##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended April 30, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
 For the transition period from to.
 Commission file number: 000-26326
 PROFESSIONAL VETERINARY PRODUCTS, LTD.
  Nebraska
    
    37-1119387(State or other jurisdiction of
    
    (IRS EmployerIncorporation or organization)
    
    Identification No.)
 th
  þ o
  o o þ
  o þ




---



##### 



PART I FINANCIAL INFORMATIONITEM 1:
    
    FINANCIAL STATEMENTS
    
    
    2Report of Independent Registered Public Accounting Firm
    
    
    2Consolidated Balance Sheets as of April 30, 2006 (unaudited)
and July 31, 2005
    
    
    3Consolidated Statements of Income for the three and nine month
periods ended April 30, 2006 and 2005 (unaudited)
    
    
    4Consolidated Statements of Cash Flows for the nine month
periods ended April 30, 2006 and 2005 (unaudited)
    
    
    5Notes to Condensed, Consolidated Financial Statements (unaudited)
    
    
    6ITEM 2:
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    13ITEM 3:
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    27ITEM 4:
    
    CONTROLS AND PROCEDURES
    
    
    28PART II OTHER INFORMATION
    
    
    29ITEM 1:
    
    LEGAL PROCEEDINGS
    
    
    29ITEM 1A:
    
    RISK FACTORS
    
    
    29ITEM 2:
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    29ITEM 3:
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    30ITEM 4:
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    30ITEM 5:
    
    OTHER INFORMATION
    
    
    30ITEM 6:
    
    EXHIBITS
    
    
    30SIGNATURESConsent of Quick & McFarlin, P.C.302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification
  1




---



##### Table of Contents



ITEM 1: FINANCIAL STATEMENTS
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     
 2




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 
    April 30,
    
    
    July 31,2006
    
    
    2005ASSETSCURRENT ASSETSCash
    
    $
    1,875
    
    
    $
    2,118Accounts receivable, net of allowance for doubtful
accounts $968 and $970, respectively
    
    
    33,071
    
    
    
    27,970Accounts receivable, related party
    
    
    3,558
    
    
    
    3,802Inventory, less allowance for obsolete inventory $61 and $152, respectively
    
    
    39,085
    
    
    
    34,670Deferred tax asset
    
    
    1,271
    
    
    
    1,178Other current assets
    
    
    608
    
    
    
    933Total current assets
    
    
    79,468
    
    
    
    70,671NET PROPERTY AND EQUIPMENT
    
    
    10,424
    
    
    
    10,483OTHER ASSETSIntangible assets, less accumulated amortization $16 and $14, respectively
    
    
    9
    
    
    
    11Intangible retirement asset
    
    
    782
    
    
    
    1,107Investment in unconsolidated affiliates
    
    
    1,803
    
    
    
    1,803Cash value life insurance
    
    
    1,569
    
    
    
    1,190Other assets
    
    
    1
    
    
    
    1Total other assets
    
    
    4,164
    
    
    
    4,112TOTAL ASSETS
    
    $
    94,056
    
    
    $
    85,266LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNote payable, bank
    
    $
    10,923
    
    
    $
    2,721Current portion of long-term debt and capital lease obligation
    
    
    1,047
    
    
    
    1,070Accounts payable
    
    
    49,934
    
    
    
    51,544Accounts payable, related parties
    
    
    1,406
    
    
    
    809Other current liabilities
    
    
    4,870
    
    
    
    4,704Total current liabilities
    
    
    68,180
    
    
    
    60,848LONG-TERM LIABILITIESLong-term debt and capital lease obligation, less current portion
    
    
    4,321
    
    
    
    5,109Accrued retirement benefits, less current portion
    
    
    782
    
    
    
    1,107Deferred tax liability
    
    
    462
    
    
    
    504Shares subject to mandatory redemption, $1 par value; issued and
outstanding 729 shares and 731 shares, respectively
    
    
    2,168
    
    
    
    2,170Total long-term liabilities
    
    
    7,733
    
    
    
    8,890TOTAL LIABILITIES
    
    
    75,913
    
    
    
