v3.26.1
Derivative Financial Instruments
 3 Months Ended
Mar. 28, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Foreign currency derivatives not designated as hedges – As a multinational corporation, we are exposed to foreign currency fluctuations. When borrowings, sales, purchases, or other transactions are denominated in a currency other than the operating unit’s functional currency, we are exposed to foreign currency risk. In most of the countries in which we operate, this exposure to foreign currency movements is limited because operating revenues and expenses of our business units are substantially denominated in the local currency. To mitigate this exposure, we may enter into foreign currency derivative contracts. As of March 28, 2026, we had foreign currency derivative contracts with a total notional amount of $309.2 million to manage the effects of exchange fluctuations on certain intercompany transactions and intercompany loans and interest denominated in foreign currencies. We do not use derivative financial instruments for trading or speculative purposes. We record mark-to-market changes in the values of these derivatives as well as settlements of derivative contracts in other expense (income) on our unaudited condensed consolidated statements of operations.
Foreign currency derivatives designated as cash flow hedges – At the end of 2024, we implemented a hedging program to manage variability in cash flows associated with the amounts payable on raw material purchases denominated in foreign currencies. Gains and losses on foreign currency derivative contracts that qualify as cash flow hedges are recorded in AOCL, to the extent the hedges are effective, and are reclassified into cost of sales on our unaudited condensed consolidated statements of operations when the underlying transactions affect net earnings. This cash flow hedging program continued during 2025 and concluded with no outstanding cash flow hedge derivative contracts as of March 28, 2026 and December 31, 2025, respectively.
No portion of these derivative contracts were deemed ineffective during the three months ended March 29, 2025. In other comprehensive (loss) income, we recorded a pre-tax mark-to-market loss of $1.6 million during the three months ended March 29, 2025.
Commodity derivatives not designated as hedges – As part of our operations, we are exposed to price changes in certain commodities used in the production of some of our finished products. To limit the effects of fluctuations in the future market price paid, we may enter into non-designated derivative contracts to manage the cost of anticipated purchases. We do not use derivative financial instruments for trading or speculative purposes. We record mark-to-market changes in the values of these derivatives as well as settlements of derivative contracts in other expense (income) on our unaudited condensed consolidated statements of operations. We had no open commodity forward swap contracts as of March 28, 2026.
Commodity derivatives designated as cash flow hedges – As part of our operations, we are exposed to price changes in certain commodities used in the production of some of our finished products. To limit the effects of fluctuations in the future market price paid and related volatility in cash flows, we may enter into commodity forward swap contracts that are designated as cash flow hedges. Accordingly, the related gains or losses are reported in AOCL and reclassified into cost of sales, in the periods in which the hedged transactions affect earnings. We had no open commodity forward contracts as of March 28, 2026. We recorded pre-tax mark-to-market gains of $0.2 million for the three months ended March 29, 2025.
As of March 28, 2026, no unrealized gains or losses are expected to be reclassified to earnings over the next 12 months.
Interest rate derivatives – We are exposed to interest rate risk in connection with our variable rate long-term debt. In February 2024, we entered into interest rate collar agreements with a cap rate of 4.50% paid against one-month USD-SOFR CME Term floored at 3.982% and 3.895% with outstanding notional amounts aggregating to $100.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility. The interest rate collar agreements were designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and matured in February 2026.
No portion of these interest rate contracts were deemed ineffective during the three months ended March 28, 2026 and March 29, 2025. In other comprehensive (loss) income, we recorded a nominal pre-tax mark-to-market loss during the three months ended March 28, 2026. We recorded a pre-tax mark-to-market loss of $0.2 million during the three months ended March 29, 2025.
As of March 28, 2026, no unrealized gains or losses are expected to be reclassified to earnings over the next twelve months.
The fair values of derivative instruments held are as follows:
Derivative Assets
(amounts in thousands)Balance Sheet LocationMarch 28, 2026December 31, 2025
Foreign currency forward contractsOther current assets$442 $539 
Derivative Liabilities
(amounts in thousands)Balance Sheet LocationMarch 28, 2026December 31, 2025
Derivatives designated as hedging instruments:
Interest rate contractsAccrued expenses and other current liabilities— 41 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsAccrued expenses and other current liabilities$783 $583 
The effect of derivative instruments in the unaudited condensed consolidated statements of operations is as follows:
Location of (Loss) Gain Recognized in Condensed Consolidated Statements of Operations
Amount of (Loss) Gain Recognized in Earnings on Derivatives
Three Months Ended
(amounts in thousands)March 28, 2026March 29, 2025
Derivatives designated as hedging instruments:
Foreign currency forward contractsCost of sales$(106)$47 
Commodity contractsCost of sales— 35 
Interest rate contractsInterest expense, net(39)— 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther expense (income)(1,120)(752)
Commodity contractsOther expense (income)— 361 
Total$(1,265)$(309)