SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 27, 2009
INTERSTATE BAKERIES CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
(Commission File Number)(IRS Employer Identification No.)
12 East Armour Boulevard
Kansas City, Missouri64111
(Address of Principal Executive Offices)(Zip Code)
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure.
As previously reported, on September 22, 2004, Interstate Bakeries Corporation (the “Company”) and each of its wholly-owned subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”). The filings were made in the United States Bankruptcy Court for the Western District of Missouri (the “Court”). On January 27, 2009, the Company filed with the Court as required by the Bankruptcy Code a consolidated monthly operating report for the four week period ended December 13, 2008 (the “MOR”).
The Company is required to file the MOR with the Bankruptcy Court and the U.S. Trustee pursuant to requirements under Local Rule 2015-2 C. The MOR should be read in conjunction with the Company’s second quarter fiscal 2009 Form 10-Q that was filed with the Securities and Exchange Commission (“SEC”) on December 24, 2008, and the Company’s Annual Report on Form 10-K for fiscal 2008 that was filed with the SEC on September 15, 2008.
The MOR is not audited and will not be subject to audit or review by the Company’s external auditors on a stand-alone basis at any time in the future. The MOR does not include quarterly and year-to-date adjustments reflected upon review of major asset and liability accounts prior to the Company’s filing of its quarterly and annual financial statements with the SEC. Due to the timing impact of the foregoing, results for this period as presented in the MOR are not necessarily indicative of the actual results for the period if all such matters were allocated to all periods in the quarter or year. Accordingly, the period reported in the MOR should not be viewed on a stand-alone basis, but rather in the context of previously reported financial results, including the Company’s SEC filings.
The information contained in the MOR is subject to additional qualifications and limitations as described in the Explanatory Notes to the MOR and readers are advised to read and consider such qualifications and limitations carefully. Accordingly, the Company cautions readers not to place undue reliance upon the information contained in the MOR. Readers are also cautioned to refer to the risk factors contained in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008, as supplemented by the Company’s second quarter fiscal 2009 Form 10-Q, which address risks that could adversely affect our financial condition, results of operations and cash flows. For these reasons, the financial information contained in the report furnished today is not indicative of the Company’s financial condition or operating results on a basis consistent with generally accepted accounting principles in the United States.
As reflected in the MOR, the Company reported net sales of $201.8 million for the four week period ended December 13, 2008. The Company’s net loss for the four week period ended December 13, 2008 was $11.3 million.
The Company reported cash of $19.3 million as of December 13, 2008. As of December 13, 2008 the Company had borrowed $110.9 million under its $309.0 million debtor-in-possession credit facility, which is subject to a borrowing base formula based on its level of eligible accounts receivable, inventory, certain real property and reserves. The credit facility was also utilized to support the issuance of letters of credit primarily in
support of the Company’s insurance programs. As of December 13, 2008, there were $149.1 million of letters of credit outstanding under the debtor-in-possession credit facility, which were partially collateralized by $21.1 million of restricted cash as shown on the MOR. The amount of the credit facility available for borrowing was $49.0 million as of December 13, 2008.
The foregoing description of the MOR is not intended to be complete and is qualified in its entirety by reference to the MOR attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Current Report on Form 8-K under the heading Item 7.01, “Regulation FD Disclosure,” including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.
