1
Introductions
Jim Cleary
President and Chief Executive Officer
Mary Pat Thompson
Senior Vice President & Chief Financial Officer
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Disclaimer/Forward-Looking Statements
This presentation may contain forward-looking statements based on current
management expectations. Numerous factors, including those related to
market conditions may cause results to differ materially from those
anticipated in forward-looking statements. Many of the factors that will
determine the Company’s future results are beyond the ability of the
Company to control or predict. These statements are subject to risks and
uncertainties and, therefore, actual results may differ materially. Potential
investors should not place undue reliance on forward-looking statements,
which reflect management’s views only as of the date hereof. The Company
undertakes no obligation to revise or update any forward-looking statements,
or to make any other forward-looking statements, whether as a result of new
information, future events or otherwise.
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introduction
Mission Statement
MWI will be the best resource to the
veterinary profession by delivering
superior value, efficiency and innovation.
5
Investment Highlights
Favorable industry dynamics driving demand for
animal health products
Market leading position with national footprint and
expansion opportunities
Broad product portfolio and value-added services
Longstanding relationships with diversified customer
and vendor bases
Premier sales and marketing franchise
Strong and consistent financial performance driven by
organic growth
Experienced management team
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Our Company
Leading distributor of animal
health products to
veterinarians across U.S.
30 years of operating history
Over 15,000 veterinary
clinics nationwide
Over 11,000 products
sourced from more than
400 vendors
Strong and consistent
financial performance
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Recent Developments
Acquired Securos, Inc. which is a leading provider of veterinary
orthopedic products
IT - Launched an updated e-commerce platform and implemented
RF receiving at distribution centers
Leased a 105,000 square-foot distribution center in the Kansas
City area and will begin operating in October 2007
Fiscal year 2006 through August 2007: MWI increased capacity
by successfully opening, moving or expanding 7 distribution
centers
November 2006: Extended Banfield contracts through November
2009
Continued expansion of value-added services, including e-
commerce, inventory management and pharmacy fulfillment
Established Specialty Resources Group, a new division of MWI
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industry overview
Attractive Industry Dynamics
Large, fragmented U.S. market with favorable
growth characteristics
54,000 practicing veterinarians
27,000 veterinary clinics
400 vendors
Diversified customer and vendor bases
Distributors play vital role
Frequent, small orders
Clinics avoid storing and managing inventory
Importance of sales representatives
Long-term relationships
Product information / consultation
No third party reimbursement risk
U.S. Animal Health Product Sales
2005 U.S. Animal Health Product
Sales By Segment
$5.0 + Billion
Source: Animal Health Institute, American Veterinary Medical Association, and Company estimates
($ in billions)
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$5.0 +
$4.5
$5.0
$4.7
2002
2003
2004
2005
Consists of approximately:
90 million cats
73 million dogs
7 million horses
Other pets
Increased spending driven by:
Human-animal bond
Rising numbers of households with pets
Focus on animal health /
preventative care
Technology migration from human health
to veterinary medicine
Aging pet population
Companion Animal Market
Large market with attractive growth profile
Note: Number of cats, dogs, and horses are for the U.S. only.
Source: Dogs and Cats for 2004 – APPMA. 2005-2006 Pet Owner’s Survey. Horses for 2004 – US Equine Market, Brakke Consulting.
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Includes cattle, swine, poultry, and
other food-producing animals
97 million cattle
61 million swine
Spending driven by:
Economic decisions
Improved productivity / yield
Disease prevention
Production Animal Market
Significant market with volume driven by large order sales
Source: USDA Agriculture statistics
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Importance of Distributors
Customers
Vendors
Single source for multiple
products
Timely product delivery
Reduced number of
vendors
Inventory management
Product information
Consultation
Cost-effective access to
a fragmented market
Logistics and distribution
Sales and marketing
support
Ability to move market
share
Flexible selling models
Distributors
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Competitive Landscape
Key Competitors (1)
Competitive market
Competition from both numerous
vendors and distributors
Competing factors include:
Customer relationships
Service and delivery
Product selection
Price
e-business capabilities
Industry consolidation well under
way
(1) Excludes vendors and other national, regional, local and specialty distributors.
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company overview
The MWI Edge:
Leading National Distributor
Decentralized distribution network facilitates regional market
responsiveness
12 strategically located distribution centers throughout the U.S.
5 pharmacies distributing Rx products to end-users nationwide
Same day shipment on 98% of orders placed
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HEADQUARTERS AND WAREHOUSE
WAREHOUSE
PHARMACY
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The MWI Edge:
Broad Product Portfolio
Over 11,000 products stocked in MWI warehouses
Over 7,000 additional products available by special order
Continually evaluate product portfolio to improve offerings
Key products include:
Pharmaceuticals,
Vaccines and Parasiticides
Diagnostics, Capital
Equipment and Supplies
Veterinary Pet Food and
Nutritional Products
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The MWI Edge:
2006 Product Revenue Mix
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The MWI Edge:
Expansive Vendor Network
Sources products from
over 400 vendors
Provides cost-effective
access to large and
diverse customer base
Serves as a principal
distributor for key vendors
Length of relationship with
many key vendors over 10
years
MWI’s size and reach have become increasingly
important to its vendor base
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Flexible Selling Arrangements –
Agency Relationships
Do not purchase and take inventory of products
Upon receipt of order, transmit order to vendor, who picks,
packs and ships order
Receive commission payment for soliciting order
Agency relationships with several leading animal health
product vendors
Gross billings of $151.4 million, generating commission
revenue of $7.8 million in FY 2006
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The MWI Edge:
Strong Customer Relationships
Nation’s largest private
veterinary practice
Customer for over 10 years
Highly efficient ordering
process
Feeders’ Advantage
Buying group of several of
the largest cattle feeders in
U.S.
