EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
 
Exhibit 99.1

Case Name: Interstate Bakeries
Corporation & All Subsidiaries
Case No: 04-45814-jwv-11
  
     
Consolidated Monthly Operating Report Summary
For The Four Weeks Ended and as of July 26, 2008
  
     
REVENUE
            
Gross Income
         $ 218,883,863  
Less Cost of Goods Sold
           114,801,472  
Ingredients, Packaging & Outside Purchasing
   $ 67,173,632          
Direct & Indirect Labor
     35,966,455          
Overhead & Production Administration
     11,661,385          
Gross Profit
             104,082,391  
                 
OPERATING EXPENSES
                
Owner - Draws/Salaries
     -          
Selling & Delivery Employee Salaries
     47,924,023          
Advertising and Marketing
     2,146,558          
Insurance (Property, Casualty, & Medical)
     11,812,078          
Payroll Taxes
     4,273,703          
Lease and Rent
     2,834,861          
Telephone and Utilities
     1,094,829          
Corporate Expense (Including Salaries)
     7,070,800          
Other Expenses
     30,764,466  (i)        
Total Operating Expenses
             107,921,318  
EBITDA
             (3,838,927 )
Restructuring & Reorganization Charges
  
(1,820,581)
 (ii)        
Depreciation and Amortization
     4,646,988          
Abandonment
     167,758          
Property & Equipment Impairment
     -          
Other( Income)/Expense
     2,787          
Gain/Loss Sale of Prop
     -          
Interest Expense
     4,515,662          
Operating Income (Loss)
             (11,351,541 )
Income Tax Expense (Benefit)
     (26,819 )        
Net Income (Loss)
           $ (11,324,722 )
                 
                 
CURRENT ASSETS
                
Accounts Receivable at end of period
           $ 133,967,183  
Increase (Decrease) in Accounts Receivable for period
             77,728  
Inventory at end of period
             61,138,867  
Increase (Decrease) in Inventory for period
             (3,374,334 )
Cash at end of period
             20,983,417  
Increase (Decrease) in Cash for period
             884,252  
      Restricted Cash
          
21,064,873
 (iii)
      Increase (Decrease) in Restricted Cash for period
             13,052  
                 
LIABILITIES
                
Increase (Decrease) Liabilities Not Subject to Compromise
             4,417,153  
Increase (Decrease) Liabilities Subject to Compromise
             (1,544 )
Taxes payable:
                
 Federal Payroll Taxes
   $ 4,170,082          
 State/Local Payroll Taxes
     1,146,128          
                         State Sales Taxes
     857,559          
 Real Estate and Personal Property Taxes
     7,751,391          
 Other (see attached supplemental schedule)
     2,961,481          
 Total Taxes Payable
             16,886,641  
                 
                 
See attached supplemental schedule for footnoted information.
                


 
 
 


IBC
      
Other Taxes Payable - Supplemental Schedule
      
for period ended
      
July 26, 2008
      
       
       
       
Description
  
Amount
  
       
Use Tax
   $ 564,582  
Accr. Franchise Tax
     564,088  
Other Taxes
     1,832,811  
         
Total Other Taxes Payable
   $ 2,961,481  
         
         
         
   
2nd period
  
(i)  Other Expenses included the following items:
        
Employee benefit costs
     12,722,154  
Facility costs (excluding lease expense)
     904,280  
Distribution/transportation costs
     13,964,831  
Local promotional costs
     1,156,920  
Miscellaneous
     2,016,281  
    $ 30,764,466  
         
(ii)  Restructuring and reorganization expenses for the period included:
        
Restructuring expenses
        
     (Gain)/loss on sale of assets
     (3,350,487 )
     Other
     87,956  
Reorganization expenses
        
     Professional fees
     1,529,042  
     Interest expense
     (12,892 )
     (Gain)/loss on sale of assets
     (74,200 )
     Other
     0  
    $ (1,820,581 )
         
(iii) Restricted cash represents cash held as collateral pursuant to IBC's debtor-in-possession credit facility.
  
         
Note: Capital expenditures for the period totaled approximately $1.9 million.
  
         


 
 
 

EXPLANATORY NOTES TO THE INTERSTATE BAKERIES CORPORATION
CONSOLIDATED MONTHLY OPERATING REPORT
DATED AS OF JULY 26, 2008

1.  
This consolidated Monthly Operating Report (MOR), reflecting results for the four-week period ended July 26, 2008 and balances of and period changes in certain of the Company’s accounts as of July 26, 2008, is preliminary, unaudited, and subject to adjustment prior to the filing of the Company’s fiscal 2009 First Quarterly Report on Form 10-Q with the Securities and Exchange Commission (SEC). This MOR should be read together and concurrently with the Company’s third quarter 2008 Form 10-Q that was filed with the Securities and Exchange Commission on April 17, 2008 and the Company’s Annual Report on Form 10-K for fiscal 2007 filed with the SEC on August 16, 2007 for a comprehensive description of our current financial condition and operating results. This MOR is being provided to the Bankruptcy Court and the U.S. Trustee pursuant to requirements under Local Rule 2015-2 C.

2.  
This MOR is not audited and will not be subject to audit or review by our external auditors on a stand-alone basis at any time in the future.  This MOR does not include  quarterly and year-to-date adjustments reflected upon review of major asset and liability accounts prior to the Company’s filing of its quarterly and annual financial statements with the SEC.

Due to the timing impact of the foregoing, results for this period as presented in the MOR are not necessarily indicative of the actual results for the period if all such matters were allocated to all periods in the quarter or year.  Accordingly, each period reported in the MORs should not be viewed on a stand-alone basis, but rather in the context of previously reported financial results, including the Company’s SEC filings.

3.  
This MOR is presented in a format providing information required under local rule and incorporating measurements used for internal operating purposes, rather than in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. This MOR does not include certain financial statements and explanatory footnotes, including disclosures required under GAAP.

4.  
As of July 26, 2008 the Company had borrowed $80.2 million under its $239.3 million debtor-in-possession credit facility, which is subject to a borrowing base formula based on its level of eligible accounts receivable, inventory, certain real property and reserves.  The credit facility was also utilized to support the issuance of letters of credit primarily in support of the Company’s insurance programs.  As of July 26, 2008 there were $136.6 million of letters of credit outstanding under the debtor-in-possession credit facility. The amount of the credit facility available for borrowing was $22.5 million as of July 26, 2008.  In addition to the borrowing base formula, each borrowing under the debtor-in-possession credit facility is subject to its terms and conditions, including the absence of an event of default thereunder.  (See Note 8 to the Company’s financial statements included in its Form 10-Q for the third fiscal quarter of 2008 ended March 8, 2008 for additional information.)

 
 
 

 
5.  
In connection with completing the fiscal 2008 audited financial statements, we are reviewing the classification of the approximately $450 million owing the pre-petition senior secured lenders (the “Pre-petition Secured Debt Claims”) at May 31, 2008 and all subsequent periods to determine whether these claims should be included in liabilities subject to compromise in accordance with American Institute of Certified Public Accountants’ Statement of Position 90-7 due to uncertainties regarding impairment of these claims.  The Pre-petition Secured Debt Claims and related changes to amounts owed have previously been included as liabilities not subject to compromise in prior Monthly Operating Reports as filed.