MIDDLEBY Corp 10-K

Item 8. Financial Statements and Supplementary Data Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 34 Consolidated Balance Sheets 37 Consolidated Statements of Earnings 38 Consolidated Statements of Comprehensive Income 39 Consolidated Statements of Changes in Stockholders’ Equity 40 Consolidated Statements of Cash Flows 41 Notes to Consolidated Financial Statements 42 The following Consolidated Financial Statement schedule is included in response to Item 15: Schedule II - Valuation and Qualifying Accounts and Reserves 75 All other schedules for which provision is made to applicable regulation of the Securities and Exchange Commission are not required under the related instruction or are inapplicable and, therefore, have been omitted. 33 Table of Cont ents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of The Middleby Corporation Opinion on Internal Control over Financial Reporting We have audited The Middleby Corporation’s internal control over financial reporting as of January 3, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework), (the COSO criteria). In our opinion, The Middleby Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 3, 2026, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Frigomeccanica S.p.A. and OKA-Spezialmaschinenfabrik GmbH & Co. KG which are included in the 2025 consolidated financial statements of the Company and constituted 1.4% and 1.2% of total and net assets, respectively, as of January 3, 2026 and 0.7% and 1.0% of net sales and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Frigomeccanica S.p.A. and OKA-Spezialmaschinenfabrik GmbH & Co. KG. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 3, 2026 and December 28, 2024, the related consolidated statements of earnings, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended January 3, 2026, and the related notes and financial statement schedule listed in the Index at Item 8 and our report dated March 4, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Chicago, Illinois March 4, 2026 34 Table of Cont ents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of The Middleby Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The Middleby Corporation (the Company) as of January 3, 2026, and December 28, 2024, the related consolidated statements of earnings, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended January 3, 2026, and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 3, 2026 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 3, 2026, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 3, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 4, 2026, expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 35 Table of Cont ents Goodwill and Indefinite-lived Intangible Impairment Assessment Description of the Matter As discussed in Note 3 and Note 12 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis or more frequently if indicators of potential impairment exist. If the fair value of the reporting units (for goodwill) or indefinite-life intangible (for trademarks and tradenames) is less than its respective carrying value, an impairment loss is recognized in an amount equal to the difference. During the third quarter of 2025, the Company identified an impairment indicator impacting the fair value of the Residential Kitchen Equipment Group in connection with conducting a strategic review of its business portfolio, considering a broad range of strategic options. As a result, the Company performed an interim quantitative goodwill and indefinite-lived intangible impairment test for the Residential Kitchen Equipment Group reporting unit and indefinite-lived intangibles as of September 27, 2025, and recorded impairment charges for goodwill and indefinite-lived intangibles of $572.6 million and $131.8 million, respectively. As of January 3, 2026, the Company’s goodwill and indefinite-lived intangibles balances related to the Residential Kitchen Equipment Group reporting were $230.0 million and $342.0 million, respectively, which are included in Current assets held for sale - discontinued operations. Auditing the Company’s interim quantitative goodwill impairment assessment for the Residential Kitchen reporting unit is complex because the estimation of fair values involves subjective management methods and assumptions. The methods for the goodwill assessment include a market approach and an income approach using a discounted cash flow model. The significant assumptions for the income approach include revenue growth rates, EBITDA margin and discount rate. These significant assumptions used in the Company’s valuation model were forward looking and changes in these assumptions could have had a material effect on the determination of fair values. Auditing the Company’s interim quantitative indefinite-lived intangible impairment assessment for certain Residential Kitchen trademarks and tradenames is complex because the estimation of fair values involves subjective management assumptions. The significant assumptions for the indefinite-lived intangible assessment include revenue growth rates and discount rates. These significant assumptions used in the Company’s valuation model were forward looking and changes in these assumptions could have had a material effect on the determination of fair values. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over its impairment assessment for the Residential Kitchen reporting unit and trademarks and tradenames, including management’s review of the methods and the significant assumptions of revenue growth rates, EBITDA margin, and discount rates. Our audit procedures to test the interim impairment assessment for the Residential Kitchen reporting unit and certain trademarks and tradenames included, among others, assessing the valuation methodologies and the weighting of the income and market approaches, the significant assumptions described above, and the underlying data used to support such assumptions. For example, we compared the significant assumptions of revenue growth rates and EBITDA margin to industry, market and economic trends. Where appropriate, we evaluated whether changes to the Company’s business and other factors would affect the revenue growth rates and EBITDA margin. We also assessed the historical accuracy of management’s assumptions of future expected net cash flows and performed sensitivity analyses of significant assumptions, including the weighting of the market and income approaches, to evaluate the changes in the fair values of the reporting unit or certain trademarks and tradenames that would result from the changes in the significant assumptions described above. We involved our valuation specialists to assist with our evaluation of the methodologies used by management, including the discounted cash flow model and in comparing the values computed from the income approach to that in the market approach and to transactions from guideline public companies, as well as auditing certain significant assumptions, including the discount rates included in the fair value estimates. /s/ Ernst & Young LLP We have served as the Company's auditor since 2012. Chicago, Illinois March 4, 2026 36 Table of Cont ents THE MIDDLEBY CORPORATION CONSOLIDATED BALANCE SHEETS JANUARY 3, 2026 AND DECEMBER 28, 2024 (amounts in thousands, except share data) Jan 3, 2026 Dec 28, 2024 ASSETS Current assets: Cash and cash equivalents $ 222,239 $ 638,766 Accounts receivable, net of allowances for credit losses of $ 25,001 and $ 21,442 573,039 531,758 Inventories, net 692,589 655,944 Prepaid expenses and other 111,176 114,734 Prepaid taxes 41,159 24,014 Current assets held for sale - discontinued operations 1,102,441 364,827 Total current assets 2,742,643 2,330,043 Property, plant and equipment, net of accumulated depreciation of $ 311,226 and $ 268,430 431,622 384,683 Goodwill 1,799,649 1,744,246 Other intangibles, net of amortization of $ 564,224 and $ 501,797 1,061,192 1,099,816 Long-term deferred tax assets 8,209 6,281 Pension benefits assets 106,444 90,391 Other assets 165,407 146,871 Non-current assets held for sale - discontinued operations — 1,480,820 Total assets $ 6,315,166 $ 7,283,151 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 44,420 $ 43,949 Accounts payable 206,666 166,184 Accrued expenses 574,810 493,678 Current liabilities held for sale - discontinued operations 242,335 125,511 Total current liabilities 1,068,231 829,322 Long-term debt 2,128,582 2,351,118 Long-term deferred tax liability 156,723 151,214 Accrued pension benefits 7,629 9,573 Other non-current liabilities 177,772 170,663 Non-current liabilities held for sale - discontinued operations — 132,830 Stockholders' equity: Preferred stock, $ 0.01 par value; none issued — — Common stock, $ 0.01 par value; 64,964,586 and 64,264,828 shares issued 153 148 Paid-in capital 602,765 520,177 Treasury stock, at cost; 16,041,990 and 10,574,619 shares ( 1,735,281 ) ( 940,691 ) Retained earnings 4,050,456 4,328,187 Accumulated other comprehensive loss ( 141,864 ) ( 269,390 ) Total stockholders' equity 2,776,229 3,638,431 Total liabilities and stockholders' equity $ 6,315,166 $ 7,283,151 The accompanying notes are an integral part of these Consolidated Financial Statements. 37 Table of Cont ents THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (amounts in thousands, except per share data) 2025 2024 2023 Net sales $ 3,201,202 $ 3,150,239 $ 3,242,090 Cost of sales 1,949,287 1,898,420 1,958,012 Gross profit 1,251,915 1,251,819 1,284,078 Selling, general, and administrative expenses 663,156 590,115 624,933 Restructuring expenses 3,270 8,245 4,732 Impairments 10,598 10,475 1,986 Gain on sale of plant — ( 1,139 ) — Income from continuing operations 574,891 644,123 652,427 Interest expense and deferred financing amortization, net 93,828 93,356 121,129 Net periodic pension benefit (other than service cost & curtailment) ( 6,294 ) ( 14,872 ) ( 9,040 ) Other expense/(income), net 5,082 ( 458 ) 4,258 Earnings from continuing operations before income taxes 482,275 566,097 536,080 Provision for income taxes 115,008 145,119 123,076 Net earnings from continuing operations 367,267 420,978 413,004 (Loss)/earnings from discontinued operations, net of tax ( 644,998 ) 7,455 ( 12,122 ) Net (loss)/earnings $ ( 277,731 ) $ 428,433 $ 400,882 Net (loss)/earnings per share: Basic from continuing operations $ 7.11 $ 7.83 $ 7.71 Basic from discontinued operations ( 12.49 ) 0.14 ( 0.23 ) Basic (loss)/earnings per share $ ( 5.38 ) $ 7.97 $ 7.48 Diluted from continuing operations $ 7.04 $ 7.77 $ 7.64 Diluted from discontinued operations ( 12.36 ) 0.14 ( 0.22 ) Diluted (loss)/earnings per share $ ( 5.32 ) $ 7.90 $ 7.41 Weighted average number of shares Basic 51,655 53,738 53,577 Dilutive common stock equivalents 524 471 509 Diluted 52,179 54,209 54,086 The accompanying notes are an integral part of these Consolidated Financial Statements. 38 Table of Cont ents THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (amounts in thousands) 2025 2024 2023 Net (loss)/earnings $ ( 277,731 ) $ 428,433 $ 400,882 Other comprehensive income/(loss): Foreign currency translation adjustments 143,643 ( 67,765 ) 59,855 Pension liability adjustment, net of tax ( 1,829 ) 31,179 11,988 Unrealized loss on interest rate swaps, net of tax ( 14,288 ) ( 9,606 ) ( 16,569 ) Other comprehensive income/(loss): 127,526 ( 46,192 ) 55,274 Comprehensive (loss)/income $ ( 150,205 ) $ 382,241 $ 456,156 The accompanying notes are an integral part of these Consolidated Financial Statements. 39 Table of Cont ents THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (amounts in thousands) Common Stock Paid-in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity Balance, December 31, 2022 $ 147 $ 408,376 $ ( 831,176 ) $ 3,498,872 $ ( 278,472 ) $ 2,797,747 Net earnings — — — 400,882 — 400,882 Currency translation adjustments — — — — 59,855 59,855 Change in unrecognized pension benefit costs, net of tax of $ 5,993 — — — — 11,988 11,988 Unrealized loss on interest rate swap, net of tax of $( 5,637 ) — — — — ( 16,569 ) ( 16,569 ) Stock compensation — 51,047 — — — 51,047 Stock issuance 1 19,793 — — — 19,794 Purchase of treasury stock — — ( 74,855 ) — — ( 74,855 ) Balance, December 30, 2023 $ 148 $ 479,216 $ ( 906,031 ) $ 3,899,754 $ ( 223,198 ) $ 3,249,889 Net earnings — — — 428,433 — 428,433 Currency translation adjustments — — — — ( 67,765 ) ( 67,765 ) Change in unrecognized pension benefit costs, net of tax of $ 9,868 — — — — 31,179 31,179 Unrealized loss on interest rate swap, net of tax of $( 3,221 ) — — — — ( 9,606 ) ( 9,606 ) Stock compensation — 36,151 — — — 36,151 Stock issuance — 4,810 — — — 4,810 Purchase of treasury stock — — ( 34,660 ) — — ( 34,660 ) Balance, December 28, 2024 $ 148 $ 520,177 $ ( 940,691 ) $ 4,328,187 $ ( 269,390 ) $ 3,638,431 Net loss — — — ( 277,731 ) — ( 277,731 ) Currency translation adjustments — — — — 143,643 143,643 Change in unrecognized pension benefit costs, net of tax of $ 2,090 — — — — ( 1,829 ) ( 1,829 ) Unrealized loss on interest rate swap, net of tax of $( 4,435 ) — — — — ( 14,288 ) ( 14,288 ) Stock compensation — 14,722 — — — 14,722 Conversion of Convertible Notes 5 2,968 — — — 2,973 Purchase of treasury stock — — ( 729,692 ) — — ( 729,692 ) Exercise of Capped Calls — 64,898 ( 64,898 ) — — — Balance, January 3, 2026 $ 153 $ 602,765 $ ( 1,735,281 ) $ 4,050,456 $ ( 141,864 ) $ 2,776,229 The accompanying notes are an integral part of these Consolidated Financial Statements. 