Friday, August 12, 2005

MWI Veterinary Supply

A vet supply company goes public. Although MWI Veterinary Supply, Inc. has been around for over a decade, it was acquired in 2002 by a private equity firm that apparently had its eyes on the pet industry.

Distributors to 14,000 vets of 10,000 products from 350 vendors, MWI Veterinary Supply consolidates a large number of products in a strong growth sector of the still fragmented pet industry. Serving the production animal line (cattle, for example) as well as companion animals, MWI is seeing approximately equal growth in both.

The company said third-quarter profit rose to $1.4 million, or 24 cents a share, from $71 million, or 12 cents a share, in the same quarter last year. Revenue for the quarter rose 30 percent to $138 million.

President and CEO Jim Cleary noted that eCommerce sales as a percent of total sales was 20.7 percent compared to 17.4 percent in the same quarter last year.

This company reminds me of Central Garden and Pet a number of years ago, as it transformed from a distributor to a major producer of pet products by acquiring the best of its suppliers. MWI Vet finds itself in a good position to follow that strategy, and shows signs that it will. Having acquired Vetpo Distributors in January 2005, the company has produced $8.7 million in sales from the transferred sales reps since then, and mentioned in the earnings conference call it will pursue more strategic acquisitions.

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