##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended November 18, 2006
 OR
 o
    
    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 1-11165
 INTERSTATE BAKERIES CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of incorporation or organization)
    
    43-1470322(I.R.S. Employer Identification No.)12
East Armour Boulevard, Kansas City, Missouri(Address of principal executive offices)
    
    64111
(Zip Code)
 (816) 502-4000
(Registrants telephone number, including area code)
 o þ
  o þ o
 o þ




---



##### 



INTERSTATE BAKERIES CORPORATION
FORM 10-Q
QUARTER ENDED NOVEMBER 18, 2006
 Description
    
    PagePART I  FINANCIAL INFORMATION (UNAUDITED)ITEM 1.
    
    Financial Statements
    
    
    3Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Operations
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Condensed Consolidated Statement of Stockholders Deficit
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    33Forward-Looking Statements
    
    
    38ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    42ITEM 4.
    
    Controls and Procedures
    
    
    42PART II  OTHER INFORMATION
    
    
    43ITEM 1.
    
    Legal Proceedings
    
    
    43ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    44ITEM 6.
    
    Exhibits and Reports on Form 8-K
    
    
    44Signatures
    
    
    45CertificationCertificationSection 1350 CertificationSection 1350 Certification
 2




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##### 



PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements
 INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)  (dollars in thousands, except share data)
 November 18,
    
    
    June 3,2006
    
    
    2006ASSETSCurrent assetsCash
    
    $
    81,612
    
    
    $
    78,178Restricted cash
    
    
    7,606
    
    
    
    86,353Accounts receivable, less allowance for doubtful accounts of $3,253 and $3,400, respectively
    
    
    148,030
    
    
    
    150,507Inventories
    
    
    66,971
    
    
    
    65,431Assets held for sale
    
    
    8,779
    
    
    
    11,931Other current assets
    
    
    67,553
    
    
    
    67,637Total current assets
    
    
    380,551
    
    
    
    460,037Property and equipment, net
    
    
    576,243
    
    
    
    601,101Other intangible assets
    
    
    160,711
    
    
    
    161,128Other assets
    
    
    29,842
    
    
    
    30,789Total assets
    
    $
    1,147,347
    
    
    $
    1,253,055LIABILITIES AND STOCKHOLDERS DEFICITLiabilities not subject to compromiseCurrent liabilitiesLong-term debt
    
    $
    448,731
    
    
    $
    494,882Accounts payable
    
    
    111,416
    
    
    
    117,044Accrued expenses
    
    
    243,165
    
    
    
    244,166Total current liabilities
    
    
    803,312
    
    
    
    856,092Other liabilities
    
    
    271,423
    
    
    
    272,647Deferred income taxes
    
    
    76,219
    
    
    
    77,819Total liabilities not subject to compromise
    
    
    1,150,954
    
    
    
    1,206,558Liabilities subject to compromise
    
    
    289,142
    
    
    
    287,080Stockholders deficitPreferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 120,000,000 shares authorized, 81,579,000 shares issued,
45,285,000 and 45,295,000 shares outstanding, respectively
    
    
    816
    
    
    
    816Additional paid-in capital
    
    
    584,269
    
    
    
    585,631Accumulated deficit
    
    
    (195,327
    )
    
    
    (142,711
    )Treasury stock, 36,294,000 and 36,284,000 shares at cost, respectively
    
    
    (678,629
    )
    
    
    (678,572
    )Unearned restricted stock compensation
    
    
    
    
    
    
    (1,869
    )Accumulated other comprehensive loss
    
    
    (3,878
    )
    
    
    (3,878
    )Total stockholders deficit
    
    
    (292,749
    )
    
    
    (240,583
    )Total liabilities and stockholders deficit
    
    $
    1,147,347
    
    
    $
    1,253,055
  3




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)  (dollars in thousands, except per share data)
 Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    671,913
    
    
    $
    702,381
    
    
    $
    1,356,158
    
    
    $
    1,447,030Cost of products sold (exclusive of items shown below)
    
    
    347,521
    
    
    
    357,022
    
    
    
    699,693
    
    
    
    727,435Selling, delivery and administrative expenses
    
    
    318,704
    
    
    
    353,060
    
    
    
    641,372
    
    
    
    704,247Restructuring (credits) charges
    
    
    (4,193
    )
    
    
    16,375
    
    
    
    (3,664
    )
    
    
    11,655Depreciation and amortization
    
    
    16,116
    
    
    
    17,449
    
    
    
    32,533
    
    
    
    35,551Loss on sale or abandonment of assets
    
    
    516
    
    
    
    403
    
    
    
    734
    
    
    
    566678,664
    
    
    
    744,309
    
    
    
    1,370,668
    
    
    
    1,479,454Operating loss
    
    
    (6,751
    )
    
    
    (41,928
    )
    
    
    (14,510
    )
    
    
    (32,424
    )Other (income) expenseInterest expense (excluding unrecorded contractual
interest expense of $1,367, $1,366, $2,750, and
$2,683, respectively)
    
    
    11,368
    
    
    
    11,600
    
    
    
    24,158
    
    
    
    22,491Reorganization charges, net
    
    
    10,052
    
    
    
    7,491
    
    
    
    16,707
    
    
    
    18,147Other income
    
    
    (1,045
    )
    
    
    (2,802
    )
    
    
    (1,076
    )
    
    
    (2,835
    )20,375
    
    
    
    16,289
    
    
    
    39,789
    
    
    
    37,803Loss before income taxes
    
    
    (27,126
    )
    
    
    (58,217
    )
    
    
    (54,299
    )
    
    
    (70,227
    )Provision (benefit) for income taxes
    
    
    (841
    )
    
    
    (4,892
    )
    
    
    (1,683
    )
    
    
    (9,915
    )Net loss
    
    $
    (26,285
    )
    