40 Table of Cont ents THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (amounts in thousands) 2025 2024 2023 Cash flows from operating activities: Net (loss)/earnings $ ( 277,731 ) $ 428,433 $ 400,882 (Loss)/earnings from discontinued operations, net of tax ( 644,998 ) 7,455 ( 12,122 ) Earnings from continuing operations, net of tax 367,267 420,978 413,004 Adjustments to reconcile earnings from continuing operations, net of tax to net cash provided by operating activities - continuing operations: Depreciation and amortization 105,305 104,113 109,917 Non-cash share-based compensation 13,462 31,902 45,156 Deferred income taxes 70,144 35,799 442 Net periodic pension benefit (other than service costs) ( 6,294 ) ( 14,872 ) ( 9,040 ) Gain on sale of plant — ( 1,139 ) — Impairments 10,598 10,475 1,986 Other non-cash items ( 125 ) 624 1,528 Changes in assets and liabilities, net of acquisitions: Accounts receivable, net ( 14,468 ) 16,915 ( 12,123 ) Inventories, net 3,066 60,959 76,227 Prepaid expenses and other assets ( 5,610 ) ( 44,248 ) 406 Accounts payable 18,071 ( 14,392 ) ( 43,046 ) Accrued expenses and other liabilities 3,168 7,406 ( 75,815 ) Net cash provided by operating activities - continuing operations 564,584 614,520 508,642 Net cash provided by operating activities - discontinued operations 65,613 72,296 120,148 Net cash provided by operating activities 630,197 686,816 628,790 Cash flows from investing activities: Net additions to property, plant and equipment ( 70,729 ) ( 36,690 ) ( 59,173 ) Proceeds from sale of property, plant and equipment — 2,507 — Purchase of intangible assets ( 1,114 ) ( 80 ) ( 1,700 ) Acquisitions, net of cash acquired ( 31,975 ) ( 111,428 ) ( 37,884 ) Net cash used in investing activities - continuing operations ( 103,818 ) ( 145,691 ) ( 98,757 ) Net cash used in investing activities - discontinued operations ( 23,071 ) ( 12,844 ) ( 56,985 ) Net cash used in investing activities ( 126,889 ) ( 158,535 ) ( 155,742 ) Cash flows from financing activities: Proceeds from Credit Facility 1,106,500 — 640,200 Repayments under Credit Facility ( 607,329 ) ( 32,813 ) ( 948,496 ) Payment of principal upon maturity of Convertible Notes ( 744,527 ) — — Proceeds from foreign loans 23,224 — — Repayments of foreign loans ( 2,143 ) ( 2,193 ) ( 166 ) Payments of deferred purchase price ( 20,073 ) ( 3,878 ) ( 7,701 ) Repurchase of treasury stock ( 723,613 ) ( 34,660 ) ( 74,565 ) Debt issuance costs on Credit Facility ( 3,167 ) — — Other, net 187 ( 224 ) ( 211 ) Net cash used in financing activities ( 970,941 ) ( 73,768 ) ( 390,939 ) Effect of exchange rates on cash and cash equivalents 22,547 ( 12,476 ) 3,386 Changes in cash and cash equivalents and cash and cash equivalents held for sale - discontinued operations: Net (decrease)/increase ( 445,086 ) 442,037 85,495 Balance at beginning of year 689,533 247,496 162,001 Balance at end of year $ 244,447 $ 689,533 $ 247,496 Non-cash investing and financing activities: Stock issuance related to acquisition and purchase of intangible assets — 4,810 19,794 The accompanying notes are an integral part of these Consolidated Financial Statements. 41 Table of Cont ents THE MIDDLEBY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (1) NATURE OF OPERATIONS The Middleby Corporation (the "company") is engaged in the design, manufacture and sale of commercial foodservice and food processing equipment. The company manufactures and assembles this equipment at thirty-eight U.S. and thirty-four international manufacturing facilities. Discontinued Operations On December 4, 2025, the company entered into a partnership interest purchase agreement to sell a 51 % stake in its Residential Kitchen Equipment Group to an affiliate of 26North Partners LP (the “ Residential Transaction”). The Residential Transaction was completed on February 2, 2026. Following the close of the Residential Transaction, the company owns a 49 % non-controlling interest in a new standalone joint venture holding the business. The 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 Consolidated Statements of Earnings and Consolidated Statements of Cash Flows as discontinued operations. 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 Consolidated Balance Sheets. These changes have been applied to all periods presented. Additionally, all of the Notes to Consolidated Financial Statements have been retrospectively restated to only include the company's continuing operations, unless noted otherwise. The Residential Kitchen Equipment Group, historically presented as a reportable segment, is no longer included in segment results. See Note 12 to these Notes to the Consolidated Financial Statements for further information. Proposed Separation Transaction On 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 Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting completion of the separation in the second quarter of 2026, 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 Food Processing 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. Reportable Segments The company reports its financial performance in two business segments representing all of the company's continuing operations: 1) the Commercial Foodservice Equipment Group and 2) the Food Processing Equipment Group. The Commercial Foodservice Equipment Group offers a broad portfolio of foodservice equipment, which enable it to serve virtually any cooking, warming, refrigeration, freezing and beverage application within a commercial kitchen or foodservice operation. This equipment is used across all types of foodservice operations, including quick-service restaurants, full-service restaurants, convenience stores, retail outlets, hotels and other institutions. The Food Processing Equipment Group offers a broad portfolio of processing solutions for customers producing protein products, such as bacon, salami and dry cure, sausage and hot dogs, egg bites, poultry, alternative protein, case ready, lunch meat and pet food, and producers of bakery products, such as bread and buns, artisan bread, sweet goods, cakes and muffins, cookies, crackers, pizza and pastries, tortillas and snacks. Through its broad line of products, the company is able to deliver a wide array of cooking solutions to service a variety of food processing requirements demanded by its customers. The company can offer highly integrated solutions that provide a food processing operation a uniquely integrated solution providing for the highest level of food quality, product consistency, and reduced operating costs resulting from increased product yields, increased capacity and greater throughput and reduced labor costs through automation. 42 Table of Cont ents (2) ACQUISITIONS AND PURCHASE ACCOUNTING The following represents summarized information on the company's acquisitions in 2024 and 2025 that were not individually material. 2024 Acquisitions During 2024, the company completed various acquisitions that were not individually material. The final allocation of consideration paid for the 2024 acquisitions is summarized as follows (in thousands): Preliminary Opening Balance Sheet Measurement Period Adjustments Adjusted Opening Balance Sheet Cash $ 7,868 $ 9 $ 7,877 Current assets 41,836 ( 1,714 ) 40,122 Property, plant and equipment 31,515 ( 504 ) 31,011 Goodwill 61,046 2,017 63,063 Other intangibles 32,248 — 32,248 Long-term deferred tax asset 9 96 105 Other assets 266 1,029 1,295 Current portion of long-term debt ( 290 ) — ( 290 ) Current liabilities ( 42,304 ) 1,545 ( 40,759 ) Long-term debt ( 369 ) — ( 369 ) Long-term deferred tax liability ( 1,132 ) — ( 1,132 ) Other non-current liabilities ( 10,763 ) ( 466 ) ( 11,229 ) Consideration paid at closing $ 119,930 $ 2,012 $ 121,942 Deferred payments — 76 76 Contingent consideration 8,681 — 8,681 Net assets acquired and liabilities assumed $ 128,611 $ 2,088 $ 130,699 The net long-term deferred tax liability amounted to $ 1.1 million. The net long-term deferred tax liability is related to the difference between the book and tax basis of identifiable intangible assets. The goodwill and $ 16.7 million of other intangibles associated with the trade names are subject to the non-amortization provisions of ASC 350. Other intangibles also include $ 12.1 million allocated to customer relationships, $ 1.1 million allocated to developed technology, and $ 2.3 million allocated to backlog, which are being amortized over periods of 5 to 7 years, 7 years, and 3 to 9 months, respectively. Goodwill of $ 49.9 million and other intangibles of $ 24.0 million are allocated to the Food Processing Equipment Group for segment reporting purposes. Goodwill of $ 13.2 million and other intangibles of $ 8.2 million are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. Of these assets, goodwill of $ 53.3 million and intangibles of $ 28.0 million are expected to be deductible for tax purposes. Two 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 sales and EBITDA targets are met with measurement dates ending between 2026 and 2027. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amounts to $ 8.7 million. One purchase agreement includes a deferred payment due to the sellers payable in 2030. The contractual obligation associated with the deferred payment on the acquisition date amounts to $ 0.1 million. 43 Table of Cont ents 2025 Acquisitions During 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): Preliminary Opening Balance Sheet Preliminary Measurement Period Adjustments Adjusted Opening Balance Sheet Cash $ 7,434 $ — $ 7,434 Current assets 41,749 ( 153 ) 41,596 Property, plant and equipment 6,073 — 6,073 Goodwill 13,419 ( 107 ) 13,312 Other intangibles 10,263 — 10,263 Other assets 44 5,456 5,500 Current portion of long-term debt ( 875 ) — ( 875 ) Current liabilities ( 36,513 ) ( 196 ) ( 36,709 ) Long-term debt ( 696 ) — ( 696 ) Long-term deferred tax liability ( 2,304 ) ( 13 ) ( 2,317 ) Other non-current liabilities ( 5,077 ) ( 4,987 ) ( 10,064 ) Consideration paid at closing $ 33,517 $ — $ 33,517 Contingent consideration 4,698 — 4,698 Net assets acquired and liabilities assumed $ 38,215 $ — $ 38,215 The 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. The 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. Two 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 2028. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amounts to $ 4.7 million. The 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. Pro Forma Financial Information In accordance with ASC 805 Business Combinations, the following unaudited pro forma results of operations for fiscal 2025 and 2024 assumes the acquisitions described above were completed on December 31, 2023 (first day of fiscal year 2024). The 44 Table of Cont ents 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): 2025 2024 Net sales $ 3,221,211 $ 3,272,826 Net earnings from continuing operations 370,148 416,073 Net earnings per share: Basic from continuing operations $ 7.17 $ 7.74 Diluted from continuing operations 7.09 7.68 Pro 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. (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The Consolidated Financial Statements include the accounts of the company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The company's Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. Significant items that are subject to such estimates and judgments include allowances for credit losses, reserves for excess and obsolete inventories, long-lived and intangible assets, warranty reserves, insurance reserves, income tax reserves and post-retirement obligations. On an ongoing basis, the company evaluates its estimates and assumptions based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Certain prior year amounts within the company's segment reporting have been reclassified to be consistent with current year presentation, including beginning to report the results of a division within the company's Food Processing segment as a result of a change in internal management and potential synergies in operations to be consistent with the reporting of financial information used to assess performance and allocate resources. These operations were previously reported in the Commercial Foodservice segment and are now managed and reported in the Food Processing segment. Additionally, certain costs 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 10 to these Notes to the Consolidated Financial Statements for further information regarding the company’s business segment results. The company's fiscal year ends on the Saturday nearest December 31. Fiscal years 2025, 2024, and 2023 ended on January 3, 2026, December 28, 2024 and December 30, 2023, respectively, and included 53, 52 and 52 weeks, respectively. (b) Cash and Cash Equivalents The company considers all short-term investments with original maturities of three months or less when acquired to be cash equivalents. The company’s policy is to invest its excess cash in interest-bearing deposits with