Segments

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segments

Segments

The Company has two operating segments: Products and Services. The Products segment consists of the Company’s manufacturing and distribution business. The Services segment consists of the Company’s veterinary services, and related product sales, provided by the Company directly to consumers.

The segments are based on the discrete financial information reviewed by the Chief Operating Decision Maker (“CODM”) to make resource allocation decisions and to evaluate performance. We measure and evaluate our reportable segments based on net sales and segment Adjusted EBITDA. We exclude from our segments certain corporate costs and expenses, such as accounting, legal, human resources, information technology, and corporate headquarters expenses as our corporate functions do not meet the definition of a segment as defined in the accounting guidance related to segment reporting.

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

$'s in 000's	Products		Services		Unallocated Corporate		Consolidated
June 30, 2022
Net Sales	$	219,014	$	33,000	$	—	$	252,014
Adjusted EBITDA	43,380		4,740		(20,538)		27,582
Depreciation expense	1,028		1,635		852		3,515
Capital expenditures	1,235		778		335		2,348

$'s in 000's	Products		Services		Unallocated Corporate		Consolidated
June 30, 2021
Net Sales	$	242,857	$	28,154	$	—	$	271,011
Adjusted EBITDA	48,187		3,028		(16,856)		34,359
Depreciation expense	991		1,288		864		3,143
Capital expenditures	685		4,254		5,038		9,977

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

$'s in 000's	Products		Services		Unallocated Corporate		Consolidated
June 30, 2022
Net Sales	$	466,764	$	60,945	$	—	$	527,709
Adjusted EBITDA	91,289		7,824		(39,936)		59,177
Depreciation expense	2,038		3,285		1,874		7,197
Capital expenditures	4,237		2,423		1,366		8,026

$'s in 000's	Products		Services		Unallocated Corporate		Consolidated
June 30, 2021
Net Sales	$	472,891	$	52,467	$	—	$	525,358
Adjusted EBITDA	86,979		5,124		(30,883)		61,220
Depreciation expense	1,931		2,470		1,873		6,274
Capital expenditures	955		6,633		10,714		18,302

The following table reconciles Segment Adjusted EBITDA to Net income for the periods presented.

	For the three months ended				For the six months ended
$'s in 000's	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Adjusted EBITDA:
Product	$	43,380	$	48,187	$	91,289	$	86,979
Services	4,740		3,028		7,824		5,124
Unallocated Corporate	(20,538)		(16,856)		(39,936)		(30,883)
Total Consolidated	27,582		34,359		59,177		61,220
Adjustments:
Depreciation	(3,515)		(3,143)		(7,197)		(6,274)
Amortization	(4,477)		(4,627)		(9,000)		(13,055)
Interest expense, net	(6,299)		(7,655)		(12,420)		(12,525)
Acquisition costs(1)	(156)		(86)		(156)		(92)
Loss on extinguishment and related costs(2)	—		(6,438)		—		(6,438)
Stock based compensation expense	(2,843)		(2,439)		(6,666)		(4,561)
Non same-store adjustment(3)	(3,466)		(5,087)		(10,631)		(10,735)
Integration costs and costs of discontinued clinics(4)	(404)		(735)		(743)		(687)
Litigation expenses	(1,141)		(320)		(3,802)		(563)
Pretax net income	$	5,281	$	3,829	$	8,562	$	6,290
Income tax (expense) benefit	(603)		205		(724)		130
Net income	$	4,678	$	4,034	$	7,838	$	6,420

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

(2) Loss on debt extinguishment and related costs are related to our entering into two new credit facilities, including the write off of deferred financing costs and related costs.

(3) Non same-store adjustment includes revenue and costs, and associated gross profit, related to our Services segment wellness centers and host partners with less than six full quarters of operating results, and also include pre-opening expenses.

(4) Integration costs and costs of discontinued clinics represent costs related to integrating the acquired businesses including personnel costs such as severance and signing bonuses, consulting costs, contract termination, and IT conversion costs. Depending on the type of costs, the costs are primarily in the Products and the corporate segments. Costs of discontinued clinics represent costs to close Services segment locations.

Supplemental geographic disclosures are below.

	Six Months Ended June 30, 2022
$'s in 000's	U.S.		Foreign		Total
Product sales	$	462,867	$	3,897	$	466,764
Service revenue	60,945		—		60,945
Total net sales	$	523,812	$	3,897	$	527,709

	Six Months Ended June 30, 2021
$'s in 000's	U.S.		Foreign		Total
Product sales	$	469,473	$	3,418	$	472,891
Service revenue	52,467		—		52,467
Total net sales	$	521,940	$	3,418	$	525,358

	Three Months Ended June 30, 2022
$'s in 000's	U.S.		Foreign		Total
Product sales	$	217,285	$	1,729	$	219,014
Service revenue	33,000		—		33,000
Total net sales	$	250,285	$	1,729	$	252,014

	Three Months Ended June 30, 2021
$'s in 000's	U.S.		Foreign		Total
Product sales	$	240,897	$	1,960	$	242,857
Service revenue	28,154		—		28,154
Total net sales	$	269,051	$	1,960	$	271,011

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

	June 30, 2022		December 31, 2021
United States	$	73,389	$	75,315
Europe	3,302		1,298
Total	$	76,691	$	76,613