growth has been through acquisitions.       On June  1, 2004, VCA merged with
National PetCare Centers, Inc. This
added another 67 animal hospitals in
11 states.       And on October  1, 2004, VCA
acquired Sound Technologies, Inc. This
is the nation’s largest supplier of ultra-
sound and digital radiology equipment
to the veterinary market.       VCA currently has three operating
segments:
Laboratory, Animal
Hospital and
Corporate. They
operate as sepa-
rate units because
they have different
products, services
and functions. The
laboratory seg-
ment provides test-
ing services for
veterinarians. The animal hospital seg-
ment is what most pet lovers are famil-
iar with. This segment provides veteri-
nary services and sells related retail and
pharmaceutical products. Corporate pro-
vides sales and administrative support
for the other two segments. Profit centers Laboratory revenue increased US$4.3  million for the three months
ended September  30, 2004, and US$17.0  million for the nine months
ended September  30, 2004, compared
to the same periods in the prior year.
Animal Hospital revenue increased
US$36.3  million and US$70.6  million
in the same periods. This isn’t bad,
especially when you consider that
many pet products that once were sold
only at veterinary hospitals are now
also sold at pet stores like Petsmart
and Petco.       Even vaccina-
tions are now
given less fre-
quently. To offset
this, VCA has
placed greater
emphasis on high-
quality veterinary
care and wellness
programs, which
are more expen-
sive. These trends have resulted in a decrease in the
number of treatments and an increase
in the average revenue per treatment.       As I write this, the company has
announced that it will report fourth-
quarter 2004 results on February 24,
2005. It looks as if the stock is experi-
encing resistance at US$20. But there’s
been increased buying in the past two
months, which leads me to expect pos-
itive fourth-quarter results. VCA
Antech (WOOF:NASDAQ) is a buy
under US$20.  12 TAIPAN Publisher:
J. Christoph Amberger Editors:   Christian DeHaemer,
Siu-Yee Ng, Briton L. Ryle, Adam
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