PetIQ, Inc. (“PetIQ” or the “Company”) (Nasdaq: PETQ), a leading
pet medication, product and wellness company, today reported
financial results for the second quarter and six months ended June
30, 2024.
Cord Christensen, PetIQ’s Founder and CEO, commented, “We are
very pleased to report another quarter of record financial results.
The strength of PetIQ's brands fueled second quarter profitability
that exceeded our expectations. We believe these results
demonstrate the resilience of the pet medication and health and
wellness categories in which we compete. The strategic marketing
investments and operational initiatives our team is executing on
across the organization are delivering results and we expect them
to support our long-term growth and success."
Second Quarter 2024 Highlights Compared to Prior Year
Period
- Record net sales of $328.9 million, an increase of 4.6%, and
in-line with the Company's guidance of $325.0 million to $335.0
million
- Product segment net sales of $291.2 million, an increase of
4.7%
- Net sales for PetIQ’s manufactured products increased 15.7% and
outperformed the Company's growth expectations for the quarter
- Services segment net sales of $37.7 million, an increase of
3.7%
- Gross profit of $88.3 million, an increase of 19.5%
- Gross margin increased 330 basis points to 26.8%
- Record net income of $15.3 million, or earnings per diluted
share ("EPS") of $0.49, an increase of 51.1%
- Record adjusted net income of $22.7 million, or adjusted EPS of
$0.70, an increase of 52.2%
- Record EBITDA of $32.7 million, an increase of 11.8%
- EBITDA margin increased 60 basis points to 9.9%
- Record Adjusted EBITDA of $39.0 million, an increase of 19.0%,
and above the Company's guidance of $34.0 million to $36.0
million
- Adjusted EBITDA margin increased 150 basis points to 11.9%
Six Month 2024 Highlights Compared to Prior Year
Period
- Record net sales of $637.4 million, an increase of 5.3%
- Products segment net sales of $568.1 million, an increase of
5.8%
- Net sales for PetIQ’s manufactured products increased 16.8% and
outperformed the Company's growth expectations for the first six
months of 2024
- Services segment net sales of $69.3 million, an increase of
2.1%
- Gross profit was $162.8 million, an increase of 19.6%
- Record net income of $30.2 million, or EPS of $0.96, an
increase of 46.6%
- Record adjusted net income of $41.2 million, or adjusted EPS of
$1.28, an increase of 34.7%
- Record EBITDA of $64.8 million, an increase of 15.9%
- Record Adjusted EBITDA of $74.3 million, an increase of
16.9%
- Adjusted EBITDA margin increased 120 basis points to 11.7%
Second Quarter 2024 Financial Results
Net sales were $328.9 million for the second quarter of 2024, an
increase of 4.6% compared to net sales of $314.5 million in the
prior year period, driven by an increase in net sales in both the
Products and Services segments.
Products segment net sales increased 4.7% to $291.2 million for
the second quarter of 2024 from $278.2 million in the prior year
period, primarily reflecting an increase in sales from flea and
tick, and health and wellness product categories. Net sales for
PetIQ’s manufactured products outperformed the Company's growth
expectations for the second quarter of 2024 with an increase of
15.7% compared to the prior year period.
Services segment net sales for the second
quarter of 2024 increased 3.7% to $37.7 million from $36.4 million
in the prior year period driven by an increase in mobile community
clinic sales, partially offset by the closure of 149 wellness
centers in the second half of 2023 associated with the previously
disclosed Services segment optimization.
Second quarter 2024 gross profit was $88.3 million, an increase
of 19.5%, compared to $73.9 million in the prior year period. Gross
margin increased 330 basis points to 26.8% from 23.5% in the prior
year period, primarily from an increase in sales of PetIQ's higher
margin manufactured products as a result of favorable product and
channel mix. The Company also benefited from operational
efficiencies in the Company's facilities and from its Services
segment optimization.
Selling, general and administrative expenses
(“SG&A”) were $60.1 million for the second quarter of 2024
compared to $55.2 million in the prior year period. As a percentage
of net sales, SG&A was 18.3% for the second quarter of 2024, an
increase of 80 basis points compared to the prior year period.
