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  "documentTitle": "PetIQ, Inc. (PETQ)",
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      "text": "PetIQ / VIP Petcare financial results, 2015-17",
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      "text": "Post-acquisition margins largely flat following inter-company eliminations (and gross margin down through FY18)",
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      "text": "Operating Margin: 1.7%",
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      "text": "We would expect to see some level of operating leverage in the combined PetIQ-VIP business with the consolidation of shared G&A and inter-company sales. Yet, even when $111M of zero-margin revenue is eliminated, margins for the combined business appear to be largely flat following the acquisition. We question the economic logic of the acquisition given the apparent lack of leverage or demonstrable economic synergies between the separate businesses. At the same time, the Company has experienced material gross margin contraction through FY18, confirming our view that the “opening up” of the veterinary pharmaceutical distribution market will pressure the profitability of PetIQ’s products segment.",
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      "text": "Source: PetIQ SEC Filings, PetIQ Post-Acquisition Modeling Call Presentation",
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      "text": "Where Is The Operating Leverage?",
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