What changed in this filing

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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-17 · 355 added, 354 removed, 115 unchanged (86% of the section changed)

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As with any business, the Company’s business and operations involve risks and uncertainties.

In addition to the other discussions in this report, particularly those under the headings “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” below and “Forward-Looking Statements” above, the following factors should be considered:

In addition to the other discussions in this report, particularly those under the headings “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” below and “Forward-Looking Statements” above, the following factors should be considered:

Business Risks

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natural ingredients, including dehydrated vegetables and other food ingredients;

synthetic food and beverage colors;

natural and synthetic

food and beverage colors;

personal care colors and ingredients;

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and technical colors, specialty colors, and specialty dyes and pigments.

We sell these products to

customers in industries and markets that are highly competitive.

We sell these products to customers in industries

and markets that are highly competitive.

We face intense competition from multiple competitors in each of our business lines.

These competitors range from large multinational flavor companies with broad and

sophisticated product portfolios and outstanding technological capabilities to smaller more specialized regional companies that focus on a single product line or offering.

Our success against these competitors depends upon our ability to

continually develop and manufacture safe, high quality, innovative, and legally compliant products across each of our product lines in varying batch sizes, at varying frequencies, and at acceptable prices.

We also must provide outstanding

product development support, on time delivery, regulatory assistance, and after-sale product support to all of our customers, wherever they are located.

If we are unable to do these tasks, or if competitors do any of these tasks better than

we do, we may lose part or all of our business with some customers.

These competitors range from large multinational flavor companies with broad and sophisticated product portfolios and

outstanding technological capabilities to smaller more specialized regional companies that focus on a single product line or offering.

Our success against these competitors depends upon our ability to continually develop and manufacture safe, high

quality, innovative, and legally compliant products across each of our product lines in varying batch sizes, at varying frequencies, and at acceptable prices.

We also must provide outstanding product development support, on time delivery,

regulatory assistance, and after-sale product support to all of our customers, wherever they are located.

If we are unable to do these tasks, or if competitors do any of these tasks better than we do, we may lose part or all of our business with

some customers.

We do lose business to competitors from time to time.

Competition can reduce both our sales and the prices at which we are able to sell our products, which can negatively

Competition can reduce both our sales and the prices at which we are able to sell our products, or cause us to incur additional costs to remain competitive, which can negatively

affect our results.

Our business is impacted by adverse developments in economic conditions, which could negatively affect our financial performance and our ability to grow or sustain the growth of our

Our business is impacted by adverse developments in economic, political, and capital market conditions, which could negatively affect our financial performance and our ability to grow or

sustain the growth of our business.

We compete around the world in various geographic regions and product markets.

Global economic and political conditions affect our businesses and the businesses of our customers and

Economic downturns, changes in interest rates, lower consumer confidence, decreasing employment levels, price instability, inflation, slowing economic growth, and social and political instability in the industries and/or

markets where we compete could negatively affect our financial performance in future periods and adversely impact our ability to grow or sustain our business.

For example, current macroeconomic and political instability have caused global

supply chain disruptions, inflation, and the strengthening of the U.S.

dollar, which have adversely impacted and could continue to adversely impact our results of operations.

Global economic and political conditions affect our businesses and the businesses of our customers and suppliers.

Economic downturns,

changes in interest rates, lower consumer confidence, decreasing employment levels, price instability, inflation, slowing economic growth, and social and political instability in the industries and/or markets where we compete could negatively

affect our financial performance in future periods and adversely impact our ability to grow or sustain our business.

For example, current macroeconomic and political instability caused by rising interest rates, global supply chain disruptions,

inflation, ongoing conflicts between Russia and Ukraine as well as Israel and Hamas and related disruptions in the Red Sea and region, geopolitical tensions, and the strengthening of the U.S.

dollar, have adversely impacted, and could continue to

adversely impact, our results of operations.

We have experienced, and could continue to experience, increased raw material and energy cost inflation, as well as disruptions and delays in our supply chain, as a result of global macroeconomic trends, including

increased global demand, labor shortages, geopolitical and economic tensions, including the conflicts between Russia and Ukraine and in the Middle East, which has grown out of the Israel and Hamas conflict.

For example, suppliers

located in Ukraine are our main source of sunflower oil, which is primarily used in our savory and beverage businesses.

We have encountered difficulties, and may continue to encounter difficulties, in finding favorable pricing and reliable

alternative sources or substitutes for certain of the raw materials we need (including sunflower oil) for certain products.

If these difficulties persist, accelerate, or expand, our operations could be adversely affected.

These increased costs, or any potential shortage of energy or raw materials, could adversely affect our profitability.

The military conflicts may also increase the risk of cybersecurity incidents, including the risk of cyberattacks in

retaliation based upon the United States’ and/or European Union’s support for Ukraine or Israel.

Such attacks, whether on us or on critical infrastructure and financial institutions globally, could also adversely affect our operations.

In addition, the credit markets provide us with liquidity to operate and grow our business beyond the liquidity that our cash flows provide.

A worldwide economic downturn and/or disruption

of the credit markets could reduce our access to capital or significantly increase our costs of capital, which may negatively impact our financial condition, results of operations, and cash flows.

We have seen our interest expense rise as

a result of increased interest rates, and a continued increase in such rates may negatively affect our results.

A worldwide economic downturn and/or disruption of the credit markets could

reduce our access to capital or significantly increase our costs of capital, which may negatively impact our financial condition, results of operations, and cash flows.

We have seen our interest expense rise as a result of increased interest

rates, and a continued increase in such rates may negatively affect our results.

A disruption in our manufacturing operations could adversely affect our profitability.

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Generally, our labs and plants are dedicated to particular product lines.

For example, many (but by no means all) of our food colors products

are developed and manufactured in our St.

For example, many (but by no means all) of our food colors products are

developed and manufactured in our St.

Louis facility.

While we have redundant capabilities across labs and plants for many product lines, in some cases, we only manufacture particular products at one facility.

To establish a new

manufacturing capability at a plant could require substantial time, money, and numerous governmental and customer approvals.

Additionally, because of the complexity and highly specialized nature of many of the products we produce, it would

require a tremendous amount of technical, engineering, and management time and effort to establish the new capability.

Manufacturing involves inherent risks such as industrial accidents, environmental events, labor disputes, labor

shortages, product quality control issues, safety issues, licensing, and regulatory compliance requirements, as well as natural disasters, conflicts, terrorist acts, civil unrest, ERP software issues, cyber-attacks, and other events that we

cannot control.

If one of our development or manufacturing facilities is disrupted or impaired, we could cause a supply disruption to our customers, which could cause short and long-term damage to our customer relationships.

Such disruption

would have an adverse effect on our financial performance and future growth.

The coronavirus/COVID-19 has significantly impacted worldwide economic conditions and could adversely affect our results and financial condition.

The coronavirus, also known as COVID-19, has caused, and may continue to cause, a material adverse effect on the level of economic activity around the world, including through factory shutdowns, disruptions in

supply and logistics, travel and transportation restrictions, widespread illness and quarantines, and uncertainty and volatility in the financial markets.

These disruptions present numerous risks to our operations.

We may be unable to

produce goods due to constraints in production caused by our factories being ordered to close;

our inability to obtain raw materials due to shortages, transportation disruptions, or supplier shutdowns;

or due to illnesses and quarantines

affecting our workforce.

Any of these events could adversely affect our ability to produce and sell our products, resulting in reduced revenue.

While all of our manufacturing facilities currently remain open, it remains possible that a government could order partial or total shutdown of one or more of our facilities as a result of a zero-COVID

government policy or otherwise.

Earlier during the COVID-19 pandemic in 2020 through 2022, our facilities in China and India were shut down at times by the local governments as a result of COVID-19 restrictions.

