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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 3, 2000
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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
----------------------------------------------------
(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 $659,000,000 as of August 2, 2000. 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 63,338,185 shares of Common Stock, $.01 par value per share,
outstanding as of August 2, 2000.
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 3, 2000.
** Refers to portions of Registrant's definitive proxy statement
filed on August 25, 2000.
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), Interstate Bakeries Corporation's ability to recover its raw
material costs in the pricing of its products, the availability of capital on
acceptable terms, actions of competitors and governmental entities, the extent
to which Interstate Bakeries Corporation is able to develop new products and
markets for its products, the time required for such development, the level of
demand for such products, changes in Interstate Bakeries Corporation's
business strategies 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-Hos," 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 66
bakeries and approximately 1,500 thrift stores and employs more than 34,000
people. Its sales force delivers products directly from the Company's more
than 1,300 distribution centers on approximately 11,000 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. In its 1988 fiscal
year, the Company underwent a change in control through a leveraged buyout
transaction and acquired 10 bakeries in the southeastern United States. In
July 1991, the Company returned to the public market by issuing shares of
Common Stock. In July 1995, the Company acquired Continental Baking Company
("CBC") from Ralston Purina Company ("RPC") for $220,000,000 in cash and
33,846,154 shares of Common Stock. Since the acquisition of CBC, the Company
has taken significant steps to continue to build and capitalize on the brand
equity in the "Wonder" and "Hostess" brands. The Company has also worked to
realize cost savings from the CBC acquisition and to achieve economies of
scale in its operations. On July 29, 1997, RPC issued $479,953,687.50 of 7%
Stock Appreciation Income Linked Securities ("SAILS"), which were
exchangeable at maturity, at the option of RPC, for cash or up to 15,498,000
shares of the Company's Common Stock. Pursuant to the SAILS transaction, the
Company repurchased 2,000,000 shares of its Common Stock from RPC for
$60,079,375, or $30.0396875 per share, which amount was the closing sales
price of the Common Stock on the New York Stock Exchange on July 23, 1997 of
$30.96875 per share, less a 3% discount.
During the 1998 fiscal year, the Company purchased from RPC 1,200,000
shares of the Company's Common Stock at an average price of $31.375 per share,
and during the 1999 fiscal year, the Company purchased from RPC 500,000 shares
at $28.375 per share.
On March 31, 2000, the Company announced it had extended the Shareholder
Agreement with RPC. Under the amended agreement, RPC was required to reduce
its ownership of the Company's Common Stock to no more than 20% by September
30, 2000, 15% by August 1, 2004 and 10% by August 1, 2005. RPC also agreed to
use the Company's Common Stock to satisfy its SAILS obligations.
On July 24, 2000, the Company signed an agreement with RPC and an
affiliate of RPC to purchase from the RPC affiliate 15,498,000 shares of the
Company's Common Stock, at a price per share equal to the average closing
price per share for the Company's Common Stock for the most recent 20
consecutive trading days ending on and including July 31, 2000, for shares of
the Company's Common Stock purchased on August 1, 2000, and for such per share
price, plus an interest component, for shares of Company Common Stock
purchased on September 1, 2000. On August 1, 2000, the Company purchased
2,551,020 shares of its Common Stock for a total of $39,999,993.60 pursuant to
this agreement. On September 1, 2000, the Company is obligated to purchase
12,946,980 shares of its Common Stock for a total of $203,008,646.40, plus an
interest component of $1,419,700.08, pursuant to this agreement. After this
repurchase, RPC will own approximately 29.5% of the Company's outstanding
Common Stock.
In connection with this repurchase agreement, the Shareholder Agreement was
amended to, among other provisions, eliminate the requirement that RPC reduce
its ownership to no more than 20% of the Company's Common Stock by September
30, 2000. RPC and its affiliates are now required to reduce their ownership
of the Company's Common Stock to no more than 15% by August 1, 2004 and no
more than 10% by August 1, 2005. The Company has the right of first offer on
disposal of any Company Common Stock owned by RPC and its affiliates.
Further, this amendment deleted the requirement of RPC to use the Company's
Common Stock to satisfy its SAILS obligations.
