Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 03, 2021 | May 25, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 3, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
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 | Apr. 03, 2021 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 67,105 | $ 137,345 |
Patient accounts receivable | 195,720 | 172,887 |
Receivables under insured programs | 8,388 | 7,992 |
Prepaid expenses | 12,609 | 11,080 |
Other current assets | 9,394 | 11,340 |
Total current assets | 293,216 | 340,644 |
Property and equipment, net | 32,168 | 32,650 |
Operating lease right of use assets | 45,231 | 46,217 |
Goodwill | 1,317,340 | 1,316,385 |
Intangible assets, net | 72,266 | 73,572 |
Receivables under insured programs | 25,184 | 23,990 |
Deferred income taxes | 2,931 | 2,931 |
Other long-term assets | 9,426 | 7,627 |
Total assets | 1,797,762 | 1,844,016 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 41,906 | 56,668 |
Accrued payroll and employee benefits | 49,239 | 56,834 |
Accrued interest | 2,476 | 2,398 |
Notes payable | 1,814 | 2,872 |
Current portion of insurance reserves - insured programs | 8,388 | 7,992 |
Current portion of insurance reserves | 13,186 | 12,294 |
Current portion of long-term obligations | 9,910 | 9,910 |
Current portion of operating lease liabilities | 11,312 | 11,884 |
Current portion of deferred payroll taxes | 24,824 | 24,824 |
Government stimulus liabilities | 29,444 | |
Other current liabilities | 44,430 | 45,293 |
Total current liabilities | 207,485 | 260,413 |
Long-term obligations, less current portion | 1,163,059 | 1,163,490 |
Long-term insurance reserves - insured programs | 25,184 | 23,990 |
Long-term insurance reserves | 32,910 | 30,336 |
Operating lease liabilities, less current portion | 39,260 | 40,246 |
Deferred payroll taxes, less current portion | 24,824 | 24,824 |
Deferred income taxes | 3,285 | 2,591 |
Other long-term liabilities | 28,076 | 30,957 |
Total liabilities | 1,524,083 | 1,576,847 |
Commitments and contingencies (Note 10) | ||
Deferred restricted stock units | 2,135 | 2,135 |
Stockholders’ equity: | ||
Preferred stock, no par value, 5,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 1,000,000,000 shares authorized;141,928,184 issued and outstanding, respectively | 1,419 | 1,419 |
Additional paid-in capital | 721,959 | 721,247 |
Accumulated deficit | (451,834) | (457,632) |
Total stockholders’ equity | 271,544 | 265,034 |
Total liabilities, deferred restricted stock units, and stockholders’ equity | $ 1,797,762 | $ 1,844,016 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 03, 2021 | Jan. 02, 2021 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, no par value | ||
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 | 141,928,184 | 141,928,184 |
Common stock, outstanding | 141,928,184 | 141,928,184 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 417,160,000 | $ 355,223,000 |
Cost of revenue, excluding depreciation and amortization | 285,477,000 | 247,682,000 |
Branch and regional administrative expenses | 69,372,000 | 59,694,000 |
Corporate expenses | 27,399,000 | 25,797,000 |
Depreciation and amortization | 4,848,000 | 4,183,000 |
Acquisition-related costs | 1,768,000 | 0 |
Operating income | 28,296,000 | 17,867,000 |
Interest income | 77,000 | 46,000 |
Interest expense | (22,425,000) | (21,063,000) |
Gain on debt extinguishment | 127,000 | |
Other income | 159,000 | 41,791,000 |
Income before income taxes | 6,107,000 | 38,768,000 |
Income tax expense | (309,000) | (1,131,000) |
Net income | $ 5,798,000 | $ 37,637,000 |
Income per share: | ||
Net income per share, basic | $ 0.04 | $ 0.27 |
Weighted average shares of common stock outstanding, basic | 142,122,934 | 137,468,875 |
Net income per share, diluted | $ 0.04 | $ 0.27 |
Weighted average shares of common stock outstanding, diluted | 146,266,014 | 140,330,909 |
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 | 50,000 | $ 51 | 49,949 | |
Issuance of common stock (shares) | 5,124,995 | |||
Non-cash compensation | 318 | 318 | ||
Net income | 37,637 | 37,637 | ||
Ending Balance at Mar. 28, 2020 | 358,147 | $ 1,419 | 719,673 | (362,945) |
Ending Balance (in shares) at Mar. 28, 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 | |||
Non-cash compensation | 712 | 712 | ||
Net income | 5,798 | 5,798 | ||
Ending Balance at Apr. 03, 2021 | $ 271,544 | $ 1,419 | $ 721,959 | $ (451,834) |
Ending Balance (in shares) at Apr. 03, 2021 | 141,928,184 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Cash Flows From Operating Activities: | ||
Net income | $ 5,798 | $ 37,637 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 4,848 | 4,183 |
Amortization of deferred debt issuance costs | 2,140 | 1,744 |
Amortization and impairment of operating lease right of use assets | 3,550 | 3,123 |
Non-cash compensation | 712 | 318 |
(Gain) loss on disposal of licenses, property and equipment | (4) | 48 |
Fair value adjustment on interest rate derivatives | (2,820) | 6,422 |
Gain on debt extinguishment | (127) | |
Deferred income taxes | 694 | 573 |
Changes in operating assets and liabilities, net of impact of acquisitions: | ||
Patient accounts receivable | (22,852) | (1,168) |
Prepaid expenses | (1,684) | 1,760 |
Other current and long-term assets | 1,957 | 2,748 |
Accounts payable and other accrued liabilities | (15,841) | (10,187) |
Accrued payroll and employee benefits | (7,595) | (1,881) |
Accrued interest | 78 | 1,826 |
Insurance reserves | 3,466 | 684 |
Operating lease liabilities | (4,126) | (3,317) |
Deferred payroll taxes | 885 | |
Other current and long-term liabilities | (1,232) | (1,218) |
Net cash (used in) provided by operating activities | (32,911) | 44,053 |
Cash Flows From Investing Activities: | ||
Acquisitions of businesses, net of cash acquired | (500) | |
Purchases of property and equipment | (2,665) | (6,327) |
Net cash used in investing activities | (3,165) | (6,327) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of common stock | 50,000 | |
Proceeds from revolving credit facility | 14,000 | |
Repayments on revolving credit facility | (45,500) | |
Principal payments on term loans and notes payable | (3,535) | (2,677) |
Payment of government stimulus funds | (29,444) | |
