Aveanna Healthcare Holdings, Inc.

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 2025” refers to the 53-week fiscal year ending on January 3, 2026. “Fiscal year 2024” refers to the 52-week fiscal year ended on December 28, 2024. The “three-month period ended March 29, 2025”, or “first quarter of 2025” refers to the 13-week fiscal quarter ended on March 29, 2025. The “three-month period ended March 30, 2024” or “first quarter of 2024” refers to the 13-week fiscal quarter ended on March 30, 2024.

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 2025” refers to the 53-week fiscal year ending on January 3, 2026. “Fiscal year 2024” refers to the 52-week fiscal year ended on December 28, 2024. The “three-month period ended June 28, 2025”, or “second quarter of 2025” refers to the 13-week fiscal quarter ended on June 28, 2025. 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 "six-month period ended June 28, 2025", or "first six months of 2025", refers to the period from December 29, 2024 through June 28, 2025. 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.

Previous wording

Operating income was $51.8 million, or 9.3% of revenue, for the three-month period ended March 29, 2025, as compared to operating income of $22.9 million for the three-month period ended March 30, 2024, an increase of $28.9 million.

Current wording

Operating income was $80.0 million, or 13.6% of revenue, for the three-month period ended June 28, 2025, as compared to operating income of $37.1 million, or 7.4% of revenue, for the three-month period ended June 29, 2024, an increase of $42.9 million.

Previous wording

Operating income for the first quarter of 2025 was positively impacted by an increase of $34.2 million, or 59.1%, in Field contribution, as compared to the first quarter of 2024. The $34.2 million increase in Field contribution resulted from a $68.6 million, or 14.0%, increase in consolidated revenue and a 4.7% increase in our Field contribution margin to 16.5% for the first quarter of 2025 from 11.8% for the first quarter of 2024. The primary driver of our higher Field contribution margin over the comparable quarter was an increase in gross margin percentage of 3.1%, along with a 1.6% decrease in branch and regional administrative expenses as a percentage of revenue to 16.3% for the first quarter of 2025 from 17.9% for the first quarter of 2024.

Current wording

Operating income for the second quarter of 2025 was positively impacted by an increase of $50.4 million, or 71.7%, in Field contribution, as compared to the second quarter of 2024. The $50.4 million increase in Field contribution resulted from a $84.6 million, or 16.8%, increase in consolidated revenue and a 6.6% increase in our Field contribution margin to 20.5% for the second quarter of 2025 from 13.9% for the second quarter of 2024. The primary driver of our higher Field contribution margin over the comparable quarter was an increase in gross margin percentage of 4.5%, along with a 2.1% decrease in branch and regional administrative expenses as a percentage of revenue to 15.3% for the second quarter of 2025 from 17.4% for the second quarter of 2024.

Previous wording

The following items primarily contributed to the $28.9 million increase in operating income over the comparable first quarter period:

Current wording

The following items primarily contributed to the $42.9 million increase in operating income over the comparable second quarter period:

Previous wording

Net income for the three-month period ended March 29, 2025 was $5.2 million, as compared to net loss of $11.2 million for the three-month period ended March 30, 2024. The $16.4 million increase in net income was primarily driven by the following:

Current wording

Net income for the three-month period ended June 28, 2025 was $27.0 million, as compared to net income of $13.9 million for the three-month period ended June 29, 2024. The $13.1 million increase in net income was primarily driven by the following:

Previous wording

an aggregate $23.6 million decrease in valuation gains on interest rate derivatives and net settlements received from interest rate derivative counterparties over the comparable periods.

Current wording

an aggregate $6.4 million decrease in valuation gains on interest rate derivatives and net settlements received from interest rate derivative counterparties compared to the second quarter of 2024.

