##### 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, 2010
 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
(State or other jurisdiction of 
incorporation or organization)
    
    37-1119387
(IRS Employer
Identification No.)
 
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



PART I FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCondensed Consolidated Balance Sheets as of April 30, 2010 (unaudited) and
July 31, 2009
    
    
    2Condensed Consolidated Statements of Loss and Comprehensive Loss for the three
and nine month periods ended April 30, 2010 and 2009 (unaudited)
    
    
    3Condensed Consolidated Statement of Stockholders Equity for the nine month period ended April 30, 2010 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine month periods ended
April 30, 2010 and 2009 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    14ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    23ITEM 4T: CONTROLS AND PROCEDURES
    
    
    22PART II OTHER INFORMATION
    
    
    24ITEM 1: LEGAL PROCEEDINGS
    
    
    24ITEM 1A: RISK FACTORS
    
    
    24ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    24ITEM 3: DEFAULTS UPON SENIOR SECURITIES
    
    
    25ITEM 4: [REMOVED AND RESERVED]
    
    
    25ITEM 5: OTHER INFORMATION
    
    
    25ITEM 6: EXHIBITS
    
    
    26SIGNATURES
    
    
    27EX-10.1EX-31.1.AEX-31.1.BEX-32
  1




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##### Table of Contents



ITEM 1: FINANCIAL STATEMENTS
 PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
    April 30,
    
    
    July 31,2010
    
    
    2009ASSETSCURRENT ASSETSCash
    
    $
    4,865
    
    
    $
    1,408Accounts receivable, net of allowance: $537 and $305, respectively
    
    
    32,476
    
    
    
    24,227Accounts receivable, related parties
    
    
    603
    
    
    
    348Inventory, net of allowance: $181 and $127, respectively
    
    
    35,780
    
    
    
    37,107Deferred tax asset
    
    
    494
    
    
    
    952Other current assets
    
    
    721
    
    
    
    3,518Total current assets
    
    
    74,939
    
    
    
    67,560NET PROPERTY AND EQUIPMENT
    
    
    8,068
    
    
    
    8,718OTHER ASSETSIntangible assets, less accumulated amortization, $43 and $10, respectively
    
    
    187
    
    
    
    30Investment in unconsolidated affiliates
    
    
    144
    
    
    
    144Cash value of life insurance
    
    
    2,923
    
    
    
    2,826Deferred tax asset
    
    
    3,519
    
    
    
    446Other assets
    
    
    9
    
    
    
    9Total other assets
    
    
    6,782
    
    
    
    3,455TOTAL ASSETS
    
    $
    89,789
    
    
    $
    79,733LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNote payable, bank
    
    $
    22,099
    
    
    $
    20,287Current portion of long-term debt and capital lease obligation
    
    
    
    
    
    
    400Current portion of accrued retirement benefits
    
    
    243
    
    
    
    243Accounts payable
    
    
    48,764
    
    
    
    29,043Accounts payable, related parties
    
    
    1,042
    
    
    
    845Interest rate swap
    
    
    
    
    
    
    111Other current liabilities
    
    
    3,313
    
    
    
    3,656Total current liabilities
    
    
    75,461
    
    
    
    54,585LONG-TERM LIABILITIESLong-term debt
    
    
    
    
    
    
    3,370Accrued retirement benefits
    
    
    2,770
    
    
    
    2,811Total long-term liabilities
    
    
    2,770
    
    
    
    6,181TOTAL LIABILITIES
    
    
    78,231
    
    
    
    60,766COMMITMENTS AND CONTINGENT LIABILITIES  SEE NOTE 10STOCKHOLDERS EQUITYCommon stock, $1 par value; authorized 30,000 shares; issued and
outstanding, 1,898 and 1,948, respectively shares
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    5,631
    
    
    
    5,779Retained earnings
    
    
    6,219
    
    
    
    13,562Accumulated other comprehensive loss
    
    
    (294
    )
    
