<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934. For the fiscal year ended July 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)

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

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

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:
                     Common Stock, par value $1.00 per share
                                (Title of Class)

         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 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulations S-K (ss. 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]

         As of September 30, 2001, the aggregate market value of the voting and
non-voting Common Stock held by non-affiliates of the Registrant was $4,644,000.
Shares of Common Stock held by each executive officer and director of the
Registrant have been excluded in that such persons may be deemed to be
affiliates of the Registrant. This determination of affiliate status is not
necessarily a conclusive determination for other purposes. As of September 30,
2001, 1,548 shares of the Registrant's Common Stock were outstanding.

<PAGE>

         The Undersigned Registrant hereby amends the following items of its
Annual Report on Form 10-K for the year ended July 31, 2001, as set forth below.

PART II.

Item 6.  Selected Financial Data

         The historical selected financial data set forth below for the five
years ended July 31, 2001 are derived from the Company's Financial Statements
included elsewhere in this report and should be read in conjunction with those
financial statements and notes thereto. The financial data for the period ended
July 31, 2001 is consolidated and includes accounts of Exact Logistics, LLC and
ProConn, LLC from December 6, 2000, the date the Company became the sole member
of Exact Logistics, LLC and ProConn, LLC. All amounts are in thousands except
per share data. No cash dividends were declared.

<TABLE>
<CAPTION>
                                                       At the Year Ended July 31,
                                           1997         1998      1999         2000         2001
                                                               (Restated)   (Restated)   (Restated)
<S>                                      <C>         <C>       <C>          <C>          <C>
For the Year:
-------------
Net sales and other revenues ..........   80,939       92,546      120,536      176,275       197,523
Operating income ......................      160          258           11        1,410         1,320
Net income ............................       46          102          141          547           387
Basic income per share:
   Operating income ...................  $173.63       257.63         9.57     1,109.40        912.08
    Net Income ........................  $ 49.98       101.44       128.52       430.55        267.58
Basic common shares outstanding
    used in the calculation ...........      921        1,001        1,095        1,271         1,447

At Year End:
------------
Total assets ..........................  $14,176       20,008       28,358       59,612        50,737

Total long-term obligations ...........  $ 1,302        1,225            -        6,013         5,565
</TABLE>

                                       1

<PAGE>

         The following table presents selected financial data for the Company
for each of the quarters in the two-year period ended July 31, 2001. The
financial data for the period ended July 31, 2001 is consolidated and includes
accounts of Exact Logistics, LLC and ProConn, LLC from December 6, 2000, the
date the Company became the sole member of Exact Logistics, LLC and ProConn,
LLC. The historical selected financial data are derived from the Company's
Financial Statements included elsewhere in this report and should be read in
conjunction with those financial statements and notes thereto. All amounts are
in thousands except per share data.

<TABLE>
<CAPTION>
                                                              Quarters Ended                                        Year Ended
                             October 31, 1999     January 31, 2000      April 30, 2000        July 31, 2000       July 31, 2000
                                (Restated)           (Restated)           (Restated)            (Restated)          (Restated)
<S>                          <C>                  <C>                   <C>                   <C>                 <C>
Revenues ..................       $    41,522               39,234              42,111               53,408             176,275
Gross profit ..............             3,060                3,696               3,380                4,205              14,341
Operating income...........               207                  566                (218)                 855               1,410
Net income ................               101                  188                (348)                 606                 547
Net income per share ......       $     84.14               151.13             (270.25)              450.17              430.55
Weighted average common
    shares outstanding ....             1,200                1,243               1,289                1,347               1,271

<CAPTION>
                                                              Quarters Ended                                        Year Ended
                             October 31, 2000     January 31, 2001      April 30, 2001        July 31, 2001       July 31, 2001
                                (Restated)           (Restated)           (Restated)            (Restated)          (Restated)
<S>                          <C>                  <C>                   <C>                   <C>                 <C>
Revenues ..................       $    49,755               46,345              50,774               50,648             197,523
Gross profit ..............             3,500                3,698               3,751                4,915              15,863
Operating income... .......               697                   19                (120)                 724               1,320
Net income ................               254                 (148)                (82)                 363                 387
Net income per share ......       $    183.00              (104.39)             (56.33)              240.23              267.58
Weighted average common
    shares outstanding ....             1,388                1,420               1,465                1,515               1,447
</TABLE>


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operation

Results of Operations

         The following discussion is based on the historical results of
operations for fiscal 1999, 2000 and 2001.

Fiscal 1999 Compared to Fiscal 1998:

         Net sales and other revenue for the fiscal year ending July 31, 1999
increased by 30.2% or $28.0 million. Net sales and other revenue for the 1999
fiscal year totaled $120.5 million compared to $92.5 million for the previous
fiscal year. The growth was attributable to increased sales to existing
customers of $22.1 million and to new customers of $5.9 million. During the year
the number of total shareholders increased by 140 veterinary practices. On July
31, 1999 there were 1,188 shareholders of the Company.

         Gross profit increased by $1.4 million to $8.7 million compared to $7.3
million for the previous fiscal year. This increase was primarily due to the
increase in revenue. Gross profit as a percentage of total revenues was 7.2% in
fiscal 1999 compared to 7.9% in fiscal 1998. This decrease in percentage was
primarily due to lower margin from the sale of product.

                                        2

<PAGE>

         Operating, general and administrative expenses increased by $1.6
million to $8.6 million in fiscal year 1999 compared to $7.0 million for the
previous year. This increase was primarily due to support the increase in
revenue. Such operating, general and administrative expenses as a percentage of
total revenue for fiscal 1999 was 7.2% vs. 7.6% for fiscal 1998. This decrease
in percentage was primarily due to maintaining tight control on expenses while
increasing revenue.

         Operating income decreased by $248 thousand to $11 thousand for fiscal
year 1999 compared to $258 thousand for the previous year. This decrease was
primarily due to a decrease in commissions from $1.8 million for fiscal year
1998 to $1.6 million for fiscal year 1999, an increase of net purchases from
$86.7 million for fiscal year 1998 to $114.1 million for fiscal year 1999, an
increase of freight out from $2.0 million for fiscal year 1998 to $2.5 million
for fiscal year 1999, an increase in vendor rebates from $3.4 million for fiscal
year 1998 to $4.6 million for fiscal year 1999, in addition to an increase of
operating, general and administrative expenses from $8.7 million for fiscal year
1998 to $10.4 million for fiscal year 1999. This trend of decreasing operating
incomes is not likely to continue.