major banks that are subject to minimal credit and market risk. (c) Accounts Receivable Accounts receivable, as shown in the Consolidated Balance Sheets, were net of allowances for credit losses of $ 25.0 million and $ 21.4 million at January 3, 2026 and December 28, 2024, respectively. The company estimates allowances for expected credit losses using an aging methodology and establishes customer-specific reserves for higher risk trade customers. We consider a combination of specific customer circumstances, credit conditions, market conditions and the history of write-offs and collections in developing the allowances. At January 3, 2026, all accounts receivable were expected to be collected within one year. (d) Inventories Inventories are composed of material, labor and overhead and are stated at the lower of cost or net realizable value. Costs for inventory have been determined primarily using the first-in, first-out ("FIFO") method. The company estimates reserves for 45 Table of Cont ents inventory obsolescence and shrinkage based on its judgment of future realization. Inventories consist of the following (in thousands): Jan 3, 2026 Dec 28, 2024 Raw materials and parts $ 404,119 $ 405,868 Work-in-process 93,334 69,984 Finished goods 195,136 180,092 Inventories, net $ 692,589 $ 655,944 (e) Property, Plant and Equipment Property, plant and equipment are carried at cost as follows (in thousands): Jan 3, 2026 Dec 28, 2024 Land $ 60,365 $ 52,846 Building and improvements 327,906 282,131 Furniture and fixtures 59,646 54,053 Machinery and equipment 294,931 264,083 Total property, plant and equipment 742,848 653,113 Less accumulated depreciation ( 311,226 ) ( 268,430 ) Property, plant and equipment, net $ 431,622 $ 384,683 Property, plant and equipment are depreciated or amortized on a straight-line basis over their useful lives based on management's estimates of the period over which the assets will be utilized to benefit the operations of the company. The useful lives are estimated based on historical experience with similar assets, taking into account anticipated technological or other changes. The company periodically reviews these lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property and equipment or if technological changes were to occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense in future periods. The f ollowing is a summary of the estimated useful lives: Building and improvements 20 to 40 years Furniture and fixtures 3 to 7 years Machinery and equipment 3 to 10 years Depreciation expense amounted to $ 43.7 million, $ 39.8 million and $ 36.8 million in fiscal 2025, 2024 and 2023, respectively. Expenditures which significantly extend useful lives are capitalized. Maintenance and repairs are charged to expense as incurred. Asset impairments are recorded whenever events or changes in circumstances indicate that the recorded value of an asset is greater than the sum of its expected future undiscounted cash flows. Asset impairments are recorded at the amount by which the recorded value of an asset exceeds its fair value. (f) Goodwill and Other Intangibles The company’s business acquisitions result in the recognition of goodwill and other intangible assets, which are a significant portion of the company’s total assets. Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Identifiable intangible assets are recognized separately from goodwill and include trademarks and trade names, technology, customer relationships and other specifically identifiable assets. Trademarks and trade names are deemed to be indefinite-lived. Goodwill and indefinite-lived intangible assets are not amortized but are subject to impairment testing. The company performs the annual impairment assessment for goodwill and indefinite-lived intangible assets as of first day of the fourth quarter of the fiscal year and more frequently if indicators of impairment exist. The goodwill impairment test is performed at the reporting unit level. The company initially performs a qualitative analysis to determine if it is more likely than not that the goodwill balance or indefinite-life intangible asset is impaired. In conducting a qualitative assessment, the company analyzes a variety of events or factors that may influence the fair value of the reporting unit or indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, share price and other relevant factors. 46 Table of Cont ents If an indicator of impairment is determined from the qualitative analysis, then the company will perform a quantitative analysis. The fair value of each reporting unit is compared to its carrying value. If the fair value of the reporting unit is less than its carrying value, the resulting difference will be a charge to impairment of goodwill in the Consolidated Statements of Earnings in the period in which the determination is made. Fair value is determined using an income approach using a discounted cash flow model. The company performed a qualitative assessment as of September 28, 2025 over its two reporting units and the company determined there were no impairment indicators for the period ended January 3, 2026. No impairment was recognized and the company has not previously recognized any goodwill impairments and therefore there are no accumulated goodwill impairment losses. Goodwill is allocated to reporting units as follows (in thousands): Commercial Foodservice Food Processing Total Balance as of December 30, 2023 $ 1,307,136 $ 397,137 $ 1,704,273 Goodwill acquired during the year 14,187 46,745 60,932 Measurement period adjustments to goodwill acquired in prior year 271 57 328 Exchange effect and other ( 9,509 ) ( 11,778 ) ( 21,287 ) Balance as of December 28, 2024 $ 1,312,085 $ 432,161 $ 1,744,246 Goodwill acquired during the year — 13,312 13,312 Measurement period adjustments to goodwill acquired in prior year ( 985 ) 3,116 2,131 Exchange effect and other ( 13,768 ) 53,728 39,960 Balance as of January 3, 2026 $ 1,297,332 $ 502,317 $ 1,799,649 Intangible assets consist of the following (in thousands): January 3, 2026 December 28, 2024 Estimated Weighted Average Remaining Life Gross Carrying Amount Accumulated Amortization Estimated Weighted Average Remaining Life Gross Carrying Amount Accumulated Amortization Amortized intangible assets: Customer relationships 5.4 $ 690,513 $ ( 507,129 ) 6.1 $ 678,717 $ ( 453,954 ) Backlog 0.1 3,463 ( 3,068 ) 0.3 2,192 ( 804 ) Developed Technology 6.8 91,319 ( 54,027 ) 7.5 86,969 ( 47,039 ) $ 785,295 $ ( 564,224 ) $ 767,878 $ ( 501,797 ) Indefinite-lived assets: Trademarks and trade names $ 840,121 $ 833,735 The company completed its annual impairment assessment for indefinite-lived intangible assets as of September 28, 2025 and identified indicators of impairment with certain trademarks and trade names within the Commercial Foodservice Equipment Group and Food Processing Equipment Group segments. The company estimated the fair value of the trademarks and trade names using a relief from royalty method under the income approach. In performing the quantitative analyses on the trademarks and trade names, significant assumptions include revenue growth rates, assumed royalty rates and discount rates, which are considered level 3 inputs in the fair value hierarchy. The company believes the assumptions utilized within the quantitative analysis are reasonable and consistent with assumptions that would be used by other marketplace participants. Based on the results of the quantitative assessments, the company recorded impairment charges of $ 10.6 million associated with several trademarks, of which $ 9.3 million was associated with the Commercial Foodservice Equipment Group and $ 1.3 million with the Food Processing Equipment Group. The diminution in fair value for the trademarks was due to market conditions resulting in lower than expected revenue performance in the current year and forecasted revenues for future periods. The gross value of all trademarks and trade names tested was approximately $ 23.8 million, including the impaired trademarks. 47 Table of Cont ents The estimates of future cash flows used in determining the fair value of indefinite-lived intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The company continues to monitor global and regional economic market conditions, channel inventory levels, and the underlying demand for its products to assess the impact on its business and financial performance. The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions. The company performed a qualitative assessment as of September 28, 2025 for all other trademarks and trade names and determined there were no impairment indicators for the period ended January 3, 2026. Definite-lived intangible assets are amortized over their estimated useful lives and tested for impairment whenever events or changes in circumstances indicate that the recorded value of an asset is greater than the sum of its expected future undiscounted cash flows. The aggregate intangible amortization expense was $ 55.3 million, $ 57.2 million and $ 66.0 million in 2025, 2024 and 2023, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands): 2026 $ 49,931 2027 41,193 2028 34,956 2029 29,941 2030 25,777 Thereafter 39,273 $ 221,071 (g) Accrued Expenses Accrued expenses consist of the following (in thousands): Jan 3, 2026 Dec 28, 2024 Contract liabilities $ 168,381 $ 113,735 Accrued payroll and related expenses 110,621 96,354 Accrued warranty 79,512 77,540 Accrued customer rebates 56,585 44,711 Accrued contingent consideration 26,764 25,748 Accrued short-term leases 19,522 17,829 Accrued sales and other tax 18,702 12,585 Accrued professional fees 18,112 13,774 Accrued agent commission 17,686 16,311 Accrued product liability and workers compensation 9,700 10,340 Other accrued expenses 49,225 64,751 Accrued expenses $ 574,810 $ 493,678 (h) Litigation Matters From 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 of the company. 48 Table of Cont ents (i) Accumulated Other Comprehensive Loss The following table summarizes the components of accumulated other comprehensive loss as reported in the Consolidated Balance Sheets (in thousands): Jan 3, 2026 Dec 28, 2024 Unrecognized pension benefit costs, net of tax of $ 15,956 and $ 13,866 $ ( 80,363 ) $ ( 78,534 ) Unrealized gain on interest rate swap, net of tax of $ 3,543 and $ 7,978 8,111 22,399 Currency translation adjustments ( 69,612 ) ( 213,255 ) Accumulated other comprehensive loss $ ( 141,864 ) $ ( 269,390 ) Changes in accumulated other comprehensive loss (1) were as follows (in thousands): Currency Translation Adjustment Pension Benefit Costs Unrealized Gain/(Loss) Interest Rate Swap Total Balance as of December 30, 2023 $ ( 145,490 ) $ ( 109,713 ) $ 32,005 $ ( 223,198 ) Other comprehensive (loss)/income before reclassification ( 67,765 ) 28,585 17,598 ( 21,582 ) Amounts reclassified from accumulated other comprehensive income — 2,594 ( 27,204 ) ( 24,610 ) Net current-period other comprehensive (loss)/income ( 67,765 ) 31,179 ( 9,606 ) ( 46,192 ) Balance as of December 28, 2024 $ ( 213,255 ) $ ( 78,534 ) $ 22,399 $ ( 269,390 ) Other comprehensive income/(loss) before reclassification 143,643 ( 2,125 ) 2,427 143,945 Amounts reclassified from accumulated other comprehensive income — 296 ( 16,715 ) ( 16,419 ) Net current-period other comprehensive income/(loss) 143,643 ( 1,829 ) ( 14,288 ) 127,526 Balance as of January 3, 2026 $ ( 69,612 ) $ ( 80,363 ) $ 8,111 $ ( 141,864 ) (1) As of January 3, 2026, pension and unrealized gain on interest rate swap amounts, net of tax, were $ 16.0 million and $ 3.5 million, respectively. During fiscal 2025, the adjustments to pension and unrealized gain on interest rate swap amounts, net of tax, were $ 2.1 million and $( 4.4 ) million, respectively. (j) Fair Value Measures 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: Level 1 – Quoted prices in active markets for identical assets or liabilities Level 2 – Inputs, other than quoted prices in active markets, which are observable either directly or indirectly Level 3 – Unobservable inputs based on our own assumptions 49 Table of Cont ents The 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): Level 1 Level 2 Level 3 Total As of January 3, 2026 Financial Assets: Interest rate swaps $ — $ 11,230 $ — $ 11,230 Financial Liabilities: Contingent consideration — — 32,950 32,950 Foreign exchange derivative contracts — 804 — 804 As of December 28, 2024 Financial Assets: Interest rate swaps $ — $ 29,952 $ — $ 29,952 Financial Liabilities: Contingent consideration — — 53,228 53,228 Foreign exchange derivative contracts — 1,400 — 1,400 The contingent consideration, as of January 3, 2026 and December 28, 2024, relates to the earnout provisions recorded in conjunction with various purchase agreements. 