Discontinued Operations and Disposal Groups

9 Months Ended

Oct. 03, 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 financial results of the Residential Kitchen and Food Processing Equipment Groups 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 and Food Processing Equipment Groups were reclassified and reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets through their respective deconsolidation dates.

Residential Kitchen Equipment Group

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. Upon the close of the Residential Transaction, the company retained a 49% non-controlling equity interest in Composition Brands, which now holds the Residential Kitchen Equipment business. The company received cash proceeds at closing of $564.6 million, net of cash disposed, 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. During the third quarter of 2026, the company and Composition Brands finalized the post-closing purchase price adjustment related to the Residential Transaction, resulting in an adjustment due to the company of $4.9 million, recorded within Prepaid expenses and other in the Condensed Consolidated Balance Sheet as of October 3, 2026, and a reduction of the pre-tax loss recorded upon deconsolidation. The company received cash settlement of this adjustment subsequent to quarter-end, in the fourth quarter of 2026. See Note 3 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 October 3, 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 of 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 Current liabilities of discontinued operations as of October 3, 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 of discontinued operations. The ongoing net periodic pension benefit, actuarial gains and losses, and other comprehensive income/(loss) 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 6 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.

Food Processing Equipment Group

On July 6, 2026, the company completed the previously announced separation of its food processing business, Midera Food Processing, Inc. (“Midera”), into a new, publicly traded company (the “Spin-off”). The Spin-off was achieved through the distribution by the company of 100% of the issued and outstanding shares of Midera common stock on a pro rata basis to the holders of the company’s common stock. The Spin-off was structured as a tax-free distribution for U.S. federal income tax purposes. Midera is now an independent public company trading under the symbol “MFP” on The Nasdaq Stock Market LLC.

In connection with the Spin-off, the company entered into various agreements to effect the separation and provide a framework for the relationship between it and Midera, including a Separation and Distribution Agreement, a Tax Matters Agreement, an Employee Matters Agreement and a Transition Services Agreement ("TSA"). Under the terms of the TSA, the company and Midera will each provide specified services, including information technology, payroll and benefits, accounting, finance, compliance and administrative activities, to the other on a transitional basis to help ensure an orderly transition following the Spin-off.

Certain assets and liabilities included in the Food Processing Equipment Group have not yet legally transferred to Midera as of October 3, 2026. These assets and liabilities, which are associated with distribution operations in one international location, have not been deconsolidated and will remain classified as assets and liabilities of discontinued operations until legal transfer is completed.

Prior to the Spin-off, on June 29, 2026, Alkar Holdings, Inc., a wholly-owned subsidiary of the company as of July 4, 2026, entered into a five-year, $1.0 billion credit agreement (the "Midera Credit Facility") in connection with the anticipated Spin-off, which matures on June 29, 2031 and consists of a $750.0 million U.S. Dollar revolving credit facility and a $250.0 million multi-currency revolving credit facility.

On June 29, 2026, the company received a cash distribution of $233.0 million from Alkar Holdings, Inc. in connection with the anticipated Spin-off, financed through borrowings under the Midera Credit Facility and cash on hand. The company used the proceeds received from the cash distribution to repay a portion of the outstanding borrowings under its Credit Facility.

On October 23, 2025, a foreign subsidiary of the Food Processing Equipment Group entered into a term loan with an initial principal amount of €20.0 million, which matures on September 30, 2035 and will be repaid in equal quarterly installments beginning in the first quarter of 2026 (the "Midera Foreign Debt").

In connection with the Spin-off, on July 6, 2026, the Midera Credit Facility, inclusive of all borrowings outstanding, and Midera Foreign Debt were transferred to Midera and are no longer reflected in the company's Condensed Consolidated Financial Statements.

