Operational Improvement Plan

9 Months Ended

Sep. 30, 2020

Operational Improvement Plan [Abstract]

3.	Operational Improvement Plan

During the three months ended September 30, 2020, the Company approved an operational improvement plan (Operational Improvement Plan) to consolidate manufacturing facilities and improve efficiencies within the Company. As part of the Operational Improvement Plan, the Company is combining its New Jersey cosmetics manufacturing facility in the Personal Care product line of the Color segment into its existing Color segment facility in Missouri, and the Company incurred additional employee separation costs within its Personal Care product line in the Color segment. In addition, the Company is centralizing certain Flavors & Extracts segment support functions in Europe into one location. In the Asia Pacific segment, the Company incurred employee separation costs in connection with the elimination of certain selling and administrative positions.

The following table summarizes the Operational Improvement Plan costs by segment for the three and nine months ended September 30, 2020:

(In thousands) Three and Nine Months Ended September 30, 2020	Flavors & Extracts		Color		Asia Pacific		Consolidated
Employee separation	$	337	$	1,477	$	610	$	2,424
Other costs⁽¹⁾		-		217		-		217
Total	$	337	$	1,694	$	610	$	2,641

(1)

Other costs include professional services, accelerated depreciation, and other related costs.

The Company recorded the Operational Improvement Plan costs for the three and nine months ended September 30, 2020, as follows:

(In thousands) Three and Nine Months Ended September 30, 2020	Selling & Administrative Expenses		Cost of Products Sold		Consolidated
Employee separation	$	2,424	$	-	$	2,424
Other costs⁽¹⁾		182		35		217
Total	$	2,606	$	35	$	2,641

(1)

Other costs include professional services, accelerated depreciation, and other related costs.

The Company expects the total costs in 2020 and 2021 associated with the Operational Improvement Plan to be between $5 million and $7 million, primarily related to severance and accelerated depreciation.