Segment Information

3 Months Ended

Apr. 03, 2021

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, consistent with the criteria in ASC 280, Segment Reporting.  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 3, 2021 and March 28, 2020 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 3, 2021 and March 28, 2020, respectively (amounts in thousands):

	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 Period Ended March 28, 2020
	PDS			HHH			MS			Total
Revenue	$	320,513		$	4,477		$	30,233		$	355,223
Cost of revenue, excluding depreciation and amortization		227,963			2,803			16,916			247,682
Gross margin	$	92,550		$	1,674		$	13,317		$	107,541
Gross margin percentage		28.9	%		37.4	%		44.0	%		30.3	%

	For the Three-Month Periods Ended
Segment Reconciliation:	April 3, 2021			March 28, 2020
Total segment gross margin	$	131,683		$	107,541
Branch and regional administrative expenses		69,372			59,694
Corporate expenses		27,399			25,797
Depreciation and amortization		4,848			4,183
Acquisition-related costs		1,768			-
Operating income		28,296			17,867
Interest income		77			46
Interest expense		(22,425	)		(21,063	)
Loss on debt extinguishment		-			127
Other income		159			41,791
Income before income taxes	$	6,107		$	38,768