    $
    (53,325
    )
    
    $
    (52,616
    )
    
    $
    (60,312
    )Loss per shareBasic
    
    $
    (0.58
    )
    
    $
    (1.18
    )
    
    $
    (1.16
    )
    
    $
    (1.34
    )Diluted
    
    $
    (0.58
    )
    
    $
    (1.18
    )
    
    $
    (1.16
    )
    
    $
    (1.34
    )
  4




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)  (dollars in thousands)
 Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,2006
    
    
    2005Operating activitiesNet loss
    
    $
    (52,616
    )
    
    $
    (60,312
    )Depreciation and amortization
    
    
    32,533
    
    
    
    35,551Provision (benefit) for deferred income taxes
    
    
    600
    
    
    
    (840
    )Reorganization charges, net
    
    
    16,707
    
    
    
    18,147Cash reorganization items
    
    
    (14,700
    )
    
    
    (18,711
    )Non-cash bankruptcy-related credits
    
    
    234
    
    
    
    (620
    )Non-cash interest expense  deferred debt fees
    
    
    661
    
    
    
    2,806Non-cash restricted stock and deferred share compensation expense
    
    
    449
    
    
    
    629(Gain) loss on sale, write-down or abandonment of assets
    
    
    (5,375
    )
    
    
    4,260Change in operating assets and liabilities:Accounts receivable
    
    
    2,477
    
    
    
    21,839Inventories
    
    
    (1,540
    )
    
    
    10,581Other current assets
    
    
    (2,116
    )
    
    
    7,923Accounts payable and accrued expenses
    
    
    (6,992
    )
    
    
    (4,666
    )Long-term portion of self insurance reserves
    
    
    (488
    )
    
    
    11,580Other
    
    
    527
    
    
    
    (4,818
    )Net cash from (used in) operating activities
    
    
    (29,639
    )
    
    
    23,349Investing activitiesPurchases of property and equipment
    
    
    (11,620
    )
    
    
    (17,904
    )Proceeds from sale of assets
    
    
    13,158
    
    
    
    23,838Restricted cash deposit
    
    
    (11,354
    )
    
    
    (19,923
    )Restricted cash release
    
    
    89,222
    
    
    
    Acquisition and development of software assets
    
    
    (758
    )
    
    
    Other
    
    
    217
    
    
    
    45Net cash from (used in) investing activities
    
    
    78,865
    
    
    
    (13,944
    )Financing activitiesReduction of long-term debt
    
    
    (45,792
    )
    
    
    (544
    )Increase in revolving credit facility
    
    
    
    
    
    
    13,414Stock option exercise proceeds
    
    
    
    
    
    
    101Net cash from (used in) financing activities
    
    
    (45,792
    )
    
    
    12,971Net increase in cash
    
    
    3,434
    
    
    
    22,376Cash at the beginning of period
    
    
    78,178
    
    
    
    151,558Cash at the end of period
    
    $
    81,612
    
    
    $
    173,934Cash payments (received)Interest
    
    $
    20,747
    
    
    $
    20,488Income taxes
    
    
    (530
    )
    
    
    (15,510
    )Non-cash investing and financing activitiesLong-term debt reduction from lease rejections
    
    
    359
    
    
    
    856Asset disposals from lease rejections
    
    
    271
    
    
    
    682Convertible note conversion to equity
    
    
    1
    
    
    
    Interest income earned on restricted cash deposit
    
    
    614
    
    
    
    
  5




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIT
(UNAUDITED)  (dollars and shares in thousands)
 Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned
    
    
    AccumulatedStock Issued
    
    
    Additional
    
    
    
    
    
    Treasury Stock
    
    

    Restricted
    
    
    Other
    
    
    TotalNumber
    
    
    Par
    
    
    Paid-in
    
    
    Accumulated

    
    
    Number of
    
    
    
        
    Stock
        
    Comprehensive
        
    Stockholdersof Shares
    
    
    Value
    
    
    Capital
    
    
    Deficit
    
    
    Shares
    
    
    Cost
    
    
    Compensation
    
    
    Loss
    
    
    DeficitBalance June 3, 2006
    
    
    81,579
    
    
    $
    816
    
    
    $
    585,631
    
    
    $
    (142,711
    )
    
    
    (36,284
    )
    
    $
    (678,572
    )
    
    $
    (1,869
    )
    
    $
    (3,878
    )
    
    $
    (240,583
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,616
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,616
    )Adoption of SFAS No.
123R, Share-Based
Payment
    
    
    
    
    
    
    
    
    
    
    (1,869
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,869
    
    
    
    
    
    
    
    Convertible note
conversion
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    1Restricted share
compensation expense
    
    
    
    
    
    
    
    
    
    
    537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    537Restricted
shares
surrendered
    
    
    
    
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    (10
    )
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    (88
    )Balance November
18, 2006
    
    
    81,579
    
    
    $
    816
    
    
    $
    584,269
    
    
    $
    (195,327
    )
    
    
    (36,294
    )
    
    $
    (678,629
    )
    
    $
    
    
    
    $
    (3,878
    )
    
    $
    (292,749
    )
  6




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##### 



INTERSTATE BAKERIES CORPORATION
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 1. Voluntary Chapter 11 Filing
    
    
    authorize us to pay pre-petition and post-petition employee wages and salaries and
related benefits during our restructuring under Chapter 11;
    
    authorize us to pay trust fund taxes in the ordinary course of business, including
pre-petition amounts; and
    
    authorize the continued use of our cash management systems.
   7




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##### 



Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code
 8




---



##### 



2. Description of Business and Significant Accounting Policies
 Description of Business
    Significant Accounting Policies
 Significant Accounting Policies
 Fiscal year end
 Principles of consolidation
 Use of estimates
 Cash and cash equivalents
 Contingencies Accounting for Contingencies
 Newly Adopted Accounting Pronouncements Accounting Changes and
Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial
Statements
 9




