SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the thirty-nine weeks ended September 28, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-5084
TASTY BAKING COMPANY
(Exact name of company as specified in its charter)
Pennsylvania 23-1145880
- --------------------------------------------------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(215) 221-8500
- --------------------------------------------------------------------------------
(Company's Telephone Number, including area code)
Indicate by check mark whether the company (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 company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.50 8,103,685
- --------------------------------------------------------------------------------
(Title of Class) (No. of shares Outstanding
at October 25, 2002)
INDEX OF EXHIBITS IS LOCATED ON PAGE 11 OF 14.
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TASTY BAKING COMPANY AND SUBSIDIARIES
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
September 28, 2002 and December 29, 2001.............................3
Consolidated Condensed Statements of Operations
Thirteen and Thirty-nine weeks ended September 28, 2002
and September 29, 2001...............................................4
Consolidated Condensed Statements of Cash Flows
Thirty-nine weeks ended September 28, 2002 and September 29, 2001....5
Notes to Consolidated Condensed Financial Statements...............6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................8-9
Item 3. Quantitative and Qualitative Disclosure
About Market Risk10
Item 4. Controls and Procedures..........................................10-11
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...........................11
Item 6. Exhibits and Reports on Form 8-K....................................11
Signatures ..................................................................12
Certification ............................................................13-14
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
- -------------------------------------------------------------------------------------------------
September 28, 2002 December 29, 2001
- -------------------------------------------------------------------------------------------------
Current assets:
Cash $ 85,977 $ 367,220
Accounts and notes receivable, net of
allowance for doubtful accounts 23,774,305 22,233,413
Inventories:
Raw materials 4,074,270 3,995,228
Work in progress 833,674 720,511
Finished goods 2,269,843 3,696,045
----------------------------------
7,177,787 8,411,784
Deferred income taxes, prepayments and other 4,116,521 4,156,755
----------------------------------
Total current assets 35,154,590 35,169,172
----------------------------------
Property, plant and equipment: 188,661,690 184,224,586
Less accumulated depreciation 129,783,036 124,522,610
----------------------------------
58,878,654 59,701,976
----------------------------------
Long-term receivables 9,641,774 10,201,049
----------------------------------
Deferred income taxes 7,381,934 7,381,934
----------------------------------
Spare parts inventory and miscellaneous assets 3,786,714 3,682,688
----------------------------------
Total assets $114,843,666 $116,136,819
==================================
Current liabilities:
Current obligations under capital leases $ 183,667 $ 239,593
Notes payable, banks 3,000,000 3,900,000
Accounts payable 7,332,933 5,306,976
Accrued liabilities 6,786,451 7,438,750
----------------------------------
Total current liabilities 17,303,051 16,885,319
----------------------------------
Long-term debt, less current portion 10,000,000 11,000,000
----------------------------------
Long-term obligations under capital leases,
less current portion 3,485,807 3,603,310
----------------------------------
Accrued pensions and other liabilities 11,830,504 11,506,969
----------------------------------
Postretirement benefits other than pensions 17,807,505 18,076,719
----------------------------------
Shareholders' equity:
Common stock 4,558,243 4,558,243
Capital in excess of par value of stock 29,389,935 29,388,567
Retained earnings 33,587,677 34,838,636
----------------------------------
67,535,855 68,785,446
Less:
Treasury stock, at cost 12,610,746 13,167,082
Management Stock Purchase Plan
receivables and deferrals 508,310 553,862
----------------------------------
54,416,799 55,064,502
----------------------------------
Total liabilities and shareholders' equity $114,843,666 $116,136,819
==================================
See accompanying notes to consolidated condensed financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
For the Thirteen Weeks Ended For the Thirty-nine Weeks Ended
September 28, 2002 September 29, 2001 (b) September 28, 2002 September 29, 2001 (b)
