v3.23.3
BUSINESS REALIGNMENT ACTIVITIES
9 Months Ended
Oct. 01, 2023
Restructuring and Related Activities [Abstract]  
BUSINESS REALIGNMENT ACTIVITIES BUSINESS REALIGNMENT ACTIVITIES
We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Cost of sales$(506)$(1)$527 $
Selling, marketing and administrative expense80 394 2,472 2,096 
Business realignment costs— — 441 274 
(Benefits) costs associated with business realignment activities$(426)$393 $3,440 $2,373 
Costs recorded by program during the three and nine months ended October 1, 2023 and October 2, 2022 related to these activities were as follows:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
International Optimization Program:
Severance and employee benefit costs$— $$441 $287 
Other program costs(426)391 2,999 2,086 
Total$(426)$393 $3,440 $2,373 
Amounts classified as liabilities qualifying as exit and disposal costs primarily represent employee-related and certain third-party service provider charges, however, such amounts at October 1, 2023 are not significant.
2020 International Optimization Program
In the fourth quarter of 2020, we commenced a program (“International Optimization Program”) to streamline resources and investments in select international markets, including the optimization of our China operating model that will improve our operational efficiency and provide for a strong, sustainable and simplified base going forward.
The International Optimization Program was originally expected to total pre-tax costs of $50,000 to $75,000, with cash costs in the range of $40,000 to $65,000, primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities. The costs and related benefits of the International Optimization Program relate to the International segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs. This program was completed in 2023.
For the nine months ended October 1, 2023 and October 2, 2022, we recognized total costs associated with the International Optimization Program of $3,440 and $2,373, respectively. These charges predominantly included third-party charges in support of our initiative to transform our China operating model, as well as severance and employee benefit costs. Since inception, we have incurred pre-tax charges to execute the program totaling $53,799.