<PAGE>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

|X|      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

         For the quarterly period ended October 31, 2001; or

|_|      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.

             (Exact name of registrant as specified in its charter)



               Nebraska                   5047                   37-1119387
(State or other jurisdiction of (Primary Standard Industrial   (IRS Employer
Incorporation or organization)   Classification Code Number) Identification No.)


                            10077 South 134th Street
                              Omaha, Nebraska 68138
                                 (402) 331-4440
   (Address and telephone number of registrant's principal executive offices)


     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

         Yes      |X|      No       |_|


     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

     Class                                Outstanding at October 31, 2001
     -----                                -------------------------------
     Common Stock, $1.00 par value                 1,546






<PAGE>


                     PROFESSIONAL VETERINARY PRODUCTS, LTD.
                         INDEX TO 10-Q FOR THE QUARTERLY
                          PERIOD ENDED OCTOBER 31, 2001

PART I    FINANCIAL INFORMATION                                           PAGE

     ITEM 1.  FINANCIAL STATEMENTS

              Consolidating Balance Sheet at October 31, 2001 and
              Consolidated Balance Sheet at October 31, 2000
              (unaudited) .....................................................2

              Consolidating Statements of Income for the three
              months ended October 31, 2001 and Consolidated
              Statements of Income for the three months ended
              October 31, 2000 (unaudited) ....................................3

              Consolidating Statements of Retained Earnings for the
              three months ended October 31, 2001 and Consolidated
              Statements of Retained Earnings for the three months
              ended October 31, 2000 (unaudited) ..............................3

              Consolidating Statements of Cash Flow at the three months
              ended October 31, 2001 and Consolidated Statements of Cash
              Flow at the three months ended October 31, 2000 (unaudited)...   4

              Notes to Financial Statements ...................................5

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATION ...................11

     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
              ABOUT MARKET RISK ..............................................11

PART II   OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS ..............................................12

     ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS ......................12

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ................................12

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............12

     ITEM 5.  OTHER INFORMATION ..............................................12

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K ...............................12

              SIGNATURES .....................................................12





<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS
             Consolidating Balance Sheet for the three months ended
                October 31, 2001 and Consolidated Balance Sheet
                   for the three months ended October 31, 2000
                                   (unaudited)

                                     Assets

<TABLE>
<CAPTION>

Current assets:                                                  2001            2000
                                                                 ----            ----
<S>                                                        <C>              <C>
  Cash                                                       $    53,980     $    28,680
  Accounts receivable, trade, less allowance
    for doubtful accounts (0)                                 27,741,185     $29,722,365
  Accounts receivable, rebate                                 (1,740,809)       (857,587)
  Accounts receivable, stock                                      54,584          57,709
  Accounts receivable, other                                      14,901         637,462
  Inventory                                                   21,280,363      23,194,286
                                                             -----------     -----------
         Total current assets                                 47,404,204      52,782,915
                                                             -----------     -----------
Property and equipment                                         8,939,577       8,666,759
  Less accumulated depreciation                                1,572,876       1,018,299
                                                             -----------     -----------
                                                               7,366,701       7,648,460
                                                             -----------     -----------
Other assets:
  Organization expense less accumulated amortization of
    $64,337 (2001), $49,223 (2000)                               162,463         177,577
  Loan origination fee less accumulated amortization of
    $5,333 (2001), $3,333 (2000)                                  14,667          16,667
  Trademark, less accumulated  amortization of
    $1,056 (2001), $727 (2000)                                     3,944           4,278
  Investments                                                  1,643,850       1,643,850
  Cash value life insurance                                       32,379          30,077
                                                             -----------     -----------

                                                               1,857,303       1,872,449
                                                             -----------     -----------

                                                             $56,628,208     $62,303,824
                                                             ===========     ===========

