MERIDIAN, ID -- (Marketwire) -- 02/04/09 -- MWI Veterinary Supply, Inc. (NASDAQ: MWIV) (the "Company") announced financial results today for its first quarter ended December 31, 2008.

Highlights:

--  Revenues were $231.8 million for the quarter, 14.0% higher than
    revenues for the same period in the prior fiscal year.
--  Net income was $5.9 million for the quarter, 26.6% higher than net
    income for the same period in the prior fiscal year.  Diluted earnings per
    share were $0.48 for the quarter, compared to $0.38 for the same period in
    the prior fiscal year.
--  Selling, general and administrative ("SG&A") expenses as a percentage
    of revenues were 10.0% for the quarter, compared to 10.5% for the same
    period in the prior fiscal year.
--  Internet sales to independent veterinary practices and producers grew
    by approximately 42% for the quarter compared to the same period in the
    prior fiscal year.  Our product sales from the internet as a percentage of
    sales improved to 27% for the quarter as compared to 24% for the same
    period in the prior fiscal year.
--  We doubled the capacity of our Dallas distribution center by moving to
    a larger facility with 70,000 square feet in November 2008.
--  We completed the quarter with no borrowings on our $70 million credit
    line and a cash balance of $786,000.
    

"While the environment is more challenging, the MWI team again delivered great operating results in the December quarter," said Jim Cleary, President and Chief Executive Officer. "We had 14% growth in revenues, 26% growth in net income, 42% growth in internet sales, and we finished the quarter with excellent liquidity and no borrowings on our $70 million credit line."

Quarter ended December 31, 2008 compared to quarter ended December 31, 2007

Total revenues grew 14.0% to $231.8 million for the quarter ended December 31, 2008, compared to $203.4 million for the quarter ended December 31, 2007. Revenues attributable to new customers represented approximately 71% of the growth in total revenues during the quarter ended December 31, 2008. Commissions were $2.9 million for both of the quarters ended December 31, 2008 and 2007. In the same quarter of the prior year, there were promotion programs and incentives offered related to commissions that were not offered during the quarter ended December 31, 2008.

Gross profit increased by 13.0% to $33.7 million for the quarter ended December 31, 2008, compared to $29.8 million for the quarter ended December 31, 2007. Gross profit as a percentage of total revenues was 14.5% for the quarter ended December 31, 2008, compared to 14.6% for the quarter ended December 31, 2007. The decrease in gross profit as a percentage of total revenues was due to the decrease in commissions as a percentage of total revenues as previously explained. Vendor rebates for the quarter ended December 31, 2008 increased approximately $1.2 million compared to the quarter ended December 31, 2007.

Operating income increased 25.2% to $9.7 million for the quarter ended December 31, 2008, compared to $7.7 million for the quarter ended December 31, 2007. SG&A expenses as a percentage of revenue were 10.0% for the quarter ended December 31, 2008, compared to 10.5% for the quarter ended December 31, 2007, due to operating leverage and cost-control measures. The dollar increase in SG&A expenses was primarily due to increased compensation costs as a result of additional headcount of 53 employees since December 31, 2007, including 22 additional field sales representatives and 10 additional telesales representatives as well as an increase in our allowance for doubtful accounts.

Net income increased 26.6% to $5.9 million for the quarter ended December 31, 2008, compared to $4.7 million for the quarter ended December 31, 2007. Diluted earnings per share were $0.48 and $0.38 per share for the quarters ended December 31, 2008 and 2007, respectively, an increase of 26.3%.

Our cash balance as of December 31, 2008 was $786,000 and we had no borrowings on our $70 million credit line. Receivables increased 7.7% to $138.4 million compared to September 30, 2008 with continued revenue growth. Inventories increased 13.3% to $134.2 million compared to September 30, 2008 as we took advantage of opportunities to buy products on favorable terms ahead of vendor price increases.