Aveanna Healthcare Holdings, Inc. (NASDAQ: AVAH), a leading,
diversified home care platform focused on providing care to
medically complex, high-cost patient populations, today announced
financial results for the three and nine-month periods ended
October 1, 2022.
Tony Strange, Chief Executive Officer, commented
“We continue to manage through a very difficult labor environment,
and our results clearly do not meet our expectations. However, I am
encouraged by signs of progress within our Private Duty and MS
businesses. We are seeing our preferred payer partners embrace the
idea of value-based pricing and can demonstrate that similar models
will produce growth in caregivers and increased volume, all while
producing savings and better outcomes for our payers, and
ultimately creating long-term value for our shareholders.
As mentioned on our second quarter call, we
completed the system conversion for HHH from four operating systems
to one with Homecare Homebase, which will create efficiencies and
enhance our analytic capabilities. However, our results in Home
Health and Hospice during the quarter were impacted by the
conversion and fell below our expectations. We remain confident
that this business will return to normal operating levels as we
move through the end of 2022 and into 2023.
I’d also like to thank all of our employees who
worked tirelessly in preparing for and in response to Hurricane
Ian. All patients and employees were accounted for within 24 hours
of the storm, and relief efforts were underway immediately. This
response is another example of the resiliency of the Aveanna
team.
We look forward to discussing our third quarter
results, expectations for the fourth quarter, as well as
preliminary expectations for 2023 on our upcoming earnings call”
Mr. Strange concluded.
Three-Month Periods Ended October 1, 2022 and
October 2, 2021
Revenue was $443.0 million for the three-month
period ended October 1, 2022, as compared to $411.3 million for the
three-month period ended October 2, 2021, an increase of $31.7
million, or 7.7%. The overall increase in revenue was primarily
attributable to a $28.5 million increase in Private Duty Services
("PDS") segment revenue and a $2.9 million increase in Home Health
& Hospice (“HHH”) segment revenue compared with the prior year
period.
Gross margin was $134.6 million, or 30.4% of
revenue, for the three months ended October 1, 2022, as compared to
$139.7 million, or 34.0% of revenue, for the three months ended
October 2, 2021, a decrease of $5.2 million, or 3.7%.
Net income was $24.3 million for the third
quarter of 2022, compared to net income of $2.1 million for the
third quarter of 2021, primarily due to a $43.5 million increase in
valuation gains on interest rate derivatives over the comparable
periods. Net income per diluted share was $0.13 for the third
quarter of 2022, as compared to net income per diluted share of
$0.01 for the third quarter of 2021. Adjusted net loss per diluted
share was $0.03 for the third quarter of 2022, as compared to
adjusted net income of $0.11 for the third quarter of 2021.
Adjusted EBITDA was $24.7 million, or 5.6% of
revenue, for the third quarter of 2022, as compared to $45.8
million, or 11.1% of revenue, for the third quarter of 2021.
Nine-Month Periods Ended October 1, 2022 and
October 2, 2021
Revenue was $1,336.5 million for the nine-month
period ended October 1, 2022, as compared to $1,264.5 million for
the nine-month period ended October 2, 2021, an increase of $72.0
million, or 5.7%. The overall increase in revenue was primarily
attributable to a $26.2 million increase in PDS segment revenue and
a $49.3 million increase in HHH segment revenue compared with the
prior year period.
Gross margin was $424.5 million, or 31.8% of
revenue, for the nine months ended October 1, 2022, as compared to
$418.0 million, or 33.1% of revenue, for the nine months ended
October 2, 2021, an increase of $6.4 million, or 1.5%.
Net loss was $424.3 million for the first nine
months of 2022, as compared to net income of $9.1 million for the
first nine months of 2021, primarily due to a $470.2 million
goodwill impairment recorded in the second quarter of 2022, net of
a $83.4 million increase in valuation gains on interest rate
derivatives over the comparable periods. Net loss per diluted share
was $2.29 for the first nine months of 2022, as compared to net
income per diluted share of $0.05 for the first nine months of
2021. Adjusted net income per diluted share was $0.04 for the first
nine months of 2022, as compared to $0.31 for the first nine months
of 2021.
Adjusted EBITDA was $99.7 million, or 7.5% of
revenue, for the first nine months of 2022, as compared to $138.4
million, or 10.9% of revenue, for the first nine months of
2021.
Liquidity, Cash Flow, and
Debt
- As of October 1, 2022, we had cash of $63.7 million, plus the
following liquidity available under our credit facilities:
- $182.4 million of available borrowing capacity under our
revolving credit facility;
- $32.8 million of availability under our securitization
facility; and
- $140.0 million of availability under our Delayed Draw Term Loan
("DDTL") for future acquisitions.
- Net cash provided by operating, investing and financing
activities was $33.2 million for the nine months ended October 1,
2022. Free cash flow, which excludes liquidity related activity
under our credit facilities and cash used and provided by
acquisitions and divestitures, was a deficit of $44.9 million for
the nine months ended October 1, 2022. This included a $11.7
million purchase of an interest rate cap in February 2022 and $3.5
million of repayments of CMS advances received by companies
acquired by us. See "Non-GAAP Financial Measures - Free cash flow"
below.
- As of October 1, 2022 we had bank debt of $1,466.3 million. Our
interest rate exposure under our credit facilities is hedged with
the following instruments:
- $520.0 million notional amount of interest rate swaps that
convert variable rate debt to a fixed rate, and
- $880.0 million notional amount of interest rate caps that cap
our exposure to LIBOR at 3.0%.
The leverage maintenance covenants in our
revolving credit facility do not become operative unless more than
one third of the total availability under the revolving credit
facility has been utilized, subject to a $15.0 million carve-out
for letters of credit. Should the leverage maintenance covenant
become operative, maximum allowable first lien leverage would be
7.6x.
David Afshar, Chief Financial Officer, commented
“We were pleased with our third quarter cash collections as our
operations and revenue cycle teams executed on reducing our
accounts receivable balances during the quarter. We continue to
have ample liquidity to fund our operations and believe our credit
facilities are appropriately hedged against the rising interest
rate environment. Our interest rate swaps extend through June, 2026
and our interest rate caps extend through February, 2027.”
