0001628280-22-021999 | 10-Q | XBRL Viewer

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Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2022	Aug. 09, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
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	Q2
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		29,312,764
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		252,540

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 5,396	$ 79,406
Accounts receivable, net	168,831	113,947
Inventories	160,064	96,440
Other current assets	9,337	8,896
Total current assets	343,627	298,689
Property, plant and equipment, net	76,691	76,613
Operating lease right of use assets	20,674	20,489
Other non-current assets	1,882	2,024
Intangible assets, net	181,566	190,662
Goodwill	230,594	231,110
Total assets	855,035	819,587
Current liabilities
Accounts payable	81,093	55,057
Accrued wages payable	10,370	12,704
Accrued interest payable	1,387	3,811
Other accrued expenses	11,539	11,680
Current portion of operating leases	6,334	6,500
Current portion of long-term debt and finance leases	8,446	8,350
Total current liabilities	119,170	98,102
Operating leases, less current installments	15,259	14,843
Long-term debt, less current installments	450,904	448,470
Finance leases, less current installments	1,830	2,493
Other non-current liabilities	431	459
Total non-current liabilities	468,424	466,265
Equity
Additional paid-in capital	374,057	368,006
Accumulated deficit	(106,762)	(114,525)
Accumulated other comprehensive loss	(2,203)	(684)
Total stockholders' equity	265,121	252,826
Non-controlling interest	2,320	2,394
Total equity	267,441	255,220
Total liabilities and equity	855,035	819,587
Class A common stock
Equity
Common stock value	29	29
Class B common stock
Equity
Common stock value	$ 0	$ 0

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2022	Dec. 31, 2021
Class A common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	125,000	125,000
Common stock, shares, issued (in shares)	29,304	29,139
Common stock, shares outstanding (in shares)	29,304	29,139
Class B common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	100,000	100,000
Common stock, shares, issued (in shares)	252	272
Common stock, shares outstanding (in shares)	252	272

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Total net sales	$ 252,014	$ 271,011	$ 527,709	$ 525,358
Total cost of sales	190,040	211,383	408,100	417,931
Gross profit	61,974	59,628	119,609	107,427
Operating expenses
Selling, general and administrative expenses	50,595	43,142	98,831	83,814
Operating income	11,379	16,486	20,778	23,613
Interest expense, net	6,299	7,655	12,420	12,525
Loss on debt extinguishment	0	5,453	0	5,453
Other income, net	(201)	(451)	(204)	(655)
Total other expense, net	6,098	12,657	12,216	17,323
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
Net income attributable to non-controlling interest	46	8	75	361
Net income attributable to PetIQ, Inc.	$ 4,632	$ 4,026	$ 7,763	$ 6,059
Net loss per share attributable to PetIQ, Inc. Class A common stock
Basic (in dollars per share)	$ 0.16	$ 0.14	$ 0.27	$ 0.22
Diluted (in dollars per share)	$ 0.16	$ 0.14	$ 0.26	$ 0.22
Weighted Average shares of Class A common stock outstanding
Basic (in shares)	29,283	28,491	29,223	27,444
Diluted (in shares)	29,329	29,156	29,304	28,059
Products
Total net sales	$ 219,014	$ 242,857	$ 466,764	$ 472,891
Total cost of sales	163,568	185,837	354,419	368,664
Services
Total net sales	33,000	28,154	60,945	52,467
Total cost of sales	$ 26,472	$ 25,546	$ 53,681	$ 49,267

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Comprehensive Income
Net income	$ 4,678	$ 4,034	$ 7,838	$ 6,420
Foreign currency translation adjustment	(1,077)	363	(1,533)	504
Comprehensive income	3,601	4,397	6,305	6,924
Comprehensive income attributable to non-controlling interest	36	10	61	368
Comprehensive income attributable to PetIQ, Inc.	$ 3,565	$ 4,387	$ 6,244	$ 6,556

- 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.

+ References

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+ Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net income	$ 7,838	$ 6,420
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization of intangible assets and loan fees	17,660	20,405
Loss on debt extinguishment	0	5,453
Loss on disposition of property, plant, and equipment	0	167
Stock based compensation expense	6,666	4,561
Other non-cash activity	48	176
Changes in assets and liabilities
Accounts receivable	(54,969)	(57,011)
Inventories	(63,771)	(20,580)
Other assets	(409)	(2,166)
Accounts payable	26,481	(6,632)
Accrued wages payable	(2,359)	(482)
Other accrued expenses	(2,569)	3,493
Net cash used in operating activities	(65,384)	(46,196)
Cash flows from investing activities
Proceeds from disposition of property, plant, and equipment	0	350
Purchase of property, plant, and equipment	(8,026)	(18,302)
Net cash used in investing activities	(8,026)	(17,952)
Cash flows from financing activities
Proceeds from issuance of long-term debt	44,000	630,568
Principal payments on long-term debt	(42,800)	(576,843)
Tax distributions to LLC Owners	0	(72)
Principal payments on finance lease obligations	(744)	(1,226)
Payment of deferred financing fees and debt discount	0	(6,360)
Tax withholding payments on Restricted Stock Units	(865)	(852)
Exercise of options to purchase class A common stock	115	12,588
Net cash (used in) provided by financing activities	(294)	57,803
Net change in cash and cash equivalents	(73,704)	(6,345)
Effect of exchange rate changes on cash and cash equivalents	(306)	52
Cash and cash equivalents, beginning of period	79,406	33,456
Cash and cash equivalents, end of period	5,396	27,163
Supplemental cash flow information
Interest paid	13,380	8,051
Net change in property, plant, and equipment acquired through accounts payable	595	(358)
Finance lease additions	59	141
Income taxes paid, net of refunds	244	214
Accrued tax distribution	$ 0	$ 7

Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Accumulated Deficit	Accumulated Other Comprehensive Loss	Additional Paid-in Capital	Non-controlling Interest	Class A common stock Common Stock	Class B common stock Common Stock
Beginning balance at Dec. 31, 2020	$ 246,410	$ (98,558)	$ (686)	$ 319,642	$ 25,983	$ 26	$ 3
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			63	22,824	(22,887)	$ 3	$ (3)
Exchange of LLC Interests held by LLC Owners (in shares)						2,615	2,615
Accrued tax distributions	(7)				(7)
Other comprehensive income	504		497		7
Stock based compensation expense	4,561			4,304	257
Exercise of options to purchase common stock (in shares)						531
Exercise of Options to purchase common stock	12,588			12,588
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)						52
Issuance of stock vesting of RSU's, net of tax withholdings	(852)			(852)
Net income	6,420	6,059			361
Ending balance at Jun. 30, 2021	269,624	(92,499)	(126)	358,506	3,714	$ 29	$ 0
Ending balance (in shares) at Jun. 30, 2021						28,909	425
Beginning balance at Dec. 31, 2020	$ 246,410	(98,558)	(686)	319,642	25,983	$ 26	$ 3
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	$ 255,220	(114,525)	(684)	368,006	2,394	$ 29	$ 0
Ending balance (in shares) at Dec. 31, 2021						29,139	272
Beginning balance at Mar. 31, 2021	256,688	(96,525)	(500)	345,386	8,298	$ 28	$ 1
Beginning balance (in shares) at Mar. 31, 2021						28,102	941
Increase (Decrease) in Stockholders' Equity
Exchange of LLC Interests held by LLC Owners			13	4,793	(4,806)	$ 1	$ (1)
Exchange of LLC Interests held by LLC Owners (in shares)						516	516
Accrued tax distributions	141				141
Other comprehensive loss	363		361		2
Stock based compensation expense	2,439			2,369	70
Exercise of options to purchase common stock (in shares)						289
Exercise of Options to purchase common stock	6,008			6,008
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)						2
Issuance of stock vesting of RSU's, net of tax withholdings	(50)			(50)
Net income	4,034	4,026			8
Ending balance at Jun. 30, 2021	269,624	(92,499)	(126)	358,506	3,714	$ 29	$ 0
Ending balance (in shares) at Jun. 30, 2021						28,909	425
Beginning balance at Dec. 31, 2021	255,220	(114,525)	(684)	368,006	2,394	$ 29	$ 0
Beginning 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	(1,533)		(1,519)		(14)
Stock based compensation expense	$ 6,666			6,609	57
Exercise of options to purchase common stock (in shares)	2					2
Exercise of Options to purchase common stock	$ 115			115
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)						143
Issuance of stock vesting of RSU's, net of tax withholdings	(865)			(865)
Net income	7,838	7,763			75
Ending balance at Jun. 30, 2022	267,441	(106,762)	(2,203)	374,057	2,320	$ 29	$ 0
Ending balance (in shares) at Jun. 30, 2022						29,304	252
Beginning balance at Mar. 31, 2022	261,159	(111,394)	(1,136)	371,398	2,262	$ 29	$ 0
Beginning balance (in shares) at Mar. 31, 2022						29,272	252
Increase (Decrease) in Stockholders' Equity
Other comprehensive loss	(1,077)		(1,067)		(10)
Stock based compensation expense	2,843			2,821	22
Exercise of Options to purchase common stock	15			15
Issuance of stock for vesting of RSU's, net of tax with holdings (in shares)						33
Issuance of stock vesting of RSU's, net of tax withholdings	(177)			(177)
Net income	4,678	4,632			46
Ending balance at Jun. 30, 2022	$ 267,441	$ (106,762)	$ (2,203)	$ 374,057	$ 2,320	$ 29	$ 0
Ending balance (in shares) at Jun. 30, 2022						29,304	252

Principal Business Activity and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2022
Accounting Policies [Abstract]
Principal Business Activity and Significant Accounting Policies	Principal Business Activity and Significant Accounting Policies Principal Business Activity and Principles of Consolidation PetIQ, Inc. ("PetIQ", the "Company", "we", or "us") is a leading pet medication and wellness company delivering a smarter way for pet parents to help their pets live their best lives through convenient access to affordable veterinary products and services. We engage with customers through more than 60,000 points of distribution across retail and e-commerce channels with our branded and distributed medications as well as health and wellness items, which are further supported by our world-class medications manufacturing facility in Omaha, Nebraska and health and wellness manufacturing facility in Springville, Utah. Our national service platform, operates in over 2,600 retail partner locations in 41 states, providing cost effective and convenient veterinary wellness services. PetIQ believes that pets are an important part of the family and deserve the best products and care that we can give them. We have two reporting segments: (i) Products; and (ii) Services. The Products segment consists of our manufacturing and distribution business. The Services segment consists of veterinary services and related product sales provided by the Company directly to consumers. We are the sole managing member of PetIQ Holdings, LLC (“HoldCo”), a Delaware limited liability company, which is the sole member of PetIQ, LLC (“Opco”) and, through Holdco, operate and control all of the business and affairs of Opco. The condensed consolidated financial statements as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021 are unaudited. The condensed consolidated balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2021 and related notes thereto included in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. 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. Significant Accounting Policies The Company's significant accounting policies are discussed in Note 1 – Principal Business Activity and Significant Accounting Policies in the Annual Report. There have been no significant changes to these policies that have had a material impact on the Company's unaudited condensed financial statements and related notes during the three and six months ended June 30, 2022.

Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

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) (the "ABL"), subject to a borrowing base limitation. 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 June 30, 2022 was 2.89%. 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) (the "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 June 30, 2022 was 5.50%. 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.

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


$'s in 000's	June 30, 2022		December 31, 2021
Convertible Notes	$	143,750	$	143,750
Term loans	297,000		298,500
Revolving credit facility	5,000		—
Other Debt	21,635		23,518
Net discount on debt and deferred financing fees	(9,477)		(10,418)
	$	457,908	$	455,350
Less current maturities of long-term debt	(7,004)		(6,880)
Total long-term debt	$	450,904	$	448,470

Future maturities of long-term debt, excluding the discount on debt and deferred financing fees, as of June 30, 2022, are as follows:


($'s in 000's)
Remainder of 2022	$	4,385
2023	7,124
2024	7,426
2025	3,600
2026	152,350
Thereafter	292,500

As part of the termination of the Company's previous debt facilities, the Company wrote off $5.5 million in deferred financing fees to loss on debt extinguishment and incurred an additional $0.9 million in costs related to the transaction which are included in Selling, general and administrative expenses for the three and six months ended June 30, 2021.

- 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

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

LeasesThe 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				For the Six Months Ended
$'s in 000's	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Finance lease cost
Amortization of right-of-use assets	$	458	$	803	$	983	$	1,369
Interest on lease liabilities	57		123		121		214
Operating lease cost	1,737		1,332		3,314		2,624
Variable lease cost(1)	266		309		781		615
Short-term lease cost	8		2		13		6
Sublease income	(65)		(65)		(130)		(108)
Total lease cost	$	2,461	$	2,504	$	5,082	$	4,720

(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:


	June 30, 2022	June 30, 2021
Weighted-average remaining lease term (years)
Operating leases	3.59	4.13
Finance leases	2.19	2.62
Weighted-average discount rate
Operating leases	4.5%	5.2%
Finance leases	4.5%	4.8%

Annual future commitments under non-cancelable leases as of June 30, 2022, consist of the following:


	Lease Obligations
$'s in 000's	Operating Leases		Finance Leases
Remainder of 2022	$	3,564	$	819
2023	7,137		1,702
2024	5,613		613
2025	4,584		239
2026	2,230		73
Thereafter	151		—
Total minimum future obligations	$	23,278	$	3,446
Less interest	(1,685)		(174)
Present value of net future minimum obligations	21,594		3,272
Less current lease obligations	(6,334)		(1,442)
Long-term lease obligations	$	15,259	$	1,830

Supplemental cash flow information:


$'s in 000's	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	121	$	214
Operating cash flows from operating leases	3,386		2,525
Financing cash flows from finance leases	744		1,226
(Noncash) right-of-use assets obtained in exchange for lease obligations
Operating leases	3,620		2,810
Finance leases	59		141

Income Tax	6 Months Ended
Income Tax	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income Tax	Income Tax Our effective tax rate (ETR) from continuing operations was 11.5% and 8.5% for the three and six months ended June 30, 2022, respectively, and (5.4)% and (2.1)% for the three and six months ended June 30, 2021, respectively, including discrete items. Income tax expense for the three and six months ended June 30, 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 June 30, 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 June 30, 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.

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+ Details

Earnings per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

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 income per share of Class A common stock:


	Three months ended June 30,				Six months ended June 30,
(in 000's, except for per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	4,678	$	4,034	$	7,838	$	6,420
Less: net income attributable to non-controlling interests	46		8		75		361
Net income attributable to PetIQ, Inc. — basic and diluted	4,632		4,026		7,763		6,059
Denominator:
Weighted-average shares of Class A common stock outstanding — basic	29,283		28,491		29,223		27,444
Dilutive effects of stock options that are convertible into Class A common stock	32		518		47		470
Dilutive effect of RSUs	14		147		34		145

Weighted-average shares of Class A common stock outstanding — diluted	29,329		29,156		29,304		28,059

Earnings per share of Class A common stock — basic	$	0.16	$	0.14	$	0.27	$	0.22
Earnings per share of Class A common stock — diluted	$	0.16	$	0.14	$	0.26	$	0.22

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 dilutive effect of other potential common shares excludes stock options of 1,531 thousand shares and 845 thousand restricted stock units for the three months ended June 30, 2022, as the inclusion under the treasury stock method would have been antidilutive.

The computation of dilutive effect of other potential common shares excludes stock options of 1,531 thousand shares and 803 thousand restricted stock units for the six months ended June 30, 2022, as the inclusion under the treasury stock method would have been antidilutive.