    
    (376
    )Total stockholders equity
    
    
    11,558
    
    
    
    18,967TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    89,789
    
    
    $
    79,733
  2




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     Three Months Ended
    
    
    Nine months EndedApril 30,
    
    
    April 30,
    
    
    April 30,
    
    
    April 30,2010
    
    
    2009
    
    
    2010
    
    
    2009NET SALES AND OTHER REVENUE
    
    $
    88,744
    
    
    $
    75,291
    
    
    $
    245,841
    
    
    $
    225,813COST OF SALES
    
    
    80,727
    
    
    
    67,376
    
    
    
    222,534
    
    
    
    199,774Gross profit
    
    
    8,017
    
    
    
    7,915
    
    
    
    23,307
    
    
    
    26,039OPERATING GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    12,899
    
    
    
    9,662
    
    
    
    32,409
    
    
    
    30,009Operating loss
    
    
    (4,882
    )
    
    
    (1,747
    )
    
    
    (9,102
    )
    
    
    (3,970
    )OTHER INCOME (EXPENSE)Interest income
    
    
    64
    
    
    
    98
    
    
    
    181
    
    
    
    292Interest expense
    
    
    (361
    )
    
    
    (250
    )
    
    
    (1,092
    )
    
    
    (854
    )Other expense  net
    
    
    (297
    )
    
    
    (152
    )
    
    
    (911
    )
    
    
    (562
    )Loss before income taxes
    
    
    (5,179
    )
    
    
    (1,899
    )
    
    
    (10,013
    )
    
    
    (4,532
    )Income tax benefit
    
    
    (1,533
    )
    
    
    (753
    )
    
    
    (2,670
    )
    
    
    (1,593
    )NET LOSS
    
    $
    (3,646
    )
    
    $
    (1,146
    )
    
    $
    (7,343
    )
    
    $
    (2,939
    )LOSS PER COMMON SHARE
    
    $
    (1,915.92
    )
    
    $
    (581.43
    )
    
    $
    (3,824.48
    )
    
    $
    (1,471.71
    )Weighted average common shares outstanding
    
    
    1,903
    
    
    
    1,971
    
    
    
    1,920
    
    
    
    1,997COMPREHENSIVE LOSSNet loss
    
    $
    (3,671
    )
    
    $
    (1,146
    )
    
    $
    (7,368
    )
    
    $
    (2,939
    )Other comprehensive income (loss):Adjustment for net periodic pension benefit
cost, net of tax
    
    
    5
    
    
    
    6
    
    
    
    15
    
    
    
    18Adjustment for mark-to-market value of swap,
net of tax
    
    
    
    
    
    
    29
    
    
    
    67
    
    
    
    (97
    )Total comprehensive loss
    
    $
    (3,666
    )
    
    $
    (1,111
    )
    
    $
    (7,286
    )
    
    $
    (3,018
    )SUPPLEMENTAL INFORMATIONNet sales and other revenue  related parties
    
    $
    1,139
    
    
    $
    716
    
    
    $
    3,168
    
    
    $
    3,566Purchases  related parties
    
    $
    4,580
    
    
    $
    2,032
    
    
    $
    8,226
    
    
    $
    8,587
  3




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     AccumulatedCommon
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    OtherShares
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveIssued
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    TotalBALANCE AT
AUGUST 1, 2009
    
    
    1,948
    
    
    $
    2
    
    
    $
    5,779
    
    
    $
    13,562
    
    
    $
    (376
    )
    
    $
    18,967Redemption of stock
    
    
    (50
    )
    
    
    
    
    
    
    (148
    )
    
    
    
    
    
    
    
    
    
    
    (148
    )Change in
unrecognized
pension cost, net
of tax of $10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    15Change in
mark-to-market
interest rate swap,
net of tax of $44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    67Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,343
    )
    
    
    
    
    
