Discontinued Operations and Disposal Groups

3 Months Ended

Apr. 04, 2026

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

As discussed in Note 1 to these Notes to the Condensed Consolidated Financial Statements, the Residential Kitchen Equipment Group’s financial results are reflected in the Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows as discontinued operations through the date of deconsolidation. The assets and liabilities of the Residential Kitchen Equipment Group were reclassified and reported as assets and liabilities held for sale - discontinued operations in the Condensed Consolidated Balance Sheets through the date of deconsolidation.

Upon classification as held for sale during the fourth quarter of 2025, the company ceased depreciating and amortizing long-lived assets within the disposal group, which primarily included property, plant and equipment, intangible assets, and operating lease right-of-use assets.

The Residential Transaction was completed on February 2, 2026. Following the close of the Residential Transaction, the company owns a 49% non-controlling equity interest in Composition Brands, which now holds the Residential Kitchen Equipment business. The company received cash proceeds of $564.6 million, net of cash disposed and subject to future closing adjustments, and a promissory note payable by Composition Brands in the principal amount of $135.0 million, with an initial fair value of $82.4 million. The company's retained interest in Composition Brands had an initial fair value of $150.8 million. The company recognized a pre-tax loss of $94.9 million upon deconsolidation, including $50.8 million related to the remeasurement of the retained interest to fair value. See Note 4 to these Notes to the Condensed Consolidated Financial Statements for further information on the retained equity method investment and promissory note receivable.

Certain assets and liabilities included in the determination of consideration received for the Residential Transaction have not yet legally transferred to Composition Brands as of April 4, 2026. These assets and liabilities, which are associated with distribution operations in certain international locations, have not been deconsolidated and will remain classified as assets and liabilities held for sale – discontinued operations until legal transfer is completed, which is expected within one year of the closing date. Consideration allocated to this portion of the business of $6.5 million is included in Accrued expenses in Liabilities held for sale - discontinued operations as of April 4, 2026. The company recognized a loss of $0.6 million to adjust the carrying value of the remaining net assets for this portion of the business to the value of deferred consideration, representing fair value, as of April 4, 2026.

Certain assets and liabilities that were previously associated with the Residential Kitchen Equipment Group were excluded from the scope of the Residential Transaction, including a defined benefit pension plan in the United Kingdom (the Aga Rangemaster Group Pension Scheme or the “Retained Plan”) and earnout obligations associated with several prior acquisitions.

The Retained Plan, which covers certain current and former employees of, and was previously sponsored by, a division within the Residential Kitchen Equipment Group, was not transferred to Composition Brands. The Retained Plan is not included in assets held for sale - discontinued operations. The ongoing net periodic pension benefit, actuarial gains and losses, and other comprehensive (loss)/income related to the Retained Plan are reflected in the company’s results of continuing operations. The Retained Plan is included within Corporate and Other in the company's business segment results. See Note 7 to these Notes to the Condensed Consolidated Financial Statements for further information regarding the company’s business segment results. Certain other immaterial defined benefit pension plans were included within the scope of the Residential Transaction and have been included within the results of discontinued operations.

Financial Information

The following table summarizes the operating results of the Residential Kitchen Equipment Group as presented in (Loss)/earnings from discontinued operations, net of tax in the Condensed Consolidated Statements of Comprehensive Income (in thousands):

	Three Months Ended
	Apr 4, 2026		Mar 29, 2025
Net sales	$	51,796	$	176,004
Cost of sales	36,010		122,649
Gross profit	15,786		53,355
Selling, general, and administrative expenses	21,076		40,797
Restructuring expenses	240		1,481
(Loss)/income from discontinued operations	(5,530)		11,077
Interest income, net(1)	(16)		(457)
Net periodic pension cost	—		19
Other expense, net	768		1,314
Loss on disposition	94,911		—
Loss on classification as held for sale	608		—
(Loss)/earnings from discontinued operations before income taxes	(101,801)		10,201
Provision for income taxes	33,556		2,912
(Loss)/earnings from discontinued operations, net of tax	$	(135,357)	$	7,289

(1)Represents interest income directly associated with, not allocated to, the Residential Kitchen Equipment Group

The following table summarizes the carrying amounts of major classes of assets and liabilities held for sale - discontinued operations as presented in the Condensed Consolidated Balance Sheets (in thousands):

	Apr 4, 2026		Jan 3, 2026
ASSETS
Cash and cash equivalents	$	723	$	22,208
Accounts receivable, net	2,373		109,280
Inventories, net	7,745		199,534
Prepaid expenses and other	234		17,951
Property, plant and equipment, net	194		150,561
Goodwill	—		229,964
Other intangibles, net	—		385,133
Pension benefits assets	—		1,150
Other assets	204		49,410
Valuation allowance - loss on classification as held for sale	(608)		(62,750)
Total assets held for sale - discontinued operations	$	10,865	$	1,102,441
LIABILITIES
Accounts payable	$	581	$	53,151
Accrued expenses	7,502		93,247
Long-term deferred tax liability	5		71,649
Other non-current liabilities	111		24,288
Total liabilities held for sale - discontinued operations	$	8,199	$	242,335