Segments (Tables)

9 Months Ended

Sep. 30, 2023

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	Products		Services
September 30, 2023
Net sales	$	239,665	$	37,354
Segment Adjusted EBITDA	29,039		2,912
Depreciation expense	1,870		8,981


$'s in 000's	Products		Services
September 30, 2022
Net sales	$	176,217	$	33,508
Segment Adjusted EBITDA	18,282		927
Depreciation expense	1,761		1,815

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


$'s in 000's	Products		Services
September 30, 2023
Net sales	$	776,825	$	105,212
Segment Adjusted EBITDA	94,513		5,274
Depreciation expense	5,547		12,989


$'s in 000's	Products		Services
September 30, 2022
Net sales	$	642,981	$	94,453
Segment Adjusted EBITDA	74,095		4,290
Depreciation expense	5,461		5,312

Summary of Segment Adjusted EBITDA to Net Loss Reconciliation

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


	For the three months ended				For the nine months ended
$'s in 000's	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Segment Adjusted EBITDA:
Products(1)	$	29,039	$	18,282	$	94,513	$	74,095
Services(1)	2,912		927		5,274		4,290
Total	31,951		19,209		99,787		78,385
Adjustments:
Depreciation(2)	(10,851)		(3,576)		(18,536)		(10,773)
Amortization	(4,546)		(4,602)		(15,285)		(13,602)
Interest	(8,581)		(7,276)		(26,137)		(19,696)
Goodwill impairment(3)	—		(47,264)		—		(47,264)
Acquisition costs(4)	122		(1,035)		(713)		(1,191)

Stock based compensation expense	(2,851)		(2,238)		(8,059)		(8,904)
Non same-store adjustment(5)	(2,791)		(2,944)		(7,036)		(13,575)
Integration costs(6)	(484)		(200)		(2,078)		(943)
Restructuring(7)	(1,200)		—		(1,200)		—
Litigation expenses	(30)		—		(30)		(3,802)


Pretax net income (loss)	$	739	$	(49,926)	$	20,713	$	(41,365)
Income tax (expense) benefit	(283)		355		(923)		(368)
Net income (loss)	$	456	$	(49,571)	$	19,790	$	(41,733)

(1) In the fourth quarter of 2022, the Company began allocating corporate expenses to each segment pro rata based on net sales for each segment. The presentation of Products Segment Adjusted EBITDA and Services Segment Adjusted EBITDA for the three and nine months ended September 30, 2022 has been recast for comparability. For the three and nine months ended September 30, 2022, total corporate expenses were $20.7 million, of which $17.4 million was allocated to Products and $3.3 million was allocated to Services, and $60.6 million, of which $52.8 million was allocated to Products and $7.8 million was allocated to Services, respectively.

(2) Depreciation includes $7.3 million of accelerated depreciation recognized during the three and nine months ended September 30, 2023, associated with Services segment optimization.

(3) Non-cash goodwill impairment due to a significant decline in the Company’s market capitalization, driven primarily by rising interest rates and macroeconomic conditions.

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

(5) 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.

(6) Integration costs represent costs related to integrating acquired businesses, including personnel costs such as severance and retention bonuses, consulting costs, contract termination costs and IT conversion costs.

(7) Restructuring consists of variable lease expenses, inventory valuation adjustments and other miscellaneous costs.

Long-Lived Assets by Geographic Areas

Supplemental geographic disclosures are below.


	Three Months Ended September 30, 2023
$'s in 000's	U.S.		Foreign		Total
Product sales	$	237,962	$	1,703	$	239,665
Service revenue	37,354		—		37,354
Total net sales	$	275,316	$	1,703	$	277,019


	Three Months Ended September 30, 2022
$'s in 000's	U.S.		Foreign		Total
Product sales	$	174,517	$	1,700	$	176,217
Service revenue	33,508		—		33,508
Total net sales	$	208,025	$	1,700	$	209,725


	Nine Months Ended September 30, 2023
$'s in 000's	U.S.		Foreign		Total
Product sales	$	772,013	$	4,812	$	776,825
Service revenue	105,212		—		105,212
Total net sales	$	877,225	$	4,812	$	882,037


	Nine Months Ended September 30, 2022
$'s in 000's	U.S.		Foreign		Total
Product sales	$	637,385	$	5,596	$	642,981
Service revenue	94,453		—		94,453
Total net sales	$	731,838	$	5,596	$	737,434

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


	September 30, 2023		December 31, 2022
United States	$	58,921	$	69,376
Europe	4,006		4,019
Total	$	62,927	$	73,395