Previous wording

a $2.1 million, or 3.9%, increase in HHH revenue; and

Current wording

a $5.5 million, or 10.0%, increase in HHH revenue; and

Previous wording

The 10.4% increase in PDS revenue rate for thethree-month period ended March 29, 2025, as compared to thethree-month period ended March 30, 2024, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers, including payments received in the current period related to certain rate increases applied retroactively and improved collections on fully reserved aged receivables.

Current wording

The 12.3% increase in PDS revenue rate for thethree-month period ended June 28, 2025, as compared to thethree-month period ended June 29, 2024, resulted primarily from the following: (i) reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers, including payments received in the current period related to certain rate increases applied retroactively for services provided since January 1, 2025, for which there is currently no associated wage pass-through reflected in segment cost of revenue, excluding depreciation and amortization; (ii) increases in value-based payments from certain payors; and (iii) improved collections on fully reserved aged receivables.

Previous wording

Our HHH segment revenue increase of $2.1 million, or 3.9%, for thethree-month period ended March 29, 2025, as compared to thethree-month period ended March 30, 2024, resulted primarily from an increase in home health revenue per completed episode due to improvements in home health episodic mix.

Current wording

Our HHH segment revenue increase of $5.5 million, or 10.0%, for thethree-month period ended June 28, 2025, as compared to thethree-month period ended June 29, 2024, resulted primarily from a 6.9% increase in total episodes and an increase in home health revenue per completed episode due to improvements in patient mixcompared to the second quarter of 2024.

Previous wording

The$1.5 million, or 3.6%, increase in MS segment revenue for thethree-month period ended March 29, 2025, as compared to thethree-month period ended March 30, 2024, was attributable to a 6.9% increase in revenue rate, partially offset by a decline in volume of 3.3% over the comparable period.

Current wording

The$1.0 million, or 2.2%, increase in MS segment revenue for thethree-month period ended June 28, 2025, as compared to thethree-month period ended June 29, 2024, was attributable to a 5.4% increase in revenue rate, partially offset by a decline in volume of 3.2%compared to the second quarter of 2024.

Previous wording

The 10.3% increase in PDS cost of revenue for thethree-month period ended March 29, 2025 resulted from the previously described 6.1% increase in PDS volume combined with a 4.2% increase in PDS cost of revenue rate. The 4.2% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases.

Current wording

The 10.5% increase in PDS cost of revenue for thethree-month period ended June 28, 2025 resulted from the previously described 6.9% increase in PDS volume combined with a 3.6% increase in PDS cost of revenue rate. The 3.6% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases net of $6.2 million lower general and professional liability reserve associated with the release of certain accrued legal settlements.

Previous wording

Gross margin was $183.6 million, or 32.8% of revenue, for the three-month period ended March 29, 2025, as compared to $145.9 million, or 29.7% of revenue, for the three-month period ended March 30, 2024. Gross margin increased $37.7 million, or 25.9%, from the comparable prior year quarter. The 3.1% increase in gross margin percentage for the three-month period ended March 29, 2025 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 $210.8 million, or 35.8% of revenue, for the three-month period ended June 28, 2025, as compared to $158.3 million, or 31.3% of revenue, for the three-month period ended June 29, 2024. Gross margin increased $52.5 million, or 33.2%, from the comparable prior year quarter. The 4.5% increase in gross margin percentage for the three-month period ended June 28, 2025 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 28.4% increase in PDS spread rate from $9.75 to $12.37 driven by the 10.4% increase in PDS revenue rate, net of the 4.2% increase in PDS cost of revenue rate;

Current wording

a 35.6% increase in PDS spread rate from $10.73 to $14.29 driven by the 12.3% increase in PDS revenue rate, net of the 3.6% increase in PDS cost of revenue rate;

Previous wording

a 1.1% increase in gross margin percentage in our HHH segment.

Current wording

a 1.2% increase in gross margin percentage in our HHH segment.