- ----------------------------------------------------------------------------------------------------------------------------------
Gross Sales $ 63,652,435 $ 62,531,791 $ 193,308,728 $ 194,707,238
Less discounts and allowances (23,670,747) (21,717,403) (70,581,607) (68,452,675)
-------------------------------------------------------------------------------
Net Sales 39,981,688 40,814,388 122,727,121 126,254,563
-------------------------------------------------------------------------------
Costs and expenses:
Cost of sales 28,066,016 26,306,668 80,927,504 79,240,956
Depreciation 1,885,566 1,713,048 5,260,424 5,265,136
Restructure charge (a) - - 1,405,000 -
Selling, general and
administrative 10,727,781 11,139,121 32,621,405 32,727,412
Interest expense 224,758 264,225 780,646 866,622
Other income, net (258,663) (316,181) (833,902) (937,410)
-------------------------------------------------------------------------------
40,645,458 39,106,881 120,161,077 117,162,716
-------------------------------------------------------------------------------
Income (loss) before provision for
income taxes (663,770) 1,707,507 2,566,044 9,091,847
Provision (benefit) for income taxes (232,304) 657,430 913,590 3,423,787
-------------------------------------------------------------------------------
Net income (loss) $ (431,466) $ 1,050,077 $ 1,652,454 $ 5,668,060
===============================================================================
Average common shares outstanding:
Basic 8,077,752 8,041,297 8,065,959 7,980,580
Diluted 8,165,012 8,202,964 8,177,983 8,124,676
Per share of common stock:
Net income:
Basic ($ 0.05) $ 0.13 $ 0.20 $ 0.71
============= ============= ============= =============
Diluted ($ 0.05) $ 0.13 $ 0.20 $ 0.70
============= ============= ============= =============
Cash dividend $ 0.12 $ 0.12 $ 0.36 $ 0.36
============= ============= ============= =============
(a) The restructure charge of $1,405,000 includes costs associated with the closure of six thrift stores and severance charges
related to the elimination of certain manufacturing and administrative positions during the second quarter of 2002.
(b) Reclassified for comparative purposes to reflect the change in presentation for thrift stores and cooperative advertising.
See accompanying notes to consolidated condensed financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
- ------------------------------------------------------------------------------------------------------
For the Thirty-nine Weeks Ended
September 28, 2002 September 29, 2001
- ------------------------------------------------------------------------------------------------------
Cash flows from (used for) operating activities
Net income $ 1,652,454 $ 5,668,060
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 5,260,424 5,265,135
Amortization 31,070 49,927
Restructure charge 1,123,130 -
Other (588,077) 307,452
Changes in assets and liabilities
affecting operations 522,239 (3,888,618)
---------------------------------
Net cash from operating activities 8,001,240 7,401,956
---------------------------------
Cash flows from (used for) investing activities
Purchase of property, plant and equipment (4,437,102) (5,997,432)
Proceeds from owner/operators' loan repayments 3,090,795 2,888,092
Loans to owner/operators (2,531,520) (3,480,589)
Other 79,911 29,885
---------------------------------
Net cash used for investing activities (3,797,916) (6,560,044)
---------------------------------
Cash flows from (used for) financing activities
Additional long-term debt - 1,000,000
Dividends paid (2,903,413) (2,867,140)
Payment of long-term debt (1,173,429) (1,195,069)
Net increase (decrease) in short-term debt (900,000) 700,000
Net proceeds from sale of common stock 492,275 1,318,113
---------------------------------
Net cash used for financing activities (4,484,567) (1,044,096)
---------------------------------
Net decrease in cash (281,243) (202,184)
Cash, beginning of year 367,220 311,242
---------------------------------
Cash, end of period $ 85,977 $ 109,058
=================================
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 424,620 $ 716,220
=================================
Income taxes $ 994,651 $ 3,058,642
=================================
See accompanying notes to consolidated condensed financial statements.
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TASTY BAKING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Restructure Charges
-------------------
During the fourth quarter of 2001, the company closed its Dutch Mill plant
in Wyckoff, New Jersey. In addition, the company closed two thrift stores.
Costs related to these events were included in a restructure charge of
$1,728,000. At June 29,2002 the balance remaining for the 2001 restructure
was $387,065 of which $124,632 was spent during the third quarter. The
remaining balance for the 2001 restructure at September 28, 2002 was
$262,433.
