UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 2, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-11165
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INTERSTATE BAKERIES CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 43-1470322
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
12 East Armour Boulevard, Kansas City, Missouri 64111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 502-4000
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock,
$.01 par value per share New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
- ------------------------------- -------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
[ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $778,609,836 as of August 1, 2001. For these purposes only,
the registrant has assumed that shares of Common Stock, $.01 par value per
share, that may be deemed to be beneficially owned by certain members of the
board of directors constitute shares held by affiliates of the registrant.
There were 50,417,495 shares of Common Stock, $.01 par value per share,
outstanding as of August 1, 2001.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Part and Item Document Incorporated
of Form 10-K: By Reference
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Part II, Item 5 Annual Report*
Part II, Item 6 Annual Report*
Part II, Item 7 Annual Report*
Part II, Item 8 Annual Report*
Part III, Item 10 Proxy Statement**
Part III, Item 11 Proxy Statement**
Part III, Item 12 Proxy Statement**
Part III, Item 13 Proxy Statement**
- -------------------------------------------------------------------
* Refers to portions of Registrant's annual report to security
holders with respect to the fiscal year ended June 2, 2001.
** Refers to portions of Registrant's definitive proxy statement
filed on August 24, 2001.
FORWARD-LOOKING STATEMENTS
Certain statements incorporated by reference or made in this Report,
including those under the captions "Business," "Legal Proceedings" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and elsewhere are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, and are
subject to the safe harbor created by that Act. Such forward-looking
statements include, without limitation, the future availability and prices of
raw materials, the availability of capital on acceptable terms, the
competitiveness of the bread and cake industry, potential environmental
liabilities and other statements contained herein that are not historical
facts. Because such forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, changes in general economic and business
conditions (including in the bread and cake markets), the availability and
costs of raw materials and the ability to recover raw material costs in the
pricing of products, the availability of capital on acceptable terms, actions
of competitors, including pricing policy, actions of governmental entities,
including regulatory requirements, increased costs and uncertainties related
to periodic renegotiation of union contracts, the extent to which we are able
to develop new products and markets for products, the time required for such
development, the level of demand for such products, our success in realizing
projected savings from productivity and product quality improvements, changes
in our business strategies, including our ability to continue to participate
in industry consolidation and to integrate successfully businesses we acquire,
the outcome of legal proceedings to which we are or may become a party and
other factors.
PART I
Item 1. Business
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General
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Interstate Bakeries Corporation ("the Company"), a Delaware corporation
incorporated in 1987, is the largest baker and distributor of fresh bakery
products in the United States. The Company produces, markets, distributes and
sells a wide range of breads, rolls, snack cakes, donuts, sweet goods and
related products. These products are sold under a number of national brand
names, such as "Wonder," "Hostess" and "Home Pride," as well as
regional brand names, including "Butternut," "Dolly Madison,"
"Drake's" and "Merita". Based on independent publicly available market
data, "Wonder" white bread and "Home Pride" wheat bread are the number
one and two selling branded breads sold in the United States. "Hostess"
products, including "Twinkies" and "Ho-Ho's," are among the leading
snack cake products sold in the United States.
The principal executive offices of the Company are located at 12 East
Armour Boulevard, Kansas City, Missouri 64111, and the telephone number is
(816)502-4000.
The Company distributes its products in markets representing
approximately 90% of the United States population. The Company operates 63
bakeries and approximately 1,400 thrift stores and employs more than 34,000
people. Its sales force delivers products directly from the Company's more
than 1,200 distribution centers on approximately 10,400 delivery routes to
more than 200,000 food outlets and stores.
The Company or its predecessors have baked and distributed fresh bread
and cake products since 1927. The Company has grown to its present size
primarily through acquisitions of other baking businesses.