    
    (7,343
    )BALANCE AT APRIL
30, 2010
    
    
    1,898
    
    
    $
    2
    
    
    $
    5,631
    
    
    $
    6,219
    
    
    $
    (294
    )
    
    $
    11,558
  4




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     April 30,
    
    
    April 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (7,343
    )
    
    $
    (2,939
    )Adjustments to reconcile net loss to net cash from operating
activities:Depreciation and amortization
    
    
    1,174
    
    
    
    1,370Loss on sale of assets
    
    
    
    
    
    
    26Retirement benefits
    
    
    (15
    )
    
    
    166Deferred income tax
    
    
    (2,670
    )
    
    
    (257
    )Allowance for doubtful accounts
    
    
    232
    
    
    
    413Allowance for obsolete inventory
    
    
    54
    
    
    
    (53
    )(Increase) decrease in:Receivables
    
    
    (8,736
    )
    
    
    (4,519
    )Inventory
    
    
    1,273
    
    
    
    (5,359
    )Other current assets
    
    
    2,797
    
    
    
    (1,176
    )Other assets
    
    
    
    
    
    
    2Increase (decrease) in:Accounts payable
    
    
    19,920
    
    
    
    9,636Other current liabilities
    
    
    (345
    )
    
    
    207Total adjustments
    
    
    13,684
    
    
    
    456Net cash provided by (used in) operating activities
    
    
    6,341
    
    
    
    (2,483
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (481
    )
    
    
    (337
    )Increase in cash value of life insurance
    
    
    (97
    )
    
    
    (453
    )Purchase of intangible assets
    
    
    (200
    )
    
    
    Net cash used in investing activities
    
    
    (778
    )
    
    
    (790
    )CASH FLOWS FROM FINANCING ACTIVITIESNet short-term borrowings
    
    
    1,812
    
    
    
    5,141Principal payments on long-term debt and capital lease obligations
    
    
    (3,770
    )
    
    
    (274
    )Payments for redemption of common stock
    
    
    (148
    )
    
    
    (218
    )Net cash provided by (used in) financing activities
    
    
    (2,106
    )
    
    
    4,649Net increase in cash
    
    
    3,457
    
    
    
    1,376Cash at beginning of period
    
    
    1,408
    
    
    
    1,985Cash at end of period
    
    $
    4,865
    
    
    $
    3,361Supplemental disclosure of cash flow information:Interest paid
    
    $
    996
    
    
    $
    877Income taxes refunded
    
    $
    (2,544
    )
    
    $
    (182
    )Non-cash periodic pension cost
    
    $
    25
    
    
    $
    18Non-cash unrealized (loss) gain on interest rate swap
    
    $
    111
    
    
    $
    (97
    )
  5




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
 
 NOTE 1  BASIS OF PRESENTATION:
      NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS:
 The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles FASB Accounting Standards Codification
 Subsequent Events Amendments to Certain
Recognition and Disclosure Requirements
 6




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 3  PROPERTY AND EQUIPMENT:
  April 30,
    
    
    July 31,2010
    
    
    2009Land
    
    $
    1,762
    
    
    $
    1,762Buildings
    
    
    5,217
    
    
    
    5,217Leasehold improvements
    
    
    606
    
    
    
    606Equipment
    
    
    11,505
    
    
    
    11,14019,090
    
    
    
    18,725Less  Accumulated depreciation
    
    
    11,327
    
    
    
    10,1967,763
    
    
    
    8,529Construction in progress
    
    
    305
    
    
    
    189Net property, plant, and equipment
    
    $
    8,068
    
    
    $
    8,718
 NOTE 4  LINE OF CREDIT:
    7




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
   NOTE 5  EARNINGS PER SHARE:
 Earnings per Share
 NOTE 6  COMMON STOCK:
  NOTE 7  INCOME TAXES:
 Income Taxes
   8




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
   NOTE 8  POST RETIREMENT BENEFITS:
   Three Months Ended
    