Principal payments of financing lease obligations | (203) | (153) |
Payment of debt issuance costs | (196) | (689) |
Payment of deferred offering costs | (786) | |
Net cash (used in) provided by financing activities | (34,164) | 14,981 |
Net (decrease) increase in cash and cash equivalents | (70,240) | 52,707 |
Cash and cash equivalents at beginning of period | 137,345 | 3,327 |
Cash and cash equivalents at end of period | 67,105 | 56,034 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 20,207 | 17,493 |
Acquisition of property and equipment on accrual | 2,520 | $ 4,003 |
Deferred offering costs included in accounts payable and other accrued liabilities | 1,874 | |
Cash paid for income taxes, net of refunds received | $ (202) |
Description of Business
Description of Business | 3 Months Ended |
Apr. 03, 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 operations 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 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 03, 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 April 3, 2021 and the results of operations for the three-month periods ended April 3, 2021 and March 28, 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 April 3, 2021 and January 2, 2021. For the three-month periods ended April 3, 2021 and March 28, 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 April 3, 2021 and December 29, 2019 through March 28, 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 The Company has deferred offering costs, consisting of legal, accounting, filing and other fees and costs directly attributable to the Company’s initial public offering. The deferred offering costs will be offset against the proceeds received upon the closing of the initial public offering. As of April 3, 2021 and January 2, 2021, capitalized deferred offering costs totaled $4.8 million and $2.9 million, respectively, and were included in other long-term assets on the accompanying consolidated balance sheets. See Note 15 – Subsequent Events for additional information regarding the completion of the Company’s initial public offering and its effects. 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 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 In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope |
Revenue
Revenue | 3 Months Ended |
Apr. 03, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. REVENUE Revenue is primarily derived from pediatric healthcare services provided to patients, including private duty nursing, therapy services, and adult home health and hospice services (“patient revenue”) and 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 treatment 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 upon delivery 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 famil ies and patient s by coordinating the reimbursement of authorized medical expenses between certain state-contracted non-profit programs and famil ies and patient s . 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 (“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 April 3, 2021 and January 2, 2021, estimated explicit and implicit price concessions of $56.3 million and $55.4 million, respectively, were recorded as reductions to our patient accounts receivable balances to enable us to record our revenue and patient accounts receivable at the estimated amounts we expected to collect. 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 not record any bad debt expense for the three-month periods ended April 3, 2021 and March 28, 2020, respectively. The Company derives a significant portion of its revenue from Medicaid, Medicaid MCO, and other government 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-month periods ended April 3, 2021 and March 28, 2020, respectively. The following table presents revenue by payer type and as a percentage of revenue for the three-month periods ended April 3, 2021 and March 28, 2020, respectively (in thousands): For the Three-Month Periods Ended April 3, 2021 March 28, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 232,884 55.8 % $ 209,873 59.1 % Medicaid 103,497 24.8 % 94,960 26.7 % Commercial 47,003 11.3 % 41,235 11.6 % Medicare 32,016 7.7 % 8,552 2.4 % Self-pay 1,760 0.4 % 603 0.2 % Total revenue $ 417,160 100.0 % $ 355,223 100.0 % |
Acquisitions
Acquisitions | 3 Months Ended |
Apr. 03, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 4. ACQUISITIONS Acquisitions During the Three-Month Period Ended April 3, 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. Total consideration for the transaction was $0.5 million, which was paid in cash at closing. The total consideration was recorded directly to goodwill on the accompanying consolidated balance sheet. The entire amount of goodwill is deductible for tax purposes. During the three-month period ended April 3, 2021, the Company incurred $1.8 million in transaction costs, including $0.1 million related to the Loma Linda transaction, as well as $1.7 million related to the subsequent acquisition discussed in Note 15 – Subsequent Events. These costs are included in acquisition-related costs in the accompanying consolidated statement of operations. The Company did not incur any acquisition-related costs during the three-month period ended March 28, 2020. Pro forma financial information related to the Loma Linda acquisition has not been provided as it is not material to the Company’s consolidated results of operations. The results of operations of the Loma Linda acquisition are included in the Company’s consolidated results of operations from the date of acquisition and were not significant for the three-month period ended April 3, 2021. |
Long-Term Obligations and Notes