Revised Full Year 2022
Guidance
- Revenue of at least $1,782 million updated from prior guidance
of revenue of at least $1,785 million.
Consistent with prior practice, we are not
providing guidance on net income at this time due to the volatility
of certain required inputs that are not available without
unreasonable efforts, including future fair value adjustments
associated with our interest rate swaps and caps.
- Adjusted EBITDA of at least $128 million updated from prior
guidance of Adjusted EBITDA of at least $150 million.
Non-GAAP Financial Measures
In addition to our results of operations
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”), we also evaluate our financial performance
using EBITDA, Adjusted EBITDA, Field contribution, Field
contribution margin, Adjusted corporate expense, Adjusted net
income and Adjusted net income per diluted share. Given our
determination of adjustments in arriving at our computations, these
non-GAAP measures have limitations as analytical tools and should
not be considered in isolation or as substitutes or alternatives to
net income or loss, revenue, operating income or loss, cash flows
from operating activities, total indebtedness or any other
financial measures calculated in accordance with GAAP.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP
financial measures and are not intended to replace financial
performance measures determined in accordance with U.S. GAAP, such
as net income (loss). Rather, we present EBITDA and Adjusted EBITDA
as supplemental measures of our performance. We define EBITDA as
net income (loss) before interest expense, net; income tax
(expense) benefit; and depreciation and amortization. We define
Adjusted EBITDA as EBITDA, adjusted for the impact of certain other
items that are either non-recurring, infrequent, non-cash, unusual,
or items deemed by management to not be indicative of the
performance of our core operations, including impairments of
goodwill, intangible assets, and other long-lived assets; non-cash,
share-based compensation; sponsor fees; loss on extinguishment of
debt; fees related to debt modifications; the effect of interest
rate derivatives; acquisition-related and integration costs; legal
costs and settlements associated with acquisition matters; COVID-19
related costs; restructuring costs; and other system transition
costs, professional fees and other costs. As non-GAAP financial
measures, our computations of EBITDA and Adjusted EBITDA may vary
from similarly termed non-GAAP financial measures used by other
companies, making comparisons with other companies on the basis of
this measure impracticable.
We believe our computations of EBITDA and
Adjusted EBITDA are helpful in highlighting trends in our core
operating performance. In determining which adjustments are made to
arrive at EBITDA and Adjusted EBITDA, we consider both (1) certain
non-recurring, infrequent, non-cash or unusual items, which can
vary significantly from year to year, as well as (2) certain other
items that may be recurring, frequent, or settled in cash but which
we do not believe are indicative of our core operating performance.
We use EBITDA and Adjusted EBITDA to assess operating performance
and make business decisions.
We have incurred substantial acquisition-related
costs and integration costs in fiscal years 2022, 2021 and 2020.
The underlying acquisition activities take place over a defined
timeframe, have distinct project timelines and are incremental to
activities and costs that arise in the ordinary course of our
business. Therefore, we believe it is important to exclude these
costs from our Adjusted EBITDA because it provides us a normalized
view of our core, ongoing operations after integrating our acquired
companies, which we believe is an important measure in assessing
our performance.
Field contribution and Field contribution
margin
Field contribution and Field contribution margin
are non-GAAP financial measures and are not intended to replace
financial performance measures determined in accordance with GAAP,
such as operating income (loss). Rather, we present Field
contribution and Field contribution margin as supplemental measures
of our performance. We define Field contribution as operating
income (loss) prior to corporate expenses and other non-field
related costs, including depreciation and amortization,
acquisition-related costs, and other operating expenses. Field
contribution margin is Field contribution as a percentage of
revenue. As non-GAAP financial measures, our computations of Field
contribution and Field contribution margin may vary from similarly
termed non-GAAP financial measures used by other companies, making
comparisons with other companies on the basis of these measures
impracticable.
We believe Field contribution and Field
contribution margin are helpful in highlighting trends in our core
operating performance and evaluating trends in our branch and
regional results, which can vary from year to year. We use Field
contribution and Field contribution margin to make business
decisions and assess the operating performance and results
delivered by our core field operations, prior to corporate and
other costs not directly related to our field operations. These
metrics are also important because they guide us in determining
whether our branch and regional administrative expenses are
appropriately sized to support our caregivers and direct patient
care operations. Additionally, Field contribution and Field
contribution margin determine how effective we are in managing our
field supervisory and administrative costs associated with
supporting our provision of services and sale of products.
Adjusted corporate expenses
Adjusted corporate expenses is a non-GAAP
financial measure and is not intended to replace financial
performance measures determined in accordance with GAAP, such as
corporate expenses. Rather, we present adjusted corporate expenses
as a supplemental measure of our performance. We define Adjusted
corporate expenses as corporate expenses adjusted for the impact of
certain other items that are either non-recurring, infrequent,
non-cash, unusual, or items deemed by us to not be indicative of
the performance of our core operations, including non-cash,
share-based compensation; sponsor fees; acquisition-related and
integration costs; legal costs and settlements associated with
acquisition matters; COVID related costs, net of reimbursement; and
other system transition costs, professional fees and other costs.
As non-GAAP financial measures, our computations of adjusted
corporate expenses may vary from similarly termed non-GAAP
financial measures used by other companies, making comparisons with
other companies on the basis of this measure impracticable.
We believe Adjusted corporate expenses is
helpful in highlighting trends in our corporate support function,
which can vary from year to year. We use Adjusted corporate
expenses to make business decisions in determining whether or not
our corporate expenses is appropriately sized to support our
caregivers and direct patient care operations. Excluding the
aforementioned items from corporate expenses that are either
non-recurring, infrequent, non-cash, unusual, or items deemed by us
to not be indicative of the performance of our core operations
allows us to evaluate adjusted corporate expenses in relation to
the support necessary for our caregivers and direct patient care
operations.