Any such future shutdowns

could adversely affect our results.

Even if our facilities are allowed to remain open, an outbreak of illness among employees at any of our facilities could result in a temporary or prolonged manufacturing disruption or facility closure.

We have also found it difficult to hire production workers and other employees in some markets as a result of the COVID-19 pandemic and changing dynamics in the employment market, which have increased competition for labor.

Additionally,

changes in governmental policies could also affect our ability to operate our facilities.

Even if we can produce our products, we may not be able to ship them on time due to transportation disruptions.

In addition, due to travel restrictions and customer shutdowns, we may not be able to continue

sales efforts with some new and existing customers.

Even where we can produce our products, offer our products for sale, and deliver them, our customers may not be able to fully operate their production facilities due to shutdowns or

their inability to obtain other raw materials necessary to produce their products, which may result in less demand for our products.

Customers may also face transportation disruptions for their products, which could reduce customers’

sales and, therefore, customers’ demand for our products.

Additionally, many customers have cancelled or delayed new product introductions due to the disruptions created by the COVID-19 pandemic.

It is unclear when, or if, such new

product introductions will return to pre-COVID-19 pandemic levels.

A prolonged decline of new product introductions or limited time offerings could adversely affect our results.

Overall, COVID-19 and the volatile economic conditions stemming from the COVID-19 pandemic could exacerbate the other risk factors that we identify in this report, any of which could materially adversely impact

our business.

More broadly, the COVID-19 pandemic has demonstrated the massive economic and societal impacts that can be generated by a global pandemic, and there can be no assurance that there will not be a resurgence of COVID-19,

globally or in regions that are significant to us, or the outbreak of another pandemic in the future, either of which could materially adversely impact our business.

As a result of any of the foregoing, our results or financial condition

could be adversely impacted and the impacts could be material.

To establish a new manufacturing

capability at a plant could require substantial time, money, and numerous governmental and customer approvals.

Additionally, because of the complexity and highly specialized nature of many of the products we produce, it would require a tremendous

amount of technical, engineering, and management time and effort to establish the new capability.

Manufacturing involves inherent risks such as industrial accidents, environmental events, labor disputes, labor shortages, product quality control

issues, safety issues, licensing, and regulatory compliance requirements, as well as natural disasters, conflicts, terrorist acts, civil unrest, ERP software issues, cyber-attacks, and other events that we cannot control.

If one of our development

or manufacturing facilities is disrupted or impaired, we could cause a supply disruption to our customers, which could cause short and long-term damage to our customer relationships.

Such disruption would have an adverse effect on our financial

performance and future growth.

Intense competition among our customers and their competitors may result in reduced sales and profitability for our customers and us.

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Our customers face intense competition .

competitive pressure has caused some of our customers to change or reduce ordering patterns, to resist price increases, to discontinue or reduce existing product offerings, and to introduce fewer new products and reduce or eliminate

traditional limited time offerings.

This competitive

pressure has caused some of our customers to change or reduce ordering patterns, to resist price increases, to discontinue or reduce existing product offerings, and to introduce fewer new products and reduce or eliminate traditional limited time

Some of our large, multinational customers may increasingly become vertically integrated as a result of cost pressures, supply chain disruptions, or other reasons.

We would lose business to the extent any

of our customers are able to produce the products that we otherwise supply them.

Additionally, the commercial outlets for many of our customers are also under intense competitive pressure, which has caused many such commercial outlets to be

resistant to price increases from their suppliers.

Ultimately, o ur ability to sell our products to customers depends upon our customers’ ability to succeed against their competitors and to respond effectively

to the demands of their own customers.

We would lose business to the extent any of our customers are able to

produce the products that we otherwise supply them.

Additionally, the commercial outlets for many of our customers are also under intense competitive pressure, which has caused many such commercial outlets to be resistant to price increases from

their suppliers.

Ultimately, o ur ability to sell our products to customers depends upon our customers’ ability to succeed against their competitors and to respond effectively to the demands of their own customers,

including pressure to reduce prices.

When our customers do not successfully compete, as happens from time to time, it can impact our sales and the prices at which we sell our products, which can negatively affect our results.

The ongoing military conflict between Russia and Ukraine, and the global response to it, may adversely affect our operations.

In February 2022, Russia invaded Ukraine.

This ongoing military conflict has increased the likelihood of supply chain interruptions and, for certain raw materials, decreased our ability to source materials that we need to make our

For example, suppliers located in Ukraine are our main source of sunflower oil, which is primarily used in our savory and beverage businesses.

We have encountered difficulties, and may continue to encounter difficulties, in

finding favorable pricing and reliable alternative sources or substitutes for certain of the raw materials we need (including sunflower oil) for certain products.

If these difficulties persist, accelerate, or expand, our operations could

be adversely affected.

In addition, we have experienced increased costs for transportation, energy, and raw materials due in part to the negative impact of the Russia-Ukraine military conflict on the global economy.

These increased costs, or any potential

shortage of energy or raw materials, could adversely affect our profitability.

The military conflict may also increase the risk of cybersecurity incidents, including the risk of cyberattacks in retaliation for the United States’ and

European Union’s support of Ukraine and sanctions against Russia or otherwise.

Such attacks, whether on us or on critical infrastructure and financial institutions globally, could also adversely affect our operations.

It is not possible to predict the broader or long-term consequences of this military conflict, which could include further sanctions, regional instability, a wider military conflict, and adverse effects on international trade policies

and economic conditions, cybersecurity, currency exchange rates, and financial markets.

In some product lines, most of our sales are made to a relatively small number of customers;

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In some of our product lines, our sales are concentrated with a small number of customers.

While we do not currently have any single customer that we consider to be significant to us as a whole, the loss of a

significant customer for a particular product line could substantially affect the sales and profitability of that line or the business unit that sells that product line, which may cause us to re-evaluate that line.

Those developments could

negatively affect our results.

While we do not currently have any single customer that we consider to be significant to us as a whole, the loss of a significant

customer for a particular product line could substantially affect the sales and profitability of that line or the business unit that sells that product line, which may cause us to re-evaluate that line.

Those developments could negatively affect

Consolidation has resulted in customers with increased buying power, which can affect our profitability.

Many of our customers have consolidated in recent years and we expect the combination trend to continue in many business lines.

These consolidations have often produced large, sophisticated customers with

increased buying power who are more capable of resisting price increases or vertically integrating.

If the larger size or greater buying power of those customers results in additional negotiating strength, the prices we are able to charge

could be negatively affected and our profitability could decline.

These consolidations have often produced large, sophisticated customers with increased buying

power who are more capable of resisting price increases or vertically integrating.

If the larger size or greater buying power of those customers results in additional negotiating strength, the prices we are able to charge could be negatively

affected and our profitability could decline.

In addition, if any of these large customers are able to produce the products that we otherwise supply them, our results of operations may be adversely impacted.

Our sales and profitability are affected by changing consumer preferences, changing regulations and technologies, and our ability and our customers’ ability to make and sell to

consumers in highly competitive markets.

Our sales and profitability are affected by changing consumer preferences, changing regulations and technologies, and our ability and our customers’ ability to make and sell to consumers in

highly competitive markets.

Although we do not generally make or sell proprietary consumer products, many of our products are sold to companies that develop and market consumer products, either directly or through other commercial and retail

Sales of flavors, colors, personal care ingredients, pharmaceutical and nutraceutical excipients and ingredients, and many of our other products depend in part upon our customers’ ability to create and sell products to consumers in

highly competitive markets, all of which are beyond our control.

Our sales could also be affected by changing regulations or technologies that could impact consumer demand for products that contain our products.