Long-Term Obligations and Notes Payable | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations and Notes Payable | 5 . LONG-TERM OBLIGATIONS AND NOTES PAYABLE Long-term obligations and notes payable consisted of the following as of April 3, 2021 Instrument Stated Maturity Date Contractual Interest Rate (1) Interest Rate as of April 3, 2021 April 3, 2021 January 2, 2021 Term loan - First Lien Term Loan 03/2024 L + 4.25% 5.25% $ 561,600 $ 563,061 Term loan - First Lien Term Loan Amendment 03/2024 L + 5.5% 6.50% 216,580 217,133 Term loan - First Lien Term Loan Fourth Amendment 03/2024 L + 6.25% 7.25% 184,075 184,538 Subordinated term loan - Second Lien Term Loan 03/2025 L + 8.0% 9.00% 240,000 240,000 Revolving Credit Facility 03/2023 L + 4.25% 5.25% - - Notes payable - finance agreements 09/2021 2.07% 2.07% 1,814 2,872 Total principal amount of long-term obligations and notes payable 1,204,069 1,207,604 Less: unamortized debt issuance costs (29,286 ) (31,332 ) Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs 1,174,783 1,176,272 Less: current portion of long-term obligations and notes payable (11,724 ) (12,782 ) Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs, less current portion $ 1,163,059 $ 1,163,490 (1) 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 an initial public offering. The amendment also extended the maturity date to March 2023; provided that upon the occurrence of an initial public offering, the maturity date will become the date that is five years after the completion of such initial public offering, or May 2026; provided further that if the Company does not refinance its term loans by December 2023, the maturity date will become December 2023. See Note 15 – Subsequent Events for additional information regarding the completion of the Company’s initial public offering and its effects on the Company’s long-term obligations. In conjunction with entering into a settlement agreement related to an acquisition, the Company amended its first lien credit agreement on March 19, 2020, and April 1, 2020. These amendments allowed the Company to retain certain legal settlement payments it received during the three-month period ended March 28, 2020 and also increased the letter of credit commitment limit under the revolving credit facility to $30.0 million. The Company has a LIBOR floor of 1.0% under its credit facilities. Beginning on March 18, 2020 and continuing for the remainder of the first fiscal quarter of 2020, as well as continuing through the three-month period ended April 3, 2021, the LIBOR benchmark rates decreased below 1.0%. Accordingly, the LIBOR floor rate of 1.0% became operative under the Company’s credit facility agreements and remained in effect at April 3, 2021. 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 April 3, 2021 and January 2, 2021 was $29.3 million and $31.3 million, respectively. Debt issuance costs related to the revolving credit facility are recorded within other long-term assets. The balance for debt issuance costs related to the revolving credit facility as of April 3, 2021 and January 2, 2021 was $0.4 million and $0.5 million, respectively. The Company recognized $2.1 million and $1.7 million of interest expense related to the amortization of debt issuance costs during the three-month periods ended April 3, 2021 and March 28, 2020, respectively. Issued letters of credit as of April 3, 2021 and January 2, 2021 were $19.8 million, respectively. There were no swingline loans outstanding as of April 3, 2021 and January 2, 2021, respectively. Borrowing capacity under the revolving credit facility was $55.2 million as of April 3, 2021 and January 2, 2021, respectively. The Company was in compliance with all financial covenants and restrictions at April 3, 2021 and January 2, 2021. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 03, 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 liabilities measured at fair value are as follows (amounts in thousands): Fair Value Measurements at April 3, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 25,804 $ - $ 25,804 $ - $ 25,804 $ - $ 25,804 Fair Value Measurements at January 2, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 28,624 $ - $ 28,624 $ - $ 28,624 $ - $ 28,624 The fair values of the interest rate swap 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 arrangements. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Apr. 03, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 7 . 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. 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. At April 3, 2021 and January 2, 2021, the aggregate notional amount of the interest rate swaps was $520.0 million, respectively. The fair value of the interest rate swaps at April 3, 2021 and January 2, 2021 was $25.8 million and $28.6 million, respectively, and is included in other long-term liabilities on the accompanying consolidated balance sheets. The agreements expire on October 31, 2023. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income on the accompanying consolidated statements of operations. The effects of the interest rate swaps 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 April 3, 2021 and March 28, 2020, respectively (amounts in thousands): Statement of Operations For the Three-Month Periods Ended Classification April 3, 2021 March 28, 2020 Interest rate swap agreements Other income $ 2,820 $ (6,422 ) The Company does not utilize financial instruments for trading or other speculative purposes. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 03, 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 expense of $0.3 million and $1.1 million for the three-month periods ended April 3, 2021 and March 28, 2020, respectively. The Company’s effective tax rate was 4.8% and 2.9% for the three-month periods ended April 3, 2021 and March 28, 2020, respectively. The effective tax rates for the three-month periods ended April 3, 2021 and March 28, 2020 differ from the statutory rate of 21% primarily due to a release of a valuation allowance recorded for certain deferred tax assets reflected in the consolidated financial statements and separate state and local income taxes on taxable subsidiaries. The valuation allowance release is due to pre-tax book income recorded in the quarter. For the three-month period ended April 3, 2021, 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 within the Company’s operations in income tax expense. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 3 Months Ended |
Apr. 03, 2021 | |
