Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 29, 2024 | Jul. 26, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 29, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38257 | |
Entity Registrant Name | National Vision Holdings, Inc. | |
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 $0.01 per share | |
Trading Symbol | EYE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 78,635,532 | |
Entity Central Index Key | 0001710155 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 179,515 | $ 149,896 |
Accounts receivable, net | 61,068 | 86,854 |
Inventories | 90,956 | 119,908 |
Prepaid expenses and other current assets | 32,863 | 40,012 |
Total current assets | 364,402 | 396,670 |
Noncurrent assets: | ||
Property and equipment, net | 357,057 | 360,187 |
Goodwill | 717,544 | 717,544 |
Trademarks and trade names | 240,547 | 240,547 |
Other intangible assets, net | 19,385 | 20,173 |
Right of use assets | 414,446 | 406,275 |
Other assets | 32,919 | 28,336 |
Noncurrent assets of discontinued operations | 0 | 2,779 |
Total noncurrent assets | 1,781,898 | 1,775,841 |
Total assets | 2,146,300 | 2,172,511 |
Current liabilities: | ||
Accounts payable | 49,969 | 67,556 |
Other payables and accrued expenses | 110,004 | 123,288 |
Unearned revenue | 39,471 | 48,117 |
Deferred revenue | 63,835 | 62,867 |
Current maturities of long-term debt and finance lease obligations | 312,888 | 10,480 |
Current operating lease obligations | 86,994 | 85,090 |
Current liabilities of discontinued operations | 0 | 302 |
Total current liabilities | 663,161 | 397,700 |
Noncurrent liabilities: | ||
Long-term debt and finance lease obligations, less current portion and debt discount | 143,927 | 450,771 |
Noncurrent operating lease obligations | 382,548 | 376,814 |
Deferred revenue | 22,416 | 21,459 |
Other liabilities | 8,381 | 8,465 |
Deferred income taxes, net | 82,459 | 87,884 |
Total noncurrent liabilities | 639,731 | 945,393 |
Commitments and contingencies (See Note 11) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 200,000 shares authorized; 85,267 and 84,831 shares issued as of June 29, 2024 and December 30, 2023, respectively; 78,628 and 78,311 shares outstanding as of June 29, 2024 and December 30, 2023, respectively | 853 | 848 |
Additional paid-in capital | 796,812 | 788,967 |
Accumulated other comprehensive loss | (64) | (419) |
Retained earnings | 263,176 | 254,616 |
Treasury stock, at cost; 6,639 and 6,520 shares as of June 29, 2024 and December 30, 2023, respectively | (217,369) | (214,594) |
Total stockholders’ equity | 843,408 | 829,418 |
Total liabilities and stockholders’ equity | $ 2,146,300 | $ 2,172,511 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 29, 2024 | Dec. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 85,267,000 | 84,831,000 |
Common stock, outstanding (in shares) | 78,628,000 | 78,311,000 |
Treasury stock (in shares) | 6,639,000 | 6,520,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Revenue: | ||||
Total net revenue | $ 451,733 | $ 431,786 | $ 934,527 | $ 896,598 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 193,580 | 180,322 | 389,126 | 366,449 |
Operating expenses: | ||||
Selling, general and administrative expenses | 231,353 | 222,924 | 471,481 | 451,600 |
Depreciation and amortization | 22,692 | 22,089 | 45,913 | 44,045 |
Asset impairment | 3,519 | 893 | 3,975 | 1,247 |
Other expense (income), net | (2) | (3) | (1) | (104) |
Total operating expenses | 257,562 | 245,903 | 521,368 | 496,788 |
Income from operations | 591 | 5,561 | 24,033 | 33,361 |
Interest Income (Expense), Nonoperating | 3,196 | 1,836 | 7,452 | 6,703 |
Earnings (loss) from continuing operations before income taxes | (2,605) | 3,725 | 16,581 | 26,658 |
Income tax provision (benefit) | (1,564) | 88 | 5,869 | 8,007 |
Income (loss) from continuing operations, net of tax | (1,041) | 3,637 | 10,712 | 18,651 |
Income (loss) from discontinued operations, net of tax (See Note 2) | (2,084) | 1,977 | (2,152) | 5,233 |
Net income (loss) | $ (3,125) | $ 5,614 | $ 8,560 | $ 23,884 |
Basic earnings (loss) per share: | ||||
Continuing operations (in usd per share) | $ (0.01) | $ 0.05 | $ 0.14 | $ 0.24 |
Discontinued operations (in usd per share) | (0.03) | 0.03 | (0.03) | 0.07 |
Total (in usd per share) | (0.04) | 0.07 | 0.11 | 0.30 |
Diluted earnings (loss) per share: | ||||
Continuing operations (in usd per share) | (0.01) | 0.05 | 0.14 | 0.24 |
Discontinued operations (in usd per share) | (0.03) | 0.03 | (0.03) | 0.07 |
Total (in usd per share) | $ (0.04) | $ 0.07 | $ 0.11 | $ 0.30 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 78,575 | 78,101 | 78,480 | 78,411 |
Diluted (in shares) | 78,575 | 78,343 | 78,774 | 78,784 |
Comprehensive income (loss): | ||||
Net income (loss) | $ (3,125) | $ 5,614 | $ 8,560 | $ 23,884 |
Unrealized gain on hedge instruments | 229 | 255 | 483 | 508 |
Tax provision of unrealized gain on hedge instruments | 64 | 65 | 128 | 130 |
Comprehensive income (loss) | (2,960) | 5,804 | 8,915 | 24,262 |
Products | ||||
Revenue: | ||||
Total net revenue | 361,967 | 352,180 | 750,050 | 732,333 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 111,213 | 106,362 | 224,417 | 217,436 |
Services and plans | ||||
Revenue: | ||||
Total net revenue | 89,766 | 79,606 | 184,477 | 164,265 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | $ 82,367 | $ 73,960 | $ 164,709 | $ 149,013 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 78,992 | |||||
Balance at beginning of period at Dec. 31, 2022 | $ 901,113 | $ 842 | $ 767,112 | $ (1,179) | $ 320,517 | $ (186,179) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 282 | |||||
Issuance of common stock | 493 | $ 3 | 490 | |||
Stock-based compensation | 4,271 | 4,271 | ||||
Purchase of treasury stock (in shares) | (1,189) | |||||
Purchase of treasury stock | (27,609) | (27,609) | ||||
Unrealized gain on hedge instruments, net of tax | 188 | 188 | ||||
Net income (loss) | 18,270 | 18,270 | ||||
Balance at end of period (in shares) at Apr. 01, 2023 | 78,085 | |||||
Balance at end of period at Apr. 01, 2023 | 896,726 | $ 845 | 771,873 | (991) | 338,787 | (213,788) |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 78,992 | |||||
Balance at beginning of period at Dec. 31, 2022 | 901,113 | $ 842 | 767,112 | (1,179) | 320,517 | (186,179) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 23,884 | |||||
Balance at end of period (in shares) at Jul. 01, 2023 | 78,154 | |||||
Balance at end of period at Jul. 01, 2023 | 908,412 | $ 846 | 777,762 | (801) | 344,401 | (213,796) |
Balance at beginning of period (in shares) at Apr. 01, 2023 | 78,085 | |||||
Balance at beginning of period at Apr. 01, 2023 | 896,726 | $ 845 | 771,873 | (991) | 338,787 | (213,788) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 70 | |||||
Issuance of common stock | 452 | $ 1 | 451 | |||
Stock-based compensation | 5,438 | 5,438 | ||||
Purchase of treasury stock (in shares) | (1) | |||||
Purchase of treasury stock | (8) | (8) | ||||
Unrealized gain on hedge instruments, net of tax | 190 | 190 | ||||
Net income (loss) | 5,614 | 5,614 | ||||
Balance at end of period (in shares) at Jul. 01, 2023 | 78,154 | |||||
Balance at end of period at Jul. 01, 2023 | $ 908,412 | $ 846 | 777,762 | (801) | 344,401 | (213,796) |
Balance at beginning of period (in shares) at Dec. 30, 2023 | 78,311 | 78,311 | ||||
Balance at beginning of period at Dec. 30, 2023 | $ 829,418 | $ 848 | 788,967 | (419) | 254,616 | (214,594) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 363 | |||||
Issuance of common stock | 316 | $ 4 | 312 | |||
Stock-based compensation | 2,431 | 2,431 | ||||
Purchase of treasury stock (in shares) | (116) | |||||
Purchase of treasury stock | (2,721) | (2,721) | ||||
Unrealized gain on hedge instruments, net of tax | 190 | 190 | ||||
Net income (loss) | 11,685 | 11,685 | ||||
Balance at end of period (in shares) at Mar. 30, 2024 | 78,558 | |||||
Balance at end of period at Mar. 30, 2024 | $ 841,319 | $ 852 | 791,710 | (229) | 266,301 | (217,315) |
Balance at beginning of period (in shares) at Dec. 30, 2023 | 78,311 | 78,311 | ||||
Balance at beginning of period at Dec. 30, 2023 | $ 829,418 | $ 848 | 788,967 | (419) | 254,616 | (214,594) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 8,560 | |||||
Balance at end of period (in shares) at Jun. 29, 2024 | 78,628 | 78,628 | ||||
Balance at end of period at Jun. 29, 2024 | $ 843,408 | $ 853 | 796,812 | (64) | 263,176 | (217,369) |
Balance at beginning of period (in shares) at Mar. 30, 2024 | 78,558 | |||||
Balance at beginning of period at Mar. 30, 2024 | 841,319 | $ 852 | 791,710 | (229) | 266,301 | (217,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 73 | |||||
Issuance of common stock | 354 | $ 1 | 353 | |||
Stock-based compensation | 4,749 | 4,749 | ||||
Purchase of treasury stock (in shares) | (3) | |||||
Purchase of treasury stock | (54) | (54) | ||||
Unrealized gain on hedge instruments, net of tax | 165 | 165 | ||||
Net income (loss) | $ (3,125) | (3,125) | ||||
Balance at end of period (in shares) at Jun. 29, 2024 | 78,628 | 78,628 | ||||
Balance at end of period at Jun. 29, 2024 | $ 843,408 | $ 853 | $ 796,812 | $ (64) | $ 263,176 | $ (217,369) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2024 | Jul. 01, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 8,560 | $ 23,884 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 47,244 | 49,742 |
Amortization of debt discount and deferred financing costs | 1,261 | 1,800 |
Amortization of cloud computing implementation costs | 2,330 | 1,289 |
Asset impairment | 3,975 | 1,280 |
Deferred income tax expense (benefit) | (5,425) | 1,220 |
Stock-based compensation expense | 7,246 | 9,788 |
Losses (gains) on change in fair value of derivatives | (66) | (1,750) |
Inventory adjustments | 2,951 | 1,996 |
Other | 1,218 | 1,509 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 24,351 | 560 |
Inventories | 26,000 | 290 |
Operating lease right of use assets and lease liabilities | (1,722) | 525 |
Other assets | 1,248 | 2,239 |
Accounts payable | (17,587) | (1,168) |
Deferred and unearned revenue | (6,721) | 824 |
Other liabilities | (19,415) | 18,188 |
Net cash provided by operating activities | 75,448 | 112,216 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (39,620) | (54,120) |
Other | 1,577 | (665) |
Net cash used for investing activities | (38,043) | (54,785) |
Cash flows from financing activities: | ||
Repayments on long-term debt | (3,750) | 0 |
Proceeds from issuance of common stock | 670 | 945 |
Purchase of treasury stock | (2,775) | (27,611) |
Payments of debt issuance costs | 0 | (2,869) |
Payments on finance lease obligations | (1,585) | (2,536) |
Net cash used for financing activities | (7,440) | (32,071) |
Net change in cash, cash equivalents and restricted cash | 29,965 | 25,360 |
Cash, cash equivalents and restricted cash, beginning of year | 151,027 | 230,624 |
Cash, cash equivalents and restricted cash, end of period | 180,992 | 255,984 |
Supplemental cash flow disclosure information: | ||
Cash paid for interest | 4,196 | 5,399 |
Cash paid for taxes | 5,084 | 4,347 |
Capital expenditures accrued at the end of the period | $ 12,124 | $ 10,770 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 29, 2024 | |
