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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended October 31, 2002; 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)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [_]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at October 31, 2002
----- -------------------------------
Common Stock, $1.00 par value 1,700
PART I FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of October 31, 2002 and 3
July 31, 2002
Consolidated Income Statements for the three months 4
ended October 31, 2002 and 2001
Consolidated Statements of Cash Flow for the three months ended 5
October 31, 2002 and 2001
Notes to Financial Statements 6
Independent Accountant's Report 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 11
ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES 11
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
CERTIFICATIONS 13
PART I
FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
2
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Consolidated Balance Sheets
As of October 31, 2002 (unaudited) and July 31, 2002
(in thousands, except share data)
October 31, July 31,
2002 2002
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 93 $ 1,324
Accounts receivable, trade, net of allowance for doubtful
accounts of $373 and $353 27,968 16,817
Accounts receivable, related parties 3,164 2,875
Inventory 45,658 36,991
Deferred tax asset 146 146
Prepaid expenses and other current assets 39 36
------------ ------------
Total current assets 77,068 58,189
------------ ------------
NET PROPERTY AND EQUIPMENT 9,460 8,719
------------ ------------
OTHER ASSETS
Intangible assets, net of accumulated amortization
of $9 and $83 16 168
Investment in unconsolidated affiliates 1,491 1,491
Cash value life insurance 67 67
Other assets 119 -
------------ ------------
Total other assets 1,693 1,726
------------ ------------
TOTAL ASSETS $ 88,221 $ 68,634
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 5,245 $ -
Notes payable, bank 15,022 6,897
Current portion of long-term debt 506 496
Accounts payable, trade 49,473 44,007
Accounts payable, related parties 2,471 1,680
Other current liabilities 2,123 2,583
------------ ------------
Total current liabilities 74,840 55,663
------------ ------------
LONG-TERM LIABILITIES
Long-term debt 4,948 5,076
Deferred income tax liability 346 343
------------ ------------
Total long-term liabilities 5,294 5,419
------------ ------------
TOTAL LIABILITIES 80,134 61,082
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $1 par value per share; authorized 30,000 shares; issued
and outstanding 1,700 shares and 1,544 shares 2 2
Paid-in capital 4,968 4,547
Retained earnings 3,117 3,003
------------ ------------
Total stockholders' equity 8,087 7,552
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 88,221 $ 68,634
============ ============
See notes to the condensed, consolidated financial statements.
3
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Consolidated Statements of Income
Three Month Periods Ended October 31, 2002 and 2001
(unaudited)
(in thousands, except share data)
October 31, October 31,
2002 2001
------------ ------------
NET SALES AND OTHER REVENUE $ 75,236 $ 59,153
COST OF SALES 68,513 54,817
------------ ------------
Gross profit 6,723 4,336
OPERATING, GENERAL, AND
ADMINISTRATIVE EXPENSES 6,422 3,615
------------ ------------
Operating income 301 721
------------ ------------
OTHER INCOME (EXPENSE)
Interest income 128 117
Interest expense (240) (195)
------------ ------------
Total other income (expense) (112) (77)
------------ ------------
Income before taxes 189 643
Income tax expense 75 302
------------ ------------
NET INCOME $ 114 $ 341
============ ============
NET EARNINGS PER SHARE
OF COMMON STOCK $ 69.66 $ 222.40
============ ============
Weighted average common
shares outstanding 1,641 1,536
============ ============
See notes to the condensed, consolidated financial statements.
4
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended October 31, 2002 and 2001
(unaudited)
(in thousands)
October 31, October 31,
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 114 $ 342
------------ ------------
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 357 161
(Increase) decrease in:
Receivables (11,440) (7,727)
Inventories (8,667) 1,062
Prepaid expenses and other current assets (3) 235
Increase (decrease) in:
Accounts payable 6,257 1,091
Other current liabilities (460) (682)
Deferred tax liability 3 8
------------ ------------
Total adjustments (13,953) (5,852)
------------ ------------
Net cash from operating activities (13,839) (5,510)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (946) (23)
Deposits on property and equipment (119) -
------------ ------------
Net cash from investing activities (1,065) (23)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net loan proceeds (reduction) 8,007 3,557
Bank overdraft 5,245 1,277
Net proceeds from issuance of
common stock 421 96
------------ ------------
Net cash from financing activities 13,673 4,930
------------ ------------
Net decrease in cash (1,231) (603)
Cash at beginning of fiscal year 1,324 657
------------ ------------
Cash at end of period $ 93 $ 54
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 217 $ 189
============ ============
Income taxes paid $ 341 $ 3
============ ============
See notes to the condensed, consolidated financial statements.