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##### 



Share-Based Payment Accounting for Stock-Based Compensation, Accounting for Stock Issued to Employees
 Inventory Costs  An Amendment of ARB No. 43,
Chapter 4 .
 Recently Issued Accounting Pronouncements Employers Accounting for Defined Benefit Pension and Other Postretirement Plans
 Fair Value Measurements
 Quantifying Financial Misstatements
 10




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##### 



Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement No. 109
 How Taxes
Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the
Income Statement (That Is, Gross versus Net Presentation)
 3. Inventories
  November 18,
    
    
    June 3,2006
    
    
    2006(dollars in thousands)Ingredients and packaging
    
    $
    43,055
    
    
    $
    44,540Finished goods
    
    
    23,916
    
    
    
    20,891$
    66,971
    
    
    $
    65,431
 4. Property and Equipment
  November 18,
    
    
    June 3,2006
    
    
    2006(dollars in thousands)Land and buildings (lives ranging from 10 to 35 years)
    
    $
    386,707
    
    
    $
    390,573Machinery and equipment (lives ranging from 4 to 15 years)
    
    
    924,117
    
    
    
    931,4081,310,824
    
    
    
    1,321,981Less accumulated depreciation
    
    
    (734,581
    )
    
    
    (720,880
    )$
    576,243
    
    
    $
    601,101
  5. Assets Held for Sale
  11




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##### 



6. Lease Obligations
  Guarantors
Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness
of Others
 7. Other Intangible Assets
  November 18,
    
    
    June 3,2006
    
    
    2006(dollars in thousands)Intangible assets with indefinite lives(generally trademarks and trade names)Gross carrying amount
    
    $
    157,471
    
    
    $
    157,471Intangible assets with finite livesGross carrying amount
    
    $
    13,854
    
    
    $
    13,854Less:Accumulated amortization
    
    
    (10,614
    )
    
    
    (10,197
    )Net carrying amount
    
    $
    3,240
    
    
    $
    3,657
  12




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##### 



8. Debt
  November 18,
    
    
    June 3,2006
    
    
    2006(dollars in thousands)SecuredPost-petition credit agreement
    
    $
    
    
    
    $
    Senior secured credit facility  pre-petition
    
    
    444,495
    
    
    
    489,817Unsecured6% senior subordinated convertible notes  pre-petition
    
    
    99,999
    
    
    
    100,000Capital leasesReal Estate
    
    
    4,236
    
    
    
    5,065Capital lease converted to pre-petition debt
    
    
    6,125
    
    
    
    6,125554,855
    
    
    
    601,007Less:Long-term debt recorded to current liabilities
    
    
    (448,731
    )
    
    
    (494,882
    )Pre-petition debt included in liabilities subject to compromise
    
    
    (106,124
    )
    
    
    (106,125
    )Long-term debt recorded as long-term liability
    
    $
    
    
    
    $
    
 Post-Petition Credit Agreement
    13




---



##### 



Senior Secured Credit Facility
  6% Senior Subordinated Convertible Notes
  Other Matters
   9. Derivative Instruments
  14




---



##### 



10. Liabilities Subject to Compromise
    15




---



##### 



November 18,
    
    
    June 3,2006
    
    
    2006(dollars in thousands)Accounts payable
    
    $
    130,465
    
    
    $
    129,951Taxes payable
    
    
    7,715
    
    
    
    7,966Retirement obligations (SERP and deferred compensation)
    
    
    14,389
    
    
    
    14,598Legal reserve
    
    
    13,160
    
    
    
    12,910Interest bearing debt and capital leases
    
    
    106,124
    
    
    
    106,125Other
    
    
    17,289
    
    
    
    15,530$
    289,142
    
    
    $
    287,080
  11. Employee Benefit Plans
 American Bakers Association Retirement Plan
     16




---



##### 



Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Service cost
    
    $
    261
    
    
    $
    364
    
    
    $
    522
    
    
    $
    728Interest cost
    
    
    776
    
    
    
    740
    
    
    
    1,552
    
    
    
    1,480Expected return on negative plan assets
    
    
    84
    
    
    
    57
    
    
    
    168
    
    
    
    114Recognition ofActuarial (gain) loss
    
    
    
    
    
    
    (1,281
    )
    
    
    
    
    
    
    (2,562
    )Total periodic pension (credit) cost
    
    
    1,121
    
    
    
    (120
    )
    
    
    2,242
    
    
    
    (240
    )Curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,176
    )Net pension (credit) expense
    
    $
    1,121
    
    
    $
    (120
    )
    
    $
    2,242
    
    
    $
    (1,416
    )
 Defined Benefit Pension Plan
  Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Service cost
    
    $
    213
    
    
    $
    209
    
    
    $
    426
    
    
    $
    418Interest cost
    
    
    916
    
    
    
    932
    
    
    
    1,832
    
    
    
    1,864Expected return on plan assets
    
    
    (1,246
    )
    
    
    (1,127
    )
    
    
    (2,492
    )
    
    
    (2,254
    )Recognition ofPrior service cost
    
    
    63
    
    
    
    66
    
    
    
    126
    
    
    
    132Actuarial loss
    
    
    7
    
    
    
    124
    
    
    
    14
    
    
    
    248Net pension expense
    
    $
    (47
    )
    
    $
    204
    
    
    $
    (94
    )
    
    $
    408
 17




---



##### 



Postretirement Health and Life Plans
     Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Service cost
    
    $
    298
    
    
    $
    333
    
    
    $
    596
    
    
    $
    666Interest cost
    
    
    833
    
    
    
    783
    
    
    
    1,666
    
    
    
    1,566AmortizationUnrecognized prior service cost (benefit)
    
