##### 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, 2009
 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.)
 th
  þ o
 o o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



PART I FINANCIAL INFORMATION
    
    
    2ITEM 1. FINANCIAL STATEMENTS
    
    
    2Condensed Consolidated Balance Sheets as of April 30, 2009 (unaudited)
and July 31, 2008
    
    
    2Condensed Consolidated Statements of Income (Loss) and Comprehensive
Income (Loss) for the three and nine month periods ended April 30, 2009
and 2008 (unaudited)
    
    
    3Condensed Consolidated Statements of Stockholders Equity for
the nine month periods ended April 30, 2009 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for
the nine month periods ended April 30, 2009 and 2008 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    15ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    29ITEM 4: CONTROLS AND PROCEDURES
    
    
    30PART II OTHER INFORMATION
    
    
    30ITEM 1: LEGAL PROCEEDINGS
    
    
    30ITEM 1A: RISK FACTORS
    
    
    31ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    31ITEM 3: DEFAULTS UPON SENIOR SECURITIES
    
    
    32ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    32ITEM 5: OTHER INFORMATION
    
    
    33ITEM 6: EXHIBITS
    
    
    33SIGNATURESEX-10.1EX-10.2EX-31.1(A)EX-31.1(B)EX-32
  1




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##### Table of Contents



PART I FINANCIAL INFORMATION 
 ITEM 1: FINANCIAL STATEMENTS
 PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
    April 30,
    
    
    July 31,2009
    
    
    2008ASSETSCURRENT ASSETSCash
    
    $
    3,361
    
    
    $
    1,985Accounts Receivable, less allowance for doubtful
accounts $914 and $501, respectively
    
    
    32,231
    
    
    
    27,782Accounts receivable, related parties
    
    
    320
    
    
    
    663Inventory, less allowance for obsolete inventory $129 and
$182, respectively
    
    
    41,318
    
    
    
    35,906Deferred tax asset
    
    
    678
    
    
    
    599Other current assets
    
    
    2,447
    
    
    
    1,271Total current assets
    
    
    80,355
    
    
    
    68,206NET PROPERTY AND EQUIPMENT
    
    
    9,143
    
    
    
    10,200OTHER ASSETSIntangible assets, less accumulated
amortization, $9 and $7 respectively
    
    
    31
    
    
    
    33Investment in unconsolidated affiliates
    
    
    144
    
    
    
    144Cash value of life insurance
    
    
    2,804
    
    
    
    2,351Deferred tax asset
    
    
    519
    
    
    
    257Other assets
    
    
    1
    
    
    
    3Total other assets
    
    
    3,499
    
    
    
    2,788TOTAL ASSETS
    
    $
    92,997
    
    
    $
    81,194LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNote payable, bank
    
    $
    18,001
    
    
    $
    12,860Current portion of long-term debt and capital lease obligation
    
    
    392
    
    
    
    371Current portion of accrued retirement benefits
    
    
    69
    
    
    
    115Accounts payable
    
    
    42,163
    
    
    
    32,801Accounts payable, related parties
    
    
    1,012
    
    
    
    738Interest rate swap
    
    
    163
    
    
    
    Other current liabilities
    
    
    4,300
    
    
    
    4,093Total current liabilities
    
    
    66,100
    
    
    
    50,978LONG-TERM LIABILITIESLong-term debt and capital lease obligation,
less current portion
    
    
    3,472
    
    
    
    3,767Accrued retirement benefits
    
    
    3,065
    
    
    
    2,853Total long-term liabilities
    
    
    6,537
    
    
    
    6,620TOTAL LIABILITIES
    
    
    72,637
    
    
    
    57,598STOCKHOLDERS EQUITYCommon stock, $1 par value; authorized 30,000 shares; issued
and outstanding, 1,964 shares and 2,037, respectively
    
    
    2
    
    
    
    2Paid-in capital
    
    
    5,826
    
    
    
    6,044Retained earnings
    
    
    14,996
    
    
    
    17,935Accumulated other comprehensive loss
    
    
    (464
    )
    
    
    (385
    )Total stockholders equity
    
    
    20,360
    
    
    
    23,596TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    92,997
    
    
    $
    81,194
  2




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     Three Months Ended
    
    
    Nine Months EndedApril 30,
    
    
    April 30,
    
    
    April 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008NET SALES AND OTHER REVENUE
    
