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  "documentTitle": "PetIQ, Inc. (PETQ)",
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  "presentationDate": "2019-04-30 00:00:00",
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  "notes": "Uses a table to demonstrate the impact of accounting reclassification on margins.",
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      "text": "We believe that, as brick-and-mortar clinics renting space from retailers, these wellness centers should designate rental expense as a COGS item.",
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      "text": "Gross Margin: -26%",
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      "text": "We note that, in its illustration of wellness center unit economics, management allocated wellness center rent expense to SG&A. We believe that, as brick-and-mortar clinics renting space from retailers, these wellness centers should designate rental expense as a COGS item.",
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      "text": "Gross profit is our net product sales plus service revenue less cost of product sales and services. Our cost of product sales consists primarily of costs of raw goods, finished goods packaging materials, manufacturing, shipping and handling costs and costs associated with our warehouses and distribution network. Cost of services are comprised of all service and product costs related to providing veterinary services, including but not limited to, salaries of veterinarians, technicians and other clinic based personnel, facilities rent, occupancy costs, supply costs, depreciation and amortization of clinic assets, certain marketing and promotional expenses and costs of goods sold. — PETQ: FY18 10-K",
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      "text": "1. Source: Presentation, Slide 14, 2. Examples: Jackson Hewitt, Subway, 3. Source: WOOF FY16 10-K, 4. Projected results for full 1,000 wellness center base at maturity",
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      "text": "Misrepresenting Store Gross Margin?",
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