    
    (1,706
    )
    
    
    (1,706
    )
    
    
    (3,412
    )
    
    
    (3,412
    )Unrecognized net loss
    
    
    242
    
    
    
    302
    
    
    
    484
    
    
    
    604Net postretirement benefit (credit) expense
    
    $
    (333
    )
    
    $
    (288
    )
    
    $
    (666
    )
    
    $
    (576
    )
 12. Supplemental Executive Retirement Plan
    13. Stock-Based Compensation
  18




---



##### 



1996 Stock Incentive Plan
  The year-to-date analysis of our stock option activity is as follows:Weighted
    
    
    WeightedAverage
    
    
    AverageExercise Price
    
    
    Remaining
    
    
    AggregateShares
    
    
    Per Share
    
    
    Contractual Term
    
    
    Intrinsic Value(dollars in(in thousands)
    
    
    
    
    
    
    
    
    
    
    thousands)Outstanding, beginning of period
    
    
    4,099
    
    
    $
    16.41Expired
    
    
    (453
    )
    
    
    18.68Outstanding, end of period
    
    
    3,646
    
    
    
    16.13
    
    
    
    4.58
    
    
    $
    26,211Options exercisable, end of period
    
    
    3,646
    
    
    
    16.13
    
    
    
    4.58
    
    
    $
    26,211
   19




---



##### 



WeightedAverageGrant DateShares
    
    
    Fair Value(in thousands)Nonvested, beginning of period
    
    
    162
    
    
    $
    14.49Surrendered
    
    
    (10
    )
    
    
    12.22Nonvested, end of period
    
    
    152
    
    
    
    14.64
   Pro Forma Employee Stock-Based Compensation Expense
 Accounting for
Stock-Based Compensation  Transition and Disclosure
  Twelve
    
    
    Twenty-Weeks
    
    
    Four WeeksEnded
    
    
    EndedNovember 12, 2005(dollars in thousands, except per share data)Net loss, as reported
    
    $
    (53,325
    )
    
    $
    (60,312
    )Add: Stock-based employee
compensation expense included in
reported net income, net of income
taxes of $0
    
    
    303
    
    
    
    630Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of income taxes of
$0
    
    
    (418
    )
    
    
    (852
    )Pro forma net loss
    
    $
    (53,440
    )
    
    $
    (60,534
    )Basic and diluted loss per shareAs reported
    
    $
    (1.18
    )
    
    $
    (1.34
    )Pro forma
    
    
    (1.18
    )
    
    
    (1.34
    )
 20




---



##### 



14. Restructuring (Credits) Charges
  Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Severance costs
    
    $
    67
    
    
    $
    1,682
    
    
    $
    296
    
    
    $
    4,504Long-lived asset charges
    
    
    (4,787
    )
    
    
    12,064
    
    
    
    (5,195
    )
    
    
    4,287Curtailment gain on a benefit plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (706
    )Other exit costs
    
    
    527
    
    
    
    2,629
    
    
    
    1,235
    
    
    
    3,570Total
    
    $
    (4,193
    )
    
    $
    16,375
    
    
    $
    (3,664
    )
    
    $
    11,655
 Fiscal 2007 Activity
     21




---



##### 



Long-LivedSeverance
    
    
    Assetand Related
    
    
    ChargesBenefits
    
    
    (Credits)
    
    
    Other
    
    
    Total(dollars in thousands)Fiscal 2004 PlanBalance June 3, 2006
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Expensed in Fiscal 2007
    
    
    
    
    
    
    (8
    )
    
    
    4
    
    
    
    (4
    )Cash Paid in Fiscal 2007
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    8Balance November 18, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fiscal 2005 Consolidation
& RIF PlanBalance June 3, 2006
    
    
    199
    
    
    
    
    
    
    
    
    
    
    
    199Expensed in Fiscal 2007
    
    
    
    
    
    
    
    
    
    
    156
    
    
    
    156Cash Paid in Fiscal 2007
    
    
    (186
    )
    
    
    
    
    
    
    (156
    )
    
    
    (342
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance November 18, 2006
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Fiscal 2005 PC Review PlanBalance June 3, 2006
    
    
    893
    
    
    
    
    
    
    
    98
    
    
    
    991Expensed in Fiscal 2007
    
    
    
    
    
    
    (222
    )
    
    
    682
    
    
    
    460Cash Paid in Fiscal 2007
    
    
    (490
    )
    
    
    
    
    
    
    (695
    )
    
    
    (1,185
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    222
    
    
    
    
    
    
    
    222Balance November 18, 2006
    
    
    403
    
    
    
    
    
    
    
    85
    
    
    
    488Fiscal 2006 PC Review PlanBalance June 3, 2006
    
    
    1,000
    
    
    
    
    
    
    
    45
    
    
    
    1,045Expensed in Fiscal 2007
    
    
    
    
    
    
    (4,965
    )
    
    
    366
    
    
    
    (4,599
    )Cash Paid in Fiscal 2007
    
    
    (557
    )
    
    
    
    
    
    
    (387
    )
    
    
    (944
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    4,965
    
    
    
    
    
    
    
    4,965Balance November 18, 2006
    
    
    443
    
    
    
    
    
    
    
    24
    
    
    
    467Accounting Office ClosingsBalance June 3, 2006
    
    
    345
    
    
    
    
    
    
    
    
    
    
    
    345Expensed in Fiscal 2007
    
    
    296
    
    
    
    
    
    
    
    27
    
    
    
    323Cash Paid in Fiscal 2007
    
    
    (214
    )
    
    
    
    
    
    
    (1
    )
    
    
    (215
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance November 18, 2006
    
    
    427
    
    
    
    
    
    
    
    26
    
    
    
    453ConsolidatedBalance June 3, 2006
    
    
    2,437
    
    
    
