Aveanna Healthcare Holdings Inc
For the period ended Sep 28, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Nov 7, 2024
AVAH$13.25-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-08.
0000950170-24-093268
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-11-07.
0000950170-24-122748
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 246 previous paragraphs and 249 current paragraphs.
135 unchanged; 75 reworded; 39 added; 33 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
Operating Income (Loss)
Current report
Operating income was $34.0 million, or 6.7% of revenue, for the three-month period ended September 28, 2024, as compared to operating loss of 76.4 million for the three-month period ended September 30, 2023, an increase of $110.4 million.
Current report
the previously discussed $15.3 million increase in Field contribution; and
Current report
a $105.1 million decrease in goodwill impairment expense; offset by
Current report
a $4.4 million increase in corporate expenses; and
Current report
a 6.2 million increase in other operating expense (income).
Current report
Net Loss
Current report
the previously discussed $110.4 million increase in operating income; offset by
Current report
a $14.9 million increase in tax expense.
Current report
Revenue was $509.0 million for the three-month period ended September 28, 2024, as compared to $478.0 million for the three-month period ended September 30, 2023, an increase of $31.0 million, or 6.5%. This increase resulted from the following segment activity:
Current report
a $24.8 million, or 6.4%, increase in PDS revenue;
Current report
a $5.1 million, or 12.6%, increase in MS revenue.
Current report
Cost of revenue, excluding depreciation and amortization, was $349.3 million for the three-month period ended September 28, 2024, as compared to $330.7 million for the three-month period ended September 30, 2023, an increase of $18.6 million, or 5.6%. This increase resulted from the following segment activity:
Current report
a $19.4 million, or 6.9%, increase in PDS cost of revenue;
Current report
a $2.6 million, or 9.6%, decrease in HHH cost of revenue; and
Current report
a $1.8 million, or 7.8%, increasein MS cost of revenue.
Current report
Branch and regional administrative expenses were $88.2 million, or 17.3% of revenue, for thethree-month period ended September 28, 2024, as compared to $91.0 million, or 19.0% of revenue, for thethree-month period ended September 30, 2023, a decrease of $2.8 million, or 3.1%.
Current report
a 1.7% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended September 28, 2024, as compared to the three-month period ended September 30, 2023.
Current report
Goodwill Impairment
Current report
Goodwill impairment was $105.1 million for the three-month period ended September 30, 2023. As a result of anticipated volume not being actualized to forecasted levels in the reporting unit within our HHH segment, primarily related to continued challenges in the labor markets, we recorded a $105.1 million non-cash goodwill impairment charge during the three months ended September 30, 2023. There was no goodwill impairment charge recorded during the three-month period ended September 28, 2024.
Current report
Interest expense, net of interest income was $39.1 million for the three-month period ended September 28, 2024, as compared to $39.5 million for the three-month period ended September 30, 2023, a decrease of $0.4 million, or 1.0%. The decrease was primarily driven by a lower principal balance on the 2021 Extended Term Loan (as described in Note 4 to our interim unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q (our “Quarterly Financial Statements”))and the September 2024 U.S.
Current report
federal funds rate cut, partially offset by higher borrowing under our Securitization Facility (as defined in Note 5 to our Quarterly Financial Statements). See further analysis under Liquidity and Capital Resources below.
Current report
Other (Expense) Income
Current report
Nine-Month Period Ended September 28, 2024 Compared to the Nine-Month Period Ended September 30, 2023
Current report
Operating Income (Loss)
Current report
the previously discussed $26.7 million increase in Field contribution;
Current report
a $105.1 million decrease in goodwill impairment expense; and
Current report
a $7.2 million increase in corporate expenses; and
Current report
a $11.9 million decrease in other operating income.