Previous wording

The 4.0% increase in branch and regional administrative expenses for thethree-month period ended March 29, 2025, as compared to thethree-month period ended March 30, 2024, was primarily due to an increase in incentive compensation expense during the current three-month period due to improved forecasted performance compared to annual targets and the acceleration of certain non-cash share-based compensation awards during the quarter. The overall 1.6% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended March 29, 2025, as compared to the three-month period ended March 30, 2024, resulted from leveraging our branch and administrative expense structure as a result of our restructuring efforts.

Current wording

The 2.4% increase in branch and regional administrative expenses for thethree-month period ended June 28, 2025, as compared to thethree-month period ended June 29, 2024, was primarily due to an increase in incentive compensation expense during the current three-month period due to improved forecasted performance compared to annual targets and the additional branch operations associated with the Thrive acquisition. The overall 2.1% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024, resulted from leveraging our branch and administrative expense structure as a result of our restructuring efforts.

Previous wording

Field contribution was $92.2 million, or 16.5% of revenue, for the three-month period ended March 29, 2025, as compared to $57.9 million, or 11.8% of revenue, for the three-month period ended March 30, 2024. Field contribution increased $34.2 million, or 59.1%, for the three-month period ended March 29, 2025, as compared to the three-month period ended March 30, 2024. The 4.7% increase in Field contribution margin for the three-month period ended March 29, 2025 resulted from the following:

Current wording

Field contribution was $120.7 million, or 20.5% of revenue, for the three-month period ended June 28, 2025, as compared to $70.3 million, or 13.9% of revenue, for the three-month period ended June 29, 2024. Field contribution increased $50.4 million, or 71.7%, for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024. The 6.6% increase in Field contribution margin for the three-month period ended June 28, 2025 resulted from the following:

Previous wording

Depreciation and amortization was $2.6 million for the three-month period ended March 29, 2025, as compared to $2.9 million for the three-month period ended March 30, 2024, a decrease of $0.3 million, or 10.9%. The $0.3 million decrease primarily resulted from improved capital asset management.

Current wording

Depreciation and amortization was $2.6 million for the three-month period ended June 28, 2025, as compared to $2.8 million for the three-month period ended June 29, 2024, a decrease of $0.2 million, or 7.6%. The $0.2 million decrease primarily resulted from improved capital asset management.

Previous wording

Interest expense, net of interest income was $36.2 million for the three-month period ended March 29, 2025, as compared to $39.5 million for the three-month period ended March 30, 2024, a decrease of $3.3 million, or 8.5%. The decrease was primarily driven by a lower principal balance on the 2021 Extended Term Loan (as described in Note 4 to our Quarterly Financial Statements)and decreases in the U.S. federal funds rate. See further analysis under Liquidity and Capital Resources below.

Current wording

Interest expense, net of interest income was $35.9 million for the three-month period ended June 28, 2025, as compared to $39.5 million for the three-month period ended June 29, 2024, a decrease of $3.6 million, or 9.2%. The decrease was primarily driven by a lower principal balance on the 2021 Extended Term Loan (as described in Note 5 to our Quarterly Financial Statements)and decreases in the U.S. federal funds rate. See further analysis under Liquidity and Capital Resources below.

Previous wording

Other expense was $5.5 million forthe three-month period ended March 29, 2025, as compared to other income of $18.2 million forthe three-month period ended March 30, 2024, a decrease to other income of $23.6 million. We realized a $19.9 million increase in non-cash valuation losses associated with interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable quarter-end valuation date, as well as a $3.6 million decrease in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year fiscal quarter due to lower market interest rates. Details of other (expense) income included the following:

Current wording

Other expense was $0.0 million forthe three-month period ended June 28, 2025, as compared to other income of $6.4 million forthe three-month period ended June 29, 2024, a decrease to other income of $6.4 million. We realized a $2.8 million increase in non-cash valuation losses associated with interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable quarter-end valuation date, as well as a $3.5 million decrease in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year fiscal quarter due to lower market interest rates. Details of other (expense) income included the following:

Previous wording

We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. We incurred income tax expense of $5.0 million for thethree-month period ended March 29, 2025, as compared to income tax expense of $12.7 million for thethree-month period ended March 30, 2024. This decrease in tax expense was primarily driven by differences in our projections of annual earnings at the end of each comparable three-month period, as well as 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.

