Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38257 | |
Entity Registrant Name | National Vision Holdings, Inc. | |
Entity Central Index Key | 0001710155 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4841717 | |
Entity Address, Address Line One | 2435 Commerce Ave | |
Entity Address, Address Line Two | Building 2200 | |
Entity Address, City or Town | Duluth | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30096 | |
City Area Code | 770 | |
Local Phone Number | 822‑3600 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | EYE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 79,117,971 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 94,086 | $ 17,132 |
Accounts receivable, net | 50,655 | 50,735 |
Inventories | 111,894 | 116,022 |
Prepaid expenses and other current assets | 22,014 | 30,815 |
Total current assets | 278,649 | 214,704 |
Property and equipment, net | 372,069 | 355,117 |
Other assets: | ||
Goodwill | 777,613 | 777,613 |
Right of use assets | 344,179 | 0 |
Other assets | 6,575 | 8,876 |
Total non-current assets | 1,799,775 | 1,446,685 |
Total assets | 2,078,424 | 1,661,389 |
Current liabilities: | ||
Accounts payable | 45,337 | 43,642 |
Other payables and accrued expenses | 101,556 | 81,004 |
Unearned revenue | 29,224 | 27,295 |
Deferred revenue | 57,231 | 52,144 |
Current maturities of long-term debt and finance lease obligations | 13,736 | 7,567 |
Current operating lease obligations | 56,814 | 0 |
Total current liabilities | 303,898 | 211,652 |
Long-term debt and finance lease obligations, less current portion and debt discount | 584,250 | 570,545 |
Non-current operating lease obligations | 326,492 | 0 |
Other non-current liabilities: | ||
Deferred revenue | 22,115 | 20,134 |
Other liabilities | 13,407 | 53,964 |
Deferred income taxes, net | 62,791 | 61,940 |
Total other non-current liabilities | 98,313 | 136,038 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 200,000 shares authorized; 79,920 and 78,246 shares issued as of September 28, 2019 and December 29, 2018, respectively; 79,022 and 78,167 shares outstanding as of September 28, 2019 and December 29, 2018, respectively | 800 | 782 |
Additional paid-in capital | 693,541 | 672,503 |
Accumulated other comprehensive loss | (4,921) | (2,810) |
Retained earnings | 103,212 | 74,840 |
Treasury stock, at cost; 898 and 79 shares as of September 28, 2019 and December 29, 2018, respectively | (27,161) | (2,161) |
Total stockholders’ equity | 765,471 | 743,154 |
Total liabilities and stockholders’ equity | 2,078,424 | 1,661,389 |
Trademarks and trade names | ||
Other assets: | ||
Intangible assets | 240,547 | 240,547 |
Other intangible assets, net | ||
Other assets: | ||
Intangible assets | $ 58,792 | $ 64,532 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, issued (shares) | 79,920,000 | 78,246,000 |
Common stock, outstanding (shares) | 79,022,000 | 78,167,000 |
Treasury stock (shares) | 898,000 | 79,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Revenue: | ||||
Total net revenue | $ 431,902 | $ 387,425 | $ 1,322,568 | $ 1,180,932 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 204,502 | 182,588 | 618,978 | 540,101 |
Operating expenses: | ||||
Selling, general and administrative | 190,290 | 185,028 | 566,444 | 521,344 |
Depreciation and amortization | 22,336 | 19,344 | 63,570 | 54,783 |
Asset impairment | 3,516 | 2,137 | 7,387 | 2,137 |
Other expense, net | 146 | 411 | 975 | 829 |
Total operating expenses | 216,288 | 206,920 | 638,376 | 579,093 |
Income (loss) from operations | 11,112 | (2,083) | 65,214 | 61,738 |
Interest expense, net | 7,873 | 9,407 | 25,902 | 28,144 |
Loss on extinguishment of debt | 9,786 | 0 | 9,786 | 0 |
Earnings (loss) before income taxes | (6,547) | (11,490) | 29,526 | 33,594 |
Income tax provision (benefit) | (7,739) | (16,661) | 647 | (8,499) |
Net income | $ 1,192 | $ 5,171 | $ 28,879 | $ 42,093 |
Earnings per share: | ||||
Basic (in usd per share) | $ 0.02 | $ 0.07 | $ 0.37 | $ 0.56 |
Diluted (in usd per share) | $ 0.01 | $ 0.06 | $ 0.35 | $ 0.54 |
Weighted average shares outstanding: | ||||
Basic (shares) | 78,474 | 76,118 | 78,387 | 75,361 |
Diluted (shares) | 81,561 | 79,710 | 81,510 | 78,571 |
Comprehensive income: | ||||
Net income | $ 1,192 | $ 5,171 | $ 28,879 | $ 42,093 |
Unrealized gain (loss) on hedge instruments | 681 | 2,267 | (2,837) | 11,842 |
Tax provision (benefit) of unrealized gain (loss) on hedge instruments | 175 | 580 | (727) | 3,033 |
Comprehensive income | 1,698 | 6,858 | 26,769 | 50,902 |
Products | ||||
Revenue: | ||||
Total net revenue | 355,789 | 319,312 | 1,096,482 | 977,497 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 144,518 | 130,951 | 444,177 | 389,560 |
Services and plans | ||||
Revenue: | ||||
Total net revenue | 76,113 | 68,113 | 226,086 | 203,435 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | $ 59,984 | $ 51,637 | $ 174,801 | $ 150,541 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Beginning balance (shares) at Dec. 30, 2017 | 74,654 | |||||
Beginning balance at Dec. 30, 2017 | $ 654,600 | $ 746 | $ 631,798 | $ (9,868) | $ 32,157 | $ (233) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 449 | |||||
Issuance of common stock | 2,248 | $ 5 | 2,243 | |||
Stock based compensation | 1,596 | 1,596 | ||||
Purchase of treasury stock (shares) | (25) | |||||
Purchase of treasury stock | (855) | (855) | ||||
Unrealized gain (loss) on hedge instruments, net of tax | 4,624 | 4,624 | ||||
Net income | 24,455 | 24,455 | ||||
Ending balance (shares) at Mar. 31, 2018 | 75,078 | |||||
Ending balance at Mar. 31, 2018 | 705,698 | $ 751 | 635,637 | (5,244) | 75,642 | (1,088) |
Beginning balance (shares) at Dec. 30, 2017 | 74,654 | |||||
Beginning balance at Dec. 30, 2017 | 654,600 | $ 746 | 631,798 | (9,868) | 32,157 | (233) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 42,093 | |||||
Ending balance (shares) at Sep. 29, 2018 | 77,136 | |||||
Ending balance at Sep. 29, 2018 | 751,338 | $ 770 | 659,480 | (1,059) | 93,280 | (1,133) |
Beginning balance (shares) at Mar. 31, 2018 | 75,078 | |||||
Beginning balance at Mar. 31, 2018 | 705,698 | $ 751 | 635,637 | (5,244) | 75,642 | (1,088) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 256 | |||||
Issuance of common stock | 1,218 | $ 2 | 1,216 | |||
Stock based compensation | 1,524 | 1,524 | ||||
Purchase of treasury stock | (5) | (5) | ||||
Unrealized gain (loss) on hedge instruments, net of tax | 2,498 | 2,498 | ||||
Net income | 12,467 | 12,467 | ||||
Ending balance (shares) at Jun. 30, 2018 | 75,334 | |||||
Ending balance at Jun. 30, 2018 | 723,400 | $ 753 | 638,377 | (2,746) | 88,109 | (1,093) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 1,803 | |||||
Issuance of common stock | 10,502 | $ 17 | 10,485 | |||
Stock based compensation | 10,618 | 10,618 | ||||
Purchase of treasury stock (shares) | (1) | |||||
Purchase of treasury stock | (40) | (40) | ||||
Unrealized gain (loss) on hedge instruments, net of tax | 1,687 | 1,687 | ||||
Net income | 5,171 | 5,171 | ||||
Ending balance (shares) at Sep. 29, 2018 | 77,136 | |||||
Ending balance at Sep. 29, 2018 | 751,338 | $ 770 | 659,480 | (1,059) | 93,280 | (1,133) |
Beginning balance (shares) at Dec. 29, 2018 | 78,167 | |||||
Beginning balance at Dec. 29, 2018 | 743,154 | $ 782 | 672,503 | (2,810) | 74,840 | (2,161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 51 | |||||
Issuance of common stock | 513 | $ 1 | 512 | |||
Stock based compensation | 2,937 | 2,937 | ||||
Unrealized gain (loss) on hedge instruments, net of tax | (947) | (947) | ||||
Net income | 17,429 | 17,429 | ||||
Ending balance (shares) at Mar. 30, 2019 | 78,218 | |||||
Ending balance at Mar. 30, 2019 | 762,580 | $ 783 | 675,952 | (3,757) | 91,763 | (2,161) |
Beginning balance (shares) at Dec. 29, 2018 | 78,167 | |||||
Beginning balance at Dec. 29, 2018 | 743,154 | $ 782 | 672,503 | (2,810) | 74,840 | (2,161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 28,879 | |||||
Ending balance (shares) at Sep. 28, 2019 | 79,022 | |||||
Ending balance at Sep. 28, 2019 | 765,471 | $ 800 | 693,541 | (4,921) | 103,212 | (27,161) |
Beginning balance (shares) at Mar. 30, 2019 | 78,218 | |||||
Beginning balance at Mar. 30, 2019 | 762,580 | $ 783 | 675,952 | (3,757) | 91,763 | (2,161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 266 | |||||
Issuance of common stock | 1,553 | $ 3 | 1,550 | |||
Stock based compensation | 1,714 | 1,714 | ||||
Unrealized gain (loss) on hedge instruments, net of tax | (1,670) | (1,670) | ||||
Net income | 10,257 | 10,257 | ||||
Ending balance (shares) at Jun. 29, 2019 | 78,484 | |||||
Ending balance at Jun. 29, 2019 | 774,434 | $ 786 | 679,216 | (5,427) | 102,020 | (2,161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (shares) | 1,357 | |||||
Issuance of common stock | 8,238 | $ 14 | 8,224 | |||
Stock based compensation | 6,101 | 6,101 | ||||
Purchase of treasury stock (shares) | (819) | |||||
Purchase of treasury stock | (25,000) | (25,000) | ||||
Unrealized gain (loss) on hedge instruments, net of tax | 506 | 506 | ||||
Net income | 1,192 | 1,192 | ||||
Ending balance (shares) at Sep. 28, 2019 | 79,022 | |||||
Ending balance at Sep. 28, 2019 | $ 765,471 | $ 800 | $ 693,541 | $ (4,921) | $ 103,212 | $ (27,161) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 28,879 | $ 42,093 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 63,570 | 54,783 |
Amortization of loan costs | 1,071 | 1,287 |
Asset impairment | 7,387 | 2,137 |
Deferred income tax (benefit) expense | 651 | (8,696) |
Stock based compensation expense | 10,840 | 13,749 |
Inventory adjustments | 3,065 | 2,491 |
Bad debt expense | 6,265 | 4,981 |
Loss on extinguishment of debt | 9,786 | 0 |
Other | 1,963 | 1,555 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,023) | (663) |
Inventories | 1,063 | (10,620) |
Other assets | 11,373 | 381 |
Accounts payable | 1,694 | (4,823) |
Deferred revenue | 7,068 | 6,235 |
Other liabilities | 22,286 | 11,062 |
Net cash provided by operating activities | 170,938 | 115,952 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (76,472) | (78,813) |
Other | 564 | 136 |
Net cash used for investing activities | (75,908) | (78,677) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt, net of discounts | 566,550 | 0 |
Proceeds from exercise of stock options | 9,992 | 14,032 |
Principal payments on long-term debt | (564,300) | (4,275) |
Purchase of treasury stock | (25,000) | (900) |
Payments on finance lease obligations | (2,054) | |
Payments on finance lease obligations | (1,256) | |
Payments of debt issuance costs | (2,930) | 0 |
Net cash provided by (used for) financing activities | (17,742) | 7,601 |
Net change in cash, cash equivalents and restricted cash | 77,288 | 44,876 |
Cash, cash equivalents and restricted cash, beginning of year | 17,998 | 5,193 |
Cash, cash equivalents and restricted cash, end of period | 95,286 | 50,069 |
Supplemental cash flow disclosure information: | ||
Cash paid for interest | 25,182 | 28,988 |
Property and equipment accrued at the end of the period | 13,808 | 9,060 |
Right of use assets acquired under finance leases | 9,551 | 9,722 |
Right of use assets acquired under operating leases | 84,643 | 0 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | ||
Total cash, cash equivalents and restricted cash | $ 17,998 | $ 5,193 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Nature of Operations National Vision Holdings, Inc. (“NVHI,” the “Company,” “we,” “our,” or “us”) is a holding company whose operating subsidiaries include its indirect wholly owned subsidiary, National Vision, Inc. (“NVI”) and NVI’s direct wholly owned subsidiaries. We are a leading value retailer of eyeglasses and contact lenses in the United States and its territories. We operated 1,145 and 1,082 retail optical locations as of September 28, 2019 and December 29, 2018 , respectively, through our five store brands, including America’s Best Contacts and Eyeglasses (“America’s Best”), Eyeglass World, Vista Optical locations on U.S. Army/Air Force military bases (“Military”) and within Fred Meyer stores, and our management and services arrangement with Walmart (“Legacy”). Basis of Presentation We prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and, therefore, do not include all information and disclosures required by U.S. GAAP for complete consolidated financial statements. The condensed consolidated balance sheet as of December 29, 2018 has been derived from the audited consolidated balance sheet for the fiscal year then ended. These condensed consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s consolidated financial position as of September 28, 2019 , the consolidated results of operations and comprehensive income, the statements of changes in stockholders’ equity for the three and nine months ended September 28, 2019 and September 29, 2018 , and its statements of cash flows for the nine months ended September 28, 2019 and September 29, 2018 . Certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted; however, we believe that the disclosures included herein are sufficient for a fair presentation of the information presented. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the fiscal year ended December 29, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2019. The Company’s significant accounting policies are set forth in Note 1 within those consolidated financial statements. We use the same accounting policies in preparing interim condensed consolidated financial information and annual consolidated financial statements. There were no changes to our significant accounting policies during the nine months ended September 28, 2019 , except for the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases. See “Adoption of New Accounting Pronouncements” below for further discussion. The condensed consolidated financial statements include our accounts and those of our subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. Fiscal Year Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31. Fiscal year 2019 contains 52 weeks and will end on December 28, 2019 . All three and nine month periods presented herein contain 13 and 39 weeks, respectively. All references to years and quarters relate to fiscal periods rather than calendar periods. Seasonality The consolidated results of operations for the three and nine months ended September 28, 2019 and September 29, 2018 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonality and uncertainty of general economic conditions that may impact our key end markets. Historically, our business has realized a higher portion of net revenue, income from operations, and cash flows from operations in the first fiscal quarter, and a lower portion of net revenue, income from operations, and cash flows from operations in the fourth fiscal quarter. The seasonally larger first quarter is attributable primarily to the timing of our customers’ personal income tax refunds and annual health insurance program start or reset periods. Seasonality related to fourth quarter holiday spending by retail customers generally does not impact our business. Our quarterly consolidated results may also be affected by the timing of new store openings, store closings, and certain holidays. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Asset Impairment We evaluate impairment of long-lived tangible and right of use (“ROU”) store assets at the store level, which is the lowest level at which independent cash flows can be identified, when events or conditions indicate the carrying value of such assets may not be recoverable. In making this evaluation, we may consider multiple factors including financial performance of the stores, regional and local business climates, future plans for the store operations and other qualitative factors. If the store's projected undiscounted net cash flows expected to be generated by the related assets over the shorter of the remaining useful life or the remaining term of the lease are less than the carrying value of the subject assets, we then measure impairment based on a discounted cash flow model and market-based indications of value of the ROU asset and record an impairment charge as the excess of carrying value over estimated fair value. As directed in the accounting guidance for long-lived assets held and used, we use entity-specific assumptions related to our anticipated use of the assets when developing the projected undiscounted cash flows. We identified indicators of impairment of certain stores and recorded $3.5 million and $7.4 million of related asset impairment charges during the three and nine months ended September 28, 2019 , respectively, in Corporate/Other. These impairment charges were primarily driven by lower than projected customer sales volume in certain stores. The estimated fair value of the impaired assets was $14.6 million as of September 28, 2019 ; this value includes fair value estimates related to impairments recorded in the first and second quarters of 2019. The cash flows used in the estimation were discounted to fair value using a rate of 8% . A significant decrease in the estimated cash flows would lead to a lower fair value measurement, as would a significant increase in the discount rate. The market-based indications of value of ROU assets were based on third-party information without adjustment. These measurements were classified as Level 3 measurements in the fair value hierarchy. Income Taxes Our income tax rate for the three months ended September 28, 2019 reflected our statutory federal and state rate of 25.6% , offset by a discrete benefit of $6.3 million associated primarily with stock option exercises. Our income tax benefit for the nine months ended September 28, 2019 reflected income tax expense at our statutory federal and state rate of 25.6% , offset by a discrete benefit of $7.7 million associated primarily with stock option exercises. In comparison, the income tax rate associated with the three and nine months ended September 29, 2018 was reduced by $13.9 million and $18.0 million respective income tax benefit resulting from stock option exercises. Secondary Offering and Common Stock Repurchase On August 7, 2019, the Company entered into an Underwriting Agreement by and among the Company, KKR Vision Aggregator L.P. (the “Selling Stockholder”), and Goldman Sachs & Co. LLC, as underwriter (the “Underwriter”), relating to an underwritten offering of 9,149,908 shares of the Company’s common stock, par value $0.01 per share. The offering was completed on August 12, 2019. In connection with the offering, our Board of Directors authorized, and the Company completed, a repurchase of 819,134 shares out of the 9,149,908 shares of common stock subject to the offering from the Underwriter at $30.52 per share, which was the price the Underwriter purchased the shares from the Selling Stockholder in the offering. The Company did not receive any proceeds from the offering. As a result of this underwritten offering and concurrent share repurchase, the Selling Stockholder no longer owns any shares of our common stock as of September 28, 2019 . The secondary offering constituted a vesting event whereby a final portion of the performance-based options vested and the remaining portion of unvested performance options awarded under the 2014 Stock Incentive Plan was forfeited. Refer to Note 5. “Stock Incentive Plans.” for further information on stock based compensation activity for the nine months ended September 28, 2019. As a result of the offering, we incurred $4.2 million of non-cash stock-based compensation expense during the three months ended September 28, 2019 . We additionally recorded $1.1 million in long-term cash incentive compensation expense and $0.4 million in offering related expenses in selling, general and administrative (“SG&A”) during the three months ended September 28, 2019 . Adoption of New Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases . This new guidance establishes a ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with such classification affecting the pattern of expense recognition in the statement of operations. Disclosure of key information about leasing arrangements is also required. We adopted ASU No. 2016-02, as amended, as of December 30, 2018 (the first day of fiscal year 2019 ), using the modified retrospective transition approach without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward historical lease classification for leases in existence as of the adoption date, to not assess whether any expired or existing contracts are leases or contain leases and to not assess whether unamortized initial direct costs for existing leases meet the definition of initial direct costs. In addition, we elected the practical expedients to not separate lease components from non-lease components and to not apply this new guidance to leases with terms of less than 12 months. Upon adoption, we recorded operating lease liabilities of approximately $349.7 million as of December 30, 2018 . The Company treated tenant improvement allowances (“TIAs”) and deferred rent of $28.6 million and $11.9 million , respectively, as of December 30, 2018 as reductions of lease payments used to measure ROU assets and recorded $308.5 million of lease ROU assets upon adoption. The difference between the additional lease assets and lease liabilities net of the deferred tax impact was $0.5 million , which was recorded as an adjustment to fiscal year 2019 opening retained earnings. Adoption of this new guidance did not result in significant changes to our results of operations or cash flows. See Note 8 . “Leases” for additional information. Future Adoption of Accounting Pronouncements Cloud Computing. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This new guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years and may be adopted on a prospective or retrospective basis. The Company is in the process of assessing the new guidance. Credit Losses . In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This new guidance requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. Initial adoption of ASU 2016-13 is required to be reported on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, except for certain provisions that are required to be applied prospectively. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim reporting periods within those fiscal years. The Company is in the process of assessing the new guidance. |
Details of Certain Balance Shee
Details of Certain Balance Sheet Accounts | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Details of Certain Balance Sheet Accounts | Details of Certain Balance Sheet Accounts In thousands As of As of Accounts receivable, net: Trade receivables $ 27,879 $ 27,356 Credit card receivables 15,131 16,636 Tenant improvement allowances receivable 6,183 5,149 Other receivables 4,544 4,206 Allowance for uncollectible accounts (3,082 ) (2,612 ) $ 50,655 $ 50,735 In thousands As of As of Inventories: Raw materials and work in process (1) $ 57,844 $ 59,946 Finished goods 54,050 56,076 $ 111,894 $ 116,022 (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, the Company does not separately present raw materials and work in process. In thousands As of As of Property and equipment, net: Land and building $ 3,632 $ 3,632 Equipment 186,181 160,958 Information systems hardware and software 113,127 101,809 Furniture and fixtures 53,922 48,992 Leasehold improvements 207,113 186,499 Construction in progress 28,299 40,697 Right of use assets under finance leases 36,437 25,446 628,711 568,033 Less: Accumulated depreciation 256,642 212,916 $ 372,069 $ 355,117 In thousands As of As of Other payables and accrued expenses: Employee compensation and benefits $ 40,347 $ 20,529 Advertising 2,565 2,076 Self-insurance reserves 8,464 8,117 Reserves for customer returns and remakes 7,606 4,645 Capital expenditures 11,532 14,078 Legacy management and services agreement 6,642 5,383 Fair value of derivative liabilities 6,260 3,130 Supplies and other store support expenses 3,038 4,929 Litigation settlements 3,894 3,938 Other 11,208 14,179 $ 101,556 $ 81,004 In thousands As of As of Other non-current liabilities: Fair value of derivative liabilities $ 3,214 $ 3,505 Tenant improvements (1) — 30,851 Deferred rental expenses (1) — 11,926 Self-insurance reserves 5,528 5,114 Other 4,665 2,568 $ 13,407 $ 53,964 (1) Tenant improvements and deferred rental expenses are used to measure ROU assets on the balance sheet under ASC 842, Leases as of September 28, 2019. See Note 8. “Leases” for further details. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Assets and Liabilities | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Assets and Liabilities | The Company uses a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect pricing based upon a reporting entity’s own market assumptions. The Company is required to measure certain assets and liabilities at fair value or disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 - Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2 - Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the instruments. • Level 3 - Valuation inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include discounted cash flow models and similar techniques. The fair value estimates of financial instruments are not necessarily indicative of the amounts we might pay or receive in actual market transactions. The use of different market assumptions and/or estimation methodologies may have a material impact on the estimated fair value amounts. Cash, Cash Equivalents and Restricted Cash The carrying amount of cash and cash equivalents approximates fair value due to the short-term maturity of the instruments. All cash and cash equivalents are denominated in U.S. currency. Accounts Receivable, Net The carrying amount of accounts receivable approximates fair value due to the short-term nature of those items and the effect of related allowances for doubtful accounts. Accounts Payable and Other Payables and Accrued Expenses The carrying amounts of accounts payable and other payables and accrued expenses approximate fair value due to the short-term nature of those items. Long-term Debt - Term Loan and Revolving Credit Facility Since the borrowings under the Term Loan (as defined below) and revolving credit facility utilize variable interest rate setting mechanisms such as LIBOR, the fair values of these borrowings are deemed to approximate the carrying values. Refer to Note 4 . “Long-term Debt” for additional information on the Term Loan and revolving credit facility. Finance Lease Obligations The fair value of finance lease obligations is based on estimated future contractual cash flows discounted at an appropriate market rate of interest (Level 2 inputs). The estimated fair values of our finance leases were $39.4 million and $30.7 million as of September 28, 2019 and December 29, 2018 , respectively, compared to carrying values of $34.2 million and $24.5 million , respectively. Interest Rate Derivatives The Company is party to three pay-fixed and receive-floating interest rate swap agreements to offset the variability of cash flows in LIBOR-indexed debt interest payments, subject to a 1.0% floor, attributable to changes in the benchmark interest rate from March 13, 2017 to March 13, 2021 related to its credit agreement. During the first quarter of 2019 , in accordance with the original agreements with the counterparties, the notional amount of the first derivative decreased from $140.0 million to $105.0 million . There were no other changes in the terms of the arrangements. We recognize as assets or liabilities at fair value the estimated amounts we would receive or pay upon a termination of interest rate swaps prior to their scheduled expiration dates. Fair value is based on information that is model-driven and whose inputs are observable (Level 2 inputs). Cumulative unrealized losses on derivative instruments are recorded in accumulated other comprehensive loss (“AOCL”), net of tax. As of September 28, 2019 , the Company expects to reclassify $4.7 million of unrealized losses on derivative instruments, net of tax, from AOCL into earnings in the next 12 months as the derivative instruments mature. See Note 12 . “Accumulated Other Comprehensive Loss” for further details. Changes in the cash flows of each derivative are expected to be highly effective in offsetting the changes in interest payments on a principal balance equal to the derivative’s notional amount, attributable to the hedged risk. Our hedges have been deemed highly effective since inception as a result of our quarterly hedge effectiveness testing. Our cash flow hedge position related to interest rate derivative contracts is as follows: In thousands Notional Amount Maturity Date Other Payables and Accrued Expenses Other Liabilities AOCL, Net of Tax (1) As of $ 430,000 March 2021 $ 6,260 $ 3,214 $ 4,921 As of $ 465,000 March 2021 $ 3,130 $ 3,505 $ 2,810 (1) Includes stranded tax benefit of $2.1 million within AOCL from adopting provisions of the Tax Cuts and Jobs Act of 2017 during the year ended December 30, 2017. |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | Long-term Debt Long-term debt consists of the following: In thousands As of As of First Lien - Term Loan B $ — $ 364,300 First Lien - Term Loan A — 200,000 First Lien - Term Loan, due July 18, 2024 420,000 — First Lien - Revolving credit facility, due July 18, 2024 148,000 — Total term loans before unamortized discount 568,000 564,300 Unamortized discount (4,196 ) (10,673 ) Total term loans 563,804 553,627 Less current maturities (10,500 ) (5,000 ) Term loans - non-current portion 553,304 548,627 Finance lease obligations 34,182 24,485 Less current maturities (3,236 ) (2,567 ) Long-term debt, less current portion and unamortized debt discount $ 584,250 $ 570,545 Scheduled maturities of the Term Loan and revolving credit facility are as follows: Fiscal Period In thousands 2019 - fourth quarter $ 2,625 2020 10,500 2021 10,500 2022 13,125 2023 21,000 Thereafter 510,250 $ 568,000 Term Loan - Joinder and Amendment and Restatement Agreement On July 18, 2019 (the “Closing Date”), the credit agreement, dated as of October 9, 2018 (the “Existing Credit Agreement”), by and among Nautilus Acquisition Holdings, Inc. (“Holdings”), a Delaware corporation and a wholly-owned subsidiary of the Company, NVI, Goldman Sachs Bank USA, as administrative agent and collateral agent, and the lenders from time to time party thereto and the other parties thereto, was amended and restated pursuant to that certain Joinder and Amendment and Restatement Agreement, dated as of July 18, 2019 (the “Restatement Agreement”) by and among Holdings, NVI, as borrower, certain subsidiaries of NVI, as guarantors, Goldman Sachs Bank USA, as former administrative agent and collateral agent, Bank of America, N.A., as new administrative agent and collateral agent, and the lenders from