    $
    75,291
    
    
    $
    82,683
    
    
    $
    225,813
    
    
    $
    263,300COST OF SALES
    
    
    67,376
    
    
    
    71,680
    
    
    
    199,774
    
    
    
    229,838Gross profit
    
    
    7,915
    
    
    
    11,003
    
    
    
    26,039
    
    
    
    33,462OPERATING GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    9,662
    
    
    
    10,359
    
    
    
    30,009
    
    
    
    29,880Operating income (loss)
    
    
    (1,747
    )
    
    
    644
    
    
    
    (3,970
    )
    
    
    3,582OTHER INCOME (EXPENSE)Interest income
    
    
    98
    
    
    
    84
    
    
    
    292
    
    
    
    245Interest expense
    
    
    (250
    )
    
    
    (317
    )
    
    
    (854
    )
    
    
    (1,091
    )Other
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Equity in earnings of unconsolidated affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )Other expense  net
    
    
    (152
    )
    
    
    (232
    )
    
    
    (562
    )
    
    
    (881
    )Income (loss) before taxes
    
    
    (1,899
    )
    
    
    412
    
    
    
    (4,532
    )
    
    
    2,701Income tax expense (benefit)
    
    
    (753
    )
    
    
    164
    
    
    
    (1,593
    )
    
    
    976NET INCOME (LOSS)
    
    $
    (1,146
    )
    
    $
    248
    
    
    $
    (2,939
    )
    
    $
    1,725EARNINGS (LOSS) PER COMMON SHARE
    
    $
    (581.43
    )
    
    $
    121.57
    
    
    $
    (1,471.71
    )
    
    $
    841.87Weighted average common shares
outstanding
    
    
    1,971
    
    
    
    2,040
    
    
    
    1,997
    
    
    
    2,049COMPREHENSIVE INCOMENet income (loss)
    
    $
    (1,146
    )
    
    $
    248
    
    
    $
    (2,939
    )
    
    $
    1,725Other comprehensive income:Adjustment for net periodic pension
benefit cost, net of tax
    
    
    6
    
    
    
    7
    
    
    
    18
    
    
    
    19Adjustment for mark-to-market
value of swap, net of tax
    
    
    29
    
    
    
    
    
    
    
    (97
    )
    
    
    Total comprehensive income (loss)
    
    $
    (1,111
    )
    
    $
    255
    
    
    $
    (3,018
    )
    
    $
    1,744SUPPLEMENTAL INFORMATIONNet sales and other revenue  related parties
    
    $
    716
    
    
    $
    10,346
    
    
    $
    3,566
    
    
    $
    29,858Purchases  related parties
    
    $
    2,032
    
    
    $
    2,753
    
    
    $
    8,587
    
    
    $
    9,873
  3




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     AccumulatedCommon
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    OtherShares
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveIssued
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income(Loss)
    
    
    TotalBALANCE AT JULY 31, 2008
    
    
    2,037
    
    
    $
    2
    
    
    $
    6,044
    
    
    $
    17,935
    
    
    $
    (385
    )
    
    $
    23,596Redemption of stock
    
    
    (73
    )
    
    
    
    
    
    
    (218
    )
    
    
    
    
    
    
    
    
    
    
    (218
    )Change in unrecognized pension cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    18Change in mark-to-market interest
rate swap
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (97
    )
    
    
    (97
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,939
    )
    
    
    
    
    
    
    (2,939
    )BALANCE AT APRIL 30, 2009
    
    
    1,964
    
    
    $
    2
    
    
    $
    5,826
    
    
    $
    14,996
    
    
    $
    (464
    )
    
    $
    20,360
  4




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
     April 30,
    
    
    April 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    (2,939
    )
    
    $
    1,725Adjustments to reconcile net income (loss) to net cash
from operating activities:Depreciation and amortization
    
    
    1,370
    
    
    
    1,233(Gain)Loss on sale of assets
    
    
    26
    
    
    
    (1
    )Retirement benefits
    
    
    166
    
    
    
    246Deferred income tax
    
    
    (257
    )
    
    
    (154
    )Allowance for doubtful accounts
    
    
    413
    
    
    
    (22
    )Allowance for obsolete inventory
    
    
    (53
    )
    
    
    (1
    )Loss from affiliates
    
    
    
    
    
    
    36Changes in:Receivables
    
    
    (4,519
    )
    
    
    (8,560
    )Inventory
    
    
    (5,359
    )
    
    
    (6,734
    )Other current assets
    
    
    (1,176
    )
    