    
    
    
    
    143
    
    
    
    2,580Expensed in Fiscal 2007
    
    
    296
    
    
    
    (5,195
    )
    
    
    1,235
    
    
    
    (3,664
    )Cash Paid in Fiscal 2007
    
    
    (1,447
    )
    
    
    
    
    
    
    (1,243
    )
    
    
    (2,690
    )Noncash Utilization in
Fiscal 2007
    
    
    
    
    
    
    5,195
    
    
    
    
    
    
    
    5,195Balance November 18, 2006
    
    $
    1,286
    
    
    $
    
    
    
    $
    135
    
    
    $
    1,421
 Fiscal 2006 Activity
  22




---



##### 



Long-LivedSeverance
    
    Assetand Related
    
    ChargesBenefits
    
    (Credits)
    
    Other
    
    TotalFiscal 2004 Plan
    
    $
    2,537
    
    
    $
    (8,091
    )
    
    $
    7,006
    
    
    $
    1,452Fiscal 2005 Consolidation
& RIF Plan
    
    
    5,575
    
    
    
    6,389
    
    
    
    2,739
    
    
    
    14,703Fiscal 2005 PC Review Plan
    
    
    7,206
    
    
    
    18,435
    
    
    
    (4,346
    )
    
    
    21,295Software Write-off
    
    
    3⁄4
    
    
    
    4,509
    
    
    
    3⁄4
    
    
    
    4,509Fiscal 2006 PC Review Plan
    
    
    6,163
    
    
    
    (19,365
    )
    
    
    3,391
    
    
    
    (9,811
    )Accounting Office Closings
    
    
    641
    
    
    
    3⁄4
    
    
    
    27
    
    
    
    668Expected remaining restructuring (credits) charges by plan (in thousands):Severance
    
    Long-Livedand Related
    
    AssetBenefits
    
    Charges (1)
    
    Other
    
    TotalFiscal 2005 Consolidation
& RIF Plan
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    214
    
    
    $
    214Fiscal 2005 PC Review Plan
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    315
    
    
    
    315Fiscal 2006 PC Review Plan
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    912
    
    
   
    912Accounting Office Closings
    
    
    103
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
   103
 
 (1)
    
    Excludes gains expected to be realized on subsequent sales of real
property. 23




---



##### 



15. Reorganization Charges
  November 18, 2006Twelve Weeks
    
    
    Twenty-Four WeeksEnded
    
    
    EndedReorganization
    
    
    Reorganization
    
    
    CashCharges
    
    
    Charges
    
    
    Payments(dollars in thousands)Professional fees
    
    $
    10,522
    
    
    $
    18,455
    
    
    $
    18,125Employee retention expenses
    
    
    350
    
    
    
    700
    
    
    
    Lease rejection charges (credits)
    
    
    15
    
    
    
    98
    
    
    
    Interest income
    
    
    (562
    )
    
    
    (1,721
    )
    
    
    (2,600
    )Gain on sale of assets
    
    
    (273
    )
    
    
    (825
    )
    
    
    (825
    )Reorganization charges, net
    
    $
    10,052
    
    
    $
    16,707
    
    
    $
    14,700
 November 12, 2005Twelve Weeks
    
    
    Twenty-Four WeeksEnded
    
    
    EndedReorganization
    
    
    Reorganization
    
    
    CashCharges
    
    
    Charges
    
    
    Payments(dollars in thousands)Professional fees
    
    $
    6,913
    
    
    $
    15,765
    
    
    $
    16,378Employee retention expenses
    
    
    1,533
    
    
    
    4,406
    
    
    
    4,286Lease rejection charges (credits)
    
    
    5
    
    
    
    (71
    )
    
    
    Interest income
    
    
    (863
    )
    
    
    (1,356
    )
    
    
    (1,356
    )Gain on sale of assets
    
    
    (97
    )
    
    
    (597
    )
    
    
    (597
    )Reorganization charges, net
    
    $
    7,491
    
    
    $
    18,147
    
    
    $
    18,711
 16. Income Taxes
  Twenty-four Weeks EndedNovember 18,
    
    November 12,2006
    
    2005Statutory federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net
    
    
    1.1
    
    
    
    1.1Valuation allowance increase
    
    
    (31.6
    )
    
    
    (26.7
    )Adjustments to prior year tax accruals
    
    
    
    
    
    
    5.8Other
    
    
    (1.4
    )
    
    
    (1.1
    )3.1
    %
    
    
    14.1
    %
 24




---



##### 



17. Commitments and Contingencies
    25




---



##### 



26




---



##### 



27




---



##### 



28




---



##### 



29




---



##### 



18. Earnings (Loss) per Share
 Earnings per
Share
 30




---



##### 



Twelve Weeks Ended
    
    Twenty-Four Weeks EndedNovember 18,
    
    November 12,
    
    November 18,
    
    November 12,2006
    
    2005
    
    2006
    
    2005(in thousands)Weighted average common shares outstanding:Basic and diluted
    
    
    45,165
    
    
    
    45,107
    
    
    
    45,165
    
    
    
    45,099
   19. Comprehensive Loss
  Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Net loss
    
    $
    (26,285
    )
    
    $
    (53,325
    )
    
    $
    (52,616
    )
    
    $
    (60,312
    )Other comprehensive income (loss):Commodity derivative (gains) losses
reclassified to cost of products
sold, net of income taxes of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477
    )Comprehensive loss
    
    $
    (26,285
    )
    
    $
    (53,325
    )
    
    $
    (52,616
    )
    
    $
    (60,789
    )
 20. Segment Information
 Disclosures about Segments of an Enterprise and Related Information
  31




---



##### 



Wholesale operations
 Retail operations
    Twelve Weeks Ended
    
    
    Twenty-Four Weeks EndedNovember 18,
    
    
    November 12,
    
    
    November 18,
    
    
    November 12,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)Net SalesWholesale operations
    
