Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 2, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --01-01 | |
Entity Registrant Name | Aveanna Healthcare Holdings Inc. | |
Entity Central Index Key | 0001832332 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 184,164,184 | |
Entity File Number | 001-40362 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4717209 | |
Entity Address, Address Line One | 400 Interstate North Parkway SE | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 770 | |
Local Phone Number | 441-1580 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | AVAH | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 121,708 | $ 137,345 |
Patient accounts receivable | 189,033 | 172,887 |
Receivables under insured programs | 8,264 | 7,992 |
Prepaid expenses | 13,038 | 11,080 |
Other current assets | 10,692 | 11,340 |
Total current assets | 342,735 | 340,644 |
Property and equipment, net | 31,599 | 32,650 |
Operating lease right of use assets | 46,817 | 46,217 |
Goodwill | 1,419,591 | 1,316,385 |
Intangible assets, net | 77,612 | 73,572 |
Receivables under insured programs | 25,423 | 23,990 |
Deferred income taxes | 2,931 | 2,931 |
Other long-term assets | 8,946 | 7,627 |
Total assets | 1,955,654 | 1,844,016 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 46,883 | 56,668 |
Accrued payroll and employee benefits | 55,211 | 56,834 |
Accrued interest | 1,801 | 2,398 |
Notes payable | 2,671 | 2,872 |
Current portion of insurance reserves - insured programs | 8,264 | 7,992 |
Current portion of insurance reserves | 14,105 | 12,294 |
Current portion of long-term obligations | 8,600 | 9,910 |
Current portion of operating lease liabilities | 12,166 | 11,884 |
Current portion of deferred payroll taxes | 25,699 | 24,824 |
Government stimulus liabilities | 29,444 | |
Other current liabilities | 44,173 | 45,293 |
Total current liabilities | 219,573 | 260,413 |
Long-term obligations, less current portion | 829,674 | 1,163,490 |
Long-term insurance reserves - insured programs | 25,423 | 23,990 |
Long-term insurance reserves | 31,296 | 30,336 |
Operating lease liabilities, less current portion | 40,099 | 40,246 |
Deferred payroll taxes, less current portion | 25,699 | 24,824 |
Deferred income taxes | 3,430 | 2,591 |
Other long-term liabilities | 23,893 | 30,957 |
Total liabilities | 1,199,087 | 1,576,847 |
Commitments and contingencies (Note 10) | ||
Deferred restricted stock units | 2,135 | 2,135 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value as of October 2, 2021 and no par value as of January 2, 2021, 5,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 184,164,184 and 141,928,184 issued and outstanding, respectively | 1,841 | 1,419 |
Additional paid-in capital | 1,201,075 | 721,247 |
Accumulated deficit | (448,484) | (457,632) |
Total stockholders’ equity | 754,432 | 265,034 |
Total liabilities, deferred restricted stock units, and stockholders’ equity | $ 1,955,654 | $ 1,844,016 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 02, 2021 | Jan. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value | $ 0 | |
Preferred stock, par value | $ 0.01 | |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock,outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, Issued | 184,164,184 | 141,928,184 |
Common stock, outstanding | 184,164,184 | 141,928,184 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Jul. 15, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 |
Income Statement [Abstract] | |||||
Revenue | $ 411,276 | $ 366,003 | $ 1,264,548 | $ 1,072,803 | |
Cost of revenue, excluding depreciation and amortization | 271,534 | 251,873 | 846,534 | 744,503 | |
Branch and regional administrative expenses | 76,370 | 59,641 | 223,462 | 174,455 | |
Corporate expenses | $ 7,000 | 37,873 | 32,493 | 97,673 | 81,039 |
Goodwill impairment | 75,727 | ||||
Depreciation and amortization | 5,145 | 3,922 | 15,163 | 12,339 | |
Acquisition-related costs | 2,007 | 4,510 | 4,779 | 4,679 | |
Other operating expenses | 687 | 1,274 | |||
Operating income (loss) | 18,347 | 12,877 | 76,937 | (21,213) | |
Interest income | 44 | 38 | 182 | 247 | |
Interest expense | (12,106) | (19,065) | (53,793) | (58,972) | |
Loss on debt extinguishment | $ (400) | (4,784) | (13,702) | (73) | |
Other (expense) income | (511) | (1,723) | (1,088) | 35,608 | |
Income (loss) before income taxes | 990 | (7,873) | 8,536 | (44,403) | |
Income tax benefit (expense) | 1,100 | 471 | 612 | (2,915) | |
Net income (loss) | $ 2,090 | $ (7,402) | $ 9,148 | $ (47,318) | |
Income (loss) per share: | |||||
Net income (loss) per share, basic | $ 0.01 | $ (0.05) | $ 0.06 | $ (0.34) | |
Weighted average shares of common stock outstanding, basic | 184,554 | 142,123 | 165,877 | 140,559 | |
Net income (loss) per share, diluted | $ 0.01 | $ (0.05) | $ 0.05 | $ (0.34) | |
Weighted average shares of common stock outstanding, diluted | 188,246 | 142,123 | 170,667 | 140,559 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 28, 2019 | $ 270,192 | $ 1,368 | $ 669,406 | $ (400,582) |
Beginning Balance (shares) at Dec. 28, 2019 | 136,803,189 | |||
Issuance of common stock, net of underwriters' discounts and commissions | 50,000 | $ 51 | 49,949 | |
Issuance of common stock, net of underwriters' discounts and commissions (shares) | 5,124,995 | |||
Non-cash compensation | 1,328 | 1,328 | ||
Net income (loss) | (47,318) | (47,318) | ||
Ending Balance at Sep. 26, 2020 | 274,202 | $ 1,419 | 720,683 | (447,900) |
Ending Balance (in shares) at Sep. 26, 2020 | 141,928,184 | |||
Beginning Balance at Jun. 27, 2020 | 281,168 | $ 1,419 | 720,247 | (440,498) |
Beginning Balance (shares) at Jun. 27, 2020 | 141,928,184 | |||
Non-cash compensation | 436 | 436 | ||
Net income (loss) | (7,402) | (7,402) | ||
Ending Balance at Sep. 26, 2020 | 274,202 | $ 1,419 | 720,683 | (447,900) |
Ending Balance (in shares) at Sep. 26, 2020 | 141,928,184 | |||
Beginning Balance at Jan. 02, 2021 | 265,034 | $ 1,419 | 721,247 | (457,632) |
Beginning Balance (shares) at Jan. 02, 2021 | 141,928,184 | |||
Issuance of common stock, net of underwriters' discounts and commissions | 470,108 | $ 422 | 469,686 | |
Issuance of common stock, net of underwriters' discounts and commissions (shares) | 42,236,000 | |||
Non-cash compensation | 10,142 | 10,142 | ||
Net income (loss) | 9,148 | 9,148 | ||
Ending Balance at Oct. 02, 2021 | 754,432 | $ 1,841 | 1,201,075 | (448,484) |
Ending Balance (in shares) at Oct. 02, 2021 | 184,164,184 | |||
Beginning Balance at Jul. 03, 2021 | 748,080 | $ 1,841 | 1,196,813 | (450,574) |
Beginning Balance (shares) at Jul. 03, 2021 | 184,164,184 | |||
Non-cash compensation | 4,262 | 4,262 | ||
Net income (loss) | 2,090 | 2,090 | ||
Ending Balance at Oct. 02, 2021 | $ 754,432 | $ 1,841 | $ 1,201,075 | $ (448,484) |
Ending Balance (in shares) at Oct. 02, 2021 | 184,164,184 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 9,148 | $ (47,318) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 15,163 | 12,339 |
Amortization of deferred debt issuance costs | 7,234 | 5,400 |
Amortization and impairment of operating lease right of use assets | 11,081 | 9,984 |
Non-cash compensation | 10,142 | 2,176 |
Goodwill impairment | 75,727 | |
Loss on disposal of licenses, property and equipment | 109 | 1,566 |
Fair value adjustments on interest rate derivatives | (6,246) | 6,950 |
Loss on debt extinguishment | 13,702 | 73 |
Deferred income taxes | 839 | 580 |
Changes in operating assets and liabilities, net of impact of acquisitions: | ||
Patient accounts receivable | (3,376) | 7,256 |
Prepaid expenses | 2,715 | 1,754 |
Other current and long-term assets | 39 | (2,478) |
Accounts payable and other accrued liabilities | (15,851) | (5,523) |
Accrued payroll and employee benefits | (3,164) | 8,383 |
Accrued interest | (597) | 13,318 |
Insurance reserves | 2,752 | 4,654 |
Operating lease liabilities | (11,783) | (9,992) |
Deferred payroll taxes | 31,291 | |
Other current and long-term liabilities | (9,719) | 1,977 |
Net cash provided by operating activities | 22,188 | 118,117 |
Cash Flows From Investing Activities: | ||
Acquisitions of businesses, net of cash acquired | (103,202) | (49,345) |
Purchases of property and equipment | (10,306) | (12,156) |
Net cash used in investing activities | (113,508) | (61,501) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of common stock | 477,688 | 50,000 |
Proceeds from revolving credit facility | 14,000 | |
Repayments on revolving credit facility | (45,500) | |
Proceeds from issuance of term loans, net of debt issuance costs | 925,261 | 180,651 |
Principal payments on term loans and notes payable | (1,276,643) | (8,375) |
Proceeds from government stimulus funds | 23,826 | |
Payment of government stimulus funds | (29,444) | |
Principal payments of financing lease obligations | (503) | (467) |
Payment of debt issuance costs | (13,107) | (1,816) |
Settlements with derivative counterparties | (2,096) | |
Payment of offering costs | (5,473) | |
Net cash provided by financing activities | 75,683 | 212,319 |
Net (decrease) increase in cash and cash equivalents | (15,637) | 268,935 |
Cash and cash equivalents at beginning of period | 137,345 | 3,327 |
Cash and cash equivalents at end of period | 121,708 | 272,262 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 47,156 | 40,254 |
Acquisition of property and equipment on accrual | 3,246 | 2,519 |
Offering costs included in accounts payable and other accrued liabilities | 135 | |
Cash paid for income taxes, net of refunds received | $ 3,915 | $ 925 |
Description of Business
Description of Business | 9 Months Ended |
Oct. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Aveanna Healthcare Holdings Inc. (together with its consolidated subsidiaries, referred to herein as the “Company”) is headquartered in Atlanta, Georgia and has locations in 30 states with concentrations in Texas, Pennsylvania, and California, providing a broad range of pediatric and adult healthcare services including nursing, rehabilitation services, occupational nursing in schools, therapy services, day treatment centers for medically fragile and chronically ill children and adults, as well as delivery of enteral nutrition and other products to patients. The Company also provides case management services in order to assist families and patients by coordinating the provision of services between insurers or other payers, physicians, hospitals, and other healthcare providers. In addition, the Company provides respite healthcare services, which are temporary care provider services provided in relief of the patient’s normal caregiver. The Company’s services are designed to provide a high quality, lower cost alternative to prolonged hospitalization. Initial Public Offering On May 3, 2021, the Company completed the initial public offering (“IPO”) of its common stock pursuant to a Registration Statement on Form S-1 (File No. 333-254981), which was declared effective by the SEC on April 28, 2021. The Company issued and sold an aggregate of 42,236,000 shares of common stock, including 4,000,000 shares of common stock purchased by the underwriters on May 25, 2021 pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions. The Company received net proceeds from the IPO of $ 477.7 million. On May 3, 2021, the Company used $ 307.0 million of proceeds to repay in full all outstanding obligations under the second lien credit agreement dated as of March 16, 2017 (as amended, the “Second Lien Credit Agreement”), thereby terminating the Second Lien Credit Agreement. In addition, on May 4, 2021, the Company used $ 100.0 million of proceeds to repay an equal amount of principal outstanding under its First Lien Credit Agreement (as defined in Note 5). The remaining proceeds have been and are planned to be used for offering costs, general corporate purposes, and future acquisitions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying interim unaudited consolidated financial statements include the accounts of Aveanna Healthcare Holdings Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the accompanying interim unaudited consolidated financial statements from their respective dates of acquisition. Basis of Presentation The accompanying consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim unaudited consolidated financial statements do not include all the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, these interim unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position as of October 2, 2021 and the results of operations for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively. The results reported in these interim unaudited consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. These interim unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended January 2, 2021 included in the Company’s prospectus dated April 28, 2021 (the “Prospectus”), which is deemed to be part of the Company’s Registration Statement on Form S-1 (File No. 333-254981) filed with the SEC. Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52 or 53-week fiscal year. The accompanying interim unaudited consolidated balance sheets reflect the accounts of the Company as of October 2, 2021 and January 2, 2021. For the three-month periods ended October 2, 2021 and September 26, 2020, the accompanying interim unaudited consolidated statements of operations and stockholders’ equity reflect the accounts of the Company from July 4, 2021 through October 2, 2021 and June 28, 2020 through September 26, 2020, respectively. For the nine-month periods ended October 2, 2021 and September 26, 2020, the accompanying interim unaudited consolidated statements of operations, stockholders’ equity and cash flows reflect the accounts of the Company from January 3, 2021 through October 2, 2021 and December 29, 2019 through September 26, 2020 , respectively. Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Deferred Offering Costs Upon closing of the IPO on May 3, 2021, deferred offering costs of $ 7.6 million were reclassified into stockholders ’ equity and recorded against the proceeds from the offering. As of January 2, 2021, capitalized deferred offering costs totaled $ 2.9 million and were included in other long-term assets on the accompanying consolidated balance sheet. See Note 1 – Description of Business and Note 9 – Stockholders’ Equity and Stock-Based Compensation for additional information regarding the completion of the Company’s IPO. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves consistent application by clarifying and amending existing guidance. This ASU is effective for annual fiscal years beginning after December 15, 2020, and interim periods therein. The Company adopted this standard effective January 3, 2021 and the adoption of this standard did not materially affect the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. An entity may adopt this ASU as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adopting this standard. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This ASU is effective immediately and should be adopted in conjunction with ASU 2020-04. The Company is currently evaluating the impact of adopting this standard. |