Products and Brands
- -------------------
The Company produces, markets, distributes and sells white breads,
variety breads, crusty breads, reduced calorie breads, English muffins, rolls
and buns under a number of well-known national brand names, including
"Wonder," "Home Pride" and "Bread du Jour," and regional brand names
including "Beefsteak," "Brown's Classic," "Bunny," "Buttermaid,"
"Butternut," "Colombo," "Cotton's Holsum," "Country Kitchen,"
"DiCarlo," "Eddy's," "Emperor Norton," "Grandma Emilie's,"
"Holsum," "J.J. Nissen," "Merita," "Millbrook Farms," "Parisian,"
"Sunbeam," "Sweetheart," "Toscano" and "Weber's"; bagels under the
brand name "Braun's"; and croutons under the brand names "Mrs.
Cubbison's" and "Marie Callender's". The Company's snack cakes, donuts,
sweet rolls, snack pies, breakfast pastries, variety cakes, large cakes and
shortcakes are also sold under a number of well-known national and regional
brand names, including "Hostess", "Drake's" and "Dolly Madison". The
Company is also a baker and distributor of "Roman Meal" breads, including
traditional Roman Meal bread, Roman Meal variety breads, Roman Meal light
breads, Roman Meal buns, rolls and English muffins and Sunmaid raisin bread.
The Company's various brands are positioned across a wide spectrum of consumer
categories and price points.
The Company believes that its brand trademarks such as "Wonder,"
"Hostess," "Home Pride," "Butternut" and "Dolly Madison" and
product trademarks such as "Twinkies," "Ho-Hos" and "Zingers" are of
material importance to its strategy of brand building. The Company also owns
a number of patents related to the processes used in making the Company's
bread and cake products. The Company takes appropriate action from time to
time against third parties to prevent infringement of its trademarks and other
intellectual property. The Company also enters into confidentiality
agreements from time to time with employees and third parties as necessary to
protect formulas and processes used in producing the Company's products.
Marketing and Distribution
- --------------------------
The majority of the Company's bread sales are through supermarkets, while
the Company's cake products are sold principally through supermarkets and
convenience stores. Cake sales tend to be somewhat seasonal, with a
historically weak winter period, which the Company believes is attributable to
home baking and consumption patterns during the holiday season. Spring and
early summer months are historically stronger due to increased sales of
shortcake products during the fresh strawberry season. No single customer
accounts for more than 5% of the Company's net sales.
The Company's marketing and advertising campaigns are conducted through
targeted television and radio advertising, coupons in newspapers and other
printed media.
The Company distributes its products in markets representing
approximately 90% of the United States population, with its strongest presence
(as measured by sales, market share and number of facilities) in southern
California, the Pacific Northwest, the upper Midwest, the Northeast, the
Mountain States, the Middle Atlantic States and Florida. With plants and
distribution centers across the United States, the Company is located close to
the major marketplaces enabling efficient delivery and superior customer
service. The Company does not keep a backlog of inventory as its fresh bakery
products are promptly distributed to its customers after being produced.
The Company's fresh bakery products are delivered from the Company's
network of 63 bakeries to its more than 1,200 distribution centers. The
products are then delivered primarily to supermarkets and convenience stores
by the Company's sales force on its approximate 10,400 delivery routes.
Unsold products are picked up by the Company's sales force and delivered to
the Company's approximate 1,400 thrift stores for retail sale. Thrift store
sales represented approximately 12% of the net sales of the Company during the
fifty-two week period ended June 2, 2001.
Sources and Availability of Raw Materials
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The ingredients of bread and cake products, principally flour, sugar and
edible oils, are readily available from numerous sources. Generally, the
Company purchases its commodity requirements on the spot markets, although the
Company attempts to lock in prices for raw materials through advance purchase
contracts, generally not longer than one year in duration, when prices are
expected to increase. Through its program of central purchasing of baking
ingredients and packaging materials, the Company believes it is able to
utilize its national presence to obtain competitive prices. The prices for
raw materials are dependent on a number of factors including the results of
crop production, transportation and processing costs, governmental legislation
and policies and export sales demand of such commodities. Although commodity
prices have been volatile and may continue to be volatile, historically, the
Company attempts to recover the majority of its commodity cost increases
through increasing prices, switching to a higher-margin revenue mix and
obtaining additional operating efficiencies.
