Kraft Heinz (NASDAQ:KHC) will restate its financial statements for 2016 and 2017 by $181 million, after a review into its procurement and accounting procedures discovered employee misconduct.
Kraft Heinz disclosed in February a $15-billion writedown on its Kraft and Oscar Mayer brands, as well as an investigation by the Securities and Exchange Commission into its accounting and procurement practices.
The SEC investigation launched an internal review, which caused Kraft Heinz to delay filing its annual report twice. Standard & Poor’s also put the company on CreditWatch negative.
According to Monday’s filing with the SEC, the miscalculations were due in part to recognizing the benefits of costs and rebates in the wrong time period, which the company said it has since corrected.
Shortly after the filing was released, Warren Buffett, who has a $10.6-billion stake in Kraft Heinz through Berkshire Hathaway, told reporters "The company has my confidence."
Berkshire Hathaway and private equity firm 3G Capital created Kraft Heinz by merging Kraft Foods and H.J. Heinz in 2015. The investment team previously worked together to take Heinz private two years prior.
But the Kraft Heinz deal has created headaches for Buffett. More recently, Buffett has been asked to defend 3G’s once-lauded operational excellence, as Kraft Heinz’s performance has deteriorated. Shares of the food giant have tumbled more than 24% through the year. Those shares opened Monday down a mere six cents to $32.52
The company in February reduced its dividend by 36%.
Berkshire Hathaway in February wrote down over $3 billion related to its investment in Kraft Heinz
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