Revenue
Revenue | 9 Months Ended |
Oct. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. REVENUE Revenue is primarily derived from (i) pediatric healthcare services provided to patients including private duty nursing and therapy services, (ii) adult home health and hospice services (collectively “patient revenue”); and (iii) from the delivery of enteral nutrition and other products to patients (“product revenue”). The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each service provided is its own stand-alone contract. Incremental costs of obtaining a contract are expensed as incurred due to the short-term nature of the contracts. Services ordered by a healthcare provider in an episode of care are not separately identifiable and therefore have been combined into a single performance obligation for each contract. The Company recognizes revenue as its performance obligations are completed. For patient revenue, the performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the healthcare services provided. For product revenue, the performance obligation is satisfied at the point in time of delivery of the product to the patient. The Company recognizes patient revenue equally over the number of treatments provided in a single episode of care. Typically, patients and third-party payers are billed within several days of the service being performed, and payments are due based on contract terms. The Company disaggregates revenue from contracts with customers by reportable segment and by payer within each of the Company’s lines of business. The Company uses a portfolio approach to group contracts with similar characteristics and analyze historical cash collection trends. The Company’s lines of business are generally classified into the following categories: private duty services; home health and hospice; and medical solutions. Private Duty Services (“PDS”). The PDS business includes a broad range of pediatric and adult healthcare services including private duty skilled nursing, unskilled services which include employer of record support services (“EOR”) and personal care services, pediatric therapy services, rehabilitation services, and nursing services in schools and pediatric day healthcare centers. Home Health & Hospice (“HHH”) . The HHH business provides home health, hospice, and personal care services to predominately elderly patients. Medical Solutions (“MS”). The MS business includes the delivery of enteral nutrition and other products to patients. Other Revenue. The Company provides financial management services in order to assist families and patients by coordinating the reimbursement of authorized medical expenses between certain state-contracted non-profit programs and families and patients. Other revenue represents the monthly fee earned by the Company for providing these services. For the PDS, HHH, and MS businesses, the Company receives payments from the following sources for services rendered: (i) state governments under their respective Medicaid programs (“Medicaid”); (ii) Managed Care providers of state government Medicaid programs (“Medicaid MCO”); (iii) commercial insurers; (iv) other government programs including Medicare and Tricare and ChampVA (“Medicare”); and (v) individual patients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component. The Company determines the transaction price based on established billing rates reduced by contractual adjustments and discounts provided to third-party payers and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. For the PDS, HHH, and MS businesses, implicit price concessions are based on historical collection experience. As of October 2, 2021 and January 2, 2021, estimated explicit and implicit price concessions of $ 54.6 million and $ 55.4 million, respectively, were recorded as reductions to patient accounts receivable balances to arrive at the estimated collectible revenue and patient accounts receivable. For the PDS, HHH, and MS businesses, most contracts contain variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense which is included as a component of operating expenses in the consolidated statements of operations. The Company did no t record any bad debt expense for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively. The Company derives a significant portion of its revenue from Medicaid, Medicaid MCO, Medicare and other payers that receive discounts from established billing rates. The regulations and various managed care contracts under which these discounts must be estimated are complex and subject to interpretation. Management estimates the transaction price on a payer-specific basis given its interpretation of the applicable regulations or contract terms. Updated regulations and contract negotiations occur frequently, necessitating regular review and assessment of the estimation process by management; however, there were no material revenue adjustments recognized from performance obligations satisfied or partially satisfied in previous periods for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively. The following tables present revenue by payer type and as a percentage of revenue for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively (in thousands): For the Three-Month Periods Ended October 2, 2021 September 26, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 219,418 53.3 % $ 226,686 61.9 % Medicaid 101,120 24.6 % 99,742 27.3 % Commercial 39,867 9.7 % 30,943 8.4 % Medicare 49,700 12.1 % 8,303 2.3 % Self-pay 1,171 0.3 % 329 0.1 % Total revenue $ 411,276 100.0 % $ 366,003 100.0 % For the Nine-Month Periods Ended October 2, 2021 September 26, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 681,548 53.9 % $ 652,663 60.8 % Medicaid 308,340 24.4 % 288,156 26.9 % Commercial 140,718 11.1 % 105,871 9.9 % Medicare 129,548 10.3 % 24,619 2.3 % Self-pay 4,394 0.3 % 1,494 0.1 % Total revenue $ 1,264,548 100.0 % $ 1,072,803 100.0 % |
Acquisitions
Acquisitions | 9 Months Ended |
Oct. 02, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 4. ACQUISITIONS Acquisitions During the Three and Nine-Month Periods Ended October 2, 2021 On March 31, 2021 , the Company acquired certain assets of Loma Linda University Medical Center (“Loma Linda”). Loma Linda specializes in providing pediatric, private duty, and home care services in California. Preliminary total consideration for the transaction was $ 0.5 million, all of which was paid in cash at closing. On April 16, 2021 , the Company acquired 100 % of the issued and outstanding membership interests of Doctor’s Choice Holdings, LLC (“Doctor’s Choice”). Doctor’s Choice provides home health services in Florida. Preliminary total consideration for the transaction was 101.6 million, of which $ 100.6 million was paid in cash at closing. As part of funding the Doctor’s Choice acquisition, on the date of acquisition, the Company borrowed incremental amounts under its then existing second lien term loan facility of $ 67.0 million, including debt issuance costs of $ 1.7 million. The estimated allocations of purchase price for the assets acquired and liabilities assumed with respect to the Loma Linda and Doctor’s Choice acquisitions are preliminary and based on information available to the Company as of October 2, 2021. The Company is completing its procedures related to the purchase price allocations and if information regarding these values is received that would result in a material adjustment to the values recorded, management will recognize the adjustment in the period such determination is made. The preliminary purchase price allocations as of the acquisition dates, reflecting measurement period adjustments made during the respective period, are as follows (amounts in thousands): Entity Loma Linda Doctor’s Choice Acquisition Date 3/31/21 4/16/21 Cash consideration $ 500 $ 101,609 Contingent consideration - - Total $ 500 $ 101,609 Cash and cash equivalents $ - $ 1 Patient accounts receivable - 12,789 Receivables under insured programs - 142 Prepaid expenses - 431 Other current assets - 11 Property and equipment, net - 461 Operating lease right of use assets - 1,013 Intangible assets, net - licenses - 4,993 Intangible assets, net - trade names - 1,486 Receivables under insured programs - 312 Other long-term assets - 99 Accounts payable and other accrued liabilities - ( 7,135 ) Accrued payroll and employee benefits - ( 2,226 ) Current portion of insurance reserves - insured programs - ( 142 ) Current portion of operating lease liabilities - ( 488 ) Current portion of deferred payroll taxes - ( 875 ) Other current liabilities - ( 11,469 ) Long-term insurance reserves - insured programs - ( 312 ) Long-term insurance reserves - ( 19 ) Operating lease liabilities, less current portion - ( 501 ) Deferred payroll taxes, less current portion - ( 876 ) Total identifiable net assets - ( 2,305 ) Goodwill 500 103,914 Total $ 500 $ 101,609 The preliminary goodwill recognized is attributable to the excess of the particular purchase price of the acquisition over the fair value of identifiable net assets acquired, including other identified intangible assets. Preliminary goodwill of $ 0.5 million and $ 103.9 million related to the Loma Linda and Doctor’s Choice acquisitions, respectively, is deductible for tax purposes, and amortization commences on the applicable transaction date. Goodwill is primarily attributable to expected synergies resulting from the transactions. The Company incurred transaction costs of $ 2.0 million and $ 4.8 million during the three and nine-month periods ended October 2, 2021, respectively. These costs are included in acquisition-related costs in the accompanying consolidated statements of operations. Acquisitions During the Three and Nine-Month Periods Ended September 26, 2020 On August 2, 2020 , the Company acquired 100 % of the issued and outstanding common stock of Total Care, Inc. (“Total Care”). Total Care provides private duty nursing and individual client care for all ages, with a particular focus on pediatric patients. Total consideration for the transaction was $ 11.8 million, of which $ 10.4 million was paid in cash at closing. On September 19, 2020 , the Company acquired 100 % of the issued and outstanding common stock of D&D Services, Inc. d/b/a Preferred Pediatric Home Health Care (“Preferred”). Preferred is a comprehensive provider of home care services for pediatric and adult patients. Total consideration for the transaction was $ 40.6 million, of which $ 39.8 million was paid in cash at closing. On September 26, 2020 , the Company acquired 100 % of the issued and outstanding membership interests of Evergreen Home Healthcare, LLC (“Evergreen”). Evergreen offers private duty nursing and unskilled services and home care services to children and adults. Total consideration for the transaction was $ 14.5 million, of which $ 11.3 million was paid in cash at closing. Total consideration also included $ 1.9 million of contingent consideration recognized at the acquisition date. Under the purchase agreement, the Company agreed to pay the sellers of Evergreen up to an additional $ 1.9 million based on the outcome of whether Evergreen's Paycheck Protection Program loan was forgiven. During the nine-month period ended October 2, 2021, the Company paid $ 1.9 million to the sellers of Evergreen following forgiveness of such loan. The final purchase price allocations as of the respective acquisition dates, reflecting measurement period adjustments made during the respective periods, are as follows (amounts in thousands): Entity Total Care Preferred Evergreen Acquisition Date 8/2/20 9/19/20 9/26/20 Cash consideration $ 11,787 $ 40,622 $ 14,500 Contingent consideration - - - Total $ 11,787 $ 40,622 $ 14,500 Cash and cash equivalents $ 262 $ - $ 31 Patient accounts receivable 868 3,891 565 Receivables under insured programs 17 1,760 179 Prepaid expenses - 338 24 Other current assets - 331 - Property and equipment, net 6 1,178 59 Operating lease right of use assets 329 480 342 Intangible assets, net - licenses 152 2,815 1,225 Intangible assets, net - trade names 109 392 135 Deferred income taxes 7 - - Accounts payable and other accrued liabilities ( 16 ) ( 1,187 ) ( 40 ) Accrued payroll and employee benefits ( 561 ) ( 1,394 ) ( 602 ) Current portion of operating lease liabilities ( 60 ) ( 150 ) ( 130 ) Other current liabilities - ( 3,909 ) - Long-term insurance reserves - insured programs ( 54 ) ( 1,760 ) ( 179 ) Long-term insurance reserves - - - Operating lease liabilities, less current portion ( 269 ) ( 330 ) ( 212 ) Deferred income taxes - ( 2,020 ) - Other long-term liabilities - ( 93 ) - Total identifiable net assets 790 342 1,397 Goodwill 10,997 40,280 13,103 Total $ 11,787 $ 40,622 $ 14,500 The Company incurred aggregate transaction costs of $ 4.5 million and $ 4.7 million during the three and nine-month periods ended September 26, 2020, respectively. These costs are included in acquisition-related costs in the accompanying consolidated statements of operations. Pending Acquisitions On September 27, 2021, an indirect wholly owned subsidiary of the Company entered into a Membership Interest Purchase Agreement with Comfort Care Home Health Services, LLC, an Alabama limited liability company (“Comfort Care Home Health”), Comfort Care Hospice, L.L.C., an Alabama limited liability company (“Comfort Care Hospice”), Premier Medical Housecall, LLC, an Alabama limited liability company (“Premier Medical Housecall,” and together with Comfort Care Home Health and Comfort Care Hospice, the “Companies”) and the other parties thereto, pursuant to which the Company agreed to acquire the outstanding membership interests of the Companies for aggregate consideration of $ 345.0 million in cash. The purchase price is subject the Companies being free of debt and cash and otherwise subject to a customary purchase price adjustment for working capital. The transaction is subject to customary closing conditions, including the absence of legal restraints and the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. See Note 15 – Subsequent Events for disclosure of an additional pending acquisition. |
Long-Term Obligations