Employees
- ---------
The Company employs more than 34,000 people. Approximately 80% of the
Company's employees are covered by more than 600 union contracts. Most of the
Company's unionized workers are members of either the International
Brotherhood of Teamsters or the Bakery, Confectionery, Tobacco, Grain Millers
International Union. None of the individual collective bargaining agreements
is material to the Company's consolidated operations.
The Company believes it has good relations with its union and nonunion
employees.
Competition
- -----------
The Company faces intense competition in all of its markets from large,
national bakeries and smaller regional operators, as well as from supermarket
chains with their own bakeries or private label products and grocery stores
with their own in-store bakeries. Competition is based on product quality,
price, brand loyalty, effective promotional activities and the ability to
identify and satisfy emerging consumer preferences. Customer service,
including frequency of deliveries and maintenance of fully stocked shelves, is
also an important competitive factor and is central to the competition for
retail shelf space among bread and cake product distributors. The Earthgrains
Company, George Weston Bakeries, Inc. (formerly know as Bestfoods Baking
Company) and Flowers Industries, Inc. are the Company's largest bread
competitors, each marketing bread products under various brand names.
Entenmann's, McKee Foods Corp. and Tasty Baking Co. are the largest
competitors of the Company with respect to cake sales. The Company from time
to time experiences price pressure in certain of its markets as a result of
competitors' promotional pricing practices. However, the Company believes
that its geographic diversity helps to limit the effect of regionally-based
competition.
Governmental Regulation; Environmental Matters
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The Company's operations are subject to regulation by various federal,
state and local governmental entities and agencies. As a baker of goods for
human consumption, the Company's operations are subject to stringent quality
and labeling standards, including the Federal Food and Drug Act. The
operations of the Company's bakeries and its delivery fleet are subject to
various federal, state and local environmental laws and workplace regulations,
including the Occupational Safety and Health Act, the Fair Labor Standards
Act, the Clean Air Act and the Clean Water Act. The Company believes that its
current legal and environmental compliance programs adequately address such
concerns and that it is in substantial compliance with such applicable laws
and regulations.
The Company has underground fuel storage tanks at various locations
throughout the United States which are subject to federal and state
regulations establishing minimum standards for such tanks and where necessary,
remediation of associated contamination. The Company is presently in the
process of remediating any contaminated sites. In addition, the Company has
received notices from the United States Environmental Protection Agency, state
agencies, and/or private parties seeking contribution, that it has been
identified as a "potentially responsible party" (PRP), under the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended. Because of these activities, the Company may be required to share in
the cost of cleanup with respect to four "Superfund" sites. The Company's
ultimate liability in connection with these sites may depend on many factors
including the volume of material contributed to the site, the number of other
PRP's and their financial viability and the remediation methods and technology
to be used. While it is difficult to quantify the potential financial impact
of actions involving environmental matters, particularly remediation costs at
waste disposal sites and future capital expenditures for environmental control
equipment, in the opinion of the Company's management, the ultimate liability
arising from such environmental matters, taking into account established
accruals for estimated liabilities, should not be material to the overall
financial position of the Company, but could be material to results of
operations or cash flows for a particular quarter or annual period.
