{"url_path":"/sec/midd/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Condensed Consolidated Financial Statements","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/769520/0000769520-26-000032-index.html","accession_number":"0000769520-26-000032","cik":"0000769520","ticker":"MIDD","issuer_name":"MIDDLEBY Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/769520/0000769520-26-000032-index.html","primary_entity_key":"0000769520","primary_entity_name":"MIDDLEBY Corp"},"word_count":8840,"has_tables":true,"body_markdown":"Item 1.      Condensed Consolidated Financial Statements\n\nTHE MIDDLEBY CORPORATION\n\nCONDENSED CONSOLIDATED BALANCE SHEETS\n\n(amounts in thousands, except share data)\n\n(Unaudited)\n\nApr 4, 2026Jan 3, 2026\n\nASSETS\n\nCurrent assets:  \n\nCash and cash equivalents$177,065 $222,239 \n\nAccounts receivable, net of allowances for credit losses of $25,192 and $25,001\n608,028 573,039 \n\nInventories, net728,388 692,589 \n\nPrepaid expenses and other97,786 111,176 \n\nPrepaid taxes25,707 41,159 \n\nCurrent assets held for sale - discontinued operations10,865 1,102,441 \n\nTotal current assets1,647,839 2,742,643 \n\nProperty, plant and equipment, net of accumulated depreciation of $321,803 and $311,226\n424,961 431,622 \n\nGoodwill1,794,037 1,799,649 \n\nOther intangibles, net of amortization of $572,654 and $564,224\n1,044,998 1,061,192 \n\nLong-term deferred tax assets7,390 8,209 \n\nPension benefits assets107,799 106,444 \n\nEquity method investment155,293 — \n\nNote receivable84,186 — \n\nOther assets155,484 165,407 \n\nTotal assets$5,421,987 $6,315,166 \n\nLIABILITIES AND STOCKHOLDERS' EQUITY  \n\nCurrent liabilities:  \n\nCurrent maturities of long-term debt$44,154 $44,420 \n\nAccounts payable215,386 206,666 \n\nAccrued expenses571,051 574,810 \n\nCurrent liabilities held for sale - discontinued operations8,199 242,335 \n\nTotal current liabilities838,790 1,068,231 \n\nLong-term debt1,829,866 2,128,582 \n\nLong-term deferred tax liability195,323 156,723 \n\nAccrued pension benefits7,467 7,629 \n\nOther non-current liabilities175,610 177,772 \n\nStockholders' equity:  \n\nPreferred stock, $0.01 par value; none issued\n— — \n\nCommon stock, $0.01 par value; 65,106,185 and 64,964,586 shares issued\n153 153 \n\nPaid-in capital611,017 602,765 \n\nTreasury stock, at cost; 18,483,628 and 16,041,990 shares\n(2,110,057)(1,735,281)\n\nRetained earnings4,000,383 4,050,456 \n\nAccumulated other comprehensive loss(126,565)(141,864)\n\nTotal stockholders' equity2,374,931 2,776,229 \n\nTotal liabilities and stockholders' equity$5,421,987 $6,315,166 \n\nThe accompanying notes are an integral part of these Condensed Consolidated Financial Statements.\n\n1\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nTHE MIDDLEBY CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(amounts in thousands, except per share data)\n\n(Unaudited)\n\nThree Months Ended\n\nApr 4, 2026Mar 29, 2025\n\nNet sales$839,908 $730,623 \n\nCost of sales516,718 438,045 \n\nGross profit323,190 292,578 \n\nSelling, general and administrative expenses188,297 161,809 \n\nRestructuring expenses1,539 1,248 \n\nIncome from continuing operations133,354 129,521 \n\nInterest expense and deferred financing amortization, net25,480 18,821 \n\nNet periodic pension benefit(2,429)(1,516)\n\nOther (income)/expense, net(2,621)960 \n\nEarnings from continuing operations before income taxes112,924 111,256 \n\nProvision for income taxes27,640 26,193 \n\nNet earnings from continuing operations85,284 85,063 \n\n(Loss)/earnings from discontinued operations, net of tax(135,357)7,289 \n\nNet (loss)/earnings$(50,073)$92,352 \n\nNet (loss)/earnings per share:\n\nBasic from continuing operations$1.81 $1.59 \n\nBasic from discontinued operations(2.87)0.14 \n\nBasic (loss)/earnings per share$(1.06)$1.72 \n\nDiluted from continuing operations$1.81 $1.56 \n\nDiluted from discontinued operations(2.87)0.13 \n\nDiluted (loss)/earnings per share$(1.06)$1.69 \n\nWeighted average number of shares\n\nBasic47,232 53,594 \n\nDilutive common stock equivalents11 1,027 \n\nDiluted47,243 54,621 \n\nComprehensive (loss)/income$(34,774)$131,780 \n\nThe accompanying notes are an integral part of these Condensed Consolidated Financial Statements.\n\n2\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nTHE MIDDLEBY CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY\n\n(amounts in thousands)\n\n(Unaudited)\n\nCommon StockPaid-in CapitalTreasury StockRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity\n\nBalance, January 3, 2026$153 $602,765 $(1,735,281)$4,050,456 $(141,864)$2,776,229 \n\nNet loss— — — (50,073)— (50,073)\n\nCurrency translation adjustments— — — — (12,349)(12,349)\n\nChange in unrecognized pension benefit costs, net of tax of $(106)\n— — — — 1,821 1,821 \n\nUnrealized loss on interest rate swap, net of tax of $(217)\n— — — — (690)(690)\n\nReclassification due to sale of Residential Kitchen Equipment Group— — — — 26,517 26,517 \n\nStock compensation— 8,252 — — — 8,252 \n\nPurchase of treasury stock— — (374,776)— — (374,776)\n\nBalance, April 4, 2026$153 $611,017 $(2,110,057)$4,000,383 $(126,565)$2,374,931 \n\nCommon StockPaid-in CapitalTreasury StockRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity\n\nBalance, December 28, 2024$148 $520,177 $(940,691)$4,328,187 $(269,390)$3,638,431 \n\nNet earnings— — — 92,352 — 92,352 \n\nCurrency translation adjustments— — — — 46,829 46,829 \n\nChange in unrecognized pension benefit costs, net of tax of $270\n— — — — (1,952)(1,952)\n\nUnrealized loss on interest rate swap, net of tax of $(1,701)\n— — — — (5,449)(5,449)\n\nStock compensation— 2,488 — — — 2,488 \n\nPurchase of treasury stock— — (42,778)— — (42,778)\n\nBalance, March 29, 2025$148 $522,665 $(983,469)$4,420,539 $(229,962)$3,729,921 \n\nThe accompanying notes are an integral part of these Condensed Consolidated Financial Statements.\n\n3\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nTHE MIDDLEBY CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(amounts in thousands)\n\n(Unaudited)\n\nThree Months Ended\n\nApr 4, 2026Mar 29, 2025\n\nCash flows from operating activities:\n\nNet (loss)/earnings$(50,073)$92,352 \n\n(Loss)/earnings from discontinued operations, net of tax(135,357)7,289 \n\nEarnings from continuing operations, net of tax85,284 85,063 \n\nAdjustments to reconcile earnings from continuing operations, net of tax to net cash provided by operating activities - continuing operations:\n\nDepreciation and amortization25,469 26,350 \n\nNon-cash share-based compensation10,074 2,288 \n\nDeferred income taxes6,917 (8,338)\n\nNet periodic pension benefit(2,429)(1,516)\n\nOther non-cash items631 25 \n\nChanges in assets and liabilities, net of acquisitions:\n\nAccounts receivable, net(38,323)12,203 \n\nInventories, net(40,623)(28,495)\n\nPrepaid expenses and other assets27,052 16,806 \n\nAccounts payable10,565 17,969 \n\nAccrued expenses and other liabilities3,195 14,929 \n\nNet cash provided by operating activities - continuing operations87,812 137,284 \n\nNet cash (used in)/provided by operating activities - discontinued operations(22,206)3,850 \n\nNet cash provided by operating activities65,606 141,134 \n\nCash flows from investing activities:\n\nNet additions to property, plant and equipment(7,939)(26,463)\n\nPurchase of intangible assets— (1,114)\n\nProceeds from sale of 51% interest in Residential Kitchen Equipment Group, net