0001558370-22-007132 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2022	May 04, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Entity File Number	001-38163
Entity Registrant Name	PetIQ, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	35-2554312
Entity Address, Address Line One	230 E. Riverside Dr.
Entity Address, City or Town	Eagle
Entity Address, State or Province	ID
Entity Address, Postal Zip Code	83616
City Area Code	208
Local Phone Number	939-8900
Title of 12(b) Security	Class A Common Stock, $0.001 par value
Trading Symbol	PETQ
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001668673
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		29,270,190
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		252,540

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 51,104	$ 79,406
Accounts receivable, net	179,058	113,947
Inventories	167,714	96,440
Other current assets	10,148	8,896
Total current assets	408,024	298,689
Property, plant and equipment, net	78,194	76,613
Operating lease right of use assets	19,162	20,489
Other non-current assets	1,970	2,024
Intangible assets, net	186,111	190,662
Goodwill	230,973	231,110
Total assets	924,434	819,587
Current liabilities
Accounts payable	128,913	55,057
Accrued wages payable	11,236	12,704
Accrued interest payable	5,099	3,811
Other accrued expenses	13,709	11,680
Current portion of operating leases	6,047	6,500
Current portion of long-term debt and finance leases	8,411	8,350
Total current liabilities	173,415	98,102
Operating leases, less current installments	14,300	14,843
Long-term debt, less current installments	472,945	448,470
Finance leases, less current installments	2,164	2,493
Other non-current liabilities	451	459
Total non-current liabilities	489,860	466,265
Equity
Additional paid-in capital	371,398	368,006
Accumulated deficit	(111,394)	(114,525)
Accumulated other comprehensive loss	(1,136)	(684)
Total stockholders' equity	258,897	252,826
Non-controlling interest	2,262	2,394
Total equity	261,159	255,220
Total liabilities and equity	924,434	819,587
Class A common stock
Equity
Common stock value	$ 29	$ 29

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2022	Dec. 31, 2021
Common stock, shares outstanding	29,272	29,139
Class A common stock
Common stock, par value	$ 0.001	$ 0.001
Common stock authorized	125,000	125,000
Common Stock, Shares, Issued	29,272	29,139
Common stock, shares outstanding	29,272	29,139
Class B common stock
Common stock, par value	$ 0.001	$ 0.001
Common stock authorized	100,000	100,000
Common Stock, Shares, Issued	252	272
Common stock, shares outstanding	252	272

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Total net sales	$ 275,695	$ 254,347
Total cost of sales	218,060	206,548
Gross profit	57,635	47,799
Operating expenses
Selling, general and administrative expenses	48,236	40,672
Operating income	9,399	7,127
Interest expense, net	6,121	4,870
Other income, net	(3)	(204)
Total other expense, net	6,118	4,666
Pretax net income	3,281	2,461
Income tax expense	(121)	(75)
Net income	3,160	2,386
Net income attributable to non-controlling interest	29	353
Net income attributable to PetIQ, Inc.	$ 3,131	$ 2,033
Net income per share attributable to PetIQ, Inc. Class A common stock
Basic	$ 0.11	$ 0.08
Diluted	$ 0.11	$ 0.08
Weighted Average shares of Class A common stock outstanding
Basic	29,164	26,386
Diluted	29,290	27,004
Product
Total net sales	$ 247,750	$ 230,034
Total cost of sales	190,851	182,827
Services
Total net sales	27,945	24,313
Total cost of sales	$ 27,209	$ 23,721

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Comprehensive Income
Net income	$ 3,160	$ 2,386
Foreign currency translation adjustment	(456)	141
Comprehensive income	2,704	2,527
Comprehensive income attributable to non-controlling interest	25	358
Comprehensive income attributable to PetIQ	$ 2,679	$ 2,169

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities
Net Income	$ 3,160	$ 2,386
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation, amortization of intangible assets and loan fees	8,966	12,351
Gain on disposition of property, plant, and equipment	148	30
Stock based compensation expense	3,823	2,122
Other non-cash activity	316	145
Changes in assets and liabilities
Accounts receivable	(65,026)	(72,423)
Inventories	(71,417)	(32,767)
Other assets	(1,273)	(726)
Accounts payable	74,094	32,182
Accrued wages payable	(1,496)	(2,184)
Other accrued expenses	3,325	1,531
Net cash provided by (used in) operating activities	(45,380)	(57,353)
Cash flows from investing activities
Purchase of property, plant, and equipment	(5,678)	(8,325)
Net cash used in investing activities	(5,678)	(8,325)
Cash flows from financing activities
Proceeds from issuance of long-term debt	40,000	242,500
Principal payments on long-term debt	(16,150)	(204,641)
Principal payments on finance lease obligations	(399)	(468)
Tax withholding payments on Restricted Stock Units	(688)	(802)
Exercise of options to purchase class A common stock	100	6,580
Net cash provided by financing activities	22,863	43,169
Net change in cash and cash equivalents	(28,195)	(22,509)
Effect of exchange rate changes on cash and cash equivalents	(107)	117
Cash and cash equivalents, beginning of period	79,406	33,456
Cash and cash equivalents, end of period	51,104	11,064
Supplemental cash flow information
Interest paid	4,072	4,441
Net change in property, plant, and equipment acquired through accounts payable	290	(622)
Finance lease additions	59
Income taxes paid, net of refunds	$ (5)	17
Accrued tax distribution		$ 149

Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Class A common stock Common Stock	Class B common stock Common Stock	Accumulated Deficit	Accumulated Other Comprehensive Loss	Additional Paid-in Capital	Non-controlling Interest	Total
Beginning Balance at Dec. 31, 2020	$ 26	$ 3	$ (98,558)	$ (686)	$ 319,642	$ 25,983	$ 246,410
Beginning Balance (in shares) at Dec. 31, 2020	25,711	3,040
Increase (Decrease) in Stockholders' Equity
Exchange of LLC Interests held by LLC Owners	$ 2	$ (2)		50	18,031	(18,081)
Exchange of LLC Interests held by LLC Owners (in shares)	2,099	(2,099)
Accrued tax distributions						(149)	(149)
Other comprehensive income				136		5	141
Stock based compensation expense					1,935	187	2,122
Exercise of Options to purchase Common Stock					6,580		6,580
Exercise of Options to purchase Common Stock (in shares)	242
Issuance of stock for vesting of RSU's, net of tax with holdings					(802)		(802)
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)	50
Net Income			2,033			353	2,386
Ending Balance at Mar. 31, 2021	$ 28	$ 1	(96,525)	(500)	345,386	8,298	256,688
Ending Balance (in shares) at Mar. 31, 2021	28,102	941
Beginning Balance at Dec. 31, 2020	$ 26	$ 3	(98,558)	(686)	319,642	25,983	$ 246,410
Beginning Balance (in shares) at Dec. 31, 2020	25,711	3,040
Increase (Decrease) in Stockholders' Equity
Exercise of Options to purchase Common Stock (in shares)							583
Ending Balance at Dec. 31, 2021	$ 29		(114,525)	(684)	368,006	2,394	$ 255,220
Ending Balance (in shares) at Dec. 31, 2021	29,139	272
Increase (Decrease) in Stockholders' Equity
Exchange of LLC Interests held by LLC Owners					192	(192)
Exchange of LLC Interests held by LLC Owners (in shares)	20	(20)
Other comprehensive income				(452)		(4)	(456)
Stock based compensation expense					3,788	35	3,823
Exercise of Options to purchase Common Stock					100		$ 100
Exercise of Options to purchase Common Stock (in shares)	2						2
Issuance of stock for vesting of RSU's, net of tax with holdings					(688)		$ (688)
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)	110
Net Income			3,131			29	3,160
Ending Balance at Mar. 31, 2022	$ 29		$ (111,394)	$ (1,136)	$ 371,398	$ 2,262	$ 261,159
Ending Balance (in shares) at Mar. 31, 2022	29,272	252

Debt

3 Months Ended

Mar. 31, 2022

Debt

Debt

Note 2 – Debt

Senior Secured Asset-Based Revolving Credit Facility

On April 13, 2021, Opco entered into an asset-based credit agreement with KeyBank National Association, as administrative agent and collateral agent, and the lenders’ party thereto, that provides senior secured financing of $125.0 million (which may be increased by up to $50.0 million in certain circumstances), subject to a borrowing base limitation (the “ABL”). The borrowing base for the ABL Facility at any time equals the sum of: (i) 90% of eligible investment-grade accounts; plus (ii) 85% of eligible other accounts; plus, (iii) 85% of the net orderly liquidation value of the cost of certain eligible on-hand and in-transit inventory; plus, (iv) at the option of Opco, 100% of qualified cash; minus (v) reserves. The ABL Facility bears interest at a variable rate plus a margin, with the variable rate being based on a base rate or LIBOR at the option of the Company. The rate at March 31, 2022 was 1.48%. The Company also pays a commitment fee on unused borrowings at a rate of 0.35%.

The ABL is secured by the assets of the Company including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, and deposit accounts. The ABL contains certain negative covenants that restrict the Company’s ability to incur additional indebtedness, pay dividends, make investments, loans, and acquisitions, among other restrictions. The ABL is due on the fifth anniversary of the agreement.

Senior Secured Term Loan Facility

On April 13, 2021, Opco entered into a term credit and guaranty agreement with Jefferies Finance LLC, as administrative agent and collateral agent, and the lenders’ party thereto, that provides senior secured term loans of $300.0 million (which may be increased in certain circumstances) (“Term Loan B”). The Term Loan B bears interest at a variable rate of either prime, federal funds effective rate or LIBOR, plus an applicable margin of between 3.25% and 4.25% depending on the underlying base rate. LIBOR rates are subject to a 0.50% floor. The interest rate at March 31, 2022 was 4.75%. The Term Loan B requires quarterly payments of 0.25% of the original principal amount, with the balance due on the seventh anniversary of the closing date.

The credit agreement governing the Term Loan B does not require Opco to comply with any financial maintenance covenants but contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default. Any unpaid balance is due on the seventh anniversary of the agreement.

The following represents the Company’s long-term debt as of:



$'s in 000's	March 31, 2022		December 31, 2021
Convertible Notes	$	143,750	$	143,750
Term loans		298,500		298,500
Revolving credit facility		25,000		—
Other Debt		22,582		23,518
Net discount on debt and deferred financing fees		(9,946)		(10,418)
	$	479,886	$	455,350
Less current maturities of long-term debt		(6,941)		(6,880)
Total long-term debt	$	472,945	$	448,470

Future maturities of long-term debt, excluding the discount on debt and deferred financing fees, as of March 31, 2022, are as follows:


($'s in 000's)
Remainder of 2022			5,992
2023			7,124
2024			7,426
2025			4,600
2026			172,350
Thereafter			292,340

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Leases

3 Months Ended

Mar. 31, 2022

Leases

Leases

Note 3 – Leases

The Company leases certain real estate for commercial, production, and retail purposes, as well as equipment from third parties. Lease expiration dates are between 2022 and 2027. A portion of leases are denominated in foreign currencies.

For both operating and finance leases, the Company recognizes a right-of-use (“ROU”) asset, which represents the right to use the underlying asset for the lease term, and a lease liability, which represents the present value of our obligation to make payments arising over the lease term.

We elected the short-term lease exemption for all leases that qualify. This means leases having an initial term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the term of the lease.

The Company’s leases may include options to extend or terminate the lease. Renewal options generally range from one to ten years and the options to extend are included in the lease term when it is reasonably certain that we will exercise that option. Some leases have variable payments, however, because they are not based on an index or rate, they are not included in the ROU assets and liabilities. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities. Variable payments for equipment and vehicles primarily relate to usage, repairs, and maintenance. As the implicit rate is not readily determinable for most of the Company’s leases, the Company applies a portfolio approach using an estimated incremental borrowing rate, giving consideration to company specific information and publicly available interest rates for instruments with similar characteristics, to determine the initial present value of lease payments over the lease terms.

The components of lease expense consists of the following:


	For the Three Months Ended
$'s in 000's	March 31, 2022		March 31, 2021
Finance lease cost
Amortization of right-of-use assets	$	525	$	566
Interest on lease liabilities		64		91
Operating lease cost		1,577		1,292
Variable lease cost⁽¹⁾		515		306
Short-term lease cost		5		4
Sublease income		(65)		(43)
Total lease cost	$	2,621	$	2,216

(1)

Variable lease cost primarily relates to percentage rent, common area maintenance, property taxes and insurance on leased real estate.

