Segment Information

3 Months Ended

Apr. 02, 2022

Segment Reporting [Abstract]

Segment Information

13. SEGMENT INFORMATION

The Company’s operating segments have been identified based upon how management has organized the business by services provided to customers and how the chief operating decision maker (“CODM”) manages the business and allocates resources. The Company has three operating segments and three reportable segments, Private Duty Services, Home Health & Hospice, and Medical Solutions. The PDS segment predominantly includes private duty skilled nursing services, unskilled and personal care services, and pediatric therapy services. The HHH segment provides home health and hospice services to predominately elderly patients. Through the MS segment, the Company provides enteral nutrition and other products to adults and children, delivered on a periodic or as-needed basis.

The CODM evaluates performance using gross margin (and gross margin percentage). Gross margin includes revenue less all costs of revenue, excluding depreciation and amortization, but excludes branch and regional administrative expenses, corporate expenses and other non-field expenses. The CODM does not evaluate a measure of assets when assessing performance.

Results shown for the three-month periods ended April 2, 2022 and April 3, 2021 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 2, 2022 and April 3, 2021, respectively (amounts in thousands):

	For the three-month period ended April 2, 2022
	PDS			HHH			MS			Total
Revenue	$	350,190		$	66,623		$	33,721		$	450,534
Cost of revenue, excluding depreciation and amortization		251,874			34,168			19,666			305,708
Gross margin	$	98,316		$	32,455		$	14,055		$	144,826
Gross margin percentage		28.1	%		48.7	%		41.7	%		32.1	%
	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 periods ended
Segment Reconciliation:	April 2, 2022			April 3, 2021
Total segment gross margin	$	144,826		$	131,683
Branch and regional administrative expenses		88,743			69,372
Corporate expenses		36,567			27,399
Depreciation and amortization		5,819			4,848
Acquisition-related costs		91			1,768
Other operating income		(170	)		-
Operating income		13,776			28,296
Interest income		62			77
Interest expense		(22,364	)		(22,425	)
Other income		36,457			159
Income before income taxes	$	27,931		$	6,107