MWI Vet exceeds $2 billion in revenue for fiscal year 2012

MWI Vet reported revenue growth of more than 30 percent for the fourth quarter ended Sept. 30 and fiscal year 2012. The Boise-based company distributes pet and animal health and pharmaceutical products in the United States and United Kingdom.

For the fourth quarter, revenues increased 30.9 percent from $421.3 million in 2011 to $551.4 million in 2012. Total revenues for fiscal year 2012 rose 32.6 percent to $2.08 billion from $1.57 billion last year.

MWI’s acquisition of Micro Beef Technology in October 2011 for $60 million contributed to this bump in revenue. Excluding Micro Beef, growth was 17.3 percent in the U.S. and 14.7 percent in the U.K. for fiscal year 2012.

The Micro Beef purchase also helped drive up sales, general, and administrative costs in the fourth quarter and fiscal year. MWI added 90 new sales people, including 50 from Micro Beef. MWI also had increased expenses related to vesting of restricted stock awards.

Kevin Ellich, senior research analyst at Piper Jaffray, said the Micro Beef acquisition increased MWI’s exposure to the production or livestock market. That business is affected by weather, like drought.

In an October interview with Idaho Business Review, MWI CEO Jim Cleary viewed this exposure differently. He said, “One of the key things is all our competition is either strong in the companion animal market or strong in the production animal market. We’re strong in both.” Cleary said that allows MWI to push product for both markets through the same distribution system without added costs.

Piper Jaffray’s Ellich also had concerns with MWI’s stock price. He said it appears to be expensive based on its price-to-earnings ratio relative to other companies in the industry. MWI stock’s PE ratio is about 27.

For fiscal year 2013, MWI estimates revenue growth of 10.1 percent to 12.5 percent. The company also predicts diluted earnings per share will be from $4.66 to $4.80. These estimates are based on current contracts with product manufacturers.