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 wholly-owned subsidiaries. We are a leading value retailer of eyeglasses and contact lenses in the United States (the “U.S.”). We operated 1,216 and 1,188 retail optical locations in the U.S. and its territories as of June 29, 2024 and December 30, 2023, respectively, through our four store brands, including America’s Best Contacts and Eyeglasses (“America’s Best”), Eyeglass World, Vista Optical locations on select U.S. Army/Air Force military bases (“Military”) and within select Fred Meyer stores. We operated 225 stores for Walmart Inc. (“Walmart”) as of December 30, 2023; these stores are not reflected in the store counts above and the operating results of these stores are presented as discontinued operations. Also presented in discontinued operations are the majority of the operations formerly conducted by the Company’s Arlington Contact Lens (“AC Lens”) subsidiary. Refer to Note 2. “Discontinued Operations” for more information. Basis of Presentation and Principles of Consolidation We prepare our 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 30, 2023 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 results of the interim period. 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 30, 2023 included in the 2023 Annual Report on Form 10-K. 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 six months ended June 29, 2024. The condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts within the Condensed Consolidated Statements of Cash Flows and footnotes to the financial statements for fiscal year 2023 have been reclassified to conform to the fiscal year 2024 presentation. Retrospective reclassifications have been made to prior period financial statements and disclosures to present the discontinued operations. Refer to Note 2. “Discontinued Operations” for more information on discontinued operations. The Company has consolidated certain entities meeting the definition of a variable interest entity (“VIE”) as the Company concluded that it is the primary beneficiary of the entities under the provisions of Accounting Standards Codification 810, Consolidation. As of June 29, 2024, the variable interest entities include 29 professional corporations. The total assets of the consolidated VIEs included in the accompanying Condensed Consolidated Balance Sheets as of June 29, 2024 and December 30, 2023, were $5.9 million and $8.3 million, respectively, and the total liabilities of the consolidated VIEs were $8.1 million and $9.8 million, respectively. Fiscal Year Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31. Fiscal year 2024 contains 52 weeks and will end on December 28, 2024. All three and six month periods presented herein contain 13 and 26 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 six months ended June 29, 2024 and July 1, 2023, 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 markets. Historically, our business has realized a higher portion of net revenue, income from operations, and cash flows from operations in the first half of the year, and a lower portion of net revenue, income from operations, and cash flows from operations in the fourth fiscal quarter. The first half seasonality is attributable primarily to the timing of our customers’ personal income tax refunds and annual health insurance program start/reset periods. Seasonality related to fourth quarter holiday spending by retail customers generally does not impact our business. Our quarterly consolidated results generally 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 Non-cash impairment charges of $3.5 million and $4.0 million were recorded for the three and six months ended June 29, 2024 compared to $0.9 million and $1.2 million for the three and six months ended July 1, 2023 related to tangible long-lived store assets and Right of Use (“ROU”) assets. The impairments were primarily driven by lower than projected customer sales volume in certain stores and other entity-specific assumptions. We considered multiple factors including, but not limited to: forecasted scenarios related to store performance and the likelihood that these scenarios would be ultimately realized; and the remaining useful lives of the assets. Asset impairment expenses were recognized in Corporate/Other. Refer to Note 5. “Fair Value Measurement” for additional information on impairment charges. Income Taxes The Company’s quarterly provision (benefit) for income taxes has historically been calculated using the annualized effective tax rate (“AETR”) method, which applies an estimated annual effective tax rate to pre-tax income or loss. For the three and six months ended June 29, 2024, the Company calculated the provision (benefit) for income taxes using a discrete effective tax rate (“ETR”) method. The Company determined that due to the fact that small changes in the Company’s estimated pretax income or loss would result in significant changes in the estimated AETR, the historical method would not provide a reliable estimate for the three and six months ended June 29, 2024. Our effective tax rate for the three months ended June 29, 2024 was 60.0%, reflecting our statutory federal and state rate of 25.2%, tax impacts of consolidated VIEs and effects of other permanent items. Our effective tax rate for the three months ended July 1, 2023 was 2.4%, reflecting our statutory federal and state rate of 25.4%, tax impacts of consolidated VIEs, employee-related federal tax credits and effects of other permanent items. Our effective tax rate for the six months ended June 29, 2024 was 35.4%, reflecting our statutory federal and state rate of 25.2%, non-deductible compensation expense, tax impacts of consolidated VIEs and other permanent items. Our effective tax rate for the six months ended July 1, 2023 was 30.0%, reflecting our statutory federal and state rate of 25.4%, tax impacts of non-deductible compensation expenses, reduced deductibility of meals and entertainment and effects of other permanent items. Share Repurchases Effective February 23, 2024, the Board of Directors authorized the Company to repurchase up to $50 million aggregate amount of shares of the Company’s common stock until January 3, 2026. As of June 29, 2024, $50 million remains available under the share repurchase authorization. During the six months ended July 1, 2023, the Company repurchased 1.1 million shares of its common stock for $25.0 million. Investments In the second quarter of fiscal year 2023, we completed an investment in an entity specializing in applying artificial intelligence-powered screening and diagnostic tools to retinal imaging. In the second quarter of fiscal year 2024, we invested an additional $0.5 million in the entity. As of June 29, 2024, we have invested a total of $2.3 million in the entity. We have agreed to invest up to an additional $1.0 million in the entity upon the completion of certain milestones. The investment is recognized in Other assets in the Condensed Consolidated Balance Sheets as of June 29, 2024 and in Other in the investing section of the Condensed Consolidated Statements of Cash Flows for the six months ended June 29, 2024. The investment is valued at cost less impairment. Discontinued Operations In accordance with ASC 205-20 “Presentation of Financial Statements: Discontinued Operations,” a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, non-current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. Our operations related to Walmart, including our former Legacy reportable segment, as well as the majority of our AC Lens operations, met the requirements to be classified as discontinued operations as of June 29, 2024. Accordingly, we classified the results of these operations as discontinued operations in the condensed consolidated statements of operations for all periods presented. The results of all discontinued operations, less applicable income taxes, are reported as components of net income separate from the net income of continuing operations, and certain assets and liabilities associated with these operations were classified as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets for the periods presented. Additionally, the cash flows and comprehensive income of discontinued operations have not been segregated and are included in the interim Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Operations and Comprehensive Income, respectively, for all periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted. For additional information, see Note 2. “Discontinued Operations.” Future Adoption of Accounting Pronouncements Reference Rate Reform. The Financial Accounting Standards Board (“FASB”) has issued guidance at various points over the last several years that provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that may be affected by the cessation of the London Inter-bank Offered Rate (“LIBOR”). We are currently able to apply this new guidance for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2024. Refer to Note 7. “Interest Rate Derivatives” for more information on our transition from LIBOR to Term Secured Overnight Financing Rate (“Term SOFR”). Segment reporting . In November 2023, the FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update provides, among other things, enhanced segment disclosure requirements including disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures. Income taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and for interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures. The Enhancement and Standardization of Climate-Related Disclosures for Investors. In March 2024, the SEC issued its final rule on the enhancement and standardization of climate-related disclosures for investors. Subsequent to issuance, the rule became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. Unless legal challenges to the rule prevail or the effective date is delayed, this rule will require registrants to disclose certain climate-related information in registration statements and annual reports, and the revisions to Regulation S-X (including disclosure related to severe weather events and other natural conditions) would apply to the Company’s financial statements beginning with the Company’s fiscal year 2025. The Company is currently evaluating the rule to determine the impact on its consolidated financial statements and disclosures. The FASB issued other accounting guidance during the period that is not currently applicable or expected to have a material impact on the Company’s financial statements, and therefore, is not described above. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On July 20, 2023, the Company received a notice of non-renewal from Walmart of the Management & Services Agreement by and between NVI and Walmart, dated as of May 1, 2012 (as amended, supplemented or otherwise modified from time to time, the “Walmart MSA”). In accordance with the terms of the Walmart MSA and the notice, the agreement terminated as of February 23, 2024 (the “Termination Date”). In connection with the termination of the Walmart MSA, the Amended and Restated Supplier Agreement between NVI and Walmart, dated as of January 17, 2017; the agreement between FirstSight Vision Services, Inc. (“FirstSight”), a wholly-owned subsidiary of the Company, and Walmart, which arranged for the provision by FirstSight of optometric services at optometric offices next to certain Walmart stores throughout California; and certain other related agreements also terminated as of the Termination Date. The Walmart MSA includes provisions governing the transition period and post-termination obligations of the parties. AC Lens delivered notices of non-renewal of the agreements it has with Walmart and its affiliate Sam’s Club regarding wholesale contact lenses distribution and related services, such that these agreements terminated during the three months ended June 29, 2024, and the Company wound down the majority of AC Lens operations, including the closure of its Ohio distribution center, which largely supported the wholesale distribution and e-commerce contact lens services that the Company provided to Walmart and Sam’s Club. During the three and six months ended June 29, 2024, we recorded $2.9 million and $5.7 million, respectively, of net expense associated with the termination of the Walmart MSA and wind down of AC Lens, which consisted of employee compensation benefits, early termination fees, and other exit related costs. These charges were recorded in both Selling, general, and administrative expenses and Costs applicable to revenue for discontinued operations. We anticipate that we will incur approximately $2 million during the rest of fiscal year 2024 related to the termination of the Walmart MSA and wind down of AC Lens. As a result of the termination of the Walmart MSA and wind down of AC Lens operations, our former Legacy reportable segment and certain other results previously included in our Corporate/Other and Reconciliations categories, met the criteria to be presented as discontinued operations as of June 29, 2024. Accordingly, the assets and liabilities and results of operations of the discontinued operations have been presented in the tables below. Refer to Note 3. “Details of Cost Savings Plan” for more information on the cost savings plan related to our continuing operations. Major classes of assets and liabilities related to discontinued operations are presented in the table below. We have retained working capital and deferred tax balances related to discontinued operations; consequently, these items are not part of the disposal group. In thousands As of As of Noncurrent assets: Property and equipment, net $ — $ 2,376 Right of use assets — 304 Other intangible assets, net — 99 Total noncurrent assets of discontinued operations $ — $ 2,779 Current liabilities: Current operating lease obligations $ — $ 302 Total current liabilities of discontinued operations $ — $ 302 The following table presents income (loss) from discontinued operations, net of tax: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenue: Net product sales $ 53,471 $ 80,745 $ 127,070 $ 165,353 Net sales of services and plans — 12,809 4,513 25,758 Total net revenue 53,471 93,554 131,583 191,111 Costs applicable to revenue (exclusive of depreciation and amortization): Products 49,901 61,152 109,528 123,180 Services and plans 7 6,365 2,762 12,262 Total costs applicable to revenue 49,908 67,517 112,290 135,442 Operating expenses: Selling, general and administrative expenses 6,542 21,046 23,164 42,293 Depreciation and amortization 370 2,840 1,331 5,697 Asset impairment — — — 33 Other expense (income), net (8) (13) (20) (30) Total operating expenses 6,904 23,873 24,475 47,993 Earnings (loss) from discontinued operations before income taxes (3,341) 2,164 (5,182) 7,676 Income tax provision (benefit) from discontinued operations (1,257) 187 (3,030) 2,443 Income (loss) from discontinued operations, net of tax $ (2,084) $ 1,977 $ (2,152) $ 5,233 The following table presents significant non-cash items and cash flows from investing activities related to discontinued operations: Six Months Ended June 29, 2024 July 1, 2023 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $ 1,331 5,697 Stock-based compensation expense 81 567 Inventory adjustments 441 (36) Other (564) — Cash flows from investing activities: Purchase of property and equipment — (1,439) Other 1,732 — |
Details of Cost Savings Plan
Details of Cost Savings Plan | 6 Months Ended |
Jun. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Details of Cost Savings Plan | Details of Cost Savings Plan In connection with the discontinued operations, the Company implemented a cost savings plan that included optimizing non-customer facing labor costs, as well as reducing travel expenses and third-party spend. We have incurred $1.9 million since the inception of the cost savings plan, which is included within our continuing operations results. The plan has been substantially completed and we do not anticipate additional material costs related to this plan. The liability related to this plan is recorded in Other payables and accrued expenses in the Condensed Consolidated Balance Sheets. Some remaining payments are not anticipated to occur until fiscal year 2025. This disclosure excludes the impact of the Walmart partnership termination and wind down of AC Lens operations, which are currently presented under discontinued operations. In thousands Employee Compensation Benefits Balance at December 30, 2023 $ 1,800 Expenses recognized during the period 69 Payments during the period (1,477) Balance at June 29, 2024 $ 392 Employee compensation benefits During the six months ended June 29, 2024, we recognized $0.1 million in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income, in the Corporate/Other category, related to termination benefits for certain associates. |
Details of Certain Balance Shee
Details of Certain Balance Sheet Accounts | 6 Months Ended |
Jun. 29, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Details of Certain Balance Sheet Accounts | Details of Certain Balance Sheet Accounts The following table provides a reconciliation of cash and cash equivalents reported within the Condensed Consolidated Balance sheets to the total of Cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statement of Cash Flows: Six Months Ended In thousands June 29, 2024 July 1, 2023 Cash, cash equivalents and restricted cash: Cash and cash equivalents $ 179,515 $ 254,647 Restricted cash included in other assets 1,477 1,337 $ 180,992 $ 255,984 The following tables provide additional details of certain balance sheet accounts as of the dates shown below: In thousands As of As of Accounts receivable, net: Trade receivables $ 29,096 $ 43,518 Credit card receivables 16,879 27,905 Other receivables (1) 16,451 15,747 Allowance for credit losses (1,358) (316) $ 61,068 $ 86,854 (1) Includes Coronavirus Aid, Relief, and Economic Security (“CARES”) Act receivable in the amount of $9.0 million as of June 29, 2024 and December 30, 2023. In thousands As of As of Inventories: Raw materials and work in process (1) $ 55,838 $ 57,367 Finished goods 35,118 62,541 $ 90,956 $ 119,908 (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 Other payables and accrued expenses: Associate compensation and benefits $ 43,684 $ 62,614 Self-insurance liabilities 9,284 9,139 Capital expenditures 12,124 5,412 Advertising 4,862 6,446 Reserves for customer returns and remakes 4,884 9,093 Payable to Walmart 697 6,068 Income taxes payable 3,032 1,863 Supplies and other store support expenses 4,973 5,434 Litigation settlements (See Note 11) 4,950 500 Other 21,514 16,719 $ 110,004 $ 123,288 In thousands As of As of Other noncurrent liabilities: Self-insurance liabilities $ 5,816 $ 5,657 Other 2,565 2,808 $ 8,381 $ 8,465 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 29, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Recurring fair value measurements Interest Rate Derivatives We recognize as assets or liabilities at fair value the estimated amounts we would receive or pay upon a termination of interest rate derivatives prior to their scheduled expiration dates. The fair value is based on information that is model-driven and whose inputs were observable (Level 2 inputs) such as Term SOFR forward rates. See Note 7. “Interest Rate Derivatives” for further details. Non-recurring fair value measurements Long-lived and ROU Store Assets We recognized impairments of $3.5 million and $4.0 million during the three and six months ended June 29, 2024, respectively, and $0.9 million and $1.2 million during the three and six months ended July 1, 2023, respectively, related to our long-lived tangible store assets and ROU assets. The cash flows used in estimating fair value were discounted using market rates of 11.5%. A decrease in the estimated cash flows would lead to a lower fair value measurement, as would an increase in the discount rate. These non-recurring fair value measurements are classified as Level 3 measurements in the fair value hierarchy. The estimated remaining fair value of the assets impaired during the six months ended June 29, 2024 and July 1, 2023 was $0.5 million and $1.0 million, respectively; the estimated remaining fair values include amounts estimated at various dates during the related fiscal years. Substantially all of the remaining fair value of the impaired store assets represents the fair value of ROU assets. Additional fair value information Long-term Debt - Term Loan A and Revolving Loans Since the borrowings under the $142.5 million outstanding principal first lien term loan (“Term Loan A”) and revolving credit loans in an aggregate principal amount of $300.0 million (the “Revolving Loans”) utilize variable interest rate setting mechanisms such as Term SOFR, the fair values of these borrowings are deemed to approximate the carrying values. We also considered the effect of our own credit risk on the fair values of Term Loan A and Revolving Loans. Refer to Note 6. “Long-term Debt” for more information on these borrowings. Long-term Debt - 2025 Notes The Company has $302.5 million in aggregate principal amount of 2.50% convertible senior notes due on May 15, 2025 (the “2025 Notes”) issued and outstanding as of June 29, 2024. Refer to Note 6. “Long-term Debt” for more information on the 2025 Notes. The estimated fair value of the 2025 Notes was approximately $290.5 million a nd $303.3 million as of June 29, 2024 and December 30, 2023, respectively. The estimated fair value of the 2025 Notes is based on the prices the 2025 Notes have traded in the market as well as overall market conditions on the date of valuation, stated coupon rates, the number of coupon payments each year and the maturity dates, and represents a Level 2 measurement in the fair value hierarchy. Refer to Note 6. “Long-term Debt” for more information on the 2025 Notes. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 29, 2024 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consists of the following: In thousands As of As of 2025 Notes, due May 15, 2025 $ 302,497 $ 302,497 Term Loan A, due June 13, 2028 142,500 146,250 Revolving Loans, due June 13, 2028 — — Long-term debt before unamortized discount and issuance costs 444,997 448,747 Unamortized discount and issuance costs - 2025 Notes (1,609) (2,497) Unamortized discount and issuance costs - Term Loan A (948) (1,066) Long-term debt less debt discount and issuance costs 442,440 445,184 Less current maturities (309,997) (7,500) Long-term debt - noncurrent portion 132,443 437,684 Finance lease obligations 14,375 16,067 Less current maturities (2,891) (2,980) Long-term debt and finance lease obligations, less current portion, discount, and issuance costs $ 143,927 $ 450,771 Scheduled annual maturities of debt are as follows: Fiscal Period In thousands 2024 - remainder of fiscal year $ 1,875 2025 311,872 2026 7,500 2027 7,500 2028 116,250 Thereafter — $ 444,997 Credit Agreement We were in compliance with all covenants related to our long-term debt as of June 29, 2024. 2025 Notes The 2025 Notes mature on May 15, 2025, and due to the upcoming maturity, we have reclassified the outstanding principal balance of $302.5 million from a noncurrent to a current liability in the accompanying Condensed Consolidated Balance Sheets as of June 29, 2024. As of June 29, 2024, the Company has $293.6 million of availability under its revolving credit facility, in addition to $179.5 million of cash on hand, which provides the Company with sufficient liquidity to repay the remaining balance of the 2025 Notes as they become due. We recognized the following in Interest expense (income), net related to the 2025 Notes: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Contractual interest expense $ 1,891 $ 2,515 $ 3,781 $ 5,031 Amortization of issuance costs $ 446 $ 578 $ 888 $ 1,116 As of June 29, 2024, the remaining period for the unamortized debt issuance costs balance was approximately one year. As of June 29, 2024, the stock price conditions under which the 2025 Notes can be converted at the holders’ option were not met. |
