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Derivatives and Hedging Transactions
 6 Months Ended
Jun. 27, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Transactions
8. Derivatives and Hedging Transactions
The Company holds derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates and interest rates. In hedging these transactions, the Company in the normal course of business, holds the following types of derivatives.
Interest Rate Swap Agreements
The Company enters into interest rate swap agreements designated as cash flow hedges to manage its interest rate risk related to its variable rate debt obligations. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these instruments have been designated as effective and as such, the related gains or losses have been recorded as a component of accumulated other comprehensive (loss) income, net of tax. Other comprehensive income or loss is reclassified into current period income when the hedged interest expense affects earnings.
As of June 27, 2026 and December 31, 2025, the Company was a party to interest rate swap agreements that hedged a notional amount of $600.0 million of the Company’s variable rate debt.
As of June 27, 2026, a notional amount of $250.0 million matures in January 2027, a notional amount of $100.0 million matures in March 2027, and a notional amount of $250.0 million matures in March 2028.
Foreign Exchange Contracts
The Company periodically enters into foreign exchange contracts to manage risks associated with foreign currency transactions and future variability of intercompany cash flows arising from those transactions that may be adversely affected by changes in exchange rates. These contracts are marked-to-market with the resulting gains and losses recognized in Other income, net in the unaudited condensed consolidated statements of operations. For the three months ended June 27, 2026 and June 28, 2025, the Company recognized $1.1 million of income and $2.9 million of expense, respectively, and for the six months ended June 27, 2026 and June 28, 2025, the Company recognized $1.9 million of income and $3.7 million of expense, respectively, related to foreign exchange contracts.
Net Investment Hedges
The Company uses net investment hedges to minimize its exposure to variability in the foreign currency translation of its net investment in one of its international subsidiaries. The effective portion of changes in the fair value of the hedging
instrument is recognized in accumulated other comprehensive income (loss) consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness.
In May 2026, the Company entered into a 13-month euro-denominated foreign currency forward contract of €75.0 million notional amount to hedge the net investment in one of its foreign subsidiaries designated as a hedge with an original expiry date of June 16, 2027. Since the notional value of the derivative designated as a hedge of a net investment in a foreign subsidiary equals the portion of the net investment designated as being hedged and the derivative relates solely to the foreign exchange rate between the functional currency of the hedged net investment and the Company’s functional currency, all changes in fair value of the derivative are reported in the cumulative translation adjustment accounts, net of tax, within accumulated other comprehensive income (loss) in the Company’s unaudited condensed consolidated balance sheets.
The amounts recorded in accumulated other comprehensive (loss) income will be reclassified to earnings only upon the sale or liquidation of the Company’s investment in the hedged international subsidiary.
The following table summarizes the gross fair values and location on the unaudited condensed consolidated balance sheets of the Company’s significant derivative instruments (in thousands):
Other Current AssetsOther Non-Current AssetsAccrued Expenses and Other LiabilitiesOther Current AssetsOther Non-Current AssetsAccrued Expenses and Other LiabilitiesOther Non-Current Liabilities
June 27, 2026December 31, 2025
Interest rate swaps$3,901 $2,566 $— $— $4,680 $122 $180 
Foreign exchange contracts974 — 190 129 — 884 — 
Net investment hedge1,596 — — — — — — 
Total$6,471 $2,566 $190 $129 $4,680 $1,006 $180 
The following table presents the effects of derivative instruments by contract type in accumulated other comprehensive (loss) income (“AOCI”) in the Company’s unaudited condensed consolidated financial statements (in thousands):
Gain (Loss) Recognized in AOCI (1)
Gain (Loss) Reclassified From AOCI to Earnings (2)
Location of Gain (Loss) Reclassified from AOCI into Earnings
Three Months EndedThree Months Ended
June 27, 2026June 28, 2025June 27, 2026June 28, 2025
Interest rate swaps (3)
$1,177 $(767)$1,515 $2,398 Interest expense, net
Net investment hedge1,596 — 125 — N/A
Total$2,773 $(767)$1,640 $2,398 
(1) The tax expense and benefit, respectively, on the gain (loss) recognized in AOCI for the three months ended June 27, 2026 and June 28, 2025 was $0.6 million and $0.2 million, respectively.
(2) The tax expense on the gain reclassified from AOCI to earnings for the three months ended June 27, 2026 and June 28, 2025 was $0.4 million and $0.6 million, respectively.
(3) The Company estimates that $5.0 million of unrealized gains will be reclassified from AOCI into earnings in the next 12 months.
Gain (Loss) Recognized in AOCI (1)
Gain (Loss) Reclassified From AOCI to Earnings (2)
Location of Gain (Loss) Reclassified from AOCI into Earnings
Six Months EndedSix Months Ended
June 27, 2026June 28, 2025June 27, 2026June 28, 2025
Interest rate swaps$4,968 $(4,227)$2,879 $5,188 Interest expense, net
Net investment hedge1,596 — 125 — N/A
Total$6,564 $(4,227)$3,004 $5,188 
(1) The tax expense and benefit, respectively, on the gain (loss) recognized in AOCI for the six months ended June 27, 2026 and June 28, 2025 was $1.5 million and $1.1 million, respectively.
(2) The tax expense on the gain reclassified from AOCI to earnings for the six months ended June 27, 2026 and June 28, 2025 was $0.7 million and $1.3 million, respectively.