time to time party thereto (the Existing Credit Agreement, as amended and restated by the Restatement Agreement, the “Credit Agreement”). The Existing Credit Agreement was amended and restated to, among other things, (i) establish new first lien term loans in an aggregate principal amount of $420.0 million (“Term Loan”) to repay all principal, interest fees and other amounts outstanding under the Existing Credit Agreement immediately prior to the Closing Date, (ii) establish a new revolving credit facility in an aggregate principal amount of $300.0 million , of which $148.0 million was drawn as of closing and (iii) replace Goldman Sachs Bank USA with Bank of America, N.A. as administrative agent and collateral agent under the Credit Agreement and related documentation. In connection with the principal repayments of our existing debt, the Company wrote off associated deferred debt issuance costs of $6.0 million and associated unamortized debt discount of $3.8 million , in the third quarter of 2019. Pursuant to the Restatement Agreement, the initial new Applicable Margins, as defined in the Credit Agreement, are (i) 1.50% for the new first lien term loans that are London Inter-bank Offered Rate (“LIBOR”) Loans and (ii) 0.50% for the new first lien term loans that are Alternative Base Rate (“ABR”) Loans. The Restatement Agreement further provides that following the Closing Date, the above Applicable Margins for the new first lien term loans will be based on NVI’s consolidated first lien leverage ratio as follows: (a) if NVI’s consolidated first lien leverage ratio is greater than 3.75 to 1.00 , the Applicable Margin will be 2.00% for LIBOR Loans and 1.00% for ABR Loans, (b) if NVI’s consolidated first lien leverage ratio is less than or equal to 3.75 to 1.00 , but greater than 2.75 to 1.00 , the Applicable Margin will be 1.75% for LIBOR Loans and 0.75% for ABR Loans, (c) if NVI’s consolidated first lien leverage ratio is less than or equal to 2.75 to 1.00 but greater than 1.75 to 1.00 , the Applicable Margin will be 1.50% for LIBOR Loans and 0.50% for ABR Loans, (d) if NVI’s consolidated first lien leverage ratio is less than or equal to 1.75 to 1.00 but greater than 0.75 to 1.00 , the Applicable Margin will be 1.25% for LIBOR Loans and 0.25% for ABR Loans and (e) if NVI’s consolidated first lien leverage ratio is less than or equal to 0.75 to 1.00 , the Applicable Margin will be 1.00% for LIBOR Loans and 0.00% for ABR Loans. The new first lien term loans will amortize in quarterly installments equal to 2.50% per annum in the first three years of the loan and 5.00% per annum thereafter. In addition, pursuant to the Restatement Agreement, solely with respect to the Term Loan, commencing on the fiscal quarter ending on December 28, 2019 , Holdings will not permit (i) the Consolidated Total Debt to Consolidated EBITDA Ratio, as defined in the Credit Agreement, as of the last day of any fiscal quarter of Holdings to be greater than 4.75 to 1.00 for the first two years, and 4.50 to 1.00 thereafter, subject to certain step-ups after the consummation of a Material Acquisition, as defined in the Credit Agreement, or (ii) the Consolidated Interest Coverage Ratio of Holdings, as defined in the Credit Agreement, as of the last day of any fiscal quarter of Holdings to be less than 3.00 to 1.00 . |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | The following tables summarize stock based compensation activity for the nine months ended September 28, 2019 : Service-based options (1) Performance-based options Total options Outstanding at December 29, 2018 2,583,380 4,143,781 6,727,161 Granted 299,207 — 299,207 Exercised (644,766 ) (987,340 ) (1,632,106 ) Forfeited (17,832 ) (1,258,280 ) (1,276,112 ) Outstanding at September 28, 2019 2,219,989 1,898,161 4,118,150 Vested and exercisable at September 28, 2019 1,386,225 1,767,727 3,153,952 (1) Includes service-based options under the Vision Holding Corp. Amended and Restated 2013 Equity Incentive Plan, the 2014 Stock Incentive Plan, and the 2017 Omnibus Incentive Plan. Service-based restricted stock unit (RSU) awards Performance-based restricted stock unit (PSU) awards Restricted stock (RSA) awards Outstanding at December 29, 2018 98,076 — 11,431 Granted 108,256 115,665 13,712 Vested — — (4,515 ) Forfeited (9,833 ) (2,274 ) — Outstanding at September 28, 2019 196,499 113,391 20,628 During the nine months ended September 28, 2019 , the Company made grants of stock options, performance-based restricted stock units (“PSUs”) and/or restricted stock units (“RSUs”) to eligible employees under the National Vision Holdings, Inc. 2017 Omnibus Incentive Plan (the “2017 Omnibus Incentive Plan”). The service-based options granted in fiscal 2019 vest in three equal annual installments, with one-third of the total options vesting on each of the first, second, and third anniversaries of the grant date, subject to continued employment through the applicable vesting date. The PSUs granted in fiscal 2019 are settled after the end of the performance period (i.e., cliff vesting), which begins on the first day of our 2019 fiscal year and ends on the last day of our 2021 fiscal year, and are based on the Company’s achievement of certain performance targets. The RSUs granted in fiscal 2019 vest in three equal installments. The weighted average grant date fair values per share of RSUs and PSUs granted during the nine months ended September 28, 2019 were $34.82 and $34.54 , respectively. During the nine months ended September 28, 2019 , we granted an aggregate of 13,712 restricted stock awards (“RSAs”) to eligible members of the Company’s Board of Directors under the 2017 Omnibus Incentive Plan. The awards vest one year from the grant date. The weighted average grant date fair value per share of each of the awards, based on the stock price on the date of grant, was $29.18 . The weighted average price of stock options exercised during the nine months ended September 28, 2019 was $5.77 . The weighted average grant date fair value of the stock options granted during the nine months ended September 28, 2019 was $13.68 . The following table summarizes stock compensation expense under the Company’s plans, which is included in SG&A in the accompanying statements of operations: Three months ended Nine months ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Stock options $ 4,948 $ 10,260 $ 7,955 $ 12,590 RSUs and PSUs 1,028 347 2,598 1,107 RSAs 125 11 201 41 Associate stock purchase plan 22 11 86 11 Total stock based compensation expense $ 6,123 $ 10,629 $ 10,840 $ 13,749 The unrecognized compensation cost as of September 28, 2019 related to RSUs, PSUs, RSAs and service-based stock options granted in 2019 was $2.7 million , $3.2 million , $0.3 million and $3.3 million |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 28, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with KKR During the three months ended September 28, 2019 , KKR Capital Markets LLC acted as a lead arranger with respect to the refinancing of our Credit Agreement, and received $1.0 million in fees in connection therewith. See Note 4 . “Long-term Debt” for additional information on the refinancing. During the three months ended September 28, 2019, the Company completed a secondary offering pursuant to which KKR Vision Aggregator L.P. sold 9,149,908 shares of the Company’s common stock in an underwritten offering. See Note 1 . “Description of Business and Basis of Presentation-Secondary Offering and Common Stock Repurchase” for further details. Equity in Net Assets of Non-Consolidated Investee The Company has an investment in a private start-up company whose principal business is licensing software to eyeglass retailers. Under the equity method of accounting, we are required to record our interest in the investee’s reported net income or loss for each reporting period, which is presented in other expense, net in the Company’s condensed consolidated statements of operations. Our interest in the investee’s net losses was $0.2 million and $1.2 million for the three and nine months ended September 28, 2019 , respectively and $0.4 million and $1.0 million for the three and nine months ended September 29, 2018 , respectively. There is no remaining investment balance associated with this investee as of September 28, 2019 . On August 29, 2017 , the investee issued a secured convertible promissory note to the Company, in the principal amount of $1.5 million , due on August 29, 2020 . The net carrying amount of the convertible promissory note after applying the investee’s net losses of $0.2 million was $1.3 million , and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets as of September 28, 2019 . Interest income associated with the note was immaterial for the three and nine months ended September 28, 2019 and September 29, 2018 |
Revenue From Contracts with Cus
Revenue From Contracts with Customers | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts with Customers | Revenue from Contracts with Customers The Company’s revenues are recognized either at the point of sale or upon delivery and customer acceptance, paid for at the time of sale in cash, credit card, or on account with managed care payors having terms generally between 14 and 120 days , with most paying within 90 days . Our point in time revenues include 1) retail sales of prescription and non-prescription eyewear, contact lenses and related accessories to retail customers (including those covered by managed care), 2) eye exams and 3) wholesale sales of inventory in which our customer is another retail entity. Revenues recognized over time primarily include product protection plans, eye care club memberships and management fees earned from our legacy partner. The following disaggregation of revenues is based on the timing of revenue recognition: Three Months Ended Nine Months Ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Revenues recognized at a point in time $ 394,709 $ 352,245 $ 1,211,942 $ 1,075,355 Revenues recognized over time 37,193 35,180 110,626 105,577 Total net revenue $ 431,902 $ 387,425 $ 1,322,568 $ 1,180,932 Refer to Note 10 . “Segment Reporting” for the Company’s disaggregation of net revenue by reportable segment. As the reportable segments are aligned by similar economic factors, trends and customers, the reportable segment disaggregation view best depicts how the nature, amount and uncertainty of revenue and cash flows are affected by economic factors. Contract Assets and Liabilities The Company’s contract assets and contract liabilities primarily result from timing differences between the performance of our obligations and the customer’s payment. Accounts Receivable Accounts receivable associated with revenues consist primarily of trade receivables and credit card receivables. Trade receivables consist primarily of receivables from managed care payors and receivables from major retailers. While we have relationships with almost all vision care insurers in the United States and with all of the major carriers, currently, a relatively small number of payors comprise the majority of our managed care revenues, subjecting us to concentration risk. Trade receivables and credit card receivables are included in accounts receivable, net, on our condensed consolidated balance sheets, and are presented separately in Note 2 . “Details of Certain Balance Sheet Accounts.” Accounts receivable are reduced by allowances for amounts that may become uncollectible. Estimates of our allowance for uncollectible accounts are based on our historical and current operating, billing, and collection trends. Impairment losses (i.e., bad debt expense) recognized on our receivables were approximately $2.4 million and $6.3 million for the three and nine months ended September 28, 2019 , respectively, and $1.7 million and $5.0 million for the three and nine months ended September 29, 2018 , respectively. Unsatisfied Performance Obligations (Contract Liabilities) Our retail customers generally make payments for prescription eyewear products at the time they place an order. Amounts we collect in advance for undelivered merchandise are reported as unearned revenue in the accompanying condensed consolidated balance sheets. Unearned revenue at the end of a reporting period is estimated based on delivery times throughout the current month and generally ranges from four to 10 days . All unearned revenue at the end of a reporting period is recognized in the next fiscal period. Our contract liabilities also consist of deferred revenue on services and plans obligations, primarily product protection plans and eye care club memberships. The unamortized portion of amounts we collect in advance for these services and plans is reported as deferred revenue in the accompanying condensed consolidated balance sheets (current and non-current portions). Our deferred revenue balance as of September 28, 2019 was $79.3 million . We expect future revenue recognition of this balance of $20.3 million , $42.2 million , $13.4 million , $3.2 million , and $0.2 million in fiscal years 2019 , 2020 , 2021 , 2022 , and thereafter , respectively. We recognized $27.9 million and $83.2 million of previously deferred revenues during the three and nine months ended September 28, 2019 , respectively and $26.5 million and $78.5 million during the three and nine months ended September 29, 2018 , respectively. |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases | Leases We lease our stores, laboratories, distribution centers, and corporate offices. These leases generally have noncancellable lease terms of between five and 10 years , with an option to renew for additional terms of one to 10 years or more. The lease term includes renewal option periods when the renewal is deemed reasonably certain after considering the value of the leasehold improvements at the end of the noncancellable lease period. Most leases for our stores provide for a minimum rent and typically include escalating rent over time with the exception of Military for which lease payments are variable and based on a percentage of sales. For Vista Optical locations in Fred Meyer stores, we pay fixed rent plus a percentage of sales after certain minimum thresholds are achieved. The Company’s leases generally require us to pay insurance, real estate taxes and common area maintenance expenses, substantially all of which are variable and not included in the measurement of the lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company does not consider its management and services agreement with its legacy partner to contain a lease arrangement. Our lease arrangements include TIAs, which are contractual amounts received from a lessor for improvements made to leased properties by the Company. For operating leases, TIAs are treated as a reduction of the lease payments used to measure the ROU assets in the accompanying consolidated balance sheet as of September 28, 2019 (non-current liabilities as of December 29, 2018 ), and are amortized as a reduction in rental expense over the life of the respective leases. For finance leases, a lease ROU asset is recorded as property and equipment and corresponding amounts are recorded as finance lease debt obligations at an amount equal to the lesser of the net present value of minimum lease payments to be made over the lease term or the fair value of the property for leases in existence as of fiscal year end 2018 and at the net present value of the minimum lease