During the second quarter of 2002 the company closed six additional thrift
stores and eliminated certain manufacturing and administrative positions.
There were 67 employees terminated as a result of the restructure, of which
42 were temporary employees, 13 were thrift store employees and 12 were
corporate and administrative employees. Costs related to these events were
included in a restructure charge of $1,405,000. The balance of the 2002
restructure charge was $1,314,714 at June 28, 2002. During the third
quarter, $191,584 was expended relative to this charge. The balance
remaining for the 2002 restructure at June 28,2002 was $1,123,130.
Balance Current Balance
06/29/02 Expenditures 9/28/02
-------- ------------ -------
Lease obligations $ 957,502 $ 59,451 $ 898,051
Severance 420,023 192,872 227,151
Other 324,254 63,893 260,361
---------- -------- ----------
Total $1,701,779 $316,216 $1,385,563
2. Interim Financial Information
-----------------------------
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position of the company as of September 28, 2002 and December 29, 2001, the
results of its operations for the thirteen and thirty-nine weeks ended
September 28, 2002 and September 29, 2001 and cash flows for the
thirty-nine weeks ended September 28, 2002 and September 29, 2001. These
unaudited consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto in the company's 2001 Annual Report to Shareholders. In addition,
the results of operations for the thirteen and thirty-nine weeks ended
September 28, 2002 are not necessarily indicative of the results to be
expected for the full year.
3. New Credit Facility
-------------------
On January 31, 2002 the company entered into a new credit facility (the
`facility') for $40,000,000 with two banks. This facility replaced all
existing short-term and long-term lines of credit. Under the facility,
$15,000,000 is available on a 364-day basis and $25,000,000 is available on
a three-year revolving term, both of which are renewable annually for an
extension of one year upon approval of the banks. The facility bears
interest at an indexed LIBOR rate or the prime rate, and it contains
restrictive covenants, which include provisions for the maintenance of
tangible net worth, coverage of fixed charges, and restrictions on total
indebtedness, guarantees and investments. The 364-day portion of the
facility contains a sub-limit of $6,000,000 for overnight "Swing Line"
borrowings. The revolving portion allows for Standby Letters of Credit to
be issued.
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4. Net Income Per Common Share
---------------------------
Net income per common share is presented as basic and diluted earnings per
share. Net income per common share - Basic is based on the weighted average
number of common shares outstanding during the year. Net income per common
share - Diluted is based on the weighted average number of common shares
and dilutive potential common shares outstanding during the year. The
company's dilutive potential common shares outstanding during the year
result entirely from dilutive stock options. Potential common shares, which
would result from the exercise of stock options, are not included in the
computation of diluted per share amounts when the options' exercise price
is greater than the average market price of the common shares. As the
Company incurred a new loss for the thirteen week period ended September
28, 2002, the effect of dilutive securities, totaling 87,260 equivalent
shares, have been excluded from the computation of net loss per share as
their impact would be anti-dilutive.
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TASTY BAKING COMPANY AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
-----------------------------------------------------------
Results of Operations
For the third quarter of 2002, the company realized a net loss of $431,466
versus net income of $1,050,077 for the third quarter of 2001. Net loss per
share was $.05 in 2002 compared to net income per share of $.13 in 2001.
Net income for the thirty-nine weeks ended September 28, 2002 was $1,652,454, or
$.20 per share versus $5,668,060, or $.70 per share for the thirty-nine weeks
ended September 29, 2001. Included in net income for the thirty-nine weeks ended
September 28, 2002 was a restructure charge in the amount of $1,405,000. The
after-tax impact of this charge was $843,000, or $.10 per share. After
eliminating the effect of this charge, the comparable results for the
thirty-nine weeks ended September 28, 2002 were $2,495,454, or $.31 per share.
For the third quarter 2002, gross sales increased 1.8% to $63,652,435, compared
to $62,531,791 for the third quarter 2001. The increase in gross sales for the
third quarter of 2002 was primarily the result of increased volume in our
national sales. Gross sales, less discounts and allowances, resulted in a
decrease in net sales of 2.0% to $39,981,688, compared to $40,814,388 reported
last year. The percentage decrease in net sales was primarily due to the effect
of higher commissions related to the company's increased national sales volume.