Current wording

We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. We incurred income tax expense of $17.1 million for thethree-month period ended June 28, 2025, as compared to income tax benefit of $9.9 million for thethree-month period ended June 29, 2024. This increase in tax expense was primarily driven by differences in our projections of annual earnings at the end of each comparable three-month period, as well as 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

Our PDS segment revenue growth of $65.0 million, or 16.5%, for thethree-month period ended March 29, 2025 was attributable to a 6.1% increase in volume and a 10.4% increase in revenue rate. The 6.1% increase in volume was primarily attributable to growth in demand for non-clinical services.

Current wording

Our PDS segment revenue growth of $143.2 million, or 17.8%, for the six-month period ended June 28, 2025 was attributable to a 6.5% increase in volume and a 11.3% increase in revenue rate. The 6.5% increase in volume was primarily attributable to growth in demand for non-clinical services.

Previous wording

The 0.3% increase in MS cost of revenue for thethree-month period ended March 29, 2025 was driven by the 3.6% increase in cost of revenue rate, offset by the previously described 3.3% decline in MS volumes.

Current wording

The 1.6% decrease in MS cost of revenue for the six-month period ended June 28, 2025 was driven by the previously described 3.2% decline in MS volumes offset by a 1.6% increase in cost of revenue rate.

Previous wording

a 11.6% increase in MS spread rate from $182.01 to $203.74 driven by the 6.9% increase in MS revenue rate, net of the 3.6% increase in MS cost of revenue rate; and

Current wording

a 12.4% increase in MS spread rate from $186.78 to $210.75 driven by the 6.1% increase in MS revenue rate, net of the 1.6% increase in MS cost of revenue rate; and

Previous wording

Corporate expenses were $37.5 million, or 6.7% of revenue, forthe three-month period ended March 29, 2025, as compared to $29.8 million, or 6.1% of revenue, forthe three-month period ended March 30, 2024. The $7.7 million, or 25.7%, increase in corporate expenses resulted primarily from higher compensation and benefits costs and non-cash share-based compensation.

Current wording

Corporate expenses were $72.0 million, or 6.3% of revenue, forthesix-month period ended June 28, 2025, as compared to $60.1 million, or 6.0% of revenue, forthesix-month period ended June 29, 2024. The $11.9 million, or 19.9%, increase in corporate expenses resulted primarily from higher compensation and benefits and higher non-cash share-based compensation costs, primarily due to the acceleration of the SMRP in the first quarter of 2025.

Previous wording

Other operating expense was $0.2 million for thethree-month period ended March 29, 2025, as compared to other operating expense of $2.3 million for thethree-month period ended March 30, 2024, a decrease in other operating expense of $2.2 million. The $2.2 million decrease primarily resulted from a certain facility lease asset impairment recorded in the first fiscal quarter of 2024.

Current wording

Other operating expense was $0.3 million for the six-month period ended June 28, 2025, as compared to other operating expense of $2.4 million for the six-month period ended June 29, 2024, a decrease in other operating expense of $2.1 million. The $2.1 million decrease primarily resulted from impairment of a certain facility lease asset recorded in the prior year six-month period.

