Segments (Tables)

6 Months Ended

Jun. 30, 2020

Segments

Summary of financial information relating to the Company's operating segments

Financial information relating to the Company’s operating segments for the three months ended:

$'s in 000's					Unallocated
June 30, 2020	Products		Services		Corporate		Consolidated
Net Sales	$	264,307	$	2,675	$	—	$	266,982
Adjusted EBITDA		41,851		1,112		(14,657)		28,306
Depreciation expense		1,167		890		926		2,983
Capital expenditures		3,593		940		817		5,350

$'s in 000's					Unallocated
June 30, 2019	Products		Services		Corporate		Consolidated
Net Sales	$	194,606	$	26,028	$	—	$	220,634
Adjusted EBITDA		21,156		6,804		(7,130)		20,831
Depreciation expense		429		520		579		1,529
Capital expenditures	$	812	$	25	$	11	$	848

Financial information relating to the Company’s operating segments for the six months ended:

$'s in 000's					Unallocated
June 30, 2020	Products		Services		Corporate		Consolidated
Net Sales	$	430,587	$	23,173	$	—	$	453,760
Adjusted EBITDA		66,130		3,101		(26,467)		42,764
Depreciation expense		2,484		1,737		1,635		5,856
Capital expenditures		5,266		3,773		1,386		10,425

$'s in 000's					Unallocated
June 30, 2019	Products		Services		Corporate		Consolidated
Net Sales	$	320,690	$	48,380	$	—	$	369,070
Adjusted EBITDA		34,712		12,081		(15,091)		31,703
Depreciation expense		982		1,045		1,156		3,183
Capital expenditures		1,258		306		166		1,730

Summary of reconciles segment adjusted ebitda to pretax net income

	For the three months ended				For the six months ended
$'s in 000's	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Adjusted EBITDA:
Product	$	41,851	$	21,156	$	66,130	$	34,712
Services		1,112		6,804		3,101		12,081
Unallocated Corporate		(14,657)		(7,130)		(26,467)		(15,091)
Total Consolidated		28,306		20,831		42,764		31,703
Adjustments:
Depreciation		(2,983)		(1,529)		(5,856)		(3,183)
Amortization		(2,250)		(1,278)		(4,492)		(2,557)
Interest		(5,967)		(2,242)		(10,671)		(4,179)
Acquisition costs(1)		(146)		(2,889)		(732)		(3,465)
Stock based compensation expense		(1,844)		(1,602)		(4,402)		(3,146)
Non same-store revenue(2)		953		2,155		3,235		3,671
Non same-store costs(2)		(3,698)		(4,045)		(10,098)		(7,296)
Fair value adjustment of contingent note(3)		—		(1,460)		—		(780)
Integration costs and costs of discontinued clinics(4)		(8,850)		(1,142)		(9,304)		(1,142)
Clinic launch expenses(5)		(603)		—		(1,279)		—
Litigation expenses		(384)		—		(433)		—
COVID-19 related costs(6)		(4,433)		—		(4,433)		—
Pretax net (loss) income	$	(1,899)	$	6,799	$	(5,701)	$	9,625
Income tax benefit (expense)		(61)		(881)		1,108		(1,381)
Net (loss) income	$	(1,960)	$	5,918	$	(4,593)	$	8,244

(1) Acquisition costs include legal, accounting, banking, consulting, diligence, and other out-of-pocket costs related to completed and contemplated acquisitions.

(2) Non same-store revenue and costs relate to Services segment and are from wellness centers, host partners, and regions with less than six full trailing quarters of operating results.

(3) Fair value adjustment on the contingent note represents the non cash adjustment to mark the 2019 Contingent Note to Fair value.

(4) Integration costs and costs of discontinued clinics represent costs related to integrating the acquired businesses, such as personnel costs like severance and signing bonuses, consulting work, contract termination, and IT conversion costs. These costs are primarily in the Products segment and the Corporate segment for personnel costs, legal and consulting expenses, and IT costs.

(5) Clinic launch expenses relate to our Services segment and represent the nonrecurring costs to open new veterinary wellness centers, primarily employee costs, training, marketing, and rent prior to opening for business.

(6) Costs related to maintaining service segment infrastructure, staffing, and overhead related clinics and wellness centers closed due to COVID-19 related health and safety initiatives. Product segment and unallocated corporate costs related to incremental wages paid to essential workers and sanitation costs due to COVID.

Summary of net book value of property plant and equipment, net by location

	Six months ended June 30, 2020
$'s in 000's		U.S.		Foreign		Total
Product sales	$	428,332	$	2,255	$	430,587
Service revenue		23,173		—		23,173
Total net sales	$	451,505	$	2,255	$	453,760

	Six months ended June 30, 2019
$'s in 000's		U.S.		Foreign		Total
Product sales	$	317,445	$	3,245	$	320,690
Service revenue		48,380		—		48,380
Total net sales	$	365,825	$	3,245	$	369,070

	Three months ended June 30, 2020
$'s in 000's		U.S.		Foreign		Total
Product sales	$	263,260	$	1,047	$	264,307
Service revenue		2,675		—		2,675
Total net sales	$	265,935	$	1,047	$	266,982

	Three months ended June 30, 2019
$'s in 000's		U.S.		Foreign		Total
Product sales	$	192,994	$	1,612	$	194,606
Service revenue		26,028		—		26,028
Total net sales	$	219,022	$	1,612	$	220,634

Property, plant, and equipment by geographic location is below.

	June 30, 2020		December 31, 2019
United States	$	56,221	$	51,397
Europe		1,250		1,128
Total	$	57,471	$	52,525