Current report
Net Loss
Current report
the previously discussed $115.2 million increase in operating income; offset by
Current report
Revenue was $1,504.6 million for the nine-month period ended September 28, 2024, as compared to $1,416.4 million for the nine-month period ended September 30, 2023, an increase of $88.3 million, or 6.2%. This increase resulted from the following segment activity:
Current report
a $77.1 million, or 6.8%, increase in PDS revenue;
Current report
Cost of revenue, excluding depreciation and amortization, was $1,040.8 million for the nine-month period ended September 28, 2024, as compared to $969.4 million for the nine-month period ended September 30, 2023, an increase of $71.4 million, or 7.4%. This increase resulted from the following segment activity:
Current report
a $76.4 million, or 9.4%, increase in PDS cost of revenue;
Current report
a $11.4 million, or 13.0%, decrease in HHH cost of revenue; and
Current report
Goodwill Impairment
Current report
Goodwill impairment was $105.1 million for the nine-month period ended September 30, 2023. As a result of anticipated volume not being actualized to forecasted levels in the reporting unit within our HHH segment, primarily related to continued challenges in the labor markets, we recorded a $105.1 million non-cash goodwill impairment charge during the nine-month period ended September 30, 2023. There was no goodwill impairment charge recorded during the nine-month period ended September 28, 2024.
Current report
On September 30, 2024, the we amended the terms of our revolving credit facility under the First Lien Credit Agreement (as defined in Note 4 of our Quarterly Financial Statements) to extend the Revolving Credit Facility’s maturity date from April 29, 2026 to the earlier of (i) April 15, 2028 and (ii) May 1, 2026 if by such date the Securitization Facility has not been renewed or replaced or paid-off, in each case, in full, with a maturity date that is April 15, 2028, or later. Additionally, such amendment immediately reduced the maximum borrowing availability under the Revolving Credit Facility from $200.0 million to $170.3 million through April 29, 2026, and then subsequently reduces availability to $148.9 million from April 29, 2026 through the amended maturity date.
Removed paragraphs (33)
Previous report
Operating Income
Previous report
Operating income was $37.1 million, or 7.4% of revenue, for the three-month period ended June 29, 2024, as compared to operating income of 37.5 million, or 7.9% of revenue, for the three-month period ended July 1, 2023, a decrease of $0.4 million.
Previous report
the previously discussed $6.3 million increase in Field contribution;
Previous report
a $3.9 million increase in corporate expenses;
Previous report
a 3.4 million increase in other operating expense (income); and
Previous report
Net Income
Previous report
the previously discussed $0.4 million decrease in operating income;
Previous report
a $1.6 million increase in interest expense, net of interest income; offset by
Previous report
a 9.1 million increase in tax benefit.
Previous report
Revenue was $505.0 million for the three-month period ended June 29, 2024, as compared to $471.9 million for the three-month period ended July 1, 2023, an increase of $33.0 million, or 7.0%. This increase resulted from the following segment activity:
Previous report
a $30.2 million, or 8.0%, increase in PDS revenue;
Previous report
a $3.6 million, or 9.3%, increase in MS revenue.
Previous report
Cost of revenue, excluding depreciation and amortization, was $346.7 million for the three-month period ended June 29, 2024, as compared to $316.7 million for the three-month period ended July 1, 2023, an increase of $30.0 million, or 9.5%. This increase resulted from the following segment activity:
Previous report
a $30.8 million, or 11.6%, increase in PDS cost of revenue;
Previous report
a $3.3 million, or 11.5%, decrease in HHH cost of revenue; and
Previous report
a $2.5 million, or 11.2%, increasein MS cost of revenue.
Previous report
a 1.8% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended June 29, 2024, as compared to the three-month period ended July 1, 2023.
Previous report
Six-Month Period Ended June 29, 2024 Compared to the Six-Month Period Ended July 1, 2023
Previous report
Operating Income
Previous report
the previously discussed $11.5 million increase in Field contribution; and
Previous report
a $2.8 million increase in corporate expenses; and
Previous report
a $5.6 million decrease in other operating income.
Previous report
Net Income (Loss)
Previous report
the previously discussed $4.9 million increase in operating income; and
Previous report
Revenue was $995.6 million for the six-month period ended June 29, 2024, as compared to $938.4 million for the six-month period ended July 1, 2023, an increase of $57.3 million, or 6.1%. This increase resulted from the following segment activity:
Previous report
a $52.2 million, or 7.0%, increase in PDS revenue;
Previous report
Cost of revenue, excluding depreciation and amortization, was $691.5 million for the six-month period ended June 29, 2024, as compared to $638.6 million for the six-month period ended July 1, 2023, an increase of $52.9 million, or 8.3%. This increase resulted from the following segment activity:
Previous report
a $8.7 million, or 14.6%, decrease in HHH cost of revenue; and
Previous report
Branch and regional administrative expenses were $175.9 million, or 17.7% of revenue, for the six-month period ended June 29, 2024, as compared to $183.0 million, or 19.5% of revenue, for the six-month period ended July 1, 2023, a decrease of $7.1 million, or 3.9%.
