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 2026” refers to the 52-week fiscal year ending on January 2, 2027. “Fiscal year 2025” refers to the 53-week fiscal year ended on January 3, 2026. The “three-month period ended April 4, 2026”, or “first quarter of 2026” refers to the 13-week fiscal quarter ended on April 4, 2026. 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.

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 2026” refers to the 52-week fiscal year ending on January 2, 2027. “Fiscal year 2025” refers to the 53-week fiscal year ended on January 3, 2026. The “three-month period ended July 4, 2026”, or “second quarter of 2026” refers to the 13-week fiscal quarter ended on July 4, 2026. 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 "six-month period ended July 4, 2026", or "first six months of 2026", refers to the period from January 4, 2026 through July 4, 2026. 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.

Previous wording

On March 12, 2026, the Company announced that it had entered into a definitive agreement to acquire Family First Holding, LLC, a scaled, multi-state provider of pediatric home care that primarily provides skilled Private Duty Nursing services with 27 locations in seven states including Florida, Illinois, Iowa, Pennsylvania, South Dakota, Texas, and North Carolina, where it is currently launching operations. The purchase price for the acquisition is $175.5 million in cash, subject to customary adjustments. The transaction is expected to close in the second fiscal quarter of 2026, subject to, among other things, customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. We intend to fund the acquisition with a combination of cash on hand and borrowings under our Securitization Facility.

Current wording

On June 1, 2026, the Company completed the acquisition of Family First Holding, LLC, a scaled, multi-state provider of pediatric home care that primarily provides skilled Private Duty Nursing services with 27 locations in seven states including Florida, Illinois, Iowa, Pennsylvania, South Dakota, Texas, and North Carolina. The Company paid $173.7 million in cash as consideration, after customary adjustments for working capital and other items, funded with cash on hand. The operating results of Family First Holding, LLC subsequent to the acquisition date are included in our PDS operating segment.

Previous wording

Net income for the three-month period ended April 4, 2026 was $41.7 million, as compared to net income of $5.2 million for the three-month period ended March 29, 2025. The $36.5 million increase in net income was primarily driven by the following:

Current wording

Net income for the three-month period ended July 4, 2026 was $40.3 million, as compared to net income of $27.0 million for the three-month period ended June 28, 2025. The $13.3 million increase in net income was primarily driven by the following:

Previous wording

an aggregate $8.6 million decrease in valuation losses on interest rate derivatives and net settlements received from interest rate derivative counterparties included in other income (expense) over the comparative period; and

Current wording

an aggregate $3.0 million decrease in valuation losses on interest rate derivatives and net settlements received from interest rate derivative counterparties included in other income (expense); and

Previous wording

a $0.9 million, or 3.6%, increase in MS cost of revenue.

Current wording

a $0.9 million decrease in tax expense.

Previous wording

a $9.9 million, or 17.4%, increase in HHH revenue; and

Current wording

a $8.9 million, or 14.8%, increase in HHH revenue; and

Previous wording

The 5.7% increase in PDS revenue rate for the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and improved collections on fully reserved aged receivables.

Current wording

The 1.7% increase in PDS revenue rate for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and improved implicit price concessions. Reimbursement rate increases in the second quarter of 2026 exceeded the second quarter of 2025 which benefited from certain rate increases applied retroactively for services provided during the first quarter of 2025.

Previous wording

a $4.8 million, or 18.6%, increase in HHH cost of revenue; and

Current wording

a $4.8 million, or 17.7%, increase in HHH cost of revenue; and

Previous wording

a 0.1% increase in PDS spread rate from $12.37 to $12.38 driven by the 5.7% increase in PDS revenue rate, net of the 8.1% increase in PDS cost of revenue rate;

Current wording

a 11.1% decrease in PDS spread rate from $14.29 to $12.88 driven by the 1.7% increase in PDS revenue rate, net of the 7.8% increase in PDS cost of revenue rate;

Previous wording

a 8.1% increase in MS spread rate from $203.74 to $219.53 driven by the 2.9% increase in MS revenue rate, and a 0.9% decrease in MS cost of revenue rate; and

