Exhibit 99.2
MWI VETERINARY SUPPLY ANNOUNCES 2008 FOURTH QUARTER
AND FISCAL YEAR RESULTS
MERIDIAN, Idaho (November 6, 2008) – MWI Veterinary Supply, Inc. (Nasdaq: MWIV) (the “Company”) announced financial results today for its fourth quarter and fiscal year ended September 30, 2008.
Highlights:
· Revenues were $224.8 million for the quarter, 18.2% higher than revenues for the same period in the prior fiscal year. Revenues were $831.4 million for fiscal year 2008, 17.1% higher than revenues for fiscal year 2007.
· Net income was $5.4 million for the quarter, 25.4% higher than net income for the same period in the prior fiscal year. Net income was $19.9 million for fiscal year 2008, 18.0% higher than net income for fiscal year 2007. Diluted earnings per share were $0.44 for the quarter, compared to $0.35 for the same period in the prior fiscal year. Diluted earnings per share were $1.62 for fiscal year 2008, compared to $1.40 for fiscal year 2007.
· Selling, general and administrative (“SG&A”) expenses as a percentage of revenues were 9.6% for the quarter, compared to 10.2% for the same period in the prior fiscal year. SG&A expenses as a percentage of revenues were 10.1% for fiscal year 2008, compared to 10.3% for fiscal year 2007.
· Our product sales from the internet as a percentage of sales improved to 28% for the quarter as compared to 26% for the same period in the prior fiscal year and 27% for fiscal year 2008 as compared to 24% for fiscal year 2007.
· We acquired substantially all of the assets of AAHA Services Corporation (“AAHA MARKETLink”) in July 2008, and entered into long-term sponsorship and licensing agreements with American Animal Hospital Association.
· Cash flow provided by operations for fiscal year 2008 was $10.6 million, and we completed the fiscal year with $3.4 million of cash and no borrowings on our $70 million credit line.
Quarter ended September 30, 2008 compared to quarter ended September 30, 2007
Total revenues grew 18.2% to $224.8 million for the quarter ended September 30, 2008, compared to $190.2 million for the quarter ended September 30, 2007. Revenues attributable to
new customers represented approximately 62% of the growth in total revenues during the quarter ended September 30, 2008. Included in the new customer growth were approximately $2.8 million of revenues attributable to new customers acquired as a result of the acquisition of AAHA MARKETLink on July 1, 2008. Additionally, we had $5.4 million of incremental revenues as a result of the acquisition of AAHA MARKETLink from customers who had previously been purchasing from both MWI and AAHA MARKETLink. Commissions grew 27.0% to $3.2 million for the quarter ended September 30, 2008, compared to $2.5 million for the quarter ended September 30, 2007.
Gross profit increased by 16.8% to $31.2 million for the quarter ended September 30, 2008, compared to $26.7 million for the quarter ended September 30, 2007. Gross profit as a percentage of total revenues was 13.9% for the quarter ended September 30, 2008, compared to 14.0% for the quarter ended September 30, 2007. Vendor rebates for the quarter ended September 30, 2008 increased approximately $95,000 compared to the quarter ended September 30, 2007.
Operating income increased 31.6% to $8.8 million for the quarter ended September 30, 2008, compared to $6.7 million for the quarter ended September 30, 2007. SG&A expenses as a percentage of revenue were 9.6% for the quarter ended September 30, 2008, compared to 10.2% for the quarter ended September 30, 2007. This reduction was due to improvements in compensation and benefits costs, occupancy and location expense and travel expense as a percentage of revenues. SG&A expenses increased 11.3% to $21.6 million for the quarter ended September 30, 2008, compared to $19.4 million for the quarter ended September 30, 2007. During fiscal year 2008 our overall headcount increased approximately 10% to 881 employees, including 23 additional field sales representatives and 18 additional telesales representatives.
Net income increased 25.4% to $5.4 million for the quarter ended September 30, 2008, compared to $4.3 million for the quarter ended September 30, 2007. Diluted earnings per share were $0.44 and $0.35 per share for the quarters ended September 30, 2008 and 2007, respectively, an increase of 25.7%.
Fiscal year ended September 30, 2008 compared to fiscal year ended September 30, 2007
Total revenues grew 17.1% to $831.4 million for the fiscal year ended September 30, 2008, compared to $710.1 million in the fiscal year ended September 30, 2007. Revenues attributable to new customers represented approximately 57% of the growth in total revenues during the fiscal year ended September 30, 2008. Commissions grew 34.5% to $13.0 million for the fiscal year ended September 30, 2008, compared to $9.6 million for the fiscal year ended September 30, 2007.
