VIRBAC CORP - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.

For the quarterly period ended March 31, 2003

Commission File Number: 0-24312

VIRBAC CORPORATION

State of Incorporation: Delaware I.R.S. Employer I.D. 43-1648680

3200 Meacham Boulevard
Fort Worth, TX 76137
(817) 831-5030

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 Exchange Act of 1934 during
the preceding twelve months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety days.

Yes X No
--- ---

The number of shares of common stock outstanding at May 9, 2003 is 22,207,463
shares.

VIRBAC CORPORATION

INDEX

PART I - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (UNAUDITED) PAGE 3

The accompanying notes are an integral part
of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) PAGE 4

The accompanying notes are an integral part
of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) PAGE 5

The accompanying notes are an integral part
of these consolidated financial statements.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) PAGE 6

The accompanying notes are an integral part
of these consolidated financial statements.

VIRBAC CORPORATION PAGE 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Virbac Corporation (the "Company") manufactures and distributes
companion animal health products. The Company is a leader in dermatological and
oral hygiene products for companion animals, or pets, and provides a broad array
of health care products to its customers under the C.E.T., Allerderm, St. JON,
Iverhart, Mardel, Pet Tabs, and Preventic brand names.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
information and footnotes required by accounting standards generally accepted in
the United States of America for complete financial statements. In the opinion
of management, these statements include all adjustments (which consist of
normal, recurring adjustments) necessary to present fairly the financial
position as of March 31, 2003 and December 31, 2002, and the results of
operations and cash flows for the three months ended March 31, 2003 and 2002.
The results of operations for the three months ended March 31, 2003 and 2002 are
not necessarily indicative of the operating results for the full year. This
interim report should be read in conjunction with the Company's consolidated
financial statements and notes related thereto included in the 2002 Form 10-K as
filed with the Securities and Exchange Commission.

REVENUE RECOGNITION

The Company recognizes revenue when ownership transfers to the
Company's customers.

Revenue related to certain contract manufacturing customers,
for whom the Company provides warehousing and/or distribution services,
is contractually recognized upon the completion of the manufacturing
process.

EMPLOYEE STOCK-BASED COMPENSATION

The Company has adopted SFAS No. 123, "Accounting for
Stock-Based Compensation," on a disclosure basis only. The Company
measures compensation costs under Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees" and its
related interpretations. Had compensation cost for all of the Company's
stock option plans been determined based upon the fair value at the
grant dates consistent with the methodology prescribed in SFAS 123, the
Company's net income and net income per share would have changed to the
pro forma amounts listed below using the weighted average fair values
indicated.

VIRBAC CORPORATION PAGE 8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. INVENTORIES (in thousands)

Inventories consist of the following:

3. LONG-TERM DEBT (in thousands)

The revolving credit facility expires on July 31, 2005. There are no
principal payments due until July 2005, when the full amount outstanding will be
due and payable. At March 31, 2003, $1.6 million was available under the credit
facility and the interest rate was 3.25%. The weighted average interest rate for
2002 was 3.81%.

The revolving credit facility contains financial covenants, including,
but not limited to, tangible net worth and interest coverage ratios, and
restricts the payment of dividends. At March 31, 2003, the Company was in
compliance with all covenants.

The Company has received net advances of $300,000 subsequent to March
31, 2003.

4. STOCK OPTIONS AND COMMON STOCK TRANSACTIONS

Under terms of the Company's Incentive Stock Option Plans, officers and
certain other employees may be granted options to purchase the Company's common
stock at the closing market price on the date that the option is granted.
Options generally vest over three years and have a maximum term of ten years.

For the three months ended March 31, 2003, 5,000 options were
exercised. Of the options exercised, all were issued from previously unissued
shares.

Due to the loss the Company incurred in the quarter ended March 31,
2003, 666,000 potentially dilutive common shares were excluded from the fully
diluted earnings per share calculation.