of cash transferred564,575 — \n\nAcquisitions, net of cash acquired(109)9 \n\nNet cash provided by/(used in) investing activities - continuing operations556,527 (27,568)\n\nNet cash used in investing activities - discontinued operations(1,577)(7,269)\n\nNet cash provided by/(used in) investing activities554,950 (34,837)\n\nCash flows from financing activities:\n\nProceeds from Credit Facility430,000 — \n\nRepayments under Credit Facility(727,782)(10,938)\n\nRepayments of foreign loans(905)(433)\n\nPayments of deferred purchase price(11,202)(2,885)\n\nRepurchase of treasury stock(374,776)(42,778)\n\nOther, net— (57)\n\nNet cash used in financing activities(684,665)(57,091)\n\nEffect of exchange rates on cash and cash equivalents(2,550)6,404 \n\nChanges in cash and cash equivalents and cash and cash equivalents held for sale - discontinued operations:\n\nNet (decrease)/increase(66,659)55,610 \n\nBalance at beginning of period244,447 689,533 \n\nBalance at end of period$177,788 $745,143 \n\nNon-cash investing and financing activities:\n\nNon-cash consideration from sale of Residential Kitchen Equipment Group - Retained Investment$150,847 $— \n\nNon-cash consideration from sale of Residential Kitchen Equipment Group - Note Receivable82,380 — \n\nThe accompanying notes are an integral part of these Condensed Consolidated Financial Statements.\n\n4\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nTHE MIDDLEBY CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nAPRIL 4, 2026\n\n(Unaudited)\n\n(1)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\n(a)Basis of Presentation\n\nThe Condensed Consolidated Financial Statements have been prepared by The Middleby Corporation (the \"company\" or “Middleby”), pursuant to the rules and regulations of the Securities and Exchange Commission (\"SEC\"). The financial statements are unaudited and certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the company's 2025 Form 10-K. The company’s interim results are not necessarily indicative of future full year results for the fiscal year 2026.\n\nIn the opinion of management, the financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the company as of April 4, 2026 and January 3, 2026, the results of operations for the three months ended April 4, 2026 and March 29, 2025, cash flows for the three months ended April 4, 2026 and March 29, 2025 and statement of stockholders' equity for the three months ended April 4, 2026 and March 29, 2025.\n\nDiscontinued Operations\n\nOn February 2, 2026, the company completed a transaction selling a 51% stake in its Residential Kitchen Equipment Group to an affiliate of 26North Partners LP (the “Residential Transaction”). Following the close of the Residential Transaction, the company owns a 49% non-controlling equity interest in Composition Brands, a new standalone entity holding the Residential Kitchen Equipment business (\"Composition Brands\"). The company received cash proceeds of $564.6 million, net of cash disposed and subject to future closing adjustments, 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.\n\nThe sale of the Residential Kitchen Equipment Group represents a strategic shift that will have a major effect on the company's operations and financial results. Due to this shift, the Residential Kitchen Equipment Group’s financial results 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 Equipment Group have been reclassified and reported as assets and liabilities held for sale - discontinued operations in the Condensed Consolidated Balance Sheets through the date of deconsolidation. These changes have been applied to all periods presented. Additionally, all of the Notes to the Condensed Consolidated Financial Statements have been retrospectively restated to only include the company's continuing operations, unless noted otherwise.\n\nThe Residential Kitchen Equipment Group, historically presented as a reportable segment, is no longer included in segment results. Certain prior year amounts within the company's segment reporting that were previously associated with the Residential Kitchen Equipment Group were excluded from the scope of the Residential Transaction and are now included within Corporate and Other. All prior period segment disclosures have been recast to reflect these changes. See Note 7 to these Notes to the Condensed Consolidated Financial Statements for further information regarding the company’s business segment results.\n\nSee Notes 4 and 9 to these Notes to the Condensed Consolidated Financial Statements for further information on the retained equity method investment and discontinued operations, respectively.\n\nProposed Separation Transaction\n\nOn February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Midera Food Processing, Inc. (the subsidiary of the company which will own and operate the company's Food Processing business), as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting July 6, 2026 for the completion of the separation, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Midera Food Processing, Inc. is expected to be tax-free for U.S. federal income tax purposes. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.\n\n5\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nUse of Estimates\n\nThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses. Significant estimates and assumptions are used for, but are not limited to, allowances for credit losses, reserves for excess and obsolete inventories, long-lived and intangible assets, equity method investments, note receivables, warranty reserves, insurance reserves, income tax reserves, non-cash share-based compensation and post-retirement obligations. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the notes herein.\n\n(b)Inventories\n\nInventories consist of the following (in thousands):\n\n Apr 4, 2026Jan 3, 2026\n\nRaw materials and parts$401,822 $404,119 \n\nWork-in-process104,347 93,334 \n\nFinished goods222,219 195,136 \n\nInventories, net$728,388 $692,589 \n\n(c)Goodwill and Other Intangibles\n\nGoodwill\n\nChanges in the carrying amount of goodwill for the three months ended April 4, 2026 are as follows (in thousands):\n\nCommercial FoodserviceFood ProcessingTotal\n\nBalance as of January 3, 2026$1,297,332 $502,317 $1,799,649 \n\nExchange effect and other(1,996)(3,616)(5,612)\n\nBalance as of April 4, 2026$1,295,336 $498,701 $1,794,037 \n\nThe annual impairment assessment for goodwill and indefinite-lived intangible assets is performed as of the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The company does not believe there have been any interim indicators of impairment requiring analysis other than at the annual assessment date. This is supported by the review of order rates, backlog levels and financial performance across business segments.