Previous wording

a $3.3 million decrease in interest expense, net; and

Current wording

Interest Expense, net of Interest Income

Previous wording

EBITDA and Adjusted EBITDA are non-GAAP financial measures and are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as net income or loss. Rather, we present EBITDA and Adjusted EBITDA as supplemental measures of our performance. We define EBITDA as net income or loss before interest expense, net; income tax expense; and depreciation and amortization. We define Adjusted EBITDA as EBITDA, adjusted for the impact of certain other items that are either non-recurring, infrequent, non-cash, unusual, or items deemed by management to not be indicative of the performance of our core operations, including impairments of goodwill, intangible assets, and other long-lived assets; non-cash, share-based compensation, and associated employer payroll taxes; loss on extinguishment of debt; fees related to debt modifications; the effect of interest rate derivatives; acquisition-related and integration costs; legal costs and settlements associated with acquisition matters; restructuring costs; other legal matters; other system transition costs, professional fees; and other costs including gains and losses on acquisitions and dispositions of certain businesses. As non-GAAP financial measures, our computations of EBITDA and Adjusted EBITDA may vary from similarly termed non-GAAP financial measures used by other companies, making comparisons with other companies on the basis of this measure impracticable.

Current wording

EBITDA and Adjusted EBITDA are non-GAAP financial measures and are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as net income or loss. Rather, we present EBITDA and Adjusted EBITDA as supplemental measures of our performance. We define EBITDA as net income or loss before interest expense, net; income tax expense or benefit; and depreciation and amortization. We define Adjusted EBITDA as EBITDA, adjusted for the impact of certain other items that are either non-recurring, infrequent, non-cash, unusual, or items deemed by management to not be indicative of the performance of our core operations, including impairments of goodwill, intangible assets, and other long-lived assets; non-cash, share-based compensation, and associated employer payroll taxes; loss on extinguishment of debt; fees related to debt modifications; the effect of interest rate derivatives; acquisition-related and integration costs; legal costs and settlements associated with acquisition matters; restructuring costs; other legal matters; other system transition costs, professional fees; and other costs including gains and losses on acquisitions and dispositions of certain businesses. As non-GAAP financial measures, our computations of EBITDA and Adjusted EBITDA may vary from similarly termed non-GAAP financial measures used by other companies, making comparisons with other companies on the basis of this measure impracticable.

Previous wording

The following table reconciles net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated:

Current wording

The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods indicated:

Previous wording

Represents (i) costs associated with our Integration Management Office, which focuses on our integration efforts and transformational projects such as systems conversions and implementations, material cost reduction and restructuring projects, among other things, of $0.2 million for the three-month period ended March 29, 2025, and $0.3 million for the three-month period ended March 30, 2024; and (ii) transitionary costs incurred to integrate acquired companies into our field and corporate operations of $0.0 million for the three-month period ended March 29, 2025 and $0.0 million for the three-month period ended March 30, 2024. Transitionary costs incurred to integrate acquired companies include IT consulting costs and related integration support costs; salary, severance and retention costs associated with duplicative acquired company personnel until such personnel are exited from the Company; accounting, legal and consulting costs; expenses and impairments related to the closure and consolidation of overlapping markets of acquired companies, including lease termination and relocation costs; costs associated with terminating legacy acquired company contracts and systems; and one-time costs associated with rebranding our acquired companies and locations to the Aveanna brand.

Current wording

Represents (i) costs associated with our Integration Management Office, which focuses on our integration efforts and transformational projects such as systems conversions and implementations, material cost reduction and restructuring projects, among other things, of $0.5 million and $0.7 million for the three and six-month periods ended June 28, 2025, respectively, and $0.3 million and $0.6 million for the three and six-month periods ended June 29, 2024, respectively; and (ii) transitionary costs incurred to integrate acquired companies into our field and corporate operations of $1.8 million for both the three and six-month periods ended June 28, 2025, and $0.1 million for both the three and six-month periods ended June 29, 2024, respectively. Transitionary costs incurred to integrate acquired companies include IT consulting costs and related integration support costs; salary, severance and retention costs associated with duplicative acquired company personnel until such personnel are exited from the Company; accounting, legal and consulting costs; expenses and impairments related to the closure and consolidation of overlapping markets of acquired companies, including lease termination and relocation costs; costs associated with terminating legacy acquired company contracts and systems; and one-time costs associated with rebranding our acquired companies and locations to the Aveanna brand.

