Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2024 | May 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 30, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-28 | |
Entity Registrant Name | Aveanna Healthcare Holdings Inc. | |
Entity Central Index Key | 0001832332 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 192,378,711 | |
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 | Mar. 30, 2024 | Dec. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 42,607 | $ 43,942 |
Patient accounts receivable | 257,544 | 236,558 |
Receivables under insured programs | 11,024 | 9,250 |
Prepaid expenses | 16,030 | 15,684 |
Other current assets | 8,831 | 9,452 |
Total current assets | 336,036 | 314,886 |
Property and equipment, net | 19,424 | 20,548 |
Operating lease right of use assets | 47,686 | 49,499 |
Goodwill | 1,054,552 | 1,054,552 |
Intangible assets, net | 93,364 | 94,010 |
Receivables under insured programs | 24,991 | 21,315 |
Other long-term assets | 66,899 | 58,175 |
Total assets | 1,642,952 | 1,612,985 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 43,175 | 30,130 |
Accrued payroll and employee benefits | 68,953 | 67,160 |
Current portion of insurance reserves - insured programs | 11,024 | 9,250 |
Current portion of insurance reserves | 20,258 | 20,918 |
Securitization obligations | 165,000 | 155,000 |
Current portion of long-term obligations | 9,200 | 9,200 |
Current portion of operating lease liabilities | 15,440 | 14,881 |
Other current liabilities | 48,880 | 48,219 |
Total current liabilities | 381,930 | 354,758 |
Long-term obligations, less current portion | 1,275,127 | 1,276,341 |
Long-term insurance reserves - insured programs | 24,991 | 21,315 |
Long-term insurance reserves | 46,629 | 40,290 |
Operating lease liabilities, less current portion | 39,137 | 39,818 |
Deferred income taxes | 5,473 | 4,859 |
Other long-term liabilities | 3,803 | 3,039 |
Total liabilities | 1,777,090 | 1,740,420 |
Commitments and contingencies (Note 10) | ||
Deferred restricted stock units | 2,135 | 2,135 |
Stockholders' deficit: | ||
Preferred stock, $0.01 par value as of March 30, 2024 and December 30, 2023 5,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 192,378,711 and 190,733,153 issued and outstanding, respectively | 1,923 | 1,907 |
Additional paid-in capital | 1,244,210 | 1,239,757 |
Accumulated deficit | (1,382,406) | (1,371,234) |
Total stockholders' deficit | (136,273) | (129,570) |
Total liabilities, deferred restricted stock units, and stockholders' deficit | $ 1,642,952 | $ 1,612,985 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 30, 2024 | Dec. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 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 | 192,378,711 | 190,733,153 |
Common stock, outstanding | 192,378,711 | 190,733,153 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 490,653 | $ 466,413 |
Cost of revenue, excluding depreciation and amortization | 344,799 | 321,948 |
Branch and regional administrative expenses | 87,914 | 91,708 |
Corporate expenses | 29,842 | 30,935 |
Depreciation and amortization | 2,912 | 4,041 |
Acquisition-related costs | 70 | |
Other operating expense | 2,320 | 72 |
Operating income | 22,866 | 17,639 |
Interest income | 102 | 75 |
Interest expense | (39,647) | (35,958) |
Other income (expense) | 18,169 | (12,188) |
Income (loss) before income taxes | 1,490 | (30,432) |
Income tax expense | (12,662) | (1,566) |
Net loss | $ (11,172) | $ (31,998) |
Net loss per share: | ||
Net loss per share, basic | $ (0.06) | $ (0.17) |
Net loss per share, diluted | $ (0.06) | $ (0.17) |
Weighted average shares of common stock outstanding, basic | 192,241 | 189,054 |
Weighted average shares of common stock outstanding, diluted | 192,241 | 189,054 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2022 | $ (6,310) | $ 1,888 | $ 1,228,512 | $ (1,236,710) |
Beginning Balance (shares) at Dec. 31, 2022 | 188,859,165 | |||
Non-cash share-based compensation | 2,442 | 2,442 | ||
Net loss | (31,998) | (31,998) | ||
Ending Balance at Apr. 01, 2023 | (35,866) | $ 1,888 | 1,230,954 | (1,268,708) |
Ending Balance (in shares) at Apr. 01, 2023 | 188,859,165 | |||
Beginning Balance at Dec. 30, 2023 | (129,570) | $ 1,907 | 1,239,757 | (1,371,234) |
Beginning Balance (shares) at Dec. 30, 2023 | 190,733,153 | |||
Employee stock purchase plan | 1,349 | $ 10 | 1,339 | |
Employee stock purchase plan (shares) | 1,010,635 | |||
Issuance of vested restricted shares | $ 6 | (6) | ||
Issuance of vested restricted shares (shares) | 634,923 | |||
Non-cash share-based compensation | 3,120 | 3,120 | ||
Net loss | (11,172) | (11,172) | ||
Ending Balance at Mar. 30, 2024 | $ (136,273) | $ 1,923 | $ 1,244,210 | $ (1,382,406) |
Ending Balance (in shares) at Mar. 30, 2024 | 192,378,711 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (11,172) | $ (31,998) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 2,912 | 4,041 |
Amortization of deferred debt issuance costs | 1,223 | 1,421 |
Amortization of operating lease right of use assets | 6,233 | 4,236 |
Non-cash share-based compensation | 4,081 | 2,442 |
Loss on disposal or impairment of licenses, property and equipment, and software | 229 | 68 |
Fair value adjustments on interest rate derivatives | (8,276) | 18,537 |
Deferred income taxes | 614 | 594 |
Changes in operating assets and liabilities, net of impact of acquisitions: | ||
Patient accounts receivable | (20,986) | (20,595) |
Prepaid expenses | (346) | (1,500) |
Other current and long-term assets | (4,308) | (4,441) |
Accounts payable and other accrued liabilities | 13,065 | (1,763) |
Accrued payroll and employee benefits | 1,793 | 18,316 |
Insurance reserves | 5,679 | 1,960 |
Operating lease liabilities | (4,542) | (1,005) |
Other current and long-term liabilities | 1,829 | 17,182 |
Net cash (used in) provided by operating activities | (11,972) | 7,495 |
Cash Flows From Investing Activities: | ||
Purchase of certificates of need | (2,678) | |
Purchases of property and equipment, and software | (1,308) | (2,122) |
Net cash used in investing activities | (1,308) | (4,800) |
Cash Flows From Financing Activities: | ||
Proceeds from employee stock purchase plan | 1,349 | |
Proceeds from securitization obligation | 20,000 | 35,000 |
Repayment of securitization obligation | (10,000) | (20,000) |
Proceeds from revolving credit facility | 20,000 | |
Repayments on revolving credit facility | (20,000) | |
Principal payments on term loans | (2,300) | (2,300) |
Principal payments on notes payable | (1,383) | (3,192) |
Principal payments on financing lease obligations | (65) | (206) |
Settlements with interest rate swap counterparties | 4,344 | 3,219 |
Net cash provided by financing activities | 11,945 | 12,521 |
Net change in cash and cash equivalents | (1,335) | 15,216 |
Cash and cash equivalents at beginning of period | 43,942 | 19,217 |
Cash and cash equivalents at end of period | 42,607 | 34,433 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 38,491 | 24,196 |
Cash paid for income taxes, net of refunds received | $ (64) | $ (386) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (11,172) | $ (31,998) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | |
Mar. 30, 2024 | Sep. 30, 2023 | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the quarter ended March 30, 2024, none of the directors or officers of the Company adopted , modified , or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1 (c) under the Exchange Act or any "non-Rule 10b5-1 trading arrangement", as defined in Item 408 of Regulation S-K. | |
Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Rule 10b5-1 Arrangement Modified | false | |
Non-Rule 10b5-1 Arrangement Modified | false |
Description of Business
Description of Business | 3 Months Ended |
Mar. 30, 2024 | |
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 33 states with concentrations in California, Texas and Pennsylvania, providing a broad range of pediatric and adult healthcare services including nursing, hospice, 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. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 30, 2024 | |
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 interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the interim unaudited consolidated financial statements from their respective dates of acquisition. Basis of Presentation The accompanying interim 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 March 30, 2024 and the results of operations for the three-month periods ended March 30, 2024 and April 1, 2023, 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 future period or the year ending December 28, 2024. 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 fiscal year ended December 30, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024. 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 interim unaudited consolidated balance sheets reflect the accounts of the Company as of March 30, 2024 and December 30, 2023. For the three-month periods ended March 30, 2024 and April 1, 2023, the interim unaudited consolidated statements of operations, stockholders' deficit, and cash flows reflect the accounts of the Company from December 31, 2023 through March 30, 2024 and January 1, 2023 through April 1, 2023 , respectively. Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the interim unaudited consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these interim unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The standard improves reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit (referred to as the “significant expense principle”). The standard will become effective for the fiscal year 2024 annual financial statements and interim financial statements thereafter and will be applied retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company plans to adopt the standard when it becomes effective, beginning with the Company's fiscal year 2024 annual financial statements, and is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The standard enhances income tax disclosure requirements for all entities by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. The standard will be effective for the fiscal year 2025 annual financial statements with early adoption permitted. The Company plans to adopt the standard when it becomes effective beginning with the Company's fiscal year 2025 annual financial statements, and the Company expects the adoption of the standard will impact certain of its income tax disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. REVENUE The Company evaluates the nature, amount, timing and uncertainty of revenue and cash flows using the five-step process . The Company uses a portfolio approach to group contracts with similar characteristics and analyze historical cash collection trends. 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) 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; 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’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, non-clinical services, which include employer of record support services 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. 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, 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 did not adjust for the effects of a significant financing component. 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. The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payers and by implicit price concessions which are estimated based on historical collection experience. 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 by management. There were no material revenue adjustments recognized from performance obligations satisfied or partially satisfied in previous periods for the three-month periods ended March 30, 2024 and April 1, 2023, respectively. As of March 30, 2024 and December 30, 2023, estimated contractual adjustments and implicit price concessions of $ 68.5 million and $ 62.6 million, respectively, were recorded as reductions to patient accounts receivable balances to arrive at the estimated collectible revenue and patient accounts receivable. 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-month periods ended March 30, 2024 and April 1, 2023, respectively. The following table presents revenue by payer type as a percentage of total revenue for the three-month periods ended March 30, 2024 and April 1, 2023, respectively: For the three-month periods ended March 30, 2024 April 1, 2023 Medicaid MCO 56.0 % 54.6 % Medicaid 22.3 % 22.5 % Commercial 10.9 % 10.2 % Medicare 10.7 % 12.6 % Self-pay 0.1 % 0.1 % Total revenue 100.0 % 100.0 % |
Long-Term Obligations
Long-Term Obligations | 3 Months Ended |
Mar. 30, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | 4. LONG-TERM OBLIGATIONS Long-term obligations consisted of the following as of March 30, 2024 and December 30, 2023, respectively (dollar amounts in thousands): Instrument Stated Contractual Interest Rate Interest Rate March 30, 2024 December 30, 2023 2021 Extended Term Loan (1) 07/2028 S + 3.75 % 9.19 % $ 897,450 $ 899,750 Second Lien Term Loan (1) 12/2029 S + 7.00 % 12.49 % 415,000 415,000 Revolving Credit Facility (1) 04/2026 S + 3.75 % 9.19 % - - Total principal amount of long-term obligations 1,312,450 1,314,750 Less: unamortized debt issuance costs ( 28,123 ) ( 29,209 ) Total amount of long-term obligations, net of unamortized debt issuance costs 1,284,327 1,285,541 Less: current portion of long-term obligations ( 9,200 ) ( 9,200 ) Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion $ 1,275,127 $ 1,276,341 (1) S = Greater of 0.50% or one-month SOFR , plus a credit spread adjustment The 2021 Extended Term Loan bears interest, at the Company’s election, at a variable interest rate based on either SOFR (subject to a minimum of 0.50 % ), or an alternative base rate ABR (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus a credit spread adjustment ("CSA") of 0.10 % and an applicable margin of 3.75 % for loans accruing interest based on SOFR, and an applicable margin of 2.75 % for loans accruing interest based on ABR. The Revolving Credit Facility bears interest, at the Company’s election, at a variable interest rate based on either SOFR or ABR (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus a CSA of 0.10 % and an applicable margin of 3.75 % for loans accruing interest based on SOFR, and an applicable margin of 2.75 % for loans accruing interest based on ABR. As of March 30, 2024, the principal amount of the 2021 Extended Term Loan and borrowings under the Revolving Credit Facility accrued interest at a rate of 9.19 % . The Second Lien Term Loan bears interest at a rate per annum equal to, at the Company’s election, either (1) an applicable margin (equal to 6.00 %) plus a base rate determined by reference to the highest of (a) 0.50 % per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the SOFR rate for an interest period of one month plus a CSA depending on the interest period plus 1.00 %; or (2) an applicable margin (equal to 7.00 %) plus SOFR and a CSA depending on the interest period; provided that such rate is not lower than a floor of 0.50 %. As of March 30, 2024, the principal amount of the Second Lien Term Loan accrued interest at a rate of 12.49 % . 