    $
    596,238
    
    
    $
    620,093
    
    
    $
    1,201,282
    
    
    $
    1,275,183Retail operations
    
    
    75,675
    
    
    
    82,288
    
    
    
    154,876
    
    
    
    171,847Total net sales
    
    $
    671,913
    
    
    $
    702,381
    
    
    $
    1,356,158
    
    
    $
    1,447,030Operating Income (Loss)Wholesale operations
    
    $
    7,156
    
    
    $
    (8,235
    )
    
    $
    14,787
    
    
    $
    9,541Retail operations
    
    
    2,164
    
    
    
    2,059
    
    
    
    5,001
    
    
    
    7,0829,320
    
    
    
    (6,176
    )
    
    
    19,788
    
    
    
    16,623Corporate
    
    
    (16,071
    )
    
    
    (35,752
    )
    
    
    (34,298
    )
    
    
    (49,047
    )Total operating loss
    
    
    (6,751
    )
    
    
    (41,928
    )
    
    
    (14,510
    )
    
    
    (32,424
    )Interest expense
    
    
    11,368
    
    
    
    11,600
    
    
    
    24,158
    
    
    
    22,491Reorganization charges
    
    
    10,052
    
    
    
    7,491
    
    
    
    16,707
    
    
    
    18,147Other (income) expense
    
    
    (1,045
    )
    
    
    (2,802
    )
    
    
    (1,076
    )
    
    
    (2,835
    )20,375
    
    
    
    16,289
    
    
    
    39,789
    
    
    
    37,803Loss before income taxes
    
    
    (27,126
    )
    
    
    (58,217
    )
    
    
    (54,299
    )
    
    
    (70,227
    )Provision (benefit) for income taxes
    
    
    (841
    )
    
    
    (4,892
    )
    
    
    (1,683
    )
    
    
    (9,915
    )Net loss
    
    $
    (26,285
    )
    
    $
    (53,325
    )
    
    $
    (52,616
    )
    
    $
    (60,312
    )
 32




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Managements
Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements
  OVERVIEW OF CERTAIN TRENDS AND EVENTS AFFECTING OPERATIONS, FINANCIAL POSITION AND LIQUIDITY
 Overview of Certain Trends and Events Affecting Operations, Financial Position and
Liquidity
 CRITICAL ACCOUNTING POLICIES
 Critical Accounting Policies
 RESULTS OF OPERATIONS
  Twelve Weeks Ended
    
    Twenty-Four Weeks EndedNovember 18,
    
    November 12,
    
    November 18,
    
    November 12,2006
    
    2005
    
    2006
    
    2005Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of products sold (exclusive of items
shown below)
    
    
    51.7
    
    
    
    50.8
    
    
    
    51.6
    
    
    
    50.3Selling, delivery and administrative expenses
    
    
    47.4
    
    
    
    50.3
    
    
    
    47.3
    
    
    
    48.7Restructuring (credits) charges
    
    
    (0.6
    )
    
    
    2.3
    
    
    
    (0.3
    )
    
    
    0.8Depreciation and amortization
    
    
    2.4
    
    
    
    2.5
    
    
    
    2.4
    
    
    
    2.4Loss on sale or abandonment of assets
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating loss
    
    
    (1.0
    )
    
    
    (6.0
    )
    
    
    (1.1
    )
    
    
    (2.2
    )Interest expense
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.8
    
    
    
    1.6Reorganization charges
    
    
    1.5
    
    
    
    1.1
    
    
    
    1.2
    
    
    
    1.3Other income
    
    
    (0.2
    )
    
    
    (0.5
    )
    
    
    (0.1
    )
    
    
    (0.2
    )Loss before income taxes
    
    
    (4.0
    )
    
    
    (8.3
    )
    
    
    (4.0
    )
    
    
    (4.9
    )Income taxes
    
    
    (0.1
    )
    
    
    (0.7
    )
    
    
    (0.1
    )
    
    
    (0.7
    )Net loss
    
    
    (3.9
    )%
    
    
    (7.6
    )%
    
    
    (3.9
    )%
    
    
    (4.2
    )%
 33




---



##### 



Net Sales
 (dollars in thousands)
 Twelve Weeks Ended
    
    Twenty-four Weeks EndedNovember 18,
    
    
    
    
    
    November 12,
    
    
    
    
    
    Increase/
    
    November 18,
    
    
    
    
    
    November 12,
    
    
    
    
    
    Increase/2006
    
    %
    
    2005
    
    %
    
    (Decrease)
    
    2006
    
    %
    
    2005
    
    %
    
    (Decrease)Wholesale operations
    
    $
    596,238
    
    
    
    88.7
    %
    
    $
    620,093
    
    
    
    88.3
    %
    
    
    (3.9
    )%
    
    $
    1,201,282
    
    
    
    88.6
    %
    
    $
    1,275,183
    
    
    
    88.1
    %
    
    
    (5.8
    )%Retail operations
    
    
    75,675
    
    
    
    11.3
    
    
    
    82,288
    
    
    
    11.7
    
    
    
    (8.0
    )
    
    
    154,876
    
    
    
    11.4
    
    
    
    171,847
    
    
    
    11.9
    
    
    
    (9.9
    )Total net sales
    
    $
    671,913
    
    
    
    100.0
    %
    
    $
    702,381
    
    
    
    100.0
    %
    
    
    (4.3
    )
    
    $
    1,356,158
    
    
    
    100.0
    %
    
    $
    1,447,030
    
    
    
    100.0
    %
    
    
    (6.3
    )
 Consolidated net sales.
 Wholesale operations net sales.
 Retail operations net sales.
 Gross profit (exclusive of depreciation and amortization).
  34