                      Liabilities and Stockholders' Equity

                                                                2001             2000
                                                                ----             ----
Current liabilities:
  Bank overdraft                                             $ 1,277,407     $ 1,503,645
  Notes payable, bank                                          7,958,024       5,232,460
  Current portion of long-term debt                              465,422         391,217
  Accounts payable, trade                                     33,576,030      42,708,388
  Accrued interest                                                70,208          92,211
  Accrued wages                                                  343,198         179,115
  Accrued expenses                                               175,539          78,759
  Accrued income taxes                                           138,040         181,796
  Deferred income tax liability                                  101,910          14,417
                                                             -----------     -----------
        Total current liabilities                             44,105,778      50,367,591
                                                             -----------     -----------
Long-term debt                                                 5,447,813       5,943,283
                                                             -----------     -----------
Stockholders' equity:
  Common stock, $1 par value per share.
    Authorized 30,000 shares; issued and
    outstanding 1,546 (2001), 1,395 (2000)                         1,546           1,395
  Paid-in Capital                                              4,565,454       4,112,605
  Retained earnings                                            2,507,617       1,864,533
                                                             -----------     -----------
                                                               7,074,617       5,978,533
                                                             -----------     -----------
                                                             $56,628,208     $62,303,824
                                                             ===========     ===========
</TABLE>

                See accompanying notes to financial statements.

                                       2

<PAGE>

 Consolidating Statements of Income for the three months ended October 31, 2001
 Consolidated Statements of Income for the three months ended October 31, 2000
                                   (unaudited)

<TABLE>
<CAPTION>
                                                               Amount                   Percent
                                                               ------                   -------
                                                          2001         2000          2001      2000
                                                          ----         ----          ----      ----
<S>                                                  <C>            <C>            <C>        <C>
Revenues:
   Gross sales                                       $ 60,242,309   $50,180,424    101.11     100.17
   Less rebate                                         (1,740,809)     (857,587)    (2.92)     (1.71)
                                                     ------------   -----------    ------     ------
   Net sales                                           58,501,500    49,322,837     98.19      98.46
   Shipping                                                41,965        63,464      0.07        .13
   Commissions                                            488,004       355,386      0.82        .71
   Sales promotion                                        425,897       340,169      0.71        .68
   Contracted Services                                     16,875             -      0.03          -
   Miscellaneous                                          104,158        12,713      0.18        .02
                                                     ------------   -----------    ------     ------
                                                       59,578,399    50,094,569    100.00     100.00
                                                     ------------   -----------    ------     ------
Cost of sales:
    Net purchases                                      56,169,738    46,445,058     94.28      92.71
    Freight out                                         1,398,848     1,068,932      2.35       2.13
    Less vendor rebates                                (2,752,296)   (1,259,942)    (4.62)     (2.51)
                                                     ------------   -----------    ------     ------
                                                       54,816,290    46,254,048     92.01      92.33
                                                     ------------   -----------    ------     ------
           Gross profit                                 4,762,109     3,840,521      7.99       7.67
Operating, general and administrative
expenses                                                3,931,871     3,086,235      6.60       6.16
                                                     ------------   -----------    ------     ------
           Operating income                               830,238       754,286      1.39       1.51
                                                     ------------   -----------    ------     ------
Other income (expense):
      Interest income                                     117,276       110,220      0.20        .21
      Interest expense                                   (194,728)     (311,936)    (0.33)      (.62)
      Gain (loss) on sale of equipment                          -        (2,560)        -       (.01)
                                                     ------------   -----------    ------     ------
                                                          (77,452)     (204,276)    (0.13)     (0.42)
                                                     ------------   -----------    ------     ------
           Income before income taxes                     752,786       550,010      1.26       1.09
Income taxes                                              270,676       202,300      0.45        .40
                                                     ------------   -----------    ------     ------
          Net income                                 $    482,110   $   347,710      0.81        .69
                                                     ============   ===========    ======     ======
</TABLE>

    Consolidating Statements of Retained Earnings for the three months ended
                                October 31, 2001
    Consolidated Statements of Retained Earnings for the three months ended
                                October 31, 2000
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                              2001           2000
                                                                              ----           ----
<S>                                                                        <C>            <C>
Balance at beginning of period                                             $2,025,507     $1,516,823
Net income                                                                    482,110        347,710
                                                                           ----------     ----------
Balance at end of period                                                   $2,507,617     $1,864,533
                                                                           ==========     ==========
</TABLE>

                 See accompanying notes to financial statements.