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 Consolidated Statements of Earnings. The following table represents changes in the fair value of the contingent consideration liabilities for the fiscal years 2025 and 2024 (in thousands): 2025 2024 Beginning balance $ 53,228 $ 51,538 Payments of contingent consideration ( 22,633 ) ( 4,141 ) New contingent consideration 4,698 8,681 Changes in fair value ( 2,343 ) ( 2,850 ) Ending balance $ 32,950 $ 53,228 (k) Foreign Currency The income statements of the company’s foreign operations are translated at the monthly average exchange rates. Assets and liabilities of the company’s foreign operations are translated at exchange rates at the balance sheet date. These translation adjustments are not included in determining net earnings for the period but are disclosed and accumulated in a separate component of stockholders’ equity. Exchange gains and losses on foreign currency transactions are included in determining net income for the period in which they occur. These transactions amounted to a loss (gain) of $ 6.3 million, $( 0.1 ) million and $ 8.6 million in 2025, 2024 and 2023, respectively, and are included in other expense/(income), net in the Consolidated Statements of Earnings. (l) Shipping and Handling Costs Fees billed to the customer for shipping and handling are classified as a component of net sales in the Consolidated Statements of Earnings. Shipping and handling costs are included in cost of sales in the Consolidated Statements of Earnings. (m) Warranty Costs In 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 50 Table of Cont ents estimates are forecasts that are based on the best available information, claims costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable. A rollforward of the warranty reserve for the fiscal years 2025 and 2024 is as follows (in thousands): 2025 2024 Beginning balance $ 77,540 $ 67,951 Warranty reserve related to acquisitions 763 420 Warranty expense 72,291 83,921 Warranty claims paid ( 71,082 ) ( 74,752 ) Ending balance $ 79,512 $ 77,540 (n) Research and Development Costs Research and development costs, included in cost of sales in the Consolidated Statements of Earnings, are expensed as incurred. These costs were $ 58.8 million, $ 50.8 million and $ 47.1 million in fiscal 2025, 2024 and 2023, respectively. (o) Non-Cash Share-Based Compensation The company's 2021 Stock Incentive Plan (the "2021 Plan"), allows for the granting of stock options, stock appreciation rights, restricted stock and restricted stock units, performance stock, phantom units and other equity-based awards. The company estimates the fair value of restricted stock grants, restricted stock units and performance stock units at the time of grant and recognizes compensation costs over the vesting period of the grants. The expense, net of forfeitures, is recognized using the straight-line method. Non-cash share-based compensation expense is only recognized for those grants expected to vest. See Note 6 to these Notes to the Consolidated Financial Statements for further information on the company's share-based incentive plans. (p) Earnings Per Share Basic earnings per share is calculated based upon the weighted average number of common shares outstanding, and diluted earnings per share is calculated based upon the weighted average number of common shares outstanding and other dilutive securities. The company’s potentially dilutive securities amounted to 524,000 , 471,000 and 509,000 for fiscal 2025, 2024 and 2023, respectively. The company's potentially dilutive securities consist of shares issuable on vesting of restricted stock units computed using the treasury method and amounted to approximately 56,000 , 53,000 and 67,000 for fiscal 2025, 2024 and 2023, respectively. During fiscal 2025, 2024 and 2023, the average market price of the company's common stock exceeded the exercise price of the Convertible Notes (as defined below) resulting in approximately 468,000 , 418,000 and 442,000 diluted common stock equivalents to be included in the diluted net earnings per share, respectively. All of the Convertible Notes were converted ahead of the Convertible Notes maturing on September 1, 2025 and the company settled the principal amount in cash and the excess conversion value by delivering 493,917 of its common stock, and the company exercised its rights under the Capped Call Transactions (as defined below) which resulted in the receipt of 472,432 shares of its common stock to be held in treasury. See Note 5 to these Notes to the Consolidated Financial Statements for further details on the Convertible Notes and the Capped Call Transactions. There were no anti-dilutive equity awards excluded from common stock equivalents for 2025, 2024 and 2023. (q) Consolidated Statements of Cash Flows Cash paid for interest was $ 104.2 million, $ 97.7 million and $ 119.2 million in fiscal 2025, 2024 and 2023, respectively. Cash payments totaling $ 79.1 million, $ 108.7 million and $ 131.9 million were made for income taxes during fiscal 2025, 2024 and 2023, respectively. (r) New Accounting Pronouncements Accounting Pronouncements - Recently Adopted In December 2023, the FASB issued Accounting Standard Update ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity’s income tax rate reconciliation table. This ASU requires consistent categories and greater disaggregation of information presented in the effective tax rate reconciliation and requires disclosure of income taxes paid in both domestic and foreign jurisdictions. The company adopted this standard prospectively by providing the revised disclosures for the year ended January 3, 2026 and by providing pre-ASU disclosures for the prior periods. These changes did not impact the company's Consolidated Financial Statements but provide additional information for users of the financial statements. See Note 7 to these Notes to the Consolidated Financial Statements for further details. 51 Table of Cont ents Accounting Pronouncements - To be adopted In 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 on its Consolidated Financial Statements and disclosures. (4) REVENUE RECOGNITION Revenue is recognized when the control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The company’s contracts can have multiple performance obligations or just a single performance obligation. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the company’s best estimate of the standalone selling price of each distinct good or service in the contract. Within the Commercial Foodservice Equipment, the estimated standalone selling price of equipment is based on observable prices. Within the Food Processing Equipment Group, the company estimates the standalone selling price for equipment and services based on expected cost to manufacture the good or complete the service plus an appropriate profit margin. The estimated standalone selling price of aftermarket parts is based on observable prices. As the company's standard payment terms are less than one year, the company does not assess whether a contract has a significant financing component. The company treats shipping and handling activities performed after the customer obtains control of the good as a contract fulfillment activity. Sales, use and value added taxes assessed by governmental authorities are excluded from the measurement of the transaction price within the company’s contracts with its customers. The company generally expenses sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. Control may pass to the customer over time or at a point in time. 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. Equipment that is highly customized and for which we have a contractual, enforceable right to collect payment upon customer cancellation for performance completed to date qualifies for over time revenue recognition. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. Installation services provided in connection with the delivery of the equipment are also generally recognized as those services are rendered. The company generally uses the cost-to-cost input method of progress for its contracts because it best depicts the transfer of control to the customer that occurs as the company incurs costs. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the proportion of direct labor hours incurred to date to the total estimated direct labor hours at completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment. These measures include forecasts based on the best information available and therefore reflect the company’s judgment to faithfully depict the transfer of the goods. Revenue generated from standard equipment, contracts without an enforceable right to payment for performance completed to date, as well as aftermarket parts, are recognized at the point in time control transfers to the customer, which is typically based on contractual shipping terms. Contract Estimates Accounting for long-term contracts within the Food Processing Equipment group involves the use of various techniques to estimate total contract revenue and costs. For the company’s long-term contracts, estimated profit for the equipment performance obligations is recognized as the equipment is manufactured and assembled. Profit on the equipment performance obligations is estimated as the difference between the total estimated revenue and expected costs to complete a contract. Contract cost estimates are based on anticipated labor and materials, and the performance of subcontractors. The company does not disclose information about remaining performance obligations that have original expected durations of one year or less. The company has not recognized material favorable or unfavorable changes in estimates related to its contracts with customers in fiscal 2025, 2024, or 2023. 52 Table of Cont ents Contracts within the Commercial Foodservice Equipment Group may contain variable consideration in the form of volume rebate programs. The company’s estimate of variable consideration is based on its experience with similarly situated customers using the portfolio approach. Disaggregation of Revenue We disaggregate our net sales by reportable operating segment and geographical location as we believe it best depicts how the nature, timing and uncertainty of our net sales and cash flows are affected by economic factors. The following table summarizes our net sales by reportable segment and geographical location (in thousands): Commercial Foodservice Food Processing Total 2025 United States and Canada $ 1,681,955 $ 477,877 $ 2,159,832 Asia 214,214 34,679 248,893 Europe and Middle East 371,907 259,533 631,440 Latin America 82,971 78,066 161,037 Total $ 2,351,047 $ 850,155 $ 3,201,202 2024 United States and Canada $ 1,705,847 $ 447,918 $ 2,153,765 Asia 213,617 30,626 244,243 Europe and Middle East 365,018 225,921 590,939 Latin America 95,902 65,390 161,292 Total $ 2,380,384 $ 769,855 $ 3,150,239 2023 United States and Canada $ 1,823,041 $ 484,688 $ 2,307,729 Asia 231,009 42,238 273,247 Europe and Middle East 341,351 173,765 515,116 Latin America 89,916 56,082 145,998 Total $ 2,485,317 $ 756,773 $ 3,242,090 Contract Balances Payments on equipment contracts are typically due based on contractually stated milestones. Contract 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 Consolidated Balance Sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Changes in contract assets and contract liabilities associated with the timing of payments and status of over time revenue contracts are recorded in prepaid expenses and other assets and accrued expenses and other liabilities, respectively, within operating activities in the Consolidated Statements of Cash Flows. Contract 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 Consolidated Balance Sheets. Non-current contract liabilities are recorded in other non-current liabilities in the Consolidated Balance Sheets. Contract liabilities are reduced when the associated revenue from the contract is recognized. The following table provides information about contract assets and contract liabilities from contracts with customers (in thousands): Jan 3, 2026 Dec 28, 2024 Contract assets $ 57,039 $ 59,864 Contract liabilities 168,381 113,735 Non-current contract liabilities 20,987 19,930 During fiscal 2025, the company reclassified $ 40.6 million to accounts receivable which was included in the contract asset balance at the beginning of the period and recognized revenue of $ 86.8 million which was included in the contract liability balance at the beginning of the period. Additions to contract liabilities were $ 126.9 million during fiscal 2025, inclusive of 53 Table of Cont ents $ 20.5 million related to companies acquired during fiscal 2025. Substantially all of the company's outstanding performance obligations will be satisfied within 12 to 36 months. There were no contract asset impairments during fiscal 2025. (5) FINANCING ARRANGEMENTS The following table provides information about the company's financing arrangements (in thousands): Jan 3, 2026 Dec 28, 2024 Senior secured revolving credit line $ 698,500 $ — Term loan facility 805,097 928,542 Delayed draw term loan facility 637,135 712,500 Convertible senior notes — 745,074 Foreign loans 32,270 8,489 Other debt arrangement — 462 Total debt 2,173,002 2,395,067 Less: Current maturities of long-term debt 44,420 43,949 Long-term debt $ 2,128,582 $ 2,351,118 Credit Facility On October 21, 2021, the company entered into an amended and restated five-year, $ 4.5 billion multi-currency senior secured credit agreement (the "Credit Facility") that amended and restated the company's pre-existing $ 3.1 billion credit facility. The Credit