue must realizable

(collectible) and earned prior to recognition (FASE Statement of

Concepts No. 5, ¶ 83)

COUNT I

(Against All Defendants For Violations Of Section 10(b) Of The Exchange Act

And Rule lOb-5 Promulgated Thereunder)

38. Plaintiff incorporates by reference and realleges

the preceding paragraphs as though fully set forth herein. This

Count is asserted against all defendants.

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39. During the Class Period, defendants, directly and

indirectly, by use of means and instrumentalities of interstate

commerce and/or the mails, engaged in a plan and course of conduct,

pursuant to which each of them knowingly or recklessly engaged in

acts, transactions, practices, and courses of business that

operated as a fraud and deceit upon plaintiff and the other members

of the Class; made various untrue statements of material fact and

omitted to state material facts necessary in order to make the

statements made, in light of the circumstances under which they

were made, not misleading; and employed devices and artifices to

defraud in connection with the purchase and sale of securities,

which were intended to, and, throughout the Class Period, did: (1)

deceive the investing public, including plaintiff and other Class

members, regarding, among other things, (a) the actual and expected

revenues and profits of PSSI, and (b) the accuracy of PSSI's

financial statements issued during the Class Period; (ii)

artificially inflate and maintain the market price of PSSI

securities; and (iii) cause plaintiff and other members of the

Class to purchase PSSI securities at artificially inflated prices.

40. Pursuant to the aforesaid plan and course of

conduct, defendants participated, directly and indirectly, in the

preparation and/or issuance of the statements and documents

referred to above. Each of the Individual Defendants participated

directly in the wrongs complained of herein. By reason of their

senior position as executive officers and/or directors, as well as

their close personal working relationships, each of the Individual

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Defendants was a "controlling person" of PSSI, within the meaning

of Section 20(a) of the Exchange Act, and had the power and

influence, and exercised the same, to cause the Company to engage

in the unlawful conduct complained of herein. The Individual

Defendants were able to, and did, directly or indirectly, in whole

or material part, control the content of PSSI's public financial

reports, filings with the SEC, and public statements. Each

Individual Defendants was provided, for his approval or otherwise,

with copies of PSSI's reports, filings, releases, and statements

herein alleged to have been materially false and misleading prior

to or shortly after their issuance by the Company, and had the

ability and opportunity to prevent their issuance or to cause them

to be corrected.

41. As an officer and/or director of a publicly-held

company the common stock of which was, and is, registered pursuant

to the federal securities laws, each Individual Defendant had a

duty to disseminate timely, accurate, truthful, and complete

information and a duty to disseminate on behalf of the Company

timely, accurate, truthful, and complete financial statements so

that the market price of PSSI common stock would be based on

truthful, accurate and complete information. As hereinafter

alleged, each Individual Defendant violated these specific duties

and obligations.

42. Said statements and documents were materially false

and misleading in that, among other things, they misrepresented the

17

status of P551 the actual and expected revenues and profits of

PSSI, and the Company's financial condition.

43. At all relevant times, P551 and the Individual

Defendants had actual knowledge that the statements and documents

complained of herein were materially false and misleading as set

forth herein and intended to deceive plaintiff and the other

members of the Class. In the alternative, those defendants acted

in reckless disregard for the truth in that they failed or refused

to ascertain and disclose such facts as would have revealed the

materially false and misleading nature of the statements and

documents complained of herein although such facts were readily

available to defendants. Said facts and omissions of defendants

were committed willfully or with reckless disregard for the truth.

In addition, PSSI and the Individual Defendants knew or recklessly

disregarded that material facts were being misrepresented or

omitted as alleged herein.

44. Information showing that the defendants acted

knowingly or with reckless disregard for the truth is peculiarly

within defendants' knowledge and control. As senior corporate

officers of PSSI, the Individual Defendants had knowledge of the

details of the Company's financial affairs and results. Plaintiff,

who purchased PSSI common stock on the open market, did not have

knowledge of the details of the Company's internal corporate

affairs. However, the following facts, among others, indicate a

strong inference that PSSI and the Individual Defendants acted with

scienter:

I'

(a) PSSI and the Individual Defendants had a strong

incentive to keep PSSI's share price as high as possible until the

merger with GSMS was completed;

(b) defendants need to keep PSSI's share price

artificially inflated in order to consummate other acquisitions to

stock-swap transactions;

45. Additionally, during the Class Period, the

Individual Defendants sold thousands of shares of Company stock for

proceeds of tens of million of dollars.

46. As a result of PSSI's and the Individual Defendants'

fraudulent conduct as alleged herein, the prices at which PSSI

common stock were purchased on the secondary market were

artificially inflated throughout the Class Period. At the time

that plaintiff and the other members of the Class purchased PSSI

common stock, the true value of such common stock was substantially

lower than the prices paid by plaintiff and the other members of

the Class. The market price of PSSI common stock declined sharply

immediately following the public disclosures on May 8, 1998 of the

material adverse financial results. In ignorance of the materially

false and misleading nature of the statements and documents

complained of herein, as well as of the adverse, undisclosed

information known to defendants, plaintiff and the other members of

the Class relied, to his/her damage, on such statements and

documents, and/or on the integrity of the offering and market

prices of PSSI common stock in purchasing such common stock at

artificially inflated prices during the Class Period. Had

19

plaintiff and the other members of the Class known the truth, they

would not have taken such action.