VIRBAC CORPORATION PAGE 9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. COMMITMENTS AND CONTINGENCIES

LITIGATION

The Company is subject to certain litigation and claims arising out of
the conduct of its business. While the final outcome of any litigation or claim
cannot be determined with certainty, management believes that the final outcome
of any current litigation or claim will not have a material adverse effect on
the Company's financial position, cash flows or results of operations.

ADJUSTMENT OF MERGER SHARES

The Company is the result of the March 5, 1999 merger of Virbac, Inc.,
a subsidiary of Virbac SA ("VBSA"), a French veterinary pharmaceutical
manufacturer, and Agri-Nutrition Group Limited ("AGNU"), a publicly held
company. In order to maintain VBSA's 60% ownership interest in the Company until
the expiration, termination or exercise of all options to purchase the Company's
common stock outstanding as of the date of the merger and until the Company's
last issuance of common stock pursuant to the "Mardel Merger Agreement", the
Company will contemporaneously, with the issuance of common stock upon the
exercise of pre-merger AGNU options or pursuant to the Mardel Merger Agreement,
issue to VBSA a number of additional shares of common stock equal to the product
of (a) the aggregate number of shares of common stock issued upon the exercise
of such AGNU options or pursuant to the Mardel Merger Agreement and (b) 1.5.
Each such post-merger adjustment will dilute the voting power of current
stockholders. As of March 31, 2003, 221,000 pre-merger options were outstanding.
During the first three months of 2003, no shares were issued for pre-merger
options exercised. No newly issued shares will be issued to VBSA as long as
treasury shares are available to satisfy these pre-merger obligations.

ACQUISITION OF LICENSING RIGHTS

In 1999, the Company acquired the rights to manufacture and sell
products under development by a third party for a period of 15 years. The
Company has made milestone payments totaling $3.2 million for such rights.
Depending upon the third party reaching certain milestones with respect to
obtaining U. S. Food and Drug Administration ("FDA") approval to sell such
products, the Company was committed to paying in fiscal 2001 and 2002
approximately $0.8 million and $0.7 million, respectively. During 2001, the
Company entered into an agreement with the third party whereby the Company
acquired ownership of all rights and data for the products, and the Company's
future royalty payments under the agreement were reduced in exchange for the
Company assuming all remaining costs of registering the products. The Company
estimates those costs to be approximately $1.4 million and they will be recorded
as research and development expense in the periods in which they are incurred.
Of the expected $1.4 million, approximately $370,000 had been incurred by March
31, 2003.

Upon adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangibles," the Company determined that the $3.2 million
previously paid to the third party has an indefinite life and will not be
amortized. Instead, these costs will be reviewed for impairment each year in
accordance with the Company's policy.

PFIZER AGREEMENT

In 2000, the Company reached an agreement to sublicense to Pfizer Inc.
the Company's North American distribution rights for two equine products. Under
the terms of the agreement, the Company received an initial cash payment of
$5.25 million, of which $4.25 is subject to repayment if the Company has not
obtained FDA approval to sell the products or certain other conditions are not
met by January 1, 2004. In September 2002, the Company received an additional
payment of $0.7 million because a regulatory milestone had been achieved. These
product license fees will be recognized over the contract period of 15 years.
The payments received have been reflected as unearned product license fees in
the accompanying Balance Sheets,

VIRBAC CORPORATION PAGE 10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

net of revenue recognized. The Company began recognition of these fees in the
fourth quarter of 2002 of which $26,000 was recognized during the three months
ended March 31, 2003.

6. SEGMENT AND RELATED INFORMATION

The Company has three reportable segments. The Veterinary segment
distributes pet health products mainly to veterinarian offices. The Consumer
Brands segment manufactures and distributes pet health products to pet stores,
farm and feed stores, and the mass retail market. PM Resources manufactures and
distributes animal health and specialty chemicals under private label brands and
for third parties.

