PetIQ, Inc. (“PetIQ” or the “Company”) (Nasdaq: PETQ), a leading
pet medication, product and wellness company, today reported
financial results for the fourth quarter and full year ended
December 31, 2023.
Cord Christensen, PetIQ’s Founder and CEO commented, “2023 was a
record year for PetIQ. I am very proud of our team's execution to
grow our business, enabling us to significantly exceed the top and
bottom line guidance that we provided at the beginning of the year.
These results also fueled cash generation above our expectations,
and we improved the Company's net leverage to a record low.”
Christensen continued, “We made significant strategic
investments in marketing during the year to support the growth and
development of PetIQ's portfolio of pet health and wellness brands
as evidenced by our higher rate of consumption and market share
gains. We will use the cost savings from our Services segment
optimization to reinvest in our future growth, funding
approximately half of the planned incremental marketing initiatives
in 2024. Our mission to help pet parents have access to affordable
and convenient pet health and wellness continues to gain momentum
and we're excited about our opportunities to fuel growth and
enhance shareholder value for many years to come.”
Full Year 2023 Highlights Compared to Prior
Year
- Record net sales of $1,102.0 million, an increase of 19.6%,
above the high-end of the Company's most recent guidance of
$1,060.0 million to $1,080.0 million and well-ahead of the
Company's original outlook of $970.0 million to $1,030.0
million
- Product segment net sales of $968.2 million compared to $800.3
million, an increase of 21.0%
- Net sales for PetIQ’s manufactured products increased 28% and
outperformed the Company's growth expectations for the year
- Services segment net revenue of $133.8 million compared to
$121.2 million, an increase of 10.4%
- Gross profit of $252.7 million compared to $209.7 million, an
increase of 20.5%
- Gross margin increased 10 basis points to 22.9%
- Adjusted gross profit of $254.9 million and adjusted gross
margin of 23.1%
- Net income of $2.1 million, or earnings per diluted share
("EPS") of $0.07, includes $13.6 million of total
restructuring attributable to the Company's previously disclosed
Services segment optimization and a $7.7 million non-cash asset
charge for the Company's foreign subsidiary's related valuation and
expected sale
- Adjusted net income of $36.6 million, or adjusted diluted
EPS of $1.24, an increase of 103.3% compared to adjusted net income
of $17.7 million, or adjusted diluted EPS of $0.61
- Adjusted EBITDA of $104.7 million compared to $77.7 million, an
increase of 34.8%, above the high-end of the Company's most recent
guidance of $99 million to $103 million and well-ahead of the
Company's original outlook of $86 million to $92 million
- Highest reported cash from operations and free cash flow in the
Company's history of $61.9 million and $52.7 million, respectively,
for the year ended December 31, 2023
- Net leverage as measured under the Company's credit agreement
was a record low 2.9x as of December 31, 2023 compared to 3.7x as
of December 31, 2022
Fourth Quarter 2023 Highlights Compared to Prior Year
Period
- Net sales of $219.9 million, an increase of 19.5%
- Product segment net sales of $191.3 million compared to $157.3
million, an increase of 21.6%
- Net sales for PetIQ’s manufactured products increased 36% and
outperformed the Company's growth expectations for the quarter
- Services segment net revenue of $28.6 million compared to $26.8
million, an increase of 6.9%
- Gross profit of $44.0 million compared to $39.3 million, an
increase of 12.0%
- Gross margin decreased 130 basis points to 20.0% primarily due
to 149 wellness center closures in 2023, of which 104 wellness
center closed in the fourth quarter, associated with Services
segment optimization
- Adjusted gross profit of $45.6 million and adjusted gross
margin of 20.7%
- Net loss of $17.5 million, or a loss per share of $0.60,
includes the aforementioned total restructuring and related
non-cash asset charges of $5.1 million and $7.7 million,
respectively
- Adjusted net loss of $3.4 million, or adjusted loss per share
of $0.12
- Adjusted EBITDA of $12.0 million
Fourth Quarter 2023 Financial Results
Net sales were $219.9 million for the fourth quarter of 2023, an
increase of 19.5% compared to net sales of $184.1 million in the
prior year period, driven by an increase in sales from both the
Products and Services segments.
Products segment net sales of $191.3 million increased 21.6% for
the fourth quarter of 2023, compared to the prior year period,
reflecting broad-based growth in the Company's product categories
from strong consumer demand across sales channels as well as from
the acquisition Rocco & Roxie LLC ("Rocco & Roxie")
completed in January 2023. The Company experienced growth during
the fourth quarter of 2023 from flea and tick, prescription
medication, health and wellness as well as dental and treat product
offerings. Net sales for PetIQ’s manufactured products outperformed
the Company's growth expectations for the fourth quarter of 2023 as
compared to the prior year period with an increase of 36% including
the acquisition of Rocco & Roxie, or an increase of 19%, on an
organic basis.
Services segment revenue for the fourth quarter of 2023
increased 6.9% to $28.6 million from the fourth quarter last year
driven by operational improvements, despite the loss of revenue
from the 149 wellness centers closed in the third and fourth
quarters of 2023 associated with the previously disclosed Services
segment optimization. The Company ended 2023 with 133 wellness
centers in operation.