\n\nOther Intangibles\n\nIntangible assets consist of the following (in thousands):\n\n April 4, 2026January 3, 2026\n\nGross Carrying AmountAccumulated AmortizationGross Carrying AmountAccumulated Amortization\n\nAmortized intangible assets:    \n\nCustomer relationships$688,777 $(517,127)$690,513 $(507,129)\n\nBacklog— — 3,463 (3,068)\n\nDeveloped technology91,132 (55,527)91,319 (54,027)\n\nTotal amortized intangible assets$779,909 $(572,654)$785,295 $(564,224)\n\nIndefinite-lived assets:    \n\nTrademarks and trade names$837,743  $840,121  \n\n6\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nThe aggregate intangible amortization expense was $13.3 million and $14.2 million for the three month period ended April 4, 2026 and March 29, 2025, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands):\n\nRemainder of 2026$36,567 \n\n202741,078 \n\n202834,838 \n\n202929,851 \n\n203025,715 \n\nThereafter39,206 \n\n$207,255 \n\n(d)Accrued Expenses\n\nAccrued expenses consist of the following (in thousands):\n\n Apr 4, 2026Jan 3, 2026\n\nContract liabilities$177,712 $168,381 \n\nAccrued payroll and related expenses127,557 110,621 \n\nAccrued warranty78,593 79,512 \n\nAccrued customer rebates35,213 56,585 \n\nAccrued short-term leases21,135 19,522 \n\nAccrued sales and other tax17,662 18,702 \n\nAccrued agent commission17,096 17,686 \n\nAccrued contingent consideration15,221 26,764 \n\nAccrued professional fees12,836 18,112 \n\nAccrued product liability and workers compensation10,108 9,700 \n\nOther accrued expenses57,918 49,225 \n\nAccrued expenses$571,051 $574,810 \n\n(e)Litigation Matters\n\nFrom time to time, the company is subject to proceedings, lawsuits and other claims related to products, suppliers, employees, customers and competitors. The company maintains insurance to partially cover product liability, workers compensation, property and casualty, and general liability matters. The company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after assessment of each matter and the related insurance coverage. The required accrual may change in the future due to new developments or changes in approach, such as a change in settlement strategy in dealing with these matters. The company does not believe that any such matter will have a material adverse effect on its financial condition, results of operations or cash flows.\n\n7\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\n(f)Other Comprehensive (Loss)/Income\n\nChanges in accumulated other comprehensive loss(1) were as follows (in thousands):\n\n Currency Translation AdjustmentPension Benefit CostsUnrealized Gain/(Loss) Interest Rate SwapTotal\n\nBalance as of January 3, 2026$(69,612)$(80,363)$8,111 $(141,864)\n\nOther comprehensive (loss)/income before reclassification(12,349)1,309 2,064 (8,976)\n\nAmounts reclassified from accumulated other comprehensive loss23,647 3,382 (2,754)24,275 \n\nNet current-period other comprehensive income/(loss)11,298 4,691 (690)15,299 \n\nBalance as of April 4, 2026$(58,314)$(75,672)$7,421 $(126,565)\n\nBalance as of December 28, 2024$(213,255)$(78,534)$22,399 $(269,390)\n\nOther comprehensive income/(loss) before reclassification46,829 (2,464)(788)43,577 \n\nAmounts reclassified from accumulated other comprehensive loss— 512 (4,661)(4,149)\n\nNet current-period other comprehensive income/(loss)46,829 (1,952)(5,449)39,428 \n\nBalance as of March 29, 2025$(166,426)$(80,486)$16,950 $(229,962)\n\n(1)As of April 4, 2026, pension and unrealized loss on interest rate swap amounts, net of tax, were $15.9 million and $3.3 million, respectively. During the three months ended April 4, 2026, the adjustments to pension and unrealized loss on interest rate swap amounts, net of tax, were $(0.1) million and $(0.2) million, respectively. As of March 29, 2025, pension and unrealized gain on interest rate swap amounts, net of tax, were $14.1 million and $6.3 million, respectively. During the three months ended March 29, 2025, the adjustments to pension and unrealized gain on interest rate swap amounts, net of tax, were $0.3 million and $(1.7) million, respectively.\n\nComponents of other comprehensive (loss)/income were as follows (in thousands):\n\n Three Months Ended\n\n Apr 4, 2026Mar 29, 2025\n\nNet (loss)/earnings$(50,073)$92,352 \n\nCurrency translation adjustment(12,349)46,829 \n\nPension liability adjustment, net of tax1,821 (1,952)\n\nUnrealized loss on interest rate swaps, net of tax(690)(5,449)\n\nReclassification due to sale of Residential Kitchen Equipment Group26,517 — \n\nComprehensive (loss)/income$(34,774)$131,780 \n\n(g)Fair Value Measures\n\nAccounting Standards Codification (\"ASC\") 820 Fair Value Measurements and Disclosures defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into the following levels:\n\nLevel 1 – Quoted prices in active markets for identical assets or liabilities.\n\nLevel 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.\n\nLevel 3 – Unobservable inputs based the company's own assumptions.\n\n8\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nThe company’s financial assets and liabilities that are measured at fair value and are categorized using the fair value hierarchy are as follows (in thousands):\n\nLevel 1Level 2Level 3Total\n\nAs of April 4, 2026\n\nFinancial Assets:\n\nNote receivable$— $— $84,186 $84,186 \n\nInterest rate swaps— 10,322 — 10,322 \n\nFinancial Liabilities:\n\nContingent consideration— — 21,015 21,015 \n\nForeign exchange derivative contracts— 220 — 220 \n\nAs of January 3, 2026\n\nFinancial Assets:\n\nInterest rate swaps$— $11,230 $— $11,230 \n\nFinancial Liabilities:\n\nContingent consideration— — 32,950 32,950 \n\nForeign exchange derivative contracts— 804 — 804 \n\nThe note receivable was received in conjunction with the Residential Transaction. Changes in fair value associated with the note receivable are recognized in Other (income)/expense, net in the Condensed Consolidated Statements of Comprehensive Income. See Note 4 to these Notes to the Condensed Consolidated Financial Statements for further information regarding the note receivable.\n\nThe following table represents changes in the fair value of the note receivable (in thousands):\n\nBalance as of January 3, 2026$— \n\nReceipt of note receivable at fair value82,380 \n\nChanges in fair value1,806 \n\nBalance as of April 4, 2026$84,186 \n\nThe contingent consideration as of April 4, 2026 and January 3, 2026 relates to earnout provisions recorded in conjunction with various purchase agreements.\n\nEarnout provisions are classified within Level 3 in the fair value hierarchy, as the methodology used to estimate fair value includes significant unobservable inputs reflecting management’s own assumptions. The earnout provisions associated with these acquisitions are based upon performance measurements related to sales and EBITDA, as defined in the respective purchase agreements. On a quarterly basis, the company assesses the projected results for each of the acquisitions in comparison to the earnout targets and adjusts the liability accordingly. Discount rates for valuing contingent consideration are determined based on the company rates and specific acquisition risk considerations. Changes in fair value associated with the earnout provisions are recognized in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income. The earnout liabilities are included in Accrued expenses and Other non-current liabilities in the Condensed Consolidated Balance Sheets.\n\nThe following table represents changes in the fair value of the contingent consideration liabilities (in thousands):\n\nBalance as of January 3, 2026$32,950 \n\nPayments of contingent consideration(12,252)\n\nChanges in fair value317 \n\nBalance as of April 4, 2026$21,015 \n\n(h)Warranty Costs\n\nIn the normal course of business, the company issues product warranties for specific product lines and provides for the estimated future warranty cost in the period in which the sale is recorded. The estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, claim costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.