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 March 30, 2024 and December 30, 2023 was $ 28.1 million and $ 29.2 million, respectively. The Company recognized interest expense related to the amortization of debt issuance costs of $ 1.1 million and $ 1.4 millio n during the three-month periods ended March 30, 2024 and April 1, 2023, respectively. Issued letters of credit as of March 30, 2024 and December 30, 2023 were $ 31.8 million and $ 31.9 million, respectively. There were no swingline loans outstanding as of March 30, 2024 or December 30, 2023. Borrowing capacity under the Company's Revolving Credit Facility was approximately $ 168.2 million as of March 30, 2024 and $ 168.1 million as of December 30, 2023. Available borrowing capacity under the Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 30 % of the total commitment is utilized . The fair value of the Company's long-term obligations was estimated using market-observable inputs from the Company’s comparable peers with public debt, including quoted prices in active markets, which are considered Level 2 inputs. The aggregate fair value of the Company's long-term obligations was $ 1,212.0 million at March 30, 2024. The Company was in compliance with all financial covenants and restrictions under the foregoing instruments at March 30, 2024 . |
Securitization Facility
Securitization Facility | 3 Months Ended |
Mar. 30, 2024 | |
Securitization Facility [Abstract] | |
Securitization Facility | 5. SECURITIZATION FACILITY On November 12, 2021, the Company (through a wholly owned special purpose entity, Aveanna SPV I, LLC) (the “special purpose entity”) and a lending institution entered into a Receivables Financing Agreement, which, as amended, has a maturity date of July 31, 2026 (as amended, the “Securitization Facility”) . The m aximum amount available under the Securitization Facility is $ 175.0 million, subject to certain borrowing base requirements. The Company incurred debt issuance costs of $ 2.4 million in connection with the Securitization Facility, which were capitalized and included in other long-term assets. The Company recognized interest expense related to the amortization of debt issuance costs of $ 0.1 million and $ 0.1 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively. Pursuant to two separate sale agreements, each of which is among Aveanna Healthcare, LLC, as initial servicer, certain of the Company's subsidiaries and the special purpose entity, the subsidiaries sold substantially all of their existing and future accounts receivable balances to the special purpose entity. The special purpose entity uses the accounts receivable balances to collateralize loans made under the Securitization Facility. The Company retains the responsibility of servicing the accounts receivable balances pledged as collateral under the Securitization Facility and provides a performance guaranty. The outstanding balance under the Securitization Facility was $ 165.0 million and $ 155.0 million at March 30, 2024 and December 30, 2023, respectively. The balance accrues interest at a rate equal to the SOFR rate, plus a CSA, plus an applicable margin . The interest rate under the Securitization Facility was 8.93 % at March 30, 2024. The Securitization Facility is accounted for as a collateralized financing activity, rather than a sale of assets; therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities in the interim unaudited consolidated balance sheets; (ii) the consolidated statements of operations reflect the interest expense associated with the collateralized borrowings; and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the consolidated statements of cash flows. The Securitization Facility is included within current liabilities on the interim unaudited consolidated balance sheets as it is collateralized by current patient accounts receivable and not because payments are due within one year of the balance sheet date. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 30, 2024 | |
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 measured at fair value were as follows (amounts in thousands): Fair Value Measurements at March 30, 2024 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreements $ - $ 35,293 $ - $ 35,293 Interest rate swap agreements - 26,460 - 26,460 Total derivative assets $ - $ 61,753 $ - $ 61,753 Fair Value Measurements at December 30, 2023 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreements $ - $ 30,455 $ - $ 30,455 Interest rate swap agreements - 23,022 - 23,022 Total derivative assets $ - $ 53,477 $ - $ 53,477 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 | 3 Months Ended |
Mar. 30, 2024 | |
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 interest rate caps. The Company recognizes derivatives as either assets or liabilities at fair value on the interim unaudited 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 terms of the respective derivatives. The Company currently has two interest rate swap agreements intended to limit its exposure to interest rate risk on its variable rate debt. These swaps expire on June 30, 2026 . Prior to the quarter ended July 1, 2023, the interest rate swap agreements paid a fixed rate of 2.08 % and received the one-month LIBOR rate, subject to a 0.50 % floor. During the quarter ended July 1, 2023, the Company amended its interest rate swap agreements to change the benchmark rate under the agreements from LIBOR to SOFR. Since July 1, 2023, the interest rate swap agreements have paid a fixed rate of 2.03 % and received the one-month SOFR rate, subject to a 0.50 % floor. The aggregate notional amount of the interest rate swaps remained unchanged at $ 520.0 million at March 30, 2024 and December 30, 2023, respectively. The fair value of the interest rate swaps was $ 26.5 million at March 30, 2024 and $ 23.0 million at December 30, 2023 and is included in other long-term assets in the interim unaudited consolidated balance sheets. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income in the consolidated statements of operations, which are included within cash flows from operating activities in the consolidated statements of cash flows. The net settlements incurred with swap counterparties under the swap agreements are recognized through cash flows from financing activities in the consolidated statements of cash flows due to an other-than-insignificant financing element on the interest rate swaps. The Company has interest rate cap agreements with an aggregate notional amount of $ 880.0 million and a cap rate of 3.00 %. The cap agreements have an expiration date of February 28, 2027 . Prior to the quarter ended July 1, 2023, the cap agreements provided that the counterparty would pay the Company the amount by which LIBOR exceeded 3.00 % in a given measurement period. During the quarter ended July 1, 2023, the Company amended its interest rate cap agreements to provide that the counterparty would pay the Company the amount by which SOFR exceeds 2.96 %. The fair value of the interest rate cap agreements was $ 35.3 million at March 30, 2024 and $ 30.5 million at December 30, 2023 and is included in other long-term assets on the interim unaudited consolidated balance sheets. The Company does not apply hedge accounting to interest rate cap agreements and records all mark-to-market adjustments directly to other income in the consolidated statements of operations, which are included within cash flows from operating activities in the consolidated statement of cash flows. The following losses and gains from these derivatives not designated as hedging instruments were recognized in the Company’s consolidated statements of operations for the three-month periods ended March 30, 2024 and April 1, 2023, respectively (amounts in thousands): Statement of Operations For the three-month periods ended Classification March 30, 2024 April 1, 2023 Interest rate cap agreements Other income (expense) $ 4,838 $ ( 11,036 ) Interest rate swap agreements Other income (expense) $ 3,438 $ ( 7,501 ) The Company does not utilize financial instruments for trading or other speculative purposes. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 30, 2024 | |
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 expense of $ 12.7 million and $ 1.6 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively. The Company’s effective tax rate was 849.8 % and negative 5.1 % for the three-month periods ended March 30, 2024 and April 1, 2023, respectively. The effective tax rates for the three-month periods ended March 30, 2024 and April 1, 2023 differed from the statutory rate of 21 % primarily due to increased current federal and state taxes resulting from certain non-deductible expenses, most notably interest expense, and the changes in the valuation allowance recorded against certain deferred tax assets. For the three-month period ended March 30, 2024, there were no material changes to the Company’s uncertain tax positions. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions in income tax expense in the accompanying consolidated statements of operations. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 9. SHARE-BASED COMPENSATION Pre-IPO Options and Management Restricted Units The Company recorded compensation expense, net of forfeitures, o f $ 0.8 million and $ 0.5 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense as of March 30, 2024 associated with these o utstanding awards was $5 .8 million. Director Restricted Stock Units In February 2024, the Compensation Committee of the Company's Board of Directors (the "Compensation Committee") approved grants of 331,950 restricted stock units, with a grant date per share fair value of $ 2.41 , to certain independent Directors ("Director RSUs"). Director RSUs vest over a one-year period. The Company recorded compensation expense of $ 0.2 million and $ 0.3 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively, which is included in corporate expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense as of March 30, 2024 associated with outstanding director restricted stock units was $ 0.7 million. Long-Term Incentive Plan ("LTIP") During the three-month period ended March 30, 2024, the Compensation Committee approved grants of restricted stock units ("RSUs") and performance stock units ("PSUs") under the Company's 2021 Omnibus Stock Incentive Plan. The RSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. Compensation cost for the RSUs is measured based on the grant date fair value of each share and the number of shares granted and is recognized over the applicable vesting period on a straight-line basis. During the three-month period ended March 30, 2024, the Company granted 2,873,968 RSUs with a grant date per share fair value of $ 2.41 . The PSUs contain a performance criteria based on an adjusted EBITDA target over a three-year performance period. The PSUs are also subject to a three-year service-based cliff vesting schedule commencing on the date of grant . The PSUs have a service and a performance condition and compensation cost is initially measured based on the grant date fair value of each share. Cumulative compensation cost is subsequently adjusted at the end of each reporting period to reflect the current estimation of achieving the performance condition. During the three-month period ended March 30, 2024, the Company granted 2,873,881 PSUs with a weighted average grant date per share fair value of $ 2.41 . Total compensation expense, net of forfeitures, for all outstanding awards under the LTIP described above was $1 .7 million and $ 1.4 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations. Total unrecognized compensation expense for all awards under the LTIP was $18 .9 million as of March 30, 2024. Senior Management Retention Plan ("SMRP") In the second quarter of 2023, the Compensation Committee approved SMRP awards to certain members of management to be paid in the form of RSUs under the 2021 Omnibus Stock Incentive Plan. The awards were granted based on a fixed dollar value for each member of senior management included in the plan. The Company recorded compensation expense, net of forfeitures, of $ 1.0 million during the three-month period ended March 30, 2024, which is included in corporate expenses and branch and regional administrative expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense as of March 30, 2024 associated with the remaining SMRP awards was $ 11.2 million. Employee Stock Purchase Plan During the three-month period ended March 30, 2024, p articipants purchased a total of 1,010,635 shares of common stock at a price of $ 1.33 per share. The Company recorded compensation expense o f $ 0.4 million and $ 0.2 million for the three-month periods ended March 30, 2024 and April 1, 2023, respectively, which is included in corp orate expenses, branch and regional administrative expenses and cost of revenue, excluding depreciation and amortization in the accompanying consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 30, 2024 | |
