Interstate Bakeries Corporation (NYSE:IBC), the nation’s largest baker and distributor of fresh branded bread and cake, Friday (6 July) reported net income of $15,107,000, or $.30 per diluted common share, for the fourth quarter of fiscal 2001, the twelve weeks ended June 2, 2001.
This compares to $7,807,000, or $.12 per share, in the prior year, the thirteen weeks ended June 3, 2000.
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Net sales for the quarter were $820,006,000, an increase of 2.7% over prior year sales adjusted for the extra week. Operating income for the quarter was $35,332,000, compared to the prior year’s $20,120,000. One-time events, including an eight-day work stoppage in the Northeast, workers’ compensation costs and start-up costs of a new bakery, reduced the prior year’s operating income.
“While we still have much work to do, this was a very encouraging quarter for our Company. We are pleased with the progress we have made,” IBC Chairman and Chief Executive Officer, Charles A. Sullivan, said.
“We have concluded a difficult year with a lot of positive momentum, particularly in improved sales and cost control,” he added. “We head into fiscal year 2002 positioned to meet our performance goals and further drive shareholder value.”
For the twelve weeks ended June 2, 2001, IBC reported:
- Net sales of $820,006,000 in comparison to the prior year’s $867,247,000. Excluding the extra week of the prior year’s fourth quarter, net sales improved by approximately $21,000,000, or 2.7 percent.
- Operating income of $35,332,000, or 4.3 percent of net sales, compared to the prior year’s $20,120,000, or 2.3 percent of net sales.
- Net income of $15,107,000, or 1.8 percent of net sales, compared to the previous year’s $7,807,000, or 0.9 percent of net sales.
- Earnings per share of $0.30 (diluted basis) in comparison to the prior year’s $0.12.
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By GlobalDataFor the 52 weeks of fiscal 2001, IBC also reported:
- Net sales of $3,496,482,000 in comparison to the prior year’s $3,522,929,000. Excluding the extra week in the prior year, net sales for fiscal 2001 improved by approximately $36,000,000, or 1.0 percent.
- Operating income of $147,103,000, or 4.2 percent of net sales, compared to the prior year’s $170,398,000, or 4.8 percent of net sales.
- Net income of $61,125,000, or 1.7 percent of net sales, compared to the previous year’s $89,388,000, or 2.5 percent of net sales.
- Earnings per share of $1.13 (diluted basis), compared to the prior year’s $1.31.
“There were a number of positive trends in the fourth quarter that indicate we are getting back on track for improved sales growth and renewed profitability,” Mr. Sullivan said. “Though our net sales increase for the quarter remained modest, the growth reflects improved pricing with a moderation in unit volume declines experienced in the prior quarter.”
Specifically addressing areas which have provided recent challenges for IBC, Mr. Sullivan noted that the Northeast, particularly New York City and Philadelphia, continues to struggle because of high delivery costs and low prices. However, he indicated that the new Pacific Northwest bakery operation “has significantly improved over the prior year, lowering costs of production and meeting our original plan projections” and that the new Biddeford bakery, which services the New England area, is also “performing up to expectations.”
“Across the Company, we continue to reduce costs through enhanced production, selling and distribution efficiencies,” added Mr. Sullivan.
Mr. Sullivan noted that although operating earnings continue to be adversely affected by unusual increases in employee health benefits, natural gas and electric utility costs, “we are making the appropriate adjustments for the current business environment by focusing on controlling costs, seeking prudent pricing and increasing volume through expansion of popular bakery products and more effective and selective promotional programs.”
Looking to the future, Mr. Sullivan emphasized: “The elements are in place for future growth, improved margins and expanded shareholder value. We are dedicated to continuing the momentum and doing whatever it takes to realize our goals.”
Interstate Bakeries Corporation is the nation’s largest wholesale baking company with 63 bread and cake bakeries located in strategic markets from coast to coast. The Company is headquartered in Kansas City, Missouri.
INTERSTATE BAKERIES CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(000’S EXCEPT PER SHARE DATA)
Twelve Thirteen Fifty-Two Fifty-Three
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
June 2, June 3, June 2, June 3,
2001 2000 2001 2000
——– ——— ———– ———-
Net sales $820,006 $ 867,247 $ 3,496,482 $3,522,929
——– ——— ———– ———-
Cost of products
sold 384,232 417,605 1,652,518 1,672,168
Selling, delivery
and administrative
expenses 374,941 404,106 1,585,962 1,568,759
Depreciation and
amortization 25,501 25,416 110,899 111,604
——– ——— ———– ———-
784,674 847,127 3,349,379 3,352,531
——– ——— ———– ———-
Operating income 35,332 20,120 147,103 170,398
Interest expense
— net 10,485 7,630 46,568 27,378
——– ——— ———– ———-
Income before
income taxes 24,847 12,490 100,535 143,020
Income taxes 9,740 4,683 39,410 53,632
——– ——— ———– ———-
Net income $ 15,107 $ 7,807 $ 61,125 $ 89,388
======== ========= =========== ==========
Earnings per
share:
Basic $ 0.30 $ 0.12 $ 1.13 $ 1.31
======== ========= =========== ==========
Diluted $ 0.30 $ 0.12 $ 1.13 $ 1.31
======== ========= =========== ==========
Average shares
outstanding:
Basic 50,556 66,080 54,110 68,156
======== ========= =========== ==========
Diluted 50,710 66,198 54,296 68,356
======== ========= =========== ==========
CONSOLIDATED CONDENSED BALANCE SHEET
(000’S)
June 2, June 3,
2001 2000
———- ———-
Assets:
Current assets $ 336,925 $ 341,147
Property and equipment — net 874,310 886,078
Other assets 412,261 424,700
———- ———-
$1,623,496 $1,651,925
========== ==========
Liabilities and Stockholders’
Equity:
Current liabilities (a) $ 903,345 $ 330,457
Long-term debt 0 385,000
Other long-term liabilities 327,346 344,791
Stockholders’ equity 392,805 591,677
———- ———-
$1,623,496 $1,651,925
========== ==========
(a) The current liabilities amount at June 2, 2001, includes $585
million outstanding under the Company’s existing credit facilities
which is currently being refinanced on a long-term basis.