Fourth quarter 2023 gross profit was $44.0 million, an increase
of 12.0%, compared to $39.3 million in the prior year period. Gross
margin decreased 130 basis points to 20.0% from 21.3% in the prior
year period primarily as a result of the 104 and 45 wellness center
closures in the fourth quarter and third quarter of 2023,
respectively. Adjusted gross profit for the fourth quarter of 2023
was $45.6 million and adjusted gross margin was 20.7%.
Selling, general and administrative expenses (“SG&A”) was
$42.7 million for the fourth quarter of 2023 compared to $37.7
million in the prior year period. As a percentage of net sales,
SG&A was 19.4% for the fourth quarter of 2023, a decrease of
110 basis points compared to the prior year period. Adjusted
SG&A was $40.6 million for the fourth quarter of 2023 compared
to $34.7 million in the prior year period. As a percentage of net
sales adjusted SG&A was 18.5%, an improvement of 40 basis
points compared to the prior year period primarily as a result of
continued leverage of costs and increased business expense
efficiencies relative to the growth in net sales, partially offset
by incremental and planned marketing expense of approximately $3
million to support PetIQ's manufactured brands.
Restructuring and related charges attributable to the Services
segment optimization were $3.5 million, plus an additional
$1.6 million included in cost of services equating to a total
restructuring of $5.1 million for the fourth quarter of 2023.
See the "Calculation of Total Restructuring Expenses" financial
table that accompanies this release for the components of expenses
included in restructuring and cost of services. In the fourth
quarter of 2023 the Company recorded non-cash asset charges of $7.7
million for its foreign subsidiary, Mark & Chappell, in
connection with the related valuation and expected sale of the
business.
Net loss was $17.5 million for the fourth quarter of 2023
compared to a net loss of $6.8 million in the prior year period.
Adjusted net loss for the fourth quarter of 2023 was $3.4 million
and adjusted loss per share was $0.12, compared to adjusted net
loss of $3.0 million, and adjusted loss per share of $0.10 in the
prior year period. Adjusted EBITDA of $12.0 million, includes
approximately $3 million of aforementioned incremental and planned
marketing expense, compared to $12.9 million in the prior year
period.
Cash Flow and Balance Sheet
The Company ended the quarter with total cash and cash
equivalents of $116.4 million. For the year ended December 31,
2023, the Company generated its highest annual cash from operations
and free cash flow in the Company's history of $61.9 million and
$52.7 million, respectively. The Company’s total debt was $445.2
million as of December 31, 2023. The Company had total liquidity,
which it defines as cash on hand plus debt availability, of $241.4
million as of December 31, 2023. The Company's net leverage as
measured under the Company's credit agreement was a record low 2.9x
as of December 31, 2023 a reduction from 3.7x in 2022. Please refer
to the financial tables within this press release for a calculation
of the Company’s net leverage under the credit agreement and free
cash flow.
Adjusted gross profit, adjusted gross margin, adjusted SG&A,
adjusted SG&A as a percent of net sales, adjusted net income,
adjusted EPS, adjusted EBITDA, adjusted EBITDA margin and free cash
flow are non-GAAP financial measures. The Company believes these
non-GAAP financial measures provide useful additional information
to investors about current trends in the Company's operations and
are useful for period-over-period comparisons of operations. In
addition, management uses these non-GAAP financial measures to
assess operating performance and for business planning purposes.
See “Non-GAAP Financial Measures” for a definition of these
measures and the financial tables that accompany this release for a
reconciliation to the most comparable GAAP measure.
Outlook
For the full year 2024 and first quarter of 2024 the Company is
providing its outlook inclusive of its Services segment
optimization, the expected sale of its foreign subsidiary, Mark
& Chappell and a return to more normal flea and tick
seasonality as compared to the record seasonal patterns experienced
in 2023. Additionally, for the year ending December 31, 2024, the
Company expects the 2024 net sales contribution to be weighted to
the first half of 2024, with approximately 56% of the Company's
projected annual net sales recorded in this period. The Company's
annual adjusted EBITDA is also expected to be weighted to the first
half of 2024. The Company's annual seasonality can vary based on
the timing of shipments, promotional activity, product launches and
a number of other factors.
For the full year 2024 the Company expects:
- Net sales of $1,130.0 million to $1,180.0 million
- Adjusted EBITDA of $109.0 million to $114.0 million
For the first quarter of 2024 the Company expects:
- Net sales of $290.0 million to $310.0 million
- Adjusted EBITDA of $31.0 million to $33.0 million
The Company does not provide guidance for net income, the most
directly comparable GAAP measure to Adjusted EBITDA, and similarly
cannot provide a reconciliation between its forecasted adjusted
EBITDA and net income without unreasonable effort due to the
unavailability of reliable estimates for certain components of net
income and the respective reconciliations. These forecasted items
are not within the Company’s control, may vary greatly between
periods and could significantly impact future financial results for
the first quarter ending March 31, 2024 and full year ending
December 31, 2024.