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
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 66 bakeries to its more than 1,300 distribution centers. The
products are then delivered primarily to supermarkets and convenience stores
by the Company's sales force on its approximate 11,000 delivery routes.
Unsold products are picked up by the Company's sales force and delivered to
the Company's approximate 1,500 thrift stores for retail sale. Thrift store
sales represented approximately 12% of the net sales of the Company during the
fifty-three week period ended June 3, 2000.
Sources and Availability of Raw Materials
- -----------------------------------------
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. Although commodity prices have been
volatile and may continue to be volatile, historically, the Company has been
able 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.
In March 2000, the Teamsters in the Northeast went on strike forcing the
closure of five of the Company's bakeries in the northeast region. The
Teamsters claimed the Company violated an arbitration ruling. After eight
days, they returned to work. Contract discussions are continuing and the
Company believes the labor issues will be resolved in the near future.
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, 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
- ----------------------------------------------
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 a relatively small number of "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
- --------
The Company produces substantially all of its products through its
national network of 66 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 Minonk, Illinois
Billings, Montana Monroe, Louisiana
Birmingham, Alabama Montebello, California
Boise, Idaho New Bedford, Massachusetts
Boonville, Missouri Oakland, California
Buffalo, New York Ogden, Utah
Castroville, California Orlando, Florida
Charlotte, North Carolina Peoria, Illinois
Cincinnati, Ohio Philadelphia, Pennsylvania
Columbus, Georgia Pomona, California
Columbus, Indiana Richmond, Virginia
Columbus, Ohio Rocky Mount, North Carolina
Davenport, Iowa Sacramento, California (2)
Decatur, Illinois Salt Lake City, Utah
Defiance, Ohio San Diego, California
Denver, Colorado San Francisco, California (2)
Detroit, Michigan San Pedro, California
Emporia, Kansas Schiller Park, Illinois
Florence, South Carolina Seattle, Washington
Glendale, California Spokane, Washington
Grand Rapids, Michigan Springfield, Missouri
Hodgkins, Illinois St. Louis, Missouri
Indianapolis, Indiana Tacoma, Washington
Jacksonville, Florida Tampa, Florida
Jamaica, New York Toledo, Ohio
Kansas City, Missouri Tulsa, Oklahoma
Knoxville, Tennessee Waterloo, Iowa
Los Angeles, California (3) Wayne, New Jersey
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 was underway during fiscal 2000
in the Company's Pacific Northwest market area where production of three
bakeries is being merged into a single bakery in Tacoma, Washington. The last
of the three bakeries, located in Spokane, Washington, will be closed during
fiscal 2001. 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 is scheduled to complete new bakeries in Knoxville, Tennessee and
Kansas City, Missouri.
Other Properties
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The Company's more than 1,300 distribution centers and approximately
1,500 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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On July 31, 2000, in Theodis Carroll, Jr., et.al. and Scott Bryant,
et.al. v. Interstate Brands Corporation, et.al. originally filed June 11,
1998, 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.
The court subsequently reduced these compensatory damages to approximately
$5,800,000. On August 2, 2000, the jury also awarded punitive damages
totaling approximately $121,000,000. The Company intends to appeal these
verdicts. Based upon the opinion of outside counsel, the Company believes the
compensatory damages should be overturned or reduced on appeal and it is
likely that the Company will succeed in obtaining either a reversal of the
punitive damages or a new trial.
The Company also has been named as a defendant in various claims arising
out of its normal business operations. Based upon the facts available to
date, management believes that the Company has meritorious defenses to these
actions and that their ultimate resolution will not have a material adverse
effect on the Company's financial position.
Item 4. Submission of Matters to a Vote of Security Holders
- ------ ---------------------------------------------------
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 21 and 22
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. The 33,846,154
unregistered shares of the Company's Common Stock issued to RPC on July 22,
1995 in connection with the Company's acquisition of CBC, were issued in
reliance upon Section 4(2) of the Securities Act of 1933, as amended, as a
transaction by an issuer not involving any public offering.