Long-Term Obligations | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | 5. LONG-TERM OBLIGATIONS Long-term obligations consisted of the following as of October 2, 2021 and January 2, 2021, respectively (dollar amounts in thousands): Instrument Stated Contractual Interest Rate Interest Rate October 2, 2021 January 2, 2021 Term loan - First Lien Term Loan (1) 03/2024 L + 4.25 % 5.25 % $ - $ 563,061 Term loan - First Lien Term Loan Amendment (1) 03/2024 L + 5.5 % 6.50 % - 217,133 Term loan - First Lien Term Loan Fourth Amendment (1) 03/2024 L + 6.25 % 7.25 % - 184,538 Subordinated term loan - Second Lien Term Loan (1) 03/2025 L + 8.0 % 9.00 % - 240,000 2021 Extended Term Loan (2) 07/2028 L + 3.75 % 4.25 % 860,000 - Revolving Credit Facility (2) 03/2023 L + 3.75 % 5.25 % - - Total principal amount of long-term obligations 860,000 1,204,732 Less: unamortized debt issuance costs ( 21,726 ) ( 31,332 ) Total amount of long-term obligations, net of unamortized debt issuance costs 838,274 1,173,400 Less: current portion of long-term obligations ( 8,600 ) ( 9,910 ) Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion $ 829,674 $ 1,163,490 (1) L = Greater of 1.00% or one-month LIBOR , (2) L = Greater of 0.50% or one-month LIBOR On March 11, 2021, the Company amended its revolving credit facility to increase the maximum availability to $ 200.0 million, subject to the occurrence of the Company’ s initial public offering. The amendment also extended the maturity date to April 29, 2026 upon completion of the IPO and subject to the completion of the refinancing of the Company ’ s term loans, which occurred on July 15, 2021. With proceeds received from the IPO, on May 3, 2021 the Company repaid an aggregate principal amount of $ 307.0 million under its Second Lien Credit Agreement, including the incremental amount borrowed in connection with financing the acquisition of Doctor’s Choice, thereby repaying in full and terminating the Second Lien Credit Agreement. In addition, on May 4, 2021, the Company repaid $ 100.0 million in principal amount of its outstanding indebtedness under the First Lien Credit Agreement. In connection with these repayments of principal amounts, the Company wrote off debt issuance costs totaling $ 8.9 million, which are included in loss on debt extinguishment in the accompanying consolidated statements of operations. On May 4, 2021, following completion of the initial public offering and satisfaction of the other applicable conditions precedent, the maximum availability of our revolving credit facility increased from $ 75.0 million to $ 200.0 million. In connection with this increase in capacity, the Company incurred debt issuance costs of $ 1.6 million, which were capitalized and included in other long-term assets. On July 15, 2021 the Company entered into an Extension Amendment ("the Extension Amendment") to its First Lien Credit Agreement with Barclays Bank, as administrative agent, the collateral agent, a letter of credit issuer, and swingline lender, and the lenders and other agents party thereto from time to time (as amended to date, the "First Lien Credit Agreement"). The Extension Amendment converted outstanding balances under all remaining first lien term loans into a single term loan in an aggregate principal amount of $ 860.0 million (the “2021 Extended Term Loan”), and extended the maturity date to July 2028 . In accordance with ASC 470-50-40, Debt Modification and Extinguishments , the Extension Amendment was accounted for as a modification of debt for the lenders that remained in the syndicate, while the portions of the converted loans attributable to lenders who did not participate in the conversion were accounted for as an extinguishment of debt. As a result, for the remaining unamortized debt issuance costs related to the First Lien Credit Agreement, the Company recorded a $ 4.4 million loss on debt extinguishment and deferred $ 14.0 million as a direct deduction from the carrying amount of the debt. For the newly incurred deferred issuance costs on the Extension Amendment, the Company recorded a $ 0.4 million loss on debt extinguishment, $ 7.0 million of modification expense within corporate expenses on the accompanying consolidated statements of operations and deferred $ 8.3 million as a direct deduction from the carrying amount of the debt. The Extension Amendment also provided for a delayed draw term loan facility (the “Delayed Draw Term Loan Facility”) in an aggregate principal amount of $ 200.0 million, which permits the Company to incur senior secured first lien term loans (the “Delayed Draw Term Loans”) from time to time until July 15, 2023, in each case subject to certain terms and conditions. The Delayed Draw Term Loan Facility was undrawn as of October 2, 2021 , and any future draws thereunder would also mature in July 2028 . In connection with this new facility, the Company incurred debt issuance costs of $ 2.5 million, which were capitalized and included in other long-term assets. On August 9, 2021, the Company entered into the Seventh Amendment to its First Lien Credit Agreement, as previously amended, (the “Seventh Amendment”) to reduce the interest rates applicable to Revolving Credit Loans (as defined in the First Lien Credit Agreement). As amended, Revolving Credit Loans bear interest, at the Company's election, at a variable interest rate based on either LIBOR (subject to a minimum of 0.50 % ) or prime or federal funds rate ("Annual Base Rate" or "ABR") (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus an applicable margin of 3.75 % for loans accruing interest based on LIBOR and an applicable margin of 2.75 % for loans accruing interest based on ABR. In connection with this amendment, the Company incurred debt issuance costs of $ 0.1 million, which were capitalized and included in other long-term assets. The 2021 Extended Term Loan and any Delayed Draw Term Loans bear interest, at the Company’s election, at a variable interest rate based on either LIBOR (subject to a minimum of 0.50 % ), or ABR (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus an applicable margin of 3.75 % for loans accruing interest based on LIBOR and an applicable margin of 2.75 % for loans accruing interest based on ABR. As of October 2, 2021, the $ 860.0 million principal amount of the 2021 Extended Term Loan accrued interest at a rate of 4.25 % . Debt issuance costs related to the term loans are recorded as a direct deduction from the carrying amount of the debt. The balance for debt issuance costs related to the term loans as of October 2, 2021 and January 2, 2021 was $ 21.7 million and $ 31.3 million, respectively. Debt issuance costs related to the revolving credit facility and Delayed Draw Term Loans are recorded within other long-term assets. The balance for debt issuance costs related to the revolving credit facility and Delayed Draw Term Loans as of October 2, 2021 and January 2, 2021 was $ 3.8 million and $ 0.5 million, respectively. The Company recognized interest expense related to the amortization of debt issuance costs of $ 1.4 million and $ 7.2 million during the three and nine-month periods ended October 2, 2021, respectively, and $ 1.9 million and $ 5.4 million during the three and nine-month periods ended September 26, 2020, respectively. Issued letters of credit as of October 2, 2021 and January 2, 2021 were $ 19.8 million, respectively. There were no swingline loans outstanding as of October 2, 2021 and January 2, 2021, respectively. Borrowing capacity under the Company's revolving credit facility was $ 180.2 million as of October 2, 2021 and $ 55.2 million as of January 2, 2021. The Company was in compliance with all financial covenants and restrictions at October 2, 2021 and January 2, 2021 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. FAIR VALUE MEASUREMENTS The carrying amounts of cash and cash equivalents, patient accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of the instruments. The Company’s other assets and other liabilities measured at fair value are as follows (amounts in thousands): Fair Value Measurements at October 2, 2021 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreement $ - $ 765 $ - $ 765 Total derivative assets $ - $ 765 $ - $ 765 Liabilities: Interest rate swap agreements $ - $ 22,290 $ - $ 22,290 Total derivative liabilities $ - $ 22,290 $ - $ 22,290 Fair Value Measurements at January 2, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 28,624 $ - $ 28,624 Total derivative liabilities $ - $ 28,624 $ - $ 28,624 The fair values of the interest rate swap and cap agreements are based on the estimated net proceeds or costs to settle the transactions as of the respective balance sheet dates. The valuations are based on commercially reasonable industry and market practices for valuing similar financial instruments. See Note 7 – Derivative Financial Instruments for further details on the Company’s interest rate swap and cap agreements. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Oct. 02, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 7. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s earnings and cash flows are subject to fluctuations due to changes in interest rates, and the Company seeks to mitigate a portion of this risk by entering into derivative contracts. The derivatives the Company currently uses are interest rate swaps and an interest rate cap. The Company recognizes derivatives as either assets or liabilities at fair value on the accompanying consolidated balance sheets and does not designate the derivatives as hedging instruments. Changes in the fair value of derivatives are therefore recorded in earnings throughout the term of the respective derivative. In October 2018, the Company entered into two interest rate swap agreements to limit its exposure to interest rate risk on its variable rate debt. In July 2021, the Company amended its interest rate swap agreements to extend the expiration dates to June 30, 2026 and reduce the fixed rate paid under the swaps. As amended, the Company pays a rate of 2.08 % and receives the one-month LIBOR rate, subject to a 0.50 % floor. The aggregate notional amount of the interest rate swaps remained unchanged at $ 520.0 million at October 2, 2021 and January 2, 2021, respectively. The fair value of the interest rate swaps at October 2, 2021 and January 2, 2021 was $ 22.3 million and $ 28.6 million, respectively, and is included in other long-term liabilities on the accompanying consolidated balance sheets. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other (expense) income on the accompanying consolidated statements of operations which are included within cash flows from operating activities on the accompanying consolidated statements of cash flows. The net settlements incurred with swap counterparties under the swap agreements prior to the amendment are recognized through cash flows from operating activities on the accompanying consolidated statements of cash flows. Subsequent to the interest rate swap amendment in July 2021, the net settlements are recognized through cash flows from financing activities on the accompanying consolidated statements of cash flows due to an other-than-insignificant financing element on the interest rate swaps resulting from the amendment. In July 2021, the Company also entered into a three-year, $ 340.0 million notional interest rate cap agreement with a cap rate of 1.75 % . The cap agreement provides that the counterparty will pay the Company the amount by which LIBOR exceeds 1.75 % in a given measurement period and expires on July 31, 2024 . The one-time premium paid for this interest rate cap was $ 0.9 million. The fair value of the interest rate cap at October 2, 2021 was $ 0.8 million and is included in other long term assets on the accompanying consolidated balance sheets. The Company does not apply hedge accounting to the interest rate cap agreements and records all mark-to-market adjustments directly to other (expense) income on the accompanying consolidated statements of operations. The effects of the interest rate cap are recognized through cash flows from operating activities on the accompanying consolidated statements of cash flows. The following gains (losses) from these derivatives not designated as hedging instruments were recognized in the Company’s consolidated statements of operations for the three-month periods ended October 2, 2021 and September 26, 2020, respectively (amounts in thousands): Statement of Operations For the Three-Month Periods Ended Classification October 2, 2021 September 26, 2020 Interest rate cap agreement Other (expense) income $ ( 88 ) $ - Interest rate swap agreements Other (expense) income $ 1,481 $ 1,157 Statement of Operations For the Nine-Month Periods Ended Classification October 2, 2021 September 26, 2020 Interest rate cap agreement Other (expense) income $ ( 88 ) $ - Interest rate swap agreements Other (expense) income $ 6,334 $ ( 6,925 ) The Company does not utilize financial instruments for trading or other speculative purposes. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES The Company’s provision for income taxes is recorded on an interim basis based upon the Company’s estimate of the annual effective income tax rate for the full year applied to “ordinary” income or loss, adjusted each quarter for discrete items. The Company recorded income tax benefit of $ 1.1 million and $ 0.6 million for the three and nine-month periods ended October 2, 2021, respectively, and income tax benefit of $ 0.5 million and income tax expense of $ 2.9 million for the three and nine-month periods ended September 26, 2020, respectively. The Company’s effective tax rate was negative 111.1 % and negative 7.2 % for the three and nine-month periods ended October 2, 2021, respectively, and 6.0 % and negative 6.6 % for the three and nine-month periods ended September 26, 2020, respectively. The effective tax rates for the three and nine-month periods ended October 2, 2021 and September 26, 2020 differ from the statutory rate of 21 % primarily due to the reversal in the third quarter of 2021 of a pre-acquisition tax position initially recorded through goodwill, changes in the valuation allowance recorded against certain deferred tax assets, and separate state and local income taxes on taxable subsidiaries. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 9 Months Ended |
Oct. 02, 2021 | |
