Earnings call transcript Q1 2023

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Operator

Good day, and welcome to the PetIQ Inc.

First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to conference like Turner, to now Relations. Investor would turn over the Katie I ahead. go Please

Katie Turner

Cord Thank afternoon. quarter and call Financial Executive conference first joining Glasman, Zvi XXXX call and Chief are Officer; today's and On Good webcast. for earnings you us Officer. Chairman Chief Christensen, on PetIQ's

and laws. during management's Before statements of meaning in within that of and These are call on the beliefs securities based statements begin, expectations and forward-looking these actual we could remember management risks this current the materially the course statements. differ described please events uncertainties may forward-looking involve federal make those or that from

and to filed that the materially or company's Exchange and company's the for from on Report press other release refer issued expressed any from Form detailed risks today. time forward-looking reports to to the today discussion of XX-K results differ those Securities statements in made Commission Please time a could and Annual the actual cause implied with

Please today's financial non-GAAP refer measures. will note to call on certain management

GAAP. financial as accordance While for substitute non-GAAP most to a be will for financial information to considered measures useful non-GAAP intended of measures financial isolation release is the the the with comparable presentation in GAAP. or these Please provide in investors, this the to in measures for information with believes information today's company presented not a accordance refer reconciliation of prepared

a supplemental has on In reference. posted addition website PetIQ presentation its for

the to And with Christensen. that, I'd call over Cord turn to like

Cord Christensen

key and quarter with the joining our We financial will afternoon and today us to an highlights financial outlook. good quarter review Zvi I'll first for Katie, our results. you, you then results begin everyone. overview of Thank discuss appreciate

I answer and be Michael questions. your Zvi, to available Finally will

We to pleased our start with XXXX. are very

sales services well and us record solid million. the leverage $XXX.X the million businesses million quarter performed expansion net resulting has gross XXth first EBITDA outlook Roxie net and EBITDA. in Rocco helped adjusted SG&A the Net income acquisition for completed January quarter. cash. topped on first our adjusted achieve million and and $XX.X It $XXX to in sales for of team delivered we $XXX products in of above guidance quarter our quarterly complementary and Our strategic of our Both and margin

discussed we PetIQ's Roxie and dog Rocco call strong brand stain supplements a This growing a the premium which our and includes primarily As products. presence e-commerce offerings, in offering particularly on with into last channel and quarter, and with sales pet odor expands jerky also is treats. product today acquisition their super-premium

million we believe business to of grow We have introduce brick-and-mortar new retail e-commerce to growth and existing a distribution tremendous Rocco to e-commerce in to accelerate opportunity SKUs in Roxie's and beyond their sales $XXX increased and XXXX channels. segment's channels. compared for reflecting year The the across Products sales beyond net of prior and X.X% product period sales categories growth to broad-based all all

and amount disproportionate of broader capture to dramatically as outperformed of continue results. this were generated and importantly the the tick portfolio by flea brands and quarter over of flea the at When QX you during channels to the seen last XXXX. combined over-the-counter sales this strongest In the XX XX look first we've that consumption evidenced XX% year online over-the-counter a QX in tick our and category growth PetIQ's the sales category growth in category year-over-year was months of all

Nielsen look sales tick measured we've and for said the total you flea portion just a if at As category. the channel consistently only it's of

which tick category story complete competes. for does for a now result the PetIQ less XX% As the not and categories OTC tell the than and represents volume data of the results Nielsen in market flea

by PetIQ's market products been and valuable veterinarian services has and convenient unique believe needed in offering more We never parents. affordable the continue to position and pet

detail. Turning to in our segment more products

tick the saw outperformed is products best business. XXXX. manufactured critical We PetIQ The our Perrigo manufactured Animal tick quarter since financial category PetIQ's our in grew broader channels and few March share. flea brands results gain and a OTC in XX and our mentioned the looking growth QX. in portfolio its pet leading basis When Health to a flea to of our the at flea from category points acquisition of of I include: most for of enabling XX largest As versus over market's our parents winning and OTC the quarter of sales XXXX, tick XX all ended weeks X.X%, growth highlights the of of brands X.X%

channel is dollar that in within low-margin we a consumption, to SKU year's Included chose base strategically the discontinue. last for

product sales over If up total brands, XX% the consumption OTC this of ahead and flea consumption. of portfolio our you category for tick move would well be our of from base, the and

category planned XXXX. segment the period. in as versus pet supplement lower a see of significant during healthy continues X.X%, to consumption prior SKU, quarter year This brick-and-mortar PetIQ first the was Our due and in the expected, transition total of first to growth to in compared our pet business quarter the of supplements the growth

approximately had broader consumption year. of sales XXXX. take XX.X% you this When and missed XX QX year period in into account in been up for over the category eight XX%, were better brands March than this weeks have PetIQ ended last As a result, would our QX of the that supplement we

