Table of Contents

 

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-Q**

 

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**x**      QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

 

**For the quarter ended June 30, 2009**

** **

**OR**

 

**o**         TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

 

**For the transition periodfrom                      to                      **

** **

**Commission File Number:  000-51468**

 

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**MWIVETERINARY SUPPLY, INC.**

(Exact name of Registrantas specified in its Charter)

 

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| **Delaware**                                | ** ** | **02-0620757**                           |
|---------------------------------------------|------------|------------------------------------------|
| (State of  Incorporation)                   |       | (I.R.S. Employer  Identification Number) |
|                                        |       |                                     |
| **651 S.  Stratford Drive, Suite 100** | ** ** | ** **                               |
| **Meridian,  ID**                           | ** ** | **83642**                                |
| (Address of  principal executive offices)   |       | (Zip Code)                               |

 

**(800) 824-3703**

(Registrant’s telephone number, including area code)

 

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Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the Registrant was required to filesuch reports) and (2) has been subject to such filing requirements for thepast 90 days.  Yes x No o

 

Indicate by check markwhether the registrant has submitted electronically and posted on its corporateWeb site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T during the preceding 12months (or for such shorter period that the registrant was required to submitand post such files).  Yes oNo o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act.

 

| Large  accelerated filer oNon-accelerated  filer o

(Do not check if a smaller reporting company) |   | Accelerated  filer x Smaller reporting company  o |
|-------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theAct). Yes o No x

 

The number of shares ofthe registrant’s common stock, $0.01 par value, outstanding as of July 28,2009 was 12,120,581.

 

 

 

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**MWIVETERINARY SUPPLY, INC.**

 

**INDEX**

 
| **PART I.**  | **FINANCIAL INFORMATION**                                                                                     | ** ** |
|-------------------|---------------------------------------------------------------------------------------------------------------|------------|
|              |                                                                                                          |       |
| **Item 1.**       | **Financial Statements (Unaudited)**                                                                          | ** ** |
|              | Condensed Consolidated  Statements of Income for the three and nine months ended June 30, 2009  and 2008 | 3          |
|              |                                                                                                          |       |
|              | Condensed Consolidated  Balance Sheets as of June 30, 2009 and September 30, 2008                   | 4          |
|              |                                                                                                          |       |
|              | Condensed Consolidated  Statements of Cash Flows for the nine months ended June 30, 2009 and  2008       | 5          |
|              |                                                                                                          |       |
|              | Notes to  Condensed Consolidated Financial Statements                                                         | 6          |
|              |                                                                                                          |       |
|              | Report of  Independent Registered Public Accounting Firm                                                      | 13         |
|              |                                                                                                          |       |
| **Item 2.**       | **Management’s  Discussion and Analysis of Financial Condition and Results of Operations**               | 14         |
|              |                                                                                                          |       |
| **Item 3.**       | **Quantitative  and Qualitative Disclosures About Market Risk**                                               | 19         |
|              |                                                                                                          |       |
| **Item 4.**       | **Controls and  Procedures**                                                                                  | 19         |
|              |                                                                                                          |       |
| **PART II.** | **OTHER INFORMATION**                                                                                         | ** ** |
|              |                                                                                                          |       |
| ** **        | **Cautionary Statement**                                                                                      | 20         |
|              |                                                                                                          |       |
| **Item 1.**       | **Legal Proceedings**                                                                                         | 21         |
| ** **        | ** **                                                                                                    | ** ** |
| **Item 1A.**      | **Risk Factors**                                                                                              | 21         |
| ** **        | ** **                                                                                                    | ** ** |
| **Item 2.**       | **Unregistered  Sales of Equity Securities and Use of Proceeds**                                              | 21         |
|              |                                                                                                          |       |
| **Item 3.**       | **Defaults Upon  Senior Securities**                                                                          | 21         |
|              |                                                                                                          |       |
| **Item 4.**       | **Submission of  Matters to a Vote of Security Holders**                                                      | 22         |
|              |                                                                                                          |       |
| **Item 5.**       | **Other Information**                                                                                         | 22         |
|              |                                                                                                          |       |
| **Item 6.**       | **Exhibits**                                                                                                  | 22         |

 

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**PART I.  FINANCIAL INFORMATION**

 

**Item 1.    Financial Statements**

 

**MWI VETERINARY SUPPLY, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME**

**Dollars and shares in thousands, except per sharedata(unaudited)**

 
| ** **                                    | ** ** | **Three months ended June 30,** | ** ** | **Nine months ended June 30,** | ** ** |
|-----------------------------------------------|------------|--------------------------------------|------------|-------------------------------------|------------|
| ** **                                    | ** ** | **2009**                             | ** ** | **2008**                            | ** ** | **2009** | ** ** | **2008** | ** ** |
| Revenues:                                     |       |                                 |       |                                |       |   |   |   |   |
| Product sales                                 |       | $                                    | 231,743    |                                | $          | 196,325 |   | $ | 647,979 |   | $ | 568,089 |   |
| Product sales to  related party               |       | 12,075                               |       | 8,689                               |       | 35,542 |   | 28,728 |   |
| Commissions                                   |       | 3,645                                |       | 3,263                               |       | 10,273 |   | 9,781 |   |
| Total revenues                                |       | 247,463                              |       | 208,277                             |       | 693,794 |   | 606,598 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Cost of product sales                         |       | 212,980                              |       | 177,970                             |       | 594,022 |   | 518,238 |   |
| Gross profit                                  |       | 34,483                               |       | 30,307                              |       | 99,772 |   | 88,360 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Selling, general and  administrative expenses |       | 22,748                               |       | 20,802                              |       | 67,379 |   | 62,515 |   |
| Depreciation and  amortization                |       | 844                                  |       | 757                                 |       | 2,546 |   | 2,250 |   |
| Operating income                              |       | 10,891                               |       | 8,748                               |       | 29,847 |   | 23,595 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Other income (expense):                       |       |                                 |       |                                |       |   |   |   |   |
| Interest expense                              |       | (63                                  | )          | (53                                 | )          | (202 | ) | (218 | ) |
| Earnings of equity  method investees          |       | 53                                   |       | 37                                  |       | 174 |   | 129 |   |
| Other                                         |       | 130                                  |       | 115                                 |       | 406 |   | 467 |   |
| Total other income  (expense), net            |       | 120                                  |       | 99                                  |       | 378 |   | 378 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Income before taxes                           |       | 11,011                               |       | 8,847                               |       | 30,225 |   | 23,973 |   |
| Income tax expense                            |       | (4,395                               | )          | (3,429                              | )          | (11,873 | ) | (9,477 | ) |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Net income                                    |       | $                                    | 6,616      |                                | $          | 5,418 |   | $ | 18,352 |   | $ | 14,496 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Earnings per common  share:                   |       |                                 |       |                                |       |   |   |   |   |
| Basic                                         |       | $                                    | 0.55       |                                | $          | 0.45 |   | $ | 1.52 |   | $ | 1.20 |   |
| Diluted                                       |       | $                                    | 0.54       |                                | $          | 0.44 |   | $ | 1.49 |   | $ | 1.18 |   |
|                                          |       |                                 |       |                                |       |   |   |   |   |
| Weighted average common  shares outstanding:  |       |                                 |       |                                |       |   |   |   |   |
| Basic                                         |       | 12,079                               |       | 12,051                              |       | 12,075 |   | 12,049 |   |
| Diluted                                       |       | 12,303                               |       | 12,298                              |       | 12,298 |   | 12,297 |   |

 

See Notes toCondensed Consolidated Financial Statements

 

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**MWI VETERINARY SUPPLY, INC.CONDENSED CONSOLIDATED BALANCE SHEETS**