5
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Notes to the Condensed, Consolidated Financial Statements
October 31, 2002
(unaudited)
(in thousands, except per share data)
1. ACCOUNTING POLICIES
The accompanying condensed, consolidated financial statements of Professional
Veterinary Products, Ltd., and its wholly-owned subsidiaries (the "Company")
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and in accordance with
the rules and regulations of the United States Securities and Exchange
Commission (the "SEC"). Accordingly, these condensed, consolidated financial
statements do not include all of the information and footnotes required by
accounting principles generally accepted in the United States for complete
financial statements.
The information contained in the financial statements is unaudited. The
statements reflect all normal and recurring adjustments which, in the opinion of
management, are necessary for a fair statement of the results for the interim
periods presented. All significant intercompany accounts and transactions have
been eliminated.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
These condensed, consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended July 31, 2002
filed with the SEC. The Company follows the same accounting policies in
preparation of interim financial statements. These policies are presented in
Note 1 to the Consolidated Financial Statements included on Form 10-K referred
to above.
The results of operations and cash flows for the three months ended October 31,
2002 are not necessarily indicative of the results to be expected for the fiscal
year ending July 31, 2003 or any other period. Certain amounts from prior
periods have been reclassified to conform to the current period's presentation.
Accounting Changes
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
142, Goodwill and Other Intangible Assets, as of the beginning of the current
fiscal year. SFAS No. 142 provides that goodwill and other intangible assets
with indefinite lives shall not be amortized and shall be tested for impairment
of value on an annual basis. For further discussion of the Company's adoption of
SFAS No. 142, see Note 2 to the condensed, consolidated financial statements.
The Company adopted SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, as of the beginning of the current fiscal year. SFAS No. 144
supercedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. SFAS No. 144 addresses financial
accounting and reporting for the impairment of long lived assets held for use
and for long lived assets that are to be disposed of by sale. The adoption of
this statement had no effect on the Company's financial position or results of
operations.
6
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Notes to the Condensed, Consolidated Financial Statements
October 31, 2002
(unaudited)
(in thousands, except per share data)
1. ACCOUNTING POLICIES (continued)
The Company adopted SFAS No. 143, Accounting for Asset Retirement Obligations,
as of the beginning of the current fiscal year. This statement requires the
Company to recognize the fair value of a liability associated with the cost the
company would be obligated to incur in order to retire an asset at some point in
the future. The liability would be recognized in the period in which it is
incurred and can be reasonably estimated. The adoption of this statement had no
effect on the Company's financial position or results of operations.
Recently Issued Accounting Pronouncements
In July 2002, the FASB issued SFAS 146, Accounting for Costs Associated with
Exit and Disposal Activities. This statement addresses costs such as
restructuring, involuntary termination of employees and consolidating facilities
but excludes from its scope exit and disposal activities that are in connection
with a business combination and those activities to which SFAS No. 143 and 144
are applicable. SFAS No. 146 is effective for exit and disposal activities that
are initiated after December 31, 2002. The Company will assess the impact of
adoption of SFAS 146 based on the nature of any exit or disposal activities that
are ongoing at that time.
2. GOODWILL AND OTHER INTANGIBLE ASSETS
The Company adopted SFAS No. 142 as of the beginning of the current fiscal year.
SFAS No. 142, among other things, eliminates the amortization of goodwill and
requires an annual assessment of goodwill impairment by applying a fair value
based test. SFAS No. 142 requires that any goodwill recorded in connection with
an acquisition consummated on or after July 1, 2001 not be amortized. No
additional goodwill was acquired during the three months ended October 31, 2002.
The Company performed an impairment test as of August 1, 2002. Goodwill was
determined to be impaired and the amount of $151 was charged to operating,
general, and administrative expenses. The goodwill impairment is associated with
the assets acquired by the Company in connection with its acquisition of
Am-V-Co. Remaining goodwill will be tested for impairment on an annual basis and
further impairment charges may result. In accordance with the non-amortization
provisions of SFAS No. 142, remaining goodwill will not be amortized going
forward.
Intangible assets subject to amortization according to SFAS No. 142 consist only
of the loan origination fee. The original loan origination fee subject to
amortization was $20, and accumulated amortization was $7 and $7 for October 31,
2002 and July 31, 2002, respectively. Amortization on the loan fees are computed
straight-line over the term of the related note and is included in interest
expense. Amortization expense was $0.5 for the three months ended October 31,
2002 and 2001. The estimated aggregate amortization expense for the five
succeeding fiscal years is $10.
An intangible asset not subject to amortization, according to SFAS No. 142, is
the Company trademark. This intangible asset has a carrying amount of $4 at
October 31, 2002.
An intangible asset not subject to amortization, according to Accounting
Principles Board Opinion 18, is the goodwill associated with the equity method
investment in an unconsolidated affiliate (AAHA Service Corp.). This intangible
asset has a carrying amount of $1,347 at October 31, 2002.