SKU QX, is the retailers early the transition and across completed we read in Importantly, acceleration an in consumption.

across treats for basis category. Pur offerings, dental Luv ended share Minties all retail XX March Dog plus plus the XX XXX%, and our and channels by our points brand XX driven XX.X% brand within weeks PetIQ overall across XXXX. gain addition, In branded the of and grew all grew increased consumption treats of XX%

top This to our as our with represented a net partners XX.X% QX inventory had for segment, e-commerce sales manufactured PetIQ of Roxie. in in was Products Rocco & the acquisition mix the late in slightly products our compared for forma aggressive distributed XXXX XX.X% of below QX expectations pro XXXX, quarter, of our more build, business the quarter.

having achieve of of segment to objective continue products. sales, XX% Products However, to greater PetIQ XXXX for net from than manufactured we our stated expect

focusing Now Services on the segment.

an revenue to reported compared segment per of Servicing counts increased our quarter served, pet We rates, as pet dollar the the with as first of and Our in increase XX.X% million, cancellation and prior first XXXX average compared increased period $XX.X improved to line XXXX. expectations. experienced year of quarter net

quarter We profit operating centers, maturation in achieved and to well strong segment the will team's and pleased Product best of We helped Improved offerings, and of four our centers the efficiencies positioned segments fourth more its to our to quarter Services quarter, are very wellness our wellness remain with and wellness of and opened ability XXXX. Services prudent, for the since continue results segment our and contribution in believe growth health are to XXXX. Services attract execution, with across quarter pet we parents first generate XXXX.

to certain business, and our sales shipments quarter-to-quarter. We team across control continues XXXX, prudent timing our our to channels in weather segment Products reiterating year our in is control across performing are we still show remain the all said, optimistic guidance our the to date, of all XXXX on annual in aspects like we and that lead categories. outside growth fluctuations given of about variables the but for that our consistently for and example, can being data are focused in of well That early opportunities for QX is PetIQ

work our the these and corporate to employees, for appreciate hard In well facilities us as and distribution and manufacturing the our achieve dedication offices, values results. and as closing, of financial commitment helping mission in our our we core to

call turn over now With the I'd to like that to overview, Zvi.

Zvi Glasman

addition our Thank full you, Cord. first pleased sales discuss XXXX. Today, in ahead quarterly outlook $XXX.X will more as compared and last to million, the an to by in and QX of X.X% of detail, an Services for net were Products quarter increase as adjusted QX from year We're well our expectations. sales of Rocco EBITDA segments sales achieve Roxie. and financials net year driven our I and & both the increase the QX

million, partially by XXXX offset in in basis the Products in lapping the higher period distributed of manufactured the segment, XX.X%, brand quarter PetIQ first and of profit on an mix Services shipments new late product margin profitability timing in the of quarter by from prior year increased based of the to gross launches in First a $XX.X resulting driven XXXX increase gross XX of points a segment. higher quarter the from X%

$XX.X XXXX, last year. expenses quarter were of in SG&A $XX.X quarter of million XXXX $XX.X to in for SG&A compared first QX million the year. prior was $XX.X Adjusted for QX compared to the million first the million of

as lower adjusted operating to incurred prior the As period. as lower SG&A due points efficiencies, basis prior a The mainly resulting in was decrease costs of compensation compared the decrease net sales, year period, XXX well legal expenses was of expenses. a percentage year from one-time to XX.X%

for million $XX.X $X.XX million perspective, the history. XX.X% net XX.X% EBITDA million XXXX first From income and highest the to record $XX.X net QX increased a of of was profit QX compared $X.XX. increase last we $X.X income to million quarter of $XX.X EPS the in in of was reported year. EPS of company's or an Adjusted

adjusted million to QX EBITDA prior XX.X% increase of an $XX.X XX.X% was to margin compared compared of basis quarter an EBITDA adjusted points of of the XXX representing period First increase year $XX.X an in million XXXX.

