Derivative Financial Instruments

9 Months Ended

Sep. 27, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

As a result of its operating and financing activities, the Company is exposed to market risks from changes in foreign currency exchange rates and interest rates. These market risks may adversely affect the Company’s operating results, cash flows and financial position. The Company seeks to manage risk from changes in foreign currency exchange rates through the use of forward contracts, cross currency swaps or both and uses interest rate swaps to manage the risk of changes in interest rates. The Company’s derivative contracts are not collateralized and are entered into with large, reputable financial institutions that are monitored for counterparty risk. Refer to Note 5. Fair Value Measurements for information on the fair value of our derivative financial instruments.

Foreign currency contracts

The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company uses forward contracts and cross currency swaps to manage its exposure to fluctuations in the U.S. dollar (“USD”) – Canadian dollar (“CAD”) exchange rate. Forward contracts and cross currency swaps lock in the exchange rate for a portion of the estimated cash flows of the Company’s Canadian operations. As of September 27, 2025 and December 28, 2024, the Company’s forward contracts had USD equivalent notional amounts of $101.6 million and $102.5 million, respectively. In September 2025, the Company entered into cross currency swaps with USD notional amounts of $200.0 million as of September 27, 2025. In April 2024, the Company terminated its then-existing cross currency swaps, resulting in net proceeds of $28.1 million. Cross currency swaps and forward contracts were not designated in hedging relationships.

Interest rate swap contracts

The Company’s market risk is affected by changes in interest rates. The Company’s 2025 Senior Secured Credit Facilities bear interest based on market rates plus an applicable margin. Because the interest rate on the Company’s floating-rate debt is tied to market rates, the Company manages its exposure to interest rate movements by effectively converting a portion of its floating-rate debt to fixed-rate debt using interest rate swaps. Interest rate swaps, as used by the Company, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. In September 2025, the Company entered into interest rate swaps with USD notional amounts of $600.0 million as of September 27, 2025. In April 2024, the Company terminated its then-existing interest rate swaps, resulting in net proceeds of $10.3 million. All interest rate swaps were designated as cash flow hedging instruments.

The fair value of derivative financial instruments were as follows:

(in thousands)	Balance Sheet Location	September 27, 2025		December 28, 2024
Derivatives not designated as hedging instruments:
Forward contracts	Derivative asset – current	$	—	$	4,574
Cross currency swaps	Derivative asset – current	1,640		—
Total derivatives in an asset position		$	1,640	$	4,574
Forward contracts	Accounts payable and accrued liabilities	$	144	$	—
Cross currency swaps	Derivative liabilities – non-current	2,167		—
Total derivatives in a liability position		$	2,311	$	—
Derivatives designated as hedging instruments:
Interest rate swaps	Derivative asset – current	$	1,304	$	—
Interest rate swaps	Derivative liabilities – non-current	$	2,176	$	—
Deferred (loss) gain on interest rate swaps (1)	Accumulated other comprehensive income	$	(900)	$	4,432

(1)Presented gross of immaterial income taxes.

The impact of derivative financial instruments on the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income was as follows:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(in thousands, gross of immaterial income taxes)	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
(Gain) loss on forward contracts recognized in loss (gain) on foreign currency, net	$	(1,848)	$	1,193	$	2,745	$	733
Loss (gain) on cross currency swaps recognized in loss (gain) on foreign currency, net	$	532	$	—	$	532	$	(7,647)
Gain on interest rate swaps recognized in interest expense, net	$	(30)	$	(2,637)	$	(4,462)	$	(8,341)

The table below presents the effect of cash flow hedge accounting on comprehensive (loss) income:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(in thousands, gross of immaterial income taxes)	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
(Loss) gain recognized in other comprehensive loss	$	(870)	$	—	$	(870)	$	2,364
Gain reclassified from accumulated other comprehensive income into net (loss) income	$	30	$	2,637	$	4,462	$	8,341

Amounts reclassified from accumulated other comprehensive income into net (loss) income are recognized in interest expense, net in the unaudited interim Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. Within the next twelve months, the Company estimates that $1.2 million of gains currently recognized within accumulated other comprehensive income will be reclassified as a decrease in interest expense, net.