Operational Improvement Plan

12 Months Ended

Dec. 31, 2020

Operational Improvement Plan [Abstract]

15. Operational Improvement Plan

During the third quarter of 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. 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 costs in connection with the elimination of certain selling and administrative positions. The Company reports all costs associated with the Operational Improvement Plan in Corporate & Other.

The following table summarizes the Operational Improvement Plan expenses by segment for the year ended December 31, 2020:

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Employee separation	$	352	$	1,749	$	589	$	2,690
Other costs⁽¹⁾		-		640		9		649
Total	$	352	$	2,389	$	598	$	3,339

(1)

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

The Company recorded the Operational Improvement Plan expenses for the year ended December 31, 2020, as follows:

(In thousands)	Selling and Administrative Expenses		Cost of Products Sold		Consolidated
Employee separation	$	2,690	$	-	$	2,690
Other costs⁽¹⁾		614		35		649
Total	$	3,304	$	35	$	3,339

(1)

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

As of December 31, 2020, the Company recorded $2.2 million of accrued liabilities in Other accrued expenses on the Company’s Consolidated Balance Sheet related to this plan. 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.