0000950170-22-016576 | 10-Q | XBRL Viewer | Aveanna Healthcare Holdings INC

Revenue

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

3. REVENUE

The Company evaluated the nature, amount, timing and uncertainty of revenue and cash flows using the five-step process. The Company uses a portfolio approach to group contracts with similar characteristics and analyze historical cash collection trends.

Revenue is primarily derived from (i) pediatric healthcare services provided to patients including private duty nursing services, unskilled care, and therapy services; (ii) adult home health and hospice services (collectively “patient revenue”); and (iii) from the delivery of enteral nutrition and other products to patients (“product revenue”). The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each service provided is its own stand-alone contract. Incremental costs of obtaining a contract are expensed as incurred due to the short-term nature of the contracts.

Services ordered by a healthcare provider in an episode of care are not separately identifiable and therefore have been combined into a single performance obligation for each contract. The Company recognizes revenue as its performance obligations are completed. For patient revenue, the performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the healthcare services provided. For product revenue, the performance obligation is satisfied at the point in time of delivery of the product to the patient. The Company recognizes patient revenue equally over the number of treatments provided in a single episode of care. Typically, patients and third-party payers are billed within several days of the service being performed, and payments are due based on contract terms.

The Company’s lines of business are generally classified into the following categories: private duty services; home health and hospice; and medical solutions.

Private Duty Services (“PDS”). The PDS business includes a broad range of pediatric and adult healthcare services including private duty skilled nursing, unskilled services which include employer of record support services and personal care services, pediatric therapy services, rehabilitation services, and nursing services in schools and pediatric day healthcare centers.

Home Health & Hospice (“HHH”). The HHH business provides home health, hospice, and personal care services to predominately elderly patients.

Medical Solutions (“MS”). The MS business includes the delivery of enteral nutrition and other products to patients.

For the PDS, HHH, and MS businesses, the Company receives payments from the following sources for services rendered: (i) state governments under their respective Medicaid programs (“Medicaid”); (ii) managed Care providers of state government Medicaid programs (“Medicaid MCO”); (iii) commercial insurers; (iv) other government programs including Medicare and Tricare and ChampVA (“Medicare”); and (v) individual patients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component.

The Company determines the transaction price based on established billing rates reduced by contractual adjustments and discounts provided to third-party payers and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. For the PDS, HHH, and MS businesses, implicit price concessions are based on historical collection experience. As of July 2, 2022 and January 1, 2022, estimated explicit and implicit price concessions of $58.2 million and $55.8 million, respectively, were recorded as reductions to patient accounts receivable balances to arrive at the estimated collectible revenue and patient accounts receivable. For the PDS, HHH, and MS businesses, most contracts contain variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense which is included as a component of operating expenses in the

consolidated statements of operations. The Company did not record any bad debt expense for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively.

The Company derives a significant portion of its revenue from Medicaid, Medicaid MCO, Medicare and other payers that receive discounts from established billing rates. The regulations and various managed care contracts under which these discounts must be estimated are complex and subject to interpretation. Management estimates the transaction price on a payer-specific basis given its interpretation of the applicable regulations or contract terms. Updated regulations and contract negotiations occur frequently, necessitating regular review and assessment of the estimation process by management; however, there were no material revenue adjustments recognized from performance obligations satisfied or partially satisfied in previous periods for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively.

The following table presents revenue by payer type as a percentage of revenue for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively:


	For the three-month periods ended						For the six-month periods ended
	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
	Percentage			Percentage			Percentage			Percentage
Medicaid MCO		54.3	%		52.6	%		51.9	%		54.2	%
Medicaid		21.7	%		23.8	%		21.9	%		24.3	%
Commercial		9.8	%		12.3	%		9.9	%		11.8	%
Medicare		14.1	%		11.0	%		16.2	%		9.4	%
Self-pay		0.1	%		0.3	%		0.1	%		0.3	%
Total revenue		100.0	%		100.0	%		100.0	%		100.0	%

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Commitments and Contingencies	6 Months Ended
Jul. 02, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	11. COMMITMENTS AND CONTINGENCIES Insurance Reserves As is typical in the healthcare industry, the Company is subject to claims that its services have resulted in patient injury or other adverse effects. The accrued insurance reserves included in the accompanying interim unaudited consolidated balance sheets include estimates of the ultimate costs, in the event the Company was unable to receive funds from claims made under commercial insurance policies, for claims that have been reported but not paid and claims that have been incurred but not reported at the balance sheet dates. Although substantially all reported claims are paid directly by the Company’s commercial insurance carriers, the Company is ultimately responsible for payment of these claims in the event its insurance carriers become insolvent or otherwise do not honor the contractual obligations under the malpractice policies. The Company is required under U.S. GAAP to recognize these estimated liabilities in its consolidated financial statements on a gross basis; with a corresponding receivable from the insurance carriers reflecting the contractual indemnity provided by the carriers under the related malpractice policies. The Company maintains primary commercial insurance coverage on a claims-made basis for professional malpractice claims with a $1.0 million per claim deductible and $5.5 million per claim and annual aggregate limits as of October 1, 2021. Prior to October 1, 2021, the Company maintained primary commercial insurance coverage on a claim basis for professional malpractice claims with a $0.5 million per claim deductible and $6.0 million per claim and annual aggregate limits. Moreover, the Company maintains excess insurance coverage for professional malpractice claims. In addition, the Company maintains workers’ compensation insurance with a $0.5 million per claim deductible and statutory limits. The Company reimburses insurance carriers for deductible losses under these policies. The Company’s insurance carriers require collateral to secure the Company’s obligation to reimburse insurance carriers for these deductible payments. Collateral as of July 2, 2022 was comprised of $17.6 million of issued letters of credit, $2.9 million in cash collateral, and $2.9 million in surety bonds. Collateral as of January 1, 2022 was comprised of $17.6 million of issued letters of credit, $2.9 million in cash collateral, and $2.9 million in surety bonds. As of July 2, 2022, insurance reserves totaling $83.4 million were included on the accompanying interim unaudited consolidated balance sheets, representing $37.3 million and $46.1 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. At January 1, 2022, insurance reserves totaling $80.5 million were included on the accompanying consolidated balance sheets, representing $38.7 million and $41.8 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. Litigation and Other Current Liabilities On December 24, 2018, Aveanna Healthcare LLC, an indirect wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Agreement”) to acquire a pediatric home health company (the “Seller”). The agreement contained a provision whereby a $75.0 million transaction termination fee (the “Break-up Fee”) could be payable to the Seller under certain circumstances. On December 20, 2019, Aveanna Healthcare LLC terminated the Agreement, and the Seller demanded payment of the Break-up Fee. The Company believes the Agreement was terminated for cause and therefore no payment of the Break-up Fee is due to the Seller. The Seller has disputed this assertion. While the Company believes that litigation over this matter is unlikely at the present time, it is possible that the Company and the Seller may in the future pursue claims and counterclaims related to the termination of the Agreement and payment of the Break-up Fee. At this time, the Company is unable to predict the possible loss or range of loss, if any, associated with the resolution of any such litigation, or any potential related effect on the Company or its business or operations. On August 6, 2020, the Company sued Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”) in the Delaware Superior Court. The Company asserted that the Defendants made fraudulent representations and warranties in connection with the Epic acquisition. The Company is seeking damages ranging from $24.0 million to $50.0 million. The Company also requested a declaratory judgment holding that the Defendants waived any claim to the Company’s continued possession of $7.1 million in escrow funds (the “Escrow Funds”) that were delivered to the Company in January 2018 by the Epic acquisition escrow agent. In response, the Defendants asserted four counterclaims: (1) specific performance of an alleged right to control a tax audit; (2) advancement of litigation fees and expenses for certain individual Defendants; (3) a declaratory judgment; and (4) breach of contract claim concerning the Escrow Funds. The Company subsequently reached an agreement with the Defendants, which (1) allowed the Defendants to take a principal role in the applicable tax audit, though the Company will continue to communicate with the Internal Revenue Service and retain the ability to make strategic decisions with respect to the audit and (2) dismissed claims against certain individual Defendants mooting Defendants’ claims for advancement of litigation fees and expenses. On July 29, 2021, the Delaware Superior Court denied the Defendants’ motion for judgment on the pleadings with respect to the Company’s claim for fraud against the Defendants, which allows the Company to pursue discovery with respect to the alleged fraud claim. With respect to the Company’s retention of certain tax refunds the Company received on behalf of Defendants, the Court denied the Company’s motion for judgment on the pleadings, pursuant to which the Company sought to retain the tax refunds as matter of law. The Court also ordered Seller to refile its motion for summary judgment on the same subject and abated a ruling pending further discovery and resolution of whether the parties entered into a post-closing agreement, allowing the Company to retain the tax refunds pending the outcome of the related tax audits. Lastly, the Court denied the Company’s motion for judgment on the pleadings as to its continued possession of the Escrow Funds. At this time, the Company cannot predict the ultimate resolution or estimate the amount of any loss or recovery, if any, related to this matter. The Company is currently a party to various routine litigation incidental to the business. While management currently believes that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. Management has established provisions within other current liabilities in the accompanying interim unaudited consolidated balance sheets, which in the opinion of management represents the best estimate of exposure and adequately provides for such losses that may occur from asserted claims related to the provision of professional services and which may not be covered by the Company’s insurance policies. Management believes that any additional unfavorable provisions would not be material to the Company’s results of operations or financial position; however, if an unfavorable ruling on any asserted or unasserted claim were to occur, there exists the possibility of a material adverse impact on the Company’s net earnings or financial position. The estimate of the potential impact from legal proceedings on the Company’s financial position or overall results of operations could change in the future. Healthcare Regulatory Matters Starting on October 30, 2019 the Company has received grand jury subpoenas issued by the U.S. Department of Justice, Antitrust Division (the “Antitrust Division”) requiring the production of documents and information pertaining to nurse wages, reimbursement rates, and hiring activities in a few of its local markets. The Company is fully cooperating with the Antitrust Division with respect to this investigation and management believes that it is not probable that this matter will materially impact the Company’s business, results of operations or financial condition. However, based on the information currently available to the Company, management cannot predict the timing or outcome of this investigation or predict the possible loss or range of loss, if any, associated with the resolution of this litigation. Laws and regulations governing the government payer programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s practice to cooperate fully with such inquiries. In addition to laws and regulations governing the Medicaid, Medicaid Managed Care, and Tricare programs, there are a number of federal and state laws and regulations governing matters such as the corporate practice of medicine, fee splitting arrangements, anti-kickback statues, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. Failure to comply with any such laws or regulations could have an adverse impact on the Company’s operations and financial results. The Company believes that it is in material compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of wrongdoing.

