During the periods covered by this report, the Company has made no changes to its policies or strategies for the use of derivative instruments and there has been no change in related accounting methods. For the Company's derivative instruments, which are designated as cash flow hedges, gains and losses are initially reported as a component of accumulated other comprehensive loss and subsequently recognized in earnings with the corresponding hedged item.

As of October 2, 2026, the Company held $350.0 million of interest rate swap contracts to mitigate risks to earnings and cash flows relating to fluctuations in interest rates. During the nine months ended October 2, 2026, the Company elected not to renew certain interest rate swap contracts, which resulted in a decrease in interest rate swap contracts of $100.0 million from December 31, 2025. As of October 2, 2026, and December 31, 2025, these contracts had notional values of $318.8 million and $428.1 million, respectively. These contracts are designated and qualify as effective cash flow hedges.

The following table summarizes the amount at fair value and location of the derivative instruments for interest rate hedges in the Condensed Consolidated Balance Sheets:


	Fair Value (level 2)
		As of
		October 2,		December 31,
(In thousands)	Balance sheet caption	2026		2025
Interest rate swap designated as cash flow hedge	Prepaid expenses and other current assets	$	2,330	$	—
Interest rate swap designated as cash flow hedge	Other non-current assets	$	968	$	—
Interest rate swap designated as cash flow hedge	Other accrued liabilities	$	—	$	770
Interest rate swap designated as cash flow hedge	Other non-current liabilities	$	—	$	1,380
Interest rate swap designated as cash flow hedge	Accumulated other comprehensive loss	$	3,298	$	(2,150)

The Company regularly assesses the creditworthiness of the counterparty to its interest rate swaps. As of October 2, 2026, the counterparty to the interest rate swaps had performed in accordance with its contractual obligations. Both the counterparty credit risk and the Company's credit risk were considered in the fair value determination as of October 2, 2026.

Net interest rate derivative gains of $0.1 million were recognized in interest expense, net in the Condensed Consolidated Statements of Income for the three months ended October 2, 2026. Net interest rate derivative expenses of $2.8 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income for the nine months ended October 2, 2026. Net interest rate derivative gains of $0.7 million and $2.2 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income for the three and nine months ended September 26, 2025, respectively. The Company expects $2.4 million of existing interest rate swap gains reported in accumulated other comprehensive loss as of October 2, 2026, to be recognized in earnings within the next 12 months.