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  "docSlug": "2692179b6d0b",
  "documentTitle": "PetIQ, Inc. (PETQ)",
  "authorId": "54_Spruce_Point_Capital",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-04-30 00:00:00",
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  "notes": "The slide uses a table to contrast revenue/inventory growth against rebate growth, pointing to a specific supplier (Merial) as the potential source of the anomaly.",
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      "kind": "callout",
      "text": "Note that vendor rebates exploded just as one supplier (Merial) became an increasingly dominant supplier to VIP",
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      "text": "Vendor Rebate Growth: 149%",
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      "text": "On Apr 2, 2018, management reported rebates up 175%, completely out of line with sales or inventory growth. We find this perplexing and concerning given its proximity to the VIP acquisition. Was part of the attraction of the VIP acquisition access to manufacturer rebates, on which PetIQ profitability appears to depend so heavily?",
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      "kind": "paragraph",
      "text": "Suppliers: Purchases from one supplier accounted for 75% of purchases for the year ended December 31, 2017. Purchases from one supplier accounted for 57% of purchases for the year ended December 31, 2016. Purchases from three suppliers accounted for 91% of purchases for the year ended December 31, 2015.",
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      "kind": "quote",
      "text": "The Company also receives rebates from vendors based on the volume of purchases of inventory, which is included as a reduction of cost of sales when the related inventory is sold and totaled $21,705,176, $8,710,422, and $5,136,899 for the years ended December 31, 2017, 2016, and 2015, respectively.",
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      "kind": "source-note",
      "text": "Source: PetIQ SEC Filings",
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      "text": "Revenue, Revenue Growth, Inventories, Inventory Growth, Vendor Rebates, Vendor Rebate Growth for FY15, FY16, FY17",
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      "kind": "title",
      "text": "Why Such Growth In Rebates?",
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