Adjusted SG&A was $56.3 million for the second quarter of 2024
compared to $51.5 million in the prior year period. As a percentage
of net sales adjusted SG&A was 17.1% for the second quarter of
2024, an increase of 70 basis points, compared to the prior year
period primarily as a result of a planned increase in marketing
expense of $5.0 million to support PetIQ's manufactured
brands.
Net income was $15.3 million, or EPS of $0.49, based on a
diluted share count of 34.9 million for the second quarter of 2024,
an increase of 51.1%, compared to net income of $9.5 million, or
EPS of $0.32, based on a diluted share count of 29.4 million in the
prior year period. The year-over-year increase in the Company's
diluted share count is due to the Company's use of the if-converted
method under accounting rule ASC 260, "Earnings Per Share." The
Company does not currently intend or expect to satisfy its
convertible notes with common stock. Included in net income for the
second quarter of 2024 is a $2.6 million loss associated with the
sale of the Company's foreign subsidiary, Mark & Chappell on
April 30, 2024.
Adjusted net income for the second quarter of 2024 was $22.7
million and adjusted EPS was $0.70, an increase of 52.2%, compared
to adjusted net income of $13.4 million, and adjusted EPS of $0.46
in the prior year period.
For the second quarter of 2024, EBITDA increased 11.8% to $32.7
million and EBITDA margin increased 60 basis points to 9.9%
compared to the prior year period. Second quarter Adjusted EBITDA
was $39.0 million, an increase of 19.0%, compared to $32.9 million
in the prior year period. Adjusted EBITDA margin increased 150
basis points to 11.9% for the second quarter of 2024 compared to
10.4% in the prior year period.
Cash Flow and Balance Sheet
The Company ended the quarter with total cash and cash
equivalents of $84.1 million. The Company’s total debt was $442.6
million as of June 30, 2024. The Company had total liquidity, which
it defines as cash on hand plus debt availability, of $209.1
million as of June 30, 2024. The Company's net leverage as measured
under the Company's credit agreement was 3.0x as of June 30, 2024,
compared to 3.6x as of June 30, 2023, as a result of the Company's
increased earnings and improvements in working capital. Please
refer to the financial tables within this press release for a
calculation of the Company’s net leverage under the credit
agreement.
Adjusted SG&A, adjusted net income, adjusted EPS, EBITDA,
adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial
measures. The Company believes these non-GAAP financial measures
provide useful additional information to investors about current
trends in the Company's operations and are useful for
period-over-period comparisons of operations. In addition,
management uses these non-GAAP financial measures to assess
operating performance and for business planning purposes. See
“Non-GAAP Financial Measures” for a definition of these measures
and the financial tables that accompany this release for a
reconciliation to the most comparable GAAP measure.
PetIQ Enters into Definitive Agreement to be Acquired by
Bansk Group
In a separate press release issued today, PetIQ also announced
that it has entered into a definitive merger agreement (the
“Agreement”) pursuant to which Bansk Group, a consumer-focused
private investment firm dedicated to building distinctive consumer
brands, will acquire all of the outstanding shares of PetIQ’s
common stock for $31.00 per share. The proposed all-cash
transaction is expected to close in the fourth quarter of 2024,
subject to the approval of PetIQ stockholders and the satisfaction
of other customary closing conditions. For further information
regarding the proposed transaction, please see PetIQ's Current
Report on Form 8-K, which will be filed in connection with this
definitive agreement announcement.
As result of the Agreement, PetIQ has suspended its 2024
financial outlook and will no longer host its earnings conference
call and webcast previously scheduled for today, Wednesday, August
7, 2024, at 4:30 p.m. EST.