    
    (454
    )Other assets
    
    
    2
    
    
    
    1Accounts payable
    
    
    9,636
    
    
    
    8,225Other current liabilities
    
    
    207
    
    
    
    (637
    )Total adjustments
    
    
    456
    
    
    
    (6,822
    )Net cash consumed by operating activities
    
    
    (2,483
    )
    
    
    (5,097
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (337
    )
    
    
    (1,483
    )Proceeds from the sale of fixed assets
    
    
    
    
    
    
    1Purchase of investments
    
    
    
    
    
    
    (9
    )Sale of investments
    
    
    
    
    
    
    40Cash value of life insurance
    
    
    (453
    )
    
    
    (451
    )Net cash consumed by investing activities
    
    
    (790
    )
    
    
    (1,902
    )CASH FLOWS FROM FINANCING ACTIVITIESNet short-term borrowings
    
    
    5,141
    
    
    
    9,872Payments of long-term debt and capital lease obligation
    
    
    (274
    )
    
    
    (308
    )Redemptions of common stock
    
    
    (218
    )
    
    
    (62
    )Net cash provided by financing activities
    
    
    4,649
    
    
    
    9,502Net increase in cash
    
    
    1,376
    
    
    
    2,503Cash at beginning of year
    
    
    1,985
    
    
    
    1,111Cash at end of period
    
    $
    3,361
    
    
    $
    3,614Supplemental disclosure of cash flows information:Interest paid
    
    $
    877
    
    
    $
    1,145Income taxes paid (refunded)
    
    $
    (182
    )
    
    $
    1,879Non-cash periodic pension cost
    
    $
    18
    
    
    $
    19Non-cash unrealized loss on interest rate swap
    
    $
    (97
    )
    
    $
    
  5




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 
    NOTE 1  BASIS OF PRESENTATION:
      NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS:
 Fair Value
Measurements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133.
 6




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 3  PROPERTY AND EQUIPMENT:
  April 30,
    
    
    July 31,2009
    
    
    2008Land
    
    $
    1,762
    
    
    $
    1,762Buildings
    
    
    5,217
    
    
    
    5,217Leasehold improvements
    
    
    606
    
    
    
    636Equipment
    
    
    11,221
    
    
    
    10,98218,806
    
    
    
    18,597Less  Accumulated depreciation
    
    
    9,944
    
    
    
    8,6988,862
    
    
    
    9,899Construction in progress
    
    
    281
    
    
    
    301Net property, plant, and equipment
    
    $
    9,143
    
    
    $
    10,200
 NOTE 4  LINE OF CREDIT:
   NOTE 5  EARNINGS PER SHARE:
 Earnings per Share
 7




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 6  COMMON STOCK:
  NOTE 7  INCOME TAXES:
 Accounting for Uncertainty in Income Taxes, Accounting for Income Taxes
   NOTE 8  POST RETIREMENT BENEFITS:
   Three Months Ended
    
    
    Nine Months EndedApril 30,
    
    
    April 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    24
    
    
    $
    35
    
    
    $
    73
    
    
    $
    104Interest cost
    
    
    46
    
    
    
    41
    
    
    
    139
    
    
    
    123Amortization of prior losses
    
    
    2
    
    
    
    1
    
    
    
    5
    
    
    
    5Amortization of unrecognized prior service cost
    
    
    9
    
    
    
    9
    
    
    
    26
    
    
    
    26Net periodic benefit cost
    
    $
    81
    
    
    $
    86
    
    
    $
    243
    
    
    $
    258
 8




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 9  DERIVATIVE FINANCIAL INSTRUMENTS:
    April 30,
    
    July 31,2009
    
    2008Fair value of interest rate swap agreement
    
    $
    (163
    )
    
    $
    Balance sheet location of fair value amount
    
    CurrentLiabilities
    
    
    
    Gain (loss) recognized in other
comprehensive income (effective
portion-net of tax)
    
    $
    (97
    )
    
    $
    Gain or loss reclassified from accumulated
other comprehensive income into income
(effective portion)
    
    $
    (92
    )
    
    $
    Location of gain (loss) reclassified from
accumulated other comprehensive income
into income
    
    
    Interest
Expense
    
    
    
    Gain 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  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:
  9




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 10  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (continued):
  Level 1
    
    Quoted prices in active markets for identical assets or liabilitiesLevel 2
    
    Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilitiesLevel 3
    
    Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities
  Interest Rate Swap Agreement
   10




