<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended October 31, 1999; or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ___________ to ____________.
Commission file number: pending (Securities Act file number: 333-86629)
PROFESSIONAL VETERINARY PRODUCTS, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Nebraska 5047 37-1119387
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
10077 South 134th Street
Omaha, Nebraska 68138
(402) 331-4440
(Address and telephone number of registrant's principal executive offices)
10100 J Street
Omaha, Nebraska 68127
(Former Address)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities and
Exchange Act of 1934 during the proceeding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [ ] No [ X ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT SEPTEMBER 1, 1999
----- --------------------------------
Common Stock, $1.00 par value 1,197
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
INDEX TO 10-Q FOR THE QUARTERLY
PERIOD ENDED OCTOBER 31, 1999
PART I FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets at October 31, 1999 and October 31, 1998
(unaudited) ...............................................3
Statements of Income for the three months ended
October 31, 1999 and October 31, 1998 (unaudited)..........5
Statements of Retained Earnings for the three months
ended October 31, 1999 and October 31, 1998 (unaudited)....6
Statements of Cash Flow for the three months ended October
31, 1999 and October 31, 1998 (unaudited) .................7
Notes to Financial Statements .............................8
Accountant's Compilation Report ..........................13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION ....14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK .....................................15
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS ........................................15
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ................15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ..........................17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......17
ITEM 5. OTHER INFORMATION ........................................18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .........................18
SIGNATURES ...............................................18
2
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Balance Sheet
October 31, 1999 and 1998 (unaudited)
Assets
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Current assets:
Cash $ 26,678 7,508
Accounts receivable, trade, less allowance
for doubtful accounts (0) 21,714,128 8,931,950
Accounts receivable, stock 72,917 45,834
Accounts receivable, other 604,618 10,455
Inventory 17,947,852 16,668,690
----------- -----------
Total current assets 40,366,193 25,664,437
----------- -----------
Property and equipment 8,491,563 4,910,039
Less accumulated depreciation 1,646,504 1,792,240
----------- -----------
6,845,059 3,117,799
----------- -----------
Other assets:
Organization expense less
accumulated amortization of
$34,107 (1999), $18,967 (1998) 192,691 207,831
Loan origination fee less
accumulated amortization of
$1,333 (1999), $6,875 (1998) 18,667 1,375
Trademark, less accumulated
amortization of
$389 (1999), $-0- (1998) 4,611 -
Investments 143,850 -
----------- -----------
359,819 209,206
----------- -----------
$47,571,071 28,991,442
=========== ===========
</TABLE>
See accompanying notes to financial statements and accountant's
compilation report.
3
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Balance Sheet (continued)
October 31, 1999 and 1998 (unaudited)
<TABLE>
Liabilities and Stockholders' Equity
------------------------------------
<S> <C> <C>
Current liabilities:
Bank overdraft $ 954,198 578,292
Current portion of long-term debt 75,014 76,985
Notes payable, bank 1,768,877 2,755,000
Notes payable, other 54,634 -
Accounts payable, trade 35,739,039 19,996,771
Accrued interest 37,574 27,862
Accrued expenses 234,882 143,945
Accrued income taxes 94,559 115,484
------------ ----------
Total current liabilities 38,958,777 23,694,339
------------ ----------
Long-term debt 3,924,986 1,205,245
------------ ----------
Stockholders' equity:
Common stock, no par value per share.
Authorized 30,000 shares; issued and
outstanding 1,211 shares (1999),
1,053 shares (1998) 3,562,000 3,093,000
Retained earnings 1,125,308 998,858
------------ ----------
4,687,308 4,091,858
------------ ----------
$ 47,571,071 28,991,442
============ ==========
</TABLE>
See accompanying notes to financial statements and accountant's
compilation report.