Current wording

a 4.0% increase in MS spread rate from $217.60 to $225.87 driven by the 5.0% increase in MS revenue rate, net of the 6.0% increase in MS cost of revenue rate; and

Previous wording

Field contribution was $109.6 million, or 16.9% of revenue, for the three-month period ended April 4, 2026, as compared to $92.2 million, or 16.5% of revenue, for the three-month period ended March 29, 2025. Field contribution increased $17.5 million, or 18.9%, for the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025. The 0.4% increase in Field contribution margin for the three-month period ended April 4, 2026 resulted from the following:

Current wording

Field contribution was $121.4 million, or 18.1% of revenue, for the three-month period ended July 4, 2026, as compared to $120.7 million, or 20.5% of revenue, for the three-month period ended June 28, 2025. Field contribution increased $0.7 million, or 0.6%, for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025. The 2.4% decrease in Field contribution margin for the three-month period ended July 4, 2026 resulted from the following:

Previous wording

Depreciation and amortization was $3.0 million for the three-month period ended April 4, 2026, as compared to $2.6 million for the three-month period ended March 29, 2025, an increase of $0.5 million, or 17.3%. The $0.5 million increase primarily resulted from an increase in amortization expense related to acquired tradenames from Thrive.

Current wording

Depreciation and amortization was $2.8 million for the three-month period ended July 4, 2026, as compared to $2.6 million for the three-month period ended June 28, 2025, an increase of $0.2 million, driven primarily from an increase in amortization expense related to acquired tradenames from Thrive.

Previous wording

There was no other operating expense for the three-month period ended April 4, 2026. Other operating expense was $0.2 million for the three-month period ended March 29, 2025.

Current wording

Other operating expense was $0.1 million for the three-month period ended July 4, 2026, as compared to other operating expense of $0.2 million for the three-month period ended June 28, 2025. Other operating expense in the comparable periods primarily resulted from the value associated with the impairment of certain licenses.

Previous wording

Interest expense, net of interest income was $27.5 million for the three-month period ended April 4, 2026, as compared to $36.2 million for the three-month period ended March 29, 2025, a decrease of $8.7 million, or 24.0%. The decrease was primarily driven by a lower U.S. federal funds rate during the three-month period ended April 4, 2026 compared to the three-month period ended March 29, 2025, and the positive effect of the refinancing of our credit facility in the third quarter of 2025. The drivers above reduced our weighted average interest rate from 9.0% as of March 29, 2025 to 7.3% as of April 4, 2026, resulting in lower interest expense. Further, our interest income increased $1.5 million over the comparable periods due to improved liquidity. See further analysis under Liquidity and Capital Resources below.

Current wording

Interest expense, net of interest income was $26.5 million for the three-month period ended July 4, 2026, as compared to $35.9 million for the three-month period ended June 28, 2025, a decrease of $9.4 million, or 26.1%. The decrease was primarily driven by a lower U.S. federal funds rate over the comparable periods, the positive effect of the refinancing of our credit facility in the third quarter of 2025, and the successful repricing of our credit facility during the second quarter of 2026. The drivers above reduced our weighted average interest rate from 9.0% as of June 28, 2025 to 6.6% as of July 4, 2026, resulting in lower interest expense. See further analysis under Liquidity and Capital Resources below.

Previous wording

Operating income was $69.3 million for the three-month period ended April 4, 2026, as compared to operating income of $51.8 million for the three-month period ended March 29, 2025, an increase of $17.5 million, or 33.8%.

Current wording

Operating income was $149.3 million for the six-month period ended July 4, 2026, as compared to operating income of $131.8 million for the six-month period ended June 28, 2025, an increase of $17.5 million, or 13.3%.