Conference Call and Webcast
The Company will host a conference call with members of the
executive management team to discuss these results. The conference
call is scheduled to begin today at 4:30 p.m. ET. To participate on
the live call listeners in North America may dial 833-816-1410 and
international listeners may dial 412-317-0503.
In addition, the call will be broadcast live over the Internet
hosted at the “Investors” section of the Company's website at
www.PetIQ.com. A telephonic playback will be available through
March 20, 2024. North American listeners may dial 844-512-2921 and
international listeners may dial 412-317-6671; the passcode is
10186272.
About PetIQ
PetIQ is a leading pet medication, product and wellness company
delivering a smarter way for pet parents to help their pets live
their best lives through convenient access to affordable health and
wellness products and veterinary services. The Company's product
business engages with pet parents through retail and e-commerce
channels in more than 60,000 points of distribution with its
branded and distributed pet medications as well as health and
wellness items, which are further supported by its world-class
medications manufacturing facility in Omaha, Nebraska and health
and wellness manufacturing facility in Springville, Utah. The
Company’s veterinarian service platform operates in over 2,600
community clinic locations and wellness centers hosted at retailers
in 39 states providing cost effective and convenient veterinary
wellness services. PetIQ believes that pets are an important part
of the family and deserve the best products and care we can
provide.
Contact: katie.turner@petiq.com
or 208.513.1513Media: kara.schafer@petiq.com or
407.929.6727
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties, such as statements about our
plans, objectives, expectations, assumptions or future events. In
some cases, you can identify forward-looking statements by
terminology such as “anticipate,” “estimate,” “plan,” “project,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could” and similar expressions. Forward-looking
statements involve estimates, assumptions, known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from any future results, performances, or
achievements expressed or implied by the forward-looking
statements. Forward-looking statements should not be read as a
guarantee of future performance or results and will not necessarily
be accurate indications of the times at, or by, which such
performance or results will be achieved. Forward-looking statements
are based on information available at the time those statements are
made or management's good faith belief as of that time with respect
to future events and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but
are not limited to, general economic or market conditions,
including inflation and interest rates; overall consumer spending
in the industry; our ability to successfully grow our business
through acquisitions and our ability to integrate acquisitions; our
dependency on a limited number of customers; our ability to
implement our growth strategy effectively; our ability to continue
to grow our Services segment; disruptions in our manufacturing,
shipping, transportation and distribution chains; competition from
veterinarians and others in our industry; reputational damage to
our brands; the effectiveness of our marketing and trade promotion
programs; recalls or withdrawals of our products or product
liability claims; our ability to introduce new products and improve
existing products; our ability to protect our intellectual
property; costs associated with governmental regulation; our
ability to keep and retain key employees; our ability to sustain
profitability; cyber security risks, including breaches that result
in business interruption and data loss; our substantial
indebtedness and ability to raise additional capital as needed; and
the risks set forth under the “Risk Factors” section of our Annual
Report on Form 10-K for the year ended December 31, 2022 and other
reports filed time to time with the Securities and Exchange
Commission. Additional risks and uncertainties not currently known
to us or that we currently deem to be immaterial may materially
adversely affect our business, financial condition or operating
results. The forward-looking statements speak only as of the date
on which they are made, and, except as required by law, we
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events. In addition, we cannot assess the impact of each factor on
our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Consequently, you
should not place undue reliance on forward-looking statements.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
U.S. GAAP, PetIQ uses the following non-GAAP financial measures:
adjusted gross profit, adjusted gross margin, adjusted SG&A,
adjusted SG&A as a percentage of total net sales, adjusted net
(loss) income, adjusted (loss) earnings per share, adjusted EBITDA,
adjusted EBITDA margin and free cash flow.
Adjusted gross profit consists of gross profit adjusted for
restructuring and purchase accounting adjustment to inventory.
Adjusted gross margin is adjusted gross margin stated as a
percentage of total net sales.
Adjusted SG&A consists of SG&A adjusted for acquisition
costs, stock-based compensation expense, integration and business
transformation costs, and litigation expenses. Adjusted SG&A is
adjusted SG&A as a percentage of total net sales.
Adjusted net (loss) income consists of net income adjusted for
tax expense, impairment and other asset charges, acquisition costs,
integration and business transformation costs, litigation expenses,
restructuring costs and stock-based compensation expense. Adjusted
net income is utilized by management to evaluate the effectiveness
of our business strategies. Non-GAAP adjusted earnings per share is
defined as non-GAAP adjusted net income divided by the weighted
average number of shares of common stock outstanding during the
period.
EBITDA represents net income before interest, income taxes,
impairment and other asset charges, and depreciation and
amortization. Adjusted EBITDA represents EBITDA plus adjustments
for transactions that management does not believe are
representative of our core ongoing business including acquisition
costs, restructuring, stock-based compensation expense, litigation
expenses, and integration and business transformation costs.
Adjusted EBITDA margin is adjusted EBITDA stated as a percentage of
total net sales.
Adjusted EBITDA is utilized by management as a factor in
evaluating the Company's performance and the effectiveness of our
business strategies. The Company presents EBITDA because it is a
necessary component for computing adjusted EBITDA.