About PetIQ
PetIQ is a leading pet medication, health and wellness company
delivering a smarter way for pet parents to help their pets live
their best lives through convenient access to affordable products
and veterinary services. The Company's product business engages
with pet parents through retail and e-commerce sales channels with
its branded and distributed pet medications as well as health and
wellness items. PetIQ manufactures and distributes pet products
from its world-class facilities in Omaha, Nebraska, Springville,
Utah and Daytona Beach, Florida. The Company’s veterinarian
services offering operates in over 2,600 mobile community clinic
locations and wellness centers hosted at retail partners in 39
states. PetIQ believes that pets are an important part of the
family and deserve the best products and care we can provide
them.
Contact: katie.turner@petiq.com
or 208.513.1513Media: kara.schafer@petiq.com or
407.929.6727
Notice Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,”
“could” or other similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not
limited to, statements regarding our business and growth
strategies, our future financial performance and the timeline for
closing the transaction with the Bansk Group (the “proposed
transaction”). These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of Company management and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as,
and must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and may differ from assumptions. Many actual
events and circumstances are beyond the control of the Company.
These forward-looking statements are subject to a number of risks
and uncertainties, including general economic or market conditions,
including inflation and interest rates; overall consumer spending
in the industry; our ability to successfully grow our business
through acquisitions and our ability to integrate acquisitions; our
dependency on a limited number of customers; our ability to
implement our growth strategy effectively; our ability to continue
to grow our Services segment; disruptions in our manufacturing,
shipping, transportation and distribution chains; competition from
veterinarians and others in our industry; reputational damage to
our brands; the effectiveness of our marketing and trade promotion
programs; recalls or withdrawals of our products or product
liability claims; our ability to introduce new products and improve
existing products; our ability to protect our intellectual
property; costs associated with governmental regulation; our
ability to keep and retain key employees; our ability to sustain
profitability; cyber security risks, including breaches that result
in business interruption and data loss; our substantial
indebtedness and ability to raise additional capital as needed; the
timing, receipt and terms and conditions of any required
governmental and regulatory approvals of the proposed transaction
that could delay the consummation of the proposed transaction or
cause the parties to abandon the proposed transaction; the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement entered into
in connection with the proposed transaction; the possibility that
the Company’s stockholders may not approve the proposed
transaction; the risk that the parties to the merger agreement may
not be able to satisfy the conditions to the proposed transaction
in a timely manner or at all; risks related to disruption of
management time from ongoing business operations due to the
proposed transaction; the risk that any announcements relating to
the proposed transaction could have adverse effects on the market
price of the common stock of the Company; the risk of any
unexpected costs or expenses resulting from the proposed
transaction; the risk of any litigation relating to the proposed
transaction; and the risk that the proposed transaction and its
announcement could have an adverse effect on the ability of the
Company to retain and hire key personnel and to maintain
relationships with customers, vendors, partners, employees,
stockholders and other business relationships and on its operating
results and business generally.
Further information on factors that could cause actual results
to differ materially from the results anticipated by the
forward-looking statements is included in the Company’s Annual
Report on Form 10‑K for the fiscal year ended December 31, 2023 and
other filings made by the Company from time to time with the
Securities and Exchange Commission. These filings, when available,
are available on the investor relations section of the Company’s
website at https://ir.petiq.com/ or on the SEC’s website at
https://www.sec.gov. If any of these risks materialize or any of
these assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. There may be additional risks that the Company
presently does not know of or that the Company currently believes
are immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. The
forward-looking statements included in this press release are made
only as of the date hereof. The Company assumes no obligation and
does not intend to update these forward-looking statements, except
as required by law.
Non-GAAP Financial Measures In addition to
financial results reported in accordance with U.S. GAAP, PetIQ uses
the following non-GAAP financial measures: adjusted SG&A,
adjusted net income, adjusted earnings per share, EBITDA, adjusted
EBITDA, and adjusted EBITDA margin.
Adjusted SG&A consists of SG&A adjusted for acquisition
costs, stock-based compensation expense, integration and business
transformation costs, and litigation expenses.
Adjusted net income consists of net income adjusted for tax
expense, impairment and other asset charges, acquisition costs,
stock-based compensation expense, integration and business
transformation costs, and litigation expenses. Adjusted net income
is utilized by management to evaluate the effectiveness of our
business strategies. Non-GAAP adjusted earnings per share is
defined as non-GAAP adjusted net income divided by the weighted
average number of shares of common stock outstanding during the
period.
