Segment Information

6 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Segment Information

14. 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 and six-month periods ended July 2, 2022 and July 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 and six-month periods ended July 2, 2022 and July 3, 2021, respectively (amounts in thousands):

	For the three-month period ended July 2, 2022
	PDS			HHH			MS			Total
Revenue	$	348,025		$	61,382		$	33,548		$	442,955
Cost of revenue, excluding depreciation and amortization		246,636			31,797			19,479			297,912
Gross margin	$	101,389		$	29,585		$	14,069		$	145,043
Gross margin percentage		29.1	%		48.2	%		41.9	%		32.7	%
	For the three-month period ended July 3, 2021
	PDS			HHH			MS			Total
Revenue	$	349,680		$	50,071		$	36,361		$	436,112
Cost of revenue, excluding depreciation and amortization	$	243,898		$	25,765		$	19,860			289,523
Gross margin	$	105,782		$	24,306		$	16,501		$	146,589
Gross margin percentage		30.3	%		48.5	%		45.4	%		33.6	%

	For the six-month period ended July 2, 2022
	PDS			HHH			MS			Total
Revenue	$	698,215		$	128,005		$	67,269		$	893,489
Cost of revenue, excluding depreciation and amortization		498,510			65,965			39,145			603,620
Gross margin	$	199,705		$	62,040		$	28,124		$	289,869
Gross margin percentage		28.6	%		48.5	%		41.8	%		32.4	%
	For the six-month period ended July 3, 2021
	PDS			HHH			MS			Total
Revenue	$	700,507		$	81,589		$	71,176		$	853,272
Cost of revenue, excluding depreciation and amortization		492,895			43,094			39,011			575,000
Gross margin	$	207,612		$	38,495		$	32,165		$	278,272
Gross margin percentage		29.6	%		47.2	%		45.2	%		32.6	%

	For the three-month periods ended						For the six-month periods ended
Segment Reconciliation:	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Total segment gross margin	$	145,043		$	146,589		$	289,869		$	278,272
Branch and regional administrative expenses		88,998			77,720			177,741			147,092
Corporate expenses		36,202			32,401			72,769			59,800
Goodwill impairment		470,207			-			470,207			-
Depreciation and amortization		6,038			5,170			11,857			10,018
Acquisition-related costs		(22	)		1,004			69			2,772
Other operating expense (income)		1			-			(169	)		-
Operating (loss) income		(456,381	)		30,294			(442,605	)		58,590
Interest income		143			61			205			138
Interest expense		(22,919	)		(19,262	)		(45,283	)		(41,687	)
Loss on debt extinguishment		-			(8,918	)		-			(8,918	)
Other income (expense)		4,926			(736	)		41,383			(577	)
(Loss) Income before income taxes	$	(474,231	)	$	1,439		$	(446,300	)	$	7,546