Financial Information

The following tables summarize the operating results of the Residential Kitchen and Food Processing Equipment Groups as presented in Loss from discontinued operations, net of tax in the Condensed Consolidated Statements of Comprehensive Income (in thousands):

	Three Months Ended October 3, 2026
	Residential Kitchen		Food Processing		Total
Net sales	$	13	$	—	$	13
Cost of sales	18		—		18
Gross profit	(5)		—		(5)
Selling, general and administrative expenses	(1,124)		29,774		28,650
Income/(loss) from operations	1,119		(29,774)		(28,655)
Other expense, net	55		25		80
Gain on disposition	(4,866)		—		(4,866)
Earnings/(loss) before income taxes	5,930		(29,799)		(23,869)
Benefit from income taxes	—		(2,886)		(2,886)
Earnings/(loss) from discontinued operations, net of tax	$	5,930	$	(26,913)	$	(20,983)

	Three Months Ended September 27, 2025
	Residential Kitchen		Food Processing		Total
Net sales	$	174,777	$	201,353	$	376,130
Cost of sales	120,486		132,314		252,800
Gross profit	54,291		69,039		123,330
Selling, general and administrative expenses	44,686		45,095		89,781
Restructuring expenses	2,456		17		2,473
Impairments	709,116		—		709,116
(Loss)/income from operations	(701,967)		23,927		(678,040)
Interest (income)/expense, net(1)	(160)		8		(152)
Net periodic pension cost	21		—		21
Other expense, net	438		2,720		3,158
(Loss)/earnings before income taxes	(702,266)		21,199		(681,067)
(Benefit from)/provision for income taxes	(94,836)		5,731		(89,105)
(Loss)/earnings from discontinued operations, net of tax	$	(607,430)	$	15,468	$	(591,962)

	Nine Months Ended October 3, 2026
	Residential Kitchen		Food Processing		Total
Net sales	$	51,834	$	469,308	$	521,142
Cost of sales	36,104		305,163		341,267
Gross profit	15,730		164,145		179,875
Selling, general and administrative expenses	21,502		143,723		165,225
Restructuring expenses	240		104		344
(Loss)/income from operations	(6,012)		20,318		14,306
Interest (income)/expense, net(1)	(17)		426		409
Other expense, net	823		1,300		2,123
Loss on disposition	90,045		—		90,045
(Loss)/earnings before income taxes	(96,863)		18,592		(78,271)
Provision for income taxes	31,966		18,834		50,800
Loss from discontinued operations, net of tax	$	(128,829)	$	(242)	$	(129,071)

(1)Represents interest (income)/expense directly associated with, not allocated to, the Residential Kitchen and Food Processing Equipment Groups.

	Nine Months Ended September 27, 2025
	Residential Kitchen		Food Processing		Total
Net sales	$	531,840	$	585,454	$	1,117,294
Cost of sales	369,005		374,546		743,551
Gross profit	162,835		210,908		373,743
Selling, general and administrative expenses	131,496		132,647		264,143
Restructuring expenses	5,538		69		5,607
Impairments	709,116		—		709,116
(Loss)/income from operations	(683,315)		78,192		(605,123)
Interest (income)/expense, net(1)	(1,029)		13		(1,016)
Net periodic pension cost	61		—		61
Other expense/(income), net	3,758		(8,108)		(4,350)
(Loss)/earnings before income taxes	(686,105)		86,287		(599,818)
(Benefit from)/provision for income taxes	(90,254)		16,806		(73,448)
(Loss)/earnings from discontinued operations, net of tax	$	(595,851)	$	69,481	$	(526,370)

(1)Represents interest (income)/expense directly associated with, not allocated to, the Residential Kitchen and Food Processing Equipment Groups.

The following tables summarize the carrying amounts of major classes of assets and liabilities of discontinued operations as presented in the Condensed Consolidated Balance Sheets (in thousands):

	Oct 3, 2026
	Residential Kitchen		Food Processing		Total
ASSETS
Cash and cash equivalents	$	1,167	$	—	$	1,167
Accounts receivable, net	2,752		159		2,911
Inventories, net	7,207		—		7,207
Prepaid expenses and other	196		—		196
Prepaid taxes	58		—		58
Property, plant and equipment, net	136		—		136
Other assets	134		—		134
Total assets of discontinued operations	$	11,650	$	159	$	11,809
LIABILITIES
Accounts payable	$	1,516	$	42	$	1,558
Accrued expenses	8,145		136		8,281
Long-term deferred tax liability	4		—		4
Other non-current liabilities	85		—		85
Total liabilities of discontinued operations	$	9,750	$	178	$	9,928