Item 2. Properties
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Bakeries
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The Company produces substantially all of its products through its
national network of 63 bakeries. All of the Company's bakeries are owned with
the exception of bakeries in Castroville and Montebello, California, each of
which are leased premises. The Company's bakeries are located as follows:
Akron, Ohio Memphis, Tennessee
Alexandria, Louisiana Miami, Florida
Anchorage, Alaska Milwaukee, Wisconsin
Biddeford, Maine Monroe, Louisiana
Billings, Montana Montebello, California
Birmingham, Alabama New Bedford, Massachusetts
Boise, Idaho Oakland, California
Boonville, Missouri Ogden, Utah
Buffalo, New York Orlando, Florida
Castroville, California Peoria, Illinois
Charlotte, North Carolina Philadelphia, Pennsylvania
Cincinnati, Ohio Pomona, California
Columbus, Georgia Rocky Mount, North Carolina
Columbus, Indiana Sacramento, California (2)
Columbus, Ohio Salt Lake City, Utah
Davenport, Iowa San Diego, California
Decatur, Illinois San Francisco, California (2)
Defiance, Ohio San Pedro, California
Denver, Colorado Schiller Park, Illinois
Detroit, Michigan Seattle, Washington
Emporia, Kansas Springfield, Missouri
Florence, South Carolina St. Louis, Missouri
Glendale, California Tacoma, Washington
Grand Rapids, Michigan Tampa, Florida
Hodgkins, Illinois Toledo, Ohio (Northwood)
Indianapolis, Indiana Tulsa, Oklahoma
Jacksonville, Florida Waterloo, Iowa
Jamaica, New York Wayne, New Jersey
Kansas City, Missouri
Knoxville, Tennessee
Los Angeles, California (3)
The Company makes capital investments to update or retrofit its
facilities to produce new products on existing lines and to increase line
speeds. The Company believes that its facilities are well maintained but
continues to pursue opportunities to enhance operating efficiencies through
strategic capital investments, some of which may allow the Company to realize
operating synergies through the consolidation of less efficient or redundant
facilities. During fiscal 1999, the Company opened its $60 million Biddeford,
Maine bakery, which resulted in the closure of four less efficient bakeries in
the Northeast. A similar consolidation effort occurred during fiscal 2000 in
the Company's Pacific Northwest market area where production of three bakeries
was merged into a single bakery in Tacoma, Washington. Also during fiscal
2000, the Company refitted the older section of its Rocky Mount, North
Carolina, bakery with new higher-speed equipment after this bakery was flooded
during Hurricane Floyd. In fiscal year 2001, the Company completed a new
bakery in Knoxville, Tennessee and began installing equipment in a new bakery
in the Kansas City area which is scheduled to be completed during fiscal 2002.
Other Properties
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The Company's more than 1,200 distribution centers and approximately
1,400 thrift stores are located throughout the Company's distribution area.
Generally, each thrift store is between 500 and 1,600 square feet in size.
Most of the stores are located at the Company's distribution centers, with the
remainder located along the Company's distribution routes. The majority of
the Company's distribution centers and thrift stores are leased facilities.
Item 3. Legal Proceedings
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In July 2000, a jury in California awarded compensatory damages totaling
approximately $10,800,000 against the Company and in favor of 18 plaintiffs
who alleged various forms of racial discrimination at the Company's San
Francisco bakery in the case styled Theodis Carroll, Jr., et al. and Scott
Bryant, et al., v. Interstate Brands Corporation, et al., originally filed
June 11, 1998 in the Superior Court of California for the County of San
Francisco. The trial court subsequently reduced these compensatory damages to
approximately $5,800,000. In August 2000, the jury also awarded punitive
damages totaling approximately $121,000,000. During October 2000, the trial
court further reduced the compensatory damages to $3,000,000 and the punitive
award to $24,300,000. In February 2001, the trial court also awarded
$2,000,000 in attorneys' fees to the plaintiffs. The Company is actively
appealing in the Court of Appeal, First Appellate District, of the State of
California, all of the judgments awarded to the plaintiffs in the case, asking
for either a new trial or a reduction or elimination of the damage awards,
while the plaintiffs have cross-appealed the trial court's reductions of
damage awards. Based upon the opinion of outside counsel, although the Company
feels its appeals present strong arguments, no substantially certain outcome
exists and it is not possible to estimate the amount of a probable loss, if
any, to the Company at this time. The Company believes it has adequate
reserves for the compensatory damages and legal fees awarded.