Previous report
Interest expense, net of interest income was $79.1 million for the six-month period ended June 29, 2024, as compared to $73.8 million for the six-month period ended July 1, 2023, an increase of $5.3 million, or 7.2%. The increase was primarily driven by higher interest rates due to continued increases in the U.S. federal funds rate and higher borrowing under our Securitization Facility. See further analysis under Liquidity and Capital Resources below.
Previous report
Other Income
Previous report
million for the three and six-month periods ended June 29, 2024, respectively, and $(0.7) million and $(0.6) million for the three and six-month periods ended July 1, 2023, respectively.
Previous report
On March 23, 2023, we amended the agreement governing our Revolving Credit Facility to increase the sublimit for letters of credit to $40.0 million from $30.0 million. The other terms of the Revolving Credit Facility remained unchanged by such amendment.
Reworded paragraphs (75)
Previous wording
Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52-week or 53-week fiscal year. “Fiscal year 2024” refers to the 52-week fiscal year ending on December 28, 2024. “Fiscal year 2023” refers to the 52-week fiscal year ended on December 30, 2023. The “three-month period ended June 29, 2024”, or “second quarter of 2024” refers to the 13-week fiscal quarter ended on June 29, 2024. The “three-month period ended July 1, 2023” or “second quarter of 2023” refers to the 13-week fiscal quarter ended on July 1, 2023. The "six-month period ended June 29, 2024", or "first six months of 2024", refers to the period from December 31, 2023 through June 29, 2024. The "six-month period ended July 1, 2023", or "first six months of 2023", refers to the period from January 1, 2023 through July 1, 2023.
Current wording
Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52-week or 53-week fiscal year. “Fiscal year 2024” refers to the 52-week fiscal year ending on December 28, 2024. “Fiscal year 2023” refers to the 52-week fiscal year ended on December 30, 2023. The “three-month period ended September 28, 2024”, or “third quarter of 2024” refers to the 13-week fiscal quarter ended on September 28, 2024. The “three-month period ended September 30, 2023” or “third quarter of 2023” refers to the 13-week fiscal quarter ended on September 30, 2023. The "nine-month period ended September 28, 2024", or "first nine months of 2024", refers to the period from December 31, 2023 through September 28, 2024. The "nine-month period ended September 30, 2023", or "first nine months of 2023", refers to the period from January 1, 2023 through September 30, 2023.
Previous wording
The following table summarizes the revenues generated by each of our segments for the six-month periods ended June 29, 2024 and July 1, 2023, respectively:
Current wording
The following table summarizes the revenues generated by each of our segments for the nine-month periods ended September 28, 2024 and September 30, 2023, respectively:
Previous wording
Operating income for the second quarter of 2024 was positively impacted by an increase of $6.3 million, or 9.8%, in Field contribution, as compared to the second quarter of 2023. The $6.3 million increase in Field contribution resulted from a $33.0 million, or 7.0%, increase in consolidated revenue and a 0.3% increase in our Field contribution margin to 13.9% for the second quarter of 2024 from 13.6% for the second quarter of 2023. The primary driver of our higher Field contribution margin over the comparable quarter was a 1.9% decrease in branch and regional administrative expenses as a percentage of revenue to 17.4% for the second quarter of 2024 from 19.3% for the second quarter of 2023.
Current wording
Operating income for the third quarter of 2024 was positively impacted by an increase of $15.3 million, or 27.1%, in Field contribution, as compared to the third quarter of 2023. The $15.3 million increase in Field contribution resulted from a $31.0 million, or 6.5%, increase in consolidated revenue and a 2.2% increase in our Field contribution margin to 14.0% for the third quarter of 2024 from 11.8% for the third quarter of 2023. The primary driver of our higher Field contribution margin over the comparable quarter was an increase in gross margin percentage of 0.6%, along with a 1.7% decrease in branch and regional administrative expenses as a percentage of revenue to 17.3% for the third quarter of 2024 from 19.0% for the third quarter of 2023.
