Aveanna Healthcare Holdings, Inc.

1. DESCRI PTION OF BUSINESS

Aveanna Healthcare Holdings Inc. (together with its consolidated subsidiaries, the “Company”) is headquartered in Atlanta, Georgia and has locations in 38 states with concentrations in Texas, Pennsylvania, and California. The Company provides a broad range of pediatric and adult healthcare services, primarily focused on care in the home, including nursing, hospice, rehabilitation, occupational nursing in schools, therapy, and day treatment center services for medically complex and chronically ill children and adults, as well as delivery of enteral nutrition and other products to patients. 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The 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 consolidated financial statements, and business combinations accounted for as purchases have been included in the accompanying consolidated financial statements from their respective dates of acquisition.

Basis of Presentation

The Company's 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 consolidated balance sheets reflect the accounts of the Company as of January 3, 2026 and December 28, 2024. For the fiscal years ended January 3, 2026 and December 28, 2024, the accompanying consolidated statements of operations, stockholders' equity (deficit)and cash flows reflect the accounts of the Company from December 29, 2024 through January 3, 2026, and December 31, 2023 through December 28, 2024, respectively. The fiscal year ended January 3, 2026 included 53 weeks and the fiscal year ended December 28, 2024 included 52 weeks.

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.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Patient Accounts Receivable

The Company receives payments for services rendered from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, and patients. Revenue and receivables from government agencies are significant to the Company's operations, but management does not believe there are significant credit risks associated with these government agencies. The Company writes off patient accounts receivables on a periodic basis once we have exhausted our collection efforts and deem an account to be uncollectible. Management does not believe there are any other significant concentrations of revenue from any particular payer that would subject the Company to any significant credit risks in the collection of accounts receivable. Changes in general economic conditions, patient accounting service center operations, payer mix, or federal or state governmental health care coverage could affect collection of patient accounts receivable, cash flows and results of operations.

Long-Lived Assets

The carrying value of long-lived assets, including amortizable, identifiable intangible assets, and asset groups are evaluated whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant decrease in the market price of an asset, a significant adverse change in the extent or manner in which an asset is being used or a significant deterioration in its physical condition, and operating or cash flow performance that demonstrates continuing losses associated with an asset or asset group. A potential impairment has occurred if the projected future undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group are less than the carrying value of the asset or asset group. The estimate of cash flows includes management’s assumptions of cash inflows and outflows directly resulting from the use of the asset in operation. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment charge is recorded equal to the excess of the asset or asset group’s carrying value over its fair value.

Fair value is measured based on a projected discounted cash flow model using a discount rate that the Company believes is commensurate with the risk inherent in its business. Impairment charges are recognized within operating expenses as other operating expense in the fiscal year incurred. There wasno impairment of depreciable or amortizable long-lived assets recorded in the fiscal years ended January 3, 2026 and December 28, 2024.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation and amortization and are depreciated on a straight-line basis over the estimated useful lives of the assets. Additions and improvements are capitalized. Maintenance and repair expenses are charged to expense as incurred. When assets are sold or retired, the corresponding cost and accumulated depreciation are removed from the related accounts and any gain or loss is recognized in other (expense) income on the consolidated statements of operations.

The Company generally provides for depreciation over the following estimated useful lives:

The following table summarizes the balances related to property and equipment, net as of January 3, 2026 and December 28, 2024 (amounts in thousands):

Depreciation expense for the fiscal years ended January 3, 2026 and December 28, 2024, was$9.8 million and$9.6 million, respectively.

Leases

The Company leases office space and certain equipment, which are accounted for as operating leases. The Company’s current leases have expiration dates through 2031. Certain of the Company’s leases include termination options and renewal options for periods ranging from one to five years. Because the Company is not reasonably certain to exercise termination options, the options are not considered in determining the lease term, and payments for the full lease term are included in lease payments. Because the Company is not reasonably certain to exercise renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s leases do not contain material residual value guarantees. The Company determines if an arrangement is a lease at inception and evaluates the lease classification at that time. Lease arrangements with an initial term of 12 months or less are considered short-term leases and are not recorded on the accompanying consolidated balance sheets. Rent is recognized on a straight-line basis over the lease term.

Operating leases are included in operating lease right of use assets, current portion of operating lease liabilities, and operating lease liabilities, less current portion on the accompanying consolidated balance sheets. Operating lease right of use assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right of use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, including considerations of any prepayments or incentives.

The Company uses the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, the Company uses its incremental borrowing rate.

The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for all leases.

Goodwill

Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of an acquired business. Goodwill is not amortized but is subject to an annual impairment test at the reporting unit level. The Company performs its annual goodwill impairment test on the first day of the fourth quarter of each fiscal year. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. These events or circumstances include but are not limited to, a significant adverse change in the business or regulatory environment or legal factors.

The annual goodwill impairment test is either a qualitative test or a single-step quantitative test. For its annual goodwill impairment test, regardless of using the quantitative or qualitative testing method, the Company engages a third-party valuation firm to assist in assessing each reporting unit’s fair value. The assessment includes an income approach and a market approach. 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.

The Company has the option to first qualitatively assess factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company elects not to use this option, or it is determined that qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the reporting unit is less than its carrying value, or it is determined from the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test.

The quantitative test requires the Company to estimate and compare the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value exceeds the carrying amount, the goodwill is not considered impaired. To the extent a reporting unit’s carrying amount exceeds its fair value, the reporting unit’s goodwill is deemed impaired, and an impairment charge is recognized based on the excess of a reporting unit’s carrying amount over its fair value up to the amount of goodwill in the reporting unit. The fair value of the reporting units is measured using Level 3 inputs such as operating cash flows and market data.

The quantitative test occurs at interim periods when its more likely than not the fair value of the reporting unit has fallen below its carrying amount. 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 years.

During the annual goodwill impairment tests for both fiscal years 2025 and 2024, the Company did not identify any reporting units in which it was more likely than not that the related carrying value exceeded the estimated fair value. The Company's last quantitative assessment was as of September 29, 2024. The Company determined that it hadsix reporting units for the fiscal years ended January 3, 2026 and December 28, 2024.

