<PAGE>

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

                                    FORM 10-K

[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)

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

                           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 ((S)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.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the definitive Proxy Statement for the Registrant's 2001 Annual
Meeting of Stockholders to be filed within 120 days of the fiscal year ended
July 31, 2001 are incorporated by reference in Items 10, 11, 12 and 13 of Part
III of this Annual Report on Form 10-K.

<PAGE>

                     PROFESSIONAL VETERINARY PRODUCTS, LTD.
                          INDEX TO 10-K FOR THE ANNUAL
                           PERIOD ENDED JULY 31, 2001

<TABLE>
<S>                                                                                                      <C>
PART I
         ITEM 1.     BUSINESS.....................................................................          1

         ITEM 2.     PROPERTIES ..................................................................          4

         ITEM 3.     LEGAL PROCEEDINGS ...........................................................          4

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

PART II
         ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .......          4

         ITEM 6.     SELECTED FINANCIAL DATA .....................................................          5

         ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                     OPERATION ...................................................................          6

         ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ..................          9

         ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .................................          9

         ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE ......          9

PART III
         ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT ..............................          9

         ITEM 11.    EXECUTIVE COMPENSATION ......................................................         10

         ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ..............         10

         ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ..............................         10

  PART IV
         ITEM 14.    FINANCIAL STATEMENT SCHEDULES ...............................................         10

                     EXHIBITS AND REPORTS ON FORM 8-K ............................................       II-1

         SIGNATURES ..............................................................................       II-2
</TABLE>

<PAGE>

                                     PART I
                                     ------

ITEM 1.      BUSINESS

         The Company is a leading wholesale distributor of animal health
products to practicing veterinarians. The Company also offers a broad array of
prescription, non-prescription and sundry items to assist veterinarians in their
practice. The Company does not sell pet foods. A small quantity of feed additive
type products are sold by the Company.

         The Company distributes approximately 18,000 different items including
biologicals, pharmaceuticals, parasiticides, instruments and equipment.
Routinely some 11,000 items are inventoried for immediate shipment. The balance
of items are either drop-shipped from the manufacturer to the customer or are
special order items.

         As of July 31, 2001, the Company had 1,534 shareholder veterinary
clinics. These shareholders are principally located from the Rocky Mountains to
the Atlantic Seaboard with some presence in the South. No shareholder/customer
represented more than 1% of the Company's total revenues during the past fiscal
year.

         Due to the geographical location of the majority of its shareholders,
nearly 65% of the Company's gross sales are related to products used for the
treatment and/or prevention of diseases in food animals. The balance of product
sales are for the treatment and/or prevention of diseases in companion animals
and equine.

         The Company primarily sells branded products as marketed by the major
animal health manufacturers and suppliers. The Company does not currently
private label any products, but would consider a private label product agreement
if there was a decisive competitive advantage for doing such.

         The Company's business strategy is to be the leading supplier of animal
health products to veterinary clinics by offering a complete assortment of items
at competitive prices which are supported by superior levels of customer
service. The Company believes that this strategy provides it with a competitive
advantage by combining the broad product selection with everyday low prices and
support from very efficient operations. The shareholder veterinary clinics are
able to lower their product acquisition costs, which both increases
profitability and gives them a competitive market advantage.

         The Company has heavily invested in electronic information systems to
maximize efficiencies. All phases of the transactional process are
electronically driven. The Company believes this advanced electronic technology
will assist in earlier adoption of electronic commerce through the internet by
both its customers and suppliers.

         The Company has two direct subsidiaries: Exact Logistics, LLC and
ProConn, LLC. Exact Logistics, LLC was organized in the State of Nebraska on
December 6, 2000. The limited liability company is a single member entity and is
100% owned by the Company. The purpose of Exact Logistics, LLC is to act as a
contract logistics partner to warehouse and ship products.

         ProConn, LLC was organized in the State of Nebraska on December 6,
2000. The limited liability company is a single member entity and is 100% owned
by the Company. The purpose of ProConn, LLC is to act as a supplier of animal
health products to the producer and/or consumer.

Value-Added Services

         The Company offers its customers and suppliers a comprehensive menu of
value-added services. These services allow individual customers various
selections based on their individual needs. The Company manages a database of
all transactions so that its customers may maximize their


                                       1

<PAGE>

participation in promotions frequently offered by suppliers. The customer is
periodically apprised, either by phone or mailings, of their level of
participation in these promotions. This promotional tracking service gives the
customer the option to maximize their participation in a promotion which can
ultimately increase their profitability and allow them to more effectively
compete in certain markets.

         The Company has developed a multi-day inventory management and
purchasing techniques seminar for its customers. This seminar is held at the
Company's headquarters. The customer is trained to better use the Company's
resources and also be increasingly efficient in managing their product and
inventory activities.

         The Company has Electronic Data Interchange (EDI) capability which
provides the supplier with product sales and movement. The supplier is able to
monitor sales activities, advertising effectiveness and market trends in an
efficient manner. The Company also assists the manufacturer in the design of
effective promotions. The historical transactional database and the promotional
tracking service are unique tools to assist the manufacturer in tailoring
effective promotions.

Rebates to Shareholders

         The Company and its shareholders are in a contractual relationship
evidenced in the Company's Articles of Incorporation which requires that all
sales of Company products to Company shareholders be at no more than 5% over the
cost of the Company as determined by the Company's certified public accountant.
Based on this requirement, the Company's certified public accounting firm
annually makes a determination of the Company's product costs. This valuation of
product costs is then multiplied by 105% and compared to the Company's product
sales. Amounts in excess of the 105% computation are overcharges which are then
rebated back to shareholders by credit memo. Such rebates are made on a pro rata
basis to shareholders, based on the aggregate amount of products purchased by
each shareholder during the year for which the rebate is made. Rebates are
included in the Company's financial statements and are netted against sales on
the Company's income statement/balance sheet.

The Animal Health Industry

         A national veterinary organization lists over 22,000 veterinary
practices in the United States. There are some 45,000 veterinarians practicing
in the various disciplines of veterinary medicine. This survey indicated nearly
71% of the veterinarians in private clinical practice predominately specialize
in companion animal medicine.

         The U.S. animal health manufacturer sales of biologicals,
pharmaceuticals, insecticides and other packaged goods was over $4.1 billion for
2000. This segment of business in which the Company participates is intended to
meet the product and supply needs of the private clinical practice.

         Sundry items such as collars, leashes, cages, books, aquatic supplies
and equine tack are primarily sold through retail pet supply outlets. These
products typically are not purchased from veterinary practices. The Company
makes a few of these items available; however, annual sales are very minimal.

         Consolidation is a primary force reshaping the animal health industry.
Sales by the top ten animal health product manufacturers account for over 75% of
the U.S. market. At this time, the top five U.S. animal health product companies
have a market share that exceeds 50% of the total animal health business.