Previous wording

Represents legal and forensic costs, as well as settlements associated with resolving legal matters arising during or as a result of our acquisition-related activities. This primarily includes costs of $0.9 million for the three-month period ended March 29, 2025 and $0.4 million for the three-month period ended March 30, 2024, to comply with the U.S. Department of Justice, Antitrust Division’s grand jury subpoena related to nurse wages and hiring activities in certain of our markets, in connection with a terminated transaction.

Current wording

Represents legal and forensic costs, as well as settlements associated with resolving legal matters arising during or as a result of our acquisition-related activities. This primarily includes (i) costs of $0.4 million and $1.3 million for the three and six-month periods ended June 28, 2025, respectively, and $0.2 million and $0.6 million for the three and six-month periods ended June 29, 2024, respectively, to comply with the U.S. Department of Justice, Antitrust Division’s grand jury subpoena related to nurse wages and hiring activities in certain of our markets, in connection with a terminated transaction.

Previous wording

Represents activity related to accrued legal settlements and the related costs and expenses associated with certain judgments and arbitration awards rendered against the Company where certain insurance coverage is in dispute.

Current wording

Represents activity related to accrued legal settlements and the related costs and expenses associated with certain judgments and arbitration awards rendered against the Company where certain insurance coverage is in dispute. The Company released a legal reserve related to a certain accrued legal settlement during the three and six-month periods ended June 28, 2025.

Previous wording

Represents other costs or (income) that are either non-cash or non-core to the Company’s ongoing operations of $(0.2) million for the three-month period ended March 29, 2025, and $(0.8) million for the three-month period ended March 30, 2024.

Current wording

Represents: (i) other costs or (income) that are either non-cash or non-core to the Company’s ongoing operations of $0.1 million and $(0.1) million for the three and six-month periods ended June 28, 2025, respectively, and $0.1 million and $(0.7) million for the three and six-month periods ended June 29, 2024, respectively.

Previous wording

Field contribution and Field contribution margin have limitations as analytical tools and should not be considered in isolation or as substitutes or alternatives to gross margin, gross margin percentage, net income or loss, revenue, operating income or loss, cash flows from operating activities, total indebtedness or any other financial measures calculated in accordance with U.S. GAAP.

Current wording

Field contribution and Field contribution margin have limitations as analytical tools and should not be considered in isolation or as substitutes or alternatives to gross margin, gross margin percentage, net income or loss, revenue, operating income or loss, cash flows from operating activities, total indebtedness, gross margin, or gross margin percentage or any other financial measures calculated in accordance with U.S. GAAP.

Previous wording

In September 2023, in response to a $7.9 million arbitration award rendered against us in connection with a civil litigation matter, we promptly obtained a $9.1 million appellate bond with the trial court. The $9.1 million appellate bond was collateralized with letters of credit. While we intend to avail ourselves of all appellate options, the resolution of this matter could reduce the cash available to us for general working capital purposes.

Current wording

In September 2023, in response to a $7.9 million arbitration award rendered against us in connection with a civil litigation matter, we promptly obtained a $9.1 million appellate bond with the trial court. The $9.1 million appellate bond was collateralized with letters of credit. During the second fiscal quarter, a settlement agreement between all parties was reached. On June 9, 2025, the court entered an agreed final judgment in the matter and ordered release of the bond. The letters of credit securing the bond were released on June 16, 2025.

Previous wording

At March 29, 2025 we had $71.5 million in cash on hand, $56.2 million available to us under our Securitization Facility and approximately $138.0 million of borrowing capacity under the Revolving Credit Facility. Available borrowing capacity under the Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 30% of the total commitment is utilized, subject to a $15.0 million carve-out for letters of credit. We believe that our operating cash flows, available cash on hand, and availability under our Securitization Facility and Revolving Credit Facility will be sufficient to meet our cash requirements for at least the next twelve months. Our future capital requirements will depend on many factors that are difficult to predict, including the size, timing and structure of any future acquisitions, future capital investments and future results of operations. We cannot assure you that cash provided by operating activities or cash and cash equivalents on hand will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all.