    69,738COMMITMENTS AND CONTINGENT LIABILITIES  SEE NOTE 8REDEEMABLE COMMON STOCK  SEE NOTE 6
    
    
    3,807
    
    
    
    3,797STOCKHOLDERS EQUITYRetained earnings
    
    
    14,336
    
    
    
    11,731Total stockholders equity
    
    
    14,336
    
    
    
    11,731TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    94,056
    
    
    $
    85,266
  3




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 
     Three Months Ended
    
    
    Nine Months EndedApril 30,
    
    
    April 30,
    
    
    April 30,
    
    
    April 30,2006
    
    
    2005
    
    
    2006
    
    
    2005NET SALES AND OTHER REVENUE
    
    $
    85,487
    
    
    $
    102,689
    
    
    $
    287,906
    
    
    $
    292,379COST OF SALES
    
    
    75,692
    
    
    
    92,071
    
    
    
    256,365
    
    
    
    261,867Gross Profit
    
    
    9,795
    
    
    
    10,618
    
    
    
    31,541
    
    
    
    30,512OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    8,490
    
    
    
    8,771
    
    
    
    26,422
    
    
    
    25,262Operating income
    
    
    1,305
    
    
    
    1,847
    
    
    
    5,119
    
    
    
    5,250OTHER INCOME (EXPENSE)Interest income
    
    
    110
    
    
    
    149
    
    
    
    342
    
    
    
    418Interest expense
    
    
    (504
    )
    
    
    (359
    )
    
    
    (1,323
    )
    
    
    (917
    )Other
    
    
    (20
    )
    
    
    
    
    
    
    (20
    )
    
    
    Other expense, net
    
    
    (414
    )
    
    
    (210
    )
    
    
    (1,001
    )
    
    
    (499
    )Income before taxes
    
    
    891
    
    
    
    1,637
    
    
    
    4,118
    
    
    
    4,751Income tax expense
    
    
    333
    
    
    
    620
    
    
    
    1,514
    
    
    
    1,784NET INCOME
    
    $
    558
    
    
    $
    1,017
    
    
    $
    2,604
    
    
    $
    2,967EARNINGS PER REDEEMABLE COMMON SHARE
    
    $
    434.70
    
    
    $
    807.67
    
    
    $
    2,026.65
    
    
    $
    2,383.46Weighted average redeemable common shares outstanding
    
    
    1,285
    
    
    
    1,260
    
    
    
    1,285
    
    
    
    1,245SUPPLEMENTAL INFORMATIONNet sales and other revenue, related parties
    
    $
    9,574
    
    
    $
    10,039
    
    
    $
    30,717
    
    
    $
    29,137Purchases, related parties
    
    $
    2,526
    
    
    $
    2,279
    
    
    $
    8,986
    
    
    $
    10,109
  4




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 
     April 30,
    
    
    April 30,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    2,604
    
    
    $
    2,967Adjustments to reconcile net income to net cash from
operating activities:Depreciation and amortization
    
    
    1,081
    
    
    
    948(Gain)/Loss on disposal of assets
    
    
    20
    
    
    
    Retirement benefits
    
    
    325
    
    
    
    387Cash value of life insurance
    
    
    (379
    )
    
    
    (449
    )Deferred income tax
    
    
    (134
    )
    
    
    (232
    )Allowance for doubtful accounts
    
    
    (2
    )
    
    
    191Allowance for obsolete inventory
    
    
    (91
    )
    
    
    23(Increase) decrease in:Receivables
    
    
    (4,855
    )
    
    
    (16,069
    )Inventory
    
    
    (4,324
    )
    
    
    344Other current assets
    
    
    325
    
    
    
    312Other assets
    
    
    
    
    
    
    20Increase (decrease) in:Accounts payable
    
    
    (1,013
    )
    
    
    4,438Other current liabilities
    
    
    (159
    )
    
    
    406Total adjustments
    
    
    (9,206
    )
    
    
    (9,681
    )Net cash consumed by operating activities
    
    
    (6,602
    )
    
    
    (6,714
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (1,040
    )
    
    
    (1,073
    )Net cash consumed by investing activities
    
    
    (1,040
    )
    