Therefore, we depend upon

our customers’ ability to create markets for the consumer products that incorporate the products that we manufacture.

In addition, if we cannot adequately anticipate and respond to the needs of our customers as they evolve in response to

changing consumer preferences, new technologies, and price demands, our results could be adversely affected.

The COVID-19 pandemic and ongoing economic uncertainty have impacted consumer behavior in numerous ways and it is difficult to

predict whether these changes will persist over the long term and how they will impact our customers.

Additionally, the market pressures on our customers may adversely affect the willingness of these customers to launch new products, to

introduce limited time offerings, and to grow or continue to produce existing product lines.

Since the beginning of the COVID-19 pandemic, we have seen a reduction in the size of new product launches and fewer limited time offerings from

some of our customers.

Any of these actions by our customers can adversely affect our results.

competitive markets, all of which are beyond our control.

Our sales could also be affected by changing regulations or technologies (including, for example, off-label prescription drug use for weight loss) that could impact consumer demand for

products that contain our products.

Therefore, we depend upon our customers’ ability to create markets for the consumer products that incorporate the products that we manufacture.

In addition, if we cannot adequately anticipate and respond to the

needs of our customers as they evolve in response to changing consumer preferences, new technologies (including advancements such as artificial intelligence and machine learning, which may become critical in understanding consumer preferences in

the future), and price demands, our results could be adversely affected.

The COVID-19 pandemic and ongoing economic uncertainty have impacted consumer behavior in numerous ways and it is difficult to predict whether these changes will persist over

the long term and how they will impact our customers.

Additionally, the market pressures on our customers may adversely affect the willingness of these customers to launch new products, to introduce limited time offerings, and to grow or continue

to produce existing product lines.

Since the beginning of the COVID-19 pandemic, we have seen a reduction in the size of new product launches and fewer limited time offerings from some of our customers.

Any of these actions by our customers can

adversely affect our results.

If we do not maintain an efficient cost structure, our profitability could decrease.

Our success depends in part on our ability to maintain an efficient cost structure.

We regularly initiate cost-reduction measures that could impact our manufacturing, sales, operations, and information systems

We regularly initiate cost-reduction measures that could impact our manufacturing, sales, operations, and information systems functions.

If we do not continue to manage costs and achieve additional efficiencies, or we do not successfully implement related strategies, our competitiveness and our profits could decrease.

As discussed above, the price pressures in our

markets make such cost reduction efforts particularly important.

For example, in 2020 and 2021, the Company executed an operational improvement plan to further consolidate manufacturing facilities and improve efficiencies within the

Personal Care business line of the Company.

As discussed above, the price pressures in our markets make such

cost reduction efforts particularly important.

For example, in 2023, the Company began the execution of a portfolio optimization plan to optimize certain production facilities, centralize and eliminate certain production and selling and

administrative positions, and improve efficiencies globally within the Company.

These types of activities have required, and may continue to require, the devotion of significant resources and management attention and may pose business risks.

Our ability to realize anticipated

cost savings may be affected by a number of factors, including our ability to effectively reduce overhead, rationalize manufacturing capacity, and effectively produce products at the consolidated facilities.

Furthermore, our cost reduction

efforts may not be as effective as we had anticipated, which could have an adverse effect on our financial condition.

addition, these actions may result in a deterioration of employee relations at the impacted locations in our business.

Our ability to realize anticipated cost savings may be affected by a number of factors, including our ability to effectively

reduce overhead, rationalize manufacturing capacity, and effectively produce products at the consolidated facilities.

Furthermore, our cost reduction efforts may not be as effective as we had anticipated, which could have an adverse effect on our

financial condition.

A disruption in our supply chain could adversely affect our profitability.

We generally rely on third party suppliers for various raw materials that we use to make our products.

We use many different chemical products, natural products, and other commodities as raw material

We also use raw materials whose production is energy intensive and dependent on successful farming techniques and favorable climatic and environmental conditions.

As the demand for natural products continues to grow, the

risks associated with agriculture, such as reduced crop yields, reduced crop availability, water shortages, increased water costs, reduced access to water, droughts, and other potentially more severe weather events, are becoming

increasingly important.

In addition, we obtain some raw materials from a single supplier or a limited number of suppliers.

We use many different chemical products, natural products, and other commodities as raw material ingredients.

also use raw materials whose production is energy intensive and dependent on successful farming techniques and favorable climatic and environmental conditions.

As the demand for natural products continues to grow, the risks associated with

agriculture, such as reduced crop yields, reduced crop availability, water shortages, increased water costs, reduced access to water, droughts, and other potentially more severe weather events, are becoming increasingly important.

In addition, we

obtain some raw materials from a single supplier or a limited number of suppliers.

Disruptions or other issues with those suppliers could affect the availability of those materials.

Even if there

are multiple suppliers of a particular raw material, there are occasionally shortages.

Even if there are multiple suppliers of a particular raw

material, there are occasionally shortages.

Constrictions in supply of raw materials can lead to increased costs.

We may not be able to pass these costs to customers for a variety of reasons,

including the fact that some of our competitors may not be subject to the increased costs.

Additionally, government regulatory action against any of our suppliers could also cause a supply disruption.

We have, in the past, dealt with

regulators shutting down suppliers that provided the Company with raw materials.

This adversely impacted the supply of raw materials for the affected products and, therefore, impacted our ability to produce products containing

these raw materials.

Additionally, our yields from harvests for onion were adversely impacted in 2021 and 2022 by both drought and flooding, resulting in reduced availability of onion products for our Natural Ingredients business.

Any future unavailability or shortage of a raw material, however caused, could negatively affect our operations using that raw material and thus adversely affect our results.

We may not be able to pass these costs to customers for a variety of reasons, including the fact that some of our competitors may

not be subject to the increased costs.

Additionally, government regulatory action against any of our suppliers or particular raw materials could also cause a supply disruption.

We have, in the past, dealt with regulators shutting down

suppliers that provided the Company with raw materials.

This adversely impacted the supply of raw materials for the affected products and, therefore, impacted our ability to produce products containing these raw materials.

Additionally, our yields from harvests for onion were adversely impacted in

2021 and 2022 by both drought and flooding, resulting in reduced availability of onion products for our Natural Ingredients business in recent prior years.

We increased the amount of onion and garlic planted in 2023, but there is no certainty that

we will achieve greater yields or, if we do increase our yields, that there will be a market for such products.

Any future unavailability or shortage of a raw material, however caused, could negatively affect our

operations using that raw material and thus adversely affect our results.

We may not be able to manage inventory as effectively as anticipated, which may adversely impact our performance.

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We must maintain appropriate inventory levels and product mix to meet customer demand, without incurring costs related to storing and holding excess inventory.

inventory management decisions do not accurately predict demand or otherwise result in excess inventory, as has happened in the past, our financial results may be adversely impacted by markdowns, impairment charges, or other costs related

to disposal of excess or obsolete inventory.

For example, the shelf-life for natural products is generally shorter than synthetic products, so as the demand for natural products grows, it becomes more likely that any excess inventory could

need to be written off or subject to markdowns and would have an adverse impact on our revenue and profitability.

Additionally, if we do not maintain enough inventory to satisfy the demand of our customers, we may lose business to our

competitors, which could adversely affect our results.

Since the beginning of the COVID-19 pandemic, we have held large quantities of raw material and finished goods inventory to minimize disruptions to our customers.

As we emerge from the

worst impacts of the pandemic, we may not be as effective as we intend in reducing our inventory to more normal levels.

If our inventory

management decisions do not accurately predict demand or otherwise result in excess inventory, as has happened in the past, our financial results may be adversely impacted by markdowns, impairment charges, or other costs related to disposal of

excess or obsolete inventory.

