Interstate Bakeries Corporation, the largest wholesale baker in the US, has reported earnings per diluted share of US$0.32 for its 16-week Q3 ended 9 March 2002, more than double the prior year’s US$0.15.
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Highlights of the 16 weeks ended 9 March 2002, include:
*Net sales of US$1.053bn, an increase of 1.6% year on year
*Operating income of US$37.1m, 3.5% of net sales, up from 2001’s US$28.9m, 2.8% of net sales
*Net income of US$16.7m, an increase of 116% year on year
*Diluted earnings per share of US$0.32 compared to the prior year’s US$0.15
*Diluted earnings per share were reduced US$.02 per share as the result of a charge relating to the bankruptcy of a major customer
Results reported for the first 40 weeks of the fiscal year include:
*Net sales of US$2.7bn, up 1.5% year on year
*Operating income of US$129.7m (before one-time charges of US$25.7m), or 4.8% of net sales, compared to the prior year’s US$111.7m, or 4.2% of net sales
*Net income (after one-time charges) of US$47,784,000, or 1.8% of net sales, compared to the previous year’s US$46m, or 1.7% of net sales
*Diluted earnings per share (post one-time charges) of US$0.92, up 10.8% on last year
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By GlobalData“Overall we are pleased with our positive performance. As our quarterly results clearly indicate, IBC has continued to build on the momentum with which we entered fiscal 2002,” chairman Charles Sullivan said. “We’ve made gains toward sales volume improvement while maintaining tight discipline on operational costs.”
Sullivan credited improved volume, rather than pricing, for the quarter’s overall 1.6% net sales growth. For the 16 weeks, bread unit sales increased 3.3% and cake unit sales increased 2.2% over the prior year. He also indicated that the company’s US market share was beginning to inch up as a result of these volume improvements.
Sullivan noted that higher ingredient costs, as well as higher labour-related costs, especially the cost of medical benefits, contributed to a slight gross margin erosion during the quarter. However, selling, delivery and administration expenses showed improvement on a percentage of net sales basis even with higher labour-related costs.
The company said it continued to take costs out of both its bakery operations and route distribution system. The investment made over the past few years in new bakeries and major plant upgrades, along with an extended shelf life programme (ESL), is reported to be driving this improved productivity and expense reduction.
Looking forward, Sullivan said the company intended to focus on increasing top-line growth while ensuring earnings growth through improved efficiency and productivity. Sales improvements are expected through the merchandising advantages of ESL, better price realisation on promotions, improved product mix and expansion of new bakery products where appropriate.
“There is still significant work ahead of us to reach our financial and operational goals, but by leveraging our competitive advantages and operating strengths, we are confident we can successfully navigate even the most challenging of courses,” Sullivan said.