Intangible Assets, Net

Intangible assets consist of licenses (including certificates of need), acquired trade names, non-compete agreements, and internal-use software. The Company amortizes non-compete agreements and acquired trade names that it does not intend to use indefinitely on a straight-line basis over its estimated useful lives, which isone tofour years for non-compete agreements andone totwo years for acquired trade names. In addition, the Company amortizes internal-use software over the lesser of the remaining license term or useful life of the software, which isthree toten years. Impairment tests are performed annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible below its carrying amount. These events or circumstances include but are not limited to, a significant adverse change in the business or exiting an overlapping market.

During the fiscal years ended January 3, 2026 and December 28, 2024, the Company recorded asset impairment charges related to previously acquired licenses due to their surrender and the closure of related branches of $1.9 million and $3.2 million, respectively.

These losses are included in other operating expense in the accompanying consolidated statements of operation. The Company utilizes the cost approach to determine the estimated fair value of acquired licenses. The cost approach calculates fair value by calculating the cost to acquire a license in each state the Company operates. The Company calculates the replacement cost based on average incurred costs to acquire a license in each location.

Business Combinations

In determining whether an acquisition should be accounted for as a business combination or an asset acquisition, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this is the case, the single identifiable asset or the group of similar assets is not deemed to be a business and is instead deemed to be an asset. If this is not the case, the Company then further evaluates whether the single identifiable asset or group of similar identifiable assets and activities includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If so, the Company concludes that the single identifiable asset or group of similar identifiable assets and activities is a business.

The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The assets acquired and liabilities assumed are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill represents the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed. The operations of an acquisition are included in the consolidated financial statements from the respective date of the acquisition.

Debt Issuance Costs

The Company defers costs directly associated with acquiring third-party financing. Debt issuance costs related to the term loans are recorded as a direct deduction from the carrying amount of the debt. Debt issuance costs related to the revolving credit facility (the “Revolving Credit Facility”) under the First Lien Credit Agreement (as defined in Note 7 -Long-Term Obligations) and securitization obligations are recorded within other long-term assets. Debt issuance costs are amortized using the effective interest rate method over the terms of the related long-term obligation and securitization obligation. The Company recognized approximately$5.9 million and$5.5 million of interest expense related to the amortization of these costs for the fiscal years ended January 3, 2026 and December 28, 2024, respectively.

Insurance Programs

The Company self-insures its exposure to professional malpractice and workers’ compensation risk up to selected retention levels. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have been reported but not paid and claims that have been incurred but not reported. We engage a third-party actuarial valuation firm to assist management in calculating these reserves. The actuarial valuations consider a number of factors, including historical claim payment patterns, changes in case reserves and the assumed rate of increase in healthcare costs. The Company's historical experience and recent trends in industry experience are the most significant factors in the determination of these reserves. Management believes the use of actuarial methods to account for these reserves provides a consistent and effective way to measure these subjective accruals. However, actual claims incurred may differ from estimates due to changes in the timing of claims reporting, claims payment and settlement practices or claims reserve practices, as well as differences between assumed and actual future cost increases. Accrued unpaid claims and expenses that are expected to be paid within the next twelve months are classified as current liabilities. All other accrued unpaid claims and expenses are classified as long-term liabilities.

Receivables under insured programs represent the portion of the Company’s reserves for professional liability and workers’ compensation losses estimated to be reimbursable under commercial insurance policies. The entities providing loss coverage to the Company are creditworthy commercial insurance companies and the Company believes that such receivables are probable of being collected and that these companies will be able to fully satisfy their obligations under the insurance contracts. Receivables under insured programs that are expected to be paid within the next twelve months are classified as current assets. All other receivables under insured programs are classified as long-term assets.

Income Taxes

The Company uses the asset and liability approach for measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates. The deferred tax calculation requires the Company to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when the Company believes it is more likely than not that some portion or all the deferred tax assets will not be realized. The effect of a change in tax rate is recognized as income or expense in the fiscal year that includes the enactment date.

Management regularly assesses the ability to realize deferred tax assets recorded in the Company’s entities based upon the weight of available evidence, including such factors as the recent earnings history and expected future taxable income. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, the Company could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in its effective tax rate.

The Company records liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have less than a 50% likelihood of being sustained, no tax benefit is recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future fiscal years, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the fiscal year in which such changes occur. Any interest or penalties incurred related to unrecognized tax benefits are recorded as a component of the provision for income tax expense.

Net Income (Loss) per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the diluted weighted average number of common shares outstanding for the period. For purpose of this calculation, outstanding stock options and unvested restricted stock units are considered potentially dilutive common shares.

Share-Based Compensation

The fair value of restricted stock units is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The fair value of restricted stock units is based on the value of the underlying shares of common stock at the grant date. See Note 12 -Share-Based Compensation for additional discussion of share based compensation awards. The Company has elected to account for forfeitures as they occur rather than apply an estimated forfeiture rate to share-based compensation expense.

Fair Values of Financial Instruments

Certain assets and liabilities are recorded at fair value in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company uses a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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Level 1 – Quoted market prices in active markets for identical assets and liabilities.

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Level 2 – Observable inputs other than quoted market prices in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

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Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

See Note 9 –Fair Value Measurements for additional details of the Company’s fair value measurements.

Derivative Financial Instruments

The Company may from time to time utilize derivative financial instruments to reduce interest rate risk. The Company does not hold or issue derivative financial instruments for trading purposes. The Company recognizes derivatives as either assets or liabilities at fair value in the accompanying consolidated balance sheets and does not designate the derivatives as hedging instruments. Changes in the fair value of derivatives are recognized in the Company’s consolidated statements of operations in other (expense) income.

Branch and Regional Administrative Expenses

Branch and regional administrative expenses are administrative costs incurred in the branches and regional offices to administratively support the provision of clinical care to patients. These costs include the compensation of branch and regional leaders, recruiting, scheduling, and rent, among other costs.

Corporate Expenses

Corporate expenses include costs to support the branches and regions including corporate headquarters, corporate payroll, billing and collections, corporate facilities, corporate people services, corporate information technology, and corporate related professional services necessary to support field operations.

Marketing Costs

The Company expenses marketing costs as incurred. Marketing expense for the fiscal years ended January 3, 2026 and December 28, 2024 was$6.9 million and$7.3 million, respectively.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. There was no difference between net income (loss) and comprehensive income (loss) presented in the accompanying consolidated financial statements for the fiscal years ended January 3, 2026 and December 28, 2024.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of patient accounts receivable. Should government agencies suspend or significantly reduce contributions to government insurance programs, the Company’s ability to collect its receivables would be adversely affected. The Company’s exposure to credit risk with respect to its remaining receivables is limited due to the large number of state Medicaid, Medicaid Managed Care Organization payers, and Medicare Advantage payers.