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 professional malpractice insurance reserves included in the interim unaudited consolidated balance sheets include estimates of the ultimate costs, including third-party legal defense 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 (after the Company satisfies the applicable policy deductible and/or retention), 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. Since October 1, 2023, the Company has m aintained primary commercial insurance coverage on a claims-made basis for professional malpractice claims with a $ 2.0 million per claim deductible and $ 4.5 million per claim and annual aggregate limits. Prior to October 1, 2023, the Company maintained primary commercial insurance coverage on a claims made basis for professional malpractice claims with varying deductibles by policy year from $ 0.5 million to $ 1.5 million on a per claim basis and $ 5.0 million to $ 6.0 million per claim and annual aggregate limits. Moreover, the Company maintains excess insurance coverage for professional malpractice claims to cover any claims over the aggregate limits. 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 March 30, 2024 was comprised of $ 22.7 million of issued letters of credit and $ 0.7 million in cash collateral. Collateral as of December 30, 2023 was comprised of $ 22.7 million of issued letters of credit and $ 0.7 million in cash collateral. As of March 30, 2024, insurance reserves totaling $ 102.9 million were included on the interim unaudited consolidated balance sheets, representing $ 42.0 million and $ 60.9 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. At December 30, 2023, insurance reserves totaling $ 91.8 million were included on the consolidated balance sheets, representing $ 39.4 million and $ 52.4 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. Litigation and Other Current Liabilities 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 Company's acquisition of Epic Health Services Inc. The Company sought damages ranging from $ 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 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 March 10, 2023, the parties entered into a confidential settlement agreement releasing all claims related to this matter and ending all related litigation. The settlement did not have a material impact on the consolidated results of operations. On April 4, 2023, as part of the settlement, the Company funded $ 6.8 million to an escrow account for the purpose of settling certain tax audits with the IRS, which have now been effectively settled with the IRS. On November 23, 2022, a judgment in the amount of $ 19.8 million was rendered against the Company related to a civil litigation matter in Texas. In March 2023, the plaintiffs attempted to enforce the judgment by seeking a writ of garnishment, and $ 18.4 million was garnished from the Company’s cash accounts. The Company promptly obtained and recorded an $ 18.4 million cash collateralized appellate bond with the state trial court, and such court dissolved the writ of garnishment and ordered the return of the previously garnished funds. All previously garnished funds have been returned to the Company. In July 2023, the Company and the plaintiffs reached a confidential settlement agreement wherein the plaintiffs have agreed to release all claims and extinguish the aforementioned judgment in exchange for a settlement payment. The corresponding appeal of the judgment has been discontinued upon finalization of the settlement and the Company has secured the return of the underlying collateral for the aforementioned appellate bond. The settlement did not have a material impact on the consolidated results of operations. On January 18, 2023, an arbitration award in the amount of $ 7.9 million was rendered against the Company related to a claim under the Company's Texas non-subscriber benefit plan. After the trial court entered a judgment to enforce the arbitration award, the Company promptly obtained a $ 9.1 million collateralized appellate bond and intends to avail itself of all appellate options. The ultimate resolution of these litigated matters is not expected to have a material impact on the consolidated financial statements. 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. Healthcare Regulatory Matters Starting on October 30, 2019 the Company has received grand jury 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 that a loss event is not probable and that this matter will not 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 matter. On July 19, 2023, the Company received a Civil Investigation Demand issued by the U.S. Department of Justice, United States Attorney’s Office, Middle District of Alabama (the “AUSA”), requiring the production of documents and information pertaining to Comfort Care Hospice, LLC, an indirect wholly owned subsidiary of the Company, regarding issues of (1) improper submission of claims to Medicare and other federal healthcare programs for service to patients who were ineligible or not properly certified for said healthcare services and (2) improper remuneration to medical directors and skilled nursing facilities for patient referrals in violation of certain federal regulations. The Company is fully cooperating with the AUSA with respect to this investigation, and management believes that a loss event is not probable and that this matter will not 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 matter. 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS As of March 30, 2024, one of the Company’s majority stockholders owned 5.1 % of the Company’s 2021 Extended Term Loan. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | 12. 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. 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, non-clinical 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-month periods ended March 30, 2024 and April 1, 2023 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-month periods ended March 30, 2024 and April 1, 2023, respectively (amounts in thousands): For the three-month period ended March 30, 2024 PDS HHH MS Total Revenue $ 395,009 $ 54,613 $ 41,031 $ 490,653 Cost of revenue, excluding depreciation and amortization 294,874 25,639 24,286 344,799 Gross margin $ 100,135 $ 28,974 $ 16,745 $ 145,854 Gross margin percentage 25.4 % 53.1 % 40.8 % 29.7 % For the three-month period ended April 1, 2023 PDS HHH MS Total Revenue $ 372,947 $ 56,126 $ 37,340 $ 466,413 Cost of revenue, excluding depreciation and amortization 268,763 31,095 $ 22,090 321,948 Gross margin $ 104,184 $ 25,031 $ 15,250 $ 144,465 Gross margin percentage 27.9 % 44.6 % 40.8 % 31.0 % For the three-month periods ended Segment Reconciliation: March 30, 2024 April 1, 2023 Total segment gross margin $ 145,854 $ 144,465 Branch and regional administrative expenses 87,914 91,708 Corporate expenses 29,842 30,935 Depreciation and amortization 2,912 4,041 Acquisition-related costs - 70 Other operating expense 2,320 72 Operating income 22,866 17,639 Interest income 102 75 Interest expense ( 39,647 ) ( 35,958 ) Other income (expense) 18,169 ( 12,188 ) Income (loss) before income taxes $ 1,490 $ ( 30,432 ) |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 30, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share is calculated by dividing net loss by the diluted weighted average number of shares of common stock outstanding for the period. For purposes of this calculation, outstanding stock options RSUs and PSUs are considered potential dilutive shares of common stock. The following is a computation of basic and diluted net loss per share (amounts in thousands, except per share amounts): For the three-month periods ended March 30, 2024 April 1, 2023 Numerator: Net loss $ ( 11,172 ) $ ( 31,998 ) Denominator: Weighted average shares of common stock outstanding (1) , basic and diluted 192,241 189,054 Net loss per share, basic and diluted $ ( 0.06 ) $ ( 0.17 ) Dilutive securities outstanding not included in the computation of diluted net loss per share, as their effect is antidilutive: RSUs 9,709 8,570 PSUs 6,558 4,620 Stock options 13,153 14,236 (1) The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 30, 2024 | |
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 interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the interim unaudited consolidated financial statements from their respective dates of acquisition. |