\n\n9\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nA rollforward of the warranty reserve is as follows (in thousands):\n\nBalance as of January 3, 2026$79,512 \n\nWarranty expense18,749 \n\nWarranty claims(19,668)\n\nBalance as of April 4, 2026$78,593 \n\n(i)Income Taxes\n\nA tax provision of $27.6 million, at an effective rate of 24.5%, was recorded during the three month period ended April 4, 2026, as compared to a tax provision of $26.2 million at an effective rate of 23.5% in the prior year period. During the three month period ended April 4, 2026, the effective tax rate was higher than prior period due to an increase in non-deductible costs. The effective tax rate for the three month period ended April 4, 2026 was higher than the U.S. statutory tax rate of 21.0% primarily due to non-deductible expenses, state taxes and foreign rate differentials.\n\n(j)Non-Cash Share-Based Compensation\n\nThe company estimates the fair value of market-based stock awards and stock options at the time of grant and recognizes compensation cost over the vesting period of the awards and options. Non-cash share-based compensation expense was $10.1 million and $2.3 million for the three month period ended April 4, 2026 and March 29, 2025, respectively.\n\n(k)Earnings Per Share\n\nBasic earnings per share is calculated based upon the weighted average number of common shares actually outstanding, and diluted earnings per share is calculated based upon the weighted average number of common shares outstanding and other dilutive securities.\n\nThe company’s potentially dilutive securities consist of shares issuable upon vesting of restricted stock grants, computed using the treasury method, and amounted to 11,000 for the three months ended April 4, 2026. There were no potentially dilutive securities for the three months ended March 29, 2025.\n\nFor the three months ended March 29, 2025, the average market price of the company's common stock exceeded the exercise price of the Convertible Notes (as defined below) resulting in 1,027,000 diluted common stock equivalents to be included in the diluted net earnings per share.\n\n(l)Common, Preferred and Treasury Stock\n\nShares Authorized\n\nAt April 4, 2026 and January 3, 2026, the company had 95,000,000 authorized shares of common stock and 2,000,000 authorized shares of non-voting preferred stock.\n\nTreasury Stock\n\nIn November 2017, the company's Board of Directors approved a stock repurchase program authorizing the company to repurchase in the aggregate up to 2,500,000 shares of its outstanding common stock. In May 2022, July 2024 and May 2025, the company's Board of Directors approved the repurchase of an additional 2,500,000, 2,500,000 and 7,500,000 shares of its outstanding common stock under the current program, respectively.\n\nDuring three months ended April 4, 2026 and March 29, 2025, the company repurchased 2,385,405 and 192,048 shares of its common stock under the program for $365.9 million and $29.2 million, respectively. As of April 4, 2026, 10,530,345 shares had been purchased under the stock repurchase program and 4,469,655 shares remained authorized for repurchase.\n\nThe company also treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. During the three months ended April 4, 2026 and March 29, 2025, the company repurchased 56,233 and 81,548 shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $8.9 million and $13.6 million, respectively.\n\n(m)Condensed Consolidated Statements of Cash Flows\n\nCash paid for interest was $25.2 million and $24.7 million for the three months ended April 4, 2026 and March 29, 2025, respectively. Cash payments totaling $8.4 million and $6.1 million were made for income taxes for the three months ended April 4, 2026 and March 29, 2025, respectively.\n\n10\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\n(n)New Accounting Pronouncements\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the footnotes to the financial statements for both annual and interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The company is currently evaluating the impact of the adoption of this standard.\n\n(2)ACQUISITIONS AND PURCHASE ACCOUNTING\n\nThe company accounts for all business combinations using the acquisition method to record a new cost basis for the assets acquired and liabilities assumed. The difference between the purchase price and the fair value of the assets acquired and liabilities assumed has been recorded as goodwill in the financial statements. The company recognizes identifiable intangible assets, primarily trade names and customer relationships, at their fair value using a discounted cash flow model. The significant assumptions used to estimate the value of the intangible assets include revenue growth rates, projected profit margins, discount rates, royalty rates, and customer attrition rates. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The results of operations are reflected in the Condensed Consolidated Financial Statements of the company from the dates of acquisition.\n\n2025 Acquisitions\n\nDuring 2025, the company completed various acquisitions that were not individually material. The following estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date for the 2025 acquisitions and are summarized as follows (in thousands):\n\nPreliminary Opening Balance SheetPreliminary Measurement Period AdjustmentsAdjusted Opening Balance Sheet\n\nCash$7,434 $— $7,434 \n\nCurrent assets41,749 (153)41,596 \n\nProperty, plant and equipment6,073 — 6,073 \n\nGoodwill13,419 (107)13,312 \n\nOther intangibles10,263 — 10,263 \n\nOther assets44 5,456 5,500 \n\nCurrent portion of long-term debt(875)— (875)\n\nCurrent liabilities(36,513)(196)(36,709)\n\nLong-term debt(696)— (696)\n\nLong-term deferred tax liability(2,304)(13)(2,317)\n\nOther non-current liabilities(5,077)(4,987)(10,064)\n\nConsideration paid at closing$33,517 $— $33,517 \n\nContingent consideration4,698 — 4,698 \n\nNet assets acquired and liabilities assumed$38,215 $— $38,215 \n\nThe net long-term deferred tax liability amounted to $2.3 million. The net long-term deferred tax liability is comprised of $1.3 million related to the difference between the book and tax basis of identifiable intangible assets and $1.0 million related to the difference between the book and tax basis of identifiable tangible asset and liability accounts.\n\nThe goodwill and $4.6 million of other intangibles associated with the trade names are subject to the non-amortization provisions of ASC 350. Other intangibles also include $2.6 million allocated to customer relationships, $1.1 million allocated to developed technology, and $2.0 million allocated to backlog, which are being amortized over periods of 7 years, 7 years, and 6 months, respectively. Goodwill of $13.3 million and other intangibles of $10.3 million are allocated to the Food Processing Equipment Group for segment reporting purposes. Of these assets, goodwill of $7.6 million and intangibles of $5.5 million are expected to be deductible for tax purposes.\n\nTwo purchase agreements include earnout provisions providing for a contingent payment due to the sellers for the achievement of certain targets. Two earnouts are payable to the extent certain EBITDA targets are met with measurement dates ending in\n\n11\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\n2028. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amounts to $4.7 million.\n\nThe company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the company is waiting for additional information necessary to finalize those fair values for the acquisitions completed during 2025. Certain intangible assets are preliminarily valued using historical information from the Food Processing Equipment Group and qualitative assessment of the businesses at acquisition date. Specifically, the company estimated the fair values of the intangible assets based on the percentage of purchase price assigned to similar intangible assets in previous acquisitions within the Food Processing Group. Thus, the provisional measurements of fair values set forth above are subject to change. The company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.\n\n2026 Acquisitions\n\nThere were no acquisitions completed during the three month period ended April 4, 2026.\n\nPro Forma Financial Information\n\nIn accordance with ASC 805 Business Combinations, the following unaudited pro forma results of operations for the three months ended April 4, 2026 and March 29, 2025, assumes the 2025 acquisitions described above were completed on December 29, 2024 (first day of fiscal year 2025). The following pro forma results include adjustments to reflect amortization of intangibles associated with the acquisitions and the effects of adjustments made to the carrying value of certain assets (in thousands, except per share data):\n\nThree Months Ended\n\nApr 4, 2026Mar 29, 2025\n\nNet sales$839,908 $739,101 \n\nNet earnings from continuing operations86,141 82,112 \n\nNet earnings per share:  \n\nBasic from continuing operations$1.82 $1.53 \n\nDiluted from continuing operations1.82 1.50 \n\nPro forma data may not be indicative of the results that would have been obtained had these acquisitions occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Additionally, the pro forma financial information does not reflect the costs which the company has incurred or may incur to integrate the acquired businesses.\n\n(3)REVENUE RECOGNITION\n\nDisaggregation of Revenue\n\nThe company disaggregates its net sales by reportable operating segment and geographical location as the company believes it best depicts how the nature, timing and uncertainty of its net sales and cash flows are affected by economic factors. In general, the Commercial Foodservice Equipment Group recognizes revenue at the point in time control transfers to their customers based on contractual shipping terms. Revenue from equipment sold under our long-term contracts within the Food Processing Equipment group is recognized over time as the equipment is manufactured and assembled.\n\n12\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nThe following table summarizes the company's net sales by reportable operating segment and geographical location (in thousands):\n\n Commercial FoodserviceFood ProcessingTotal\n\nThree Months Ended April 4, 2026   \n\nUnited States and Canada$448,280 $115,042 $563,322 \n\nAsia46,727 10,870 57,597 \n\nEurope and Middle East97,616 71,868 169,484 \n\nLatin America22,913 26,592 49,505 \n\nTotal$615,536 $224,372 $839,908 \n\nThree Months Ended March 29, 2025\n\nUnited States and Canada$413,860 $93,163 $507,023 \n\nAsia48,715 3,704 52,419 \n\nEurope and Middle East82,051 54,688 136,739 \n\nLatin America18,091 16,351 34,442 \n\nTotal$562,717 $167,906 $730,623 \n\nContract Balances\n\nContract assets primarily relate to the company's right to consideration for work completed but not billed at the reporting date and are recorded in prepaid expenses and other in the Condensed Consolidated Balance Sheet. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Accounts receivable are not considered contract assets under the revenue standard as contract assets are conditioned upon the company's future satisfaction of a performance obligation. Accounts receivable, in contracts, are unconditional rights to consideration.\n\nContract liabilities relate to advance consideration received from customers for which revenue has not been recognized. Current contract liabilities are recorded in accrued expenses in the Condensed Consolidated Balance Sheet. Non-current contract liabilities are recorded in other non-current liabilities in the Condensed Consolidated Balance Sheet. Contract liabilities are reduced when the associated revenue from the contract is recognized.\n\nThe following table provides information about contract assets and contract liabilities from contracts with customers (in thousands):\n\n Apr 4, 2026Jan 3, 2026\n\nContract assets$40,565 $57,039 \n\nContract liabilities177,712 168,381 \n\nNon-current contract liabilities21,068 20,987 \n\nDuring the three month period ended April 4, 2026, the company reclassified $17.7 million to receivables, which was included in the contract asset balance at the beginning of the period. During the three month period ended April 4, 2026, the company recognized revenue of $46.5 million, which was included in the contract liability balance at the beginning of the period. Additions to contract liabilities representing amounts billed to clients in excess of revenue recognized to date were $62.3 million during the three month period ended April 4, 2026.\n\nSubstantially all of the company's outstanding performance obligations will be satisfied within 12 to 36 months. There were no contract asset impairments during the three month period ended April 4, 2026.\n\n(4)EQUITY METHOD INVESTMENT AND NOTE RECEIVABLE\n\nAs a result of the completion of the Residential Transaction on February 2, 2026, the company deconsolidated the Residential Kitchen Equipment Group and recognized a loss on disposal within discontinued operations. See Note 9 to these Notes to the Condensed Consolidated Financial Statements for further information on the company's discontinued operations. Following the closing, the company retained a 49% non-controlling equity interest in Composition Brands, which now holds the Residential Kitchen Equipment business. The company accounts for its investment in Composition Brands under the equity method of accounting in accordance with ASC 323 Investments—Equity Method and Joint Ventures.\n\nThe initial fair value of the company’s equity method investment of $150.8 million, as of February 2, 2026, was determined using an option pricing model under the income approach. Key inputs included the discount rate, expected volatility and time to\n\n13\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nliquidity. This one-time, non-recurring valuation is classified as Level 3 due to the use of significant unobservable inputs. In addition to the initial fair value, the company capitalized $4.4 million of eligible costs into the initial carrying value of the investment.\n\nThe company has elected to report its share of Composition Brands' results of operations on a one-quarter lag, consistent with the timing of financial information available from Composition Brands. Due to the reporting lag, the company has not recorded any share of Composition Brands' results during the quarter ended April 4, 2026.