For example, the shelf-life for natural products is generally shorter than synthetic products, so if the demand for natural products slows, it becomes more likely that any excess inventory could need to be written off

or subject to markdowns and would have an adverse impact on our revenue and profitability.

Additionally, if we do not maintain enough inventory to satisfy the demand of our customers, we may lose business to our competitors, which could adversely

affect our results.

During the COVID-19 pandemic, we held large quantities of raw material and finished goods inventory to minimize disruptions to our customers.

As we continue to emerge from the pandemic, we may not be as effective as we intend in

reducing our inventory to more normal levels.

As we saw starting at the end of 2022 and continuing through 2023, many of our customers are also reducing their inventory to more normal levels.

This has had an adverse impact on our ability to reduce

our inventory at an optimal rate and may continue to have such an impact in the future.

Raw material, energy, labor, and transportation cost volatility, including inflation in prices due to ongoing supply chain challenges and other macroeconomic forces, may reduce our

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We have experienced challenges as a result of ongoing domestic and global supply chain issues, particularly with respect to raw materials, logistics, and labor.

In addition, we have experienced inflationary

increases in the costs of raw materials, energy, transportation, and labor.

Although we attempt to manage these challenges through pricing and other actions, we may not be able to increase our product prices enough to offset these increased

Increasing our prices also may reduce sales volume and related profitability and cause us to lose customers.

If inflationary conditions persist, accelerate, or expand, it will become more difficult to manage these challenges without

adverse impacts to our revenues and profitability.

In addition, we have experienced inflationary increases in

the costs of raw materials, energy, transportation, and labor.

Although we attempt to manage these challenges through pricing and other actions, we may not be able to increase our product prices enough to offset these increased costs.

our prices also may reduce sales volume and related profitability and cause us to lose customers.

If inflationary conditions persist, accelerate, or expand, it will become more difficult to manage these challenges without adverse impacts to our

revenues and profitability.

We use various energy sources in our production and distribution processes.

Commodity and energy prices are subject to significant volatility caused by market fluctuations, supply and demand, currency fluctuation,

production and transportation disruption, disruptive world events (such as the Russia-Ukraine military conflict discussed above), and changes in governmental regulations, particularly related to carbon reduction.

Commodity, transportation,

and energy price increases will raise both our raw material costs and operating costs.

Additionally, as many areas move away from using carbon-based sources of energy, we would initially anticipate increases in the cost of energy generated

from renewable energy sources as well as potential reliability and continuity issues related to electrical power generation, distribution, and supply.

While the long-term environment impact of these moves is favorable, the shorter and

medium-term impact in increased energy prices could adversely affect our profitability.

The financial condition of our customers may adversely affect their ability to buy products from us at current levels, to accept price increases, or to pay for products that they have

already purchased.

As mentioned above, our customers are under intense pressure in their markets from competitors and as a result of changing consumer preferences.

Historically, these combined pressures have resulted in some of the Company’s customers

entering bankruptcy or receivership.

production and transportation disruption, disruptive world events (such as the Russia-Ukraine and Middle Eastern conflicts and related disruptions in the Red Sea and Arabian Sea discussed above), and changes in governmental regulations,

particularly related to carbon reduction.

Commodity, transportation, and energy price increases will raise both our raw material costs and operating costs.

Additionally, as many areas move away from using carbon-based sources of energy, we would

initially anticipate increases in the cost of energy generated from renewable energy sources as well as potential reliability and continuity issues related to electrical power generation, distribution, and supply.

While the long-term environment

impact of these moves is favorable, the shorter and medium-term impact in increased energy prices could adversely affect our profitability.

The financial condition of our customers may adversely affect their ability to buy products from us at current levels, to accept price increases, or to pay for products that they have already

As mentioned above, our customers are under intense pressure in their markets from competitors and their end customers and as a result of changing consumer preferences.

Historically, these combined pressures have resulted in some of the

Company’s customers entering bankruptcy or receivership.

There is risk that other customers of the Company could enter bankruptcy or receivership in the near-term.

Once in bankruptcy or receivership, these customers are restricted from paying certain

outstanding invoices to the Company until later in the bankruptcy process and even when able to pay, may not be able to pay the full amounts owed.

Once in bankruptcy or receivership, these customers are restricted from paying

certain outstanding invoices to the Company until later in the bankruptcy process and even when able to pay, may not be able to pay the full amounts owed.

Additionally, certain payments made to us prior to a customer declaring for bankruptcy may

be, and have been, subject to clawback during the bankruptcy or receivership process.

Financially distressed customers may change or reduce ordering patterns, reduce willingness to accept price increases, discontinue or reduce existing

product offerings, and introduce fewer new products.

Financially distressed customers may change or reduce ordering patterns, reduce willingness to accept price increases, discontinue or reduce existing product

offerings, and introduce fewer new products.

Those developments could adversely affect our results.

In addition, if any of our suppliers become financially insolvent and fail to perform their obligations under arrangements with us, we may be forced to replace the underlying commitment at current or above market prices

or on other terms that are less favorable to us with little recourse against such supplier.

In such events, we may incur losses, or our results of operations, financial condition, or liquidity could otherwise be adversely affected.

The impact of currency exchange rate fluctuation may negatively affect our results.

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dollars at applicable exchange rates.

The applicable exchange rates between and among

foreign currencies and the U.S.

We are therefore subject to non-U.S.

currency risks and

exchange exposure.

The applicable exchange rates between and among foreign currencies and the U.S.

dollar have fluctuated and will continue to do so in the future.

These fluctuations have impacted our results of operations in recent periods as discussed below in more detail under the headings “Management’s

Discussion and Analysis of Financial Condition and Results of Operations.” Such currency exchange rate volatility may also adversely impact our financial condition or liquidity.

While we may use forward exchange contracts and foreign

currency denominated debt to manage our exposure to foreign exchange risk, such risk management strategies do not insulate us completely from those exposures and may not be effective, and our results of operations could be adversely

These fluctuations have impacted our results of operations in recent

periods as discussed below in more detail under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Such currency exchange rate volatility may also adversely impact our financial condition or

While we may use forward exchange contracts and foreign currency denominated debt to manage our exposure to foreign exchange risk, such risk management strategies do not insulate us completely from those exposures and may not be

effective, and our results of operations could be adversely affected.

Exchange rates can be volatile and a substantial weakening of foreign currencies against the U.S.

dollar could reduce our profit margin in certain of our businesses outside of the U.S.

and adversely impact the comparability of

results from period to period.

dollar could reduce our profit margin in certain of our businesses outside of

and adversely impact the comparability of results from period to period.

The continued strength of the U.S.

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This subjects us to risks that could materially impact our operating results, including:

difficulties in staffing and managing foreign personnel in diverse cultures;

transportation delays or interruptions;

in staffing and managing foreign personnel in diverse cultures;

transportation and other supply chain delays or interruptions;

sometimes unpredictable regulatory changes;

physical security risks;

and the effects of international political

developments and political and economic instability.

For example, we have a natural colors business in Peru, which has experienced political instability in recent years, including the removal of its president in late 2022.

political instability of Peru has not yet materially adversely impacted our business in Peru, it could do so in the future, and our results of operations could be adversely affected.

Also, we have a flavors manufacturing facility in Celaya,

Mexico, which has experienced increased levels of political and criminal violence by narcotics trafficking cartels during 2022.

While the instability in Mexico has not yet materially adversely impacted our business there, it could do so in

the future, and our results of operations could be adversely affected.