Basis of Presentation | Basis of Presentation The accompanying interim 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 March 30, 2024 and the results of operations for the three-month periods ended March 30, 2024 and April 1, 2023, 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 future period or the year ending December 28, 2024. 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 fiscal year ended December 30, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024. 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 interim unaudited consolidated balance sheets reflect the accounts of the Company as of March 30, 2024 and December 30, 2023. For the three-month periods ended March 30, 2024 and April 1, 2023, the interim unaudited consolidated statements of operations, stockholders' deficit, and cash flows reflect the accounts of the Company from December 31, 2023 through March 30, 2024 and January 1, 2023 through April 1, 2023 , respectively. |
Use of Estimates | Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the interim unaudited consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these interim unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The standard improves reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit (referred to as the “significant expense principle”). The standard will become effective for the fiscal year 2024 annual financial statements and interim financial statements thereafter and will be applied retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company plans to adopt the standard when it becomes effective, beginning with the Company's fiscal year 2024 annual financial statements, and is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The standard enhances income tax disclosure requirements for all entities by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. The standard will be effective for the fiscal year 2025 annual financial statements with early adoption permitted. The Company plans to adopt the standard when it becomes effective beginning with the Company's fiscal year 2025 annual financial statements, and the Company expects the adoption of the standard will impact certain of its income tax disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Payer Type as a Percentage of Revenue | The following table presents revenue by payer type as a percentage of total revenue for the three-month periods ended March 30, 2024 and April 1, 2023, respectively: For the three-month periods ended March 30, 2024 April 1, 2023 Medicaid MCO 56.0 % 54.6 % Medicaid 22.3 % 22.5 % Commercial 10.9 % 10.2 % Medicare 10.7 % 12.6 % Self-pay 0.1 % 0.1 % Total revenue 100.0 % 100.0 % |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | Long-term obligations consisted of the following as of March 30, 2024 and December 30, 2023, respectively (dollar amounts in thousands): Instrument Stated Contractual Interest Rate Interest Rate March 30, 2024 December 30, 2023 2021 Extended Term Loan (1) 07/2028 S + 3.75 % 9.19 % $ 897,450 $ 899,750 Second Lien Term Loan (1) 12/2029 S + 7.00 % 12.49 % 415,000 415,000 Revolving Credit Facility (1) 04/2026 S + 3.75 % 9.19 % - - Total principal amount of long-term obligations 1,312,450 1,314,750 Less: unamortized debt issuance costs ( 28,123 ) ( 29,209 ) Total amount of long-term obligations, net of unamortized debt issuance costs 1,284,327 1,285,541 Less: current portion of long-term obligations ( 9,200 ) ( 9,200 ) Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion $ 1,275,127 $ 1,276,341 (1) S = Greater of 0.50% or one-month SOFR , plus a credit spread adjustment |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Other Assets and Other Liabilities Measured at Fair Value | The Company’s other assets measured at fair value were as follows (amounts in thousands): Fair Value Measurements at March 30, 2024 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreements $ - $ 35,293 $ - $ 35,293 Interest rate swap agreements - 26,460 - 26,460 Total derivative assets $ - $ 61,753 $ - $ 61,753 Fair Value Measurements at December 30, 2023 Level 1 Level 2 Level 3 Total Assets: Interest rate cap agreements $ - $ 30,455 $ - $ 30,455 Interest rate swap agreements - 23,022 - 23,022 Total derivative assets $ - $ 53,477 $ - $ 53,477 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Losses and Gains from Derivatives | The following losses and gains from these derivatives not designated as hedging instruments were recognized in the Company’s consolidated statements of operations for the three-month periods ended March 30, 2024 and April 1, 2023, respectively (amounts in thousands): Statement of Operations For the three-month periods ended Classification March 30, 2024 April 1, 2023 Interest rate cap agreements Other income (expense) $ 4,838 $ ( 11,036 ) Interest rate swap agreements Other income (expense) $ 3,438 $ ( 7,501 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables summarize the Company’s segment information for the three-month periods ended March 30, 2024 and April 1, 2023, respectively (amounts in thousands): For the three-month period ended March 30, 2024 PDS HHH MS Total Revenue $ 395,009 $ 54,613 $ 41,031 $ 490,653 Cost of revenue, excluding depreciation and amortization 294,874 25,639 24,286 344,799 Gross margin $ 100,135 $ 28,974 $ 16,745 $ 145,854 Gross margin percentage 25.4 % 53.1 % 40.8 % 29.7 % For the three-month period ended April 1, 2023 PDS HHH MS Total Revenue $ 372,947 $ 56,126 $ 37,340 $ 466,413 Cost of revenue, excluding depreciation and amortization 268,763 31,095 $ 22,090 321,948 Gross margin $ 104,184 $ 25,031 $ 15,250 $ 144,465 Gross margin percentage 27.9 % 44.6 % 40.8 % 31.0 % For the three-month periods ended Segment Reconciliation: March 30, 2024 April 1, 2023 Total segment gross margin $ 145,854 $ 144,465 Branch and regional administrative expenses 87,914 91,708 Corporate expenses 29,842 30,935 Depreciation and amortization 2,912 4,041 Acquisition-related costs - 70 Other operating expense 2,320 72 Operating income 22,866 17,639 Interest income 102 75 Interest expense ( 39,647 ) ( 35,958 ) Other income (expense) 18,169 ( 12,188 ) Income (loss) before income taxes $ 1,490 $ ( 30,432 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Loss Per Share | The following is a computation of basic and diluted net loss per share (amounts in thousands, except per share amounts): For the three-month periods ended March 30, 2024 April 1, 2023 Numerator: Net loss $ ( 11,172 ) $ ( 31,998 ) Denominator: Weighted average shares of common stock outstanding (1) , basic and diluted 192,241 189,054 Net loss per share, basic and diluted $ ( 0.06 ) $ ( 0.17 ) Dilutive securities outstanding not included in the computation of diluted net loss per share, as their effect is antidilutive: RSUs 9,709 8,570 PSUs 6,558 4,620 Stock options 13,153 14,236 (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) | Mar. 30, 2024 State |
Subsidiary, Sale of Stock [Line Items] | |
Number of states in which entity locations | 33 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 30, 2024 | Apr. 01, 2023 | Dec. 30, 2023 | |
Revenue Disclosure [Line Items] | |||
Estimated contractual adjustments and price concessions | $ 68,500,000 | $ 62,600,000 | |
Bad debt expense | $ 0 | $ 0 | |
Maximum | |||
Revenue Disclosure [Line Items] | |||