Other information related to leases was as follows as of:


	March 31, 2022	March 31, 2021
Weighted-average remaining lease term (years)
Operating leases	3.75	4.26
Finance leases	2.40	2.78
Weighted-average discount rate
Operating leases	4.5%	5.3%
Finance leases	4.6%	4.9%

Annual future commitments under non-cancelable leases as of March 31, 2022, consist of the following:


	Lease Obligations
$'s in 000's	Operating Leases		Finance Leases
Remainder of 2022	$	5,052	$	1,203
2023		6,336		1,702
2024		4,781		622
2025		3,745		239
2026		2,147		79
Thereafter		124		—
Total minimum future obligations	$	22,185	$	3,845
Less interest		(1,838)		(211)
Present value of net future minimum obligations		20,347		3,634
Less current lease obligations		(6,047)		(1,470)
Long-term lease obligations	$	14,300	$	2,164

Supplemental cash flow information:



	For the Year Ended
$'s in 000's	March 31, 2022		March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	64	$	91
Operating cash flows from operating leases		1,583		1,224
Financing cash flows from finance leases		399		468
(Noncash) right-of-use assets obtained in exchange for lease obligations
Operating leases		572		1,418
Finance leases		81		—

Income Tax

3 Months Ended

Mar. 31, 2022

Income Tax

Income Tax

Note 4 – Income Tax

Our effective tax rate (ETR) from continuing operations was 3.7% for the three months ended March 31, 2022, and 3.06% for the three months ended March 31, 2021, including discrete items. Income tax expense for the three months ended March 31, 2022 and 2021 was different than the U.S federal statutory income tax rate of 21% primarily due to the effects of a change in valuation allowance, state taxes, and foreign GILTI income inclusion.

The Company has assessed the realizability of the net deferred tax assets as of March 31, 2022 and in that analysis has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income to realize its deferred tax assets. The Company believes it is more likely than not that the benefit from recorded deferred tax assets will not be realized. The Company has recorded a valuation allowance for deferred tax assets of $106.3 million as of March 31, 2022 and

December 31, 2021. In future periods, if we conclude we have future taxable income sufficient to recognize the deferred tax assets, we may reduce or eliminate the valuation allowance.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Earnings per Share

3 Months Ended

Mar. 31, 2022

Earnings per Share

Earnings per Share

Note 5 – Earnings per Share

Basic and Diluted Earnings per Share

Basic earnings per share of Class A common stock is computed by dividing net income available to PetIQ, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to PetIQ, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Three months ended March 31,

(in 000's, except for per share amounts)		2022	2021
Numerator:
Net income	$	3,160	$	2,386
Less: net income attributable to non-controlling interests		29		353
Net income attributable to PetIQ, Inc. — basic and diluted		3,131		2,033
Denominator:
Weighted-average shares of Class A common stock outstanding — basic		29,164		26,386
Dilutive effects of stock options that are convertible into Class A common stock		60		470
Dilutive effect of RSUs		66		148
Dilutive effect for conversion of Notes		—		—
Weighted-average shares of Class A common stock outstanding — diluted		29,290		27,004

Earnings per share of Class A common stock — basic	$	0.11	$	0.08
Earnings per share of Class A common stock — diluted	$	0.11	$	0.08

Shares of the Company’s Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

The computation of the dilutive effect of other potential common shares excludes stock awards of 1,797 thousand and 652 thousand shares for the three months ended March 31, 2022 and 2021, respectively, as the inclusion under the treasury stock method would have been antidilutive.

The dilutive impact of the Notes have not been included in the dilutive earnings per share calculation for the three and three months ended March 31, 2022 and 2021 as they would be antidilutive.

Stock Based Compensation

3 Months Ended

Mar. 31, 2022

Stock Based Compensation

Stock Based Compensation

Note 6 – Stock Based Compensation

PetIQ, Inc. Omnibus Incentive Plan

The PetIQ, Inc. Omnibus Incentive Plan, as amended (the “Plan”), provides for the grant of various equity-based incentive awards to directors of the Company, employees, and consultants. The types of equity-based awards that may be granted under the Plan include: stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), and other stock-based awards. The Company has 3,914 thousand authorized shares under the Plan. As of March 31, 2022 and 2021, 26 thousand and 767 thousand shares were available for issuance under the Plan, respectively. All awards issued under the Plan may only be settled in shares of Class A common stock. Shares issued pursuant to awards under the incentive plans are from our authorized but unissued shares.

PetIQ, Inc. 2018 Inducement and Retention Stock Plan for CVC Employees

The PetIQ, Inc. 2018 Inducement and Retention Stock Plan for CVC Employees (the “Inducement Plan”) provides for the grant of stock options to employees hired in connection with an acquisition as employment inducement awards pursuant to NASDAQ Listing Rule 5635(c)(4). The Inducement Plan reserved 800 thousand shares of Class A common stock of the Company. As of March 31, 2022, no shares were available for issuance under the Inducement Plan. All awards issued under the Plan may only be settled in shares of Class A common stock.

Stock Options

The Company awards stock options to certain employees under the Plan and previously issued stock options under the Inducement Plan, which are subject to time-based vesting conditions, typically 25% on each anniversary of the grant date until fully vested. Upon a termination of service relationship by the Company, all unvested options will be forfeited and the shares of common stock underlying such awards will become available for issuance under the Plan. The maximum contractual term for stock options is 10 years.

The fair value of these equity awards is amortized to equity based compensation expense over the vesting period, which totaled $1.3 million and $1.4 million for the three months ended March 31, 2022 and 2021, respectively. All stock based compensation expense is included in selling, general and administrative expenses based on the role of recipients. The fair value of the stock option awards was determined on the grant dates using the Black-Scholes valuation model based on the following weighted-average assumptions for the periods ended March 31, 2022 and 2021:


	March 31, 2022			March 31, 2021
Expected term (years) ⁽¹⁾		6.25			6.25
Expected volatility ⁽²⁾		37.21	%		33.91	%
Risk-free interest rate ⁽³⁾		1.44	%		0.90	%
Dividend yield ⁽⁴⁾		0.00	%		0.00	%

(1)

The Company utilized the simplified method to determine the expected term of the stock options since we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

(2)

The expected volatility assumption was calculated based on a peer group analysis of stock price volatility with a look back period consistent with the expected option term.

