Segments

12 Months Ended

Dec. 31, 2023

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. 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 their respective Segment Adjusted EBITDA performance. Beginning in the fourth quarter of 2022, we allocate to our segments capital expenditures and certain costs and expenses, such as accounting, legal, human resources, information technology and corporate headquarters expenses, on a pro rata basis based on net sales to better align with the discrete financial information reviewed by our CODM. Such expenses previously were not allocated to segments. The Company has recast prior periods to give effect to this change. This change in presentation had no impact on the Consolidated Statements of Operations.

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

$'s in 000's
December 31, 2023	Products		Services
Net sales	$	968,151	$	133,812
Segment Adjusted EBITDA	110,565		2,623
Depreciation expense	7,614		17,159
Capital expenditures	7,824		1,392

$'s in 000's
December 31, 2022	Products		Services
Net sales	$	800,305	$	121,208
Segment Adjusted EBITDA	90,333		3,781
Depreciation expense	7,443		7,077
Capital expenditures	8,432		3,541

$'s in 000's
December 31, 2021	Products		Services
Net sales	$	825,395	$	107,133
Segment Adjusted EBITDA	88,982		3,910
Depreciation expense	7,397		6,969
Capital expenditures	18,568		12,702

The value of assets by segment were as follows as of:

	December 31, 2023		December 31, 2022
Products	$	798,578	$	735,096
Services	69,647		83,800
Total assets	$	868,226	$	818,896

The following table reconciles Segment EBITDA to Net income (loss) for the periods presented.

	Year Ended December 31,
$'s in 000's	2023		2022		2021
Segment Adjusted EBITDA:
Product	$	110,565	$	90,333	$	88,982
Services	2,623		3,781		3,910
Total	113,188		94,114		92,892
Adjustments:
Depreciation(1)	(24,773)		(14,520)		(14,366)
Amortization	(19,797)		(18,079)		(22,336)
Interest expense, net	(34,547)		(27,374)		(24,696)
Acquisition costs(2)	(1,164)		(1,464)		(92)
Loss on debt extinguishment and related costs(3)	—		—		(6,438)
Stock based compensation expense	(9,468)		(11,363)		(9,428)
Non same-store adjustment(4)	(8,482)		(16,423)		(23,159)
Integration costs(5)	(2,316)		(1,171)		142
Litigation expenses	(31)		(3,862)		(4,105)
CFO Transition	—		—		(928)
Restructuring(6)	(2,564)		—		—
Impairment and other asset charges(7)	(7,680)		(47,264)		—
Pretax net income (loss)	$	2,366	$	(47,406)	$	(12,514)
Income tax benefit (expense)	173		(1,214)		(3,869)
Net income (loss)	$	2,539	$	(48,620)	$	(16,383)

(1) Depreciation includes $11.0 million of accelerated depreciation recognized during the year ended December 31, 2023, associated with Services segment optimization.

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

(3) 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.

(4) 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.

(5) 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.

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

(7) 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.

Supplemental geographic disclosures are below.

	Year ended December 31, 2023
$'s in 000's	U.S.		Foreign		Total
Product sales	$	960,346	$	7,805	$	968,151
Service revenue	133,812		—		133,812
Total net sales	$	1,094,158	$	7,805	$	1,101,963

	Year ended December 31, 2022
$'s in 000's	U.S.		Foreign		Total
Product sales	$	793,427	$	6,878	$	800,305
Service revenue	121,208		—		121,208
Total net sales	$	914,635	$	6,878	$	921,513

	Year ended December 31, 2021
$'s in 000's	U.S.		Foreign		Total
Product sales	$	818,593	$	6,802	$	825,395
Service revenue	107,133		—		107,133
Total net sales	$	925,726	$	6,802	$	932,528

The net book value of property plant and equipment, by geographic location was as follows as of:

	December 31, 2023		December 31, 2022
United States	$	57,097	$	69,376
Europe	—		4,019
Total	$	57,097	$	73,395