Free cash flow consists of cash provided by operations less
capital expenditures.
We believe that the use of these non-GAAP measures provides
additional tools for investors to use in evaluating ongoing
operating results and trends. In addition, you should be aware when
evaluating these non-GAAP measures that in the future we may incur
expenses similar to those excluded when calculating these measures.
Our presentation of these measures should not be construed as an
inference that our future results will be unaffected by these or
other unusual or non-recurring items. Our computation of non-GAAP
measures may not be comparable to other similarly titled measures
computed by other companies, because all companies do not calculate
these non-GAAP measures in the same manner. Our management does
not, and you should not, consider the non-GAAP financial measures
in isolation or as an alternative to financial measures determined
in accordance with GAAP. The principal limitation of non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in our financial
statements. See a reconciliation of each non-GAAP measure to the
most comparable GAAP measure, in the financial tables that
accompany this release.
PetIQ, Inc.Consolidated Balance Sheets(Unaudited, in 000’s
except for per share amounts) |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
116,369 |
|
|
$ |
101,265 |
|
Accounts receivable, net |
|
|
142,511 |
|
|
|
118,004 |
|
Inventories |
|
|
159,309 |
|
|
|
142,605 |
|
Other current assets |
|
|
12,645 |
|
|
|
8,238 |
|
Total current assets |
|
|
430,834 |
|
|
|
370,112 |
|
Property, plant and equipment, net |
|
|
57,097 |
|
|
|
73,395 |
|
Operating lease right of use assets |
|
|
19,079 |
|
|
|
18,231 |
|
Other non-current assets |
|
|
2,083 |
|
|
|
1,373 |
|
Intangible assets, net |
|
|
159,729 |
|
|
|
172,479 |
|
Goodwill |
|
|
199,404 |
|
|
|
183,306 |
|
Total assets |
|
$ |
868,226 |
|
|
$ |
818,896 |
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
139,264 |
|
|
$ |
112,995 |
|
Accrued wages payable |
|
|
16,734 |
|
|
|
11,512 |
|
Accrued interest payable |
|
|
6,636 |
|
|
|
1,912 |
|
Other accrued expenses |
|
|
10,692 |
|
|
|
7,725 |
|
Current portion of operating leases |
|
|
7,608 |
|
|
|
6,595 |
|
Current portion of long-term debt and finance leases |
|
|
8,595 |
|
|
|
8,751 |
|
Total current liabilities |
|
|
189,529 |
|
|
|
149,490 |
|
Operating leases, less current installments |
|
|
13,763 |
|
|
|
12,405 |
|
Long-term debt, less current installments |
|
|
437,820 |
|
|
|
443,276 |
|
Finance leases, less current installments |
|
|
516 |
|
|
|
907 |
|
Other non-current liabilities |
|
|
3,600 |
|
|
|
1,025 |
|
Total non-current liabilities |
|
|
455,699 |
|
|
|
457,613 |
|
Equity |
|
|
|
|
Additional paid-in capital |
|
|
387,349 |
|
|
|
378,709 |
|
Class A common stock, par value $0.001 per share, 125,000 shares
authorized; 29,570 and 29,348 shares issued, respectively |
|
|
29 |
|
|
|
29 |
|
Class B common stock, par value $0.001 per share, 8,402 shares
authorized; 231 and 252 shares issued and outstanding,
respectively |
|
|
— |
|
|
|
— |
|
Class A treasury stock, at cost, 373 and 373 shares,
respectively |
|
|
(3,857 |
) |
|
|
(3,857 |
) |
Accumulated deficit |
|
|
(160,602 |
) |
|
|
(162,733 |
) |
Accumulated other comprehensive loss |
|
|
(1,706 |
) |
|
|
(2,224 |
) |
Total stockholders' equity |
|
|
221,213 |
|
|
|
209,924 |
|
Non-controlling interest |
|
|
1,785 |
|
|
|
1,869 |
|
Total equity |
|
|
222,998 |
|
|
|
211,793 |
|
Total liabilities and equity |
|
$ |
868,226 |
|
|
$ |
818,896 |
|
PetIQ, Inc.Consolidated Statements of Operations(Unaudited,
in 000’s, except for per share amounts) |
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
191,327 |
|
|
$ |
157,324 |
|
|
$ |
968,151 |
|
$ |
800,305 |
|
Services revenue |
|
|
28,600 |
|
|
|
26,755 |
|
|
|
133,812 |
|
|
121,208 |
|
Total net sales |
|
|