Previous wording
The following items primarily contributed to the $0.4 million decrease in operating income over the comparable second quarter period:
Current wording
The following items primarily contributed to the $110.4 million increase in operating income over the comparable third quarter period:
Previous wording
Net income for the three-month period ended June 29, 2024 was $13.9 million, as compared to net income of $25.6 million for the three-month period ended July 1, 2023. The $11.7 million decrease in net income was primarily driven by the following:
Current wording
Net loss for the three-month period ended September 28, 2024 was $42.8 million, as compared to net loss of $102.4 million for the three-month period ended September 30, 2023. The $59.5 million decrease in net loss was primarily driven by the following:
Previous wording
an aggregate $18.8 million decrease in valuation gains on interest rate derivatives and net settlements received from interest rate derivative counterparties over the comparable quarter; and
Current wording
an aggregate $36.4 million decrease in valuation gains on interest rate derivatives and net settlements received from interest rate derivative counterparties over the comparable quarter; and
Previous wording
a $2.3 million, or 2.1%, decrease in HHH revenue; and
Current wording
a $1.2 million, or 2.2%, increase in HHH revenue; and
Previous wording
Our PDS segment revenue growth of $30.2 million, or 8.0%, for thethree-month period ended June 29, 2024 was attributable to a 4.8% increase in volume and a 3.2% increase in revenue rate. The 4.8% increase in volume was primarily attributable to growth in demand for non-clinical services.
Current wording
Our PDS segment revenue growth of $24.8 million, or 6.4%, for thethree-month period ended September 28, 2024 was attributable to a 3.8% increase in volume and a 2.6% increase in revenue rate. The 3.8% increase in volume was primarily attributable to growth in demand for non-clinical services.
Previous wording
The 3.2% increase in PDS revenue rate for thethree-month period ended June 29, 2024, as compared to thethree-month period ended July 1, 2023, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and increases in value-based payments, offset by increases in implicit price concessions.
Current wording
The 2.6% increase in PDS revenue rate for thethree-month period ended September 28, 2024, as compared to thethree-month period ended September 30, 2023, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and increases in value-based payments, offset by increases in implicit price concessions.
Previous wording
Our HHH segment revenue decrease of $0.8 million, or 1.4%, for thethree-month period ended June 29, 2024, as compared to thethree-month period ended July 1, 2023, resulted primarily from a decline in volumes over the comparable period. While home health total admissions declined 5.1% as compared to the 2023 period, total segment revenue for the three-month period ended June 29, 2024 declined by a lower rate primarily due to improvements in home health episodic mix.
Current wording
Our HHH segment revenue increase of $1.2 million, or 2.2%, for thethree-month period ended September 28, 2024, as compared to thethree-month period ended September 30, 2023, resulted primarily from an increase in home health total episodes over the comparable period and an increase in home health revenue per completed episode due to improvements in home health episodic mix.
Previous wording
The$3.6 million, or 9.3%, increase in MS segment revenue for thethree-month period ended June 29, 2024, as compared to thethree-month period ended July 1, 2023, was attributable to volume growth of 10.6% partially offset by a 1.3% decrease in revenue rate over the comparable period.
Current wording
The$5.1 million, or 12.6%, increase in MS segment revenue for thethree-month period ended September 28, 2024, as compared to thethree-month period ended September 30, 2023, was attributable to both an 8.1% increase in revenue rate and volume growth of 4.5% over the comparable period.
Previous wording
The 10.6% increase in PDS cost of revenue for the six-month period ended June 29, 2024 resulted from the previously described 4.8% increase in PDS volume combined with a 5.8% increase in PDS cost of revenue rate. The 5.8% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of state reimbursement rate increases.
Current wording
The 6.9% increase in PDS cost of revenue for thethree-month period ended September 28, 2024 resulted from the previously described 3.8% increase in PDS volume combined with a 3.1% increase in PDS cost of revenue rate. The 3.1% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases.
Previous wording
The 11.5% decrease in HHH cost of revenue for thethree-month period ended June 29, 2024 was driven primarily by a decline in HHH volumes and improvements in HHH caregiver utilization.
Current wording
The 9.6% decrease in HHH cost of revenue for thethree-month period ended September 28, 2024 was driven primarily by a decline in HHH non-episodic volumes and improvements in HHH caregiver utilization.
