MWI Veterinary Supply (MWIV)

TOP CONTRIBUTORS

Tom Park

www.zacks.com

MWI Veterinary Supply, Inc. is a leading distributor of animal health products to veterinarians across the United States of America. The company, based in Meridian, Idaho, distributes more than 11,000 products sourced from over 450 vendors to more than 16,000 veterinary practices nationwide. Products MWI sells include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food, and nutritional products. MWI markets these products to veterinarians in both the companion animal and production animal markets. Companion animals include dogs, cats, other pets, and horses, while production animals include cattle and other food-producing animals. To be competitive, MWI also offers its customers a variety of value-added services, including on-line ordering, pharmacy fulfillment, in-clinic inventory management, equipment procurement consultation, educational seminars, and pet cremation service. MWI's growth has primarily been from internal growth initiatives and, to a lesser extent, selective acquisitions. The increasing maturity of the production animal market results in lower margins on product sales relative to the companion animal market. Approximately two-thirds of MWI's total revenues have been generated from sales of companion animal products and one-third from production animal products. MWI sells products that it sources from vendors to its customers through either a buy/sell transaction or an agency relationship with its vendors. In the buy/sell arrangement, MWI generates revenues from the sale of goods purchased from vendors and held in inventory to customers. In the agency arrangement, MWI generates revenues through commissions received from its vendors for soliciting orders from customers on behalf of the vendors. Vendors typically establish sales growth goals based on a calendar year, quarterly, or trimester performance for MWI to meet to receive performance rebates, which are a reduction to cost of product sales. MWIV has a sales force of over 160 field sales representatives and over 120 telesales representatives covering the U.S., and also offers print product catalogs. MWIV provides on-line ordering, valuable business information, and value-added services through its Internet site. In fiscal 2007, approximately 24% of product sales were generated over the Internet. MWI completed its initial public offering of common stock in August 2005.

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