Item 6. Selected Financial Data
- ------ -----------------------
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
- ------- ----------------------------------------------------------
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 for wheat), the
Company enters into commodity futures and options 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 3, 2000, 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 3, 2000. Based upon the Company's sensitivity
analysis at June 3, 2000, 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
- ------- -------------------------------------------
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
- ------- ---------------------------------------------------------------
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,
involving the election of directors and ratification of independent auditors
filed on August 25, 2000.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
- -------- --------------------------------------------------------------
(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 3, 2000 and May 29,
1999.
For 53 weeks ended June 3, 2000, the 52 weeks ended
May 29, 1999 and May 30, 1998:
Consolidated Statement of Income
Consolidated Statement of Cash Flows
Consolidated Statement of Stockholders' Equity
Notes to Consolidated Financial Statements
Independent Auditors' Report dated August 11, 2000.
2. Financial Statement Schedule
The following report and schedule are filed herewith as a
part hereof:
Independent Auditors' Report dated August 11, 2000.
Schedule for 53 weeks ended June 3, 2000, the 52 weeks
ended May 29, 1999 and May 30, 1998:
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:
--------------------
A report on Form 8-K was filed on May 16, 2000 regarding the
Company's Preferred Stock Purchase Rights.
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 23, 2000 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 23, 2000
- ----------------------- Chief Executive Officer
Charles A. Sullivan and Director (Principal
Executive Officer)
/s/ Michael J. Anderson Director August 23, 2000
- -----------------------
Michael J. Anderson
/s/ G. Kenneth Baum Director August 23, 2000
- -------------------
G. Kenneth Baum
/s/ Leo Benatar Director August 23, 2000
- ---------------
Leo Benatar
/s/ E. Garrett Bewkes, Jr. Director August 23, 2000
- --------------------------
E. Garrett Bewkes, Jr.
/s/ Robert B. Calhoun, Jr. Director August 23, 2000
- --------------------------
Robert B. Calhoun, Jr.
/s/ Frank E. Horton Director August 23, 2000
- -------------------
Frank E. Horton
/s/ James R. Elsesser Director August 23, 2000
- ---------------------
James R. Elsesser
/s/ Richard L. Metrick Director August 23, 2000
- ----------------------
Richard L. Metrick
/s/ Frank W. Coffey Senior Vice President and August 23, 2000
- ------------------- 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 as of June 3, 2000 and May 29, 1999,
and for each of the three fiscal years in the period ended June 3, 2000, and
have issued our report thereon dated August 11, 2000; such consolidated
financial statements and report are included in your 2000 Annual Report to
Stockholders and are incorporated herein by reference. Our audits also
included the consolidated financial statement schedule of Interstate Bakeries
Corporation and its subsidiaries, 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
August 11, 2000
INTERSTATE BAKERIES CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
FIFTY-THREE WEEKS ENDED JUNE 3, 2000,
FIFTY-TWO WEEKS ENDED MAY 29, 1999 AND MAY 30, 1998
(In Thousands)
Balance at Additions Accounts Balance
beginning charged charged at end
Description of period to income off of period
- ----------- ---------- --------- -------- ---------
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
======= ======= ======= =======
1998:
Reserve for
discounts
and allow-
ances on
accounts
receivable $ 7,977 $(2,663) $ - $ 5,314
Allowance for
doubtful
accounts 4,577 1,853 2,323 4,107
------- ------- ------- -------
$12,554 $ (810) $ 2,323 $ 9,421
======= ======= ======= =======
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 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).
10.4 Memorandum of Agreement, dated as of May 16, 1991, by and among
Interstate Bakeries Corporation, Interstate Brands Corporation and
Charles A. Sullivan (incorporated herein by reference to
Exhibit 10.4 to the Form S-1).
10.5 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).
10.6 Credit Agreement, dated May 31, 1995, signed by Interstate Brands
Corporation, Chemical Bank, the Lenders and Issuing Bank (as
defined therein) (incorporated by reference to Exhibit 1 to the
Form 8-K filed on June 9, 1995).
10.7 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).
13.1 Page 1 and pages 13 to 28 of the Interstate Bakeries Corporation
annual report to security holders for the year ended June 3,
2000. (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).
27.0 Financial Data Schedule.*
-------------------------
* Filed herewith.