The Company is also subject to interest rate risk due to the variable interest rates on its term loan debt obligations. As a result, the Company has entered into interest rate caps and interest rate swap agreements to limit its exposure to risk on its variable rate debt. Should the major financial institutions that the Company has entered into these agreements cease operations or face bankruptcy, the Company’s ability to collect its settlements related to the interest rate cap and swap agreements would be adversely affected. The Company has not experienced any credit losses associated with the interest rate cap and swap agreements. See Note 10 –Derivative Financial Instruments for further details on the interest rate derivative instruments.

The Company maintains its cash in bank deposit accounts with major financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents.

Segments

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 hasthree operating segments andthree reportable segments, Private Duty Services (“PDS”), Medical Solutions (“MS”) and Home Health & Hospice (“HHH”).

All of the Company’s identifiable assets are located in the United States, which is where the Company is domiciled. The Company does not generate revenue outside the United States. See Note 17 –Segment Informationfor additional information on the Company’s segments.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires entities to enhance consistency in income tax disclosures by improving transparency and comparability for stakeholders. Among other changes, ASU 2023-09 requires additional information in the effective tax rate reconciliation, including disaggregation of certain categories, and greater detail about income taxes paid, including disaggregation by jurisdiction. The Company adopted ASU 2023-09 and applied the guidance prospectively effective for the fiscal year ending January 3, 2026.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires public entities to disclose additional information that disaggregates certain expense captions into specified categories in the Notes to the consolidated financial statements. In January 2025, the FASB issued ASU 2025-01, Expense Disaggregation Disclosures (Topic 220): Clarifying the Effective Date. The new standard clarifies that ASU 2024-03 is required to be adopted in the annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact the amended guidance will have on its disclosures.

3. REVENUE

The Company evaluates 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 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, non-clinical services, which include support 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, Tricare and ChampVA (collectively, “Medicare”); and (v) individual patients. As the period between the time of service and time of payment isone year or less, the Company does not adjust for the effects of a significant financing component.

Most contracts contain variable consideration, however, it is unlikely that 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. The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payers and by implicit price concessions which the Company estimates based on its historical collection experience. 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 by management. There were no material revenue adjustments recognized from performance obligations satisfied or partially satisfied in previous periods for the fiscal years ended January 3, 2026 or December 28, 2024.

As of January 3, 2026 and December 28, 2024, estimated contractual adjustments and implicit price concessions of$106.5 million and$90.6 million, respectively, were recorded as reductions to patient accounts receivable balances to arrive at the estimated collectible revenue and patient accounts receivable. 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 didnot record any bad debt expense for thefiscal years ended January 3, 2026 or December 28, 2024.

The following table presents revenue by payer type as a percentage of total revenue for thefiscal years ended January 3, 2026 and December 28, 2024:

4. ACQUISITION

On April 1, 2025, the Company, Thrive Skilled Pediatric Care, LLC, a Delaware limited liability company (“Thrive”), and other parties thereto entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, following a series of mergers, Thrive would become a wholly-owned subsidiary of the Company (collectively, the “Merger”). Thrive was an independent provider of pediatric home care with 23 locations in seven states including Arizona, Georgia, Kansas, New Mexico, North Carolina, Virginia, and Texas. Thrive primarily provides skilled Private Duty Nursing services, but also provides Pediatric Therapy, Licensed Health Aide Services, and Certified Nurse Assistant Services.

On June 2, 2025, the Company paid approximately $75.7 million as consideration upon consummation of the Merger, including the issuance of 11.2 million shares of common stock, equating to $59.8 million based on the opening market price of the Company’s common stock on the closing date. This issuance of the shares of common stock did not involve a public offering and was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering.

The Merger Agreement provides for customary purchase price adjustments, and approximately 1.3 million shares of the Company’s common stock are being held in escrow for a period of up to 12 months following the closing to support obligations under the Merger Agreement.

The preliminary purchase price allocation as of the acquisition date, reflecting measurement period adjustments made during the respective period, is as follows (amounts in thousands):

The purchase price allocation is preliminary pending the finalization of thenet working capital settlement. The preliminary goodwill recognized is attributable to the excess of the particular purchase price of the acquisition over the fair value of identifiable net assets acquired, including other identified intangible assets. Goodwill is primarily attributable to expected synergies resulting from the acquisition. $58.7 millionof the goodwill related to the Thrive acquisition is deductible for tax purposes. See Note 5 - Goodwill and Intangible Assets, Net for allocation of goodwill and measurement period adjustments to reportable segments. Acquired trade names are amortizing over a 1 year useful life and licenses are classified as indefinite-lived intangible assets.

Pro forma financial information related to the above acquisition has not been provided as the transaction was determined to not be significant to the Company in accordance with Regulation S-X. The results of operations following the acquisition date of June 2, 2025 are included in the Company’s consolidated results of operations for the year ended January 3, 2026.

The Company incurred transaction costs of$3.8 million during the year ended January 3, 2026 and$1.5 million during the year ended December 28, 2024. These costs are included in acquisition-related costs in the accompanying consolidated statement of operations.

5. GOODWILL AND INTANGIBLE ASSETS, NET

The following table summarizes changes in goodwill by segment during the fiscal years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

(1) Goodwill balance is net of accumulated impairment losses of $608.0 million for PDS, $119.8 million for MS, and $487.4 million for HHH.

See Note 2 –Summary of Significant Accounting Policies, Goodwill for details on goodwill impairment.

The following tables summarize the changes in intangible assets for the fiscal years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

Amortization expense related to the Company’s intangible assets was$0.7 million and$1.2 million for the fiscal years ended January 3, 2026 and December 28, 2024, respectively. Included in the amounts above was amortization expense of internal-use software of $0.4 million for the fiscal year ended January 3, 2026 and $1.2 million for the fiscal year ended December 28, 2024. License impairment recorded in the fiscal year ended January 3, 2026 was related to PDS.