         For fiscal year 1999, the Company's other income (expense) was $223
thousand in income as compared to an expense of $83 thousand for the previous
year. The interest expense for the period ending July 31, 1999 increased to $263
thousand from $244 thousand for the same period in the previous year, an
increase of $19 thousand. This increase is primarily attributable to interest
costs associated with a higher average balance on the Company's revolving line
of credit. This increase is partially offset by gain on the sale of the
Company's property and equipment at 10100 "J" Street, Omaha, Nebraska of $237
thousand. The expenses were further offset by an increase in interest income of
$88 thousand primarily attributable to an increased amount of monthly finance
charges which the Company received on past due account receivable balances.

Fiscal 2000 Compared to Fiscal 1999:

         Net sales and other revenue for the fiscal year ending July 31, 2000
increased by 46.2% or $55.8 million. Net sales and other revenue for the 2000
fiscal year totaled $176.3 million compared to $120.5 million for the previous
fiscal year. The growth was principally attributable to increased sales to
existing customers of $37.0 million and to new customers of $18.8 million.
During the year the number of total shareholders increased by 193 veterinary
practices. On July 31, 2000 there were 1,381 shareholders of the Company.

         Gross profit increased by $5.6 million to $14.3 million compared to
$8.7 million for the previous fiscal year. This increase was primarily due to
the increase in revenue. Gross profit as a percentage of total revenue was 8.1%
for fiscal 2000 compared to 7.2% for fiscal 1999. This increase in percentage
was primarily due to higher vendor rebates.

         Operating, general and administrative expenses increased by $4.2
million to $12.9 million for fiscal year 2000 compared to $8.7 million for the
previous year. This increase was primarily due to support the increase in
revenue. Such operating, general and administrative expenses as a percentage of
total revenue for fiscal 2000 was 7.3% vs. 7.2% in fiscal 1999.

         Operating income increased by $1.4 million to $1.4 million for fiscal
year 2000 compared to $11 thousand for the previous year. This increase is
primarily attributable to the increase in gross profit as a percentage of total
revenue while maintaining the percentage of operating, general and
administrative expenses.

         For fiscal year 2000, other income (expense) was $533 thousand of
expenses as compared to $223 thousand of income for the previous year.
Principally as a result of an increase in a higher average balance on the
revolving line of credit and debt resulting from the Company's new facility,
interest expense for the period ending July 31, 2000 was $862 thousand as
compared to $263 thousand for the

                                        3

<PAGE>

same period the previous fiscal year. In addition, as a result of an increase in
the amount of monthly financial charges on past due account receivable balances,
interest income increased by $124 thousand.

Fiscal 2001 Compared to Fiscal 2000:

         Net sales and other revenue for the fiscal year ending July 31, 2001
increased by 12.1% or $21.2 million. Net sales and other revenue for the 2001
fiscal year totaled $197.5 million compared to $176.3 million for the previous
fiscal year. The growth was principally attributable to increased sales to
existing customers of $13.6 million and to new customers of $7.6 million. During
the year the number of total shareholders increased by 153 veterinary practices.
On July 31, 2001 there were 1,534 shareholders of the Company.

         Gross profit increased by $1.6 million to $15.9 million compared to
$14.3 million for the previous fiscal year. This increase was primarily due to
the increase in revenue. Gross profit as a percentage of total revenue was 8.0%
for fiscal 2001 compared to 8.1% for fiscal 2000. This decrease in percentage
was primarily due to higher freight costs.

         Operating, general and administrative expenses increased by $1.6
million to $14.5 million for fiscal year 2001 compared to $12.9 million for the
previous year. This increase was primarily due to support the increase in
revenue. Such operating, general and administrative expenses as a percentage of
total revenue for fiscal 2001 was 7.4% vs. 7.3% for fiscal 2000.

         Operating income decreased by $153 thousand to $1.3 million for fiscal
year 2001 compared to $1.4 million for the previous year. This decrease is
primarily attributable to the decrease in gross profit as a percentage of total
revenue while also decreasing the percentage of operating, general and
administrative expenses.

         Company's other income (expense) was $504 thousand (expense) for fiscal
year 2001 as compared to $533 thousand (expense) for the previous year. In
addition, interest expense for the period ending July 31, 2001 increased to $1.0
million as compared to $862 thousand for the same period of the previous year -
an increase of $144 thousand. The increase was due to increased borrowing on the
Company's revolving line of credit. These increased expenses were partially
offset by an increase in interest income of $131 thousand which was due
principally to a greater amount of monthly finance charges on past due accounts
receivable balances.


Seasonality in Operating Results

         The Company's quarterly sales and operating results have varied
significantly in the past and will likely continue to do so in the future.
Historically, the Company's sales are seasonal with peak sales in the late
spring and early fall. The cyclical nature is directly tied to the significant
amount of business the Company does in the livestock sector. Product use cycles
are directly related to certain medical procedures performed by veterinarians on
livestock during the late spring and early fall.

         In the last few years the Company has been selling more companion
animal related products. These products tend to have a seasonal nature which
minimally overlaps the livestock business cycles. The net result is a reduction
of the cyclical seasonal nature of the business. Minimizing the cyclical nature
of the Company's business has allowed for more efficient utilization of all
resources.


Liquidity and Capital Resources

         The Company expends capital primarily to fund day-to-day operations and
expand those operations to accommodate sales growth. It is necessary for the
Company to expend necessary funds to

                                        4

<PAGE>

maintain significant inventory levels in order to fulfill its commitment to its
customers. Historically, the Company has financed its cash requirements
primarily from short term bank borrowings and cash from operations. The short
term bank borrowings are accomplished through a fifteen million dollar revolving
line of credit at U.S. Bank, Omaha, Nebraska. At the year end, July 31, 2001,
there were no additional material commitments for capital expenditures.

         Net cash used by operating activities of $2.1 million in fiscal year
ending July 1998 was primarily attributable to increases of $1.5 million in
accounts receivable and $4.4 million in inventories. These were partially offset
by an increase of $2.6 million in accounts payable. Net cash provided by
operating activities of $1.9 million in fiscal year ending July 1999 was
primarily attributable to an increase of $6.6 million in accounts receivable. It
was partially offset by increases of $0.4 million in inventories and $7.7
million in accounts payable. In the fiscal year ending July 2000, net cash used
by operating activities of $5.7 million was primarily attributable to increases
of $10.4 million in accounts receivable and $15.8 million in inventories. These
were partially offset by an increase of $19.0 million in accounts payable. For
the fiscal year ending July 2001, net cash provided by operating activities of
$5.2 million was primarily attributable to decreases of $3.1 million in accounts
receivable and $6.0 million in inventories. These were partially offset by a
decrease of $4.8 million in accounts payable.