         Livestock production continues the consolidation spiral that started a
number of years ago. Agribusiness integrators continue to build larger livestock
raising facilities. Improved management systems coupled with new preventative
products have resulted in an ongoing reduction in food animal product sales for
the past several years. There also has been a loss of market share in several
key


                                       2

<PAGE>

product groups due to generic competition. The generic products generally sell
for lower prices which causes a pricing deflation in the market.

         The companion animal market is experiencing considerable growth.
Several new therapeutic and preventative products have contributed to most of
this increased sales volume. Nutraceuticals (nutritional pharmaceuticals) have
an increasing presence in the companion animal market. During the past five
years companion animal product sales have grown to nearly 50% of the total U.S.
market.

Competition

         Distribution of animal health products is characterized by either
"ethical" or "OTC" channels of product movement. Ethical distribution is defined
as those sales of goods to licensed veterinarians for use in their professional
practice. Many of these products are prescription and must only be sold to a
licensed professional. OTC (over-the-counter) distribution is the movement of
non-prescription goods to the animal owner and the end user. Many of these
products will also be purchased by the licensed veterinarian for professional
use or for resale to their client.

         There are numerous ethical distribution companies operating in the same
geographical regions as the Company and competition in this distribution
industry is intense. Most of the competitors generally offer a similar range of
products at prices often comparable to the Company's. The Company seeks to
distinguish itself from its competitors by offering a higher level of customer
service as well as having its principal customers also as its
shareholders/owners. In addition to competition from other distributors, the
Company also faces existing and potentially increased competition from
manufacturers and suppliers who distribute some percentage of their products
directly to veterinarians. Although the Company competes against direct sales by
manufacturers and suppliers, it is often able to compete with such direct sales
by adding new value-added services and pricing differentiation.

         The Company's customers, licensed practicing veterinarians, compete
with the OTC distributors for the sale of products to the animal owner. Several
large OTC distributors sell products directly to the large agribusiness
integrator or the livestock owner. Pet food and supplies are sold by a highly
fragmented industry which includes supermarkets, discount stores and other mass
merchandisers, specialty pet stores, direct mail houses and veterinarians. The
Company does not sell products directly to the animal owner and therefore does
not compete with its customer for the sale of such product.

         The role of the animal health distributor has changed dramatically
during the last decade. Successful distributors have shifted from a selling
mentality to providing products and services in a consultative environment.
Declining profit margins typify current financial trends. Currently there is an
over capacity in the animal health distribution network, although there have
been few animal health distributor mergers or acquisitions. The Company believes
it must continue to add value to the distribution channel, and reduce the
redundancies that exist, while removing unnecessary costs associated with
product movement.

Government Regulation

         Both state and federal government agencies regulate the distribution of
certain animal health products. The Company is subject to regulation by the U.S.
Department of Agriculture, the Food and Drug Administration and the Drug
Enforcement Administration. Several State Boards of Pharmacy require the Company
to be licensed in their state for the sale of animal health products within
their jurisdiction. Each state (as well as certain cities and counties) requires
the Company to collect sales taxes/use taxes on differing types of animal health
products.

         The Company is subject to laws governing its relationship with
employees, including minimum wage requirements, overtime, working conditions and
citizenship requirements.


                                       3

<PAGE>

Environmental Considerations

         The Company does not manufacture, re-label or in any way alter the
composition or packaging of products. All products are distributed in compliance
with the relevant rules and regulations as approved by various State and Federal
regulatory agencies. The Company's distribution business practices create no
impact on the environment.

Employees

         As of September 30, 2001 the Company had 204 employees. The Company is
not subject to any collective bargaining agreements and has not experienced any
work stoppages. The Company considers its relationship with its employees to be
good.

ITEM 2.           PROPERTIES

         The Company owns its building, which contains nearly 100,000 square
feet of open warehouse space and 30,000 square feet of finished office area. The
building is a facility the Company constructed and completed in late 1999 and is
located on 9.6 acres of land in a newly developed industrial subdivision of
Omaha, Nebraska. The latest in technology was incorporated into the design of
the new facility to maximize distribution efficiencies. The building is subject
to a first and second mortgage held by US Bank.

ITEM 3.           LEGAL PROCEEDINGS

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

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

         No matters were submitted to a vote of security holders during the
quarter ended July 31, 2001.

                                     PART II
                                     -------

ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

         There is no established public trading market for the Company's common
stock. Ownership of the Company's stock is limited to licensed, practicing
veterinarians (or businesses comprised of veterinarians such as a partnership or
corporation). Each veterinarian shareholder is limited to ownership of one share
of stock, which is purchased at the fixed price of $3,000. The share of stock
may not be sold or transferred, except back to the Company at the same $3,000
price. On July 31, 2001, there were 1,534 record holders of the Company's common
stock.

         The Company has never declared or paid any cash dividends on the common
stock. The Company intends to retain any future earnings for funding growth of
the Company's business and therefore does not currently anticipate paying cash
dividends in the foreseeable future.


                                       4

<PAGE>


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.

<TABLE>
<CAPTION>
                                                       Fiscal Years

Stated in Dollars                                      1997              1998              1999              2000              2001
<S>                                           <C>                <C>              <C>              <C>               <C>
Statement of Data
Revenues ....................................  $ 80,938,835        94,245,375       122,253,200       178,547,153       199,340,661
Cost of goods sold ..........................    73,701,533        85,261,574       111,875,873       161,934,175       181,660,419
Gross profit ................................     7,237,302         8,983,801        10,377,327        16,612,978        17,680,242
Operating, general and
administrative expenses .....................     7,077,385         8,725,912        10,366,843        15,202,927        16,360,464
Operating income ............................       159,917           257,889            10,484         1,410,051         1,319,778
Other income ................................       125,256           161,205           486,355           372,795           504,436
Other expenses ..............................      (208,407)         (244,111)          263,198           905,880         1,008,638
Income before income taxes ..................        76,766           174,983           233,641           876,966           815,576
Income taxes ................................        30,736            73,440            92,907           320,367           306,892
                                               ------------      ------------      ------------      ------------      ------------
Net income ..................................  $     46,030           101,543           140,734           556,599           508,684
                                               ============      ============      ============      ============      ============
Net income per share:
Basic earnings per share ....................  $      47.65             96.89            118.46            403.04            331.61
                                               ============      ============      ============      ============      ============
Basic common shares
outstanding used in the
calculation .................................           966             1,048             1,188             1,381             1,534

Supplemental Operating Data
Net cash provided by (used in)
operating activities ........................  ($   647,441)       (2,115,978)        1,863,413        (5,691,783)        5,218,803
Net cash provided by (used in)
investing activities ........................      (194,181)         (442,604)       (1,033,443)       (6,676,998)         (287,106)
Net cash provided by (used in)
financing activities ........................       721,767         1,317,233         1,372,564        10,877,188        (3,875,962)

Balance Sheet Data
Working capital .............................  $  2,456,944         2,698,906         1,052,710         1,975,467         2,776,630
Total Assets ................................    14,175,862        20,007,753        28,358,152        59,700,070        50,982,051
Total long-term obligations .................     1,301,609         1,225,089                 0         6,013,631         5,565,035
**Total short-term borrowings ...............     1,062,985         3,285,273         4,413,238         8,216,400         4,293,713
Shareholder equity ..........................     3,542,947         3,891,490         4,453,224         5,588,823         6,556,507
</TABLE>

                                        5

<PAGE>


ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         This report contains forward-looking statements that involve risks and
uncertainties. Actual events or results may differ materially from those
indicated in such forward-looking statements. The following discussion of the
financial conditions and results of operations should be read in conjunction
with the Financial Statements and related notes thereto included elsewhere in
this report.

