v3.26.1
Fair Value of Assets and Liabilities
 3 Months Ended
Mar. 28, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Assets and Liabilities Fair Value of Assets and Liabilities
 
For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair value measurement as follows:
 
Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;
 
Level 2—Valuations based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable or can be corroborated by observable market data;
 
Level 3—Valuations based upon one or more significant unobservable inputs.

There were no transfers in or out of Level 1, Level 2 or Level 3 during the period.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.
 
Cash Equivalents
 
Cash equivalents primarily consist of money market funds, certificates of deposit, and short-term time deposits, which are held with institutions with sound credit ratings and are highly liquid. The Company classified cash equivalents as Level 1 and were valued at cost, which approximates fair value.

Investments in Equity Securities

Investments in equity securities listed on a national market or exchange are valued at the last sales price and classified within Level 1 of the valuation hierarchy and recorded in Investments and Other long-term assets.
Derivatives Designated as Hedging Instruments

For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective, and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. For highly effective cash flow hedges, ASC 815 requires the entire change in fair value of the hedging instrument included in the assessment of hedge effectiveness to be recorded in other comprehensive income. No amount of ineffectiveness was recognized for the three months ended March 28, 2026. The Company continues to assess the effectiveness of the hedges on an ongoing basis. The Company does not enter into derivative financial instruments for trading purposes.

Cross-Currency Swap Agreement

In February 2026, the Company entered into a fixed-to-fixed cross currency swaps to mitigate foreign currency risk exposure related to fluctuations between the Euro and the U.S. dollar. These instruments were designated as net investment hedges to offset the impact of EUR-USD exchange rate volatility associated with the Company's net investments in certain foreign entities. The fair value of the cross-currency swaps was determined using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as net investment hedges are deferred in the foreign currency translation adjustment within accumulated other comprehensive loss. Gains or losses deferred in accumulated other comprehensive loss are reclassified into earnings at the time the underlying hedged net investment is disposed of or substantially liquidated. The Company applied cross-currency swap net investment hedge designation under spot method. Under this method, the Company is allowed to recognize interest income from the spot‑forward differential on a straight‑line basis over the term of the swap agreement, and the spot‑forward differential is excluded from the assessment of hedge effectiveness. For the three months ended March 28, 2026, the Company recorded a pre-tax unrealized gain on the cross-currency swaps of $2.3 million. The primary inputs into the valuation of the cross-currency swaps are interest rate yield curves, foreign exchange rates, cross-currency basis spreads, credit spreads and other market information. The cross-currency swaps are classified within Level 2 of the fair value hierarchy since all significant inputs are corroborated by observable market data. As of March 28, 2026, the Company had outstanding cross-currency swap agreements designated as net investment hedges with an aggregate notional value of €84.7 million on the pay leg and $100.0 million on the receive leg.

Zero Cost Collar Agreement

In July 2024, the Company implemented a hedging program to manage foreign currency risk exposure related to fluctuations between the U.S. dollar and Mexican peso. These foreign currency zero cost collars are designated as cash flow hedges for a portion of our Mexican peso-denominated manufacturing expenses, predominantly salary expenses, vendor payments, and utility expenses. If the spot rate is between the weighted-average ceiling and floor rates on the date of maturity, then the Company would not owe or receive any payments under these collars. The Company plans to continue executing zero cost collars with 14-month rolling maturities as an ongoing strategy to hedge peso-denominated manufacturing expenses. The trade entry date, maturity date, weighted-average floor, and weighted-average ceiling for each collar trade was as follows:
Trade Entry DateTrade Maturity DateWeighted-Average FloorWeighted-Average Ceiling
July 3, 2024August 29, 202518.000019.4350
August 5, 2024September 29, 202519.655021.0000
September 3, 2024November 3, 202520.082021.7571
September 30, 2024November 26, 202519.870021.3650
November 4, 2024January 2, 202620.120021.6900
December 3, 2024February 2, 202620.425022.0377
January 2, 2025March 2, 202620.800021.9082
February 6, 2025March 30, 202620.530022.0000
April 9, 2025June 1, 202620.970022.2355
May 1, 2025June 29, 202619.694020.9700
June 4, 2025August 3, 202619.310020.3437
July 2, 2025August 31, 202618.850019.8025
August 5, 2025September 29, 202618.850019.8000
September 2, 2025November 2, 202618.810019.8347
September 30, 2025November 30, 202618.420019.3700
November 4, 2025January 4, 202718.720019.7000
November 26, 2025February 2, 202718.430019.4852
January 6, 2026March 1, 202718.062018.9250
February 4, 2026April 5, 202717.417518.2500
March 4, 2026May 3, 202717.672018.4060

The fair value of the collars was determined using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss until the underlying transactions are recognized in earnings. For the three months ended March 28, 2026, the Company recorded pre-tax unrealized losses on the collars of $4.0 million. As of March 28, 2026, the Company estimates that approximately $3.2 million of pre-tax gains recorded in accumulated other comprehensive loss will be recognized in earnings over the next 12 months. The amounts included in accumulated other comprehensive income will be reclassified to earnings should the hedge no longer be considered effective. No amount of ineffectiveness was included in net income for the three months ended March 28, 2026. The Company will continue to assess the effectiveness of the hedge on an ongoing basis. The primary inputs into the valuation of the collars are interest yield curves, interest rate volatilities, foreign exchange rates, foreign exchange volatilities, credit risk, credit spreads and other market information. The collars are classified within Level 2 of the fair value hierarchy since all significant inputs are corroborated by market observable data.