**Dollars and shares in thousands, except per sharedata  (unaudited)**

 
| ** **                                                                                                       | ** ** | **June 30,** | ** ** | **September 30,** | ** ** |
|------------------------------------------------------------------------------------------------------------------|------------|-------------------|------------|------------------------|------------|
| ** **                                                                                                       | ** ** | **2009**          | ** ** | **2008**               | ** ** |
| **Assets**                                                                                                       |       |              |       |                   |       |
| ** **                                                                                                       |       |              |       |                   |       |
| Current Assets:                                                                                                  |       |              |       |                   |       |
| Cash and cash  equivalents                                                                                       |       | $                 | 5,070      |                   | $          | 3,419 |   |
| Receivables, net                                                                                                 |       | 130,724           |       | 128,564                |       |
| Inventories                                                                                                      |       | 118,350           |       | 118,403                |       |
| Prepaid expenses and  other current assets                                                                       |       | 2,565             |       | 3,168                  |       |
| Deferred income taxes                                                                                            |       | 1,799             |       | 809                    |       |
| Total current assets                                                                                             |       | 258,508           |       | 254,363                |       |
|                                                                                                             |       |              |       |                   |       |
| Property and equipment,  net                                                                                     |       | 8,818             |       | 9,687                  |       |
| Goodwill                                                                                                         |       | 37,610            |       | 37,727                 |       |
| Intangibles, net                                                                                                 |       | 10,401            |       | 10,945                 |       |
| Other assets, net                                                                                                |       | 2,408             |       | 2,083                  |       |
| Total assets                                                                                                     |       | $                 | 317,745    |                   | $          | 314,805 |   |
|                                                                                                             |       |              |       |                   |       |
| **Liabilities  And Stockholders’ Equity**                                                                   |       |              |       |                   |       |
| ** **                                                                                                       |       |              |       |                   |       |
| Current Liabilities:                                                                                             |       |              |       |                   |       |
| Line-of-credit                                                                                                   |       | $                 | —     |                   | $          | — |   |
| Accounts payable                                                                                                 |       | 106,162           |       | 123,003                |       |
| Accrued expenses                                                                                                 |       | 10,269            |       | 9,854                  |       |
| Current maturities of  long-term debt                                                                            |       | 97                |       | 97                     |       |
| Total current  liabilities                                                                                       |       | 116,528           |       | 132,954                |       |
|                                                                                                             |       |              |       |                   |       |
| Deferred income taxes                                                                                            |       | 1,242             |       | 751                    |       |
|                                                                                                             |       |              |       |                   |       |
| Long-term debt                                                                                                   |       | —            |       | 97                     |       |
|                                                                                                             |       |              |       |                   |       |
| Commitments and  contingencies                                                                                   |       |              |       |                   |       |
|                                                                                                             |       |              |       |                   |       |
| **Stockholders’  Equity**                                                                                   |       |              |       |                   |       |
| Common stock $0.01 par  value, 40,000 authorized; 12,120 and 12,098 shares issued and outstanding,  respectively |       | 121               |       | 121                    |       |
| Additional paid in  capital                                                                                      |       | 122,939           |       | 122,319                |       |
| Retained earnings                                                                                                |       | 76,915            |       | 58,563                 |       |
| Total stockholders’  equity                                                                                 |       | 199,975           |       | 181,003                |       |
| Total liabilities and  stockholders’ equity                                                                 |       | $                 | 317,745    |                   | $          | 314,805 |   |

 

See Notes to CondensedConsolidated Financial Statements

 

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**MWI VETERINARY SUPPLY, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**Dollars in thousands (unaudited)**

 
| ** **                                                                        | ** ** | **Nine months ended June 30,** | ** ** |
|-----------------------------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                                        | ** ** | **2009**                            | ** ** | **2008** | ** ** |
| **Cash Flows From Operating Activities:**                                         |       |                                |       |   |   |
| Net  income                                                                       |       | $                                   | 18,352     |   | $ | 14,496 |   |
| Adjustments  to reconcile net income to net cash provided byoperating activities: |       |                                |       |   |   |
| Depreciation  and amortization                                                    |       | 2,555                               |       | 2,259 |   |
| Amortization  of debt issuance costs                                              |       | 32                                  |       | 32 |   |
| Stock-based  compensation                                                         |       | 221                                 |       | 77 |   |
| Deferred  income taxes                                                            |       | (499                                | )          | (468 | ) |
| Earnings  of equity method investees                                              |       | (174                                | )          | (129 | ) |
| Loss  on disposal of property and equipment                                       |       | 28                                  |       | 1 |   |
| Tax  benefit of common stock options                                              |       | (225                                | )          | (130 | ) |
| Changes  in operating assets and liabilities (net of effects of acquisitions):    |       |                                |       |   |   |
| Receivables                                                                       |       | (2,245                              | )          | 4,716 |   |
| Inventories                                                                       |       | (159                                | )          | (24,300 | ) |
| Prepaid  expenses and other current assets                                        |       | 603                                 |       | 408 |   |
| Accounts  payable                                                                 |       | (16,282                             | )          | 12,223 |   |
| Accrued  expenses                                                                 |       | 640                                 |       | 561 |   |
| Net  cash provided by operating activities                                        |       | 2,847                               |       | 9,746 |   |
|                                                                              |       |                                |       |   |   |
| **Cash Flows From Investing Activities:**                                         |       |                                |       |   |   |
| Business  acquisitions                                                            |       | 117                                 |       | (4,548 | ) |
| Purchases  of property and equipment                                              |       | (1,649                              | )          | (1,460 | ) |
| Other                                                                             |       | 5                                   |       | 300 |   |
| Net  cash used in investing activities                                            |       | (1,527                              | )          | (5,708 | ) |
|                                                                              |       |                                |       |   |   |
| **Cash Flows From Financing Activities:**                                         |       |                                |       |   |   |
| Proceeds  from stock options                                                      |       | 15                                  |       | 94 |   |
| Tax  benefit of common stock options                                              |       | 225                                 |       | 130 |   |
| Payment  on long-term debt                                                        |       | (97                                 | )          | (97 | ) |
| Issuance  of common stock                                                         |       | 188                                 |       | — |   |
| Net  cash provided by financing activities                                        |       | 331                                 |       | 127 |   |
|                                                                              |       |                                |       |   |   |
| **Increase in Cash and Cash Equivalents**                                         |       | 1,651                               |       | 4,165 |   |
|                                                                              |       |                                |       |   |   |
| Cash  and Cash Equivalents at Beginning of Period                                 |       | 3,419                               |       | 8,599 |   |
|                                                                              |       |                                |       |   |   |
| Cash  and Cash Equivalents at End of Period                                       |       | $                                   | 5,070      |   | $ | 12,764 |   |

 

See Notes toCondensed Consolidated Financial Statements

 

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**MWI VETERINARY SUPPLY, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Dollars in thousands, except per share data(unaudited)**

 

## **NOTE 1 — GENERAL**

##  

**Basisof Presentation**

 

The accompanyingunaudited condensed consolidated financial statements include the results ofoperations, financial position and cash flows of MWI Veterinary Supply, Inc.and its wholly-owned subsidiaries (collectively referred to as “we,” “us,” and “our”throughout this Form 10-Q).  Allmaterial intercompany balances have been eliminated.  We have evaluated all subsequent eventsthrough July 30, 2009, the date the financial statements were issued.

 

In the opinion of ourmanagement, the accompanying unaudited condensed consolidated financialstatements include all adjustments necessary to present fairly, in all materialrespects, our results for the periods presented. These condensed consolidatedfinancial statements have been prepared by us pursuant to the rules andregulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosuresnormally included in financial statements prepared in accordance withaccounting principles generally accepted in the United States have beencondensed or omitted pursuant to such rules and regulations.  These condensed consolidated financialstatements should be read in conjunction with the consolidated financialstatements and accompanying notes included in our 2008 Annual Report on Form 10-Kfiled with the SEC on November 24, 2008. The results of operations for the three and nine months ended June 30,2009 are not necessarily indicative of results to be expected for the entirefiscal year.

 

Our unaudited condensedconsolidated balance sheet as of September 30, 2008 has been derived fromthe audited consolidated balance sheet as of that date.

 

**Useof Estimates**

 

*The*accompanyingunaudited condensed consolidated financial statements have been prepared on theaccrual basis of accounting using accounting principles generally accepted inthe United States. In preparing financial information, we use certain estimatesand assumptions that may affect the reported amounts and disclosures. Some ofthese estimates require difficult, subjective and complex judgments aboutmatters that are inherently uncertain. As a result, actual results could differmaterially from these estimates. Estimates are used when accounting for salesreturns, allowance for doubtful accounts, customer incentives, vendor rebates,inventories, goodwill and intangible assets, income taxes, impairment oflong-lived assets, depreciation and amortization, employee benefits, unearnedincome and contingencies. The estimates of fair value of assets and liabilitiesand the disclosure of contingent assets and liabilities as of the balance sheetdate and reported amounts of revenue and expenses for the periods are based onassumptions that we believe to be reasonable.

 

**RevenueRecognition**

 

*We sell products we source from vendors to our customersthrough either a “buy/sell” transaction or an agency relationship with ourvendors. In a “buy/sell” transaction, we purchase or take inventory of productsfrom the vendor. When a customer places an order with us, we pick, pack, ship andinvoice the customer for the order. We recognize revenue from “buy/sell”transactions as product sales when the product is delivered to the customer. Weaccept product returns from our customers. We estimate returns based onhistorical experience and recognize these estimated returns as a reduction ofproduct sales. Product returns have historically not been significant to ourfinancial statements. We record revenues net of sales tax.  In an agency relationship, we generally donot purchase and take inventory of products from vendors. We receive an orderfrom a customer, then transmit the order to the vendor, who picks, packs andships the order to the customer. In some cases, the vendor invoices andcollects payment from the customer, while in other cases we invoice and collectpayment from the customer on behalf of the vendor. We receive a commissionpayment for soliciting the order from the customer and for providing othercustomer service activities. Commissions are recognized when the services upon whichthe commissions are based are complete.*Gross billings from agency contracts were $72,960 and$66,195 for the three months ended June 30, 2009 and 2008, respectively,and generated commission revenue of $3,645 and $3,263, respectively.  Gross billings from agency contracts were $196,097and $180,935 for the nine months ended June 30, 2009 and 2008,respectively, and generated commission revenue of $10,273 and $9,781,respectively.