         In the fiscal year ending July 1998, net cash used by investing
activities of $0.4 million was primarily attributable to investments in
equipment, which includes the purchase of computer equipment. Net cash used by
investing activities of $1.0 million in fiscal year ending July 1999 was
primarily attributable to investments in property, which included the purchase
of land for future construction of the building, and investments in equipment,
such as the purchase of computer equipment. Net cash used by investing
activities of $6.7 million in fiscal year ending July 2000 was primarily
attributable to investments in property, including the construction of our new
building, and investments in equipment, such as the purchase of office and
warehouse equipment for use in the new building. Net cash used by investing
activities of $0.3 million in fiscal year ending July 2001 was primarily
attributable to investments in equipment, including the purchase of office,
warehouse and computer equipment.

         Net cash provided by financing activities of $1.3 million in fiscal
year ending July 1998 was primarily attributable to increases of $1.0 million in
loan proceeds and $0.3 million from net proceeds from issuance of common stock.
Net cash provided by financing activities of $1.4 million in fiscal year ending
July 1999 was primarily attributable to increases of $1.0 million in loan
proceeds and $0.4 million from net proceeds from issuance of common stock. In
the fiscal year ending July 2000, net cash provided by financing activities of
$11.2 million was primarily attributable to increases of $10.2 million in loan
proceeds and $0.6 million from net proceeds from issuance of common stock. In
the fiscal year ending July 2001, net cash used by financing activities of $4.3
million was primarily attributable to a decrease of $4.3 million in loan
proceeds, an increase of $0.4 million from net proceeds from issuance of common
stock, and a bank overdraft of $0.4 million.

                                        5

<PAGE>

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a)(1)            Financial Statements
         (a)(3)            Exhibits

<TABLE>
<CAPTION>
         (a)(1)   The following financial statements are filed as part of this report:
                  <S>                                                                                <C>
                  Independent Auditor's Report ....................................................  F-1
                  Consolidated Balance Sheets for the year ended July 31, 2001 and 2000 ...........  F-2
                  Consolidated Statements of Income for the year ended July 31, 2001, 2000
                           and 1999 ...............................................................  F-3
                  Consolidated Statements of Stockholders' Equity for the year ended July 31,
                           2001, 2000 and 1999 ....................................................  F-4
                  Consolidated Statements of Cash Flow for the year ended July 31, 2001,
                           2000 and 1999 ..........................................................  F-5
                  Notes to Financial Statements ...................................................  F-6
</TABLE>

                                       6

<PAGE>


                             QUICK & MCFARLIN, P.C.
                     Certified Public Accountants Letterhead




                          Independent Auditor's Report

To the Board of Directors
         Professional Veterinary Products, Ltd.
                  Omaha, Nebraska

         We have audited the accompanying consolidated balance sheets of
Professional Veterinary Products, Ltd. and subsidiaries as of July 31, 2001 and
2000, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended July 31, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Professional
Veterinary Products, Ltd. and subsidiaries as of July 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended July 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.

         As described in Note 15, these consolidated financial statements have
been restated for the change in accounting for the investment in an affiliate,
for stock subscriptions receivable, and for certain reclassifications relating
to sales promotion revenue.

                           /s/ Quick & McFarlin, P.C.

Omaha, Nebraska
April 19, 2002, except for Notes 1(j), 1(k), 15 and 16, as to which the date is
July 31, 2002

                                      F-1

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
                           Consolidated Balance Sheets

               As of July 31, 2001 (Restated) and 2000 (Restated)
                        (in Thousands, except share data)

<TABLE>
<CAPTION>
Assets
------
Current assets:                                                             July 31, 2001              July 31, 2000
                                                                               (Restated)                 (Restated)
<S>                                                                         <C>                        <C>
  Cash ....................................................................           657                          -
  Accounts receivable, trade, less allowance for doubtful accounts (0) ....        15,783                     20,006
  Accounts receivable, related parties ....................................         2,490                        629
  Accounts receivable, other ..............................................           129                        933
  Prepaid income taxes ....................................................           122                          -
  Inventory ...............................................................        22,342                     28,427
                                                                                ---------                  ---------
       Total current assets ...............................................        41,523                     49,995
                                                                                ---------                  ---------
Property and equipment ....................................................         8,916                      8,640
  Less accumulated depreciation ...........................................         1,433                        896
                                                                                ---------                  ---------
                                                                                    7,483                      7,744
                                                                                ---------                  ---------
Other assets:
  Goodwill less accumulated amortization $60 (2001), $45 (2000) ...........           166                        181
  Loan origination fee less accumulated amortization $5 (2001),
      $3 (2000) ...........................................................            15                         17
  Trademark, less accumulated amortization $1 (2001), $1 (2000) ...........             4                          4
  Investments in unconsolidated affiliates ................................         1,513                      1,635
  Cash value life insurance ...............................................            33                         30
  Deferred income tax asset ...............................................             -                          6
                                                                                ---------                  ---------
                                                                                    1,731                      1,873
                                                                                ---------                  ---------
                                                                                   50,737                     59,612
                                                                                =========                  =========

Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
  Bank overdraft ..........................................................             -                        399
  Notes payable, bank .....................................................         4,294                      8,216
  Current portion of long-term debt .......................................           456                        420
  Accounts payable, trade .................................................        31,950                     36,154
  Accounts payable, related parties .......................................           535                      1,082
  Other current liabilities ...............................................         1,532                      1,827
                                                                                ---------                  ---------
       Total current liabilities ..........................................        38,767                     48,098
                                                                                ---------                  ---------

Long-term debt ............................................................         5,565                      6,013
Deferred income tax liability .............................................            94                          -
                                                                                ---------                  ---------
       Total liabilities ..................................................        44,426                     54,111
                                                                                ---------                  ---------

