The H.J. Heinz Co.’s restructuring took a toll on the Pittsburgh food company, which lost $77 million during a truncated fiscal year that ran from May 1 to Dec. 29, according to regulatory filings.
Heinz saw sales drop to $7.34 billion, down from $7.44 billion for a comparable period the year before, a decline spurred in part by currency rate shifts, the company told the Securities and Exchange Commission on Monday.
The document filed with the regulators reflects the turmoil at Heinz, which was sold June 7 but spent the months before that going through the sales process. A joint venture of 3G Capital and Berkshire Hathaway acquired the business for more than $28 billion.
After the deal closed, CEO Bernardo Hees lost little time changing the management and restructuring the company, moves that cut 3,400 corporate and field jobs and cost millions of dollars in severance. More cuts have been announced this year, including the closures of several plants that will eliminate hundreds more jobs.
“We continue to examine all of our businesses globally to ensure we are operating as efficiently and effectively as possible, with an unwavering commitment to providing our consumers with the highest product quality in the industry," said Michael Mullen, senior vice president of corporate and government affairs. "The difficult actions we are taking now will result in Heinz becoming a stronger and more nimble organization that is better-positioned to become one of the most efficient food companies in the world.”
One risk factor listed in the SEC filing notes, “Our business could be adversely impacted as a result of the merger and significant costs, expenses and fees.” One of those costs, the filing noted, could be workers' uncertainty about their futures with Heinz and challenges that ambiguity might raise in retaining and hiring key personnel.
In addition to about $275 million in severance and benefits costs last year, Heinz disclosed paying $70 million for other implementation costs such as professional fees and contract termination costs.
The company disclosed that Mr. Hees earned $9.2 million for his service from June 7 to Dec. 29, including a base salary of $561,538, a $1.2 million bonus and $7.29 million in stock options.
Meanwhile, the company reported that sales in its North American consumer products segment fell 3.4 percent, while sales in Europe dropped 0.5 percent and the Asia/Pacific segment reported a sales drop of 2.8 percent.
U.S. foodservice, which includes restaurants, reported a sales gain of 4.2 percent and the "rest of world" segment, including places like Brazil and Egypt, rose 0.6 percent.