---



##### 



Selling, delivery and administrative expenses.
   Restructuring charges.
   35




---



##### 



Operating Loss
 (dollars in thousands)
 Twelve Weeks Ended
    
    Twenty-four Weeks EndedNovember 18,
    
    
    
    
    
    November 12,
    
    
    
    
    
    November 18,
    
    
    
    
    
    November 12,2006
    
    %
    
    2005
    
    %
    
    2006
    
    %
    
    2005
    
    %Wholesale operations
    
    $
    7,156
    
    
    
    (106.0
    )%
    
    $
    (8,235
    )
    
    
    19.6
    %
    
    $
    14,787
    
    
    
    (101.9
    )%
    
    $
    9,541
    
    
    
    (29.4
    )%Retail operations
    
    
    2,164
    
    
    
    (32.1
    )
    
    
    2,059
    
    
    
    (4.9
    )
    
    
    5,001
    
    
    
    (34.5
    )
    
    
    7,082
    
    
    
    (21.9
    )9,320
    
    
    
    (138.1
    )
    
    
    (6,176
    )
    
    
    14.7
    
    
    
    19,788
    
    
    
    (136.4
    )
    
    
    16,623
    
    
    
    (51.3
    )Corporate
    
    
    (16,071
    )
    
    
    238.1
    
    
    
    (35,752
    )
    
    
    85.3
    
    
    
    (34,298
    )
    
    
    236.4
    
    
    
    (49,047
    )
    
    
    151.3Total operating loss
    
    $
    (6,751
    )
    
    
    100.0
    %
    
    $
    (41,928
    )
    
    
    100.0
    %
    
    $
    (14,510
    )
    
    
    100.0
    %
    
    $
    (32,424
    )
    
    
    100.0
    %
 Consolidated operating loss
 Wholesale operating income (loss).
 Retail operating income (loss).
  Reorganization charges.
  36




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##### 



Interest expense.
  Provision for income taxes.
  CASH RESOURCES AND LIQUIDITY
 Sources of Liquidity and Capital Cash Resources and Liquidity
 CASH FLOWS
  Cash from (used in) operating activities.
 Cash from (used in) investing activities.
 37




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##### 



Cash from (used in) financing activities.
 OFF-BALANCE SHEET FINANCING
  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
  RECENT ACCOUNTING PRONOUNCEMENTS
  FORWARD-LOOKING STATEMENTS
  
    
    our ability to continue as a going concern;
    
    our ability to obtain court approval with respect to motions filed by us from time to time in the
Chapter 11 proceeding;
    
    our ability to operate pursuant to the covenants, terms and certifications of the DIP Facility;
    
    our ability to obtain any necessary relief from the minimum
EBITDA covenant under our DIP Facility, as described herein;
    
    our ability to negotiate an extension (if necessary) or refinance our DIP Facility, which, pursuant to
an extension, expires on June 2, 2007;
    
    our ability to develop, propose, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 proceeding;
    
    risks associated with failing to obtain court approval for one or more extensions to the exclusivity
period for us to propose and confirm one or more plans of reorganization or with third parties seeking
and obtaining court approval to terminate or shorten any such exclusivity period, for the appointment
of a Chapter 11 trustee or to convert the Chapter 11 proceeding to a Chapter 7 proceeding;
 38




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##### 




    
    risks associated with inflationary cost increases in materials, ingredients, energy and employee wages
and benefits;
    
    risks associated with our restructuring process, including the risks associated with achieving the
desired savings in connection with our profit center restructuring and bakery and route consolidations
to achieve the desired results;
    
    potential adverse publicity;
    
    our ability to obtain and maintain adequate terms with vendors and service providers;
    
    the potential adverse impact of the Chapter 11 proceeding on our liquidity or results of operations;
    
    risks associated with product price increases, including the risk that such actions will not
effectively offset inflationary cost pressures and may adversely impact sales of our products;
    
    the effectiveness of our efforts to hedge our exposure to price increases with respect to various
ingredients and energy;
    
    our ability to finalize, fund and execute a going-forward business plan;
    
    our ability to retain, motivate and/or attract key executives and employees;
    
    changes in our relationship with employees and the unions that represent them;
    
    increased costs and uncertainties related to periodic renegotiation of union contracts;
    
    risks associated with a stockholder action to compel an annual meeting for the purpose of effecting a
change of control of the Company;
    
    increased costs and uncertainties with respect to the ABA Plan;
    
    successful resolution of material weaknesses in our internal controls;
    
    resolution of any deficiencies and implementation of software updates with respect to our financial
reporting systems;
    
    changes to dietary guidelines;
    
    the continuing effects of changes in consumers eating habits;
    
    the performance of our recent new product introductions, including the success of such new products in
achieving and retaining market share; and
    
    the outcome of legal proceedings to which we are or may become a party.
 39




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##### 



Bankruptcy-Related Factors
 
    
    our ability to evaluate various alternatives including, but not limited to, the sale of some or
all of our assets, infusion of capital, debt restructuring and the filing and ultimate approval of
a plan of reorganization with the Bankruptcy Court, or any combination of these options;
    
    our ability to develop and implement a successful plan of reorganization in the Chapter 11 process;
    
    our ability to operate our business under the restrictions imposed by the Chapter 11 process and
in compliance with the limitations contained in the debtor-in-possession credit facility;
    
    the instructions, orders and decisions of the bankruptcy court and other effects of legal and
administrative proceedings, settlements, investigations and claims;
    
    changes in our relationships with suppliers and customers, including the ability to maintain these
relationships and contracts that are critical to our operations, in light of the Chapter 11
process;
    
    our ability to maintain adequate liquidity and working capital under our DIP Facility, as well as
our ongoing ability to purchase from vendors on satisfactory terms throughout the reorganization.
    