Interest Rate Derivatives
Interest Rate Derivatives | 6 Months Ended |
Jun. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Derivatives | Interest Rate Derivatives We are party to an interest rate collar to offset the variability of cash flows in Term SOFR-indexed debt interest payments. During the second quarter of 2023, we amended the reference rate of the collar from LIBOR to Term SOFR. The aggregate notional amount of the interest rate collar, which is not designated as a cash flow hedge, was $300.0 million as of June 29, 2024. The fair value of our interest rate collar instrument was an asset of $0.6 million, which is recorded in Prepaid expenses and other current assets as of June 29, 2024, and an asset of $5.6 million, which was recorded in Prepaid expenses and other current assets as of December 30, 2023. See Note 5. “Fair Value Measurement” for further details. We recognized (gains) losses on the change in fair value of the interest rate collar of $(0.1) million and $(0.5) million during the three and six months ended June 29, 2024, respectively, and $(2.8) million and $(2.3) million during the three and six months ended July 1, 2023, respectively. The interest rate collar matured on July 18, 2024. Cash flows related to derivatives qualifying as hedges are included in the same section of the Consolidated Statements of Cash Flows as the underlying assets and liabilities being hedged. Cash flows during the six months ended June 29, 2024 and July 1, 2023 related to derivatives not qualifying as hedges were included in the operating section of the Condensed Consolidated Statements of Cash Flows and were immaterial. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 29, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans On June 12, 2024, the Company’s stockholders approved the amendment and restatement of the National Vision Holdings, Inc. 2017 Omnibus Incentive Plan (as amended and restated, the “2017 Omnibus Incentive Plan”), increasing the number of shares of common stock of the Company authorized for issuance under the 2017 Omnibus Incentive Plan by an additional 5.6 million shares. During the six months ended June 29, 2024, the Company granted 297,032 performance-based restricted stock units (“PSUs”) and 558,161 time-based restricted stock units (“RSUs”) to eligible employees and non-employee directors under the 2017 Omnibus Incentive Plan and the 2014 Stock Incentive Plan for Key Employees of National Vision Holdings, Inc. (formerly known as Nautilus Parent, Inc.) and its Subsidiaries (the “2014 Stock Incentive Plan”). The PSUs granted in fiscal 2024 will be settled after the end of the performance period (i.e., cliff vesting), which begins on the first day of our 2024 fiscal year and ends on the last day of our 2026 fiscal year, and are based on the Company’s achievement of certain performance targets. The RSUs granted in fiscal 2024 vest primarily in three equal annual installments. |
Revenue From Contracts with Cus
Revenue From Contracts with Customers | 6 Months Ended |
Jun. 29, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | Revenue from Contracts with Customers The majority of our 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. For sales of in-store non-prescription eyewear and related accessories, and paid eye exams, we recognize revenue at the point of sale. 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) and 2) eye exams. Revenues recognized over time primarily include product protection plans (i.e. warranties) and eye care club memberships. The following disaggregation of revenues depicts our revenue based on the timing of revenue recognition: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenues recognized at a point in time $ 419,747 $ 400,241 $ 870,562 $ 833,587 Revenues recognized over time 31,986 31,545 63,965 63,011 Total net revenue $ 451,733 $ 431,786 $ 934,527 $ 896,598 Refer to Note 12. “Segment Reporting” for the Company’s disaggregation of net revenue by reportable segment. As our reportable segment is 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. We record reductions in revenue for estimated price concessions granted to managed care providers. The Company considers its revenue from managed care customers to include variable consideration and estimates such amounts associated with managed care customer revenues using the history of concessions provided and cash receipts from managed care providers. We reduced our net revenue for variable consideration of $3.1 million and $3.5 million during the three months ended June 29, 2024 and July 1, 2023, respectively, and $7.0 million and $7.1 million during the six months ended June 29, 2024 and July 1, 2023, respectively. Accounts Receivable Credit loss expense recognized on our receivables, which is presented in SG&A expenses in the Company’s Condensed Consolidated Statements of Operations, was $0.1 million and $0.2 million for the three months ended June 29, 2024 and July 1, 2023, respectively, and $0.2 million and $0.3 million for the six months ended June 29, 2024 and July 1, 2023, respectively. Unsatisfied Performance Obligations (Contract Liabilities) During the three months ended June 29, 2024 and July 1, 2023, we recognized $23.1 million and $23.0 million, respectively, of deferred revenues outstanding at the beginning of each respective period. During the six months ended June 29, 2024 and July 1, 2023, we recognized $41.2 million and $40.4 million, respectively, of deferred revenues outstanding at the beginning of each respective period. Our deferred revenue balance as of June 29, 2024 and December 30, 2023 was $86.3 million and $84.3 million, respectively. We expect future revenue recognition of the June 29, 2024 balance of $50.6 million, $23.3 million, $10.9 million and $1.5 million in fiscal years 2024, 2025, 2026 and 2027, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 29, 2024 | |
Leases [Abstract] | |
Leases | Leases Our lease costs for the three and six months ended June 29, 2024 and July 1, 2023 were as follows: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Operating lease cost Fixed lease cost (a) $ 25,741 $ 23,939 $ 51,073 $ 47,059 Variable lease cost (b) 9,545 9,051 18,804 17,943 Sublease income (c) (334) (309) (665) (625) Finance lease cost Amortization of finance lease assets 582 894 1,241 1,750 Interest on finance lease liabilities 316 440 648 889 Net lease cost $ 35,850 $ 34,015 $ 71,101 $ 67,016 (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 leasing space to independent optometrists. In thousands Six Months Ended Other Information June 29, 2024 July 1, 2023 Operating cash outflows - operating leases $ 55,615 $ 59,035 Right of use assets acquired under operating leases $ 53,664 $ 59,929 |
Leases | Leases Our lease costs for the three and six months ended June 29, 2024 and July 1, 2023 were as follows: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Operating lease cost Fixed lease cost (a) $ 25,741 $ 23,939 $ 51,073 $ 47,059 Variable lease cost (b) 9,545 9,051 18,804 17,943 Sublease income (c) (334) (309) (665) (625) Finance lease cost Amortization of finance lease assets 582 894 1,241 1,750 Interest on finance lease liabilities 316 440 648 889 Net lease cost $ 35,850 $ 34,015 $ 71,101 $ 67,016 (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 leasing space to independent optometrists. In thousands Six Months Ended Other Information June 29, 2024 July 1, 2023 Operating cash outflows - operating leases $ 55,615 $ 59,035 Right of use assets acquired under operating leases $ 53,664 $ 59,929 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 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. We are currently and may in the future become subject to various claims and pending or threatened lawsuits in the ordinary course of our business. On September 23, 2022, we were served with notice of a lawsuit filed by a former employee in California state court alleging, on behalf of a proposed class of employees, several violations of California wage and hour laws. On December 9, 2022, the case was removed to the federal District Court for the Northern District of California. On January 18, 2023, we were served with a related representative action filed in California state court pursuant to California’s Private Attorneys General Act. We filed an answer to this action on February 17, 2023. On September 29, 2023, the state court set the PAGA action for trial on October 7, 2024. The parties attended mediation on March 11, 2024, but a resolution of the matter was not reached at that time. Following mediation, the parties agreed to a settlement of all claims alleged by the named plaintiff on behalf of himself and all putative class members and other aggrieved employees. The Company will pay $4.5 million for the gross settlement fund in connection with the settlement. The settlement is subject to approval by the court following a fairness hearing. On June 6, 2023, the Company was served with notice of a former employee’s intention to file a representative action against the Company pursuant to California’s Private Attorneys General Act based on alleged violations of California’s wage and hour laws. On June 22, 2023, the Company was served with a related lawsuit filed by the former employee in California state court alleging, on behalf of a proposed class of employees, violations of California wage and hour laws. On July 24, 2023, the Company filed its answer and a notice of removal of the case to the federal District Court for the Southern District of California. On July 28, 2023, the Company filed a Notice of Related Cases, seeking for both the case currently pending in the Northern District of California and described in the paragraph above and this case to be assigned to the same Judge/Magistrate Judge in an effort to save judicial effort and avoid duplication of labor. On August 15, 2023, the parties filed a stipulation to stay the case in the Southern District of California pending the resolution of the lawsuit pending in the Northern District of California. On August 21, 2023, the court entered an Order to Show Cause why the action should not be either dismissed or transferred to the federal court for the Northern District of California. Following the parties’ submission of their respective responses, the court dismissed the action without prejudice on September 11, 2023. The plaintiff retains his ability to pursue a PAGA action in state court pursuant to the June 6, 2023 notice. On January 22, 2024, the plaintiff filed a demand for arbitration of the claims set forth in the Complaint previously filed in state court in June 2023. We dispute the plaintiff’s allegations and intend to vigorously defend the litigation. On January 27, 2023, a purported class action complaint was filed in federal court in the Northern District of Georgia against the Company and two of the Company’s officers (the “Securities Class Action”). The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 for materially false and misleading statements made between May 2021 and May 2022. The complaint seeks unspecified damages as well as equitable relief. On March 28, 2023, the original plaintiff, City of Southfield General Employees Retirement System, and a new plaintiff, International Union of Operating Engineers, Local No. 793, Members Pension Benefit Trust of Ontario, filed a lead plaintiff motion, seeking to be appointed co-lead plaintiffs. On April 3, 2023, the Company along with its named officers filed a motion to dismiss the complaint. On May 19, 2023, the court granted the lead plaintiff motion. On June 30, 2023, the plaintiffs filed an amended complaint, which added a claim under Section 20A of the Exchange Act and extended the alleged class period to February 28, 2023. On August 21, 2023, the Company filed a motion to dismiss the amended complaint. The plaintiffs filed their response in opposition to this motion on October 5, 2023. On March 30, 2024, the court granted the Company’s motion and dismissed the amended complaint with prejudice. On April 29, 2024, the plaintiffs filed a motion for reconsideration of the order granting the motion to dismiss. The Company and named officers filed a response in opposition to the plaintiffs’ motion for reconsideration on May 13, 2024, and the plaintiffs then filed a reply in support of their motion on May 28, 2024. The Company disputes the allegations asserted by plaintiffs and will continue to defend the litigation vigorously. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 29, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company provides its principal products and services through one reportable segment: Owned & Host. The “Corporate/Other” category includes the results of operations of our other operating segments, as well as corporate overhead support. Revenues from the Corporate/Other category are attributable to our dedicated e-commerce website and FirstSight operations. Our dedicated e-commerce website was previously managed by AC Lens and was transitioned to NVI. FirstSight sells single-service health plans in connection with the operations of America’s Best operations in California. The “Reconciliations” category represents other adjustments to reportable segment results necessary for the presentation of consolidated financial results in accordance with U.S. GAAP. Our former Legacy reportable segment and certain other results previously included in the Corporate/Other and Reconciliations categories met the requirements to be classified as discontinued operations as of June 29, 2024. Refer to Note 2. “Discontinued Operations” for information related to our discontinued operations. Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”) or net revenue, less costs applicable to revenue, less SG&A expenses. Depreciation and amortization, asset impairment, and other corporate costs that are not allocated to the reportable segment, including interest expense (income), net are excluded from segment EBITDA. There are no differences between the measurement of our reportable segment’s assets and 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. The following is a summary of certain financial data for our Owned & Host reportable segment and Corporate/Other and Reconciliations categories. Reportable segment information is presented on the same basis as our consolidated financial statements, except for net revenue and associated costs applicable to revenue, which are 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 our reportable segment. Three Months Ended June 29, 2024 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 349,311 $ 8,099 $ 4,557 $ 361,967 Net sales of services and plans 90,174 — (408) 89,766 Total net revenue 439,485 8,099 4,149 451,733 Costs of products 103,688 6,520 1,005 111,213 Costs of services and plans 82,322 45 — 82,367 Total costs applicable to revenue 186,010 6,565 1,005 193,580 SG&A 174,078 57,275 — 231,353 Asset impairment — 3,519 — 3,519 Other expense (income), net — (2) — (2) EBITDA $ 79,397 $ (59,258) $ 3,144 Depreciation and amortization 22,692 Interest expense, net 3,196 Earnings (loss) from continuing operations before income taxes $ (2,605) Three Months Ended July 1, 2023 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 339,311 $ 8,347 $ 4,522 $ 352,180 Net sales of services and plans 79,443 1 162 79,606 Total net revenue 418,754 8,348 4,684 431,786 Costs of products 99,521 6,037 804 106,362 Costs of services and plans 73,958 2 — 73,960 Total costs applicable to revenue 173,479 6,039 804 180,322 SG&A 165,772 57,152 — 222,924 Asset impairment — 893 — 893 Other expense (income), net — (3) — (3) EBITDA $ 79,503 $ (55,733) $ 3,880 Depreciation and amortization 22,089 Interest expense, net 1,836 Earnings from continuing operations before income taxes $ 3,725 Six Months Ended June 29, 2024 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 729,907 $ 16,344 $ 3,799 $ 750,050 Net sales of services and plans 186,429 — (1,952) 184,477 Total net revenue 916,336 16,344 1,847 934,527 Costs of products 211,031 12,746 640 224,417 Costs of services and plans 164,664 45 — 164,709 Total costs applicable to revenue 375,695 12,791 640 389,126 SG&A 353,701 117,780 — 471,481 Asset impairment — 3,975 — 3,975 Other expense (income), net — (1) — (1) EBITDA $ 186,940 $ (118,201) $ 1,207 Depreciation and amortization 45,913 Interest expense, net 7,452 Earnings from continuing operations before income taxes $ 16,581 Six Months Ended July 1, 2023 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 714,147 $ 17,226 $ 960 $ 732,333 Net sales of services and plans 166,513 1 (2,249) 164,265 Total net revenue 880,660 17,227 (1,289) 896,598 Costs of products 204,878 12,497 61 217,436 Costs of services and plans 149,011 2 — 149,013 Total costs applicable to revenue 353,889 12,499 61 366,449 SG&A 333,617 117,983 — 451,600 Asset impairment — 1,247 — 1,247 Other expense (income), net — (104) — (104) EBITDA $ 193,154 $ (114,398) $ (1,350) Depreciation and amortization 44,045 Interest expense, net 6,703 Earnings from continuing operations before income taxes $ 26,658 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 29, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Diluted EPS related to the 2025 Notes is calculated using the if-converted method; the number of dilutive shares is based on the initial conversion rate associated with the 2025 Notes. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows: Three Months Ended Six Months Ended In Thousands, Except Earnings Per Share June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Numerator: Income (loss) from continuing operations, net of tax $ (1,041) $ 3,637 $ 10,712 $ 18,651 Income (loss) from discontinued operations, net of tax $ (2,084) $ 1,977 $ (2,152) $ 5,233 Net income (loss) $ (3,125) $ 5,614 $ 8,560 $ 23,884 Denominator: Weighted average shares outstanding, Basic 78,575 78,101 78,480 78,411 Effect of dilutive securities: Stock options — 83 41 115 Restricted stock units — 159 253 258 Weighted average shares outstanding, Diluted 78,575 78,343 78,774 78,784 Basic earnings (loss) per share: Continuing operations $ (0.01) $ 0.05 $ 0.14 $ 0.24 Discontinued operations $ (0.03) $ 0.03 $ (0.03) $ 0.07 Total $ (0.04) $ 0.07 $ 0.11 $ 0.30 Diluted earnings (loss) per share: Continuing operations $ (0.01) $ 0.05 $ 0.14 $ 0.24 Discontinued operations $ (0.03) $ 0.03 $ (0.03) $ 0.07 Total $ (0.04) $ 0.07 $ 0.11 $ 0.30 Anti-dilutive securities excluded from diluted weighted average common shares 11,385 13,790 11,074 13,614 Some of the totals in the table above do not foot due to rounding differences |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2024 | Mar. 30, 2024 | Jul. 01, 2023 | Apr. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ (3,125) | $ 11,685 | $ 5,614 | $ 18,270 | $ 8,560 | $ 23,884 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 29, 2024 shares | Jun. 29, 2024 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Melissa Rasmussen [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On May 31, 2024, Melissa Rasmussen, Chief Financial Officer of the Company, adopted a trading arrangement for the sale of the Company’s common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of the Exchange Act Rule 10b5-1(c). Ms. Rasmussen’s Rule 10b5-1 Trading Plan provides for the sale of up to 10,000 shares of common stock pursuant to one or more limit orders from August 30, 2024, until May 30, 2025. | |
Name | Melissa Rasmussen | |
Title | Chief Financial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | May 31, 2024 | |
Expiration Date | May 30, 2025 | |
Arrangement Duration | 273 days | |
Aggregate Available | 10,000 | 10,000 |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 29, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation We prepare our 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 30, 2023 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 results of the interim period. 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 30, 2023 included in the 2023 Annual Report on Form 10-K. 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 six months ended June 29, 2024. The condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts within the Condensed Consolidated Statements of Cash Flows and footnotes to the financial statements for fiscal year 2023 have been reclassified to conform to the fiscal year 2024 presentation. Retrospective reclassifications have been made to prior period financial statements and disclosures to present the discontinued operations. Refer to Note 2. “Discontinued Operations” for more information on discontinued operations. |
Fiscal Year | Fiscal Year Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31. Fiscal year 2024 contains 52 weeks and will end on December 28, 2024. All three and six month periods presented herein contain 13 and 26 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 |
Income Taxes | Income Taxes The Company’s quarterly provision (benefit) for income taxes has historically been calculated using the annualized effective tax rate (“AETR”) method, which applies an estimated annual effective tax rate to pre-tax income or loss. For the three and six months ended June 29, 2024, the Company calculated the provision (benefit) for income taxes using a discrete effective tax rate (“ETR”) method. The Company determined that due to the fact that small changes in the Company’s estimated pretax income or loss would result in significant changes in the estimated AETR, the historical method would not provide a reliable estimate for the three and six months ended June 29, 2024. Our effective tax rate for the three months ended June 29, 2024 was 60.0%, reflecting our statutory federal and state rate of 25.2%, tax impacts of consolidated VIEs and effects of other permanent items. Our effective tax rate for the three months ended July 1, 2023 was 2.4%, reflecting our statutory federal and state rate of 25.4%, tax impacts of consolidated VIEs, employee-related federal tax credits and effects of other permanent items. Our effective tax rate for the six months ended June 29, 2024 was 35.4%, reflecting our statutory federal and state rate of 25.2%, non-deductible compensation expense, tax impacts of consolidated VIEs and other permanent items. Our effective tax rate for the six months ended July 1, 2023 was 30.0%, reflecting our statutory federal and state rate of 25.4%, tax impacts of non-deductible compensation expenses, reduced deductibility of meals and entertainment and effects of other permanent items. |
Discontinued Operations | Discontinued Operations In accordance with ASC 205-20 “Presentation of Financial Statements: Discontinued Operations,” a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, non-current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. |