The computation of dilutive effect of other potential common shares excludes stock options of 480 thousand shares and 88 thousand restricted stock units for the three months ended June 30, 2021, as the inclusion under the treasury stock method would have been antidilutive.

The computation of dilutive effect of other potential common shares excludes stock options of 652 thousand shares and 88 thousand restricted stock units for the six months ended June 30, 2021, as the inclusion under the treasury stock method would have been antidilutive.

The dilutive impact of the Convertible Notes have not been included in the dilutive earnings per share calculation for the three and six months ended June 30, 2022 and 2021 as they would be antidilutive.

Stock Based Compensation

6 Months Ended

Jun. 30, 2022

Share-based Payment Arrangement [Abstract]

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. On June 22, 2022, the Company’s stockholders approved an amendment and restatement of the Omnibus Plan to, among other things, increase the total number of shares of the Company’s Class A Common Stock reserved and available for issuance thereunder by 1,890 thousand shares resulting in a total of 5,804 thousand Class A Common Stock issuable under the Plan. As of June 30, 2022 and 2021, 1,914 thousand and 698 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”) provided for the grant of stock options to employees hired in connection with an acquisition in 2018 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, of which 760 thousand were granted. No further grants may be made under the Inducement Plan. All awards issued under the Inducement 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 $0.9 million and $2.2 million for the three and six months ended June 30, 2022, respectively, and $1.4 million and $2.7 million for the three and six months ended June 30, 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 June 30, 2022 and 2021:


	June 30, 2022		June 30, 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 June 30, 2022 was $9.14 per option. At June 30, 2022, total unrecognized compensation cost related to unvested stock options was $4.8 million and is expected to be recognized over a weighted-average period of 2.1 years.


	Stock Options (in 000's)	Weighted Average Exercise Price		Aggregate Intrinsic Value (in 000's)		Weighted Average Remaining Contractual Life (years)
Outstanding at January 1, 2020	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		$	10
Forfeited	(21)	28.93
Cancelled	(1)	35.66
Outstanding at June 30, 2022	1,780	$	26.39	$	198	6.8
Options exercisable at June 30, 2022	1,183

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 June 30, 2022, total unrecognized compensation cost related to unvested RSUs was $20.3 million and is expected to vest over a weighted average 3.2 years.

The fair value of these equity awards is amortized to equity based compensation expense over the vesting period, which totaled $2.0 million and $4.4 million for the three and six months ended June 30, 2022, respectively, and $1.0 million and $1.8 million for the three and six months ended June 30, 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 June 30, 2022.


	Number of Shares (in 000's)	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	317	$	22.91
Granted	268	37.91
Settled	(103)	24.81
Forfeited	(23)	26.02
Outstanding at December 31, 2021	459	$	31.08
Granted	795	20.42
Settled	(187)	28.31
Forfeited	(62)	31.72
Nonvested RSUs at June 30, 2022	1,004	$	23.19

Stockholders’ Equity	6 Months Ended
Stockholders’ Equity	Jun. 30, 2022
Stockholders' Equity Note [Abstract]
Stockholders’ Equity	Stockholders’ Equity Exchanges During the six months ended June 30, 2022 holders of Class B common stock and LLC Interests exercised exchange rights and exchanged 20 thousand Class B common shares and corresponding LLC Interests for newly issued Class A common stock. The LLC Agreement generally allows for exchanges on the last day of each calendar month.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Non-Controlling Interests

6 Months Ended

Jun. 30, 2022

Noncontrolling Interest [Abstract]

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
$'s in 000's	LLC Owners	PetIQ, Inc.	Total	LLC 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		145	145
Exchange transactions	(20)	20	—
As of June 30, 2022	252	29,304	29,556	0.9	%	99.1	%

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

For the three and six months ended June 30, 2022 the Company owned a weighted average of 99.1%, of Holdco, and for the three and six months ended June 30, 2021 the Company owned a weighted average of 97.5% and 94.4%, respectively.

Customer Concentration	6 Months Ended
Customer Concentration	Jun. 30, 2022
Risks and Uncertainties [Abstract]
Customer Concentration	Customer Concentration The Company has significant exposure to customer concentration. During the three and six months ended June 30, 2022, three customers individually accounted for more than 10% of sales, comprising 48% and 43% of net sales, respectively for such periods. During the three and six months ended June 30, 2021 two and one customers individually accounted for more than 10% of sales, comprising 33% and 26% of net sales in both such periods. At June 30, 2022 three Products segment customers individually accounted for more than 10% of outstanding trade receivables, and accounted for 66% of outstanding trade receivables, net. At December 31, 2021 one Products segment customers individually accounted for more than 10% of outstanding trade receivables, and accounted for 47% of outstanding trade receivables, net.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation Contingencies The Company records a liability when a particular contingency is both probable and estimable. If the probable loss cannot be reasonably estimated, no accrual is recorded, but the loss contingency and the reasons to the effect that it cannot be reasonably estimated are disclosed. If a loss is reasonably possible, the Company will provide disclosure to that affect. As of June 30, 2022 and December 31, 2021 the Company had $1.2 million and $3.5 million accrued on the condensed consolidated balance sheet, respectively. The Company expenses legal costs as incurred within selling, general and administrative expenses on the condensed consolidated statements of operations. During the three months ended June 30, 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, the settlement and final payment are expected to be finalized in the three months ended September 30, 2022. Additionally, during the three months ended June 30, 2022, the Company settled a lawsuit brought by a former supplier to the Company related to the redemption of ownership interest for $5.5 million. The Company had an accrued obligation of $4.5 million related to the lawsuit recorded as of March 31, 2022. During the three months ended June 30, 2022, the Company recorded an additional $1.0 million of expense in the condensed consolidated statements of operations and paid $5.5 million in full satisfaction of the lawsuit. 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

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

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

- 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.