4
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Income
Three months ended October 31, 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
AMOUNT PERCENT
-------- ---------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Net Sales $ 41,142,357 26,236,826 98.46 97.33
Shipping 28,251 21,875 .07 .08
Commissions 348,235 436,483 .83 1.62
Sales promotion 261,869 223,072 .63 .83
Annual meeting reimbursement - 16,609 - .06
Miscellaneous 3,153 21,356 .01 .08
------------ ---------- ------ ------
41,783,865 26,956,221 100.00 100.00
------------ ---------- ------ ------
Cost of sales:
Net purchases 38,536,377 24,958,457 92.23 92.58
Freight out 768,440 533,272 1.84 1.98
Less vendor rebates (842,903) (723,083) (2.02) (2.68)
------------ ---------- ------ ------
38,461,914 24,768,646 92.05 91.88
------------ ---------- ------ ------
Gross profit 3,321,951 2,187,575 7.95 8.12
Operating, general and administrative
expenses
3,019,105 1,849,642 7.23 6.86
------------ ---------- ------ ------
Operating income 302,846 337,933 .72 1.26
Other income - Interest 69,330 38,172 .17 .14
------------ ---------- ------ ------
372,176 376,105 .89 1.40
Other expenses - Interest 99,721 81,253 .24 .30
------------ ---------- ------ ------
Income before income taxes 272,455 294,852 .65 1.10
Income taxes 107,371 115,484 .25 .43
------------ ---------- ------ ------
Net income $ 165,084 179,368 .40 .67
============ ========== ====== ======
</TABLE>
See accompanying notes to financial statements and accountant's
compilation report.
5
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Retained Earnings
Three months ended October 31, 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Balance at beginning of period $ 960,224 819,490
Net income 166,084 179,368
---------- -------
Balance at end of period $1,125,308 998,858
========== =======
</TABLE>
See accompanying notes to financial statements and accountant's
compilation report.
6
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Cash Flows
Three months ended October 31, 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $165,084 179,368
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization $ 46,368 66,216
Adjustments for working capital
changes:
(Increases) decrease in:
Receivables (11,180,520) (4,435,972)
Inventories (5,360,620) (3,663,377)
(Increase (decrease) in:
Accounts payable 17,562,256 9,556,544
Accrued expenses (1,024,544) (951,427)
Income taxes 76,652 73,044
------------ ------------
Total adjustments 119,592 645,028
------- -------
Net cash provided (used) by
operating activities 284,676 824,396
Cash flows from investing activities -
Purchase of property and equipment (3,850,732) (975,548)
Cash flows from financing activities:
Net loan proceeds (reduction) 1,410,273 636,723
Net proceeds from issuance of
common stock 135,584 53,500
------- ------
Net cash provided (used) by
financing activities
1,545,857 690,223
--------- -------
Net increase (decrease) in cash (2,020,199) 539,071
Cash (deficit) at beginning of period 1,092,679 (1,109,855)
---------
Cash (deficit) at end of period $ (927,520) (570,784)
========== =========
Supplemental disclosure of cash flow information:
Interest paid $84,760 70,531
======= ======
Income taxes paid $30,719 42,440
======= ======
</TABLE>
See accompanying notes to financial statements and accountant's
compilation report.
7
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements
October 31, 1999 and 1998
(1) Organization and summary of significant accounting policies:
Organization:
Professional Veterinary Products, Ltd. was incorporated in the
State of Missouri in 1982. The corporation was formed to buy,
sell and warehouse pharmaceuticals and other veterinary
related items. The purpose of the corporation is to act as a
wholesale distributor primarily to shareholders. Shareholders
are limited to the ownership of one share of stock and must be
a licensed veterinarian or business entity comprised of
licensed veterinarians.
Summary of significant accounting policies:
(a) Basis of accounting:
The corporation uses the accrual method of
accounting for financial statement and income tax
purposes.
(b) Concentration of cash balances:
The Company's cash funds are located in a single
financial institution. The amount on deposit at
October 31, 1999 and 1998 exceeded the $100,000
federally insured limit.