Gross profit increased by 16.8% to $119.6 million for the fiscal year ended September 30, 2008, compared to $102.3 million in the fiscal year ended September 30, 2007. Gross profit as a percentage of total revenues was 14.4% for both of the fiscal years ended September 30, 2008 and 2007. Vendor rebates for the fiscal year ended September 30, 2008 increased approximately $1.0 million, compared to the fiscal year ended September 30, 2007.
Operating income increased 21.1% to $32.4 million for the fiscal year ended September 30, 2008, compared to $26.7 million for the fiscal year ended September 30, 2007. SG&A expenses
as a percentage of revenue were 10.1% for the fiscal year ended September 30, 2008, compared to 10.3% for the fiscal year ended September 30, 2007. SG&A expenses increased 14.9% to $84.1 million for the fiscal year ended September 30, 2008, compared to $73.2 million for the fiscal year ended September 30, 2007.
Net income increased 18.0% to $19.9 million for the fiscal year ended September 30, 2008 compared to $16.9 million for the fiscal year ended September 30, 2007. Diluted earnings per share were $1.62 and $1.40 for the fiscal years ended September 30, 2008 and 2007, respectively, an increase of 15.7%.
MWI Veterinary Supply, Inc.
(Unaudited - - Dollars and shares in thousands, except per share amounts)
Condensed Consolidated Statements of Income
| | Quarter Ended September 30, | | Fiscal Year Ended September 30, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
Revenues | | $ | 224,766 | | $ | 190,154 | | $ | 831,364 | | $ | 710,105 | |
Cost of product sales | | 193,574 | | 163,438 | | 711,812 | | 607,756 | |
Gross profit | | 31,192 | | 26,716 | | 119,552 | | 102,349 | |
Selling, general and administrative expenses | | 21,608 | | 19,413 | | 84,123 | | 73,215 | |
Depreciation and amortization | | 828 | | 650 | | 3,078 | | 2,424 | |
Operating income | | 8,756 | | 6,653 | | 32,351 | | 26,710 | |
Interest expense | | (47 | ) | (40 | ) | (265 | ) | (545 | ) |
Other income | | 225 | | 369 | | 821 | | 925 | |
Income before taxes | | 8,934 | | 6,982 | | 32,907 | | 27,090 | |
Income tax expense | | (3,513 | ) | (2,659 | ) | (12,990 | ) | (10,215 | ) |
Net income | | $ | 5,421 | | $ | 4,323 | | $ | 19,917 | | $ | 16,875 | |
Net income per share - diluted | | $ | 0.44 | | $ | 0.35 | | $ | 1.62 | | $ | 1.40 | |
Weighted average common shares outstanding - diluted | | 12,311 | | 12,276 | | 12,301 | | 12,044 | |
Condensed Consolidated Balance Sheets
| | September 30, | | September 30, | |
| | 2008 | | 2007 | |
Assets | | | | | |
Cash | | $ | 3,419 | | $ | 8,599 | |
Receivables, net | | 128,564 | | 111,676 | |
Inventories | | 118,403 | | 94,623 | |
Prepaid expenses and other current assets | | 3,168 | | 2,362 | |
Deferred income taxes | | 809 | | 518 | |
Total current assets | | 254,363 | | 217,778 | |
Property and equipment, net | | 9,687 | | 9,206 | |
Goodwill | | 37,727 | | 32,964 | |
Intangibles, net | | 10,945 | | 5,014 | |
Other assets, net | | 2,083 | | 2,232 | |
Total Assets | | $ | 314,805 | | $ | 267,194 | |
| | | | | |
Liabilities | | | | | |
Line-of-credit | | $ | — | | $ | — | |
Accounts payable | | 123,003 | | 98,724 | |
Accrued expenses | | 9,854 | | 7,693 | |
Current portion of long-term debt | | 97 | | 97 | |
Total current liabilities | | 132,954 | | 106,514 | |
Deferred income taxes | | 751 | | 474 | |
Long-term debt | | 97 | | 195 | |
Other long-term liabilities | | — | | — | |
Stockholders’ Equity | | 181,003 | | 160,011 | |
Total Liabilities and Stockholders’ Equity | | $ | 314,805 | | $ | 267,194 | |