\n\nDue to the presence of certain liquidation preferences and other investor rights in the limited partnership agreement, the company will utilize the Hypothetical Liquidation at Book Value (“HLBV”) method to determine its share of Composition Brands' earnings or losses. Under the HLBV method, the company will calculate its share of Composition Brands' earnings or losses for each reporting period based on the change in the amount the company would receive if Composition Brands were liquidated at book value at the beginning and end of the period, taking into account the capital structure of Composition Brands, including any liquidation and distribution preferences.\n\nThe HLBV method is considered the most appropriate means of reflecting the economic substance of the company’s investment in Composition Brands, given the existence of contractual terms that affect the allocation of profits and losses among investors.\n\nIn connection with the Residential Transaction, the company entered into various commercial arrangements, pursuant to which the company will provide certain engineering, manufacturing, distribution, and sales channel support to Composition Brands on a transitional basis for initial periods of up to three years from the closing date of the Residential Transaction, with certain commercial arrangements automatically renewing for one-year terms until terminated. The company will also provide certain post-closing information technology, finance, tax, human resources, treasury, legal and supply chain services on a transitional basis for periods, generally up to 12 months from the closing date of the Residential Transaction (although certain services may be provided for up to 18 months from the closing date of the transaction if Composition Brands exercises its extension option), under the terms of a transition services agreement. Income and expenses related to these agreements are recognized in accordance with the underlying contractual terms and were not considered material to the company’s Condensed Consolidated Financial Statements for the quarter ended April 4, 2026.\n\nNo distributions or dividends were received from Composition Brands during the quarter ended April 4, 2026.\n\nThe company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. As of April 4, 2026, no indicators of impairment were identified.\n\nNote Receivable\n\nIn connection with the Residential Transaction, the company received an unsecured promissory note from Composition Brands in the principal amount of $135.0 million. The note matures on August 2, 2033 and is comprised of two tranches:\n\n•$125.0 million is non-interest bearing, and\n\n•$10.0 million bears interest at a rate of 12% per annum.\n\nThe note contains provisions that require partial or full repayment upon the occurrence of certain specified events, including the sale of specified assets, achievement of certain EBITDA targets, change of control of Composition Brands, or the occurrence of other events and conditions as defined in the transaction agreements. The company monitors these contingencies on an ongoing basis.\n\nThe company has elected to account for the note receivable at fair value under the fair value option in accordance with ASC 825 Financial Instruments.\n\nThe note is presented as Note receivable in the Condensed Consolidated Balance Sheets and is measured at fair value at each reporting date, with changes in fair value recognized in Other (income)/expense, net in the Condensed Consolidated Statements of Comprehensive Income.\n\nAs of April 4, 2026, the fair value of the note receivable was $84.2 million. For the three month period ended April 4, 2026, the change in fair value recognized in earnings was a gain of $1.8 million.\n\nThe company estimates the fair value of the note receivable using the income approach. The note receivable is classified as a Level 3 instrument in the fair value hierarchy due to the use of significant unobservable inputs, including the timing and amount of future cash flows due to the contingent repayment provisions discussed above and the discount rate.\n\n14\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\n(5)FINANCING ARRANGEMENTS\n\nThe following table provides information about the company's financing arrangements (in thousands):\n\nApr 4, 2026Jan 3, 2026\n\nSenior secured revolving credit line$411,000 $698,500 \n\nTerm loan facility799,082 805,097 \n\nDelayed draw term loan facility633,103 637,135 \n\nForeign loans30,835 32,270 \n\nTotal debt1,874,020 2,173,002 \n\nLess: Current maturities of long-term debt44,154 44,420 \n\nLong-term debt$1,829,866 $2,128,582 \n\nCredit Facility\n\nAs of April 4, 2026, the company had $1.8 billion of borrowings outstanding under its credit facility (the \"Credit Facility\"), including $801.0 million outstanding under the term loan ($799.1 million, net of unamortized issuance fees) and $633.1 million outstanding under the delayed draw term loan. The company also had $4.2 million in outstanding letters of credit as of April 4, 2026, which reduces the borrowing availability under the Credit Facility. Remaining borrowing capacity under this facility was $2.0 billion at April 4, 2026.\n\nAt April 4, 2026, borrowings under the Credit Facility accrued interest at a rate of 1.375% above the daily simple or term Secured Overnight Financing Rate (“SOFR”) per annum or 0.375% above the highest of the prime rate, the federal funds rate plus 0.50% and one month Term SOFR plus 1.00%. The interest rates on borrowings under the Credit Facility may be adjusted quarterly based on the company’s Funded Debt less Unrestricted Cash to Pro Forma EBITDA (the “Leverage Ratio”) on a rolling four-quarter basis. Additionally, a commitment fee based upon the Leverage Ratio is charged on the unused portion of the commitments under the Credit Facility. As of April 4, 2026, borrowings under the Credit Facility accrued interest at a minimum of 1.375% above SOFR (with an additional spread adjustment of 0.10%) and the variable unused commitment fee will be at a minimum of 0.20%. The average interest rate per annum, inclusive of hedging instruments, on the debt under the Credit Facility was equal to 4.73% at the end of the period and the variable commitment fee was equal to 0.20% per annum as of April 4, 2026.\n\nThe term loan and delayed draw term loan facilities had an average interest rate per annum, inclusive of hedging instruments, of 4.62% as of April 4, 2026.\n\nOn 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. In addition, the company has other international credit facilities to fund working capital needs outside the United States. At April 4, 2026, these foreign credit facilities amounted to $30.8 million with a weighted average per annum interest rate of approximately 2.73%.\n\nThe company’s debt is reflected on the balance sheet at cost. The fair values of the Credit Facility, term debt and foreign and other debt is based on the amount of future cash flows associated with each instrument discounted using the company's incremental borrowing rate. The company believes its interest rate margins, based on the company’s Leverage Ratio, on its existing debt are consistent with current market conditions and therefore the carrying value of debt reflects the fair value. The carrying value and estimated aggregate fair value, a level 2 measurement, based primarily on market prices, of debt is as follows (in thousands):\n\nApr 4, 2026Jan 3, 2026\n\nCarrying ValueFair ValueCarrying ValueFair Value\n\nTotal debt$1,874,020 $1,875,974 $2,173,002 $2,175,192 \n\nThe company uses floating-to-fixed interest rate swap agreements to hedge variable interest rate risk associated with the Credit Facility. At April 4, 2026, the company had outstanding floating-to-fixed interest rate swaps totaling $155.0 million notional amount carrying an average interest rate of 1.05% maturing in less than 12 months and $160.0 million notional amount carrying an average interest rate of 1.50% that mature in more than 12 months but less than 23 months.