Item 4. Submission of Matters to a Vote of Security Holders
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Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
- ------- -------------------------------------------------------------
Matters
-------
The section entitled "Common Stock Information" appearing on page 1 of
the Annual Report is incorporated herein by this reference. Note 3, entitled
"Debt", to the consolidated financial statements appearing on pages 22 and
23 of the Annual Report is also incorporated herein by this reference with
regard to limitations on cash dividends and Common Stock repurchases. The
section entitled, "Management's Discussion and Analysis of Financial
Condition and Results of Operations", specifically the subsection entitled
"Capital Resources and Liquidity" appearing on page 15 of the Annual Report
is also incorporated herein by this reference with regard to planned Common
Stock repurchases and dividend payments on the Common Stock.
Item 6. Selected Financial Data
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The section entitled "Five-Year Summary of Financial Data", appearing
on page 13 of the Annual Report, is incorporated herein by this reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
- ------- ---------------------------------------------------------------
Results of Operations
---------------------
The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing on pages 14 and 15 of the
Annual Report is incorporated herein by this reference.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
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The Company is exposed to market risks relative to commodity price
fluctuations and interest rate changes. The Company actively manages these
risks through the use of derivative financial instruments. As a matter of
policy, the Company uses these financial instruments only for hedging
purposes, and the use of derivatives for trading and speculative purposes is
prohibited.
Commodity Prices
Commodities used by the Company in the production of its products are
subject to wide price fluctuations, depending upon factors such as weather,
worldwide market supply and demand and government regulation. To reduce the
risk associated with commodity price fluctuations (primarily wheat, corn,
soybean oil and certain fuels), the Company enters into commodity futures,
options and forward purchase contracts, fixing commodity prices for future
periods. A sensitivity analysis was prepared and based upon the Company's
commodity-related derivatives position as of June 2, 2001, an assumed 10%
adverse change in commodity prices would not result in a material effect on
fair values, future earnings or cash flows of the Company.
Interest Rates
The Company manages its exposure to interest rate risk through the use of
a combination of floating and fixed rate debt. In addition, from time to
time, the Company has entered into interest rate swap agreements to fix rates
on variable rate debt instruments. The Company had no outstanding interest
rate swap agreements at June 2, 2001. However, in conjunction with a debt
refinancing on July 19, 2001 the Company did enter into interest rate swap
agreements resulting in fixed interest rates on $400,000,000 from 5.74% to
6.81% with termination dates ranging from July 2002 to July 2004. At June 2,
2001, an assumed 10% adverse change in interest rates would not have a
material impact on fair values, future earnings or cash flows of the Company.
Item 8. Financial Statements and Supplementary Data
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The consolidated financial statements and accompanying notes and the
Independent Auditors' Report appearing on pages 16 to 28 of the Annual Report
are incorporated herein by this reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
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Financial Disclosure
--------------------
Not applicable.
PART III
The information required by Part III (Item 10, 11, 12 and 13) is
incorporated herein by reference to the Company's definitive proxy statement,
filed on August 24, 2001.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
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(a) Documents Filed as Part of this Report:
1. Financial Statements
The following financial statements and report included in the
Company's Annual Report are incorporated herein by reference:
Consolidated Balance Sheet at June 2, 2001 and June 3,
2000.
For the 52 weeks ended June 2, 2001, the 53 weeks ended
June 3, 2000 and the 52 weeks ended May 29, 1999:
Consolidated Statement of Income
Consolidated Statement of Cash Flows
Consolidated Statement of Stockholders' Equity
Notes to Consolidated Financial Statements
Independent Auditors' Report dated July 20, 2001.
2. Financial Statement Schedule
The following report and schedule are filed herewith as a
part hereof:
Independent Auditors' Report dated July 20, 2001.
Schedule for 52 weeks ended June 2, 2001, 53 weeks ended
June 3, 2000 and the 52 weeks ended May 29, 1999:
II Valuation and Qualifying Accounts
All other schedules have been omitted since the required
information is not present or not present in amounts
sufficient to require submission of the schedule, or because
the information required is included in the consolidated
financial statements or the notes thereto.
