PetIQ Inc (PETQ) 2024 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the PETIQ. First Quarter 2024 earnings conference call. (Operator Instructions) Please note that today's event is being recorded.

女士們、先生們，午安。感謝您的支持，歡迎來到 PETIQ。 2024 年第一季財報電話會議。（操作員說明）請注意，今天的活動正在錄製中。

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

我現在想將會議交給投資者關係部門的凱蒂·特納 (Katie Turner)。請繼續。

Good afternoon, and thank you for joining us on today's Hughes First Quarter 2024 Earnings Conference Call and Webcast for Christenson Chief Executive Officer, and Brad Glassman, Chief Financial Officer, will review today's prepared remarks.

下午好，感謝您參加今天的休斯 2024 年第一季度收益電話會議和克里斯滕森首席執行官網絡廣播，首席財務官布拉德·格拉斯曼將回顧今天準備的演講。

Before we begin, please remember that during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events or those described in these forward-looking statements, please refer to the Company's annual report on Form 10 K and other reports filed from time to time with the Securities Exchange Commission and the company's press release issued today for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

在我們開始之前，請記住，在本次電話會議期間，管理層可能會做出聯邦證券法含義內的前瞻性陳述。這些聲明是基於管理層當前的預期和信念，涉及風險和不確定性，可能與實際事件或這些前瞻性聲明中描述的事件存在重大差異，請參閱公司的10 K 表格年度報告以及不時提交的其他報告。

Please note on today's call, management will refer to certain non-GAAP financial measures. While the company believes these non-GAAP financial measures will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for definitions and a reconciliation of non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP. In addition, package posted a supplemental presentation on its website for reference.

請注意，在今天的電話會議上，管理階層將參考某些非公認會計準則財務指標。同時該公司相信這些非公認會計準則財務指標將為投資者提供有用的信息。此資訊的呈現不應被孤立地考慮或作為根據 GAAP 呈現的財務資訊的替代品。請參閱今天的新聞稿，以了解非公認會計原則財務指標與根據公認會計原則制定的最具可比較指標的定義和調節。此外，Package還在其網站上發布了補充說明以供參考。

And with that, I'd like to turn the call over to Cord Christensen during Q2.

因此，我想在第二季度將電話轉給科德·克里斯滕森 (Cord Christensen)。

And good afternoon, everyone. We appreciate you joining us today to discuss our Q1 financial results. I'll begin with an overview of our Life Foods. We will review our quarterly financials and 2024 outlook. Finally, the Michael, John and I will be available to answer your questions. We are pleased by our start to 2024. We had a record Q1 with consolidated net sales of $308.4 million at the high end of our guidance. The consistent growth of our products segment fueled our financial results. The strength of these brands in Q1 led to favorable leverage of our costs with gross margin expanding 280 basis points to 24.2%. This helped offset higher SG&A expense when compared to Q1 last year, resulting in record profitability. Our net income of 14.9 million or EPS of $0.48 increased 47.8% from Q1 last year and Q1 2024. Adjusted EBITDA increased 15% year over year to $35.3 million, exceeding our guidance of 31 million to $33 million. This resulted in the highest adjusted EBITDA margin in the Company's history of 11.4%, an increase of 80 basis points from Q1 of last year. Based on the strong year-to-date results, we are pleased to raise our guidance for 2020 for net sales, adjusted EBITDA and free cash flow.

大家下午好。我們感謝您今天加入我們討論我們第一季的財務表現。我將首先概述我們的生命食品。我們將回顧我們的季度財務狀況和 2024 年展望。最後，麥可、約翰和我將回答您的問題。我們對 2024 年的開局感到高興。我們第一季的綜合淨銷售額創歷史新高，達到 3.084 億美元，達到我們指導值的上限。我們產品部門的持續成長推動了我們的財務表現。第一季這些品牌的實力為我們帶來了有利的成本槓桿，毛利率擴大了 280 個基點，達到 24.2%。與去年第一季相比，這有助於抵銷更高的銷售、管理及行政費用，從而實現創紀錄的獲利能力。我們的淨利潤為 1,490 萬美元，每股收益為 0.48 美元，比去年第一季和 2024 年第一季成長了 47.8%。調整後 EBITDA 年成長 15% 至 3530 萬美元，超出我們 3100 萬至 3300 萬美元的指導。這使得公司調整後的 EBITDA 利潤率達到 11.4%，創歷史新高，比去年第一季增加 80 個基點。基於今年迄今的強勁業績，我們很高興上調 2020 年淨銷售額、調整後 EBITDA 和自由現金流的指引。

Focusing our product segment in more detail for Q1 of 2020 for the products segment contributed net sales of 276.9 million, an increase of approximately 7% compared to the prior year period. The growth in Q1 of this year was broad-based across all product categories. As we've discussed with you the last few quarters, when you look at all the sales channels combined for 2023, it was one of the strongest seasons in the last 10 years for the OTC flea and tick category, we are lapping that record season in 2024. And yet we continue to generate impressive growth from territories, brands, which were up 14.3% compared to the first quarter last year. This growth rate exceeded our expectations for the quarter. Our in-house sales and marketing teams are building significant brands in the pet categories that are growing both online and brick and mortar retail, while capturing a disproportionate amount of market share. In Q1, we spent an incremental 4.7 million on enhanced advertising and promotional efforts in line with our plan to step up in marketing for 2024. This step-up is included in our Q1 2024 adjusted EBITDA for Q2, we expect to spend 6 million more in brand-building and marketing initiatives than we did in Q2 last year. We are continuing to lean into investments and initiatives that we expect to support the long-term success of our brands.