Previous wording
The 11.2% increase in MS cost of revenue for thethree-month period ended June 29, 2024 was driven by the previously described 10.6% growth in MS volumes and a 0.6% increase in cost of revenue rate.
Current wording
The 7.8% increase in MS cost of revenue for thethree-month period ended September 28, 2024 was driven by the previously described 4.5% growth in MS volumes and a 3.3% increase in cost of revenue rate.
Previous wording
Gross margin was $158.3 million, or 31.3% of revenue, for the three-month period ended June 29, 2024, as compared to $155.3 million, or 32.9% of revenue, for the three-month period ended July 1, 2023. Gross margin increased $3.0 million, or 1.9%, from the comparable prior year quarter. The 1.6% decrease in gross margin percentage for the three-month period ended June 29, 2024 resulted from the combined changes in our revenue rates and cost of revenue rates in each of our segments, which we refer to as the change in our spread rate, as follows:
Current wording
Gross margin was $159.7 million, or 31.4% of revenue, for the three-month period ended September 28, 2024, as compared to $147.3 million, or 30.8% of revenue, for the three-month period ended September 30, 2023. Gross margin increased $12.4 million, or 8.4%, from the comparable prior year quarter. The 0.6% increase in gross margin percentage for the three-month period ended September 28, 2024 resulted from the combined changes in our revenue rates and cost of revenue rates in each of our segments, which we refer to as the change in our spread rate, as follows:
Previous wording
a 7.0% decrease in PDS spread rate from $10.97 to $10.24 driven by the 2.2% increase in PDS revenue rate, net of the 5.8% increase in PDS cost of revenue rate;
Current wording
a 1.3% increase in PDS spread rate from $10.35 to $10.48 driven by the 2.6% increase in PDS revenue rate, net of the 3.1% increase in PDS cost of revenue rate;
Previous wording
a 1.2% decrease in MS spread rate from $188.79 to $186.78 driven by the 0.2% increase in MS revenue rate, net of the 1.2% increase in MS cost of revenue rate; and
Current wording
a 14.3% increase in MS spread rate from $197.84 to $224.79 driven by the 8.1% increase in MS revenue rate, net of the 3.3% increase in MS cost of revenue rate; and
Previous wording
our HHH segment, in which gross margin percentage increased by 5.2%.
Current wording
our HHH segment, in which gross margin percentage increased by 6.0%.
Previous wording
The 3.6% decrease in branch and regional administrative expenses for thethree-month period ended June 29, 2024, as compared to thethree-month period ended July 1, 2023, was primarily due to the positive effects of restructuring portions of our branch and regional operating structure, which resulted in the overall 1.9% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended June 29, 2024, as compared to the three-month period ended July 1, 2023.
Current wording
The 3.1% decrease in branch and regional administrative expenses for thethree-month period ended September 28, 2024, as compared to thethree-month period ended September 30, 2023, was primarily due to the positive effects of restructuring portions of our branch and regional operating structure, which resulted in the overall 1.7% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended September 28, 2024, as compared to the three-month period ended September 30, 2023.
Previous wording
Field contribution was $70.3 million, or 13.9% of revenue, for the three-month period ended June 29, 2024, as compared to $64.0 million, or 13.6% of revenue, for the three-month period ended July 1, 2023. Field contribution increased $6.3 million, or 9.8%, for the three-month period ended June 29, 2024, as compared to the three-month period ended July 1, 2023. The 0.3% increase in Field contribution margin for the three-month period ended June 29, 2024 resulted from the following:
Current wording
Field contribution was $71.5 million, or 14.0% of revenue, for the three-month period ended September 28, 2024, as compared to $56.3 million, or 11.8% of revenue, for the three-month period ended September 30, 2023. Field contribution increased $15.3 million, or 27.1%, for the three-month period ended September 28, 2024, as compared to the three-month period ended September 30, 2023. The 2.2% increase in Field contribution margin for the three-month period ended September 28, 2024 resulted from the following:
Previous wording
a 1.6% decrease in gross margin percentage in the three-month period ended June 29, 2024, as compared to the three-month period ended July 1, 2023; and
Current wording
a 0.6% increase in gross margin percentage in the three-month period ended September 28, 2024, as compared to the three-month period ended September 30, 2023; and
Previous wording
Corporate expenses were $30.2 million, or 6.0% of revenue, forthe three-month period ended June 29, 2024, as compared to $26.4 million, or 5.6% of revenue, forthe three-month period ended July 1, 2023. The $3.9 million, or 14.8%, increase in corporate expenses resulted primarily from higher compensation and benefits costs, non-cash share-based compensation, and professional services.