3. Exhibits
The exhibits are listed in the Exhibit Index. Copies of
certain documents have not been filed as exhibits, in
reliance upon paragraph (b)(4)(iii) of Item 601 of
Regulation S-K. Registrant agrees to furnish a copy of any
such instrument to the Securities and Exchange Commission
upon request.
(b) Reports on Form 8-K:
--------------------
None.
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
INTERSTATE BAKERIES CORPORATION
Dated: August 20, 2001 By: /s/ Charles A. Sullivan
-------------------------------
Charles A. Sullivan
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on the dates indicated.
Capacities
Name of Signatory In Which Signing Date
- ----------------- ---------------- ----
/s/ Charles A. Sullivan Chairman of the Board, August 20, 2001
- ----------------------- Chief Executive Officer
Charles A. Sullivan and Director (Principal
Executive Officer)
/s/ Michael J. Anderson Director August 20, 2001
- -----------------------
Michael J. Anderson
/s/ G. Kenneth Baum Director August 20, 2001
- -------------------
G. Kenneth Baum
/s/ Leo Benatar Director August 20, 2001
- ---------------
Leo Benatar
/s/ E. Garrett Bewkes, Jr. Director August 20, 2001
- --------------------------
E. Garrett Bewkes, Jr.
/s/ Robert B. Calhoun Director August 20, 2001
- --------------------------
Robert B. Calhoun
/s/ Frank E. Horton Director August 20, 2001
- -------------------
Frank E. Horton
s/ James R. Elsesser Director August 20, 2001
- ---------------------
James R. Elsesser
/s/ Richard L. Metrick Director August 20, 2001
- ----------------------
Richard L. Metrick
/s/ Frank W. Coffey Senior Vice President and August 20, 2001
- ------------------- Chief Financial Officer
Frank W. Coffey
INDEPENDENT AUDITORS' REPORT
Interstate Bakeries Corporation
We have audited the consolidated financial statements of Interstate
Bakeries Corporation and its subsidiaries (the "Company") as of June 2, 2001
and June 3, 2000, and for each of the three fiscal years in the period ended
June 2, 2001, and have issued our report thereon dated July 20, 2001; such
consolidated financial statements and report are included in your 2001 Annual
Report to Stockholders and are incorporated herein by reference. Our audits
also included the consolidated financial statement schedule of the Company,
listed on Item 14. This consolidated financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
July 20, 2001
INTERSTATE BAKERIES CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FIFTY-TWO WEEKS ENDED JUNE 2, 2001,
FIFTY-THREE WEEKS ENDED JUNE 3, 2000
AND FIFTY-TWO WEEKS ENDED MAY 29, 1999
(In Thousands)
Balance at Additions Accounts Balance
beginning charged charged at end
Description of period to income off of period
- ----------- ---------- --------- -------- ---------
2001:
Reserve for
discounts
and allow-
ances on
accounts
receivable $ 3,464 $ 53 $ - $ 3,517
Allowance for
doubtful
accounts 4,638 2,316 2,885 4,069
------- ------- ------- -------
$ 8,102 $ 2,369 $ 2,885 $ 7,586
======= ======= ======= =======
2000:
Reserve for
discounts
and allow-
ances on
accounts
receivable $ 4,538 $(1,074) $ - $ 3,464
Allowance for
doubtful
accounts 4,240 2,665 2,267 4,638
------- ------- ------- -------
$ 8,778 $ 1,591 $ 2,267 $ 8,102
======= ======= ======= =======
1999:
Reserve for
discounts
and allow-
ances on
accounts
receivable $ 5,314 $ (776) $ - $ 4,538
Allowance for
doubtful
accounts 4,107 2,465 2,332 4,240
------- ------- ------- -------
$ 9,421 $ 1,689 $ 2,332 $ 8,778
======= ======= ======= =======
EXHIBIT INDEX
-------------
Exhibit
No. Exhibit
- ------- ---------
3.1 Restated Certificate of Incorporation of Interstate Bakeries
Corporation, as amended (incorporated herein by reference to
Exhibit 3.1 to the Annual Report on Form 10-K of Interstate
Bakeries Corporation filed on August 30, 1995).