2020 年第一季度，產品細分領域更加重視產品細分，貢獻了淨銷售額 2.769 億美元，較上年同期成長約 7%。今年第一季所有產品類別均廣泛成長。正如我們在過去幾個季度與您討論的那樣，當您查看2023 年所有銷售管道的總和時，您會發現這是過去10 年來OTC 跳蚤和蜱類產品最強勁的季節之一，我們正在打破這一創紀錄的季節2024年。然而，我們的地區和品牌繼續實現令人印象深刻的成長，與去年第一季相比成長了 14.3%。這一增長率超出了我們對本季的預期。我們的內部銷售和行銷團隊正在寵物類別中打造重要品牌，這些品牌在線上和實體零售都在成長，同時佔領了不成比例的市場份額。第一季度，我們根據 2024 年加強行銷的計劃，增加了 470 萬美元用於加強廣告和促銷工作。這項措施已包含在我們 2024 年第一季調整後的第二季 EBITDA 中，我們預計在品牌建立和行銷活動上的支出將比去年第二季增加 600 萬美元。我們將繼續致力於投資和舉措，希望能夠支持我們品牌的長期成功。

I'd now like to focus on a few of our key category consumption highlights for the first quarter. In the first quarter of 2024 COTC. flea and tick category grew 6.2%, and Patrick Hughes brands increased 10.6%, got accused flea and tick brands gained share across all channels and at each of our top 10 customers while continuing to capture a disproportionate amount of the growth online and dramatically outperforming the broader category as evidenced by our market share results for the 12 weeks ended March 23rd, 2024 and IQOTC. flea and tick brands captured 15.8% of the category, which is an increase of 63 basis points versus the prior year period. Petsmart on countering total maintained its growth trajectory in the quarter, gaining 14.8% over the prior year period. This fast-growing category has nearly tripled in market size over the last five years and is now the largest category within the OTC animal health market. Our pets Avant brands continued to see accelerated consumption and growth in the first quarter of 2024, where offerings in this space grew 51.2% compared to the prior year period. This growth was driven by organic new brand, along with the successful launch of Racal and Roxy into the premium segment of the category. Strong household penetration trends along with expanded needs states in the past certain categories give us confidence that these double-digit growth rates to continue for many years to come. Competitors positioned very well to continue to gain share in this market. In addition, our pet general and treat offerings also outperformed the category in Q1, cemented and ParAllele brands both grew at three times the total category, leading to significant share gains. The Macy's brand grew 48% and gained 89 basis points of share in the dentistry category. The pure luxury brand also continues to gain momentum as it posted outstanding growth of 65% and Q1 versus a year ago. Our newest brand in our product portfolio, Rocco and Roxy, grew 23.4% from the first quarter of 2024. This growth was driven by our launch into the southern category and the core stain and odor off is also soft, healthy growth and good share within the market.

我現在想重點介紹第一季的一些關鍵品類消費亮點。2024年第一季COTC。跳蚤和蜱蟲類別增長了6.2%，帕特里克·休斯(Patrick Hughes) 品牌增長了10.6%，受到指責跳蚤和蜱蟲品牌在所有渠道和我們的前10 位客戶中都獲得了份額，同時繼續獲得不成比例的線上成長，並大幅超越我們截至 2024 年 3 月 23 日的 12 週的市佔率結果和 IQOTC 證明了這一點。跳蚤和蜱蟲品牌佔了該類別的 15.8%，比去年同期成長了 63 個基點。Petsmart 在本季保持了成長勢頭，較去年同期成長 14.8%。這個快速成長的類別在過去五年中市場規模幾乎增加了兩倍，目前是非處方動物保健市場中最大的類別。我們的寵物 Avant 品牌在 2024 年第一季持續加速消費和成長，該領域的產品與去年同期相比成長了 51.2%。這一成長是由有機新品牌以及 Racal 和 Roxy 成功進入該類別的高端市場所推動的。強勁的家庭滲透率趨勢以及過去某些類別的需求擴大使我們相信這些兩位數的成長率將在未來許多年持續下去。競爭對手處於非常有利的位置，可以繼續獲得該市場的份額。此外，我們的寵物普通用品和零食產品在第一季的表現也優於該類別，水泥和 ParAllele 品牌的成長均為總類別的三倍，從而帶來了顯著的份額成長。梅西百貨品牌成長了 48%，在牙科類別中的份額增加了 89 個基點。該純奢侈品牌也持續保持強勁勢頭，第一季與去年同期相比成長了 65%。我們產品組合中的最新品牌 Rocco 和 Roxy 較 2024 年第一季成長了 23.4%。這一增長是由我們進入南方類別所推動的，核心污漬和除味產品也是柔軟、健康的成長和良好的市場份額。

Shifting to the services segment, we had a slight net sales increase of 0.2% to 31.6 million compared to Q1 last year. We ran more mobile committed clinics across the country than a year ago and increased our pet counts to grow our services segment net sales and essentially offset the lost sales from 149 wellness centers we closed in the second half of 2023. Our services team continues to do an excellent job managing our contract labor to offer pet parents, convenient and affordable pet health and wellness options. We are also pleased with the significant operational improvements we achieved in Q1 of this year, which led to gross margin expansion of 810 basis points for the Services segment.

轉向服務領域，與去年第一季相比，我們的淨銷售額小幅成長 0.2% 至 3,160 萬。與一年前相比，我們在全國範圍內運營了更多的移動承諾診所，並增加了寵物數量，以增加我們服務部門的淨銷售額，並基本上抵消了我們在2023 年下半年關閉的149 個健康中心的銷售損失。我們的服務團隊繼續出色地管理我們的合約工，為寵物父母提供方便且負擔得起的寵物健康和保健選擇。我們也對今年第一季實現的重大營運改善感到高興，這導致服務部門的毛利率擴大了 810 個基點。

That completes my Q1 highlights. Before I turn it over to Harvey, I would like to thank our team across the country for their commitment to our mission of providing smarter pet health care and their continued support of Parex these core values.

我的第一季亮點就這樣完成了。在我將其交給哈維之前，我要感謝我們遍布全國的團隊致力於我們提供更聰明的寵物醫療保健的使命，並感謝他們對派麗這些核心價值觀的持續支持。

I'd like to now turn the call over to Steve Sanghi, cord today, I will discuss our Q1 financial results in more detail and our outlook for 2024. We're pleased with our start to the year. Our seasoned team generated strong growth across key brands increased both sales and profitability year over year. And the services segment optimization we completed in the second half of 2024 is already generating significant operational improvements for our business. For Q1 of 2024, the Company reported net sales of 308.4 million, an increase of 6.2% compared to Q1 of last year, driven by growth in the product segment. This was at the high end of our guidance for the quarter, driven by broad-based growth across sales channels and product categories of course, MENTIONED First Quarter 2024 gross profit was 74.5 million, an increase of 19.7% compared to 62.3 million in the prior year period. Gross margin increased 280 basis points to 24.2% from 21.4% for Q1 of last year. Growth and success of our higher margin manufactured brands was the primary driver of our margin expansion as well as operational efficiencies in our facilities. We also benefited from our Services segment optimization with a closure of 149 wellness centers in the second half of 2023.