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 10  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (continued):
 Fair Value Measurements UsingQuoted Pricesin Active
    
    SignificantMarkets for
    
    Other
    
    SignificantIdentical
    
    Observable
    
    UnobservableAssets
    
    Inputs
    
    InputsFair Value
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Interest rate swap agreement
    
    $
    (163
    )
    
    $
    
    
    
    $
    (163
    )
    
    $
    
 NOTE 11  COMMITMENTS AND CONTINGENT LIABILITIES:
 Stock Redemption 
 Major Customers, Major Suppliers and Credit Concentrations 
 Other 
  Agreements 
 11




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 12  SEGMENT INFORMATION:
   Disclosures About Segments of an Enterprise and Related
Information.
 12




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##### Table of Contents



PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 12  SEGMENT INFORMATION (continued):
  Direct
    
    
    
    
    
    
    CondensedWholesale
    
    
    Logistics
    
    
    Customer
    
    
    
    
    
    
    ConsolidatedDistribution
    
    
    Services
    
    
    Services
    
    
    Eliminations
    
    
    TotalThree 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
    )Three months ended April 30, 2008Net sales and other revenue
    
    $
    82,392
    
    
    $
    96
    
    
    $
    13,866
    
    
    $
    (13,671
    )
    
    $
    82,683Cost of sales
    
    
    73,220
    
    
    
    81
    
    
    
    12,396
    
    
    
    (14,017
    )
    
    
    71,680Operating, general and
administrative expenses
    
    
    8,516
    
    
    
    
    
    
    
    1,843
    
    
    
    
    
    
    
    10,359Operating income (loss)
    
    
    656
    
    
    
    15
    
    
    
    (373
    )
    
    
    346
    
    
    
    644Income (loss) before taxes
    
    $
    412
    
    
    $
    15
    
    
    $
    (361
    )
    
    $
    346
    
    
    $
    412Nine 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
    )
    
    $
    92,997Nine months ended April 30, 2008Net sales and other revenue
    
    $
    263,349
    
    
    $
    1,360
    
    
    $
    50,598
    
    
    $
    (52,007
    )
    
    $
    263,300Cost of sales
    
    
    235,477
    
    
    
    1,419
    
    
    
    44,360
    
    
    
    (51,418
    )
    
    
    229,838Operating, general and
administrative expenses
    
    
    24,282
    
    
    
    
    
    
    
    5,598
    
    
    
    
    
    
    
    29,880Operating income (loss)
    
    
    3,590
    
    
    
    (59
    )
    
    
    640
    
    
    
    (589
    )
    
    
    3,582Income (loss) before taxes
    
    $
    2,701
    
    
    $
    (59
    )
    
    $
    648
    
    
    $
    (589
    )
    
    $
    2,701Business segment assets
    
    $
    106,314
    
    
    $
    335
    
    
    $
    14,399
    
    
    $
    (13,745
    )
    
    $
    107,303
 13




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PROFESSIONAL VETERINARY PRODUCTS, LTD.
 NOTE 13  SIGNIFICANT ESTIMATES AND CONCENTRATIONS
 Current
Economic Conditions
   
 14




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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 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 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
   15




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Current Assets
  Current Liabilities
  Results of Operations
 16




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Summary Condensed Consolidated Results of Operations Table For Three Months Ended April 30, 2009
 Three Months EndedApril 30,(in thousands)2009
    
    
    2008Net sales and other revenue
    
    $
    75,291
    
    
    $
    82,683Cost of sales
    
    
    67,376
    
    
    
    71,680Gross profit
    
    
    7,915
    
    
    
    11,003Operating, general and administrative
expenses
    
    
    9,662
    
    
    
    10,359Operating income (loss)
    
    
    (1,747
    )
    
    
    644Interest expense, net
    
    
    (152
    )
    
    
    (233
    )Other expense
    
    
    
    
    
    
    1Income (loss) before taxes
    
    
    (1,899
    )
    
    
    412Income tax expense (benefit)
    
    
    (753
    )
    
    
    164Net income (loss)
    
    $
    (1,146
    )
    
    $
    248
 Three months ended April 30, 2009 as compared to three months ended April 30, 2008
    17




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Operating Segments  three months ended April 30, 2009 as compared to three months ended April 30,
2008
   18




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Wholesale Distribution
      Logistics Services
   19




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Direct Customer Services
      20




