Interstate Bakeries Corps reports a 14 percent increase in profits to $69.8 million
IBC closes plants and cuts jobs during the year, reporting lower earnings of $27.45 million (including one-time charges) and $3.5 billion in sales, down less than 1 percent.
A low-carb diet craze slims the bottom lines of IBC and others. Meanwhile, the Securities and Exchange Commission starts an informal inquiry of IBC after the company retained a law firm to investigate how it sets workers’ compensation and other reserves. Then, the company takes a $40 million pretax charge for workers’ comp reserves and delays filing its annual report with the SEC. Closings and job cuts continue; IBC files for Chapter 11 bankruptcy protection in September, and Chairman and CEO James Elsesser resigns. At the time, IBC has 32,600 employees, including about 600 in the Kansas City area. Sales decline 1.7 percent to $3.46 billion, yielding a net loss of $25.7 million.
The SEC’s investigation into IBC turns formal. Facility closings/sales and layoffs grow, affecting thousands of jobs, and the company launches a whole wheat version of Wonder Bread. For the fiscal year, the company loses $379.3 million on revenue of $3.4 billion.
IBC spends about $10 million on an ad campaign to promote its whole-grain products. The company makes more job cuts but begins to catch up on past-due SEC reports. It also offers to settle the SEC investigation and decreases its annual loss to $128.3 million, even as revenue dips to $3.06 billion.
IBC grapples with its unions, threatening liquidation if they don’t approve changes that include exiting certain areas and laying off hundreds. Eventually, agreements are reached. Also, largely unwelcome buyout offers emerge.
Efforts continue to get IBC out of bankruptcy. In October, a bankruptcy judge approves a nearly $600 million exit financing plan for IBC.
IBC emerges from four and a half years of Chapter 11 bankruptcy in February. It has to adjust financing commitments late in the game to do so. Players include an affiliate of private equity firm Ripplewood Holdings LLC, which offers capital in exchange for shares and notes; General Electric Capital Corp. and GE Capital Markets Inc., which offer a credit line; and Silver Point Finance LLC and Monarch Master Funding Ltd., which offer a term loan-secured credit facility. Later in February, the company says it will move its corporate headquarters to Dallas, taking about 20 employees out of the Kansas City area. IBC has roughly 22,000 employees, with about 200 local full-time corporate employees, plus about 400 at area facilities. Some closings and layoffs continue; in November, the company changes its name to Hostess Brands.
A federal judge in Kansas City dismisses a $56 million lawsuit tied to IBC’s bankruptcy.
Hostess records $2.5 billion in revenue.
Hostess Brands files for Chapter 11 bankruptcy protection. It has about 19,000 employees, including about 100 corporate employees in the Kansas City area, plus some at a Lenexa bakery. It reports assets worth $1 billion and liabilities of $1.4 billion.