我現在想將電話轉給 Steve Sanghi，今天我將更詳細地討論我們第一季的財務業績以及我們對 2024 年的展望。我們對今年的開局感到滿意。我們經驗豐富的團隊在主要品牌中實現了強勁成長，銷售額和獲利能力逐年增加。我們在 2024 年下半年完成的服務部門優化已經為我們的業務帶來了顯著的營運改善。2024年第一季，在產品領域成長的推動下，公司淨銷售額為3.084億美元，較去年第一季成長6.2%。這是我們本季指導的上限，當然，受到銷售管道和產品類別廣泛增長的推動，提到的 2024 年第一季毛利為 7,450 萬美元，比上一季的 6,230 萬美元增長了 19.7%年期間。毛利率從去年第一季的 21.4% 成長 280 個基點至 24.2%。我們利潤率較高的製造品牌的成長和成功是我們利潤率擴張以及工廠營運效率的主要驅動力。我們也受惠於服務部門的最佳化，在 2023 年下半年關閉了 149 個健康中心。

From an SG&A perspective, as we noted on our Q4 call, we are spending more on marketing in 2024 to support our manufactured brands. As a result, first quarter adjusted SG&A increased 7.8 million to 47.1 million. And as a percentage of net sales. Adjusted SG&A was 15.3%, an increase of 180 basis points compared to the prior year period. The increase in SG&A was primarily due to an increase in marketing expense of 4.7 million, and the remainder was mostly normal increases in annual compensation expenses.

從 SG&A 角度來看，正如我們在第四季度電話會議中指出的那樣，我們將在 2024 年在行銷上投入更多資金，以支持我們的製造品牌。結果，第一季調整後的 SG&A 增加了 780 萬美元，達到 4,710 萬美元。以及佔淨銷售額的百分比。調整後的銷售及管理費用為 15.3%，較上年同期成長 180 個基點。SG&A 的增加主要是由於行銷費用增加了 470 萬美元，其餘大部分是年度薪資費用的正常增加。

Adjusted net income was $18.5 million and adjusted EPS was $0.53, an increase of 32.5% year over year. Ebitda increased 20.2% to 32.2 million and adjusted EBITDA increased 15% to 35.3 million above our Q1 adjusted EBITDA guidance. Our adjusted EBITDA margin increased 80 basis points year over year to 11.4%. The highest in the Company's history, even with the step-up in marketing expense.

調整後淨利潤為 1850 萬美元，調整後每股收益為 0.53 美元，年增 32.5%。Ebitda 成長 20.2%，達到 3,220 萬，調整後 EBITDA 比我們第一季調整後 EBITDA 指引增加 15%，達到 3,530 萬。我們調整後的 EBITDA 利潤率年增 80 個基點，達到 11.4%。即使行銷費用增加，也是公司史上最高的。

Turning to our balance sheet and liquidity, the company ended Q1 with total cash and cash equivalents of 25.4 million for 2024, we are raising our guidance for annual free cash flow from an excess of 45 million to in excess of 50 million from an inventory perspective, our inventory at the end of Q1 was a bit higher than normal for this time of the year. This is due to our planned seasonal build and the timing of available inventory from our distribution partners. As we progress through the flea and tick season in total from Q2 and into Q3, we expect our inventory to be more in line with our historical levels. Company's total debt, which is comprised of its term loan ABL. and convertible debt, was 443.9 million as of March 31st, 2024. In addition to our cash on hand, the Company's $125 million ABL is undrawn. Total liquidity, which we define as cash on hand, plus debt availability was 150.4 million as of March 31st, 2024. While we continue to have no intention of making additional borrowings, we would note that our liquidity is ample and our credit facilities are flexible. Our net leverage, as calculated under terms of our credit facilities at the end of Q1 was 3.6 times, an improvement from 4.5 times in 2023. Keep in mind, Q1 is always our highest leverage quarter of the year based on seasonal changes in working capital due to the annual increase in inventory to position us well for the flea and tick season on April 30th, 2024. Subsequent to the end of the first quarter we completed the sale of the Company's foreign subsidiary within the product segment, Mark and capital for approximately $4 million in net cash proceeds and the Company will receive future royalties for certain licensed trademarks and related intellectual property. As a result of the transaction, we expect to recognize an approximate 1.7 million loss subject to normal working capital adjustments in the second quarter of 2024.

談到我們的資產負債表和流動性，公司2024年第一季末的現金和現金等價物總額為2540萬，我們從庫存角度將年度自由現金流指引從超過4500萬提高到超過5000萬，我們第第一季末的庫存略高於一年中這個時候的正常水準。這是由於我們計劃的季節性生產以及我們的分銷合作夥伴提供可用庫存的時間。隨著我們從第二季到第三季的跳蚤和蜱蟲季節的進展，我們預計我們的庫存將更加符合我們的歷史水平。公司的總債務由定期貸款 ABL 組成。截至 2024 年 3 月 31 日，可轉換債務為 4.439 億美元。除了我們手頭上的現金外，該公司的 1.25 億美元 ABL 尚未提取。截至 2024 年 3 月 31 日，總流動性（我們定義為手頭現金加上可用債務）為 1.504 億美元。雖然我們仍然無意額外借款，但我們注意到我們的流動性充足且信貸便利靈活。根據第一季末信貸額度條款計算，我們的淨槓桿比率為 3.6 倍，較 2023 年的 4.5 倍有所改善。請記住，根據營運資金的季節性變化，第一季始終是我們一年中槓桿率最高的季度，因為庫存每年增加，這使我們能夠在2024 年4 月30 日的跳蚤和蜱蟲季節做好準備。第一季末後，我們完成了對公司產品部門的外國子公司、商標和資本的出售，獲得約400 萬美元的淨現金收益，公司未來將收到某些許可商標和相關智慧財產權的特許權使用費。由於此交易，我們預計將在 2024 年第二季確認約 170 萬美元的損失，但需進行正常的營運資本調整。