Previous wording

Operating income for the three-month period ended April 4, 2026 was positively impacted by an increase of $17.5 million, or 18.9%, in Field contribution as compared to the three-month period ended March 29, 2025. The $17.5 million increase in Field contribution resulted from an $88.7 million, or 15.9%, increase in consolidated revenue and a 0.4% increase in our Field contribution margin to 16.9% for the three-month period ended April 4, 2026 from 16.5% for the three-month period ended March 29, 2025. The primary driver of our higher Field contribution margin period over period was a 1.5% decrease in branch and regional administrative expenses as a percentage of revenue to 14.8% for the three-month period ended April 4, 2026 from 16.3% for the three-month period ended March 29, 2025, partially offset by a decrease in gross margin percentage from 32.8% for the three-month period ended March 29, 2025 to 31.7% for the three-month period ended April 4, 2026.

Current wording

Operating income for the six-month period of 2026 was positively impacted by an increase of $18.2 million, or 8.5%, in Field contribution as compared to the six-month period of 2025. The $18.2 million increase in Field contribution resulted from a $169.6 million, or 14.8%, increase in consolidated revenue partially offset by a 1.0% decrease in our Field contribution margin to 17.5% for the six-month period of 2026 from 18.5% for the six-month period of 2025. The primary driver of our lower Field contribution margin year over year was a decrease in gross margin percentage from 34.3% for the six-month period of 2025 to 32.2% for the six-month period of 2026, partially offset by a 1.2% decrease in branch and regional administrative expenses as a percentage of revenue to 14.6% for the six-month period of 2026 from 15.8% for the six-month period of 2025.

Previous wording

The following items primarily contributed to the $17.5 million increase in operating income for the three-month period ended April 4, 2026 compared to the three-month period ended March 29, 2025 primarily consists of:

Current wording

The following items primarily contributed to the $17.5 million increase in operating income compared to the first six months of 2025 primarily consists of:

Previous wording

a $0.5 million increase in depreciation and amortization; and

Current wording

a $0.7 million increase in depreciation and amortization; and

Previous wording

a $3.0 million increase in acquisition-related costs associated with the pending acquisition of Family First.

Current wording

a $4.0 million increase in acquisition-related costs associated with the acquisition of Family First.

Previous wording

a $1.6 million decrease in income tax expense.

Current wording

a $2.6 million decrease in income tax expense.

Previous wording

Our PDS segment revenue growth of $75.7 million, or 16.4%, for the three-month period ended April 4, 2026 was attributable to a 10.7% increase in volume and a 5.7% increase in revenue rate. The 10.7% increase in volume was primarily attributable to growth in demand for non-clinical services and new volumes attributable to the Thrive acquisition which was completed on June 2, 2025.

Current wording

Our PDS segment revenue growth of $143.6 million, or 15.2%, for the six-month period ended July 4, 2026 was attributable to a 11.5% increase in volume and a 3.7% increase in revenue rate. The 11.5% increase in volume was primarily attributable to growth in demand for non-clinical services and new volumes attributable to the Thrive and Family First acquisitions which were completed on June 2, 2025 and June 1, 2026, respectively.

Previous wording

Our HHH segment revenue increase of $9.9 million, or 17.4%, for the three-month period ended April 4, 2026 resulted primarily from a 23.1% increase in total episodes compared to the first three months of 2025. Home health episodic mix increased from 77.3% for the first three months of 2025 to 80.9% for the first three months of 2026.

Current wording

Our HHH segment revenue increase of $18.8 million, or 16.1%, for the six-month period ended July 4, 2026 resulted primarily from a 20.8% increase in total episodes compared to the first six months of 2025. The increase in HHH segment revenue was also driven by home health episodic mix, which increased from 75.9% for the first six months of 2025 to 80.9% for the first six months of 2026.

Previous wording

Our MS segment revenue growth of $3.2 million, or 7.4%, for the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025, was attributable to an increase in volume of 4.5% and a 2.9% increase in revenue rate, each compared to the first quarter of 2025.

Current wording

Our MS segment revenue growth of $7.3 million, or 8.5%, for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025, was attributable to an increase in volume of 4.4% compared to the first six months of 2025 and an increase in revenue rate of 4.1%.