 

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**Costof Product Sales and Vendor Rebates**

 

*Cost of product salesconsist of our inventory product cost, including shipping costs to and from ourdistribution centers. Vendor rebates are recorded based on the terms of thecontracts or programs with each vendor.  *Many of our vendors’ rebate programs arebased on a calendar year.  *We may receive quarterly, semi-annual or annualperformance-based rebates from third-party vendors based upon attainment ofcertain sales and/or purchase goals. Sales rebates are classified in theaccompanying consolidated statements of income as a reduction to cost ofproduct sales at the time the sales performance measures are achieved. Purchaserebates are measured against inventory purchases from the vendors and areclassified as a reduction of inventory until the product is sold. When theinventory is sold and purchase measures are achieved, purchase rebates arerecognized as a reduction to cost of product sales.*

 

*Historically, actualresults have not significantly deviated from those determined using theestimates described above. We expect that our estimates in the future willcontinue to be reasonable as our rebates are based on specific vendor programgoals and are principally recorded upon achievement of sales or purchaseperformance measures. Vendors may change or eliminate rebate programs from yearto year.*

 

**NOTE 2 —EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS**

 

In September 2006, the FASB issued Statement ofFinancial Accounting Standards (“SFAS”) No. 157, *Fair ValueMeasurements* (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fairvalue according to generally accepted accounting principles and expandsdisclosure requirements regarding fair value measurements.  This statement emphasizes that fair valueshould be determined based on assumptions market participants would use toprice the asset or liability.  SFAS 157 waseffective for financial assets for our fiscal year beginning October 1,2008.  The implementation of SFAS 157 didnot have a material effect on our consolidated financial statements.  FASB Staff Position 157-2 (“FSP 157-2”)delayed the implementation of SFAS 157 for nonfinancial assets and liabilities,except for items that are recognized or disclosed at fair value in thefinancial statements on a recurring basis (at least annually). FSP 157-2 willbe effective for nonfinancial assets and liabilities for our fiscal yearbeginning October 1, 2009.  The adoptionof this statement is not expected to have a material impact on our consolidatedfinancial statements.

 

In December 2007, the FASB issued SFAS No. 141(Revised), *Business Combinations* (“SFAS 141-R”).  SFAS 141-R retains the purchase method ofaccounting for acquisitions, but requires a number of changes, includingchanges in the way assets and liabilities are recognized in the purchaseaccounting. It changes the recognition of assets acquired and liabilitiesassumed arising from contingencies, requires the capitalization of in-processresearch and development at fair value and requires the expensing ofacquisition-related costs as incurred, among other items. The statement willapply prospectively to any business combinations occurring in our fiscal yearbeginning October 1, 2009.

 

In December 2007, the FASB issued SFAS No. 160,*Noncontrolling Interests in Consolidated FinancialStatements, an amendment of ARB 51* (“SFAS 160”).  This statement amends Accounting ResearchBulletin No. 51, *Consolidated FinancialStatements*, to establish accounting and reporting standards for thenoncontrolling interest in a subsidiary and for the deconsolidation of asubsidiary. Noncontrolling interests shall be reclassified to equity,consolidated net income shall be adjusted to include net income attributable tononcontrolling interests and consolidated comprehensive income shall beadjusted to include comprehensive income attributable to the noncontrollinginterests.  SFAS 160 will be effectivefor our fiscal year beginning October 1, 2009.  The adoption of this statement is notexpected to have a material impact on our consolidated financial statements.

 

In April 2008, the FASB issued FASB StaffPosition FAS 142-3 (“FSP 142-3”), which amends the list of factors an entityshould consider in determining the useful life of recognized intangible assetsunder FASB Statement 142.  FSP 142-3 willbe effective for our fiscal year beginning October 1, 2009.  We are currently evaluating the expectedimpact, if any, that FSP 142-3 will have on our consolidated financialstatements.

 

In April 2009, FASB issued FSP No. 107-1/APB28-1, *Interim Disclosures about Fair Value of FinancialInstrument*(FSP 107-1).  FSP107-1 states that entities shall include disclosures about the fair value of financialinstruments whenever it issues summarized financial information for interimreporting periods.  Entities shalldisclose in the body or in the accompanying notes of its summarized financialinformation the fair value of all financial instruments for which it ispracticable to estimate that value, whether recognized or not recognized in thestatement of financial position, as required by Statement 107.  FSP 107-1 was effective for our fiscalquarter ending June 30, 2009.  Theimplementation of FSP 107-1 did not have a material effect on our consolidatedfinancial statements.

 

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In May 2009, the FASB issued SFAS No. 165, *Subsequent Events* (“SFAS 165”), which provides guidance toestablish general standards of accounting for and disclosures of events thatoccur after the balance sheet date but before financial statements are issuedor are available to be issued. SFAS 165 requires entities to disclose the datethrough which subsequent events were evaluated as well as the rationale for whythat date was selected, that is, whether that date represents the date thefinancial statements were issued or were available to be issued. SFAS 165 waseffective for our fiscal quarter ending June 30, 2009.  The adoption of SFAS 165 did not have amaterial impact on our consolidated financial statements.

 

In June 2009, the FASB issued Statement No. 168,*The FASB Accounting Standards Codification and theHierarchy of Generally Accepted Accounting Principles* (“SFAS 168”).  SFAS 168 will become the single source ofauthoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”),superseding existing FASB, American Institute of Certified Public Accountants,Emerging Issues Task Force, and related accounting literature.  SFAS 168 reorganizes the thousands of GAAPpronouncements into roughly 90 accounting topics and displays them using aconsistent structure.  Also included isrelevant Securities and Exchange Commission guidance organized using the sametopical structure in separate sections. SFAS 168 is effective for our fiscal year ending September 30, 2009.  This will have an impact on the Company’sfinancial statements since all future references to authoritative accountingliterature will be references in accordance with SFAS 168.

 

**NOTE3**—**BUSINESS ACQUISITION**

 

InJuly 2008, we acquired substantially all of the assets of AAHA ServicesCorporation, operating as AAHA MARKETLink (“AAHA MARKETLink”) for approximately$8,676, net of cash acquired of $1,320 (including direct acquisition costs ofapproximately $212).  The purchase price of$8,676 was reduced by $117 during the nine months ended June 30, 2009 aftera post-closing working capital adjustment. Based near Denver, Colorado, AAHA MARKETLink was a distributor of animalhealth products to members of the American Animal Hospital Association.

 

**NOTE4**—**RECEIVABLES**

 
| ** **                       | ** ** | **June 30,** | ** ** | **September 30,** | ** ** |
|----------------------------------|------------|-------------------|------------|------------------------|------------|
| ** **                       | ** ** | **2009**          | ** ** | **2008**               | ** ** |
| Trade                            |       | $                 | 120,869    |                   | $          | 118,228 |   |
| Vendor rebates and  programs     |       | 10,372            |       | 11,200                 |       |
| Related party                    |       | 1,919             |       | 14                     |       |
|                             |       | 133,160           |       | 129,442                |       |
| Allowance for doubtful  accounts |       | (2,436            | )          | (878                   | )          |
|                             |       | $                 | 130,724    |                   | $          | 128,564 |   |

 

Product sales resultingfrom transactions with a single customer were approximately 12% and 10% oftotal product sales during the three and nine months ended June 30, 2009,respectively, and approximately 11% and 10% of total products sales during thethree and nine months ended June 30, 2008, respectively. Approximately 13%and 10% of our trade receivables resulted from transactions with this singlecustomer as of June 30, 2009 and September 30, 2008, respectively.

 

**NOTE5**—**PROPERTY AND EQUIPMENT**

 
| ** **                          | ** ** | **June 30,** | ** ** | **September 30,** | ** ** |
|-------------------------------------|------------|-------------------|------------|------------------------|------------|
| ** **                          | ** ** | **2009**          | ** ** | **2008**               | ** ** |
| Land                                |       | $                 | 20         |                   | $          | 20 |   |
| Leasehold improvements              |       | 3,548             |       | 3,094                  |       |
| Machinery, furniture  and equipment |       | 12,715            |       | 11,587                 |       |
| Computer equipment                  |       | 3,271             |       | 3,428                  |       |
| Construction in  progress           |       | 222               |       | 1,626                  |       |
|                                |       | 19,776            |       | 19,755                 |       |
| Accumulated  depreciation           |       | (10,958           | )          | (10,068                | )          |
|                                |       | $                 | 8,818      |                   | $          | 9,687 |   |

 

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Depreciation expense was$640 and $601 for the three months ended June 30, 2009 and 2008,respectively.  Depreciation expense was $1,931and $1,819 for the nine months ended June 30, 2009 and 2008, respectively.