Now turning to our guidance. As stated in today's earnings release, we are raising our full year 2024 net sales and adjusted EBITDA guidance that we previously provided on February 28th, 2024. Our 2024 full year outlook remains inclusive of the services segment optimization, the sale of the Company's foreign subsidiary, Mark and Chipotle, and a return to a more normal flea and tick season as compared to the record seasonal patterns experienced in 2023. These three items total approximately 52 million of net sales and 8 million of adjusted EBITDA on an annual basis. If you take these into account, our growth in 2024 would be significantly higher or represent a net sales increase of approximately 11% and an adjusted EBITDA increase of approximately 19% as compared to 2023. We've broken these variables out for reference in the outlook section of today's earnings presentation posted on the Investors section of our website, inclusive of the variables I just mentioned for the full year 2024, we expect net sales of $1,135 million, 1,185 million, an increase of approximately 5% based on the midpoint and adjusted EBITDA of 112 million to 117 million, an increase of approximately 10% based on the midpoint, including our step-up in marketing compared to last year, for the second quarter of 2024, we expect net sales of 325 million to $335 million, an increase of approximately 5% based on the midpoint adjusted EBITDA of 34 to 36 million, an increase of approximately 6% based on the midpoint, including the approximate 6 million of incremental marketing spend compared to Q2 of last year. Additionally, I want to reiterate that for modeling purposes going forward, our share count will vary during the course of the year due to the accounting rules regarding the Company's convertible notes. This will depend on a number of factors, including quarterly earnings for certain quarters in 2024, the share count will increase by approximately 4.8 million shares and our diluted EPS will be calculated on the same basis. Importantly, we currently have no intention of satisfying our convertible debt obligation with shares, but are required to report the Company's share count based on the theoretical increase.

現在轉向我們的指導。如同今天的財報所述，我們將提高我們先前於 2024 年 2 月 28 日提供的 2024 年全年淨銷售額和調整後 EBITDA 指引。我們對 2024 年全年的展望仍然包括服務部門的優化、公司外國子公司 Mark 和 Chipotle 的出售，以及與 2023 年創紀錄的季節性模式相比，跳蚤和蜱蟲季節的回歸。這三項每年的淨銷售額總計約為 5,200 萬美元，調整後的 EBITDA 約為 800 萬美元。如果考慮到這些因素，與 2023 年相比，我們 2024 年的成長將顯著更高，即淨銷售額成長約 11%，調整後的 EBITDA 成長約 19%。我們在網站投資者部分發布的今天收益報告的展望部分中對這些變量進行了分解，以供參考，其中包括我剛剛提到的2024 年全年變量，我們預計淨銷售額為11.35 億美元、11.85億美元、 2024年第二季度，與去年相比，我們在中點的基礎上增加了約5%，調整後的EBITDA為1.12億至1.17億美元，在中點的基礎上增加了約10% ，包括我們在行銷方面的加強，我們預計淨銷售額為3.25 億至3.35 億美元，根據調整後EBITDA 34 至3600 萬美元的中點增長約5%，根據中點增長約6%，其中包括與去年同期相比約600 萬美元的增量行銷支出到去年第二季。此外，我想重申，出於未來建模的目的，由於有關公司可轉換票據的會計規則，我們的股份數量在這一年中將會有所變化。這將取決於多種因素，包括 2024 年某些季度的季度收益、股票數量將增加約 480 萬股，我們的稀釋每股收益將以相同基礎計算。重要的是，我們目前無意用股票來履行我們的可轉換債務義務，但需要根據理論增量來報告公司的股票數量。

That concludes my financial review cord. Michael, John and I are now available for your questions. Operator?

我的財務回顧就到此結束。麥可、約翰和我現在可以回答你們的問題。操作員？

(Operator Instructions) Rupesh Parikh, Oppenheimer.

（操作員說明）Rupesh Parikh，Oppenheimer。

Good afternoon. Thanks for taking my question and also congrats on a really nice quarter. So maybe maybe just starting out with the gross margin line. So your really strong performance across both the product side and the service side. So I know the product side typically mix can impact the delivery there, but at least on the surface, I'm just hoping to get some more color in terms of how you guys think about the sustainability of the level of gross margin delivery we saw in Q1?

午安.感謝您提出我的問題，也恭喜您度過了一個非常美好的季度。所以也許只是從毛利率線開始。因此，你們在產品方面和服務方面的表現都非常出色。所以我知道產品方面的混合通常會影響那裡的交付，但至少在表面上，我只是希望從你們如何看待我們所看到的毛利率交付水平的可持續性方面獲得更多的信息在第一季度？

John, I'll take that one because yes, there's three key factors that are driving it as you call it ever passed. So we just talked about the services element. So that's a key component of it. And then when you look at the mix of what's growing in our business, it's the manufacturing portfolio versus distributed is really benefiting in a big way. We expect that trend to continue. And I'll let Steve talk specifically to some of the key things we expect to continue as we trend into Q2 three and four?

約翰，我會選擇這個，因為是的，有三個關鍵因素推動著它，就像你所說的那樣。所以我們只討論了服務元素。所以這是它的關鍵組成部分。然後，當你看看我們業務成長的組合時，你會發現製造組合與分散式組合確實受益匪淺。我們預計這種趨勢將持續下去。我會讓史蒂夫具體談談我們預計在進入第二季第三和第四季時繼續進行的一些關鍵事情？

Well, I think if you're thinking about services specifically, we're going to see a lot of increases in services for the balance of the year. There's always some seasonality on, but we are going to be anniversarying closing 140, 49 wellness centers.

好吧，我認為如果你具體考慮服務，我們將看到今年剩餘時間的服務大量增加。總是會有一些季節性因素，但我們將迎來關閉 140、49 個健康中心的周年紀念日。

In terms of some of the improvements in product.

在產品的一些改進方面。

Yes, you're right.