EBITDA represents net income before interest, income taxes,
depreciation and amortization. Adjusted EBITDA represents EBITDA
plus adjustments for transactions that management does not believe
are representative of our core ongoing business including
acquisition costs, stock-based compensation expense, integration
and business transformation costs, impairment and other asset
charges, and litigation expenses. Adjusted EBITDA margin is
adjusted EBITDA stated as a percentage of total net sales.
Adjusted EBITDA is utilized by management as a factor in
evaluating the Company's performance and the effectiveness of our
business strategies. The Company presents EBITDA because it is a
necessary component for computing adjusted EBITDA.
We believe that the use of these non-GAAP measures provides
additional tools for investors to use in evaluating ongoing
operating results and trends. In addition, you should be aware when
evaluating these non-GAAP measures that in the future we may incur
expenses similar to those excluded when calculating these measures.
Our presentation of these measures should not be construed as an
inference that our future results will be unaffected by these or
other unusual or non-recurring items. Our computation of non-GAAP
measures may not be comparable to other similarly titled measures
computed by other companies, because all companies do not calculate
these non-GAAP measures in the same manner. Our management does
not, and you should not, consider the non-GAAP financial measures
in isolation or as an alternative to financial measures determined
in accordance with GAAP. The principal limitation of non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in our financial
statements. See a reconciliation of each non-GAAP measure to the
most comparable GAAP measure, in the financial tables that
accompany this release.
PetIQ, Inc.Condensed
Consolidated Balance Sheets(Unaudited, in 000’s
except for per share amounts)
|
|
|
|
|
|
|
June 30, 2024 |
|
December 31, 2023 |
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
84,130 |
|
|
$ |
116,369 |
|
Accounts receivable, net |
|
|
214,978 |
|
|
|
142,511 |
|
Inventories |
|
|
164,965 |
|
|
|
159,309 |
|
Other current assets |
|
|
6,972 |
|
|
|
12,645 |
|
Total current assets |
|
|
471,045 |
|
|
|
430,834 |
|
Property, plant and equipment, net |
|
|
53,845 |
|
|
|
57,097 |
|
Operating lease right of use assets |
|
|
16,804 |
|
|
|
19,079 |
|
Other non-current assets |
|
|
1,675 |
|
|
|
2,083 |
|
Intangible assets, net |
|
|
151,620 |
|
|
|
159,729 |
|
Goodwill |
|
|
199,404 |
|
|
|
199,404 |
|
Total assets |
|
$ |
894,393 |
|
|
$ |
868,226 |
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
142,230 |
|
|
$ |
139,264 |
|
Accrued wages payable |
|
|
14,175 |
|
|
|
16,734 |
|
Accrued interest payable |
|
|
1,130 |
|
|
|
6,636 |
|
Other accrued expenses |
|
|
12,357 |
|
|
|
10,692 |
|
Current portion of operating leases |
|
|
5,827 |
|
|
|
7,608 |
|
Current portion of long-term debt and finance leases |
|
|
6,959 |
|
|
|
8,595 |
|
Total current liabilities |
|
|
182,678 |
|
|
|
189,529 |
|
Operating leases, less current installments |
|
|
11,446 |
|
|
|
13,763 |
|
Long-term debt, less current installments |
|
|
436,011 |
|
|
|
437,820 |
|
Finance leases, less current installments |
|
|
343 |
|
|
|
516 |
|
Other non-current liabilities |
|
|
3,600 |
|
|
|
3,600 |
|
Total non-current liabilities |
|
|
451,400 |
|
|
|
455,699 |
|
Equity |