Overview

         The Company was chartered on August 2, 1982 as a Missouri corporation.
Since January 1, 1983 the Company has operated from various facilities in Omaha,
Nebraska. The Company shareholders approved Amended and Restated Articles of
Incorporation at the Company's 1999 Annual Meeting to permit the Company to
become a Nebraska corporation. The Company surrendered its Missouri charter and
became a Nebraska corporation on September 22, 1999. The Company's fiscal year
begins on August 1 and concludes on July 31 of the following year.

         The Company is one of the largest distributors of animal health
products to veterinarians who practice food animal medicine in the United
States. The Company was founded in 1982 by veterinarians whose primary interests
were "food animal" related. The changing trends of veterinary medicine has
resulted in a gradual shift toward the sale of more "companion animal" products.

         The Company's sales have increased from $62.6 million in fiscal year
1995 to $195.9 million in fiscal year 2001, and the Company expects this trend
of increases in sales to continue. The Company will continue our strategy of
supporting the food animal veterinarian with a broad range of products and
value-added services. However, sales in the food animal sector are subject to
very low margins. In view of the increasing maturity of the food animal market
the Company must continue to look for future growth in the companion animal
sector.

         Historically companion animal product related transactions have enjoyed
higher margins than sales of food animal products. However, as competition
increases in the companion animal sector it is likely that margins will begin to
erode. The Company believes there is likely to be consolidation of the many
small privately owned veterinary clinics, which will result in an increasing
number of larger veterinary practice business units. As a result, the larger
veterinary practices will have increased purchasing leverage and will negotiate
for lower product costs which will reduce margins at the distribution level and
impact Company revenue and net income.

         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, invoiced to the customer, followed by payment from the customer
to the Company. There are several product lines where the Company provides all
transactional activities described above, except that the manufacturer retains
title to the product.

         A second transaction model used by the Company is termed the "agency
agreement". Under this approach, the Company receives orders for products from
its customer. The Company transmits the order to the manufacturer who then
picks, packs, ships, invoices and collects payment from the customer. The
Company receives a commission payment for soliciting the order as well as other
customer service activities. The Company's operating expenses associated with
this type of sale may be lower than the traditional buy/sell transaction. Agency
selling allows the manufacturer and the Company to immediately react to market
conditions. This arrangement allows the manufacturer to establish and
standardize price of its products in the market. This current information often
is used by the Company and the various manufacturers to develop data based
marketing programs.


                                       6

<PAGE>

         The mode of selling products to veterinarians is dictated by the
manufacturer. There has been a recent slight shift away from agency agreements
returning to the traditional buy/sell transactional business model.

         Product returns from the Company's customers and to the Company's
suppliers occur in the ordinary course of business. The Company extends to its
customers the same return of goods policies as extended to the Company by the
various manufacturers. The Company does not believe its operations will be
adversely impacted due to the return of products.

New Subsidiaries

         On December 6, 2000 the Company became the sole member of Exact
Logistics, LLC, a Nebraska limited liability company, and ProConn, LLC, a
Nebraska limited liability company. Both limited liability companies are single
member entities and are 100% owned by the Company. The purpose of Exact
Logistics, LLC is to act as a contract logistics partner to warehouse and ship
products. The purpose of ProConn, LLC is to act as a supplier of animal health
products to the producer and/or consumer.

Results of Operations

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

Fiscal 1999 Compared to Fiscal 1998:
-----------------------------------

         Net sales for the fiscal year ending July 31, 1999 increased by 31.0%
or $28.1 million. Sales for the 1999 fiscal year totaled $118.7 million compared
to $90.6 million for the previous fiscal year. The growth was attributable to
increased sales to existing veterinary shareholders and also the addition of new
shareholders. During the year 140 veterinary practices became shareholders of
the Company. On July 31, 1999 there were 1,188 shareholders of the Company.

         Gross profit increased by $1.4 million to $10.4 million compared to
$9.0 million for the previous fiscal year. Gross profit as a percentage of total
revenues was 8.5% in fiscal 1999 compared to 9.5% in fiscal 1998.

         Operating, general and administrative expenses increased by $1.6
million to $10.3 million in fiscal year 1999 compared to $8.7 million for the
previous year. Such operating, general and administrative expenses as a
percentage of total revenues fiscal 1999 was 8.5% vs. 9.3% in fiscal 1998.

Fiscal 2000 Compared to Fiscal 1999:
-----------------------------------

         Net sales for the fiscal year ending July 31, 2000 increased by 47.2%
or $56.0 million. Sales for the 2000 fiscal year totaled $174.8 million compared
to $118.8 million for the previous fiscal year. The growth was attributable to
increased sales to existing veterinary shareholders and also the addition of new
shareholders. During the year 193 veterinary practices became shareholders of
the Company. On July 31, 2000 there were 1,381 shareholders of the Company.

         Gross profit increased by $6.2 million to $16.6 million compared to
$10.4 million for the previous fiscal year. Gross profit as a percentage of
total revenues was 9.3% in fiscal 2000 compared to 8.5% in fiscal 1999.

         Operating, general and administrative expenses increased by $4.8
million to $15.2 million in fiscal year 2000 compared to $10.4 million for the
previous year. Such operating, general and administrative expenses as a
percentage of total revenues fiscal 2000 was 8.5% vs. 8.5% in fiscal 1999.


                                       7

<PAGE>

Fiscal 2000 Compared to Fiscal 2001:
-----------------------------------

         Net revenues for the fiscal year ending July 31, 2001 increased by
11.6% or $20.8 million. Revenues for the 2001 fiscal year totaled $199.3 million
compared to $178.5 million for the previous fiscal year. The growth was
attributable to increased sales to existing veterinary shareholders and also the
addition of new shareholders. During the year 153 veterinary practices became
shareholders of the Company. On July 31, 2001 there were 1,534 shareholders of
the Company.

