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. The Company sold the land and building assets in February 2026 for approximately $2.0 million, resulting in a $0.4 million gain recognized in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings. There were no costs associated with the Portfolio Optimization Plan recognized during the three months ended March 31, 2026. The Company has completed all actions contemplated under the Portfolio Optimization Plan.

The total cost of the Portfolio Optimization Plan was approximately $50 million, primarily related to non-cash impairment charges and 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 beginning in 2026. 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.

(In thousands)	Flavors & Extracts		Color		Consolidated
Non-cash charges – Cost of products sold	$	855	$	-	$	855
Employee separation – Selling and administrative expenses		246		8		254
Other production costs – Cost of products sold		959		-		959
Other costs – Selling and administrative expenses⁽¹⁾		791		5		796
Total	$	2,851	$	13	$	2,864