 

**NOTE6**—**INTANGIBLES**

 
| ** **                | ** ** | ** **       | ** ** | **June 30,** | ** ** | **September 30,** | ** ** |
|---------------------------|------------|------------------|------------|-------------------|------------|------------------------|------------|
| ** **                | ** ** | **Useful Lives** | ** ** | **2009**          | ** ** | **2008**               | ** ** |
| Amortizing:               |       |             |       |              |       |                   |       |
| Customer relationships    |       | 9-20 years       |       | $                 | 9,076      |                   | $          | 9,076 |   |
| Covenants not to  compete |       | 1-5 years        |       | 686               |       | 686                    |       |
| Other                     |       | 3-5 years        |       | 257               |       | 257                    |       |
|                      |       |             |       | 10,019            |       | 10,019                 |       |
| Accumulated  amortization |       |             |       | (1,970            | )          | (1,346                 | )          |
|                      |       |             |       | 8,049             |       | 8,673                  |       |
| Non-Amortizing:           |       |             |       |              |       |                   |       |
| Trade names and patents   |       |             |       | 2,352             |       | 2,272                  |       |
|                      |       |             |       | $                 | 10,401     |                   | $          | 10,945 |   |

 

Amortization expense was$207 and $159 for the three months ended June 30, 2009 and 2008,respectively.  Amortization expense was $624and $440 for the nine months ended June 30, 2009 and 2008,respectively.  Estimated future annualamortization expense related to intangible assets as of June 30, 2009follows:

 
| ** **         | ** ** | **Amount** | ** ** |
|--------------------|------------|------------|------------|
| Remainder  of 2009 |       | $          | 205        |   |
| 2010               |       | 803        |       |
| 2011               |       | 786        |       |
| 2012               |       | 760        |       |
| 2013               |       | 675        |       |
| Thereafter         |       | 4,820      |       |
|               |       | $          | 8,049      |   |

 

**NOTE7**—**CREDIT FACILITY AND LONG-TERM DEBT**

 

**Line-of-Credit**—On December 13, 2006, MWI VeterinarySupply Co., our wholly-owned subsidiary (“MWI Co.”) as borrower, entered intoan unsecured credit agreement with us and Memorial Pet Care, Inc. (ourwholly-owned subsidiary), as guarantors, and Bank of America, N.A. and WellsFargo Bank, N.A., (collectively, the “lenders”) for the provision of arevolving credit facility (the “facility”). The facility allows for borrowings in the aggregate of $70,000, with theright to request an increase in the commitment of the lenders to $100,000.  The facility has a maturity date of December 1,2011 and a variable interest rate equal to the Daily LIBOR Floating Rate or theLIBOR 1-month fixed rate plus a margin ranging from 0.7% to 1.25% or the PrimeRate (at our option).  The lenders alsoreceive an unused line fee and letter of credit fee equal to 0.125% of theunused amount of the facility. Our outstanding balance on the facility at eachof June 30, 2009 and September 30, 2008 was $0, and the interest ratefor the facility was 1.0% as of June 30, 2009.

 

The facility containscertain financial covenants as well as other restrictive covenants. As of June 30,2009, we were in compliance with all covenants in the facility.  The facility allows for the issuance of up to$10,000 in letters of credit. The letters of credit would typically act as aguarantee of payment to certain third-parties in accordance with specifiedterms and conditions. We had no letters of credit at June 30, 2009 and fourletters of credit totaling $400 at September 30, 2008. There were nooutstanding borrowings on these letters of credit at either June 30, 2009or September 30, 2008.

 

**Long-TermDebt**—In January 2005,we issued a promissory note in the aggregate principal amount of $487 inpartial consideration for the purchase of substantially all the assets of VetpoDistributors, Inc. The note bears interest at the prime rate (3.25% at June 30,2009), payable quarterly. The principal of the note is payable in five equalannual installments, the first of which was due on January 1, 2006.  The balance on this promissory note was $97and $194 at June 30, 2009 and September 30, 2008, respectively.

 

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**NOTE8**—**COMMON STOCK AND STOCK-BASED AWARDS**

 

We have two stock-basedaward plans: the 2002 Stock Option Plan and the Amended and Restated 2005Stock-Based Incentive Compensation Plan (the “2005 Plan”).  The 2002 Plan allows our Board of Directorsto grant common stock options to directors, executives and other key employees,however no options have been issued under this plan since June 2002.  The 2005 Plan allows our Board of Directorsto grant common stock options, restricted stock, deferred units and otherstock-based awards to directors, executives and other key employees.  These plans have been developed to provideadditional incentives by allowing equity ownership in our Company and, as aresult, encouraging participants to contribute to our success.  At June 30, 2009, 404,076 options topurchase common stock were outstanding (347,668 options were vested andexercisable) with a weighted average exercise price of $2.93 and expiringthrough September 2015.

 

We granted no commonstock options during each of the three and nine months ended June 30, 2009and 2008.  During the three months ended June 30,2009 and 2008, we issued 0 and 1,000 shares of restricted stock under the 2005Plan, respectively, which vest ratably over five years.  During the nine months ended June 30,2009 and 2008, we issued 0 and 5,000 shares of restricted stock under the 2005Plan, respectively, which vest ratably over five years.  During the three months ended June 30,2009 and 2008, we recognized $86 and $32 of compensation expense related to restrictedstock grants, respectively.  During the ninemonths ended June 30, 2009 and 2008, we recognized $265 and $94 ofcompensation expense related to restricted stock grants, respectively.  At June 30, 2009, 1,483,624 shares wereavailable to be issued under our stock-based award plans.

 

We also have an employeestock purchase plan (“ESPP”) that allows substantially all employees topurchase shares of our common stock at 95% of the fair market value on the dateof purchase.  The purchase date is thelast trading date of the purchase period, which begins in March, June, September andDecember.  Employees accumulate amountsthrough payroll deductions during the purchase period of between 1% and 10% butno more than $20,000 annually.  Anemployee is allowed to purchase a maximum of 200 shares per purchaseperiod.  During the three and nine monthsended June 30, 2009, we issued 2,211 and 7,537 shares, respectively, ofour common stock under the ESPP.  At June 30,2009, there were 490,892 shares available to be issued under the ESPP.

 

**NOTE 9**—**INCOME TAXES**

 

Oureffective tax rate for the three months ended June 30, 2009 and 2008 was 39.9%and 38.8%, respectively.  The change inour effective tax rate is due to a change in our estimates related to statetaxes.  Our effective tax rate for the ninemonths ended June 30, 2009 and 2008 was 39.3% and 39.5%, respectively.

 

Asof June 30, 2009, we had $226 of unrecognized tax benefits, of which $27 wouldimpact our effective rate if recognized. Our policy for classifying interestand penalties associated with unrecognized tax benefits is to include suchitems in income tax expense.  The amountof interest and penalties recognized during the three and nine months ended June 30,2009 was not material.

 

Wefiled Form 3115 Application of Change in Accounting Method with theInternal Revenue Service during the fiscal year ended September 30,2008.  We filed an advance consentrequest for a non-automatic account method change for tax purposes for which wehad not received approval prior to our reporting period end.  The method change will make revenuerecognition for tax purposes the same as revenue recognized for book purposes.We expect resolution within the next twelve months which would decrease theliability for unrecognized tax benefits by approximately $185.

 

Additionally,we are in the process of entering into voluntary disclosure agreements withcertain state jurisdictions and it is possible that these matters may besettled within the next twelve months, which would decrease the liability for unrecognizedtax benefits by approximately $41 as a result of the payment of additional taxexpected to be due. Settlement of any particular position would usually requirethe use of cash.  The resolution of amatter would be recognized as an adjustment to our income tax expense and oureffective tax rate in the period of resolution. With few exceptions, we are no longer subject to income tax examinationfor years before 2004 in the U.S. and significant state and local jurisdictions.

 

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## **NOTE 10 — COMPUTATION OF EARNINGS PER SHARE***(In thousands, except per share data)*

 
| ** **                                                       | ** ** | **Three months ended June 30,** | ** ** |
|------------------------------------------------------------------|------------|--------------------------------------|------------|
| ** **                                                       | ** ** | **2009**                             | ** ** | **2008** | ** ** |
| ** **                                                       | ** ** | **Basic**                            | ** ** | **Diluted** | ** ** | **Basic** | ** ** | **Diluted** | ** ** |
| Net income                                                       |       | $                                    | 6,616      |   | $ | 6,616 |   | $ | 5,418 |   | $ | 5,418 |   |
| Weighted average common  shares outstanding                      |       | 12,079                               |       | 12,079 |   | 12,051 |   | 12,051 |   |
| Effect of diluted  securities Stock options and restricted stock |       |                                 |       | 224 |   |   |   | 247 |   |
| Weighted average  diluted shares outstanding                     |       |                                 |       | 12,303 |   |   |   | 12,298 |   |
| Earnings per share                                               |       | $                                    | 0.55       |   | $ | 0.54 |   | $ | 0.45 |   | $ | 0.44 |   |
| Anti-dilutive shares excluded  from calculation                  |       |                                 |       | — |   |   |   | — |   |

 
| ** **                                                       | ** ** | **Nine months ended June 30,** | ** ** |
|------------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                       | ** ** | **2009**                            | ** ** | **2008** | ** ** |
|                                                             | ** ** | **Basic**                           | ** ** | **Diluted** | ** ** | **Basic** | ** ** | **Diluted** | ** ** |
| Net income                                                       |       | $                                   | 18,352     |   | $ | 18,352 |   | $ | 14,496 |   | $ | 14,496 |   |
| Weighted average common  shares outstanding                      |       | 12,075                              |       | 12,075 |   | 12,049 |   | 12,049 |   |
| Effect of diluted  securities Stock options and restricted stock |       |                                |       | 223 |   |   |   | 248 |   |
| Weighted average  diluted shares outstanding                     |       |                                |       | 12,298 |   |   |   | 12,297 |   |
| Earnings per share                                               |       | $                                   | 1.52       |   | $ | 1.49 |   | $ | 1.20 |   | $ | 1.18 |   |
| Anti-dilutive shares excluded  from calculation                  |       |                                |       | — |   |   |   | — |   |

 

**NOTE 11**—**RELATED PARTIES**

 

MWI Co. holds a50.0% membership interest in Feeders’ Advantage.  MWI Co. charged Feeders’ Advantage forcertain operating and administrative services in the amounts of $189 and $126for the three months ended June 30, 2009 and 2008, respectively, and $562and $412 for the nine months ended June 30, 2009 and 2008, respectively.  Sales of products to Feeders’ Advantage were$12,075 and $8,688 for the three months ended June 30, 2009 and 2008,respectively, which represented 5% and 4% of total product sales during thethree months ended June 30, 2009 and 2008, respectively.  Sales of products to Feeders’ Advantage were$35,542 and $28,726 for the nine months ended June 30, 2009 and 2008,respectively, which represented 5% of total product sales during both of the ninemonths ended June 30, 2009 and 2008.