(c) Accounts receivable:
Management considers accounts receivable to be
fully collectible, accordingly, no allowance for
doubtful accounts is required.
(d) Inventory:
Inventory is valued at the lower of cost or
market on the first-in, first-out basis.
(e) Property and equipment depreciation:
Property and equipment are stated at cost. For
financial reporting purposes and income tax
purposes, the company uses accelerated
depreciation methods over the estimated useful
lives of the assets.
See accountant's compilation report.
8
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
October 31, 1999 and 1998
(1) Summary of significant accounting policies (continued):
(f) Cash and cash equivalents:
The corporation considers all highly liquid
investments with a maturity of three months or
less when purchased to be cash equivalents.
(g) Amortization:
Organizational costs are being amortized over
sixty months on a straight-line basis.
Financing costs are being amortized over the term
of the note on a straight-line basis. This
amortization is included in interest expense in
the income statement.
The intangible costs are being amortized over
fifteen years on a straight-line basis.
(h) Use of estimates:
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual
results could differ from those estimates.
(i) Income taxes:
Income taxes are provided for the tax effects of
transactions reported in the financial statements
and consist of taxes currently due. The amount of
income taxes paid or payable for a year is
determined by applying the provisions of the
enacted tax law to the taxable income for that
year.
(2) For the three months ended October 31, the Company recognized
liabilities for overcharges on sales in excess of an agreed to
profit margin of 5% totaling $697,289 (1999), $722,120 (1998).
See accountant's compilation report.
9
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
October 31, 1999 and 1998
(3) Property and equipment:
<TABLE>
<CAPTION>
BOOK VALUE
ACCUMULATED ----------
COST DEPRECIATION 1999 1998
---- ------------ ---- ----
<S> <C> <C> <C> <C>
Land $ 953,780 - 953,780 969,235
Buildings 5,224,835 - 5,224,835 1,670,219
Equipment 2,312,948 1,646,504 666,444 478,345
--------- --------- ------- -------
$ 8,491,563 1,646,504 6,845,059 3,117,799
=========== ========= ========= =========
</TABLE>
(4) Long-term debt:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Note payable, bank, 7.42% interest $ 4,000,000 -
Note payable, bank, 8.25% interest - 1,282,230
---------
4,000,000 1,282,230
---------
Less current portion due within one year 75,014 76,985
------ ------
$ 3,924,986 1,205,245
=========== =========
</TABLE>
Note payable, bank, 7.42% interest:
Monthly installments of principal and interest of $32,028
commencing January 1, 2000 with final installment and entire
unpaid principal balance due on May 1, 2009. Loan is
collateralized by land and building.
Total yearly payments of long-term debt are due as follows:
<TABLE>
<S> <C>
2000 $ 75,014
2001 96,339
2002 103,735
2003 111,700
2004 120,275
2005 - 2009 3,492,937
----------
$4,000,000
</TABLE>
(5) Commitments and contingent liabilities - leases:
On February 1, 1996, the company entered into a lease with
Nebraska Leasing Services, Inc. for the purpose of leasing a
vehicle. The lease minimum rentals are $431.36 per month for a
term of 48 months with a final rental installment of $11,000. The
lease expires February 1, 2000.
See accountant's compilation report.
10
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
October 31, 1999 and 1998
On July 28, 1997, the company entered into a lease with IBM Credit
Corporation for the purpose of leasing related computer hardware.
The lease minimum rentals are $6,541 per month. The lease expires
July 30, 2002.
On February 4, 1998, the company entered into a lease with
Nebraska Leasing Services, Inc. for the purpose of leasing a
vehicle. The lease minimum rentals are $649.92 per month for a
term of 36 months with a final rental installment of $19,500. The
lease expires January 4, 2001.
On February 18, 1998, the company entered into a lease with
Nebraska Leasing Services, Inc. for the purpose of leasing a
truck. The lease minimum rentals are $451.13 per month for a term
of 36 months with a final rental installment of $12,000. The lese
expires January 18, 2001.