                                       3

<PAGE>

       Consolidating Statements of Cash Flows for the three months ended
                                October 31, 2001
        Consolidated Statements of Cash Flows for the three months ended
                                October 31, 2000
                                   (unaudited)
<TABLE>
<CAPTION>

                                                           2001          2000
                                                           ----          ----
<S>                                                    <C>            <C>
Cash flows from operating activities:
   Net income                                          $   482,110       347,710
   Adjustments to reconcile net income
       to net cash provided (used) by
       operating activities:
          Depreciation and amortization                    144,083       135,015
          (Gain) loss on sale of property                        -         2,560
          Deferred income taxes                                  -
          Adjustments for working capital
            changes:
            (Increases) decrease in:
                Receivables                             (7,340,256)   (7,913,573)
                Inventories                              1,061,959     5,232,421
                Deferred income tax                          7,951        20,383
          Increase (decrease) in:
              Accounts payable                             878,300     5,472,696
              Accrued expenses                            (943,280)   (1,244,989)
              Income taxes                                 259,473       (50,137)
                                                       -----------    ----------

               Total adjustments                        (5,931,770)    1,654,376
                                                       -----------    ----------
                  Net cash provided (used) by
                      operating activities              (5,449,660)    2,002,086

Cash flows from investing activities:
   Purchase of property and equipment                      (23,175)      (37,463)
                                                       -----------    ----------
          Net cash provided (used) by
                 investing activities                      (23,175)      (37,463)

Cash flows from financing activities:
   Net loan proceeds (reduction)                         3,556,587    (3,082,674)
   Net proceeds from issuance of
      common stock                                          36,000        42,000
                                                       -----------    ----------
               Net cash provided (used) by
                      financing activities
                                                         3,592,587    (3,040,674)
                                                       -----------    ----------
   Net increase (decrease) in cash                      (1,880,248)   (1,076,051)

   Cash (deficit) at beginning of period                   656,821      (398,914)
                                                       -----------    ----------
   Cash (deficit) at end of period                      (1,223,427)   (1,474,965)
                                                       ===========    ==========
   Supplementary disclosures of cash flow information:
            Interest paid                                  189,025       330,336
                                                       ===========    ==========
            Income taxes paid                          $     3,252       232,054
                                                       ===========    ==========
</TABLE>

                 See accompanying notes to financial statements.

                                       4

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and
              Consolidated Financial Statements - October 31, 2000

(1)      Organization and summary of significant accounting policies:

         Organization:
                  Professional Veterinary Products, Ltd. was incorporated in the
                  State of Missouri in 1982. The corporation was domesticated in
                  Nebraska on September 22, 1999. The corporation was formed to
                  buy, sell and warehouse pharmaceuticals and other veterinary
                  related items. The purpose of the corporation is to act as a
                  wholesale distributor primarily to shareholders. Shareholders
                  are limited to the ownership of one share of stock and must be
                  a licensed veterinarian or business entity comprised of
                  licensed veterinarians.

                  Exact Logistics, LLC was organized in the State of Nebraska on
                  December 6, 2000. The limited liability company is 100% owned
                  by Professional Veterinary Products, Ltd. The purpose of the
                  LLC is to act as a logistics partner to warehouse and ship
                  products to other animal health distributors.

                  ProConn, LLC was organized in the State of Nebraska on
                  December 6, 2000. The limited liability company is 100% owned
                  by Professional Veterinary Products, Ltd. The purpose of the
                  LLC is to act as a supplier of animal health products to the
                  producer or consumer.