Current wording

At June 28, 2025 we had $100.7 million in cash on hand, $106.3 million available to us under our Securitization Facility and approximately $147.0 million of borrowing capacity under the Revolving Credit Facility. Available borrowing capacity under the Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 30% of the total commitment is utilized, subject to a $15.0 million carve-out for letters of credit. We believe that our operating cash flows, available cash on hand, and availability under our Securitization Facility and Revolving Credit Facility will be sufficient to meet our cash requirements for at least the next twelve months. Our future capital requirements will depend on many factors that are difficult to predict, including the size, timing and structure of any future acquisitions, future capital investments and future results of operations. We cannot assure you that cash provided by operating activities or cash and cash equivalents on hand will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all.

Previous wording

The following table sets forth a summary of our cash flows from operating, investing, and financing activities for the three-month periods presented:

Current wording

The following table sets forth a summary of our cash flows from operating, investing, and financing activities for the six-month periods presented:

Previous wording

The primary sources or uses of our operating cash flow are operating income or operating losses, as well as any other significant non-cash items such as depreciation, amortization and share-based compensation, and cash paid for interest. The timing of collections of accounts receivable and the payment of accounts payable, other accrued liabilities and accrued payroll can also impact and cause fluctuations in our operating cash flow. Cash used in operating activities decreased by $3.3 million for the three-month period ended March 29, 2025 compared to the three-month period ended March 30, 2024, primarily due to:

Current wording

The primary sources or uses of our operating cash flow are operating income or operating losses, as well as any other significant non-cash items such as depreciation, amortization and share-based compensation, and cash paid for interest. The timing of collections of accounts receivable and the payment of accounts payable, other accrued liabilities and accrued payroll can also impact and cause fluctuations in our operating cash flow. Cash provided by operating activities increased by $53.1 million for the six-month period ended June 28, 2025 compared to the six-month period ended June 29, 2024, primarily due to:

Previous wording

the provision of cash associated with operating assets and liabilities over the comparable period, including the timing of collections of accounts receivable, as well as payroll and incentive settlements.

Current wording

the provision of cash associated with operating assets and liabilities during the first six months of 2025, including the timing of collections of accounts receivable, as well as payroll and incentive settlements.

Previous wording

Net cash used in investing activities was $2.3 million for the three-month period ended March 29, 2025, as compared to $1.3 million for the three-month period ended March 30, 2024. The primary driver of the $1.0 million decrease in cash used in the current period was the prior year purchase of certificates of need of $2.7 million.

Current wording

Net cash used in investing activities was $18.3 million for the six-month period ended June 28, 2025, as compared to $2.6 million for the six-month period ended June 29, 2024. The primary driver of the $15.8 million increase in cash used in the current period was the purchase of Thrive.

Previous wording

Net cash used in financing activities increased by $13.8 million, from $11.9 million net cash provided by financing activities for the three-month period ended March 30, 2024 to $1.8 million used for the three-month period ended March 29, 2025. The $13.8 million increase was primarily attributable to borrowings under the Securitization Facility during the prior year period. There were no borrowings under our Securitization Facility during the three-month period ended March 29, 2025.

Current wording

Net cash (used in) provided by financing activities increased by $24.6 million, from $16.5 million net cash provided by financing activities for the six-month period ended June 29, 2024 to $8.2 million net cash used in financing activities for the six-month period ended June 28, 2025. The $24.6 million increase in net cash used was primarily attributable to payments for shares withheld to cover employee taxes on vesting of restricted stock during the current year period and borrowings under the Securitization Facility during the prior year period. There were no borrowings made under our Securitization Facility during the six-month period ended June 28, 2025.