Facility initially consisted of (i) a $ 1.0 billion term loan facility, (ii) a $ 750 million delayed draw term loan facility, and (iii) a $ 2.75 billion multi-currency revolving credit facility, with the potential under certain circumstances, to increase the amount of the Credit Facility by the greater of $ 625 million (increased to $ 850 million as part of the August 19, 2025 Credit Facility amendment, as described below) and 100 % of consolidated EBITDA for the most recently ended period of four consecutive fiscal quarters (plus additional amounts, subject to compliance with a senior secured net leverage ratio), either by increasing the revolving commitment or by adding one or more revolver or term loan tranches. On August 11, 2022, the company borrowed $ 750 million against the delayed draw term facility as provided under the Credit Facility. The funds were used to reduce outstanding borrowings under the revolver. On August 19, 2025, the company and its lenders entered into an agreement to amend the Credit Facility which, among other things, extended the maturity date of the Credit Facility and made certain changes that, subject to the satisfaction of specified conditions, give the company and its subsidiaries the ability to consummate the company’s previously announced plan to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to the company's shareholders. The company also repaid approximately $ 93 million and approximately $ 53 million of the outstanding principal of the term loan facility and delayed draw term loan facility, respectively, and the overall borrowing capacity of the multi-currency revolving credit facility was reduced to approximately $ 2.4 billion as part of the amendment. There were no changes to borrowing rates or financial covenants as part of the amendment. The Credit Facility matures on April 28, 2028, with the potential to extend the maturity date in one-year increments with the consent of the extending lenders. The term facility will amortize in equal quarterly installments due on the last day of each fiscal quarter, commencing with the first full fiscal quarter after October 21, 2021, in an aggregate amount equal to 2.50 % of the original aggregate principal amount of the term loan facility, with the balance, plus any accrued interest, due and payable on April 28, 2028. The delayed draw term loan facility will amortize in quarterly installments due on the last day of each fiscal quarter, and commenced on December 31, 2022, in an amount equal to 0.625 % of the principal amount of such borrowing, with the balance, plus any accrued interest, due and payable on April 28, 2028. Fees associated with the amendment of the term loan facilities are recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheets and amortized to interest expense over the term of the Credit Facility. As of January 3, 2026, the company had $ 2.1 billion of borrowings outstanding under the Credit Facility, including $ 807.3 million outstanding under the term loan ($ 805.1 million , net of unamortized issuance fees) and $ 637.1 million outstanding under the delayed draw term loan. The company also had $ 4.5 million in outstanding letters of credit as of January 3, 2026, which reduces the borrowing availability under the Credit Facility. Remaining borrowing capacity under this facility was $ 1.7 billion at January 3, 2026. At January 3, 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 54 Table of Cont ents 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 January 3, 2026, borrowings under the Credit Facility accrued interest at a minimum of 1.375 % above SOFR and the variable unused commitment fee will be at a minimum of 0.20 %. Borrowings under the Credit Facility accrue interest at a minimum of 1.375 % above the daily simple SOFR or term SOFR for the applicable interest period (each of which includes a spread adjustment of 0.10 %). The average interest rate per annum, inclusive of hedging instruments, on the debt under the Credit Facility was equal to 4.68 % at the end of the period and the variable commitment fee was equal to 0.20 % per annum as of January 3, 2026. The term loan and delayed draw term loan facilities had an average interest rate per annum, inclusive of hedging instruments, of 4.41 % as of January 3, 2026. On 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 January 3, 2026, these foreign loans amounted to $ 32.3 million in U.S. Dollars with a weighted average per annum interest rate of approximately 2.72 %. The 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 on its existing debt are consistent with current market conditions and therefore the carrying value of debt reflects the fair value. The interest rate margin is based on the company's Leverage Ratio. The carrying value and estimated aggregate fair value, a level 2 measurement, based primarily on market prices, of debt excluding the Convertible Notes is as follows (in thousands): Jan 3, 2026 Dec 28, 2024 Carrying Value Fair Value Carrying Value Fair Value Total debt excluding convertible senior notes $ 2,173,002 $ 2,175,192 $ 1,649,994 $ 1,652,702 The company uses floating-to-fixed interest rate swap agreements to hedge variable interest rate risk associated with the Credit Facility. At January 3, 2026, the company had outstanding floating-to-fixed interest rate swaps totaling $ 155.0 million notional amount carrying an average interest rate of 1.11 % maturing in less than 12 months and $ 315.0 million notional amount carrying an average interest rate of 1.28 % that mature in more than 12 months but less than 26 months. The terms of the Credit Facility, as amended, limit the ability of the company and its subsidiaries to, with certain exceptions: incur indebtedness; grant liens; engage in certain mergers, consolidations, acquisitions and dispositions; make restricted payments; enter into certain transactions with affiliates; and requires, among other things, the company to satisfy certain financial covenants: (i) a minimum Interest Coverage Ratio (as defined in the Credit Facility) of 3.00 to 1.00 , (ii) a maximum Secured Leverage Ratio (as defined in the Credit Facility) of Funded Debt less Unrestricted Cash to Pro Forma EBITDA (each as defined in the Credit Facility) of 3.75 to 1.00 , which may be adjusted to 4.25 to 1.00 for a four consecutive fiscal quarter period in connection with certain qualified acquisitions, subject to the terms and conditions contained in the Credit Facility. The Credit Facility is secured by substantially all of the assets of Middleby Marshall, the company and the company's domestic subsidiaries and is unconditionally guaranteed by, subject to certain exceptions, the company and certain of the company's direct and indirect material foreign and domestic subsidiaries. The Credit Facility contains certain customary events of default, including, but not limited to, the failure to make required payments; bankruptcy and other insolvency events; the failure to perform certain covenants; the material breach of a representation or warranty; non-payment of certain other indebtedness; the entry of undischarged judgments against the company or any subsidiary for the payment of material uninsured amounts; the invalidity of the company guarantee or any subsidiary guaranty; and a change of control of the company. At January 3, 2026, the company was in compliance with all covenants pursuant to its borrowing agreements. The aggregate amount of debt payable during each of the next five years is as follows (in thousands): 2026 $ 44,420 2027 44,041 2028 2,063,576 2029 3,204 2030 and thereafter 17,761 $ 2,173,002 55 Table of Cont ents Convertible Notes On August 21, 2020, the company issued $ 747.5 million aggregate principal amount of 1.00 % Convertible Senior Notes due 2025 in a private offering pursuant to an indenture, dated August 21, 2020 (the "Indenture"), between the company and U.S. Bank National Association, as trustee. Interest was payable semi-annually in arrears on March 1 and September 1 of each year. The company could settle the conversions of the Convertible Notes in cash, shares of the company's common stock or any combination thereof at its election. 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. The Convertible Notes were general unsecured obligations of the company. All of the Convertible Notes were converted ahead of the Convertible Notes maturing on September 1, 2025. The company settled the principal amount in cash and the excess conversion value by delivering 493,917 shares of its common stock. The shares of common stock delivered to settle the excess conversion value of the Convertible Notes were offset by shares received under the Capped Call Transactions described below. The following table summarizes the outstanding principal amount and carrying value of the Convertible Notes (in thousands): Dec 28, 2024 Principal $ 747,499 Unamortized issuance costs ( 2,425 ) Net carrying amount $ 745,074 The following table summarizes total interest expense recognized related to the Convertible Notes (in thousands): 2025 2024 2023 Contractual interest expense $ 5,046 $ 7,433 $ 7,454 Interest cost related to amortization of debt issuance costs 2,425 3,573 3,583 Total interest expense $ 7,471 $ 11,006 $ 11,037 Capped Call Transactions In connection with the pricing of the Convertible Notes, the company entered into privately negotiated Capped Call Transactions (the "2020 Capped Call Transactions") and the company used the net proceeds of the offering of the Convertible Notes to pay the aggregate amount of $ 104.7 million for them. The company entered into two tranches of privately negotiated Capped Call Transactions in December 2021 (the "2021 Capped Call Transactions") in the aggregate amount of $ 54.6 million. On March 15, 2022, the company entered into an additional tranche of privately negotiated Capped Call Transactions (the "2022 Capped Call Transactions") in the amount of $ 9.7 million. The company exercised its rights under the Capped Call Transactions upon maturity of the Convertible Notes, which resulted in the receipt of 472,432 shares of its common stock to be held in treasury. These transactions resulted in a $ 64.9 million increase in treasury stock, which was measured based on the fair market value of the shares received, offset by an equivalent increase in additional paid-in capital with no net impact to equity. (6) COMMON AND PREFERRED STOCK (a) Shares Authorized At January 3, 2026 and December 28, 2024, the company had 95,000,000 authorized shares of common stock and 2,000,000 authorized shares of non-voting preferred stock. (b) Treasury Stock In 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 company to repurchase an additional 2,500,000 , 2,500,000 , and 7,500,000 shares of its outstanding common stock under the current program. During 2024, the company repurchased 117,526 shares of its common stock under the program for $ 16.4 million, including applicable commissions, which represented an average price of $ 139.39 . During 2025, the company repurchased 4,911,050 shares of its common stock under the program for $ 709.6 million, including applicable commissions, which represented an average price of $ 144.50 . As of January 3, 2026, 8,144,940 shares had been purchased under the 2017 stock repurchase program and 6,855,060 remain authorized for repurchase. 