Commitments and Contingencies

6 Months Ended

Jul. 02, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Insurance Reserves

As is typical in the healthcare industry, the Company is subject to claims that its services have resulted in patient injury or other adverse effects.

The accrued insurance reserves included in the accompanying interim unaudited consolidated balance sheets include estimates of the ultimate costs, in the event the Company was unable to receive funds from claims made under commercial insurance policies, for claims that have been reported but not paid and claims that have been incurred but not reported at the balance sheet dates. Although substantially all reported claims are paid directly by the Company’s commercial insurance carriers, the Company is ultimately responsible for payment of these claims in the event its insurance carriers become insolvent or otherwise do not honor the contractual obligations under the malpractice policies. The Company is required under U.S. GAAP to recognize these estimated liabilities in its consolidated financial statements on a gross basis; with a corresponding receivable from the insurance carriers reflecting the contractual indemnity provided by the carriers under the related malpractice policies.

The Company maintains primary commercial insurance coverage on a claims-made basis for professional malpractice claims with a $1.0 million per claim deductible and $5.5 million per claim and annual aggregate limits as of October 1, 2021. Prior to October 1, 2021, the Company maintained primary commercial insurance coverage on a claim basis for professional malpractice claims with a $0.5 million per claim deductible and $6.0 million per claim and annual aggregate limits. Moreover, the Company maintains excess insurance coverage for professional malpractice claims. In addition, the Company maintains workers’ compensation insurance with a $0.5 million per claim deductible and statutory limits. The Company reimburses insurance carriers for deductible losses under these policies. The Company’s insurance carriers require collateral to secure the Company’s obligation to reimburse insurance carriers for these deductible payments. Collateral as of July 2, 2022 was comprised of $17.6 million of issued letters of

credit, $2.9 million in cash collateral, and $2.9 million in surety bonds. Collateral as of January 1, 2022 was comprised of $17.6 million of issued letters of credit, $2.9 million in cash collateral, and $2.9 million in surety bonds.

As of July 2, 2022, insurance reserves totaling $83.4 million were included on the accompanying interim unaudited consolidated balance sheets, representing $37.3 million and $46.1 million of reserves for professional malpractice claims and workers’ compensation claims, respectively. At January 1, 2022, insurance reserves totaling $80.5 million were included on the accompanying consolidated balance sheets, representing $38.7 million and $41.8 million of reserves for professional malpractice claims and workers’ compensation claims, respectively.

Litigation and Other Current Liabilities

On December 24, 2018, Aveanna Healthcare LLC, an indirect wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Agreement”) to acquire a pediatric home health company (the “Seller”). The agreement contained a provision whereby a $75.0 million transaction termination fee (the “Break-up Fee”) could be payable to the Seller under certain circumstances. On December 20, 2019, Aveanna Healthcare LLC terminated the Agreement, and the Seller demanded payment of the Break-up Fee. The Company believes the Agreement was terminated for cause and therefore no payment of the Break-up Fee is due to the Seller. The Seller has disputed this assertion. While the Company believes that litigation over this matter is unlikely at the present time, it is possible that the Company and the Seller may in the future pursue claims and counterclaims related to the termination of the Agreement and payment of the Break-up Fee. At this time, the Company is unable to predict the possible loss or range of loss, if any, associated with the resolution of any such litigation, or any potential related effect on the Company or its business or operations.

On August 6, 2020, the Company sued Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”) in the Delaware Superior Court. The Company asserted that the Defendants made fraudulent representations and warranties in connection with the Epic acquisition. The Company is seeking damages ranging from $24.0 million to $50.0 million. The Company also requested a declaratory judgment holding that the Defendants waived any claim to the Company’s continued possession of $7.1 million in escrow funds (the “Escrow Funds”) that were delivered to the Company in January 2018 by the Epic acquisition escrow agent. In response, the Defendants asserted four counterclaims: (1) specific performance of an alleged right to control a tax audit; (2) advancement of litigation fees and expenses for certain individual Defendants; (3) a declaratory judgment; and (4) breach of contract claim concerning the Escrow Funds. The Company subsequently reached an agreement with the Defendants, which (1) allowed the Defendants to take a principal role in the applicable tax audit, though the Company will continue to communicate with the Internal Revenue Service and retain the ability to make strategic decisions with respect to the audit and (2) dismissed claims against certain individual Defendants mooting Defendants’ claims for advancement of litigation fees and expenses. On July 29, 2021, the Delaware Superior Court denied the Defendants’ motion for judgment on the pleadings with respect to the Company’s claim for fraud against the Defendants, which allows the Company to pursue discovery with respect to the alleged fraud claim. With respect to the Company’s retention of certain tax refunds the Company received on behalf of Defendants, the Court denied the Company’s motion for judgment on the pleadings, pursuant to which the Company sought to retain the tax refunds as matter of law. The Court also ordered Seller to refile its motion for summary judgment on the same subject and abated a ruling pending further discovery and resolution of whether the parties entered into a post-closing agreement, allowing the Company to retain the tax refunds pending the outcome of the related tax audits. Lastly, the Court denied the Company’s motion for judgment on the pleadings as to its continued possession of the Escrow Funds. At this time, the Company cannot predict the ultimate resolution or estimate the amount of any loss or recovery, if any, related to this matter.

The Company is currently a party to various routine litigation incidental to the business. While management currently believes that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. Management has established provisions within other current liabilities in the accompanying interim unaudited consolidated balance sheets, which in the opinion of management represents the best estimate of exposure and adequately provides for such losses that may occur from asserted claims related to the provision of professional services and which may not be covered by the Company’s insurance policies. Management believes that any additional unfavorable provisions would not be material to the Company’s results of operations or financial position; however, if an unfavorable ruling on any asserted or unasserted claim were to occur, there exists the possibility of a material adverse impact on the Company’s net earnings or financial position. The estimate of the potential impact from legal proceedings on the Company’s financial position or overall results of operations could change in the future.

Healthcare Regulatory Matters

Starting on October 30, 2019 the Company has received grand jury subpoenas issued by the U.S. Department of Justice, Antitrust Division (the “Antitrust Division”) requiring the production of documents and information pertaining to nurse wages, reimbursement rates, and hiring activities in a few of its local markets. The Company is fully cooperating with the Antitrust Division with respect to this investigation and management believes that it is not probable that this matter will materially impact the Company’s business, results of operations or financial condition. However, based on the information currently available to the Company, management cannot predict the timing or outcome of this investigation or predict the possible loss or range of loss, if any, associated with the resolution of this litigation.

Laws and regulations governing the government payer programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s practice to cooperate fully with such inquiries. In addition to laws and regulations governing the Medicaid, Medicaid Managed Care, and Tricare programs, there are a number of federal and state laws and regulations governing matters such as the corporate practice of medicine, fee splitting arrangements, anti-kickback statues, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. Failure to comply with any such laws or regulations could have an adverse impact on the Company’s operations and financial results. The Company believes that it is in material compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of wrongdoing.

Commitments and Contingencies - Additional Information (Details) - USD ($)				6 Months Ended
	Oct. 01, 2021	Sep. 30, 2021	Aug. 06, 2020	Jul. 02, 2022	Jan. 01, 2022	Dec. 20, 2019	Dec. 24, 2018
Loss Contingencies [Line Items]
Insurance, per claims deductible	$ 1,000,000.0	$ 500,000
Professional malpractice claims, per claim and annual aggregate limits	$ 5,500,000	$ 6,000,000.0
Insurance reserves				$ 83,400,000	$ 80,500,000
Provision for transaction termination fee							$ 75,000,000.0
Break-up fee due to Seller						$ 0
Escrow funds			$ 7,100,000
Name of defendants				Epic/Freedom, LLC (“Seller”), Webster Capital Corporation, and Webster Equity Partners (collectively, the “Defendants”)
Minimum
Loss Contingencies [Line Items]
Damages sought value			24,000,000.0
Maximum
Loss Contingencies [Line Items]
Damages sought value			$ 50,000,000.0
Professional Malpractice Claims
Loss Contingencies [Line Items]
Insurance reserves				$ 37,300,000	38,700,000
Surety Bonds
Loss Contingencies [Line Items]
Collaterals				2,900,000	2,900,000
Cash Collateral
Loss Contingencies [Line Items]
Collaterals				2,900,000	2,900,000
Letters of Credit
Loss Contingencies [Line Items]
Collaterals				17,600,000	17,600,000
Workers Compensation Insurance
Loss Contingencies [Line Items]
Insurance, per claims deductible				500,000
Insurance reserves				$ 46,100,000	$ 41,800,000

Revenue (Tables)

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Payer Type as a Percentage of Revenue

The following table presents revenue by payer type as a percentage of revenue for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively:


	For the three-month periods ended						For the six-month periods ended
	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
	Percentage			Percentage			Percentage			Percentage
Medicaid MCO		54.3	%		52.6	%		51.9	%		54.2	%
Medicaid		21.7	%		23.8	%		21.9	%		24.3	%
Commercial		9.8	%		12.3	%		9.9	%		11.8	%
Medicare		14.1	%		11.0	%		16.2	%		9.4	%
Self-pay		0.1	%		0.3	%		0.1	%		0.3	%
Total revenue		100.0	%		100.0	%		100.0	%		100.0	%

Segment Information (Tables)

6 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Summary of Segment Information

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

Derivative Financial Instruments - Schedule of Gains from Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Derivative Instruments Gain Loss [Line Items]
Derivative gain (loss)			$ 44,789	$ 4,853
Interest Rate Cap Agreement \| Not Designated as Hedging Instruments \| Other Income (Expense)
Derivative Instruments Gain Loss [Line Items]
Derivative gain (loss)	$ 1,119		13,664
Interest Rate Swap Agreements \| Not Designated as Hedging Instruments \| Other Income (Expense)
Derivative Instruments Gain Loss [Line Items]
Derivative gain (loss)	$ 5,414	$ 2,033	$ 31,125	$ 4,853

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jul. 02, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying interim unaudited consolidated financial statements include the accounts of Aveanna Healthcare Holdings Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the accompanying interim unaudited consolidated financial statements from their respective dates of acquisition. Basis of Presentation The accompanying interim consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim unaudited consolidated financial statements do not include all the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, these interim unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position as of July 2, 2022 and the results of operations for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively. The results reported in these interim unaudited consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. These interim unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended January 1, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2022. Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52 or 53-week fiscal year. The accompanying interim unaudited consolidated balance sheets reflect the accounts of the Company as of July 2, 2022 and January 1, 2022. For the three-month periods ended July 2, 2022 and July 3, 2021, the accompanying interim unaudited consolidated statements of operations, stockholders’ equity and cash flows reflect the accounts of the Company from April 2, 2022 through July 2, 2022 and April 3, 2021 through July 3, 2021, respectively. For the six-month periods ended July 2, 2022 and July 3, 2021, the accompanying interim unaudited consolidated statements of operations, stockholders' equity and cash flows reflect the accounts of the Company from January 2, 2022 through July 2, 2022 and January 3, 2021 through July 3, 2021, respectively. Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. An entity may adopt this ASU as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adopting this standard. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This ASU is effective immediately and should be adopted in conjunction with ASU 2020-04. The Company is currently evaluating the impact of adopting this standard.