是的，你說得對。

Some of that came from mix. But also we'd like to highlight that we had a fair bit of operational improvements and some of those are in our base in the back half of last year. So in total, we feel really good about margins moving up. And to the right this year, we had previously guided 50 basis points plus of margin improvement. We think it's more like 75 plus. Now we will tell you that every quarter won't be linear mix will impact it, and we're not really prepared to give margin guidance by quarter, but we feel really good about the trajectory of our margins over time on as we continue to contribute or are at which I know we highlighted in our release, our comments, and I'm sure you will have more comments about it as the call goes on freight.

其中一些來自混合。但我們也想強調，我們在營運方面進行了相當多的改進，其中一些是去年下半年在我們的基地實現的。因此總的來說，我們對利潤率的上升感到非常滿意。今年，我們之前指導利潤率提高了 50 個基點以上。我們認為它更像是 75+。現在我們將告訴您，每個季度的線性組合都不會對其產生影響，而且我們並沒有真正準備好按季度提供利潤指導，但我們對隨著時間的推移我們的利潤率軌跡感到非常滿意，因為我們繼續貢獻或正在，我知道我們在我們的發布和評論中強調了這一點，我相信隨著貨運的進行，您會對此有更多評論。

And then maybe just a related question just on the environment. So you guys have tremendous momentum throughout your portfolio. But the pet category is clearly a challenge out there and you have some concerns about the US consumer as well. So I'd just love to hear just what you guys are seeing that, that category? And then just any shifts you're seeing from a consumer behavior perspective and refreshes according.

然後也許只是一個與環境相關的問題。所以你們的整個投資組合都擁有巨大的動力。但寵物類別顯然是一個挑戰，您也對美國消費者感到擔憂。所以我很想聽聽你們對這個類別的看法？然後，您從消費者行為的角度看到的任何變化都會根據變化進行刷新。

Thanks for the questions out of the system for their wood. So we're watching the product categories more than we were. There's definitely pressure on some of them that is different. And what we're seeing our categories are still in good organic growth. And obviously, we're growing significantly faster than the category. So we have dot-com seeing the consumer de-prioritizing, their pets' health care, where they are able to trade down and some of the other categories are going down.

感謝系統對他們木頭提出的問題。因此，我們比以前更專注於產品類別。他們中的一些人肯定面臨著不同的壓力。我們看到我們的類別仍然處於良好的有機成長之中。顯然，我們的成長速度明顯快於同類產品。因此，我們在網路上看到消費者不再優先考慮他們的寵物的醫療保健，他們可以在其中進行交易，而其他一些類別正在下降。

Okay, great. And then just my final question. So just on the flea and tick season or I guess in terms of how you guys plan the year, any changes versus what your initial thoughts are in planning for an average year is essentially how it's playing out so far?

好的，太好了。然後是我的最後一個問題。因此，就跳蚤和蜱蟲季節而言，或者我想就你們如何計劃這一年而言，與你們最初的想法相比，在平均年度計劃中的任何變化基本上都是迄今為止的表現？

And Michael, why don't you take that one?

邁克爾，你為什麼不拿那個？

Yes, in the past and when we modeled the year, we call it a five on a scale of one to 10 kind of an average year. If you were to look at the first three to four months of the season, we would say that the year to date scored more like a six and what we are projecting for the rest of the year would be consistent with that early read that we're seeing on the season. So slightly favorable compared to our original modeling, which had the category growing 3% category is actually growing closer to 4% to 5%. And as Cord mentioned, we're well north of that performance for our portfolio and we would expect pretty consistent trend throughout the rest of the year.

是的，在過去，當我們對年份進行建模時，我們將其稱為 5 級（從 1 到 10 的平均年份）。如果你看一下本賽季的前三到四個月，我們會說今年迄今為止的得分更像是六分，我們對今年剩餘時間的預測將與我們早期的報道一致。與我們最初的模型相比，這稍微有利一些，我們的原始模型的類別增長了 3%，而類別實際上增長了接近 4% 到 5%。正如 Cord 所提到的，我們的投資組合表現遠遠超出了這一水平，我們預計今年剩餘時間的趨勢將相當一致。

Looking at the weather patterns, Brian, any different metrics that we get to read, the tea leaves, if you will, on the quality of the season, tell us we should expect something like a five or six on a scale of one to 10.

布萊恩，看看天氣模式，我們讀到的任何不同指標，茶葉，如果你願意的話，關於季節的質量，告訴我們我們應該期待從 1 到 10 的等級，比如 5 或 6。

Okay, great. Thank you. I'll pass it on.

好的，太好了。謝謝。我會把它傳遞下去。

Jon Andersen, William Blair.

喬恩·安德森，威廉·布萊爾。

Good afternoon, everybody. Congrats on the quarter. I wanted to ask about the marketing spending. Are you still planning on at this point spending?

大家下午好。恭喜本季。我想問一下行銷支出。此時您還打算花錢嗎？

I think that's an incremental $12 million for the year. What is the cadence of that? And if you can talk a little bit about how you're applying those dollars, obviously, you don't want to talk too much from competitive reasons, but kind of maybe big picture where those dollars are being applied in the products or and or services businesses.

我認為今年將增加 1200 萬美元。那節奏是怎樣的？如果你能談談你如何應用這些美元，顯然，你不想從競爭原因談論太多，但可能是這些美元被應用在產品或和或中的大局服務企業。

And thanks, Tom. Thanks for the question. Yes, we are adding the 12 million that's on a base of 44. So we have significant investments already being made across the entire year. The incremental $12 million is heavily front year loaded. And so you'll see us spend of close to $10 million in the front half of the year. And then the balance will be spent in the back half, but we have ample spread across that. We don't love talking about where now we're spending for competitive reasons, but I can tell you that as we said before, we are measure it. We're seeing the return why we're exceeding our projections in the categories and on we feel good that we're still going into the right amount of spend for how we can affect our company's brands and our sales and profit. So you definitely can see in the numbers.