3.2 Restated Bylaws of Interstate Bakeries Corporation (incorporated
herein by reference to Exhibit 3.2 to the Annual Report on
Form 10-K of Interstate Bakeries Corporation filed on August 30,
1991 (the "1991 10-K")).
4.1 Article FOURTH of Restated Certificate of Incorporation of
Interstate Bakeries Corporation (incorporated herein by reference
to Exhibit A to the Proxy Statement relating to the 1997 Annual
Meeting of Stockholders of Interstate Bakeries Corporation).
4.2 Preferred Stock Purchase Rights Agreement effective as of May 8,
2000 (incorporated herein by reference to Form 8-K filed on May
16, 2000).
10.1 Interstate Bakeries Corporation 1991 Stock Option Plan
(incorporated herein by reference to Exhibit 10.1 to the
Registration Statement on Form S-1 of Interstate Bakeries
Corporation, File No. 33-40830 (the "Form S-1")).
10.2 Employment Agreement, dated as of March 1, 1989, by and among
Interstate Bakeries Corporation, Interstate Brands Corporation and
Charles A. Sullivan (incorporated herein by reference to
Exhibit 10.2 to the Form S-1) and Restated Memorandum of Agreement
dated as of July 22, 1992 by and among Interstate Bakeries
Corporation, Interstate Brands Corporation and Charles A. Sullivan
(incorporated herein by reference to Exhibit 10.5 to the Annual
Report on Form 10-K of Interstate Bakeries Corporation filed on
August 20, 1992).
10.4 Credit Agreement among Interstate Bakeries Corporation, as a
Guarantor, Interstate Brands Corporation and Interstate Brands
West Corporation, each as a Borrower, the several Lenders from
time to time parties hereto, and The Chase Manhattan Bank, as
Administrative Agent, dated as of July 19, 2001, and Guarantee and
Collateral Agreement made by Interstate Bakeries Corporation,
Interstate Brands Corporation, Interstate Brands West Corporation,
and certain of their Subsidiaries, in favor of The Chase Manhattan
Bank, as Administrative Agent, dated as of July 19, 2001.*
10.5 Interstate Bakeries Corporation 1996 Stock Incentive Plan
(incorporated by reference to Exhibit A to the Proxy Statement
relating to the 1996 Annual Meeting of Stockholders of Interstate
Bakeries Corporation).
10.6 Shareholder Agreement by and among Interstate Bakeries
Corporation, Ralston Purina Company and VCS Holding Company, dated
July 22, 1995, Supplement to Shareholder Agreement, dated July 25,
1995, Letter Amendment to Shareholder Agreement, dated July 3,
1997, and First Amendment to Shareholder Agreement, dated March
30, 2000.*
10.7 Amendment #2 to the Shareholder Agreement and Amendment to the
Supplement to Shareholder Agreement dated as of July 24, 2000 by
and among Interstate Bakeries Corporation, Ralston Purina Company,
and Tower Holding Company, Inc., a wholly owned subsidiary of
Ralston Purina Company (incorporated by reference to Exhibit 10.2
to the Current Report on Form 8-K of Interstate Bakeries
Corporation filed on July 25, 2000).
13.1 Page 1 and pages 13 to 28 of the Interstate Bakeries Corporation
annual report to security holders for the year ended June 2,
2001. (Those portions of the annual report to security holders
not listed here shall not be deemed to be filed as a part of this
Report.)*
21.1 Subsidiaries of Interstate Bakeries Corporation (incorporated
herein by reference to Exhibit 21.1 to the Annual Report on Form
10-K of Interstate Bakeries Corporation filed on August 20,
1999).
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* Filed herewith.