         Gross profit increased by $1.1 million to $17.7 million compared to
$16.6 million for the previous fiscal year. Gross profit as a percentage of
total revenues was 8.9% in fiscal 2001 compared to 9.3% in fiscal 2000.

         Operating, general and administrative expenses increased by $1.2
million to $16.4 million in fiscal year 2001 compared to $15.2 million for the
previous year. Such operating, general and administrative expenses as a
percentage of total revenues fiscal 2001 was 8.2% vs. 8.5% in fiscal 2000.

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's capital requirements relate primarily to working capital,
the expansion of our operations to accommodate sales growth. The Company
maintains significant inventory levels to fulfill its operating commitment to
its customers. Historically, the Company has financed our cash requirements
primarily from short-term bank borrowings and cash from operations.

         Net cash used by operating activities of $2,115,978 in fiscal year
ending July 1998 was primarily attributable to increases of $1,493,853 in
accounts receivable and $4,473,791 in inventories. These were partially offset
by an increase of $2,594,480 in accounts payable. Net cash provided by operating
activities of $1,863,413 in fiscal year ending July 1999 was primarily
attributable to an increase of $6,631,793 in accounts receivable. It was
partially offset by increases of $418,081 in inventories and $7,736,556 in
accounts payable. In the fiscal year ending July 2000, net cash used by
operating activities of $5,691,783 was primarily attributable to increases of
$10,430,441 in accounts receivable and $15,839,475 in inventories. These were
partially offset by an increase of $19,058,909 in accounts payable. For the
fiscal year ending July 2001, net cash used by operating activities of
$5,218,803 was primarily attributable to decreases of $3,129,815 in accounts
receivable and $6,084,384 in inventories. These were partially offset by a
decrease of $4,751,004 in accounts payable.

         In the fiscal year ending July 1998, net cash used by investing
activities of $442,604 was primarily attributable to investments in property and
equipment. Net cash used by investing activities of $1,033,443 in fiscal year
ending July 1999 was primarily attributable to investments in property and
equipment. Net cash used by investing activities of $6,676,998 in fiscal year
ending July 2000 was primarily attributable to investments in property and
equipment. Net cash used by investing activities of

                                       8

<PAGE>

$287,106 in fiscal year ending July 2001 was primarily attributable to
investments in property and equipment.

         Net cash provided by financing activities of $1,317,233 in fiscal year
ending July 1998 was primarily attributable to increases of $1,035,913 in loan
proceeds and $281,320 from net proceeds from issuance of common stock. Net cash
provided by financing activities of $1,372,564 in fiscal year ending July 1999
was primarily attributable to increases of $1,012,731 in loan proceeds and
$359,833 from net proceeds from issuance of common stock. In the fiscal year
ending July 2000, net cash provided by financing activities of $10,877,188 was
primarily attributable to increases of $10,236,396 in loan proceeds and $640,792
from net proceeds from issuance of common stock. In the fiscal year ending July
2001, net cash used by financing activities of $3,875,962 was primarily
attributable to a decrease of $4,334,962 in loan proceeds and an increase of
$459,000 from net proceeds from issuance of common stock.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

         The interest payable on the Company's revolving line of credit is based
on variable interest rates and is therefore affected by changes in market
interest rates. If interest rates on variable rate debt rose .650 percentage
points (a 10% change from the interest rate as of July, 31, 2001), assuming no
change in the Company's outstanding balance under the line of credit
(approximately $4,293,713 as of July 31, 2001), the Company's annualized income
before taxes and cash flows from operating activities would decline by
approximately $27,909.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See "Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K" for the Company's Financial Statements, and the notes thereto,
Supplementary Data, and the financial statement schedules filed as part of this
report.

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

         There has been no current report on Form 8-K filed within 24 months
prior to the date of the most recent financial statements reporting a change of
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.

                                    PART III
                                    --------

         Incorporated by reference in Items 10 to 13 below are certain sections
of the Company's definitive proxy statement, to be filed pursuant to Regulation
14A within 120 days after July 31, 2001.

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

         Incorporated by reference in this Annual Report is the information
required by this Item 10 contained in the sections entitled "Proposal: Election
of Directors", "Information About Directors and Executive Officers" and "Section
16(b) Beneficial Ownership Reporting Compliance" of the Company's definitive
proxy statement, to be filed pursuant to Regulation 14A with the SEC within 120
days after July 31, 2001.

                                       9

<PAGE>


ITEM 11.          EXECUTIVE COMPENSATION

         Incorporated by reference in this Annual Report is the information
required by this Item 11 contained in the section entitled "Information About
Directors and Executive Officers --Executive Compensation", of the Company's
definitive proxy statement, to be filed pursuant to Regulation 14A with the SEC
within 120 days after July 31, 2001.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         No stockholder of the Company is a beneficial owner of more than five
percent of the Company's common stock.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Incorporated by reference in this Annual Report is the information
required by this Item 13 contained in the section entitled the "Information
About Directors and Executive Officers--Certain Transactions" of the Company's
definitive proxy statement, to be filed pursuant to Regulation 14A with the SEC
within 120 days after July 31, 2001.

                                     PART IV
                                     -------

<TABLE>
<S>                                                                                        <C>
ITEM 14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)     (1)     The following financial statements are filed as part of this report:

                Independent Auditor's Reports ...........................................  F-1
                Consolidating Balance Sheet at July 31, 2001 and Consolidated
                       Balance Sheet at July 31, 2000 ...................................  F-3
                Consolidating Statements of Income at July 31, 2001, Consolidated
                       Statements of Income at July 31, 2000 and Statements of
                       Income at July 31, 1999 ..........................................  F-4
                Consolidating Statements of Retained Earnings at July 31, 2001,
                       Consolidated Statements of Retained Earnings at July 31, 2000
                       Statements of Retained Earnings at July 31, 1999 .................  F-5
                Consolidating Statements of Cash Flow at July 31, 2001, Consolidated
                       Statements of Cash Flow at July 31, 2000 and Statements of
                       Cash Flow and July 31, 1999 ......................................  F-6
                Notes to Financial Statements ...........................................  F-7
                Schedule of Operating, General and Administrative
                       Expenses .........................................................  F-14
</TABLE>

                                       10

<PAGE>

                          MARVIN E. JEWELL & CO., 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 consolidating balance sheets of
Professional Veterinary Products, Ltd., a Nebraska corporation, and subsidiaries
as of July 31, 2001, and the related consolidating statements of income,
retained earnings, cash flows and accompanying schedule for the year then ended.
We have also audited the consolidated balance sheet of Professional Veterinary
Products, Ltd. and subsidiaries as of July 31, 2000, and the related
consolidated statements of income, retained earnings, cash flows and
accompanying schedule for the year then ended. These consolidating and
consolidated 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 July 31, 2001 consolidating financial statements
referred to above present fairly, in all material respects, the individual and
consolidated financial position of Professional Veterinary Products, Ltd. and
subsidiaries as of July 31, 2001 and the results of their operations and their
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the
July 31, 2000 consolidated financial statements referred to above present
fairly, in all material respects, the individual and consolidated financial
position of Professional Veterinary Products, Ltd. and subsidiaries as of July
31, 2000 and the results of their operations and their cash flows for the year
then ended in conformity with accounting principles generally accepted in the
United States of America.