    
    (1,073
    )CASH FLOWS FROM FINANCING ACTIVITIESNet short-term borrowings
    
    
    8,202
    
    
    
    7,551Proceeds from capital lease obligation
    
    
    
    
    
    
    208Payments on long-term debt and capital lease obligation
    
    
    (811
    )
    
    
    (989
    )Net proceeds (payments) from issuance of shares subject
to mandatory redemption
    
    
    (2
    )
    
    
    54Net proceeds (payments) from issuance of redeemable
common stock
    
    
    10
    
    
    
    98Net cash provided by financing activities
    
    
    7,399
    
    
    
    6,922Net increase (decrease) in cash
    
    
    (243
    )
    
    
    (865
    )Cash at beginning of period
    
    
    2,118
    
    
    
    2,545Cash at end of period
    
    $
    1,875
    
    
    $
    1,680SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Interest paid
    
    $
    1,274
    
    
    $
    902Income taxes paid
    
    $
    1,494
    
    
    $
    1,760
  5




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 
    NOTE 1  BASIS OF PRESENTATION:
      NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS:
 Accounting for Rental Costs Incurred during a Construction Period
 Accounting for Certain Hybrid Financial Instruments. Accounting
for Derivative Instruments and Hedging Activities, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.
 6




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS (continued):
  Accounting for Servicing of Financial Assets. Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
 NOTE 3  PROPERTY AND EQUIPMENT:
  April 30,
    
    
    July 31,2006
    
    
    2005Land
    
    $
    1,762
    
    
    $
    1,762Buildings
    
    
    5,088
    
    
    
    5,045Leasehold improvements
    
    
    595
    
    
    
    550Equipment
    
    
    8,822
    
    
    
    7,91116,267
    
    
    
    15,268Less  Accumulated
depreciation
    
    
    5,903
    
    
    
    4,90810,364
    
    
    
    10,360Construction in progress
    
    
    60
    
    
    
    123Net property, plant and
equipment
    
    $
    10,424
    
    
    $
    10,483
 NOTE 4  LINE OF CREDIT:
   NOTE 5  EARNINGS PER SHARE:
 Earnings per Share
 7




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 5  EARNINGS PER SHARE (continued):
  NOTE 6  SHARES SUBJECT TO MANDATORY REDEMPTION AND REDEEMABLE COMMON STOCK:
 See,
   NOTE 7  POST RETIREMENT BENEFITS:
  8




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 7  POST RETIREMENT BENEFITS (continued):
  April 30,2006
    
    
    2005Service cost
    
    $
    115
    
    
    $
    144Interest cost
    
    
    108
    
    
    
    129Amortization of prior losses
    
    
    
    
    
    
    12Amortization of unrecognized prior service cost
    
    
    102
    
    
    
    102Net periodic benefit cost
    
    $
    325
    
    
    $
    387
 NOTE 8  COMMITMENTS AND CONTINGENT LIABILITIES:
 Stock Redemption  See,
 Major Customer, Major Suppliers and Credit Concentrations 
 Other 
 Agreements 
  9




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 9  SEGMENT INFORMATION:
    10




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 9  SEGMENT INFORMATION (continued):
  Wholesale
    
    Logistics
    
    Customer
    
    
    
    
    
    ConsolidatedDistribution
    
    Services
    
    Services
    
    Eliminations
    
    TotalThree months ended April 30, 2006Net sales and other revenue
    
    $
    85,165
    
    
    $
    94
    
    
    $
    9,425
    
    
    $
    (9,197
    )
    
    $
    85,487Cost of sales
    
    
    76,740
    
    
    
    80
    
    
    
    7,997
    
    
    
    (9,125
    )
    
    
    75,692Operating, general and
administrative expenses
    
    
    7,138
    
    
    
    
    
    
    
    1,352
    
    
    
    
    
    
    
    8,490Operating income
    
    
    1,287
    
    
    
    14
    
    
    
    75
    
    
    
    (71
    )
    
    
    1,305Income before taxes
    
    
    891
    
    
    
    14
    
    
    
    57
    
    
    
    (71
    )
    
