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MWI Veterinary Supply Inc. Reports Operating Results (10-K)

November 28, 2012 | About:
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10qk

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MWI Veterinary Supply Inc. (MWIV) filed Annual Report for the period ended 2012-11-27.

Mwi Veterinary Supply, Inc. has a market cap of $1.44 billion; its shares were traded at around $113.45 with a P/E ratio of 26.7 and P/S ratio of 0.7. Mwi Veterinary Supply, Inc. had an annual average earning growth of 25.7% over the past 5 years.

Highlight of Business Operations:

Total Revenues. Total revenues increased $509,806, or 32.6%, to $2,075,146 for the fiscal year ended September 30, 2012 from $1,565,340 for the fiscal year ended September 30, 2011. Excluding the impact of the acquisition of Micro, revenue growth in the United States was 17.3% for the fiscal year ended September 30, 2012 as compared to the fiscal year ended September 30, 2011. Revenues from the acquisition of Micro, which was acquired on October 31, 2011, were $246.6 million for the fiscal year ended September 30, 2012. Revenue growth in the United Kingdom was 14.7% for the fiscal year ended September 30, 2012 as compared to the fiscal year ended September 30, 2011, consisting of 16.8% organic growth and a decline of 2.1% related to foreign currency exchange. Excluding the impact of Micro, the growth in revenues in the United States came primarily from increased business as a result of the growth from our e-commerce platform, the addition of new flea, tick and heartworm products, the addition of sales representatives over the past twelve months and the acquisition of Nelson. Excluding the impact of Micro, revenues in the United States attributable to new customers represented approximately 36% of the growth in total revenues during the fiscal year ended September 30, 2012. Excluding the impact of Micro, revenues in the United States attributable to existing customers represented approximately 64% of the growth in total revenues during the fiscal year ended September 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 an existing customer. 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 $61,331, or 29.8%, to $266,916 for the fiscal year ended September 30, 2012 from $205,585 for the fiscal year ended September 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 12.9% and 13.1% for the fiscal years ended September 30, 2012 and 2011, respectively. Gross profit as a percentage of total revenues decreased due to the reduction in commissions, lower product margins and lower vendor rebates as a percentage of revenues, partially offset by improved freight as a percentage of total revenues. Vendor rebates increased by $1,330 for the fiscal year ended September 30, 2012 as compared to the fiscal year ended September 30, 2011. This increase in vendor rebates was primarily due to revenue growth achieved during the fiscal year.

Total Revenues. Total revenues increased $335,998, or 27.3%, to $1,565,340 for the fiscal year ended September 30, 2011 from $1,229,342 for the fiscal year ended September 30, 2010. Revenue growth in the United States was 21.5% as compared to the fiscal year ended September 30, 2010. Revenue growth in the United Kingdom was 68.0% as we owned Centaur for the full fiscal year compared to approximately eight months in the same period in the prior fiscal year. The growth in organic revenues in the United States came primarily from increased business as a result of the bankruptcy and liquidation of a competitor that is no longer in business, growth from our e-commerce platform, the addition of new flea, tick and heartworm products, the acquisition of Nelson and the addition of sales representatives over the past twelve months. Organic revenues in the United States attributable to new customers represented approximately 53% of the growth in total revenues during the fiscal year ended September 30, 2011. Organic revenues in the United States attributable to existing customers represented approximately 47% of the growth in total revenues during the fiscal year ended September 30, 2011.

Gross Profit. Gross profit increased $40,582, or 24.6%, to $205,585 for the fiscal year ended September 30, 2011 from $165,003 for the fiscal year ended September 30, 2010. The change in gross profit is primarily a result of increased total revenues as discussed above including the additional gross profit from Centaur for the full fiscal year as compared to approximately eight months in the prior fiscal year. Gross profit as a percentage of total revenues was 13.1% and 13.4% for the fiscal years ended September 30, 2011 and 2010, respectively. Gross profit as a percentage of total revenues decreased partially due to the addition of Centaur as well as a slight decrease in the gross margin in the United States. The gross margin is impacted by the addition of Centaur because Centaur's gross profit as a percentage of total revenues is generally lower than MWI's, which serves to reduce the overall gross margin of the consolidated Company when compared to our results for the same period in the prior year. Vendor rebates increased by $2,362 for the fiscal year ended September 30, 2011 as compared to the fiscal year ended September 30, 2010. This increase in vendor rebates was primarily due to revenue growth achieved during the fiscal year.

Selling, General and Administrative Expenses (“SG&A”). SG&A increased $24,863, or 23.5%, to $130,656 for the fiscal year ended September 30, 2011 from $105,793 for the fiscal year ended September 30, 2010. This increase was primarily due to the addition of Centaur s operating expenses for the full fiscal year compared to approximately eight months in the prior fiscal year, increased compensation and benefits costs and increased bank service fees. Also included in the increase in SG&A expenses are the direct acquisition-related expenses of $861 incurred in connection with acquisitions. SG&A as a percentage of revenue was 8.3% for the fiscal year ended September 30, 2011 and 8.6% for the fiscal year ended September 30, 2010. SG&A expenses as a percentage of total revenues decreased due, in part, to the addition of Centaur because Centaur s SG&A expenses as a percentage of total revenues are generally lower than MWI s, which serves to reduce the overall SG&A expenses as a percentage of total revenues when compared to our results for the same period in the prior year.

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