The estimated aggregate amortization expense related to intangible assets for each of the next five years subsequent to January 3, 2026 and thereafter is as follows (amounts in thousands):

6. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

Additional information regarding certain balance sheet accounts is presented below as of January 3, 2026 and December 28, 2024 (amounts in thousands):

7. LONG-TERM OBLIGATIONS

Long-term obligations consisted of the following as of January 3, 2026 and December 28, 2024 (dollar amounts in thousands):

Scheduled future maturities of term loans for each of the next five years subsequent to January 3, 2026 are as follows (amounts in thousands):

On September 17, 2025, Aveanna Healthcare LLC (the “Borrower”), a wholly owned subsidiary of the Company, entered into the fourth joinder and twelfth amendment (the “Refinancing Amendment”) to its First Lien Credit Agreement, dated as of March 16, 2017 (as further amended, supplemented, or otherwise modified from time to time, the “Existing Credit Agreement”), among the Company, the borrowing subsidiaries party thereto, the lenders party thereto, Barclays Bank PLC as administrative agent and collateral agent (in such capacities, the “Administrative

Agent”), and other agents party thereto (the Existing Credit Agreement, as amended by the Refinancing Amendment, the “Amended Credit Agreement”). The Existing Credit Agreement provided for among other things, a senior secured term loan facility (the “Existing Term Loan Facility”) and a $170.3 million senior secured revolving credit facility (the “Existing Revolving Credit Facility”).

The Refinancing Amendment provides for, among other things, the refinancing of the Existing Revolving Credit Facility under the Existing Credit Agreement and incremental revolving loan commitments in an aggregate principal amount of $79.7 million, resulting in total aggregate revolving loan commitments of $250.0 million (the “2025 Refinancing Revolving Credit Facility”), a portion of which may be used for the issuance of letters of credit and swingline loans. The Refinancing Amendment additionally provides for the refinancing of the term loans previously outstanding (“2025 Refinancing Term Loans”) under the Existing Term Loan Facility (the “2025 Refinancing Term Facility”) and an incremental senior secured term loan facility, with aggregate commitments increased by $439.0 million (the “2025 Incremental Term Loans”). Combined, the 2025 Refinancing Term Loans and 2025 Incremental Term Loans aggregate to a total principal balance of $1,325.0 million (the “2025 Term Loans”). The 2025 Refinancing Revolving Credit Facility and the 2025 Refinancing Term Facility replace the Existing Revolving Facility and the Existing Term Loan Facility, respectively. The maturity date for loans and commitments under the 2025 Refinancing Revolving Credit Facility is September 17, 2030. The maturity date for loans and commitments under the 2025 Refinancing Term Facility is September 17, 2032. Loans under the 2025 Refinancing Term Facility amortize at a rate equal to 1.00% per annum, payable in equal quarterly installments, and were issued with original issue discount at 99.75% of par.

Proceeds from the 2025 Term Loans were used to immediately refinance in full the Existing Term Loans and the second lien term loan (the “Second Lien Term Loan”) provided by the Second Lien Credit Agreement, dated as of December 10, 2021, by and among the Company, the Borrower, a syndicate of lending institutions from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent, to pay accrued interest through the Closing Date, and to fund working capital and general corporate purposes.

In connection with refinancing the incremental revolving loan commitments for the 2025 Refinancing Revolving Credit Facility, the Company incurred debt issuance costs of $2.5 million and will be amortized straight-line through the maturity date of the September 17, 2030.

In accordance with ASC 470-50-40, Debt Modification and Extinguishments, the Refinancing Amendment related to the 2025 Term Loans was accounted for as a modification of debt for the lenders that remained in the syndicate, while the aggregate balance attributable to lenders of the Existing Term Loan Facility and Second Lien Term Loan who did not participate in the 2025 Term Loans was accounted for as an extinguishment of debt. As a result, unamortized debt issuance costs related to the Existing Term Loan Facility and Second Lien Term Loan were written off and recorded as a$5.9 million loss on debt extinguishment on the consolidated statements of operations for the fiscal year ended January 3, 2026. A balance of $15.3 million of existing debt issuance costs allocated to the lenders that continued in the syndicate remained deferred and will be amortized via the effective-interest method through the maturity date of the September 17, 2032. Third party fees allocated to lenders who remained in the syndicate were recorded as debt modification expense of $16.0 million and included in Corporate expenses on the consolidated statements of operations for the fiscal year ended January 3, 2026. The aggregate balance of the 2025 Term Loans attributable to new lenders was treated as new debt. $3.9 million of third party fees allocated to new borrowers and $3.3 million of lender fees were deferred and will be amortized via the effective-interest method through the maturity date of the September 17, 2032.

The 2025 Term Loans under the Amended Credit Agreement bear interest at a rate equal to, at the election of the Borrower, Term SOFR (as defined in the Amended Credit Agreement) plus an applicable margin equal to 3.75% per annum or an alternative base rate (“ABR”) plus an applicable margin equal to 2.75% per annum. Loans under the 2025 Refinancing Revolving Credit Facility bear interest at a rate equal to, at the election of the Borrower, Term SOFR, plus an applicable margin equal to 3.75% per annum or a base rate plus an applicable margin equal to 2.75% per annum, so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Amended Credit Agreement) is greater than 3.90 to 1.00 as of the last day of the preceding fiscal quarter, subject to (a) a decrease of 0.25% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.90 to 1.00 and greater than 3.40 to 1.00 as of the last day of the preceding fiscal quarter and (b) a decrease of 0.50% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.40 to 1.00 as of the last day of the preceding fiscal quarter. As of January 3, 2026, the principal amount of the 2025 Term Loans and borrowings under the 2025 Refinancing Revolving Credit Facility each accrued interest at a rate of 7.47%.

On September 17, 2025, substantially concurrently with the Refinancing Amendment, the Borrower terminated its

Second Lien Credit Agreement. The Second Lien Credit Agreement provided for the Second Lien Term Loan in an aggregate principal amount of $415.0 million. The entirety of the Second Lien Term Loan was repaid with proceeds from the 2025 Incremental Term Loans.

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 January 3, 2026 and December 28, 2024 was$21.8 million and$24.7 million, respectively. Debt issuance costs related to the 2025 Refinancing Revolving Credit Facility are recorded within other long-term assets. The balance for debt issuance costs related to the 2025 Refinancing Revolving Credit Facility as of January 3, 2026 and December 28, 2024 was$3.2 million and$1.6 million, respectively. The Company recognized interest expense related to the amortization of debt issuance costs of$5.2 million and$4.8 million for the fiscal years ended January 3, 2026 and December 28, 2024, respectively.