(3)

The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds to the expected term of the stock options.

(4)

The Company has not paid and does not anticipate paying a cash dividend on our common stock.

The weighted average grant date fair value of stock options granted during the period ended March 31, 2022 was $9.14 per option. At March 31, 2022, total unrecognized compensation cost related to unvested stock options was $5.9 million and is expected to be recognized over a weighted-average period of 2.3 years.


							Weighted
							Average
			Weighted		Aggregate		Remaining
	Stock		Average		Intrinsic		Contractual
	Options		Exercise		Value		Life
	(in 000's)		Price		(in 000's)		(years)
Outstanding at January 1, 2021		2,086	$	23.93	$	30,302		7.2
Granted		354		35.66
Exercised		(583)		23.05	$	8,499
Forfeited		(64)		24.84
Cancelled		(25)		25.70
Outstanding at December 31, 2021		1,768		26.51	$	2,897		7.3
Granted		37		21.91
Exercised		(2)		19.49	$	5
Forfeited		(2)		35.66
Outstanding at March 31, 2022		1,801	$	26.41	$	4,132		7.1
Options exercisable at March 31, 2022		1,155

Restricted Stock Units

The Company awards RSUs to certain employees and directors under the Plan, which are subject to time-based vesting conditions. Upon a termination of service relationship by the Company, all unvested RSUs will be forfeited and the shares of common stock underlying such awards will become available for issuance under the Plan. The fair value of RSUs are measured based on the closing fair market value of the Company’s common stock on the date of grant. At March 31, 2022, total unrecognized compensation cost related to unvested RSUs was $23.5 million and is expected to vest over a weighted average 3.4 years.

The fair value of these equity awards is amortized to equity based compensation expense over the vesting period, which totaled $2.5 million and $0.8 million for the three months ended March 31, 2022 and 2021, respectively. All stock based compensation expense is included in selling, general and administrative expenses based on the role of recipients.

The following table summarizes the activity of the Company’s RSUs for the period ended March 31, 2022.


			Weighted
	Number of		Average
	Shares		Grant Date
	(in 000's)		Fair Value
Outstanding at January 1, 2021		317	$	22.91
Granted		268		37.91
Settled		(103)		24.81
Forfeited		(23)		26.02
Outstanding at December 31, 2021		459		31.08
Granted		712		20.85
Settled		(143)		26.10
Forfeited		(1)		35.66
Nonvested RSUs at March 31, 2022		1,027	$	24.68

Non-Controlling Interests

3 Months Ended

Mar. 31, 2022

Non-Controlling Interests

Non-Controlling Interests

Note 7 – Non-Controlling Interests

The following table presents the outstanding LLC Interests and changes in LLC Interests for the periods presented.


	LLC Interests held					% of Total
		LLC				LLC
$'s in 000's	Owners		PetIQ, Inc.		Total	Owners	PetIQ, Inc.
As of January 1, 2021		3,040		25,711	28,751	10.6%	89.4%
Stock based compensation transactions		—		660	660
Exchange transactions		(2,768)		2,768	—
As of December 31, 2021		272		29,139	29,411	0.9%	99.1%
Stock based compensation transactions		—		113	113
Exchange transactions		(20)		20	—
As of March 31, 2022		252		29,272	29,524	0.9%	99.1%

Note that certain figures shown in the table above may not recalculate due to rounding.

For the three months ended March 31, 2022 and 2021 the Company owned a weighted average of 99.1% and 91.2%, respectively, of HoldCo.

Customer Concentration

3 Months Ended

Mar. 31, 2022

Customer Concentration

Customer Concentration

Note 8 – Customer Concentration

The Company has significant exposure to customer concentration. During the three months ended March 31, 2022 and 2021, two customers individually accounted for more than 10% of sales, comprising 36% and 42% of net sales, respectively for such periods.

At March 31, 2022 two Products segment customers individually accounted for more than 10% of outstanding trade receivables, and accounted for 49% of outstanding trade receivables, net. At December 31, 2021 one Products segment customer individually accounted for more than 10% of outstanding trade receivables, and accounted for 47% of outstanding trade receivables, net.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

Note 9 – Commitments and Contingencies

Litigation Contingencies

The Company records a liability when a particular contingency is probable and estimable and provides disclosure for contingencies that are at least reasonably possible of resulting in a loss including an estimate which we currently cannot make. The Company expenses legal costs as incurred within selling, general and administrative expenses on the condensed consolidated statements of operations. As of March 31, 2022 and December 31, 2021 the Company had $6.0 million and $3.5 million in liabilities accrued on the condensed consolidated balance sheet, respectively.

During 2021, the Company entered into mediation with a third party who had filed a class action lawsuit against the Company. As a result of that mediation, the Company accrued the expected settlement of $1.4 million in the period ended September 30, 2021. The Company expects final settlement and payment to occur in 2022.

Additionally, during the three months ended March 31, 2022, the Company has continued to evaluate a lawsuit brought by a former supplier to the Company related to the redemption of ownership interest. The plaintiff has alleged actual damages of approximately $3 million plus interest and attorney’s fees and has claimed additional punitive damages that could result in treble damages. The Company believes the range of outcomes is between $4.5 million and the amount alleged by the plaintiff, and as no amount within the range is more likely than any other, the Company has accrued an obligation of $4.5 million as of March 31, 2022, of which $2.5 million of expense was recorded in the three months ended March 31, 2022. There is no assurance that the Company’s defense will be successful, and as such, the Company will continue to monitor the expected outcome of the matter.

Commitments

We have commitments for leases and long-term debt that are discussed further in Note 2 - Debt, and Note 3 - Leases. In addition, we have purchase obligations for goods and services, capital expenditures, and raw materials entered into in the normal course of business.

