Government Assistance	9 Months Ended
Sep. 28, 2024
Government Assistance [Abstract]
Government Assistance	2. GOVERNMENT ASSISTANCE The Company receives government assistance from various governmental entities to support the operations of its early childhood education and care centers and before- and after-school sites, which is comprised of both Income Grants and Capital Grants. Income Grants consist primarily of funds received for reimbursement of food costs, teacher compensation, and classroom supplies, and in certain cases, as incremental revenue. Refer to Note 1, Organization and Summary of Significant Accounting Policies, and Note 2, Government Assistance, within the audited consolidated annual financial statements for the fiscal year ended December 30, 2023 included in the Prospectus for further information regarding the Company's government assistance policy and disclosures related to all forms of government assistance received. A portion of the Company's food costs are reimbursed through the federal Child and Adult Care Food Program. The program is operated by states to partially or fully offset the cost of food for children that meet certain criteria. The Company recognized food subsidies of $13.2 million and $10.9 million during the three months ended September 28, 2024 and September 30, 2023, and $38.6 million and $33.7 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, offsetting cost of services (excluding depreciation and impairment) in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. COVID-19 Related Stimulus The federal government passed multiple stimulus packages since the onset of the coronavirus disease 2019 ("COVID-19") pandemic to stabilize the child care industry, including without limitation, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act”), the Consolidated Appropriations Act, and the American Rescue Plan Act. "COVID-19 Related Stimulus" refers to grants arising from governmental acts relating to the COVID-19 pandemic and are accounted for in accordance with the Company's government assistance policy. COVID-19 Related Stimulus is recognized as revenue or as cost reimbursements based on stipulations within each specific grant. Revenue arising from COVID-19 Related Stimulus is to replace lost revenue at centers due to closures or reduced enrollment as a result of the COVID-19 pandemic. The Company recognized $0.2 million and $1.4 million during the three months ended September 28, 2024 and September 30, 2023, and $0.3 million and $3.0 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in revenue from COVID-19 Related Stimulus in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. Additionally, the Company recognized $16.9 million and $36.9 million during the three months ended September 28, 2024 and September 30, 2023, and $55.9 million and $145.2 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in funding for reimbursement of center operating expenses, offsetting cost of services (excluding depreciation and impairment) in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. As of September 28, 2024 and December 30, 2023, $1.3 million and $1.0 million, respectively, were recorded in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets for amounts receivable from COVID-19 Related Stimulus. Refer to Note 5, Prepaid Expenses and Other Current Assets. The Company records a deferred grant liability for amounts received from government assistance that do not yet meet the Company’s recognition criteria. As of September 28, 2024 and December 30, 2023, $7.2 million and $18.1 million, respectively, were recorded for deferred grants, primarily related to COVID-19 Related Stimulus, in other current liabilities on the unaudited condensed consolidated balance sheets. The Employee Retention Credit (“ERC”), established by the CARES Act and extended and expanded by several subsequent governmental acts, allows eligible businesses to claim a per employee payroll tax credit based on a percentage of qualified wages, including health care expenses, paid during calendar year 2020 through September 2021. During the fiscal year ended December 31, 2022, the Company applied for ERC for qualified wages and benefits paid throughout the fiscal years ended January 1, 2022 and January 2, 2021. Reimbursements of $62.0 million in cash tax refunds for ERC claimed, along with $2.3 million in interest income, were received during the fiscal year ended December 30, 2023. Due to the unprecedented nature of ERC legislation and the changing administrative guidance, not all of the ERC reimbursements received have met the Company's recognition criteria. During the nine months ended September 28, 2024, the Company recognized $23.4 million of ERC in cost of services (excluding depreciation and impairment), along with $0.5 million in interest income in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. No ERC was recognized during the three months ended September 28, 2024 and the three and nine months ended September 30, 2023. As of September 28, 2024 and December 30, 2023, deferred ERC liabilities of $31.4 million and $20.6 million were recorded in other current liabilities and $12.3 million and $43.7 million were recorded in other long-term liabilities, respectively, on the unaudited condensed consolidated balance sheets. Additionally, the Company recorded $3.4 million in ERC receivables in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets as of September 28, 2024 as there is reasonable assurance these reimbursements will be received. Refer to Note 5, Prepaid Expenses and Other Current Assets, and Note 15, Income Taxes. Refer to Note 20, Income Taxes, within the audited consolidated annual financial statements for the fiscal year ended December 30, 2023 included in the Prospectus for further information regarding uncertain tax positions for ERC not yet recognized.

