Acquisitions and Purchase Accounting

6 Months Ended

Jul. 04, 2026

Business Combination [Abstract]

Business Combination

The company accounts for all business combinations using the acquisition method to record a new cost basis for the assets acquired and liabilities assumed. The difference between the purchase price and the fair value of the assets acquired and liabilities assumed has been recorded as goodwill in the financial statements. The company recognizes identifiable intangible assets, primarily trade names and customer relationships, at their fair value using a discounted cash flow model. The significant assumptions used to estimate the value of the intangible assets include revenue growth rates, projected profit margins, discount rates, royalty rates, and customer attrition rates. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The results of operations are reflected in the Condensed Consolidated Financial Statements of the company from the dates of acquisition.

2025 Acquisitions

During 2025, the company completed various acquisitions that were not individually material. The final allocation of consideration paid for the 2025 acquisitions is summarized as follows (in thousands):

	Preliminary Opening Balance Sheet		Measurement Period Adjustments		Adjusted Opening Balance Sheet
Cash	$	7,434	$	—	$	7,434
Current assets	41,749		(1,357)		40,392
Property, plant and equipment	6,073		—		6,073
Goodwill	13,419		1,912		15,331
Other intangibles	10,263		—		10,263
Other assets	44		5,456		5,500
Current portion of long-term debt	(875)		—		(875)
Current liabilities	(36,513)		(350)		(36,863)
Long-term debt	(696)		—		(696)
Long-term deferred tax liability	(2,304)		231		(2,073)
Other non-current liabilities	(5,077)		(4,987)		(10,064)
Consideration paid at closing	$	33,517	$	905	$	34,422
Contingent consideration	4,698		—		4,698
Net assets acquired and liabilities assumed	$	38,215	$	905	$	39,120

The net long-term deferred tax liability amounted to $2.1 million. The net long-term deferred tax liability is comprised of $1.3 million related to the difference between the book and tax basis of identifiable intangible assets and $0.8 million related to the difference between the book and tax basis of identifiable tangible asset and liability accounts.

The goodwill and $4.6 million of other intangibles associated with the trade names are subject to the non-amortization provisions of ASC 350. Other intangibles also include $2.6 million allocated to customer relationships, $1.1 million allocated to developed technology, and $2.0 million allocated to backlog, which are being amortized over periods of 7 years, 7 years, and 6 months, respectively. Goodwill of $15.3 million and other intangibles of $10.3 million are allocated to the Food Processing Equipment Group for segment reporting purposes. Of these assets, goodwill of $7.8 million and intangibles of $5.5 million are expected to be deductible for tax purposes.

Two purchase agreements include earnout provisions providing for a contingent payment due to the sellers for the achievement of certain targets. Two earnouts are payable to the extent certain EBITDA targets are met with measurement dates ending in 2028. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amounts to $4.7 million.

2026 Acquisitions

There were no acquisitions completed during the six month period ended July 4, 2026.