7
PROFESSIONAL VETERINARY PRODUCTS, LTD. AND SUBSIDIARIES
Notes to the Condensed, Consolidated Financial Statements
October 31, 2002
(unaudited)
(in thousands, except per share data)
2. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
The following schedule reflects net income for the three months ended October
31, 2002 and 2001 adjusted to exclude goodwill amortization and impairment
charges:
October 31, October 31,
2002 2001
---- ----
Net income
Net income as reported $ 114 $ 342
Impairment 151
Amortization, net of taxes - 19
-------- --------
Pro forma net income $ 265 $ 361
======== ========
Earnings per share
Net earnings per share as reported $ 69.65 $ 222.40
Impairment 92.10 -
Amortization, net of taxes - 12.81
-------- --------
Pro Forma net earnings per share $ 161.75 $ 235.21
======== ========
3. SEGMENT INFORMATION
The Company has one reportable segment, which buys, sells, and warehouses animal
health related items. The Company does not have separate strategic business
units that offer different products or services. The Company did not receive
over 10% of revenues from any single external customer.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the prior year condensed,
consolidated financial statements to conform to the current year presentation.
Such reclassifications had no impact on results of operations or shareholders'
equity.
8
To the Board of Directors
Professional Veterinary Products, Ltd.
Omaha, NE
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying consolidated balance sheet of
Professional Veterinary Products, Ltd. (a Nebraska Corporation) and subsidiaries
as of October 31, 2002, and the related statements of consolidated income for
the three month periods ended October 31, 2002 and 2001 and the consolidated
statements of cash flows for the three month periods ended October 31, 2002 and
2001. We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of the management of
Professional Veterinary Products, Ltd.
A review of interim financial information consists principally of inquiries
of Company personnel and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles.
The July 31, 2002 balance sheet included in these financial statements was
audited by us. Our audit report dated October 14, 2002 expressed an unqualified
opinion on that balance sheet.
/s/ Quick & McFarlin, P.C.
Omaha, Nebraska
December 5, 2002
9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company expends capital primarily to fund day-to-day operations and
expand those operations to accommodate sales growth. It is necessary for the
Company to expend necessary funds to maintain significant inventory levels in
order to fulfill its commitment to its customers. Historically, the Company has
financed its cash requirements primarily from short term bank borrowings and
cash from operations. The short term bank borrowings are accomplished through a
twenty million dollar revolving line of credit at U.S. Bank, Omaha, Nebraska.
As in previous years, the Company's capital expenditures were made to
finance day-to-day operations and to expand its operations to accommodate the
growth in the number of customers and corresponding growth in sales. Inventory
needs and expenses associated therewith continue to grow. Capital requirements
have been funded primarily from short-term bank borrowings and cash derived from
its operations.
Net cash used by operating activities of $5.5 million for period ending
October 31, 2001 was primarily attributable to an increase of $7.7 million in
receivables. These were partially offset by a decrease of $1.1 million in
inventories and an increase of $1.1 million in accounts payable. Net cash used
by operating activities of $13.8 million for period ending October 31, 2002 was
primarily attributable to an increase of $11.4 million in receivables and $8.7
million in inventories. These were partially offset by an increase of $6.3
million in accounts payable.
Net cash used by investing activities of $23 thousand for period ending
October 31, 2001 was attributable to investments in equipment, including the
purchase of office, warehouse and computer equipment. Net cash used by investing
activities of $1.1 million for period ending October 31, 2002 was primarily
attributable to the purchase of 10 acres of land adjoining the current corporate
headquarters in Omaha, Nebraska for $808 thousand plus investments in equipment,
including the purchase of office, warehouse and computer equipment.
Net cash provided by financing activities of $4.9 million for period ending
October 31, 2001 was primarily attributable to net loan proceeds of $3.6 million
and a bank overdraft of $1.3 million. Net cash provided by financing activities
of $13.7 million for period ending October 31, 2002 was primarily attributable
to net loan proceeds of $8.0 million and a bank overdraft of $5.2 million.
RESULTS OF OPERATIONS
Three months ended October 31, 2002 as compared to three months ended
October 31, 2001:
Net sales and other revenue increased $16 million to $75.2 million compared
to $59.2 million for the same period the previous year. The 27% growth was
principally attributable to increased sales to existing customers of $3.2
million and to new customers of $12.8 million.
Gross profit increased $2.4 million to $6.7 million compared to $4.3
million for the same period the previous year. This increase is primarily
attributable to the increase in net sales and other revenue. Gross profit as a
percentage of net sales and other revenue was 8.9% compared to 7.3% for the same
period the previous year. This increase in gross profit percentage is primarily
attributable to higher margin from the sale of product including a reduction in
freight costs.