    the significant time that will be required by management to structure and implement a plan of
reorganization as well as to evaluate various alternatives including, but not limited to, the sale
of some or all of our assets, infusion of capital and debt restructuring or any combination of
these options, as well as our restructuring plan;
    
    our reliance on key management personnel, including the effects of the Chapter 11 process on our
ability to attract and retain key management personnel;
    
    our ability to successfully reject unfavorable contracts and leases; and
    
    the duration of the Chapter 11 process.
 General Factors
 
    
    the availability of capital on acceptable terms in light of the various factors discussed herein,
including our reorganization under the Chapter 11 process;
    
    the availability and cost of raw materials, packaging, fuels and utilities, and the ability to recover
these costs in the pricing of products, improved efficiencies and other strategies;
    
    increased pension, health care, workers compensation and other employee costs;
    
    actions of competitors, including pricing policy and promotional spending;
    
    increased costs, delays or deficiencies related to restructuring activities;
    
    the effectiveness of advertising and marketing spending;
    
    the effectiveness and adequacy of our information and data systems:
    
    changes in general economic and business conditions (including in the bread and sweet goods markets);
    
    costs associated with increased contributions to single employer, multiple employer or multi-employer
pension plans;
 40




---



##### 




    
    any inability to protect and maintain the value of our intellectual property;
    
    future product recalls or food safety concerns;
    
    further consolidation in the retail food industry;
    
    changes in consumer tastes or eating habits;
    
    costs associated with environmental compliance and remediation;
    
    increased costs and uncertainties related to periodic renegotiation of union contracts;
    
    obligations and uncertainties with respect to the ABA Plan;
    
    the impact of any withdrawal liability arising under our multi-employer pension plans as a result of
prior actions or current consolidations;
    
    actions of governmental entities, including regulatory requirements;
    
    acceptance of new product offerings by consumers and our ability to expand existing brands;
    
    the performance of our recent new product introductions, including the success of such new products in
achieving and retaining market share;
    
    the effectiveness of hedging activities;
    
    expenditures necessary to carry out cost-saving initiatives and savings derived from these initiatives;
    
    changes in our business strategies;
    
    unexpected costs or delays incurred in connection with our previously announced and other future
facility closings;
    
    bankruptcy filings by customers;
    
    changes in our relationship with employees and the unions that represent them;
    
    the outcome of legal proceedings to which we are or may become a party, including any litigation
stemming from our sale of convertible notes on August 12, 2004 or events leading up to our filing of a
voluntary petition for protection under Chapter 11 of the Bankruptcy Code;
    
    business disruption from terrorist acts, our nations response to such acts and acts of war; and
    
    other factors.
   41




---



##### 



Item 3. Quantitative and Qualitative Disclosure about Market Risk
  Commodity prices.
 Item 4. Controls and Procedures
      42




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##### 



PART II OTHER INFORMATION
 Item 1. Legal Proceedings
        43




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##### 



ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities
 Maximum Number (orTotal Number of
    
    
    Approximate DollarShares (or Units)
    
    
    Value) of SharesPurchased as Part
    
    
    (or Units) that MayTotal Number of
    
    
    
    
    
    
    of Publicly
    
    
    Yet Be PurchasedShares (or Units)
    
    
    Average Price Paid
    
    
    Announced Plans or
    
    
    Under the Plans orPeriod
    
    Purchased(A)
    
    
    per Share (or Unit)
    
    
    Programs
    
    
    ProgramsPeriod 4August 27 September 23, 2006
    
    
    2
    
    
    $
    3.86
    
    
    
    2
    
    
    
    7,396,665Period 5September 24-Ocotber 21, 2006
    
    
    5
    
    
    
    2.92
    
    
    
    5
    
    
    
    7,396,660Period 6October 22-November 18, 2006
    
    
    6
    
    
    
    2.83
    
    
    
    6
    
    
    
    7,396,654Total
    
    
    13
    
    
    $
    3.02
    
    
    
    13
    
    
    
    7,396,654
 
 A)
    
    Repurchases resulted from the repurchase of fractional shares upon
issuance of certificates representing stock held in the Employee
Stock Purchase Plan. This plan was terminated in conjunction with
the Bankruptcy filing in September 2004. Item 6. Exhibits
 Exhibit No.
    
    Exhibit3.1
    
    Restated Certificate of Incorporation of Interstate Bakeries Corporation,
as amended (incorporated herein by reference to Exhibit 3.1 to Interstate
Bakeries Corporations Amendment No. 1 to its Quarterly Report on Form 10-Q
for the quarter ended March 9, 2002, filed on April 19, 2002).3.2
    
    Restated Bylaws of Interstate Bakeries Corporation (incorporated herein by
reference to Exhibit 3.1 to Interstate Bakeries Corporations Quarterly
Report on Form 10-Q for the quarter ended November 15, 2003 filed on
December 22, 2003).31.1
    
    Certification of Antonio C. Alvarez II pursuant to Rule 13a-14(a)/15d-14(a)*31.2
    
    Certification of Ronald B. Hutchison pursuant to Rule 13a-14(a)/15d-14(a)*32.1
    
    Certification of Antonio C. Alvarez II pursuant to 18 U.S.C. Section 1350*32.2
    
    Certification of Ronald B. Hutchison pursuant to 18 U.S.C. Section 1350*
 
 *
    
    Filed herewith 44




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##### 



SIGNATURES
  INTERSTATE BAKERIES CORPORATIONDated: December 22, 2006
    By:
    /s/ Antonio C. AlvarezAntonio C. Alvarez IIChief Executive Officer
(Principal Executive Officer)Dated: December 22, 2006
    By:
    /s/ Ronald B. HutchisonRonald B. HutchisonExecutive Vice President and 
Chief Financial Officer
(Principal Financial Officer) 45