 

MWI Co. providesFeeders’ Advantage with a line-of-credit to finance its day-to-day operations.This line-of-credit bears interest at the prime rate. The interest due on theline-of-credit is calculated and charged to Feeders’ Advantage on the last dayof each month. Conversely, to the extent MWI Co. has a payable balance due toFeeders’ Advantage, the payable balance accrues interest in favor of Feeders’Advantage at the average federal funds rates in effect for that month. As of June 30,2009, MWI Co. had a receivable balance from Feeders’ Advantage of $1,919, and asof September 30, 2008, MWI Co. had a payable balance to Feeders’ Advantageof $429.

 

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**NOTE 12 — STATEMENTS OF CASH FLOWS — SUPPLEMENTAL ANDNON-CASH DISCLOSURES**

 
| ** **                                             | ** ** | **Nine months ended June 30,** | ** ** |
|--------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                             | ** ** | **2009**                            | ** ** | **2008** | ** ** |
| *Supplemental  Disclosures*                            |       |                                |       |   |   |
| Cash paid for interest                                 |       | $                                   | 149        |   | $ | 161 |   |
| Cash paid for income  taxes                            |       | 11,300                              |       | 9,382 |   |
| *Non-cash  Activities*                                 |       |                                |       |   |   |
| Equipment acquisitions  financed with accounts payable |       | 21                                  |       | 50 |   |
|                                                        |            |                                     |            |  |  |  |  |

 

**NOTE 13**—**COMMITMENTS AND CONTINGENCIES**

 

## Fromtime to time, in the normal course of business, we may become a party to legalproceedings that may have an adverse effect on our financial position, resultsof operations and cash flows. At June 30, 2009, we were not a party to anymaterial pending legal proceedings and were not aware of any claims that couldhave a material adverse effect on our financial position, results of operationsor cash flows.

 

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**REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board of Directorsand Stockholders of

MWI Veterinary Supply, Inc.

Meridian, ID

 

We have reviewed theaccompanying condensed consolidated balance sheet of MWI Veterinary Supply, Inc.and subsidiaries (the “Corporation”) as of June 30, 2009, and the relatedcondensed consolidated statements of income for the three-month and nine-monthperiods ended June 30, 2009 and 2008, and of cash flows for the nine-monthperiods ended June 30, 2009 and 2008. These interim financial statements are the responsibility of theCorporation’s management.

 

We conducted our reviewsin accordance with the standards of the Public Company Accounting OversightBoard (United States).  A review ofinterim financial information consists principally of applying analyticalprocedures and making inquiries of persons responsible for financial and accountingmatters.  It is substantially less inscope than an audit conducted in accordance with the standards of the PublicCompany Accounting Oversight Board (United States), the objective of which isthe expression of an opinion regarding the financial statements taken as awhole.  Accordingly, we do not expresssuch an opinion.

 

Based on our reviews, weare not aware of any material modifications that should be made to suchcondensed consolidated interim financial statements for them to be inconformity with accounting principles generally accepted in the United Statesof America.

 

We have previouslyaudited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the consolidated balance sheet of MWIVeterinary Supply, Inc. and subsidiaries as of September 30, 2008 andthe related consolidated statements of income, stockholders’ equity, and cashflows for the year then ended (not presented herein); and in our report dated November 21,2008, we expressed an unqualified opinion on those consolidated financialstatements. In our opinion, the information set forth in the accompanyingcondensed consolidated balance sheet as of September 30, 2008 is fairlystated, in all material respects, in relation to the consolidated balance sheetfrom which it has been derived.

 

 

/s/ DELOITTE &TOUCHE LLP

Boise, ID

July 30, 2009

 

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**Item 2.    Management’s Discussion and Analysis ofFinancial Condition and Results of Operations**

 

*Alldollar amounts are presented in thousands, except for per share amounts.*

 

**Overview**

 

Weare a leading distributor of animal health products to veterinarians across theUnited States.  We distribute more than 30,000products sourced from over 500 vendors to approximately 19,000 veterinarypractices nationwide.  We currently operateout of twelve strategically located distribution centers.  Products we sell include pharmaceuticals,vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinarypet food and nutritional products.  Wemarket these products to veterinarians in both the companion animal andproduction animal markets. We operate within a single reporting segment and areprimarily located within the United States.

 

OurDallas, Texas distribution center moved from a 35,000 square foot facility to a70,000 square foot facility in November 2008.  In January 2009, we consolidated ourdistribution center in San Antonio, Texas into our Dallas, Texas distributioncenter.

 

Historically,we estimate that approximately two-thirds of our total revenues have beengenerated from sales to the companion animal market and one-third from sales tothe production animal market. The state of the overall economy and consumerspending have impacted both markets, while volatile commodity prices in milk, grain,corn and feeder cattle and changes in weather patterns have also affected demandin the production animal market.  Bothmarkets have been integral to our financial results and we intend to continuesupporting both markets.

 

Webelieve that growth in the companion animal market has slowed recently as aresult of a decrease in consumer spending and a general slowdown in the economy.  Historically, growth in the companion animal markethas been due to the increasing number of households with companion animals,increased expenditures on animal health and preventative care, an aging petpopulation, advancements in pharmaceuticals and diagnostic testing and extensivemarketing programs sponsored by companion animal nutrition and pharmaceuticalcompanies. While the average order size for companion animal health products isoften smaller than production animal health products, companion animal healthproducts typically have higher margins. We intend to continue to penetrate thismarket through internal growth initiatives and selective acquisitions.

 

Productsales in the production animal market have been negatively impacted byincreasing volatility in commodity prices such as milk, corn, grain and feedercattle, changes in weather patterns that allow cattle to graze for longerperiods and changes in the general economy. We intend to continue to support production animal veterinarians with abroad range of products and value added services. Historically, sales in thismarket have been largely driven by spending on animal health products toimprove productivity, weight gain and disease prevention, as well as a growingfocus on food safety.

 

Ourquarterly sales and operating results have varied significantly in the past,and will likely continue to do so in the future. Historically, our totalrevenues have typically been higher during the spring and fall months due toincreased sales of production animal products. Product use cycles forproduction animal products are directly related to medical procedures performedby veterinarians on production animals during the spring and fall months. Thesebuying patterns can also be affected by vendors’ and distributors’ marketing programslaunched during the summer months, particularly in June, which can causeveterinarians to purchase production animal health products earlier than thoseproducts are needed. This kind of early purchasing may reduce our sales in themonths these purchases would have otherwise been made.

 

*Sales*

 

Wesell products that we source from our vendors to our customers through either a“buy/sell” transaction or an agency relationship with our vendors. In a “buy/sell”transaction, we purchase or take inventory of products from our vendors. When acustomer places an order, we pick, pack and ship products, and then invoice thecustomer for the order. We record sales from “buy/sell” transactions, whichaccount for the majority of our business, as revenue in conformity withaccounting principles generally accepted in the United States. In an agencyrelationship, we generally do not purchase and take inventory of products fromvendors. When we receive an order from a customer, we transmit the order to thevendor, who picks, packs and ships the order to our customer. In some cases,the vendor invoices and collects payment from the customer, while in othercases we invoice and collect payment from the customer on behalf of the vendor.We receive a commission payment for soliciting the order from the customer andfor providing other customer service activities. The aggregate revenue wereceive in agency transactions constitutes the “commissions” line item on ourstatement of income and is recorded in conformity with accounting principlesgenerally accepted in the United States. The vendor determines the method weuse to sell the products. Historically, vendors have occasionally switchedbetween the “buy/sell” and agency models for particular products in response tomarket conditions related to that particular product. A switch between modelscan impact our revenues, gross margin, gross margin percentage and operatingincome.