                  Professional Veterinary Products, Ltd., Exact Logistics, LLC
                  and ProConn, LLC are presented as combined financial
                  statements because they are related through common ownership
                  and control. Their accounting policies follow generally
                  accepted accounting principles and conform to the common
                  practices of the industry in which they are engaged. Exact
                  Logistics, LLC and ProConn, LLC are single member limited
                  liability companies with Professional Veterinary Products,
                  Ltd. as their only corporate member. They have elected to be
                  treated as an unincorporated branch of the parent entity for
                  financial and income tax purposes. All income taxes of the
                  unincorporated branches are reflected and are the
                  responsibility of the parent entity.

         Summary of significant accounting policies:

                  (a)   Basis of accounting:
                            The corporation uses the accrual method of
                            accounting for consolidating financial statement
                            and income tax purposes.

                  (b)   Consolidation policy:
                            These financial statements include the accounts
                            of Professional Veterinary Products, Ltd. and its
                            single-member limited liability companies Exact
                            Logistics, LLC and ProConn, LLC. All material
                            intercompany accounts and transactions have been
                            eliminated.

                  (c)   Concentration of cash balances:
                            The Company's cash funds are located in a single
                            financial institution. The amount on deposit at
                            October 31, 2001 and 2000 exceeded the $100,000
                            federally insured limit.

                  (d)   Accounts receivable:
                            Management considers accounts receivable to be
                            fully collectible, accordingly, no allowance for
                            doubtful accounts is required.

                  (e)   Inventory:
                            Inventory is valued at the lower of cost or market
                            on the first-in, first-out basis.

                                       5

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and
        Consolidated Financial Statements - October 31, 2000 (continued)

(1)  Organization and summary of significant accounting policies: (continued)

         (f)  Property and equipment depreciation:
                   Property and equipment are stated at cost. Major additions
                   are capitalized and depreciated over their estimated useful
                   lives. For financial reporting purposes, the Company uses the
                   straight-line method and for income tax purposes, the Company
                   uses accelerated depreciation methods.

         (g)  Cash and cash equivalents:
                   The corporation considers all highly liquid investments with
                   a maturity of three months or less when purchased to be cash
                   equivalents.

         (h)  Amortization:

                   Organizational costs are being amortized over sixty months on
                   a straight-line basis.

                   Financing costs are being amortized over the term of the
                   note on a straight-line basis.This amortization is included
                   in interest expense in the income statement.

                   The intangible costs are being amortized over fifteen years
                   on a straight-line basis.

         (i)  Use of estimates:

                   The preparation of financial statements in conformity with
                   generally accepted accounting principles requires management
                   to make estimates and assumptions that affect certain
                   reported amounts and disclosures. Accordingly, actual results
                   could differ from those estimates.

         (j)  Income taxes:

                   Income taxes are provided for the tax effects of
                   transactions reported in the financial statements and
                   consist of taxes currently due plus deferred taxes. Deferred
                   taxes are recognized for differences between liabilities for
                   financial statement and income tax purposes. The differences
                   related primarily to depreciable assets (use of difference
                   depreciation methods and lives for financial statement and
                   income tax purposes), and Uniform Capitalization Rules Code
                   Sec. 263A (capitalization of direct and indirect costs
                   associated with resale activities). The deferred tax assets
                   and liabilities represent the future tax return consequences
                   of those differences, which will either be deductible or
                   taxable when the assets and liabilities are recovered or
                   settled. Deferred taxes are also recognized for operating
                   losses and tax credits that are availale to offset future
                   taxable income.

                   Exact Logistics, LLC and ProConn, LLC are single member
                   limited liability companies with Professional Veterinary
                   Products, Ltd. as their only corporate member. They have
                   elected to be treated as an unincorporated branch of the
                   parent entity for income tax purposes. All income taxes of
                   the unincorporated branches are reflected and are the
                   responsibility of the parent entity.