|
|
|
|
Additional paid-in capital |
|
|
392,169 |
|
|
|
387,349 |
|
Class A common stock, par value $0.001 per share, 125,000 shares
authorized; 29,999 and 29,570 shares issued, respectively |
|
|
29 |
|
|
|
29 |
|
Class B common stock, par value $0.001 per share, 8,402 shares
authorized; 231 and 231 shares issued and outstanding,
respectively |
|
|
— |
|
|
|
— |
|
Class A treasury stock, at cost, 373 and 373 shares,
respectively |
|
|
(3,857 |
) |
|
|
(3,857 |
) |
Accumulated deficit |
|
|
(130,373 |
) |
|
|
(160,602 |
) |
Accumulated other comprehensive loss |
|
|
— |
|
|
|
(1,706 |
) |
Total stockholders' equity |
|
|
257,968 |
|
|
|
221,213 |
|
Non-controlling interest |
|
|
2,347 |
|
|
|
1,785 |
|
Total equity |
|
|
260,315 |
|
|
|
222,998 |
|
Total liabilities and equity |
|
$ |
894,393 |
|
|
$ |
868,226 |
|
PetIQ, Inc.Condensed
Consolidated Statements of Operations (Unaudited,
in 000’s, except for per share amounts)
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
Product sales |
|
$ |
291,200 |
|
|
$ |
278,167 |
|
|
$ |
568,091 |
|
|
$ |
537,160 |
|
Services sales |
|
|
37,741 |
|
|
|
36,380 |
|
|
|
69,293 |
|
|
|
67,858 |
|
Total net sales |
|
|
328,941 |
|
|
|
314,547 |
|
|
|
637,384 |
|
|
|
605,018 |
|
Cost of products sold |
|
|
212,650 |
|
|
|
210,428 |
|
|
|
421,713 |
|
|
|
411,330 |
|
Cost of services |
|
|
28,008 |
|
|
|
30,240 |
|
|
|
52,845 |
|
|
|
57,549 |
|
Total cost of sales |
|
|
240,658 |
|
|
|
240,668 |
|
|
|
474,558 |
|
|
|
468,879 |
|
Gross profit |
|
|
88,283 |
|
|
|
73,879 |
|
|
|
162,826 |
|
|
|
136,139 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
60,082 |
|
|
|
55,159 |
|
|
|
110,291 |
|
|
|
98,486 |
|
Impairment and other asset charges(1) |
|
|
2,620 |
|
|
|
— |
|
|
|
2,620 |
|
|
|
— |
|
Operating income |
|
|
25,581 |
|
|
|
18,720 |
|
|
|
49,915 |
|
|
|
37,653 |
|
Interest expense, net |
|
|
9,254 |
|
|
|
8,824 |
|
|
|
18,360 |
|
|
|
17,556 |
|
Other (income) expense, net |
|
|
(24 |
) |
|
|
151 |
|
|
|
(150 |
) |
|
|
123 |
|
Total other expense, net |
|
|
9,230 |
|
|
|
8,975 |
|
|
|
18,210 |
|
|
|
17,679 |
|
Pretax net income |
|
|
16,351 |
|
|
|
9,745 |
|
|
|
31,705 |
|
|
|
19,974 |
|
Income tax expense |
|
|
(885 |
) |
|
|
(192 |
) |
|
|
(1,212 |
) |
|
|
(640 |
) |
Net income |
|
|
15,466 |
|
|
|
9,553 |
|
|
|
30,493 |
|
|
|
19,334 |
|
Net income attributable to non-controlling interest |
|
|
144 |
|
|
|
85 |
|
|
|
264 |
|
|
|
167 |
|
Net income attributable to PetIQ, Inc. |
|
$ |
15,322 |
|
|
$ |
9,468 |
|
|
$ |
30,229 |
|
|
$ |
19,167 |
|
Net income per share attributable to PetIQ, Inc. Class A
common stock |
Basic |
|
$ |
0.52 |
|
|
$ |
0.32 |
|
|
$ |
1.03 |
|
|
$ |
0.66 |
|
Diluted |
|
$ |
0.49 |
|
|
$ |
0.32 |
|
|
$ |
0.96 |
|
|
$ |
0.66 |
|
Weighted Average shares of Class A common stock
outstanding |
Basic |
|
|
29,534 |
|
|
|
29,136 |
|
|
|
29,408 |
|
|
|
29,083 |
|
Diluted(2) |
|
|
34,940 |
|
|
|
29,373 |
|
|
|
34,949 |
|
|
|
29,218 |
|
(1) Impairment and other asset charges includes asset charges
associated with the Company's sale of its foreign subsidiary, Mark
& Chappell, on April 30, 2024. (2) Diluted weighted average
shares of Class A common stock outstanding is computed and
presented in accordance with the if-converted method under
accounting rule ASC 260, "Earnings Per Share," regarding the
Company’s convertible notes. The Company does not currently intend
or expect to satisfy its convertible notes with common stock.