 

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Ourtop ten vendors supplied products that accounted for approximately 74% and 72% ofour revenues for the nine months ended June 30, 2009 and 2008,respectively, and 72% of our revenues for the fiscal year ended September 30,2008.  Pfizer supplied products thataccounted for approximately 24% and 23% of our revenues during the nine monthsended June 30, 2009 and 2008, respectively, and 23% of our revenues forour fiscal year ended September 30, 2008. Of the Pfizer supplied products, production animal products under alivestock agreement accounted for approximately 14% and 17% of our revenuesduring the nine months ended June 30, 2009 and 2008, respectively andapproximately 17% of our revenues for our fiscal year ended September 30,2008.  Fort Dodge supplied products thataccounted for approximately 11%  and 12% ofour revenues during the nine months ended June 30, 2009 and 2008,respectively, and 12% of our revenues for our fiscal year ended September 30,2008.  Intervet-Schering, a subsidiary ofSchering Plough Corporation (“Schering Plough”), supplied products thataccounted for approximately 11% and 9% of our revenues during the nine monthsended June 30, 2009 and 2008, respectively, and 9% of our revenues for ourfiscal year ended September 30, 2008. Merial Limited (“Merial”), a joint venture between Merck & Co., Inc.and Sanofi-Aventis S.A., supplies the majority of their products to us under anagency relationship.  Commission revenuegenerated from Merial products accounted for approximately 55% and 62% of totalcommission revenues for the nine months ended June 30, 2009 and 2008,respectively, and 60% of total commission revenues for our fiscal year ended September 30,2008.

 

OnJanuary 26, 2009, Pfizer and Wyeth announced that they had entered into a mergeragreement under which Pfizer will acquire all of the outstanding stock ofWyeth.  Pfizer and Fort Dodge, which is adivision of Wyeth, are our two largest vendors as measured by our revenues.  On March 9, 2009, Merck andSchering-Plough announced that they had entered into a merger agreement underwhich Merck will acquire all of the outstanding stock of Schering-Plough.

 

*Vendor Rebates*

 

We typically renegotiate vendor contractsannually.  These vendor contracts mayinclude terms defining rebates, commissions and exclusivity requirements.Vendor rebates based on sales are classified in our accompanying consolidatedstatements of income as a reduction to cost of product sales at the time thesales performance measures are achieved. Purchase rebates are measured against inventory purchases from thevendors and are a reduction of inventory until the product is sold.  When the inventory is sold, purchase rebatesare recognized as a reduction to cost of product sales. Many of our vendors’rebate programs are based on a calendar year.

 

On December 12, 2008, we entered into a 2009Livestock Products Distribution Agreement (the “Agreement”) with Pfizer, Inc.which was effective January 1, 2009. Under the Agreement, MWI is entitled to distribute Pfizer’s livestockproducts to customers in the livestock field. The Agreement allows for a reduced fee for logistics and has eliminatedincentive fees and rebates compared to the 2008 Livestock Products Agreement.  MWI is required to maintain sufficientinventory levels to meet customer demand and to store products in accordancewith their respective label instructions. The Agreement expires on December 31, 2009 and may be terminated byeither party with or without cause upon 30 days prior written notice.

 

*Acquisitions*

 

InJuly 2008, we acquired substantially all of the assets of AAHAMARKETLink.  Based near Denver, Colorado,AAHA MARKETLink was a distributor of animal health products to members ofAmerican Animal Hospital Association.

 

For more information onour business, see our Annual Report on Form 10-K filed with the SEC on November 24,2008.

 

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**Results of Operations**

 

Thefollowing table summarizes our results of operations for the three and nine monthsended June 30, 2009 and 2008, in dollars and as a percentage of totalrevenues.

 
| ** **                                                  | ** ** | **Three  Months Ended June 30,** | ** ** | **Nine  Months Ended June 30,** | ** ** |
|-------------------------------------------------------------|------------|---------------------------------------|------------|--------------------------------------|------------|
| ** **                                                  | ** ** | **2009**                              | ** ** | **%**                                | ** ** | **2008** | ** ** | **%** | ** ** | **2009** | ** ** | **%** | ** ** | **2008** | ** ** | **%** | ** ** |
| Revenues:                                                   |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Product sales                                               |       | $                                     | 231,743    |                                 | 93.6       | % | $ | 196,325 |   | 94.2 | % | $ | 647,979 |   | 93.4 | % | $ | 568,089 |   | 93.7 | % |
| Product sales to related  party                             |       | 12,075                                |       | 4.9                                  | %          | 8,689 |   | 4.2 | % | 35,542 |   | 5.1 | % | 28,728 |   | 4.7 | % |
| Commissions                                                 |       | 3,645                                 |       | 1.5                                  | %          | 3,263 |   | 1.6 | % | 10,273 |   | 1.5 | % | 9,781 |   | 1.6 | % |
| Total revenues                                              |       | 247,463                               |       | 100.0                                | %          | 208,277 |   | 100.0 | % | 693,794 |   | 100.0 | % | 606,598 |   | 100.0 | % |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of product sales                                       |       | 212,980                               |       | 86.1                                 | %          | 177,970 |   | 85.4 | % | 594,022 |   | 85.6 | % | 518,238 |   | 85.4 | % |
| Gross profit                                                |       | 34,483                                |       | 13.9                                 | %          | 30,307 |   | 14.6 | % | 99,772 |   | 14.4 | % | 88,360 |   | 14.6 | % |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative  expenses               |       | 22,748                                |       | 9.2                                  | %          | 20,802 |   | 10.0 | % | 67,379 |   | 9.7 | % | 62,515 |   | 10.3 | % |
| Depreciation and  amortization                              |       | 844                                   |       | 0.3                                  | %          | 757 |   | 0.4 | % | 2,546 |   | 0.4 | % | 2,250 |   | 0.4 | % |
| Operating income                                            |       | 10,891                                |       | 4.4                                  | %          | 8,748 |   | 4.2 | % | 29,847 |   | 4.3 | % | 23,595 |   | 3.9 | % |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                     |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                            |       | (63                                   | )          | 0.0                                  | %          | (53 | ) | 0.0 | % | (202 | ) | 0.0 | % | (218 | ) | 0.0 | % |
| Earnings of equity  method investees                        |       | 53                                    |       | 0.0                                  | %          | 37 |   | 0.0 | % | 174 |   | 0.0 | % | 129 |   | 0.0 | % |
| Other                                                       |       | 130                                   |       | 0.1                                  | %          | 115 |   | 0.0 | % | 406 |   | 0.0 | % | 467 |   | 0.1 | % |
| Total other income  (expense), net                          |       | 120                                   |       | 0.1                                  | %          | 99 |   | 0.0 | % | 378 |   | 0.0 | % | 378 |   | 0.1 | % |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before taxes                                         |       | 11,011                                |       | 4.5                                  | %          | 8,847 |   | 4.2 | % | 30,225 |   | 4.3 | % | 23,973 |   | 4.0 | % |
| Income tax expense                                          |       | (4,395                                | )          | -1.8                                 | %          | (3,429 | ) | -1.6 | % | (11,873 | ) | -1.7 | % | (9,477 | ) | -1.6 | % |
| Net income                                                  |       | $                                     | 6,616      |                                 | 2.7        | % | $ | 5,418 |   | 2.6 | % | $ | 18,352 |   | 2.6 | % | $ | 14,496 |   | 2.4 | % |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common  share:                                 |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                       |       | $                                     | 0.55       |                                 |       |   | $ | 0.45 |   |   |   | $ | 1.52 |   |   |   | $ | 1.20 |   |   |   |
| Diluted                                                     |       | $                                     | 0.54       |                                 |       |   | $ | 0.44 |   |   |   | $ | 1.49 |   |   |   | $ | 1.18 |   |   |   |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares  outstanding (in thousands): |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                       |       | 12,079                                |       |                                 |       | 12,051 |   |   |   | 12,075 |   |   |   | 12,049 |   |   |   |
| Diluted                                                     |       | 12,303                                |       |                                 |       | 12,298 |   |   |   | 12,298 |   |   |   | 12,297 |   |   |   |
|                                                        |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                 |       |                                  |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Product sales from  Internet as a percentage of sales       |       | 32                                    | %          |                                 |       | 28 | % |   |   | 30 | % |   |   | 26 | % |   |   |
| Field sales  representatives (at end of period)             |       | 187                                   |       |                                 |       | 177 |   |   |   | 187 |   |   |   | 177 |   |   |   |
| Telesales  representatives (at end of period)               |       | 137                                   |       |                                 |       | 134 |   |   |   | 137 |   |   |   | 134 |   |   |   |
| Fill rate (1)                                               |       | 98                                    | %          |                                 |       | 98 | % |   |   | 98 | % |   |   | 98 | % |   |   |

 

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(1)   Definedas, for any period, the dollar value of orders shipped the same day they wereplaced from any distribution center expressed as a percentage of the totaldollar value of the orders placed by customers in the period.

 

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**Three Months Ended June 30, 2009 Compared to ThreeMonths Ended June 30, 2008**

 

*Total Revenues*.  Total revenues increased 18.8% to $247,463 forthe three months ended June 30, 2009, from $208,277 for the three months endedJune 30, 2008.  Revenues from newand existing customers both represented approximately 50% of the growth intotal revenues during the three months ended June 30, 2009.  For the purpose of calculating growth ratesof new and existing customer revenue, we have defined a new customer as acustomer that did not purchase product from us in the corresponding fiscalquarter of the prior year, with the remaining customer base being consideredexisting customers.  Included in the newcustomer growth were approximately $3,678 of revenues attributable to newcustomers acquired as a result of the acquisition of substantially all of theassets of AAHA MARKETLink as of July 1, 2008.  Additionally, we had approximately $6,886 ofincremental revenues as a result of the acquisition of substantially all of theassets of AAHA MARKETLink from customers who had previously been purchasing productfrom both MWI and AAHA MARKETLink. Commissions on agency sales increased 11.7% to $3,645 for the threemonths ended June 30, 2009, from $3,263 for the three months ended June 30,2008.