$XX.X $XX.X million cash in balance cash the year March liquidity used cash the $XX.X to Net March million activities the for used operating the prior and the were company compared operating to ended turning had for our in XXXX XX Now, first XX quarter first sheet ended quarter of period. activities total and equivalents for million. XXXX

reflects higher timing accounts growth profile provided due company's The by for in capital. purchases. inventory changes receivable increase inventory The cash inventory usage change primarily payable partially working while and higher driven flows accounts operating seasonal offset working normal in growth cash by capital our driven working in to and primarily capital of benefit earnings by are

comparable of total our XX is $XXX.X debt to $XXX for March million $XX $XX.X the XXXX. XXXX Notably Rocco as Roxie. despite XXXX at and of Our compared total of million our was end period debt down in acquisition paid for the million million

$XXX our company's together define liquidity million of and which representing credit hand $XXX.X we of cash on March to total the of plus addition availability, cash is availability revolving as on undrawn In limit has XXXX. XX. hand million as

making liquidity our our While would ample no credit we have note borrowings that, of additional is flexible. intention we facilities are and

needs of end as first under based period X.Xx on the normal the consistent as Rocco well facilities timing amount and the calculated of growth its with credit business prior and seasonality first of Roxie. as leverage of net at year to the the working of the the acquisition company the in was for Our the paid XXXX quarter capital our support terms quarter

the highest our few be end of to continue the expect be we year expect the reduce years. leverage We at to next net net We to believe XXXX. and over of will the than XXXX QX leverage lower quarter leverage

consistent quarters and free and We cash Products down contribution to in the positions segment believe cash continue growth the to as build our debt. in the future flow from Services segment drive ongoing as our well opportunistically pay company improvement

to our turning Now guidance.

noted are on reiterating finnawe For February and and the XXXX today our guidance provided earnings XXXX company December and year as noted previously available XX and today's in on ending in presentation XX as our the website. earnings also release slow financial that

period, quarter of second million prior the to net of midpoint of $XXX year $XXX expect guidance. the the of million based approximately XXXX. increase X% an For sales compared to we the on

based to on of the the QX From there's expect approximately an million SG&A expect we advertising million quarter million the adjusted standpoint QX prior to this to EBITDA increase compared in from of timing of that based the period $XX For shifted of $XX approximately of spend midpoint $X.X and promotions. of we year year that guidance. an second X%, on XXXX,

of delivering in our We affordable are of about and execute options pet for focused opportunities as all smarter, remain we our our parents. optimistic on mission stakeholders value for on for growth convenient XXXX and

That review. Operator? overview your that concludes and for my are Cord, I financial questions, With available Michael

Operator

We begin ahead. Rupesh The will go first with the now Parikh from Oppenheimer. question-and-answer Please question comes Instructions] session. [Operator

Rupesh Parikh

Thanks my questions, taking quarter. nice on afternoon. congrats Good also a for

just was far? thus going curious, And with of Rocco note the so integration Roxie is any surprises and how So I the acquisition, far?

Cord Christensen

They mean, We've far them known concentrated for business. so customers I very Yeah. the business. the no Rupesh. Thanks few a doing surprises long a for time. question. studied had We've very

been our start really so the their So ability really inventory things to bring start there's to far. into system, for streamline distribution, no surprises our

that affect We were we did some did sales. the didn't business as to kind continue with. we have non-strategic earnings, not that of base they but testing some viewed it of It decided the affect

year-over-year grow strategic kind we running, that we're a run if base. track on currently rate we're that's base of out look the the So how you base still back of and XX% to think profitable,

extremely way of lots grow. distribution ahead do And your of we and so no think work Integration and of white the to things schedule. lots far, can by you'd make we're well. anything we kind space surprises initial has of So Michael on gone conversations? add retailer Smith, increase things really based again,

Michael Smith

only into play stain is about take other us optimistic seen some thing I And overtime. initially just, have again better premium brick-and-mortar. we'd side, Especially in supplement as the add some and spaces brand role tests odor some into that but read love better-than-expected what real optimism than modeled. as the for supplements the the brain on trends moved today, of The we it can in brand, the to early see this No. we've the is playing and some would we we primarily on

Rupesh Parikh

then, And on are follow-up upbeat what on guys question commentary one fairly and seeing maybe flea far. you just category Great. so tick

you're curious, promotional from know some inventory times year seeing in adjustments the the And what channels. perspective Just competitive there retail a I at within last category. were

curious, you guys seeing. what just are channel how now based are in inventories right the on So retail

Cord Christensen

Yeah. that. to one Michael, you are best answer the

go So ahead.