The accounting policies of the reportable segments are the same as
those described in Note 2 of the Company's annual report 10-K. In evaluating
segment performance (excluding PM Resources), management focuses on income from
operations excluding depreciation, amortization, interest, other expenses or
(income), and taxes. All intercompany sales and transfers to the reportable
segments are at cost. Such sales are eliminated in consolidation. Total assets
are monitored by the Company's corporate personnel (except for accounts
receivable which is reviewed by Veterinary and Consumer Brands segments).
Management separately monitors PM Resources results and total assets. The
Company's reportable segments utilize different channels of distribution. They
are managed separately because each business distributes different products and
each has different marketing strategies. During the three months ended March 31,
2003, the management of the Company reorganized the reporting structure for
certain customers previously reported in the PM Resources segment into the
Consumer Brands segment. All results reported below have been adjusted to
reflect this change. Summarized financial information concerning the Company's
reportable segments is shown in the following tables:

7. OUTSTANDING CHECKS IN EXCESS OF FUNDS ON DEPOSIT

The Company uses a revolving credit facility to fund working capital
needs. Under terms of this facility, the bank automatically sweeps the Company's
checking accounts and either increases or reduces the amount outstanding under
the revolving line of credit. At any given point in time, the Company has checks
outstanding that have not been presented to the bank for payment. The Company's
outstanding checks are classified as accounts payable-trade in the amounts of
$1.2 million and $1.2 million at March 31, 2003 and December 31, 2002,
respectively.

VIRBAC CORPORATION PAGE 11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES

As of March 31, 2003, the Company has available net operating loss
carryforwards totaling approximately $2.2 million, which expire in the years
2011 to 2019. The Company also has available general business tax credit and
alternative minimum tax credit carryforwards totaling approximately $0.1
million. The general business tax credits expire in the years 2010 to 2020; the
alternative minimum tax carryforwards may be carried forward indefinitely.

9. INTANGIBLE ASSETS AND GOODWILL

For the three months ended March 31, 2003, no goodwill or other
intangible assets were impaired or disposed. Goodwill and other intangibles, net
consisted of the following:

Acquired Intangible Assets:

Goodwill:

Amortization expense for patents and product rights is expected to be the
following for each of the next five years (in thousands):

VIRBAC CORPORATION PAGE 12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. WORKING CAPITAL

The net change in working capital described earlier in the Consolidated
Statements of Cash Flow consists of the following changes:

VIRBAC CORPORATION PAGE 13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

Virbac Corporation (the "Company") manufactures and distributes
companion animal health products. The Company is a leader in dermatological and
oral hygiene products for companion animals, or pets, and provides a broad array
of health care products to its customers under the C.E.T., Allerderm, St. JON,
Iverhart, Mardel, Pet-Tabs, and Preventic brand names.

The Management's Discussion and Analysis that follows, and the other
documents incorporated by reference, contain forward-looking information made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements involve a number of risks, uncertainties
and other factors that could cause actual results to differ materially from
those stated, including without limitation:

o Unanticipated new competitive products or technological entries
into the market could adversely affect sales forecasts.

o A lack of acceptance of the Company's products by the market could
adversely affect sales projections.

o Projections of future revenues related to products not yet
registered with certain governmental agencies could differ
significantly if those registrations are not received in the time
periods anticipated.

o Interest rates and changes to those rates could differ
significantly from Company projections.

o The Company receives significant support from its majority owner,
Virbac SA ("VBSA"), including product development and research
expenditures made that benefit the Company, short-term borrowings,
and worldwide distribution of the Company's products. The Company's
results could be adversely affected if VBSA were to reduce this
support.

o The Company could experience a decrease in the demand for its
products, which could result in reduced funding available under the
Company's lines of credit.

o Effects of other strategic initiatives, including acquisitions,
divestitures, and restructurings.

o The cost of compliance with newly issued SEC rules and corporate
governance initiatives is uncertain and could adversely affect the
Company's operating results in future periods.