Revenue, performance obligation, expected timing of satisfaction, period | 1 year |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Payer Type as a Percentage of Revenue (Details) - Customer Concentration Risk - Total revenue | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 100% | 100% |
Medicaid MCO | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 56% | 54.60% |
Medicaid | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 22.30% | 22.50% |
Commercial | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 10.90% | 10.20% |
Medicare | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 10.70% | 12.60% |
Self-pay | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 0.10% | 0.10% |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Goodwill by Segment (Details) $ in Thousands | Mar. 30, 2024 USD ($) |
Goodwill [Line Items] | |
Balance at December 31, 2022, net | $ 1,054,552 |
Balance at September 30, 2023, net | $ 1,054,552 |
Long-Term Obligations - Schedul
Long-Term Obligations - Schedule of Long-Term Obligations and Notes Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Dec. 30, 2023 | |
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 1,312,450 | $ 1,314,750 |
Less: unamortized debt issuance costs | (28,123) | (29,209) |
Total amount of long-term obligations, net of unamortized debt issuance costs | 1,284,327 | 1,285,541 |
Less: current portion of long-term obligations | (9,200) | (9,200) |
Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion | 1,275,127 | 1,276,341 |
Second Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 415,000 | 415,000 |
Stated Maturity Date | 2029-12 | |
Contractual Interest Rate | S + 7.00% | |
Interest Rate | 12.49% | |
Second Lien Term Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 7% | |
2021 Extended Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations | $ 897,450 | $ 899,750 |
Stated Maturity Date | 2028-07 | |
Contractual Interest Rate | S + 3.75% | |
Interest Rate | 9.19% | |
2021 Extended Term Loan | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate margin on borrowings | 3.75% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Stated Maturity Date | 2026-04 | |
Contractual Interest Rate | S + 3.75% | |
Interest Rate | 9.19% | |
Revolving Credit Facility | SOFR | ||
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) | 3 Months Ended |
Mar. 30, 2024 | |
Second Lien Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | S = Greater of 0.50% or one-month SOFR |
2021 Extended Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument, description of contractual interest rate | S = Greater of 0.50% or one-month SOFR |
Long-Term Obligations - Additio
Long-Term Obligations - Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Dec. 10, 2021 | Jul. 15, 2021 | Mar. 30, 2024 | Mar. 30, 2023 | Dec. 30, 2023 | |
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 28,123,000 | $ 29,209,000 | |||
Fair value of long-term obligations | 1,212,000,000 | ||||
Swingline loans | 0 | 0 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 168,200,000 | 168,100,000 | |||
Finance leverage covenant minimum percentage utilization of commitment | 30% | ||||
Revolving Credit Facility | SOFR | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 3.75% | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Issued letter of credit | $ 31,800,000 | 31,900,000 | |||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 28,100,000 | $ 29,200,000 | |||
Second Lien Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest Rate | 12.49% | ||||
Debt instrument minimum floor rate percentage | 0.50% | ||||
Second Lien Term Loan | SOFR | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 7% | ||||
Second Lien Term Loan | SOFR and CSA | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 7% | ||||
Second Lien Term Loan | SOFR One Month Plus CSA | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 1% | ||||
Second Lien Term Loan | Annual Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 6% | ||||
Second Lien Term Loan | Federal Funds Effective Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 0.50% | ||||
2021 Extended Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest Rate | 9.19% | ||||
2021 Extended Term Loan | SOFR | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 3.75% | ||||
2021 Extended Term Loan and Delayed Draw Term Loan Facility | SOFR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instruments, variable interest rate | 0.50% | ||||
2021 Extended Term Loan and Delayed Draw Term Loan Facility | SOFR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate margin on borrowings | 3.75% | ||||
2021 Extended Term Loan and Delayed Draw Term Loan Facility | CSA | |||||
Debt Instrument [Line Items] | |||||
Debt instruments, variable interest rate | 0.10% | ||||
2021 Extended Term Loan and Delayed Draw Term Loan Facility | Annual Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instruments, variable interest rate | 2% | ||||
Interest rate margin on borrowings | 2.75% | ||||
Amended First Lien Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Interest expense related to amortization of debt issuance costs | $ 1,100,000 | $ 1,400,000 |
Securitization Facility - Addit
Securitization Facility - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Jul. 31, 2023 | Mar. 30, 2024 | Apr. 01, 2023 | Dec. 30, 2023 | Nov. 12, 2021 | |
Debt Instrument [Line Items] | |||||
Outstanding balance | $ 1,312,450 | $ 1,314,750 | |||
Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum amount available under securitization facility | $ 175,000 | ||||
Debt issuance costs | $ 2,400 | ||||
Interest expense related to amortization of debt issuance costs | 100 | $ 100 | |||
Maturity date | Jul. 31, 2026 | ||||
Outstanding balance | $ 165,000 | $ 155,000 | |||
Securitization Facility | Bloomberg Short-term Bank Yield Index | |||||
Debt Instrument [Line Items] | |||||
Interest rate under facility | 8.93% |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Other Assets and Other Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 30, 2023 |
Assets: | ||
Total derivative assets | $ 61,753 | $ 53,477 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Level 2 | ||
Assets: | ||
Total derivative assets | $ 61,753 | $ 53,477 |
Interest Rate Cap Agreements | ||
Assets: | ||
Total derivative assets | 35,293 | 30,455 |
Interest Rate Cap Agreements | Level 2 | ||
Assets: | ||
Total derivative assets | 35,293 | 30,455 |
Interest Rate Swap Agreements | ||
Assets: | ||
Total derivative assets | 26,460 | 23,022 |
Interest Rate Swap Agreements | Level 2 | ||
Assets: | ||
Total derivative assets | $ 26,460 | $ 23,022 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) | 1 Months Ended | ||||||
Feb. 09, 2022 USD ($) | Jul. 31, 2021 | Mar. 30, 2024 USD ($) | Dec. 30, 2023 USD ($) | Jul. 01, 2023 | Apr. 01, 2023 | Oct. 31, 2018 Swap | |
Other Long-Term Assets | |||||||
Derivative [Line Items] | |||||||
Fair value of interest rate swaps | $ 26,500,000 | $ 23,000,000 | |||||
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 | 2.03% | 2.08% | |||||
Derivative, floor interest rate | 0.50% | 0.50% | |||||
Interest Rate Swap Agreements | |||||||
Derivative [Line Items] | |||||||
Number of interest rate swap agreement | Swap | 2 | ||||||
Interest Rate Cap Agreements | |||||||
Derivative [Line Items] | |||||||