Current wording
Corporate expenses were $31.9 million, or 6.3% of revenue, forthe three-month period ended September 28, 2024, as compared to $27.4 million, or 5.7% of revenue, forthe three-month period ended September 30, 2023. The $4.4 million, or 16.2%, increase in corporate expenses resulted primarily from higher compensation and benefits costs, non-cash share-based compensation, and professional services.
Previous wording
Depreciation and amortization was $2.8 million for the three-month period ended June 29, 2024, as compared to $3.5 million for the three-month period ended July 1, 2023, a decrease of $0.7 million, or 18.8%. The $0.7 million decrease primarily resulted from improved capital asset management.
Current wording
Depreciation and amortization was $2.6 million for the three-month period ended September 28, 2024, as compared to $3.0 million for the three-month period ended September 30, 2023, a decrease of $0.4 million, or 12.7%. The $0.4 million decrease primarily resulted from improved capital asset management.
Previous wording
Other operating expense was $0.1 million for thethree-month period ended June 29, 2024, as compared to other operating income of $3.3 million for thethree-month period ended July 1, 2023, a decrease in other operating income of $3.4 million. The $3.4 million decrease primarily resulted from a favorable $3.6 million acquisition-related legal settlement recorded in the prior year three-month period.
Current wording
Other operating expense was $2.9 million for thethree-month period ended September 28, 2024, as compared to other operating income of $3.4 million for thethree-month period ended September 30, 2023, a decrease in other operating income of $6.2 million. The $6.2 million decrease primarily resulted from a favorable $5.1 million non-cash gain on the acquisition of certain business licenses and other net assets recorded during the third quarter of 2023, and a $1.1 million increase in license impairment charges recorded in the third quarter of 2024.
Previous wording
Other income was $6.4 million forthe three-month period ended June 29, 2024, as compared to other income of $25.2 million forthe three-month period ended July 1, 2023, a decrease of $18.8 million. We realized a $19.9 million decrease in non-cash valuation gains on interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable quarter-end valuation dates, offset by a $1.7 million improvement in net settlements with interest rate derivative counterparties as interest rates increased compared to the prior year quarter due to higher market interest rates. Details of other income included the following:
Current wording
Other expense was $22.2 million forthe three-month period ended September 28, 2024, as compared to other income of $14.1 million forthe three-month period ended September 30, 2023, a decrease to other income of $36.4 million. The decrease was primarily driven by a $36.3 million decrease in non-cash valuation gains on interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable quarter-end valuation dates. Details of other (expense) income included the following:
Previous wording
We incurred income tax benefit of $9.9 million for thethree-month period ended June 29, 2024, as compared to income tax benefit of $0.8 million for thethree-month period ended July 1, 2023. This increase in tax benefit was primarily driven by the changes in federal and state valuation allowances, and changes to federal and state current tax expense.
Current wording
We incurred income tax expense of $15.5 million for thethree-month period ended September 28, 2024, as compared to income tax expense of $0.6 million for thethree-month period ended September 30, 2023. This increase in tax expense was primarily driven by the changes in federal and state valuation allowances, and changes to federal and state current tax expense due to certain non-deductible expenses, most notably interest expense.
Previous wording
The following table summarizes our consolidated results of operations, including Field contribution, which is a non-GAAP measure (see “Non-GAAP Financial Measures” below), for the six-month periods indicated:
Current wording
The following table summarizes our consolidated results of operations, including Field contribution, which is a non-GAAP measure (see “Non-GAAP Financial Measures” below), for the nine-month periods indicated:
Previous wording
The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the six-month periods indicated:
Current wording
The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the nine-month periods indicated:
Previous wording
The following tables summarize our key performance measures by segment for the six-month periods indicated:
Current wording
The following tables summarize our key performance measures by segment for the nine-month periods indicated:
Previous wording
Operating income was $60.0 million for the six-month period ended June 29, 2024, as compared to operating income of $55.1 million for the six-month period ended July 1, 2023, an increase of $4.9 million, or 8.8%.
