Kraft Heinz: misstatements not quantitatively material
PITTSBURGH (AP) — Shares of Kraft Heinz are up sharply in the first day of trading since the company said that financial misstatements in revealed last month were not quantitatively material.
The Pittsburgh company first said in February that it was being investigated by the Securities and Exchange Commission over its procurement operations. Kraft Heinz Co. said in a regulatory filing in May that several employees within those procurement operations engaged in misconduct and that it would have to restate financial reports for the years 2016, 2017, and for the first nine months of 2018.
In a regulatory filing on Friday, Kraft Heinz said because of the qualitative nature of the matters identified in its internal investigation, including the number of years over which the misconduct occurred and the number of transactions, suppliers, and procurement employees involved, the company determined that it would be appropriate to correct the misstatements in its previously issued consolidated financial statements by restating them.
The company made adjustments to correct prior misstatements, essentially increasing the total cost of products sold during the time when the misconduct occurred.
Shares rose 5% in midday trading Monday.