Interest Rate Derivatives

3 Months Ended

Apr. 04, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Interest Rate Derivatives

Interest Rate Derivatives

In December 2025, we entered into an interest rate swap agreement to help manage interest rate exposure by economically converting a portion of our variable-rate debt to fixed-rate debt. Under the interest rate swap agreement, we receive a floating interest rate of the one-month SOFR and pay a fixed interest rate of 3.43% on $100 million of notional amount. We designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship.

We recognized (gains) losses on the change in fair value of the interest rate swap of $(0.5) million in Other comprehensive income (loss) during the three months ended April 4, 2026. A net gain of $0.1 million was reclassified from Accumulated other comprehensive income (loss) into Interest expense, net, during the three months ended April 4, 2026.

As of April 4, 2026, the Company expects to reclassify $0.2 million of unrealized gains on the derivative, net of tax, from AOCI into earnings in the next 12 months. Cash flows related to derivatives are included in the operating section of the Condensed Consolidated Statements of Cash Flows. See Note 10. “Accumulated Other Comprehensive Income (Loss)” for further details.

Our cash flow hedge position related to derivatives designated as hedging instruments under ASC 815 is as follows:

In thousands	Balance Sheet Classification	As of April 4, 2026		As of January 3, 2026
Current portion	Prepaid Expenses and Other Current Assets	$	230	$	—
Non-current portion	Other Assets	29		—
Current portion	Other Payables and Accrued Expenses	—		45
Non-current portion	Other Liabilities	—		116
Total derivative liabilities or assets designated as hedging instruments		$	259	$	161