Interest Rate Swap

On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate. The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027. The fair value of the interest rate swap was valued using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss until the underlying transactions are recognized in earnings. For the three months ended March 28, 2026, the Company recorded a pre-tax unrealized gain on the interest rate swap of $0.8 million. As of March 28, 2026, the Company estimates that approximately $1.9 million of pre-tax gains recorded in accumulated other comprehensive loss will be recognized in earnings over the next 12 months. The primary inputs into the valuation of the interest rate swap are interest yield curves, interest rate volatility, credit risk, credit spreads and other market information. The interest rate swap is classified within Level 2 of the fair value hierarchy since all significant inputs are corroborated by observable market data.

The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts. The Company seeks to minimize this risk by limiting its counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of positions with individual counterparties. In the event of a default by one of its counterparties, the Company may not receive payments provided for under the terms of its derivatives.
As of March 28, 2026 and December 27, 2025, the fair values of the Company's derivative financial instruments and their classifications on the Condensed Consolidated Balance Sheets were as follows:


(in thousands)		Condensed Consolidated Balance Sheets ClassificationMarch 28, 2026December 27, 2025
Derivatives designated as hedging instruments
Interest rate swap agreement:
Designated as cash flow hedgePrepaid expenses and other current assets$1,714 $1,162 
Other long-term assets618 382 
Zero cost collar agreement:
Designated as cash flow hedgePrepaid expenses and other current assets$3,602 $6,816 
Other long-term assets— 3 
Accrued liabilities777 — 
Other long-term liabilities16 — 
Cross-currency swap agreement:
Designated as net investment hedgePrepaid expenses and other current assets$757 $— 
Other long-term assets1,518 — 

The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three months ended March 28, 2026 and March 29, 2025 were as follows:

Three Months Ended
(in thousands)Classification of (Gains) Losses Recognized in the Condensed Consolidated Statements of OperationsMarch 28, 2026March 29, 2025
Derivatives designated as cash flow hedges
Interest rate swap agreementInterest expense$(464)$(788)
Zero cost collar agreementCost of sales(4,078)1,480 
Zero cost collar agreementSelling, general, and administrative expenses(336)121 
Derivatives designated as net investment hedges
Cross-currency swap agreementInterest expense$(97)$— 

The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 28, 2026 and March 29, 2025 were as follows:

 Three Months Ended
(in thousands)March 28, 2026March 29, 2025
Derivatives designated as cash flow hedges
Interest rate swap agreement$(788)$2,318 
Zero cost collar agreement4,031 (2,442)
Derivatives designated as net investment hedges
Cross-currency swap agreement$(2,275)$— 
Mutual Funds
 
The Company has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. The marketable securities are classified as Level 1 under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value and recorded in Other long-term assets in the Condensed Consolidated Balance Sheets.
 
There were no changes during the quarter ended March 28, 2026 to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of March 28, 2026 and December 27, 2025, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of March 28, 2026:
 Fair Value Measurements Using 
(in thousands)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Cash equivalents$430,054 $— $— $430,054 
Investments in equity securities7,396 — — 7,396 
Mutual funds26,150 — — 26,150 
   Total $463,600 $— $— $463,600 

The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 27, 2025: 
 Fair Value Measurements Using 
(in thousands)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Cash equivalents$465,915 $— $— $465,915 
Investments in equity securities7,676 — — 7,676 
Mutual funds25,730 — — 25,730 
   Total$499,321 $— $— $499,321 

In addition to the methods and assumptions used for the financial instruments recorded at fair value as discussed above, the following methods and assumptions are used to estimate the fair value of other financial instruments that are not marked to market on a recurring basis. The Company’s other financial instruments include cash and cash equivalents, short-term investments, trade receivable and its long-term debt. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and trade receivable approximate their fair values. The Company’s revolving and term loan debt facilities' fair values approximate book value at March 28, 2026 and December 27, 2025, as the rates on these borrowings are variable in nature. The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill. The Company utilizes Level 3 inputs in the determination of the initial fair value for certain assets acquired and liabilities assumed in business acquisitions.

The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series B and USD Senior Notes, Series B, as of March 28, 2026 and December 27, 2025 were as follows:
 March 28, 2026December 27, 2025
(in thousands)Carrying
Value		Estimated
Fair Value		Carrying
Value		Estimated
Fair Value
Euro Senior Notes, Series B due 2028$109,545 $103,634 $111,977 $106,908 
USD Senior Notes, Series B due 2027100,000 99,132 100,000 99,152 
USD Senior Notes, Series B due 2030125,000 119,169 125,000 120,076 
USD Senior Notes, due 2032100,000 94,340 100,000 95,587