In addition, changes in policies by the United States or foreign governments could negatively affect our operating results due to changes in duties, tariffs, trade regulations, taxes, or limitations on currency or

fund transfers.

physical security risks, including the potential for violence, civil and

labor unrest, and possible terrorist attacks;

difficulties in enforcing rights, collecting revenues, and protecting assets in foreign jurisdictions;

and the effects of international political developments and political and economic instability.

example, we have a flavors manufacturing facility in Celaya, Mexico;

this city continues to experience increased levels of political and criminal violence by narcotics trafficking cartels.

While the instability in Mexico has not yet materially

adversely impacted our business there, it could do so in the future, and our results of operations could be adversely affected.

limitations on currency or fund transfers.

For example, changes in the trade relationship between the U.S.

and China as well as potential regulatory actions by the Chinese government may affect the availability and cost of our raw materials and products originating

in China, the demand for, as well as the supply of, our products manufactured in China or containing raw materials from China, and the demand from Chinese customers for our products.

Chinese government pandemic control policies also caused

our facilities to be shutdown for certain periods during 2022.

and China as well as potential regulatory actions by the Chinese government may affect the availability and cost of our raw materials and

products originating in China, the demand for, as well as the supply of, our products manufactured in China or containing raw materials from China, and the demand from Chinese customers for our products.

These kinds of restrictions could be adopted with little to no advanced notice, and we may not be able to effectively mitigate the adverse impacts from such measures.

Any of these events could increase the cost of our

products, create disruptions to our supply chain, and impair our ability to effectively operate and compete in the countries where we do business.

The impact of tariffs and other trade barriers may negatively affect our results.

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The Company sells to customers located both inside and outside the countries in which products are manufactured.

The Company also depends upon suppliers both inside and

outside the countries in which products are manufactured.

The Company also depends upon suppliers both inside and outside

the countries in which products are manufactured.

Tariffs and other trade barriers imposed by the U.S.

or other countries have affected and could continue to adversely affect our manufacturing costs, our ability to source and import

raw materials, our ability to export our products to other markets, and our ability to compete successfully against other companies that are not impacted by tariffs to the same extent as the Company.

example, we have production facilities, customers, and suppliers in the United Kingdom, and greater trade restrictions resulting from the departure of the United Kingdom from the European Union could result in increased costs and other

adverse financial impacts to our business.

Additionally, the uncertainties created by tariffs and other trade barriers have also affected and could continue to affect our customers’ demand for our products because, for example,

the customers decide to delay product launches or destock inventory due to these uncertainties.

It is difficult to predict the effects of current or future tariffs and other trade barriers and disputes, and the Company’s efforts to reduce

the effects of tariffs through pricing and other measures may not be effective.

In some cases, our products, such as U.S.

or other countries have affected and could continue to adversely affect our manufacturing costs, our ability to source and import raw materials,

our ability to export our products to other markets, and our ability to compete successfully against other companies that are not impacted by tariffs to the same extent as the Company.

Additionally, the uncertainties created by tariffs and other

trade barriers have also affected and could continue to affect our customers’ demand for our products because, for example, the customers decide to delay product launches or destock inventory due to these uncertainties.

It is difficult to predict

the effects of current or future tariffs and other trade barriers and disputes, and the Company’s efforts to reduce the effects of tariffs through pricing and other measures may not be effective.

In some cases, our

products, such as U.S.

grown garlic and onion, benefit from tariffs levied against foreign products.

beneficial tariffs were reduced or eliminated, it could adversely affect our business and financial condition.

Various stakeholders’ increasing and changing expectations and new laws and regulations with respect to Environmental, Social, and Governance (ESG) matters may impose additional costs

on us or expose us to additional risks.

If these beneficial tariffs were reduced or eliminated, it could adversely affect our business and financial condition.

Various stakeholders’ increasing and changing expectations and new laws and regulations with respect to Environmental, Social, and Governance (ESG) matters may impose additional costs on us or

expose us to additional risks.

Stakeholder expectations in connection with ESG matters have been, and continue to be, rapidly evolving and increasing.

The enhanced stakeholder and regulatory focus on ESG matters requires us to continuously

monitor various developing standards and reporting requirements and make continuous progress in our efforts to reduce our, as well as our suppliers’, energy consumption, greenhouse gas emissions, water usage, and waste generation.

Implementing such monitoring, reporting, and improved sustainability could be costly.

Even where we make progress, our ESG practices still may not meet the standards of all of our stakeholders.

For example, many of our large, global

customers are committing to long-term targets to reduce greenhouse gas emissions within their supply chains.

If we are unable to achieve these reductions, our customers may seek out alternative suppliers who are better able to support such

In addition, some of our customers and other stakeholders are requiring us to provide information on our plans relating to certain ESG matters, such as greenhouse gas emissions, and we expect this trend to continue as more

regulations are being adopted.

it could have a negative impact on the trading price of our common stock.

In addition, the increased focus on ESG matters may result in new or increased regulations, laws, and demands, such as carbon tax programs and enhanced sustainability reporting regimes, which could cause us to

incur additional costs or to make changes to our operations to comply with any such regulations, laws, or demands.

These actions are likely to increase costs associated with our operations, including costs for raw materials, production,

and transportation.

The enhanced stakeholder and regulatory focus on ESG matters requires us to continuously monitor various developing standards

and reporting requirements and make continuous progre ss in our e ffort s to reduce our , as w e ll as our suppliers ’ , energ y consumption , gr e enhous e gas emi ss ion s, water usage , and wa s te generation.

Implementing such monitoring , reporting , and impro ve d s u s tainabilit y could be costl y .

Even wh e re we make progre s s , our ESG practice s still may not meet the standards o f all of our s tak e hold e r s .

For e xample , man y of our large , global custom e r s are committing to long-tern1 targets to r e duce greenhou s e ga s emis s ion s within their suppl y chains.

I f w e are unable to achie v e the se r e ducti o n s, our cu s tomer s may see k out alt e rnati v e s upp l i e r s who are better able to s upport s uch reductions.

Certain of our customers hav e al s o indicated that th e y will r e quir e that their supplier s meet a certain s core or grade on one or more sustainability platforms.

I f we are unable to meet such criteria , w e ma y be unable to win new busine ss or lose existing busine ss with tho s e cu s t o mers.

We are also experiencing certain of our cu s tomers requesting that we undertak e s pecific s u s tainabilit y initiative s, so me of which ma y impo s e s ignificant co s t s on the Compan y .

If w e fail to und e rtak e s uch initiati v es , we ma y lo s e business with tho se cu s tom e r s or , if w e do undertak e s uch initiatives and are unable to pa ss on the additional cost s, our profitability could b e adversel y impacted.

In additi o n , s om e of our cu s tomers and other s tak e holders are requiring us to pro v ide information on

our plans relating to certain ESG matter s, such as

greenhouse gas emissions (including carbon scores for particula r product s we s uppl y ) , and we expect this trend to continue as more regulations are being adopted.

I f we are unable to re s pond , or w e ar e perceived to be re s ponding inad e quatel y , to th e expectations o f our stakeholder s, our busin es s and r e putation could b e harmed , our profit and rev e nue could decline , and it could ha v e a n e gati v e impact on the trading pric e of our common s tock.

In addition, the increased focus on ESG matters may result in new or increased regulations, laws, and demands, such as carbon tax and tariff programs and enhanced sustainability reporting regimes, which could cause us

to incur additional costs or to make changes to our operations to comply with any such regulations, laws, or demands.

These actions are likely to increase costs associated with our operations, including costs for energy, raw materials,

production, transportation, and labor.

We are also likely to incur additional third-party service provider costs, including sustainability platform fees, audit costs, and other service fees from sustainability professionals in order to remain

compliant with newly enacted regulations, laws, and demands, including the European Union Corporate Sustainability Reporting Directive and California SB 253 and SB 261.

If we are unable to pass on these costs, our profit could decline.