Segments

3 Months Ended

Mar. 31, 2022

Segments

Segments

Note 10 – 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					Unallocated
March 31, 2022	Products		Services		Corporate		Consolidated
Net Sales	$	247,750	$	27,945	$	—	$	275,695
Adjusted EBITDA		47,909		3,084		(19,398)		31,595
Depreciation expense		1,010		1,650		1,022		3,682
Capital expenditures		3,002		1,644		1,032		5,678


$'s in 000's					Unallocated
March 31, 2021	Products		Services		Corporate		Consolidated
Net Sales	$	230,034	$	24,313	$	—	$	254,347
Adjusted EBITDA		38,792		2,096		(14,027)		26,861
Depreciation expense		940		1,182		1,009		3,131
Capital expenditures		270		2,379		5,676		8,325

The following table reconciles segment Adjusted EBITDA to Net income:


	For the three months ended
$'s in 000's	March 31, 2022		March 31, 2021
Adjusted EBITDA:
Product	$	47,909	$	38,792
Services		3,084		2,096
Unallocated Corporate		(19,398)		(14,027)
Total Consolidated		31,595		26,861
Adjustments:
Depreciation		3,682		3,131
Amortization		4,523		8,428
Interest		6,121		4,870
Acquisition costs⁽¹⁾		—		6
Stock based compensation expense		3,823		2,122
Non same-store adjustment⁽²⁾		7,165		5,648
Integration costs and costs of discontinued clinics⁽³⁾		339		(48)
Litigation expenses		2,661		243
Pretax net income	$	3,281	$	2,461
Income tax expense		(121)		(75)
Net income	$	3,160	$	2,386

(1)

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

(2)

Non same-store adjustment includes revenue and costs 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.

(3)

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 segment and the corporate segment. Costs of discontinued clinics represent costs to close Service segment locations.

Supplemental geographic disclosures are below:


		Three months ended March 31, 2022
$'s in 000's		U.S.		Foreign		Total
Product sales	$	245,572	$	2,178	$	247,750
Service revenue		27,945		—		27,945
Total net sales	$	273,517	$	2,178	$	275,695


		Three months ended March 31, 2021
$'s in 000's		U.S.		Foreign		Total
Product sales	$	228,575	$	1,459	$	230,034
Service revenue		24,313		—		24,313
Total net sales	$	252,888	$	1,459	$	254,347

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


	March 31, 2022		December 31, 2021
United States	$	74,878	$	75,315
Europe		3,316		1,298
Total	$	78,194	$	76,613

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

Related Parties

3 Months Ended

Mar. 31, 2022

Related Parties

Related Parties

Note 11 – Related Parties

Chris Christensen, the brother of CEO, McCord Christensen, acts as the Company’s agent at Moreton Insurance (“Moreton”), which acts as a broker for a number of the Company’s insurance policies. The Company’s premium expense, which is paid at a variety of times throughout the year, is generally paid directly to the relevant insurance company, amounted to $6.9 million for policies that cover March 31, 2022. Mr. Chris Christensen earns various forms of compensation based on the specifics of each policy.

Katie Turner, the spouse of CEO, McCord Christensen, is the owner of Acadia Investor Relations LLC, (“Acadia”) which acts as the Company’s investor relations consultant. Acadia has been paid $0.06 million for the three months ended March 31, 2022.

Principal Business Activity and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Principal Business Activity and Significant Accounting Policies

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant, and equipment and intangible assets; the valuation of property, plant, and equipment, intangible assets and goodwill, the valuation of deferred tax assets, the valuation of inventories, and reserves for legal contingencies.12

Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt

Schedule of components of long term debt



$'s in 000's	March 31, 2022		December 31, 2021
Convertible Notes	$	143,750	$	143,750
Term loans		298,500		298,500
Revolving credit facility		25,000		—
Other Debt		22,582		23,518
Net discount on debt and deferred financing fees		(9,946)		(10,418)
	$	479,886	$	455,350
Less current maturities of long-term debt		(6,941)		(6,880)
Total long-term debt	$	472,945	$	448,470

Schedule of future maturities of long-term debt, excluding net discount on debt and deferred financing fees


($'s in 000's)
Remainder of 2022			5,992
2023			7,124
2024			7,426
2025			4,600
2026			172,350
Thereafter			292,340

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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-Paragraph 1
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+ Details

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases

Schedule of components of lease expense


	For the Three Months Ended
$'s in 000's	March 31, 2022		March 31, 2021
Finance lease cost
Amortization of right-of-use assets	$	525	$	566
Interest on lease liabilities		64		91
Operating lease cost		1,577		1,292
Variable lease cost⁽¹⁾		515		306
Short-term lease cost		5		4
Sublease income		(65)		(43)
Total lease cost	$	2,621	$	2,216

(1)

Variable lease cost primarily relates to percentage rent, common area maintenance, property taxes and insurance on leased real estate.

Schedule of other information related to leases


	March 31, 2022	March 31, 2021
Weighted-average remaining lease term (years)
Operating leases	3.75	4.26
Finance leases	2.40	2.78
Weighted-average discount rate
Operating leases	4.5%	5.3%
Finance leases	4.6%	4.9%

Summary of annual future commitments under non-cancelable leases


	Lease Obligations
$'s in 000's	Operating Leases		Finance Leases
Remainder of 2022	$	5,052	$	1,203
2023		6,336		1,702
2024		4,781		622
2025		3,745		239
2026		2,147		79
Thereafter		124		—
Total minimum future obligations	$	22,185	$	3,845
Less interest		(1,838)		(211)
Present value of net future minimum obligations		20,347		3,634
Less current lease obligations		(6,047)		(1,470)
Long-term lease obligations	$	14,300	$	2,164

Supplemental cash flow information



	For the Year Ended
$'s in 000's	March 31, 2022		March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	64	$	91
Operating cash flows from operating leases		1,583		1,224
Financing cash flows from finance leases		399		468
(Noncash) right-of-use assets obtained in exchange for lease obligations
Operating leases		572		1,418
Finance leases		81		—

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings per Share

Reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock


	Three months ended March 31,

(in 000's, except for per share amounts)		2022	2021
Numerator:
Net income	$	3,160	$	2,386
Less: net income attributable to non-controlling interests		29		353
Net income attributable to PetIQ, Inc. — basic and diluted		3,131		2,033
Denominator:
Weighted-average shares of Class A common stock outstanding — basic		29,164		26,386
Dilutive effects of stock options that are convertible into Class A common stock		60		470
Dilutive effect of RSUs		66		148
Dilutive effect for conversion of Notes		—		—
Weighted-average shares of Class A common stock outstanding — diluted		29,290		27,004

Earnings per share of Class A common stock — basic	$	0.11	$	0.08
Earnings per share of Class A common stock — diluted	$	0.11	$	0.08

Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Stock Based Compensation

Fair value of the stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions


	March 31, 2022			March 31, 2021
Expected term (years) ⁽¹⁾		6.25			6.25
Expected volatility ⁽²⁾		37.21	%		33.91	%
Risk-free interest rate ⁽³⁾		1.44	%		0.90	%
Dividend yield ⁽⁴⁾		0.00	%		0.00	%

(1)

(2)

The expected volatility assumption was calculated based on a peer group analysis of stock price volatility with a look back period consistent with the expected option term.