Stockholders' equity:
  Common stock, $1 par value per share. Authorized 30,000 shares;
   issued and outstanding 1,557 (January 31, 2002), 1,534 shares
      (2001), 1,381 shares (2000) .........................................             2                          1
  Paid-in capital .........................................................         4,415                      3,993
  Retained earnings .......................................................         1,894                      1,507
                                                                                ---------                  ---------
                                                                                    6,311                      5,501
                                                                                ---------                  ---------
                                                                                   50,737                     59,612
                                                                                =========                  =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-2

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
                        Consolidated Statements of Income

   Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999 (Restated)
                    (in Thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                        July 31,      July 31,      July 31,
                                                          2001          2000          1999
                                                       (Restated)    (Restated)    (Restated)
<S>                                                    <C>           <C>           <C>
Net sales and other revenue                              $ 197,523       176,275       120,536

Cost of sales                                              181,660       161,934       111,876
                                                         ---------     ---------     ---------

       Gross profit                                         15,863        14,341         8,660

Operating, general and administrative expenses              14,543        12,931         8,649
                                                         ---------     ---------     ---------

       Operating income                                      1,320         1,410            11
                                                         ---------     ---------     ---------

Other income (expense):
      Interest income                                          504           373           249
      Interest expense                                      (1,006)         (862)         (263)
      Other                                                     (2)          (44)          237
                                                         ---------     ---------     ---------
                                                              (504)         (533)          223
                                                         ---------     ---------     ---------

Equity in loss of affiliate                                   (122)           (9)            -
                                                         ---------     ---------     ---------

       Income before taxes                                     694           868           234

Income taxes                                                   307           321            93
                                                         ---------     ---------     ---------

       Net income                                        $     387           547           141
                                                         =========     =========     =========

Net earnings per share of common stock                   $  267.58        430.55        128.52
                                                         =========     =========     =========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
                 Consolidated Statements of Stockholders' Equity

   Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999 (Restated)
                   (in Thousands, except Common Shares Issued)

<TABLE>
<CAPTION>
                                            Common                            Additional
                                            Shares            Common            Paid-in          Retained
                                            Issued             Stock            Capital          Earnings            Total
<S>                                        <C>               <C>              <C>                <C>               <C>
Balance at July 31, 1998                      1,048          $      1          $  2,993          $    819          $  3,813
Issuance of stock                               157                                 471                 -               471
Redemption of stock                             (17)                -               (50)                -               (50)
Net change in
    Accounts receivable, stock                    -                 -               (62)                -               (62)
Net income                                        -                 -                 -               141               141
                                           --------          --------          --------          --------          --------

Balance at July 31, 1999                      1,188                 1             3,352               960             4,313
(restated)
Issuance of stock                               211                                 633                 -               633
Redemption of stock                             (18)                -               (54)                -               (54)
Net change in
    Accounts receivable, stock                    -                 -                62                 -                62
Net income                                        -                 -                 -               547               547
                                           --------          --------          --------          --------          --------

Balance at July 31, 2000                      1,381                 1             3,993             1,507             5,501
(restated)
Issuance of stock                               172                 1               515                 -               516
Redemption of stock                             (19)                -               (57)                -               (57)
Net change in
    Accounts receivable, stock                    -                 -               (36)                -               (36)
Net income                                        -                 -                 -               387               387
                                           --------          --------          --------          --------          --------

Balance at July 31, 2001
(restated)                                    1,534          $      2          $  4,415          $  1,894          $  6,311
                                           ========          ========          ========          ========          ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flow

   Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999 (Restated)
                                 (in Thousands)

<TABLE>
<CAPTION>
                                                                     July 31, 2001          July 31, 2000          July 31, 1999
                                                                        (Restated)             (Restated)             (Restated)
<S>                                                                  <C>                    <C>                    <C>
Cash flows from operating activities:
  Net income                                                            $      387             $      547             $      141
                                                                        ----------             ----------             ----------

  Adjustments to reconcile net income to net cash provided (used)
      by operating activities:
        Depreciation and amortization                                          563                    443                    288
        (Gain) loss on sale of property                                          2                     43                   (237)
        Equity loss in affiliate                                               122                      9                      -
  Adjustments for working capital changes:
        (Increase) decrease in:
          Receivables                                                        3,167                (10,430)                (6,632)
          Inventories                                                        6,085                (15,839)                   418
          Cash value life insurance                                             (3)                   (30)                     -
          Deferred income tax                                                  100                     (6)                     -
        Increase (decrease) in:
          Accounts payable                                                  (4,751)                19,058                  7,736
          Accrued expenses and income taxes payable                           (417)                   513                    149
                                                                        ----------             ----------             ----------
           Total adjustments                                                 4,868                 (6,239)                 1,722
                                                                        ----------             ----------             ----------
           Net cash provided used (by) operating activities                  5,255                 (5,692)                 1,863
                                                                        ----------             ----------             ----------
Cash flows from investing activities:
  Purchase of property and equipment                                          (287)                (5,292)                (2,762)
  Purchase of trademark                                                          -                      -                     (5)
  Purchase of investments                                                        -                 (1,500)                  (144)
  Proceeds from sale of property                                                 -                    115                  1,878
                                                                        ----------             ----------             ----------
               Net cash provided (used) by investing activities               (287)                (6,677)                (1,033)
                                                                        ----------             ----------             ----------
Cash flows from financing activities:
  Net loan proceeds (reduction)                                             (4,334)                10,236                  1,013
  Bank overdraft                                                              (399)                   399                 (1,110)
  Net proceeds from issuance of common stock                                   422                    641                    360
                                                                        ----------             ----------             ----------
               Net cash provided (used) by financing activities             (4,311)                11,276                    263
                                                                        ----------             ----------             ----------
Net increase (decrease) in cash                                                657                 (1,093)                 1,093
Cash at beginning of year                                                        -                  1,093                      -
                                                                        ----------             ----------             ----------
Cash at end of year                                                     $      657             $        -             $    1,093
                                                                        ==========             ==========             ==========

Supplemental disclosure of cash flow information:
  Interest paid                                                         $    1,052             $      774             $      258
                                                                        ==========             ==========             ==========

  Income taxes paid                                                     $      560             $      106             $      117
                                                                        ==========             ==========             ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(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. This 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.
       This 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 consolidated 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 on these financial statements and
       are the responsibility of the parent entity.

     Summary of significant accounting policies:
       (a)  Principles of consolidation:
             The consolidated financial statements include the accounts of
             Professional Veterinary Products, Ltd. and its wholly owned
             subsidiaries. The term "Company" used herein means Professional
             Veterinary Products, Ltd. and its subsidiaries, unless otherwise
             indicated by the context. All material intercompany accounts and
             transactions have been eliminated in consolidation. Investments in
             companies in which the Company exercises significant influence, but
             not control, are accounted for using the equity method of
             accounting. Investments in companies in which the Company has less
             than a 20% ownership interest, and does not exercise significant
             influence, are accounted for at cost.