Aggregate notional amount | $ 880,000,000 | ||||||
Fair value of interest rate swaps | $ 35,300,000 | $ 30,500,000 | |||||
Derivative expiration date | Feb. 28, 2027 | ||||||
Derivative, cap interest rate | 3% | 2.96% | 3% |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Losses and Gains from Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Derivative Instruments Gain Loss [Line Items] | ||
Derivative gain (loss) | $ 8,276 | $ (18,537) |
Interest Rate Cap Agreements | Not Designated as Hedging Instruments | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative gain (loss) | $ 4,838 | $ (11,036) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Interest Rate Swap Agreement | Not Designated as Hedging Instruments | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative gain (loss) | $ 3,438 | $ (7,501) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 12,662 | $ 1,566 |
Effective tax rate | 849.80% | (5.10%) |
Statutory tax rate | 21% | 21% |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2024 | Mar. 30, 2024 | Apr. 01, 2023 | |
Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense, net of forfeitures | $ 1.7 | $ 1.4 | |
Unrecognized compensation expense | 18.9 | ||
Senior Management Retention Plan | Management | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 1 | ||
Unrecognized compensation expense | 11.2 | ||
Pre-IPO Options and Management Restricted Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 0.8 | 0.5 | |
Unrecognized compensation expense | 0.8 | ||
Restricted Stock Units | Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 0.2 | 0.3 | |
Unrecognized compensation expense | $ 0.7 | ||
Shares awarded | 331,950 | ||
Weighted average grant date fair value of options granted | $ 2.41 | ||
Vesting period | 1 year | ||
Restricted Stock Units | Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted | 2,873,968 | ||
Fair value of shares granted | $ 2.41 | ||
Performance Stock Units | Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted | 2,873,881 | ||
Fair value of shares granted | $ 2.41 | ||
Term of award | The PSUs are also subject to a three-year service-based cliff vesting schedule commencing on the date of grant | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP shares purchased | 1,010,635 | ||
Share price | $ 1.33 | ||
Employee Stock Purchase Plan | Corporate Expenses and Branch and Regional Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 0.4 | $ 0.2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
Jan. 18, 2023 | Nov. 23, 2022 | Oct. 01, 2022 | Aug. 06, 2020 | Mar. 16, 2023 | Mar. 30, 2024 | Dec. 30, 2023 | Apr. 04, 2023 | |
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | $ 2 | |||||||
Professional malpractice claims, per claim and annual aggregate limits | $ 4.5 | |||||||
Insurance reserves | $ 102.9 | $ 91.8 | ||||||
Litigation Settlement, Amount | $ 7.9 | |||||||
Escrow funds | $ 7.1 | $ 6.8 | ||||||
Name of defendants | Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”) | |||||||
Texas | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation Settlement, Amount | $ 19.8 | |||||||
Litigation settlement, garnishment of cash | $ 18.4 | |||||||
Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | $ 0.5 | |||||||
Professional malpractice claims, per claim and annual aggregate limits | 5 | |||||||
Damages sought value | 24 | |||||||
Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | 1.5 | |||||||
Professional malpractice claims, per claim and annual aggregate limits | 6 | |||||||
Damages sought value | $ 50 | |||||||
Professional Malpractice Claims | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance reserves | 42 | 39.4 | ||||||
Cash Collateral | ||||||||
Loss Contingencies [Line Items] | ||||||||
Collaterals | 0.7 | 0.7 | ||||||
Appellate Bond | ||||||||
Loss Contingencies [Line Items] | ||||||||
Cash collateralized | $ 9.1 | |||||||
Appellate Bond | Texas | ||||||||
Loss Contingencies [Line Items] | ||||||||
Cash collateralized | $ 18.4 | |||||||
Letters of Credit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Collaterals | 22.7 | 22.7 | ||||||
Workers Compensation Insurance | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance, per claims deductible | 0.5 | |||||||
Insurance reserves | $ 60.9 | $ 52.4 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | Mar. 30, 2024 |
2021 Extended Term Loan | |
Related Party Transaction [Line Items] | |
Shareholders ownership percentage | 5.10% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 30, 2024 Segment | |
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 | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 490,653 | $ 466,413 |
Cost of revenue, excluding depreciation and amortization | 344,799 | 321,948 |
Gross margin | $ 145,854 | $ 144,465 |
Gross margin percentage | 29.70% | 31% |
PDS | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 395,009 | $ 372,947 |
Cost of revenue, excluding depreciation and amortization | 294,874 | 268,763 |
Gross margin | $ 100,135 | $ 104,184 |
Gross margin percentage | 25.40% | 27.90% |
HHH | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 54,613 | $ 56,126 |
Cost of revenue, excluding depreciation and amortization | 25,639 | 31,095 |
Gross margin | $ 28,974 | $ 25,031 |
Gross margin percentage | 53.10% | 44.60% |
MS | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 41,031 | $ 37,340 |
Cost of revenue, excluding depreciation and amortization | 24,286 | 22,090 |
Gross margin | $ 16,745 | $ 15,250 |
Gross margin percentage | 40.80% | 40.80% |
Segment Information - Summary_2
Segment Information - Summary of Segment Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Segment Reconciliation: | ||
Total segment gross margin | $ 145,854 | $ 144,465 |
Branch and regional administrative expenses | 87,914 | 91,708 |
Corporate expenses | 29,842 | 30,935 |
Depreciation and amortization | 2,912 | 4,041 |
Acquisition-related costs | 70 | |
Other operating expense | 2,320 | 72 |
Operating income | 22,866 | 17,639 |
Interest income | 102 | 75 |
Interest expense | (39,647) | (35,958) |
Other income (expense) | 18,169 | (12,188) |
Income (loss) before income taxes | $ 1,490 | $ (30,432) |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Numerator: | ||
Net loss | $ (11,172) | $ (31,998) |
Denominator: | ||
Weighted average shares of common stock outstanding, basic | 192,241 | 189,054 |
Weighted average shares of common stock outstanding, diluted | 192,241 | 189,054 |
Net loss per share, basic | $ (0.06) | $ (0.17) |
Net loss per share, diluted | $ (0.06) | $ (0.17) |
RSUs | ||
Denominator: | ||
Dilutive securities outstanding not included in the computation of diluted net loss per share, as their effect is antidilutive: | 9,709 | 8,570 |
PSUs | ||
Denominator: | ||
Dilutive securities outstanding not included in the computation of diluted net loss per share, as their effect is antidilutive: | 6,558 | 4,620 |
Employee Stock Option | ||
Denominator: | ||
Dilutive securities outstanding not included in the computation of diluted net loss per share, as their effect is antidilutive: | 13,153 | 14,236 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - Securitization Facility - USD ($) $ in Millions | Jul. 31, 2023 | Nov. 12, 2021 |
Subsequent Event [Line Items] | ||
Maturity date | Jul. 31, 2026 | |
Maximum amount available under securitization facility | $ 175 |