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MWI Veterinary Supply Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 30, 2012 04:56PM

MWI Veterinary Supply Inc. (MWIV) filed Quarterly Report for the period ended 2012-07-30. Mwi Veterinary Supply, Inc. has a market cap of $1.18 billion; its shares were traded at around $97.82 with a P/E ratio of 24.3 and P/S ratio of 0.8. Mwi Veterinary Supply, Inc. 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 73% and 70% of our revenues for the nine months ended June 30, 2012 and 2011, respectively, and 71% of our revenues for the fiscal year ended September 30, 2011. Pfizer supplied products that accounted for approximately 22% and 24% of our revenues during the nine months ended June 30, 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 13% and 12% of our revenues during the nine months ended June 30, 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 15% and 11% of our revenues during the nine months ended June 30, 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 52% and 48% of total commission revenues during the nine months ended June 30, 2012 and 2011, respectively, and 47% of total commission revenues for our fiscal year ended September 30, 2011.

Total Revenues. Total revenues increased 35.0% to $554,669 for the three months ended June 30, 2012, from $410,736 for the three months ended June 30, 2011. Excluding the acquisition of the assets of Micro, organic revenue growth in the United States was 18.5% for the quarter ended June 30, 2012 compared to the same period in the prior fiscal year. Revenues from Micro, which was acquired on October 31, 2011, were $69,069 for the quarter ended June 30, 2012. Revenue growth in the United Kingdom was 16.7% for the quarter ended June 30, 2012, compared to the same period in the prior fiscal year, consisting of 20.2% organic growth partially offset by a decline of 3.5% related to foreign currency exchange. Excluding the revenues from Micro, revenues in the United States attributable to existing customers represented approximately 68% of the growth in revenues and revenues attributable to new customers represented approximately 32% of the growth in revenues during the three months ended June 30, 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 28.5% to $69,519 for the three months ended June 30, 2012, from $54,087 for the three months ended June 30, 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 12.5% and 13.2% for the three months ended June 30, 2012 and 2011, respectively. The decrease in gross profit as a percentage of total revenues was primarily due to the decrease in commissions, as well as lower product margins partially offset by improved freight as a percentage of total revenues. Vendor rebates for the three months ended June 30, 2012 increased by approximately $286 compared to the three months ended June 30, 2011.

Total Revenues. Total revenues increased 33.2% to $1,523,740 for the nine months ended June 30, 2012, from $1,144,022 for the nine months ended June 30, 2011. Excluding the acquisition of the assets of Micro, revenue growth in the United States was 18.5% for the nine months ended June 30, 2012 compared to the same period in the prior fiscal year. Revenues from Micro, which was acquired on October 31, 2011, were $178,236 for the nine months ended June 30, 2012. Revenue growth in the United Kingdom was 13.2% for the nine months ended June 30, 2012, compared to the same period in the prior fiscal year, consisting of 15.2% organic growth, partially offset by a decline of 2.0% related to foreign currency exchange. Excluding the revenues from Micro, revenues in the United States attributable to existing customers represented approximately 66% of the growth in revenues and revenues attributable to new customers represented approximately 34% of the growth in revenues during the nine months ended June 30, 2012.

Gross Profit. Gross profit increased by 28.0% to $198,651 for the nine months ended June 30, 2012, from $155,145 for the nine months ended June 30, 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 13.0% and 13.6% for the nine months ended June 30, 2012 and 2011, respectively. The decrease in gross profit as a percentage of total revenues was due to a decrease in commissions and lower vendor rebates as a percentage of total revenues. Vendor rebates for the nine months ended June 30, 2012 increased by approximately $613 compared to the nine months ended June 30, 2011.

Read the The complete Report



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