RESULTS OF OPERATIONS

The consolidated financial statements of the Company are prepared in
accordance with generally accepted accounting principles in the United States.
The preparation of these consolidated financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent liabilities and the reported
amounts of revenues and expenses. On an ongoing basis, management evaluates its
estimates and judgements, including those related to customer incentives,
product returns, bad debts, inventories, intangible assets, income taxes,
contingencies and litigation. Management bases its assumptions on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgements
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

Management believes the following critical accounting policies, among
others, affect its more significant judgements and estimates used in the
preparation of its consolidated financial statements:

o The Company records estimated reductions in revenue for product
returns. Should a greater proportion of product be returned in
later periods than was estimated, additional reductions to revenue
may be required.

o The Company maintains allowances for doubtful accounts for
estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of the Company's
customers were to deteriorate, resulting in impairment in their
ability to make payments, additional provisions may be required.

VIRBAC CORPORATION PAGE 14

o The Company writes down its inventory for estimated obsolescence
or unmarketable inventory equal to the difference between cost of
the inventory and the estimated market value based upon
assumptions about future demand and market conditions. If actual
market conditions or demand is less favorable than management
projected, additional write-downs may be required.

o The Company records a valuation allowance to reduce its deferred
tax assets to the amount that it believes is more likely than not
to be realized. While the Company has considered future taxable
income and ongoing prudent and feasible tax planning strategies
in assessing the need for the valuation allowance, in the event
that the Company were to determine that it would not be able to
realize all or part of its net deferred tax assets in the future,
an adjustment to the deferred tax assets would be charged to
income in the period such determination was made.

o The Company has recorded unearned product license fees related to
its distribution agreement with Pfizer. The ability of the
Company to recognize this as income is dependent upon the
Company obtaining registrations permitting it to sell these
products from the appropriate governmental agencies. The Company
also will record the income based upon estimates of when the
sales of these products will occur. If the registrations are not
received in a timely manner, or certain other conditions are not
met, the Company would be required to repay some or all of the
unearned product license fees to Pfizer. The Company began to
recognize these product license fees into income in 2002.

o The Company is required to assess the carrying values of
goodwill and intangible assets with indeterminate lives annually,
or when circumstances dictate that the carrying value might be
impaired. Intangibles that are subject to amortization are also
reviewed in each reporting period to determine if the carrying
value might be impaired. The method for determining if impairment
has occurred requires estimates of future cash flows and the
Company's weighted average cost of capital. In the event that an
impairment is determined to have occurred, the Company will
reduce the carrying value of the asset and earnings in that
period.

VIRBAC CORPORATION PAGE 15

QUARTER ENDED MARCH 31, 2003 COMPARED TO QUARTER ENDED MARCH 31, 2002

Net Revenues: Net revenues decreased by approximately $0.5 million or 3% for the
quarter ended March 31, 2003 compared with the quarter ended March 31, 2002 due
to decreased sales in the Veterinary segment, which were partially offset by
increased sales in the Consumer Brands and PM Resources segments. Specifically,
net revenues by segment were as follows:

During the three months ended March 31, 2003, the management of the Company
reorganized the reporting structure for certain customers previously reported in
the PM Resources segment into the Consumer Brands segment. As a result, revenue
of $1.8 million that previously would have been reported for the PM Resources
segment for the three months ended March 31, 2003, was reported for the Consumer
Brands segment. All results reported below have been adjusted to reflect this
change.

o Veterinary net revenues decreased mostly due to high levels of
backorders to our customers and due to lower Iverhart Plus
sales. Backorders at March 31, 2003 were approximately $1.1
million higher than at March 31, 2002, due to production
difficulties resulting from the closure of the Harbor City
facility. The Company expects the backorders to be a temporary
situation with future quarters having more normal backorder
levels. In addition, the first quarter of 2002 had higher than
normal sales associated with the initial launch of Iverhart
Plus. The quarter ended March 31, 2003 had more normal levels
of sales for this product.

o Consumer Brands net revenues increased mostly due to higher
sales of the Company's rodenticide product. This is a seasonal
product and these incremental sales are not expected to be
repeated in future quarters.

o PM Resources net revenues increased because of higher
livestock pour-on product and higher contract manufacturing
business. The livestock pour-on product sales increased by
$795,000 and are expected to be less than this in the second
quarter due to seasonality of the product. The contract
manufacturing sales increase was due to the addition of new
customers. This business is expected be down slightly in
future quarters from the first quarter level.