    
    Nine months EndedApril 30,
    
    
    April 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    8
    
    
    $
    24
    
    
    $
    24
    
    
    $
    73Interest Cost
    
    
    41
    
    
    
    46
    
    
    
    122
    
    
    
    139Amortization of prior losses
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    5Amortization of unrecognized prior service costs
    
    
    8
    
    
    
    9
    
    
    
    25
    
    
    
    26Net periodic benefit cost
    
    $
    57
    
    
    $
    81
    
    
    $
    171
    
    
    $
    243
 NOTE 9  DERIVATIVE FINANCIAL INSTRUMENTS:
   9




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 9  DERIVATIVE FINANCIAL INSTRUMENTS (continued):
 Derivative Instruments
and Hedging Activities
 April 30, 2010
    
    
    
    
    

    July 31, 2009Fair Value of interest rate swap agreement
    
    
    N/A
    

    
    
    
    
    
    
    $
    (111
    )Balance sheet location of fair value amount
    
    
    N/A
    
    
    
    
    
    
    
    Current LiabilitiesGain (loss) recognized in other comprehensive
income (effective portion-net of tax)
    
    
    

    $
    (67
    )
    
    
    
    
    
    

    $
    (67
    )Loss reclassified from accumulated other
comprehensive income into income (effective
portion)
    
    
    

    $
    (96
    )
    
    
    
    
    
    

    $
    (162
    )Location of loss reclassified from accumulated
other comprehensive income into income
    
    
    Interest Expense
    
    
    
    Interest ExpenseGain or loss recognized in income
(ineffective portion and amount excluded from
effectiveness testing)
    
    
    

    $
    
    
    
    
    
    
    
    

    $
    Location of gain (loss) recognized in
income (ineffective portion and amount
excluded from effectiveness testing)
    
    
    
    

    
    
    
    
    
    
    
    
    

    
 NOTE 10  COMMITMENTS AND CONTINGENT LIABILITIES:
 Stock Redemption 
 Major Customers, Major Suppliers and Credit Concentrations 
 Litigation 
  10




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
  Other 
 NOTE 11  SEGMENT INFORMATION:
   Segment Reporting.
 11




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
  Direct
    
    
    
    
    
    CondensedWholesale
    
    Logistics
    
    Customer
    
    
    
    
    
    ConsolidatedDistribution
    
    Services
    
    Services
    
    Eliminations
    
    TotalThree months ended April 30, 2010Net sales and other revenue
    
    $
    81,947
    
    
    $
    58
    
    
    $
    29,644
    
    
    $
    (22,905
    )
    
    $
    88,744Cost of sales
    
    
    79,593
    
    
    
    49
    
    
    
    27,874
    
    
    
    (26,789
    )
    
    
    80,727Operating, general and
administrative expenses
    
    
    7,239
    
    
    
    
    
    
    
    5,660
    
    
    
    
    
    
    
    12,899Operating income (loss)
    
    
    (4,885
    )
    
    
    9
    
    
    
    (3,890
    )
    
    
    (3,884
    )
    
    
    (4,882
    )Income (loss) before taxes
    
    $
    (5,179
    )
    
    $
    9
    
    
    $
    (3,893
    )
    
    $
    (3,884
    )
    
    $
    (5,179
    )Three months ended April 30, 2009Net sales and other revenue
    
    $
    74,489
    
    
    $
    84
    
    
    $
    9,863
    
    
    $
    (9,145
    )
    
    $
    75,291Cost of sales
    
    
    68,109
    
    
    
    72
    
    
    
    9,022
    
    
    
    (9,827
    )
    
    
    67,376Operating, general and
administrative expenses
    
    
    8,114
    
    
    
    
    
    
    
    1,548
    
    
    
    
    
    
    
    9,662Operating income (loss)
    
    
    (1,735
    )
    
    
    12
    
    
    
    (708
    )
    
    
    684
    
    
    