謝謝，湯姆。謝謝你的提問。是的，我們是在 44 的基礎上加上 1200 萬。因此，我們全年已經進行了大量投資。新增的 1200 萬美元是前一年的重擔。因此，您會看到我們今年上半年的支出接近 1000 萬美元。然後餘額將用在後半部分，但我們在這方面有足夠的分佈。我們不喜歡談論出於競爭原因我們現在在哪裡花錢，但我可以告訴你，正如我們之前所說，我們正在衡量它。我們看到了回報，為什麼我們在各個類別上超出了我們的預測，我們感到高興的是，我們仍然投入適量的支出來影響我們公司的品牌以及我們的銷售和利潤。所以你絕對可以從數字中看到。

And are you seeing on the products business? Are you seeing both healthy demand on the the distributed side of your business, which is more national or premium and as well as your own? Or is there a trade down that that's helping manufactured brands I don't know if there's any anything you can kind of tease out from what you've seen so far in terms of consumer behavior and Michael's message.

您是否關注產品業務？您是否看到您業務的分散式方面（更全國性或高端以及您自己的業務）都有健康的需求？或者是否存在一種可以幫助製造品牌的交易，我不知道您是否可以從迄今為止所看到的消費者行為和邁克爾的信息中找出任何東西。

I could take that first?

我可以先拿那個嗎？

Yes, I would say the overall health of the category is solid, right? So our outperformance isn't necessarily coming at the demise of other players in the category should be looked at the health of our distributed brands consumption. It is close to the expectation that we built for the year. If you look at our manufactured brands were obviously well ahead of the expectations that we had modeled. And again, a lot of that growth isn't necessarily coming as cannibalization. We are seeing some new customers come into the category or we're seeing some lapsed customers come into the category that's helping to generate kind of an overall bigger pie than we expected. And we are getting a bigger piece of that pie on than we modeled in the beginning of the year. So it's not that our distributed businesses are performing poorly. It's just that our manufactured brands are really accelerated team member from them.

是的，我想說該類別的整體健康狀況是穩定的，對嗎？因此，我們的優異表現並不一定會導致該類別中其他參與者的消亡，應該考慮我們分散式品牌消費的健康狀況。這接近我們今年的預期。如果你看看我們製造的品牌，顯然遠遠超出了我們建模的預期。再說一次，這種成長的很大一部分並不一定來自於蠶食。我們看到一些新客戶進入該類別，或者我們看到一些流失的客戶進入該類別，這有助於產生比我們預期更大的整體蛋糕。我們正在分得比年初更大的一塊蛋糕。所以並不是說我們的分散式業務表現不佳。只是我們製造的品牌確實是他們加速的團隊成員。

Yes, that's helpful. One quick one. I think I may be wrong in this, but I think fairly unusual for you to raise at this point of the year. And could you talk a little bit about what gives you the conviction that maybe the one or two things that don't know, fitness, the least protect consumer and computer forensics, that incremental marketing spending more on what you're seeing that gives you that kind of conviction to raise at this point? Thanks, Jim.

是的，這很有幫助。快一點。我認為我在這一點上可能是錯的，但我認為你在今年這個時候提出融資是相當不尋常的。你能談談是什麼讓你相信，也許是一兩件事你不知道，健身，最不保護消費者和電腦取證，增量行銷在你所看到的東西上花費更多，讓你在這一點上要提出什麼樣的信念？謝謝，吉姆。

Thanks for the question, John. We can grow. Obviously, we've historically not raised guidance in the end of the first quarter because we want to see second quarter consumption and get a real Paul Reid on some of the seasonal parts of our business. I think first and foremost, you're starting to see our other brands that aren't seasonal, picked up steam and are continuing to gain momentum. Their top line is growing at a higher percentage than what we did last year or projected flea and tick at a six add some incremental to it as well. And so right now, the consumption rates, we're seeing the way that we are seeing the market come. We felt very good about raising all three of those lines and and then lean in that way. And we hope to see the continued acceleration if we can we so maybe we don't see anything in the second quarter or third quarter, but we're definitely seeing the right trends right now.

謝謝你的提問，約翰。我們可以成長。顯然，我們歷來沒有在第一季末提出指導意見，因為我們希望看到第二季度的消費情況，並在我們業務的一些季節性部分獲得真正的保羅·里德(Paul Reid)。我認為首先也是最重要的是，您開始看到我們的其他非季節性品牌正在成長並繼續獲得動力。他們的收入成長百分比高於我們去年的成長率，或預期跳蚤和蜱蟲的成長率為 6，也會增加一些增量。因此，現在，就消費率而言，我們正在看到市場的發展方式。我們對提高所有這三條線然後以這種方式傾斜感覺非常好。如果可以的話，我們希望看到持續的加速，所以也許我們在第二季或第三季看不到任何東西，但我們現在肯定看到了正確的趨勢。

Great. Thanks so much.

偉大的。非常感謝。

(Operator Instructions) Bill Chappell, Truist Securities.

（操作員指示）Bill Chappell，Truist 證券公司。

Has the upside of a couple of is there any way to kind of bridge the gross margin expansion in terms of product mix versus it being manufactured versus distributed as compared to just on just channel mix. I'm just trying to understand, so how much of this was your products versus manufactured products and I mean versus versus third party product distribution business? And how much of this was actual just some gains in efficiency and overall sales?

與僅通路組合相比，有沒有辦法彌補產品組合與製造與分銷方面的毛利率擴張。我只是想了解，那麼其中有多少是您的產品與製造產品相比，我的意思是與第三方產品分銷業務相比？其中有多少實際上只是效率和整體銷售的一些提升？

I think, Bill, we said a couple of times that our products are doing extremely well at much higher margin. We've seen the overall average margin in that portfolio move up a little above where we were talking about from before. So we're better than the 56 plus some right now on and when your growth rates are 14.3 overall and you have categories where we're 50%, three times the category, flea and tick being a better than two times. That's going to be a contributor. We are getting extremely good at our plants. And as you get more throughput and get bigger with the efficiencies we find are paying dividends at a faster rate and then closing down stores that had a drag on and picking up the 810 basis points in services that we believe that we can retain throughout the year. It gives us a lot of confidence that we're doing the right things at the margin and in the right direction. So our mix for the quarter was really in line with our normal mixes. And so it wasn't a significant mix changes. The other things we just talked about. But obviously if I miss something or yes, Q4 was a court said it right?

