Financial Instruments

9 Months Ended

Oct. 03, 2026

Notes To Financial Statements [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

Foreign Exchange

The company periodically enters into derivative instruments, principally forward contracts, to reduce exposures pertaining to fluctuations in foreign exchange rates. The notional amount of foreign currency contracts outstanding was $157.4 million and $120.9 million as of October 3, 2026 and January 3, 2026, respectively. The fair value of these forward contracts was a loss of $0.3 million at the end of the third quarter of 2026.

Interest Rate

The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in other comprehensive income/(loss). As of October 3, 2026, the fair value of these instruments was an asset of $14.8 million. The change in fair value of these swap agreements in the first nine months of 2026 was a gain of $2.7 million, net of taxes.

The following table summarizes the fair value of interest rate swaps (in thousands):

Condensed Consolidated Balance Sheets Location	Oct 3, 2026		Jan 3, 2026
Prepaid expenses and other	$	1,365	$	1,516
Other assets	13,396		9,714

The following table summarizes the impact on earnings from interest rate swaps (in thousands):

		Three Months Ended				Nine Months Ended
	Location	Oct 3, 2026		Sep 27, 2025		Oct 3, 2026		Sep 27, 2025
Amount of gain/(loss) recognized in other comprehensive income	Other comprehensive (loss)/income	$	8,055	$	616	$	9,827	$	(2,093)
Gain reclassified from accumulated other comprehensive loss (effective portion)	Interest expense and deferred financing amortization, net	1,650		4,027		6,296		13,287

Interest rate swaps are subject to default risk to the extent the counterparty is unable to satisfy its settlement obligations under the interest rate swap agreements. The company reviews the credit profile of the financial institutions that are counterparties to such swap agreements and assesses their creditworthiness prior to entering into the interest rate swap agreements and throughout the term. The interest rate swap agreements typically contain provisions that allow the counterparty to require early settlement in the event that the company becomes insolvent or is unable to maintain compliance with its covenants under its existing debt agreement.