219,927 |
|
|
|
184,079 |
|
|
|
1,101,963 |
|
|
921,513 |
|
Cost of products sold |
|
|
146,807 |
|
|
|
120,715 |
|
|
|
732,422 |
|
|
606,548 |
|
Cost of
services |
|
|
29,130 |
|
|
|
24,080 |
|
|
|
116,801 |
|
|
105,302 |
|
Total cost of sales |
|
|
175,937 |
|
|
|
144,795 |
|
|
|
849,223 |
|
|
711,850 |
|
Gross profit |
|
|
43,990 |
|
|
|
39,284 |
|
|
|
252,740 |
|
|
209,663 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
42,729 |
|
|
|
37,747 |
|
|
|
196,236 |
|
|
182,561 |
|
Restructuring(1) |
|
|
3,516 |
|
|
|
— |
|
|
|
11,751 |
|
|
— |
|
Impairment and other asset charges(2) |
|
|
7,680 |
|
|
|
— |
|
|
|
7,680 |
|
|
47,264 |
|
Operating (loss) income |
|
|
(9,935 |
) |
|
|
1,537 |
|
|
|
37,073 |
|
|
(20,162 |
) |
Interest expense, net |
|
|
8,410 |
|
|
|
7,678 |
|
|
|
34,547 |
|
|
27,374 |
|
Other expense (income), net |
|
|
2 |
|
|
|
(98 |
) |
|
|
160 |
|
|
(130 |
) |
Total other expense, net |
|
|
8,412 |
|
|
|
7,580 |
|
|
|
34,707 |
|
|
27,244 |
|
Pretax net (loss) income |
|
|
(18,347 |
) |
|
|
(6,043 |
) |
|
|
2,366 |
|
|
(47,406 |
) |
Income tax benefit (expense) |
|
|
1,096 |
|
|
|
(845 |
) |
|
|
173 |
|
|
(1,214 |
) |
Net (loss) income |
|
|
(17,251 |
) |
|
|
(6,888 |
) |
|
|
2,539 |
|
|
(48,620 |
) |
Net (loss) income attributable to non-controlling interest |
|
|
236 |
|
|
|
(52 |
) |
|
|
408 |
|
|
(412 |
) |
Net (loss) income attributable to PetIQ, Inc. |
|
$ |
(17,487 |
) |
|
$ |
(6,836 |
) |
|
$ |
2,131 |
|
$ |
(48,208 |
) |
Net
(loss) income per share attributable to PetIQ, Inc. Class A common
stock |
Basic |
|
$ |
(0.60 |
) |
|
$ |
(0.24 |
) |
|
$ |
0.07 |
|
$ |
(1.65 |
) |
Diluted |
|
$ |
(0.60 |
) |
|
$ |
(0.24 |
) |
|
$ |
0.07 |
|
$ |
(1.65 |
) |
Weighted
Average shares of Class A common stock outstanding |
Basic |
|
|
29,193 |
|
|
|
28,967 |
|
|
|
29,135 |
|
|
29,159 |
|
Diluted |
|
|
29,193 |
|
|
|
28,967 |
|
|
|
29,530 |
|
|
29,159 |
|
(1) Restructuring charges include accelerated depreciation and
amortization, variable lease expenses, lease termination costs, and
other miscellaneous costs.(2) Impairment and other asset charges
includes asset charges associated with the Company committing to a
plan to sell its foreign subsidiary, Mark & Chappell during the
year ended December 31, 2023. For the year ended December 31, 2022,
impairment and other asset charges includes write-down of the full
goodwill balance of the Services segment.
PetIQ, Inc.Consolidated Statements of Cash Flows(Unaudited,
in 000’s) |
|
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating
activities |
|
|
|
|
Net income (loss) |
|
$ |
2,539 |
|
|
$ |
(48,620 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities |
|
|
|
|
Depreciation and amortization of intangible assets and loan
fees |
|
|
44,498 |
|
|
|
35,468 |
|
Loss on disposition of property, plant, and equipment |
|
|
8 |
|
|
|
438 |
|
Stock based compensation expense |
|
|
9,468 |
|
|
|
11,363 |
|
Deferred tax adjustment |
|
|
(172 |
) |
|
|
599 |
|
Impairment and other asset charges |
|
|
7,680 |
|
|
|
47,264 |
|
Other non-cash activity |
|
|
(85 |
) |
|
|
(385 |
) |
Changes in assets and liabilities, net of business acquisition |
|
|
|
|
Accounts receivable |
|
|
(24,457 |
) |
|
|
(4,137 |
) |
Inventories |
|
|
(16,041 |
) |
|
|
(46,297 |
) |
Other assets |
|
|
(4 |
) |
|
|
1,093 |
|
Accounts payable |
|
|
25,950 |
|
|
|
58,546 |
|
Accrued wages payable |
|
|
5,342 |
|
|
|
(1,225 |
) |
Other accrued expenses |
|
|
7,161 |
|
|
|
(6,083 |
) |
Net cash provided by operating activities |
|
|
61,887 |
|
|
|
48,024 |
|
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant, and equipment |
|
|
(9,145 |
) |
|
|
(11,973 |
) |
Business acquisitions (net of cash acquired) |
|
|
(27,634 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(36,779 |
) |
|
|
(11,973 |
) |
Cash flows from financing activities |
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
35,000 |