(2)    For the three months ended October 31, 2001, the Company recognized
       liabilities for overcharges on sales in excess of an agreed to profit
       margin of 5% totaling $1,740,809 (2001), $857,587 (2000).

                                       6

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and
        Consolidated Financial Statements - October 31, 2000 (continued)

(3)  Property and equipment:
                                                              Book Value
                                         Accumulated          ----------
                                Cost     Depreciation      2001         2000
                                ----     ------------      ----         ----
        Land                $   953,780       -           953,780      953,780
        Buildings             4,715,527      225,536    4,489,991    4,607,879
        Equipment             3,270,270    1,347,340    1,922,930    2,086,801
                            -----------    ---------    ---------    ---------
                            $ 8,939,577    1,572,876    7,366,701    7,648,460
                            ===========    =========    =========    =========

(4)  Investments - Non Marketable:

     The Company has invested in AAHA Services Corp., of which they own less
          than 20%. The remaining 80% is owned by American Animal Hospital
          Association (AAHA). AAHA operates AAHA Services Corp. without regard
          to the views of Professional Veterinary Products, Ltd. The investment
          is, therefore, carried at cost.

     The Company has invested in Agri-Laboratories, Ltd., of which they own 5%.
          The investment is carried at cost.

                                                     2001            2000
                                                     ----            ----
     Investment in AAHA Services Corp.           $ 1,500,000       1,500,000
     Investment in Agri-Laboratories, Ltd.           143,850         143,850
                                                 -----------       ---------
                                                 $ 1,643,850       1,643,850
                                                 ===========       =========


(5)  Cash surrender value of life insurance:

     The Company owns insurance policies on the Chief Executive Officer. The
          total face value of the policies on the life of the Chief Executive
          Officer was $375,000 at October 31, 2001 and 2000.

(6)  Income taxes:

     The Company's total noncurrent deferred tax asset and noncurrent deferred
          tax liabilities at October 31 are as follows (computed at the
          statutory rate 34%):

                                                   2001              2000
                                                   ----              ----
     Noncurrent deferred tax asset -
       Inventory overhead costs
         capitalized for tax purposes          $  37,400         $  47,600

     Noncurrent deferred tax liability -
       Accumulated depreciation                 (139,310)          (62,017)
                                               ---------         ---------

     Net noncurrent deferred tax asset
       per financials                           (101,910)          (14,417)

     Prior year deferred tax asset
       (liability)                               (93,959)            5,966
                                               ---------         ---------

     Deferred tax expense                          7,951            20,383

     Taxes currently payable                     262,725           181,917
                                               ---------         ---------
     Income tax provision per financials       $ 270,676         $ 202,300
                                               =========         =========



                                       7

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and

        Consolidated Financial Statements - October 31, 2000 (continued)

(7)  Long-term debt:
<TABLE>
<CAPTION>
                                                                     2001                2000
                                                                     ----                ----
        <S>                                                     <C>                <C>
         Note payable, bank, 7.42% interest                      $ 3,837,261        $ 3,929,138
         Note payable, bank, 9.10% interest                        1,094,874          1,174,072
         Note payable, bank, 8.66% interest                          981,100          1,231,290
                                                                   ---------          ---------
                                                                   5,913,235          6,334,500
                    Less current portion due within one year        (465,422)          (391,217)
                                                                 -----------        -----------
                                                                 $ 5,447,813        $ 5,943,283
                                                                 ===========        ===========
</TABLE>


         Note payable, bank, 7.42% interest:

             Monthly installments of principal and interest of $32,028
             commencing January 1, 2000 with final installment and entire
             unpaid principal balance due on June 1, 2009. Loan is
             collateralized by land and building.

         Note payable, bank, 9.10% interest:

             Monthly installments of principal and interest of $15,352
             commencing July 1, 2000 with a final installment and entire
             unpaid principal balance due on May 1, 2010. Loan is
             collateralized by land and building.