56 Table of Cont ents The 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 2024, the company repurchased 118,171 shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $ 18.3 million. During 2025, the company repurchased 83,889 shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $ 14.0 million. (c) Share-Based Awards The company maintains an incentive plan under which the company's Board of Directors grants share-based awards to key employees. On May 10, 2021, the 2021 Stock Incentive Plan (the "2021 Plan") was approved, which included a maximum amount of 1,350,000 shares allowed to be awarded plus the shares remaining for future grants under the 2011 Stock Incentive Plan (the "2011 Plan") as of the approval date and any shares outstanding that are subsequently forfeited or expired. Thus, no further shares are available to grant under the 2011 Plan and the maximum amount of shares available for future grants under the 2021 Plan as of January 3, 2026 is 292,453 . Non-cash share-based compensation of $ 13.5 million, $ 31.9 million and $ 45.2 million was recognized for fiscal 2025, 2024 and 2023, respectively, associated with restricted share grants and restricted stock units. The company recorded a related tax benefit of $ 0.7 million, $ 0.1 million and $ 0.8 million in fiscal 2025, 2024 and 2023, respectively. Restricted share grants The company has issued restricted share grant awards, which are generally time and performance based and were not subject to market conditions. The fair value of restricted share grants represents the closing share price of the company's stock as of the date of the grant and is recognized over the vesting period of the awards. The weighted average grant date fair value was $ 136.13 per share for restricted share grants in fiscal 2023 which represents the closing share price of the company’s stock as of the date of grant. The approximate fair value of restricted shares vested were $ 0.3 million and $ 0.6 million for fiscal 2024 and 2023, respectively. As of December 28, 2024, all compensation cost related to nonvested restricted share grant compensation arrangements were recognized and there are no additional nonvested shares. Restricted stock units During 2020, the company began granting restricted stock units, which entitle the holder to shares of common stock subject to time vesting and the achievement of certain market and performance goals. The fair value for time-based units are valued at the closing share price of the company’s stock as of the date of the grant and the fair value for performance units are based upon valuations using the Monte Carlo Methodology. Compensation expense is recognized over the performance measurement period of the units in accordance with ASC 718 Stock Compensation for awards with market and performance vesting conditions. The company accounts for forfeitures as they occur. Time vesting units vest equally over two or three years and performance units vest based on achievement of certain company performance criteria over the two or three year period, as set forth in the grant agreement ranging from 0 to 200% of the target shares granted. The weighted average grant date fair value was $ 164.28 , $ 132.38 and $ 147.13 per share for restricted stock units in fiscal 2025, 2024 and 2023, respectively. The approximate fair value of restricted stock units vested were $ 31.9 million for fiscal 2025. A summary of the company’s nonvested restricted stock unit activity at target shares and their corresponding fair value on the date of grant for fiscal year ended January 3, 2026 is as follows: Units Weighted Average Grant-Date Fair Value Nonvested shares at December 28, 2024 697,678 149.80 Granted 265,066 164.28 Vested ( 222,738 ) 146.90 Forfeited ( 7,803 ) 140.38 Nonvested shares at January 3, 2026 732,203 156.02 As of January 3, 2026, there was $ 64.2 million of total unrecognized compensation cost related to nonvested restricted stock unit compensation arrangements, if all performance conditions are achieved as estimated. The remaining weighted average life is 1.9 years . 57 Table of Cont ents (7) INCOME TAXES Earnings before taxes is summarized as follows (in thousands): 2025 2024 2023 Domestic $ 348,790 $ 401,306 $ 392,467 Foreign 133,485 164,791 143,613 Total $ 482,275 $ 566,097 $ 536,080 The provision for income taxes is summarized as follows (in thousands): 2025 2024 2023 Federal $ 65,938 $ 81,633 $ 72,579 State and local 17,284 21,969 22,913 Foreign 31,786 41,517 27,584 Total $ 115,008 $ 145,119 $ 123,076 Current $ 44,864 $ 109,320 $ 122,634 Deferred 70,144 35,799 442 Total $ 115,008 $ 145,119 $ 123,076 The reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate were as follows (dollars in thousands): 2025 $ % Provision for income taxes at the U.S. federal statutory tax rate $ 101,278 21.0 % State and local taxes, net of federal benefit (1) 13,654 2.8 Nontaxable or nondeductible items 3,779 0.8 Foreign tax effects: UK 1,381 0.3 Italy 2,133 0.4 Other 2,531 0.5 Effect of change in tax laws or rates — — Tax credits and incentives ( 6,707 ) ( 1.4 ) Changes in valuation allowances — — Changes in unrecognized tax benefits 317 0.1 Other items ( 3,358 ) ( 0.7 ) Provision for income taxes and effective tax rate $ 115,008 23.8 % (1) State taxes in Illinois, California, Texas and Tennessee made up the majority of this category. 58 Table of Cont ents The reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate were as follows for fiscal 2024 and 2023: 2024 2023 U.S. federal statutory tax rate 21.0 % 21.0 % State and local taxes, net of federal benefit 3.1 3.4 Nontaxable or nondeductible items 0.7 0.6 Foreign income taxes at rates other than U.S. federal statutory tax rate 1.6 0.2 Tax credits and incentives ( 1.4 ) ( 2.0 ) Changes in valuation allowances 0.2 — Changes in unrecognized tax benefits ( 0.7 ) 0.3 Other items 1.1 ( 0.5 ) Effective tax rate 25.6 % 23.0 % A tax provision of $ 115.0 million, at an effective rate of 23.8 %, was recorded for fiscal 2025 as compared to $ 145.1 million at an effective rate of 25.6 %, in fiscal 2024. The effective rates in 2025 and 2024 were higher than the federal tax rate of 21.0 % primarily due to state taxes and foreign tax rate differentials. Cash taxes paid, net of refunds, by jurisdiction were as follows (in thousands): 2025 Federal $ 26,249 State and local 5,680 Foreign: Italy 13,852 UK 8,701 France 3,777 Germany 3,380 Other 17,471 Cash taxes paid, net of refunds $ 79,110 59 Table of Cont ents The company's deferred tax assets and liabilities consisted of the following (in thousands): Jan 3, 2026 Dec 28, 2024 Deferred tax assets: Compensation related $ 21,219 $ 20,421 Inventory reserves 29,509 26,298 Accrued liabilities and reserves 36,493 20,989 Warranty reserves 19,681 18,384 Operating lease liability 24,822 17,182 Basis difference on affiliates — 7,443 Capitalized R&D costs 21,854 42,722 Convertible debt — 6,502 Net operating loss carryforwards 7,378 7,082 Other 21,880 26,194 Gross deferred tax assets 182,836 193,217 Valuation allowance ( 8,314 ) ( 9,178 ) Deferred tax assets $ 174,522 $ 184,039 Deferred tax liabilities: Intangible assets $ ( 212,054 ) $ ( 221,982 ) Depreciable assets ( 32,529 ) ( 30,046 ) Interest rate swaps ( 2,874 ) ( 7,587 ) Operating lease right-of-use assets ( 23,693 ) ( 16,677 ) Pension and post-retirement benefits ( 24,482 ) ( 20,818 ) Other ( 27,404 ) ( 31,862 ) Deferred tax liabilities $ ( 323,036 ) $ ( 328,972 ) Net deferred tax liabilities $ ( 148,514 ) $ ( 144,933 ) Long-term deferred asset $ 8,209 $ 6,281 Long-term deferred liability ( 156,723 ) ( 151,214 ) Net deferred tax liabilities $ ( 148,514 ) $ ( 144,933 ) The company has recorded tax reserves on undistributed foreign earnings not permanently reinvested of $ 10.3 million and $ 15.0 million at January 3, 2026 and December 28, 2024, respectively. No further provisions were made for income taxes that may result from future remittances of undistributed earnings of foreign subsidiaries that are determined to be permanently reinvested. The company has a deferred tax asset on net operating loss carryforwards totaling $ 7.4 million as of January 3, 2026. These net operating losses are available to reduce future taxable earnings of certain domestic and foreign subsidiaries. United States federal loss carryforwards total $ 8.4 million of which $ 2.4 million will expire through 2036 and $ 6.0 million have no expiration date. State loss carryforwards total $ 11.4 million and expire through 2039 and international loss carryforwards total $ 18.6 million that can be carried forward indefinitely. Of these carryforwards, $ 6.0 million are subject to full valuation allowance. As of January 3, 2026, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $ 30.1 million (of which $ 30.1 million would impact the effective tax rate if recognized) plus approximately $ 10.6 million of accrued interest and $ 7.1 million of penalties. The company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Interest recognized in fiscal years 2025, 2024 and 2023 was $ 0.6 million, $ 0.6 million and $ 1.4 million, respectively. Penalties recognized in fiscal years 2025, 2024 and 2023 were $ 0.4 million, $( 0.3 ) million and nil , respectively. 60 Table of Cont ents The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended December 30, 2023, December 28, 2024 and January 3, 2026 (in thousands): Balance at December 30, 2023 $ 33,922 Increases to current year tax positions 3,689 Settlements ( 639 ) Lapse of statute of limitations ( 7,421 ) Balance at December 28, 2024 $ 29,551 Increases to current year tax positions 3,542 Lapse of statute of limitations ( 3,023 ) Balance as of January 3, 2026 $ 30,070 The company believes that it is reasonably possible that $ 5.3 million of its remaining unrecognized tax benefits may be recognized by the end of 2026 as a result of settlements with taxing authorities or lapses of statutes of limitations. In the normal course of business, income tax authorities in various income tax jurisdictions both in the United States and internationally conduct routine audits of our income tax returns filed in prior years. These audits are generally designed to determine if individual income tax authorities are in agreement with our interpretations of complex tax regulations regarding the allocation of income to the various income tax jurisdictions. Income tax years are open from 2022 through the current year for the United States federal jurisdiction. Income tax years open for our other major jurisdictions range from 2017 through the current year. Although the company believes its tax returns are correct, the final determination of tax examinations may be different than what was reported on the tax returns. In the opinion of management, adequate tax provisions have been made for the years subject to examination. (8) FINANCIAL INSTRUMENTS Derivatives are measured at fair value and recognized as either assets or liabilities. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If a derivative does qualify, changes in the fair value will either be offset against the change in the fair value of the hedged assets, liabilities or firm commitments or recognized in other accumulated comprehensive income until the hedged item is recognized in earnings. Foreign Exchange The 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 $ 120.9 million and $ 239.3 million as of January 3, 2026 and December 28, 2024, respectively. The fair value of these forward contracts was an unrealized loss of $ 0.8 million at the end of the year. Interest Rate The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. Prior to July 1, 2023, the company amended the Credit Facility and the existing interest rate swap agreements to transition the interest reference rate from one-month LIBOR to one-month SOFR. The amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023. The company utilized expedients within ASC 848 to conclude that this amendment should be treated as a non-substantial modification of the existing contract, resulting in no impact to the company's Consolidated Financial Statements. 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. The fair value of these instruments was an asset of $ 11.2 million and $ 30.0 million as of January 3, 2026 and December 28, 2024, respectively. The change in fair value of these swap agreements in 2025 was a loss of $ 14.3 million, net of taxes. The following summarizes the fair value of interest rate swaps (in thousands): Consolidated Balance Sheets Location Jan 3, 2026 Dec 28, 2024 Prepaid expenses and other $ 1,516 $ 1,986 Other assets 9,714 27,966 61 Table of Cont ents The following summarizes the impact on earnings from interest rate swaps (in thousands): Location 2025 2024 2023 Amount of (loss)/gain recognized in other comprehensive income Other comprehensive income/(loss) $ ( 2,007 ) $ 14,377 $ 10,015 Gain reclassified from accumulated other comprehensive income (effective portion) Interest expense and deferred financing amortization, net 16,715 27,204 32,221 Interest 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. (9) LEASE COMMITMENTS At the commencement date of a lease, the company recognizes a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term, including variable lease payments that are determined to be probable. The lease liability includes lease component fees, while non-lease component fees are expensed as incurred for all asset classes. The company includes options to extend or terminate a lease in the lease term when it is reasonably certain that we will exercise that option. When a contract excludes an implicit rate, the company utilizes an incremental borrowing rate based on information available at the lease commencement date including lease term and geographic region. The initial valuation of the right-of-use (“ROU”) asset includes the initial measurement of the lease liability, lease payments made in advance of the lease commencement date and initial direct costs incurred by the company and excludes lease incentives. Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the Consolidated Balance Sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. The company leases warehouse space, office facilities and equipment under operating leases. The company had operating lease costs of $ 27.7 million, $ 26.2 million and $ 24.5 million in fiscal 2025, 2024 and 2023 respectively, including short-term lease expense and variable lease costs, which were not material. The following table provides information about the company's operating leases (in thousands): Jan 3, 2026 Dec 28, 2024 Operating lease right-of-use assets: Other assets $ 109,942 $ 82,377 Operating lease liabilities: Accrued expenses 19,522 17,829 Other non-current liabilities 94,257 67,478 Total operating lease liabilities $ 113,779 $ 85,307 Future operating lease payments for each of the next five years is as follows (in thousands): 2026 $ 24,010 2027 21,185 2028 18,739 2029 16,035 2030 12,339 2031 and thereafter 41,289 Total future lease commitments 133,597 Less: Imputed interest 19,818 Present value of operating lease liabilities $ 113,779 62 Table of Cont ents Other information related to the company's operating leases is as follows (dollars in thousands): 2025 2024 2023 Supplemental cash flow information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 23,792 $ 21,328 $ 20,175 Right-of-use assets obtained in exchange for lease obligations 20,608 15,958 10,623 Jan 3, 2026 Dec 28, 2024 Weighted-average remaining lease term 7.1 years 6.2 years Weighted-average discount rate 4.5 % 4.1 % (10) SEGMENT INFORMATION An 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. In 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: (i) Commercial Foodservice Equipment Group: Manufactures, sells, and distributes foodservice equipment for the restaurant and institutional kitchen industry (ii) Food Processing Equipment Group: Manufactures preparation, cooking, packaging food handling and food safety equipment for the food processing industry Adjusted 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. Management 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. 