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+ Details

Related Parties	6 Months Ended
Related Parties	Jun. 30, 2022
Related Party Transactions [Abstract]
Related Parties	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 generally paid directly to the relevant insurance company, amounted to $6.9 million for policies that cover the three and six months ended June 30, 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 was paid $0.06 million and $0.1 million for the three and six months ended June 30, 2022 and June 30, 2021, respectively.

Principal Business Activity and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2022
Accounting Policies [Abstract]
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.

Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of components of long term debt

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


$'s in 000's	June 30, 2022		December 31, 2021
Convertible Notes	$	143,750	$	143,750
Term loans	297,000		298,500
Revolving credit facility	5,000		—
Other Debt	21,635		23,518
Net discount on debt and deferred financing fees	(9,477)		(10,418)
	$	457,908	$	455,350
Less current maturities of long-term debt	(7,004)		(6,880)
Total long-term debt	$	450,904	$	448,470

Future maturities of long-term debt, excluding the net discount on debt, deferred financing fees and contingent notes

Future maturities of long-term debt, excluding the discount on debt and deferred financing fees, as of June 30, 2022, are as follows:


($'s in 000's)
Remainder of 2022	$	4,385
2023	7,124
2024	7,426
2025	3,600
2026	152,350
Thereafter	292,500

- 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.

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+ Details

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of components of lease expense

The components of lease expense consists of the following:


	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
Finance lease cost
Amortization of right-of-use assets	$	458	$	803	$	983	$	1,369
Interest on lease liabilities	57		123		121		214
Operating lease cost	1,737		1,332		3,314		2,624
Variable lease cost(1)	266		309		781		615
Short-term lease cost	8		2		13		6
Sublease income	(65)		(65)		(130)		(108)
Total lease cost	$	2,461	$	2,504	$	5,082	$	4,720

(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

Other information related to leases was as follows as of:


	June 30, 2022	June 30, 2021
Weighted-average remaining lease term (years)
Operating leases	3.59	4.13
Finance leases	2.19	2.62
Weighted-average discount rate
Operating leases	4.5%	5.2%
Finance leases	4.5%	4.8%

Summary of annual future commitments under non-cancelable leases

Annual future commitments under non-cancelable leases as of June 30, 2022, consist of the following:


	Lease Obligations
$'s in 000's	Operating Leases		Finance Leases
Remainder of 2022	$	3,564	$	819
2023	7,137		1,702
2024	5,613		613
2025	4,584		239
2026	2,230		73
Thereafter	151		—
Total minimum future obligations	$	23,278	$	3,446
Less interest	(1,685)		(174)
Present value of net future minimum obligations	21,594		3,272
Less current lease obligations	(6,334)		(1,442)
Long-term lease obligations	$	15,259	$	1,830

Supplemental cash flow information


$'s in 000's	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	121	$	214
Operating cash flows from operating leases	3,386		2,525
Financing cash flows from finance leases	744		1,226
(Noncash) right-of-use assets obtained in exchange for lease obligations
Operating leases	3,620		2,810
Finance leases	59		141

Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

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

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


	Three months ended June 30,				Six months ended June 30,
(in 000's, except for per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	4,678	$	4,034	$	7,838	$	6,420
Less: net income attributable to non-controlling interests	46		8		75		361
Net income attributable to PetIQ, Inc. — basic and diluted	4,632		4,026		7,763		6,059
Denominator:
Weighted-average shares of Class A common stock outstanding — basic	29,283		28,491		29,223		27,444
Dilutive effects of stock options that are convertible into Class A common stock	32		518		47		470
Dilutive effect of RSUs	14		147		34		145

Weighted-average shares of Class A common stock outstanding — diluted	29,329		29,156		29,304		28,059

Earnings per share of Class A common stock — basic	$	0.16	$	0.14	$	0.27	$	0.22
Earnings per share of Class A common stock — diluted	$	0.16	$	0.14	$	0.26	$	0.22

Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-based Payment Arrangement [Abstract]

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

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 June 30, 2022 and 2021:


	June 30, 2022		June 30, 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	%

(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


	Stock Options (in 000's)	Weighted Average Exercise Price		Aggregate Intrinsic Value (in 000's)		Weighted Average Remaining Contractual Life (years)
Outstanding at January 1, 2020	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		$	10
Forfeited	(21)	28.93
Cancelled	(1)	35.66
Outstanding at June 30, 2022	1,780	$	26.39	$	198	6.8
Options exercisable at June 30, 2022	1,183

Summary of RSU activity

The following table summarizes the activity of the Company’s RSUs for the period ended June 30, 2022.