Adjusted net income and Adjusted net income per
diluted share
Adjusted net income represents net income (loss)
as adjusted for the impact of GAAP income tax, goodwill, intangible
and other long-lived asset impairment charges, non-cash share-based
compensation expense, sponsor fees, loss on extinguishment of debt,
interest rate derivatives, acquisition-related costs, integration
costs, legal costs, COVID-related costs net of reimbursement, ABA
exited operations, other system transition costs, professional fees
and certain other miscellaneous items on a pre-tax basis. Adjusted
net income includes a provision for income taxes derived utilizing
a combined statutory tax rate. The combined statutory tax rate is
our estimate of our long-term tax rate. The most comparable GAAP
measure is net income (loss).
Adjusted net income per diluted share represents
adjusted net income on a per diluted share basis using the
weighted-average number of diluted shares outstanding for the
period. The most comparable GAAP measure is net income (loss) per
share, diluted.
Adjusted net income and Adjusted net income per
diluted share are important to us because they allow us to assess
financial results, exclusive of the items mentioned above that are
not operational in nature or comparable to those of our
competitors.
Free cash flow
Free cash flow is a liquidity measure that
represents the net increase (decrease) in cash and cash
equivalents, adjusted for the impact of cash used to acquire
businesses, cash proceeds from the sale of businesses, and net cash
proceeds from increases to debt financing arrangements. The most
comparable GAAP measure is net increase (decrease) in cash and cash
equivalents.
We believe free cash flow is helpful in
highlighting the cash generated or used by the Company, excluding
cash related to business acquisition and disposition transactions,
and the financing of business acquisition activities, to the extent
we use debt financing to complete the transactions. Free cash flow
includes mandatory, scheduled principal payments under our credit
facilities and excludes any borrowing or repayments under our
credit facilities for liquidity purposes.
Conference Call Aveanna will
host a conference call on Thursday, November 10, 2022, at 10:00
a.m. Eastern Time to discuss our third quarter 2022 results. The
conference call can be accessed live over the phone by dialing
1-877-407-0789, or for international callers, 1-201-689-8563. A
telephonic replay of the conference call will be available until
November 17, 2022, by dialing 1-844-512-2921, or for international
callers, 1-412-317-6671. The passcode for the replay is 13733506. A
live webcast of our conference call will also be available under
the Investor Relations section of our website:
https://ir.aveanna.com/. The online replay will also be available
for one week following the call.
Forward-Looking Statements
Certain matters discussed in this press release
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
(other than statements of historical facts) in this press release
regarding our prospects, plans, financial position, business
strategy and expected financial and operational results may
constitute forward-looking statements. Forward-looking statements
generally can be identified by the use of terminology such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“seek,” “will,” “may,” “should,” “predict,” “project,” “potential,”
“continue” or the negatives of these terms or variations of them or
similar expressions. These statements are based on certain
assumptions that we have made in light of our experience in the
industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate in these circumstances. These
forward-looking statements are based on our current expectations
and beliefs concerning future developments and their potential
effect on us. Forward-looking statements involve a number of risks
and uncertainties that may cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, such as our ability to successfully execute our growth
strategy, including through organic growth and the completion of
acquisitions, effective integration of the companies we acquire,
unexpected costs of acquisitions and dispositions, the possibility
that expected cost synergies may not materialize as expected, the
failure of Aveanna or the companies we acquire to perform as
expected, estimation inaccuracies in revenue recognition, our
ability to drive margin leverage through lower costs, unexpected
increases in SG&A and other expenses, changes in reimbursement,
changes in government regulations, changes in Aveanna’s
relationships with referral sources, increased competition for
Aveanna’s services or wage inflation, changes in the interpretation
of government regulations or discretionary determinations made by
government officials, uncertainties regarding the outcome of rate
discussions with managed care organizations and our ability to
effectively collect our cash from these organizations, our ability
to effectively collect and submit data required under Electronic
Visit Verification regulations, our ability to comply with the
terms and conditions of the CMS Review Choice Demonstration
program, our ability to effectively implement and transition to new
electronic medical record systems or billing and collection
systems, changes in tax rates, the impact of adverse weather, the
impact to our business operations, reimbursements and patient
population were the COVID-19 environment to
worsen, and other risks set forth under the heading “Risk
Factors” in Aveanna’s Annual Report on Form 10-K for its 2021
fiscal year filed with the Securities and Exchange Commission on
March 28, 2022, which is available at www.sec.gov. In
addition, these forward-looking statements necessarily depend upon
assumptions, estimates and dates that may prove to be incorrect or
imprecise. Accordingly, forward-looking statements included in this
press release do not purport to be predictions of future events or
circumstances, and actual results may differ materially from those
expressed by forward-looking statements. All forward-looking
statements speak only as of the date made, and Aveanna undertakes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
About Aveanna Healthcare
Aveanna Healthcare is headquartered in Atlanta,
Georgia and has locations in 33 states 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, home health and hospice
services, 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. For more information, please
visit www.aveanna.com.