    
    891Three months ended April 30, 2005Net sales and other revenue
    
    $
    102,149
    
    
    $
    188
    
    
    $
    9,044
    
    
    $
    (8,692
    )
    
    $
    102,689Cost of sales
    
    
    92,624
    
    
    
    169
    
    
    
    8,031
    
    
    
    (8,753
    )
    
    
    92,071Operating, general and
administrative expenses
    
    
    7,659
    
    
    
    1
    
    
    
    1,111
    
    
    
    
    
    
    
    8,771Operating income
    
    
    1,866
    
    
    
    18
    
    
    
    (98
    )
    
    
    61
    
    
    
    1,847Income before taxes
    
    
    1,637
    
    
    
    18
    
    
    
    (79
    )
    
    
    61
    
    
    
    1,637Nine months ended April 30, 2006Net sales and other revenue
    
    $
    287,366
    
    
    $
    335
    
    
    $
    40,136
    
    
    $
    (39,931
    )
    
    $
    287,906Cost of sales
    
    
    260,510
    
    
    
    302
    
    
    
    34,896
    
    
    
    (39,343
    )
    
    
    256,365Operating, general and
administrative expenses
    
    
    21,758
    
    
    
    
    
    
    
    4,664
    
    
    
    
    
    
    
    26,422Operating income
    
    
    5,099
    
    
    
    33
    
    
    
    575
    
    
    
    (588
    )
    
    
    5,119Income before taxes
    
    
    4,118
    
    
    
    33
    
    
    
    555
    
    
    
    (588
    )
    
    
    4,118Nine months ended April 30, 2005Net sales and other revenue
    
    $
    291,799
    
    
    $
    1,825
    
    
    $
    32,085
    
    
    $
    (33,330
    )
    
    $
    292,379Cost of sales
    
    
    264,894
    
    
    
    1,777
    
    
    
    27,966
    
    
    
    (32,770
    )
    
    
    261,867Operating, general and
administrative expenses
    
    
    21,609
    
    
    
    1
    
    
    
    3,652
    
    
    
    
    
    
    
    25,262Operating income
    
    
    5,297
    
    
    
    47
    
    
    
    467
    
    
    
    (561
    )
    
    
    5,250Income before taxes
    
    
    4,751
    
    
    
    47
    
    
    
    514
    
    
    
    (561
    )
    
    
    4,751Business segment assetsApril 30, 2006
    
    $
    93,131
    
    
    $
    333
    
    
    $
    13,799
    
    
    $
    (13,207
    )
    
    $
    94,056July 31, 2005
    
    $
    84,574
    
    
    $
    300
    
    
    $
    10,131
    
    
    $
    (9,739
    )
    
    $
    85,266
 11




---



##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 NOTE 10  RECLASSIFICATIONS:
  NOTE 11  SUBSEQUENT EVENTS:
   12




---



##### Table of Contents



ITEM 2:
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Forward-Looking Statements
 This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking
statements are contained principally in the section entitled Managements Discussion and Analysis
of Financial Condition and Results of Operations. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements. Forward-looking statements include, but
are not limited to, statements about:
 
    
    the current economic environment affecting the Company and the markets it serves;
    
    sources of revenues and anticipated revenues, including the contribution from the growth
of new products and markets;
    
    estimates regarding the Companys capital requirements and its need for additional financing;
    
    the Companys ability to attract customers and the market acceptance of its products;
    
    our ability to establish relationships with suppliers of products; and
    
    plans for future products and services and for enhancements of existing products and services.
 In some cases, you can identify forward-looking statements by terms such as may, intend,
might, will, should, could, would, expect, believe, estimate, predict,
potential, or the negative of these terms, and similar expressions intended to identify
forward-looking statements. These statements reflect our current views with respect to future
events and are based on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these statements. Also, these statements
represent our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q ,
and we undertake no obligation to publicly update or revise these forward-looking statements.
 These statements are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations
of our management and are subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements. The following factors, among
others, could cause actual results to differ materially from those in forward-looking statements:
decreased demand for our products or services or loss of one or more of our major customers;
surplus inventories; loss of one or more of our major vendors; recessionary economic cycles;
strikes, work slow downs, or work stoppages at our vendors facilities, poor weather conditions,
decreases in manufacturer or vendor rebates, increases in interest rates; and increases in the
prices paid for goods. Readers should review and consider these factors along with the various
disclosures we make in public filings with the Securities and Exchange Commission.
 Overview
  13




