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MWI Veterinary Supply Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2012 04:42PM

MWI Veterinary Supply Inc. (MWIV) filed Quarterly Report for the period ended 2012-05-03. Mwi Vet Supply has a market cap of $1.18 billion; its shares were traded at around $96.49 with a P/E ratio of 25.9 and P/S ratio of 0.8. Mwi Vet Supply had an annual average earning growth of 22.8% over the past 5 years.



Highlight of Business Operations:

In the United States, our top ten vendors supplied products that accounted for approximately 74% and 72% of our revenues for the six months ended March 31, 2012 and 2011, respectively, and 71% of our revenues for the fiscal year ended September 30, 2011. Pfizer supplied products that accounted for approximately 23% and 24% of our revenues during the six months ended March 31, 2012 and 2011, respectively, and 24% of our revenues for our fiscal year ended September 30, 2011. Of the Pfizer supplied products, production animal products under a livestock agreement accounted for approximately 14% and 12% of our revenues during the six months ended March 31, 2012 and 2011, respectively, and approximately 13% of our revenues for our fiscal year ended September 30, 2011. Merck (formerly known as Intervet/Schering-Plough) supplied products that accounted for approximately 14% and 12% of our revenues during the six months ended March 31, 2012 and 2011, respectively, and 11% of our revenues for our fiscal year ended September 30, 2011. No other vendor accounts for more than 10% of our revenues in the United States. Merial, a subsidiary of Sanofi-Aventis, supplies the majority of their products to us under an agency relationship. Commission revenue generated from Merial products accounted for approximately 47% and 42% of total commission revenues during the six months ended March 31, 2012 and 2011, respectively, and 47% of total commission revenues for our fiscal year ended September 30, 2011.

Total Revenues. Total revenues increased 38.2% to $507,170 for the three months ended March 31, 2012, from $367,112 for the three months ended March 31, 2011. Excluding the acquisition of the assets of Micro, revenue growth in the United States was 22.9% for the quarter ended March 31, 2012, compared to the same period in the prior fiscal year. Revenues from Micro, which was acquired on October 31, 2011, were $63,006 for the quarter ended March 31, 2012. Revenue growth in the United Kingdom was 11.6% for the quarter ended March 31, 2012, compared to the same period in the prior fiscal year, consisting of 13.7% organic growth partially offset by a decline of 2.1% related to foreign currency exchange. Excluding the revenues from Micro, revenues in the United States attributable to existing customers represented approximately 70% of the growth in revenues and revenues attributable to new customers represented approximately 30% of the growth in revenues during the three months ended March 31, 2012. For the purpose of calculating growth rates of new and existing customer revenue, we have defined a new customer as a customer that did not purchase product from us in the corresponding fiscal quarter of the prior year, with the remaining customer base being considered existing customers. Revenues from new customers for each fiscal quarter are summed to arrive at the estimated year-to-date revenue for new customers.

Gross Profit. Gross profit increased by 30.7% to $66,618 for the three months ended March 31, 2012, from $50,986 for the three months ended March 31, 2011. The change in gross profit is primarily a result of increased total revenues as discussed above. Gross profit as a percentage of total revenues was 13.1% and 13.9% for the three months ended March 31, 2012 and 2011, respectively. The decrease in gross profit as a percentage of total revenues was due to lower product margins, a decrease in commissions and lower vendor rebates as a percentage of total revenues. Product margin decreased primarily due to a shift in product mix and certain vendor pricing programs that were in effect in the same period of the prior fiscal year that were not in effect during the three months ended March 31, 2012. Vendor rebates for the three months ended March 31, 2012 decreased by approximately $210 compared to the three months ended March 31, 2011.

Total Revenues. Total revenues increased 32.2% to $969,071 for the six months ended March 31, 2012, from $733,286 for the six months ended March 31, 2011. Excluding the acquisition of the assets of Micro, revenue growth in the United States was 18.5% for the six months ended March 31, 2012, compared to the same period in the prior fiscal year. Revenues from Micro, which was acquired on October 31, 2011, were $109,167 for the six months ended March 31, 2012. Revenue growth in the United Kingdom was 11.3% for the six months ended March 31, 2012, compared to the same period in the prior fiscal year, consisting of 12.7% organic growth partially offset by a decline of 1.4% related to foreign currency exchange. Excluding the revenues from Micro, revenues in the United States attributable to existing customers represented approximately 65% of the growth in revenues and revenues attributable to new customers represented approximately 35% of the growth in revenues during the six months ended March 31, 2012.

Gross Profit. Gross profit increased by 27.8% to $129,132 for the six months ended March 31, 2012, from $101,058 for the six months ended March 31, 2011. The change in gross profit is primarily a result of increased total revenues as discussed above. Gross profit as a percentage of total revenues was 13.3% and 13.8% for the six months ended March 31, 2012 and 2011, respectively. The decrease in gross profit as a percentage of total revenues was due to lower product margins, a decrease in commissions and lower vendor rebates as a percentage of total revenues. Vendor rebates for the six months ended March 31, 2012 increased by approximately $327 compared to the six months ended March 31, 2011.

Read the The complete Report



Stocks Discussed: MWIV,
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