Goodwill (Tables)

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill by Segment

The following table summarizes changes in goodwill by segment from the fiscal year ended January 1, 2022 through the six-month period ended July 2, 2022 (amounts in thousands):


	PDS			HHH			MS			Total
Balance at January 1, 2022, net (1)	$	1,160,337		$	532,775		$	142,468		$	1,835,580
Additions		-			-			-			-
Measurement adjustments		258			1,512			-			1,770
Impairments		(213,557	)		(232,538	)		(24,112	)		(470,207	)
Balance at July 2, 2022, net (2)	$	947,038		$	301,749		$	118,356		$	1,367,143

(1) Goodwill balance is net of $346.8 million accumulated impairment losses for the PDS segment and $88.0 million losses for the MS segment.

(2) Goodwill balance is net of $560.4 million accumulated impairment losses for the PDS segment, $112.1 million losses for the MS segment, and $232.5 million losses for the HHH segment.

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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+ Details

Net (Loss) Income Per Share (Tables)

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net (Loss) Income Per Share

The following is a computation of basic and diluted net (loss) income per share (amounts in thousands, except per share amounts):


	For the three-month periods ended					For the six-month periods ended
	July 2, 2022			July 3, 2021		July 2, 2022			July 3, 2021
Numerator:
Net (loss) income	$	(473,887	)	$	1,260	$	(448,553	)	$	7,058
Denominator:
Weighted average shares of common stock outstanding (1), basic		184,953			171,149		184,940			156,636
Net (loss) income per share, basic	$	(2.56	)	$	0.01	$	(2.43	)	$	0.05

Weighted average shares of common stock outstanding (1), diluted		184,953			177,683		184,940			161,975
Net (loss) income per share, diluted	$	(2.56	)	$	0.01	$	(2.43	)	$	0.04
Dilutive securities outstanding not included in the computation of diluted net (loss) income per share as their effect is antidilutive:
RSUs		4,472			-		4,472			-
PSUs		1,390			-		1,390			-
Stock options		14,679			4,703		14,679			5,649

(1)

The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units.

Goodwill - Summary of Changes in Goodwill by Segment (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 02, 2022	Jul. 02, 2022
Goodwill [Line Items]
Balance at January 1, 2022, net		$ 1,835,580
Measurement adjustments		1,770
Impairments	$ (470,207)	(470,207)
Balance at July 2, 2022, net	1,367,143	1,367,143
PDS
Goodwill [Line Items]
Balance at January 1, 2022, net		1,160,337
Measurement adjustments		258
Impairments		(213,557)
Balance at July 2, 2022, net	947,038	947,038
HHH
Goodwill [Line Items]
Balance at January 1, 2022, net		532,775
Measurement adjustments		1,512
Impairments		(232,538)
Balance at July 2, 2022, net	301,749	301,749
MS
Goodwill [Line Items]
Balance at January 1, 2022, net		142,468
Impairments		(24,112)
Balance at July 2, 2022, net	$ 118,356	$ 118,356

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Long-Term Obligations - Schedule of Long-Term Obligations and Notes Payable (Details) - USD ($) $ in Thousands		6 Months Ended
	Dec. 10, 2021	Jul. 02, 2022	Jan. 01, 2022
Debt Instrument [Line Items]
Total principal amount of long-term obligations		$ 1,283,550	$ 1,272,850
Less: unamortized debt issuance costs		(35,567)	(37,733)
Total amount of long-term obligations, net of unamortized debt issuance costs		1,247,983	1,235,117
Less: current portion of long-term obligations		(8,600)	(8,600)
Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion		1,239,383	1,226,517
2021 Extended Term Loan
Debt Instrument [Line Items]
Total principal amount of long-term obligations		$ 853,550	857,850
Stated Maturity Date		2028-07
Contractual Interest Rate		L + 3.75%
Interest Rate		4.69%
2021 Extended Term Loan \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings		3.75%
Second Lien Term Loan
Debt Instrument [Line Items]
Total principal amount of long-term obligations		$ 415,000	$ 415,000
Stated Maturity Date		2029-12
Contractual Interest Rate		L + 7.00%
Interest Rate		7.94%
Second Lien Term Loan \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings	7.00%	7.00%
Revolving Credit Facility
Debt Instrument [Line Items]
Total principal amount of long-term obligations		$ 15,000
Stated Maturity Date		2026-04
Contractual Interest Rate		L + 3.75%
Interest Rate		4.69%
Revolving Credit Facility \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings		3.75%

Long-Term Obligations (Tables)

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Schedule of Long-Term Obligations

Long-term obligations consisted of the following as of July 2, 2022 and January 1, 2022, respectively (dollar amounts in thousands):


Instrument	Stated Maturity Date	Contractual Interest Rate	Interest Rate as of July 2, 2022	July 2, 2022			January 1, 2022
2021 Extended Term Loan (1)	07/2028	L + 3.75%	4.69%	$	853,550		$	857,850
Term Loan - Second Lien Term Loan (1)	12/2029	L + 7.00%	7.94%		415,000			415,000
Revolving Credit Facility (1)	04/2026	L + 3.75%	4.69%		15,000			-
Total principal amount of long-term obligations					1,283,550			1,272,850
Less: unamortized debt issuance costs					(35,567	)		(37,733	)
Total amount of long-term obligations, net of unamortized debt issuance costs					1,247,983			1,235,117
Less: current portion of long-term obligations					(8,600	)		(8,600	)
Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion				$	1,239,383		$	1,226,517
(1) L = Greater of 0.50% or one-month LIBOR

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jul. 02, 2022
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying interim unaudited consolidated financial statements include the accounts of Aveanna Healthcare Holdings Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying interim unaudited consolidated financial statements, and business combinations accounted for as purchases have been included in the accompanying interim unaudited consolidated financial statements from their respective dates of acquisition.
Basis of Presentation	Basis of Presentation The accompanying interim consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim unaudited consolidated financial statements do not include all the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, these interim unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position as of July 2, 2022 and the results of operations for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively. The results reported in these interim unaudited consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. These interim unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended January 1, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2022. Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52 or 53-week fiscal year. The accompanying interim unaudited consolidated balance sheets reflect the accounts of the Company as of July 2, 2022 and January 1, 2022. For the three-month periods ended July 2, 2022 and July 3, 2021, the accompanying interim unaudited consolidated statements of operations, stockholders’ equity and cash flows reflect the accounts of the Company from April 2, 2022 through July 2, 2022 and April 3, 2021 through July 3, 2021, respectively. For the six-month periods ended July 2, 2022 and July 3, 2021, the accompanying interim unaudited consolidated statements of operations, stockholders' equity and cash flows reflect the accounts of the Company from January 2, 2022 through July 2, 2022 and January 3, 2021 through July 3, 2021, respectively.
Use of Estimates	Use of Estimates The Company’s accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, the Company is required to make estimates and assumptions that impact the amounts reported in these consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. An entity may adopt this ASU as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adopting this standard. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This ASU is effective immediately and should be adopted in conjunction with ASU 2020-04. The Company is currently evaluating the impact of adopting this standard.

Fair Value Measurements - Summary of Other Assets and Other Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Assets:
Total derivative assets	$ 41,172
Liabilities:
Total derivative liabilities		$ 15,342
Level 2
Assets:
Total derivative assets	41,172
Liabilities:
Total derivative liabilities		15,342
Interest Rate Cap Agreement
Assets:
Total derivative assets	25,389
Interest Rate Cap Agreement \| Level 2
Assets:
Total derivative assets	25,389
Interest Rate Swap Agreements
Assets:
Total derivative assets	15,783
Liabilities:
Total derivative liabilities		15,342
Interest Rate Swap Agreements \| Level 2
Assets:
Total derivative assets	$ 15,783
Liabilities:
Total derivative liabilities		$ 15,342