PetIQ, Inc. Condensed
Consolidated Statements of Cash Flows(Unaudited,
in 000’s)
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
30,493 |
|
|
$ |
19,334 |
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities |
|
|
|
|
Depreciation and amortization of intangible assets and loan
fees |
|
|
15,834 |
|
|
|
19,769 |
|
Gain on disposition of property, plant, and equipment |
|
|
(219 |
) |
|
|
— |
|
Stock based compensation expense |
|
|
5,401 |
|
|
|
5,208 |
|
Impairment and other asset charges |
|
|
2,620 |
|
|
|
— |
|
Other non-cash activity |
|
|
2 |
|
|
|
(135 |
) |
Changes in assets and liabilities, net of business acquisition |
|
|
|
|
Accounts receivable |
|
|
(72,367 |
) |
|
|
(74,468 |
) |
Inventories |
|
|
(5,797 |
) |
|
|
2,901 |
|
Other assets |
|
|
1,568 |
|
|
|
(481 |
) |
Accounts payable |
|
|
2,564 |
|
|
|
40,320 |
|
Accrued wages payable |
|
|
(2,559 |
) |
|
|
252 |
|
Other accrued expenses |
|
|
(4,806 |
) |
|
|
1,703 |
|
Net cash (used in) provided by operating activities |
|
|
(27,266 |
) |
|
|
14,403 |
|
Cash flows from investing activities |
|
|
|
|
Proceeds from disposition of property, plant, and equipment |
|
|
726 |
|
|
|
— |
|
Purchase of property, plant, and equipment |
|
|
(3,221 |
) |
|
|
(4,128 |
) |
Proceeds from sale of business |
|
|
2,655 |
|
|
|
— |
|
Business acquisitions (net of cash acquired) |
|
|
— |
|
|
|
(27,634 |
) |
Net cash provided by (used in) investing activities |
|
|
160 |
|
|
|
(31,762 |
) |
Cash flows from financing activities |
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
50,000 |
|
|
|
35,000 |
|
Principal payments on long-term debt |
|
|
(53,800 |
) |
|
|
(38,800 |
) |
Principal payments on finance lease obligations |
|
|
(672 |
) |
|
|
(801 |
) |
Tax withholding payments on Restricted Stock Units |
|
|
(2,843 |
) |
|
|
(969 |
) |
Exercise of options to purchase Class A common stock |
|
|
2,304 |
|
|
|
— |
|
Net cash used in financing activities |
|
|
(5,011 |
) |
|
|
(5,570 |
) |
Net change in cash and cash equivalents |
|
|
(32,117 |
) |
|
|
(22,929 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(122 |
) |
|
|
101 |
|
Cash and cash equivalents, beginning of period |
|
|
116,369 |
|
|
|
101,265 |
|
Cash and cash equivalents, end of period |
|
$ |
84,130 |
|
|
$ |
78,437 |
|
PetIQ,
Inc.Reconciliation between Net Income and Adjusted
EBITDA(Unaudited, in 000’s)
|
For the Three Months Ended |
|
For the Six Months Ended |
$'s in 000's |
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
Net income |
$ |
15,466 |
|
|
$ |
9,553 |
|
|
$ |
30,493 |
|
|
$ |
19,334 |
|
Plus: |
|
|
|
|
|
|
|
Tax expense |
|
885 |
|
|
|
192 |
|
|
|
1,212 |
|
|
|
640 |
|
Depreciation |
|
3,160 |
|
|
|
4,164 |
|
|
|
6,602 |
|
|
|
7,685 |
|
Amortization |
|
3,907 |
|
|
|
6,477 |
|
|
|
8,159 |
|
|
|
10,739 |
|