Shareholders Equity And Share Based Compensation [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 9 . STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION 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. See Note 15 – Subsequent Events for additional information regarding the completion of the Company’s initial public offering and its effects on stockholders’ equity and stock-based compensation. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 03, 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 $500,000 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 $500,000 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 April 3, 2021 and January 2, 2021 was comprised of $18.8 million of issued letters of credit, $2.9 million in cash collateral, and $2.3 million in surety bonds , respectively . As of April 3, 2021, insurance reserves totaling $79.7 million were included on the consolidated balance sheets, representing $41.2 million and $38.5 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 statement of operations for the three-month period ended March 28, 2020. On December 24, 2018, Aveanna Healthcare LLC (“Aveanna”) 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 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 Healthcare Regulatory Matters On October 30, 2019 the Company received a grand jury subpoena (“Subpoena”) issued by the U.S. Department of Justice, Antitrust Division (the “Antitrust Division”) requiring the production of documents and information pertaining to nurse wages and hiring activities in two 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 | 3 Months Ended |
Apr. 03, 2021 | |
Covid19 C A R E S Act [Abstract] | |
Covid 19 | 1 1 . 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 following portions of the CARES Act have impacted the Company: 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 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 not 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 April 3, 2021, the Company had deferred payment of $49.6 million of social security taxes in total, which is reflected 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. Temporary reimbursement Shortly after the onset of the COVID-19 pandemic 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. Advances received by the Company as of April 3, 2021 totaled $4.3 million. These advances become payable beginning one year from the date on which the accelerated advance was issued. The repayments occur via offsets by Medicare 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. 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 | 3 Months Ended |
Apr. 03, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 2 . 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 provide general and strategic advisory services and are paid a quarterly management fee plus out of pocket expenses. The Company incurred management fees and expenses totaling $0.9 million and $0.8 million during the three-month periods ended April 3, 2021 and March 28, 2020, respectively, which are included in corporate expenses in the accompanying consolidated statements of operations. The Company did not owe any amounts in connection with the Management Agreement as of April 3, 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 sheet. See Note 15 – Subsequent Events for additional information regarding the completion of the Company’s initial public offering and the resulting termination of the Management Agreement. 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 during each of the three-month periods ended April 3, 2021 and March 28, 2020, respectively, and are included in corporate expenses in the accompanying consolidated statements of operations. The Company did not owe any amounts in connection with the expenses described above as of April 3, 2021 and January 2, 2021, respectively. As of April 3, 2021, one of the Company’s stockholders owned 5.7% of the Company’s first lien term loan. |
Segment Information
Segment Information | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 1 3 . 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 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 Results shown for the three-month periods ended April 3, 2021 and March 28, 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-month periods ended April 3, 2021 and March 28, 2020, respectively (amounts in thousands): For the Three-Month Period Ended April 3, 2021 PDS HHH MS Total Revenue $ 350,827 $ 31,518 $ 34,815 $ 417,160 Cost of revenue, excluding depreciation and amortization 248,997 17,329 19,151 285,477 Gross margin $ 101,830 $ 14,189 $ 15,664 $ 131,683 Gross margin percentage 29.0 % 45.0 % 45.0 % 31.6 % For the Three-Month Period Ended March 28, 2020 PDS HHH MS Total Revenue $ 320,513 $ 4,477 $ 30,233 $ 355,223 Cost of revenue, excluding depreciation and amortization 227,963 2,803 16,916 247,682 Gross margin $ 92,550 $ 1,674 $ 13,317 $ 107,541 Gross margin percentage 28.9 % 37.4 % 44.0 % 30.3 % For the Three-Month Periods Ended Segment Reconciliation: April 3, 2021 March 28, 2020 Total segment gross margin $ 131,683 $ 107,541 Branch and regional administrative expenses 69,372 59,694 Corporate expenses 27,399 25,797 Depreciation and amortization 4,848 4,183 Acquisition-related costs 1,768 - Operating income 28,296 17,867 Interest income 77 46 Interest expense (22,425 ) (21,063 ) Loss on debt extinguishment - 127 Other income 159 41,791 Income before income taxes $ 6,107 $ 38,768 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 1 4 . NET INCOME PER SHARE Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share is calculated by dividing net income 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 per share (dollar amounts in thousands, except per share amounts): For the Three-Month Periods Ended April 3, 2021 March 28, 2020 Numerator: Net income $ 5,798 $ 37,637 Denominator: Weighted average shares of common stock outstanding (1) 142,122,934 137,468,875 Net income per share, basic $ 0.04 $ 0.27 Weighted average shares of common stock outstanding (1) 146,266,014 140,330,909 Net income per share, diluted $ 0.04 $ 0.27 Dilutive securities outstanding not included in the computation of diluted net income per share as their effect is antidilutive: Stock options 7,479,384 6,015,548 (1) The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 03, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 1 5 . SUBSEQUENT EVENTS Acquisition On April 16, 2021, the Company acquired 100% of the issued and outstanding membership interests of Doctor’s Choice Holdings, LLC (“Doctor’s Choice”) for a purchase price of $115.0 million, subject to customary adjustments. Doctor’s Choice provides home health services in Florida As part of funding the Doctor’s Choice acquisition, on the date of acquisition, the Company borrowed incremental amounts under the existing Second Lien Term Loan of $67.0 million, including debt issuance costs of $1.7 million. The entire portion of the proceeds, as well as cash on hand, were used to pay cash consideration at closing and costs and expenses incurred by the Company in connection with the transaction of $2.4 million 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 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. 