Previous wording

The 18.8% increase in PDS cost of revenue for the three-month period ended April 4, 2026 resulted from the previously described 10.7% increase in PDS volume combined with an 8.1% increase in PDS cost of revenue rate. The 8.1% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases and slightly higher general and professional liability expense over the comparable period.

Current wording

The 19.4% increase in PDS cost of revenue for the six-month period ended July 4, 2026 resulted from the previously described 11.5% increase in PDS volume combined with a 7.9% increase in PDS cost of revenue rate. The 7.9% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases and higher general and professional liability expense over the comparable periods. The six-month period ended June 28, 2025 also included a $6.2 million release of certain accrued legal settlements which did not reoccur in the six-month period ended July 4, 2026.

Previous wording

The 18.6% increase in HHH cost of revenue for the three-month period ended April 4, 2026 was driven primarily by higher home health total episodes over the comparable period.

Current wording

The 18.2% increase in HHH cost of revenue for the six-month period ended July 4, 2026 was driven primarily by higher home health total episodes over the comparable periods.

Previous wording

The 3.6% increase in MS cost of revenue for the three-month period ended April 4, 2026 was driven by the previously described 4.5% increase in MS volumes, partially offset by a 0.9% decrease in cost of revenue rate.

Current wording

The 6.9% increase in MS cost of revenue for the six-month period ended July 4, 2026 was driven by the previously described 4.4% increase in MS volumes and a 2.5% increase in cost of revenue rate.

Previous wording

Gross margin was $205.4 million, or 31.7% of revenue, for the three-month period ended April 4, 2026, as compared to $183.6 million, or 32.8% of revenue, for the three-month period ended March 29, 2025. Gross margin increased $21.9 million, or 11.9%, from the comparable prior year quarter. The 1.1% decrease in gross margin percentage for the three-month period ended April 4, 2026 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 in our PDS and MS segments, and the change in gross margin percentage in our HHH segment, as follows:

Current wording

Gross margin was $424.0 million, or 32.2% of revenue, for the six-month period ended July 4, 2026, as compared to $394.4 million, or 34.3% of revenue, for the six-month period ended June 28, 2025. Gross margin increased $29.6 million, or 7.5%, from the comparable prior year quarter. The 2.1% decrease in gross margin percentage for the six-month period ended July 4, 2026 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 in our PDS and MS segments, and the change in gross margin percentage in our HHH segment, as follows:

Previous wording

our HHH segment, in which gross margin percentage decreased by 0.5%.

Current wording

our HHH segment, in which gross margin percentage decreased by 0.8%.

Previous wording

The 4.8% increase in branch and regional administrative expenses for the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025, was primarily due to increased costs related to the acquisition of Thrive, which was completed on June 2, 2025 and increased our operating footprint, including adding new locations and support personnel. The overall 1.5% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025, is the result of leveraging our operating support model to effectively incorporate increased volume from acquisitions and higher demand driven from our existing operating footprint.

Current wording

The 6.3% increase in branch and regional administrative expenses for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025, was primarily due to increased costs related to the acquisitions of Thrive and Family First, which were completed on June 2, 2025 and June 1, 2026, respectively, and increased our operating footprint, including adding new locations and support personnel. The overall 1.2% decrease in branch and regional administrative expenses as a percentage of revenue for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025 is the result of leveraging our operating support model to effectively incorporate increased volume from acquisitions and higher demand driven from our existing operating footprint.

Previous wording

a 1.5% decrease in branch and regional administrative expenses as a percentage of revenue in the three-month period ended April 4, 2026, as compared to the three-month period ended March 29, 2025; offset by

Current wording

a 1.2% decrease in branch and regional administrative expenses as a percentage of revenue in the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025.

Previous wording

Corporate expenses were $34.2 million, or 5.3% of revenue, forthe three-month period ended April 4, 2026, as compared to $37.5 million, or 6.7% of revenue, forthe three-month period ended March 29, 2025. The $3.3 million, or 8.9%, decrease in corporate expenses resulted primarily from lower non-cash share-based compensation costs, primarily due to the acceleration of the expense associated with SMRP awards in the first quarter of 2025.