         Note payable, bank, 8.66% interest:

             Monthly installments of principal and interest of $29,032
             commencing February 1, 2000 with a final installment and
             entire unpaid principal balance due on January 1, 2005. Loan
             is collateralized by all business assets.

         Total yearly payments of long-term debt are due as follows:
<TABLE>
<CAPTION>
                                               Note               Note                Note                 Total
                                               ----               ----                ----                 -----
                                            Payable            Payable             Payable
                                            -------            -------             -------
                                         bank, 7.42%        bank, 9.10%         bank, 8.66%
                                         ----------         ----------          ----------
                                           interest           interest            interest
                                           --------           --------            --------
            <S>                         <C>               <C>                 <C>                     <C>
             2002                         $ 103,074             88,213             274,135               465,422
             2003                           110,988             96,583             298,841               506,412
             2004                           119,509            105,749             325,773               551,031
             2005                           128,684            115,783              82,351               326,818
             2006                           138,564            126,770                   -               265,334
             2007 - 2020                  3,236,442            561,776                   -             3,798,218
                                         ----------          ---------             -------             ---------

                                         $3,837,261          1,094,874             981,100             5,913,235
                                         ==========          =========             =======             =========
</TABLE>


         The maximum amount available on the revolving line of credit is
         $15,000,000. The balances due on this line of credit were $7,958,024
         and $5,232,460 for 2001 and 2000 respectively. The interest rate is
         .25% under the Index.

         All the above loan agreements are with US Bank. These loans are
         collateralized by substantially all of the assets of the Company.

         These loans agreements contain certain covenants to related financial
         ratios. Covenants relating interest bearing debt to tangible net worth
         were waived by the bank for July 31, 2000. The covenants were met for
         July 31, 2001.

                                       8

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and

        Consolidated Financial Statements - October 31, 2000 (continued)

(8)  Commitments and contingent liabilities - leases:

          On July 28, 1997, the company entered into a lease with IBM Credit
          Corporation for the purpose of leasing related computer hardware. The
          lease minimum rentals are $6,541 per month. The lease expires July 30,
          2002.

          On February 18, 1998, the company entered into a lease with Nebraska
          Leasing Services, Inc. for the purpose of leasing a truck. The lease
          minimum rentals are $451.13 per month for a term of 36 months with a
          final rental installment of $12,000. The lease expires January 18,
          2001.

          On August 14, 1998, the company entered into a lease with IBM Credit
          Corporation for the purpose of leasing related computer hardware. The
          lease minimum rentals are $3,107 per month for a term of 48 months.
          The lease expires August 14, 2002.

          On August 31, 1999, the company entered into a lease with IOS Capital
          for the purpose of leasing two copiers. The lease minimum rentals are
          $1,216 per month for a term of 48 months. The lease expires August 31,
          2003.

          On September 1, 1999, the company entered into a lease with US Bancorp
          Leasing & Financial for the purpose of leasing two forklifts. The
          lease minimum rentals are $1,189 per month for a term of 48 months.
          The lease expires August 1, 2003.

          On October 7, 1999, the company entered into a lease with Neopost
          Leasing for the purpose of leasing a postage meter. The lease minimum
          rentals are $687 per quarter for a term of 5 years. The lease expires
          February 7, 2005.

          On October 10, 1999, the company entered into a lease with US Bancorp
          Leasing for the purpose of leasing 50 scanners. The lease minimum
          rentals are $6,255 per month for a term of 36 months. The lease
          expires September 10, 2002.

          On November 10, 1999, the company entered into a lease with US Bancorp
          Leasing for the purpose of leasing a floor scrubber. The lease minimum
          rentals are $306 per month for a term of 48 months. The lease expires
          October 10, 2003.