(3)

The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds to the expected term of the stock options.

(4)

The Company has not paid and does not anticipate paying a cash dividend on our common stock.

Summary of the activity of the Company's unvested stock options


							Weighted
							Average
			Weighted		Aggregate		Remaining
	Stock		Average		Intrinsic		Contractual
	Options		Exercise		Value		Life
	(in 000's)		Price		(in 000's)		(years)
Outstanding at January 1, 2021		2,086	$	23.93	$	30,302		7.2
Granted		354		35.66
Exercised		(583)		23.05	$	8,499
Forfeited		(64)		24.84
Cancelled		(25)		25.70
Outstanding at December 31, 2021		1,768		26.51	$	2,897		7.3
Granted		37		21.91
Exercised		(2)		19.49	$	5
Forfeited		(2)		35.66
Outstanding at March 31, 2022		1,801	$	26.41	$	4,132		7.1
Options exercisable at March 31, 2022		1,155

Summary of RSU activity


			Weighted
	Number of		Average
	Shares		Grant Date
	(in 000's)		Fair Value
Outstanding at January 1, 2021		317	$	22.91
Granted		268		37.91
Settled		(103)		24.81
Forfeited		(23)		26.02
Outstanding at December 31, 2021		459		31.08
Granted		712		20.85
Settled		(143)		26.10
Forfeited		(1)		35.66
Nonvested RSUs at March 31, 2022		1,027	$	24.68

Non-Controlling Interests (Tables)

3 Months Ended

Mar. 31, 2022

Non-Controlling Interests

Summary of noncontrolling interest


	LLC Interests held					% of Total
		LLC				LLC
$'s in 000's	Owners		PetIQ, Inc.		Total	Owners	PetIQ, Inc.
As of January 1, 2021		3,040		25,711	28,751	10.6%	89.4%
Stock based compensation transactions		—		660	660
Exchange transactions		(2,768)		2,768	—
As of December 31, 2021		272		29,139	29,411	0.9%	99.1%
Stock based compensation transactions		—		113	113
Exchange transactions		(20)		20	—
As of March 31, 2022		252		29,272	29,524	0.9%	99.1%

Segments (Tables)

3 Months Ended

Mar. 31, 2022

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
March 31, 2022	Products		Services		Corporate		Consolidated
Net Sales	$	247,750	$	27,945	$	—	$	275,695
Adjusted EBITDA		47,909		3,084		(19,398)		31,595
Depreciation expense		1,010		1,650		1,022		3,682
Capital expenditures		3,002		1,644		1,032		5,678


$'s in 000's					Unallocated
March 31, 2021	Products		Services		Corporate		Consolidated
Net Sales	$	230,034	$	24,313	$	—	$	254,347
Adjusted EBITDA		38,792		2,096		(14,027)		26,861
Depreciation expense		940		1,182		1,009		3,131
Capital expenditures		270		2,379		5,676		8,325

Summary of reconciles segment adjusted ebitda to pretax net income


	For the three months ended
$'s in 000's	March 31, 2022		March 31, 2021
Adjusted EBITDA:
Product	$	47,909	$	38,792
Services		3,084		2,096
Unallocated Corporate		(19,398)		(14,027)
Total Consolidated		31,595		26,861
Adjustments:
Depreciation		3,682		3,131
Amortization		4,523		8,428
Interest		6,121		4,870
Acquisition costs⁽¹⁾		—		6
Stock based compensation expense		3,823		2,122
Non same-store adjustment⁽²⁾		7,165		5,648
Integration costs and costs of discontinued clinics⁽³⁾		339		(48)
Litigation expenses		2,661		243
Pretax net income	$	3,281	$	2,461
Income tax expense		(121)		(75)
Net income	$	3,160	$	2,386

(1)

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

(2)

(3)

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


		Three months ended March 31, 2022
$'s in 000's		U.S.		Foreign		Total
Product sales	$	245,572	$	2,178	$	247,750
Service revenue		27,945		—		27,945
Total net sales	$	273,517	$	2,178	$	275,695


		Three months ended March 31, 2021
$'s in 000's		U.S.		Foreign		Total
Product sales	$	228,575	$	1,459	$	230,034
Service revenue		24,313		—		24,313
Total net sales	$	252,888	$	1,459	$	254,347

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


	March 31, 2022		December 31, 2021
United States	$	74,878	$	75,315
Europe		3,316		1,298
Total	$	78,194	$	76,613

Principal Business Activity and Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2022 segment item location state
Principal Business Activity and Significant Accounting Policies
Number of points of distribution \| item	60,000
Number of retail pharmacy locations \| location	2,900
Number of states in which the entity provides veterinary services to pet owners \| state	42
Number of reportable segments \| segment	2

Debt - Narrative (Details) - USD ($) $ in Millions		3 Months Ended
Debt - Narrative (Details) - USD ($) $ in Millions	Apr. 13, 2021	Mar. 31, 2022
Senior Secured Asset-Based Revolving Credit Facility - ABL
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 125.0
Line of credit facility contingent increase, additional borrowing capacity	$ 50.0
Eligible investment - grade accounts	90.00%
Percentage of eligible investment other accounts	85.00%
Percentage of net orderly liquidation value of cost of certain eligible on hand and in transit inventory	85.00%
Percentage of qualified cash	100.00%
Line of credit facility, interest rate at period end		1.48%
Unused facility fee (as a percent)		0.35%
Senior Secured Term Loan Facility - Term Loan B
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 300.0
Line of credit facility, interest rate at period end		4.75%
Floor rate	0.50%
Debt instrument, frequency of periodic payment	quarterly
Percentage of periodic payment, principal	0.25%
Senior Secured Term Loan Facility - Term Loan B \| LIBOR \| Minimum
Debt Instrument [Line Items]
Variable interest rate, basis points spread over variable reference rate (as a percent)	3.25%
Senior Secured Term Loan Facility - Term Loan B \| LIBOR \| Maximum
Debt Instrument [Line Items]
Variable interest rate, basis points spread over variable reference rate (as a percent)	4.25%