On August 14, 1998, the company entered into a lease with IBM
Credit Corporation for the purpose of leasing related computer
hardware. The lease minimum rentals are $3,107 per month for a
term of 48 months. The lease expires August 14, 2002.
On August 31, 1999, the company entered into a lease with IOS
Capital for the purpose of leasing four copiers. The lease minimum
rentals are $1,216 per month for a term of 48 months. The lease
expires August 31, 2003.
On September 1, 1999, the company entered into a lease with US
Bancorp Leasing & Financial for the purpose of leasing two
forklifts. The lease minimum rentals are $1,189 per month for a
term of 48 months. The lease expires September 10, 2003.
On October 7, 1999, the company entered into a lease with Neopost
Leasing for the purpose of leasing a postage meter. The lease
minimum rentals are $687.22 per quarter for a term of 60 months.
The lease expires October 7, 2004.
On October 10, 1999, the company entered into a lease with US
Bancorp Leasing & Financial for the purpose of leasing 50
warehouse scanners. The lease minimum rentals are $6,225 per month
for a term of 36 months. The lease expires October 8, 2002.
See accountant's compilation report.
11
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
October 31, 1999 and 1998
Minimum future obligations on operating leases in effect on
October 31, 1999 are:
<TABLE>
<S> <C>
Period ended October 31, 2000 $ 177,781
Period ended October 31, 2001 170,137
Period ended October 31, 2002 134,742
Period ended October 31, 2003 17,681
Period ended October 31, 2004 1,374
---------
$ 501,715
=========
</TABLE>
(6) Transactions between Board of Directors, key employees and the company.
Professional Veterinary Products, Ltd. had sales to the Board of
Directors and key employees for the period ended October 31 as
follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Members of the Board of Directors $ 792,993 687,868
Key employees 7,618 756
----- ---
$ 800,611 688,624
========= =======
</TABLE>
(7) Profit-sharing and 401-K retirement plans:
The Company provides a non-contributory profit-sharing plan
covering all full-time employees who qualify as to age and length
of service. It has been the Company's policy to make contributions
to the plan as provided annually by the Board of Directors. The
total provision for the contribution to the plan was $0 for the
period ended October 31, 1999 and 1998.
The Company also provides a contributory 401-K retirement plan
covering all full-time employees who qualify as to age and length
of service. It is the Company's policy to match a maximum 10%
employee contribution with a 3% contribution. The total provision
to the plan for the period ended October 31, was $30,629 for 1999
and $25,658 for 1998.
See accountant's compilation report.
12
<PAGE>
[MARVIN E. JEWELL & CO., P.C.
Certified Public Accountants
Letterhead]
ACCOUNTANT'S COMPILATION REPORT
Board of Directors
Professional Veterinary Products, Ltd.
Omaha, Nebraska
We have compiled the accompanying balance sheets of
Professional Veterinary Products, Ltd. as of October 31, 1999 and 1998, and
the related statements of income, retained earnings, and cash flows for the
three months then ended, and accompanying schedule in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of
financial statements information that is the representation of management. We
have not audited or reviewed the accompanying financial statements and
schedule and, accordingly, we do no express an opinion or any other form of
assurance on them.
Lincoln, Nebraska
December 1, 1999
13
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERSTIONS
LIQUIDITY AND CAPITAL RESOURCES
Our capital requirements relate primarily to working capital and the
expansion of our operations to accommodate sales growth. We maintain
significant inventory levels to fulfill our operating commitment to our
customers. Historically, we have financed our cash requirements primarily
from short-term bank borrowings and cash from operations.
Net cash provided by operating activities of $824,396 for the period
ending October 1998 was primarily attributable to increases of $4,435,972 in
accounts receivable and $3,663,377 in inventories. These were partially
offset by an increase of $9,556,544 in accounts payable. Net cash provided by
operating activities of $284,676 for the period ending October 1999 was
primarily attributable to an increase of $11,180,520 in accounts receivable
and $5,360,620 in inventories. These were partially offset by an increase of
$17,562,256 in accounts payable.