                              /s/ Marvin E. Jewell & Co., P.C.


Lincoln, Nebraska
September 5, 2001

                                       F-1

<PAGE>

                          MARVIN E. JEWELL & CO., 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 balance sheets of Professional Veterinary
Products, Ltd., a Nebraska corporation, as of July 31, 2000 and 1999, and the
related statements of income, retained earnings, cash flows and accompanying
schedule for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion of these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. 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 financial statements referred to above present fairly,
in all material respects, the financial position of Professional Veterinary
Products, Ltd. as of July 31, 2000 and 1999, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.



                                     /s/ Marvin E. Jewell & Co., P.C.


Lincoln, Nebraska
September 20, 2000

                                       F-2

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
                   Consolidating Balance Sheet - July 31, 2001
                   Consolidated Balance Sheet - July 31, 2000

<TABLE>
<CAPTION>
                                                                        2001            2000
                                                                        ----            ----
<S>                                                                 <C>             <C>
Assets
------
Current assets:
   Cash ..................................................          $    656,821    $          -
   Accounts receivable, trade, less allowance for
         doubtful accounts (0) ...........................            23,140,929      26,749,894
   Accounts receivable, rebate ...........................            (4,867,670)     (6,114,343)
   Accounts receivable, stock ............................               114,876          77,709
   Accounts receivable, other ............................               128,427         933,116
   Prepaid income taxes ..................................               121,433             -
   Inventory .............................................            22,342,323      28,426,707
                                                                    ------------    ------------
          Total current assets ...........................            41,637,139      50,073,083
                                                                    ------------    ------------
Property and equipment ...................................             8,916,402       8,640,410
   Less accumulated depreciation .........................             1,433,156         896,198
                                                                    ------------    ------------
                                                                       7,483,246       7,744,212
                                                                    ------------    ------------
Other assets:
   Organization expense less accumulated amortization
             $60,556 (2001), $45,444 (2000) ..............               166,242         181,354
    Loan origination fee less accumulated amortization
              $4,833 (2001), $2,833 (2000) ...............                15,167          17,167
    Trademark, less accumulated
          amortization $972 (2001), $639 (2000) ..........                 4,028           4,361
     Investments .........................................             1,643,850       1,643,850
     Cash value life insurance ...........................                32,379          30,077
     Deferred income tax asset ...........................                     -           5,966
                                                                    ------------    ------------
                                                                       1,861,666       1,882,775
                                                                    ------------    ------------
                                                                    $ 50,982,051    $ 59,700,070
                                                                    ============    ============

Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
    Bank overdraft .......................................                     -         398,914
    Notes payable, bank ..................................             4,293,713       8,216,400
    Current portion of long-term debt ....................               455,924         419,603
    Accounts payable, trade ..............................            32,484,688      37,235,692
    Accrued interest .....................................                64,505         110,611
    Accrued expenses .....................................               585,224         525,505
    Accrued wages ........................................               541,289         611,097
    Accrued profit-sharing ...............................               341,207         347,861
    Accrued income taxes .................................                     -         231,933
    Deferred income tax liability ........................                93,959               -
                                                                    ------------    ------------
          Total current liabilities ......................            38,860,509      48,097,616
                                                                    ------------    ------------

Long-term debt ...........................................             5,565,035       6,013,631
                                                                    ------------    ------------
Stockholders' equity:
   Common stock, $1 par value per share. Authorized 30,000
       shares; issued and outstanding 1,534 shares (2001),
        1,381 shares (2000) ..............................                 1,534           1,381
   Paid-in capital .......................................             4,529,466       4,070,619
   Retained earnings .....................................             2,025,507       1,516,823
                                                                    ------------    ------------
                                                                       6,556,507       5,588,823
                                                                    ------------    ------------
                                                                    $ 50,982,051      59,700,070
                                                                    ============    ============
</TABLE>

         See accompanying notes to financial statements and independent
                               auditor's report.

                                       F-3

<PAGE>


             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
               Consolidating Statements of Income - July 31, 2001
                Consolidated Statements of Income - July 31, 2000
                      Statements of Income - July 31, 1999

<TABLE>
<CAPTION>
                                                                    Amount                                  Percent
                                                                    ------                                  -------
                                                2001               2000              1999           2001         2000        1999
                                                ----               ----              ----           ----         ----        ----
<S>                                         <C>                <C>                <C>               <C>         <C>         <C>
Revenues:
   Gross sales ........................     $ 200,841,804        180,905,421        123,649,623      100.75      101.32      101.14
   Less Rebate ........................        (4,867,670)        (6,114,343)        (4,889,037)      (2.44)      (3.42)      (4.00)
                                            -------------      -------------      -------------     -------     -------     -------
   Net Sales ..........................       195,974,134        174,791,078        118,760,595       98.31       97.90       97.14
   Shipping ...........................           168,747            119,373            101,435         .08         .07         .08
   Commissions ........................         1,332,578          1,325,276          1,630,808         .67         .74        1.33
   Sales promotion ....................         1,817,234          2,272,181          1,716,677         .91        1.27        1.41
   Annual meeting reimbursement .......                 -                  -             16,609           -           -         .02
   Contracted services ................             5,625                  -                  -         .01           -           -
   Miscellaneous ......................            42,343             39,245             27,076         .02         .02         .02
                                            -------------      -------------      -------------     -------     -------     -------

                                              199,340,661        178,547,153        122,253,200      100.00      100.00      100.00
                                            -------------      -------------      -------------     -------     -------     -------

Cost of sales:
   Net purchases .....................        186,486,057        168,625,655        114,061,177       93.55       94.45       93.30
   Freight out .......................          4,739,125          3,627,670          2,451,266        2.38        2.03        2.00
   Less vendor rebates ...............         (9,564,763)       (10,319,150)        (4,636,570)      (4.80)      (5.78)      (3.79)
                                            -------------      -------------      -------------     -------     -------     -------

                                              181,660,419        161,934,175        111,875,873       91.13       90.70       91.51
                                            -------------      -------------      -------------     -------     -------     -------

           Gross profit ...............        17,680,242         16,612,978         10,377,327        8.87        9.30        8.49
Operating, general and
administrative expenses
(Schedule) ............................        16,360,464         15,202,927         10,366,843        8.21        8.51        8.48
                                            -------------      -------------      -------------     -------     -------     -------

           Operating income ...........         1,319,778          1,410,051             10,484         .66         .79         .01
                                            -------------      -------------      -------------     -------     -------     -------

Other income (expense):
        Interest income ...............           504,436            372,795            249,143         .25         .21         .20
        Interest expense ..............        (1,006,078)          (862,420)          (263,198)       (.50)       (.49)       (.22)
        Gain (loss) on sale of
            property and
            equipment .................            (2,560)           (43,460)           237,212           -        (.02)        .20
                                            -------------      -------------      -------------     -------     -------     -------
                                                 (504,202)          (533,085)           223,157        (.25)       (.30)        .18
                                            -------------      -------------      -------------     -------     -------     -------

        Income before taxes ...........           815,576            876,966            233,641         .41         .49         .19

Income taxes ..........................           306,892            320,367             92,907         .15         .18         .08
                                            -------------      -------------      -------------     -------     -------     -------


          Net income ..................     $     508,684            556,599            140,734         .26         .31         .11
                                            =============      =============      =============     =======     =======     =======
</TABLE>


         See accompanying notes to financial statements and independent
                               auditor's report.