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##### Table of Contents



Summary Consolidated Results of Operations Table for nine months ended April 30, 2009
 Nine Months EndedApril 30,(in thousands)2009
    
    
    2008Net sales and other revenue
    
    $
    225,813
    
    
    $
    263,300Cost of sales
    
    
    199,774
    
    
    
    229,838Gross profit
    
    
    26,039
    
    
    
    33,462Operating, general and administrative
expenses
    
    
    30,009
    
    
    
    29,880Operating income (loss)
    
    
    (3,970
    )
    
    
    3,582Other income (expense), net
    
    
    (562
    )
    
    
    (846
    )Equity earnings of unconsolidated affiliate
    
    
    
    
    
    
    (36
    )Other expense
    
    
    
    
    
    
    1Income (loss) before taxes
    
    
    (4,532
    )
    
    
    2,701Income tax expense (benefit)
    
    
    (1,593
    )
    
    
    976Net income (loss)
    
    $
    (2,939
    )
    
    $
    1,725
 Nine months ended April 30, 2009 as compared to nine months ended April 30, 2008
     21




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Operating Segments  Nine months ended April 30, 2009 compared to nine months ended April 30, 2008
 Wholesale Distribution
     22




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Logistics Services
      Direct Customer Services
    23




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Seasonality in Operating Results
   Liquidity and Capital Resources
    24




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Operating Activities .
 25




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Investing Activities.
 Financing Activities .
 Off-Balance Sheet Arrangements
  Critical Accounting Policies
   Use of Estimates
  26




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Revenue Recognition
  Inventories
  Major Customers, Major Suppliers and Credit Concentrations
  Income Taxes
  Other Intangible Assets
   27




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##### Table of Contents



Pension Accounting
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans
   Recent Accounting Changes
 Fair Value Measurements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133.
 28




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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Liquity and Capital Resources
   29




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ITEM 4: CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
  Limitations on the Effectiveness of Controls
  
 PART II
OTHER INFORMATION
 
 ITEM 1: LEGAL PROCEEDINGS
  30




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ITEM 1A: RISK FACTORS
  Consolidation among animal health product vendors may decrease our sales and profitability.
  The general economic downturn may adversely affect our business.
  
 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    31




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##### Table of Contents



Purchases of Equity Securities by the Company and Affiliated Purchasers:
 Total Number of
    
    MaximumShares
    
    Number ofPurchased as
    
    Shares ThatPart of Publicly
    
    May Yet BeTotal Number
    
    
    
    
    
    Announced
    
    Purchasedof Shares
    
    Average Price
    
    Plans or
    
    Under the PlansPeriod
    
    Purchased
    
    Paid Per Share
    
    Programs
    
    or Programs(1)February 1  February 28, 2009
    
    
    12
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,976March 1  March 31, 2009
    
    
    4
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,972April 1  April 30, 2009
    
    
    8
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,964Total:
    
    
    24
    
    
    $
    3,000
    
    
    
    
    
    
    
    1,964
 
 (1)
    
    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. 
 ITEM 3: DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Proposal 1: Election of Three Class III Directors
 Shares Voted
    
    Shares VotedDirector
    
    FOR
    
    WITHHOLDJames Alan Hoffmann, D.V.M.
    
    
    970
    
    
    
    64Charles W. Luke, D.V.M.
    
    
    967
    
    
    
    67Rhonda Lee Pierce, D.V.M.
    
    
    967
    
    
    
    67
 32




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##### Table of Contents



Proposal 2: Election of One Non-Shareholder Director
 Shares Voted
    
    Shares VotedDirector
    
    FOR
    
    WITHHOLDDonald Janezic, Jr.
    
    
    935
    
    
    
    99
  
 ITEM 5: OTHER INFORMATION
  
 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
    
    Employment Agreement effective February 1, 2009, between Professional
Veterinary Products, Ltd. And Stephen J. Price (#)10.2
    
    Severance Agreement dated April 1, 2009 between Professional Veterinary
Products, Ltd. and Neal Soderquist (#)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 CEO
(#)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 CFO
(#)32
    
    Certifications 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 CEO and CFO (#)
 
 (#)
    
    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. 33




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SIGNATURES
   PROFESSIONAL VETERINARY PRODUCTS, LTD.By:
    
    /s/ Stephen J. PriceStephen J. Price, President and CEOBy:
    
    /s/ Tara ChicatelliTara Chicatelli , CFO
 34