我想，比爾，我們說過幾次我們的產品表現非常好，利潤率也高很多。我們已經看到該投資組合的整體平均利潤率略高於我們之前討論的水平。因此，我們現在比56 加上一些更好，當您的總體增長率為14.3，並且您的類別為50%，是該類別的三倍時，跳蚤和蜱蟲的增長率是該類別的兩倍以上。這將是一個貢獻者。我們的工廠變得非常出色。隨著吞吐量的增加和效率的提高，我們發現正在以更快的速度支付股息，然後關閉那些拖累業務的商店，並在服務中獲得 810 個基點，我們相信我們可以全年保留這些服務。這給了我們很大的信心，讓我們相信我們正在沿著正確的方向做正確的事情。所以我們本季的組合確實與我們正常的組合一致。所以這並不是一個重大的組合變化。其他的事情我們剛才也談到了。但顯然，如果我錯過了什麼，或者是的，Q4 法院說得對嗎？

We had a little bit of benefit in mix, but it was not the biggest part of the story. It was one or 2% higher manufactured versus distributed versus last year. But by the same token, our manufactured business, our health and wellness brands in our Dental treats are growing faster and they carry a slightly lower margin than our flea and tick. So yes, I think everything cord said is right. This is as the margin improvements are real thing. We expect them to continue, albeit at a different rate throughout the course of the year. That's why we've signaled that will be up 75 bps plus in margin for the year.

我們在混合中獲得了一點好處，但這並不是故事中最重要的部分。與去年相比，製造量與分銷量增加了 1% 或 2%。但出於同樣的原因，我們的製造業務、我們的牙科治療中的健康和保健品牌增長得更快，但它們的利潤率略低於我們的跳蚤和蜱蟲。所以是的，我認為索德所說的一切都是對的。這是因為利潤率的提高是真實存在的。我們預計它們將繼續下去，儘管全年的速度有所不同。這就是為什麼我們表示今年的利潤率將成長 75 個基點以上。

Got it. Maybe just to follow on from I thought there was a a distributed product, a new product in the market kind of a three and one that was started last year that you thought was going to drive a lot of the revenue growth, which would have pushed down margins. Was that not the case that I guess I was thinking there's there were some headwinds just from that standpoint.

知道了。也許只是為了跟進，我認為市場上有一種分散式產品，一種去年推出的三加一的新產品，你認為它會推動大量收入成長，這會壓低收入邊距。我想我是不是認為從這個角度來看會有一些阻力。

Yes. I mean, the product is launched. It's doing extremely well. We're starting to see a pickup. It was a direct contributor to the excess inventory that people will refer to as you look at you talk to them, but again, the timing of the season and what's going on in first quarter was not a volume and was the consumption rates were watching. We've taken that into account. It's a cycling. So capture that 75 plus basis points improvement to margin. We talked about.

是的。我的意思是，該產品已推出。它的表現非常好。我們開始看到皮卡。這是庫存過剩的直接原因，人們在與他們交談時會提到這一點，但同樣，季節的時機和第一季發生的事情不是數量，而是消費率。我們已經考慮到了這一點。這是騎自行車。因此，請抓住利潤率 75 個以上基點的改善。我們談論過。

Okay. And then in terms of kind of what you're seeing for Grove and Roxy, and I thought this was a quarter where you'd see pretty meaningful distribution gains. I think that's that's right. Did you get those gains? Are they on the shelf? And should that show up more as we move forward through this year?

好的。然後就你所看到的 Grove 和 Roxy 而言，我認為這是一個你會看到相當有意義的分銷收益的季度。我認為是這樣的。這些收穫你得到了嗎？它們在貨架上嗎？隨著今年的進展，這一點是否應該更加明顯？

Michael, you want take that one please?

邁克爾，你想要那個嗎？

Yes, we had a few big expansions planned that have played out as expected. Last quarter. We talked a little bit about the launch of Rockwater Oxy into the supplement space those points of distribution have played out as expected and they were later in Q1 and will have a bigger impact in Q2 and the rest of the year. Our large bone launch at the mid-teens brand also hit our expectations and a little ahead of that in the quarter. And then a couple of other expansions within our flea and tick portfolio that all have played out as expected as these planograms modulars for the kickoff to 2024 a bit the stores.

是的，我們計劃了一些大型擴張，並且已經按預期進行。上個季度。我們討論了 Rockwater Oxy 進入補充劑領域的情況，這些分銷點已按預期發揮作用，它們在第一季度晚些時候出現，並將在第二季度和今年剩餘時間產生更大的影響。我們在青少年品牌上推出的大骨頭也達到了我們的預期，並且比本季的預期稍早。然後，我們的跳蚤和蜱蟲產品組合中的其他一些擴充功能都已按預期發揮作用，這些貨架圖模組將於 2024 年開始在商店中推出。

Okay, great. And then one last one on services. Any changes on kind of just the overall vet population in terms of hiring and even for the mobile clinic side.

好的，太好了。最後一項是關於服務的。在招聘方面，甚至在行動診所方面，任何變化都會影響整個獸醫人口。

Now we are the key for us is we've been really focused on the key wellness centers that generate the most income for us. And we've had success in landing events in key locations that we need. But more importantly, we have a very healthy pet sorry, that population and the community clinic side. So continuing to have on average about 35 hundreds that in that population, as a reminder, kind of peak COVID timeframe, we only had about 800. So we're really happy with how that's climbed back up. And we're seeing it in our cancellation numbers, which was called out by cord cancellation numbers are low as low as they've been back in 2019 to really proud of the team and rallying there and getting the for that population back-end.

現在我們的關鍵是我們一直專注於為我們帶來最多收入的主要健康中心。我們已經成功地在我們需要的關鍵地點舉辦了活動。但更重要的是，我們有一隻非常健康的寵物，對不起，人口和社區診所方面。因此，在這個人口中，平均仍有約 3500 人，提醒一下，在新冠肺炎高峰期，我們只有約 800 人。所以我們對它的回升感到非常高興。我們在我們的取消數量中看到了這一點，因為取消數量與 2019 年的水平一樣低，我們為團隊感到非常自豪，並在那裡集結並為該人群獲得後端服務。

Great. Thanks for the color.

偉大的。謝謝你的顏色。

John Lawrence, The Benchmark Company.