	Number of Shares (in 000's)	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	317	$	22.91
Granted	268	37.91
Settled	(103)	24.81
Forfeited	(23)	26.02
Outstanding at December 31, 2021	459	$	31.08
Granted	795	20.42
Settled	(187)	28.31
Forfeited	(62)	31.72
Nonvested RSUs at June 30, 2022	1,004	$	23.19

Non-Controlling Interests (Tables)

6 Months Ended

Jun. 30, 2022

Noncontrolling Interest [Abstract]

Summary of noncontrolling interest

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


	LLC Interests held			% of Total
$'s in 000's	LLC Owners	PetIQ, Inc.	Total	LLC 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		145	145
Exchange transactions	(20)	20	—
As of June 30, 2022	252	29,304	29,556	0.9	%	99.1	%

Segments (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

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		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

Summary of reconciles segment adjusted ebitda to pretax net income

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.

Long-lived assets by geographic areas

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

Principal Business Activity and Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2022 distributionCenter location state segment
Accounting Policies [Abstract]
Number of points of distribution \| distributionCenter	60,000
Number of retail pharmacy locations \| location	2,600
Number of states in which the entity provides veterinary services to pet owners \| state	41
Number of reportable segments \| segment	2

Debt - Narrative (Details) - USD ($) $ in Millions		6 Months Ended
Debt - Narrative (Details) - USD ($) $ in Millions	Apr. 13, 2021	Jun. 30, 2022
Senior Secured Asset-Based Revolving Credit Facility
Debt
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		2.89%
Unused facility fee (as a percent)		0.35%
Senior Secured Term Loan Facility
Debt
Maximum borrowing capacity	$ 300.0
Line of credit facility, interest rate at period end		5.50%
Floor rate	0.50%
Percentage of periodic payment, principal		0.25%
Senior Secured Term Loan Facility \| LIBOR \| Minimum
Debt
Variable interest rate, basis points spread over variable reference rate (as a percent)	3.25%
Senior Secured Term Loan Facility \| LIBOR \| Maximum
Debt
Variable interest rate, basis points spread over variable reference rate (as a percent)	4.25%
Notes Payable Vip Acquisition
Debt
Wrote off deferred financing fees to loss on debt extinguishment		$ 5.5
Transaction cost on termination of debt instrument		$ 0.9

Debt - Amended & Restated Credit Agreement (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt
Long-term debt	$ 457,908	$ 455,350
Future maturities of long-term debt
Remainder of 2022	4,385
2023	7,124
2024	7,426
2025	3,600
2026	152,350
Thereafter	$ 292,500

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Debt - Long term debt schedule (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt
Long-term debt	$ 457,908	$ 455,350
Other debt	21,635	23,518
Net discount on debt and deferred financing fees	(9,477)	(10,418)
Less current maturities of long-term debt	(7,004)	(6,880)
Long-term debt, less current installments	450,904	448,470
Term loans
Debt
Outstanding balance	297,000	298,500
Revolving credit facility
Debt
Outstanding balance	5,000	0
Convertible Notes
Debt
Outstanding balance	$ 143,750	$ 143,750

Leases - Narrative (Details)	Jun. 30, 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		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Lease cost
Amortization of right-of-use assets	$ 458	$ 803	$ 983	$ 1,369
Interest on lease liabilities	57	123	121	214
Operating lease cost	1,737	1,332	3,314	2,624
Variable lease cost	266	309	781	615
Short-term lease cost	8	2	13	6
Sublease income	(65)	(65)	(130)	(108)
Total lease cost	$ 2,461	$ 2,504	$ 5,082	$ 4,720
Weighted-average remaining lease term (years)
Operating leases	3 years 7 months 2 days	4 years 1 month 17 days	3 years 7 months 2 days	4 years 1 month 17 days
Finance leases	2 years 2 months 8 days	2 years 7 months 13 days	2 years 2 months 8 days	2 years 7 months 13 days
Weighted-average discount rate
Operating leases	4.50%	5.20%	4.50%	5.20%
Finance leases	4.50%	4.80%	4.50%	4.80%

Leases - Annual future commitments under non-cancelable leases (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Operating Leases
Remainder of 2022	$ 3,564
2023	7,137
2024	5,613
2025	4,584
2026	2,230
Thereafter	151
Total minimum future obligations	23,278
Less interest	(1,685)
Present value of net future minimum obligations	21,594
Less current lease obligations	(6,334)	$ (6,500)
Operating leases, less current installments	15,259	14,843
Finance Leases
Remainder of 2022	819
2023	1,702
2024	613
2025	239
2026	73
Thereafter	0
Total minimum future obligations	3,446
Less interest	(174)
Present value of net future minimum obligations	3,272
Less current lease obligations	(1,442)
Long-term lease obligations	$ 1,830	$ 2,493

Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$ 121	$ 214
Operating cash flows from operating leases	3,386	2,525
Financing cash flows from finance leases	744	1,226
(Noncash) right-of-use assets obtained in exchange for lease obligations
Operating leases	3,620	2,810
Finance leases	$ 59	$ 141

Income Tax (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Tax (Details) - USD ($) $ in Millions	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Effective tax rate	11.50%	(5.40%)	8.50%	(2.10%)
Deferred tax assets, valuation allowance	$ 106.3		$ 106.3		$ 106.3

Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net income	$ 4,678	$ 4,034	$ 7,838	$ 6,420
Less: net income attributable to non-controlling interests	46	8	75	361
Net income attributable to PetIQ, Inc.	$ 4,632	$ 4,026	$ 7,763	$ 6,059
Denominator:
Weighted-average shares of Class A common stock outstanding -- basic (in shares)	29,283	28,491	29,223	27,444
Weighted-average shares of Class A common stock outstanding - diluted (in shares)	29,329	29,156	29,304	28,059
Earnings Per Share
Loss per share of Class A common stock - basic (in dollars per share)	$ 0.16	$ 0.14	$ 0.27	$ 0.22
Loss per share of Class A common stock - diluted (in dollars per share)	$ 0.16	$ 0.14	$ 0.26	$ 0.22
Stock options
Denominator:
Dilutive effect of share-based payment arrangements (in shares)	32	518	47	470
RSU
Denominator:
Dilutive effect of share-based payment arrangements (in shares)	14	147	34	145

Earnings Per Share - Narrative (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock options
Dilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive shares excluded from computation of diluted earnings per share (in shares)	1,531	480	1,531	652
RSU
Dilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive shares excluded from computation of diluted earnings per share (in shares)	845	88	803	88

Stock Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 22, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Stock Based Compensation
Stock options granted (in shares)				37		354
Vesting percentage on each anniversary of the grant date				25.00%
Maximum term for stock options				6 years 3 months	6 years 3 months
Stock based compensation expense		$ 2,843	$ 2,439	$ 6,666	$ 4,561
Weighted average grant date fair value of stock options granted (in dollars per share)				$ 9.14
Unrecognized compensation cost related to unvested stock options		$ 4,800		$ 4,800
Unrecognized compensation cost related to unvested options, recognized weighted-average period				2 years 1 month 6 days
Class A common stock
Stock Based Compensation
Number of shares reserved (in shares)		800		800
Stock options granted (in shares)				760
Class A common stock \| Omnibus Plan
Stock Based Compensation
Number of shares increase per amendment (in shares)	1,890
Shares reserved for future issuance (in shares)		5,804		5,804
Share available for issuance (in shares)		1,914	698	1,914	698
Maximum
Stock Based Compensation
Maximum term for stock options				10 years
Stock options
Stock Based Compensation
Stock based compensation expense		$ 900	$ 1,400	$ 2,200	$ 2,700

Stock Based Compensation - Weighted Average Assumptions (Details)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Share-based Payment Arrangement [Abstract]
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	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock Options (in 000's)
Stock options outstanding - beginning balance (in shares)	1,768	2,086
Stock options granted (in shares)	37	354
Stock option exercised (in shares)	(2)	(583)
Stock Options forfeited (in shares)	(21)	(64)
Stock options cancelled (in shares)	(1)	(25)
Stock options outstanding - ending balance (in shares)	1,780	1,768	2,086
Options exercisable (in shares)	1,183
Weighted Average Exercise Price
Weighted average exercise price outstanding - beginning balance (in dollars per share)	$ 26.51	$ 23.93
Weighted average exercise price - granted (in dollars per share)	21.91	35.66
Weighted average exercise price - exercised (in dollars per share)	19.49	23.05
Weighted average exercise price - forfeited (in dollars per share)	28.93	24.84
Weighted average exercise price - cancelled (in dollars per share)	35.66	25.70
Weighted average exercise price outstanding - ending balance (in dollars per share)	$ 26.39	$ 26.51	$ 23.93
Aggregate Intrinsic Value
Aggregate intrinsic value of shares outstanding, period start	$ 2,897	$ 30,302
Aggregate intrinsic value - exercised	10	8,499
Aggregate intrinsic value of shares outstanding, period end	$ 198	$ 2,897	$ 30,302
Weighted average remaining contractual life (years)	6 years 9 months 18 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		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Unrecognized compensation cost related to unvested stock options	$ 4,800		$ 4,800
Stock based compensation expense	2,843	$ 2,439	6,666	$ 4,561
RSU
Unrecognized compensation cost related to unvested stock options	20,300		$ 20,300
Vesting period			3 years 2 months 12 days
Stock based compensation expense	$ 2,000	$ 1,000	$ 4,400	$ 1,800
Number of Shares
Beginning Balance (in shares)			459	317	317
Granted (in shares)			795		268
Settled (in shares)			(187)		(103)
Forfeited (in shares)			(62)		(23)
Ending balance (in shares)	1,004		1,004		459
Weighted Average Grant Date Fair Value
Beginning Balance (in dollars per share)			$ 31.08	$ 22.91	$ 22.91
Granted (in dollars per share)			20.42		37.91
Settled (in dollars per share)			28.31		24.81
Forfeited (in dollars per share)			31.72		26.02
Ending balance (in dollars per share)	$ 23.19		$ 23.19		$ 31.08

Stockholders’ Equity (Details) shares in Thousands	6 Months Ended
Stockholders’ Equity (Details) shares in Thousands	Jun. 30, 2022 shares
Stockholders' Equity Note [Abstract]
Exchange of common shares (in shares)	20