Long-Term Obligations - Additional Information (Details) - USD ($)			3 Months Ended		6 Months Ended
	Dec. 10, 2021	Jul. 15, 2021	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Debt Instrument [Line Items]
Debt issuance costs			$ 35,567,000		$ 35,567,000		$ 37,733,000
Interest expense related to amortization of debt issuance costs			1,600,000	$ 3,700,000	3,300,000	$ 5,800,000
Swingline loans			0		0		0
Fair value of long-term obligations			1,283,600,000		1,283,600,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			167,400,000		$ 167,400,000		182,400,000
Revolving Credit Facility \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings					3.75%
Letter of Credit
Debt Instrument [Line Items]
Issued letter of credit			17,600,000		$ 17,600,000		17,600,000
Term Loan
Debt Instrument [Line Items]
Debt issuance costs			35,600,000		$ 35,600,000		37,700,000
Second Lien Term Loan
Debt Instrument [Line Items]
Debt instrument minimum floor rate percentage	0.50%
Second Lien Term Loan \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings	7.00%				7.00%
Second Lien Term Loan \| Annual Base Rate
Debt Instrument [Line Items]
Interest rate margin on borrowings	6.00%
Second Lien Term Loan \| Federal Funds Effective Rate
Debt Instrument [Line Items]
Interest rate margin on borrowings	0.50%
Second Lien Term Loan \| One Month LIBOR Rate
Debt Instrument [Line Items]
Interest rate margin on borrowings	1.00%
2021 Extended Term Loan \| LIBOR
Debt Instrument [Line Items]
Interest rate margin on borrowings					3.75%
Delayed Draw Term Loan Facility
Debt Instrument [Line Items]
Debt issuance costs			$ 2,100,000		$ 2,100,000		$ 3,200,000
2021 Extended Term Loan and Delayed Draw Term Loans \| LIBOR \| Minimum
Debt Instrument [Line Items]
Debt instruments, variable interest rate		0.50%
2021 Extended Term Loan and Delayed Draw Term Loans \| LIBOR \| Maximum
Debt Instrument [Line Items]
Interest rate margin on borrowings		3.75%
2021 Extended Term Loan and Delayed Draw Term Loans \| Annual Base Rate \| Minimum
Debt Instrument [Line Items]
Debt instruments, variable interest rate		2.00%
Interest rate margin on borrowings		2.75%

Related Party Transactions - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Related Party Transaction [Line Items]
Management fees and expenses	$ 0	$ 0	$ 0	$ 900,000
Amounts owed in connection with advisory services agreements	$ 0		$ 0		$ 0
2021 Extended Term Loan
Related Party Transaction [Line Items]
Shareholders ownership percentage	6.40%		6.40%

Revenue - Schedule of Revenue by Payer Type as a Percentage of Revenue (Detail) - Customer Concentration Risk - Total revenue	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	100.00%	100.00%	100.00%	100.00%
Medicaid MCO
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	54.30%	52.60%	51.90%	54.20%
Medicaid
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	21.70%	23.80%	21.90%	24.30%
Commercial
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	9.80%	12.30%	9.90%	11.80%
Medicare
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	14.10%	11.00%	16.20%	9.40%
Self-pay
Disaggregation Of Revenue [Line Items]
Percentage of total revenue	0.10%	0.30%	0.10%	0.30%

Share-Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Time Vesting Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense, net of forfeitures	$ 200,000	$ 700,000	$ 700,000	$ 1,400,000
Unrecognized compensation expense	2,700,000		2,700,000
Performance-Vesting Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense, net of forfeitures	2,700,000	4,200,000	4,600,000	4,200,000
Unrecognized compensation expense	500,000		500,000
Restricted Stock Units \| Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	200,000	0	300,000	0
Unrecognized compensation expense	0		0
Restricted Stock Units \| Management
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	1,000,000.0	0	2,000,000.0	0
Unrecognized compensation expense	13,900,000		13,900,000
Long-Term Incentive Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	900,000		1,300,000
Unrecognized compensation expense	9,200,000		$ 9,200,000
Shares granted			2,124,212
Fair value of shares granted			$ 4.93
Long-Term Incentive Plan \| Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	200,000		$ 500,000
Unrecognized compensation expense	$ 3,300,000		$ 3,300,000
Shares granted			1,389,801
Fair value of shares granted			$ 5.24
Term of award			The PSUs contain two performance criteria: (i) 50% based on relative total shareholder return ("TSR") over a three-year performance period, which measures the Company's total shareholder return as compared to the total shareholder return of a designated peer group, and (ii) 50% based on an adjusted EBITDA target over a one-year performance period. The PSUs are also subject to a three-year service-based cliff vesting schedule commencing on the date of grant.
Fair value of shares remaining measurement period			2 years 10 months 17 days
Share price	$ 4.93		$ 4.93
Risk-free interest rate			1.77%
Average closing stock price			7.29
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense		$ 0		$ 0
Cash contribution to plan	$ 1,100,000		$ 2,500,000
Employee Stock Purchase Plan \| Corporate Expenses and Branch and Regional Administrative Expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 600,000		$ 1,200,000

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Cash Flows From Operating Activities:
Net (loss) income	$ (448,553)	$ 7,058
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization	11,857	10,018
Amortization of deferred debt issuance costs	3,526	5,838
Amortization and impairment of operating lease right of use assets	8,402	9,253
Non-cash share-based compensation	10,596	5,880
Goodwill impairment	470,207
(Gain) loss on disposal of licenses, property and equipment	(123)	94
Fair value adjustments on interest rate derivatives	(44,789)	(4,853)
Gain on sale of businesses	(170)
Loss on debt extinguishment		8,918
Deferred income taxes	(89)	866
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	(27,701)	(17,190)
Prepaid expenses	(61)	(111)
Other current and long-term assets	5,854	(99)
Accounts payable and other accrued liabilities	1,232	(20,954)
Accrued payroll and employee benefits	(9,341)	(5,678)
Insurance reserves	4,804	5,025
Operating lease liabilities	(11,348)	(9,945)
Other current and long-term liabilities	(3,660)	(7,741)
Net cash used in operating activities	(29,357)	(13,621)
Cash Flows From Investing Activities:
Acquisitions of businesses, net of cash acquired	(1,206)	(102,505)
Proceeds from sale of businesses	460
Payment for interest rate cap	(11,725)
Purchases of property and equipment	(5,985)	(6,078)
Net cash used in investing activities	(18,456)	(108,583)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock		477,688
Proceeds from employee stock purchase plan	2,278
Proceeds from securitization obligation	40,000
Repayment of securitization obligation	(10,000)
Proceeds from revolving credit facility	15,000
Proceeds from issuance of term loans, net of debt issuance costs		65,261
Principal payments on term loans	(4,300)	(411,492)
Principal payments on notes payable	(4,070)	(3,067)
Repayment of government stimulus funds		(29,444)
Principal payments of financing lease obligations	(363)	(332)
Payment of offering costs		(5,375)
Payment of debt issuance costs		(1,831)
Settlements with derivative counterparties	(3,759)
Net cash provided by financing activities	34,786	91,408
Net decrease in cash and cash equivalents	(13,027)	(30,796)
Cash and cash equivalents at beginning of period	30,490	137,345
Cash and cash equivalents at end of period	17,463	106,549
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	42,763	36,861
Acquisition of property and equipment on accrual	1,139	2,095
Offering costs included in accounts payable and other accrued liabilities		98
Cash paid for income taxes, net of refunds received	$ 998	$ 3,778

Net (Loss) Income Per Share - Summary of Computation of Basic and Diluted Net (Loss) Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Numerator:
Net (loss) income	$ (473,887)	$ 1,260	$ (448,553)	$ 7,058
Denominator:
Weighted average shares of common stock outstanding, basic	184,953	171,149	184,940	156,636
Net (loss) income per share, basic	$ (2.56)	$ 0.01	$ (2.43)	$ 0.05
Weighted average shares of common stock outstanding, diluted	184,953	177,683	184,940	161,975
Net (loss) income per share, diluted	$ (2.56)	$ 0.01	$ (2.43)	$ 0.04
RSUs
Denominator:
Dilutive securities outstanding not included in the computation of diluted net (loss) income per share as their effect is antidilutive:	4,472		4,472
PSUs
Denominator:
Dilutive securities outstanding not included in the computation of diluted net (loss) income per share as their effect is antidilutive:	1,390		1,390
Stock Options
Denominator:
Dilutive securities outstanding not included in the computation of diluted net (loss) income per share as their effect is antidilutive:	14,679	4,703	14,679	5,649

Net (Loss) Income Per Share

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Net (Loss) Income Per Share

15. NET (LOSS) INCOME PER SHARE

Basic net (loss) income per share is calculated by dividing net (loss) income by the weighted average number of shares of common stock outstanding for the period. Diluted net (loss) income per share is calculated by dividing net (loss) income by the diluted weighted average number of shares of common stock outstanding for the period. For purposes of this calculation, outstanding stock options are considered potential dilutive shares of common stock. The following is a computation of basic and diluted net (loss) income per share (amounts in thousands, except per share amounts):


	For the three-month periods ended					For the six-month periods ended
	July 2, 2022			July 3, 2021		July 2, 2022			July 3, 2021
Numerator:
Net (loss) income	$	(473,887	)	$	1,260	$	(448,553	)	$	7,058
Denominator:
Weighted average shares of common stock outstanding (1), basic		184,953			171,149		184,940			156,636
Net (loss) income per share, basic	$	(2.56	)	$	0.01	$	(2.43	)	$	0.05

Weighted average shares of common stock outstanding (1), diluted		184,953			177,683		184,940			161,975
Net (loss) income per share, diluted	$	(2.56	)	$	0.01	$	(2.43	)	$	0.04
Dilutive securities outstanding not included in the computation of diluted net (loss) income per share as their effect is antidilutive:
RSUs		4,472			-		4,472			-
PSUs		1,390			-		1,390			-
Stock options		14,679			4,703		14,679			5,649

(1)

The calculation of weighted average shares of common stock outstanding includes all vested deferred restricted stock units.

Related Party Transactions

6 Months Ended

Jul. 02, 2022

Related Party Transactions

13. RELATED PARTY TRANSACTIONS

The Company had been a party to an advisory services agreement with affiliates of certain stockholders of the Company (the “Management Agreement”). Under this agreement, the managers provided general and strategic advisory services and were paid a quarterly management fee plus out of pocket expenses. Upon completion of the Company's initial public offering in April 2021 (the "IPO"), the Management Agreement was terminated. Additionally, the managers agreed to waive the fee due to them from the Company upon the successful completion of the IPO. The Company did not incur any management fees or expenses during the three or six-month period ended July 2, 2022 or the three-month period ended July 3, 2021. The Company incurred management fees and expenses of $0.9 million during the six-month period ended July 3, 2021, which is included in corporate expenses in the accompanying interim unaudited consolidated statements of operations. The Company did not owe any amounts in connection with the Management Agreement as of July 2, 2022 or January 1, 2022.

As of July 2, 2022, one of the Company’s stockholders owned 6.4% of the Company’s 2021 Extended Term Loan.

Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Segment Reporting Information [Line Items]
Revenue	$ 442,955	$ 436,112	$ 893,489	$ 853,272
Cost of revenue, excluding depreciation and amortization	297,912	289,523	603,620	575,000
Gross margin	$ 145,043	$ 146,589	$ 289,869	$ 278,272
Gross margin percentage	32.70%	33.60%	32.40%	32.60%
PDS
Segment Reporting Information [Line Items]
Revenue	$ 348,025	$ 349,680	$ 698,215	$ 700,507
Cost of revenue, excluding depreciation and amortization	246,636	243,898	498,510	492,895
Gross margin	$ 101,389	$ 105,782	$ 199,705	$ 207,612
Gross margin percentage	29.10%	30.30%	28.60%	29.60%
HHH
Segment Reporting Information [Line Items]
Revenue	$ 61,382	$ 50,071	$ 128,005	$ 81,589
Cost of revenue, excluding depreciation and amortization	31,797	25,765	65,965	43,094
Gross margin	$ 29,585	$ 24,306	$ 62,040	$ 38,495
Gross margin percentage	48.20%	48.50%	48.50%	47.20%
MS
Segment Reporting Information [Line Items]
Revenue	$ 33,548	$ 36,361	$ 67,269	$ 71,176
Cost of revenue, excluding depreciation and amortization	19,479	19,860	39,145	39,011
Gross margin	$ 14,069	$ 16,501	$ 28,124	$ 32,165
Gross margin percentage	41.90%	45.40%	41.80%	45.20%

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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Segment Information - Summary of Segment Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Segment Reconciliation:
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

Description of Business

6 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. DESCRIPTION OF BUSINESS

Aveanna Healthcare Holdings Inc. (together with its consolidated subsidiaries, referred to herein as the “Company”) is headquartered in Atlanta, Georgia and has locations in 33 states with concentrations in California, Texas and Pennsylvania, providing a broad range of pediatric and adult healthcare services including nursing, hospice, rehabilitation services, occupational nursing in schools, therapy services, day treatment centers for medically fragile and chronically ill children and adults, as well as delivery of enteral nutrition and other products to patients. The Company also provides case management services in order to assist families and patients by coordinating the provision of services between insurers or other payers, physicians, hospitals, and other healthcare providers. In addition, the Company provides respite healthcare services, which are temporary care provider services provided in relief of the patient’s normal caregiver. The Company’s services are designed to provide a high quality, lower cost alternative to prolonged hospitalization.

Securitization Facility

6 Months Ended

Jul. 02, 2022

Securitization Facility [Abstract]

Securitization Facility

6. SECURITIZATION FACILITY

On November 12, 2021, the Company (through a wholly owned special purpose entity, Aveanna SPV I, LLC) (the “special purpose entity”) entered into a Receivables Financing Agreement (the “Securitization Facility”) with a lending institution with a termination date of November 12, 2024. The maximum amount available under the Securitization Facility is $150.0 million subject to certain borrowing base requirements. The Company incurred debt issuance costs of $1.3 million in connection with the Securitization Facility, which were capitalized and included in other long-term assets.

Pursuant to two separate sale agreements dated November 12, 2021, each of which is among Aveanna Healthcare, LLC, as initial servicer, certain of the Company's subsidiaries and the special purpose entity, the subsidiaries sold substantially all of their existing and future accounts receivable balances to the special purpose entity. The special purpose entity uses the accounts receivable balances to collateralize loans made under the Securitization Facility. The Company retains the responsibility of servicing the accounts receivable balances pledged as collateral under the Securitization Facility and provides a performance guaranty.

The outstanding balance under the Securitization Facility was $150.0 million and $120.0 million at July 2, 2022 and January 1, 2022, respectively. The balance accrues interest at a rate tied to the Bloomberg Short-term Bank Yield Index (“BSBY”) plus an applicable margin, which can increase or decrease based upon the Company's credit rating. The interest rate under the Securitization Facility was 3.62% and 2.08% at July 2, 2022 and January 1, 2022, respectively.

The Securitization Facility is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities in the accompanying interim unaudited consolidated balance sheets; (ii) the accompanying interim unaudited consolidated statements of operations reflect the interest expense associated with the collateralized borrowings; and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the accompanying interim unaudited consolidated statements of cash flows. The Securitization Facility is included within current liabilities on the accompanying interim unaudited consolidated balance sheets as it is collateralized by current patient accounts receivable and not because payments are due within one year of the balance sheet date.

On August 8, 2022, the Company amended the Securitization Facility to increase the maximum amount available to $175.0 million, subject to maintaining certain borrowing base requirements. See Note 16 – Subsequent Events for further details on the Company's amendment to the Securitization Facility.

Goodwill

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

4. GOODWILL

The following table summarizes changes in goodwill by segment from the fiscal year ended January 1, 2022 through the six-month period ended July 2, 2022 (amounts in thousands):


	PDS			HHH			MS			Total
Balance at January 1, 2022, net (1)	$	1,160,337		$	532,775		$	142,468		$	1,835,580
Additions		-			-			-			-
Measurement adjustments		258			1,512			-			1,770
Impairments		(213,557	)		(232,538	)		(24,112	)		(470,207	)
Balance at July 2, 2022, net (2)	$	947,038		$	301,749		$	118,356		$	1,367,143

(1) Goodwill balance is net of $346.8 million accumulated impairment losses for the PDS segment and $88.0 million losses for the MS segment.

(2) Goodwill balance is net of $560.4 million accumulated impairment losses for the PDS segment, $112.1 million losses for the MS segment, and $232.5 million losses for the HHH segment.

A test of goodwill impairment is required at least annually or more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. As a result of continued challenges in the labor markets, including both shortages in workforce and inflationary wage pressures which have not abated and which the Company expects to persist, the Company revised its forward-looking estimates. As a result, the Company publicly updated its fiscal year 2022 earnings guidance and also performed an interim impairment assessment as of July 2, 2022. Based on that assessment, the Company determined that the carrying value of five of its six reporting units across its three segments exceeded their respective fair values and the Company accordingly recorded an aggregate goodwill impairment charge of $470.2 million during the three-month period ended July 2, 2022.

For its interim goodwill impairment test, the Company engaged a third-party valuation firm to assist in calculating the fair value of each of the Company's reporting units, which is derived using a combination of both income and market approaches. The income approach utilizes projected operating results and cash flows and includes significant assumptions, such as revenue growth rates, projected EBITDA margins, and discount rates. The market approach compares its reporting units’ earnings and revenue multiples to those of comparable companies. Estimates of fair value may differ from actual results due to, among other things, economic conditions, changes to business models or changes in operating performance. These factors increase the risk of

differences between projected and actual performance that could impact future estimates of fair value of all reporting units. Significant differences between these estimates and actual future performance could result in additional impairment in future fiscal periods.

Covid-19

6 Months Ended

Jul. 02, 2022

Covid19 C A R E S Act [Abstract]

Covid-19

12. COVID-19

In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 outbreak has adversely impacted economic activity and conditions worldwide, including workforces, liquidity, capital markets, consumer behavior, supply chains and macroeconomic conditions. After the declaration of a national emergency in the United States on March 13, 2020, in compliance with stay-at-home and physical distancing orders and other restrictions on movement and economic activity intended to reduce the spread of COVID-19, the Company altered numerous clinical, operational, and business processes. While each of the states deemed healthcare services an essential business, allowing the Company to continue to deliver healthcare services to patients, the effects of the pandemic have been wide-reaching.

In response to COVID-19, the U.S. Government enacted the CARES Act on March 27, 2020. The CARES Act has impacted the Company as follows:

Provider Relief Fund (“PRF”): Beginning in April 2020, funds were distributed to health care providers who provide or provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. In fiscal year 2020, the Company received PRF payments from the U.S. Department of Health and Human Services (“HHS”) totaling $25.1 million. On March 5, 2021, the Company repaid these PRF payments in full. In December 2021, the Company also received PRF payments from HHS totaling $2.5 million. The Company repaid these PRF payments in full in December 2021.

State Sponsored Relief Funds: In fiscal year 2020, the Company received $4.8 million of stimulus funds from the Commonwealth of Pennsylvania Department of Human Services (“Pennsylvania DHS”). Such funds were not applied for or requested. The Company did not receive stimulus funds from any individual state other than Pennsylvania. The Company previously recognized $0.5 million of income related to these funds in fiscal year 2020. On February 4, 2021, the Company repaid the remaining $4.3 million of direct stimulus funds to Pennsylvania DHS.

Deferred payment of the employer portion of social security taxes: The Company was permitted to defer payments of the employer portion of social security taxes in fiscal year 2020, which are payable in 50% increments, with the first 50% due by December 31, 2021 and the second 50% due by December 31, 2022. The Company did not defer any payroll taxes after December 31, 2020. As of July 2, 2022 and January 1, 2022, the Company had remaining deferred payments of $25.5 million of social security taxes in total, which is recorded in the current portion of deferred payroll taxes on the accompanying interim unaudited consolidated balance sheets.

Reimbursement rate increases from various state Medicaid and Medicaid Managed Care Programs: Shortly after the onset of COVID-19 in March 2020, numerous state Medicaid programs began to issue temporary rate increases and similarly directed Medicaid Managed Care programs within those states to likewise adjust rates. These temporary rate increases are paid to the Company via normal claim processing by the respective payers. Over the remainder of fiscal year 2020, continuing through fiscal year 2021 and into fiscal year 2022, while some states discontinued the temporary rate increases, most state legislatures either made such increases permanent or otherwise increased PDS reimbursement rates in their annual budgetary processes.

Medicare Advances: Certain of the home health and hospice companies the Company has acquired received advance payments from the Centers for Medicare & Medicaid Services (“CMS”) in April 2020, pursuant to the expansion of the Accelerated Payments Program provided for in the CARES Act. These advances became repayable beginning one year from the date on which the accelerated advance was issued. The repayments occur via offsets by CMS to current payments otherwise due from Medicare at a rate of 25% for the first eleven months. After the eleven months end, payments will be recouped at a rate of 50% for another six months, after which any remaining balance will become due. Gross advances received by acquired companies in April 2020 totaled $15.7 million. The Company began repaying the gross amount of the advances, via the offset mechanism described above, during the second quarter of 2021, and had repaid all such advances as of July 2, 2022. Remaining unpaid advances as of January 1, 2022 totaled $3.5 million, which is recorded in other current liabilities on the accompanying interim unaudited consolidated balance sheets.

Temporary Suspension of Medicare Sequestration: The Budget Control Act of 2011 requires a mandatory, across the board reduction in federal spending, called a sequestration. Medicare fee-for-service claims with dates of service or dates of discharge on or after April 1, 2013 incur a 2.0% reduction in Medicare payments. All Medicare rate payments and settlements are subject to this mandatory reduction, which will continue to remain in place through at least 2023, unless Congress takes further action. In response to COVID-19, the CARES Act temporarily suspended the automatic 2.0% reduction of Medicare claim reimbursements for the period from May 1, 2020 through December 31, 2021. In December 2021, Congress extended the suspension of the automatic 2.0% reduction through March 2022 and reduced the sequestration adjustment to 1.0% from April 1, 2022 through June 30, 2022, with the full 2.0% reduction for sequestration resuming thereafter.

American Rescue Plan Act (“ARPA”): On March 11, 2021 President Biden signed ARPA into law. ARPA is a federal stimulus bill designed to aid public health and economic recovery from the COVID-19 pandemic. ARPA includes $350 billion in emergency funding for state, local, territorial and tribal governments, known as the Coronavirus State and Local Fiscal Recovery Funds (“ARPA Recovery Funds”). States must obligate the ARPA Recovery Funds by December 31, 2024 and spend such funds by December 31, 2026. Usage of the ARPA Recovery Funds is subject to the requirements specified in the United States Treasury Department’s Final Rule issued on January 6, 2022. The Final Rule provides states with substantial flexibility in utilizing ARPA Relief Funds, including to support public health expenditures such as vaccination programs and testing, and PPE purchases, as well as providing premium pay for essential workers, including those in home-care settings, among many other things. States may not use ARPA Recovery Funds to fund tax cuts, fund budget deficits, or to support public employee pensions. During the three and six-month periods ended July 2, 2022, the Company received $1.3 million and $4.5 million, respectively, of ARPA Recovery Funds from various states. The Company recognized $0.5 million and $3.6 million during the three and six-month periods ended July 2, 2022, respectively, as revenue in our accompanying interim unaudited consolidated statements of operations. The remaining ARPA Recovery Funds are recorded in other current liabilities in the accompanying interim unaudited consolidated balance sheet at July 2, 2022.

Revenue - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
Revenue - Additional Information (Detail) - USD ($)	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Revenue Disclosure [Line Items]
Estimated price concession	$ 58,200,000		$ 58,200,000		$ 55,800,000
Bad debt expense	$ 0	$ 0	$ 0	$ 0
Maximum
Revenue Disclosure [Line Items]
Revenue, performance obligation, expected timing of satisfaction, period	1 year		1 year

Covid-19 - Additional Information (Detail) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		4 Months Ended	6 Months Ended	12 Months Ended	20 Months Ended
	Jul. 01, 2022	Mar. 11, 2021	Dec. 31, 2021	Jul. 02, 2022	Jun. 30, 2022	Mar. 31, 2022	Jul. 02, 2022	Jan. 02, 2021	Dec. 31, 2021	Dec. 31, 2022	Jan. 01, 2022	Feb. 04, 2021	Apr. 30, 2020	Apr. 01, 2013
Covid 19 CARES Act [Line Items]
Provider relief fund payments received CARES Act			$ 2,500					$ 25,100
Incremental percentage of deferred payment of employer portion of social security taxes							50.00%
Percentage of social security tax due CARES Act			50.00%						50.00%	50.00%
Deferred social security tax CARES Act				$ 25,500			$ 25,500				$ 25,500
ARPA Recovery Funds		$ 350,000,000		1,300			4,500
Revenue recognized				$ 500			$ 3,600
Medicare
Covid 19 CARES Act [Line Items]
Gross advance received for expansion of accelerated payments program in CARES Act													$ 15,700
Percentage of repayments due for first eleven months							25.00%
Percentage of payments recouped rate for another six months							50.00%
Percentage of reduction in payments														2.00%
Percentage of reduction of claim reimbursements	2.00%				1.00%	2.00%			2.00%
Remaining unpaid advances											$ 3,500
Pennsylvania DHS
Covid 19 CARES Act [Line Items]
Stimulus funds received CARES Act								4,800
Stimulus funds recognized as income CARES Act								500
Direct stimulus fund repaid CARES Act												$ 4,300
Other Than Pennsylvania
Covid 19 CARES Act [Line Items]
Stimulus funds received CARES Act								$ 0

Description of Business - Additional Information (Details)	Jul. 02, 2022 State
Subsidiary, Sale of Stock [Line Items]
Number of states in which entity locations	33

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (344)	$ 179	$ 2,253	$ 488
Effective tax rate	0.10%	12.40%	(0.50%)	6.50%
Statutory tax rate	21.00%	21.00%	21.00%	21.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Statement [Abstract]
Revenue	$ 442,955	$ 436,112	$ 893,489	$ 853,272
Cost of revenue, excluding depreciation and amortization	297,912	289,523	603,620	575,000
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
Income tax benefit (expense)	344	(179)	(2,253)	(488)
Net (loss) income	$ (473,887)	$ 1,260	$ (448,553)	$ 7,058
Net (loss) income per share:
Net (loss) income per share, basic	$ (2.56)	$ 0.01	$ (2.43)	$ 0.05
Weighted average shares of common stock outstanding, basic	184,953	171,149	184,940	156,636
Net (loss) income per share, diluted	$ (2.56)	$ 0.01	$ (2.43)	$ 0.04
Weighted average shares of common stock outstanding, diluted	184,953	177,683	184,940	161,975

Derivative Financial Instruments (Tables)

6 Months Ended

Jul. 02, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Gains from Derivatives

The following gains from these derivatives not designated as hedging instruments were recognized in the Company’s accompanying interim unaudited consolidated statements of operations for the three and six-month periods ended July 2, 2022 and July 3, 2021, respectively (amounts in thousands):


	Statement of Operations	For the three-month periods ended
	Classification	July 2, 2022		July 3, 2021
Interest rate cap agreement	Other income (expense)	$	1,119	$	-
Interest rate swap agreements	Other income (expense)	$	5,414	$	2,033


	Statement of Operations	For the six-month periods ended
	Classification	July 2, 2022		July 3, 2021
Interest rate cap agreements	Other income (expense)	$	13,664	$	-
Interest rate swap agreements	Other income (expense)	$	31,125	$	4,853

Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2022

Fair Value Disclosures [Abstract]

Summary of Other Assets and Other Liabilities Measured at Fair Value

The Company’s other assets and other liabilities measured at fair value are as follows (amounts in thousands):


	Fair Value Measurements at July 2, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Interest rate cap agreements	$	-	$	25,389	$	-	$	25,389
Interest rate swap agreements		-		15,783		-		15,783
Total derivative assets	$	-	$	41,172	$	-	$	41,172

	Fair Value Measurements at January 1, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Interest rate swap agreements	$	-	$	15,342	$	-	$	15,342
Total derivative liabilities	$	-	$	15,342	$	-	$	15,342

Subsequent Events

6 Months Ended

Jul. 02, 2022

Subsequent Events [Abstract]

Subsequent Events

16. SUBSEQUENT EVENTS

Securitization Facility

On August 8, 2022, the Company amended the Securitization Facility to increase the maximum amount available to $175.0 million, subject to maintaining certain borrowing base requirements. All borrowings under this facility will continue to carry variable interest rates tied to BSBY plus an applicable margin.

Delayed Draw Term Loan Facility

On August 9, 2022, the Company borrowed $60.0 million, under the Delayed Draw Term Loan Facility to replace cash previously used by the Company to complete acquisitions in the fourth quarter of 2021. The remaining available borrowing base of $140.0 million under the Delayed Draw Term Loan Facility is available until July 15, 2023, subject to certain terms and conditions.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 02, 2022	Jan. 01, 2022	Jan. 02, 2021
Statement of Financial Position [Abstract]
Preferred stock, no par value			$ 0
Preferred stock, par value	$ 0.01
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock,outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, Issued	185,918,240	184,732,268
Common stock, outstanding	185,918,240	184,732,268

Securitization Facility - Additional Information (Details) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
	Nov. 12, 2021	Jul. 02, 2022	Jan. 01, 2022	Aug. 08, 2022
Debt Instrument [Line Items]
Outstanding balance		$ 1,283,550	$ 1,272,850
Securitization Facility
Debt Instrument [Line Items]
Termination date of agreement	Nov. 12, 2024
Maximum amount available under securitization facility	$ 150,000
Debt issuance costs	$ 1,300
Outstanding balance		$ 150,000	$ 120,000
Securitization Facility \| Subsequent Event
Debt Instrument [Line Items]
Maximum amount available under securitization facility				$ 175,000
Securitization Facility \| Bloomberg Short-term Bank Yield Index
Debt Instrument [Line Items]
Interest rate under facility		3.62%	2.08%

Share-Based Compensation

6 Months Ended

Jul. 02, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

10. SHARE-BASED COMPENSATION

Time-Vesting Options

The Company recorded compensation expense, net of forfeitures, of $0.2 million and $0.7 million for the three and six-month periods ended July 2, 2022, respectively, and $0.7 million and $1.4 million for the three and six-month periods ended July 3, 2021, which is included in corporate and branch and regional administrative expenses in the accompanying interim unaudited consolidated statements of operations. Unrecognized compensation expense as of July 2, 2022 associated with outstanding performance-vesting options was $2.7 million.

Performance-Vesting Options

The Company recorded compensation expense, net of forfeiture, for the three and six-month periods ended July 2, 2022 of $2.7 million and $4.6 million, respectively, and $4.2 million for both the three and six-month periods ended July 3, 2021, which is included in corporate and branch and regional administrative expenses in the accompanying interim unaudited consolidated statements of operations. Unrecognized compensation expense as of July 2, 2022 associated with outstanding performance-vesting options was $0.5 million.

Director Restricted Stock Units

The Company recorded compensation expense for the three and six-month periods ended July 2, 2022 of $0.2 million and $0.3 million, which is included in corporate expenses in the accompanying interim unaudited consolidated statements of operations. The Company did not incur or record any such expense in the three and six-month periods ended July 3, 2021. There was no unrecognized compensation expense as of July 2, 2022 associated with outstanding director restricted stock units.