                                       F-4

<PAGE>


             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
          Consolidating Statements of Retained Earnings - July 31, 2001
          Consolidated Statements of Retained Earnings - July 31, 2000
                 Statements of Retained Earnings - July 31, 1999

<TABLE>
<CAPTION>
                                             2001              2000            1999
                                             ----              ----            ----
<S>                                      <C>               <C>               <C>
Balance at beginning of year...........  $ 1,516,823          960,224         819,490

Net income.............................      508,684          556,599         140,734
                                         -----------       ----------        --------

Balance at end of year.................  $ 2,025,507        1,516,823         960,224
                                         ===========       ==========        ========
</TABLE>


         See accompanying notes to financial statements and independent
                               auditor's report.

                                       F-5

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
             Consolidating Statements of Cash Flows - July 31, 2001
              Consolidated Statements of Cash Flows - July 31, 2000
                    Statements of Cash Flows - July 31, 1999

<TABLE>
<CAPTION>
                                                       2001                       2000                       1999
                                                       ----                       ----                       ----
<S>                                               <C>          <C>           <C>           <C>           <C>           <C>
Cash flows from operating activities:
  Net income.................................                  $    508,684                     556,599                    140,734
  Adjustments to reconcile net income
    to net cash provided (used) by
    operating activities:
      Depreciation and amortization..........     $   562,956                     443,108                    287,814
      Gain (loss) on sale of property........           2,560                      43,460                   (237,212)
      Adjustments for working capital
        changes:
        (Increases) decrease in:
          Receivables........................       3,129,185                 (10,430,441)                (6,631,793)
          Inventories........................       6,084,384                 (15,839,475)                   418,081
          Cash value life insurance..........          (2,302)                    (30,077)                         -
          Deferred income tax................          99,925                      (5,966)                         -
      Increase (decrease) in:
          Accounts payable...................      (4,751,004)                 19,058,909                  7,736,566
          Accrued expenses...................         (62,849)                    298,074                    173,766
          Income taxes payable...............        (353,366)                    214,026                    (24,533)
                                                  -----------                ------------                ------------

          Total adjustments..................                     4,710,119                  (6,248,382)                 1,722,679
                                                               ------------                ------------                -----------

               Net cash provided (used) by
                 operating activities........                     5,218,803                  (5,691,783)                 1,863,413

Cash flows from investing activities:
  Purchase of property and equipment.........        (287,106)                 (5,292,415)                (2,762,815)
  Purchase of trademark......................                                           -                     (5,000)
  Purchase of investments....................               -                  (1,500,000)                  (143,850)
  Proceeds from sale of property.............               -                     115,417                  1,878,222
                                                  -----------                ------------                ------------

       Net cash provided (used) by
         investing activities................                      (287,106)                 (6,676,998)                (1,033,433)

Cash flows from financing activities:
  Net loan proceeds (reduction)..............      (4,334,962)                 10,236,396                  1,012,731
  Net proceeds from issuance of
     common stock............................         459,000                     640,792                    359,833
                                                  -----------                ------------               ------------


        Net cash provided (used) by
               financing activities..........                    (3,875,962)                 10,877,188                  1,372,564
                                                               ------------                ------------                -----------

  Net increase (decrease) in cash............                     1,055,735                  (1,491,593)                 2,202,534
  Cash (deficit) at beginning of year........                      (398,914)                  1,092,679                 (1,109,855)
                                                               ------------                ------------                -----------
  Cash (deficit) at end of year..............                  $    656,821                    (398,914)                 1,092,679
                                                               ============                ============                ===========

  Supplementary disclosures of cash
   flow information:
        Interest paid........................                  $  1,052,184                     774,421                    257,725
                                                               ============                ============                ===========
        Income taxes paid....................                  $    560,333                     106,162                    117,440
                                                               ============                ============                ===========
</TABLE>

         See accompanying notes to financial statements and independent
                               auditor's report.

                                       F-6

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
                Consolidated Financial Statements - July 31, 2000

(1)      Organization and summary of significant accounting policies:


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

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

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

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

         Summary of significant accounting policies:

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

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

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

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

See independent auditor's report.


                                       F-7

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)

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

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

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

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

                  (h)      Amortization:
                               Organizational costs are being amortized over
                               sixty months on a straight-line basis.

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

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

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

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

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

See independent auditor's report.


                                       F-8

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)

(2)      For the fiscal year ended July 31, the Company recognized liabilities
            for overcharges on sales in excess of an agreed to profit margin
            of 5% totaling $4,867,670 (2001), $6,114,343 (2000).

(3)      Property and equipment:

<TABLE>
<CAPTION>
                                                                        Book Value
                                                  Accumulated           ----------
                                       Cost      Depreciation        2001        2000
                                       ----      ------------        ----        ----
               <S>              <C>            <C>              <C>          <C>
                Land ...........  $   953,780               -       953,780      953,780
                Buildings ......    4,715,527         196,064     4,519,463    4,637,352
                Equipment ......    3,247,095       1,237,092     2,010,003    2,153,080
                                    ---------       ---------     ---------    ---------
                                  $ 8,916,402       1,433,156     7,483,246    7,744,212
                                  ===========       =========     =========    =========
</TABLE>

(4)      Investments - Non Marketable:

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

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


<TABLE>
<CAPTION>
                                                                       2001        2000
                                                                       ----        ----
                    <S>                                          <C>           <C>
                     Investment in AAHA Services Corp .........   $ 1,500,000    1,500,000
                     Investment in Agri-Laboratories, Ltd .....       143,850      143,850
                                                                  -----------    ---------
                                                                  $ 1,643,850      143,850
                                                                  ===========    =========
</TABLE>

(5)      Cash Surrender value of life insurance:

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

See independent auditor's report.