\n\nAt April 4, 2026, the company was in compliance with all covenants pursuant to its borrowing agreements.\n\n15\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nConvertible Notes\n\nOn August 21, 2020, the company issued $747.5 million aggregate principal amount of 1.00% Convertible Senior Notes due September 1, 2025 in a private offering pursuant to an indenture (the \"Indenture\"), dated August 21, 2020, between the company and U.S. Bank National Association, as trustee. The Convertible Notes were convertible based upon an initial conversion rate of 7.7746 shares of the company's common stock per $1,000 principal amount of the Convertible Notes, which was equivalent to an initial conversion price of approximately $128.62 per share of the company's common stock, subject to adjustment upon occurrence of certain specified events in accordance with the Indenture.\n\nDuring the three month period ended March 29, 2025, the company recognized interest expense of $2.8 million related to the Convertible Notes, including $1.9 million of contractual interest and $0.9 million of interest cost related to amortization of issuance costs.\n\nAll of the Convertible Notes were converted in the third quarter of 2025 ahead of maturity on September 1, 2025.\n\n(6)FINANCIAL INSTRUMENTS\n\nForeign Exchange\n\nThe company periodically enters into derivative instruments, principally forward contracts, to reduce exposures pertaining to fluctuations in foreign exchange rates. The notional amount of foreign currency contracts outstanding was $92.7 million and $120.9 million as of April 4, 2026 and January 3, 2026, respectively. The fair value of these forward contracts was a loss of $0.2 million at the end of the first quarter of 2026.\n\nInterest Rate\n\nThe company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. As of April 4, 2026, the fair value of these instruments was an asset of $10.3 million. The change in fair value of these swap agreements in the first three months of 2026 was a loss of $0.7 million, net of taxes.\n\nThe following summarizes the fair value of interest rate swaps (in thousands):\n\nCondensed Consolidated Balance Sheets LocationApr 4, 2026Jan 3, 2026\n\nPrepaid expense and other$2,439 $1,516 \n\nOther assets7,883 9,714 \n\nThe following summarizes the impact on earnings from interest rate swaps (in thousands):\n\n  Three Months Ended\n\n LocationApr 4, 2026Mar 29, 2025\n\nAmount of gain/(loss) recognized in other comprehensive incomeOther comprehensive (loss)/income$1,846 $(2,489)\n\nGain reclassified from accumulated other comprehensive income (effective portion)Interest expense and deferred financing amortization, net2,754 4,661 \n\nInterest rate swaps are subject to default risk to the extent the counterparty is unable to satisfy its settlement obligations under the interest rate swap agreements. The company reviews the credit profile of the financial institutions that are counterparties to such swap agreements and assesses their creditworthiness prior to entering into the interest rate swap agreements and throughout the term. The interest rate swap agreements typically contain provisions that allow the counterparty to require early settlement in the event that the company becomes insolvent or is unable to maintain compliance with its covenants under its existing debt agreement.\n\n(7)SEGMENT INFORMATION\n\nAn operating segment is defined as a component of an enterprise which has discrete financial information that is evaluated regularly. The company determined that its Chief Executive Officer is the Chief Operating Decision Maker (the \"CODM\") who possesses the ultimate authority with respect to assessment of performance, allocation of resources, and all strategic actions of the company. In performing this responsibility, the CODM regularly reviews key internal management reports, financial information including forecasts, and quarterly results, which are prepared at the operating segment level.\n\n16\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nIn accordance with ASC 280-10, Segment Reporting, the company operates in two reportable operating segments defined by management reporting structure and operating activities. The company’s reportable segments are:\n\n(i)Commercial Foodservice Equipment Group: Manufactures, sells, and distributes foodservice equipment for the restaurant and institutional kitchen industry\n\n(ii)Food Processing Equipment Group: Manufactures preparation, cooking, packaging food handling and food safety equipment for the food processing industry\n\nAdjusted EBITDA is the profitability metric reported to the CODM for purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The company defines Adjusted EBITDA as operating income less depreciation, intangible amortization, restructuring, acquisition related adjustments, impairments, stock compensation and other non-recurring items which management considers to be outside core operating results. The CODM reviews this metric regularly to compare the profitability of segments, identify trends, and evaluate which segments require additional resources or strategic adjustments. The CODM uses Adjusted EBITDA to support the allocation of resources predominantly in the annual budget and forecasting process. The company believes that investors find this measure useful in comparing our operating performance to that of other companies in our industry because this measure generally illustrates the underlying performance of the business.\n\nManagement believes that inter-segment sales are made at established arm's length transfer prices. All inter-segment transactions are eliminated and values are presented net of eliminations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.\n\nThe following table summarizes the results of operations for the company's business segments(1) (in thousands):\n\n Commercial FoodserviceFood Processing\nCorporate and Other(2)\nTotal\n\nThree Months Ended April 4, 2026\n\nNet sales$615,536 $224,372 $— $839,908 \n\nCost of sales369,164 146,964 590 516,718 \n\nOther segment items(3)\n87,972 35,985 18,610 142,567 \n\nSegment adjusted EBITDA(4)\n158,400 41,423 (19,200)180,623 \n\nDepreciation expense(5)\n7,244 3,705 551 11,500 \n\nAmortization expense(6)\n10,623 2,721 625 13,969 \n\nNet capital expenditures4,214 3,329 396 7,939 \n\nThree Months Ended March 29, 2025 \n\nNet sales$562,717 $167,906 $— $730,623 \n\nCost of sales330,445 106,953 647 438,045 \n\nOther segment items(3)\n80,842 30,889 19,362 131,093 \n\nSegment adjusted EBITDA(4)\n151,430 30,064 (20,009)161,485 \n\nDepreciation expense(5)\n6,630 2,891 825 10,346 \n\nAmortization expense(6)\n11,294 2,914 1,797 16,005 \n\nNet capital expenditures6,739 19,291 450 26,480 \n\n(1)Non-operating expenses are not allocated to the reportable segments. Non-operating expenses consist of interest expense and deferred financing amortization, foreign exchange gains and losses and other income and expense items outside of income from operations.\n\n(2)Includes corporate and other general company operations.