Michael Smith

aggressive question, more Yeah. your season did the brands we terms first some promotional of activity, Feb-March. the of the in Premium by in earlier of part some see Super To programs

look net meaningful those of you results on If contributor brands not at performance. of or to performance brands' the the category those and those category the a

would or retailer aggregate in the say, of underages. whole, the overages I In major terms no inventory levels, on

that JIT slight where some we're customers inventory build position more an of category wash one we've retailers seen take we now very you system have would well the across a they patterns inventory of example, demand. historical in versus I'd demand ahead will, upgrade But the made call the across channel. retail inventory where replenishment you this is season are what flowing out approach There brands fairly when customers all if a neutral healthy where in to aggressive inventory early that to and a some

Rupesh Parikh

Okay. I'll pass Great. Thank you. it on.

Operator

Rupesh. ahead. Thanks Please go next with Andersen from comes Jon Blair. question The William

Jon Andersen

Good afternoon, everybody.

Michael Smith

Hey.

Jon Andersen

Hey.

Tick on, I & seeing said more continue? to the the expect OTC So half How Flea think business. now of comment that the you your that if be business specifically, and of you're there online? than e-commerce become you -- some Thanks. Could you these well And trends is again, like share, big just just persist? you're how bit positioned sounds a e-commerce could discuss you but helpful. taking performing your trends It how little brands are that whether would that

Cord Christensen

let Thanks, up I'll Jon after question. clean for then the kind of and goes. he I'll Michael start

So go Michael. ahead

Michael Smith

to three predict category. I'd this continued But Jon, is a going tell share long-term I'd years, it's to hate the e-commerce Yes, the to be in last two, of be you grow It's on grow to pretty actually pie. the consistent one meaningful pie thing a right? -- category. the march It's of thing and taking actually share shift and share in to another growing what

in actually bringing better flea category seen or in be compliance has job it were as great just in doing than have new tick the consumers higher we've been grow and of continued purchasing to if of e-com is customers a the it environment. to brick-and-mortar either things a One would getting

category. candidly. So, on for anything slowing the And the healthy down see I that aggregate don't

we're balance market that the If of of seeing for e-commerce balance the channel you to at look rates growth relative growth rate for versus Xx Xx, market.

brands. are e-commerce And for our disproportionately PetIQ portfolio in we for outperforming of

in And you category in I developed get more say We were a If four e-commerce as behind XXXX. to developed caught we're an XXXX on have you up wanted that we say space. as three, go maybe were heard in journey us than that would would we the whole. back be. years as not we

for an So us it's growth. definitely engine for

starting in channel. due Some on that over is that investments And learning that meaningful and those winning of winning utilize getting and and phase really spin in to to ensuring return flywheel how investments those in and investments where to that's some making disproportionately environment great time. better we're that we're a

Cord Christensen

has as And a and using team we continued invested Jon I together better internal to in clearly ago to that now Michael that's where is external were that wins team that best-in-class rates think And the our focus years that put I would add in We've team. into and resources. the online. invest translated upgrade being always And our sales team is that growth day. focus we've

brand Our than what better are is performing brands other performing.

to to So our We're as take invest see we we're there share brands with going and happy we on to that continuing continue keep it. focus expand it. and

Jon Andersen

One to Thanks follow-up. helpful. That's of you. both

Products and that a business, see business driving of view expectations manufactured more manufacturing wellness of the tick there -- and in on wellness respect both as the that. when like or your the proportion business onetime you least on It were side, opportunity side more in, with below growth guess, anything the I about health sounds quarter. your of to it think on kind that or at rates If business is the your your the part of some of On opportunity came on flea do side Thanks. kind and the aspects? factor you

Cord Christensen

on quarters as many an white have more form that both we different the well. that think and and I and We're of opportunity mature and have and flea in in side for more definitely tick, focus for have we which opportunity brands in for growth developed more wellness. and flea different means us. things factors that said we've space in tick view And Look, then we we that's health categories. area But different

rates portfolio grow to our as growth I that our we're we have to show in I a to still as of company tons our business. like So continue develop we'll I think we feel and our numbers across continue and think portfolio -- across our runway