63 Table of Cont ents The following table summarizes the results of operations for the company’s business segments (1) (in thousands): Commercial Foodservice Food Processing Corporate and Other (2) Total 2025 Net sales $ 2,351,047 $ 850,155 $ — $ 3,201,202 Cost of sales 1,406,926 541,281 1,080 1,949,287 Other segment items (3) 317,439 137,350 77,636 532,425 Segment adjusted EBITDA (5) 626,682 171,524 ( 78,716 ) 719,490 Depreciation expense (6) 28,357 12,755 2,630 43,742 Amortization expense (7) 43,557 11,698 6,308 61,563 Net capital expenditures 28,476 41,449 804 70,729 Total assets 3,569,952 1,438,433 1,306,781 6,315,166 Long-lived assets (8) 365,990 189,130 156,562 711,682 2024 Net sales $ 2,380,384 $ 769,855 $ — $ 3,150,239 Cost of sales 1,436,836 464,424 ( 2,840 ) 1,898,420 Other segment items (3,4) 289,093 108,627 62,197 459,917 Segment adjusted EBITDA (5) 654,455 196,804 ( 59,357 ) 791,902 Depreciation expense (6) 27,794 10,213 1,755 39,762 Amortization expense (7) 49,133 8,091 7,127 64,351 Net capital expenditures 23,034 12,822 834 36,690 Total assets 3,603,768 1,196,649 2,482,734 7,283,151 Long-lived assets (8) 333,385 139,798 1,635,863 2,109,046 2023 Net sales $ 2,485,317 $ 756,773 $ — $ 3,242,090 Cost of sales 1,488,685 468,474 853 1,958,012 Other segment items (3) 305,010 101,014 74,269 480,293 Segment adjusted EBITDA (5) 691,622 187,285 ( 75,122 ) 803,785 Depreciation expense (6) 26,615 8,659 1,507 36,781 Amortization expense (7) 56,168 9,831 7,137 73,136 Net capital expenditures 37,940 16,332 4,902 59,174 Total assets 3,697,258 1,067,968 2,141,465 6,906,691 Long-lived assets (8) 338,438 104,837 1,654,073 2,097,348 (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. (2) Includes corporate and other general company assets and operations and assets held for sale - discontinued operations. (3) Other segment items for each reportable segment includes operating expenses, which primarily consists of selling, general and administrative expenses. Other segment items excludes the impact of depreciation, intangible amortization, restructuring, impairments, 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. (4) Gain on sale of plant is included in Food Processing. (5) Excludes the impacts mentioned in Other segment items. (6) Includes depreciation on right of use assets. (7) Includes amortization of deferred financing costs and Convertible Notes issuance costs. (8) Long-lived assets consist of property, plant and equipment, long-term deferred tax assets, pension benefit assets, other assets and non-current assets held for sale - discontinued operations. 64 Table of Cont ents A reconciliation of Adjusted EBITDA to net earnings from continuing operations is as follows (in thousands): 2025 2024 2023 Adjusted EBITDA $ 719,490 $ 791,902 $ 803,785 Less: Other segment operating expenses (1) 144,599 147,779 151,358 Income from continuing operations 574,891 644,123 652,427 Interest expense and deferred financing amortization, net 93,828 93,356 121,129 Net periodic pension benefit (other than service cost & curtailment) ( 6,294 ) ( 14,872 ) ( 9,040 ) Other expense/(income), net 5,082 ( 458 ) 4,258 Earnings from continuing operations before income taxes 482,275 566,097 536,080 Provision for income taxes 115,008 145,119 123,076 Net earnings from continuing operations $ 367,267 $ 420,978 $ 413,004 (1) Consists of the impact of depreciation, intangible amortization, restructuring, impairments, 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. Geographic Information Long-lived assets, excluding goodwill and other intangibles, is as follows (in thousands): Jan 3, 2026 Dec 28, 2024 United States and Canada $ 407,979 $ 395,448 Asia 36,994 37,600 Europe and Middle East 254,687 184,933 Latin America 12,022 10,245 Total International 303,703 232,778 Total long-lived assets - continuing operations 711,682 628,226 Non-current assets held for sale - discontinued operations — 1,480,820 Total long-lived assets $ 711,682 $ 2,109,046 (11) EMPLOYEE RETIREMENT PLANS (a) Pension Plans U.S. Plans The company maintains a non-contributory defined benefit plan for its union employees at the Elgin, Illinois facility. Benefits are determined based upon retirement age and years of service with the company. This defined benefit plan was frozen on April 30, 2002, and no further benefits accrue to the participants beyond this date. Plan participants will receive or continue to receive payments for benefits earned on or prior to April 30, 2002 upon reaching retirement age. The company maintains a non-contributory defined benefit plan for its employees at the Smithville, Tennessee facility. Benefits are determined based upon retirement age and years of service with the company. This defined benefit plan was frozen on April 1, 2008, and no further benefits accrue to the participants beyond this date. Plan participants will receive or continue to receive payments for benefits earned on or prior to April 1, 2008 upon reaching retirement age. The company also maintains a retirement benefit agreement with its former Chairman ("Chairman Plan"). The retirement benefits are based upon a percentage of the former Chairman’s final base salary. Non-U.S. Plans The company maintains a defined benefit plan for its employees at the Wrexham, the United Kingdom facility. Benefits are determined based upon retirement age and years of service with the company. This defined benefit plan was frozen on April 30, 2010 and no further benefits accrue to the participants beyond this date. Plan participants will receive or continue to receive payments for benefits earned on or prior to April 30, 2010 upon reaching retirement age. The company maintains a defined benefit plan in the United Kingdom related to the Aga Rangemaster Group (the Aga Rangemaster Group Pension Scheme). Membership in the plan on a defined benefit basis was closed to new entrants in 2001. 65 Table of Cont ents The plan became open to new entrants on a defined contribution basis in 2002 but closed to new entrants during 2014. In December 2020, it was agreed that the Group Pension Scheme will be closed to future pension accruals effective April 5, 2021. All pension plan assets are held in separate trust funds although the net defined benefit pension obligations are included in the company's Consolidated Balance Sheets. A summary of the plans’ net periodic pension cost, benefit obligations, funded status, and net balance sheet position is as follows (dollars in thousands): 2025 2024 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Net Periodic Pension Cost/(Benefit): Interest cost $ 1,321 $ 47,206 $ 1,267 $ 43,330 Expected return on assets ( 942 ) ( 56,794 ) ( 926 ) ( 61,613 ) Amortization of net loss 51 149 281 152 Amortization of prior service cost — 2,715 — 2,637 Total net periodic pension cost/(benefit) $ 430 $ ( 6,724 ) $ 622 $ ( 15,494 ) Change in Benefit Obligation: Benefit obligation – beginning of year $ 25,581 $ 855,777 $ 27,659 $ 976,187 Interest on benefit obligations 1,321 47,206 1,267 43,330 Actuarial (gain)/loss 289 ( 6,615 ) ( 1,598 ) ( 92,821 ) Net benefit payments ( 1,793 ) ( 62,512 ) ( 1,747 ) ( 60,720 ) Exchange effect — 59,918 — ( 10,199 ) Benefit obligation – end of year $ 25,398 $ 893,774 $ 25,581 $ 855,777 Change in Plan Assets: Plan assets at fair value – beginning of year $ 16,008 $ 946,168 $ 15,751 $ 1,013,914 Company contributions 1,186 ( 168 ) 1,244 ( 72 ) Investment gain 2,368 50,235 760 4,660 Benefit payments and plan expenses ( 1,793 ) ( 62,512 ) ( 1,747 ) ( 60,720 ) Exchange effect — 66,495 — ( 11,614 ) Plan assets at fair value – end of year $ 17,769 $ 1,000,218 $ 16,008 $ 946,168 Funded Status $ ( 7,629 ) $ 106,444 $ ( 9,573 ) $ 90,391 Amounts recognized in balance sheet at year end: Pension benefit assets/(accrued pension benefits) $ ( 7,629 ) $ 106,444 $ ( 9,573 ) $ 90,391 66 Table of Cont ents 2025 2024 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Pre-tax components in accumulated other comprehensive loss at period end: Net actuarial (gain)/loss $ ( 891 ) $ 62,335 $ 297 $ 61,082 Pre-tax components recognized in other comprehensive income/(loss) for the period: Current year actuarial (gain)/loss $ ( 1,136 ) $ 688 $ ( 1,432 ) $ ( 36,035 ) Actuarial (loss)/gain recognized ( 51 ) 788 ( 281 ) ( 153 ) Prior service cost recognized — ( 223 ) — ( 3,078 ) Total amount recognized $ ( 1,187 ) $ 1,253 $ ( 1,713 ) $ ( 39,266 ) Accumulated Benefit Obligation $ 25,398 $ 893,774 $ 25,581 $ 855,777 Assumed discount rate 5.2 % 5.6 % 5.4 % 5.5 % Expected return on assets 6.0 % 5.9 % 6.0 % 5.9 % The company has engaged non-affiliated third-party professional investment advisors to assist the company in developing its investment policy and establishing asset allocations. The company's overall investment objective is to provide a return, that along with company contributions, is expected to meet future benefit payments. Investment policy is established in consideration of anticipated future timing of benefit payments under the plans. The anticipated duration of the investment and the potential for investment losses during that period are carefully weighed against the potential for appreciation when making investment decisions. The company routinely monitors the performance of investments made under the plans and reviews investment policy in consideration of changes made to the plans or expected changes in the timing of future benefit payments. The assets of the plans were invested in the following classes of securities (none of which were securities of the company): Target Allocation Percentage of Plan Assets 2025 2024 U.S. Plans: Equity 48.0 % 52.5 % 51.0 % Fixed income 40.0 32.7 38.8 Money market 4.0 5.8 2.2 Other (real estate investment trusts & commodities contracts) 8.0 9.0 8.0 Total 100.0 % 100.0 % 100.0 % Non-U.S. Plans: Equity 16.8 % 13.2 % 7.3 % Fixed income 75.6 86.6 94.6 Alternatives/Other 5.6 ( 14.7 ) ( 17.8 ) Real Estate 2.0 8.9 9.9 Cash and cash equivalents — 6.0 6.0 Total 100.0 % 100.0 % 100.0 % 67 Table of Cont ents In accordance with ASC 820 Fair Value Measurements and Disclosures , the company has measured its defined benefit pension plans at fair value. In accordance with ASU 2015-04, "Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets", the company has elected to measure the pension plan assets and obligations as of the calendar month end closest to the fiscal year end. The following tables summarize the basis used to measure the pension plans’ assets at fair value, by asset category, as of January 3, 2026 and December 28, 2024 (in thousands): U.S. Plans 2025 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Net Asset Value Total Quoted Prices in Active Markets for Identical Assets (Level 1) Net Asset Value Short Term Investment Fund (1) $ 1,024 $ — $ 1,024 $ 414 $ — $ 414 Equity Securities: Large Cap 3,733 3,733 — 3,805 3,805 — Mid Cap 345 345 — 402 402 — Small Cap 473 473 — 393 393 — International 4,783 4,783 — 3,622 3,622 — Fixed Income: Government/Corporate 4,666 4,666 — 4,528 4,528 — High Yield 670 670 — 1,143 1,143 — Other 465 465 — 484 484 — Alternative: Global Real Estate Investment Trust 858 858 — 926 926 — Commodities Contracts 752 752 — 291 291 — Total $ 17,769 $ 16,745 $ 1,024 $ 16,008 $ 15,594 $ 414 (1) Represents collective short term investment fund, composed of high-grade money market instruments with short maturities. 