Beware food companies relying on theirbookkeeping rather than their cooking to keep investorssatisfied.A number of food companies have recentlybeen selling their IOUs to deal with the fact that theircustomers, namely giant retailers like Walmart Inc., are takinglonger to pay. The sales bolster cash flows, but critics contendthey can make the giant food companies' finances look betterthan they truly are as they face increased business pressures. Thefinancing charges can also make those sales lessprofitable.Treehouse Foods Inc., whichtwo years ago bought the private-label business of ConAgra BrandsInc., in December became the latest food company to turn to itsunpaid billings as a source of immediate cash. Treehouse sold$183 million of its accounts receivables to anunidentified financial institution in the first three monthsof the year, according to its first-quarter financial filing.Cereal maker Kellogg Co., which began selling its receivables twoyears ago, recently expanded its IOU financing arrangements. Thecompany says it may borrow as much as $1 billion against itsreceivables, up from $350 million two years ago.Mondelez International and Kraft Heinz Co., which haveboth used similar financing arrangements for years, have alsorecently increased their sales of IOUs. Mondelez had borrowed $804million against its unpaid receivables at the end of last year, upfrom $211 million at the end of 2014.Changing consumertastes—including a preference for healthier foodsand organic household products—and Internet commercehave been denting the brands of Big Food. Warren Buffett,whose Berkshire Hathaway owns slightly more than a quarter of theshares of Kraft Heinz, said recently that as brands weaken,retailers were gaining the upper hand in negotiations with foodcompanies. That could be leading to the longer paymenttimes and the need for the financing.But more liberaluse of receivable financing has also opened foodcompanies up to criticism. Money manager Prescience PointCapital released a report on Kellogg in late April thataccused the cereal maker of using “accounting gimmicks” to mask itsgrowing problems. Prescience, which is short Kellogg and says itsshares can fall by more than a third, cited receivable sales as oneof those gimmicks. Prescience says Kellogg has tapped thefinancing deals to a greater extent than its rivals.Kellogg'soperations, for instance, generated $228 million in cash flow inthe first quarter, compared with a negative $34 million inthe quarter a year earlier. But the improvement seems tocome entirely from the receivable sales. What's more, without thesales, Kellogg's accounts receivable would have risen about60 percent in the past two years. Its sales, on the otherhand, were basically flat in the same period. Analysts typicallyview a rise in accounts receivables that outpaces sales as a redflag. Prescience says Kellogg has used longer payment schedules toentice customers to buy more up front, potentially setting thecompany up for a sales shortfall down the road. In all, Kellogg hascashed in more than a third of its receivables, up from 3 percenttwo years ago. Kellogg did not return a call for comment.Accountingexpert Robert Willens cautions that a large jump in receivables isnot necessarily a sign of trouble. He says that retailers takinglonger to pay could be a greater reflection of their problems andnot those of Kellogg or the other food companies. Either way, foodcompanies may soon reach the limit of how much they can feaston IOUs before their actual operations become malnourished.

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