\n\n(3)Other segment items for each reportable segment includes operating expenses, which primarily consist of selling, general and administrative expenses. Other segment items excludes the impact of depreciation, intangible amortization, restructuring, stock compensation and other items that neither relate to the ordinary course of the company’s business nor reflect the company’s underlying business performance.\n\n(4)Excludes the impacts mentioned in Other segment items.\n\n(5)Includes depreciation on right of use assets.\n\n(6)Includes amortization of deferred financing costs and, for the three month period ended March 29, 2025, Convertible Notes issuance costs.\n\n17\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nA reconciliation of Adjusted EBITDA to net earnings from continuing operations is as follows (in thousands):\n\nThree Months Ended\n\n Apr 4, 2026Mar 29, 2025\n\nAdjusted EBITDA$180,623 $161,485 \n\nLess: Other segment operating expenses(1)\n47,269 31,964 \n\nIncome from continuing operations133,354 129,521 \n\nInterest expense and deferred financing amortization, net25,480 18,821 \n\nNet periodic pension benefit (other than service cost & curtailment)(2,429)(1,516)\n\nOther (income)/expense, net(2,621)960 \n\nEarnings from continuing operations before income taxes112,924 111,256 \n\nProvision for income taxes27,640 26,193 \n\nNet earnings from continuing operations$85,284 $85,063 \n\n(1)Consists of the impact of depreciation, intangible amortization, restructuring, stock compensation and other items that neither relate to the ordinary course of the company’s business nor reflect the company’s underlying business performance.\n\nThe following table summarizes total assets by segment (in thousands):\n\nApr 4, 2026Jan 3, 2026\n\nCommercial Foodservice$3,598,918 $3,569,952 \n\nFood Processing1,388,981 1,438,433 \n\nCorporate and Other(1)\n434,088 1,306,781 \n\nTotal$5,421,987 $6,315,166 \n\n(1)Includes corporate and other general company assets and assets held for sale - discontinued operations.\n\nGeographic Information\n\nLong-lived assets, excluding goodwill and other intangibles, is as follows (in thousands):\n\nApr 4, 2026Jan 3, 2026\n\nUnited States and Canada$633,890 $407,979 \n\nAsia35,968 36,994 \n\nEurope and Middle East253,452 254,687 \n\nLatin America11,803 12,022 \n\nTotal International301,223 303,703 \n\nTotal long-lived assets$935,113 $711,682 \n\n(8)EMPLOYEE RETIREMENT PLANS\n\nThe following table summarizes the company's net periodic pension benefit related to the Aga Rangemaster Group Pension Scheme (in thousands):\n\nThree Months Ended\n\nApr 4, 2026Mar 29, 2025\n\nInterest cost$10,800 $11,412 \n\nExpected return on assets(14,039)(13,718)\n\nAmortization of prior service cost683 659 \n\nTotal net periodic pension benefit$(2,556)$(1,647)\n\nThe pension costs for all other plans of the company were not material during the period. All components of pension benefit are included within Net periodic pension benefit in the Condensed Consolidated Statements of Comprehensive Income.\n\n18\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\n(9)DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE\n\nAs discussed in Note 1 to these Notes to the Condensed Consolidated Financial Statements, the Residential Kitchen Equipment Group’s financial results 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 Equipment Group were reclassified and reported as assets and liabilities held for sale - discontinued operations in the Condensed Consolidated Balance Sheets through the date of deconsolidation.\n\nUpon 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.\n\nThe Residential Transaction was completed on February 2, 2026. Following the close of the Residential Transaction, the company owns a 49% non-controlling equity interest in Composition Brands, which now holds the Residential Kitchen Equipment business. The company received cash proceeds of $564.6 million, net of cash disposed and subject to future closing adjustments, 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. See Note 4 to these Notes to the Condensed Consolidated Financial Statements for further information on the retained equity method investment and promissory note receivable.\n\nCertain assets and liabilities included in the determination of consideration received for the Residential Transaction have not yet legally transferred to Composition Brands as of April 4, 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 held for sale – 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 Liabilities held for sale - discontinued operations as of April 4, 2026. The company recognized a loss of $0.6 million to adjust the carrying value of the remaining net assets for this portion of the business to the value of deferred consideration, representing fair value, as of April 4, 2026.\n\nCertain 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.\n\nThe 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 held for sale - discontinued operations. The ongoing net periodic pension benefit, actuarial gains and losses, and other comprehensive (loss)/income 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 7 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.\n\n19\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)\n\nFinancial Information\n\nThe following table summarizes the operating results of the Residential Kitchen Equipment Group as presented in (Loss)/earnings from discontinued operations, net of tax in the Condensed Consolidated Statements of Comprehensive Income (in thousands):\n\nThree Months Ended\n\nApr 4, 2026Mar 29, 2025\n\nNet sales$51,796 $176,004 \n\nCost of sales36,010 122,649 \n\nGross profit15,786 53,355 \n\nSelling, general, and administrative expenses21,076 40,797 \n\nRestructuring expenses240 1,481 \n\n(Loss)/income from discontinued operations(5,530)11,077 \n\nInterest income, net(1)\n(16)(457)\n\nNet periodic pension cost— 19 \n\nOther expense, net768 1,314 \n\nLoss on disposition94,911 — \n\nLoss on classification as held for sale608 — \n\n(Loss)/earnings from discontinued operations before income taxes(101,801)10,201 \n\nProvision for income taxes33,556 2,912 \n\n(Loss)/earnings from discontinued operations, net of tax$(135,357)$7,289 \n\n(1)Represents interest income directly associated with, not allocated to, the Residential Kitchen Equipment Group\n\nThe following table summarizes the carrying amounts of major classes of assets and liabilities held for sale - discontinued operations as presented in the Condensed Consolidated Balance Sheets (in thousands):\n\nApr 4, 2026Jan 3, 2026\n\nASSETS\n\nCash and cash equivalents$723 $22,208 \n\nAccounts receivable, net2,373 109,280 \n\nInventories, net7,745 199,534 \n\nPrepaid expenses and other234 17,951 \n\nProperty, plant and equipment, net194 150,561 \n\nGoodwill— 229,964 \n\nOther intangibles, net— 385,133 \n\nPension benefits assets— 1,150 \n\nOther assets204 49,410 \n\nValuation allowance - loss on classification as held for sale(608)(62,750)\n\nTotal assets held for sale - discontinued operations$10,865 $1,102,441 \n\nLIABILITIES\n\nAccounts payable$581 $53,151 \n\nAccrued expenses7,502 93,247 \n\nLong-term deferred tax liability5 71,649 \n\nOther non-current liabilities111 24,288 \n\nTotal liabilities held for sale - discontinued operations$8,199 $242,335 \n\n20\n\n[Table of Contents](#ia52fc172ca544d0fb7dc09c7e2a05681_7)"}