Current wording
Operating income was $94.0 million for the nine-month period ended September 28, 2024, as compared to operating loss of $21.2 million for the nine-month period ended September 30, 2023, an increase of $115.2 million, or 543.0%.
Previous wording
Operating income for the six-month period of 2024 was positively impacted by an increase of $11.5 million, or 9.8%, in Field contribution as compared to the six-month period of 2023. The $11.5 million increase in Field contribution resulted from a $57.3 million, or 6.1%, increase in consolidated revenue and a 0.5% increase in our Field contribution margin to 12.9% for the six-month period of 2024 from 12.4% for the six-month period of 2023. The primary driver of our higher Field contribution margin year over year was a 1.8% decrease in branch and regional administrative expenses as a percentage of revenue to 17.7% for the six-month period of 2024 from 19.5% for the six-month period of 2023.
Current wording
Operating income for the nine-month period of 2024 was positively impacted by an increase of $26.7 million, or 15.5%, in Field contribution as compared to the nine-month period of 2023. The $26.7 million increase in Field contribution resulted from a $88.3 million, or 6.2%, increase in consolidated revenue and a 1.1% increase in our Field contribution margin to 13.3% for the nine-month period of 2024 from 12.2% for the nine-month period of 2023. The primary driver of our higher Field contribution margin year over year was a 1.7% decrease in branch and regional administrative expenses as a percentage of revenue to 17.6% for the nine-month period of 2024 from 19.3% for the nine-month period of 2023 partially offset by a decrease in gross margin percentage of 0.8% over the comparable period.
Previous wording
The overall $4.9 million increase in operating income over the comparable periods primarily consists of:
Current wording
The overall $115.2 million increase in operating income over the comparable periods primarily consists of:
Previous wording
a $1.8 million decrease in depreciation and amortization; offset by
Current wording
a $2.2 million decrease in depreciation and amortization; offset by
Previous wording
Net income for the six-month period ended June 29, 2024 was $2.7 million, as compared to net loss of $6.4 million for the six-month period ended July 1, 2023. The $9.1 million increase in net income was primarily driven by the following:
Current wording
Net loss for the nine-month period ended September 28, 2024 was $40.1 million, as compared to net loss of $108.8 million for the nine-month period ended September 30, 2023. The $68.7 million decrease in net loss was primarily driven by the following:
Previous wording
an aggregate $11.6 million increase in valuation gains on interest rate derivatives, and increases in net settlements received from interest rate derivative counterparties over the comparable period; offset by
Current wording
an aggregate $24.8 million decrease in valuation gains on interest rate derivatives, and increases in net settlements received from interest rate derivative counterparties over the comparable period; and
Previous wording
a $5.3 million increase in interest expense, net of interest income; and
Current wording
a $4.9 million increase in interest expense, net of interest income; and
Previous wording
a $1.9 million increase in income tax expense.
Current wording
a $16.8 million increase in income tax expense.
Previous wording
a $0.8 million, or 1.4%, decrease in HHH revenue; and
Current wording
a $1.1 million, or 0.7%, decrease in HHH revenue; and
Previous wording
a $4.7 million, or 10.6%, increase in MS cost of revenue.
Current wording
a $12.4 million, or 10.6%, increase in MS revenue.
Previous wording
Our PDS segment revenue growth of $52.2 million, or 7.0%, for the six-month period ended June 29, 2024 was attributable to a 4.8% increase in volume and a 2.2% increase in revenue rate. The 4.8% increase in volume was primarily attributable to growth in demand for non-clinical services.
Current wording
Our PDS segment revenue growth of $77.1 million, or 6.8%, for the nine-month period ended September 28, 2024 was attributable to a 4.5% increase in volume and a 2.3% increase in revenue rate. The 4.5% increase in volume was primarily attributable to growth in demand for non-clinical services.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
a $0.7 million decrease in depreciation and amortization.
Previous report — wording carried elsewhere
a $56.9 million, or 10.6%, increase in PDS cost of revenue;
Previous report — wording carried elsewhere
of a legal matter resulting from a 2020 acquisition.