Restructuring

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Note 10 — Restructuring

During the year ended 2023, the Company implemented a Services segment optimization (the "optimization") to improve the functioning of the Services segment and profitability. The optimization included assessing the operational and financial performance of the Company's wellness centers since re-opening after the pandemic as well as the assessment of the veterinary labor market in each geographic market. The Company also evaluated its ability to potentially convert these locations to a more hygiene-focused offering and determined they would be unable to convert these locations in the future based on the aforementioned assessment and the available square footage within the respective wellness centers.

As a result of the optimization, the Company identified 149 underperforming wellness centers for closure. The Company closed 149 wellness centers during the year ended December 31, 2023 and as of March 31, 2024 continues to operate 133 wellness centers.

Closure of the wellness centers required the Company to terminate leases early. The Company agreed upon termination amounts with retail partners in 2023 and made cash payments to partially settle remaining outstanding liability during the three months ended March 31, 2024.

There were no restructuring expenses for the three months ended March 31, 2024.

A roll forward of our liability related to the optimization, which is included in accrued liabilities on our condensed consolidated balance sheets, is as follows:


$'s in 000's	Liability at December 31, 2023		Expenses		Cash Payments		Non-Cash Amounts		Liability at March 31, 2024




Lease termination	$	1,825	$	—	$	(909)	$	—	$	916
Variable lease expenses	1,010		—		(1,010)		—		—
Total Outstanding Restructuring Liability	$	2,835	$	—	$	(1,919)	$	—	$	916