Government Assistance

9 Months Ended

Sep. 28, 2024

GOVERNMENT ASSISTANCE

The Company receives government assistance from various governmental entities to support the operations of its early childhood education and care centers and before- and after-school sites, which is comprised of both Income Grants and Capital Grants. Income Grants consist primarily of funds received for reimbursement of food costs, teacher compensation, and classroom supplies, and in certain cases, as incremental revenue. Refer to Note 1, Organization and Summary of Significant Accounting Policies, and Note 2, Government Assistance, within the audited consolidated annual financial statements for the fiscal year ended December 30, 2023 included in the Prospectus for further information regarding the Company's government assistance policy and disclosures related to all forms of government assistance received.

A portion of the Company's food costs are reimbursed through the federal Child and Adult Care Food Program. The program is operated by states to partially or fully offset the cost of food for children that meet certain criteria. The Company recognized food subsidies of $13.2 million and $10.9 million during the three months ended September 28, 2024 and September 30, 2023, and $38.6 million and $33.7 million during the nine months ended September 28, 2024 and September 30, 2023, respectively,

offsetting cost of services (excluding depreciation and impairment) in the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

COVID-19 Related Stimulus

The federal government passed multiple stimulus packages since the onset of the coronavirus disease 2019 ("COVID-19") pandemic to stabilize the child care industry, including without limitation, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act”), the Consolidated Appropriations Act, and the American Rescue Plan Act. "COVID-19 Related Stimulus" refers to grants arising from governmental acts relating to the COVID-19 pandemic and are accounted for in accordance with the Company's government assistance policy.

COVID-19 Related Stimulus is recognized as revenue or as cost reimbursements based on stipulations within each specific grant. Revenue arising from COVID-19 Related Stimulus is to replace lost revenue at centers due to closures or reduced enrollment as a result of the COVID-19 pandemic. The Company recognized $0.2 million and $1.4 million during the three months ended September 28, 2024 and September 30, 2023, and $0.3 million and $3.0 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in revenue from COVID-19 Related Stimulus in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. Additionally, the Company recognized $16.9 million and $36.9 million during the three months ended September 28, 2024 and September 30, 2023, and $55.9 million and $145.2 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in funding for reimbursement of center operating expenses, offsetting cost of services (excluding depreciation and impairment) in the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

As of September 28, 2024 and December 30, 2023, $1.3 million and $1.0 million, respectively, were recorded in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets for amounts receivable from COVID-19 Related Stimulus. Refer to Note 5, Prepaid Expenses and Other Current Assets. The Company records a deferred grant liability for amounts received from government assistance that do not yet meet the Company’s recognition criteria. As of September 28, 2024 and December 30, 2023, $7.2 million and $18.1 million, respectively, were recorded for deferred grants, primarily related to COVID-19 Related Stimulus, in other current liabilities on the unaudited condensed consolidated balance sheets.

The Employee Retention Credit (“ERC”), established by the CARES Act and extended and expanded by several subsequent governmental acts, allows eligible businesses to claim a per employee payroll tax credit based on a percentage of qualified wages, including health care expenses, paid during calendar year 2020 through September 2021. During the fiscal year ended December 31, 2022, the Company applied for ERC for qualified wages and benefits paid throughout the fiscal years ended January 1, 2022 and January 2, 2021. Reimbursements of $62.0 million in cash tax refunds for ERC claimed, along with $2.3 million in interest income, were received during the fiscal year ended December 30, 2023. Due to the unprecedented nature of ERC legislation and the changing administrative guidance, not all of the ERC reimbursements received have met the Company's recognition criteria. During the nine months ended September 28, 2024, the Company recognized $23.4 million of ERC in cost of services (excluding depreciation and impairment), along with $0.5 million in interest income in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. No ERC was recognized during the three months ended September 28, 2024 and the three and nine months ended September 30, 2023. As of September 28, 2024 and December 30, 2023, deferred ERC liabilities of $31.4 million and $20.6 million were recorded in other current liabilities and $12.3 million and $43.7 million were recorded in other long-term liabilities, respectively, on the unaudited condensed consolidated balance sheets. Additionally, the Company recorded $3.4 million in ERC receivables in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets as of September 28, 2024 as there is reasonable assurance these reimbursements will be received. Refer to Note 5, Prepaid Expenses and Other Current Assets, and Note 15, Income Taxes. Refer to Note 20, Income Taxes, within the audited consolidated annual financial statements for the fiscal year ended December 30, 2023 included in the Prospectus for further information regarding uncertain tax positions for ERC not yet recognized.