       (b)  Use of estimates:
             The preparation of financial statements in conformity with
             generally accepted accounting principles requires management to
             make estimates and assumptions that affect the reported amounts of
             assets and liabilities, the disclosure of contingent assets and
             liabilities at the date of the financial statements and the
             reported amounts of revenues and expenses during the reporting
             periods. While actual results could differ from these estimates,
             management believes these estimates are reasonable.

                                      F-6

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(1) Summary of significant accounting policies (continued):

      (c)  Concentration of cash balances:
             The Company's cash funds are located in a single financial
             institution. The bank accounts, at times, exceeded the $100,000
             federally insured limit.

      (d)  Accounts receivable:
             Management considered accounts receivable to be fully collectible;
             accordingly, no allowance for doubtful accounts was deemed
             necessary by management.

      (e)  Inventory:
             Inventories are stated at the lower of cost or market using the
             first-in, first-out (FIFO) method of valuation. All products
             included in inventory are finished goods held for resale.

      (f)  Property and equipment and depreciation:
             Property and equipment are stated at cost. When an asset is sold or
             retired, its cost and related accumulated depreciation is
             eliminated from both the asset and the accumulated depreciation
             accounts respectively and the resulting gain or loss is included in
             income. 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. Estimated useful
             lives for financial purposes are as follows:

                 Building .................................  40 years
                 Furniture, Fixtures and Equipment ........   7 years
                 Computer Equipment .......................   5 years
                 Software .................................   3 years

             Expenditures for major renewals and betterments that extend the
             useful lives of property and equipment are capitalized.
             Expenditures for maintenance and repairs are charged to expense as
             incurred.

      (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.

                                      F-7

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(1)  Summary of significant accounting policies (continued):

      (h)  Intangible assets and goodwill:
             Intangible assets consist principally of goodwill, loan fees and
             trademarks. Amortization expense for goodwill and other intangibles
             was $87, $25, and $15 for 2001, 2000, and 1999, respectively.
             Management periodically evaluates the recoverability of goodwill
             and other intangible assets which would be adjusted for a permanent
             decline in value, if any, as measured by the recoverability from
             projected future cash flows from the acquired businesses. These
             analyses necessarily involve significant management judgment.
             Amortization has been computed on intangible assets as follows:

                 Goodwill .................  15 and 20 years, straight-line
                 Loan fees ................  term of the related note, straight-
                                             line (amortized expense is included
                                             in interest)
                 Trademark ................  15 years, straight-line

      (i)  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 the basis of assets and liabilities for
             financial statement and income tax purposes. The differences relate
             primarily to depreciable assets (use of different depreciation
             methods and lives for financial statement and income tax purposes),
             and Uniform Capitalization Rules IRS 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.

                                      F-8

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(1)  Summary of significant accounting policies (continued):

      (j)  Revenue recognition:
             In accordance with generally accepted accounting principles,
             revenue is recognized when the transaction is both realized or
             realizable and earned. The Company recognizes revenue when the
             customer receives the product. Shipping terms are generally FOB
             customer. The Company and/or its shipper have the risk of loss
             until delivery to the customer. Upon receipt of the product by the
             customer, title and risk of loss passes to that customer. The
             Company sells animal health products which constitute all of its
             gross sales.

             There are two major types of transactions that affect the flow of
             products to the Company's customers. Traditional "buy/sell"
             transactions account for approximately ninety percent of the
             Company's business. In this type of transaction the customer places
             an order with the Company, which is then picked, packed, shipped,
             and invoiced to the customer, followed by payment from the customer
             to the Company. In most traditional "buy/sell" transactions the
             Company, rather than the manufacturer, sets the price of the
             products.

             There are a few product lines where the Company provides all
             transactional activities described above, except that the
             manufacturer retains title to the product. The manufacturer retains
             title in accordance with the distribution agreements for these
             products. Within these agreements the manufacturer determines if
             any promotional funds or rebates will be given to the Company.
             These "consignment" transactions account for approximately five
             percent of the Company's business. The Company inventories these
             products for the manufacturer but does not pay the manufacturer
             until the product is sold to the customer and reported to the
             manufacturer. The Company is responsible for maintaining insurance
             on the products, but the value of the product is not included in
             the inventory for accounting purposes.

      (k)  Advertising:
             The Company expenses advertising costs as incurred. Advertising
             expense was $30, $25, and $16 for the years ended 2001, 2000, and
             1999, respectively.

             The Company receives sales promotion monies through various
             contracted agreements which manufacturers use specifically to
             promote their products to veterinarian purchasers. The sales
             promotion value is passed on to the veterinarian based upon their
             level of product purchases prescribed in the contracted agreements.

      (l)  Direct shipping and handling costs:
             Freight and other direct shipping costs are included in "Cost of
             sales" on the Consolidated Statements of Income. Direct handling
             costs, which represent primarily direct compensation costs of
             employees who pick, pack and otherwise prepare, if necessary,
             merchandise for shipment to the Company's customers are reflected
             in "Operating, general and administrative expenses."

                                      F-9

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(1)  Summary of significant accounting policies (continued):

      (m)  Fair value of financial instruments:
             The carrying amounts reported on the balance sheets approximate the
             fair value for cash, short-term borrowings, and all other variable
             rate debt (including borrowings under credit agreements). The
             carrying amounts reported for long-term debt approximate fair value
             because the interest approximates current market rates for
             financial instruments with similar maturities and terms.

      (n)  Assets - Recognition and measurement of impairment:
             The Company policy is to recognize an impairment loss in accordance
             with SFAS 121 if the sum of the expected future cash flows
             (undiscounted and without interest charges) is less than the
             carrying amount of the asset. The Company reviews long-lived assets
             and identifiable intangibles to be held and used for impairment
             whenever events or changes in circumstances indicated that the
             carrying amount of an asset may not be recoverable. An impairment
             loss recognized would be measured as the amount by which the
             carrying amount of the asset exceeds the fair value of the asset.
             No current impairment exists and none have been recognized.