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 now vest upon the achievement of volume weighted average price per share hurdles for any ninety consecutive days commencing on or after the nine-month anniversary of the initial public offering. The issuance of shares of common stock rather than Class B common stock resulted in a modification of the Company’s time-vesting options for accounting purposes; however, the incremental fair value was not material. The amendment of the vesting terms for the performance-vesting options has not yet resulted in a modification for accounting purposes as the Company’s Board of Directors has not specified the volume weighted average price per share. Initial Public Offering and Use of Proceeds On May 3, 2021, the Company completed its initial public offering and received proceeds, net of underwriters’ discounts and commissions, of $432.4 million in exchange for the issuance of 38,236,000 shares of the Company’s common stock. On May 3, 2021, the Company paid an aggregate principal amount of $307.0 million to repay in full all outstanding obligations under the second lien credit agreement, including the incremental amount borrowed in connection with financing the acquisition of Doctor’s Choice, thereby 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. On May 4, 2021, following completion of the initial public offering and satisfaction of the other applicable conditions precedent, the maximum availability of the Company’s 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 $1.3 million, which the Company capitalized and included in other long-term assets during the second fiscal quarter of 2021. Upon completion of the initial public offering, the Management Agreement was terminated. Additionally, the managers agreed to waive the fee due to them from the Company upon the successful completion of an initial public offering. The Company granted the underwriters an overallotment option to purchase up to an additional 5,735,400 shares of common stock from the Company at the offering price of $12.00 per share, less the underwriting discounts and commissions, within 30 days from the date of the Prospectus, dated April 28, 2021. On May 21, 2021, the underwriters exercised their overallotment option to acquire an additional 4,000,000 shares of the Company’s common stock. This transaction was completed on May 25, 2021 and resulted in additional proceeds to the Company of $45.2 million, after deducting underwriting costs of $2.8 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 03, 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 April 3, 2021 and the results of operations for the three-month periods ended April 3, 2021 and March 28, 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 April 3, 2021 and January 2, 2021. For the three-month periods ended April 3, 2021 and March 28, 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 April 3, 2021 and December 29, 2019 through March 28, 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 The Company has deferred offering costs, consisting of legal, accounting, filing and other fees and costs directly attributable to the Company’s initial public offering. The deferred offering costs will be offset against the proceeds received upon the closing of the initial public offering. As of April 3, 2021 and January 2, 2021, capitalized deferred offering costs totaled $4.8 million and $2.9 million, respectively, and were included in other long-term assets on the accompanying consolidated balance sheets. See Note 15 – Subsequent Events for additional information regarding the completion of the Company’s initial public offering and its effects. |
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 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 In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Revenue by Payer Type and Percentage of Patient and Product Revenue | The following table presents revenue by payer type and as a percentage of revenue for the three-month periods ended April 3, 2021 and March 28, 2020, respectively (in thousands): For the Three-Month Periods Ended April 3, 2021 March 28, 2020 Revenue Percentage Revenue Percentage Medicaid MCO $ 232,884 55.8 % $ 209,873 59.1 % Medicaid 103,497 24.8 % 94,960 26.7 % Commercial 47,003 11.3 % 41,235 11.6 % Medicare 32,016 7.7 % 8,552 2.4 % Self-pay 1,760 0.4 % 603 0.2 % Total revenue $ 417,160 100.0 % $ 355,223 100.0 % |
Long-Term Obligations and Not_2
Long-Term Obligations and Notes Payable (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations and Notes Payable | Long-term obligations and notes payable consisted of the following as of April 3, 2021 Instrument Stated Maturity Date Contractual Interest Rate (1) Interest Rate as of April 3, 2021 April 3, 2021 January 2, 2021 Term loan - First Lien Term Loan 03/2024 L + 4.25% 5.25% $ 561,600 $ 563,061 Term loan - First Lien Term Loan Amendment 03/2024 L + 5.5% 6.50% 216,580 217,133 Term loan - First Lien Term Loan Fourth Amendment 03/2024 L + 6.25% 7.25% 184,075 184,538 Subordinated term loan - Second Lien Term Loan 03/2025 L + 8.0% 9.00% 240,000 240,000 Revolving Credit Facility 03/2023 L + 4.25% 5.25% - - Notes payable - finance agreements 09/2021 2.07% 2.07% 1,814 2,872 Total principal amount of long-term obligations and notes payable 1,204,069 1,207,604 Less: unamortized debt issuance costs (29,286 ) (31,332 ) Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs 1,174,783 1,176,272 Less: current portion of long-term obligations and notes payable (11,724 ) (12,782 ) Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs, less current portion $ 1,163,059 $ 1,163,490 (1) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Other Liabilities Measured at Fair Value | The Company’s other liabilities measured at fair value are as follows (amounts in thousands): Fair Value Measurements at April 3, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 25,804 $ - $ 25,804 $ - $ 25,804 $ - $ 25,804 Fair Value Measurements at January 2, 2021 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap agreements $ - $ 28,624 $ - $ 28,624 $ - $ 28,624 $ - $ 28,624 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Apr. 03, 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 April 3, 2021 and March 28, 2020, respectively (amounts in thousands): Statement of Operations For the Three-Month Periods Ended Classification April 3, 2021 March 28, 2020 Interest rate swap agreements Other income $ 2,820 $ (6,422 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables summarize the Company’s segment information for the three-month periods ended April 3, 2021 and March 28, 2020, respectively (amounts in thousands): For the Three-Month Period Ended April 3, 2021 PDS HHH MS Total Revenue $ 350,827 $ 31,518 $ 34,815 $ 417,160 Cost of revenue, excluding depreciation and amortization 248,997 17,329 19,151 285,477 Gross margin $ 101,830 $ 14,189 $ 15,664 $ 131,683 Gross margin percentage 29.0 % 45.0 % 45.0 % 31.6 % For the Three-Month Period Ended March 28, 2020 PDS HHH MS Total Revenue $ 320,513 $ 4,477 $ 30,233 $ 355,223 Cost of revenue, excluding depreciation and amortization 227,963 2,803 16,916 247,682 Gross margin $ 92,550 $ 1,674 $ 13,317 $ 107,541 Gross margin percentage 28.9 % 37.4 % 44.0 % 30.3 % For the Three-Month Periods Ended Segment Reconciliation: April 3, 2021 March 28, 2020 Total segment gross margin $ 131,683 $ 107,541 Branch and regional administrative expenses 69,372 59,694 Corporate expenses 27,399 25,797 Depreciation and amortization 4,848 4,183 Acquisition-related costs 1,768 - Operating income 28,296 17,867 Interest income 77 46 Interest expense (22,425 ) (21,063 ) Loss on debt extinguishment - 127 Other income 159 41,791 Income before income taxes $ 6,107 $ 38,768 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Income Per Share | The following is a computation of basic and diluted net income per share (dollar amounts in thousands, except per share amounts): For the Three-Month Periods Ended April 3, 2021 March 28, 2020 Numerator: Net income $ 5,798 $ 37,637 Denominator: Weighted average shares of common stock outstanding (1) 142,122,934 137,468,875 Net income per share, basic $ 0.04 $ 0.27 Weighted average shares of common stock outstanding (1) 146,266,014 140,330,909 Net income per share, diluted $ 0.04 $ 0.27 Dilutive securities outstanding not included in the computation of diluted net income per share as their effect is antidilutive: Stock options 7,479,384 6,015,548 (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) | Apr. 03, 2021State |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of states in which entity operates | 30 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Summary Of Significant Accounting Policies [Line Items] | ||
Capitalized deferred offering costs | $ 4.8 | $ 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 | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Revenue Disclosure [Line Items] | |||
Estimated price concession | $ 56,300,000 | $ 55,400,000 | |
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 and Percentage of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 417,160 | $ 355,223 |
Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 100.00% | 100.00% |
Medicaid MCO | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 232,884 | $ 209,873 |
Medicaid MCO | Customer Concentration Risk | Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 55.80% | 59.10% |
Medicaid | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 103,497 | $ 94,960 |
Medicaid | Customer Concentration Risk | Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 24.80% | 26.70% |
Commercial | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 47,003 | $ 41,235 |
Commercial | Customer Concentration Risk | Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 11.30% | 11.60% |
Medicare | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 32,016 | $ 8,552 |
Medicare | Customer Concentration Risk | Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 7.70% | 2.40% |
Self-pay | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 1,760 | $ 603 |
Self-pay | Customer Concentration Risk | Revenue from Contract with Customer, Product and Service Benchmark | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of total revenue | 0.40% | 0.20% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Mar. 31, 2021 | Apr. 03, 2021 | Mar. 28, 2020 |
Business Acquisition [Line Items] | |||
Acquisition, transaction costs | $ 1,800,000 | ||
Acquisition-related costs | 1,768,000 | $ 0 | |
Loma Linda University Medical Center | |||
Business Acquisition [Line Items] | |||
Total consideration for transaction | $ 500,000 | ||
Acquisition, transaction costs | 100,000 | ||
Doctor’s Choice Holdings, LLC | |||
Business Acquisition [Line Items] | |||
Acquisition, transaction costs | $ 1,700,000 |
Long-Term Obligations and Not_3
Long-Term Obligations and Notes Payable - Schedule of Long-Term Obligations and Notes Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Jan. 02, 2021 | |
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 1,204,069 | $ 1,207,604 |
Less: unamortized debt issuance costs | (29,286) | (31,332) |
Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs | 1,174,783 | 1,176,272 |
Less: current portion of long-term obligations and notes payable | (11,724) | (12,782) |
Total amount of long-term obligations and notes payable, net of unamortized debt issuance costs, less current portion | 1,163,059 | 1,163,490 |
Term loan - First Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 561,600 | 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] | ||
Debt instrument, basis spread on variable rate | 4.25% | |
Term loan - First Lien Term Loan Amendment | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 216,580 | 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] | ||
Debt instrument, basis spread on variable rate | 5.50% | |
