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Animal Health News & Notes for August 29, 2008 8/29/2008

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Brakke Consulting's
Animal Health News & Notes for August 29, 2008
Copyright © Brakke Consulting, Inc.
 
Editor: Lynn Fondon, DVM, MBA
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IN THE NEWS:
 
earnings news
Del Monte
PetSmart
Provimi
Sanderson Farms
Smithfield Foods
Vivalis
 
other news
Ainsworth Pet Nutrition
Bioniche
Biorigin
Biotec Pharmacon
DAD's Pet Care
Immunocorp
Veterinary Products Laboratories
 
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BRAKKE CONSULTING, INC.
Merger, Acquisition, Divestiture Assistance
 
Brakke Consulting assists a wide variety of companies with valuations, due diligence, and executive counsel on confidential transactions, including mergers, acquisitions, divestitures, and product and technology licensing.
 
Brakke Consulting has the experience, insight, abilities, and contacts that provide our clients with the highest quality services in the animal health, pet, veterinary, and specialty chemicals markets.  Please contact any of our offices for a confidential consultation on our range of services.  Contact information for all offices is available on our website at www.BrakkeConsulting.com .
 
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COMPANY EARNINGS RELEASES
 
> Provimi Group reported its consolidated results for the first six months of the year.  Revenues increased by 21% to EUR 1.1 billion ($1.7 billion), largely due to higher sales prices resulting from increased materials costs.  Profit from operations before other operating income/expense was EUR 56 million ($88 million), an increase of 18% compared to the first six months of 2007. (company press release) 
 
> Del Monte Foods reported net sales for the first quarter fiscal 2009 ended July 27, 2008. Pet Products net sales were $343 million, an increase of 11% over net sales million in the prior year period. The increase was driven primarily by pricing, as well as new and existing product volume growth. Dry pet sales were particularly strong due to promotional programs. (Business Wire) 
 
> PetSmart, Inc. reported net income of $37.2 million for the second fiscal quarter of 2008 ended August 3, compared with net income of $47.1 million for the second fiscal quarter of 2007. Net sales for the second quarter of 2008 increased 11% to $1.2 billion, compared to the second quarter of 2007. Comparable store sales grew 4% in the second quarter. Pet services sales were $141 million, up 20% from the second quarter of last year. (company website) 
 
> Smithfield Foods reported a net loss of ($12.6 million) in the fiscal first quarter ended July 27, compared to a net profit of $54.6 million in the year-ago quarter. Sales rose 20% to $3.14 billion from $2.62 billion in the quarter, as pork sales soared, fueled by increased exports. (Meating Place) 
 
> Sanderson Farms posted a net loss of ($3.6 million) for its fiscal third quarter ended July 31, compared with a net income of $30.7 million in the same quarter last year. revenue increase 18% in the third quarter, with net sales of $467 million compared to $395 million for the same quarter in fiscal 2007. (Meating Place)
 
> Vivalis announced results for the first half of 2008.  Total operating revenue was EUR 2.6 million ($4.1 million), an increase of 32% compared to the comparable period in 2007.  The company reported a net loss of (EUR 1.8 million) compared to a net loss of (EUR 1.5 million) in the first half of 2007. (company press release)
 
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COMPANY NEWS RELEASES
 
> Veterinary Products Laboratories (VPL) announced the introduction of Siphotrol X-Tend Handheld Yard & Patio Fogger to the Vet-Kem line of pest control products. The active ingredients in Siphotrol X-Tend Handheld Yard & Patio Fogger are etofenprox, tetramethrin and piperonyl butoxide technical. (company press release) 
 
> Bioniche Animal Health USA, Inc., announced it has been granted full listing by the Organic Materials Review Institute (OMRI) for its Immunoboost immunostimulant technology for calves. The addition of Immunoboost to the official OMRI list indicates that this biological product has met the national standard for use in organic dairy and beef operations in the US. (CNW Newswire)
 
> Ainsworth Pet Nutrition, a subsidiary of DAD’S Pet Care, announced the launch of a new line of all-natural, super premium dog food called Rachael Ray Nutrish. (Business Wire)
 
> Norwegian pharmaceuticals developer Biotec Pharmacon ASA announced that it has agreed to sell its subsidiary, Immunocorp Animal Health AS, to the Brazilian company Biorigin for NOK 37.5 million ($7.0 million).  Immunocorp Animal Health sells non- pharmacological animal and fish feed ingredients for stimulating the immune system, and reported sales of NOK 14.1 million ($2.6 million) in the first half of 2008. (Trading Markets)
 
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ANIMAL HEALTH NEWS
 
> US - AVMA ADDRESSES PROPOSITION 2   The American Veterinary Medical Association (AVMA) issued a statement addressing California's upcoming vote on Proposition 2, which would require that all farm animals, for the majority of the day, not be confined in a manner than prevents an animal from lying down, standing up, turning around, and/or fully extending its limbs without touching another animal or an enclosure. The statement, in part, reads: “The AVMA believes Proposition 2, ‘Standards for Confining Farm Animals,’ is admirable in its goal to improve the welfare of production farm animals; however, it ignores critical aspects of animal welfare that ultimately would threaten the well-being of the very animals it strives to protect." (Cattle Network, Feedstuffs)
 
> US - CATTLE INSPECTION RULE   The USDA announced a proposed rule to amend the Federal meat inspection regulations to initiate a complete ban on the slaughter of cattle that become non-ambulatory after initial inspection by Food Safety and Inspection Service (FSIS) inspection program personnel. Under the proposed rule, all cattle that are non-ambulatory disabled at any time prior to slaughter, including those that become non-ambulatory disabled after passing ante-mortem inspection, will be condemned and properly disposed of. Establishments will be required to notify FSIS personnel when cattle become disabled after passing ante-mortem inspection. (AnimalNet)
 
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CVC Central
Aug 29 - Sept 1
Kansas City, MO
 
The CVC Central meeting concluded this week with attendance of over 2,000 veterinarians and 740 veterinary technicians.
 
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BRAKKE CONSULTING VIEWPOINT
 
Again this week, we noted that those firms that serve the companion animal markets are seeing strong sales growth in 2008, while the firms more involved in the production of animal protein are not faring quite as well. 
 
Animal protein production continues to face the high price of feed grains and other input materials.  Based on the latest projections from agricultural economists, these cost issues are not going to see relief for sometime.  However, there does seem to be a building recognition that ethanol will face more pressure to prove its real value in the energy mix.  There are a number of ethanol plants in the US that are not going on-line or producing at the volume that was expected only 12 months ago. Will this, along with record crop production in 2008, begin to drive down the value of feed grains?  If it does, there could well be some light at the end of the tunnel for animal production, which will be positive for the animal health and nutrition industries. 
 
Have a safe and enjoy Labor Day Weekend here in the US!!  Thanks to all of you that attended Kansas City Animal Health Corridor Homecoming Event this past Monday night.  It was a great event!!  If you missed it you should make plans to attend the event in 2009.
 
Ron Brakke
 
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