payments to be made over the lease term for new finance leases entered into subsequent to fiscal year end 2018 . We rent or sublease certain parts of our stores to third parties. Our sublease portfolio consists mainly of operating leases with our ophthalmologists and optometrists within our stores. In thousands As of Type Classification ASSETS Finance Property and equipment, net $ 29,314 Operating Right of use assets (a) 344,179 Total leased assets $ 373,493 LIABILITIES Current Liabilities: Finance Current maturities of long-term debt and finance lease obligations $ 3,236 Operating Current operating lease obligations 56,814 Other non-current liabilities: Finance Long-term debt and finance lease obligations, less current portion and debt discount 30,946 Operating Non-current operating lease obligations 326,492 Total lease liabilities $ 417,488 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the net present value of minimum lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. (a) TIA of $34.2 million and deferred rent of $14.2 million are treated as reductions of lease payments used to measure ROU assets as of September 28, 2019. Finance lease assets are recorded net of accumulated amortization of $7.1 million and $4.1 million as of September 28, 2019 and December 30, 2018 , respectively. In thousands Three Months Ended Nine Months Ended Lease cost by classification Selling, general and administrative: Operating lease cost (a) $ 18,542 $ 54,955 Variable lease cost (b) 6,745 19,803 Sublease income (c) (965 ) (2,881 ) Depreciation and amortization: Amortization of lease assets 1,176 3,231 Interest expense, net: Interest on lease liabilities 903 2,689 Net lease cost $ 26,401 $ 77,797 (a) Includes short-term leases, which are immaterial. (b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable as well as lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores. (c) Income from sub-leasing of stores includes rental income from operating lease properties to ophthalmologists and optometrists who are independent contractors. Lease Term and Discount Rate As of Weighted average remaining lease term (months) Operating leases 82 Finance leases 91 Weighted average discount rate (a) Operating leases 4.6 % Finance leases (b) 13.1 % (a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our long-term debt; (ii) fixed rates we pay on our interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; (iv) borrowing rates on five-year and ten-year US Treasuries; and (v) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period. (b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations. In thousands Nine Months Ended Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows - operating leases $ 55,817 The following table summarizes the maturity of our lease liabilities as of September 28, 2019 : In thousands Operating Leases (a) Finance Leases (b) Fiscal Year 2019 fourth quarter $ 13,090 $ 1,398 2020 77,497 7,196 2021 71,292 7,116 2022 63,978 7,051 2023 56,958 6,077 Thereafter 168,637 20,021 Total lease liabilities 451,452 48,859 Less: Interest 68,146 14,677 Present value of lease liabilities (c) $ 383,306 $ 34,182 (a) Operating lease payments include $75.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $1.1 million related to options to extend lease terms that are reasonably certain of being exercised. (c) The present value of lease liabilities excludes $19.1 million of legally binding minimum lease payments for leases signed but not yet commenced. As of fiscal year end 2018 , aggregate future minimum rental payments under our operating leases were as follows: Fiscal Year In thousands 2019 $ 69,372 2020 63,218 2021 56,219 2022 49,303 2023 42,545 Thereafter 126,388 $ 407,045 The future minimum rental payments above do not include amounts for variable executory costs such as insurance, real estate taxes and the common area maintenance. These costs were approximately $18.0 million , $14.9 million and $13.9 million during the fiscal years ended 2018 , 2017 and 2016 , respectively. |
Leases | Leases We lease our stores, laboratories, distribution centers, and corporate offices. These leases generally have noncancellable lease terms of between five and 10 years , with an option to renew for additional terms of one to 10 years or more. The lease term includes renewal option periods when the renewal is deemed reasonably certain after considering the value of the leasehold improvements at the end of the noncancellable lease period. Most leases for our stores provide for a minimum rent and typically include escalating rent over time with the exception of Military for which lease payments are variable and based on a percentage of sales. For Vista Optical locations in Fred Meyer stores, we pay fixed rent plus a percentage of sales after certain minimum thresholds are achieved. The Company’s leases generally require us to pay insurance, real estate taxes and common area maintenance expenses, substantially all of which are variable and not included in the measurement of the lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company does not consider its management and services agreement with its legacy partner to contain a lease arrangement. Our lease arrangements include TIAs, which are contractual amounts received from a lessor for improvements made to leased properties by the Company. For operating leases, TIAs are treated as a reduction of the lease payments used to measure the ROU assets in the accompanying consolidated balance sheet as of September 28, 2019 (non-current liabilities as of December 29, 2018 ), and are amortized as a reduction in rental expense over the life of the respective leases. For finance leases, a lease ROU asset is recorded as property and equipment and corresponding amounts are recorded as finance lease debt obligations at an amount equal to the lesser of the net present value of minimum lease payments to be made over the lease term or the fair value of the property for leases in existence as of fiscal year end 2018 and at the net present value of the minimum lease payments to be made over the lease term for new finance leases entered into subsequent to fiscal year end 2018 . We rent or sublease certain parts of our stores to third parties. Our sublease portfolio consists mainly of operating leases with our ophthalmologists and optometrists within our stores. In thousands As of Type Classification ASSETS Finance Property and equipment, net $ 29,314 Operating Right of use assets (a) 344,179 Total leased assets $ 373,493 LIABILITIES Current Liabilities: Finance Current maturities of long-term debt and finance lease obligations $ 3,236 Operating Current operating lease obligations 56,814 Other non-current liabilities: Finance Long-term debt and finance lease obligations, less current portion and debt discount 30,946 Operating Non-current operating lease obligations 326,492 Total lease liabilities $ 417,488 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the net present value of minimum lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. (a) TIA of $34.2 million and deferred rent of $14.2 million are treated as reductions of lease payments used to measure ROU assets as of September 28, 2019. Finance lease assets are recorded net of accumulated amortization of $7.1 million and $4.1 million as of September 28, 2019 and December 30, 2018 , respectively. In thousands Three Months Ended Nine Months Ended Lease cost by classification Selling, general and administrative: Operating lease cost (a) $ 18,542 $ 54,955 Variable lease cost (b) 6,745 19,803 Sublease income (c) (965 ) (2,881 ) Depreciation and amortization: Amortization of lease assets 1,176 3,231 Interest expense, net: Interest on lease liabilities 903 2,689 Net lease cost $ 26,401 $ 77,797 (a) Includes short-term leases, which are immaterial. (b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable as well as lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores. (c) Income from sub-leasing of stores includes rental income from operating lease properties to ophthalmologists and optometrists who are independent contractors. Lease Term and Discount Rate As of Weighted average remaining lease term (months) Operating leases 82 Finance leases 91 Weighted average discount rate (a) Operating leases 4.6 % Finance leases (b) 13.1 % (a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our long-term debt; (ii) fixed rates we pay on our interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; (iv) borrowing rates on five-year and ten-year US Treasuries; and (v) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period. (b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations. In thousands Nine Months Ended Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows - operating leases $ 55,817 The following table summarizes the maturity of our lease liabilities as of September 28, 2019 : In thousands Operating Leases (a) Finance Leases (b) Fiscal Year 2019 fourth quarter $ 13,090 $ 1,398 2020 77,497 7,196 2021 71,292 7,116 2022 63,978 7,051 2023 56,958 6,077 Thereafter 168,637 20,021 Total lease liabilities 451,452 48,859 Less: Interest 68,146 14,677 Present value of lease liabilities (c) $ 383,306 $ 34,182 (a) Operating lease payments include $75.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $1.1 million related to options to extend lease terms that are reasonably certain of being exercised. (c) The present value of lease liabilities excludes $19.1 million of legally binding minimum lease payments for leases signed but not yet commenced. As of fiscal year end 2018 , aggregate future minimum rental payments under our operating leases were as follows: Fiscal Year In thousands 2019 $ 69,372 2020 63,218 2021 56,219 2022 49,303 2023 42,545 Thereafter 126,388 $ 407,045 The future minimum rental payments above do not include amounts for variable executory costs such as insurance, real estate taxes and the common area maintenance. These costs were approximately $18.0 million , $14.9 million and $13.9 million during the fiscal years ended 2018 , 2017 and 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Other Agreements In the fourth quarter of 2018, the Company renewed an eyeglass lenses supply agreement with a trade vendor effective June 2019. The Company also renewed certain other agreements with the vendor, including a cloud computing service arrangement. As a result, as previously disclosed, this arrangement includes minimum purchase commitments of approximately $30.0 million over the four year term. Additionally, during the nine months ended September 28, 2019 , we entered into minimum purchase commitments with our trade vendors of approximately $17.0 million annually through 2021. Legal Proceedings From time to time, the Company is involved in various legal proceedings incidental to its business. Because of the nature and inherent uncertainties of litigation, we cannot predict with certainty the ultimate resolution of these actions and, should the outcome of these actions be unfavorable, the Company’s business, financial position, results of operations or cash flows could be materially and adversely affected. The Company reviews the status of its legal proceedings and records a provision for a liability when it is considered probable that both a liability has been incurred and the amount of the loss can be reasonably estimated. This review is updated periodically as additional information becomes available. If either or both of the criteria are not met, we reassess whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, we disclose the estimate of the amount of the loss or range of losses, or that an estimate of loss cannot be made. The Company expenses its legal fees as incurred. On January 29, 2016 , FirstSight, our wholly-owned specialized health maintenance organization, was named as a defendant in a proposed class action filed on behalf of all persons who paid for an eye examination from an optometrist at a Walmart location in California from November 5, 2009 through the date of the resolution of the litigation. The complaint alleges in particular that FirstSight participated in arrangements that caused the illegal delivery of eye examinations to the plaintiffs, and that FirstSight thereby violated, among other statutes, the Unfair Competition and False Advertising laws of California. In March 2017 , the Court granted a motion to dismiss previously filed by FirstSight. The plaintiffs filed an appeal to the U.S. Court of Appeals for the Ninth Circuit in April 2017. In July 2018, the U.S. Court of Appeals for the Ninth Circuit vacated in part, and reversed in part, the district court’s dismissal and remanded for further proceedings. In October 2018, the plaintiffs filed a second amended complaint with the district court seeking, among other claims, unspecified damages and attorneys’ fees, and in November 2018, FirstSight filed a motion to dismiss. The Company believes that the claims are without merit and intends to continue to vigorously defend the litigation. In May 2017 , a complaint (the “1-800 Contacts Matter”) was filed against the Company and other defendants alleging, on behalf of a proposed class of consumers who purchased contact lenses online, that 1-800 Contacts, Inc. entered into a series of agreements with the other defendants, including AC Lens, the Company’s subsidiary, to suppress certain online advertising and that each defendant thereby engaged in anticompetitive conduct in violation of the Sherman Antitrust Act. The Company has settled the 1-800 Contacts Matter for $7.0 million , without admitting liability. Accordingly, the Company recorded a charge for this amount during the second quarter of fiscal year 2017. On November 8, 2017 , the court in the 1-800 Contacts Matter entered an order preliminarily approving the settlement agreement, subject to a settlement hearing. Pursuant to this order, the Company deposited 50% of the settlement amount, or $3.5 million , into an escrow account, to be distributed subject to and in accordance with the terms of the settlement agreement and any further order of the court. In February 2019 , we were served with a lawsuit by a former employee who alleges, on behalf of himself and a proposed class, several violations of California wage and hour laws and seeks unspecified alleged unpaid wages, monetary damages, injunctive relief and attorneys’ fees. On March 21, 2019, we removed the lawsuit from state court to the United States District Court for the Northern District of California. The plaintiff moved to remand the action to state court on April 18, 2019, and the Court denied this motion on July 8, 2019. On July 22, 2019, the plaintiff filed an amended complaint. On July 26, 2019, the parties filed a joint stipulation wherein the Company denied all claims in the amended complaint but joined the plaintiff in seeking a stay of further proceedings in the lawsuit based on the parties’ agreement to attend early mediation in an effort to avoid further costs and expenses of protracted litigation. Mediation has been scheduled in the first quarter of 2020. The Company continues to believe that the plaintiff’s amended complaint lacks merit and will vigorously defend the litigation. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company provides its principal products and services through two reportable segments: Owned & Host and Legacy. The “Corporate/Other” category includes the results of operations of our other operating segments, AC Lens and FirstSight, as well as corporate overhead support. The “Reconciliations” category represents other adjustments to reportable segment results necessary for the presentation of consolidated financial results in accordance with U.S. GAAP. The following is a summary of certain financial data for each of our segments. Reportable segment information is presented on the same basis as our condensed consolidated financial statements, except for net revenue and associated costs applicable to revenue, which is presented on a cash basis, including point of sales for managed care payors and excluding the effects of unearned and deferred revenue, consistent with what the chief operating decision maker (“CODM”) regularly reviews. Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segments. Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”), or net revenue, less costs applicable to revenue, less selling, general and administrative costs. Depreciation and amortization, asset impairment, litigation settlement and other corporate costs that are not allocated to the reportable segments, including interest expense and debt issuance costs are excluded from segment EBITDA. There are no transactions between our reportable segments. We measure assets in our reportable segments on the same basis as consolidated assets. There have been no changes from prior periods in the measurement methods used to determine reportable segment profit or loss, and there have been no asymmetrical allocations to segments. As the reportable segments are aligned by similar economic factors, trends and customers, this disaggregation view best depicts how the nature, amount, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended September 28, 2019 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 270,171 $ 25,252 $ 63,173 $ (2,807 ) $ 355,789 Segment services and plans revenues 63,267 14,103 1 (1,258 ) 76,113 Total net revenue 333,438 39,355 63,174 (4,065 ) 431,902 Cost of products 77,670 11,681 55,684 (517 ) 144,518 Cost of services and plans 53,465 6,519 — — 59,984 Total costs applicable to revenue 131,135 18,200 55,684 (517 ) 204,502 SG&A 128,054 13,920 48,316 — 190,290 Asset impairment — — 3,516 — 3,516 Other expense, net — — 146 — 146 Loss on extinguishment of debt — — 9,786 — 9,786 EBITDA $ 74,249 $ 7,235 $ (54,274 ) $ (3,548 ) 23,662 Depreciation and amortization 22,336 Interest expense, net 7,873 Loss before income taxes $ (6,547 ) Three Months Ended September 29, 2018 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 240,882 $ 24,739 $ 53,286 $ 405 $ 319,312 Segment services and plans revenues 55,673 12,489 912 (961 ) 68,113 Total net revenue 296,555 37,228 54,198 (556 ) 387,425 Cost of products 72,532 11,328 46,881 210 130,951 Cost of services and plans 45,581 5,124 932 — 51,637 Total costs applicable to revenue 118,113 16,452 47,813 210 182,588 SG&A 118,988 13,621 52,419 — 185,028 Asset impairment — — 2,137 — 2,137 Other expense, net — — 411 — 411 EBITDA $ 59,454 $ 7,155 $ (48,582 ) $ (766 ) 17,261 Depreciation and amortization 19,344 Interest expense, net 9,407 Loss before income taxes $ (11,490 ) Nine Months Ended September 28, 2019 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 827,957 $ 81,178 $ 189,389 $ (2,042 ) $ 1,096,482 Segment services and plans revenues 191,117 42,019 12 (7,062 ) 226,086 Total net revenue 1,019,074 123,197 189,401 (9,104 ) 1,322,568 Costs of products 239,975 38,123 166,533 (454 ) 444,177 Costs of services and plans 155,710 19,090 1 — 174,801 Total costs applicable to revenue 395,685 57,213 166,534 (454 ) 618,978 SG&A 387,345 42,041 137,058 — 566,444 Asset impairment — — 7,387 — 7,387 Other expense, net — — 975 — 975 Loss on extinguishment of debt — — 9,786 — 9,786 EBITDA $ 236,044 $ 23,943 $ (132,339 ) $ (8,650 ) 118,998 Depreciation and amortization 63,570 Interest expense, net 25,902 Income before income taxes $ 29,526 Nine Months Ended September 29, 2018 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 738,886 $ 80,004 $ 153,856 $ 4,751 $ 977,497 Segment services and plans revenues 167,679 39,088 2,939 (6,271 ) 203,435 Total net revenue 906,565 119,092 156,795 (1,520 ) 1,180,932 Costs of products 217,195 36,356 134,731 1,278 389,560 Costs of services and plans 132,708 14,965 2,868 — 150,541 Total costs applicable to revenue 349,903 51,321 137,599 1,278 540,101 SG&A 351,019 40,519 129,806 — 521,344 Asset impairment — — 2,137 — 2,137 Other expense, net — — 829 — 829 EBITDA $ 205,643 $ 27,252 $ (113,576 ) $ (2,798 ) 116,521 Depreciation and amortization 54,783 Interest expense, net 28,144 Income before income taxes $ 33,594 Revenues associated with managing operations of our legacy partner were $9.3 million and $27.5 million for the three and nine months ended September 28, 2019 , respectively and $8.6 million and $27.0 million for the three and nine months ended September 29, 2018 , respectively. During the nine months ended September 28, 2019 , sales associated with our legacy partner arrangement represented 9.3% of consolidated net revenue. This exposes us to concentration of customer risk. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted average common shares outstanding for the period and includes the dilutive impact of potential new common shares issuable upon vesting and exercise of stock options and vesting of restricted stock units. Potential shares of common stock are excluded from the computation of diluted EPS if their effect is anti-dilutive. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows: Three Months Ended Nine Months Ended In thousands, except EPS September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Net income $ 1,192 $ 5,171 $ 28,879 $ 42,093 Weighted average shares outstanding for basic EPS 78,474 76,118 78,387 75,361 Effect of dilutive securities: Stock options 3,024 3,485 3,074 3,119 Restricted stock 63 107 49 91 Weighted average shares outstanding for diluted EPS 81,561 79,710 81,510 78,571 Basic EPS $ 0.02 $ 0.07 $ 0.37 $ 0.56 Diluted EPS $ 0.01 $ 0.06 $ 0.35 $ 0.54 Anti-dilutive options, RSUs outstanding excluded from EPS 315 — 289 — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Changes in the fair value of the Company’s cash flow hedge derivative instruments since inception are recorded in AOCL. The following table presents the changes in AOCL during the three and nine months ended September 28, 2019 and September 29, 2018 , respectively: Three Months Ended Nine Months Ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Cash flow hedging activity: Balance at beginning of period $ (5,427 ) $ (2,746 ) $ (2,810 ) $ (9,868 ) Other comprehensive income (loss) before reclassification (439 ) 854 (5,760 ) 6,696 Tax effect of other comprehensive income (loss) before reclassification 112 (218 ) 1,476 (1,715 ) Amount reclassified from AOCL into interest expense 1,120 1,413 2,922 5,146 Tax effect of amount reclassified from AOCL into interest expense (287 ) (362 ) (749 ) (1,318 ) Net current period other comprehensive income (loss), net of tax 506 1,687 (2,111 ) 8,809 Balance at end of period $ (4,921 ) $ (1,059 ) $ (4,921 ) $ (1,059 ) See Note 3 . “Fair Value Measurements of Financial Assets and Liabilities” for a description of the Company’s use of cash flow hedging derivatives. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and, therefore, do not include all information and disclosures required by U.S. GAAP for complete consolidated financial statements. The condensed consolidated balance sheet as of December 29, 2018 has been derived from the audited consolidated balance sheet for the fiscal year then ended. These condensed consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s consolidated financial position as of September 28, 2019 , the consolidated results of operations and comprehensive income, the statements of changes in stockholders’ equity for the three and nine months ended September 28, 2019 and September 29, 2018 , and its statements of cash flows for the nine months ended September 28, 2019 and September 29, 2018 . Certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted; however, we believe that the disclosures included herein are sufficient for a fair presentation of the information presented. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the fiscal year ended December 29, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2019. The Company’s significant accounting policies are set forth in Note 1 within those consolidated financial statements. We use the same accounting policies in preparing interim condensed consolidated financial information and annual consolidated financial statements. There were no changes to our significant accounting policies during the nine months ended September 28, 2019 , except for the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases. See “Adoption of New Accounting Pronouncements” below for further discussion. The condensed consolidated financial statements include our accounts and those of our subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31. Fiscal year 2019 contains 52 weeks and will end on December 28, 2019 . All three and nine month periods presented herein contain 13 and 39 weeks, respectively. All references to years and quarters relate to fiscal periods rather than calendar periods. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Asset Impairment | Asset Impairment We evaluate impairment of long-lived tangible and right of use (“ROU”) store assets at the store level, which is the lowest level at which independent cash flows can be identified, when events or conditions indicate the carrying value of such assets may not be recoverable. In making this evaluation, we may consider multiple factors including financial performance of the stores, regional and local business climates, future plans for the store operations and other qualitative factors. If the store's projected undiscounted net cash flows expected to be generated by the related assets over the shorter of the remaining useful life or the remaining term of the lease are less than the carrying value of the subject assets, we then measure impairment based on a discounted cash flow model and market-based indications of value of the ROU asset and record an impairment charge as the excess of carrying value over estimated fair value. As directed in the accounting guidance for long-lived assets held and used, we use entity-specific assumptions related to our anticipated use of the assets when developing the projected undiscounted cash flows. |
Income Taxes | Income Taxes Our income tax rate for the three months ended September 28, 2019 reflected our statutory federal and state rate of 25.6% , offset by a discrete benefit of $6.3 million associated primarily with stock option exercises. Our income tax benefit for the nine months ended September 28, 2019 reflected income tax expense at our statutory federal and state rate of 25.6% , offset by a discrete benefit of $7.7 million associated primarily with stock option exercises. In comparison, the income tax rate associated with the three and nine months ended September 29, 2018 was reduced by $13.9 million and $18.0 million respective income tax benefit resulting from stock option exercises. |
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases . This new guidance establishes a ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with such classification affecting the pattern of expense recognition in the statement of operations. Disclosure of key information about leasing arrangements is also required. We adopted ASU No. 2016-02, as amended, as of December 30, 2018 (the first day of fiscal year 2019 ), using the modified retrospective transition approach without adjusting the comparative periods presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward historical lease classification for leases in existence as of the adoption date, to not assess whether any expired or existing contracts are leases or contain leases and to not assess whether unamortized initial direct costs for existing leases meet the definition of initial direct costs. In addition, we elected the practical expedients to not separate lease components from non-lease components and to not apply this new guidance to leases with terms of less than 12 months. Upon adoption, we recorded operating lease liabilities of approximately $349.7 million as of December 30, 2018 . The Company treated tenant improvement allowances (“TIAs”) and deferred rent of $28.6 million and $11.9 million , respectively, as of December 30, 2018 as reductions of lease payments used to measure ROU assets and recorded $308.5 million of lease ROU assets upon adoption. The difference between the additional lease assets and lease liabilities net of the deferred tax impact was $0.5 million , which was recorded as an adjustment to fiscal year 2019 opening retained earnings. Adoption of this new guidance did not result in significant changes to our results of operations or cash flows. See Note 8 . “Leases” for additional information. Future Adoption of Accounting Pronouncements Cloud Computing. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This new guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years and may be adopted on a prospective or retrospective basis. The Company is in the process of assessing the new guidance. Credit Losses . In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This new guidance requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. Initial adoption of ASU 2016-13 is required to be reported on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, except for certain provisions that are required to be applied prospectively. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim reporting periods within those fiscal years. The Company is in the process of assessing the new guidance. |
Details of Certain Balance Sh_2
Details of Certain Balance Sheet Accounts (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable, Net | In thousands As of As of Accounts receivable, net: Trade receivables $ 27,879 $ 27,356 Credit card receivables 15,131 16,636 Tenant improvement allowances receivable 6,183 5,149 Other receivables 4,544 4,206 Allowance for uncollectible accounts (3,082 ) (2,612 ) $ 50,655 $ 50,735 |
Schedule of Inventories | In thousands As of As of Inventories: Raw materials and work in process (1) $ 57,844 $ 59,946 Finished goods 54,050 56,076 $ 111,894 $ 116,022 (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, the Company does not separately present raw materials and work in process. |
Schedule of Property and Equipment, Net | In thousands As of As of Property and equipment, net: Land and building $ 3,632 $ 3,632 Equipment 186,181 160,958 Information systems hardware and software 113,127 101,809 Furniture and fixtures 53,922 48,992 Leasehold improvements 207,113 186,499 Construction in progress 28,299 40,697 Right of use assets under finance leases 36,437 25,446 628,711 568,033 Less: Accumulated depreciation 256,642 212,916 $ 372,069 $ 355,117 |
Schedule of Other Payables and Accrued Expenses | In thousands As of As of Other payables and accrued expenses: Employee compensation and benefits $ 40,347 $ 20,529 Advertising 2,565 2,076 Self-insurance reserves 8,464 8,117 Reserves for customer returns and remakes 7,606 4,645 Capital expenditures 11,532 14,078 Legacy management and services agreement 6,642 5,383 Fair value of derivative liabilities 6,260 3,130 Supplies and other store support expenses 3,038 4,929 Litigation settlements 3,894 3,938 Other 11,208 14,179 $ 101,556 $ 81,004 |