|
|
|
59,000 |
|
Principal payments on long-term debt |
|
|
(42,600 |
) |
|
|
(66,600 |
) |
Tax distributions to LLC Owners |
|
|
(165 |
) |
|
|
— |
|
Principal payments on finance lease obligations |
|
|
(1,494 |
) |
|
|
(1,493 |
) |
Tax withholding payments on Restricted Stock Units |
|
|
(984 |
) |
|
|
(875 |
) |
Stock repurchase |
|
|
— |
|
|
|
(3,857 |
) |
Exercise of options to purchase Class A common stock |
|
|
54 |
|
|
|
115 |
|
Net cash used in financing activities |
|
|
(10,189 |
) |
|
|
(13,710 |
) |
Net change in cash and cash equivalents |
|
|
14,919 |
|
|
|
22,341 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
185 |
|
|
|
(482 |
) |
Cash
and cash equivalents, beginning of period |
|
|
101,265 |
|
|
|
79,406 |
|
Cash and cash equivalents, end of period |
|
$ |
116,369 |
|
|
$ |
101,265 |
|
PetIQ, Inc.Reconciliation between Net (Loss) Income and
Adjusted EBITDA(Unaudited, in 000’s) |
|
|
For the Three Months Ended |
|
For the Year Ended |
$'s in 000's |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Net (loss) income |
$ |
(17,251 |
) |
|
$ |
(6,888 |
) |
|
$ |
2,539 |
|
|
$ |
(48,620 |
) |
Plus: |
|
|
|
|
|
|
|
Tax (benefit) expense |
|
(1,096 |
) |
|
|
845 |
|
|
|
(173 |
) |
|
|
1,214 |
|
Depreciation(1) |
|
6,237 |
|
|
|
3,747 |
|
|
|
24,773 |
|
|
|
14,520 |
|
Amortization |
|
4,512 |
|
|
|
4,477 |
|
|
|
19,797 |
|
|
|
18,079 |
|
Impairment and other asset charges(2) |
|
7,680 |
|
|
|
— |
|
|
|
7,680 |
|
|
|
47,264 |
|
Interest expense, net |
|
8,410 |
|
|
|
7,678 |
|
|
|
34,547 |
|
|
|
27,374 |
|
EBITDA |
$ |
8,492 |
|
|
$ |
9,860 |
|
|
$ |
89,163 |
|
|
$ |
59,831 |
|
Acquisition costs(3) |
|
451 |
|
|
|
273 |
|
|
|
1,164 |
|
|
|
1,464 |
|
Stock based compensation expense |
|
1,409 |
|
|
|
2,459 |
|
|
|
9,468 |
|
|
|
11,363 |
|
Integration and business transformation costs(4) |
|
238 |
|
|
|
228 |
|
|
|
2,316 |
|
|
|
1,171 |
|
Litigation expenses |
|
— |
|
|
|
60 |
|
|
|
31 |
|
|
|
3,862 |
|
Restructuring(5) |
|
1,414 |
|
|
|
— |
|
|
|
2,564 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
12,004 |
|
|
$ |
12,879 |
|
|
$ |
104,706 |
|
|
$ |
77,691 |
|
Adjusted EBITDA Margin |
|
5.5 |
% |
|
|
7.0 |
% |
|
|
9.5 |
% |
|
|
8.4 |
% |
PetIQ, Inc.Reconciliation between Gross Profit and Adjusted
Gross Profit(Unaudited, in 000’s) |
|
|
For the Three Months Ended |
|
For the Year Ended |
$'s in 000's |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Gross profit |
$ |
43,990 |
|
|
$ |
39,284 |
|
|
$ |
252,740 |
|
|
$ |
209,663 |
|
Plus: |
|
|
|
|
|
|
|
Restructuring(6) |
|
1,604 |
|
|
|
— |
|
|
|
1,854 |
|
|
|
— |
|
Purchase accounting adjustment
to inventory related to acquisition of R&R |
|
— |
|
|
|
— |
|
|
|
320 |
|
|
|
— |
|
Adjusted gross profit |
$ |
45,594 |
|
|
$ |
39,284 |
|
|
$ |
254,914 |
|
|
$ |
209,663 |
|
Gross Margin |
|
20.0 |
% |
|
|
21.3 |
% |
|
|
22.9 |
% |
|
|
22.8 |
% |
Adjusted Gross Margin |
|
20.7 |
% |
|
|
21.3 |
% |
|
|
23.1 |
% |
|
|
22.8 |
% |
PetIQ, Inc.Reconciliation between Selling, General &
Administrative (“SG&A”) and Adjusted SG&A(Unaudited, in
000’s, Except for Percentages) |
|
|
|
For the Three Months Ended |
|
For the Year Ended |
$'s in 000's |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
SG&A |
|
$ |
42,729 |
|
|
$ |
37,747 |
|
|
$ |
196,236 |
|
|
$ |
182,561 |
|
% of Total Net Sales |
|
|
19.4 |
% |
|
|
20.5 |
% |
|
|
17.8 |
% |
|
|
19.8 |
% |
Less: |
|
|
|
|
|
|
|
|
Acquisition costs(3) |
|
|
451 |
|
|
|
273 |
|
|
|
1,164 |
|
|
|
1,464 |
|
Stock based compensation expense |
|
|
1,409 |
|
|
|
2,459 |
|
|
|
9,468 |
|
|
|
11,363 |
|
Integration and business transformation costs(4) |
|
|
238 |
|
|
|
228 |
|
|
|
1,996 |
|
|
|
1,171 |
|
Litigation expenses |
|
|
— |
|
|
|
60 |
|
|
|
31 |
|
|
|
3,862 |
|
Adjusted SG&A |
|
$ |
40,631 |
|
|
$ |
34,727 |
|
|
$ |
183,577 |
|
|
$ |
164,701 |
|
% of Total Net Sales |
|
|
18.5 |
% |
|
|
18.9 |
% |
|
|
16.7 |