Issued letters of credit as of January 3, 2026 and December 28, 2024 were $24.5 million and$32.3 million, respectively. Unused letters of credit as of January 3, 2026 and December 28, 2024 were $25.5 million and $7.7 million, respectively. There wereno swingline loans outstanding as of January 3, 2026 and December 28, 2024. Borrowing capacity under the Company's Revolving Credit Facility was$225.5 million as of January 3, 2026 and$138.0 million as of December 28, 2024. Available borrowing capacity under the 2025 Refinancing Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 40% of the total commitment is utilized.

The fair value of the Company's long-term obligations was estimated using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets, which are considered Level 2 inputs. The aggregate fair value of the Company's long-term obligations was$1,328.3 million at January 3, 2026.

The Company was in compliance with all financial covenants and restrictions under the foregoing instruments at January 3, 2026 and December 28, 2024.

8. SECURITIZATION FACILITY

On November 12, 2021, the Company (through a wholly owned special purpose entity, Aveanna SPV I, LLC) (the “special purpose entity”) and a lending institution entered into a Receivables Financing Agreement with a lending institution, which, as amended, has a scheduled termination date of June 25, 2028 (as amended, the “Securitization Facility”). On June 25, 2025, the Company amended the Securitization Facility to increase the maximum amount available thereunder from $225.0 million to $275.0 million, subject to certain borrowing base requirements andincurred additional debt issuance costs of $1.1 million. Debt issuance costs related to the Securitization Facility are amortized straight-line through the termination date. The balance for debt issuance costs related to the Securitization Facility as of January 3, 2026 and December 28, 2024 was $1.6 million and $1.1 million, respectively and included in other long-term assets. The Company recognized interest expense related to the amortization of debt issuance costs of$0.7 million and$0.7 million for the fiscal years ended January 3, 2026 and December 28, 2024, respectively.

Pursuant to two separate sale agreements, 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$165.0 million and$168.8 million at January 3, 2026 and December 28, 2024, respectively. The balance accrues interest at a rate equal to SOFR, plus a CSA, plus an applicable margin. The interest rate under the Securitization Facility was 6.29% at January 3, 2026.

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 consolidated balance sheets; (ii) the accompanying 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 consolidated statements of cash flows. The Securitization Facility is included within current liabilities on the 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.

9. 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 measured at fair value were as follows (amounts in thousands):

During the fiscal years ended January 3,2026 and December 28,2024, there wereno transfers between Level 1, Level 2, and Level 3.

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 10 –Derivative Financial Instruments for further details on the Company’s interest rate swap and cap agreements.

At the most recent quantitative goodwill impairment test on September 29, 2024, 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 used primarily unobservable inputs, including revenue growth rates, projected EBITDA margins, and discount rates, which were considered Level 3 fair value measurements. The fair value analysis took into account recent and expected operating performance.

See Note 12 –Share-Based Compensation for further details on the valuation methodologies related to the Company’s deferred restricted stock units.

10. 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 in the accompanying 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 terms of the respective derivatives. See Note 9 –Fair Value Measurements for further details on the fair value of Company’s derivative financial instruments.

The Company currently hastwo interest rate swap agreements intended to limit its exposure to interest rate risk on its variable rate debt. These swaps expire on June 30, 2026. Since July 1, 2023, the Company has paid a fixed rate of 2.03% under the interest rate swap agreements and has received the one-month SOFR rate, subject to a 0.50% floor. The aggregate notional amount of the interest rate swaps remained unchanged at$520.0 million at both January 3, 2026 and December 28, 2024. The fair value of the interest rate swaps was a$3.9 million asset at January 3, 2026 and a$15.7 million asset at December 28, 2024 and is included in other current assets in the accompanying consolidated balance sheet as of January 3, 2026, and other long-term assets in the accompanying consolidated balance sheet as of December 28, 2024. The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other (expense) income in the accompanying consolidated statements of operations, which are included within cash flows from operating activities in the accompanying consolidated statements of cash flows. The net settlements incurred with swap counterparties under the swap agreements were recognized through cash flows from financing activities in the accompanying consolidated statements of cash flows.

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. During the quarter ended July 1, 2023, the Company amended its interest rate cap agreements to provide that the counterparty will pay the Company the amount by which SOFR exceeds 2.96%. The fair value of the interest rate cap agreements at January 3, 2026 and December 28, 2024 was$4.8 million and$22.5 million, respectively, and is included in other long-term assets on the accompanying consolidated balance sheets. The Company does not apply hedge accounting to interest rate cap agreements and records all mark-to-market adjustments directly to other (expense) income in the accompanying consolidated statements of operations, which is an adjustment to reconcile cash flows from operating activities in the consolidated statement of cash flows. The net settlements incurred with cap counterparties under the cap agreements were recognized through cash flows from operating activities in the accompanying consolidated statements of cash flows.

The following mark-to-market losses from these derivatives not designated as hedging instruments were recognized in the Company’s consolidated statements of operations for the fiscal years ended January 3, 2026, and December 28, 2024, respectively.

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

11. INCOME TAXES

Pre-tax book income was derived from the following sources for the fiscal year ended January 3, 2026 (amounts in thousands):

Income taxes consisted of the following for the fiscal years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

A reconciliation of the difference between the federal statutory tax rate and the Company’s effective tax rate for income taxes for the fiscal years ended January 3, 2026 and December 28, 2024 is as follows (dollars in thousands):

(1) The states of California and Pennsylvania comprised the majority (greater than 50%) of the state tax benefit.

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of deferred tax assets and liabilities are as follows as of January 3, 2026 and December 28, 2024 (amounts in thousands):

As of January 3, 2026, the Company had gross federal and state net operating loss (“NOL”) carryforwards of$33.2 million and$376.5 million, respectively. For those losses that have an expiration date, the carryforwards will expire at various dates from 2028 through 2044. For those losses incurred after 2017, there is no statutory time expiration for the federal and certain state NOLs. A valuation allowance was established for federal and state losses that the Company believes are not more likely than not to be realized in the near future.