      (o)  Earnings per share:
             Financial Accounting Standards Board Statement No. 128, Earnings
             per Share ("SFAS No. 128") promulgates accounting standards for the
             computation and manner of presentation of the Company's earnings
             per share data. Under SFAS No. 128 the Company is required to
             present basic and diluted earnings per share. Basic earnings per
             share is computed by dividing net income available to common
             stockholders by the weighted-average number of common shares
             outstanding for the period. Diluted earnings per share reflect the
             potential dilution that could occur if securities or other
             contracts to issue common stock were exercised or converted into
             common stock. There are no securities that are convertible to
             common stock that would cause further dilution. The weighted
             average number of common shares outstanding was 1,447 for July 31,
             2001, 1,271 for July 31, 2000, and 1,095 for July 31, 1999.

      (p)  Reclassifications:
             Certain prior year amounts have been reclassified to conform to the
             July 31, 2001 presentation.

                                      F-10

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(1) Summary of significant accounting policies (continued):

       (q) New accounting pronouncements:
             In June 2001, the Financial Accounting Standards Board issued FASB
             Statement No. 142, Goodwill and Other Intangible Assets ("FAS
             142"). FAS 142 requires, among other things, that companies no
             longer amortize goodwill, but instead test goodwill for impairment
             at least annually. In addition, FAS 142 requires that the Company
             identify reporting units for the purposes of assessing potential
             future impairments of goodwill, reassess the useful lives of other
             existing recognized intangible assets, and cease amortization of
             intangible assets with an indefinite useful life. An intangible
             asset with an indefinite useful life should be tested for
             impairment in accordance with the guidance in FAS 142. FAS 142 is
             required to be applied in fiscal years beginning after December 15,
             2001 to all goodwill and other intangible assets recognized at that
             date, regardless of when those assets were initially recognized.
             FAS 142 also requires the Company to complete a transitional
             goodwill impairment test within six months from the date of
             adoption. The Company is also required to reassess the useful lives
             of other intangible assets within the first interim quarter after
             adoption of FAS 142. The Company will adopt FAS 142 in the first
             quarter of the fiscal year ending July 31, 2003. The Company
             believes that the adoption of FAS 142 will not have a material
             impact on the Company's financial position or results of operation.

             In August 2001, the FASB issued FASB Statement No. 144, Accounting
             for the Impairment or Disposal of Long-Lived Assets ("FAS 144").
             This statement superceded FASB Statement No. 121, Accounting for
             the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
             Disposed Of ("FAS 121") and amends Accounting Principles Board
             Opinion No. 30, Reporting Results of Operations - Reporting the
             Effects of Disposal of a Segment of a Business, and Extraordinary,
             Unusual and Infrequently Occurring Events and Transactions. FAS 144
             retains the fundamental provisions of FAS 121 for recognition and
             measurement of impairment, but amends the accounting and reporting
             standards for segments of a business to be disposed of. FAS 144 is
             effective for fiscal years beginning after December 15, 2001, and
             interim periods within those fiscal years, with early application
             encouraged. The provisions of FAS 144 generally are to be applied
             prospectively. The Company will adopt FAS 144 in the first quarter
             of fiscal year ending July 31, 2003. The Company believes that the
             adoption of FAS 144 will not have a material impact on the
             Company's financial position or results of operations.

(2) Concentration of credit risk:
       Financial instruments, which potentially subject the Company to
       concentrations of credit risk, include trade receivables. One customer
       comprised 12.5% of the Company's receivables at July 31, 2001. There were
       no significant individual receivables at July 31, 2000.

                                      F-11

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(3)  Rebates:
       At each fiscal year end, the Company nets rebates due to stockholders
       against accounts receivable. Rebates are paid in the form of credits
       against future purchases, never in cash. The Company offset accounts
       receivable for overcharges on sales in excess of an agreed to profit
       margin as follows:

                                                     2001          2000
                                                     ----          ----
              Accounts receivable                $ 23,141      $ 26,749
                 Less rebates                      (4,868)       (6,114)
                                                 --------      --------
                 Accounts receivable, net        $ 18,273      $ 20,635
                                                 ========      ========

       Net sales and other revenue reported on the Consolidated Statements of
       Income were reduced by rebates as follows:

                                                     2001       2000       1999
                                                     ----       ----       ----
                 Gross sales and other revenue   $202,391   $182,389   $125,425
                 Less rebates                      (4,868)    (6,114)    (4,889)
                                                 --------   --------   --------

                 Net sales and other revenue     $197,523   $176,275   $120,536
                                                 ========   ========   ========

(4)  Property and equipment:

                                           Cost                  Book Value
                                           ----                  ----------
                                    2001         2000         2001         2000
                                    ----         ----         ----         ----
                 Land            $   954      $   954      $   954      $   954
                 Buildings         4,715        4,715        4,519        4,637
                 Equipment         3,247        2,971        2,010        2,153
                                 -------      -------      -------      -------

                                 $ 8,916      $ 8,640      $ 7,483      $ 7,744
                                 =======      =======      =======      =======

                                      F-12

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(5)  Investment in unconsolidated affiliates:
       The Company purchased a 20% interest in AAHA Services Corp. in June, 2000
       for $1,500. The remaining 80% is owned by American Animal Hospital
       Association (AAHA). The Company determined that it has significant
       influence over AAHA Services Corp and accordingly should account for its
       20% ownership interest using the "equity method" of accounting for
       investments. The excess of purchase price over underlying equity in the
       amount of $1,500 (which represents goodwill) is being amortized by the
       straight-line method over 20 years. The Company purchased less than a 5%
       interest in Agri-Laboratories, Ltd., which is carried at cost. The
       amounts presented on the balance sheet can be detailed as follows:

                                                                  2001      2000
                                                                  ----      ----
          Investment in AAHA Services Corp (equity method),
            net of amortization and 20% equity method loss     $ 1,369   $ 1,491
          Investment in Agri-Laboratories, Ltd. (cost method)      144       144
                                                               -------   -------

                                                               $ 1,513   $ 1,635
                                                               =======   =======

(6)  Common Stock:
       The Company is authorized to issue 30,000 shares of common stock with a
       par value of $1.00. Issued and outstanding shares amounted to 1,534 at
       July 31, 2001 and 1,381 at July 31, 2000. Holders of common stock are
       entitled to a) one vote for each share held on matters submitted to a
       vote of stockholders, b) a ratable share of dividends declared and c) in
       the event of liquidation or dissolution, a ratable share of earnings
       after liabilities. Shareholders are not permitted to dispose of their
       stock except by a sale back to the Company. The shareholder must give the
       Company written notice of the proposed sale and the Company must redeem
       for cash the share of stock within ninety days of receiving such notice,
       at the price the shareholder paid for the share.