For comparability, 2001 net sales in this filing are revised up by a net amount
of $473,742, to reflect the reclassification of thrift store and co-operative
advertising expenses. In 2002, the company reported expenses incurred to run its
thrift stores as operating expenses; in 2001 those expenses were shown as a
reduction of net sales. Also during 2002, due to a change in accounting rules,
the company is reporting co-operative advertising as a reduction of net sales;
in 2001 co-operative advertising was included in operating expense.
Cost of sales, as a percentage of gross sales, was 44.1% and 42.1% for the third
quarters of 2002 and 2001, respectively. The percentage increase in 2002 was
primarily due to a shift in our sales mix, which resulted in a decrease in our
profit margin.
Selling, general and administrative expenses for the third quarter of 2002
decreased by $411,340, or 3.7%, compared to the third quarter of 2001. The
decrease in was largely in advertising and selling expenses in the third quarter
of 2002, and was primarily due to fewer open thrift store locations in third
quarter 2002 compared to the third quarter of 2001.
Interest expense decreased $39,467 for the third quarter of 2002 versus the
third quarter of 2001 primarily as a result of continued lower average interest
rates as well as lower average borrowing levels during the quarter.
The effective tax rate was 35.0% for the quarter ended September 28, 2002 and
38.5% for the quarter ended September 29, 2001, which compares to a federal
statutory rate of 34%. The difference between the effective rate and the
statutory rate in the third quarter of 2002 was the result of state income taxes
offset by tax benefits arising from the quarter's loss and from the quarter's
passive income and certain permanent differences.
During its October 23, 2002 earnings conference call, the company indicated that
it may be required to record significant additional pension expense in the
fourth quarter as prescribed by Statement of Financial Accounting Standards No.
87. The decline in the equity markets during 2002 has caused a corresponding
decline in the assets of the company's Pension Plan. In addition, the decline in
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interest rates in 2002 is likely to require the company to use a lower discount
rate at year-end. If the decline in the assets of the Pension Plan relative to
the actuarial assumptions continues through year-end 2002, and/or the discount
rate is lower at year-end, an additional non-cash expense will be recorded to
2002 pension expense. In 1987, upon adoption of SFAS No. 87, the company elected
the immediate recognition method for the unrecognized actuarial gains and losses
of its Pension Plan. Under this method, gains and losses that exceed a "10%
corridor," as measured against the Pension Plan's Projected Benefit Obligation
or the Market Value of Plan Assets, must be immediately recognized in the
company's financial statements. These calculations will be made in January 2003
based on the year-end asset values and discount rates and any required gains or
losses will be recognized. The decline in Pension Plan assets may require
additional cash contributions to be made to the Plan. In anticipation of this
requirement, the company made a $1,000,000 voluntary tax-deductible contribution
to the Plan on September 15, 2002.
Financial Condition
- -------------------
The company has consistently demonstrated the ability to generate sufficient
cash flow from operations. Bank borrowings, under the company's credit facility,
are used to supplement cash flow from operations during periods of cyclical
shortages.
For the thirty-nine weeks ended September 28, 2002, net cash from operating
activities increased by $599,284 to $8,001,240 from $7,401,956 for the same
period in 2001. The increase in 2002 compared to 2001 was due to a smaller
increase in receivables as compared to the prior year and a decrease in
inventories compared to an increase in the prior year. In addition, net cash
from operating activities in 2002 was affected by favorable adjustments,
including the restructure charge.
Net cash used for investing activities for the thirty-nine weeks ended September
28, 2002 decreased by $2,762,128 relative to the same period in 2001. This was
due to reduced purchases of equipment as well as decreased loans to owner
operators as compared to the same period in 2001.
Net cash used for financing activities for the thirty-nine weeks ended September
28, 2002 increased by $3,440,471 relative to the same thirty-nine week period in
2001. This was due to an overall reduction in the company's debt level and to
lower proceeds from the sale of company stock.