Internal Revenue Code Sec. 163(j) limits the deduction for net interest expense that exceeds 30% of the taxpayer’s adjusted taxable income (“ATI”) for the years ended 2025 and 2024. Sec. 163(j) permits an indefinite carryforward of any disallowed business interest. As of January 3, 2026, the Company has$371.6 million of interest expense carryovers. The deferred tax asset associated with these interest expense carryovers of$87.1 million is mostly offset by a valuation allowance as the Company believes the majority of the benefit of this carryover is not more likely than not to be realized in the future.

Annually, the Company assesses the future realization of the tax benefit of its existing deferred tax assets and determines whether a valuation allowance is needed. Based on the Company’s assessment of positive and negative evidence, it is more likely than not that most of the deferred tax assets will be realized in the future. The 163(j) attribute, the acquired Thrive federal NOLs, and various separate Company state attributes continue to carry a valuation allowance as future realization is not more likely than not. As a result, the Company recorded a valuation allowance of$104.2 million against its deferred tax assets at January 3, 2026. The valuation allowance decreased by$138.8 million from the$243.0 million valuation allowance recorded as of December 28, 2024. The decrease is primarily related to the Company's assessment of available positive and negative evidence as of January 3, 2026. The following table summarizes changes in the valuation allowance as of January 3, 2026 and December 28, 2024 (amounts in thousands):

The Company is subject to U.S. federal and state income tax in multiple jurisdictions. With limited exceptions, years prior to the 2022 fiscal year are no longer open to U.S. federal, state, or local examinations by taxing authorities. The Company is not under any current income tax examinations by any federal, state or local taxing authorities.

Uncertain Tax Positions

As of January 3, 2026 and December 28, 2024, the total unrecognized tax benefits were $14.7 million and $13.5 million, respectively, and accrued interest and penalties were$1.7 million and$0.5 million, respectively. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax benefit or expense. If the Company were to prevail on all unrecognized tax benefits recorded,$16.4 million of tax benefit would impact the overall effective tax rate within the next 12 months. The following table, which excludes penalties and interest, summarizes changes in uncertain tax positions as of January 3, 2026 and December 28, 2024 (amounts in thousands):

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA” or “H.R.1”) was signed into law by the President of the United States. The OBBBA contains significant provisions impacting corporate taxation in the United States with multiple effective dates. Among the changes effective in 2025 are modifications to capitalization of domestic research and development costs, accelerated depreciation of fixed assets and other qualifying property, as well as limitations on deductions of interest expense. Changes effective in 2026 include, among others, modifications to certain international tax provisions. The Company has recorded the impacts of OBBBA in the consolidated financial statements for the fiscal year ended January 3, 2026. There was no material effect on the Company's income tax benefit or effective tax rate.

12. SHARE-BASED COMPENSATION

Stock Incentive Plans

On July 2, 2021, the Company's Board of Directors adopted the Company's 2021 Stock Incentive Plan (the “2021 Omnibus Incentive Plan”). The 2021 Omnibus Incentive Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock or Cash Based Awards and Dividend Equivalents, as defined in the plan, to enhance the Company's ability to attract, retain, and motivate persons who make important contributions to the Company. The Company has only granted Restricted Stock Units under the 2021 Omnibus Incentive Plan.

On April 19, 2021, the Company’s Board of Directors adopted the Company’s Amended and Restated 2017 Stock Incentive Plan (the “Amended 2017 Plan”). The Amended 2017 Plan (i) provides for the issuance of shares of common stock, as opposed to the Class B common stock previously issuable under the plan, to align with the Company’s Amended and Restated Certificate of Incorporation and (ii) modified the vesting terms of the existing issued performance-vesting options to vest upon the achievement of volume weighted average price (“VWAP”) per share hurdles for any ninety consecutive days commencing on or after the nine-month anniversary of the IPO. On June 17, 2021, the Company established the VWAP per share hurdles for the performance-vesting options. Since adoption of the 2021 Omnibus Incentive Plan, no further awards have been granted under the Amended 2017 Plan.

Amended 2017 Plan

Outstanding awards granted under the Amended 2017 Plan included time-vesting options, performance-vesting options, and restricted stock awards. Most awards granted to Participants consisted of 50% time-vesting options and 50% performance-vesting options. Time-vesting options vest 20% per year over a period offive years, and the only condition to vesting is the passage of time. The related compensation expense is recognized ratably over the required service period. The Company has also awarded accelerator-vesting options under the Amended 2017 Plan, which are subject to the time-based vesting schedule of 20% per year over a period offive years and provide additional value to holders, should the Company meet specified return levels to its stockholders.

Time-Vesting, Accelerator-Vesting, & Performance-Vesting Options

To determine the fair value of time-vesting and accelerator-vesting options under the Amended 2017 Plan, the Company utilized a Black-Scholes model. No time-vesting, accelerator-vesting, or performance-vesting options were awarded during the fiscal years ended January 3, 2026 and December 28, 2024 under the Amended 2017 Plan. The Company calculated the fair value of the outstanding performance-vesting options using the Monte Carlo option-pricing model.

The following table summarizes the Company’s options activity for the years ended January 3, 2026 and December 28, 2024:

Director Restricted Stock Units - Amended 2017 Plan - Temporary Equity

In accordance with the Amended 2017 Plan, an aggregate of no more than 307,500 shares of common stock are reserved for settlement of deferred restricted stock units (“Pre-IPO Deferred RSUs”). Pre-IPO Deferred RSUs fully vest on the grant date and convert to common shares upon the earlier of (1) the sale of the Company or (2) termination of service. There wereno awards granted during the fiscal years ended January 3, 2026 and December 28, 2024.

The Pre-IPO Deferred RSUs contain a put right, which would require the Company, at the option of the award recipient, to repurchase all the Pre-IPO Deferred RSUs in event of the recipient’s termination at fair market value. The existence of this put right prevented the recipient from bearing the risks and rewards of ownership during the six month period following the vesting date as the put right requires the Company to purchase all shares the Participant received at fair market value on the repurchase date. Based on the nature of the Pre-IPO Deferred RSUs, management determined the awards, upon grant, had characteristics of a liability and initially recorded the awards at fair value upon issuance and re-measured at fair value at each reporting date.

After an award has been outstanding for six months and a day, the award recipient is subject to the risk and rewards of ownership, and the award was reclassified to temporary equity. As the put right is exercisable only when the recipient terminates his or her service, which is outside the control of the Company, the Company has classified the awards outstanding subsequent to the initial six-month period as temporary equity.