% |
|
|
17.9 |
% |
PetIQ, Inc.Calculation of Total Restructuring
Expenses(Unaudited, in 000’s) |
|
|
For the Three Months Ended December 31, 2023 |
$'s in 000's |
Expenses (Gains) |
|
Original Liability 9/30/2023 |
|
Cash Payments |
|
Non-Cash Amounts |
|
Liability at December 31, 2023 |
Included in Cost of services |
|
|
|
|
|
|
|
|
|
Inventory reserve |
$ |
638 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(638 |
) |
|
$ |
— |
Severance |
|
966 |
|
|
|
— |
|
|
(966 |
) |
|
|
— |
|
|
|
— |
Total in Cost of services |
$ |
1,604 |
|
|
$ |
— |
|
$ |
(966 |
) |
|
$ |
(638 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Included in
Restructuring |
|
|
|
|
|
|
|
|
|
Accelerated depreciation -
property, plant and equipment |
$ |
2,585 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(2,585 |
) |
|
$ |
— |
Accelerated amortization -
operating lease right of use assets |
|
1,121 |
|
|
|
— |
|
|
— |
|
|
$ |
(1,121 |
) |
|
|
— |
Lease termination gain |
|
(897 |
) |
|
|
2,722 |
|
|
— |
|
|
|
— |
|
|
|
1,825 |
Variable lease expenses |
|
707 |
|
|
|
900 |
|
|
(597 |
) |
|
|
— |
|
|
|
1,010 |
Total in Restructuring |
$ |
3,516 |
|
|
$ |
2,722 |
|
$ |
(597 |
) |
|
$ |
(3,706 |
) |
|
$ |
2,835 |
|
|
|
|
|
|
|
|
|
|
Total Restructuring
Expenses |
$ |
5,120 |
|
|
$ |
2,722 |
|
$ |
(1,563 |
) |
|
$ |
(4,344 |
) |
|
$ |
2,835 |
|
For the Twelve Months Ended December 31, 2023 |
$'s in 000's |
Expenses (Gains) |
|
Original Lease Liability |
|
Cash Payments |
|
Non-Cash Amounts |
|
Liability at December 31, 2023 |
Included in Cost of services |
|
|
|
|
|
|
|
|
|
Inventory reserve |
$ |
888 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(888 |
) |
|
$ |
— |
Severance |
|
966 |
|
|
|
— |
|
|
(966 |
) |
|
|
— |
|
|
|
— |
Total in Cost of services |
$ |
1,854 |
|
|
$ |
— |
|
$ |
(966 |
) |
|
$ |
(888 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Included in
Restructuring |
|
|
|
|
|
|
|
|
|
Accelerated depreciation -
property, plant and equipment |
$ |
8,165 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
(8,165 |
) |
|
$ |
— |
Accelerated amortization -
operating lease right of use assets |
|
2,876 |
|
|
|
— |
|
|
— |
|
|
|
(2,876 |
) |
|
|
— |
Lease termination gain |
|
(897 |
) |
|
|
2,722 |
|
|
— |
|
|
|
— |
|
|
|
1,825 |
Variable lease expenses |
|
1,607 |
|
|
|
— |
|
|
(597 |
) |
|
|
— |
|
|
|
1,010 |
Total in Restructuring |
$ |
11,751 |
|
|
$ |
2,722 |
|
$ |
(597 |
) |
|
$ |
(11,041 |
) |
|
$ |
2,835 |
|
|
|
|
|
|
|
|
|
|
Total Restructuring
Expenses |
$ |
13,605 |
|
|
$ |
2,722 |
|
$ |
(1,563 |
) |
|
$ |
(11,929 |
) |
|
$ |
2,835 |
PetIQ, Inc.Summary Segment Results(Unaudited, in
000’s) |
|
|
|
For the Three Months Ended |
|
For the Year Ended |
$'s in 000's |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Products segment sales |
|
$ |
191,327 |
|
$ |
157,324 |
|
$ |
968,151 |
|
$ |
800,305 |
Services segment revenue: |
|
|
|
|
|
|
|
|
Same-store sales |
|
|
27,191 |
|
|
23,846 |
|
|
125,137 |
|
|
102,426 |
Non same-store sales |
|
|
1,409 |
|
|
2,909 |
|
|
8,675 |
|
|
18,782 |
Total services segment revenue |
|
$ |
28,600 |
|
$ |
26,755 |
|
$ |
133,812 |
|
$ |
121,208 |
Total net sales |
|
$ |
219,927 |
|
$ |
184,079 |
|
$ |
1,101,963 |
|
$ |
921,513 |
PetIQ, Inc.Reconciliation between Net (Loss) Income and
Adjusted Net (Loss) Income(Unaudited, in 000’s, except for per
share amounts) |
|
|
For the Three Months Ended |
|
For the Year Ended |
$'s in 000's |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Net (loss) income |
$ |
(17,251 |
) |
|
$ |
(6,888 |
) |
|
$ |
2,539 |
|
|
$ |
(48,620 |
) |
Plus: |
|
|
|
|
|
|
|
Tax (benefit) expense |
|
(1,096 |
) |
|
|
845 |
|
|
|
(173 |
) |
|
|
1,214 |
|
Impairment and other asset charges(2) |
|
7,680 |
|
|
|
— |
|
|
|
7,680 |
|
|
|
47,264 |
|
Acquisition costs(3) |
|
451 |
|
|
|
273 |
|
|
|
1,164 |
|
|
|
1,464 |
|
Stock based compensation expense |
|