Interest expense, net |
|
9,254 |
|
|
|
8,824 |
|
|
|
18,360 |
|
|
|
17,556 |
|
EBITDA |
$ |
32,672 |
|
|
$ |
29,210 |
|
|
$ |
64,826 |
|
|
$ |
55,954 |
|
EBITDA Margin |
|
9.9 |
% |
|
|
9.3 |
% |
|
|
10.2 |
% |
|
|
9.2 |
% |
Impairment and other asset charges(1) |
|
2,620 |
|
|
|
— |
|
|
|
2,620 |
|
|
|
— |
|
Acquisition costs(2) |
|
198 |
|
|
|
297 |
|
|
|
198 |
|
|
|
835 |
|
Stock based compensation expense |
|
2,792 |
|
|
|
2,743 |
|
|
|
5,401 |
|
|
|
5,208 |
|
Integration and business transformation costs(3) |
|
573 |
|
|
|
618 |
|
|
|
1,075 |
|
|
|
1,594 |
|
Litigation expenses |
|
193 |
|
|
|
— |
|
|
|
193 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
39,048 |
|
|
$ |
32,868 |
|
|
$ |
74,313 |
|
|
$ |
63,591 |
|
Adjusted EBITDA Margin |
|
11.9 |
% |
|
|
10.4 |
% |
|
|
11.7 |
% |
|
|
10.5 |
% |
PetIQ,
Inc.Reconciliation between Selling, General &
Administrative (“SG&A”) and Adjusted
SG&A(Unaudited, in 000’s, Except for
Percentages)
|
|
For the Three Months Ended |
|
For the Six Months Ended |
$'s in 000's |
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
SG&A |
|
$ |
60,082 |
|
|
$ |
55,159 |
|
|
$ |
110,291 |
|
|
$ |
98,486 |
|
SG&A % of Total Net Sales |
|
|
18.3 |
% |
|
|
17.5 |
% |
|
|
17.3 |
% |
|
|
16.3 |
% |
Less: |
|
|
|
|
|
|
|
|
Acquisition costs(2) |
|
|
198 |
|
|
|
297 |
|
|
|
198 |
|
|
|
835 |
|
Stock based compensation expense |
|
|
2,792 |
|
|
|
2,743 |
|
|
|
5,401 |
|
|
|
5,208 |
|
Integration and business transformation costs(3) |
|
|
573 |
|
|
|
618 |
|
|
|
1,075 |
|
|
|
1,594 |
|
Litigation expenses |
|
|
193 |
|
|
|
— |
|
|
|
193 |
|
|
|
— |
|
Adjusted SG&A |
|
$ |
56,326 |
|
|
$ |
51,501 |
|
|
$ |
103,424 |
|
|
$ |
90,849 |
|
Adj SG&A % of Total Net Sales |
|
|
17.1 |
% |
|
|
16.4 |
% |
|
|
16.2 |
% |
|
|
15.0 |
% |
PetIQ, Inc.Summary
Segment Results(Unaudited, in 000’s)
|
|
For the Three Months Ended |
|
For the Six Months Ended |
$'s in 000's |
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
Products segment sales |
|
$ |
291,200 |
|
$ |
278,167 |
|
$ |
568,091 |
|
$ |
537,160 |
Services segment sales: |
|
|
|
|
|
|
|
|
Same-store sales |
|
|
37,282 |
|
|
33,633 |
|
|
68,251 |
|
|
62,161 |
Non same-store sales |
|
|
459 |
|
|
2,747 |
|
|
1,042 |
|
|
5,697 |
Total services segment sales |
|
$ |
37,741 |
|
$ |
36,380 |
|
$ |
69,293 |
|
$ |
67,858 |
Total net sales |
|
$ |
328,941 |
|
$ |
314,547 |
|
$ |
637,384 |
|
$ |
605,018 |
PetIQ,
Inc.Reconciliation between Net Income and Adjusted
Net Income(Unaudited, in 000’s, except for per
share amounts)
|
For the Three Months Ended |
|
For the Six Months Ended |
$'s in 000's |
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
Net income |
$ |
15,466 |
|
$ |
9,553 |
|
$ |
30,493 |
|
$ |
19,334 |
Plus: |
|
|
|
|
|
|
|
Tax expense |
|
885 |
|
|
192 |
|
|
1,212 |
|
|
640 |