Shareholders Equity And Share Based Compensation [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 9. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Issuance of Shares On March 19, 2020, the Company issued 5,124,995 shares of common stock as a result of equity contributions totaling $ 50.0 million. This transaction caused no significant changes in the Company’s ownership structure. The proceeds were used to fund strategic growth initiatives and provide additional liquidity for business operations. Change in capital structure On April 19, 2021, the Company’s Board of Directors and its stockholders approved, and the Company filed, amendments to the Company’s certificate of incorporation, including the Company’s Second Amended and Restated Certificate of Incorporation, which (i) eliminated Class B common stock, resulting in one class of shares of common stock authorized, issued and outstanding, (ii) effected a one-to- 20.5 forward stock split and (iii) authorized 1,000,000,000 shares of common stock and 5,000,000 shares of preferred stock. The par value of each share of common stock and preferred stock was not adjusted in connection with the aforementioned forward stock split. All share and per share information for prior periods, including options to purchase shares of common stock, deferred restricted stock units, option exercise prices, weighted average fair value of options granted, shares of common stock and additional paid-in capital accounts on the consolidated balance sheets, consolidated statements of operations and consolidated statements of stockholders’ equity, including the notes to the consolidated financial statements, have been retroactively adjusted, where applicable, to reflect the stock split and the increase in authorized shares. Initial Public Offering On May 3, 2021, the Company completed the IPO of its common stock pursuant to a Registration Statement on Form S-1 (File No. 333-254981), which was declared effective by the SEC on April 28, 2021. In the IPO, the Company sold an aggregate of 42,236,000 shares of common stock, including 4,000,000 shares of common stock purchased by the underwriters on May 25, 2021 pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions. The Company received net proceeds from the IPO of $ 477.7 million. The Company also incurred offering expenses of $ 7.6 million. Stock Incentive Plan On April 19, 2021, the Company’s Board of Directors adopted the Company’s Amended and Restated 2017 Stock Incentive Plan (the “Amended Plan”). The Amended Plan (i) provides for the issuance of common stock, as opposed to the Class B common stock previously issuable under the plan, to align with the Company’s Amended and Restated Certificate of Incorporation and (ii) modified the vesting terms of the existing issued performance-vesting options to vest upon the achievement of volume weighted average price (“VWAP”) per share hurdles for any ninety consecutive days commencing on or after the nine-month anniversary of the IPO. On June 17, 2021 the Company established the VWAP per share hurdles for the performance-vesting options, which resulted in an accounting modification on that date. The issuance of shares of common stock rather than Class B common stock resulted in an accounting modification on April 19, 2021 to the Company’s time-vesting options; however, the incremental fair value was not material. Performance-Vesting Options Completion of the Company’s IPO in April 2021 resulted in the Company’s performance-vesting options becoming eligible to potentially vest. Upon completion of the IPO, the Company recognized compensation expense of $ 3.2 million, representing the time elapsed from the respective grant dates of the outstanding awards to the completion of the IPO in proportion to the total requisite service period of the awards, multiplied by the respective original grant date fair values. The compensation expense recorded was included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations for the nine-month period ended October 2, 2021. The Company recorded compensation expense from the IPO date to the modification date of $ 0.4 million, which was also included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations for the nine-month period ended October 2, 2021. As a result of the June 17, 2021 modification, the Company calculated the fair value of the outstanding performance-vesting options immediately before and immediately after the modification using the Monte Carlo option-pricing model. The Company calculated incremental fair value of $ 8.8 million resulting from the modification, which, along with the unrecognized compensation expense of $ 4.4 million under the original terms, will be recognized prospectively over the revised remaining requisite service period. The Company recorded compensation expense for the period from the modification date through October 2, 2021 of $ 3.6 million, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations for the three and nine-month periods ended October 2, 2021. Unrecognized compensation expense as of October 2, 2021 associated with outstanding performance-vesting options was $ 6.1 million. The Company did no t incur or record any expense associated with the performance-vesting options during the three and nine-month periods ended September 26, 2020. Deferred Restricted Stock Units Deferred restricted stock units (“Deferred RSUs”) issued prior to the Company’s IPO contained a put right that is exercisable only when the participant resigns from the Board of Directors, which is outside the control of the Company. As such, the Company classified these pre-IPO Deferred RSU awards as liabilities for six months and then temporary equity thereafter. Deferred RSUs issued subsequent to the Company’s IPO do not contain any put rights, vest over a one year service period, and are valued based on the fair market value of a share of common stock at grant date. The Company classified these post-IPO Deferred RSU awards as equity and included related amounts within additional paid-in capital on the accompanying consolidated balance sheet as of October 2, 2021. On June 30, 2021, the Company awarded a total of 52,545 Deferred RSUs to members of the Board of Directors. The Company recognized $ 0.2 million for the three and nine-month periods ended October 2, 2021. Unrecognized compensation expense as of October 2, 2021 associated with outstanding Deferred RSUs was $ 0.5 million. Employee Stock Purchase Plan On April 28, 2021, the Company’s Board of Directors adopted the Aveanna Healthcare Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). Initially, a maximum of 5,404,926 shares of the Company’s common stock are authorized for issuance under the ESPP. Under the ESPP, shares of common stock may be purchased by eligible participants during defined purchase periods at 85 % of the lesser of the closing price of the Company’s common stock on the first day or last day of each purchase period. The first purchase period for the ESPP began on August 1, 2021 and ends on December 31, 2021. The Company used a Black-Scholes option pricing model to value the common stock purchased as part of the Company's ESPP. The fair value estimated by the option pricing model is affected by the price of the common stock as well as subjective variables that include assumed interest rates, our expected dividend yield, and our expected share volatility over the term of the award. Eligible participants contributed $ 1.1 million during the three-month period ended October 2, 2021, which is included in accrued payroll and employee benefits in the accompanying consolidated balance sheets as of October 2, 2021. The Company recorded compensation expense of $ 0.4 million which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations for the three and nine-month periods ended October 2, 2021. Unrecognized compensation expense as of October 2, 2021 associated with the remaining ESPP purchase period through December 31, 2021 was $ 0.6 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES Insurance Reserves As is typical in the healthcare industry, the Company is subject to claims that its services have resulted in patient injury or other adverse effects. The accrued insurance reserves included in the accompanying consolidated balance sheets include estimates of the ultimate costs, in the event the Company was unable to receive funds from claims made under commercial insurance policies, for claims that have been reported but not paid and claims that have been incurred but not reported at the balance sheet dates. Although substantially all reported claims are paid directly by the Company’s commercial insurance carriers, the Company is ultimately responsible for payment of these claims in the event its insurance carriers become insolvent or otherwise do not honor the contractual obligations under the malpractice policies. The Company is required under U.S. GAAP to recognize these estimated liabilities in its consolidated financial statements on a gross basis; with a corresponding receivable from the insurance carriers reflecting the contractual indemnity provided by the carriers under the related malpractice policies. The Company maintains primary commercial insurance coverage on a claim basis for professional malpractice claims with a $ 1.0 million per claim deductible and $ 5.5 million per claim and annual aggregate limits as of October 1, 2021. Prior to October 1, 2021, the Company maintained primary commercial insurance coverage on a claim basis for professional malpractice claims with a $ 0.5 million per claim deductible and $ 6.0 million per claim and annual aggregate limits. Moreover, the Company maintains excess insurance coverage for professional malpractice claims. In addition, the Company maintains workers’ compensation insurance with a $ 0.5 million per claim deductible and statutory limits. The Company reimburses insurance carriers for deductible losses under these policies. The Company’s insurance carriers require collateral to secure the Company’s obligation to reimburse insurance carriers for these deductible payments. Collateral as of October 2, 2021 and January 2, 2021 was comprised of $ 18.8 million of issued letters of credit, $ 2.9 million in cash collateral, and $ 2.9 million in surety bonds, respectively. As of October 2, 2021, insurance reserves totaling $ 79.1 million were included on the consolidated balance sheets, representing $ 42.5 million and $ 36.6 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. At January 2, 2021, insurance reserves totaling $ 74.6 million were included on the consolidated balance sheets, representing $ 38.5 million and $ 36.1 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. Litigation and Other Current Liabilities On December 16, 2016, Aveanna Healthcare LLC (f/k/a BCPE Eagle Buyer LLC) entered into a stock purchase agreement with Epic/Freedom, LLC, Epic Acquisition, Inc., and FHH Holdings, Inc. for Aveanna Healthcare LLC to acquire Epic Acquisition, Inc. and FHH Holdings, Inc. (the “Acquisition”). The Acquisition closed on March 16, 2017. On February 19, 2020, the Company entered into a settlement agreement for a legal claim totaling $ 50.0 million related to the Acquisition. The settlement proceeds were included in other income in the accompanying consolidated statements of operations for the nine-month period ended September 26, 2020. On December 24, 2018, Aveanna Healthcare LLC, an indirect wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Agreement”) to acquire a pediatric home health company (the “Seller”). The agreement contained a provision whereby a $ 75.0 million transaction termination fee (the “Break-up Fee”) could be payable to the Seller under certain circumstances. On December 20, 2019, Aveanna Healthcare LLC terminated the Agreement, and the Seller demanded payment of the Break-up Fee. The Company believes the Agreement was terminated for cause and therefore no payment of the Break-up Fee is due to the Seller. The Seller has disputed this assertion. While the Company believes that litigation over this matter is unlikely at the present time, it is possible that the Company and the Seller may in the future pursue claims and counterclaims related to the termination of the Agreement and payment of the Break-up Fee. At this time, the Company is unable to predict the possible loss or range of loss, if any, associated with the resolution of any such litigation, or any potential related effect on the Company or its business or operations. The Company is currently a party to various routine litigation incidental to the business. While management currently believes that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. Management has established provisions within other current liabilities in the accompanying consolidated balance sheets, which in the opinion of management represents the best estimate of exposure and adequately provides for such losses that may occur from asserted claims related to the provision of professional services and which may not be covered by the Company’s insurance policies. Management believes that any additional unfavorable provisions would not be material to the Company’s results of operations or financial position; however, if an unfavorable ruling on any asserted or unasserted claim were to occur, there exists the possibility of a material adverse impact on the Company’s net earnings or financial position. The estimate of the potential impact from legal proceedings on the Company’s financial position or overall results of operations could change in the future. On August 6, 2020, the Company sued Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”) in the Delaware Superior Court. The Company asserted that the Defendants made fraudulent representations and warranties in connection with the Epic acquisition. The Company is seeking damages ranging fro m $ 24.0 million to $ 50.0 million. The Company also requested a declaratory judgment holding that the Defendants waived any claim to the Company’s continued possession of $ 7.1 million in escrow funds (the “Escrow Funds”) that were delivered to the Company in January 2018 by the Epic acquisition escrow agent. In response, the Defendants asserted four counterclaims: (1) specific performance of an alleged right to control a tax audit; (2) advancement of litigation fees and expenses for certain individual Defendants; (3) a declaratory judgment; and (4) breach of contract claim concerning the Escrow Funds. The Company subsequently reached an agreement with the Defendants, which (1) allowed the Defendants to take a principal role in the applicable tax audit, though the Company will continue to communicate with the Internal Revenue Service and retain the ability to make strategic decisions with respect to the audit and (2) dismissed claims against certain individual Defendants mooting Defendants’ claims for advancement of litigation fees and expenses. On July 29, 2021, the Delaware Superior Court denied the Defendants’ motion for judgment on the pleadings with respect to the Company’s claim for fraud against the Defendants, which allows the Company to pursue discovery with respect to the alleged fraud claim. With respect to the Company’s retention of certain tax refunds the Company received on behalf of Defendants, the Court denied the Company’s motion for judgment on the pleadings, pursuant to which the Company sought to retain the tax refunds as matter of law. The Court also ordered Seller to refile its motion for summary judgment on the same subject and abated a ruling pending further discovery and resolution of whether the parties entered into a post-closing agreement, allowing the Company to retain the tax refunds pending the outcome of the related tax audits. Lastly, the Court denied the Company’s motion for judgment on the pleadings as to its continued possession of the Escrow Funds. At this time, the Company cannot predict the ultimate resolution or estimate the amount of any loss or recovery, if any, related to this matter. Healthcare Regulatory Matters Starting on October 30, 2019 the Company has received grand jury subpoenas (“Subpoenas”) issued by the U.S. Department of Justice, Antitrust Division (the “Antitrust Division”) requiring the production of documents and information pertaining to nurse wages, reimbursement rates, and hiring activities in a few of its local markets. The Company is fully cooperating with the Antitrust Division with respect to this investigation and management believes this matter is unlikely to materially impact the Company’s business, results of operations or financial condition. However, based on the information currently available to the Company, management cannot predict the timing or outcome of this investigation or predict the possible loss or range of loss, if any, associated with the resolution of this litigation. Laws and regulations governing the government payer programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s practice to cooperate fully with such inquiries. In addition to laws and regulations governing the Medicaid, Medicaid Managed Care, and Tricare programs, there are a number of federal and state laws and regulations governing matters such as the corporate practice of medicine, fee splitting arrangements, anti-kickback statues, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. Failure to comply with any such laws or regulations could have an adverse impact on the Company’s operations and financial results. The Company believes that it is in material compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of wrongdoing. |