Term loan - First Lien Term Loan Fourth Amendment | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 184,075 | 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] | ||
Debt instrument, basis spread on variable rate | 6.25% | |
Subordinated Term Loan | Second Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 240,000 | 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] | ||
Debt instrument, basis spread on variable rate | 8.00% | |
Notes Payable - Finance Agreements | ||
Debt Instrument [Line Items] | ||
Total principal amount of long-term obligations and notes payable | $ 1,814 | 2,872 |
Stated Maturity Date | 2021-09 | |
Contractual Interest Rate | 2.07% | |
Interest Rate | 2.07% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | $ (400) | $ (500) |
Stated Maturity Date | 2023-03 | |
Contractual Interest Rate | L + 4.25% | |
Interest Rate | 5.25% |
Long-Term Obligations and Not_4
Long-Term Obligations and Notes Payable - Schedule of Long-Term Obligations and Notes Payable (Parenthetical) (Details) | 3 Months Ended |
Apr. 03, 2021 | |
Debt Disclosure [Abstract] | |
Debt instrument, description of contractual interest rate | L = Greater of 1.00% or one-month LIBOR |
Long-Term Obligations and Not_5
Long-Term Obligations and Notes Payable - Additional Information (Details) - USD ($) | Mar. 11, 2021 | Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 |
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, basis spread terms | L = Greater of 1.00% or one-month LIBOR | |||
Debt issuance costs | $ 29,286,000 | $ 31,332,000 | ||
Interest expense related to amortization of debt issuance costs | 2,100,000 | $ 1,700,000 | ||
Swingline loans | $ 0 | 0 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument due date, month and year | 2023-03 | |||
Debt issuance costs | $ 400,000 | 500,000 | ||
Borrowing capacity of revolving line of credit | $ 55,200,000 | 55,200,000 | ||
Credit Facilities | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, basis spread terms | The Company has a LIBOR floor of 1.0% under its credit facilities. Beginning on March 18, 2020 and continuing for the remainder of the first fiscal quarter of 2020, as well as continuing through the three-month period ended April 3, 2021, the LIBOR benchmark rates decreased below 1.0%. Accordingly, the LIBOR floor rate of 1.0% became operative under the Company’s credit facility agreements and remained in effect at April 3, 2021 | |||
LIBOR floor rate | 1.00% | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Issued letter of credit | $ 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 due date, month and year | 2023-03 | |||
Debt instrument, maturity date, description | The amendment also extended the maturity date to March 2023; provided that upon the occurrence of an initial public offering, the maturity date will become the date that is five years after the completion of such initial public offering, or May 2026; provided further that if the Company does not refinance its term loans by December 2023, the maturity date will become December 2023. | |||
Amended First Lien Credit Agreement | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 29,300,000 | $ 31,300,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Other Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Jan. 02, 2021 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | $ 25,804 | $ 28,624 |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | 25,804 | 28,624 |
Interest Rate Swap Agreements | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | 25,804 | 28,624 |
Interest Rate Swap Agreements | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Liabilities | $ 25,804 | $ 28,624 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - Interest Rate Swap Agreement | 3 Months Ended | ||
Apr. 03, 2021USD ($) | Jan. 02, 2021USD ($) | Oct. 31, 2018Swap | |
Derivative [Line Items] | |||
Number of interest rate swap agreement | Swap | 2 | ||
Aggregate notional amount | $ 520,000,000 | $ 520,000,000 | |
Derivative expiration date | Oct. 31, 2023 | ||
Other Long-Term Liabilities | |||
Derivative [Line Items] | |||
Fair value of interest rate swaps | $ 25,800,000 | $ 28,600,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Gains (Losses) from Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Derivative Instruments Gain Loss [Line Items] | ||
Derivative gain (loss) | $ 2,820 | $ (6,422) |
Interest Rate Swap Agreements | Not Designated as Hedging Instruments | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative gain (loss) | $ 2,820 | $ (6,422) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 309 | $ 1,131 |
Effective tax rate | 4.80% | 2.90% |
Statutory tax rate | 21.00% | 21.00% |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | Mar. 19, 2020 | Mar. 28, 2020 |
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | ||
Stock issued, equity contributions | $ 50,000 | $ 50,000 |
Common Stock | ||
Schedule Of Shareholders Equity And Share Based Compensation [Line Items] | ||
Stock issued, shares | 5,124,995 | 5,124,995 |
Stock issued, equity contributions | $ 51 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Feb. 19, 2020 | Apr. 03, 2021 | Jan. 02, 2021 | Dec. 20, 2019 | Dec. 24, 2018 |
Loss Contingencies [Line Items] | |||||
Insurance, per claims deductible | $ 500,000 | ||||
Professional malpractice claims, per claim and annual aggregate limits | 6,000,000 | ||||
Insurance reserves | 79,700,000 | $ 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 | ||||
Professional Malpractice Claims | |||||
Loss Contingencies [Line Items] | |||||
Insurance reserves | 41,200,000 | 38,500,000 | |||
Surety Bonds | |||||
Loss Contingencies [Line Items] | |||||
Collaterals | 2,300,000 | 2,300,000 | |||
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 | $ 38,500,000 | $ 36,100,000 |
Covid 19 - Additional Informati
Covid 19 - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | 20 Months Ended | |||
Apr. 03, 2021 | Jan. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | Feb. 04, 2021 | Apr. 01, 2013 | |
Covid 19 CARES Act [Line Items] | ||||||
Provider relief fund payments received CARES Act | $ 25,100,000 | |||||
Incremental percentage of deferred payment of employer portion of social security taxes | 50.00% | |||||