          On November 30, 1999, the company entered into a lease with IBM Credit
          Corp for the purpose of leasing IBM Service Suite Maintenance. The
          lease minimum lease rentals are $1,675 per month for a term of 36
          months. The lease expires November 30, 2002.

          On November 30, 1999, the company entered into a lease with IOS
          Capital for the purpose of leasing related copier parts. The lease
          minimum lease rentals are $164 per month for a term of 60 months. The
          lease expires November 30, 2004.

          On February 15, 2000, the company entered into a lease with Chrysler
          Financial for the purpose of leasing a van. The lease minimum lease
          payments are $416 per month for a term of 36 months. The lease expires
          February 15, 2003.

          On March 6, 2000, the company entered into a lease with IBM Credit
          Corp for the purpose of leasing computer hardware. The lease minimum
          rentals are $6,193 per month for a term of 36 months. The lease
          expires February 6, 2003.

          On March 1, 2000, the company entered into a lease with P & L Capital
          Corp for the purpose of leasing 11 laptop computers. The lease minimum
          lease payments are $1,627 per month for a term of 24 months. The lease
          expires February 1, 2002.

                                       9

<PAGE>

         Notes to Consolidating Financial Statements - October 31, 2001
                                       and
        Consolidated Financial Statements - October 31, 2000 (continued)

(8)  Commitments and contingent liabilities - leases: (continued)

          On April 27, 2000, the company entered into a lease with Chrysler
          Financial for the purpose of leasing a vehicle. The lease minimum
          rentals are $669 per month for a term of 36 months. The lease expires
          April 27, 2003.

          On October 1, 2000, the company entered into a lease with US Bancorp
          Leasing for the purpose of leasing five forklifts. The lease minimum
          rentals are $2,572 per month for a terms of 60 months. The lease
          expires September 1, 2005.

          On January 23, 2001, the company entered into a lease with P & L
          Capital Corp., Inc. for the purpose of leasing three Dell laptop
          computers. The lease minimum rentals are $394 per month for a term of
          24 months. The lease expires January 1, 2003.

          On April 17, 2001, the company entered into a lease with P & L Capital
          Corp., Inc. for the purpose of leasing one Dell laptop computer. The
          lease minimum rentals are $129 per month for a term of 24 months. The
          lease expires April 17, 2003.


     Minimum future obligations on operating leases in effect on October 31,
2001 are:

          Period ended October 31, 2002                   $ 347,496
          Period ended October 31, 2003                      97,216
          Period ended October 31, 2004                      35,576
          Period ended October 31, 2005                      29,826
                                                          ---------
                                                          $ 510,114

(9)  Transactions between Board of Directors, key employees and the company.

          Professional Veterinary Products, Ltd. had sales to the Board of
          Directors and key employees for the period ended October 31 as
          follows:

                                                          2001            2000
                                                          ----            ----
               Members of the Board of Directors        $ 870,950       964,623
               Key employees                                  321           216
                                                        ---------       -------
                                                        $ 871,271       964,839
                                                        =========       =======

(10) Profit-sharing and 401(k) retirement plans:

          The Company provides a non-contributory profit-sharing plan covering
          all full-time employees who qualify as to age and length of service.
          It has been the Company's policy to make contributions to the plan as
          provided annually by the Board of Directors. The total provision for
          the contribution to the plan was $0 for the period ended October 31,
          2001 and 2000.

          The Company also provides a contributory 401(k) retirement plan
          covering all full-time employees who qualify as to age and length of
          service. It is the Company's policy to match a maximum 15% employee
          contribution with a 3% contribution. The total provision to the plan
          for the period ended October 31 was $20,592 (2001), $35,001 (2000).

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<PAGE>

ITEM 2:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     Our capital requirements relate primarily to working capital, the expansion
of our operations to accommodate sales growth. We maintain significant inventory
levels to fulfill our operating commitment to our customers. Historically, we
have financed our cash requirements primarily from short-term bank borrowings
and cash from operations.

