I.B.C. posts first profit in more than a year

by Eric Schroeder
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KANSAS CITY — For only the third time since filing for bankruptcy in September 2004 and the first time since April 2006, Interstate Bakeries Corp. posted a profit in the most recent four-week period. Net income in the four weeks ended June 30 was $1,052,155, which compared with a loss of $5,968,622 in the four weeks ended June 2, according to an 8-K filed Aug. 15 with the Securities and Exchange Commission.

Sales in the four weeks ended June 30 were $237,073,331, up narrowly from $235,419,377 in the previous four-week period. I.B.C. now has posted six consecutive months of increasing sales, the longest streak since the company filed for Chapter 11 bankruptcy protection in September 2004.

Operating expenses finished at $112,964,439, down 3% from $116,394,797 in the previous period. Ingredients, packaging and outside purchasing costs fell 3% to $58,631,493 from $60,613,066, while direct and indirect labor costs climbed 10%, rising to $41,282,066 from $37,685,891 in the previous period.

I.B.C. recorded charges of $1,783,987 during the most recent period from restructuring and reorganization. Charges for professional fees of approximately $1,804,058, KERP and restructuring bonus plans of $73,256, adjustments to lease rejection expense of $2,528 and "other" charges of $33,897 offset interest income of $129,752.

I.B.C. posted earnings before interest, taxes, depreciation and amortization of $11,844,534, up 29% from $9,152,304 in the prior period.

In the S.E.C. filing, I.B.C. said capital expenditures for the four-week period ended June 30 totaled approximately $1.9 million, boosting year-to-date capital spending through June 30 to $32 million.

As of June 30, I.B.C. still had not borrowed under its $200 million debtor-in-possession credit facility. The company said it has $114.1 million of letters of credit outstanding. The amount of the credit facility available for borrowing was $85.9 million as of June 30.

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