As the Pre-IPO Deferred RSUs are contingently redeemable, the Company does not subsequently adjust the redemption value once classified as temporary equity as it is not deemed probable that the Participant will terminate their service. As of January 3, 2026, there were 71,750 Pre-IPO Deferred RSUs outstanding, and at December 28, 2024, there were 143,500 Pre-IPO Deferred RSUs outstanding. All Pre-IPO Deferred RSUs were fully vested prior to the beginning of the fiscal year ended December 28, 2024.

2021 Omnibus Incentive Plan

Outstanding awards under the 2021 Omnibus Incentive Plan as of January 3, 2026 included restricted stock units which were granted to certain members of the Board of Directors and certain employees of the Company. These restricted stock units vest over time and upon vesting convert into shares of common stock on a one-for-one basis. The restricted stock units are granted annually as part of the Long-Term Incentive Plan to management and as part of board compensation to directors (“Director RSUs”). Director RSUs vest over a one-year period.

Long-Term Incentive Plan (“LTIP”)

In the first quarter of 2025, the Compensation Committee of the Board of Directors approved LTIP grants of restricted stock units (“RSUs”) and performance stock units (“PSUs”) under the 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 PSUs granted contain performance criterion based on adjusted EBITDA targets for each of the three years that the award vests. Achievement of any annual target during the three years subsequent to the grant date results in a cumulative achievement event for the target year and any prior year award not previously achieved. Additionally, the PSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. For the PSUs that have service and performance conditions, 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.

Further, during the fiscal year ended January 3, 2026, the Compensation Committee modified PSUs originally issued in February 2022. The previous performance criterion were replaced with an Adjusted EBITDA target for the fiscal year ending January 3, 2026. Effects of the modification are reflected in the table of share-based compensation expense, net of forfeitures, below. The Company recorded incremental compensation expense, net of forfeitures, of $1.6 million for the fiscal year ended January 3, 2026, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations.

The following table summarizes the Company’srestricted stock units activity for the years ended January 3, 2026 and December 28, 2024:

(1) Includes 2.7 million shares that converted from other long term liabilities as a result of the achievement of the Senior Management Retention Plan performance metric on March 29, 2025. Shares were valued at $5.37 per share at achievement.

Senior Management Retention Plan (“SMRP”)

In the second quarter of 2023, the Compensation Committee approved SMRP awards to certain members of management to be paid in the form of RSUs under the 2021 Omnibus Stock Incentive Plan. The awards were granted based on a fixed dollar value for each member of senior management included in the plan. The number of RSUs to be paid as compensation was dependent on the share price of the Company's common stock upon completion of the SMRP awards' performance criteria. The SMRP awards required the Company to achieve both specified revenue and adjusted EBITDA targets during the performance period ending January 2, 2027. The performance condition related to the SMRP was achieved on March 29, 2025, resulting in the acceleration of the remaining compensation expense of the awards. Prior to vesting, the corresponding liability for the SMRP awards was recorded within other long-term liabilities. The liability balance for the SMRP awards as of December 28, 2024 was$7.1 million.

Employee Stock Purchase Plan

On April 28, 2021, the Company’s Board of Directors adopted the Aveanna Healthcare Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, shares of common stock may be purchased by eligible participants during defined purchase periods at 85% of the lesser of the closing price of the Company’s common stock on the first day or last day of each purchase period. The Company used a Black-Scholes option pricing model to value the common stock purchased as part of the Company's ESPP. The fair value estimated by the option pricing model is affected by the price of the common stock as well as subjective variables that include assumed interest rates, the expected dividend yield, and the expected share volatility over the term of the award. Expected share volatility is based on historical price data of peers. Fair value inputs for the purchase periods in 2025 included assumed risk free interest rate of 4.24% to 4.29%, expected volatility of 43% to 47%, and expected dividend yield of 0.00%. Fair value inputs for the purchase periods in 2024 included assumed risk-free interest rate of 5.24% to 5.37%, expected volatility of 48% to 49%, and expected dividend yield of 0.00%. Participants purchased a total of 1,966,186 shares of common stock at a weighted average price of$3.21 per share during the fiscal year ended January 3, 2026. Participants purchased a total of 1,751,909 shares of common stock at a weighted average price of $1.76 per share during the fiscal year ended December 28, 2024.

Share-based compensation is included in corporate expenses, branch and regional administrative expenses and cost of revenue, excluding depreciation and amortization in the accompanying consolidated statements of operations. The following table summarizes the Company’s share-based compensation expense by plan and award classification for the years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

(1) Unrecognized compensation expense as of January 3, 2026 related to these RSUs was $8.1 million and is expected to be recognized over a weighted average period of 1.3 years.

(2) Unrecognized compensation expense as of January 3, 2026 related to these PSUs was $7.7 million and is expected to be recognized over a weighted average period of 1.1 years.

(3)There was no unrecognized compensation expense for these awards as of January 3, 2026.

(4)Includes expense related to the Senior Management Retention Plan of $7.6 million and $4.3 million, net of forfeitures, for the years ended January 3, 2026 and December 28, 2025, respectively.

We recognized a tax benefit of $3.8 million related to share-based compensation expense for the year ended January 3, 2026 andno tax benefit related to share-based compensation for the year ended December 28, 2024, respectively.

13. LEASES

The Company has historically entered into operating leases for local branches, its corporate headquarters, and certain equipment. Management exercises judgment in the determination of whether a financial arrangement includes a lease and in determining the appropriate discount rates to be applied to leases. When available, the Company uses the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, the Company uses its incremental borrowing rate.

Amounts reported in the accompanying consolidated balance sheets as of January 3, 2026 and December 28, 2024 for operating leases were as follows (amounts in thousands):

Lease Costs

The components of lease cost for the fiscal years ended January 3, 2026 and December 28, 2024 are as follows (amounts in thousands):

Supplemental Information

Information related to the Company’s operating lease right of use assets and related operating lease liabilities are as follows (dollar amounts in thousands):

Maturity of Operating Lease Liabilities

Maturities of operating lease liabilities as of January 3, 2026 are as follows (amounts in thousands):

14. 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 professional liability insurance reserves included in the accompanying consolidated balance sheets include estimates of the ultimate costs, including third-party legal defense 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 (after the Company satisfies the applicable policy deductible and/or retention), 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 liability 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 liability policies.