Management Restricted Stock Units

The Company recorded compensation expense for the three and six-month periods ended July 2, 2022 of $1.0 million and $2.0 million, which is included in corporate expenses in the accompanying interim unaudited consolidated statements of operations. The Company did not incur or record any such expense in the three and six-month periods ended July 3, 2021. Unrecognized compensation expense as of July 2, 2022 associated with outstanding management restricted stock units was $13.9 million.

Employee Stock Purchase Plan

Eligible participants contributed $1.1 million and $2.5 million during the three and six-month periods ended July 2, 2022, respectively, which is included in accrued payroll and employee benefits in the accompanying interim unaudited consolidated balance sheets as of July 2, 2022. The Company recorded compensation expense of $0.6 million and $1.2 million for the three and six-month periods ended July 2, 2022, respectively, which is included in corporate expenses, branch and regional administrative expenses and cost of revenue, excluding depreciation and amortization in the accompanying interim unaudited

consolidated statements of operations. The Company did not incur or record any expense associated with the employee stock purchase plan for the three and six-month periods ended July 3, 2021.

Long-Term Incentive Plan ("LTIP")

In the first quarter of 2022, the Compensation Committee of the Company's Board of Directors approved LTIP grants of restricted stock units ("RSUs") and performance stock units ("PSUs") under the Company's 2021 Omnibus Incentive Plan.

The RSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. Compensation cost for the RSUs is measured based on the grant date fair value of each share and the number of shares granted and is recognized over the applicable vesting period on a straight-line basis. The Company granted 2,124,212 RSUs with a grant date per share fair value of $4.93. The Company recorded compensation expense of $0.9 million and $1.3 million during the three and six-month periods ended July 2, 2022, respectively, which is included in corporate expenses and branch and regional administrative expenses in the accompanying interim unaudited consolidated statements of operations. Unrecognized compensation expense as of July 2, 2022 associated with the remaining RSUs was $9.2 million.

The PSUs contain two performance criteria: (i) 50% based on relative total shareholder return ("TSR") over a three-year performance period, which measures the Company's total shareholder return as compared to the total shareholder return of a designated peer group, and (ii) 50% based on an adjusted EBITDA target over a one-year performance period. The PSUs are also subject to a three-year service-based cliff vesting schedule commencing on the date of grant. For the PSUs that have a service and a market condition, compensation cost is measured based on the grant date estimated fair value determined using a Monte Carlo simulation model and is recognized over the applicable vesting period on a straight-line basis. The fair value inputs included in the Monte Carlo simulation model were remaining measurement period of 2.88 years, stock price on date of grant of $4.93, daily average closing stock price for the two calendar months prior to the beginning of the performance period of $7.29, risk free rate of 1.77%, and the performance payout per TSR performance percentile. For the PSUs that have a service and a performance condition, compensation cost is initially measured based on the grant date fair value of each share. Cumulative compensation cost is subsequently adjusted at the end of each reporting period to reflect the current estimation of achieving the performance condition. The Company granted 1,389,801 PSUs with a weighted average grant date per share fair value of $5.24. The Company recorded compensation expense of $0.2 million and $0.5 million during the three and six-month periods ended July 2, 2022, respectively, which is included in corporate expenses and branch and regional administrative expenses in the accompanying interim unaudited consolidated statements of operations. Unrecognized compensation expense as of July 2, 2022 associated with the remaining PSUs was $3.3 million.

Fair Value Measurements

6 Months Ended

Jul. 02, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. FAIR VALUE MEASUREMENTS

The carrying amounts of cash and cash equivalents, patient accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of the instruments.

The Company’s other assets and other liabilities measured at fair value are as follows (amounts in thousands):


	Fair Value Measurements at July 2, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Interest rate cap agreements	$	-	$	25,389	$	-	$	25,389
Interest rate swap agreements		-		15,783		-		15,783
Total derivative assets	$	-	$	41,172	$	-	$	41,172

	Fair Value Measurements at January 1, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Interest rate swap agreements	$	-	$	15,342	$	-	$	15,342
Total derivative liabilities	$	-	$	15,342	$	-	$	15,342

The fair values of the interest rate swap and cap agreements are based on the estimated net proceeds or costs to settle the transactions as of the respective balance sheet dates. The valuations are based on commercially reasonable industry and market practices for valuing similar financial instruments. See Note 8 – Derivative Financial Instruments for further details on the Company’s interest rate swap and cap agreements.

For the interim goodwill impairment test, the Company performed a Step 1 analysis that used a combination of expected present value of future cash flows (income approach) and comparable public companies (market approach) to determine the fair value of the reporting unit. These approaches use primarily unobservable inputs, including revenue growth rates, projected EBITDA margins, and discount rates, which are considered Level 3 fair value measurements. The fair value analysis takes into account recent and expected operating performance.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 02, 2022	Aug. 01, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 02, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Registrant Name	Aveanna Healthcare Holdings Inc.
Entity Central Index Key	0001832332
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		185,918,240
Entity File Number	001-40362
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-4717209
Entity Address, Address Line One	400 Interstate North Parkway SE
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	441-1580
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	AVAH
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false

Segment Information - Additional Information (Details)	6 Months Ended
Segment Information - Additional Information (Details)	Jul. 02, 2022 Segment
Segment Reporting [Abstract]
Number of operating segments	3
Number of reportable segments	3

Subsequent Events - Additional Information (Details) - USD ($) $ in Millions	Aug. 09, 2022	Aug. 08, 2022	Nov. 12, 2021
Securitization Facility
Subsequent Event [Line Items]
Maximum amount available under securitization facility			$ 150.0
Subsequent Event \| Securitization Facility
Subsequent Event [Line Items]
Maximum amount available under securitization facility		$ 175.0
Subsequent Event \| Delayed Draw Term Loan Facility
Subsequent Event [Line Items]
Amount borrowed	$ 60.0
Amount of remaining available borrowing	$ 140.0

Derivative Financial Instruments - Additional Information (Details)		1 Months Ended
	Feb. 09, 2022 USD ($)	Jul. 31, 2021	Jul. 02, 2022 USD ($)	Jan. 01, 2022 USD ($)	Oct. 31, 2018 Swap
Other Long-Term Assets
Derivative [Line Items]
Fair value of interest rate swaps			$ 15,800,000
Other Long-Term Liabilities
Derivative [Line Items]
Fair value of interest rate swaps				$ 15,300,000
Amended Interest Rate Swap Agreements
Derivative [Line Items]
Aggregate notional amount			520,000,000.0	$ 520,000,000.0
Derivative expiration date		Jun. 30, 2026
Derivative, fixed interest rate		2.08%
Derivative, floor interest rate		0.50%
Interest Rate Swap Agreement
Derivative [Line Items]
Number of interest rate swap agreement \| Swap					2
Interest Rate Cap Agreement
Derivative [Line Items]
Aggregate notional amount	$ 880,000,000.0
Fair value of interest rate swaps			$ 25,400,000
Derivative expiration date	Feb. 28, 2027
Derivative, cap interest rate	3.00%
One-time premium paid	$ 11,700,000

Goodwill - Summary of Changes in Goodwill by Segment (Parenthetical) (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
PDS
Goodwill [Line Items]
Goodwill, accumulated impairment losses	$ 560.4	$ 346.8
MS
Goodwill [Line Items]
Goodwill, accumulated impairment losses	112.1	$ 88.0
HHH
Goodwill [Line Items]
Goodwill, accumulated impairment losses	$ 232.5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning Balance at Jan. 02, 2021	$ 265,034	$ 1,419	$ 721,247	$ (457,632)
Beginning Balance (shares) at Jan. 02, 2021		141,928,184
Issuance of common stock, net of underwriters' discounts and commissions	470,108	$ 422	469,686
Issuance of common stock, net of underwriters' discounts and commissions (shares)		42,236,000
Non-cash share-based compensation	5,880		5,880
Net income (loss)	7,058			7,058
Ending Balance at Jul. 03, 2021	748,080	$ 1,841	1,196,813	(450,574)
Ending Balance (in shares) at Jul. 03, 2021		184,164,184
Beginning Balance at Apr. 03, 2021	271,544	$ 1,419	721,959	(451,834)
Beginning Balance (shares) at Apr. 03, 2021		141,928,184
Issuance of common stock, net of underwriters' discounts and commissions	470,108	$ 422	469,686
Issuance of common stock, net of underwriters' discounts and commissions (shares)		42,236,000
Non-cash share-based compensation	5,168		5,168
Net income (loss)	1,260			1,260
Ending Balance at Jul. 03, 2021	748,080	$ 1,841	1,196,813	(450,574)
Ending Balance (in shares) at Jul. 03, 2021		184,164,184
Beginning Balance at Jan. 01, 2022	635,816	$ 1,847	1,208,645	(574,676)
Beginning Balance (shares) at Jan. 01, 2022		184,732,268
Employee stock purchase plan	2,278	$ 12	2,266
Employee stock purchase plan (shares)		1,185,972
Non-cash share-based compensation	10,596		10,596
Net income (loss)	(448,553)			(448,553)
Ending Balance at Jul. 02, 2022	200,137	$ 1,859	1,221,507	(1,023,229)
Ending Balance (in shares) at Jul. 02, 2022		185,918,240
Beginning Balance at Apr. 02, 2022	665,965	$ 1,847	1,213,460	(549,342)
Beginning Balance (shares) at Apr. 02, 2022		184,732,268
Employee stock purchase plan	2,278	$ 12	2,266
Employee stock purchase plan (shares)		1,185,972
Non-cash share-based compensation	5,781		5,781
Net income (loss)	(473,887)			(473,887)
Ending Balance at Jul. 02, 2022	$ 200,137	$ 1,859	$ 1,221,507	$ (1,023,229)
Ending Balance (in shares) at Jul. 02, 2022		185,918,240

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Long-Term Obligations

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Long-Term Obligations

5. LONG-TERM OBLIGATIONS

Long-term obligations consisted of the following as of July 2, 2022 and January 1, 2022, respectively (dollar amounts in thousands):


Instrument	Stated Maturity Date	Contractual Interest Rate	Interest Rate as of July 2, 2022	July 2, 2022			January 1, 2022
2021 Extended Term Loan (1)	07/2028	L + 3.75%	4.69%	$	853,550		$	857,850
Term Loan - Second Lien Term Loan (1)	12/2029	L + 7.00%	7.94%		415,000			415,000
Revolving Credit Facility (1)	04/2026	L + 3.75%	4.69%		15,000			-
Total principal amount of long-term obligations					1,283,550			1,272,850
Less: unamortized debt issuance costs					(35,567	)		(37,733	)
Total amount of long-term obligations, net of unamortized debt issuance costs					1,247,983			1,235,117
Less: current portion of long-term obligations					(8,600	)		(8,600	)
Total amount of long-term obligations, net of unamortized debt issuance costs, less current portion				$	1,239,383		$	1,226,517
(1) L = Greater of 0.50% or one-month LIBOR

The 2021 Extended Term Loan, Revolving Credit Facility and any Delayed Draw Term Loans bear interest, at the Company’s election, at a variable interest rate based on either LIBOR (subject to a minimum of 0.50%), or ABR (subject to a minimum of 2.00%) for the interest period relevant to such borrowing, plus an applicable margin of 3.75% for loans accruing interest based on LIBOR and an applicable margin of 2.75% for loans accruing interest based on ABR.

