Segment Reporting

6 Months Ended

Jun. 27, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company provides its principal products and services through two reportable segments: Owned & Host and Legacy. The “Corporate/Other” category includes the results of operations of our other operating segments, AC Lens and FirstSight, as well as corporate overhead support. The “Reconciliations” category represents other adjustments to reportable segment results necessary for the presentation of consolidated financial results in accordance with U.S. GAAP. We incurred $2.5 million and $3.1 million of costs in the three and six months ended June 27, 2020, respectively, primarily for personal protective equipment and other supplies needed to operate our stores safely, as well as for professional fees associated with adapting our operations to the COVID-19 pandemic. Incremental expenses related to the COVID-19 pandemic are not allocated to the reportable segments, but are included in the Corporate/Other category.

The following is a summary of certain financial data for each of our segments. Reportable segment information is presented on the same basis as our condensed consolidated financial statements, except for net revenue and associated costs applicable to revenue, which is presented on a cash basis, including point of sales for managed care payors and excluding the effects of unearned and deferred revenue, consistent with what the chief operating decision maker (“CODM”) regularly reviews. Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segments. Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”), or net revenue, less costs applicable to revenue, less selling, general and administrative costs. Depreciation and amortization, asset impairment, litigation settlement and other corporate costs that are not allocated to the reportable segments, including interest expense are excluded from segment EBITDA. There are no revenue transactions between our reportable segments. We measure assets in our reportable segments on the same basis as consolidated assets. There have been no changes from prior periods in the measurement methods used to determine reportable segment profit or loss, and there have been no asymmetrical allocations to segments.

	Three Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Segment product revenues	$	177,430	$	16,254	$	50,472	$	(34,449)	$	209,707
Segment services and plans revenues	34,275		9,159		—		6,866		50,300
Total net revenue	211,705		25,413		50,472		(27,583)		260,007
Cost of products	54,898		9,093		42,135		(8,491)		97,635
Cost of services and plans	38,573		4,572		—		—		43,145
Total costs applicable to revenue	93,471		13,665		42,135		(8,491)		140,780
SG&A	86,704		10,561		39,317		—		136,582
Asset impairment	—		—		2,411		—		2,411
Debt issuance costs	—		—		136		—		136
Other expense (income), net	—		—		(92)		—		(92)
EBITDA	$	31,530	$	1,187	$	(33,435)	$	(19,092)
Depreciation and amortization									21,924
Interest expense, net									15,502
Income (loss) before income taxes									$	(57,236)

	Three Months Ended June 29, 2019
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Segment product revenues	$	260,867	$	25,785	$	62,341	$	8,540	$	357,533
Segment services and plans revenues	59,549		13,479		5		(1,115)		71,918
Total net revenue	320,416		39,264		62,346		7,425		429,451
Cost of products	77,059		12,312		54,253		2,030		145,654
Cost of services and plans	50,581		6,270		1		—		56,852
Total costs applicable to revenue	127,640		18,582		54,254		2,030		202,506
SG&A	126,078		13,884		42,316		—		182,278
Asset impairment	—		—		1,790		—		1,790
Other expense, net	—		—		356		—		356
EBITDA	$	66,698	$	6,798	$	(36,370)	$	5,395
Depreciation and amortization									20,819
Interest expense, net									8,968
Income before income taxes									$	12,734

	Six Months Ended June 27, 2020
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Segment product revenues	$	459,343	$	40,672	$	117,044	$	(14,511)	$	602,548
Segment services and plans revenues	99,589		21,198		—		6,376		127,163
Total net revenue	558,932		61,870		117,044		(8,135)		729,711
Costs of products	136,814		20,496		100,045		(3,350)		254,005
Costs of services and plans	94,167		11,162		—		—		105,329
Total costs applicable to revenue	230,981		31,658		100,045		(3,350)		359,334
SG&A	221,418		24,192		84,713		—		330,323
Asset impairment	—		—		13,766		—		13,766
Debt issuance costs	—		—		136		—		136
Litigation settlement	—		—		4,395		—		4,395
Other expense (income), net	—		—		(158)		—		(158)
EBITDA	$	106,533	$	6,020	$	(85,853)	$	(4,785)
Depreciation and amortization									46,734
Interest expense, net									22,957
Income (loss) before income taxes									$	(47,776)

	Six Months Ended June 29, 2019
In thousands	Owned & Host		Legacy		Corporate/Other		Reconciliations		Total
Segment product revenues	$	557,786	$	55,926	$	126,216	$	765	$	740,693
Segment services and plans revenues	127,850		27,916		11		(5,804)		149,973
Total net revenue	685,636		83,842		126,227		(5,039)		890,666
Costs of products	162,305		26,442		110,848		63		299,658
Costs of services and plans	102,245		12,571		1		—		114,817
Total costs applicable to revenue	264,550		39,013		110,849		63		414,475
SG&A	259,291		28,121		88,742		—		376,154
Asset impairment	—		—		3,872		—		3,872
Other expense, net	—		—		829		—		829
EBITDA	$	161,795	$	16,708	$	(78,065)	$	(5,102)
Depreciation and amortization									41,234
Interest expense, net									18,029
Income before income taxes									$	36,073

Revenues associated with managing operations of our legacy partner were $6.3 million and $13.8 million for the three and six months ended June 27, 2020, respectively, and $8.9 million and $18.2 million for the three and six months ended June 29, 2019, respectively. During the six months ended June 27, 2020, sales associated with our Legacy partner arrangement represented 8.5% of consolidated net revenue. During the six months ended June 27, 2020, AC Lens sales associated with Walmart and Sam’s Club contact lenses distribution arrangements represented 8.6% of consolidated net revenue. This exposes us to concentration of customer risk.