47. At all relevant times, the misrepresentations and

omissions particularized in this Complaint directly or proximately

caused or were a substantial contributing cause of the damages

sustained by plaintiff and the other members of the Class. The

misstatements and omissions complained of herein had the effect of

creating in the market an unrealistically positive assessment of

PSSI, as well as of its financial condition and ability to continue

as a going concern, causing PSSI common stock to be overvalued and

artificially inflated and at all relevant times. Defendants' false

portrayal, during the Class Period, of the Company's operations and

prospects, as well as of PSSI's and GSMS's financial condition,

resulted in purchases of PSSI common stock by plaintiff and by the

other members of the Class at artificially inflated prices measured

by the difference between the market prices and the actual value of

such common stock the time of purchase, thus causing the damages

complained of herein.

48. In addition, at the time PSSI common stock was

issued, such common stock was actively traded on the NASDAQ. As a

result, the market for PSSI common stock was well-developed, and

the price at which such common stock was initially offered, as well

as the prices at which is traded thereafter, necessarily reflected

the material misrepresentations and omissions complained of herein.

49. As a direct and proximate result of defendants'

aforesaid wrongful conduct during the Class Period, plaintiff and

20

the other members of the Class have suffered substantial damages in

connection with their purchases of PSSI common stock.

50. By virtue of the foregoing, each defendant has

violated Section 10(b) of the Exchange Act, and Rule lob-S

promulgated thereunder.

COUNT II

(Against The Individual Defendants For Violations Of Section 20(A) Of The Exchange Act)

51. Plaintiff incorporates by reference and realleges

the preceding paragraphs as though fully set forth herein. This

Count is asserted against Individual Defendants.

52. Throughout the Class Period, each of the Individual

Defendants, by reason of their executive positions and as the

owners, directly and/or indirectly of their shares of the Company's

common stock, had the power and influence, and exercised the same,

to cause the Company to engage in the unlawful acts, conduct, and

practices complained of herein. As a result, at the time of the

wrongs alleged herein, the Individual Defendants were "controlling

persons" of the Company within the meaning of Section 20(a) of the

Exchange Act.

53. Pursuant to Section 20(a) of the Exchange Act, by

reason of the foregoing, each of the Individual Defendants is

liable to the same extent as PSSI for the Company's aforesaid

violations of Section 10(b) of the Exchange Act and Rule lOb-5

promulgated thereunder. As a direct and proximate result of said

defendants' wrongful conduct during the Class Period, plaintiff and

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the other members of the Class have suffered substantial damages in

connection with their purchases of PSSI common stock.

WHEREFORE, plaintiff and the Class pray for judgment as

follows:

A. Declaring this action to be a proper class action

pursuant to Rules 23 (a) and 23 (b) (3) of the Federal Rules of Civil

Procedure on behalf of the Class defined herein;

B. Awarding plaintiff and the members of the Class

compensatory damages;

C. Awarding plaintiff and the members of the Class pre-

judgment and post-judgment interest, as well as their reasonable

attorneys' fees, expert witness fees and other costs;

D. Awarding such other relief as this Court may deem

just and proper.

JURY DEMAND

Plaintiff demands a trial by jury pursuant to Rule 38 (b)

of the Federal Rules of Civil Procedure.

Dated: May 26, 1998

ABBEY, GARDY & SQIJITIERI, LLP

By: _. I ~__ _., ~ iL

Lee Squitieri / Joshua M. Lifshiz 212 East 39th Street New York, New Yçrlç 1,001 (212) 889-3700 ttei-epnone (212) 684-5191 (telecopier)

Attorneys for Plaintiff Jack Hirsch Trial Counsel

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HAYES & LINDELL, P.A. J. Michael Lindell Fla. Bar # 262226 620 Blackstone Building 233 East Bay Street Jacksonville, FL 32202 (904) 353-5000 (telephone) (904) 633-9561 (telecopier)

Local Florida Counsel for Plaintiff

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PLAINTIFF'S SWORN CERTIFICATION

Jack Hirsch, being duly sworn, deposes and says the

following, under the penalties of perjury:

I. I have reviewed the complaint and authorized its

filing;

2. I did not purchase the security that is the subject

of this action (PSS World Medical, Inc.) at the direction of

plaintiffs' counsel or in order to participate in any private

action arising under this title.

3. I am willing to serve as a representative party on

behalf of a class and will testify at deposition and trial, if

necessary.

4. My transactions in the security that is the subject

of this litigation during the class period set forth in the

complaint are as follows:

Number of Date of Transaction Shares purchased

Price Per Sha

January 14, 1998

129 shares

$19.71

5. I have not served as or sought to serve as a.

representative party on behalf of a class under this title during

the last three years.

61 I will not accept any payment for serving as a

representative party, except to receive my pro rata share of any

recovery or as ordered or approved by the court including the award

to a representative of reasonable costs and expenses (including

lost wages) directly relating to the representation of the class.

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The foregoing are, to the best of my knowledge and

belief, true and correct statements

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