Covid 19
Covid 19 | 9 Months Ended |
Oct. 02, 2021 | |
Covid19 C A R E S Act [Abstract] | |
Covid 19 | 11. COVID-19 In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 outbreak has adversely impacted economic activity and conditions worldwide, including workforces, liquidity, capital markets, consumer behavior, supply chains and macroeconomic conditions. After the declaration of a national emergency in the United States on March 13, 2020, in compliance with stay-at-home and physical distancing orders and other restrictions on movement and economic activity intended to reduce the spread of COVID-19, the Company altered numerous clinical, operational, and business processes. While each of the states deemed healthcare services an essential business, allowing the Company to continue to deliver healthcare services to patients, the effects of the pandemic have been wide-reaching. In response to COVID-19, the U.S. Government enacted the CARES Act on March 27, 2020. The CARES Act has impacted the Company as follows: Provider Relief Fund (“PRF”) : Beginning in April 2020, funds were distributed to health care providers who provide or provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. During fiscal year 2020, the Company received PRF payments from the U.S. Department of Health and Human Services (“HHS”) totaling $ 25.1 million, which were included in government stimulus liabilities on the accompanying consolidated balance sheet as of January 2, 2021. On March 5, 2021, the Company repaid these PRF payments in full. State Sponsored Relief Funds : In fiscal year 2020, the Company received $ 4.8 million of stimulus funds from the Commonwealth of Pennsylvania Department of Human Services (“Pennsylvania DHS”). Such funds were not applied for or requested. The Company did no t receive stimulus funds from any individual state other than Pennsylvania. The Company recognized $ 0.5 million of income related to these funds in fiscal year 2020, with the remaining $ 4.3 million included in government stimulus liabilities on the accompanying consolidated balance sheet as of January 2, 2021. On February 4, 2021, the Company repaid the remaining $ 4.3 million of direct stimulus funds to Pennsylvania DHS. Deferred payment of the employer portion of social security taxes : The Company was permitted to defer payments of the employer portion of social security taxes in fiscal year 2020, which are payable in 50 % increments, with the first 50 % due by December 31, 2021 and the second 50 % due by December 31, 2022. The Company did not defer any payroll taxes after December 31, 2020. As of October 2, 2021, the Company had deferred payment of $ 51.4 million of social security taxes in total, which is recorded in the current portion of deferred payroll taxes and in the deferred payroll taxes, less current portion liabilities on the accompanying consolidated balance sheet. The Company did not commence deferrals until April 1, 2020; therefore the Company did not defer any payroll taxes during the three-month period ended March 28, 2020. Reimbursement rate increases from various state Medicaid and Medicaid Managed Care Programs: Shortly after the onset of COVID-19 in March 2020, numerous state Medicaid programs began to issue temporary rate increases and similarly directed Medicaid Managed Care programs within those states to likewise adjust rates. These temporary rate increases are paid to the Company via normal claim processing by the respective payers. Over the remainder of fiscal year 2020 and continuing into fiscal year 2021, while some states discontinued the temporary rate increases, most states issued continuations of the temporary rate increases with many state legislatures communicating support for either making such increases permanent or otherwise increasing PDS reimbursement rates. Medicare Advances : Certain of the home health and hospice companies the Company has acquired received advance payments from the Centers for Medicare & Medicaid Services (“CMS”) in April 2020, pursuant to the expansion of the Accelerated Payments Program provided for in the CARES Act. These advances became repayable beginning one year from the date on which the accelerated advance was issued. The repayments occur via offsets by CMS to current payments otherwise due from Medicare at a rate of 25 % for the first eleven months. After the eleven months end, payments will be recouped at a rate of 50 % for another six months, after which any remaining balance will become due. Gross advances received by acquired companies in April 2020 totaled $ 15.7 million. The Company began repaying the gross amount of the advances, via the offset mechanism described above, during the second quarter of 2021, and had repaid an aggregate amount of $ 8.8 million of such advances as of October 2, 2021. Remaining unpaid advances as of October 2, 2021 totaled $ 6.9 million and are recorded in other current liabilities on the accompanying consolidated balance sheet . Temporary Suspension of Medicare Sequestration: The Budget Control Act of 2011 requires a mandatory, across the board reduction in federal spending, called a sequestration. Medicare fee-for-service claims with dates of service or dates of discharge on or after April 1, 2013 incur a 2.0 % reduction in Medicare payments. All Medicare rate payments and settlements are subject to this mandatory reduction, which will continue to remain in place through at least 2023, unless Congress takes further action. In response to COVID-19, the CARES Act temporarily suspended the automatic 2.0 % reduction of Medicare claim reimbursements for the period from May 1, 2020 through December 31, 2021. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 02, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. RELATED PARTY TRANSACTIONS The Company had entered into an advisory services agreement with affiliates of certain stockholders of the Company (the “Management Agreement”). Under this agreement, the managers provided general and strategic advisory services and were paid a quarterly management fee plus out of pocket expenses. Upon completion of the IPO, the Management Agreement was terminated. Additionally, the managers agreed to waive the fee due to them from the Company upon the successful completion of the IPO. The Company incurred management fees and expenses totaling $ 0.8 million during the nine-month period ended October 2, 2021, and $ 0.8 million and $ 2.4 million during the three and nine-month periods ended September 26, 2020 , respectively, which are included in corporate expenses in the accompanying consolidated statements of operations. The Company did no t owe any amounts in connection with the Management Agreement as of October 2, 2021. Amounts owed by the Company in connection with the Management Agreement totaled $ 1.6 million as of January 2, 2021 and were included in accounts payable and other accrued liabilities on the consolidated balance sheets. One of the Company’s stockholders has an ownership interest in a revenue cycle vendor used by the Company for eligibility and clearinghouse billing services. Fees for such services totaled $ 0.1 million and $ 0.3 million during the three and nine-month periods ended October 2, 2021 and $ 0.1 million and $ 0.4 million during the three and nine-month periods ended September 26, 2020, respectively, and are included in corporate expenses in the accompanying co nsolidated statements of operations. The Company did no t owe any amounts in connection with the expenses described above as of October 2, 2021 and January 2, 2021, respectively. As of October 2, 2021, one of the Company’s stockholders owned 6.8 % of the Company’s 2021 Extended Term Loan. |
Segment Information
Segment Information | 9 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 13. SEGMENT INFORMATION The Company’s operating segments have been identified based upon how management has organized the business by services provided to customers and how the chief operating decision maker (“CODM”) manages the business and allocates resources, consistent with the criteria in ASC 280, Segment Reporting . The Company has three operating segments and three reportable segments, Private Duty Services, Home Health & Hospice, and Medical Solutions. The PDS segment predominantly includes private duty skilled nursing services, unskilled and personal care services, and pediatric therapy services. The HHH segment provides home health and hospice services to predominately elderly patients. Through the MS segment, the Company provides enteral nutrition and other products to adults and children, delivered on a periodic or as-needed basis. The CODM evaluates performance using gross margin (and gross margin percentage). Gross margin includes revenue less all costs of revenue, excluding depreciation and amortization, but excludes branch and regional administrative expenses, corporate expenses and other non-field expenses. The CODM does not evaluate a measure of assets when assessing performance. Results shown for the three and nine-month periods ended October 2, 2021 and September 26, 2020 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. There are no intersegment transactions. The following tables summarize the Company’s segment information for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively (amounts in thousands): For the Three-Month Periods Ended October 2, 2021 PDS HHH MS Total Revenue $ 327,133 $ 47,000 $ 37,143 $ 411,276 Cost of revenue, excluding depreciation and amortization 226,540 24,130 20,864 271,534 Gross margin $ 100,593 $ 22,870 $ 16,279 $ 139,742 Gross margin percentage 30.7 % 48.7 % 43.8 % 34.0 % For the Three-Month Periods Ended September 26, 2020 PDS HHH MS Total Revenue $ 328,985 $ 4,690 $ 32,328 $ 366,003 Cost of revenue, excluding depreciation and amortization 231,454 2,774 17,645 251,873 Gross margin $ 97,531 $ 1,916 $ 14,683 $ 114,130 Gross margin percentage 29.6 % 40.9 % 45.4 % 31.2 % For the Nine-Month Periods Ended October 2, 2021 PDS HHH MS Total Revenue $ 1,027,640 $ 128,589 $ 108,319 $ 1,264,548 Cost of revenue, excluding depreciation and amortization 719,435 67,224 59,875 846,534 Gross margin $ 308,205 $ 61,365 $ 48,444 $ 418,014 Gross margin percentage 30.0 % 47.7 % 44.7 % 33.1 % For the Nine-Month Periods Ended September 26, 2020 PDS HHH MS Total Revenue $ 963,694 $ 13,823 $ 95,286 $ 1,072,803 Cost of revenue, excluding depreciation and amortization 683,492 8,273 52,738 744,503 Gross margin $ 280,202 $ 5,550 $ 42,548 $ 328,300 Gross margin percentage 29.1 % 40.2 % 44.7 % 30.6 % For the Three-Month Periods Ended For the Nine-Month Periods Ended Segment Reconciliation: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Total segment gross margin $ 139,742 $ 114,130 $ 418,014 $ 328,300 Branch and regional administrative expenses 76,370 59,641 223,462 174,455 Corporate expenses 37,873 32,493 97,673 81,039 Goodwill impairment - - - 75,727 Depreciation and amortization 5,145 3,922 15,163 12,339 Acquisition-related costs 2,007 4,510 4,779 4,679 Other operating expenses - 687 - 1,274 Operating income (loss) 18,347 12,877 76,937 ( 21,213 ) Interest income 44 38 182 247 Interest expense ( 12,106 ) ( 19,065 ) ( 53,793 ) ( 58,972 ) Loss on debt extinguishment ( 4,784 ) - ( 13,702 ) ( 73 ) Other (expense) income ( 511 ) ( 1,723 ) ( 1,088 ) 35,608 Income (loss) before income taxes $ 990 $ ( 7,873 ) $ 8,536 $ ( 44,403 ) |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 14. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the diluted weighted average number of shares of common stock outstanding for the period. For purposes of this calculation, outstanding stock options are considered potential dilutive shares of common stock. The following is a computation of basic and diluted net income (loss) per share (amounts in thousands, except per share amounts): For the Three-Month Periods Ended For the Nine-Month Periods Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Numerator: Net income (loss) $ 2,090 $ ( 7,402 ) $ 9,148 $ ( 47,318 ) Denominator: Weighted average shares of common stock outstanding (1) , basic 184,554 142,123 165,877 140,559 Net income (loss) per share, basic $ 0.01 $ ( 0.05 ) $ 0.06 $ ( 0.34 ) Weighted average shares of common stock outstanding (1) , diluted 188,246 142,123 170,667 140,559 Net income (loss) per share, diluted $ 0.01 $ ( 0.05 ) $ 0.05 $ ( 0.34 ) Dilutive securities outstanding not included in the computation of diluted net income (loss) per share as their effect is antidilutive: Stock options 6,885 13,950 6,360 13,950 (1) The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 02, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS Pending acquisition On November 14, 2021, Aveanna Healthcare, LLC, a Delaware limited liability company (“Buyer”) and indirect wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Dunn & Berger, Inc. d/b/a Accredited Nursing Services, a California corporation (“Accredited”), Barry R. Berger and Jill Taffy Steinfeld-Berger, Trustees of The Barry R. Berger and Jill Taffy Steinfeld-Berger Family Trust dated September 19, 2006 seller ("Seller"), and the other parties thereto, to acquire all of the issued and outstanding stock of Accredited for aggregate consideration of (i) $ 180.0 million in cash plus (ii) $ 45.0 million in cash that will be held in escrow (the “Escrowed Purchase Price”), pending final reconciliation, in accordance with the terms of the Purchase Agreement, of Accredited’s volumes for September, October, and November of 2021. Any portion of the Escrowed Purchase Price not payable to Seller will be returned to Buyer. The purchase price payable by Buyer is additionally subject to a customary purchase price adjustment mechanism providing for a normalized level of working capital and that Accredited, together with its subsidiaries, be free of cash and debt at closing. The transaction is subject to customary conditions, including the absence of legal restraints and the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Securitization On November 12, 2021, the Company (through a wholly owned special purpose entity, Aveanna SPV I, LLC) entered into a Receivables Financing Agreement with a bank (the “Securitization Facility”) with a termination date of November 12, 2024 . The Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the Company's patient accounts receivable. The maximum amount available under the Securitization Facility is $ 150.0 million subject to maintaining certain borrowing base requirements. Borrowings under this facility carry variable interest rates tied to BSBY plus an applicable margin. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying interim unaudited consolidated financial statements include the accounts of Aveanna Healthcare Holdings Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the accompanying interim unaudited consolidated financial statements from their respective dates of acquisition. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim unaudited consolidated financial statements do not include all the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, these interim unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position as of October 2, 2021 and the results of operations for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively. The results reported in these interim unaudited consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. These interim unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended January 2, 2021 included in the Company’s prospectus dated April 28, 2021 (the “Prospectus”), which is deemed to be part of the Company’s Registration Statement on Form S-1 (File No. 333-254981) filed with the SEC. Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52 or 53-week fiscal year. The accompanying interim unaudited consolidated balance sheets reflect the accounts of the Company as of October 2, 2021 and January 2, 2021. For the three-month periods ended October 2, 2021 and September 26, 2020, the accompanying interim unaudited consolidated statements of operations and stockholders’ equity reflect the accounts of the Company from July 4, 2021 through October 2, 2021 and June 28, 2020 through September 26, 2020, respectively. For the nine-month periods ended October 2, 2021 and September 26, 2020, the accompanying interim unaudited consolidated statements of operations, stockholders’ equity and cash flows reflect the accounts of the Company from January 3, 2021 through October 2, 2021 and December 29, 2019 through September 26, 2020 , respectively. |
Use of Estimates | Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Deferred Offering Costs | Deferred Offering Costs Upon closing of the IPO on May 3, 2021, deferred offering costs of $ 7.6 million were reclassified into stockholders ’ equity and recorded against the proceeds from the offering. As of January 2, 2021, capitalized deferred offering costs totaled $ 2.9 million and were included in other long-term assets on the accompanying consolidated balance sheet. See Note 1 – Description of Business and Note 9 – Stockholders’ Equity and Stock-Based Compensation for additional information regarding the completion of the Company’s IPO. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves consistent application by clarifying and amending existing guidance. This ASU is effective for annual fiscal years beginning after December 15, 2020, and interim periods therein. The Company adopted this standard effective January 3, 2021 and the adoption of this standard did not materially affect the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. An entity may adopt this ASU as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adopting this standard. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This ASU is effective immediately and should be adopted in conjunction with ASU 2020-04. The Company is currently evaluating the impact of adopting this standard. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Payer Type and Percentage of Patient and Product Revenue | The following tables present revenue by payer type and as a percentage of revenue for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively (in thousands): For the Three-Month Periods Ended October 2, 2021 September 26, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 219,418 53.3 % $ 226,686 61.9 % Medicaid 101,120 24.6 % 99,742 27.3 % Commercial 39,867 9.7 % 30,943 8.4 % Medicare 49,700 12.1 % 8,303 2.3 % Self-pay 1,171 0.3 % 329 0.1 % Total revenue $ 411,276 100.0 % $ 366,003 100.0 % For the Nine-Month Periods Ended October 2, 2021 September 26, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 681,548 53.9 % $ 652,663 60.8 % Medicaid 308,340 24.4 % 288,156 26.9 % Commercial 140,718 11.1 % 105,871 9.9 % Medicare 129,548 10.3 % 24,619 2.3 % Self-pay 4,394 0.3 % 1,494 0.1 % Total revenue $ 1,264,548 100.0 % $ 1,072,803 100.0 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Business Combinations [Abstract] | |
Summary of Preliminary Purchase Price Allocations | The preliminary purchase price allocations as of the acquisition dates, reflecting measurement period adjustments made during the respective period, are as follows (amounts in thousands): Entity Loma Linda Doctor’s Choice Acquisition Date 3/31/21 4/16/21 Cash consideration $ 500 $ 101,609 Contingent consideration - - Total $ 500 $ 101,609 Cash and cash equivalents $ - $ 1 Patient accounts receivable - 12,789 Receivables under insured programs - 142 Prepaid expenses - 431 Other current assets - 11 Property and equipment, net - 461 Operating lease right of use assets - 1,013 Intangible assets, net - licenses - 4,993 Intangible assets, net - trade names - 1,486 Receivables under insured programs - 312 Other long-term assets - 99 Accounts payable and other accrued liabilities - ( 7,135 ) Accrued payroll and employee benefits - ( 2,226 ) Current portion of insurance reserves - insured programs - ( 142 ) Current portion of operating lease liabilities - ( 488 ) Current portion of deferred payroll taxes - ( 875 ) Other current liabilities - ( 11,469 ) Long-term insurance reserves - insured programs - ( 312 ) Long-term insurance reserves - ( 19 ) Operating lease liabilities, less current portion - ( 501 ) Deferred payroll taxes, less current portion - ( 876 ) Total identifiable net assets - ( 2,305 ) Goodwill 500 103,914 Total $ 500 $ 101,609 The final purchase price allocations as of the respective acquisition dates, reflecting measurement period adjustments made during the respective periods, are as follows (amounts in thousands): Entity Total Care Preferred Evergreen Acquisition Date 8/2/20 9/19/20 9/26/20 Cash consideration $ 11,787 $ 40,622 $ 14,500 Contingent consideration - - - Total $ 11,787 $ 40,622 $ 14,500 Cash and cash equivalents $ 262 $ - $ 31 Patient accounts receivable 868 3,891 565 Receivables under insured programs 17 1,760 179 Prepaid expenses - 338 24 Other current assets - 331 - Property and equipment, net 6 1,178 59 Operating lease right of use assets 329 480 342 Intangible assets, net - licenses 152 2,815 1,225 Intangible assets, net - trade names 109 392 135 Deferred income taxes 7 - - Accounts payable and other accrued liabilities ( 16 ) ( 1,187 ) ( 40 ) Accrued payroll and employee benefits ( 561 ) ( 1,394 ) ( 602 ) Current portion of operating lease liabilities ( 60 ) ( 150 ) ( 130 ) Other current liabilities - ( 3,909 ) - Long-term insurance reserves - insured programs ( 54 ) ( 1,760 ) ( 179 ) Long-term insurance reserves - - - Operating lease liabilities, less current portion ( 269 ) ( 330 ) ( 212 ) Deferred income taxes - ( 2,020 ) - Other long-term liabilities - ( 93 ) - Total identifiable net assets 790 342 1,397 Goodwill 10,997 40,280 13,103 Total $ 11,787 $ 40,622 $ 14,500 |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | Long-term obligations consisted of the following as of October 2, 2021 and January 2, 2021, respectively (dollar amounts in thousands): Instrument Stated Contractual Interest Rate Interest Rate October 2, 2021 January 2, 2021 Term loan - First Lien Term Loan (1) 03/2024 L + 4.25 % 5.25 % $ - $ 563,061 Term loan - First Lien Term Loan Amendment (1) 03/2024 L + 5.5 % 6.50 % - 217,133 Term loan - First Lien Term Loan Fourth Amendment (1) 03/2024 L + 6.25 % 7.25 % - 184,538 Subordinated term loan - Second Lien Term Loan (1) 03/2025 L + 8.0 % 9.00 % - 240,000 2021 Extended Term Loan (2) 07/2028 L + 3.75 % 4.25 % 860,000 - Revolving Credit Facility (2) 03/2023 L + 3.75 % 5.25 % - - Total principal amount of long-term obligations 860,000 1,204,732 Less: unamortized debt issuance costs ( 21,726 ) ( 31,332 ) Total amount of long-term obligations, net of unamortized debt issuance costs 838,274 1,173,400 Less: current portion of long-term obligations ( 8,600 ) ( 9,910 ) Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion $ 829,674 $ 1,163,490 (1) L = Greater of 1.00% or one-month LIBOR , (2) L = Greater of 0.50% or one-month LIBOR |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Other Assets and Other Liabilities Measured at Fair Value | The Company’s other assets and other liabilities measured at fair value are as follows (amounts in thousands): Fair Value Measurements at October 2, 2021 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreement $ - $ 765 $ - $ 765 Total derivative assets $ - $ 765 $ - $ 765 Liabilities: Interest rate swap agreements $ - $ 22,290 $ - $ 22,290 Total derivative liabilities $ - $ 22,290 $ - $ 22,290 Fair Value Measurements at January 2, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 28,624 $ - $ 28,624 Total derivative liabilities $ - $ 28,624 $ - $ 28,624 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Gains (Losses) from Derivatives | The following gains (losses) from these derivatives not designated as hedging instruments were recognized in the Company’s consolidated statements of operations for the three-month periods ended October 2, 2021 and September 26, 2020, respectively (amounts in thousands): Statement of Operations For the Three-Month Periods Ended Classification October 2, 2021 September 26, 2020 Interest rate cap agreement Other (expense) income $ ( 88 ) $ - Interest rate swap agreements Other (expense) income $ 1,481 $ 1,157 Statement of Operations For the Nine-Month Periods Ended Classification October 2, 2021 September 26, 2020 Interest rate cap agreement Other (expense) income $ ( 88 ) $ - Interest rate swap agreements Other (expense) income $ 6,334 $ ( 6,925 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables summarize the Company’s segment information for the three and nine-month periods ended October 2, 2021 and September 26, 2020, respectively (amounts in thousands): For the Three-Month Periods Ended October 2, 2021 PDS HHH MS Total Revenue $ 327,133 $ 47,000 $ 37,143 $ 411,276 Cost of revenue, excluding depreciation and amortization 226,540 24,130 20,864 271,534 Gross margin $ 100,593 $ 22,870 $ 16,279 $ 139,742 Gross margin percentage 30.7 % 48.7 % 43.8 % 34.0 % For the Three-Month Periods Ended September 26, 2020 PDS HHH MS Total Revenue $ 328,985 $ 4,690 $ 32,328 $ 366,003 Cost of revenue, excluding depreciation and amortization 231,454 2,774 17,645 251,873 Gross margin $ 97,531 $ 1,916 $ 14,683 $ 114,130 Gross margin percentage 29.6 % 40.9 % 45.4 % 31.2 % For the Nine-Month Periods Ended October 2, 2021 PDS HHH MS Total Revenue $ 1,027,640 $ 128,589 $ 108,319 $ 1,264,548 Cost of revenue, excluding depreciation and amortization 719,435 67,224 59,875 846,534 Gross margin $ 308,205 $ 61,365 $ 48,444 $ 418,014 Gross margin percentage 30.0 % 47.7 % 44.7 % 33.1 % For the Nine-Month Periods Ended September 26, 2020 PDS HHH MS Total Revenue $ 963,694 $ 13,823 $ 95,286 $ 1,072,803 Cost of revenue, excluding depreciation and amortization 683,492 8,273 52,738 744,503 Gross margin $ 280,202 $ 5,550 $ 42,548 $ 328,300 Gross margin percentage 29.1 % 40.2 % 44.7 % 30.6 % For the Three-Month Periods Ended For the Nine-Month Periods Ended Segment Reconciliation: October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Total segment gross margin $ 139,742 $ 114,130 $ 418,014 $ 328,300 Branch and regional administrative expenses 76,370 59,641 223,462 174,455 Corporate expenses 37,873 32,493 97,673 81,039 Goodwill impairment - - - 75,727 Depreciation and amortization 5,145 3,922 15,163 12,339 Acquisition-related costs 2,007 4,510 4,779 4,679 Other operating expenses - 687 - 1,274 Operating income (loss) 18,347 12,877 76,937 ( 21,213 ) Interest income 44 38 182 247 Interest expense ( 12,106 ) ( 19,065 ) ( 53,793 ) ( 58,972 ) Loss on debt extinguishment ( 4,784 ) - ( 13,702 ) ( 73 ) Other (expense) income ( 511 ) ( 1,723 ) ( 1,088 ) 35,608 Income (loss) before income taxes $ 990 $ ( 7,873 ) $ 8,536 $ ( 44,403 ) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Income (Loss) Per Share | The following is a computation of basic and diluted net income (loss) per share (amounts in thousands, except per share amounts): For the Three-Month Periods Ended For the Nine-Month Periods Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Numerator: Net income (loss) $ 2,090 $ ( 7,402 ) $ 9,148 $ ( 47,318 ) Denominator: Weighted average shares of common stock outstanding (1) , basic 184,554 142,123 165,877 140,559 Net income (loss) per share, basic $ 0.01 $ ( 0.05 ) $ 0.06 $ ( 0.34 ) Weighted average shares of common stock outstanding (1) , diluted 188,246 142,123 170,667 140,559 Net income (loss) per share, diluted $ 0.01 $ ( 0.05 ) $ 0.05 $ ( 0.34 ) Dilutive securities outstanding not included in the computation of diluted net income (loss) per share as their effect is antidilutive: Stock options 6,885 13,950 6,360 13,950 (1) The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units. |
Description of Business - Addit
Description of Business - Additional Information (Details) $ in Millions | May 25, 2021shares | May 04, 2021USD ($) | May 03, 2021USD ($)shares | Jul. 03, 2021State |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of states in which entity locations | State | 30 | |||
Net proceeds from IPO | $ 477.7 | |||
Initial Public Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock, net of underwriters' discounts and commissions (shares) | shares | 42,236,000 | |||
Underwriters Overallotment Option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock, net of underwriters' discounts and commissions (shares) | shares | 4,000,000 | |||
Second Lien Term Loan | Initial Public Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Repayment of subordinated debt | $ 307 | |||
Term loan - First Lien Term Loan | Initial Public Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Repayment of debt | $ 100 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | May 03, 2021 | Oct. 02, 2021 | Jan. 02, 2021 |
Summary Of Significant Accounting Policies [Line Items] | |||
Reclassification of deferred offering cost into equity | $ 7.6 | ||
Capitalized deferred offering costs | $ 2.9 | ||
ASU 2019-12 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||
Change in accounting principle, accounting standards update, adoption date | Jan. 3, 2021 | ||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Revenue Disclosure [Line Items] | |||||
Estimated price concession | $ 54,600,000 | $ 54,600,000 | $ 55,400,000 | ||
Bad debt expense | $ 0 | $ 0 | $ 0 | $ 0 | |
Maximum | |||||
Revenue Disclosure [Line Items] | |||||
