6/19/08

Teamsters delay Twinkie-maker autopsy

Related IBC/Teamsters stories: here

Staggering losses mount as bankruptcy drags on

Interstate Bakeries Corp., in bankruptcy since September 2004, reported higher sales and a smaller loss for the four weeks ended May 3. Revenues for the period were $224.1 million, compared with $210.2 million for the four weeks that ended April 5, and compared with $234.9 million for the same period a year ago.

The loss for the most recently reported period was $9.4 million, compared with a loss of $15.4 million the prior four-week period. A year ago, the Kansas City based baking company reported a four-week loss of $3.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the recent period was a negative $2 million, compared with negative EBITDA of $3.4 million in the prior period and a net positive EBITDA of $8.3 million a year ago.

The maker of Hostess snack cakes and Wonder bread filed for bankruptcy in 2004 amid rising costs to make its goods and escalating labor and healthcare costs even as sales were declining.

Since then the company has closed bakeries, distribution depots and thrift stores and consolidated its delivery routes. It has reduced the number of employees by more than 20 percent to about 25,000 workers.

The company has submitted a plan of reorganization to the U.S. Bankruptcy Court in Kansas City, but that plan has been moved to the sidelines while IBC negotiates with unnamed parties it says are interested in investing in the company. Meanwhile, the company has been unable to make progress in gaining what it says are needed concessions from its employees who are members of the International Brotherhood of Teamsters to craft a viable plan to operate the company post-bankruptcy.

IBC executives also say they’re also working on a plan to sell the company in whole or parts if talks with potential investors fall through.

(kansascity.com)

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