For the remainder of 2002 the company anticipates that cash flow from
operations, along with the continued availability of credit under the credit
facility, will provide sufficient cash to meet operating and financing
requirements.
Forward-Looking Statements
- --------------------------
Certain statements in this filing that are not historical facts are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve risks and
uncertainties, which could cause actual results to differ from those projected.
Factors that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements include changes in
general economic or business conditions, the availability of capital upon terms
acceptable to the company, the availability and prices of raw materials, the
level of demand for the company's products, legal proceedings to which the
company is or may become a party, the actions of competitors and customers,
changes in consumer tastes or eating habits, the success of plant modernization
and business strategies implemented by the company, and the ability to develop
and market in a timely and efficient manner new products which are accepted by
consumers.
9 of 14
Item 3. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
The company has certain floating rate debt notes. Under current market
conditions, the company believes that changes in interest rates would not have a
material impact on the consolidated financial statements of the company. The
company also has notes receivable from owner operators whose rates adjust every
three years, and, therefore, would partially offset the fluctuations in the
company's interest rates on its notes payable. The company also has the right to
sell these notes receivable, and could use these proceeds to liquidate a
corresponding amount of the debt notes payable.
Item 4. Controls and Procedures
-----------------------
The company maintains a system of disclosure controls and procedures
designed to provide reasonable assurance as to the reliability of its
consolidated financial statements and other disclosures included in the report.
The company established a disclosure committee, which consists of certain
members of management. Within 90 days prior to the date of filing of this
report, the company carried out an evaluation, under the supervision and with
the participation of management, including the Chief Executive Officer and Chief
Financial Officer, of the design and operation of the company's disclosure
controls and procedures. Based on this evaluation, the company's Chief Executive
Officer and Chief Financial Officer concluded that the company's disclosure
controls and procedures are effective for gathering, analyzing and disclosing
the information the company is required to disclose in the reports it files with
the Securities and Exchange Commission(SEC) pursuant to the Securities and
Exchange Act of 1934, within the time periods specified in the SEC's rules and
forms. There have been no significant changes in the company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of this evaluation.
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TASTY BAKING COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
During the quarter, the company sold 24,600 shares of its common stock
to two current officers and one former officer of the company pursuant
to the exercise of outstanding stock options. All shares were sold for
cash and the aggregate price paid for the shares sold was $367,031.
The options were originally granted under the terms and conditions of
the company's various stock option plans and the stock option awards
made from time to time to officers and directors. The original stock
option awards and the subsequent sale of common stock by the company
are exempt from registration as transactions by the issuer not
involving a public offering as provided under Section 4(2) of the
Securities Act of 1933, as amended, and the regulations and rulings
thereunder. All proceeds from the sale of the common stock will be
used for general corporate purposes.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit 3 - By-Laws of the company as amended on June 27,2002
Exhibit 10.1 - Amended and restated Employment Agreement between the
company and Carl S. Watts dated August 19,2002
Exhibit 10.2 - Employment Agreement between the company and Charles P.
Pizzi dated August 14,2002
Exhibit 99.1 - Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K
The company did not file a report on Form 8-K during the thirty-nine
weeks ended September 28, 2002.
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TASTY BAKING COMPANY AND SUBSIDIARIES
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TASTY BAKING COMPANY
--------------------------------------------
(Company)
November 8, 2002 /S/ John M. Pettine
- ----------------------- --------------------------------------------
(Date) JOHN M. PETTINE
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
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CERTIFICATIONS
I, John M. Pettine, Executive Vice President and Chief Financial Officer of
Tasty Baking Company, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Tasty Baking Company;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board or directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 8, 2002
/S/ John M. Pettine
-------------------------------------
John M. Pettine
Executive Vice President and Chief Financial Officer
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I, Charles P. Pizzi, President and Chief Executive Officer of Tasty Baking
Company, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Tasty Baking Company;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
(4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board or directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 8, 2002
/S/ Charles P. Pizzi
-------------------------------------
Charles P. Pizzi
President and Chief Executive Officer
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