Revenue, performance obligation, expected timing of satisfaction, period | 1 year | 1 year |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Payer Type and Percentage of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 411,276 | $ 366,003 | $ 1,264,548 | $ 1,072,803 |
Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Medicaid MCO | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 219,418 | $ 226,686 | $ 681,548 | $ 652,663 |
Medicaid MCO | Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 53.30% | 61.90% | 53.90% | 60.80% |
Medicaid | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 101,120 | $ 99,742 | $ 308,340 | $ 288,156 |
Medicaid | Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 24.60% | 27.30% | 24.40% | 26.90% |
Commercial | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 39,867 | $ 30,943 | $ 140,718 | $ 105,871 |
Commercial | Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 9.70% | 8.40% | 11.10% | 9.90% |
Medicare | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 49,700 | $ 8,303 | $ 129,548 | $ 24,619 |
Medicare | Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 12.10% | 2.30% | 10.30% | 2.30% |
Self-pay | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 1,171 | $ 329 | $ 4,394 | $ 1,494 |
Self-pay | Customer Concentration Risk | Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of total revenue | 0.30% | 0.10% | 0.30% | 0.10% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Sep. 27, 2021 | Apr. 16, 2021 | Mar. 31, 2021 | Sep. 26, 2020 | Sep. 19, 2020 | Aug. 02, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 1,419,591 | $ 1,419,591 | $ 1,316,385 | ||||||||
Acquisition-related costs | $ 2,007 | $ 4,510 | 4,779 | $ 4,679 | |||||||
Loma Linda University Medical Center | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition date | Mar. 31, 2021 | ||||||||||
Total consideration for transaction | $ 500 | ||||||||||
Aggregate consideration in cash | 500 | ||||||||||
Goodwill | $ 500 | ||||||||||
Doctor’s Choice Holdings, LLC | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition date | Apr. 16, 2021 | ||||||||||
Business acquisition, issued and outstanding membership interests percentage acquired | 100.00% | ||||||||||
Total consideration for transaction | $ 101,609 | ||||||||||
Aggregate consideration in cash | 101,609 | ||||||||||
Cash consideration | 100,600 | ||||||||||
Business acquisition, amount borrowed under existing second lien term loan facility | 67,000 | ||||||||||
Business acquisition, debt issuance costs | 1,700 | ||||||||||
Goodwill | $ 103,914 | ||||||||||
Total Care, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition date | Aug. 2, 2020 | ||||||||||
Business acquisition, issued and outstanding membership interests percentage acquired | 100.00% | ||||||||||
Total consideration for transaction | $ 11,787 | ||||||||||
Aggregate consideration in cash | 11,787 | ||||||||||
Cash consideration | 10,400 | ||||||||||
Goodwill | $ 10,997 | ||||||||||
Preferred Pediatric Home Health Care | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition date | Sep. 19, 2020 | ||||||||||
Business acquisition, issued and outstanding membership interests percentage acquired | 100.00% | ||||||||||
Total consideration for transaction | $ 40,622 | ||||||||||
Aggregate consideration in cash | 40,622 | ||||||||||
Cash consideration | 39,800 | ||||||||||
Goodwill | $ 40,280 | ||||||||||
Evergreen Home Healthcare, LLC | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition date | Sep. 26, 2020 | ||||||||||
Business acquisition, issued and outstanding membership interests percentage acquired | 100.00% | 100.00% | 100.00% | ||||||||
Total consideration for transaction | $ 14,500 | ||||||||||
Aggregate consideration in cash | 14,500 | ||||||||||
Cash consideration | 11,300 | ||||||||||
Contingent consideration | 1,900 | ||||||||||
Goodwill | 13,103 | $ 13,103 | $ 13,103 | ||||||||
Evergreen Home Healthcare, LLC | Paycheck Protection Program Loan | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total consideration for transaction | $ 1,900 | ||||||||||
Repayment of debt | $ 1,900 | ||||||||||
Purchase Agreement with Group of Companies | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Aggregate consideration in cash | $ 345,000 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Purchase Price Allocations (Details) - USD ($) $ in Thousands | Apr. 16, 2021 | Mar. 31, 2021 | Sep. 26, 2020 | Sep. 19, 2020 | Aug. 02, 2020 | Oct. 02, 2021 | Jan. 02, 2021 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,419,591 | $ 1,316,385 | |||||
Loma Linda University Medical Center | |||||||
Business Acquisition [Line Items] | |||||||
Entity | Loma Linda | ||||||
Business acquisition date | Mar. 31, 2021 | ||||||
Cash consideration | $ 500 | ||||||
Total | 500 | ||||||
Goodwill | 500 | ||||||
Total | $ 500 | ||||||
Doctor’s Choice Holdings, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Entity | Doctor’s Choice | ||||||
Business acquisition date | Apr. 16, 2021 | ||||||
Cash consideration | $ 101,609 | ||||||
Total | 101,609 | ||||||
Cash and cash equivalents | 1 | ||||||
Patient accounts receivable | 12,789 | ||||||
Receivables under insured programs | 142 | ||||||
Prepaid expenses | 431 | ||||||
Other current assets | 11 | ||||||
Property and equipment, net | 461 | ||||||
Operating lease right of use assets | 1,013 | ||||||
Receivables under insured programs | 312 | ||||||
Other long-term assets | 99 | ||||||
Accounts payable and other accrued liabilities | (7,135) | ||||||
Accrued payroll and employee benefits | (2,226) | ||||||
Current portion of insurance reserves - insured programs | (142) | ||||||
Current portion of operating lease liabilities | (488) | ||||||
Current portion of deferred payroll taxes | (875) | ||||||
Other current liabilities | (11,469) | ||||||
Long-term insurance reserves - insured programs | (312) | ||||||
Long-term insurance reserves | (19) | ||||||
Operating lease liabilities, less current portion | (501) | ||||||
Deferred payroll taxes, less current portion | (876) | ||||||
Total identifiable net assets | (2,305) | ||||||
Goodwill | 103,914 | ||||||
Total | 101,609 | ||||||
Doctor’s Choice Holdings, LLC | License | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | 4,993 | ||||||
Doctor’s Choice Holdings, LLC | Trade Names | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | $ 1,486 | ||||||
Total Care, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Entity | Total Care | ||||||
Business acquisition date | Aug. 2, 2020 | ||||||
Cash consideration | $ 11,787 | ||||||
Total | 11,787 | ||||||
Cash and cash equivalents | 262 | ||||||
Patient accounts receivable | 868 | ||||||
Receivables under insured programs | 17 | ||||||
Property and equipment, net | 6 | ||||||
Operating lease right of use assets | 329 | ||||||
Deferred income taxes | 7 | ||||||
Accounts payable and other accrued liabilities | (16) | ||||||
Accrued payroll and employee benefits | (561) | ||||||
Current portion of operating lease liabilities | (60) | ||||||
Long-term insurance reserves - insured programs | (54) | ||||||
Operating lease liabilities, less current portion | (269) | ||||||
Total identifiable net assets | 790 | ||||||
Goodwill | 10,997 | ||||||
Total | 11,787 | ||||||
Total Care, Inc. | License | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | 152 | ||||||
Total Care, Inc. | Trade Names | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | $ 109 | ||||||
Preferred Pediatric Home Health Care | |||||||
Business Acquisition [Line Items] | |||||||
Entity | Preferred | ||||||
Business acquisition date | Sep. 19, 2020 | ||||||
Cash consideration | $ 40,622 | ||||||
Total | 40,622 | ||||||
Patient accounts receivable | 3,891 | ||||||
Receivables under insured programs | 1,760 | ||||||
Prepaid expenses | 338 | ||||||
Other current assets | 331 | ||||||
Property and equipment, net | 1,178 | ||||||
Operating lease right of use assets | 480 | ||||||
Accounts payable and other accrued liabilities | (1,187) | ||||||
Accrued payroll and employee benefits | (1,394) | ||||||
Current portion of operating lease liabilities | (150) | ||||||
Other current liabilities | (3,909) | ||||||
Long-term insurance reserves - insured programs | (1,760) | ||||||
Operating lease liabilities, less current portion | (330) | ||||||
Deferred income taxes | (2,020) | ||||||
Other long-term liabilities | (93) | ||||||
Total identifiable net assets | 342 | ||||||
Goodwill | 40,280 | ||||||
Total | 40,622 | ||||||
Preferred Pediatric Home Health Care | License | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | 2,815 | ||||||
Preferred Pediatric Home Health Care | Trade Names | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | $ 392 | ||||||
Evergreen Home Healthcare, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Entity | Evergreen | ||||||
Business acquisition date | Sep. 26, 2020 | ||||||
Cash consideration | $ 14,500 | ||||||
Contingent consideration | 1,900 | ||||||
Total | 14,500 | ||||||
Cash and cash equivalents | 31 | ||||||
Patient accounts receivable | 565 | ||||||
Receivables under insured programs | 179 | ||||||
Prepaid expenses | 24 | ||||||
Property and equipment, net | 59 | ||||||
Operating lease right of use assets | 342 | ||||||
Accounts payable and other accrued liabilities | (40) | ||||||
Accrued payroll and employee benefits | (602) | ||||||
Current portion of operating lease liabilities | (130) | ||||||
Long-term insurance reserves - insured programs | (179) | ||||||
Operating lease liabilities, less current portion | (212) | ||||||
Total identifiable net assets | 1,397 | ||||||
Goodwill | 13,103 | ||||||
Total | 14,500 | ||||||
Evergreen Home Healthcare, LLC | License | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | 1,225 | ||||||
Evergreen Home Healthcare, LLC | Trade Names | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, net | $ 135 |
Long-Term Obligations - Schedul
Long-Term Obligations - Schedule of Long-Term Obligations and Notes Payable (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Jan. 02, 2021 | |
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 860,000 | $ 1,204,732 |
Less: unamortized debt issuance costs | (21,726) | (31,332) |
Total amount of long-term obligations, net of unamortized debt issuance costs | 838,274 | 1,173,400 |
Less: current portion of long-term obligations | (8,600) | (9,910) |
Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion | $ 829,674 | 1,163,490 |
Term loan - First Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | 563,061 | |
Stated Maturity Date | 2024-03 | |
Contractual Interest Rate | L + 4.25% | |
Interest Rate | 5.25% | |
Term loan - First Lien Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 4.25% | |
Term loan - First Lien Term Loan Amendment | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | 217,133 | |
Stated Maturity Date | 2024-03 | |
Contractual Interest Rate | L + 5.5% | |
Interest Rate | 6.50% | |
Term loan - First Lien Term Loan Amendment | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 5.50% | |
Term loan - First Lien Term Loan Fourth Amendment | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | 184,538 | |
Stated Maturity Date | 2024-03 | |
Contractual Interest Rate | L + 6.25% | |
Interest Rate | 7.25% | |
Term loan - First Lien Term Loan Fourth Amendment | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 6.25% | |
2021 Extended Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 860,000 | |
Stated Maturity Date | 2028-07 | |
Contractual Interest Rate | L + 3.75% | |
Interest Rate | 4.25% | |
2021 Extended Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 3.75% | |
Subordinated Term Loan | Second Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 240,000 | |
Stated Maturity Date | 2025-03 | |
Contractual Interest Rate | L + 8.0% | |
Interest Rate | 9.00% | |
Subordinated Term Loan | Second Lien Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 8.00% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Stated Maturity Date | 2023-03 | |
Contractual Interest Rate | L + 3.75% | |
Interest Rate | 5.25% | |
Revolving Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 3.75% |
Long-Term Obligations - Sched_2
Long-Term Obligations - Schedule of Long-Term Obligations and Notes Payable (Parenthetical) (Details) | 9 Months Ended |
Oct. 02, 2021 | |
Term loan - First Lien Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 1.00% or one-month LIBOR |
Term loan - First Lien Term Loan Amendment | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 1.00% or one-month LIBOR |
Term loan - First Lien Term Loan Fourth Amendment | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 1.00% or one-month LIBOR |
2021 Extended Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 0.50% or one-month LIBOR |
Subordinated Term Loan | Second Lien Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 1.00% or one-month LIBOR |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | L = Greater of 0.50% or one-month LIBOR |
Long-Term Obligations - Additio
Long-Term Obligations - Additional Information (Details) - USD ($) | Aug. 09, 2021 | Jul. 15, 2021 | May 04, 2021 | May 03, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Mar. 11, 2021 | Jan. 02, 2021 |
Debt Instrument [Line Items] | ||||||||||
Wrote off debt issuance costs | $ 8,900,000 | |||||||||
Debt issuance costs | $ 8,300,000 | |||||||||
Loss on debt extinguishment | (400,000) | $ (4,784,000) | $ (13,702,000) | $ (73,000) | ||||||
Corporate expenses | 7,000,000 | 37,873,000 | $ 32,493,000 | 97,673,000 | 81,039,000 | |||||
Debt issuance costs | 21,726,000 | 21,726,000 | $ 31,332,000 | |||||||
Interest expense related to amortization of debt issuance costs | 1,400,000 | $ 1,900,000 | 7,200,000 | $ 5,400,000 | ||||||
Swingline loans | 0 | 0 | 0 | |||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 200,000,000 | $ 75,000,000 | 180,200,000 | $ 180,200,000 | 55,200,000 | |||||
Debt issuance costs | 1,600,000 | |||||||||
Debt instrument due date, month and year | 2023-03 | |||||||||
Revolving Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margin on borrowings | 3.75% | |||||||||
Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Issued letter of credit | 19,800,000 | $ 19,800,000 | 19,800,000 | |||||||
Amended Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |||||||||
Debt instrument, maturity date | Apr. 29, 2026 | |||||||||
Debt instrument, maturity date, description | The amendment also extended the maturity date to April 29, 2026 upon completion of the IPO and subject to the completion of the refinancing of the Company’s term loans, which occurred on July 15, 2021. | |||||||||
Amended First Lien Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs | 14,000,000 | |||||||||
Loss on debt extinguishment | (4,400,000) | |||||||||
Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs | 21,700,000 | $ 21,700,000 | 31,300,000 | |||||||
Second Lien Term Loan | Initial Public Offering | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of subordinated debt | $ 307,000,000 | |||||||||
Term loan - First Lien Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument due date, month and year | 2024-03 | |||||||||