Cautionary Statement Regarding Forward-Looking Statements and Other Matters
Some information contained in this Current Report on Form 8-K may be forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are not historical in nature and include statements that reflect, when made, the Company’s views with respect to current events and financial performance. These forward-looking statements can be identified by forward-looking words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “could,” “should” and “continue” or similar words. These forward-looking statements may also use different phrases. All such forward-looking statements are and will be subject to numerous risks and uncertainties, many of which are beyond our control that could cause actual results to differ materially from such statements. Factors that could cause actual results to differ materially include, without limitation: the ability of the Company to continue as a going concern; the ability of the Company to consummate its plan of reorganization, which was confirmed by the bankruptcy court on December 5, 2008; the ability of the Company to obtain the financing necessary to implement its business plan and emerge from Chapter 11; the ability of the Company to operate pursuant to the covenants, terms and certifications of its DIP financing facility, as amended and restated; the ability of the Company to successfully negotiate an extension and increase in the amount available under, or refinance, its DIP financing facility, if needed, which expires on February 9, 2009; the Company’s ability to implement its business plan; the significant time that is and will be required by management to consummate the plan of reorganization, as well as to continue to evaluate various alternatives in the event the plan of reorganization is not consummated, including, but not limited to, the sale of the Company or some or all of its assets, infusion of capital, debt restructuring, or any combination of these options and, absent the ability to pursue any such strategy, the orderly wind-down of the Company’s operations; the ability of the Company to obtain court approval with respect to motions in the Chapter 11 proceeding filed by it from time to time; risks associated with third parties seeking and obtaining court approval for the appointment of a Chapter 11 trustee or to convert the Chapter 11 proceeding to a Chapter 7 proceeding; risks associated with cost increases in materials, ingredients, energy and employee wages and benefits; risks associated with the Company’s restructuring activities, including the risks associated with
achieving the desired savings; the Company’s ability to successfully reject unfavorable contracts and leases; the duration of the Chapter 11 process; the ability of the Company to obtain and maintain adequate terms with vendors and service providers; the potential adverse impact of the Chapter 11 proceeding on the Company’s liquidity or results of operations; the Company’s ability to operate its business under the restrictions imposed by the Chapter 11 process; the instructions, orders and decisions of the bankruptcy court and other effects of legal and administrative proceedings, settlements, investigations and claims; risks associated with product price increases, including the risk that such actions will not effectively offset inflationary cost pressures and may adversely impact sales of the Company’s products; the effectiveness of the Company’s efforts to hedge its exposure to price increases with respect to various ingredients and energy and the Company’s ability to hedge given its financial condition; the ability of the Company to attract, motivate and/or retain key executives and employees; changes in the Company’s relationship with employees and the unions that represent them; successful implementation of information technology improvements; increased costs and uncertainties with respect to a defined benefit pension plan to which we contribute; costs associated with increased contributions to single employer, multiple employer or multi-employer pension plans; the impact of any withdrawal liability arising under the Company’s multi-employer pension plans as a result of prior actions or current consolidations; the effectiveness and adequacy of our information and data systems; changes in general economic and business conditions (including in the bread and sweet goods markets); changes in consumer tastes or eating habits; acceptance of new product offerings by consumers and the Company’s ability to expand existing brands; the performance of the Company’s recent and planned new product introductions, including the success of such new products in achieving and retaining market share; the effectiveness of advertising and marketing spending; any inability to protect and maintain the value of the Company’s intellectual property; future product recalls or food safety concerns; actions of competitors, including pricing policy and promotional spending; bankruptcy filings by customers; costs associated with environmental compliance and remediation; actions of governmental entities, including regulatory requirements; the outcome of legal proceedings to which we are or may become a party; business disruption from terrorist acts, our nation’s response to such acts and acts of war; and other factors. These statements speak only as of the date of this Current Report on Form 8-K, and we disclaim any intention or obligation to update or revise any forward-looking statements to reflect new information, future events or developments or otherwise, except as required by law. We have provided additional information in our historical filings with the SEC, which readers are encouraged to review, concerning other factors that could cause actual results to differ materially from those indicated in the forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