Current wording

Corporate expenses were $68.2 million, or 5.2% of revenue, forthesix-month period ended July 4, 2026, as compared to $72.0 million, or 6.3% of revenue, forthesix-month period ended June 28, 2025. The $3.8 million, or 5.3%, decrease in corporate expenses resulted primarily from lower non-cash share-based compensation costs, primarily due to the acceleration of the SMRP in the first quarter of 2025, partially offset by higher professional services expense in the six-month period ended July 4, 2026 related to modification costs associated with the repricing of the applicable interest rate margins of our Existing Credit Facility.

Previous wording

an $8.7 million decrease in interest expense, net of interest income;

Current wording

Interest Expense, net of Interest Income

Previous wording

Other income was $3.1 million forthe three-month period ended April 4, 2026, as compared to other expense of $5.5 million forthe three-month period ended March 29, 2025. We realized an $11.0 million decrease in non-cash valuation losses on interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable valuation dates, offset by a $2.3 million decrease in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year period due to lower market interest rates. Details of other income (expense) included the following:

Current wording

Other income was $6.2 million forthesix-month period ended July 4, 2026, as compared to other expense of $5.5 million forthesix-month period ended June 28, 2025. We realized a $16.4 million decrease in non-cash valuation losses on interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable valuation dates, offset by a $4.7 million decline in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year period due to lower market interest rates. Details of other income (expense) 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 $3.3 million for the three-month period ended April 4, 2026, as compared to income tax expense of $5.0 million for the three-month period ended March 29, 2025. This decrease in tax expense was primarily driven by a discrete benefit that was partially offset by differences in our projections of annual earnings at the end of each comparable three-month period, as well as the changes to federal and state current tax expense and the changes in federal and state valuation allowances due to certain non-deductible expenses, most notably interest expense and executive compensation, while also including the effect of the OBBBA, which was enacted on July 4, 2025.

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 $19.5 million for the six-month period ended July 4, 2026, as compared to income tax expense of $22.1 million for the six-month period ended June 28, 2025. This decrease in tax expense was primarily driven by a discrete benefit that was partially offset by differences in our projections of annual earnings at the end of each comparable six-month periods, as well as the changes to federal and state current tax expense and the changes in federal and state valuation allowances due to certain non-deductible expenses, most notably interest expense and executive compensation, while also including the effect of the OBBBA, which was enacted on July 4, 2025.

Previous wording

In addition to our results of operations prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”, or “GAAP”), which we have discussed above, we also evaluate our financial performance using EBITDA, Adjusted EBITDA, Field contribution and Field contribution margin.

Current wording

In addition to our results of operations prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), which we have discussed above, we also evaluate our financial performance using EBITDA, Adjusted EBITDA, Field contribution and Field contribution margin.

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 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; 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

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 for the three-month period ended April 4, 2026, and $0.2 million for the three-month period ended March 29, 2025; and (ii) transitionary costs incurred to integrate acquired companies into our field and corporate operations of $0.9 million for the three-month period ended April 4, 2026, and $0.1 million for the three-month period ended March 29, 2025. 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 $0.9 million for the three and six-month periods ended July 4, 2026, respectively, and $0.5 million and $0.7 million for the three and six-month periods ended June 28, 2025, respectively; and (ii) transitionary costs incurred to integrate acquired companies into our field and corporate operations of $0.7 million and $1.8 million for the three and six-month periods ended July 4, 2026, respectively, and $1.8 million for both the three and six-month periods ended June 28, 2025, 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 $1.4 million for the three-month period ended April 4, 2026, and $0.9 million for the three-month period ended March 29, 2025, 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 $1.1 million and $2.6 million for the three and six-month periods ended July 4, 2026, respectively, and $0.4 million and $1.3 million for the three and six-month periods ended June 28, 2025, 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 period 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 $1.2 million for the three-month period ended April 4, 2026, and $(0.2) million for the three-month period ended March 29, 2025.

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 $1.1 million for the three and six-month periods ended July 4, 2026, respectively, and $0.1 million and $(0.1) million for the three and six-month periods ended June 28, 2025, respectively.