Term loan - First Lien Term Loan | Initial Public Offering | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 100,000,000 | |||||||||
Term loan - First Lien Term Loan | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margin on borrowings | 4.25% | |||||||||
2021 Extended Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument due date, month and year | 2028-07 | |||||||||
Aggregate principal amount | $ 860,000,000 | 860,000,000 | $ 860,000,000 | |||||||
Debt instrument, interest Rate | 4.25% | |||||||||
2021 Extended Term Loan | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margin on borrowings | 3.75% | |||||||||
Delayed Draw Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs | $ 3,800,000 | $ 3,800,000 | $ 500,000 | |||||||
Debt instrument due date, month and year | 2028-07 | |||||||||
Aggregate principal amount | $ 200,000,000 | |||||||||
Debt issuance costs | $ 2,500,000 | |||||||||
2021 Extended Term Loan and Delayed Draw Term Loans | LIBOR | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instruments, variable interest rate | 0.50% | |||||||||
2021 Extended Term Loan and Delayed Draw Term Loans | LIBOR | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margin on borrowings | 3.75% | |||||||||
2021 Extended Term Loan and Delayed Draw Term Loans | Annual Base Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instruments, variable interest rate | 2.00% | |||||||||
Interest rate margin on borrowings | 2.75% | |||||||||
Seventh Amendment on First Lien Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs | $ 100,000 | |||||||||
Seventh Amendment on First Lien Credit Agreement | Revolving Credit Facility | LIBOR | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instruments, variable interest rate | 0.50% | |||||||||
Interest rate margin on borrowings | 3.75% | |||||||||
Seventh Amendment on First Lien Credit Agreement | Revolving Credit Facility | Annual Base Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instruments, variable interest rate | 2.00% | |||||||||
Interest rate margin on borrowings | 2.75% |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Other Assets and Other Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets | $ 765 | |
Liabilities | 22,290 | $ 28,624 |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets | 765 | |
Liabilities | 22,290 | 28,624 |
Interest Rate Cap Agreement | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets | 765 | |
Interest Rate Cap Agreement | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets | 765 | |
Interest Rate Swap Agreements | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | 22,290 | 28,624 |
Interest Rate Swap Agreements | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | $ 22,290 | $ 28,624 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) | 1 Months Ended | |||
Jul. 31, 2021USD ($) | Oct. 02, 2021USD ($) | Jan. 02, 2021USD ($) | Oct. 31, 2018Swap | |
Other Long-Term Liabilities | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swaps | $ 22,300,000 | $ 28,600,000 | ||
Amended Interest Rate Swap Agreements | ||||
Derivative [Line Items] | ||||
Aggregate notional amount | 520,000,000 | $ 520,000,000 | ||
Derivative expiration date | Jun. 30, 2026 | |||
Derivative, fixed interest rate | 2.08% | |||
Derivative, floor interest rate. | 0.50% | |||
Interest Rate Swap Agreement | ||||
Derivative [Line Items] | ||||
Number of interest rate swap agreement | Swap | 2 | |||
Interest Rate Cap Agreement | ||||
Derivative [Line Items] | ||||
Aggregate notional amount | $ 340,000,000 | |||
Derivative expiration date | Jul. 31, 2024 | |||
Derivative, cap interest rate | 1.75% | |||
One-time premium paid | $ 900,000 | |||
Fair value of interest rate cap | $ 800,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Gains (Losses) from Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative gain (loss) | $ 6,246 | $ (6,950) | ||
Interest Rate Cap Agreement | Not Designated as Hedging Instruments | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative gain (loss) | $ (88) | (88) | ||
Interest Rate Swap Agreements | Not Designated as Hedging Instruments | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative gain (loss) | $ 1,481 | $ 1,157 | $ 6,334 | $ (6,925) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (1,100) | $ (471) | $ (612) | $ 2,915 |
Effective tax rate | (111.10%) | 6.00% | (7.20%) | (6.60%) |
Statutory tax rate | 21.00% | 21.00% |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation - Additional Information (Details) | Oct. 02, 2021USD ($)shares | Jun. 30, 2021shares | Jun. 17, 2021USD ($) | May 25, 2021shares | May 03, 2021USD ($)shares | Apr. 28, 2021shares | Apr. 19, 2021shares | Mar. 19, 2020USD ($)shares | Oct. 02, 2021USD ($)shares | Sep. 26, 2020USD ($) | Oct. 02, 2021USD ($)shares | Sep. 26, 2020USD ($)shares | Jan. 02, 2021shares |
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Stock issued, equity contributions | $ 50,000,000 | $ 470,108,000 | $ 50,000,000 | ||||||||||
Stockholders' equity, forward stock split description | effected a one-to-20.5 forward stock split | ||||||||||||
Stockholders' equity, forward stock split | 20.5 | ||||||||||||
Common stock, authorized | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||||
Preferred stock, authorized | shares | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||
Net proceeds from IPO | $ 477,700,000 | ||||||||||||
Offering expenses | $ 5,473,000 | ||||||||||||
Performance-Vesting Options | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Compensation expense | $ 0 | 0 | |||||||||||
Incremental fair value resulting from modification | $ 8,800,000 | ||||||||||||
Unrecognized compensation expense | $ 6,100,000 | $ 4,400,000 | $ 6,100,000 | 6,100,000 | |||||||||
Performance-Vesting Options | Corporate and Branch and Regional Administrative Expenses | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Compensation expense | 3,600,000 | 400,000 | |||||||||||
Deferred Restricted Stock Units | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Compensation expense | 200,000 | $ 200,000 | |||||||||||
Vesting period | 1 year | ||||||||||||
Unrecognized compensation expense | 500,000 | 500,000 | $ 500,000 | ||||||||||
Deferred Restricted Stock Units | Members of Board of Directors | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Shares awarded | shares | 52,545 | ||||||||||||
Initial Public Offering | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Stock issued, shares | shares | 42,236,000 | ||||||||||||
Offering expenses | $ 7,600,000 | ||||||||||||
Initial Public Offering | Performance-Vesting Options | Corporate and Branch and Regional Administrative Expenses | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Compensation expense | $ 3,200,000 | ||||||||||||
Underwriters Overallotment Option | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Stock issued, shares | shares | 4,000,000 | ||||||||||||
Employee Stock Purchase Plan | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Shares authorized for issuance | shares | 5,404,926 | ||||||||||||
Purchase price, as percentage of closing price of common stock | 85.00% | ||||||||||||
ESPP purchase | $ 600,000 | 600,000 | 600,000 | ||||||||||
Cash contribution to plan | 1,100,000 | ||||||||||||
Employee Stock Purchase Plan | Corporate and Branch and Regional Administrative Expenses | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Compensation expense | $ 400,000 | 400,000 | |||||||||||
Common Stock | |||||||||||||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | |||||||||||||
Stock issued, equity contributions | $ 422,000 | $ 51,000 | |||||||||||
Stock issued, shares | shares | 5,124,995 | 42,236,000 | 5,124,995 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Oct. 01, 2021 | Sep. 30, 2021 | Aug. 06, 2020 | Feb. 19, 2020 | Oct. 02, 2021 | Jan. 02, 2021 | Dec. 20, 2019 | Dec. 24, 2018 |
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | $ 1,000,000 | $ 500,000 | ||||||
Professional malpractice claims, per claim and annual aggregate limits | $ 5,500,000 | $ 6,000,000 | ||||||
Insurance reserves | $ 79,100,000 | $ 74,600,000 | ||||||
Settlement agreement, legal claim | $ 50,000,000 | |||||||
Provision for transaction termination fee | $ 75,000,000 | |||||||
Break-up fee due to Seller | $ 0 | |||||||
Escrow funds | $ 7,100,000 | |||||||
Name of defendants | Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”) | |||||||
Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages sought value | 24,000,000 | |||||||
Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages sought value | $ 50,000,000 | |||||||
Professional Malpractice Claims | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance reserves | $ 42,500,000 | 38,500,000 | ||||||
Surety Bonds | ||||||||
Loss Contingencies [Line Items] | ||||||||
Collaterals | 2,900,000 | 2,900,000 | ||||||
Cash Collateral | ||||||||
Loss Contingencies [Line Items] | ||||||||
Collaterals | 2,900,000 | 2,900,000 | ||||||
Letters of Credit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Collaterals | 18,800,000 | 18,800,000 | ||||||
Workers Compensation Insurance | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | 500,000 | |||||||
Insurance reserves | $ 36,600,000 | $ 36,100,000 |
Covid 19 - Additional Informati
Covid 19 - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | 20 Months Ended | ||||
Oct. 02, 2021 | Jan. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | Feb. 04, 2021 | Apr. 30, 2020 | Apr. 01, 2013 | |
Covid 19 CARES Act [Line Items] | |||||||
Provider relief fund payments received CARES Act | $ 25,100 | ||||||
Incremental percentage of deferred payment of employer portion of social security taxes | 50.00% | ||||||
Deferred social security tax CARES Act | $ 51,400 | ||||||
Medicare | |||||||
Covid 19 CARES Act [Line Items] | |||||||
Gross advance received for expansion of accelerated payments program in CARES Act | $ 15,700 | ||||||
Percentage of repayments due for first eleven months | 25.00% | ||||||
Percentage of payments recouped rate for another six months | 50.00% | ||||||
Repayment of advances received in CARES Act | $ 8,800 | ||||||
Percentage of reduction in payments | 2.00% | ||||||
Remaining unpaid advances | $ 6,900 | ||||||
Scenario Forecast | |||||||
Covid 19 CARES Act [Line Items] | |||||||
Percentage of social security tax due CARES Act | 50.00% | 50.00% | |||||
Scenario Forecast | Medicare | |||||||
Covid 19 CARES Act [Line Items] | |||||||
Percentage of reduction of claim reimbursements | 2.00% | ||||||
Pennsylvania DHS | |||||||
Covid 19 CARES Act [Line Items] | |||||||
Stimulus funds received CARES Act | 4,800 | ||||||
Stimulus funds recognized as income CARES Act | 500 | ||||||
Stimulus funds included in government stimulus liabilities CARES Act | 4,300 | ||||||
Direct stimulus fund repaid CARES Act | $ 4,300 | ||||||
Other Than Pennsylvania | |||||||
Covid 19 CARES Act [Line Items] | |||||||
Stimulus funds received CARES Act | $ 0 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Related Party Transaction [Line Items] | |||||
Management fees and expenses | $ 800,000 | $ 800,000 | $ 2,400,000 | ||
Amounts owed in connection with advisory services agreements | $ 0 | 0 | $ 1,600,000 | ||
Fees for revenue cycle vendor eligibility and clearing house billing services | 100,000 | $ 100,000 | 300,000 | $ 400,000 | |
Amount owed to revenue cycle vendor | $ 0 | $ 0 | $ 0 | ||
2021 Extended Term Loan | |||||
Related Party Transaction [Line Items] | |||||
Shareholders ownership percentage | 6.80% | 6.80% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Oct. 02, 2021Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 411,276 | $ 366,003 | $ 1,264,548 | $ 1,072,803 |
Cost of revenue, excluding depreciation and amortization | 271,534 | 251,873 | 846,534 | 744,503 |
Gross margin | $ 139,742 | $ 114,130 | $ 418,014 | $ 328,300 |
Gross margin percentage | 34.00% | 31.20% | 33.10% | 30.60% |
PDS | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 327,133 | $ 328,985 | $ 1,027,640 | $ 963,694 |
Cost of revenue, excluding depreciation and amortization | 226,540 | 231,454 | 719,435 | 683,492 |
Gross margin | $ 100,593 | $ 97,531 | $ 308,205 | $ 280,202 |
Gross margin percentage | 30.70% | 29.60% | 30.00% | 29.10% |
HHH | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 47,000 | $ 4,690 | $ 128,589 | $ 13,823 |
Cost of revenue, excluding depreciation and amortization | 24,130 | 2,774 | 67,224 | 8,273 |
Gross margin | $ 22,870 | $ 1,916 | $ 61,365 | $ 5,550 |
Gross margin percentage | 48.70% | 40.90% | 47.70% | 40.20% |
MS | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 37,143 | $ 32,328 | $ 108,319 | $ 95,286 |
Cost of revenue, excluding depreciation and amortization | 20,864 | 17,645 | 59,875 | 52,738 |
Gross margin | $ 16,279 | $ 14,683 | $ 48,444 | $ 42,548 |
Gross margin percentage | 43.80% | 45.40% | 44.70% | 44.70% |
Segment Information - Summary_2
Segment Information - Summary of Segment Reconciliation (Details) - USD ($) $ in Thousands | Jul. 15, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 |
Segment Reconciliation: | |||||
Total segment gross margin | $ 139,742 | $ 114,130 | $ 418,014 | $ 328,300 | |
Branch and regional administrative expenses | 76,370 | 59,641 | 223,462 | 174,455 | |
Corporate expenses | $ 7,000 | 37,873 | 32,493 | 97,673 | 81,039 |
Goodwill impairment | 75,727 | ||||
Depreciation and amortization | 5,145 | 3,922 | 15,163 | 12,339 | |
Acquisition-related costs | 2,007 | 4,510 | 4,779 | 4,679 | |
Other operating expenses | 687 | 1,274 | |||
Operating income (loss) | 18,347 | 12,877 | 76,937 | (21,213) | |
Interest income | 44 | 38 | 182 | 247 | |
Interest expense | (12,106) | (19,065) | (53,793) | (58,972) | |
Loss on debt extinguishment | $ (400) | (4,784) | (13,702) | (73) | |
Other (expense) income | (511) | (1,723) | (1,088) | 35,608 | |
Income (loss) before income taxes | $ 990 | $ (7,873) | $ 8,536 | $ (44,403) |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Numerator: | ||||
Net income (loss) | $ 2,090 | $ (7,402) | $ 9,148 | $ (47,318) |
Denominator: | ||||
Weighted average shares of common stock outstanding, basic | 184,554 | 142,123 | 165,877 | 140,559 |
Net income (loss) per share, basic | $ 0.01 | $ (0.05) | $ 0.06 | $ (0.34) |
Weighted average shares of common stock outstanding, diluted | 188,246 | 142,123 | 170,667 | 140,559 |
Net income (loss) per share, diluted | $ 0.01 | $ (0.05) | $ 0.05 | $ (0.34) |
Stock Options | ||||
Denominator: | ||||
Dilutive securities outstanding not included in the computation of diluted net income (loss) per share as their effect is antidilutive | 6,885 | 13,950 | 6,360 | 13,950 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - USD ($) $ in Millions | Nov. 14, 2021 | Nov. 12, 2021 |
Securitization Facility | ||
Subsequent Event [Line Items] | ||
Maximum amount available under securitization facility | $ 150 | |
Termination date of agreement | Nov. 12, 2024 | |
Stock Purchase Agreement with Dunn & Berger, Inc. | ||
Subsequent Event [Line Items] | ||
Base purchase price | $ 180 | |
Potential additional consideration | $ 45 |