68 Table of Cont ents Non-U.S. Plans 2025 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Net Asset Value Cash and cash equivalents $ 60,836 $ 52,471 $ — $ 8,365 Equity Securities: UK 461 — — 461 International: Developed 122,872 120,448 — 2,424 Emerging 11,869 11,495 — 374 Unquoted/Private Equity 1,899 — — 1,899 Fixed Income: Government/Corporate: UK 347,970 844 343,826 3,300 International 271,944 91,036 163,642 17,266 Index Linked 249,717 1,615 248,062 40 Other 526 — — 526 Real Estate: Direct 86,237 — 86,237 — Indirect 2,119 — — 2,119 Leveraged Loans 31,984 — — 31,984 Alternative/Other ( 188,216 ) 18,472 ( 207,389 ) 701 Total $ 1,000,218 $ 296,381 $ 634,378 $ 69,459 69 Table of Cont ents 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Net Asset Value Cash and cash equivalents $ 64,080 $ 7,262 $ 45,734 $ 11,084 Equity Securities: UK 2,535 — — 2,535 International: Developed 55,623 — — 55,623 Emerging 13,187 — — 13,187 Unquoted/Private Equity 2,304 — — 2,304 Fixed Income: Government/Corporate: UK 517,581 805 9,388 507,388 International 93,888 — 63,482 30,406 Index Linked 300,098 1,480 — 298,618 Other 315 — — 315 Real Estate: Direct 92,388 — 92,388 — Indirect 3,150 — — 3,150 Leveraged Loans 28,292 — — 28,292 Alternative/Other ( 227,273 ) — 613 ( 227,886 ) Total $ 946,168 $ 9,547 $ 211,605 $ 725,016 The fair value of the Level 1 assets is based on observable quoted market prices of the identical underlying security in an active market. The fair value of the Level 2 assets is primarily based on market observable inputs to quoted market prices, benchmark yields and broker/dealer quotes. Level 3 inputs, as applicable, represent unobservable inputs that reflect assumptions developed by management to measure assets at fair value. The expected return on assets is developed in consideration of the anticipated duration of investment period for assets held by the plan, the allocation of assets in the plan, and the historical returns for plan assets. Estimated future benefit payments under the plans are as follows (in thousands): U.S. Plans Non-U.S. Plans 2026 $ 1,946 $ 63,420 2027 1,952 63,956 2028 1,961 64,270 2029 1,975 63,900 2030 through 2035 11,229 379,391 The contributions expected to be made in 2026 are $ 0.5 million for the U.S. Plans and nil for the Non-U.S. Plans. (b) Defined Contribution Plans As of January 3, 2026, the company maintained two separate defined contribution 401(k) savings plans covering all employees in the United States. These two plans separately cover the union employees at the Elgin, Illinois facility and all other remaining union and non-union employees in the United States. The company also maintained defined contribution plans for its UK based employees. 70 Table of Cont ents (12) DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE As discussed in Note 1 to these Notes to the Consolidated Financial Statements, the Residential Kitchen Equipment Group’s financial results are reflected in the Consolidated Statements of Earnings and Consolidated Statements of Cash Flows as discontinued operations. 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 Consolidated Balance Sheets. Upon classification as held for sale during the fourth quarter of 2025, the company recognized a loss of $ 62.8 million within Earnings from discontinued operations, net of tax in the Consolidated Statements of Earnings to adjust the carrying value of the disposal group to fair value less cost to sell. The fair value of the disposal group was estimated using the expected sale price as negotiated with the third party buyer. Upon classification as held for sale, the company also 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. The Residential Transaction was completed on February 2, 2026. Following the close of the Residential Transaction, the company owns a 49 % non-controlling interest in a new standalone joint venture holding the business. The company received net cash proceeds of approximately $ 565 million and a $ 135 million promissory note from the joint venture, subject to future closing adjustments . In addition to the retained equity interest, the company will have continuing involvement with the Residential Kitchen Equipment Group through various commercial arrangements, pursuant to which the company will provide certain engineering, manufacturing, distribution, and sales channel support to the joint venture on a transitional basis for initial periods of up to three years from the closing date of the 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 transaction (although certain services may be provided for up to 18 months from the closing date of the transaction if the joint venture exercises its extension option), under the terms of a transition services agreement. Certain 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 “Retained Plan”) and earnouts associated with several prior acquisitions. The 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 the joint venture. 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 income/(loss) 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 10 to these Notes to the 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 transaction and have been included within the results of discontinued operations. See Note 11 to these Notes to the Consolidated Financial Statements for further information regarding the company’s continuing operations pension plans, including the Retained Plan. 71 Table of Cont ents Financial Information The following table summarizes the operating results of the Residential Kitchen Equipment Group as presented in Earnings from discontinued operations, net of tax in the Consolidated Statements of Earnings (in thousands): 2025 2024 2023 Net sales $ 733,305 $ 724,923 $ 794,515 Cost of sales 506,581 506,373 544,531 Gross profit 226,724 218,550 249,984 Selling, general, and administrative expenses 186,226 172,387 182,013 Restructuring expenses 8,982 5,936 9,402 Impairments 709,116 28,162 76,128 (Loss)/income from discontinued operations ( 677,600 ) 12,065 ( 17,559 ) Interest (income)/expense and deferred financing amortization, net (1) ( 1,340 ) ( 1,127 ) ( 781 ) Net periodic pension cost/(benefit) (other than service cost & curtailment) 81 ( 25 ) ( 31 ) Other expense/(income), net 3,244 1,994 ( 45 ) Loss on classification as held for sale 62,750 — — (Loss)/earnings from discontinued operations before income taxes ( 742,335 ) 11,223 ( 16,702 ) (Benefit from)/provision for income taxes ( 97,337 ) 3,768 ( 4,580 ) (Loss)/earnings from discontinued operations, net of tax $ ( 644,998 ) $ 7,455 $ ( 12,122 ) (1) Represents interest income directly associated with, not allocated to, the Residential Kitchen Equipment Group The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as presented in the Consolidated Balance Sheets (in thousands): Jan 3, 2026 Dec 28, 2024 ASSETS Cash and cash equivalents $ 22,208 $ 50,767 Accounts receivable, net 109,280 111,597 Inventories, net 199,534 185,623 Prepaid expenses and other 17,951 16,832 Prepaid taxes — 8 Property, plant and equipment, net 150,561 141,282 Goodwill 229,964 773,976 Other intangibles, net 385,133 511,221 Pension benefits assets 1,150 816 Other assets 49,410 53,525 Valuation allowance - loss on classification as held for sale ( 62,750 ) — Total assets held for sale - discontinued operations $ 1,102,441 $ 1,845,647 LIABILITIES Accounts payable $ 53,151 $ 42,724 Accrued expenses 93,247 82,787 Long-term deferred tax liability 71,649 100,848 Other non-current liabilities 24,288 31,982 Total liabilities held for sale - discontinued operations $ 242,335 $ 258,341 Impairments During the third quarter of 2025, the company identified an impairment indicator impacting the fair value of Residential Kitchen Equipment Group in connection with conducting a strategic review of its business portfolio, considering a broad range 72 Table of Cont ents of strategic options. As a result, the company performed an interim quantitative intangible asset and goodwill impairment tests for the Residential Kitchen Equipment Group reporting unit as of September 27, 2025. Based on the results of the quantitative tests of indefinite-lived trademarks and trade names, the company recorded a non-cash impairment charge of $ 131.8 million associated with several trademarks and trade names within the Residential Kitchen Equipment Group. The gross value of all indefinite-lived trademarks and trade names tested was approximately $ 473.0 million, including those which were impaired. The diminution in fair value for the trademarks and trade names was due to macroeconomic conditions such as high interest rates, international tariffs, challenging housing market conditions and higher carrying costs of inventory levels in the channel. This led to lower than expected revenue in the current year and corresponding reductions of future revenue due to lowered expectations for recovery in demand. The company estimated the fair value of trademarks and trade names using a relief from royalty method under the income approach. In performing the quantitative analyses on the trademarks and trade names, significant assumptions include revenue growth rates, assumed royalty rates and discount rates, which are considered level 3 inputs in the fair value hierarchy. The company believes the assumptions utilized within the quantitative analysis are reasonable and consistent with assumptions that would be used by other marketplace participants. Based on the results of quantitative tests over amortized intangible assets, the company recorded an impairment charge of $ 3.5 million related to developed technology. Based on the results of the goodwill impairment test, the company determined that the carrying amount of the Residential Kitchen Equipment Group reporting unit exceeded its estimated fair value and recorded a non-cash goodwill impairment charge of $ 572.6 million. The impairment was driven by a combination of factors, including macroeconomic conditions such as high interest rates, international tariffs, challenging housing market conditions and higher carrying costs of inventory levels in the channel, which led to lower than expected revenue in the current year and corresponding reductions of future revenue due to lowered expectations for recovery in demand. At the time the interim impairment test was performed, the company estimated the fair value of the Residential Kitchen Equipment Group reporting unit by considering both a market approach and an income approach using a discounted cash flow model, which use level 3 inputs in the fair value hierarchy. For the income approach, key valuation inputs included revenue growth rates, EBITDA margins and discount rate, which are based on management’s estimates and assumptions believed to be reasonable and reflective of known market conditions as of the interim impairment test date. 73 Table of Cont ents (13) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) As discussed in Notes 1 and 12 to these Notes to the Consolidated Financial Statements, the Residential Kitchen Equipment Group’s financial results are reflected in the Consolidated Statements of Earnings as discontinued operations in all periods presented. The following tables provide unaudited summarized quarterly financial information on the same basis (in thousands, except per share data): 2025 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 730,623 $ 796,799 $ 807,355 $ 866,425 Gross profit 292,578 316,102 307,015 336,220 Net earnings from continuing operations 85,063 101,666 94,452 86,086 Net earnings/(loss) from discontinued operations 7,289 4,290 ( 607,430 ) ( 49,147 ) Net earnings/(loss) $ 92,352 $ 105,956 $ ( 512,978 ) $ 36,939 Net earnings/(loss) per share: Basic from continuing operations $ 1.59 $ 1.93 $ 1.87 $ 1.73 Basic from discontinued operations 0.14 0.08 ( 12.02 ) ( 0.99 ) Basic earnings/(loss) per share $ 1.72 $ 2.01 $ ( 10.15 ) $ 0.74 Diluted from continuing operations $ 1.56 $ 1.91 $ 1.86 $ 1.72 Diluted from discontinued operations 0.13 0.08 ( 11.93 ) ( 0.98 ) Diluted earnings/(loss) per share $ 1.69 $ 1.99 $ ( 10.08 ) $ 0.74 Weighted average number of shares Basic 53,594 52,616 50,521 49,888 Dilutive common stock equivalents 1,027 538 386 144 Diluted 54,621 53,154 50,907 50,032 2024 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 753,027 $ 798,783 $ 769,591 $ 828,838 Gross Profit 295,200 322,642 302,636 331,341 Net earnings from continuing operations 85,293 110,327 107,520 117,838 Net earnings/(loss) from discontinued operations 1,275 5,068 6,646 ( 5,534 ) Net earnings $ 86,568 $ 115,395 $ 114,166 $ 112,304 Net earnings/(loss) per share: Basic from continuing operations $ 1.59 $ 2.05 $ 2.00 $ 2.19 Basic from discontinued operations 0.02 0.09 0.12 ( 0.10 ) Basic earnings per share $ 1.61 $ 2.15 $ 2.12 $ 2.09 Diluted from continuing operations $ 1.57 $ 2.04 $ 1.99 $ 2.17 Diluted from discontinued operations 0.02 0.09 0.12 ( 0.10 ) Diluted earnings per share $ 1.59 $ 2.13 $ 2.11 $ 2.07 Weighted average number of shares Basic 53,654 53,765 53,770 53,764 Dilutive common stock equivalents 740 307 267 570 Diluted 54,394 54,072 54,037 54,334 74 Table of Cont ents THE MIDDLEBY CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE FISCAL YEARS ENDED JANUARY 3, 2026, DECEMBER 28, 2024 AND DECEMBER 30, 2023 (amounts in thousands) Balance Beginning of Period Additions/(Recoveries) Charged to Expense Other Adjustments (1) Write-Offs During the Period Balance at End of Period Allowance for Credit Losses - Accounts Receivable 2025 $ 21,442 $ 4,164 $ 1,506 $ ( 2,111 ) $ 25,001 2024 21,755 2,956 5 ( 3,274 ) 21,442 2023 18,271 5,734 397 ( 2,647 ) 21,755 (1) Amounts consist primarily of allowances assumed from acquired companies. Balance Beginning of Period Additions/(Recoveries) Charged to Expense Write-Offs During the Period Balance at End of Period Valuation Allowance - Deferred Tax Assets 2025 $ 9,178 $ ( 864 ) $ — $ 8,314 2024 8,205 973 — 9,178 2023 8,305 ( 100 ) — 8,205 75 Table of Cont ents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None