Future Adoption of Accounting Pronouncements | Future Adoption of Accounting Pronouncements Reference Rate Reform. The Financial Accounting Standards Board (“FASB”) has issued guidance at various points over the last several years that provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that may be affected by the cessation of the London Inter-bank Offered Rate (“LIBOR”). We are currently able to apply this new guidance for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2024. Refer to Note 7. “Interest Rate Derivatives” for more information on our transition from LIBOR to Term Secured Overnight Financing Rate (“Term SOFR”). Segment reporting . In November 2023, the FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update provides, among other things, enhanced segment disclosure requirements including disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures. Income taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and for interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures. The Enhancement and Standardization of Climate-Related Disclosures for Investors. In March 2024, the SEC issued its final rule on the enhancement and standardization of climate-related disclosures for investors. Subsequent to issuance, the rule became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. Unless legal challenges to the rule prevail or the effective date is delayed, this rule will require registrants to disclose certain climate-related information in registration statements and annual reports, and the revisions to Regulation S-X (including disclosure related to severe weather events and other natural conditions) would apply to the Company’s financial statements beginning with the Company’s fiscal year 2025. The Company is currently evaluating the rule to determine the impact on its consolidated financial statements and disclosures. The FASB issued other accounting guidance during the period that is not currently applicable or expected to have a material impact on the Company’s financial statements, and therefore, is not described above. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Major Classes of Assets and Liabilities & Non-Cash Items and Cash Flows from Investing Activities Related to Discontinued Operations | Major classes of assets and liabilities related to discontinued operations are presented in the table below. We have retained working capital and deferred tax balances related to discontinued operations; consequently, these items are not part of the disposal group. In thousands As of As of Noncurrent assets: Property and equipment, net $ — $ 2,376 Right of use assets — 304 Other intangible assets, net — 99 Total noncurrent assets of discontinued operations $ — $ 2,779 Current liabilities: Current operating lease obligations $ — $ 302 Total current liabilities of discontinued operations $ — $ 302 The following table presents income (loss) from discontinued operations, net of tax: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenue: Net product sales $ 53,471 $ 80,745 $ 127,070 $ 165,353 Net sales of services and plans — 12,809 4,513 25,758 Total net revenue 53,471 93,554 131,583 191,111 Costs applicable to revenue (exclusive of depreciation and amortization): Products 49,901 61,152 109,528 123,180 Services and plans 7 6,365 2,762 12,262 Total costs applicable to revenue 49,908 67,517 112,290 135,442 Operating expenses: Selling, general and administrative expenses 6,542 21,046 23,164 42,293 Depreciation and amortization 370 2,840 1,331 5,697 Asset impairment — — — 33 Other expense (income), net (8) (13) (20) (30) Total operating expenses 6,904 23,873 24,475 47,993 Earnings (loss) from discontinued operations before income taxes (3,341) 2,164 (5,182) 7,676 Income tax provision (benefit) from discontinued operations (1,257) 187 (3,030) 2,443 Income (loss) from discontinued operations, net of tax $ (2,084) $ 1,977 $ (2,152) $ 5,233 The following table presents significant non-cash items and cash flows from investing activities related to discontinued operations: Six Months Ended June 29, 2024 July 1, 2023 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $ 1,331 5,697 Stock-based compensation expense 81 567 Inventory adjustments 441 (36) Other (564) — Cash flows from investing activities: Purchase of property and equipment — (1,439) Other 1,732 — |
Details of Cost Savings Plan (T
Details of Cost Savings Plan (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Other Payables and Accrued Expenses | The liability related to this plan is recorded in Other payables and accrued expenses in the Condensed Consolidated Balance Sheets. Some remaining payments are not anticipated to occur until fiscal year 2025. This disclosure excludes the impact of the Walmart partnership termination and wind down of AC Lens operations, which are currently presented under discontinued operations. In thousands Employee Compensation Benefits Balance at December 30, 2023 $ 1,800 Expenses recognized during the period 69 Payments during the period (1,477) Balance at June 29, 2024 $ 392 Employee compensation benefits During the six months ended June 29, 2024, we recognized $0.1 million in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income, in the Corporate/Other category, related to termination benefits for certain associates. |
Details of Certain Balance Sh_2
Details of Certain Balance Sheet Accounts (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents reported within the Condensed Consolidated Balance sheets to the total of Cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statement of Cash Flows: Six Months Ended In thousands June 29, 2024 July 1, 2023 Cash, cash equivalents and restricted cash: Cash and cash equivalents $ 179,515 $ 254,647 Restricted cash included in other assets 1,477 1,337 $ 180,992 $ 255,984 |
Schedule of Accounts Receivable, Net | The following tables provide additional details of certain balance sheet accounts as of the dates shown below: In thousands As of As of Accounts receivable, net: Trade receivables $ 29,096 $ 43,518 Credit card receivables 16,879 27,905 Other receivables (1) 16,451 15,747 Allowance for credit losses (1,358) (316) $ 61,068 $ 86,854 (1) Includes Coronavirus Aid, Relief, and Economic Security (“CARES”) Act receivable in the amount of $9.0 million as of June 29, 2024 and December 30, 2023. |
Schedule of Inventories | In thousands As of As of Inventories: Raw materials and work in process (1) $ 55,838 $ 57,367 Finished goods 35,118 62,541 $ 90,956 $ 119,908 (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 Other Payables and Accrued Expenses | In thousands As of As of Other payables and accrued expenses: Associate compensation and benefits $ 43,684 $ 62,614 Self-insurance liabilities 9,284 9,139 Capital expenditures 12,124 5,412 Advertising 4,862 6,446 Reserves for customer returns and remakes 4,884 9,093 Payable to Walmart 697 6,068 Income taxes payable 3,032 1,863 Supplies and other store support expenses 4,973 5,434 Litigation settlements (See Note 11) 4,950 500 Other 21,514 16,719 $ 110,004 $ 123,288 |
Schedule of Other Non-current Liabilities | In thousands As of As of Other noncurrent liabilities: Self-insurance liabilities $ 5,816 $ 5,657 Other 2,565 2,808 $ 8,381 $ 8,465 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following: In thousands As of As of 2025 Notes, due May 15, 2025 $ 302,497 $ 302,497 Term Loan A, due June 13, 2028 142,500 146,250 Revolving Loans, due June 13, 2028 — — Long-term debt before unamortized discount and issuance costs 444,997 448,747 Unamortized discount and issuance costs - 2025 Notes (1,609) (2,497) Unamortized discount and issuance costs - Term Loan A (948) (1,066) Long-term debt less debt discount and issuance costs 442,440 445,184 Less current maturities (309,997) (7,500) Long-term debt - noncurrent portion 132,443 437,684 Finance lease obligations 14,375 16,067 Less current maturities (2,891) (2,980) Long-term debt and finance lease obligations, less current portion, discount, and issuance costs $ 143,927 $ 450,771 We recognized the following in Interest expense (income), net related to the 2025 Notes: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Contractual interest expense $ 1,891 $ 2,515 $ 3,781 $ 5,031 Amortization of issuance costs $ 446 $ 578 $ 888 $ 1,116 |
Schedule of Maturities of Long-Term Debt | Scheduled annual maturities of debt are as follows: Fiscal Period In thousands 2024 - remainder of fiscal year $ 1,875 2025 311,872 2026 7,500 2027 7,500 2028 116,250 Thereafter — $ 444,997 |
Revenue From Contracts with C_2
Revenue From Contracts with Customers (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenues | The following disaggregation of revenues depicts our revenue based on the timing of revenue recognition: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenues recognized at a point in time $ 419,747 $ 400,241 $ 870,562 $ 833,587 Revenues recognized over time 31,986 31,545 63,965 63,011 Total net revenue $ 451,733 $ 431,786 $ 934,527 $ 896,598 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Leases [Abstract] | |
Schedule of Lease Cost | Our lease costs for the three and six months ended June 29, 2024 and July 1, 2023 were as follows: Three Months Ended Six Months Ended In thousands June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Operating lease cost Fixed lease cost (a) $ 25,741 $ 23,939 $ 51,073 $ 47,059 Variable lease cost (b) 9,545 9,051 18,804 17,943 Sublease income (c) (334) (309) (665) (625) Finance lease cost Amortization of finance lease assets 582 894 1,241 1,750 Interest on finance lease liabilities 316 440 648 889 Net lease cost $ 35,850 $ 34,015 $ 71,101 $ 67,016 (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 leasing space to independent optometrists. |
Schedule of Operating Lease Cash Flows | In thousands Six Months Ended Other Information June 29, 2024 July 1, 2023 Operating cash outflows - operating leases $ 55,615 $ 59,035 Right of use assets acquired under operating leases $ 53,664 $ 59,929 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Financial Data by Segment | The following is a summary of certain financial data for our Owned & Host reportable segment and Corporate/Other and Reconciliations categories. Reportable segment information is presented on the same basis as our consolidated financial statements, except for net revenue and associated costs applicable to revenue, which are 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 our reportable segment. Three Months Ended June 29, 2024 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 349,311 $ 8,099 $ 4,557 $ 361,967 Net sales of services and plans 90,174 — (408) 89,766 Total net revenue 439,485 8,099 4,149 451,733 Costs of products 103,688 6,520 1,005 111,213 Costs of services and plans 82,322 45 — 82,367 Total costs applicable to revenue 186,010 6,565 1,005 193,580 SG&A 174,078 57,275 — 231,353 Asset impairment — 3,519 — 3,519 Other expense (income), net — (2) — (2) EBITDA $ 79,397 $ (59,258) $ 3,144 Depreciation and amortization 22,692 Interest expense, net 3,196 Earnings (loss) from continuing operations before income taxes $ (2,605) Three Months Ended July 1, 2023 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 339,311 $ 8,347 $ 4,522 $ 352,180 Net sales of services and plans 79,443 1 162 79,606 Total net revenue 418,754 8,348 4,684 431,786 Costs of products 99,521 6,037 804 106,362 Costs of services and plans 73,958 2 — 73,960 Total costs applicable to revenue 173,479 6,039 804 180,322 SG&A 165,772 57,152 — 222,924 Asset impairment — 893 — 893 Other expense (income), net — (3) — (3) EBITDA $ 79,503 $ (55,733) $ 3,880 Depreciation and amortization 22,089 Interest expense, net 1,836 Earnings from continuing operations before income taxes $ 3,725 Six Months Ended June 29, 2024 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 729,907 $ 16,344 $ 3,799 $ 750,050 Net sales of services and plans 186,429 — (1,952) 184,477 Total net revenue 916,336 16,344 1,847 934,527 Costs of products 211,031 12,746 640 224,417 Costs of services and plans 164,664 45 — 164,709 Total costs applicable to revenue 375,695 12,791 640 389,126 SG&A 353,701 117,780 — 471,481 Asset impairment — 3,975 — 3,975 Other expense (income), net — (1) — (1) EBITDA $ 186,940 $ (118,201) $ 1,207 Depreciation and amortization 45,913 Interest expense, net 7,452 Earnings from continuing operations before income taxes $ 16,581 Six Months Ended July 1, 2023 In thousands Owned & Host Corporate/Other Reconciliations Total Net product sales $ 714,147 $ 17,226 $ 960 $ 732,333 Net sales of services and plans 166,513 1 (2,249) 164,265 Total net revenue 880,660 17,227 (1,289) 896,598 Costs of products 204,878 12,497 61 217,436 Costs of services and plans 149,011 2 — 149,013 Total costs applicable to revenue 353,889 12,499 61 366,449 SG&A 333,617 117,983 — 451,600 Asset impairment — 1,247 — 1,247 Other expense (income), net — (104) — (104) EBITDA $ 193,154 $ (114,398) $ (1,350) Depreciation and amortization 44,045 Interest expense, net 6,703 Earnings from continuing operations before income taxes $ 26,658 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