Cash Flow and Information about
Indebtedness
The following table sets forth a summary of our
cash flows from operating, investing, and financing activities for
the period presented:
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
|
October 2, 2021 |
|
Net cash (used in) provided by operating activities |
$ |
(8,166 |
) |
|
$ |
22,188 |
|
Net cash
used in investing activities |
$ |
(22,092 |
) |
|
$ |
(113,508 |
) |
Net cash
provided by financing activities |
$ |
63,449 |
|
|
$ |
75,683 |
|
Cash and
cash equivalents at beginning of period |
$ |
30,490 |
|
|
$ |
137,345 |
|
Cash and
cash equivalents at end of period |
$ |
63,681 |
|
|
$ |
121,708 |
|
|
|
|
|
|
|
|
|
The following table presents our long-term
indebtedness as of October 1, 2022:
(dollars in
thousands) |
|
|
|
|
Instrument |
Interest Rate |
|
October 1, 2022 |
|
2021 Extended Term Loan |
L + 3.75% |
|
$ |
851,400 |
|
Delayed Draw
Term Loan |
L +
3.75% |
|
|
59,850 |
|
Second Lien
Term Loan |
L +
7.00% |
|
|
415,000 |
|
Revolving
Credit Facility |
L +
3.75% |
|
|
- |
|
Securitization Facility |
BSBY +
2.00% |
|
|
140,000 |
|
Total
indebtedness |
|
|
$ |
1,466,250 |
|
L = Greater
of 0.50% or one-month LIBOR |
|
|
|
|
|
|
|
|
|
Results of Operations
Three and Nine-Month Periods Ended
October 1, 2022, Compared to the Three and Nine-Month Periods Ended
October 2, 2021
The following table summarizes our consolidated
results of operations for the periods indicated (amounts in
thousands, except per share data):
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
|
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Revenue |
$ |
443,009 |
|
$ |
411,276 |
|
$ |
1,336,498 |
|
$ |
1,264,548 |
|
Cost of
revenue, excluding depreciation and amortization |
|
308,426 |
|
|
271,534 |
|
|
912,046 |
|
|
846,534 |
|
Branch and
regional administrative expenses |
|
89,542 |
|
|
76,370 |
|
|
267,283 |
|
|
223,462 |
|
Corporate
expenses |
|
33,215 |
|
|
37,873 |
|
|
105,984 |
|
|
97,673 |
|
Goodwill
impairment |
|
- |
|
|
- |
|
|
470,207 |
|
|
- |
|
Depreciation
and amortization |
|
4,917 |
|
|
5,145 |
|
|
16,774 |
|
|
15,163 |
|
Acquisition-related costs |
|
- |
|
|
2,007 |
|
|
69 |
|
|
4,779 |
|
Other
operating expense |
|
2,122 |
|
|
- |
|
|
1,953 |
|
|
- |
|
Operating
income (loss) |
|
4,787 |
|
|
18,347 |
|
|
(437,818 |
) |
|
76,937 |
|
Interest
income |
|
164 |
|
|
44 |
|
|
369 |
|
|
182 |
|
Interest
expense |
|
(28,462 |
) |
|
(12,106 |
) |
|
(73,745 |
) |
|
(53,793 |
) |
Loss on debt
extinguishment |
|
- |
|
|
(4,784 |
) |
|
- |
|
|
(13,702 |
) |
Other income
(expense) |
|
45,140 |
|
|
(511 |
) |
|
86,523 |
|
|
(1,088 |
) |
Income
(loss) before income taxes |
|
21,629 |
|
|
990 |
|
|
(424,671 |
) |
|
8,536 |
|
Income tax
benefit |
|
2,669 |
|
|
1,100 |
|
|
416 |
|
|
612 |
|
Net income
(loss) |
$ |
24,298 |
|
$ |
2,090 |
|
$ |
(424,255 |
) |
$ |
9,148 |
|
Net income
(loss) per share: |
|
|
|
|
|
|
|
|
Net income
(loss) per share, basic |
$ |
0.13 |
|
$ |
0.01 |
|
$ |
(2.29 |
) |
$ |
0.06 |
|
Weighted
average shares of common stock outstanding, basic |
|
186,113 |
|
|
184,554 |
|
|
185,327 |
|
|
165,877 |
|
Net income
(loss) per share, diluted |
$ |
0.13 |
|
$ |
0.01 |
|
$ |
(2.29 |
) |
$ |
0.05 |
|
Weighted
average shares of common stock outstanding, diluted |
|
186,166 |
|
|
188,246 |
|
|
185,327 |
|
|
170,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables summarize our consolidated
key performance measures, including Field contribution and Field
contribution margin, which are non-GAAP measures, for the periods
indicated:
|
For the three-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
Revenue |
$ |
443,009 |
|
$ |
411,276 |
|
$ |
31,733 |
|
|
7.7 |
% |
Cost of
revenue, excluding depreciation and amortization |
|
308,426 |
|
|
271,534 |
|
|
36,892 |
|
|
13.6 |
% |
Gross
margin |
$ |
134,583 |
|
$ |
139,742 |
|
$ |
(5,159 |
) |
|
-3.7 |
% |
Gross margin percentage |
|
30.4 |
% |
|
34.0 |
% |
|
|
|
|
Branch and
regional administrative expenses |
|
89,542 |
|
|
76,370 |
|
|
13,172 |
|
|
17.2 |
% |
Field
contribution |
$ |
45,041 |
|
$ |
63,372 |
|
$ |
(18,331 |
) |
|
-28.9 |
% |
Field contribution margin |
|
10.2 |
% |
|
15.4 |
% |
|
|
|
|
Corporate
expenses |
$ |
33,215 |
|
$ |
37,873 |
|
$ |
(4,658 |
) |
|
-12.3 |
% |
As a percentage of revenue |
|
7.5 |
% |
|
9.2 |
% |
|
|
|
|