Michael? add you'd else anything So

Michael Smith

would that in add is of if side there's think we the data portfolio QX I a lumpiness you and back occurred you're the ships-out had launch that way flows inventory on always from that manufactured year that last looking the our that just especially perspective some where last at way a in meaningful year. to

better at brand you'll manufactured And outperforming Sometimes consumption. consumption, our see look brands. look at distributed if you our

it's share the one is look you way when going ships of a of about think that of lot base. So to

to So of is consumption better and way when consumption manufactured probably health the light. share you at of a our that look catch portfolio

Cord Christensen

we clear, are be the to consumption make just out the guidance achievable. everyone at and the wanted that is XX% Jon still are on company that to We're there were and sure looking the data. numbers originally very think we focused is clear very, still we very heard have we number that an we for achievable that very definitely

the say the should right that percentage for we numbers catches full And gap year the close up. So the shipment get not consumption to see and all the it place.

Jon Andersen

Sure.

for question if Zvi Is could… Zvi I a on? Okay. have

Zvi Glasman

What's am I here. the question?

Jon Andersen

that? just your priorities of last year And you free for it a bringing number Good. wanted are What's you I the year? as plan what cash kind free to down? one, three, year delivered Is do well? of priorities other Thanks. the full for flow cash year or cash. in this in. for on that there use debt Is Free and basis you've pull and inflected two levels have strong

Zvi Glasman

generated $XX year. last We million of our at free flow million target of Yes. cash $XX to

being despite target this We year, million same $X flow interest cash higher. have expense the

things business In and expansion like supporting forth. brands, supporting so means new service that foremost business terms in our the of reinvest and priority, first

a year would between quarter debt turn last will of down end debt. the this anticipate Next come about by paying year. a – of versus be that We down

This is peaked year year at five QX. Importantly peak a rate we leverage QX. X.X of our leverage last in

be course, the any R&R in done well. acquisitions, Rocco as And down of balance those come the strategic we've the us and get like some we acquisitions year. will leverage our Roxie priorities year, for this of So always are great if we of going believe with to and past

Operator

Please ahead. The go [Operator Instructions] Chappell Bill question Truist next Securities. comes from with

Bill Chappell

Thanks, good afternoon.

Cord Christensen

Bill. Hi,

Bill Chappell

Just looking a follow-up. go with at well, I'll –

the said, a So comfortable particular you're XX% from be sales to or you timing… the be full manufactured percentage will you're If there or to you overcorrect, getting kind of do looking back that year. that well Is quarter next for quarters? the above the as all XX% at expect three above of for of it where

Cord Christensen

of Yes. Yes. anomaly. was an QX kind

for lumpy lowest the We got heavily QX. that for a distributed it it the quarter quarter But it our leveling brands tell consumption the end as evident Again numbers some expected to was of be there story. think the at rest and be of is QX little the brands restock slightly. that we're will bit But the very as on skewed always out that far our year through I really manufactured track.

into of now numbers month, is right are now see good see the some month. is getting about of very big to bigger July is a months. through consumption it need we big consumption June, numbers think And feel good. May a level I we should We But the the how as get right rest year. once those we pretty be to XX% back

Bill Chappell

some And had with certainly, it. services is improvement to improvement still quarter. some understand absenteeism. just of year the the last for the had impressive Omicron. still we that But had in of then issues. for still overall We comps. lot to trying We do other Got a The were for margin margin kind

that other the meaningful really year? So to see we move of on plan you to things sequentially, see sequentially some improvement, can at the margin rest there it's or did really is look we as

Cord Christensen

sure. for Yes

did out delivering economy a think the our significant of in things thing very to over had coming due on we margin year COVID. in saw you've that comp we we of I last the the P&L Yes, on we it's today's working. improvement line rightsized of were because low We're a seeing couple the the is but as quarters, numbers. words through just expectations flow using last and with based said we first lots

should the we we've year and year, are running operators for it be XXX But the was still last in things can closer improvement, just P&Ls year, basis rest year driving significant the business. almost going to at basis of right prior the right When cancellation XXXX healing see but when of numbers. And of properly think really properly. we other XXXX the improvement see basis prior running better, total type to you got to it of business rates of points look over you're that the run improvement these a again, points or now discipline, very P&L yes, more over it year. disciplined that with points But than return

Bill Chappell

And I might difference terms fourth have mobile running the even of missed year? a but was of versus quarter there last you're that in clinics

Cord Christensen

John exact XXXX have veterinarian since don't our do front been you or comparable a the mobile is they've are cancellation know of that me. have I the the XXXX, ever is best lot in pool number? best the been of to the hills. right clinics in it's which rates for I

kind year ramp have But similar to on the clinics run of yet. again But to I think further. that comment. looking prior ramped number We'll we've been and the John can you of it not rate running you're of on start if a

John Pearson

-- and Yes, between did just just clinics. X,XXX breaks we did so centers, that increase we X,XXX up or of clinics. over We than XX,XXX, XX,XXX last did community XX,XXX less so clinics, versus wellness X,XXX

Bill Chappell

Thanks the color. for That’s great.