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 Six Months Ended In Thousands, Except Earnings Per Share June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Numerator: Income (loss) from continuing operations, net of tax $ (1,041) $ 3,637 $ 10,712 $ 18,651 Income (loss) from discontinued operations, net of tax $ (2,084) $ 1,977 $ (2,152) $ 5,233 Net income (loss) $ (3,125) $ 5,614 $ 8,560 $ 23,884 Denominator: Weighted average shares outstanding, Basic 78,575 78,101 78,480 78,411 Effect of dilutive securities: Stock options — 83 41 115 Restricted stock units — 159 253 258 Weighted average shares outstanding, Diluted 78,575 78,343 78,774 78,784 Basic earnings (loss) per share: Continuing operations $ (0.01) $ 0.05 $ 0.14 $ 0.24 Discontinued operations $ (0.03) $ 0.03 $ (0.03) $ 0.07 Total $ (0.04) $ 0.07 $ 0.11 $ 0.30 Diluted earnings (loss) per share: Continuing operations $ (0.01) $ 0.05 $ 0.14 $ 0.24 Discontinued operations $ (0.03) $ 0.03 $ (0.03) $ 0.07 Total $ (0.04) $ 0.07 $ 0.11 $ 0.30 Anti-dilutive securities excluded from diluted weighted average common shares 11,385 13,790 11,074 13,614 Some of the totals in the table above do not foot due to rounding differences |
Description of Business and B_3
Description of Business and Basis of Presentation - Nature of Operations (Details) | Jun. 29, 2024 store store_brand | Dec. 30, 2023 store |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of retail optical locations | 1,216 | 1,188 |
Number of store brands | store_brand | 4 | |
Walmart MSA | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of retail optical locations | 225 |
Description of Business and B_4
Description of Business and Basis of Presentation - Basis of Presentation and Principles of Consolidation (Details) $ in Thousands | Jun. 29, 2024 USD ($) corporation | Dec. 30, 2023 USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of corporations | corporation | 29 | |
Assets | $ 2,146,300 | $ 2,172,511 |
Variable Interest Entity, Primary Beneficiary | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Assets | 5,900 | 8,300 |
Liabilities | $ 8,100 | $ 9,800 |
Description of Business and B_5
Description of Business and Basis of Presentation - Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Accounting Policies [Abstract] | ||||
Asset impairment | $ 3,519 | $ 893 | $ 3,975 | $ 1,247 |
Description of Business and B_6
Description of Business and Basis of Presentation - Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Accounting Policies [Abstract] | ||||
Effective income tax rate (percent) | 60% | 2.40% | 35.40% | 30% |
Statutory federal and state rate (percent) | 25.20% | 25.40% | 25.20% | 25.40% |
Description of Business and B_7
Description of Business and Basis of Presentation - Share Repurchases (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2024 | Mar. 30, 2024 | Jul. 01, 2023 | Apr. 01, 2023 | Jul. 01, 2023 | Feb. 23, 2024 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Repurchase of common stock, value | $ 54 | $ 2,721 | $ 8 | $ 27,609 | ||
February 2024 Share Repurchase | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 50,000 | |||||
Stock repurchase program, remaining authorized repurchase amount | $ 50,000 | |||||
April 2023 Share Repurchase | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares repurchased (in shares) | 1.1 | |||||
Repurchase of common stock, value | $ 25,000 |
Description of Business and B_8
Description of Business and Basis of Presentation - Investment (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2024 USD ($) | Jun. 29, 2024 USD ($) | |
Accounting Policies [Abstract] | ||
Additional investment in entity | $ 0.5 | |
Investments | $ 2.3 | $ 2.3 |
Investments, additional maximum milestone payment amount | $ 1 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - Walmart MSA and AC Lens $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2024 USD ($) | Jun. 29, 2024 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Additional costs to be incurred | $ 2 | $ 2 |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Expense from disposal of discontinued operations | $ 2.9 | $ (5.7) |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Major Classes of Assets and Liabilities Related to Discontinued Operations (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Noncurrent assets: | ||
Total noncurrent assets of discontinued operations | $ 0 | $ 2,779 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 0 | 302 |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | Walmart MSA | ||
Noncurrent assets: | ||
Property and equipment, net | 0 | 2,376 |
Right of use assets | 0 | 304 |
Other intangible assets, net | 0 | 99 |
Total noncurrent assets of discontinued operations | 0 | 2,779 |
Current liabilities: | ||
Current operating lease obligations | 0 | 302 |
Total current liabilities of discontinued operations | $ 0 | $ 302 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Discontinued Operation (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - Walmart MSA - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Revenue: | ||||
Total net revenue | $ 53,471 | $ 93,554 | $ 131,583 | $ 191,111 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 49,908 | 67,517 | 112,290 | 135,442 |
Operating expenses: | ||||
Selling, general and administrative expenses | 6,542 | 21,046 | 23,164 | 42,293 |
Depreciation and amortization | 370 | 2,840 | 1,331 | 5,697 |
Asset impairment | 0 | 0 | 0 | 33 |
Other expense (income), net | (8) | (13) | (20) | (30) |
Total operating expenses | 6,904 | 23,873 | 24,475 | 47,993 |
Earnings (loss) from discontinued operations before income taxes | (3,341) | 2,164 | (5,182) | 7,676 |
Income tax provision (benefit) from discontinued operations | (1,257) | 187 | (3,030) | 2,443 |
Income (loss) from discontinued operations, net of tax | (2,084) | 1,977 | (2,152) | 5,233 |
Net product sales | ||||
Revenue: | ||||
Total net revenue | 53,471 | 80,745 | 127,070 | 165,353 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | 49,901 | 61,152 | 109,528 | 123,180 |
Net sales of services and plans | ||||
Revenue: | ||||
Total net revenue | 0 | 12,809 | 4,513 | 25,758 |
Costs applicable to revenue (exclusive of depreciation and amortization): | ||||
Total costs applicable to revenue | $ 7 | $ 6,365 | $ 2,762 | $ 12,262 |
Discontinued Operations - Sch_3
Discontinued Operations - Schedule of Non-Cash items and Proceeds from Sale of Assets Related to Discontinued Operations (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - Walmart MSA - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | $ 370 | $ 2,840 | $ 1,331 | $ 5,697 |
Stock-based compensation expense | 81 | 567 | ||
Inventory adjustments | 441 | (36) | ||
Other | (564) | 0 | ||
Cash flows from investing activities: | ||||
Purchase of property and equipment | 0 | (1,439) | ||
Other | $ 1,732 | $ 0 |
Details of Cost Savings Plan -
Details of Cost Savings Plan - Narrative (Details) - Termination Of Walmart Partnership $ in Thousands | 6 Months Ended |
Jun. 29, 2024 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Charges incurred | $ 1,900 |
Employee Compensation Benefits | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | $ 69 |
Details of Cost Savings Plan _2
Details of Cost Savings Plan - Other Payables and Accrued Expenses (Details) - Termination Of Walmart Partnership - Employee Compensation Benefits $ in Thousands | 6 Months Ended |
Jun. 29, 2024 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 1,800 |
Expenses recognized during the period | 69 |
Payments during the period | (1,477) |
Ending balance | $ 392 |
Details of Certain Balance Sh_3
Details of Certain Balance Sheet Accounts - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 | Jul. 01, 2023 | Dec. 31, 2022 |
Cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | $ 179,515 | $ 149,896 | $ 254,647 | |
Restricted cash included in other assets | 1,477 | 1,337 | ||
Total cash, cash equivalents and restricted cash | $ 180,992 | $ 151,027 | $ 255,984 | $ 230,624 |
Details of Certain Balance Sh_4
Details of Certain Balance Sheet Accounts - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Accounts receivable, net: | ||
Allowance for credit losses | $ (1,358) | $ (316) |
Accounts receivable, net of allowance | 61,068 | 86,854 |
The CARES Act | ||
Accounts receivable, net: | ||
Government assistance receivable | 9,000 | 9,000 |
Trade receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | 29,096 | 43,518 |
Credit card receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | 16,879 | 27,905 |
Other receivables | ||
Accounts receivable, net: | ||
Accounts receivable, gross | $ 16,451 | $ 15,747 |
Details of Certain Balance Sh_5
Details of Certain Balance Sheet Accounts - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Inventories: | ||
Raw materials and work in process | $ 55,838 | $ 57,367 |
Finished goods | 35,118 | 62,541 |
Inventories | $ 90,956 | $ 119,908 |
Details of Certain Balance Sh_6
Details of Certain Balance Sheet Accounts - Schedule of Other Payables and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Other payables and accrued expenses: | ||
Associate compensation and benefits | $ 43,684 | $ 62,614 |
Self-insurance liabilities | 9,284 | 9,139 |
Capital expenditures | 12,124 | 5,412 |
Advertising | 4,862 | 6,446 |
Reserves for customer returns and remakes | 4,884 | 9,093 |
Payable to Walmart | 697 | 6,068 |
Income taxes payable | 3,032 | 1,863 |
Supplies and other store support expenses | 4,973 | 5,434 |
Litigation settlements (See Note 11) | 4,950 | 500 |
Other | 21,514 | 16,719 |
Total other payables and accrued expenses | $ 110,004 | $ 123,288 |
Details of Certain Balance Sh_7
Details of Certain Balance Sheet Accounts - Schedule of Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Other noncurrent liabilities: | ||
Self-insurance liabilities | $ 5,816 | $ 5,657 |
Other | 2,565 | 2,808 |
Total other non-current liabilities | $ 8,381 | $ 8,465 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Dec. 30, 2023 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Asset impairment | $ 3,519,000 | $ 893,000 | $ 3,975,000 | $ 1,247,000 | |
Estimated fair value of impaired assets | 500,000 | $ 1,000,000 | |||
Aggregate principal amount | 444,997,000 | 444,997,000 | $ 448,747,000 | ||
Convertible Senior Notes | 2025 Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Aggregate principal amount | $ 302,497,000 | $ 302,497,000 | 302,497,000 | ||
Stated interest rate (percent) | 2.50% | 2.50% | |||
Revolving Loans, due June 13, 2028 | Term Loan A, due June 13, 2028 | First Lien Term A Loan and Revolving Loans | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Aggregate principal amount | $ 142,500,000 | $ 142,500,000 | |||
Revolving Loans, due June 13, 2028 | Line of Credit | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Aggregate principal amount | 0 | 0 | 0 | ||
Revolving Loans, due June 13, 2028 | Line of Credit | First Lien Term A Loan and Revolving Loans | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Line of credit facility borrowing capacity | 300,000,000 | 300,000,000 | |||