Further, our customers and the markets we serve may impose standards, regulations, market-based policies, or preferences that we may not be able to

timely meet due to the required level of capital investment or technological advancement, which in the case of the availability of sustainable energy to support our operations is generally outside our control.

If we fail to keep up with

changing regulations and preferences, or if we fail to innovate or operate in ways that maximize sustainability, our customers may choose more sustainable suppliers.

Failing to quickly and cost-efficiently adapt to stakeholder ESG

expectations and standards could adversely affect our business and financial condition.

Additionally, consumers who buy food and personal care products from our customers may be unwilling to pay the higher prices that could result from

the increased costs of products as a result of these sustainability efforts, which could adversely affect our business and financial condition.

our customers and the markets we serve may impose standards, regulations, market-based policies, or preferences that we may not be able to timely meet due to the required level of capital investment or technological advancement, which in the case

of the availability of sustainable energy to support our operations is generally outside our control.

If we fail to keep up with changing regulations and preferences, or if we fail to innovate or operate in ways that maximize sustainability, our

customers may choose more sustainable suppliers.

Failing to quickly and cost-efficiently adapt to stakeholder ESG expectations and standards could adversely affect our business and financial condition.

Additionally, consumers who buy food and

personal care products from our customers may be unwilling to pay the higher prices that could result from the increased costs of products as a result of the increased costs engendered by these sustainability efforts, which could adversely affect

our business and financial condition.

World events and natural disasters are beyond our control and could affect our results.

World events can adversely affect national, international, and local economies.

Economies can also be affected by conflicts, natural disasters, changes in climate, severe weather (including droughts and

flooding), epidemics, pandemics (including the coronavirus, as discussed in more detail above), or other catastrophic events.

Such events and conditions, as well as uncertainty in or impairment of financial markets, have adversely

affected and could continue to affect our revenues and profitability, particularly if they occur in locations in which we or our customers have significant operations.

Our natural colors, flavors, extracts, and essential oils businesses

are dependent on favorable climatic conditions and the non-occurrence of natural disasters.

Adverse weather events could impact our or our growers’ ability to plant, grow, and harvest crops, and such events could also increase the

presence of disease and pests on such crops, which may negatively affect our ability to supply certain products.

For example, our Natural Ingredients business has significant operations in California, which has been dealing with drought

conditions, flooding, and water supply issues.

In the event that there is an insufficient supply of water for our operations or the operations of the growers that we contract with, our Natural Ingredients business may be materially

impacted and could have an adverse effect on our results.

As noted above, our yields from harvests for onion were adversely impacted in 2021 and 2022 by both drought and flooding, resulting in reduced availability of our onion

In addition, while we have manufacturing facilities throughout the world, certain of our facilities are the sole manufacturer of a specific product, and a disruption in manufacturing could lead to

increased costs of relocating or replacing the production of a product, or reformulating a product, which could have an adverse effect on our results.

Economies can also be affected by conflicts, natural disasters, changes in climate, severe weather (including droughts and flooding),

epidemics, pandemics, or other catastrophic events.

Such events and conditions, as well as uncertainty in or impairment of financial markets, have adversely affected and could continue to affect our revenues and profitability, particularly if they

occur in locations in which we or our customers have significant operations.

Our natural colors, flavors, extracts, and essential oils businesses are dependent on favorable climatic conditions and the non-occurrence of natural disasters.

weather events could impact our or our growers’ ability to plant, grow, and harvest crops, and such events could also increase the presence of disease and pests on such crops, which may negatively affect our ability to supply certain products.

example, our Natural Ingredients business has significant operations in California, which has been dealing with drought conditions, flooding, and water supply issues, which such issues had negatively impacted certain of our yields from onion

harvests in prior years as discussed above.

In the event that there is an insufficient supply of water for our operations or the operations of the growers that we contract with, our Natural Ingredients business may be materially impacted and could

have an adverse effect on our results in future periods.

While we make efforts to diversify where we grow products, these efforts may be insufficient to mitigate all adverse effects.

In addition, while we have manufacturing facilities throughout

the world, certain of our facilities are the sole manufacturer of a specific product, and a disruption in manufacturing could lead to increased costs of relocating or replacing the production of a product, or reformulating a product, which could

have an adverse effect on our results.

Litigation and Regulatory Risks

Many of our products are used in items for human consumption and contact.

We may be subject to product liability claims and product recalls, which could negatively impact our

profitability and corporate image.

We sell flavors, fragrances, and colors that are used in foods, beverages, pharmaceuticals, personal care, nutraceuticals, and other items for human consumption or contact.

These products involve risks such as

contamination or spoilage, tampering, defects, and other adulteration.

We may be subject to product liability claims and product recalls, which could negatively impact our profitability and

corporate image.

We sell flavors, colors, and other specialty ingredients that are used in foods, beverages, pharmaceuticals, personal care, nutraceuticals, and other items for human consumption or contact.

These products involve risks

such as contamination or spoilage, tampering, defects, and other adulteration.

If the consumption or use of our products causes product damage, injury, illness, or death, we may be subject to liability, including class action lawsuits and other

civil and governmental litigation.

We are also subject to product liability claims involving products containing diacetyl and related chemicals.

From time to time, we or our customers have withdrawn or recalled products in the event of

contamination, product defects, or perceived quality problems.

If our customers withdraw or recall products related to ingredients that we provide to them, as has occurred in the past, they may make claims against us.

We are also subject to product liability claims involving products containing diacetyl and related chemicals as well as cosmetic ingredients that may have utilized talc in the past.

From time to time, we or our

customers have withdrawn or recalled products in the event of contamination, product defects, or perceived quality problems.

If our customers withdraw or recall products related to ingredients that we provide to them, as has occurred in the past,

they may make claims against us.

Although we vigorously defend against claims when they are made, there can be no assurance that any claims or recalls will not be material.

While we maintain liability insurance against these risks, coverage may

be unavailable or incomplete.

A significant product defect, product recall, or product liability judgment can negatively impact our profitability for a period of time depending on the insurance coverage, costs, adverse publicity, product

availability, scope, competitive reaction, and consumer attitudes.

Even if a product liability claim is unsuccessful or is not fully pursued, the cost of defense and the negative publicity surrounding any assertion that our products caused

illness, injury, or death or any recall involving our products could adversely affect our reputation with existing and potential customers and our corporate image and thereby adversely impact our profitability.

While we maintain liability insurance against these risks, coverage may be

unavailable or incomplete.

scope, competitive reaction, and consumer attitudes.

Even if a product liability claim is unsuccessful or is not fully pursued, the cost of defense and the negative publicity surrounding any assertion that our products caused illness, injury, or

death or any recall involving our products could adversely affect our reputation with existing and potential customers and our corporate image and thereby adversely impact our profitability.

There are an enormous number of laws and regulations applicable to us, our suppliers, and our customers across all of our business lines.

Compliance with these legal requirements is

costly to us and can affect our operations as well as those of our suppliers and customers.

Compliance with these legal requirements is costly to

us and can affect our operations as well as those of our suppliers and customers.

Failure to comply could also be costly and disruptive.

Our facilities and products are subject to many laws and regulations relating to the environment, health, safety, and the content, processing, packaging, storage, distribution, quality, and safety of food, drugs,

personal care, other consumer products, and industrial colors.

These laws and regulations are administered in the United States by the Department of Agriculture, the Food and Drug Administration, the Environmental Protection Agency, the

Department of Labor, and other federal and state governmental agencies.

care, other consumer products, and industrial colors.

These laws and regulations are administered in the United States by the Department of Agriculture, the Food and Drug Administration, the Environmental Protection Agency, the Department of Labor,

and other federal and state governmental agencies.

