Oct. 29--PSS World Medical Inc. (NASDAQ: PSSI) reported today sharply higher quarterly profits and raised its earnings targets for the rest of the fiscal year, due in part to increased sales of flu-related products.

Jacksonville-based PSS, which distributes supplies to physician offices and elder care facilities, said net income for the second quarter ended Oct. 2 rose 75 percent to $21.7 million, or 37 cents per diluted share. Sales rose 14 percent to $562 million.

PSS also said it is raising its earnings goal for the entire fiscal year ending in March 2010 from $1.05 to $1.09 a share to $1.15 to $1.17 a share.

Executive Vice President and Chief Financial Officer David Bronson said in an interview today that about five to six cents of the projected increase in earnings can be attributed to demand for H1N1 flu-related products. PSS is not distributing the vaccine for the H1N1, or swine flu. But it does sell products to physicians such as flu test kits and surgical masks and gloves.

"It's a market basket of about 200 products" related to flu treatment, Bronson said.

"We attribute the increase in the use of these products to H1N1," he said.

PSS attributed about $23 million of its second-quarter sales and $2.9 million in operating income to H1N1-related sales.

Besides demand for flu-related products, PSS said its earnings are also being helped by programs to reach new customers and strengthen relationships with existing customers.

"We've added 10,000 customers this year," Bronson said. The company distributes products to more than 100,000 physician offices nationwide.

Analysts were already anticipating PSS would raise its earnings targets. The average forecast of analysts surveyed by Thomson Financial projects PSS to earn $1.17 a share in this fiscal year, which is at the top end of its revised target range. But the second-quarter earnings of 37 cents were seven cents higher than the average forecast of analysts.

The earnings were released after the market closed Wednesday. PSS's stock last week reached a 10-year high of $22.87.

Bronson said PSS employees are benefiting from the company's strong earnings, because the company has not had to do any mass layoffs during the recession and most employees receive some type of performance-related compensation.

"It looks like it will be a good year financially for all of our people," he said.

-----

To see more of The Florida Times-Union or to subscribe to the newspaper, go to http://www.jacksonville.com.

Copyright (c) 2009, The Florida Times-Union, Jacksonville

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:PSSI, NYSE:TRI,

A service of YellowBrix, Inc.