Gross Profit: Gross profit decreased by $775,000 or 11%. The decrease in gross
profit increase was attributable to decreased net revenues and an unfavorable
mix of products sold. Gross profit as a percentage of net revenues decreased to
39% from 43%. Specifically, gross profit by segment was as follows:

o Veterinary gross profit decreased entirely due to decreases in
sales volume in all categories due to increases in backorders
and lower Iverhart Plus sales.

o Consumer Brands gross profit increased almost entirely due to
higher sales volume. The Company expects the Consumer Brands
gross profit to range between 30% and 33% for the remainder of
the year.

VIRBAC CORPORATION PAGE 16

o PM Resources gross profit increased due to higher sales volume and a
favorable mix of products sold. The higher volume accounted for
$217,000 of the variance and the improved mix accounted for $302,000 of
the variance. The Company expects gross profits to range between 15%
and 20% for the remainder of 2003.

Operating Expenses: Operating expenses have increased $1.6 million or 30% for
the quarter ended March 31, 2003 compared to the quarter ended March 31, 2002.
As a percent of sales, operating expenses increased to 46% compared to 34% in
the year earlier quarter. Selling, general, and administrative expenses ("SGA")
accounted for $1.2 million of the increase in the operating expenses for the
quarter. The selling, general, and administrative expenses were higher due to
$323,000 in costs to close the Company's Harbor City manufacturing facility and
the remaining $898,000 was due to higher promotion costs related to the
Company's dental and dermatological products. The Company anticipates that the
closure of the Harbor City facility will reduce future operating expenses by
approximately $700,000 annually. Research and development expenses increased by
$519,000 compared to the corresponding quarter in 2002, due to the timing of
expenditures related to the new product registration efforts the Company is
undertaking. The Company expects research and development expenses to be
approximately 6% to 7% of sales for the next several quarters. Warehouse and
distribution expenses were down by $111,000 compared to the corresponding
quarter in 2002. The decreased distribution costs were due to decreased sales
volume and more efficient operations.

Interest Expense and Other Income (Expense): Interest expense was lower for the
quarter than the prior year due to lower interest rates and borrowings in 2003
as compared with 2002. The interest rate on the Company's debt agreement was
3.81% at March 31, 2002 as compared with 3.25% at March 31, 2003.

Taxes: The Company has available net operating loss carryforwards totaling
approximately $0.8 million, which expire in the years 2011 to 2019. The Company
also has available general business tax credit and alternative minimum tax
credit carryforwards totaling approximately $0.1 million. The general business
tax credits expire in the years 2010 to 2020; the alternative minimum tax
carryforwards may be carried forward indefinitely. The Company has recorded
income tax benefit in the quarter ended March 31, 2003 of $405,000 and income
tax expense in the quarter ended March 31, 2002 of $524,000, which reflects a
38% effective tax rate for 2003 and a 40% tax rate for 2002. The rate is lower
in 2003 because the of lower state income tax rates.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 2003, $3.6 million of cash was
used in operations. Of this amount, $659,000 came from net loss and $3.0 million
was used for working capital. The Company carried higher accounts receivable of
$2.0 million due to the seasonal impact of granting customers longer payment
terms. Accounts receivable are expected to be reduced significantly during the
next two quarters. Accrued expenses were down by $1.3 million due to the timing
of payments made.

Cash flows used in investing activities during the three months ended
March 31, 2003 include payments made for proprietary dental product licenses and
purchases of property, plant, and equipment.

Cash flows provided by financing activities during the three months
ended March 31, 2003 primarily reflect net borrowings of the revolving credit
facility. This credit facility was used to fund the growth in accounts
receivable and payments of accrued expenses.