---



##### Table of Contents



Restatement of Previously Reported Financial Statements
  Note on Common Stock
  Current Assets
  14




---



##### Table of Contents



Current Liabilities
  Results of Operations
  Summary Consolidated Results of Operations Table For Three Months Ended April 30, 2006
 Three Months EndedApril 30,(in thousands)2006
    
    
    2005Net sales and other revenue
    
    $
    85,487
    
    
    $
    102,689Cost of sales
    
    
    75,692
    
    
    
    92,071Gross profit
    
    
    9,795
    
    
    
    10,618Operating, general and
administrative expenses
    
    
    8,490
    
    
    
    8,771Operating income
    
    
    1,305
    
    
    
    1,847Interest expense, net
    
    
    (394
    )
    
    
    (210
    )Other
    
    
    (20
    )
    
    
    Other expense, net
    
    
    (414
    )
    
    
    (210
    )Income before taxes
    
    
    891
    
    
    
    1,637Income tax expense
    
    
    333
    
    
    
    620Net income
    
    $
    558
    
    
    $
    1,017
 Three months ended April 30, 2006 as compared to three months ended April 30, 2005
   15




---



##### Table of Contents



Operating Segments  Three months ended April 30, 2006 as compared to three months ended April 30,
2005
    16




---



##### Table of Contents



Wholesale Distribution
     17




---



##### Table of Contents



Logistics Services
      Direct Customer Services
     18




---



##### Table of Contents



Summary Consolidated Results of Operations Table for nine months ended April 30, 2006
 Nine Months EndedApril 30,(in thousands)2006
    
    
    2005Net sales and other revenue
    
    $
    287,906
    
    
    $
    292,379Cost of sales
    
    
    256,365
    
    
    
    261,867Gross profit
    
    
    31,541
    
    
    
    30,512Operating, general and
administrative expenses
    
    
    26,422
    
    
    
    25,262Operating income
    
    
    5,119
    
    
    
    5,250Interest expense, net
    
    
    (981
    )
    
    
    (499
    )Other
    
    
    (20
    )
    
    
    Other expense, net
    
    
    (1,001
    )
    
    
    (499
    )Income before taxes
    
    
    4,118
    
    
    
    4,751Income tax expense
    
    
    1,514
    
    
    
    1,784Net income
    
    $
    2,604
    
    
    $
    2,967
 Nine months ended April 30, 2006 as compared to Nine months ended April 30, 2005
   19




---



##### Table of Contents



Operating Segments  nine months ended April 30, 2006 compared to nine months ended April 30, 2005
 Wholesale Distribution
  20




---



##### Table of Contents



Logistics Services
    21




---



##### Table of Contents



Direct Customer Services
      Seasonality in Operating Results
  22




---



##### Table of Contents



Liquidity and Capital Resources
      23




---



##### Table of Contents



Operating Activities.
 Investing Activities.
 24




---



##### Table of Contents



Financing Activities.
 Off-Balance Sheet Arrangements
  Critical Accounting Policies
   Use of Estimates
  Revenue Recognition
  25




---



##### Table of Contents



Inventories
  Major Customer, Major Suppliers and Credit Considerations
  Income Taxes
  Goodwill and Other Intangible Assets
   Recent Accounting Changes
 Accounting for Rental Costs Incurred during a Construction Period.
 Accounting for Certain Hybrid Financial Instruments. Accounting
for Derivative Instruments and Hedging Activities, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.
 26




---



##### Table of Contents



Accounting for Servicing of Financial Assets. Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
 
 ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
      27




---



##### Table of Contents



ITEM 4: CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
  Limitations on the Effectiveness of Controls
  28




---



##### Table of Contents



PART II
OTHER INFORMATION
 
 ITEM 1: LEGAL PROCEEDINGS
  
 ITEM 1A: RISK FACTORS
  
 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    (1)
 Maximum NumberTotal Number of
    
    of Shares ThatTotal
    
    
    