Debt - Long-term debt and future maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Debt
Other Debt	$ 22,582	$ 23,518
Net discount on debt and deferred financing fees	(9,946)	(10,418)
Long term debt	479,886	455,350
Less current maturities of long-term debt	(6,941)	(6,880)
Long-term debt, less current installments	472,945	448,470
Future maturities of long-term debt
Remainder of 2022	5,992
2023	7,124
2024	7,426
2025	4,600
2026	172,350
Thereafter	292,340
Convertible Notes
Debt
Outstanding balance	143,750	143,750
Term loans
Debt
Outstanding balance	298,500	$ 298,500
Revolving credit facility
Debt
Outstanding balance	$ 25,000

Leases - Narrative (Details)	Mar. 31, 2022
Minimum
Lessee, Lease, Description [Line Items]
Renewal options term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Renewal options term	10 years

Leases - Components of lease expense and other information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease cost
Amortization of right-of-use assets	$ 525	$ 566
Interest on lease liabilities	64	91
Operating lease cost	1,577	1,292
Variable lease cost	515	306
Short-term lease cost	5	4
Sublease income	(65)	(43)
Total lease cost	$ 2,621	$ 2,216
Weighted-average remaining lease term (years), Operating leases	3 years 9 months	4 years 3 months 3 days
Weighted-average remaining lease term (years), Finance leases	2 years 4 months 24 days	2 years 9 months 10 days
Weighted-average discount rate, Operating leases	4.50%	5.30%
Weighted-average discount rate, Finance leases	4.60%	4.90%

Leases - Annual future commitments under non-cancelable leases (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Lease Obligations, Operating Leases
2022	$ 5,052
2023	6,336
2024	4,781
2025	3,745
2026	2,147
Thereafter	124
Total minimum future obligations	22,185
Less interest	(1,838)
Present value of net future minimum obligations	20,347
Less current lease obligations	(6,047)	$ (6,500)
Long-term lease obligations	14,300	14,843
Lease Obligations, Finance Leases
2022	1,203
2023	1,702
2024	622
2025	239
2026	79
Total minimum future obligations	3,845
Less interest	(211)
Present value of net future minimum obligations	3,634
Less current lease obligations	(1,470)
Long-term lease obligations	$ 2,164	$ 2,493

Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases
Operating cash flows from finance leases	$ 64	$ 91
Operating cash flows from operating leases	1,583	1,224
Financing cash flows from finance leases	399	468
Operating leases	572	$ 1,418
Finance leases	$ 81

Income Tax (Details) - USD ($) $ in Millions	3 Months Ended
Income Tax (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Income Tax
Effective tax rate	3.70%	3.06%
Income tax expense (benefit) at federal statutory rate	21.00%	21.00%
Deferred tax assets, valuation allowance			$ 106.3

Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net Income	$ 3,160	$ 2,386
Less: net loss attributable to non-controlling interests	29	353
Net income attributable to PetIQ, Inc.	$ 3,131	$ 2,033
Denominator:
Weighted-average shares of Class A common stock outstanding -- basic (in shares)	29,164	26,386
Weighted-average shares of Class A common stock outstanding - diluted (in shares)	29,290	27,004
Loss per share of Class A common stock - basic	$ 0.11	$ 0.08
Loss per share of Class A common stock - diluted	$ 0.11	$ 0.08
Anti dilutive shares excluded from computation of diluted earnings per share	1,797	652
Stock options
Denominator:
Dilutive effects of stocks	60	470
RSU
Denominator:
Dilutive effects of stocks	66	148

Stock Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock Based Compensation
Stock based compensation expense	$ 3,823	$ 2,122
Vesting percentage on each anniversary of the grant date	25.00%
Maximum term for stock options	6 years 3 months	6 years 3 months
Weighted average grant date fair value of stock options granted	$ 9.14
Unrecognized compensation cost related to unvested stock options	$ 5,900
Unrecognized compensation cost related to unvested options, recognized weighted-average period	2 years 3 months 18 days
Omnibus Plan
Stock Based Compensation
Share available for issuance	0
Class A common stock
Stock Based Compensation
Number of shares reserved	800
Class A common stock \| Omnibus Plan
Stock Based Compensation
Shares reserved for future issuance	3,914
Share available for issuance	26	767
Maximum
Stock Based Compensation
Maximum term for stock options	10 years
Stock options
Stock Based Compensation
Stock based compensation expense	$ 1,300	$ 1,400

Stock Based Compensation - Weighted Average Assumptions (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock Based Compensation
Expected term (years)	6 years 3 months	6 years 3 months
Expected volatility	37.21%	33.91%
Risk-free interest rate	1.44%	0.90%
Dividend yield	0.00%	0.00%

Stock Based Compensation - Summary of Unvested Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock Based Compensation
Stock Options Outstanding - Beginning Balance	1,768	2,086
Stock Options Granted (in shares)	37	354
Stock option Exercised (in shares)	(2)	(583)
Stock Options Forfeited (in shares)	(2)	(64)
Stock Options Cancelled (in shares)		(25)
Stock Options Outstanding - Ending Balance	1,801	1,768	2,086
Options exercisable - Ending Balance	1,155
Weighted Average Exercise Price Outstanding - Beginning Balance	$ 26.51	$ 23.93
Weighted Average Exercise Price - Granted	21.91	35.66
Weighted Average Exercise Price - Exercised	19.49	23.05
Weighted Average Exercise Price - Forfeited	35.66	24.84
Weighted Average Exercise Price - Cancelled		25.70
Weighted Average Exercise Price Outstanding - Ending Balance	$ 26.41	$ 26.51	$ 23.93
Aggregate Intrinsic Value	$ 4,132	$ 2,897	$ 30,302
Aggregate Intrinsic Value - Exercised	$ 5	$ 8,499
Weighted Average Remaining Contractual Life (years)	7 years 1 month 6 days	7 years 3 months 18 days	7 years 2 months 12 days