99.1Interstate Bakeries Corporation Consolidated Monthly Operating Report for the four week period ended December 13, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 27, 2009 INTERSTATE BAKERIES
By:/s/ J. Randall Vance
J. Randall Vance
Senior Vice President, Chief
Financial Officer and Treasurer
99.1Interstate Bakeries Corporation Consolidated Monthly Operating Report for the four week period ended December 13, 2008
Case Name: Interstate Bakeries
Corporation & All SubsidiariesCase No: 04-45814-jwv-11
Consolidated Monthly Operating Report Summary
For The Four Weeks Ended and as of December 13, 2008
Gross Income $201,802,115
Less Cost of Goods Sold 97,637,492
Ingredients, Packaging & Outside Purchasing $55,321,821
Direct & Indirect Labor 32,753,372
Overhead & Production Administration 9,562,299
Gross Profit 104,164,623
Owner - Draws/Salaries -
Selling & Delivery Employee Salaries 45,709,954
Advertising and Marketing 3,672,892
Insurance (Property, Casualty, & Medical) 11,334,016
Payroll Taxes 4,060,052
Lease and Rent 3,263,121
Telephone and Utilities 1,342,584
Corporate Expense (Including Salaries) 7,191,700
Other Expenses 26,406,636 (i)
Total Operating Expenses 102,980,955
Restructuring & Reorganization Charges 3,319,572 (ii)
Depreciation and Amortization 4,488,658
Property & Equipment Impairment -
Other( Income)/Expense 26,510
Gain/Loss Sale of Prop -
Interest Expense 4,809,674
Operating Income (Loss) (11,538,804)
Income Tax Expense (Benefit) (250,522)
Net Income (Loss) $(11,288,282)
Accounts Receivable at end of period $126,693,844
Increase (Decrease) in Accounts Receivable for period (7,913,157)
Inventory at end of period 57,378,911
Increase (Decrease) in Inventory for period (2,761,622)
Cash at end of period 19,272,760
Increase (Decrease) in Cash for period (5,391,175)
Restricted Cash 21,124,605 (iii)
Increase (Decrease) in Restricted Cash for period 7,865
Increase (Decrease) Liabilities Not Subject to Compromise (10,577,952)
Increase (Decrease) Liabilities Subject to Compromise (111,873) (iv)
Federal Payroll Taxes $3,973,380
State/Local Payroll Taxes 4,429,405
State Sales Taxes 700,360
Real Estate and
Personal Property Taxes 6,092,735
Other (see attached supplemental schedule) 2,632,054
Total Taxes Payable 17,827,934
See attached supplemental schedule for footnoted information.
Other Taxes Payable - Supplemental Schedule
for period ended
December 13, 2008
Use Tax $535,831
Accr. Franchise Tax 496,532
Other Taxes 1,599,691
Total Other Taxes Payable $2,632,054
(i) Other Expenses included the following items:
Employee benefit costs 12,485,044
Facility costs (excluding lease expense) 809,480
Distribution/transportation costs 10,340,175
Local promotional costs 1,042,557
(ii) Restructuring and reorganization expenses for the period included:
(Gain)/loss on sale of assets 0
Professional fees 3,379,179
Interest income (10,475)
Adjustments to lease rejection expense (102,660)
(Gain)/loss on sale of assets (38,306)
(iii) Restricted cash represents cash held as collateral pursuant to IBC's debtor-in-possession credit facility.
Note: Capital expenditures for the period totaled approximately $1.6 million.
EXPLANATORY NOTES TO THE INTERSTATE BAKERIES CORPORATION
CONSOLIDATED MONTHLY OPERATING REPORT
DATED AS OF DECEMBER 13, 2008
1.This consolidated Monthly Operating Report (MOR), reflecting results for the four-week period ended December 13, 2008 and balances of and period changes in certain of the Company’s accounts as of December 13, 2008, is preliminary and unaudited. This MOR should be read together and concurrently with the Company’s second quarter 2009 Form 10-Q that was filed with the Securities and Exchange Commission (SEC) on December 24, 2008 and the Company’s Annual Report on Form 10-K for fiscal 2008 filed with the SEC on September 15, 2008 for a comprehensive description of our current financial condition and operating results. This MOR is being provided to the Bankruptcy Court and the U.S. Trustee pursuant to requirements under Local Rule 2015-2 C.
2.This MOR is not audited and will not be subject to audit or review by our external auditors on a stand-alone basis at any time in the future. This MOR does not include quarterly and year-to-date adjustments reflected upon review of major asset and liability accounts prior to the Company’s filing of its quarterly and annual financial statements with the SEC. Due to the timing impact of the foregoing, results for this period as presented in the MOR are not necessarily indicative of the actual results for the period if all such matters were allocated to all periods in the quarter or year. Accordingly, each period reported in the MORs should not be viewed on a stand-alone basis, but rather in the context of previously reported financial results, including the Company’s SEC filings.
3.This MOR is presented in a format providing information required under local rule and incorporating measurements used for internal operating purposes, rather than in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. This MOR does not include certain financial statements and explanatory footnotes, including disclosures required under GAAP.
4.As of December 13, 2008, the Company had borrowed $110.9 million under its $309.0 million debtor-in-possession credit facility, which is subject to a borrowing base formula based on its level of eligible accounts receivable, inventory, certain real property and reserves. The credit facility was also utilized to support the issuance of letters of credit primarily in support of the Company’s insurance programs. As of December 13, 2008, there were $149.1 million of letters of credit outstanding under the debtor-in-possession credit facility. The amount of the credit facility available for borrowing was $49.0 million as of December 13, 2008.