Schedule of Other Non-current Liabilities | In thousands As of As of Other non-current liabilities: Fair value of derivative liabilities $ 3,214 $ 3,505 Tenant improvements (1) — 30,851 Deferred rental expenses (1) — 11,926 Self-insurance reserves 5,528 5,114 Other 4,665 2,568 $ 13,407 $ 53,964 (1) Tenant improvements and deferred rental expenses are used to measure ROU assets on the balance sheet under ASC 842, Leases as of September 28, 2019. See Note 8. “Leases” for further details. |
Fair Value Measurements of Fi_2
Fair Value Measurements of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Cash Flow Hedge Derivative Contracts | Our cash flow hedge position related to interest rate derivative contracts is as follows: In thousands Notional Amount Maturity Date Other Payables and Accrued Expenses Other Liabilities AOCL, Net of Tax (1) As of $ 430,000 March 2021 $ 6,260 $ 3,214 $ 4,921 As of $ 465,000 March 2021 $ 3,130 $ 3,505 $ 2,810 (1) Includes stranded tax benefit of $2.1 million within AOCL from adopting provisions of the Tax Cuts and Jobs Act of 2017 during the year ended December 30, 2017. |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following: In thousands As of As of First Lien - Term Loan B $ — $ 364,300 First Lien - Term Loan A — 200,000 First Lien - Term Loan, due July 18, 2024 420,000 — First Lien - Revolving credit facility, due July 18, 2024 148,000 — Total term loans before unamortized discount 568,000 564,300 Unamortized discount (4,196 ) (10,673 ) Total term loans 563,804 553,627 Less current maturities (10,500 ) (5,000 ) Term loans - non-current portion 553,304 548,627 Finance lease obligations 34,182 24,485 Less current maturities (3,236 ) (2,567 ) Long-term debt, less current portion and unamortized debt discount $ 584,250 $ 570,545 |
Schedule of Maturities of Long-term Debt | Scheduled maturities of the Term Loan and revolving credit facility are as follows: Fiscal Period In thousands 2019 - fourth quarter $ 2,625 2020 10,500 2021 10,500 2022 13,125 2023 21,000 Thereafter 510,250 $ 568,000 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following tables summarize stock based compensation activity for the nine months ended September 28, 2019 : Service-based options (1) Performance-based options Total options Outstanding at December 29, 2018 2,583,380 4,143,781 6,727,161 Granted 299,207 — 299,207 Exercised (644,766 ) (987,340 ) (1,632,106 ) Forfeited (17,832 ) (1,258,280 ) (1,276,112 ) Outstanding at September 28, 2019 2,219,989 1,898,161 4,118,150 Vested and exercisable at September 28, 2019 1,386,225 1,767,727 3,153,952 (1) Includes service-based options under the Vision Holding Corp. Amended and Restated 2013 Equity Incentive Plan, the 2014 Stock Incentive Plan, and the 2017 Omnibus Incentive Plan. |
Schedule of Restricted Stock and Restricted Stock Units Activity | Service-based restricted stock unit (RSU) awards Performance-based restricted stock unit (PSU) awards Restricted stock (RSA) awards Outstanding at December 29, 2018 98,076 — 11,431 Granted 108,256 115,665 13,712 Vested — — (4,515 ) Forfeited (9,833 ) (2,274 ) — Outstanding at September 28, 2019 196,499 113,391 20,628 |
Schedule of Stock Compensation Expense | The following table summarizes stock compensation expense under the Company’s plans, which is included in SG&A in the accompanying statements of operations: Three months ended Nine months ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Stock options $ 4,948 $ 10,260 $ 7,955 $ 12,590 RSUs and PSUs 1,028 347 2,598 1,107 RSAs 125 11 201 41 Associate stock purchase plan 22 11 86 11 Total stock based compensation expense $ 6,123 $ 10,629 $ 10,840 $ 13,749 |
Revenue From Contracts with C_2
Revenue From Contracts with Customers (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenues | The following disaggregation of revenues is based on the timing of revenue recognition: Three Months Ended Nine Months Ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Revenues recognized at a point in time $ 394,709 $ 352,245 $ 1,211,942 $ 1,075,355 Revenues recognized over time 37,193 35,180 110,626 105,577 Total net revenue $ 431,902 $ 387,425 $ 1,322,568 $ 1,180,932 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Schedule of Lease Type and Classification On Balance Sheet | In thousands As of Type Classification ASSETS Finance Property and equipment, net $ 29,314 Operating Right of use assets (a) 344,179 Total leased assets $ 373,493 LIABILITIES Current Liabilities: Finance Current maturities of long-term debt and finance lease obligations $ 3,236 Operating Current operating lease obligations 56,814 Other non-current liabilities: Finance Long-term debt and finance lease obligations, less current portion and debt discount 30,946 Operating Non-current operating lease obligations 326,492 Total lease liabilities $ 417,488 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the net present value of minimum lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. (a) TIA of $34.2 million and deferred rent of $14.2 million are treated as reductions of lease payments used to measure ROU assets as of September 28, 2019. |
Schedule of Lease Cost | In thousands Three Months Ended Nine Months Ended Lease cost by classification Selling, general and administrative: Operating lease cost (a) $ 18,542 $ 54,955 Variable lease cost (b) 6,745 19,803 Sublease income (c) (965 ) (2,881 ) Depreciation and amortization: Amortization of lease assets 1,176 3,231 Interest expense, net: Interest on lease liabilities 903 2,689 Net lease cost $ 26,401 $ 77,797 (a) Includes short-term leases, which are immaterial. (b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable as well as lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores. (c) Income from sub-leasing of stores includes rental income from operating lease properties to ophthalmologists and optometrists who are independent contractors. |
Schedule of Lease Terms and Discount Rate | Lease Term and Discount Rate As of Weighted average remaining lease term (months) Operating leases 82 Finance leases 91 Weighted average discount rate (a) Operating leases 4.6 % Finance leases (b) 13.1 % (a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our long-term debt; (ii) fixed rates we pay on our interest rate swaps; (iii) LIBOR margins for issuers of similar credit rating; (iv) borrowing rates on five-year and ten-year US Treasuries; and (v) effect of collateralization. As a majority of our leases are five-year and 10-year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period. (b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations. |
Schedule of Operating Lease Cash Flows | In thousands Nine Months Ended Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows - operating leases $ 55,817 |
Schedule of Maturity for Operating Lease Liabilities | The following table summarizes the maturity of our lease liabilities as of September 28, 2019 : In thousands Operating Leases (a) Finance Leases (b) Fiscal Year 2019 fourth quarter $ 13,090 $ 1,398 2020 77,497 7,196 2021 71,292 7,116 2022 63,978 7,051 2023 56,958 6,077 Thereafter 168,637 20,021 Total lease liabilities 451,452 48,859 Less: Interest 68,146 14,677 Present value of lease liabilities (c) $ 383,306 $ 34,182 (a) Operating lease payments include $75.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $1.1 million related to options to extend lease terms that are reasonably certain of being exercised. (c) The present value of lease liabilities excludes $19.1 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Schedule of Maturity for Finance Lease Liabilities | The following table summarizes the maturity of our lease liabilities as of September 28, 2019 : In thousands Operating Leases (a) Finance Leases (b) Fiscal Year 2019 fourth quarter $ 13,090 $ 1,398 2020 77,497 7,196 2021 71,292 7,116 2022 63,978 7,051 2023 56,958 6,077 Thereafter 168,637 20,021 Total lease liabilities 451,452 48,859 Less: Interest 68,146 14,677 Present value of lease liabilities (c) $ 383,306 $ 34,182 (a) Operating lease payments include $75.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $1.1 million related to options to extend lease terms that are reasonably certain of being exercised. (c) The present value of lease liabilities excludes $19.1 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Schedule of Aggregate Future Minimum Rental Payments at Prior Year End | As of fiscal year end 2018 , aggregate future minimum rental payments under our operating leases were as follows: Fiscal Year In thousands 2019 $ 69,372 2020 63,218 2021 56,219 2022 49,303 2023 42,545 Thereafter 126,388 $ 407,045 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Financial Data by Segment | The following is a summary of certain financial data for each of our segments. Reportable segment information is presented on the same basis as our condensed consolidated financial statements, except for net revenue and associated costs applicable to revenue, which is presented on a cash basis, including point of sales for managed care payors and excluding the effects of unearned and deferred revenue, consistent with what the chief operating decision maker (“CODM”) regularly reviews. Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segments. Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”), or net revenue, less costs applicable to revenue, less selling, general and administrative costs. Depreciation and amortization, asset impairment, litigation settlement and other corporate costs that are not allocated to the reportable segments, including interest expense and debt issuance costs are excluded from segment EBITDA. There are no transactions between our reportable segments. We measure assets in our reportable segments on the same basis as consolidated assets. There have been no changes from prior periods in the measurement methods used to determine reportable segment profit or loss, and there have been no asymmetrical allocations to segments. As the reportable segments are aligned by similar economic factors, trends and customers, this disaggregation view best depicts how the nature, amount, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended September 28, 2019 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 270,171 $ 25,252 $ 63,173 $ (2,807 ) $ 355,789 Segment services and plans revenues 63,267 14,103 1 (1,258 ) 76,113 Total net revenue 333,438 39,355 63,174 (4,065 ) 431,902 Cost of products 77,670 11,681 55,684 (517 ) 144,518 Cost of services and plans 53,465 6,519 — — 59,984 Total costs applicable to revenue 131,135 18,200 55,684 (517 ) 204,502 SG&A 128,054 13,920 48,316 — 190,290 Asset impairment — — 3,516 — 3,516 Other expense, net — — 146 — 146 Loss on extinguishment of debt — — 9,786 — 9,786 EBITDA $ 74,249 $ 7,235 $ (54,274 ) $ (3,548 ) 23,662 Depreciation and amortization 22,336 Interest expense, net 7,873 Loss before income taxes $ (6,547 ) Three Months Ended September 29, 2018 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 240,882 $ 24,739 $ 53,286 $ 405 $ 319,312 Segment services and plans revenues 55,673 12,489 912 (961 ) 68,113 Total net revenue 296,555 37,228 54,198 (556 ) 387,425 Cost of products 72,532 11,328 46,881 210 130,951 Cost of services and plans 45,581 5,124 932 — 51,637 Total costs applicable to revenue 118,113 16,452 47,813 210 182,588 SG&A 118,988 13,621 52,419 — 185,028 Asset impairment — — 2,137 — 2,137 Other expense, net — — 411 — 411 EBITDA $ 59,454 $ 7,155 $ (48,582 ) $ (766 ) 17,261 Depreciation and amortization 19,344 Interest expense, net 9,407 Loss before income taxes $ (11,490 ) Nine Months Ended September 28, 2019 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 827,957 $ 81,178 $ 189,389 $ (2,042 ) $ 1,096,482 Segment services and plans revenues 191,117 42,019 12 (7,062 ) 226,086 Total net revenue 1,019,074 123,197 189,401 (9,104 ) 1,322,568 Costs of products 239,975 38,123 166,533 (454 ) 444,177 Costs of services and plans 155,710 19,090 1 — 174,801 Total costs applicable to revenue 395,685 57,213 166,534 (454 ) 618,978 SG&A 387,345 42,041 137,058 — 566,444 Asset impairment — — 7,387 — 7,387 Other expense, net — — 975 — 975 Loss on extinguishment of debt — — 9,786 — 9,786 EBITDA $ 236,044 $ 23,943 $ (132,339 ) $ (8,650 ) 118,998 Depreciation and amortization 63,570 Interest expense, net 25,902 Income before income taxes $ 29,526 Nine Months Ended September 29, 2018 In thousands Owned & Host Legacy Corporate/Other Reconciliations Total Segment product revenues $ 738,886 $ 80,004 $ 153,856 $ 4,751 $ 977,497 Segment services and plans revenues 167,679 39,088 2,939 (6,271 ) 203,435 Total net revenue 906,565 119,092 156,795 (1,520 ) 1,180,932 Costs of products 217,195 36,356 134,731 1,278 389,560 Costs of services and plans 132,708 14,965 2,868 — 150,541 Total costs applicable to revenue 349,903 51,321 137,599 1,278 540,101 SG&A 351,019 40,519 129,806 — 521,344 Asset impairment — — 2,137 — 2,137 Other expense, net — — 829 — 829 EBITDA $ 205,643 $ 27,252 $ (113,576 ) $ (2,798 ) 116,521 Depreciation and amortization 54,783 Interest expense, net 28,144 Income before income taxes $ 33,594 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted EPS Calculations | A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows: Three Months Ended Nine Months Ended In thousands, except EPS September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Net income $ 1,192 $ 5,171 $ 28,879 $ 42,093 Weighted average shares outstanding for basic EPS 78,474 76,118 78,387 75,361 Effect of dilutive securities: Stock options 3,024 3,485 3,074 3,119 Restricted stock 63 107 49 91 Weighted average shares outstanding for diluted EPS 81,561 79,710 81,510 78,571 Basic EPS $ 0.02 $ 0.07 $ 0.37 $ 0.56 Diluted EPS $ 0.01 $ 0.06 $ 0.35 $ 0.54 Anti-dilutive options, RSUs outstanding excluded from EPS 315 — 289 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The following table presents the changes in AOCL during the three and nine months ended September 28, 2019 and September 29, 2018 , respectively: Three Months Ended Nine Months Ended In thousands September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Cash flow hedging activity: Balance at beginning of period $ (5,427 ) $ (2,746 ) $ (2,810 ) $ (9,868 ) Other comprehensive income (loss) before reclassification (439 ) 854 (5,760 ) 6,696 Tax effect of other comprehensive income (loss) before reclassification 112 (218 ) 1,476 (1,715 ) Amount reclassified from AOCL into interest expense 1,120 1,413 2,922 5,146 Tax effect of amount reclassified from AOCL into interest expense (287 ) (362 ) (749 ) (1,318 ) Net current period other comprehensive income (loss), net of tax 506 1,687 (2,111 ) 8,809 Balance at end of period $ (4,921 ) $ (1,059 ) $ (4,921 ) $ (1,059 ) |
Description of Business and B_3
Description of Business and Basis of Presentation - Nature of Operations (Details) | Sep. 28, 2019storestore_brand | Dec. 29, 2018store |
Accounting Policies [Abstract] | ||
Number of retail optical locations | store | 1,145 | 1,082 |
Number of store brands | store_brand | 5 |
Description of Business and B_4
Description of Business and Basis of Presentation - Asset Impairment (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | |
Accounting Policies [Abstract] | ||
Impairment charge on long-lived assets held and used | $ 3.5 | $ 7.4 |
Estimated fair value of impaired assets held and used | $ 14.6 | $ 14.6 |