Non-Controlling Interests (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Exchange transactions (in shares)			20
Continuing LLC Owners
Beginning common stock, shares outstanding (in shares)			272	3,040	3,040
Stock based compensation adjustments (in shares)					0
Exchange transactions (in shares)			20		2,768
Ending common stock, shares outstanding (in shares)	252		252		272
Amended Holdco LLC Agreement
Beginning common stock, shares outstanding (in shares)			29,411	28,751	28,751
Stock based compensation adjustments (in shares)			145		660
Exchange transactions (in shares)			0		0
Ending common stock, shares outstanding (in shares)	29,556		29,556		29,411
Holdco
Weighted average ownership percentage in Holdco	99.10%	97.50%	99.10%	94.40%
Continuing LLC Owners
Ownership interest by continuing LLC owners	0.90%		0.90%		0.90%	10.60%
PetIQ
Beginning common stock, shares outstanding (in shares)			29,139	25,711	25,711
Stock based compensation adjustments (in shares)			145		660
Exchange transactions (in shares)			20		2,768
Ending common stock, shares outstanding (in shares)	29,304		29,304		29,139
Ownership interest in Holdco	99.10%		99.10%		99.10%	89.40%

Customer Concentration (Details)	3 Months Ended		6 Months Ended		12 Months Ended
Customer Concentration (Details)	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Customer concentrations \| Sales \| Three Customers
Customer Concentration
Concentration risk	48.00%
Customer concentrations \| Sales \| One Customer
Customer Concentration
Concentration risk			43.00%	26.00%
Customer concentrations \| Sales \| Two Customers
Customer Concentration
Concentration risk		33.00%
Credit concentrations \| Accounts receivable \| Three Customers
Customer Concentration
Concentration risk			66.00%
Credit concentrations \| Accounts receivable \| One Customer
Customer Concentration
Concentration risk					47.00%

Commitments and Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021
Litigation Contingencies
Liability recorded	$ 1.2		$ 3.5
Mediation With Third Party
Litigation Contingencies
Liability recorded				$ 1.4
Lawsuit By Former Supplier For Redemption Of Ownership Interest
Litigation Contingencies
Liability recorded		$ 4.5
Litigation settlement, amount award to other party	5.5
Loss contingency accrual, provision	1.0
Loss contingency accrual, payments	$ 5.5

Segments - Additional Information (Details)	6 Months Ended
Segments - Additional Information (Details)	Jun. 30, 2022 segment
Segment Reporting [Abstract]
Number of operating segments	2

Segments - Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segments
Net Sales	$ 252,014	$ 271,011	$ 527,709	$ 525,358
Adjusted EBITDA	27,582	34,359	59,177	61,220
Depreciation expense	3,515	3,143	7,197	6,274
Capital expenditures	2,348	9,977	8,026	18,302
Products
Segments
Net Sales	219,014	242,857	466,764	472,891
Services
Segments
Net Sales	33,000	28,154	60,945	52,467
Operating Segments \| Products
Segments
Net Sales	219,014	242,857	466,764	472,891
Adjusted EBITDA	43,380	48,187	91,289	86,979
Depreciation expense	1,028	991	2,038	1,931
Capital expenditures	1,235	685	4,237	955
Operating Segments \| Services
Segments
Net Sales	33,000	28,154	60,945	52,467
Adjusted EBITDA	4,740	3,028	7,824	5,124
Depreciation expense	1,635	1,288	3,285	2,470
Capital expenditures	778	4,254	2,423	6,633
Unallocated Corporate
Segments
Adjusted EBITDA	(20,538)	(16,856)	(39,936)	(30,883)
Depreciation expense	852	864	1,874	1,873
Capital expenditures	$ 335	$ 5,038	$ 1,366	$ 10,714

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Segments - Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	$ 27,582	$ 34,359	$ 59,177	$ 61,220
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	(156)	(86)	(156)	(92)
Loss on extinguishment and related costs	0	(6,438)	0	(6,438)
Stock based compensation expense	(2,843)	(2,439)	(6,666)	(4,561)
Non same store adjustment	(3,466)	(5,087)	(10,631)	(10,735)
Integration costs	(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
Unallocated Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	(20,538)	(16,856)	(39,936)	(30,883)
Products \| Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	43,380	48,187	91,289	86,979
Services \| Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Adjusted EBITDA	$ 4,740	$ 3,028	$ 7,824	$ 5,124

Segments - Supplemental revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segments
Net Sales	$ 252,014	$ 271,011	$ 527,709	$ 525,358
Products
Segments
Net Sales	219,014	242,857	466,764	472,891
Services
Segments
Net Sales	33,000	28,154	60,945	52,467
United States
Segments
Net Sales	250,285	269,051	523,812	521,940
United States \| Products
Segments
Net Sales	217,285	240,897	462,867	469,473
United States \| Services
Segments
Net Sales	33,000	28,154	60,945	52,467
Foreign
Segments
Net Sales	1,729	1,960	3,897	3,418
Foreign \| Products
Segments
Net Sales	1,729	1,960	3,897	3,418
Foreign \| Services
Segments
Net Sales	$ 0	$ 0	$ 0	$ 0

- Definition

+ References

+ Details

Segments - Property, plant, and equipment by geographic location (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	$ 76,691	$ 76,613
United States
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	73,389	75,315
Europe
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	$ 3,302	$ 1,298

Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
Related Parties (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Jun. 30, 2022
Acadia Investor Relations L LC
Related Parties
Related party transaction, expenses from transactions with related party	$ 60	$ 100
Insurance Policies With Chris Christensen
Related Parties
Premium expense	$ 6,900	$ 6,900