Cord Christensen

Thanks Bill.

Operator

ahead. The Please from Corey Jefferies. go next question with comes Grady

Corey Grady

for my thanks questions. taking Hi,

buying last you premium year trading continued mentioned to with you both release press consumers consumer what saw tier seeing I the think but and in sticking add smaller of down. pack you Can you're in lower more on trade behavior? color sizes. down terms So,

point So, that into for curious and seeing Thanks. year? the what your this plays you're outlook at how

Cord Christensen

go Michael ahead do that? you to and take want

Michael Smith

in last saw Sure. some of anniversary this we to as Those year a start time trends same category frames when the of that of from we perspective some maintaining the trade-down behavior. year are

One of bit pack things size a transition. is bouncing that back the is the

up consumers We you pack are if trade seeing will. size in back

sizes at gone So, larger of those brand brand and are some value category. looking they decided overall going into the to that pack of they've a even to the proposition stay there new and back across now though

Corey Grady

Thank helpful. That's concept. you. about it. quarter then a last Got And services talked you test

about you You're any of how running menu Thanks. with an and services. additional are pilots Can performing expanded learnings? talk initial maybe those

Cord Christensen

I question. Yes, for John expanded They thanks shortly, have fourth one expectations. And opening three Yes, been a at we of open our have time. the it's where believe period we've locations very are two to the for now performing simple.

veterinarian service be menu to of allow to services be really us present a done that that the doing those have may every month. things pets are and that their require people We don't single

So, that of weighted the plan X.X subscription program it's instead an track annualized it we a heavily of The over year, is time. are builds building. far see how times towards that services subscription thing vet more the monthly would kind of on as as

those add rest the through Our try to intention more is the existing test to it year of continue to the to locations and perfect P&L.

a average which but that any ticket additional more a XX perspective revenue year very versus are our a it's frequency from similar But is X.X but times, often close right can you there win. that add can now a have a ticket time times allow opportunities we're very size we in that's to these that pleased XX be to that service significantly

so doing feel We're care not revised kind frequently. So, about good it. their declaring and of outlook good on of take very we're more pets feeling approach better and victory, but people more very the far, to to about help just

Corey Grady

Thank you.

Operator

Andersen Instructions] William have follow-up Please [Operator a go with Jon ahead. Blair. from we And

Jon Andersen

of how is e-commerce Thanks the Roxie, and And and that a broaden just of an And business? the to channel you that want much expand channel. opportunities I'm or business couple context on is concentration. for of trying by of like today? mentioned reach SKUs? -- much You what to in the kind can get you the concentration through a follow-up. for individual how Rocco sense that of that in offers me that remind better and product I

Cord Christensen

ahead go please. Michael, Jon. question, the for Thanks

Michael Smith

Yeah.

are that than There aggregate, R&R SKU or with But the the we hero time and the launched and of on than two that finding categories we're consumers. predominantly business. e-com On I'd is again, traction. stain expanded with -- continuing business of SKUs explored brands odor over are brand XX% those is earlier new other the And and business been And within brand, recently the happy taking other greater offerings. segments into journey that, sales. that those mentioned the greater has two we've net that's what a that taking the been is one for SKUs, with which say XX% is resonate supplements

Jon Andersen

change or products in-house? in you produce are produce do are will future? made today? to products And And able you How that those the the

Cord Christensen

Yeah.

have Rocco None do have to right I no anything are to and now different to think Jon of be things couldn't generate manufacturers. we're our and of there's currently that items of SKUs Rocco contract to adding for produce may of synergy create additional things and are not that a not standpoint looking points Roxie some Right chose did doubt if an the but Roxie their the adding and currently and they benefit. with analyzing now, other we and do things from a we see there's better that not But those would where we own at business couldn't we there's from adding now. distribution they're anything the if priority it, it to list reason and do produce. made of lot we it not But right new sell at intending point. top a other and benefit going manufacturing. the