Operating, general and administrative expenses increased $2.8 million to
$6.4 million compared to $3.6 million for the same period the previous year.
This increase is primarily attributable to support the
10
increase in net sales and other revenue. These expenses as a percentage of net
sales and other revenue was 8.5% compared to 6.1% for the same period the
previous year. This change in percentage was primarily attributable to increased
expenses maintaining two distribution centers compared to one distribution
center for the same period the previous year, also added expenses to support the
ProConn LLC business which was not active the previous year.
Operating income decreased $420 thousand to $301 thousand compared to $721
thousand for the same period the previous year. This decrease is primarily
attributable to the increase in operating, general and administrative expenses
of $2.8 million which was partially offset by the increase in gross profit of
$2.4 million.
The Company's other income (expense) increased to $112 thousand (expense)
from the $77 thousand (expense) for the same period the previous year. Interest
expense increased from $195 thousand to $240 thousand. The increase is
principally related to a higher average balance on the revolving line of credit.
The total was partially offset by an increase in interest income of $11
thousand.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks primarily from changes in U.S.
interest rates. The Company does not engage in financial transactions for
trading or speculative purposes.
The interest payable on the Company's revolving line of credit is based on
variable interest rates and is therefore affected by changes in market interest
rates. If interest rates on variable rate debt rose .444 percentage points (a
10% change from the interest rate as of October 31, 2002), assuming no change in
the Company's outstanding balance under the line of credit (approximately $15.0
million as of October 31, 2002), the Company's annualized income before taxes
and cash flows from operating activities would decline by approximately $67
thousand.
ITEM 4: DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures: An evaluation of
our disclosure controls and procedures (as defined in Section 13(a)-14(c) of the
Securities Exchange Act of 1934 (the "Exchange Act")) was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer within the 90-day period preceding the filing date of this
quarterly report. Our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures as currently in effect are
effective in ensuring that the information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is (i) accumulated and
communicated to Company management (including the Chief Executive Officer and
Chief Financial Officer) in a timely manner, and (ii) recorded, processed,
summarized and reported within the time periods specified in the Security and
Exchange Commission's rules and forms.
(b) Changes in Internal Controls: In the quarter ended October 31, 2002,
we did not make any significant changes in, nor take any corrective actions
regarding, our internal controls or other factors that could significantly
affect these controls.
11
PART II
OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company has not been informed of any legal matters that would have a
material adverse effect on its financial condition, results of operation or cash
flow.
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
(d) Use of Proceeds:
On October 19, 1999 the registration statement (Registration No. 333-86629)
for the initial public offering of our common stock became effective. 500 shares
of common stock were registered with an aggregate offering price of $1,500,000.
On November 8, 2001, the Company filed another registration statement
(Registration No. 333-72962) for the public offering of an additional 500 shares
of common stock, in addition to the 114 shares previously registered under
Registration No. 333-86629 that remain unsold. Through October 31, 2002, 558
shares of common stock have been sold for an aggregate offering price of
$1,674,000.
The amount of expenses incurred in connection with the issuance and
distribution of our common stock increased by approximately $91,000 to $217,792,
including the additional SEC registration fee, Blue Sky filing fees and
expenses, printing expenses, legal fees, and miscellaneous expenses. None of
these expenses represented a direct or indirect payment to directors, officers,
persons owning 10% or more of any class of our common stock.
The net offering proceeds to the Company after deducting the total expenses
are $1,456,208 as of October 31, 2002.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5: OTHER INFORMATION
None.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-K
None
(b) REPORTS ON FORM 8-K
The Company filed no current reports on Form 8-K during the
quarter ended October 31, 2002.
12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 13, 2002 By: /s/ Dr. Lionel L. Reilly, President
-----------------------------------
CERTIFICATIONS
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Professional Veterinary Products, Ltd. Form
10-Q (the "Report") for the quarter ended October 31, 2002, each of the
undersigned hereby certifies that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Professional
Veterinary Products, Ltd.
/s/ Dr. Lionel L. Reilly
- ----------------------------------------
Dr. Lionel L. Reilly
President/Chief Executive Officer
/s/ Neal B. Soderquist
- ----------------------------------------
Neal B. Soderquist
Chief Financial Officer
13
I, Dr. Lionel L. Reilly, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Professional
Veterinary Products, Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
December 13, 2002
/s/ Dr. Lionel L. Reilly
- -----------------------------------------
Dr. Lionel L. Reilly
President/Chief Executive Officer
14
I, Neal B. Soderquist, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Professional
Veterinary Products, Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
December 13, 2002
/s/ Neal B. Soderquist
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Neal B. Soderquist
Chief Financial Officer
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