Deferred social security tax CARES Act | $ 49,600,000 | |||||
Medicare | ||||||
Covid 19 CARES Act [Line Items] | ||||||
Advance received for expansion of accelerated payments program in CARES Act | $ 4,300,000 | |||||
Percentage of repayments due for first eleven months | 25.00% | |||||
Percentage of payments recouped rate for another six months | 50.00% | |||||
Percentage of reduction in payments | 2.00% | |||||
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 | 4,800,000 | |||||
Stimulus funds recognized as income CARES Act | 500,000 | |||||
Stimulus funds included in government stimulus liabilities CARES Act | 4,300,000 | |||||
Direct stimulus fund repaid CARES Act | $ 4,300,000 | |||||
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 | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Related Party Transaction [Line Items] | |||
Management fees and expenses | $ 900,000 | $ 800,000 | |
Amounts owed in connection with advisory services agreements | 0 | $ 1,600,000 | |
Fees for revenue cycle vendor eligibility and clearing house billing services | 100,000 | $ 100,000 | |
Amount owed to revenue cycle vendor | $ 0 | $ 0 | |
First Lien Term Loan | |||
Related Party Transaction [Line Items] | |||
Shareholders ownership percentage | 5.70% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Apr. 03, 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 ($) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 417,160,000 | $ 355,223,000 |
Cost of revenue, excluding depreciation and amortization | 285,477,000 | 247,682,000 |
Gross margin | $ 131,683,000 | $ 107,541,000 |
Gross margin percentage | 31.60% | 30.30% |
Segment Reconciliation: | ||
Total segment gross margin | $ 131,683,000 | $ 107,541,000 |
Branch and regional administrative expenses | 69,372,000 | 59,694,000 |
Corporate expenses | 27,399,000 | 25,797,000 |
Depreciation and amortization | 4,848,000 | 4,183,000 |
Acquisition-related costs | 1,768,000 | 0 |
Operating income | 28,296,000 | 17,867,000 |
Interest income | 77,000 | 46,000 |
Interest expense | (22,425,000) | (21,063,000) |
Gain on debt extinguishment | 127,000 | |
Other income | 159,000 | 41,791,000 |
Income before income taxes | 6,107,000 | 38,768,000 |
PDS | ||
Segment Reporting Information [Line Items] | ||
Revenue | 350,827,000 | 320,513,000 |
Cost of revenue, excluding depreciation and amortization | 248,997,000 | 227,963,000 |
Gross margin | $ 101,830,000 | $ 92,550,000 |
Gross margin percentage | 29.00% | 28.90% |
Segment Reconciliation: | ||
Total segment gross margin | $ 101,830,000 | $ 92,550,000 |
HHH | ||
Segment Reporting Information [Line Items] | ||
Revenue | 31,518,000 | 4,477,000 |
Cost of revenue, excluding depreciation and amortization | 17,329,000 | 2,803,000 |
Gross margin | $ 14,189,000 | $ 1,674,000 |
Gross margin percentage | 45.00% | 37.40% |
Segment Reconciliation: | ||
Total segment gross margin | $ 14,189,000 | $ 1,674,000 |
MS | ||
Segment Reporting Information [Line Items] | ||
Revenue | 34,815,000 | 30,233,000 |
Cost of revenue, excluding depreciation and amortization | 19,151,000 | 16,916,000 |
Gross margin | $ 15,664,000 | $ 13,317,000 |
Gross margin percentage | 45.00% | 44.00% |
Segment Reconciliation: | ||
Total segment gross margin | $ 15,664,000 | $ 13,317,000 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Numerator: | ||
Net income | $ 5,798 | $ 37,637 |
Denominator: | ||
Weighted average shares of common stock outstanding, basic | 142,122,934 | 137,468,875 |
Net income per share, basic | $ 0.04 | $ 0.27 |
Weighted average shares of common stock outstanding, diluted | 146,266,014 | 140,330,909 |
Net income per share, diluted | $ 0.04 | $ 0.27 |
Stock Options | ||
Denominator: | ||
Dilutive securities outstanding not included in the computation of diluted net income per share as their effect is antidilutive | 7,479,384 | 6,015,548 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands | May 25, 2021USD ($) | May 21, 2021shares | May 04, 2021USD ($) | May 03, 2021USD ($)shares | Apr. 28, 2021$ / sharesshares | Apr. 19, 2021shares | Apr. 16, 2021USD ($) | Mar. 28, 2020USD ($) | Apr. 03, 2021shares | Jan. 02, 2021shares |
Subsequent Event [Line Items] | ||||||||||
Common stock, authorized | shares | 1,000,000,000 | 1,000,000,000 | ||||||||
Preferred stock, authorized | shares | 5,000,000 | 5,000,000 | ||||||||
Received proceeds, net of underwriters discounts and commissions | $ 50,000 | |||||||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
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 | |||||||||
Preferred stock, authorized | shares | 5,000,000 | |||||||||
Subsequent Event | Revolving Credit Facility | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 200,000 | $ 75,000 | ||||||||
Debt issuance costs | 1,300 | |||||||||
Subsequent Event | Initial Public Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Received proceeds, net of underwriters discounts and commissions | $ 432,400 | |||||||||
Issuance of common stock (shares) | shares | 38,236,000 | |||||||||
Subsequent Event | Initial Public Offering | Second Lien Term Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Repayment of subordinated debt | $ 307,000 | |||||||||
Subsequent Event | Initial Public Offering | Term loan - First Lien Term Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Repayment of debt | $ 100,000 | |||||||||
Subsequent Event | Underwriters Overallotment Option | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Received proceeds, net of underwriters discounts and commissions | $ 45,200 | |||||||||
Issuance of common stock (shares) | shares | 4,000,000 | |||||||||
Debt issuance costs | $ 2,800 | |||||||||
Shares granted to underwriters right to purchase additional shares | shares | 5,735,400 | |||||||||
Stock, offering price per share | $ / shares | $ 12 | |||||||||
Doctor’s Choice Holdings, LLC | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Business acquisition, issued and outstanding membership interests percentage acquired | 100.00% | |||||||||
Business acquisition, purchase price | $ 115,000 | |||||||||
Business acquisition, amount borrowed under existing Second Lien Term Loan | 67,000 | |||||||||
Business acquisition, debt issuance costs | 1,700 | |||||||||
Business acquisition, transaction costs | $ 2,400 |