In addition, individual states may also enact regulations prohibiting or limiting the manufacturing and/or sale of goods containing certain of our products (such as the California Food Safety Act’s

prohibition on red dye 3), which could cause a decrease in our sales of such products and negatively impact our results of operations.

We, our suppliers, and our customers are subject to similar governmental regulation and oversight abroad.

Compliance with these laws and regulations can be complex and

costly and affect our, our suppliers’, and our customers’ operations.

Also, if we, our suppliers, or our customers fail to comply with applicable laws and regulations, we could be subject to administrative penalties and injunctive relief,

civil and criminal remedies, fines, recalls of products, and private civil lawsuits.

Regulatory action against a supplier or customer can create risk for us and negatively affect our operations.

As discussed above, actions by regulatory

agencies against us and our suppliers can also adversely impact the availability of raw materials.

Whenever raw materials become more costly or unavailable due to legal, regulatory, or other governmental actions, our profitability could be

adversely impacted.

Compliance with these laws and regulations can be complex and costly and affect our, our suppliers’, and our customers’ operations.

Also, if we, our suppliers, or our customers fail to comply with applicable laws and regulations, we could be

subject to administrative penalties and injunctive relief, civil and criminal remedies, fines, recalls of products, and private civil lawsuits.

Regulatory action against a supplier or customer can create risk for us and negatively affect our

As discussed above, actions by regulatory agencies against us and our suppliers can also adversely impact the availability of raw materials.

Whenever raw materials become more costly or unavailable due to legal, regulatory, or other

governmental actions, our profitability could be adversely impacted.

Environmental compliance may be costly to us.

Our operations are subject to extensive and stringent laws and regulations that pertain to the discharge of materials into the environment, handling of materials, and disposition of wastes and air emissions.

rules operate or will operate at both the federal and state levels in the United States, and there are analogous laws at most of our overseas locations.

Environmental regulations, and the potential failure to comply with them, can have

serious consequences, including the costs of compliance and defense;

operate or will operate at both the federal and state levels in the United States, and there are analogous laws at most of our overseas locations.

Environmental regulations, and the potential failure to comply with them, can have serious

consequences, including the costs of compliance and defense;

interference with our operations or the ability to obtain required permits;

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and negative publicity.

Additionally, the

ability of our suppliers to comply with environmental regulations may cause adverse effects on us by reducing or eliminating the availability of necessary raw materials or increasing the cost of raw materials.

These factors might adversely

impact our ability to make certain products as well as our profitability on the products that can be made.

Additionally, the ability of our

suppliers to comply with environmental regulations may cause adverse effects on us by reducing or eliminating the availability of necessary raw materials or increasing the cost of raw materials.

These factors might adversely impact our ability to

make certain products as well as our profitability on the products that can be made.

We could be adversely affected by violations of anti-bribery and anti-corruption laws and regulations.

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Foreign Corrupt Practices Act, the United Kingdom Bribery Act, and similar anti-bribery and anti-corruption laws and regulations in other countries where we operate.

While we maintain robust policies

to prevent violations of these laws and to monitor third party risks, investigating and resolving actual or alleged violations of anti-bribery and anti-corruption laws is expensive and could negatively impact our results of operations or

financial condition.

While we maintain robust policies to

prevent violations of these laws and to monitor third party risks, investigating and resolving actual or alleged violations of anti-bribery and anti-corruption laws is expensive and could negatively impact our results of operations or financial

Under these laws, companies may be held liable for the corrupt actions taken by their directors, officers, employees, agents, or other representatives.

We could be subject to substantial civil and/or criminal fines and

penalties if we or any of our representatives fail to comply with these laws, which could have a material adverse effect on our business and reputation.

We could be subject to substantial civil and/or criminal fines and penalties if we or

any of our representatives fail to comply with these laws, which could have a material adverse effect on our business and reputation.

Changes in tax rates or tax laws could expose us to additional tax liabilities that may negatively affect our results.

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and numerous foreign jurisdictions.

Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates;

in the valuation of deferred tax assets and liabilities;

Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax

changes in the valuation of deferred tax assets and liabilities;

changes in liabilities for uncertain tax positions;

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or changes in tax laws or their interpretation.

Any of these changes could negatively impact our

We are also subject to the routine examination of our income tax returns by tax authorities in those countries in which we operate, and we may be subject to assessments or audits in the future in any of these

Any of these changes could negatively impact

In addition, the Organisation for Economic Co-operation and Development published a statement updating and finalizing the key components of a two-pillar plan on global tax reform that has now been agreed upon by the majority of OECD

Pillar Two imposes a global minimum corporate tax rate of 15%.

Certain countries in which we operate have enacted legislation to adopt the Pillar Two framework, and several other countries are also considering changes to their tax laws

to implement this framework.

The Pillar Two framework is expected to be effective in fiscal year 2024.

When and how this framework is adopted or enacted by the various countries in which we do business could increase tax complexity and

uncertainty and may adversely affect our results of operations.

The results of such assessments or audits, if adverse to us, could negatively impact our results.

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Our success depends in large part on the continued service and availability of our key management and technical personnel, and on our ability to attract and retain qualified new personnel.

The competition for

these individuals can be significant, and the loss of key employees could harm our business.

The competition for these

individuals can be significant and if we are unable to successfully integrate, motivate, and reward our employees, we may not be able to retain them.

The loss of key employees or inability to attract new employees in the future could harm our

In addition, we need to provide for smooth transitions when replacing key management and technical personnel positions.

Our operations and results

may be negatively affected if we are not able to do so.

Our operations and results may be negatively affected if we are not able to do so.

Additionally, many of our key personnel must have access to the Company’s trade secrets to effectively perform their job responsibilities.

Although we seek to impose confidentiality,

non-solicitation, loyalty, and non-competition obligations on many employees through agreements and our Code of Conduct, these efforts may not be successful.

Furthermore, litigation to enforce departing employees’ legal obligations may not

be, and has not always been, successful as the legal systems in many jurisdictions disfavor or prohibit restrictions on an employee’s right to change jobs as well as on preemptive measures to prevent the disclosure of a company’s trade

secrets and intellectual property before it occurs.

As a result, there is a possibility that certain competitors could attempt to exploit the Company’s trade secrets and confidential information to the Company’s competitive detriment, which

could adversely impact our profitability.

Although we seek to impose confidentiality, non-solicitation, loyalty, and

non-competition obligations on many employees through agreements and our Code of Conduct, these efforts may not be successful.

Furthermore, litigation to enforce departing employees’ legal obligations may not be, and has not always been, successful

as the legal systems in many jurisdictions disfavor or prohibit restrictions on an employee’s right to change jobs as well as on preemptive measures to prevent the disclosure of a company’s trade secrets and intellectual property before it occurs.

It may become more difficult to obtain and enforce non-competition agreements in the future, as there are various federal and state efforts ongoing in the U.S.

that would prohibit or limit them.

As a result, there is a possibility that certain

competitors could attempt to exploit the Company’s trade secrets and confidential information to the Company’s competitive detriment, which could adversely impact our profitability.

We face risks associated with strategic transactions that we have completed and may pursue in the future, which could adversely affect our operating results.

Our business strategy includes acquiring businesses and making investments that complement our existing businesses.

We have acquired many companies and operations in the past and may continue growth by acquisition

in the future.

We continue to analyze and evaluate acquisition opportunities with the potential to strengthen our industry position or enhance our existing product offerings.

We may not be able to identify suitable acquisition candidates or

have sufficient financing and/or cash available to successfully complete acquisitions in the future.

Our future growth through acquisitions could involve significant risks that may have a material adverse effect on us.

We may also be at

risk for liabilities associated with acquisitions that the Company has made in the past.