The Second Lien Term Loan bears interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin (equal to 6.00%) plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; or (2) an applicable margin (equal to 7.00%) plus LIBOR determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate is not lower than a floor of 0.50%.

Debt issuance costs related to the term loans are recorded as a direct deduction from the carrying amount of the debt. The balance for debt issuance costs related to the term loans as of July 2, 2022 and January 1, 2022 was $35.6 million and $37.7 million, respectively. Debt issuance costs related to the Revolving Credit Facility and Delayed Draw Term Loans are recorded within other long-term assets. The balance for debt issuance costs related to the Revolving Credit Facility and Delayed Draw Term Loans as of July 2, 2022 and January 1, 2022 was $2.1 million and $3.2 million, respectively. The Company recognized interest expense related to the amortization of debt issuance costs of $1.6 million and $3.3 million during the three and six-months period ended July 2, 2022, respectively, and $3.7 million and $5.8 million during the three and six-month periods ended July 3, 2021, respectively.

Issued letters of credit as of July 2, 2022 and January 1, 2022 were $17.6 million and $17.6 million, respectively. There were no swingline loans outstanding as of July 2, 2022 or January 1, 2022. Borrowing capacity under the Company's Revolving Credit Facility was $167.4 million as of July 2, 2022 and $182.4 million as of January 1, 2022.

The fair value of the long-term obligations was $1,283.6 million at July 2, 2022. Due to the variable rate nature of the 2021 Extended Term Loan and Second Lien Term Loan, the Company believes that the carrying amount approximates fair value at July 2, 2022.

The Company was in compliance with all financial covenants and restrictions under the foregoing instruments at July 2, 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Derivative Financial Instruments

6 Months Ended

Jul. 02, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

8. DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s earnings and cash flows are subject to fluctuations due to changes in interest rates, and the Company seeks to mitigate a portion of this risk by entering into derivative contracts. The derivatives the Company currently uses are interest rate swaps and interest rate caps. The Company recognizes derivatives as either assets or liabilities at fair value on the accompanying interim unaudited consolidated balance sheets and does not designate the derivatives as hedging instruments. Changes in the fair value of derivatives are therefore recorded in earnings throughout the term of the respective derivatives.

In October 2018, the Company entered into two interest rate swap agreements to limit its exposure to interest rate risk on its variable rate debt. In July 2021, the Company amended its interest rate swap agreements to extend the expiration dates to June 30, 2026 and reduce the fixed rate paid under the swaps. As amended, the Company pays a fixed rate of 2.08% and receives the one-month LIBOR rate, subject to a 0.50% floor. The aggregate notional amount of the interest rate swaps remained unchanged at $520.0 million at July 2, 2022 and January 1, 2022, respectively. The fair value of the interest rate swaps at July 2, 2022 and January 1, 2022 was a $15.8 million asset included in other long-term assets and a $15.3 million liability included in other long-term liabilities on the accompanying interim unaudited consolidated balance sheets, respectively. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income in the accompanying interim unaudited consolidated statements of operations, which are included within cash flows from operating activities in the accompanying interim unaudited consolidated statements of cash flows. The net settlements incurred with swap counterparties under the swap agreements prior to the amendment were recognized through cash flows from operating activities in the accompanying interim unaudited consolidated statements of cash flows. Subsequent to the interest rate swap amendment in July 2021, the net settlements are recognized through cash flows from financing activities in the accompanying interim unaudited consolidated statements of cash flows due to an other-than-insignificant financing element on the interest rate swaps resulting from the amendment.

On February 9, 2022, the Company entered into interest rate cap agreements for an aggregate notional amount of $880.0 million and a cap rate of 3.00%. The premium paid for the interest rate cap agreements was $11.7 million. The cap agreements have an expiration date of February 28, 2027, and provide that the counterparty will pay the Company the amount by which LIBOR exceeds 3.00% in a given measurement period. The fair value of the interest rate cap agreements at July 2, 2022 was $25.4 million and is included in other long-term assets on the accompanying interim unaudited consolidated balance sheets. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income in the accompanying interim unaudited consolidated statements of operations, which are included within cash flows from operating activities in the accompanying interim unaudited consolidated statements of cash flows.


	Statement of Operations	For the three-month periods ended
	Classification	July 2, 2022		July 3, 2021
Interest rate cap agreement	Other income (expense)	$	1,119	$	-
Interest rate swap agreements	Other income (expense)	$	5,414	$	2,033


	Statement of Operations	For the six-month periods ended
	Classification	July 2, 2022		July 3, 2021
Interest rate cap agreements	Other income (expense)	$	13,664	$	-
Interest rate swap agreements	Other income (expense)	$	31,125	$	4,853

The Company does not utilize financial instruments for trading or other speculative purposes.

Income Taxes

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. INCOME TAXES

The Company’s provision for income taxes is recorded on an interim basis based upon the Company’s estimate of the annual effective income tax rate for the full year applied to “ordinary” income or loss, adjusted each quarter for discrete items.

The Company recorded an income tax benefit of $0.3 million and income tax expense of $2.3 million for the three and six-month periods ended July 2, 2022, respectively, and income tax expense of $0.2 million and $0.5 million for the three and six-month periods ended July 3, 2021, respectively. The Company’s effective tax rate was 0.1% and negative 0.5% for the three and six-month periods ended July 2, 2022, respectively, and 12.4% and 6.5% for the three and six-month periods ended July 3, 2021, respectively. The effective tax rates for the three and six-month periods ended July 2, 2022 and July 3, 2021 differ from the statutory rate of 21% primarily due to the changes in the valuation allowance recorded against certain deferred tax assets, and separate state and local income taxes on taxable subsidiaries.

For the six-month period ended July 2, 2022, there were no material changes to the Company's uncertain tax positions. There has been no change to the Company's policy that recognizes potential interest and penalties related to uncertain tax positions in income tax expense in the accompanying interim unaudited consolidated statements of operations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Current assets:
Cash and cash equivalents	$ 17,463	$ 30,490
Patient accounts receivable	246,026	218,917
Receivables under insured programs	6,605	6,373
Prepaid expenses	19,634	14,233
Other current assets	3,389	9,202
Total current assets	293,117	279,215
Property and equipment, net	27,490	31,374
Operating lease right of use assets	49,899	51,992
Goodwill	1,367,143	1,835,580
Intangible assets, net	100,355	102,851
Receivables under insured programs	23,378	25,530
Other long-term assets	47,600	7,829
Total assets	1,908,982	2,334,371
Current liabilities:
Accounts payable and other accrued liabilities	53,370	52,624
Accrued payroll and employee benefits	45,224	54,565
Current portion of insurance reserves - insured programs	6,605	6,373
Current portion of insurance reserves	16,984	13,466
Securitization obligations	150,000	120,000
Current portion of long-term obligations	8,600	8,600
Current portion of operating lease liabilities	10,858	13,534
Current portion of deferred payroll taxes	25,523	25,523
Other current liabilities	44,001	50,146
Total current liabilities	361,165	344,831
Revolving credit facility	15,000
Long-term obligations, less current portion	1,224,383	1,226,517
Long-term insurance reserves - insured programs	23,378	25,530
Long-term insurance reserves	36,408	35,122
Operating lease liabilities, less current portion	42,393	44,682
Deferred income taxes	2,957	3,046
Other long-term liabilities	1,026	16,692
Total liabilities	1,706,710	1,696,420
Commitments and contingencies (Note 11)
Deferred restricted stock units	2,135	2,135
Stockholders’ equity:
Preferred stock, $0.01 par value as of July 2, 2022 and no par value as of January 2, 2021, 5,000,000 shares authorized; none issued or outstanding
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 185,918,240 and 184,732,268 issued and outstanding, respectively	1,859	1,847
Additional paid-in capital	1,221,507	1,208,645
Accumulated deficit	(1,023,229)	(574,676)
Total stockholders’ equity	200,137	635,816
Total liabilities, deferred restricted stock units, and stockholders’ equity	$ 1,908,982	$ 2,334,371

Long-Term Obligations - Schedule of Long-Term Obligations and Notes Payable (Parenthetical) (Details)	6 Months Ended
	Jul. 02, 2022
Second Lien Term Loan
Debt Instrument [Line Items]
Debt instrument, description of contractual interest rate	L = Greater of 0.50% or one-month LIBOR
2021 Extended Term Loan
Debt Instrument [Line Items]
Debt instrument, description of contractual interest rate	L = Greater of 0.50% or one-month LIBOR
Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, description of contractual interest rate	L = Greater of 0.50% or one-month LIBOR

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

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Goodwill - Additional Information (Details) $ in Thousands	3 Months Ended	6 Months Ended
Goodwill - Additional Information (Details) $ in Thousands	Jul. 02, 2022 USD ($)	Jul. 02, 2022 USD ($) ReportingUnit Segment
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment charge \| $	$ 470,207	$ 470,207
Carrying value of reporting units exceeded fair value		5
Number of reporting units		6
Number of reportable segments \| Segment		3