     Net cash provided by operating activities of $2,002,086 for period ending
October 31, 2000 was primarily attributable to an increase of $7,913,573 in
accounts receivable and $5,472,696 in accounts payable. These were partially
offset by a decrease of $5,232,421 in inventories. Net cash used by operating
activities of $5,449,660 for period ending October 31, 2001 was primarily
attributable to an increase of $7,340,256 in accounts receivable and $878,300 in
accounts payable. These were partially offset by a decrease of $1,061,959 in
inventories.

     Net cash used by investing activities of $37,463 for period ending October
31, 2000 was primarily attributable to investments in property and equipment.
Net cash used by investing activities of $23,175 for period ending October 31,
2001 was primarily attributable to investments in property and equipment.

     Net cash used by financing activities of $3,040,674 period ending October
31, 2000 was primarily attributable to reduction of $3,082,674 in loan proceeds
and increase of $42,000 from net proceeds from issuance of common stock. Net
cash provided by financing activities of $3,592,587 for period ending October
31, 2001 was primarily attributable to increases of $3,556,587 in loan proceeds
and $36,000 from net proceeds from issuance of common stock.

RESULTS OF OPERATIONS

     Three months ended October 31, 2001 as compared to the three months ended
October 31, 2000:

     Total Revenues for the period ending October 31, 2001 increased by 18.9% or
$9.5 million. Total Revenues for the period totaled $59.6 million compared to
$50.1 million for the same period the previous year. The growth was attributable
to increased sales to existing veterinary shareholders and also the addition of
new shareholders. During the period 12 veterinary practices became shareholders
of the Company. On October 31, 2001 there were 1,546 shareholders of the
company.

     Gross profit for the period ending October 31, 2001 increased by $922,000
to $4.8 million compared to $3.8 million for the same period the previous year.
Gross profit as a percentage of total revenues was 8.0% in the period compared
to 7.7% in the same period the previous year.

     Operating, general and administrative expenses for the period ending
October 31, 2001 increased by $846,000 to $3.9 million in the period compared to
$3.1 million for the same period the previous year. Such operating, general and
administrative expenses as a percentage of total revenues for the period was
6.6% vs. 6.2% in the same period the previous year.

ITEM 3:   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risks primarily from changes in U.S.
interest rates. The Company does not engage in financial transactions for
trading or speculative purposes.

     The interest payable on the Company's revolving line of credit is based on
variable interest rates and is therefore affected by changes in market interest
rates. If interest rates on variable rate debt rose .525 percentage points (a
10% change from the interest rate as of October 31, 2001), assuming no change in
the Company's outstanding balance under the line of credit (approximately
$7,958,024 as of October 31, 2001), the Company's annualized income before taxes
and cash flows from operating activities would decline by approximately $41,780.

                                       11

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

         The Company has not been informed of any legal matters that would have
a material adverse effect on its financial condition, results of operation or
cash flow.

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (d)      Use of Proceeds:

         On October 19, 1999 the registration statement (Registration No.
333-86629) for the initial public offering of our common stock became effective.
500 shares of common stock were registered with an aggregate offering price of
$1,500,000. Through October 31, 2001, 358 shares of common stock have been sold
for an aggregate offering price of $1,074,000.

         There have been no changes since the last reporting period in the
amount or payment of the expenses incurred in connection with the issuance and
distribution of our common stock. Accordingly, a total reasonable estimate of
the amount of expenses is $127,053.56.

         The net offering proceeds to the Company after deducting the total
expenses are $946,946.44 as of October 31, 2001.

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES

                     None.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                     None.

ITEM 5:  OTHER INFORMATION

                     None.

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

             (a)     EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-K

                     None

             (b)     REPORTS ON FORM 8-K

                     The Company filed no current reports on Form 8-K during
the quarter ended October 31, 2001.

                                   SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

     Date:    December 17, 2001          By: /s/ Dr. Lionel L. Reilly, President
                                             -----------------------------------




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