The Company's revolving credit facility contains financial covenants
including, but not limited to, tangible net worth and interest coverage ratios,
and restricts the payment of dividends. At March 31, 2003, the Company was in
compliance with such covenants.

At March 31, 2003, $1.6 million was available under the revolving
credit facility and the interest rate was 3.25%.

The Company had received net advances of $300,000 subsequent to March
31, 2003.

Management believes that the Company will have sufficient cash to meet
the needs of its current

VIRBAC CORPORATION PAGE 17

operations for at least the next twelve months from cash flows from current
operations and from existing financing facilities. In addition, the Company will
be placing particular emphasis on reducing inventories and receivables through
the end of 2003.

The Company has no current plans to significantly increase capacity of
any of its plant facilities or to expend significant capital in modifying them.
The Company expects capital expenditures to be approximately $3.0 million for
the remainder of the year.

In 2000, the Company reached an agreement to sublicense to Pfizer Inc.
the Company's North American distribution rights for two equine products. Under
the terms of the agreement, the Company received an initial cash payment of
$5.25 million, of which, $4.25 million is subject to repayment if the Company
has not obtained FDA approval to sell the products or certain other conditions
are not met by January 1, 2004. The Company believes that the appropriate
regulatory approvals will be received before December 31, 2003. In September
2002, the Company received an additional payment of $0.7 million because a
regulatory milestone had been achieved. These product license fees will be
recognized over the contract period of 15 years. The payments received have been
reflected as unearned product license fees in the September 30, 2002 and
December 31, 2001 Balance Sheet and accretion of these fees was begun in the
fourth quarter of 2002. Accretion for the three months ended March 31, 2003 was
$26,000.

The Company has no plans to pay dividends to stockholders in the
foreseeable future.

NEW ACCOUNTING PRONOUNCEMENTS

None

QUARTERLY EFFECTS AND SEASONALITY

The results of operations of certain products in the Veterinary product
line, including Virbac's flea and tick collars, have been seasonal with a lower
volume of its sales and earnings being generated during the Company's first and
fourth fiscal quarters. The results of operations of the Company's Consumer
Brands segment have also been seasonal with a relatively lower volume of its
sales and earnings being generated during the Company's fourth quarter. PM
Resources operations are highly dependent on weather, livestock economics, and
the timing of orders.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not have any derivative instruments that materially
increase its exposure to market risks for interest rates, foreign currency
rates, commodity prices or other market price risks. In addition, the Company
does not use derivatives for speculative purposes.

The Company's exposure to market risks results from changes in interest
rates. Interest rate risk exists principally with respect to long-term
indebtedness, which bears interest at floating rates. At March 31, 2003, the
Company had $10.4 million of indebtedness bearing interest at floating rates. If
an unfavorable change of 100 basis points in the interest rate applicable to the
Company's floating-rate indebtedness had occurred in the three-month period
ended March 31, 2003, the Company would have experienced additional interest
expense of $26,000 for this three-month period. This assumes no change in the
principal or a reduction of such indebtedness.

ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our principal executive officers and principal financial officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic
reports filed with the Securities and Exchange Commission. In addition, we
reviewed our internal controls, and there have been no significant changes in
our internal controls or in other factors that could significantly affect those
internal controls subsequent to the date we carried out our last evaluation.

VIRBAC CORPORATION PAGE 18

PART II - OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

VIRBAC CORPORATION

/s/ Joseph A. Rougraff
- ------------------------------------------
Joseph A. Rougraff
Vice President and Chief Financial Officer
May 13, 2003

VIRBAC CORPORATION PAGE 19

CERTIFICATION

I, Thomas L. Bell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Virbac
Corporation;

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.

/s/ Thomas L. Bell
- ------------------------------
Thomas L. Bell
Chief Executive Officer
May 13, 2003

VIRBAC CORPORATION PAGE 20

CERTIFICATION

I, Joseph A. Rougraff, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Virbac
Corporation;

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.

/s/ Joseph A. Rougraff
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Joseph A. Rougraff
Chief Financial Officer
May 13, 2003

INDEX TO EXHIBITS