(7)  Deferred income taxes:
       The company's total noncurrent deferred tax asset and noncurrent deferred
       tax liabilities at July 31 are as follows (computed at the statutory rate
       34%):

                                                             2001        2000
                                                             ----        ----
                 Noncurrent deferred tax asset -
                    Uniform capitalization                 $   37      $   48
                 Noncurrent deferred tax liability -
                    Accumulated depreciation                 (131)        (42)
                                                           ------      ------
                 Net noncurrent deferred tax asset
                   (liability) per financials                 (94)          6
                 Prior year deferred tax asset (liability)      6           -
                                                           ------      ------
                 Deferred tax expense                         100          (6)
                 Taxes currently payable                      207         327
                                                           ------      ------

                 Income tax expense                        $  307      $  321
                                                           ======      ======

                                      F-13

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(8)  Reconciliation of income tax expense:
       A reconciliation of income tax expense at the U.S. federal statutory
       income tax rate to actual income tax expense is as follows:

                                                            2001    2000    1999
                                                            ----    ----    ----
                 Income tax at federal statutory rate     $  236  $  296  $   75
                 State taxes, net of federal taxes             6       8       1
                 Amortization of goodwill                     24       3       -
                 Nondeductible and other items                41      14      17
                                                          ------  ------  ------

                                                          $  307  $  321  $   93
                                                          ======  ======  ======

(9)  Long-term debt:
                                                              2001        2000
                                                              ----        ----
             Note payable, bank, 7.42% interest            $ 3,860     $ 3,951
             Note payable, bank, 9.10% interest              1,114       1,192
             Note payable, bank, 8.66% interest              1,047       1,290
                                                           -------     -------
                                                             6,021       6,433
             Less current portion due within one year         (456)       (420)
                                                           -------     -------
                                                           $ 5,565     $ 6,013
                                                           =======     =======

       Note payable, bank, 7.42% interest:
          Monthly installments of principal and interest of $32 commencing
          January 1, 2000 with a 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 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 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 principal payments of long-term debt are due as follows:

                        Note Payable  Note Payable     Note Payable
                         bank, 7.42%   bank, 9.10%      bank, 8.66%        Total
                         -----------   -----------      -----------        -----
            2002           $   101       $    86          $   269        $   456
            2003               109            94              293            496
            2004               117           103              319            539
            2005               126           113              166            405
            2006               136           124                -            260
            Thereafter       3,271           594                -          3,865
                           -------       -------          -------        -------

                           $ 3,860       $ 1,114          $ 1,047        $ 6,021
                           =======       =======          =======        =======

                                      F-14

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(9)  Long-term debt (continued):

       The Company has in place a revolving line of credit that provides for
       borrowings of up to $15,000. The agreement provides for payment on
       demand, or if no demand is made, in one payment of all outstanding
       principal plus all accrued unpaid interest on December 1, 2001. Interest
       is payable at .25% under the U.S. Bank National Association Reference
       Rate. The balances due on this line of credit were $4,294 and $8,216 for
       2001 and 2000, respectively. The weighted average interest rates of
       borrowings outstanding under the revolving credit agreement were 8.35%,
       8.44%, and 7.71% for 2001, 2000, and 1999 respectively. The line of
       credit is collateralized by all business assets.

       All the above loan agreements are with US Bank. These loan 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.

(10) Commitments and contingent liabilities - leases:
       The Company leases various equipment under noncancelable operating leases
       expiring through September 2005. Management expects that in the normal
       course of business, leases will be renewed or replaced by other leases.

       Minimum future obligations on operating leases in effect on July, 31,
       2001 were as follows:

                 Year ended July 31, 2002                         $   386
                 Year ended July 31, 2003                             140
                 Year ended July 31, 2004                              39
                 Year ended July 31, 2005                              32
                 Year ended July 31, 2006                               5
                                                                  -------
                                                                  $   602
                                                                  =======

       Total lease expense was $399, $275, and $121 for 2001, 2000, and 1999,
       respectively.

(11) Commitments and contingent liabilities - other:
       The Company is required by its Articles of Incorporation to repurchase
       stock within 90 days of receiving written notice from the shareholder
       requesting a redemption of their stock. The redemption price is the price
       paid by the shareholder for such share of stock. Therefore, the Company
       was contingently liable for $4.5 million as of July 31, 2001.

       The Company is subject to claims and other actions arising in the
       ordinary course of business. Some of these claims and actions have
       resulted in lawsuits where the Company is a defendant. Management
       believes that the ultimate obligations if any, which may result from
       unfavorable outcomes of such lawsuits, will not have a material adverse
       effect on the financial position, results of operations or cash flows of
       the Company and that such obligations, if any, would be adequately
       covered by insurance.

                                      F-15

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(12) Related party transactions:
       In the normal course of business the Company sells to its directors,
       officers, and key employees under normal terms and conditions. Accounts
       receivable, related parties on the balance sheet include amounts
       receivable on demand as of July 31 from the following:

                                                     2001              2000
                                                     ----              ----
                 Affiliates (AAHA)                $ 2,285           $   412
                 Board of Directors                   197               213
                 Officer                                1                 1
                 Employees                              7                 3
                                                  -------           -------
                                                  $ 2,490           $   629
                                                  =======           =======

       Accounts payable, related parties on the balance sheet include amounts
       payable on demand as of July 31 to the following:

                                                     2001              2000
                                                     ----              ----
                 Affiliates (Agri-Laboratories)   $   535           $ 1,082
                                                  =======           =======

       Net sales on the Consolidated Statements of Income include sales to
       related parties as follows:

                                                      2001       2000       1999
                                                      ----       ----       ----
                 Affiliates (AAHA)                $  8,761   $  4,080          -
                 Board of Directors                  2,857      3,238   $  2,844
                 Officer                                 3          9          6
                 Employees                             100         16         24
                                                  --------   --------   --------
                                                  $ 11,721   $  7,343   $  2,874
                                                  ========   ========   ========

       Purchases from related parties were as follows:

                                                      2001       2000       1999
                                                      ----       ----       ----
                 Affiliates (Agri-Laboratories)   $ 10,518   $  6,894   $  1,601
                                                  ========   ========   ========

(13) Profit-sharing and 401(k) retirement plan:
       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 $341, $348, and $242 for 2001, 2000, and
       1999, respectively.