    
    
    Shares Purchased
    
    May Yet BeNumber of
    
    Average
    
    as Part of Publicly
    
    Purchased UnderShares
    
    Price Paid
    
    Announced Plans
    
    the Plans orPeriod
    
    Purchased
    
    Per Share
    
    or Programs(2)
    
    Programs(3)February 1  February 28, 2006
    
    
    3
    
    
    $
    3,000
    
    
    
    
    
    
    
    2,013March 1  March 31, 2006
    
    
    2
    
    
    $
    3,000
    
    
    
    
    
    
    
    2,013April 1  April 30, 2006
    
    
    1
    
    
    $
    3,000
    
    
    
    
    
    
    
    2,015Total:
    
    
    6
    
    
    $
    3,000
    
    
    
    
    
    
    
    2,015
 
 (1)
    
    Prior to May 26, 2006, the Companys Bylaws required the Company to repurchase stock within
ninety (90) days of receiving written notice from a shareholder requesting redemption of his, her,
or its stock. Under the Articles of Incorporation, the Company may repurchase the share of common
stock of any shareholder who is no longer a veterinarian or veterinary clinic or owes money to the
Company and fails to make required payments. The redemption amount is the original purchase price
of the stock paid by the shareholder. Currently, the price of each share is fixed at $3,000 as
provided in the Articles of Incorporation. There is no expiration date. After May 26, 2006, the
Company may, but is not required to, repurchase any share upon request of the shareholder.(2)
    
    Since inception, each shareholder of the Company has been entitled to have his, her, or its
share redeemed in accordance with the Articles of Incorporation and Bylaws. See,Note 11 to the
Companys Condensed, Consolidated Financial Statements for the recent amendment to the Bylaws.(3)
    
    The maximum number of shares that may be purchased by the Company varies from time to time due
to the addition of new shareholders and on-going redemption of shares. 29




---



##### Table of Contents



ITEM 3: DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5: OTHER INFORMATION
  
 ITEM 6: EXHIBITS
 ExhibitNo.
    
    Description3.1
    
    Second Amended and Restated Articles of Incorporation of Professional
Veterinary Products, Ltd. (1)3.2
    
    Second Amended and Restated Bylaws of Professional Veterinary Products, Ltd. (2)3.3
    
    Amendment to Second Amended and Restated Bylaws of Professional Veterinary
Products, Ltd. (3)4.1
    
    Certificate of Professional Veterinary Products, Ltd. (4)4.2
    
    Second Amended and Restated Articles of Incorporation of Professional
Veterinary Products, Ltd.(1)4.3
    
    Second Amended and Restated Bylaws of Professional Veterinary Products, Ltd. (2)4.4
    
    Amendment to Second Amended and Restated Bylaws of Professional Veterinary
Products, Ltd. (3)23
    
    Consent of Quick & McFarlin, P.C. for the quarter ended April 30, 2006 #31.1(A)
    
    Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, by Dr. Lionel L. Reilly, the Companys
Chief Executive Officer #31.1(B)
    
    Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, by Neal Soderquist, the Companys Chief
Financial Officer #32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, by Dr. Lionel L. Reilly, the Companys
Chief Executive Officer, and Neal Soderquist, the Companys Chief Financial Officer #
 
 #
    
    Filed herewith  (1)
    
    Form 10-Q Quarterly Report for the period ended January 31, 2005 filed March 17, 2005.(2)
    
    Form 8-K Current Report dated March 7, 2005 and filed March 11, 2005.(3)
    
    Form 8-K Current Report dated May 26, 2006 and filed June 2, 2006.(4)
    
    Form S-1 Registration Statement No. 333-86629 filed on September 7, 1999.
 30




---



##### Table of Contents



SIGNATURES
  Date: June 14, 2006
    
    PROFESSIONAL VETERINARY PRODUCTS, LTD./s/ Dr. Lionel L. ReillyDr. Lionel L. Reilly,President and Chief Executive Officer/s/ Neal B. SoderquistNeal B. Soderquist, Chief Financial Officer andVice President
 31