I.B.C. third-quarter loss tops $42 million

by Eric Schroeder
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KANSAS CITY — Lower costs helped trim the quarterly loss at Interstate Bakeries Corp., but the Kansas City-based maker of Twinkies and Wonder bread still lost $42,235,000 during the third quarter ended March 10, which compared with a loss of $42,634,000 in the same period a year ago.

Net sales in the third quarter were $861,641,000, down 2% from $874,809,000 in the third quarter of fiscal 2006.

The quarterly report was filed April 19 by I.B.C. with the Securities and Exchange Commission.

I.B.C. said it did not initiate any new restructuring activities during the third quarter, and year-to-date restructuring charges related to the company’s consolidation and company-wide reduction in force are $300,000. I.B.C. did note that it realized a restructuring credit of approximately $300,000 during the third quarter as a result of the expiration of certain obligations for severance payments associated with the Profit Center Review plan that was initiated in the fourth quarter of fiscal 2005.

Reorganization charges for the quarter totaled $9,980,000, which compared with charges of $10,255,000 in the same period a year ago. Year-to-date, reorganization charges were $26,687,000, which compared with $28,402,000 in the first three months of fiscal 2006.

I.B.C. sustained a $6 million decline in wholesale operations sales during the quarter, while unit volume declined about 6%, the company said. I.B.C. said results suffered as a result of discontinued sales associated with its restructuring efforts, reduced demand for the company’s products, and the effects of a highly competitive market with higher promotional spending.

In retail operations, sales for the third quarter eased 7%, reflecting the closing of retail outlets in conjunction with the company’s restructuring efforts.

Through the first three quarters of fiscal 2007, I.B.C. said it lost $94,851,000 on $2,217,799,000 in revenues. By comparison, the company lost $102,946,000 during the same period last year on sales of $2,321,839,000.

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