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Segment Reporting
 9 Months Ended
Sep. 26, 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 $4.7 million and $7.8 million of costs in the three and nine months ended September 26, 2020, respectively, primarily for a tangible appreciation bonus paid to our customer-facing doctors and associates, as well as personal protective equipment and other supplies needed to operate our stores safely. Incremental expenses related to the COVID-19 pandemic are not allocated to the reportable segments, but are included in the Corporate/Other category.
On July 17, 2020, NVI and Walmart entered into Amendment 4 (“Walmart Amendment”) to the management & services agreement, to extend the current term and economics of the agreement by three years, to February 23, 2024, and provide that the agreement will automatically renew for an additional three year term unless, no later than seven months prior to the end of the term, one party gives the other party written notice of non-renewal. In addition, the Walmart Amendment deletes certain provisions that are no longer applicable and updates certain administrative provisions, including with respect to background checks, and adds an obligation for the Company to provide Walmart an annual compliance certificate regarding certain of the Company’s obligations and to provide Walmart certain inspection and audit rights. All other terms and conditions of the agreement remain in effect.
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 are 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 SG&A expenses. 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 September 26, 2020
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Segment product revenues$323,159 $24,900 $57,906 $(2,629)$403,336 
Segment services and plans revenues73,241 15,332 — (6,556)82,017 
Total net revenue396,400 40,232 57,906 (9,185)485,353 
Cost of products86,945 11,676 50,154 (501)148,274 
Cost of services and plans55,680 6,108 747 — 62,535 
Total costs applicable to revenue142,625 17,784 50,901 (501)210,809 
SG&A128,206 13,068 49,244 — 190,518 
Asset impairment — — 7,150 — 7,150 
Other expense (income), net— — (154)— (154)
EBITDA$125,569 $9,380 $(49,235)$(8,684)
Depreciation and amortization22,236 
Interest expense, net12,475 
Income before income taxes$42,319 
Three Months Ended September 28, 2019
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Segment product revenues$270,171 $25,252 $63,173 $(2,807)$355,789 
Segment services and plans revenues63,267 14,103 1 (1,258)76,113 
Total net revenue333,438 39,355 63,174 (4,065)431,902 
Cost of products77,670 11,681 55,684 (517)144,518 
Cost of services and plans53,465 6,519 — — 59,984 
Total costs applicable to revenue131,135 18,200 55,684 (517)204,502 
SG&A128,054 13,920 48,316 — 190,290 
Asset impairment— — 3,516 — 3,516 
Other expense, net— — 146 — 146 
Loss on extinguishment of debt— — 9,786 — 9,786 
EBITDA$74,249 $7,235 $(54,274)$(3,548)
Depreciation and amortization22,336 
Interest expense, net7,873 
Income (loss) before income taxes$(6,547)
Nine Months Ended September 26, 2020
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Segment product revenues$782,502 $65,572 $174,950 $(17,140)$1,005,884 
Segment services and plans revenues172,829 36,530 — (179)209,180 
Total net revenue955,331 102,102 174,950 (17,319)1,215,064 
Costs of products223,759 32,173 150,198 (3,851)402,279 
Costs of services and plans149,847 17,270 747 — 167,864 
Total costs applicable to revenue373,606 49,443 150,945 (3,851)570,143 
SG&A349,624 37,260 133,957 — 520,841 
Asset impairment — — 20,916 — 20,916 
Litigation settlement — — 4,395 — 4,395 
Other expense (income), net— — (312)— (312)
Debt issuance costs— — 136 — 136 
EBITDA$232,101 $15,399 $(135,087)$(13,468)
Depreciation and amortization68,970 
Interest expense, net35,432 
Income (loss) before income taxes$(5,457)
Nine Months Ended September 28, 2019
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Segment product revenues$827,957 $81,178 $189,389 $(2,042)$1,096,482 
Segment services and plans revenues191,117 42,019 12 (7,062)226,086 
Total net revenue1,019,074 123,197 189,401 (9,104)1,322,568 
Costs of products239,975 38,123 166,533 (454)444,177 
Costs of services and plans155,710 19,090 1 — 174,801 
Total costs applicable to revenue395,685 57,213 166,534 (454)618,978 
SG&A387,345 42,041 137,058 — 566,444 
Asset impairment— — 7,387 — 7,387 
Other expense, net— — 975 — 975 
Loss on extinguishment of debt— — 9,786 — 9,786 
EBITDA$236,044 $23,943 $(132,339)$(8,650)
Depreciation and amortization63,570 
Interest expense, net25,902 
Income before income taxes$29,526 
Revenues associated with managing operations of our legacy partner were $10.1 million and $23.9 million for the three and nine months ended September 26, 2020, respectively, and $9.3 million and $27.5 million for the three and nine months ended September 28, 2019, respectively. During the nine months ended September 26, 2020, sales associated with our Legacy partner arrangement represented 8.4% of consolidated net revenue. During the nine months ended September 26, 2020, sales associated with Walmart and Sam’s Club contact lenses distribution arrangements represented 7.7% of consolidated net revenue. This exposes us to concentration of customer risk.