Discount rate used in impairment analysis (percent) | 8.00% |
Description of Business and B_5
Description of Business and Basis of Presentation - Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Accounting Policies [Abstract] | ||||
Effective income tax rate (percent) | 25.60% | 25.60% | ||
Tax benefit associated primarily with exercise of stock options | $ 6.3 | $ 13.9 | $ 7.7 | $ 18 |
Description of Business and B_6
Description of Business and Basis of Presentation - Secondary Offering and Common Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 12, 2019 | Sep. 28, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 |
Sale of Stock [Line Items] | |||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |
Shares repurchased (shares) | 819,134 | ||||
Shares repurchased price per share (in usd per share) | $ 30.52 | ||||
Non-cash stock-based compensation expense | $ 10,840 | $ 13,749 | |||
Secondary Offering | |||||
Sale of Stock [Line Items] | |||||
Number of shares issued (shares) | 9,149,908 | ||||
SG&A | |||||
Sale of Stock [Line Items] | |||||
Long-term incentive compensation expense | $ 1,100 | ||||
Offering-related expenses | 400 | ||||
Secondary offering vesting event | |||||
Sale of Stock [Line Items] | |||||
Non-cash stock-based compensation expense | $ 4,200 |
Description of Business and B_7
Description of Business and Basis of Presentation - Adoption of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 30, 2018 | Dec. 29, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease liabilities | $ 383,306 | |||
TIA treated as reduction of lease payments used to measure operating lease ROU assets | 34,200 | |||
Deferred rent treated as reduction of lease payments used to measure operating lease ROU assets | 14,200 | |||
Right of use assets | $ 344,179 | $ 0 | ||
Cumulative effect of change in accounting principle | $ 506 | $ (19,030) | ||
ASU No. 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease liabilities | 349,700 | |||
TIA treated as reduction of lease payments used to measure operating lease ROU assets | 28,600 | |||
Deferred rent treated as reduction of lease payments used to measure operating lease ROU assets | 11,900 | |||
Right of use assets | 308,500 | |||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of change in accounting principle | $ 506 | $ (19,030) |
Details of Certain Balance Sh_3
Details of Certain Balance Sheet Accounts - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Accounts receivable, net: | ||
Allowance for uncollectible accounts | $ (3,082) | $ (2,612) |
Accounts receivable, net of allowances | 50,655 | 50,735 |
Trade receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | 27,879 | 27,356 |
Credit card receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | 15,131 | 16,636 |
Tenant improvement allowances receivable | ||
Accounts receivable, net: | ||
Accounts receivable, gross | 6,183 | 5,149 |
Other receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | $ 4,544 | $ 4,206 |
Details of Certain Balance Sh_4
Details of Certain Balance Sheet Accounts - Inventories (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Inventories: | ||
Raw materials and work in process | $ 57,844 | $ 59,946 |
Finished goods | 54,050 | 56,076 |
Inventories | $ 111,894 | $ 116,022 |
Details of Certain Balance Sh_5
Details of Certain Balance Sheet Accounts - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Property and equipment, net: | ||
Property and equipment, gross | $ 628,711 | $ 568,033 |
Less: Accumulated depreciation | 256,642 | 212,916 |
Property and equipment, net | 372,069 | 355,117 |
Land and building | ||
Property and equipment, net: | ||
Property and equipment, gross | 3,632 | 3,632 |
Equipment | ||
Property and equipment, net: | ||
Property and equipment, gross | 186,181 | 160,958 |
Information systems hardware and software | ||
Property and equipment, net: | ||
Property and equipment, gross | 113,127 | 101,809 |
Furniture and fixtures | ||
Property and equipment, net: | ||
Property and equipment, gross | 53,922 | 48,992 |
Leasehold improvements | ||
Property and equipment, net: | ||
Property and equipment, gross | 207,113 | 186,499 |
Construction in progress | ||
Property and equipment, net: | ||
Property and equipment, gross | 28,299 | 40,697 |
Right of use assets under finance leases | ||
Property and equipment, net: | ||
Property and equipment, gross | $ 36,437 | $ 25,446 |
Details of Certain Balance Sh_6
Details of Certain Balance Sheet Accounts - Other Payables and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Other payables and accrued expenses: | ||
Employee compensation and benefits | $ 40,347 | $ 20,529 |
Advertising | 2,565 | 2,076 |
Self-insurance reserves | 8,464 | 8,117 |
Reserves for customer returns and remakes | 7,606 | 4,645 |
Capital expenditures | 11,532 | 14,078 |
Legacy management and services agreement | 6,642 | 5,383 |
Fair value of derivative liabilities | 6,260 | 3,130 |
Supplies and other store support expenses | 3,038 | 4,929 |
Litigation settlements | 3,894 | 3,938 |
Other | 11,208 | 14,179 |
Total other payables and accrued expenses | $ 101,556 | $ 81,004 |
Details of Certain Balance Sh_7
Details of Certain Balance Sheet Accounts - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Other non-current liabilities: | ||
Fair value of derivative liabilities | $ 3,214 | $ 3,505 |
Tenant improvements | 30,851 | |
Deferred rental expenses | 11,926 | |
Self-insurance reserves | 5,528 | 5,114 |
Other | 4,665 | 2,568 |
Total other non-current liabilities | $ 13,407 | $ 53,964 |
Fair Value Measurements of Fi_3
Fair Value Measurements of Financial Assets and Liabilities - Narrative (Details) - Finance Lease Obligations - Level 2 - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instruments | $ 39.4 | $ 30.7 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instruments | $ 34.2 | $ 24.5 |
Fair Value Measurements of Fi_4
Fair Value Measurements of Financial Assets and Liabilities - Interest Rate Derivatives (Details) | Sep. 28, 2019USD ($)agreement | Mar. 30, 2019USD ($) | Dec. 29, 2018USD ($) |
Derivative [Line Items] | |||
Estimated reclassification from AOCL to earnings in next 12 months | $ 4,700,000 | ||
Interest Rate Swap | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Number of interest rate swap agreements | agreement | 3 | ||
Derivative interest rate floor | 1.00% | ||
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Notional amount | $ 430,000,000 | $ 465,000,000 | |
Interest Rate Swap One | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Notional amount | $ 105,000,000 | $ 140,000,000 |
Fair Value Measurements of Fi_5
Fair Value Measurements of Financial Assets and Liabilities - Cash Flow Hedge Position of Interest Rate Derivative Contracts (Details) - USD ($) | Sep. 28, 2019 | Dec. 29, 2018 |
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities, current | $ 6,260,000 | $ 3,130,000 |
Fair value of derivative liabilities, noncurrent | 3,214,000 | 3,505,000 |
Stranded tax benefit in AOCL | 2,100,000 | |
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 430,000,000 | 465,000,000 |
Hedge position in AOCL, net of tax | $ 4,921,000 | $ 2,810,000 |
Long-term Debt - Summary of Lon
Long-term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 568,000 | |
Finance lease obligations | 34,182 | |
Less current maturities | (3,236) | |
Finance lease obligations | $ 24,485 | |
Less current maturities | (2,567) | |
Long-term debt and finance lease obligations, less current portion and debt discount | 584,250 | 570,545 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 568,000 | 564,300 |
Unamortized discount | (4,196) | (10,673) |
Total term loans | 563,804 | 553,627 |
Less current maturities | (10,500) | (5,000) |
Term loans - non-current portion | 553,304 | 548,627 |
First Lien - Term Loan B | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 364,300 |
First Lien - Term Loan A | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 200,000 |
First Lien - Term Loan, due July 18, 2024 | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 420,000 | 0 |
First Lien - Revolving credit facility, due July 18, 2024 | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 148,000 | $ 0 |
Long-term Debt - Maturities of
Long-term Debt - Maturities of Debt (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 - fourth quarter | $ 2,625 |
2020 | 10,500 |
2021 | 10,500 |
2022 | 13,125 |
2023 | 21,000 |
Thereafter | 510,250 |
Long-term debt, gross | $ 568,000 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - USD ($) | Jul. 18, 2019 | Sep. 28, 2019 |
Debt Instrument [Line Items] | ||
Write off of deferred debt issuance costs | $ 6,000,000 | |
Write off of unamortized debt discount | $ 3,800,000 | |
Line of Credit | First Lien - Revolving credit facility, due July 18, 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 300,000,000 | |
Amount drawn on line of credit | 148,000,000 | |
Term Loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 420,000,000 | |
Amortization per annum, years one through three (percent) | 2.50% | |
Amortization per annum, year four and thereafter (percent) | 5.00% | |
Maximum allowable quarter end Consolidated Total Debt To Consolidated EBITDA Ratio, years one and two | 4.75 | |
Maximum allowable quarter end Consolidated Total Debt To Consolidated EBITDA Ratio, after year two | 4.50 | |
Maximum allowable quarter end Consolidated Interest Coverage Ratio | 3 | |
Term Loan | Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.50% | |
Term Loan | Term Loan | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 0.50% | |
Term Loan | Term Loan | Leverage Ratio Greater Than 3.75 | Minimum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 3.75 | |
Term Loan | Term Loan | Leverage Ratio Greater Than 3.75 | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 2.00% | |
Term Loan | Term Loan | Leverage Ratio Greater Than 3.75 | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.00% | |
Term Loan | Term Loan | Leverage Ratio Between 3.75 and 2.75 | Maximum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 3.75 | |
Term Loan | Term Loan | Leverage Ratio Between 3.75 and 2.75 | Minimum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 2.75 | |
Term Loan | Term Loan | Leverage Ratio Between 3.75 and 2.75 | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.75% | |
Term Loan | Term Loan | Leverage Ratio Between 3.75 and 2.75 | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 0.75% | |
Term Loan | Term Loan | Leverage Ratio Between 2.75 and 1.75 | Maximum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 2.75 | |
Term Loan | Term Loan | Leverage Ratio Between 2.75 and 1.75 | Minimum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 1.75 | |
Term Loan | Term Loan | Leverage Ratio Between 2.75 and 1.75 | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.50% | |
Term Loan | Term Loan | Leverage Ratio Between 2.75 and 1.75 | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 0.50% | |
Term Loan | Term Loan | Leverage Ratio Between 1.75 and 0.75 | Maximum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 1.75 | |
Term Loan | Term Loan | Leverage Ratio Between 1.75 and 0.75 | Minimum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 0.75 | |
Term Loan | Term Loan | Leverage Ratio Between 1.75 and 0.75 | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.25% | |
Term Loan | Term Loan | Leverage Ratio Between 1.75 and 0.75 | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 0.25% | |
Term Loan | Term Loan | Leverage Ratio Less Than 0.75 | Maximum | ||
Debt Instrument [Line Items] | ||
Consolidated first lien leverage ratio | 0.75 | |
Term Loan | Term Loan | Leverage Ratio Less Than 0.75 | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 1.00% | |
Term Loan | Term Loan | Leverage Ratio Less Than 0.75 | ABR | ||
Debt Instrument [Line Items] | ||
Applicable margin on rate (percent) | 0.00% |
Stock Incentive Plans - Stock O
Stock Incentive Plans - Stock Option Activity (Details) | 9 Months Ended |
Sep. 28, 2019shares | |
Options outstanding | |
Outstanding, beginning balance (shares) | 6,727,161 |
Granted (shares) | 299,207 |
Exercised (shares) | (1,632,106) |
Forfeited (shares) | (1,276,112) |
Outstanding, ending balance (shares) | 4,118,150 |
Vested and exercisable (shares) | 3,153,952 |
Service-based options | |
Options outstanding | |
Outstanding, beginning balance (shares) | 2,583,380 |
Granted (shares) | 299,207 |
Exercised (shares) | (644,766) |
Forfeited (shares) | (17,832) |
Outstanding, ending balance (shares) | 2,219,989 |
Vested and exercisable (shares) | 1,386,225 |
Performance-based options | |
Options outstanding | |
Outstanding, beginning balance (shares) | 4,143,781 |
Granted (shares) | 0 |
Exercised (shares) | (987,340) |
Forfeited (shares) | (1,258,280) |
Outstanding, ending balance (shares) | 1,898,161 |
Vested and exercisable (shares) | 1,767,727 |
Stock Incentive Plans - Restric
Stock Incentive Plans - Restricted Stock Unit and Award Activity (Details) | 9 Months Ended |
Sep. 28, 2019shares | |
Service-based restricted stock unit (RSU) awards | |
Outstanding Restricted Stock Units and Awards | |
Outstanding, beginning balance (shares) | 98,076 |
Granted (shares) | 108,256 |
Vested (shares) | 0 |
Forfeited (shares) | (9,833) |
Outstanding, ending balance (shares) | 196,499 |
Performance-based restricted stock unit (PSU) awards | |
Outstanding Restricted Stock Units and Awards | |
Outstanding, beginning balance (shares) | 0 |
Granted (shares) | 115,665 |
Vested (shares) | 0 |
Forfeited (shares) | (2,274) |
Outstanding, ending balance (shares) | 113,391 |
Restricted stock (RSA) awards | |
Outstanding Restricted Stock Units and Awards | |
Outstanding, beginning balance (shares) | 11,431 |
Granted (shares) | 13,712 |
Vested (shares) | (4,515) |
Forfeited (shares) | 0 |
Outstanding, ending balance (shares) | 20,628 |
Stock Incentive Plans - Narrati
Stock Incentive Plans - Narrative (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($)installment$ / sharesshares | |
Service-based options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of equal vesting installments | installment | 3 |
Unrecognized compensation cost | $ | $ 3.3 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of equal vesting installments | installment | 3 |
Weighted average grant date fair value (in dollars per share) | $ 34.82 |
Aggregate grant during the period (shares) | shares | 108,256 |
Unrecognized compensation cost | $ | $ 2.7 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant date fair value (in dollars per share) | $ 34.54 |
Aggregate grant during the period (shares) | shares | 115,665 |
Unrecognized compensation cost | $ | $ 3.2 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price for options exercised (in dollars per share) | $ 5.77 |
Weighted average grant date fair value for options granted (in dollars per share) | $ 13.68 |
RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate grant during the period (shares) | shares | 13,712 |
Unrecognized compensation cost | $ | $ 0.3 |
Board of Directors | RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant date fair value (in dollars per share) | $ 29.18 |
Vesting period (year) | 1 year |
First anniversary of grant date | Service-based options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting amount in each equal installment (percent) | 33.33% |