       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 was $142, $115, and
       $89 for the years ended July 31, 2001, 2000, and 1999, respectively.

                                      F-16

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(14) Segment Information:
       The Company has one reportable segment which buys, sells, and warehouses
       animal health related items. The Company does not have separate strategic
       business units that offer different products or services. The Company did
       not receive over 10% of revenues from any single external customer.

(15) Restatement of financial statements:
       Subsequent to the issuance of the Company's 2001 consolidated financial
       statements and the filing of its 2001 Annual Report on Form 10-K with the
       SEC, the Company's management determined that the accounting related to
       the equity method investment in AAHA Services Corp would require
       restatement of the financial statements. The Company's restatement
       reflects the change of accounting for the investment in AAHA Services
       Corp. from the cost method to the equity method. The effect of the
       restatement is shown in the table below:

                                                      2001       2000       1999
                                                      ----       ----       ----
       Net income as previously reported          $    509   $    556   $    141

       Impact of restatement for:
         Equity in loss of affiliate                  (122)        (9)       -0-
                                                  --------   --------   --------

       Net income as restated                     $    387   $    547   $    141
                                                  ========   ========   ========

       The principal effect of these items on the accompanying financial
       statements are set forth below:

<TABLE>
<CAPTION>
                                                            Consolidated Statements of Income
                                    2001           2001        2000          2000        1999          1999
                                 Previously                 Previously                Previously
                                  Reported     As Restated   Reported     As Restated  Reported     As Restated
                                  --------     -----------   --------     -----------  --------     -----------
     <S>                          <C>          <C>           <C>          <C>          <C>          <C>
     Net sales and other revenue   199,340      197,523       178,547      176,275      122,253      120,536

     Gross profit                   17,680       15,863        16,613       14,341       10,377        8,660

     Operating, general and
     administrative expenses        16,360       14,543        15,203       12,931       10,366        8,649

     Equity in loss of affiliate         -         (122)            -           (9)           -            -

     Income before taxes               816          694           878          868          234          234

     Net income                        509          387           557          547          141          141

     Net income per share         $ 351.55     $ 267.58      $ 437.93     $ 430.55     $ 128.52     $ 128.52
</TABLE>

       For the fiscal years ended 2001 and 2000, accounts receivable - stock was
       reclassified to paid-in capital.

                                      F-17

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Years ended July 31, 2001 (Restated), 2000 (Restated), and 1999
                  (Amounts in Thousands, Except Per Share Data)

(15) Restatement of financial statements: (continued)

<TABLE>
<CAPTION>
                                                             Consolidated Balance Sheet
                                              As of July 31, 2001                    As of July 31, 2000
                                      Previously                             Previously
                                       Reported              As Restated      Reported              As Restated
                                       --------              -----------      --------              -----------
     <S>                              <C>                    <C>             <C>                    <C>
     Investments in unconsolidated
        affiliates                        1,644                 1,513            1,644                 1,635

     Total assets                        50,982                50,737           59,700                59,612

     Paid-in capital                      4,529                 4,415            4,071                 3,993

     Retained earnings                    2,025                 1,894            1,516                 1,507

     Total stockholders' equity           6,557                 6,311            5,589                 5,501
</TABLE>

(16) Selected quarterly financial data:
                  The following presents certain unaudited quarterly financial
         data and certain audited, restated year end financial data:

<TABLE>
<CAPTION>
                                                              Quarters Ended                                       Year Ended
                             October 31, 1999     January 31, 2000      April 30, 2000        July 31, 2000       July 31, 2000
                                (Restated)           (Restated)           (Restated)            (Restated)          (Restated)
<S>                          <C>                  <C>                   <C>                   <C>                 <C>
Revenues ..................       $    41,522               39,234              42,111               53,408             176,275
Gross profit ..............             3,060                3,696               3,380                4,205              14,341
Operating income...........               207                  566                (218)                 855               1,410
Net income ................               101                  188                (348)                 606                 547
Net income per share ......       $     84.14               151.13             (270.25)              450.17              430.55
Weighted average common
    shares outstanding ....             1,200                1,243               1,289                1,347               1,271

<CAPTION>
                                                              Quarters Ended                                       Year Ended
                             October 31, 2000     January 31, 2001      April 30, 2001        July 31, 2001       July 31, 2001
                                (Restated)           (Restated)           (Restated)            (Restated)          (Restated)
<S>                          <C>                  <C>                   <C>                   <C>                 <C>
Revenues ..................       $    49,755               46,345              50,774               50,648             197,523
Gross profit ..............             3,500                3,698               3,751                4,915              15,863
Operating income...........               697                   19                (120)                 724               1,320
Net income ................               254                 (148)                (82)                 363                 387
Net income per share ......       $    183.00              (104.39)             (56.33)              240.23              267.58
Weighted average common
    shares outstanding ....             1,388                1,420               1,465                1,515               1,447
</TABLE>

                                      F-18

<PAGE>

         (a)(3)   Exhibits

                  23.1     Consent of Quick & McFarlin, P.C.


                                   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:  August 5, 2002


                                    PROFESSIONAL VETERINARY PRODUCTS, LTD.


                                    By:      /s/ Dr. Lionel L. Reilly
                                             -----------------------------------
                                             Dr. Lionel L. Reilly

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

                  Signature                              Capacity


                  /s/ Dr. Lionel L. Reilly               President
--------------------------------------------
                  Dr. Lionel L. Reilly


                  /s/ Neal B. Soderquist                 Chief Financial Officer
--------------------------------------------
                  Neal B. Soderquist

                           *                             Director
--------------------------------------------
                  Mark A. Basinger


                           *                             Director
--------------------------------------------
                  Raymond C. Ebert II


                           *                             Director
--------------------------------------------
                  Fred G. Garrison


                           *                             Director
--------------------------------------------
                  Kenneth R. Liska

<PAGE>

                           *                             Director
--------------------------------------------
                  Wayne E. Rychnovsky


                           *                             Director
--------------------------------------------
                  Chester L. Rawson


                           *                             Director
--------------------------------------------
                  Amy Lynne Hinton


                           *                             Director
--------------------------------------------
                  Michael L. Whitehair


*By:                       /s/ Dr. Lionel L. Reilly
         --------------------------------------------
                           Dr. Lionel L. Reilly
                           As: Attorney-in-fact