Net cash used by investing activities of $975,548 for the period ending
October 1998 was primarily attributable to investments in property and
equipment. Net cash used by investing activities of $3,850,732 for the period
ending October 1999 was primarily attributable to investments in property and
equipment.
Net cash provided by financing activities of $690,223 for the period
ending October 1998 was primarily attributable to increases of $636,723 in
loan proceeds and $53,500 from net proceeds from the issuance of common
stock. Net cash provided by financing activities of $1,545,857 for the period
ending October 1999 was primarily attributable to increases of $1,410,273 in
loan proceeds and $135,584 from net proceeds from the issuance of common
stock.
RESULTS OF OPERATIONS
Three months ended October 31, 1999 as compared to the three months
ended October 31, 1998:
Net sales for the period ending October 31, 1999 increased by 56.8% or
$14.9 million. Sales for the period totaled $41.1 million compared to $26.2
million for the same period the previous year. The growth was attributable to
increased sales to existing veterinary shareholders and the addition of new
shareholders. During the period 23 veterinary practices became shareholders
of the Company. On October 31, 1999 the Company had 1211 shareholders.
Gross profits for the period ending October 31, 1999 increased by $1.1
million to $3.3 million compared to $2.2 million for the same period the
previous year. Gross
14
<PAGE>
profit as a percentage of total revenues was 8.0% in the period compared to
8.1% in the same period the previous year.
Operating, general and administrative expenses for the period ending
October 31, 1999 increased by $1.2 million to $3.0 million in the period
compared to $1.8 million for the same period the previous year. Such
operating, general and administrative expenses as a percentage of total
revenues for the period was 7.2% in the period compared to 6.9% in the same
period the previous year.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks primarily from changes in U.S.
interest rates. The Company does not engage in financial transactions for
trading or speculative purposes.
The interest payable on the Company's revolving line of credit is based
on variable interest rates and is therefore affected by changes in market
interest rates. If interest rates on variable rate debt rose .80 percentage
points (a 10% change from the average interest rate as of October 31,
1999), assuming no change in the Company's outstanding balance under the line
of credit (approximately $1,768,877 as of October 31, 1999), the
Company's annualized income before taxes and cash flows from operating
activities would decline by approximately $141,150.
PART II
OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company has not been informed of any legal matters that would have a
material adverse effect on its financial condition, results of operation or
cash flow.
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Recent Sales of Unregistered Securities:
A list of the securities sold by the Company between May 1996 and June
1999 and which were not registered under the Securities Act was included in
Part II of the Registration Statement filed with the Securities and Exchange
Commission on September 7, 1999, as part of the Company's Form S-1 (SEC
Registration No. 333-86629), as amended, and is incorporated herein by
reference. The following is a list of additional securities sold by the Company
through September 1st. All securities were exempt from
registration pursuant
15
<PAGE>
to a No-Action Letter issued by the Securities and Exchange Commission on
July 12, 1996.
<TABLE>
<CAPTION>
TITLE AMT DATE PRICE DISCOUNTS OR
COMMISSIONS
<S> <C> <C> <C> <C>
Vicky L. Soles, D.V.M., New Freeport, Pennsylvania 1 July-99 $3000 $0
Salt Plains Veterinary Services, P.C., Cherokee, Oklahoma 1 July-99 $3000 $0
Scott King, D.V.M., Grey Summit, Missouri 1 July-99 $3000 $0
Greg Steck, D.V.M., Centertown, Missouri 1 July-99 $3000 $0
Brocksmith Veterinary Associates, Inc., Vincennes, Indiana 1 July-99 $3000 $0
Mark A. Williams, D.V.M., Batesville, Arkansas 1 July-99 $3000 $0
Jim W. Harvey, D.V.M., Okeechobee, Florida 1 July-99 $3000 $0
Blockhouse Creek Animal Hospital, P.C., Cedar Park, Texas 1 July-99 $3000 $0
Wilhite Equine Services, L.L.C., Raymore, Missouri 1 July-99 $3000 $0
Spring Mill Veterinary Service, Mitchell, Indiana 1 July-99 $3000 $0
Hereford Veterinary Clinic, Hereford, Texas 1 July-99 $3000 $0
Gulf Coast Veterinary Surgery, P.C., Houston, Texas 1 July-99 $3000 $0
Dennis Greg Harris, D.V.M., Chapel Hill, Tennessee 1 Aug-99 $3000 $0
Russell R. Bloom, D.V.M., Helena, Montana 1 Aug-99 $3000 $0
Republican Valley Veterinary Clinic, St. Francis, Kansas 1 Aug-99 $3000 $0
Snodgrass Veterinary Medical Center, Inc., Bowling Green, KY 1 Aug-99 $3000 $0
Feeder Creek Veterinary Services, Inc., Millerspost, Ohio 1 Aug-99 $3000 $0
Town & Country Animal Clinic, P.C., Lakeview, Michigan 1 Aug-99 $3000 $0
Ronald G. Helvey, D.V.M., Mountain Home, Arkansas 1 Aug-99 $3000 $0
Arther M. Strohbehn, D.V.M., Council Bluffs, Iowa 1 Aug-99 $3000 $0
Ravan B. Inc., Quitman, Texas 1 Aug-99 $3000 $0
Randall Mims, D.V.M., Okeechobee, Florida 1 Aug-99 $3000 $0
Charles Neumann, D.V.M., Hastings, Nebraska 1 Aug-99 $3000 $0
Tony M. Forshey, D.V.M., Archbold, Ohio 1 Aug-99 $3000 $0
Battenkill Veterinary Bovine, PC, Middle Falls, New York 1 Aug-99 $3000 $0
Cat Care Clinic, P.C., Indianapolis, Indiana 1 Sept-99 $3000 $0
Melvin G. Dewey, D.V.M., Peoria, Illinois 1 Sept-99 $3000 $0
William W. Somerville, D.V.M., Clinton, Indiana 1 Sept-99 $3000 $0
All For Pets Veterinary Clinic, PA, Cabot, Arkansas 1 Sept-99 $3000 $0
Eddie C. Clayton, D.V.M., Crockett, Texas 1 Sept-99 $3000 $0
Tim Knott, D.V.M., Arthur, Nebraska 1 Sept-99 $3000 $0
Linton Veterinary Clinic, Linton, Indiana 1 Sept-99 $3000 $0
Plateau Veterinary Services, Inc., Enumclaw, Washington 1 Sept-99 $3000 $0
Racikac, Inc., Cape Coral, Florida 1 Sept-99 $3000 $0
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
TITLE AMT DATE PRICE DISCOUNTS OR
COMMISSIONS
<S> <C> <C> <C> <C>
Gene Greliner, D.V.M., Loose Creek, Missouri 1 Sept-99 $3000 $0
Greenhaven Animal Clinic, PC, San Jose, Illinois 1 Sept-99 $3000 $0
Arlyn Scherbenske, D.V.M., Steele, North Dakota 1 Sept-99 $3000 $0
Edwin D. Bracken, Jr., D.V.M., Martinburg, Pennsylvania 1 Sept-99 $3000 $0
Animal Health Associates, Inc. 1 Sept-99 $3000 $0
James Mayer, D.V.M., Radcliff, Kentucky 1 Sept-99 $3000 $0
Robert Haynes, D.V.M., Junction City, Kansas 1 Sept-99 $3000 $0
Colin Kirkegaard, D.V.M., Mitchell, South Dakota 1 Sept-99 $3000 $0
Timber Creek Animal Hospital, Inc., Pittsfield, Illinois 1 Sept-99 $3000 $0
Jeff Byers, D.V.M., Loudonville, Ohio 1 Sept-99 $3000 $0
Phillips Kinslow, D.V.M., Lebanon, Tennessee 1 Sept-99 $3000 $0
New Salem Veterinary Clinic, P.C., New Salem, North Dakota 1 Sept-99 $3000 $0
Unionville Equine Associates, P.C., Oxford, Pennsylvania 1 Sept-99 $3000 $0
Chisholm Trail Animal Hospital, P.A., Wichita, Kansas 1 Sept-99 $3000 $0
Elk County Veterinary Services, Inc., Howard, Kansas 1 Sept-99 $3000 $0
Power Genetics Veterinary Services, Holbrook, Nebraska 1 Sept-99 $3000 $0
Larry R. Brash, D.V.M., Rutland, North Dakota 1 Sept-99 $3000 $0
</TABLE>
(d) Use of Proceeds:
On October 19, 1999 the registration statement (Registration No.