 

*Gross Profit*.  Gross profit increased by 13.8% to $34,483 forthe three months ended June 30, 2009, from $30,307 for the three monthsended June 30, 2008.  Gross profitas a percentage of total revenues was 13.9% and 14.6% for the three monthsended June 30, 2009 and 2008, respectively. The decrease in gross profitas a percentage of total revenues was due to a decrease in vendor rebates,partially offset by an improvement in freight costs as a percentage of total revenues.  Vendor rebates for the three months ended June 30,2009 decreased by approximately $2,100 compared to the three months ended June 30,2008.  This decrease was primarily due tothe elimination of rebates under the Agreement with Pfizer compared to the 2008Livestock Products Agreement.

 

*Selling, General and Administrative (“SG&A”)*.  SG&A expenses increased 9.4% to $22,748 forthe three months ended June 30, 2009, from $20,802 for the three monthsended June 30, 2008.  SG&Aexpenses as a percentage of total revenues improved to 9.2% and 10.0% for thethree months ended June 30, 2009 and 2008, respectively, due to operatingleverage and cost-control measures. The dollar increase in SG&A expenseswas primarily due to increased compensation costs and an increase in ourallowance for doubtful accounts, partially offset by a decrease in travelexpenses.  Our sales headcount increasedby 13 employees as of June 30, 2009, compared to June 30, 2008 to 187field sales representatives and 137 telesales representatives.

 

*Depreciation and Amortization. *Depreciationand amortization expense increased 11.5% to $844 for the three months ended June 30,2009, from $757 for the three months ended June 30, 2008.  This increase was primarily the result of amortizationrelated to the acquisition of substantially all of the assets of AAHAMARKETLink.  Depreciation expense alsoincreased as a result of capital expenditures since June 30, 2008 relatedto improvements in our distribution centers and information technology systems.

 

*Income Tax Expense*.  Our effective tax rate for the three monthsended June 30, 2009 and 2008 was 39.9% and 38.8%, respectively.  The change in our effective tax rate is dueto a change in our estimates related to state taxes.

 

**Nine Months Ended June 30, 2009 Compared to Nine MonthsEnded June 30, 2008**

 

*Total Revenues*.  Total revenues increased 14.4% to $693,794for the nine months ended June 30, 2009, from $606,598 for the nine monthsended June 30, 2008.  Revenues fromnew and existing customers represented approximately 66% and 34%, respectively,of the growth in total revenues during the nine months ended June 30,2009.  Included in the new customergrowth were approximately $8,937 of revenues attributable to new customersacquired as a result of the acquisition of substantially all of the assets of AAHAMARKETLink as of July 1, 2008. Additionally, we had approximately $17,628 of incremental revenues as aresult of the acquisition of substantially all of the assets of AAHA MARKETLinkfrom customers who had previously been purchasing product from both MWI andAAHA MARKETLink.  Commissions on agencysales increased 5.0% to $10,273 for the nine months ended June 30, 2009,from $9,781 for the nine months ended June 30, 2008.

 

*Gross Profit*.  Gross profit increased by 12.9% to $99,772 forthe nine months ended June 30, 2009, from $88,360 for the nine monthsended June 30, 2008.  Gross profitas a percentage of total revenues was 14.4% and 14.6% for the nine months endedJune 30, 2009 and 2008, respectively. Gross profit as a percentage of totalrevenues was lower due to a decrease in vendor rebates partially offset by animprovement in freight costs as a percentage of total revenues. Vendor rebates decreasedby approximately $1,300 for the nine months ended June 30, 2009 comparedto the nine months ended June 30, 2008. This decrease was primarily due to the elimination of rebates under theAgreement with Pfizer compared to the 2008 Livestock Products Agreement.

 

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*Selling, General and Administrative*.  SG&A expenses increased 7.8% to $67,379 forthe nine months ended June 30, 2009, from $62,515 for the nine monthsended June 30, 2008.  SG&Aexpenses as a percentage of total revenues were 9.7% and 10.3% for the ninemonths ended June 30, 2009 and 2008, respectively, due to operatingleverage and cost-control measures. The dollar increase in SG&A expenses wasprimarily due to increased compensation costs and an increase in our allowancefor doubtful accounts.

 

*Depreciation and Amortization. *Depreciationand amortization expense increased 13.2% to $2,546 for the nine months ended June 30,2009, from $2,250 for the nine months ended June 30, 2008.  This increase was primarily the result ofamortization related to the acquisition of substantially all of the assets ofAAHA MARKETLink.  Depreciation expensealso increased as a result of capital expenditures since June 30, 2008related to improvements in our distribution centers and information technologysystems.

 

*Income Tax Expense*.  Our effective tax rate for the nine monthsended June 30, 2009 and 2008 was 39.3% and 39.5%, respectively.

 

**Critical Accounting Policies**

 

Thepreparation of financial statements requires management to make estimates andjudgments that affect the reported amounts of assets, liabilities, revenues andexpenses and related disclosure of contingent assets and liabilities.  The accompanying condensed consolidatedfinancial statements are prepared using the same critical accounting policiesdiscussed in our Annual Report on Form 10-K filed with the SEC on November 24,2008.

 

**Liquidity and Capital Resources**

 

Ourprincipal sources of liquidity are cash flows generated from operations andborrowings on our revolving credit facility under our credit agreement. We usecapital primarily to fund day-to-day operations and to maintain sufficientinventory levels in order to promptly fulfill customer orders and to expand ouroperations and sales growth. We believe our capital resources, including ourability to borrow funds from our revolving credit facility, will be sufficientto meet our anticipated cash needs for at least the next twelve months.  Bank of America, N.A. and Wells Fargo, N.A.are the lenders under our revolving credit facility.  The revolving credit facility allows forborrowings in the aggregate of $70,000, with the right to request an increasein the commitment to $100,000. The facility has a maturity date of December 1,2011 and a variable interest rate equal to the Daily LIBOR Floating Rate or theLIBOR 1-month fixed rate plus a margin ranging from 0.7% to 1.25% or the PrimeRate (at our option).  The lenders alsoreceive an unused line fee and letter of credit fee equal to 0.125% of theunused amount of the facility. Our outstanding balance on the facility at June 30,2009 was $0, and the interest rate for the facility was 1.0% as of June 30,2009.

 

The facility allows forthe issuance of up to $10,000 in letters of credit. The letters of credittypically act as guarantees of payment to certain third parties in accordancewith specified terms and conditions. We had no letters of credit at June 30,2009 and four letters of credit totaling $400 at September 30, 2008. Therewere no outstanding borrowings on these letters of credit at either June 30,2009 or September 30, 2008.

 

Ourlenders may have suffered losses related to their lending and other financialrelationships, especially because of the general weakening of the nationaleconomy and increased financial instability of many borrowers.  As a result, the lenders may become insolventor tighten their lending standards, which could make it more difficult for usto borrow under our revolving credit facility, extend the terms of ourrevolving credit facility or obtain alternative financing on favorable terms orat all.  Our financial condition andresults of operations could be adversely affected if we were unable to drawfunds under our revolving credit facility because of a lender default or if wefail to obtain other cost-effective financing.

 

Wegenerally extend some level of credit to our customers. If customers’ cash flowor operating and financial performance deteriorates, or if they are unable tomake scheduled payments or obtain other sources of credit, they may not be ableto pay or may delay payment to us, or in some cases may return products to us.Any inability of current and/or potential customers to pay us for our products and/orservices due to their deteriorating financial condition or otherwise mayadversely affect our results of operations and financial condition.  Our allowance for doubtful accounts increased$1,558 to $2,436 as of June 30, 2009, compared to $878 as of September 30,2008.  This change was due to an increasein our bad debt expense of $2,132 offset by write-offs of $574.

 

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*OperatingActivities*.  For the nine months ended June 30, 2009,cash provided by operations was $2,847 and was primarily attributable to netincome of $18,352, partially offset an increase of receivables of $2,245 due torevenue growth partially offset by collection of receivables with extendedpayment terms that related to sales from prior periods, and a decrease inaccounts payable of $16,282 due primarily to the timing of payment to vendorsfor strategic inventory purchases.

 

For the nine months endedJune 30, 2008, cash provided by operations was $9,746 and was primarilyattributable to net income of $14,496, a decrease of receivables of $4,716 dueto collection of receivables with extended payment terms that were related tosales from prior periods, an increase in inventories of $24,300 due toinventory stocking of the Kansas City distribution center and opportunisticinventory purchases, and an increase in accounts payable of $12,223 due to theabove mentioned inventory purchases.

 

*InvestingActivities.*  For the nine months ended June 30, 2009,net cash used in investing activities was $1,527 and was primarily due tocapital expenditures of $1,649 related to distribution center infrastructure,including the relocation of the Dallas distribution center in November 2008and technology investments.

 

For the nine months endedJune 30, 2008, net cash used in investing activities was $5,708 and wasprimarily due to the acquisition of Tri V for $4,598 coupled with capitalexpenditures of $1,460, primarily related to distribution center infrastructureand technology.