約翰·勞倫斯，基準公司。

Congrats. Could you talk about following that last question, just a little bit more on that services optimization, obviously getting that sort of of the fill rates and everything in that business better than what it's been in the last couple of years. Can you dig in a little bit more of what you did to optimize that mobile clinic business? Is it is it all just starting the absenteeism? What did you do to really optimize that.

恭喜。您能否談談最後一個問題，再談談服務優化，顯然，該業務的填充率和一切都比過去幾年更好。您能否詳細介紹一下您為優化行動診所業務所做的工作？難道這一切才剛開始缺勤嗎？你做了什麼來真正優化它。

The mobile clinic business? Yes, it's across all the services business, not just to mobile. It's also the wellness centers that some contribute some public when you close stores like we did there is going to be a pickup from underperforming stores. We've put a lot of controls and operational on controls on all of the stores. We're running more community clinics than they have a yes, higher profitability and margins that they drive. And I think just in general, we've really made sure that as we've kind of got further and further away from all the closures that took place during COVID and all the cancellations to where we were. We're really solving for a lot of those problems. So you're overcoming labor issues that we had coming out of COVID. We're closing stores that we're just never going to great like we said, and you add all those up together. And that's why you're seeing the margin improvements and the contribution go in our direction.

行動診所業務？是的，它涉及所有服務業務，而不僅僅是行動領域。當你像我們一樣關閉商店時，一些健康中心也會向公眾做出一些貢獻，表現不佳的商店將會有所恢復。我們對所有商店進行了大量的控制和操作控制。我們經營的社區診所比他們多，是的，他們帶來的獲利能力和利潤率更高。我認為總的來說，我們確實已經確保了這一點，因為我們已經離新冠疫情期間發生的所有關閉和所有取消的情況越來越遠了。我們確實正在解決很多這樣的問題。所以你們正在克服新冠疫情帶來的勞工問題。我們正在關閉那些我們永遠不會像我們所說的那樣出色的商店，然後你把所有這些加在一起。這就是為什麼你會看到利潤率的提高和貢獻都朝著我們的方向發展。

Right, thanks. Secondly, Rocco and Roxy, can you can you go back and talk about the plan when you looked at that ACQUISITION now you've had it for a period of time, is doing extremely well. Is that the is that the best example or a base case how we should look at possibilities? How you extend the business and extend the categories going forward?

好的，謝謝。其次，Rocco 和 Roxy，你們能回去談談這個計劃嗎？這是最好的例子還是我們應該如何看待可能性的基本情況？未來如何拓展業務、拓展品類？

Yes. Thanks for the question. Joe. Look, we are feel like we're running our all of our brands, our categories in the same way, and we're seeing great results across all of the business by doing that Rocket. Roxy is a great example of when we make an acquisition that we have line of sight to very quick improvement in placement and certainly our product extensions and a number of ways to improve it. And we've done it a number of times, frankly, most of our acquisitions have been very similar to that. So I would say we're very smart to find acquisitions that our great brands that we can input our ability to really improve everything about it, whether it's manufacturing, whether it's efficiencies across just people paid store count, it's products, you name. It is just a great example. And yes, it's done extremely well. And the team has done extremely well is getting placements for the extensions, and we're seeing the brands are really performing well across all channels right now. So we hope we hope to continue to do that across our existing brands, our brand and all the ones that come in the future and not to really go too far with that core.

是的。謝謝你的提問。喬.聽著，我們感覺我們正在以同樣的方式經營我們所有的品牌、我們的品類，並且透過火箭般的做法，我們在所有業務中都看到了巨大的成果。Roxy 就是一個很好的例子，當我們進行收購時，我們能夠快速改進佈局，當然還有我們的產品擴展和多種改進方法。坦白說，我們已經這樣做過很多次了，我們的大多數收購都與此非常相似。所以我想說，我們非常聰明地找到收購我們偉大的品牌，我們可以投入我們真正改善一切的能力，無論是製造，無論是支付商店數量的人的效率，還是產品，等等。這只是一個很好的例子。是的，它做得非常好。團隊在獲得擴展的展示位置方面做得非常好，我們看到這些品牌現在在所有管道上都表現良好。因此，我們希望能夠繼續在我們現有的品牌、我們的品牌以及未來的所有品牌中做到這一點，而不是在這個核心上走得太遠。

But would that be even when you look at that example, it's both top line and bottom line from for their original stripes plan. Is that right?

但即使你看那個例子，它也是他們最初的條紋計劃的頂線和底線。是這樣嗎？

Yes, we're ahead of on our plan on the growth rate for the top line. And we've said many times that we paid in oh eight, 8.5 times trailing and expected to be kind of that four to five on a run-rate basis within six months, and we've been ahead of schedule on both top and bottom.

是的，我們提前實現了營收成長率計畫。我們已經說過很多次了，我們支付了 8 倍，落後的 8.5 倍，預計在六個月內按運行率計算將達到 4 到 5 倍，而且我們在頂部和底部都領先於計劃。

Great. Congrats, and thanks.

偉大的。恭喜，也謝謝。

(Operator Instructions) And this does conclude our question and answer session for today. And I would like to turn the conference back over to Cord Christensen for any closing remarks.

（操作員說明）今天的問答環節到此結束。我想將會議轉回科德·克里斯滕森（Cord Christensen）發表閉幕詞。

Just first, like to thank all the great people at PetIQ you that keep delivering such great work to deliver great results and just feel really, really great about how the Company continues to get better and better every day.

首先，我要感謝 PetIQ 的所有優秀員工，你們不斷做出如此出色的工作，取得了出色的成果，並且對公司每天都變得越來越好感到非常非常高興。

What we do and thank all the shareholders and analysts I wanted to show up and challenge us and we could interact with as we talk about those great results. So look forward to talking to many of you over the next few days and we look forward to talking again, we get to the end of second quarter and thanks for joining us today for the.

我們所做的事情，感謝所有我想出現並挑戰我們的股東和分析師，我們可以在談論這些偉大成果時與之互動。因此，期待在接下來的幾天裡與你們中的許多人交談，我們期待再次交談，我們即將迎來第二季末，感謝您今天加入我們。

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

會議現已結束。感謝您參加今天的演示，您現在可以斷開連接了。