Level 2 | Convertible Senior Notes | 2025 Notes | Estimated fair value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Estimated fair value of convertible notes | $ 290,500,000 | $ 290,500,000 | $ 303,300,000 | ||
Discount Rate | Discounted Cash Flow | Fair Value, Inputs, Level 3 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Discount rate used in impairment analysis (percent) | 11.50% |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt before unamortized discount and issuance costs | $ 444,997 | $ 448,747 |
Long-term debt less debt discount and issuance costs | 442,440 | 445,184 |
Less current maturities | (309,997) | (7,500) |
Long-term debt - noncurrent portion | 132,443 | 437,684 |
Finance lease obligations | 14,375 | 16,067 |
Less current maturities | (2,891) | (2,980) |
Long-term debt and finance lease obligations, less current portion, discount, and issuance costs | 143,927 | 450,771 |
Credit Facility | Revolving Loans, due June 13, 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt before unamortized discount and issuance costs | 0 | 0 |
2025 Notes | Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt before unamortized discount and issuance costs | 302,497 | 302,497 |
Unamortized discount and issuance cost | (1,609) | (2,497) |
Term Loan A, due June 13, 2028 | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt before unamortized discount and issuance costs | 142,500 | 146,250 |
Unamortized discount and issuance cost | $ (948) | $ (1,066) |
Long-term Debt - Schedule of Ma
Long-term Debt - Schedule of Maturities of Debt (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 30, 2023 |
Schedule of annual maturities of debt: | ||
2024 - remainder of fiscal year | $ 1,875 | |
2025 | 311,872 | |
2026 | 7,500 | |
2027 | 7,500 | |
2028 | 116,250 | |
Thereafter | 0 | |
Total | $ 444,997 | $ 448,747 |
Long-term Debt - Schedule of In
Long-term Debt - Schedule of Interest Expense (Details) - 2025 Notes - Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,891 | $ 2,515 | $ 3,781 | $ 5,031 |
Amortization of issuance costs | $ 446 | $ 578 | $ 888 | $ 1,116 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 29, 2024 | Dec. 30, 2023 | Jul. 01, 2023 | |
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ (444,997) | $ (448,747) | |
Cash and cash equivalents | 179,515 | 149,896 | $ 254,647 |
Revolving Credit Facility | Credit Facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 0 | 0 | |
2025 Notes | Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ (302,497) | $ (302,497) | |
Remaining period for the unamortized debt issuance costs (in years) | 1 year | ||
2025 Notes | Convertible Senior Notes | Revision of Prior Period, Reclassification, Adjustment | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 302,500 | ||
Aggregate principal amount, current maturities | 302,500 | ||
2025 Notes | Revolving Credit Facility | Credit Facility | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 293,600 |
Interest Rate Derivatives (Deta
Interest Rate Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Dec. 30, 2023 | |
Derivative [Line Items] | |||||
Estimated unrealized loss reclassification to earnings in next 12 months | $ 0.1 | $ 0.1 | |||
Interest rate collar | |||||
Derivative [Line Items] | |||||
Notional amount | 300 | 300 | |||
(Gains) losses on change in fair value of derivative | (0.1) | $ (2.8) | (0.5) | $ (2.3) | |
Interest rate collar | Not designated as hedge | |||||
Derivative [Line Items] | |||||
Fair value of derivative assets | $ 0.6 | $ 0.6 | $ 5.6 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) | 6 Months Ended | |
Jun. 29, 2024 installment shares | Jun. 12, 2024 shares | |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 297,032 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 558,161 | |
Number of equal vesting installments | installment | 3 | |
2017 Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized for issuance (in shares) | 5,600,000 |
Revenue From Contracts with C_3
Revenue From Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Dec. 30, 2023 | |
Disaggregation of Revenue [Line Items] | |||||
Time frame for majority of payments on health care plans and programs accounts (in days) | 90 days | ||||
Reductions in revenue for estimated price concessions granted to managed care providers | $ 3.1 | $ 3.5 | $ 7 | $ 7.1 | |
Credit loss expense | 0.1 | 0.2 | 0.2 | 0.3 | |
Previously deferred revenue recognized | 23.1 | $ 23 | 41.2 | $ 40.4 | |
Deferred revenue | 86.3 | 86.3 | $ 84.3 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-30 | |||||
Disaggregation of Revenue [Line Items] | |||||
Performance obligations expected to be satisfied | $ 50.6 | $ 50.6 | |||
Performance obligations expected to be satisfied, expected timing | 6 months | 6 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-29 | |||||
Disaggregation of Revenue [Line Items] | |||||
Performance obligations expected to be satisfied | $ 23.3 | $ 23.3 | |||
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-04 | |||||
Disaggregation of Revenue [Line Items] | |||||
Performance obligations expected to be satisfied | $ 10.9 | $ 10.9 | |||
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-03 | |||||
Disaggregation of Revenue [Line Items] | |||||
Performance obligations expected to be satisfied | $ 1.5 | $ 1.5 | |||
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year | |||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
General payment terms for accounts on health care plans and programs (in days) | 14 days | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
General payment terms for accounts on health care plans and programs (in days) | 120 days |
Revenue From Contracts with C_4
Revenue From Contracts with Customers - Schedule of Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 451,733 | $ 431,786 | $ 934,527 | $ 896,598 |
Revenues recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 419,747 | 400,241 | 870,562 | 833,587 |
Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 31,986 | $ 31,545 | $ 63,965 | $ 63,011 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Lease cost | ||||
Fixed lease cost | $ 25,741 | $ 23,939 | $ 51,073 | $ 47,059 |
Variable lease cost | 9,545 | 9,051 | 18,804 | 17,943 |
Sublease income | (334) | (309) | (665) | (625) |
Amortization of finance lease assets | 582 | 894 | 1,241 | 1,750 |
Interest on finance lease liabilities | 316 | 440 | 648 | 889 |
Net lease cost | $ 35,850 | $ 34,015 | $ 71,101 | $ 67,016 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2024 | Jul. 01, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash outflows - operating leases | $ 55,615 | $ 59,035 |
Right of use assets acquired under operating leases | $ 53,664 | $ 59,929 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 11, 2024 USD ($) | Jan. 27, 2023 officer |
Northern District of California - Federal Court | ||
Loss Contingencies [Line Items] | ||
Gross settlement awarded to other party | $ | $ 4.5 | |
Northern District of Georgia - Federal Court | ||
Loss Contingencies [Line Items] | ||
Number of company officers filed a complaint | officer | 2 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 29, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Financial Data by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 451,733 | $ 431,786 | $ 934,527 | $ 896,598 |
Total costs applicable to revenue | 193,580 | 180,322 | 389,126 | 366,449 |
SG&A | 231,353 | 222,924 | 471,481 | 451,600 |
Asset impairment | 3,519 | 893 | 3,975 | 1,247 |
Other expense (income), net | (2) | (3) | (1) | (104) |
Depreciation and amortization | 22,692 | 22,089 | 45,913 | 44,045 |
Interest expense, net | 3,196 | 1,836 | ||
Earnings (loss) from continuing operations before income taxes | (2,605) | 3,725 | 16,581 | 26,658 |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 361,967 | 352,180 | 750,050 | 732,333 |
Total costs applicable to revenue | 111,213 | 106,362 | 224,417 | 217,436 |
Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 89,766 | 79,606 | 184,477 | 164,265 |
Total costs applicable to revenue | 82,367 | 73,960 | 164,709 | 149,013 |
Operating Segments | Owned & Host | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 439,485 | 418,754 | 916,336 | 880,660 |
Total costs applicable to revenue | 186,010 | 173,479 | 375,695 | 353,889 |
SG&A | 174,078 | 165,772 | 353,701 | 333,617 |
Asset impairment | 0 | 0 | 0 | 0 |
Other expense (income), net | 0 | 0 | 0 | 0 |
EBITDA | 79,397 | 79,503 | 186,940 | 193,154 |
Operating Segments | Owned & Host | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 349,311 | 339,311 | 729,907 | 714,147 |
Total costs applicable to revenue | 103,688 | 99,521 | 211,031 | 204,878 |
Operating Segments | Owned & Host | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 90,174 | 79,443 | 186,429 | 166,513 |
Total costs applicable to revenue | 82,322 | 73,958 | 164,664 | 149,011 |
Operating Segments | Corporate/Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 8,099 | 8,348 | 16,344 | 17,227 |
Total costs applicable to revenue | 6,565 | 6,039 | 12,791 | 12,499 |
SG&A | 57,275 | 57,152 | 117,780 | 117,983 |
Asset impairment | 3,519 | 893 | 3,975 | 1,247 |
Other expense (income), net | (2) | (3) | (1) | (104) |
EBITDA | (59,258) | (55,733) | (118,201) | (114,398) |
Operating Segments | Corporate/Other | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 8,099 | 8,347 | 16,344 | 17,226 |
Total costs applicable to revenue | 6,520 | 6,037 | 12,746 | 12,497 |
Operating Segments | Corporate/Other | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 0 | 1 | 0 | 1 |
Total costs applicable to revenue | 45 | 2 | 45 | 2 |
Reconciliations | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 4,149 | 4,684 | 1,847 | (1,289) |
Total costs applicable to revenue | 1,005 | 804 | 640 | 61 |
SG&A | 0 | 0 | 0 | 0 |
Asset impairment | 0 | 0 | 0 | 0 |
Other expense (income), net | 0 | 0 | 0 | 0 |
EBITDA | 3,144 | 3,880 | 1,207 | (1,350) |
Reconciliations | Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 4,557 | 4,522 | 3,799 | 960 |
Total costs applicable to revenue | 1,005 | 804 | 640 | 61 |
Reconciliations | Services and plans | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | (408) | 162 | (1,952) | (2,249) |
Total costs applicable to revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2024 | Mar. 30, 2024 | Jul. 01, 2023 | Apr. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Numerator: | ||||||
Income (loss) from continuing operations, net of tax | $ (1,041) | $ 3,637 | $ 10,712 | $ 18,651 | ||
Income (loss) from discontinued operations, net of tax | (2,084) | 1,977 | (2,152) | 5,233 | ||
Net income (loss) | $ (3,125) | $ 11,685 | $ 5,614 | $ 18,270 | $ 8,560 | $ 23,884 |
Denominator: | ||||||
Weighted average shares outstanding, Basic (in shares) | 78,575 | 78,101 | 78,480 | 78,411 | ||
Effect of dilutive securities: | ||||||
Stock options (in shares) | 0 | 83 | 41 | 115 | ||
Restricted stock units (in shares) | 0 | 159 | 253 | 258 | ||
Weighted average shares outstanding for diluted EPS (in shares) | 78,575 | 78,343 | 78,774 | 78,784 | ||
Basic earnings (loss) per share: | ||||||
Continuing operations (in usd per share) | $ (0.01) | $ 0.05 | $ 0.14 | $ 0.24 | ||
Discontinued operations (in usd per share) | (0.03) | 0.03 | (0.03) | 0.07 | ||
Total (in usd per share) | (0.04) | 0.07 | 0.11 | 0.30 | ||
Diluted earnings (loss) per share: | ||||||
Continuing operations (in usd per share) | (0.01) | 0.05 | 0.14 | 0.24 | ||
Discontinued operations (in usd per share) | (0.03) | 0.03 | (0.03) | 0.07 | ||
Total (in usd per share) | $ (0.04) | $ 0.07 | $ 0.11 | $ 0.30 | ||
Stock Options, Restricted Stock Units (RSUs) and Convertible Notes | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities excluded from diluted weighted average common shares (in shares) | 11,385 | 13,790 | 11,074 | 13,614 |