Operating
income |
$ |
4,787 |
|
$ |
18,347 |
|
$ |
(13,560 |
) |
|
-73.9 |
% |
As a percentage of revenue |
|
1.1 |
% |
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
Revenue |
$ |
1,336,498 |
|
$ |
1,264,548 |
|
$ |
71,950 |
|
|
5.7 |
% |
Cost of
revenue, excluding depreciation and amortization |
|
912,046 |
|
|
846,534 |
|
|
65,512 |
|
|
7.7 |
% |
Gross
margin |
$ |
424,452 |
|
$ |
418,014 |
|
$ |
6,438 |
|
|
1.5 |
% |
Gross margin percentage |
|
31.8 |
% |
|
33.1 |
% |
|
|
|
|
Branch and
regional administrative expenses |
|
267,283 |
|
|
223,462 |
|
|
43,821 |
|
|
19.6 |
% |
Field
contribution |
$ |
157,169 |
|
$ |
194,552 |
|
$ |
(37,383 |
) |
|
-19.2 |
% |
Field contribution margin |
|
11.8 |
% |
|
15.4 |
% |
|
|
|
|
Corporate
expenses |
$ |
105,984 |
|
$ |
97,673 |
|
$ |
8,311 |
|
|
8.5 |
% |
As a percentage of revenue |
|
7.9 |
% |
|
7.7 |
% |
|
|
|
|
Operating
(loss) income |
$ |
(437,818 |
) |
$ |
76,937 |
|
$ |
(514,755 |
) |
|
-669.1 |
% |
As a percentage of revenue |
|
-32.8 |
% |
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables summarize our key
performance measures by segment for the periods indicated:
|
PDS |
|
|
|
For the three-month periods ended |
|
|
(dollars and
hours in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
355,620 |
|
$ |
327,133 |
|
$ |
28,487 |
|
|
8.7 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
254,756 |
|
|
226,540 |
|
|
28,216 |
|
|
12.5 |
% |
|
Gross
margin |
$ |
100,864 |
|
$ |
100,593 |
|
$ |
271 |
|
|
0.3 |
% |
|
Gross margin percentage |
|
28.4 |
% |
|
30.7 |
% |
|
|
|
-2.3 |
% |
(4) |
Hours |
|
9,652 |
|
|
8,998 |
|
|
654 |
|
|
7.3 |
% |
|
Revenue rate |
$ |
36.84 |
|
$ |
36.36 |
|
$ |
0.48 |
|
|
1.4 |
% |
(1) |
Cost of
revenue rate |
$ |
26.39 |
|
$ |
25.18 |
|
$ |
1.21 |
|
|
5.2 |
% |
(2) |
Spread
rate |
$ |
10.45 |
|
$ |
11.18 |
|
$ |
(0.73 |
) |
|
-7.0 |
% |
(3) |
|
|
|
|
|
|
|
|
|
|
|
HHH |
|
|
|
For the three-month periods ended |
|
|
(dollars and
admissions/episodes in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
49,853 |
|
$ |
47,000 |
|
$ |
2,853 |
|
|
6.1 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
32,968 |
|
|
24,130 |
|
|
8,838 |
|
|
36.6 |
% |
|
Gross
margin |
$ |
16,885 |
|
$ |
22,870 |
|
$ |
(5,985 |
) |
|
-26.2 |
% |
|
Gross margin percentage |
|
33.9 |
% |
|
48.7 |
% |
|
|
|
-14.8 |
% |
(4) |
Home health
total admissions (5) |
|
11.3 |
|
|
11.6 |
|
-0.3 |
|
|
-2.6 |
% |
|
Home health
episodic admissions (6) |
|
7.0 |
|
|
7.1 |
|
-0.1 |
|
|
-1.4 |
% |
|
Home health
total episodes (7) |
|
11.4 |
|
|
10.5 |
|
|
0.9 |
|
|
8.6 |
% |
|
Home health
revenue per completed episode (8) |
$ |
3,023 |
|
$ |
2,894 |
|
$ |
129 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
MS |
|
|
|
For the three-month periods ended |
|
|
(dollars and
UPS in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
37,536 |
|
$ |
37,143 |
|
$ |
393 |
|
|
1.1 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
20,702 |
|
|
20,864 |
|
|
(162 |
) |
|
-0.8 |
% |
|
Gross
margin |
$ |
16,834 |
|
$ |
16,279 |
|
$ |
555 |
|
|
3.4 |
% |
|
Gross margin percentage |
|
44.8 |
% |
|
43.8 |
% |
|
|
|
1.0 |
% |
(4) |
Unique
patients served (“UPS”) |
|
81 |
|
|
78 |
|
|
3 |
|
|
3.8 |
% |
|
Revenue
rate |
$ |
463.41 |
|
$ |
476.19 |
|
$ |
(12.78 |
) |
|
-2.7 |
% |
(1) |
Cost of
revenue rate |
$ |
255.58 |
|
$ |
267.49 |
|
$ |
(11.91 |
) |
|
-4.6 |
% |
(2) |
Spread
rate |
$ |
207.83 |
|
$ |
208.70 |
|
$ |
(0.87 |
) |
|
-0.4 |
% |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PDS |
|
|
|
For the nine-month periods ended |
|
|
(dollars and
hours in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
1,053,835 |
|
$ |
1,027,640 |
|
$ |
26,195 |
|
|
2.5 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
753,266 |
|
|
719,435 |
|
|
33,831 |
|
|
4.7 |
% |
|
Gross
margin |
$ |
300,569 |
|
$ |
308,205 |
|
$ |
(7,636 |
) |
|
-2.5 |
% |
|
Gross margin percentage |
|
28.5 |
% |
|
30.0 |
% |
|
|
|
-1.5 |
% |
(4) |
Hours |
|
28,868 |
|
|
28,828 |
|
|
40 |
|
|
0.1 |
% |
|
Revenue rate |
$ |
36.51 |
|
$ |
35.65 |
|
$ |
0.86 |
|
|
2.4 |
% |
(1) |
Cost of
revenue rate |
$ |
26.09 |
|
$ |
24.96 |
|
$ |
1.13 |
|
|
4.6 |
% |
(2) |
Spread
rate |
$ |
10.41 |
|
$ |
10.69 |
|
$ |
(0.28 |
) |
|
-2.6 |
% |
(3) |
|
|
|
|
|
|
|
|
|
|
|
HHH |
|
|
|
For the nine-month periods ended |
|
|
(dollars and