                                       F-9

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)

(6)      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%):
<TABLE>
<CAPTION>

                                                                                 2001         2000
                                                                                 ----         ----
               <S>                                                         <C>             <C>
                 Noncurrent deferred tax asset -
                      Inventory overhead costs
                        capitalized for tax purposes .....................   $  37,400        47,600

                 Noncurrent deferred tax liability -
                   Accumulated depreciation ..............................    (131,359)      (41,634)
                                                                             ---------       -------

                 Net noncurrent deferred tax asset
                   per financials ........................................     (93,959)        5,966

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

                 Deferred tax expense ....................................      99,925        (5,966)

                 Taxes currently payable .................................     255,503       326,333
                                                                             ---------       -------
                 Income tax provision per financials .....................   $ 355,428       320,367
                                                                             ---------       -------
</TABLE>

(7)      Long-term debt:
<TABLE>
<CAPTION>
                                                                        2001            2000
                                                                        ----            ----
              <S>                                                  <C>              <C>
                Note payable, bank, 7.42% interest ..............    $3,860,284       3,950,442
                Note payable, bank, 9.10% interest ..............     1,115,150       1,192,534
                Note payable, bank, 8.66% interest ..............     1,045,525       1,290,258
                                                                      ---------       ---------
                                                                      6,020,959       6,433,234
                Less current portion due within one year ........      (455,924)       (419,603)
                                                                      ---------       ---------
                                                                     $5,565,035       6,013,631
                                                                     ===========      =========
</TABLE>

                Note payable, bank, 7.42% interest:

                    Monthly installments of principal and interest of $32,028
                    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 $15,352
                    commencing July 1, 2000 with a final installment and entire
                    unpaid principal balance due on May 1, 2010. Loan is
                    collateralized by land and building.

                Note payable, bank, 8.66% interest:

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

See independent auditor's report.


                                       F-10

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)


(7)  Long-term debt (continued):

     Total yearly payments of long-term debt are due as follows:

<TABLE>
<CAPTION>
                              Note Payable    Note Payable    Note Payable
                               bank, 7.42%     bank, 9.10%     bank, 8.66%
                                Interest        Interest        Interest       Total
                                --------        --------        --------       -----
          <S>                 <C>             <C>             <C>            <C>
          2002...........      $  101,306         86,288         268,330       455,924
          2003...........         109,084         94,477         292,512       496,073
          2004...........         117,459        103,442         318,873       539,774
          2005...........         126,477        113,258         165,810       405,545
          2006...........         136,188        124,005               -       260,193
          2007 - 2020....       3,269,770        593,680               -     3,863,450
                               ----------      ---------       ---------     ---------
                               $3,860,284      1,115,150       1,045,525     6,020,959
                               ==========      =========       =========     =========
</TABLE>

     The maximum amount available on the revolving line of credit is
     $15,000,000. The balances due on this line of credit were $4,293,713 and
     $8,216,400 for 2001 and 2000 respectively. The interest rate as of July 31
     was 6.50% (2001) and 9.25% (2000), or .25% under the Index.

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

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

(8)  Commitments and contingent liabilities - leases:

       On February 18, 1998, the company entered into a lease with Nebraska
       Leasing Services, Inc. for the purpose of leasing a truck. The lease
       minimum rentals were $451 per month for a term of 36 months with a final
       rental installment of $12,000. The lease expired January 18, 2001.

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

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

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

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

See independent auditor's report.

                                      F-11

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)


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

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

       On October 10, 1999, the company entered into a lease with US Bancorp for
       the purpose of leasing 50 scanners. The lease minimum rentals are $6,225
       per month for a term of 36 months. The lease expires September 10, 2002.

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

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

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

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

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

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

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

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

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

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

See independent auditor's report.

                                      F-12

<PAGE>

             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
           Notes to Consolidating Financial Statements - July 31, 2001
                                       and
          Consolidated Financial Statements - July 31, 2000 (continued)


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

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

          Period ended July 31, 2002 ...........     $384,470
          Period ended July 31, 2003 ...........      146,140
          Period ended July 31, 2004 ...........       38,935
          Period ended July 31, 2005 ...........       33,577
          Period ended July 31, 2006 ...........        5,143
                                                     --------
                                                     $608,265
                                                     ========

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

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

                                                            2001         2000
                                                            ----         ----
               Members of the Board of Directors .....   $2,856,581   3,237,383
               Key employees .........................        2,505       9,172
                                                         ----------   ---------
                                                         $2,859,086   3,246,555
                                                         ==========   =========

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

       The Company provides a non-contributory profit-sharing plan covering all
       full-time employees who qualify as to age and length of service. It has
       been the Company's policy to make contributions to the plan as provided
       annually by the Board of Directors. The total provision for the
       contribution to the plan was $341,207 for 2001 and $347,861 for 2000.

       The Company also provides a contributory 401-K retirement plan covering
       all full-time employees who qualify as to age and length of service. It
       is the Company's policy to match a maximum 15% employee contribution with
       a 3% contribution. The total provision to the plan was $142,227 and
       $114,593 for the period ended July 31, 2001 and 2000, respectively.

See independent auditor's report.

                                      F-13

<PAGE>


             PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
 Consolidating Schedule of Operating, General and Administrative
                            Expenses - July 31, 2001
 Consolidated Schedule of Operating, General and Administrative
                            Expenses - July 31, 2000
   Schedule of Operating, General and Administrative Expenses - July 31, 1999

<TABLE>
<CAPTION>
                                                   Amount                                          Percent
                                                   ------                                          -------
                                             Years Ended July 31,                            Years Ended July 31,
                                             -------------------                             -------------------
                                 2001                2000                1999            2001       2000         1999
                                 ----                ----                ----            ----       ----         ----
<S>                              <C>                 <C>                 <C>             <C>        <C>          <C>
Salaries ...................        7,416,707          6,646,651           4,745,347        3.72       3.72      3.88
Directors' fees ............           53,375             47,750              34,250         .03        .03       .03
Annual meeting .............                -             13,980              44,940           -        .01       .04
Convention and seminars.....          124,193             84,293              89,557         .06        .05       .07
Insurance ..................          753,353            554,694             393,077         .38        .31       .32
Life Insurance .............           21,356             12,065              15,681         .01        .01       .01
Office supplies and
   expense..................          597,630            835,752             325,345         .30        .47       .27
Operating supplies .........        1,093,316          1,126,498             815,023         .55        .63       .67
Equipment rent .............          387,699            356,213             234,983         .19        .20       .19
Telephone ..................          213,978            285,714             212,562         .11        .16       .17
Utilities ..................          105,964             91,524              50,988         .05        .05       .04
Accounting fees ............           48,170             43,451              33,330         .02        .02       .03
Legal fees .................          110,363            100,089              94,326         .06        .06       .08
Taxes, payroll .............          540,211            437,242             316,736         .27        .24       .26
Taxes, general .............          235,051            150,433              51,397         .12        .08       .04
Repairs and maintenance ....          143,369            373,436             252,345         .07        .21       .21
Depreciation ...............          545,509            425,653             269,760         .27        .24       .22
Amortization ...............           15,447             15,453              15,440         .01        .01       .01
Contract labor .............          114,379            125,237              23,515         .06        .07       .02
Advertising ................            9,414              9,050               5,754           -        .01       .01
Postage ....................           96,660             71,671              71,671         .05        .04       .04
Travel and promotion .......          498,346            393,054             347,062         .25        .22       .28
Dues and subscriptions......           22,147             41,377              26,014         .01        .02       .02
Profit sharing and
pension contribution .......          483,434            462,454             330,887         .24        .26       .27
Sales promotion.............        1,374,787          1,522,922             993,836         .69        .85       .81
Bank fees ..................          909,248            587,184             402,980         .46        .33       .33
Equipment maintenance ......          100,566            217,533              52,227         .05        .11       .04
Bad debts ..................           14,172             14,586               3,784         .01        .01       .01
Miscellaneous ..............          331,620            156,968             134,352         .17        .09       .11
                                 ------------        -----------          ----------      ------     ------    ------
                                 $ 16,360,464         15,202,927          10,366,843        8.21       8.51      8.48
                                 ============        ===========          ==========      ======     ======    ======
</TABLE>