1,409 |
|
|
|
2,459 |
|
|
|
9,468 |
|
|
|
11,363 |
|
Integration and business transformation costs(4) |
|
238 |
|
|
|
228 |
|
|
|
2,316 |
|
|
|
1,171 |
|
Litigation expenses |
|
— |
|
|
|
60 |
|
|
|
31 |
|
|
|
3,862 |
|
Restructuring(7) |
|
5,120 |
|
|
|
— |
|
|
|
13,605 |
|
|
|
— |
|
Adjusted Net (loss)
income |
$ |
(3,448 |
) |
|
$ |
(3,024 |
) |
|
$ |
36,630 |
|
|
$ |
17,718 |
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted EPS |
|
|
|
|
|
|
|
Basic |
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
$ |
1.26 |
|
|
$ |
0.61 |
|
Diluted |
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
$ |
1.24 |
|
|
$ |
0.61 |
|
Weighted Average
shares of Class A common stock outstanding used to compute non-GAAP
adjusted EPS |
Basic |
|
29,193 |
|
|
|
28,967 |
|
|
|
29,135 |
|
|
|
29,159 |
|
Diluted |
|
29,193 |
|
|
|
28,967 |
|
|
|
29,530 |
|
|
|
29,159 |
|
(1) Depreciation includes $3.7 million of
accelerated depreciation recognized during the three months ended
December 31, 2023 and $11.0 million of accelerated
depreciation recognized during the year ended December 31, 2023,
associated with Services segment optimization.
(2) Impairment and other asset charges includes
asset charges associated with the Company committing to a plan to
sell its foreign subsidiary, Mark & Chappell during the year
ended December 31, 2023. For the year ended December 31, 2022,
impairment and other asset charges includes write-down of the full
goodwill balance of the Services segment.
(3) Acquisition costs include legal, accounting,
banking, consulting, diligence, and other costs related to
completed and contemplated acquisitions.
(4) Integration and business transformation
costs, including personnel costs such as severance and retention
bonuses, consulting costs, contract termination costs and IT and
ERP implementation costs.
(5) Restructuring consists of variable lease
expenses, inventory reserves, lease termination costs, severance,
and other miscellaneous costs.
(6) Restructuring charges include inventory
reserves and severance costs.
(7) Restructuring charges include accelerated
depreciation and amortization, variable lease expenses, inventory
reserves, lease termination costs, severance, and other
miscellaneous costs.
PetIQ, Inc.Reconciliation of Net Cash Provided By Operating
Activities to Free Cash Flow(Unaudited, in 000’s) |
|
|
|
Year Ended December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating
activities |
|
$ |
61,887 |
|
|
$ |
48,024 |
|
Purchase of property, plant, and equipment |
|
|
(9,145 |
) |
|
|
(11,973 |
) |
Free Cash Flow |
|
$ |
52,742 |
|
|
$ |
36,051 |
|
PetIQ, Inc.Calculation of Net Leverage Ratio Under Term
Loan B(Unaudited, in 000’s, except for multiples) |
|
$'s in 000's |
December 31, 2023 |
Total debt |
$ |
445,227 |
|
Total Capital Leases |
|
1,704 |
|
Less Cash |
|
(116,369 |
) |
Net Debt |
|
330,562 |
|
LTM Term Loan B defined
EBITDA |
|
113,188 |
|
Term Loan B net
leverage(1) |
2.9 x |
(1) Our Term Loan B documentation defines Adjusted EBITDA as net
income before interest, income taxes, depreciation and amortization
and a non-cash goodwill impairment charge, as further adjusted for
acquisition costs, loss on debt extinguishment and related costs,
stock based compensation expense, integration costs, litigation
expenses, and non same-store net income (loss), which we refer to
as “Term Loan B Adjusted EBITDA.” Term Loan B Adjusted EBITDA is
not a non-GAAP measure and is presented solely for purposes of
providing investors an understanding of the Company’s financial
condition and liquidity and should not be relied upon for any
purposes other than an understanding of the Company’s financial
condition and liquidity as it relates to the Company’s Term Loan
B.
PetIQ (NASDAQ:PETQ)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
PetIQ (NASDAQ:PETQ)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024