admissions/episodes in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
177,858 |
|
$ |
128,589 |
|
$ |
49,269 |
|
|
38.3 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
98,933 |
|
|
67,224 |
|
|
31,709 |
|
|
47.2 |
% |
|
Gross
margin |
$ |
78,925 |
|
$ |
61,365 |
|
$ |
17,560 |
|
|
28.6 |
% |
|
Gross margin percentage |
|
44.4 |
% |
|
47.7 |
% |
|
|
|
-3.3 |
% |
(4) |
Home health
total admissions (5) |
|
38.0 |
|
|
29.1 |
|
8.9 |
|
|
30.6 |
% |
|
Home health
episodic admissions (6) |
|
23.3 |
|
|
18.0 |
|
5.3 |
|
|
29.4 |
% |
|
Home health
total episodes (7) |
|
37.5 |
|
|
26.5 |
|
11 |
|
|
41.5 |
% |
|
Home health
revenue per completed episode (8) |
$ |
2,978 |
|
$ |
2,894 |
|
$ |
84 |
|
|
2.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
MS |
|
|
|
For the nine-month periods ended |
|
|
(dollars and
UPS in thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
Change |
|
% Change |
|
|
Revenue |
$ |
104,805 |
|
$ |
108,319 |
|
$ |
(3,514 |
) |
|
-3.2 |
% |
|
Cost of
revenue, excluding depreciation and amortization |
|
59,847 |
|
|
59,875 |
|
|
(28 |
) |
|
0.0 |
% |
|
Gross
margin |
$ |
44,958 |
|
$ |
48,444 |
|
$ |
(3,486 |
) |
|
-7.2 |
% |
|
Gross margin percentage |
|
42.9 |
% |
|
44.7 |
% |
|
|
|
-1.8 |
% |
(4) |
Unique
patients served (“UPS”) |
|
237 |
|
|
229 |
|
|
8 |
|
|
3.5 |
% |
|
Revenue
rate |
$ |
442.22 |
|
$ |
473.01 |
|
$ |
(30.79 |
) |
|
-6.7 |
% |
(1) |
Cost of
revenue rate |
$ |
252.52 |
|
$ |
261.46 |
|
$ |
(8.94 |
) |
|
-3.5 |
% |
(2) |
Spread
rate |
$ |
189.70 |
|
$ |
211.55 |
|
$ |
(21.85 |
) |
|
-10.7 |
% |
(3) |
1) |
Represents the period over period change in revenue rate, plus the
change in revenue rate attributable to the change in volume. |
2) |
Represents the period over period change in cost of revenue rate,
plus the change in cost of revenue rate attributable to the change
in volume. |
3) |
Represents the period over period change in spread rate, plus the
change in spread rate attributable to the change in volume. |
4) |
Represents the change in margin percentage year over year (or
quarter over quarter). |
5) |
Represents home health episodic and fee-for-service
admissions. |
6) |
Represents home health episodic admissions. |
7) |
Represents episodic admissions and recertifications. |
8) |
Represents Medicare revenue per completed episode. |
|
|
The following table reconciles operating income
(loss) to Field contribution and Field contribution margin:
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Operating income (loss) |
$ |
4,787 |
|
$ |
18,347 |
|
$ |
(437,818 |
) |
$ |
76,937 |
|
Other
operating expense |
|
2,122 |
|
|
- |
|
|
1,953 |
|
|
- |
|
Acquisition-related costs |
|
- |
|
|
2,007 |
|
|
69 |
|
|
4,779 |
|
Depreciation
and amortization |
|
4,917 |
|
|
5,145 |
|
|
16,774 |
|
|
15,163 |
|
Goodwill
impairment |
|
- |
|
|
- |
|
|
470,207 |
|
|
- |
|
Corporate
expenses |
|
33,215 |
|
|
37,873 |
|
|
105,984 |
|
|
97,673 |
|
Field
contribution |
$ |
45,041 |
|
$ |
63,372 |
|
$ |
157,169 |
|
$ |
194,552 |
|
Revenue |
$ |
443,009 |
|
$ |
411,276 |
|
$ |
1,336,498 |
|
$ |
1,264,548 |
|
Field
contribution margin |
|
10.2 |
% |
|
15.4 |
% |
|
11.8 |
% |
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles net income (loss)
to EBITDA and Adjusted EBITDA:
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Net income (loss) |
$ |
24,298 |
|
$ |
2,090 |
|
$ |
(424,255 |
) |
$ |
9,148 |
|
Interest
expense, net |
|
28,298 |
|
|
12,062 |
|
|
73,376 |
|
|
53,611 |
|
Income tax
benefit |
|
(2,669 |
) |
|
(1,100 |
) |
|
(416 |
) |
|
(612 |
) |
Depreciation
and amortization |
|
4,917 |
|
|
5,145 |
|
|
16,774 |
|
|
15,163 |
|
EBITDA |
|
54,844 |
|
|
18,197 |
|
|
(334,521 |
) |
|
77,310 |
|
Goodwill,
intangible and other long-lived asset impairment |
|
2,108 |
|
|
15 |
|
|
472,192 |
|
|
109 |
|
Non-cash
share-based compensation |
|
3,512 |
|
|
4,262 |
|
|
14,108 |
|
|
10,142 |
|
Sponsor fees
(1) |
|
- |
|
|
- |
|
|
- |
|
|
808 |
|
Loss on
extinguishment of debt |
|
- |
|
|
4,784 |
|
|
- |
|
|
13,702 |
|
Bank fees
related to debt modifications |
|
- |
|
|
7,178 |
|
|
- |
|
|
7,178 |
|
Interest
rate derivatives (2) |
|
(45,038 |
) |
|
566 |
|
|
(86,066 |
) |
|
1,252 |
|
Acquisition-related costs and other costs (3) |
|
- |
|
|
2,007 |
|
|
69 |
|
|
4,779 |
|
Integration
costs (4) |
|
3,266 |
|
|
4,364 |
|
|
16,493 |
|
|
12,482 |
|
Legal costs
and settlements associated with acquisition matters (5) |
|
876 |
|
|
70 |
|
|
3,385 |
|
|
1,120 |
|
COVID-related costs, net of reimbursement (6) |
|
- |
|
|
2,009 |
|
|
5,087 |
|
|
4,329 |
|
Restructuring (7) |
|
2,149 |
|
|
- |
|
|
2,149 |
|
|
- |
|
Other system
transition costs, professional fees and other (8) |
|
3,030 |
|
|
2,358 |
|
|
6,768 |
|
|
5,178 |
|
Total
adjustments (9) |
$ |
(30,097 |
) |
$ |
27,613 |
|
$ |
434,185 |
|
$ |
61,079 |
|
Adjusted
EBITDA |
$ |
24,747 |
|
$ |
45,810 |
|
$ |
99,664 |
|
$ |
138,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles Corporate
expenses to Adjusted corporate expenses:
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Corporate expenses |
$ |
33,215 |
|
$ |
37,873 |
|
$ |
105,984 |
|
$ |
97,673 |
|
Non-cash share-based compensation |
|
(2,259 |
) |
|
(3,355 |
) |
|
(10,607 |
) |
|
(8,180 |
) |
Sponsor fees (1) |
|
- |
|
|
- |
|
|
- |
|
|
(808 |
) |
Bank fees related to debt modifications |
|
- |
|
|
(7,178 |
) |
|
- |
|
|
(7,178 |
) |
Integration costs (4) |
|
(2,025 |
) |
|
(3,759 |
) |
|
(14,072 |
) |
|
(11,408 |
) |
Legal costs and settlements associated with acquisition matters
(5) |
|
(877 |
) |
|
14 |
|
|
(3,386 |
) |
|
(1,120 |
) |
COVID-related costs, net of reimbursement (6) |
|
- |
|
|
(35 |
) |
|
(211 |
) |
|
(256 |
) |
Restructuring (7) |
|
(78 |
) |
|
- |
|
|
(78 |
) |
|
- |
|
Other system transition costs, professional fees and other (8) |
|
(3,060 |
) |
|
(1,921 |
) |
|
(6,763 |
) |
|
(5,647 |
) |
Total
adjustments |
|
(8,299 |
) |
|
(16,234 |
) |
|
(35,117 |
) |
|
(34,597 |
) |
Adjusted
corporate expenses |
$ |
24,916 |
|
$ |
21,639 |
|
$ |
70,867 |
|
$ |
63,076 |
|
Adjusted
corporate expenses as a percentage of revenue |
|
5.6 |
% |
|
5.3 |
% |
|
5.3 |
% |
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles net income (loss)
to Adjusted net (loss) income and presents Adjusted net (loss)
income per diluted share:
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
(dollars in
thousands, except share and per share data) |
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Net income (loss) |
$ |
24,298 |
|
$ |
2,090 |
|
$ |
(424,255 |
) |
$ |
9,148 |
|
Income tax benefit |
|
(2,669 |
) |
|
(1,100 |
) |
|
(416 |
) |
|
(612 |
) |
Goodwill, intangible and other long-lived asset impairment |
|
2,108 |
|
|
15 |
|
|
472,192 |
|
|
109 |
|
Non-cash share-based compensation |
|
3,512 |
|
|
4,262 |
|
|
14,108 |
|
|
10,142 |
|
Sponsor fees (1) |
|
- |
|
|
- |
|
|
- |
|
|
808 |
|
Loss on extinguishment of debt |
|
- |
|
|
4,784 |
|
|
- |
|
|
13,702 |
|
Bank fees related to debt modifications |
|
- |
|
|
7,178 |
|
|
- |
|
|
7,178 |
|
Interest rate derivatives (2) |
|
(45,038 |
) |
|
566 |
|
|
(86,066 |
) |
|
1,252 |
|
Acquisition-related costs and other costs (3) |
|
- |
|
|
2,007 |
|
|
69 |
|
|
4,779 |
|
Integration costs (4) |
|
3,266 |
|
|
4,364 |
|
|
16,493 |
|
|
12,482 |
|
Legal costs and settlements associated with acquisition matters
(5) |
|
876 |
|
|
70 |
|
|
3,385 |
|
|
1,120 |
|
COVID-related costs, net of reimbursement (6) |
|
- |
|
|
2,009 |
|
|
5,087 |
|
|
4,329 |
|
Restructuring (7) |
|
2,149 |
|
|
- |
|
|
2,149 |
|
|
- |
|
Other system transition costs, professional fees and other (8) |
|
3,030 |
|
|
2,358 |
|
|
6,768 |
|
|
5,178 |
|
Total
adjustments |
|
(32,766 |
) |
|
26,513 |
|
|
433,769 |
|
|
60,467 |
|
Adjusted
pre-tax net (loss) income |
|
(8,468 |
) |
|
28,603 |
|
|
9,514 |
|
|
69,615 |
|
Income tax
benefit (expense) on adjusted pre-tax (loss) income (9) |
|
2,117 |
|
|
(7,151 |
) |
|
(2,379 |
) |
|
(17,404 |
) |
Adjusted net
(loss) income |
$ |
(6,351 |
) |
$ |
21,452 |
|
$ |
7,135 |
|
$ |
52,211 |
|
Weighted
average shares outstanding, diluted |
|
186,166 |
|
|
188,246 |
|
|
185,327 |
|
|
170,667 |
|
Adjusted net
(loss) income per diluted share (10) |
$ |
(0.03 |
) |
$ |
0.11 |
|
$ |
0.04 |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following footnotes are applicable to tables
above that reconcile (i) net income (loss) to EBITDA and Adjusted
EBITDA, (ii) Corporate expenses to Adjusted corporate expenses and
(iii) net (loss) income to Adjusted net (loss) income. The
adjustments to reconcile Corporate expenses to Adjusted corporate
expenses only represent the amounts that were recorded within
Corporate expenses.
1) |
Represents management fees previously payable to our sponsors under
our Management Agreement as defined in Note 12 – Related Party
Transactions within the notes accompanying our interim unaudited
consolidated financial statements included in this Quarterly Report
on Form 10-Q. The Management Agreement terminated upon completion
of our initial public offering. |
2) |
Represents valuation adjustments and settlements associated with
interest rate derivatives that are not included in interest
expense, net. Such items are included in other income. |
3) |
Represents transaction costs incurred in connection with planned,
completed, or terminated acquisitions, which include investment
banking fees, legal diligence and related documentation costs, and
finance and accounting diligence and documentation, as presented on
the Company’s consolidated statements of operations. |
4) |
Represents (i) costs associated with our Integration Management
Office, which focuses solely on our integration efforts and
transformational projects, of $0.6 million and $2.3 million for the
three and nine-month periods ended October 1, 2022, respectively;
and $0.9 million and $2.8 million for the three and nine-month
periods ended October 2, 2021, respectively; and (ii) transitionary
costs incurred to integrate acquired companies into our field and
corporate operations of $2.7 million and $14.2 million for the
three and nine-month periods ended October 1, 2022, respectively;
and $3.5 million and $9.7 million for the three and nine-month
periods ended October 2, 2021, respectively. Transitionary costs
incurred to integrate acquired companies include IT consulting
costs and related integration support costs; salary, severance and
retention costs associated with duplicative acquired company
personnel until such personnel are exited from the Company;
accounting, legal and consulting costs; expenses and impairments
related to the closure and consolidation of overlapping markets of
acquired companies, including lease termination and relocation
costs; costs associated with terminating legacy acquired company
contracts and systems; and one-time costs associated with
rebranding our acquired companies and locations to the Aveanna
brand. |
5) |
Represents legal and forensic costs, as well as settlements
associated with resolving legal matters arising during or as a
result of our acquisition-related activities. This primarily
includes costs of $0.8 million and $3.1 million for the three and
nine-month periods ended October 1, 2022, respectively; and $0.1
million and $1.1 million for the three and nine-month periods ended
October 2, 2021, respectively, to comply with the U.S. Department
of Justice, Antitrust Division’s grand jury subpoena related to
nurse wages and hiring activities in certain of our markets, in
connection with a terminated transaction. |
6) |
Represents costs incurred as a result of the COVID-19 environment,
primarily including, but not limited to, (i) relief, vaccine, and
hero pay provided to our caregivers; staffing and retention related
incentives to attract and retain caregivers in the midst of the
Omicron surge; and other incremental compensation costs; (ii) sick
leave for our caregivers required by OSHA's Emergency Temporary
Standard, costs required to comply with federal, state and local
vaccination mandates and testing requirements, and worker
compensation costs for mandated quarantine time; (iii) incremental
PPE costs; and (iv) salary, severance and lease termination costs
associated with workforce reductions necessitated by COVID-19. |
7) |
Represents costs associated with restructuring our branch and
regional administrative footprint during the three months ended
October 1, 2022 in order to appropriately size our resources to
current volumes, including (i) branch and regional salary and
severance costs; and (ii) rent and lease termination costs
associated with the closure of certain office locations. |
8) |
Represents (i) costs associated with the implementation of, and
transition to, new electronic medical record systems and billing
and collection systems, duplicative system costs while such
transformational projects are in-process, and other system
transition costs of $2.2 million and $5.4 million for the three and
nine-month periods ended October 1, 2022, respectively, and $1.2
million and $1.5 million for the three and nine-month periods ended
October 2, 2021; (ii) professional fees associated with preparation
for Sarbanes-Oxley compliance, advisory fees associated with
preparation for and execution of our initial public equity
offering, of $0.8 million and $1.5 million for the three and
nine-month periods ended October 1, 2022, respectively; and $0.8
million and $4.3 million for the three and nine-month periods ended
October 2, 2021, respectively; (iii) $(0.2) million of net gains on
disposal of businesses during the nine-month period ended October
1, 2022 (there were no such gains or losses in any other period);
(iv) costs associated with obtaining certificates of need and other
denovo start-up costs of $0.1 million and $0.3 million in the three
and nine-month periods ended October 1, 2022, respectively (there
were no such costs in the prior fiscal year periods); and (v)
certain other costs or (income) that are either non-cash or
non-core to the Company’s ongoing operations of $(0.1) million and
$(0.2) million for the three and nine-month periods ended October
1, 2022, respectively; and $0.4 million and $0.6 million for the
three and nine-month periods ended October 2, 2021,
respectively. |
|
|
The table below reflects the increase or decrease, and aggregate
impact, to the line items included on our consolidated statements
of operations based upon the adjustments used in arriving at
Adjusted EBITDA from EBITDA for the periods indicated:
|
For the three-month periods ended |
|
For the nine-month periods ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
|
Revenue |
$ |
- |
|
$ |
(3 |
) |
$ |
- |
|
$ |
(153 |
) |
Cost of
revenue, excluding depreciation and amortization |
|
675 |
|
|
2,697 |
|
|
5,850 |
|
|
3,725 |
|
Branch and
regional administrative expenses |
|
3,947 |
|
|
1,381 |
|
|
7,512 |
|
|
3,340 |
|
Corporate
expenses |
|
8,299 |
|
|
16,234 |
|
|
35,117 |
|
|
34,597 |
|
Goodwill
impairment |
|
- |
|
|
- |
|
|
470,207 |
|
|
- |
|
Acquisition-related costs |
|
- |
|
|
2,007 |
|
|
69 |
|
|
4,779 |
|
Other
operating expenses |
|
2,121 |
|
|
- |
|
|
1,952 |
|
|
- |
|
Loss on debt
extinguishment |
|
- |
|
|
4,784 |
|
|
- |
|
|
13,702 |
|
Other
income |
|
(45,139 |
) |
|
513 |
|
|
(86,522 |
) |
|
1,089 |
|
Total
adjustments |
$ |
(30,097 |
) |
$ |
27,613 |
|
$ |
434,185 |
|
$ |
61,079 |
|
9) |
Derived utilizing a combined statutory rate of 25% for the three
and nine-month periods ended October 1, 2022, and October 2, 2021,
respectively, and applied to the respective adjusted pre-tax (loss)
income. |
10) |
Adjustments used to reconcile net (loss) income per diluted share
on a GAAP basis to adjusted net (loss) income per diluted share are
comprised of the same adjustments, inclusive of the tax impact,
used to reconcile net (loss) income to adjusted net (loss) income
divided by the weighted-average diluted shares outstanding during
the period. |
|
|
The following table reconciles the net increase
(decrease) in cash and cash equivalents to free cash flow:
|
For the nine-month period ended |
|
(dollars in
thousands) |
October 1, 2022 |
|
Net increase (decrease) in cash and cash equivalents |
$ |
33,191 |
|
Less:
Acquisitions of businesses, net of cash acquired |
|
(2,027 |
) |
Less:
Proceeds from sale of businesses |
|
460 |
|
Less: Net
proceeds from securitization obligation |
|
20,000 |
|
Less: Net
proceeds from delayed draw term loan |
|
59,700 |
|
Free cash
flow |
$ |
(44,942 |
) |
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