See accompanying notes to financial statements and independent auditor's report.

                                       F-14

<PAGE>

(a)      (3)      Exhibits

                  Regulation S-K                  Document
                  Exhibit Number

                     3.1           Articles of Incorporation of Professional
                                   Veterinary Products, Ltd. (1)
                     3.2           Bylaws of Professional Veterinary Products,
                                   Ltd. (1)
                     4.1           Certificate of Professional Veterinary
                                   Products, Ltd. (1)
                     4.2           Article V of the Articles of Incorporation
                                   of Professional Veterinary Products, Ltd.,
                                   which defines the rights of holders of the
                                   securities being registered (1)
                     4.3           Article II of the Bylaws of Professional
                                   Veterinary Products, Ltd., which defines the
                                   rights of holders of the securities being
                                   registered (1)
                     5.1           Form of Opinion of Baird, Holm, McEachen,
                                   Pedersen, Hamann & Strasheim (2)
                    10.1           Warranty Deed for real estate at 10100 J
                                   Street, Omaha, Nebraska from Professional
                                   Veterinary Products, Ltd. to Duane E. and
                                   Barbara G. Miller (1)
                    10.2           Warranty Deed for real estate at 10077 South
                                   134/th/ Street, Omaha, Nebraska from Hilltop
                                   Industrial Park to Professional Veterinary
                                   Products, Ltd. (1).
                    10.3           Lease of building located at 10100 J Street,
                                   Omaha, Nebraska between Professional
                                   Veterinary Products, Ltd. and Duane E. and
                                   Barbara G. Miller (1).
                    10.4           Construction Agreement for building at 10077
                                   South 134/th/ Street, Omaha, Nebraska between
                                   Professional Veterinary Products, Ltd. and
                                   Mudra Construction, Ltd. (1).
                    10.5           Sales Agency Agreement between Professional
                                   Veterinary Products, Ltd. and Bayer
                                   Corporation (1).*
                    10.6           Sales Agency Agreement between Professional
                                   Veterinary Products, Ltd. and Merial LLC
                                   (1).*
                    10.7           Select Distributors Marketing Agreement
                                   between Professional Veterinary Products,
                                   Ltd. and the Animal Health Group of Pfizer,
                                   Inc. (1).*
                    10.8           Supply and Distribution Agreement between
                                   Professional Veterinary Products, Ltd. and
                                   Schering-Plough Animal Health Corporation
                                   (1).*
                    10.9           Distributor Agreement between Professional
                                   Veterinary Products, Ltd. and The Upjohn
                                   Company (1).*
                   10.10           Distribution Agreement between Professional
                                   Veterinary Products, Ltd. and Fort Dodge
                                   Animal Health (1).
                   10.11           Purchase and Sale Agreement between
                                   Professional Veterinary Products, Ltd., AAHA
                                   Services Corporation and American Animal
                                   Hospital Association (3).
                    11.1           Statement re Computation of Per Share
                                   Earnings (4).
                    12.1           Statement re Computation of Ratios (4).
                    15.1           Letter re Unaudited Interim Financial
                                   Information (1).
                      21           Subsidiaries (4).
                    23.1           Consent of Marvin E. Jewell & Co., P.C. (4).
                    23.2           Form of consent of Baird, Holm, McEachen,
                                   Pedersen, Hamann & Strasheim (1).
                    24.1           Power of Attorney executed by Michael
                                   Whitehair (4).
                    24.2           Power of Attorney executed by Chester L.
                                   Rawson (4).
                    24.3           Power of Attorney executed by Amy Lynne
                                   Hinton (4).
                    24.4           Power of Attorney executed by Kenneth Liska
                                   (4).
                    24.5           Power of Attorney executed by Wayne
                                   Rychnovsky (4).

                                     II-1


<PAGE>


                      24.6    Power of Attorney executed by Raymond Ebert II
                              (4).
                      24.7    Power of Attorney executed by Mark Basinger (4).
                      24.8    Power of Attorney executed by Fred Garrison (4).
                      27.1    Financial Data Schedule (4).
                      99.1    No Action letter issued by Securities and
                              Exchange Commission on July 12, 1996 (1).

         (1)  Previously filed as exhibits to the Form S-1 Registration
              Statement filed on September 7, 1999.
         (2)  Previously filed as exhibits to the Pre-Effective Amendment No. 1
              to the Form S-1 Registration Statement filed on October 19, 1999.
         (3)  Previously filed as exhibits to the Post-Effective Amendment No. 1
              to the Form S-1 Registration Statement No. 333-86629 filed on
              November 3, 2000.
         (4)   Filed herewith.
         (*)  Portions of these exhibits have been redacted pursuant to a
              request for confidential treatment which was granted by the
              Securities and Exchange Commission.

              All of such previously filed documents are hereby incorporated
          herein by reference in accordance with Item 601 of Regulation S-K.

(b)       Reports of Form 8-K
          -------------------

          No reports on Form 8-K were filed during the fourth quarter.

                                   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:    October 29, 2001


                                         PROFESSIONAL VETERINARY PRODUCTS, LTD.


                                         By:        /s/ LIONEL L. REILLY
                                             -----------------------------------
                                                    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/ LIONEL L. REILLY               President
          ----------------------------------------
                            Lionel L. Reilly

                     /s/ NEAL B. SODERQUIST             Chief Financial Officer
          ----------------------------------------

                                       II-2

<PAGE>

                 Neal B. Soderquist

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


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


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


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


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


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


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


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


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

                                       II-3