Second anniversary of grant date | Service-based options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting amount in each equal installment (percent) | 33.33% |
Third anniversary of grant date | Service-based options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting amount in each equal installment (percent) | 33.33% |
Stock Incentive Plans - Stock C
Stock Incentive Plans - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock based compensation expense | $ 6,123 | $ 10,629 | $ 10,840 | $ 13,749 |
Stock options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock based compensation expense | 4,948 | 10,260 | 7,955 | 12,590 |
RSUs and PSUs | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock based compensation expense | 1,028 | 347 | 2,598 | 1,107 |
RSAs | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock based compensation expense | 125 | 11 | 201 | 41 |
Associate stock purchase plan | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock based compensation expense | $ 22 | $ 11 | $ 86 | $ 11 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with KKR (Details) - USD ($) $ in Millions | Aug. 12, 2019 | Sep. 28, 2019 |
Related Party Transactions [Abstract] | ||
Debt related commitment fees and debt issuance costs | $ 1 | |
Secondary Offering | ||
Related Party Transaction [Line Items] | ||
Number of shares issued (shares) | 9,149,908 |
Related Party Transactions - Eq
Related Party Transactions - Equity in Net Assets of Non-Consolidated Investee (Details) - Equity Method Investee - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Aug. 29, 2017 | |
Related Party Transaction [Line Items] | |||||
Interest in investee's net losses | $ (200,000) | $ (400,000) | $ (1,200,000) | $ (1,000,000) | |
Equity method investment | 0 | 0 | |||
Loan receivable | $ 1,300,000 | $ 1,300,000 | $ 1,500,000 |
Revenue From Contracts with C_3
Revenue From Contracts with Customers - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 431,902 | $ 387,425 | $ 1,322,568 | $ 1,180,932 |
Revenues recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 394,709 | 352,245 | 1,211,942 | 1,075,355 |
Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 37,193 | $ 35,180 | $ 110,626 | $ 105,577 |
Revenue From Contracts with C_4
Revenue From Contracts with Customers - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Time frame for majority of payments on health care plans and programs accounts (in days) | 90 days | |||
Bad debt expense | $ 2,400 | $ 1,700 | $ 6,265 | $ 4,981 |
Deferred revenue | 79,300 | 79,300 | ||
Previously deferred revenue recognized | $ 27,900 | $ 26,500 | $ 83,200 | $ 78,500 |
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
General payment terms for accounts on health care plans and programs (in days) | 14 days | |||
Unearned revenue, estimated delivery time for period end calculation (in days) | 4 days | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
General payment terms for accounts on health care plans and programs (in days) | 120 days | |||
Unearned revenue, estimated delivery time for period end calculation (in days) | 10 days |
Revenue From Contracts with C_5
Revenue From Contracts with Customers - Unsatisfied Performance Obligations (Details) $ in Millions | Sep. 28, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 20.3 |
Performance obligations expected to be satisfied, expected timing | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 42.2 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-03 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 13.4 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 3.2 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 0.2 |
Performance obligations expected to be satisfied, expected timing |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2018 | |
Lessee, Lease, Description [Line Items] | |||||
Finance lease assets, accumulated amortization | $ 7.1 | $ 4.1 | |||
Variable lease-related executory costs | $ 18 | $ 14.9 | $ 13.9 | ||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Term of U.S. Treasuries for borrowing rate considered in determination of lease discount rate | 5 years | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Term of U.S. Treasuries for borrowing rate considered in determination of lease discount rate | 10 years | ||||
Stores, laboratories, distribution centers, offices | Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease terms (in years) | 5 years | ||||
Renewal terms (in years) | 1 year | ||||
Stores, laboratories, distribution centers, offices | Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease terms (in years) | 10 years | ||||
Renewal terms (in years) | 10 years |
Leases - Lease Type and Classif
Leases - Lease Type and Classification (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
ASSETS | ||
Finance lease, right-of-use assets | $ 29,314 | |
Operating lease, right-of-use assets | 344,179 | $ 0 |
Total leased assets | 373,493 | |
TIA treated as reduction of lease payments used to measure operating lease ROU assets | 34,200 | |
Deferred rent treated as reduction of lease payments used to measure operating lease ROU assets | 14,200 | |
LIABILITIES | ||
Finance lease liability, current | 3,236 | |
Operating lease liability, current | 56,814 | 0 |
Finance lease liabilities, non-current | 30,946 | |
Operating lease liabilities, non-current | 326,492 | $ 0 |
Total lease liabilities | $ 417,488 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Lease Cost | ||
Operating lease cost | $ 18,542 | $ 54,955 |
Variable lease cost | 6,745 | 19,803 |
Sublease income | (965) | (2,881) |
Amortization of lease assets | 1,176 | 3,231 |
Interest on lease liabilities | 903 | 2,689 |
Net lease cost | $ 26,401 | $ 77,797 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 28, 2019 |
Leases [Abstract] | |
Operating leases, weighted average remaining lease term (months) | 82 months |
Finance leases, weighted average remaining lease term (months) | 91 months |
Operating leases, weighted average discount rate (percent) | 4.60% |
Finance leases, weighted average discount rate (percent) | 13.10% |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash outflows - operating leases | $ 55,817 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Operating Leases | |
2019 fourth quarter | $ 13,090 |
2020 | 77,497 |
2021 | 71,292 |
2022 | 63,978 |
2023 | 56,958 |
Thereafter | 168,637 |
Total lease liabilities | 451,452 |
Less: Interest | 68,146 |
Present value of lease liabilities | 383,306 |
Finance Leases | |
2019 fourth quarter | 1,398 |
2020 | 7,196 |
2021 | 7,116 |
2022 | 7,051 |
2023 | 6,077 |
Thereafter | 20,021 |
Total lease liabilities | 48,859 |
Less: Interest | 14,677 |
Finance lease obligations | 34,182 |
Operating lease payments related to reasonably certain option extensions included in total lease payments | 75,900 |
Finance lease payments related to reasonably certain option extensions included in total lease payments | 1,100 |
Minimum lease payments for leases signed but not yet commenced excluded from lease liability | $ 19,100 |
Leases - Aggregate Future Renta
Leases - Aggregate Future Rental Payments Under Operating Leases at Prior Year End (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 69,372 |
2020 | 63,218 |
2021 | 56,219 |
2022 | 49,303 |
2023 | 42,545 |
Thereafter | 126,388 |
Total future minimum rental payments | $ 407,045 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Nov. 08, 2017 | May 31, 2017 | Jul. 01, 2017 | Jun. 29, 2019 |
1-800 Contacts Matter | ||||
Loss Contingencies [Line Items] | ||||
Amount of litigation settlement | $ 7 | |||
Litigation settlement | $ 7 | |||
Percent of settlement award deposited in escrow account (percent) | 50.00% | |||
Amount of settlement deposited in escrow account | $ 3.5 | |||
Trade vendor supply and software agreement | ||||
Loss Contingencies [Line Items] | ||||
Minimum purchase commitment | $ 30 | |||
Purchase commitment term (in years) | 4 years | |||
Trade vendor purchase agreement | ||||
Loss Contingencies [Line Items] | ||||
Minimum annual purchase commitment through 2021 | $ 17 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019USD ($) | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)segment | Sep. 29, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Net revenue | $ 431,902 | $ 387,425 | $ 1,322,568 | $ 1,180,932 |
Legacy | Management of operations | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 9,300 | $ 8,600 | $ 27,500 | $ 27,000 |
Customer Concentration Risk | Sales revenue | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk (percent) | 9.30% |
Segment Reporting - Financial D
Segment Reporting - Financial Data by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 431,902 | $ 387,425 | $ 1,322,568 | $ 1,180,932 |
Total costs applicable to revenue | 204,502 | 182,588 | 618,978 | 540,101 |
SG&A | 190,290 | 185,028 | 566,444 | 521,344 |
Asset impairment | 3,516 | 2,137 | 7,387 | 2,137 |
Other expense, net | 146 | 411 | 975 | 829 |
Loss on extinguishment of debt | 9,786 | 0 | 9,786 | 0 |
EBITDA | 23,662 | 17,261 | 118,998 | 116,521 |
Depreciation and amortization | 22,336 | 19,344 | 63,570 | 54,783 |
Interest expense, net | 7,873 | 9,407 | 25,902 | 28,144 |
Earnings (loss) before income taxes | (6,547) | (11,490) | 29,526 | 33,594 |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 355,789 | 319,312 | 1,096,482 | 977,497 |
Total costs applicable to revenue | 144,518 | 130,951 | 444,177 | 389,560 |
Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 76,113 | 68,113 | 226,086 | 203,435 |
Total costs applicable to revenue | 59,984 | 51,637 | 174,801 | 150,541 |
Operating Segments | Owned & Host | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 333,438 | 296,555 | 1,019,074 | 906,565 |
Total costs applicable to revenue | 131,135 | 118,113 | 395,685 | 349,903 |
SG&A | 128,054 | 118,988 | 387,345 | 351,019 |
Asset impairment | 0 | 0 | 0 | 0 |
Other expense, net | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | ||
EBITDA | 74,249 | 59,454 | 236,044 | 205,643 |
Operating Segments | Owned & Host | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 270,171 | 240,882 | 827,957 | 738,886 |
Total costs applicable to revenue | 77,670 | 72,532 | 239,975 | 217,195 |
Operating Segments | Owned & Host | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 63,267 | 55,673 | 191,117 | 167,679 |
Total costs applicable to revenue | 53,465 | 45,581 | 155,710 | 132,708 |
Operating Segments | Legacy | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 39,355 | 37,228 | 123,197 | 119,092 |
Total costs applicable to revenue | 18,200 | 16,452 | 57,213 | 51,321 |
SG&A | 13,920 | 13,621 | 42,041 | 40,519 |
Asset impairment | 0 | 0 | 0 | 0 |
Other expense, net | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | ||
EBITDA | 7,235 | 7,155 | 23,943 | 27,252 |
Operating Segments | Legacy | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 25,252 | 24,739 | 81,178 | 80,004 |
Total costs applicable to revenue | 11,681 | 11,328 | 38,123 | 36,356 |
Operating Segments | Legacy | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 14,103 | 12,489 | 42,019 | 39,088 |
Total costs applicable to revenue | 6,519 | 5,124 | 19,090 | 14,965 |
Operating Segments | Corporate/Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 63,174 | 54,198 | 189,401 | 156,795 |
Total costs applicable to revenue | 55,684 | 47,813 | 166,534 | 137,599 |
SG&A | 48,316 | 52,419 | 137,058 | 129,806 |
Asset impairment | 3,516 | 2,137 | 7,387 | 2,137 |
Other expense, net | 146 | 411 | 975 | 829 |
Loss on extinguishment of debt | 9,786 | 9,786 | ||
EBITDA | (54,274) | (48,582) | (132,339) | (113,576) |
Operating Segments | Corporate/Other | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 63,173 | 53,286 | 189,389 | 153,856 |
Total costs applicable to revenue | 55,684 | 46,881 | 166,533 | 134,731 |
Operating Segments | Corporate/Other | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1 | 912 | 12 | 2,939 |
Total costs applicable to revenue | 0 | 932 | 1 | 2,868 |
Reconciliations | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | (4,065) | (556) | (9,104) | (1,520) |
Total costs applicable to revenue | (517) | 210 | (454) | 1,278 |
SG&A | 0 | 0 | 0 | 0 |
Asset impairment | 0 | 0 | 0 | 0 |
Other expense, net | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | ||
EBITDA | (3,548) | (766) | (8,650) | (2,798) |
Reconciliations | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | (2,807) | 405 | (2,042) | 4,751 |
Total costs applicable to revenue | (517) | 210 | (454) | 1,278 |
Reconciliations | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | (1,258) | (961) | (7,062) | (6,271) |
Total costs applicable to revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Basic and Diluted EPS Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 1,192 | $ 10,257 | $ 17,429 | $ 5,171 | $ 12,467 | $ 24,455 | $ 28,879 | $ 42,093 |
Weighted average shares outstanding for basic EPS (shares) | 78,474 | 76,118 | 78,387 | 75,361 | ||||
Effect of dilutive securities: | ||||||||
Stock options (shares) | 3,024 | 3,485 | 3,074 | 3,119 | ||||
Restricted stock (shares) | 63 | 107 | 49 | 91 | ||||
Weighted average shares outstanding for diluted EPS | 81,561 | 79,710 | 81,510 | 78,571 | ||||
Basic EPS (in usd per share) | $ 0.02 | $ 0.07 | $ 0.37 | $ 0.56 | ||||
Diluted EPS (in usd per share) | $ 0.01 | $ 0.06 | $ 0.35 | $ 0.54 | ||||
Options and RSUs | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Anti-dilutive options, RSUs outstanding excluded from EPS (shares) | 315 | 0 | 289 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 774,434 | $ 723,400 | $ 743,154 | $ 654,600 |
Ending balance | 765,471 | 751,338 | 765,471 | 751,338 |
Cash Flow Hedges | ||||
Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||||
Beginning balance | (5,427) | (2,746) | (2,810) | (9,868) |
Other comprehensive income (loss) before reclassification | (439) | 854 | (5,760) | 6,696 |
Tax effect of other comprehensive income (loss) before reclassification | 112 | (218) | 1,476 | (1,715) |
Amount reclassified from AOCL into interest expense | 1,120 | 1,413 | 2,922 | 5,146 |
Tax effect of amount reclassified from AOCL into interest expense | (287) | (362) | (749) | (1,318) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 506 | 1,687 | (2,111) | 8,809 |
Ending balance | $ (4,921) | $ (1,059) | $ (4,921) | $ (1,059) |
Uncategorized Items - a19q3nvhi
Label | Element | Value |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 742,648,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 673,630,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 1,188,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 1,200,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (2,810,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (9,868,000) |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 74,334,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 51,187,000 |
Common Stock [Member] | ||
Shares Outstanding, Adjusted Balance | eye_SharesOutstandingAdjustedBalance | 78,167,000 |
Shares Outstanding, Adjusted Balance | eye_SharesOutstandingAdjustedBalance | 74,654,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 746,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 782,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 672,503,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 631,798,000 |
Treasury Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (2,161,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (233,000) |