 

*Financing Activities.*  For the nine months ended June 30, 2009, net cashprovided by financing activities was $331, which was primarily due to commonstock issued under our employee stock purchase plan and the tax benefit of fromstock option exercises.

 

For the nine months endedJune 30, 2008, net cash provided by financing activities was $127, whichwas due to the proceeds and tax benefit of stock option exercises of $224offset by a payment on our long-term debt of $97.

 

**Contractual Obligations and Guarantees**

 

For information on our contractualobligations and guarantees, see our Annual Report on Form 10-K filed on November 24,2008 with the SEC. During the three and nine months ended June 30, 2009there were no material changes to the contractual and other long-term obligationsreported in our Form 10-K on November 24, 2008, except as follows:

 

The total liability for certain taxpositions decreased by $264 to $244 at June 30, 2009 due to resolution ofcertain tax liabilities.  We expect resolutionof these tax positions to be finalized in the next twelve months.

 

**Item3.  Quantitative and QualitativeDisclosures About Market Risk**

 

TheCompany is exposed to market risks primarily from changes in interest rates inthe United States. The Company does not engage in financial transactions fortrading or speculative purposes.

 

Theinterest payable on our revolving credit facility is based on variable interestrates and is therefore affected by changes in market interest rates. Theoutstanding balance on the facility as of June 30, 2009 was $0.  Therefore, there was no exposure to marketrisks as of that date.  If there had beena balance on the facility of $70,000, which is the maximum available amount onthe facility, a change of 10% from the interest rate as of June 30, 2009,which was 1.0% (Daily LIBOR Floating Rate plus .70%), would have changedinterest by $70.

 

**Item4.  Controls and Procedures**

 

Managementof the Company, including the Chief Executive Officer and the Chief FinancialOfficer of the Company, has evaluated the effectiveness of the Company’sdisclosure controls and procedures (as defined in Rule 13a-15(e) ofthe Securities Exchange Act of 1934) as of June 30, 2009.  Based on this evaluation, the Chief ExecutiveOfficer and Chief Financial Officer concluded that the Company’s disclosurecontrols and procedures, including the accumulation and communication ofdisclosures to the Company’s Chief Executive Officer and Chief Financial Officeras appropriate to allow timely decisions regarding required disclosure, areeffective to provide reasonable assurance that information required to bedisclosed by the Company in the reports that it files or submits under theSecurities Exchange Act of 1934 is recorded, processed, summarized and reportedwithin the time periods specified by the SEC’s rules and forms.

 

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There were no changes inthe Company’s internal control over financial reporting that occurred duringthe Company’s most recently completed fiscal quarter that have materiallyaffected, or are reasonably likely to materially affect, the Company’s internalcontrol over financial reporting.

 

**PART II. OTHER INFORMATION**

 

**CautionaryStatement for Purposes of “Safe HarborProvisions” of the Private Securities Litigation Reform Act of 1995**** ***This quarterly report on Form 10-Q containsforward-looking statements within the meaning of the federal securities laws.Statements that are not historical facts, including statements about ourbeliefs and expectations, are forward-looking statements. Forward-lookingstatements include statements preceded by, followed by or that include thewords “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,”“estimate,” “target,” “project,” “intend” and similar expressions. Thesestatements include, among others, statements regarding our expected business outlook,anticipated financial and operating results, our business strategy and means toimplement our strategy, our objectives, the amount and timing of capitalexpenditures, the amount and timing of interest expense, the likelihood of oursuccess in expanding our business, financing plans, budgets, working capitalneeds and sources of liquidity.*

 

*Forward-looking statements are only predictions and are notguarantees of our performance. These statements are based on our management’sbeliefs and assumptions, which in turn are based on currently availableinformation. Important assumptions relating to the forward-looking statementsinclude, among others, assumptions regarding demand for our products, theexpansion of product offerings geographically or through new applications, thetiming and cost of planned capital expenditures, competitive conditions andgeneral economic conditions. These assumptions could prove inaccurate.Forward-looking statements also involve known and unknown risks anduncertainties, which could cause actual results that differ materially fromthose contained in any forward-looking statement. Many of these factors arebeyond our ability to control or predict. Such factors include, but are notlimited to, the following:*

 

·                  *vendor rebates based upon attaining certain growth goals;*

 

·                  *changes in or availability of vendor rebate programs;*

 

·                  *the impact of vendor consolidation on our business;*

 

·                  *changes in the way vendors introduce products to market;*

 

·                  *exclusivity requirements with certain vendors that mayprohibit us from distributing competing products manufactured by other vendors;*

 

·                  *the impact of general economic trends on our business;*

 

·                  *the recall of a significant product by one of our vendors;*

 

·                  *extended shortage or backlog of a significant product by oneof our vendors;*

 

·                  *seasonality;*

 

·                  *the timing and effectiveness of marketing programs offeredby our vendors;*

 

·                  *the timing of the introduction of new products and servicesby our vendors;*

 

·                  *the ability to borrow on our credit line, extend the termsof our credit line**or obtain alternative financingon favorable terms or at all**;*

 

·                  *unforeseen litigation;*

 

·                  *a disruption caused by adverse weather or other naturalconditions;*

 

·                  *inability to ship products to the customer as a result oftechnological or shipping disruptions; and*

 

·                  *competition.*

 

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*Except as required by applicable law, including thesecurities laws of the United States and the rules and regulations of theSEC, we are under no obligation to publicly update or revise anyforward-looking statements, whether as a result of any new information, futureevents or otherwise. You should not place undue reliance on our forward-lookingstatements. Although we believe that the expectations reflected in theforward-looking statements are reasonable, we cannot guarantee future resultsor performance.*

 

*Investors should also be aware that while we do,from time to time, communicate with securities analysts, it is against ourpolicy to disclose any material non-public information or other confidentialcommercial information. Accordingly, stockholders should not assume that weagree with any statement or report issued by any analyst irrespective of thecontent of the statement or report. Furthermore, we have a policy againstissuing or confirming financial forecasts or projections issued by others.Thus, to the extent that reports issued by securities analysts contain anyprojections, forecasts or opinions, such reports are not the responsibility ofMWI Veterinary Supply, Inc.*

 

## **Item1.  Legal Proceedings**

##  

## We are not currently a partyto any material pending legal proceedings and are not aware of any claims thatcould have a material adverse effect on our financial position, results ofoperations or cash flows.

##  

## **Item1A.  Risk Factors**

##  

## Other than with respect tothe risk factors set forth below, there have been no material changes from therisk factors disclosed in the “Risk Factors” section of the Company’s AnnualReport on Form 10-K for the fiscal year ended September 30, 2008, asmodified by the risk factors disclosed in the “Risk Factors” section of theCompany’s Quarterly Reports on Form 10-Q for the three months ended December 31,2008 and March 31, 2009.

##  

## **Item2.  Unregistered Sales of EquitySecurities and Use of Proceeds**

##  

## The table below providesinformation concerning our repurchase of shares of our common stock during thethree months ended June 30, 2009.

 

**IssuerPurchases of Equity Securities**

 
| **Period**                                 | ** ** | **Total  Number of  Shares  Purchased** | ** ** | **Average  Price  Paid per  Share** | ** ** | **Total Number of  Shares  Purchased as  Part of Publicly  Announced Plans  or Programs** | ** ** | **Maximum Number  (or Approximate  Dollar Value) of  Shares that May Yet  Be Purchased Under  the Plans or  Programs** | ** ** |
|--------------------------------------------|------------|-----------------------------------------|------------|-------------------------------------|------------|------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------|------------|
| April 1,  2009 to April 30, 2009 |       | —                                  |       | —                              |       | —                                                                                         |       | —                                                                                                                      |       |
| May 1,  2009 to May 31, 2009     |       | —                                  |       | —                              |       | —                                                                                         |       | —                                                                                                                      |       |
| June 1,  2009 to June 30, 2009   |       | 79                                      | (1)        | $                                   | 33.13      |                                                                                           | —     |                                                                                                                        | —     |   |
| Total                                      |       | 79                                      | (1)        | $                                   | 33.13      |                                                                                           | —     |                                                                                                                        | —     |   |

 

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(1)   These shares were withheld upon the vesting ofemployee restricted stock grants in connection with payment of requiredwithholding taxes.

 

## **Item3.  Defaults Upon Senior Securities**

##  

None.

 

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## **Item4.  Submission of Matters to a Vote ofSecurity Holders**

##  

None.

 

## **Item5.  Other Information**

##  

None.

 

**Item 6. Exhibits**

 
| 15     |   | Letter re: Unaudited Interim Financial Information                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                               |
| 31.1   |   | Certification of CEO Pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002                                               |
|   |   |                                                                                                                               |
| 31.2   |   | Certification of CFO Pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002                                               |
|   |   |                                                                                                                               |
| 32     |   | Certification Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 |

 

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SIGNATURE

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

 
|                     | MWI Veterinary  Supply, Inc.                                               |
|--------------------------|---------------------------------------------------------------------------------|
|                     | (Registrant)                                                                    |
|                     |                                                                            |
|                     |                                                                            |
| Date: July 30, 2009 | /s/ Mary Patricia B. Thompson                                              |
|                     | Mary Patricia B. Thompson                                                       |
| * *                 | *Senior Vice President of Finance and  Administration, Chief Financial Officer* |

 

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