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  "documentTitle": "PetIQ, Inc. (PETQ)",
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  "notes": "The slide uses a red-box highlight technique to draw attention to the 'Realistic Estimate' column and specific metrics that drive the unprofitability thesis.",
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      "kind": "callout",
      "text": "Per Merial guidance, and reaffirming our belief that in-store clinics see limited volume",
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      "text": "Assuming 65% of COGS are variable cost",
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      "text": "Clinics would achieve break-even operating income only at ~5,000 visits per location",
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      "text": "Even taking management’s presumed average of 1.5 vets per clinic as given, we estimate that PetIQ wellness centers will be unprofitable at maturity under more reasonable store traffic assumptions.",
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      "text": "Operating Margin: -36%",
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      "text": "We also note that management estimates that it can maintain a clinic with close to five fewer veterinarians than were employed by the typical VCA hospital on average...",
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      "text": "1. Source 2. Source: WOOF FY16 10-K 3. Projected results for full 1,000 wellness center base at maturity 60",
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