Impairment and other asset charges(1) |
|
2,620 |
|
|
— |
|
|
2,620 |
|
|
— |
Acquisition costs(2) |
|
198 |
|
|
297 |
|
|
198 |
|
|
835 |
Stock based compensation expense |
|
2,792 |
|
|
2,743 |
|
|
5,401 |
|
|
5,208 |
Integration and business transformation costs(3) |
|
573 |
|
|
618 |
|
|
1,075 |
|
|
1,594 |
Litigation expenses |
|
193 |
|
|
— |
|
|
193 |
|
|
— |
Adjusted Net income |
|
22,727 |
|
|
13,403 |
|
|
41,192 |
|
|
27,611 |
Plus: interest expense on Convertible Notes |
|
1,691 |
|
|
— |
|
|
3,379 |
|
|
— |
Adjusted Net income - diluted |
$ |
24,418 |
|
$ |
13,403 |
|
$ |
44,571 |
|
$ |
27,611 |
|
|
|
|
|
|
|
|
Non-GAAP adjusted EPS |
|
|
|
|
|
|
|
Basic |
$ |
0.77 |
|
$ |
0.46 |
|
$ |
1.40 |
|
$ |
0.95 |
Diluted |
$ |
0.70 |
|
$ |
0.46 |
|
$ |
1.28 |
|
$ |
0.95 |
Weighted Average shares of Class A common stock outstanding used to
compute non-GAAP adjusted EPS |
Basic |
|
29,534 |
|
|
29,136 |
|
|
29,408 |
|
|
29,083 |
Diluted |
|
34,940 |
|
|
29,373 |
|
|
34,949 |
|
|
29,218 |
(1) Impairment and other asset charges includes
asset charges associated with the Company's sale of its foreign
subsidiary, Mark & Chappell, on April 30, 2024.(2) Acquisition
costs include legal, accounting, banking, consulting, diligence,
and other costs related to completed and contemplated
acquisitions.(3) Integration and business transformation costs,
including personnel costs such as severance and retention bonuses,
consulting costs, contract termination costs and IT and ERP
implementation costs.
PetIQ, Inc.Calculation
of Net Leverage Ratio Under Term Loan B(Unaudited,
in 000’s, except for multiples)
$'s in 000's |
June 30, 2024 |
Total debt |
$ |
442,550 |
|
Total Capital Leases |
|
764 |
|
Less Cash |
|
(84,130 |
) |
Net Debt |
|
359,184 |
|
LTM Term Loan B defined EBITDA |
|
120,020 |
|
Term Loan B net leverage(1) |
|
3.0 |
x |
(1) Our Term Loan B documentation defines Adjusted
EBITDA as net income before interest, income taxes, depreciation
and amortization and a non-cash goodwill impairment charge, as
further adjusted for acquisition costs, loss on debt extinguishment
and related costs, stock based compensation expense, integration
costs, litigation expenses, and non same-store net income (loss),
which we refer to as “Term Loan B Adjusted EBITDA.” Term Loan B
Adjusted EBITDA is not a non-GAAP measure and is presented solely
for purposes of providing investors an understanding of the
Company’s financial condition and liquidity and should not be
relied upon for any purposes other than an understanding of the
Company’s financial condition and liquidity as it relates to the
Company’s Term Loan B.
PetIQ (NASDAQ:PETQ)
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De Jul 2024 a Ago 2024
PetIQ (NASDAQ:PETQ)
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De Ago 2023 a Ago 2024