Acquired companies may have significant latent liabilities that may not be discovered before an acquisition or fully reflected in the price we pay.

Our business strategy includes acquiring businesses, making investments that complement our existing businesses, and, based on an evaluation of our business portfolio, divesting existing businesses.

We have acquired many

companies and operations in the past and may continue to grow by acquisition in the future.

We continue to analyze and evaluate acquisition opportunities with the potential to strengthen our industry position or enhance our existing product

We may not be able to identify suitable acquisition candidates or have sufficient financing and/or cash available to successfully complete acquisitions in the future.

Our future growth through acquisitions could involve significant risks

that may have a material adverse effect on us.

In addition, strategic transactions may present operational, financial, and managerial challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel

and financial and other systems, increased expenses and raw material costs, assumption of unknown liabilities and indemnities that may not be discovered before an acquisition or fully reflected in the price we pay, and potential disputes with the

buyers or sellers.

If we are unable to consummate such transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, our financial results could be adversely affected.

Divestitures have

inherent risks, including potential post-closing liabilities and claims for indemnification, that may impact our ability to fully realize the anticipated benefits of a given divestiture.

If any additional post-closing risks materialize, the

benefits of such divestitures may not be fully realized, if at all, and our business, financial condition, and results of operations could be negatively impacted.

We may also need to finance future acquisitions, and the terms of any financing, and the need to ultimately repay or refinance any indebtedness, may have negative effects on us.

Acquisitions also could have a

dilutive effect on our financial results.

Acquisitions also could have a dilutive

effect on our financial results.

Acquisitions also generally result in goodwill, which would need to be written off against earnings in the future if it becomes impaired.

Acquisitions and investments may involve significant cash

expenditures, debt incurrences, equity issuances, operating losses, and expenses.

In addition, since 2020, we have completed the divestiture of each of our inks, yogurt fruit preparations, and fragrances (excluding the essential oils product line) product lines.

Divestitures have inherent

risks, including potential post-closing liabilities and claims for indemnification, that may impact our ability to fully realize the anticipated benefits of a given divestiture.

If any additional post-closing risks materialize, the benefits

of such divestitures may not be fully realized, if at all, and our business, financial condition, and results of operations could be negatively impacted.

Acquisitions and investments may involve significant cash expenditures, debt

incurrences, equity issuances, operating losses, and expenses.

Technology and Cybersecurity Risks

Our ability to protect our intellectual property rights is key to our performance.

We protect our intellectual property rights as trade secrets, through patents, under confidentiality agreements, and through internal and external physical and cyber security systems.

We could incur significant

costs in asserting our intellectual property rights or defending ourselves from third party intellectual property claims.

The laws of some of the countries in which we operate do not protect intellectual property rights to the same extent

as the laws of the United States.

If other parties were to infringe on our intellectual property rights, or if a third party successfully asserted that we had infringed on their intellectual property rights, it could have an adverse impact

on our business.

Our ability to successfully maintain and upgrade our information technology systems, and to respond effectively to failures, disruptions, compromises, or breaches of our information

technology systems, may adversely affect our competitiveness and profitability.

Our success depends in part on our ability to maintain a current information technology platform for our businesses to operate effectively, reliably, and securely.

We routinely review and upgrade our information

technology and cybersecurity systems in order to better manage, report, and protect the information related to our formulas, research and development, manufacturing processes, trade secrets, sales, products, customers, personnel, and other

If we do not continue to maintain our information technology and cybersecurity platforms and successfully implement upgrades to systems to protect our vital information as well as our facilities and IT systems, our

competitiveness and profits could decrease.

Because of the nature of our business, and the importance of our proprietary information and manufacturing facilities, we face threats not only from hackers’ intent on theft and disruption, but

also from malicious insiders that may attempt to steal Company information.

Furthermore, our information technology systems may be susceptible to failures, disruptions, breaches, ransomware, theft, employee carelessness in the face of

social engineering threats, and other similar cybersecurity events.

The impact of any such event and the effectiveness of our response thereto may adversely affect our operations and subject us to lost business opportunities, increased

operating costs, regulatory consequences, and reputational harm.

While we take substantial steps to protect our information and systems through cyber security systems, monitoring, auditing, and training, these efforts may not always be

We protect our intellectual property rights as trade secrets, through patents, under confidentiality agreements, and through internal and external physical and cyber-security policies and systems.

We could incur

significant costs in asserting our intellectual property rights or defending ourselves from third party intellectual property claims.

The laws of some of the countries in which we operate do not protect intellectual property rights to the same

extent as the laws of the United States.

Our failure to obtain or adequately protect our intellectual property rights (including in response to developments in artificial intelligence technologies), or any change in law or other changes that serve

to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness and could have a material adverse impact on our business, financial condition, and results of operations.

In addition, if other parties

were to infringe on our intellectual property rights, or if a third party successfully asserted that we had infringed on their intellectual property rights, it could have an adverse impact on our business.

Our ability to successfully maintain and upgrade our information technology systems, and to respond effectively to failures, disruptions, compromises, or breaches of our information technology

systems, may adversely affect our competitiveness and profitability.

Our success depends in part on our ability to maintain current information technology platforms, including some managed by third-party providers, for our businesses to operate effectively, reliably, and securely.

routinely review and upgrade our information technology and cybersecurity systems in order to better manage, report, and protect the information related to our formulas, research and development, manufacturing processes, trade secrets, sales,

products, customers, personnel, and other operations.

If we do not continue to maintain our information technology and cybersecurity platforms and successfully implement upgrades to systems to protect our vital information as well as our facilities

and IT systems, our competitiveness and profits could decrease.

In addition, as artificial intelligence capabilities and other new and evolving technologies improve and gain widespread use, we may experience cyber-attacks created using artificial

intelligence or other new and evolving technologies, which may be difficult to detect and mitigate against.

These attacks could be designed to directly attack information systems with increased speed and/or efficiency or create more effective

phishing techniques.

It is also possible for a threat to be introduced as a result of our customers and third-party providers using the output of an artificial intelligence tool or other new and evolving technologies that includes a threat, such as

introducing malicious code by incorporating artificial intelligence-generated source code.

Because of the nature of our business, and the importance of our proprietary information and manufacturing facilities, we face threats and experience cybersecurity incidents and attempts from time to time, not only from

hackers’ intent on theft and disruption, but also from malicious insiders that may attempt to steal Company information or negligent employees.

Furthermore, our and our third-party providers’ information technology systems are susceptible to

failures, disruptions, breaches, ransomware, theft, employee carelessness in the face of social engineering and phishing threats and attacks, and other similar cybersecurity events.

We and third parties we utilize as vendors to support our business

and operations have experienced such attacks in the past and while there has been no material impact on our business, any such attacks in the future could have an adverse impact on our business.

The impact of any such event and the effectiveness of

our response thereto may adversely affect our operations and subject us to lost business opportunities, increased operating costs, regulatory consequences, and reputational harm.

While we take substantial steps to protect our information and

systems through cyber security systems, monitoring, auditing, and training, these efforts are not always successful.

And, while we maintain liability insurance against these risks, coverage may be unavailable or incomplete.

Unresolved Staff Comments.

In addition, the Company is subject to a variety of laws and regulations in the United States and other jurisdictions regarding privacy, data protection, and data security, including those related

to the collection, storage, handling, use, disclosure, transfer, and security of personal data.

Compliance with and interpretation of various data privacy regulations continue to evolve and any violation could subject the Company to legal claims,

regulatory penalties, and damage to its reputation.

Our failure to comply with these evolving regulations, whether as a result of a cyber-attack or otherwise, could expose us to fines, sanctions, penalties, and other costs that could harm our

reputation and adversely impact our financial results.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors