<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 January 31, 2000; 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: 000-26326
PROFESSIONAL VETERINARY PRODUCTS, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<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)
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 [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT JANUARY 31, 2000
----- -------------------------------
<S> <C>
Common Stock, $1.00 par value 1,254
</TABLE>
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
INDEX TO 10-Q FOR THE QUARTERLY
PERIOD ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets at January 31, 2000 and January 31, 1999
(unaudited) ......................................................... 3
Statements of Income for the six months ended January
31, 2000 and January 31, 1999 (unaudited) ........................... 5
Statements of Retained Earnings for the six months ended
January 31, 2000 and January 31, 1999 (unaudited) ................... 6
Statements of Cash Flow for the six months ended
January 31, 2000 and January 31, 1999 (unaudited) ................... 7
Notes to Financial Statements ....................................... 8
Accountant's Compilation Report ..................................... 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION ................................. 15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ..................................... 16
ABOUT MARKET RISK
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS ............................................................ 16
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS .................................... 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES .............................................. 17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY .................................. 17
HOLDERS
ITEM 5. OTHER INFORMATION ........................................................... 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ............................................ 17
SIGNATURES .................................................................. 18
</TABLE>
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Balance Sheet
January 31, 2000 and 1999 (unaudited)
Assets
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Current assets:
Cash $ 259,756 7,897
Accounts receivable, trade, less allowance
for doubtful accounts (0) 18,022,603 9,225,281
Accounts receivable, rebate (4,099,630) (1,934,989)
Accounts receivable, stock 76,250 51,876
Accounts receivable, other 1,858,196 9,108
Inventory 43,924,586 18,346,051
---------- ----------
Total current assets 60,041,761 25,705,224
---------- ----------
Property and equipment 8,733,026 4,934,844
Less accumulated depreciation 660,525 1,858,265
--------- ---------
8,072,501 3,076,579
--------- ---------
Other assets:
Organization expense less
accumulated amortization
$37,885 (2000), $22,741 (1999) 188,913 204,053
Loan origination fee less
accumulated amortization
$1,833 (2000), $7,287 (1999) 18,167 963
Trademark, less accumulated
amortization
$472 (2000), $139 (1999) 4,528 4,861
Investments 143,850 143,850
------- -------
Total other assets 355,458 353,727
------- -------
$68,469,720 29,135,530
=========== ==========
</TABLE>
See accompanying notes to financial statements and accountant's compilation
report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Balance Sheet (continued)
January 31, 2000 and 1999 (unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Current liabilities:
Bank overdraft $ - 75,129
Notes payable bank 8,147,753 5,105,000
Notes payable, other 54,634 93,850
Current portion of long-term debt 319,409 1,263,574
Accounts payable, trade 49,354,513 17,721,454
Accrued interest 87,920 25,891
Accrued expenses 112,029 112,425
Accrued income taxes 212,085 271,128
------- ----------
Total current liabilities 58,288,343 24,668,451
---------- ----------
Long-term debt 5,073,296 -
--------- ----------
Stockholders' equity:
Common stock, $1 par value per share.
Authorized 30,000 shares; issued and
outstanding 1,254 shares (2000),
1,084 shares (1999) 1,254 1,084
Paid-in capital 3,689,746 3,178,916
---------
Retained earnings 1,417,081 1,287,079
------------ ----------
5,108,081 4,467,079
------------ ----------
$ 68,469,720 29,135,530
============ ==========
</TABLE>
See accompanying notes to financial statements and accountant's compilation
report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Income
Six months ended January 31, 2000 and 1999 (unaudited)
<TABLE>
<CAPTION>
AMOUNT PERCENT
------ -------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Gross sales $ 84,027,336 55,246,109 103.09 100.53
Less Rebate (4,099,630) (1,934,989) (5.03) (3.52)
----------- ----------- ------ ------
Net Sales 79,927,706 53,311,120 98.06 97.01
Shipping 58,808 47,877 .07 .09
Commissions 762,812 933,457 .94 1.70
Sales promotion 755,472 622,991 .92 1.13
Annual meeting reimbursement - 16,609 - .03
Miscellaneous 6,484 21,669 .01 .04
----- ------ --- ---
81,511,282 54,953,723 100.00 100.00
---------- ---------- ------ ------
Cost of sales:
Net purchases 77,381,604 50,752,370 94.93 92.35
Freight out 1,644,893 1,082,247 2.02 1.97
Less - Vendor rebates (5,026,242) (1,793,562) (6.16) (3.26)
----------- ----------- ------ ------
74,000,255 50,041,055 90.79 91.06
---------- ---------- ----- -----
Gross profit 7,511,027 4,912,668 9.21 8.94
Operating, general and administrative
expenses 6,612,342 4,072,511 8.11 7.41
----------- ----------- ------ ------
Operating income 898,685 840,157 1.10 1.53
Other income (expense) -
Interest income 148,784 84,500 .18 .15
Interest expense (286,667) (148,440) (.35) (.27)
Loss on disposal of assets (43,460) - (.05) -
-------- --------- ----- -----
(181,343) (63,940) (.22) (.12)
--------- -------- ----- -----
Income before income taxes 717,342 776,217 .88 1.41
Income taxes 260,485 308,628 .32 .56
------- ------- --- ---
Net income $ 456,857 467,589 .56 .85
========= ======= === ===
</TABLE>
See accompanying notes to financial statements and accountant's compilation
report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Retained Earnings
Six months ended January 31, 2000 and 1999 (unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Balance at beginning of period $ 960,224 819,490
Net income 456,857 467,589
------- -------
Balance at end of period $1,417,081 1,287,079
========== =========
</TABLE>
See accompanying notes to financial statements and accountant's compilation
report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Statements of Cash Flows
Six months ended January 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $456,857 467,589
Adjustments to reconcile net income
to net cash (used) by
operating activities:
Depreciation and amortization $ 198,709 136,570
Loss on disposal of assets 43,460 -
Adjustments for working capital
changes:
(Increases) decrease in:
Receivables (4,642,943) (2,792,967)
Inventories (31,337,354) (5,340,738)
Increase (decrease) in:
Accounts payable 31,177,730 7,281,227
Accrued expenses (1,097,051) (984,918)
Income taxes 194,178 228,688
------- -------
Total adjustments (5,463,271) (1,472,138)
----------- -----------
Net cash used by
operating activities (5,006,414) (1,004,549)
Cash flows from investing activities -
Purchase of property and equipment
and leasehold improvements (5,385,030) (1,000,353)
Proceeds from disposal of assets 115,417 -
Purchase of trademark - (5,000)
Purchase of investments - (143,850)
------------ ---------
Net cash used by
investing activities (5,269,613) (1,149,203)
Cash flows from financing activities:
Net loan proceeds 9,181,854 3,061,917
Net proceeds from issuance of
common stock 261,250 134,458
------- --------
Net cash provided by
financing activities
9,443,104 3,196,375
--------- ---------
Net increase (decrease) in cash (832, 923) 1,042,623
Cash at beginning of period 1,092,679 (1,109,855)
--------- -----------
Cash (overdraft) at end of period $259,756 (67,232)
======== ========
Supplemental Disclosures:
Interest paid $221,360 139,689
======== =======
Income taxes paid $66,307 79,940
======= ======
</TABLE>
See accompanying notes to financial statements and accountant's compilation
report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements
January 31, 2000 and 1999
(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
January 31, 2000 and 1999 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.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
January 31, 2000 and 1999
(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 six months ended January 31, the Company recognized
liabilities for overcharges on sales in excess of an agreed to
profit margin of 5% totaling $4,099,630 (2000), $1,934,989 (1999).
See accountant's compilation report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
January 31, 2000 and 1999
(3) Property and equipment:
<TABLE>
<CAPTION>
Book Value
Accumulated ----------------------------------
Cost Depreciation 2000 1999
---- ------------ ---- ----
<S> <C> <C> <C> <C>
Land $ 953,780 - 953,780 969,225
Buildings 5,407,364 38,172 5,369,192 1,656,504
Equipment 2,371,882 622,353 1,749,529 450,850
--------- ------- --------- -------
$ 8,733,026 660,525 8,072,501 3,076,579
=========== ======= ========= =========
</TABLE>
(4) Long-term debt:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Note payable, bank, 7.42% interest $ 3,992,705 -
Note payable, bank, 8.66% interest 1,400,000 -
Note payable, bank, 8.75% interest - 1,263,574
----------- ---------
5,392,705 1,263,574
Less current portion due within one year (319,409) (1,263,574)
--------- -----------
$ 5,073,296 -
=========== ===========
</TABLE>
Note payable, bank, 7.42% interest:
Monthly installments of principal and interest of $32,028
with final installment and entire unpaid principal balance
due on May 1, 2009. Loan is collateralized by land and
building.
Note payable, bank, 8.66% interest:
Monthly installments of principal and interest of $29,032
until January, 2005. This note is secured by all business
assets.
Total yearly payments of long-term debt are due as follows:
<TABLE>
<S> <C>
2001 $ 319,409
2002 353,838
2003 384,749
2004 418,376
2005 454,879
2006 - 2009 3,461,454
---------
$5,392,705
==========
</TABLE>
See accountant's compilation report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
January 31, 2000 and 1999
(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.
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 lease
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.
See accountant's compilation report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
January 31, 2000 and 1999
(5) Commitments and contingent liabilities - leases: (continued)
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.
On November 10, 1999, the company entered into a lease with U.S.
Bancorp Leasing & Financial for the purpose of leasing a warehouse
floor scrubber. The lease minimum rentals are $306 per month for a
term of 60 months. The lease expires October 10, 2003.
On November 30, 1999, the company entered into a lease with IBM
Credit Corporation for the purpose of leasing IBM maintenance. The
lease minimum lease payments are $1,675 per month for a term of 36
months. The lease expires October 31, 2002.
Minimum future obligations on operating leases in effect on
January 31, 2000 are:
<TABLE>
<S> <C>
Period ended January 31, 2001 $ 259,861
Period ended January 31, 2002 246,217
Period ended January 31, 2003 161,391
Period ended January 31, 2004 21,122
Period ended January 31, 2005 1,374
---------
$ 689,965
---------
---------
</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 January 31 as
follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Members of the Board of Directors $ 1,637,298 1,329,408
Key employees 7,909 781
----- ---
$1,645,207 1,330,189
========== =========
</TABLE>
See accountant's compilation report.
<PAGE>
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Notes to Financial Statements (continued)
January 31, 2000 and 1999
(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 January 31, 2000 and 1999.
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 was $55,659 and $44,409 for the period ended January
31, 2000 and 1999, respectively.
See accountant's compilation report.
<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 January 31, 2000 and 1999, and the
related statements of income, retained earnings, and cash flows and accompanying
schedule for the six months then ended, 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 not express an opinion or any other form of assurance on
them.
/s/ Marvin E. Jewell & Co., P.C.
Lincoln, Nebraska
February 29, 2000
<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 $1,004,549 for the period
ending January 1999 was primarily attributable to increases of $2,792,967 in
accounts receivable and $5,340,738 in inventories. These were partially offset
by an increase of $7,281,227 in accounts payable. Net cash provided by operating
activities of $5,006,414 for the period ending January 2000 was primarily
attributable to an increase of $4,642,943 accounts receivable and $31,337,354 in
inventories. These were partially offset by an increase of $31,177,730 in
accounts payable.
Net cash used by investing activities of $1,149,203 for the period
ending January 1999 was primarily attributable to investments in property and
equipment. Net cash used by investing activities of $5,269,613 for the period
ending January 2000 was primarily attributable to investments in property and
equipment.
Net cash provided by financing activities of $3,169,375 for the period
ending January 1999 was primarily attributable to increases of $3,061,917 in
loan proceeds and $134,458 from net proceeds from the issuance of common stock.
Net cash provided by financing activities of $9,443,104 for the period ending
January 2000 was primarily attributable to increases of $9,181,854 in loan
proceeds and $261,250 from net proceeds from the issuance of common stock.
RESULTS OF OPERATIONS
Six months ended January 31, 2000 as compared to the six months ended
January 31, 1999:
Net sales for the period ending January 31, 2000 increased by 49.9% or
$26.6 million. Sales for the period totaled $79.9 million compared to $53.3
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 66 veterinary practices became shareholders of
the Company. On January 31, 2000 the Company had 1,254 shareholders.
Gross profits for the period ending January 31, 2000 increased by $2.6
million to $7.5 million compared to $4.9 million for the same period the
previous year. Gross
<PAGE>
profit as a percentage of total revenues was 9.2% in the period compared to 9.0%
in the same period the previous year.
Operating, general and administrative expenses for the period ending
January 31, 2000 increased by $2.5 million to $6.6 million in the period
compared to $4.1 million for the same period the previous year. Such operating,
general and administrative expenses as a percentage of total revenues for the
period was 8.1% in the period compared to 7.4% 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 .825 percentage
points (a 10% change from the average interest rate as of January 31, 2000),
assuming no change in the Company's outstanding balance under the line of credit
(approximately $8,147,753 as of January 31, 2000), the Company's annualized
income before taxes and cash flows from operating activities would decline by
approximately $67,219.
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
(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 commenced on November 1, 1999 in the states of Alaska,
Arizona, Colorado, Delaware, Georgia, Idaho, Illinois, Kansas, Kentucky,
Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Montana, New
Hampshire, New York, North Carolina,
<PAGE>
North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota,
Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming; on November
8, 1999 in the states of Connecticut, Iowa, Nebraska and New Jersey; on November
12, 1999 in the state of Oklahoma; on November 17, 1999 in the state of Indiana;
on November 23, 1999 in the state of Maryland; on November 30, 1999 in the state
of Minnesota; on December 30, 1999 in the state of Tennessee; on January 3, 2000
in the state of Ohio; on January 11, 2000 in the states of Alabama and Maine;
and on January 18, 2000 in the state of Vermont. Through January 31, 2000, 66
shares of common stock have been sold for an aggregate offering price of
$198,000 and one share of common stock has been redeemed by the Company, due to
the shareholder's death, for $3000.
There have been no changes since the last reporting period in the
amount or payment of the expenses incurred in connection with the issuance and
distribution of our common stock, with the exception of $3636.56 in additional
legal expenses.
Accordingly, a total reasonable estimate of the amount of expenses is
$127,053.56.
The net offering proceeds to the Company after deducting the total
expenses are $70,946.44 as of January 31, 2000.
ITEM 3: DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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 January 31, 2000.
<PAGE>
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: March 15, 2000 By: /s/ Dr. Lionel L. Reilly
------------------------
Dr. Lionel L. Reilly, President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 259,756
<SECURITIES> 0
<RECEIVABLES> 15,857,419
<ALLOWANCES> 0
<INVENTORY> 43,924,586
<CURRENT-ASSETS> 60,041,761
<PP&E> 8,733,026
<DEPRECIATION> 660,525
<TOTAL-ASSETS> 68,469,720
<CURRENT-LIABILITIES> 58,288,343
<BONDS> 5,073,296
0
0
<COMMON> 1,254
<OTHER-SE> 5,106,827
<TOTAL-LIABILITY-AND-EQUITY> 68,469,720
<SALES> 79,927,706
<TOTAL-REVENUES> 81,511,282
<CGS> 74,000,255
<TOTAL-COSTS> 74,000,255
<OTHER-EXPENSES> 6,612,342
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 286,667
<INCOME-PRETAX> 717,342
<INCOME-TAX> 260,485
<INCOME-CONTINUING> 456,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 456,857
<EPS-BASIC> 364.32
<EPS-DILUTED> 364.32
</TABLE>