Customer for 10 years
Highly efficient ordering
process
Corporate Clients
Independent
Veterinary Practices
Often small, privately-held
Place at least one order / week
Independent veterinary
practices and producers
account for >80% of our
product sales
Loyal customer base:
Over 66% of sales from
accounts over 5 years old
Over 79% of sales from
accounts over 3 years old
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The MWI Edge:
Premier Sales and Marketing Franchise
Sales Representatives
FYE Sept 30,
Dual coverage approach with
frequent contact
Act as business consultants
Continuous training initiatives
Performance driven compensation
Significant industry experience
Direct Marketing
Over 450,000 pieces of direct
marketing material distributed
Comprehensive and specialty
catalogs, loyalty programs,
product / vendor programs,
flyers, order stuffers
282
261
227
190
169
151
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The MWI Edge:
Value-Added Services
E-Commerce Platform
Technology systems closely integrated with customers’
day-to-day operations
E-Commerce Product Sales
as a Percent of Total Sales
18%
21%
23%
24%
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The MWI Edge:
Value-Added Services
Value-added services increase loyalty of customer base
E-commerce platform
Pharmacy fulfillment
SWEEP™ Inventory management system
Equipment procurement consultation
Special order fulfillment
Educational seminars
Pet cremation
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MWI Growth Strategy
Expand Number
of Veterinarians
Served
Offer Innovative,
Differentiated
Solutions to
Veterinarians
Increase Share of
Spend from
Existing
Customers
Pursue Strategic
Acquisitions
Expand
Agreements with
Existing and New
Vendors
Increase Overall
Productivity and
Profitability
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Pursue Strategic
Acquisitions
Specialty Resources Group,
a division of MWI
Objective:
Diversify revenue and enhance profitability through acquisition and
development of niche animal health products and services
Tactics:
Acquire manufacturers and marketers of non-pharma specialty animal
health products and services
Secure exclusive licenses and agreements
Leverage MWI sales force and customer relationships
Recent Developments:
June 8, 2007 completed acquisition of Securos and IVDN
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financial overview
Strong Growth in Revenues
Total Revenues
($ in millions)
FYE Sept 30,
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Strong Growth in Operating Income
Operating Income FYE Sept 30
($ in millions)
* includes the effect of rebate earnings of approximately $2.5 million (pre-tax) earned in fiscal year 2006 that historically
would have been earned in our fiscal year 2007 first quarter ended December 31, 2006.
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($ in millions)
2000
2001
2002
2003
2004
2005
2006
9 mos '06
9 mos '07
Management Fee
-
-
$0.1
$0.3
$0.4
$2.5
$0.0
$0.0
$0.0
Depreciation & Amortization
0.8
0.8
0.9
1.0
1.1
1.5
2.0
1.4
1.8
Operating Income
6.4
7.3
7.2
10.2
12.6
15.8
23.7
18.1
20.1
*
Condensed Consolidated Balance Sheets
($ in thousands)
$ 188,244
$ 230,559
$ 245,754
Total Liabilities & Stockholders' Equity
86,694
129,626
155,377
Stockholders' Equity
390
292
195
Long-term debt
650
505
453
Deferred income taxes
100,510
100,136
89,750
Total Current Liabilities
6,438
7,016
5,849
Accrued expenses & other current liabilities
69,382
82,561
83,804
Accounts payable
$ 24,690
$ 10,559
$ 0
Line-of-credit
Liabilities
$ 188,244
$ 230,559
$ 245,754
Total Assets
148,409
187,791
197,753
Total Current Assets
2,493
3,153
2,810
Other current assets
68,786
85,083
85,444
Inventories
77,099
99,518
97,170
Receivables, net
$ 31
$ 37
$ 12,329
Cash
9/30/2005
9/30/2006
6/30/2007
Assets
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Financial Highlights
Year to Date Highlights
Revenues were up 17% to $520.0 million compared to
the same period last year
Net income was up 19% to $12.6 million compared to
the same period last year
Cash flow from operations was $17.4 million
compared to $1.0 million for the same period last year
Internet sales to independent veterinary practices and
producers grew by 48% and pharmacy sales grew by
more than 45% compared to the same period last year
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Financial Highlights
Consistent organic growth
Stable, recurring revenue base…over 95% consumables
Minimal capital expenditure requirements
Strong returns on net assets and invested capital
Flexible and Strong Balance Sheet
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conclusion
Investment Highlights
Favorable industry dynamics driving demand for
animal health products
Market leading position with national footprint and
expansion opportunities
Broad product portfolio and value-added services
Longstanding relationships with diversified customer
and vendor bases
Premier sales and marketing franchise
Strong and consistent financial performance driven by
organic growth
Experienced management team
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