Portfolio Optimization Plan

12 Months Ended

Dec. 31, 2025

Portfolio Optimization Plan [Abstract]

14. Portfolio Optimization Plan

During the fourth quarter of 2023, the Board of Directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company evaluated the closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the closure of its sales office in Granada, Spain, and the centralization and elimination of certain selling and administrative positions. In addition, in the Color segment, the Company evaluated the closure of a manufacturing facility in Delta, British Columbia, Canada, the closure of a sales office in Argentina, and centralizing and eliminating certain production positions and selling and administrative positions. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

The Company’s Felinfach site was shut down in May 2025, and all production activities have been transferred to other locations. The Company began marketing the Felinfach site for sale in June 2025. As a result, the Company met all of the assets held for sale criteria for the Felinfach land and building assets in June 2025, which have been recorded as the only balance in Fixed assets held for sale on the Company’s Consolidated Balance Sheets. The Company has substantially completed all other actions contemplated under the Portfolio Optimization Plan in accordance with local laws.

The Company recorded $2.5 million of accrued liabilities in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to the Portfolio Optimization Plan as of December 31, 2024. The amount of accrued liabilities recorded in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to the Portfolio Optimization Plan was immaterial as of December 31, 2025. The total cost of the Portfolio Optimization Plan was $50 million, primarily related to non-cash impairment charges and proposed employee separation costs. We anticipate that the Portfolio Optimization Plan will reduce annual operating costs by approximately $8 million, with the full benefit expected to be achieved after 2025. The Company reduced headcount by approximately 100 positions, primarily in the Flavors & Extracts and Color segments, related to certain production and selling and administrative positions.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the year ended December 31, 2025:

(In thousands)	Flavors & Extracts		Color		Corporate & Other		Consolidated
Non-cash impairment charges – Selling and administrative expenses	$	953	$	-	$	-	$	953
Non-cash charges – Cost of products sold		4,344		-		-		4,344
Employee separation – Selling and administrative expenses		758		8		-		766
Other production costs – Cost of products sold		3,187		-		-		3,187
Other costs – Selling and administrative expenses⁽¹⁾		5,986		403		167		6,556
Total	$	15,228	$	411	$	167	$	15,806

(1)

Other costs include professional services, decommissioning costs, and other related costs.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the year ended December 31, 2024:

(In thousands)	Flavors & Extracts		Color			Corporate & Other			Consolidated
Non-cash impairment charges – Selling and administrative expenses	$	-	$	1,129		$	-		$	1,129
Non-cash charges – Cost of products sold		934		(194	)		-			740
Employee separation – Selling and administrative expenses		1,450		583			26			2,059
Other production costs – Cost of products sold		622		-			-			622
Other costs – Selling and administrative expenses⁽¹⁾		1,813		382			(114	)		2,081
Total	$	4,819	$	1,900		$	(88	)	$	6,631

(1)

Other costs include professional services, decommissioning costs, and other related costs.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the year ended December 31, 2023:

(In thousands)	Flavors & Extracts		Color		Corporate & Other		Consolidated
Non-cash impairment charges – Selling and administrative expenses	$	11,599	$	9,355	$	-	$	20,954
Non-cash charges – Cost of products sold		2,040		1,095		-		3,135
Employee separation – Selling and administrative expenses		2,820		288		108		3,216
Other costs – Selling and administrative expenses⁽¹⁾		39		497		-		536
Total	$	16,498	$	11,235	$	108	$	27,841

⁽¹⁾

Other costs include legal settlements, professional services, and other related costs.