MWI Veterinary Supply, Inc. F3Q09 (Qtr End 06/30/09) Earnings Call Transcript

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2009-07-30 13:30:35.0

Tags: Distribution Center, Call Transcript, Earnings, MWI Veterinary Supply Inc., Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

Thank you, Mr. Cleary. (Operator instructions). We will take our first question from Derrick Lott [ph] with Burlington Research [ph]. Please go ahead.

Derrick Lott - Burlington Research

Thank you. Good morning, Jim. Good morning, Mary Pat.

Jim Cleary

Hi.

Derrick Lott - Burlington Research

One of the attractive aspects of your business right now is the underutilized capacity that you have and I just wondered with the addition of the additional Indianapolis center, what would you estimate your unused capacity to be?

Jim Cleary

I would estimate, and this is an approximation, that with the current number of ships that we are running, once we open that facility, we'll be about 60% capacity utilization. So we still have unused capacity and by increasing the number of ships and the timing of ships overtime we could further increase that capacity.

Now, of course that's on a national level and there is significant variation from distribution center to distribution center. But that’s one of the neat things that we have accomplished since well about over the past three years or so, we have moved, opened, or expanded, I believe, eight of our 12 distribution centers, approximately eight of our 12 distribution centers and that's an expense that we've done over the past few years, which has both been the capital expenditure and during each of the periods that we do that, there is incremental operating expense.

And with the opening of our Indianapolis facility in October, we'll be completing that process over a period of time. Now, if we continue to have the type of growth that we are having, we might need to expand the distribution center, for instance, our distribution center in California. But that process that we've gone through over the last few years is largely complete.

Derrick Lott - Burlington Research

And as you look at your sales force today, will you be targeting those markets like for instance in the Midwest for expansion with the hiring of additional sales reps and maybe you could give us the sales rep count at the end of the quarter?

Jim Cleary

Yes, at the end of the quarter, we had 187 field sales reps and 137 telesales reps for a total number of 324. Now, if we compare those numbers to past quarters, our number of field sales reps stayed constant from the March quarter to the June quarter and we're up by 10 field sales reps from the June quarter last year to the June quarter this year.

 

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