Jon Andersen

luck. Good Okay. Thanks much. so

Cord Christensen

Jon. Thanks,

Operator

have And go a Benchmark. question John with from we ahead. Please Lawrence

John Lawrence

Hi, Cord, afternoon. good

Cord Christensen

John. Hi,

John Lawrence

you more just side that you there? a just on you you the you the would bit rates. little is get dive Thanks. of a dig really further absentee to every little What Can about business down it's mentioned into Services know profitable. a Cord, little talk speak And the that lot deeper can a bit and think do little I that a part happening business? Yeah,

Cord Christensen

Yeah.

with seen I general consistent clinic on difficult the the still that now vets of what for well that. think in challenged common that's at a are in that's we vets we've rates vets. that piece were to to bidding above difficult cancellation community in supported those now at is work the looking in pool in is and in hiring being hire our our quarter as which market. XXXX still we're for and veterinarians we're peak by XXXX know every extra knowledge That's improvement of single-digits XXXX. that shifts business market. attract pool everybody. and out and add ships, size now It's you It's from The Based

So we had our and January best improvements kind of now. between

can time margins so you're And more cancellation shifts going run to and improved to you see profits. any less

held part see so well. business we of And that the extremely

pets good veterinary treated. labor to to So that's we're be is the where demand moving a at for company very around

for continue spread we how have and company to vet to create to evaluate the a a as the vets that labor that in maximum and do continue We way that is of return to see to our we when have shareholders. number the there we deserve

and improvement behalf we we're And company at at that's coming at looking about market the that's going I think the through even behalf business model on. we executing of look good things on a as and the at what's look really on team feel the of that of we shareholders. feel the about But better lot look the

you're step and flow something and and change now the change measure our company's in success that how P&L, we performance. the the through definitely seeing in now margin in look So, our contribution at is the creation to that we performance

It's to consumers and some adding It's for needed market. of just helping tons see good them. to being still execution done. what we're way love The we So, area work an service best out upside. to save figure bring to where convenient additional And We're the analytics that lots do. money. more we discipline of the now,

John Lawrence

said the and of Great. at work Obviously, look forward. you that. study just as all performance helps the Thanks. a profile work recent doing I business you're that to case obviously, mean, retailer, case you growth with performance that the going follow-up. as improved And this this probably

Cord Christensen

from with had an we're a I always with happening to the them performing, on perspective mean, how Yes. happy issue we've doing. and retailers. stay what's They've We our the with performance. communication company, what business is very never the us been close with

mean, surprises. love it They pet of of have great builds. products what they more. we with is, I They it want love them, the purchases The no the of reality all it new the traffic there's So, our do. in they we but love conversion relations creates, all stores.

them And us wants pressure everybody so, is always more. the just

will do out models that us to allow figuring we're so And that.

how back place just base business now progress. started that the time. business. call people would that where sit making how in to forward most. think energized number about is different healed XX% down close reimagination enough we're some strategically substantial the yes, So doing, more center about the show has it been we're able how we've we goes it, and team it had to on base we what and we're with that I where of with I and what The COVID probably of the very increase better a conversation, And a the being at very go our we've we excited We're But were have most now from it. and to to a wellness and we can need to to very long time running meaningful on look clinics goes company John's positioned pause and than working is on, thinking of be that and

a in spot. we're So, good

John Lawrence

Great. Good luck. Thanks.

Cord Christensen

Yes.

Operator

to closing like conference our I question-and-answer session. over any concludes turn This Christensen Cord the back remarks. to would for

Cord Christensen

our money of partnerships save with very us adjusted people that health our just our of pets. retail helping we happy partners thank the on take our Again, that be mission their we're their the provided We're employees that and and above today. us needs company to EBITDA and ability for across and for help care and from basic have extremely pleased execution all joining with deliver forward received sales we you to the continued do loyal guidance to

to the So, as look continue forward quarter. the next thanks year ability we be joining our in full talking us. for subsequent We quarter, about to optimistic on deliver to few months to again and a deliver you the

everybody. So, We'll soon. to us you talk joining thanks for

Operator

Thank for now has conference you The concluded. attending today's presentation.

You may now disconnect.

PetIQ (PETQ) 9 May 232023 Q1 Earnings call transcript