333-86629) for the initial public offering of our common stock became
effective. 500 shares of common stock were registered with an aggregate
offering price of $1,500,000. The offering was not commenced during the
reporting period because printing of the prospectus was not complete.
A reasonable estimate for the amount of expenses incurred in connection
with the issuance and distribution of our common stock was $123,417,
including the SEC registration fee, Blue Sky filing fees and expenses,
printing expenses, legal fees, and miscellaneous expenses. None of these
expenses represented a direct or indirect payment to directors, officers,
persons owning 10% or more of any class of our common stock.
ITEM 3: DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company held its Annual Shareholders' Meeting on August 20,
1999.
(b) The shareholders voted the elect the entire slate of directors:
17
<PAGE>
<TABLE>
<CAPTION>
Name Votes For Votes Against Abstentions
<S> <C> <C> <C>
Dr. Mark A. Basinger 624 0 551
Dr. Raymond C. Ebert, II 624 0 551
Dr. Fred G. Garrison 624 0 551
Dr. Kenneth R. Liska 624 0 551
Dr. Wayne E. Rychnovsky 624 0 551
Dr. Timothy P. Trayer 624 0 551
Dr. Russ R. Weston 624 0 551
Dr. Michael L. Whitehair 624 0 551
</TABLE>
(c) The Amended and Restated Articles of Incorporation and Bylaws
were voted on and approved by the shareholders to change the
par value of the common stock to $1.00 and to permit the
Company to become a Nebraska corporation and to pay dividends.
There were 624 votes for, no votes against, 551 abstentions
and no broker non-votes.
ITEM 5: OTHER INFORMATION
None.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-K
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
The Company filed no current reports on Form 8-K during the
quarter ended October 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: December 15, 1999 By: /s/ Dr. Lionel L. Reilly
-------------------------------
Dr. Lionel L. Reilly, President
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 26,678
<SECURITIES> 0
<RECEIVABLES> 21,714,128
<ALLOWANCES> 0
<INVENTORY> 17,947,852
<CURRENT-ASSETS> 40,366,193
<PP&E> 8,491,563
<DEPRECIATION> 1,646,504
<TOTAL-ASSETS> 47,571,071
<CURRENT-LIABILITIES> 38,958,777
<BONDS> 3,924,986
0
0
<COMMON> 3,562,000
<OTHER-SE> 1,125,308
<TOTAL-LIABILITY-AND-EQUITY> 47,571,071
<SALES> 41,142,357
<TOTAL-REVENUES> 41,783,865
<CGS> 38,461,914
<TOTAL-COSTS> 38,461,914
<OTHER-EXPENSES> 3,019,105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,721
<INCOME-PRETAX> 272,455
<INCOME-TAX> 107,371
<INCOME-CONTINUING> 165,084
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 165,084
<EPS-BASIC> 136.32
<EPS-DILUTED> 136.32
</TABLE>