    (1,747
    )Income (loss) before taxes
    
    $
    (1,899
    )
    
    $
    12
    
    
    $
    (696
    )
    
    $
    684
    
    
    $
    (1,899
    )Nine months ended April 30, 2010Net sales and other revenue
    
    $
    237,765
    
    
    $
    180
    
    
    $
    80,590
    
    
    $
    (72,694
    )
    
    $
    245,841Cost of sales
    
    
    225,278
    
    
    
    154
    
    
    
    75,263
    
    
    
    (78,161
    )
    
    
    222,534Operating, general and
administrative expenses
    
    
    21,586
    
    
    
    
    
    
    
    10,823
    
    
    
    
    
    
    
    32,409Operating income (loss)
    
    
    (9,099
    )
    
    
    26
    
    
    
    (5,496
    )
    
    
    (5,467
    )
    
    
    (9,102
    )Income (loss) before taxes
    
    $
    (10,013
    )
    
    $
    26
    
    
    $
    (5,493
    )
    
    $
    (5,467
    )
    
    $
    (10,013
    )Business segment assets
    
    $
    89,542
    
    
    $
    421
    
    
    $
    12,791
    
    
    $
    (12,965
    )
    
    $
    89,789Nine months ended April 30, 2009Net sales and other revenue
    
    $
    221,584
    
    
    $
    208
    
    
    $
    37,639
    
    
    $
    (33,618
    )
    
    $
    225,813Cost of sales
    
    
    200,425
    
    
    
    176
    
    
    
    33,928
    
    
    
    (34,755
    )
    
    
    199,774Operating, general and
administrative expenses
    
    
    25,088
    
    
    
    
    
    
    
    4,921
    
    
    
    
    
    
    
    30,009Operating income (loss)
    
    
    (3,929
    )
    
    
    32
    
    
    
    (1,210
    )
    
    
    1,137
    
    
    
    (3,970
    )Income (loss) before taxes
    
    $
    (4,532
    )
    
    $
    32
    
    
    $
    (1,169
    )
    
    $
    1,137
    
    
    $
    (4,532
    )Business segment assets
    
    $
    92,206
    
    
    $
    382
    
    
    $
    11,570
    
    
    $
    (11,161
    )
    
    $
    92,997
 12




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 12  SIGNIFICANT ESTIMATES AND CONCENTRATIONS
 Current Economic Conditions
   13




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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 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 its serves;
    
    the 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 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 slowdowns, or work
stoppages at our vendors facilities; 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
  14




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##### Table of Contents



Current Assets
  Current Liabilities
  Results of Operations
  Summary Condensed Consolidated Results of Operations Table for Three Months Ended April 30, 2010
 Three Months EndedApril 30,(in thousands)2010
    
    
    2009Net sales and other revenue
    
    $
    88,744
    
    
    $
    75,291Cost of sales
    
    
    80,727
    
    
    
    67,376Gross profit
    
    
    8,017
    
    
    
    7,915Operating, general and administrative expenses
    
    
    12,899
    
    
    
    9,662Operating income (loss)
    
    
    (4,882
    )
    
    
    (1,747
    )Interest expense, net
    
    
    (297
    )
    
    
    (152
    )Other expense
    
    
    
    
    
    
    Loss before taxes
    
    
    (5,179
    )
    
    
    (1,899
    )Income tax benefit
    
    
    (1,533
    )
    
    
    (753
    )Net loss
    
    $
    (3,646
    )
    
    $
    (1,146
    )
 15




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##### Table of Contents



Three months ended April 30, 2010 as compared to three months ended April 30, 2009
       Operating Segments  three months ended April 30, 2010 as compared to three months ended April 30,
2009
   Wholesale Distribution
  16




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##### Table of Contents



Logistics Services
    Direct Customer Services
   17




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##### Table of Contents



Summary Consolidated Results of Operations Table for nine months ended April 30, 2010
 Nine months EndedApril 30,(in thousands)2010
    