Since October 1, 2025, the Company has maintained primary commercial insurance coverage on a claims-made basis for professional liability claims with a $2.0 millionper claim deductible, a $2.0 million aggregate buffer retention, and $5.0 million per claim and annual aggregate limits. Prior to October 1, 2025, the Company maintained primary commercial insurance coverage on a claims made basis for professional liability claims with varying deductibles by policy year from$0.5 million to $2.0 million on a per claim basis and $4.5 million to$6.0 million per claim and annual aggregate limits. Moreover, the Company maintains excess insurance coverage for professional liability claims to cover any claims over the aggregate limits. 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 January 3, 2026 was comprised of$24.5 million of issued letters of credit. Collateral as of December 28, 2024 was comprised of$23.1 million of issued letters of credit and $0.7 million in cash collateral.

As of January 3, 2026, insurance reserves totaling$97.8 million were included on the consolidated balance sheets, representing$50.4 million and$47.3 million of reserves for professional liability claims and workers’ compensation claims, respectively. Estimated receivables under the insured programs totaled $42.7 million as of January 3, 2026. At December 28, 2024, insurance reserves totaling$97.8 million were included on the consolidated balance sheets, representing$42.7 million and$55.1 million of reserves for professional liability claims and workers’ compensation claims, respectively. Estimated receivables under the insured programs totaled $34.9 million as of December 28, 2024.

Litigation and Other Current Liabilities

On January 18, 2023, an arbitration award in the amount of $7.9 million was rendered against the Company related to a claim under the Company's Texas non-subscriber benefit plan. In September 2023, upon entry of the court’s final judgment, we promptly obtained a $9.1 million appellate bond with the trial court. The appellate bond was collateralized with letters of credit. In May 2025, a settlement agreement between all parties was reached. On June 9, 2025, the court entered an agreed final judgment in the matter and ordered the release of the bond. The letters of credit securing the bond were released on June 16, 2025. As a result, amounts previously reserved for under Insurance Reserves were reduced and resulted in a net reduction to Cost of Revenue, excluding depreciation and amortization, of $6.2 million for the fiscal year ended January 3, 2026.

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 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. Based on the information currently available to the Company, management cannot predict the timing or outcome of this investigation, however, Management does not believe the outcome of this investigation will be material to the Company's results of operations or financial position.

On July 19, 2023, the Company received a Civil Investigation Demand issued by the U.S. Department of Justice, United States Attorney’s Office, Middle District of Alabama (the “AUSA”), requiring the production of documents and information pertaining to Comfort Care Hospice, LLC, an indirect wholly owned subsidiary of the Company, regarding issues of (1) improper submission of claims to Medicare and other federal healthcare programs for service to patients who were ineligible or not properly certified for said healthcare services and (2) improper remuneration to medical directors and skilled nursing facilities for patient referrals in violation of certain federal regulations. The Company is fully cooperating with the AUSA with respect to this investigation, and management believes that a loss event is not probable and that this matter will not materially impact the Company’s business, results of operations or financial position. 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 matter.

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.

15. EMPLOYEE BENEFIT PLANS

The Company and its subsidiaries sponsor several defined contribution retirement plans, which qualify under Section 401(k) of the Internal Revenue Code, covering substantially all employees. Certain of the Company’s retirement plans require or allow for contributions by the Company. Company contributions to the plans were approximately$6.8 million and$6.5 million for the fiscal years ended January 3, 2026 and December 28, 2024, respectively, and are included in cost of revenue, excluding depreciation and amortization, branch and regional administrative expenses, and corporate expenses in the accompanying consolidated statements of operations.

16. RELATED PARTY TRANSACTIONS

As of January 3, 2026, one of the Company’s significant shareholders owned 7.8% of the Company’s 2025 Term Loans.

17. 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 CODM manages the business and allocates resources. The CODM for the Company is the Chief Executive Officer. The Company hasthree operating segments andthree reportable segments, Private Duty Services, Home Health & Hospice, and Medical Solutions. The PDS segment predominantly includes private duty skilled nursing services, non-clinical and personal care services, and pediatric therapy services and is primarily reimbursed by Medicaid and Medicaid MCO. The HHH segment provides home health and hospice services to predominately elderly patients and is primarily reimbursed by Medicare. Through the MS segment, the Company provides enteral nutrition and other products to adults and children, delivered on a periodic or as-needed basis, primarily reimbursed by Medicaid and Medicaid MCO.

The CODM evaluates segment 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. Revenue and cost presented below for the

PDS and HHH segments primarily relate to patient services, while the MS segment’s revenue and cost are primarily from products. The CODM does not evaluate a measure of assets when assessing performance. The CODM uses gross margin and gross margin percentage to assess the performance of each segment compared to historical trends, forecasted performance, and industry peers, as well as ensure that each segment has appropriate operational support to manage performance.

Results shown for the fiscal years ended January 3, 2026 and December 28, 2024 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 thefiscal years ended January 3, 2026 and December 28, 2024 (amounts in thousands):

18. NET INCOME (LOSS) PER SHARE

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

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

19. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

The accompanying note is an integral part of these condensed financial statements.

A statement of cash flows has not been presented as Aveanna Healthcare Holdings Inc. didnot have any cash as of or for the fiscal years ended January 3, 2026 and December 28, 2024.

Note to Condensed Financial Statements of Registrant (Parent Company Only)

Basis of Presentation

These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of Aveanna Healthcare Holdings Inc. (“Parent”) (as defined in Rule 4-08(e)(3) of Regulation S-X) as of January 3, 2026 exceeded 25% of the consolidated net assets of the Company. The ability of the Company’s operating subsidiaries to pay dividends may be restricted due to the terms of the 2025 Term Loans and 2025 Refinanced Revolving Credit Facility, which are discussed in Note 7 –Long-Term Obligations.

These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes thereto.

20. SUBSEQUENT EVENT

On March 9, 2026, Pediatric Services of America, LLC, a subsidiary of the Company, entered into an Equity Interest Purchase Agreement to acquire 100% of the equity interests in Family First Holding, LLC for a purchase price of $175.5 million, subject to customary adjustments for working capital and other items. Family First Holding, LLC provides pediatric home care across seven states including Florida and Texas. The purchase agreement is expected to close in the second fiscal quarter of 2026, subject to, among other things, customary closing conditions and the absence of any law or governmental order preventing the transaction. The Company intends to fund the transaction with a combination of cash on hand and the Securitization Facility.