Stock Based Compensation - Restricted Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Unrecognized compensation cost related to unvested stock options	$ 5,900
Share-based Compensation	3,823	$ 2,122
RSU
Unrecognized compensation cost related to unvested stock options	$ 23,500
Vesting period	3 years 4 months 24 days
Share-based Compensation	$ 2,500	$ 800
Number of Shares
Beginning Balance	459	317	317
Granted (in shares)	712		268
Settled (in shares)	(143)		(103)
Forfeited (in shares)	(1)		(23)
Ending balance	1,027		459
Weighted Average Grant Date Fair Value
Beginning Balance	$ 31.08	$ 22.91	$ 22.91
Granted (per share)	20.85		37.91
Settled (per share)	26.10		24.81
Forfeited (per share)	35.66		26.02
Ending balance	$ 24.68		$ 31.08

Non-Controlling Interests (Details) - shares shares in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Common Stock, Shares, Outstanding, Beginning Balance	29,139	25,711	25,711
Stock based compensation transactions	113		660
Exchange transactions	20		2,768
Common Stock, Shares, Outstanding, Ending Balance	29,272		29,139
Continuing LLC Owners
Common Stock, Shares, Outstanding, Beginning Balance	272	3,040	3,040
Exchange transactions	(20)		(2,768)
Common Stock, Shares, Outstanding, Ending Balance	252		272
Amended Holdco LLC Agreement
Common Stock, Shares, Outstanding, Beginning Balance	29,411	28,751	28,751
Stock based compensation transactions	113		660
Common Stock, Shares, Outstanding, Ending Balance	29,524		29,411
Holdco
Weighted average ownership percentage in Holdco	99.10%	91.20%
Continuing LLC Owners
Ownership interest by continuing LLC owners	0.90%		0.90%	10.60%
PetIQ
Ownership interest in Holdco	99.10%		99.10%	89.40%

Customer Concentration (Details)	3 Months Ended		12 Months Ended
Customer Concentration (Details)	Mar. 31, 2022 customer product	Mar. 31, 2021 customer	Dec. 31, 2021 customer
Customer concentrations \| Sales
Customer Concentration
Number of customers accounted for more than 10% of sales individually	2	2
Customer concentrations \| Sales \| Two Customers
Customer Concentration
Concentration risk	36.00%	42.00%
Customer concentrations \| Accounts receivable
Customer Concentration
Number of customers accounted for more than 10% of sales individually	2		1
Credit concentrations \| Accounts receivable \| One Customer
Customer Concentration
Concentration risk	49.00%		47.00%

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Litigation Contingencies
Liability recorded	$ 6,000		$ 3,500
Litigation expenses	(2,661)	$ (243)
Mediation With Third Party
Litigation Contingencies
Liability recorded	1,400
Lawsuit By Former Supplier For Redemption Of Ownership Interest
Litigation Contingencies
Liability recorded	4,500
Loss Contingency, Damages Sought, Value	3,000
Litigation expenses	2,500
Lawsuit By Former Supplier For Redemption Of Ownership Interest \| Minimum
Litigation Contingencies
Loss Contingency, Estimate of Possible Loss	$ 4,500

Segments (Details) $ in Thousands	3 Months Ended
Segments (Details) $ in Thousands	Mar. 31, 2022 USD ($) segment	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Segments
Number of operating segments \| segment	2
Financial information relating to the Company's operating segments
Net Sales	$ 275,695	$ 254,347
Adjusted EBITDA	31,595	26,861
Depreciation expense	3,682	3,131
Capital expenditures	5,678	8,325
Property, plant and equipment	78,194		$ 76,613
United States
Financial information relating to the Company's operating segments
Net Sales	273,517	252,888
Property, plant and equipment	74,878		75,315
Foreign
Financial information relating to the Company's operating segments
Net Sales	2,178	1,459
Europe
Financial information relating to the Company's operating segments
Property, plant and equipment	3,316		$ 1,298
Products
Financial information relating to the Company's operating segments
Net Sales	247,750	230,034
Products \| United States
Financial information relating to the Company's operating segments
Net Sales	245,572	228,575
Products \| Foreign
Financial information relating to the Company's operating segments
Net Sales	2,178	1,459
Services
Financial information relating to the Company's operating segments
Net Sales	27,945	24,313
Services \| United States
Financial information relating to the Company's operating segments
Net Sales	27,945	24,313
Operating Segments \| Products
Financial information relating to the Company's operating segments
Net Sales	247,750	230,034
Adjusted EBITDA	47,909	38,792
Depreciation expense	1,010	940
Capital expenditures	3,002	270
Operating Segments \| Services
Financial information relating to the Company's operating segments
Net Sales	27,945	24,313
Adjusted EBITDA	3,084	2,096
Depreciation expense	1,650	1,182
Capital expenditures	1,644	2,379
Corporate, Non-Segment \| Unallocated Corporate
Financial information relating to the Company's operating segments
Adjusted EBITDA	(19,398)	(14,027)
Depreciation expense	1,022	1,009
Capital expenditures	$ 1,032	$ 5,676

Segments - Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	$ 31,595	$ 26,861
Depreciation	3,682	3,131
Amortization	4,523	8,428
Interest expense, net	6,121	4,870
Acquisition costs		6
Stock based compensation expense	3,823	2,122
Integration costs	339	(48)
Non same-store adjustment	7,165	5,648
Litigation expenses	2,661	243
Pretax net income	3,281	2,461
Income tax expense	(121)	(75)
Net income	3,160	2,386
Products \| Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	47,909	38,792
Services \| Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	3,084	2,096
Unallocated Corporate \| Corporate, Non-Segment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	$ (19,398)	$ (14,027)

Related Parties (Details) $ in Thousands	3 Months Ended
Related Parties (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Insurance Policies With Chris Christensen
Related Parties
Premium expense	$ 6,900
Acadia Investor Relations L LC
Related Parties
Related party transaction, expenses from transactions with Related Party	$ 60