    
    2009Net sales and other revenue
    
    $
    245,841
    
    
    $
    225,813Cost of sales
    
    
    222,534
    
    
    
    199,774Gross profit
    
    
    23,307
    
    
    
    26,039Operating, general and administrative expenses
    
    
    32,409
    
    
    
    30,009Operating loss
    
    
    (9,102
    )
    
    
    (3,970
    )Other expense, net
    
    
    (911
    )
    
    
    (562
    )Loss before taxes
    
    
    (10,013
    )
    
    
    (4,532
    )Income tax benefit
    
    
    (2,670
    )
    
    
    (1,593
    )Net loss
    
    $
    (7,343
    )
    
    $
    (2,939
    )
 Nine months ended April 30, 2010 as compared to nine months ended April 30, 2009
     18




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##### Table of Contents



Operating Segments Nine months ended April 30, 2010 compared to nine months ended April 30, 2009
 Wholesale Distribution
      Logistics Services
   19




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##### Table of Contents



Direct Customer Services
      Seasonality in Operating Results
  Liquidity and Capital Resources
    Operating Activities .
 20




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##### Table of Contents



Investing Activities.
 Financing Activities .
 Off-Balance Sheet Arrangements
  Critical Accounting Policies
   Use of Estimates
  Revenue Recognition
  21




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##### Table of Contents



Inventories
  Major Customers, Major Suppliers and Credit Concentrations
  Income Taxes
  Other Intangible Assets
   Pension Accounting
  Recent Accounting Changes
 Generally Accepted Accounting Principles
 Subsequent Events Amendments to Certain
Recognition and Disclosure Requirements
 22




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##### Table of Contents



ITEM 3:
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
 ITEM 4 T:
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
  23




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##### Table of Contents



Limitations on the Effectiveness of Controls
  
 PART II
OTHER INFORMATION
 
 ITEM 1:
    
    LEGAL PROCEEDINGS
  
 ITEM 1A:
    
    RISK FACTORS
 If the Companys primary lender demands immediate payment of all amounts due and payable under
the Credit Agreement, the Company currently does not have the ability to such amounts.
  
 ITEM 2:
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   24




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##### Table of Contents



Purchases of Equity Securities by the Company and Affiliated Purchasers:
 Total Number
    
    
    Maximumof Shares
    
    
    Number ofPurchased as
    
    
    Shares ThatPart of
    
    
    May Yet BePublicly
    
    
    PurchasedTotal Number
    
    
    Average Price
    
    
    Announced
    
    
    Under theOf Shares
    
    
    Paid Per
    
    
    Plans or
    
    
    Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Programs
    
    
    Programs(1)February 1  February 28, 2010
    
    
    5
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,911March 1  March 31, 2010
    
    
    11
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,900April 1  April 30, 2010
    
    
    2
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,898Total:
    
    
    18
    
    
    $
    3,000
 
 (1)
    
    The maximum number of shares that may be purchased by the Company varies from time to
time because of the on-going redemption of shares. 
 ITEM 3:
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4:
    
    [REMOVED AND RESERVED]
 
 ITEM 5:
    
    OTHER INFORMATION
 The following disclosure is provided pursuant to Item 5.02 (Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers) of Form 8-K:
   25




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##### Table of Contents



ITEM 6:
    
    EXHIBITS
 Exhibit No.
    
    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)10.1
    
    First Amendment and Wavier to Credit and Security Agreement (#)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 the Companys Principal 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 the Companys Principal 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 the Companys Chief Executive Officer and Principal 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.
 26




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SIGNATURES
  Date:      June 21, 2010
    PROFESSIONAL VETERINARY PRODUCTS, LTD.By:
    /s/ Stephen J. PriceStephen J. Price, 
President and Chief Executive Officer(principal executive officer)By:
    /s/ Vicky WinklerVicky Winkler, 
Director of Finance(principal financial officer) 27